DETROIT (Reuters) - Detroit’s emergency manager indicated for the first time that he may end collective bargaining with city employees as part of his effort to shore up the city’s sagging finances.
Kevyn Orr, a former bankruptcy lawyer, alerted state labor officials on Thursday that he has no legal requirement to bargain or participate in compulsory arbitration with Detroit’s public safety unions.
The statement by Orr, sent in letters to state employment relations officials, is his first public indication that he actively is considering exercising some of the most sweeping powers granted to him under the 2012 state law that created the position of emergency manager.
Detroit has agreements with some 48 unions, and outside analysts say the city needs concessions from organized labor if it is to restore public finances devastated by a shrinking population and high unemployment.
Staking out his position in the letters, Orr stated that Detroit is in receivership, and he has no duty to bargain under procedures set forward in the state Public Employment Relations Act. The city and its lawyers “are authorized to advance this position and seek...any and all relief available by law,” he said.
Orr’s move incensed unions for firefighters, police officers and paramedics, whose current pacts with the city end on June 30.
“It’s obvious what they’re trying to do: They don’t plan to negotiate with us,” Dan McNamara, president of the firefighters’ unions, told Reuters.
Orr’s spokesman, Bill Nowling, said the emergency manager won’t decide what to do with labor contracts until he meets with the city’s 48 unions. He described Orr’s actions as a legal formality.
“There’s no declaration that we are walking away from the negotiating table,” Nowling told Reuters. “It doesn’t mean we won’t meet in good faith with the unions.”
Orr’s letter represents a departure from his previous public posture. When the city through Mayor Dave Bing’s office sent a similar notice in early April, Orr seemed to distance himself. His office stated that Orr had no prior knowledge of the letter.
This time, Orr and the city are working in parallel. On the same date that Orr sent his letters, the city of Detroit also filed a motion with the Michigan Employment Relations Commission asking it to rule that state arbitration panels no longer have authority to hold hearings or rule on cases brought by the unions representing Detroit police and emergency medical technicians.
The city also contends in its motion that a 2012 Michigan law governing state-appointed emergency managers automatically suspended Detroit’s duty to bargain with its unions.
Detroit’s unionized police, fire, and paramedics are working under contracts imposed on them last summer by Bing, who cut their pay by 10 percent. Employees also were required to pay 20 percent of their medical costs.
Detroit is running a $100 million annual budget deficit and a state report said it has some $14 billion in long-term debt.
Orr, who formerly worked on the restructuring of auto company Chrysler, was appointed last month by Michigan’s Republican Governor Rick Snyder despite objections from elected city officials.
Additional reporting by Karen Pierog in Chicago; editing by Andrew Hay