LTC 292-2005 Update on McKinnon et. al. lawsuit
C9 MIAMIBEACH
OFFICE OF THE CITY MANAGER
NO. 292-2005
LETTER TO COMMISSION
TO:
Mayor David Dermer and Members of the City Commission
FROM:
Jorge M. Gonzalez, City Manager \.y-~
November 30, 2005 0
Update on McKinnon et al. lawsuit
DATE:
SUBJECT:
The purpose of this LTC is to update you on the outcome of the State Circuit Court's
ruling in favor of the City of Miami Beach in the McKinnon lawsuit. The City was
granted summary judgment.
This lawsuit was filed in 2001 by a group of classified employees, including Richard
McKinnon, who is presently president of Local 3178, Communications Workers of
America (CW A). The City and the Retirement System for General Employees were
named as defendants. The lawsuit was based on a number of ordinances that were
passed by the City Commission in 1993 and 1994. These ordinances, among other
things, increased the employee contribution rate to the Retirement System from 8
percent to 10 percent. The lawsuit claimed that the City was required by its Charter
and by state law to submit the ordinances to a referendum before they could
become effective. The ordinances were not submitted to a referendum.
The lawsuit was certified as a class action. The Class consisted of all participants,
actively employed or retired, in the Retirement System who had contributed at a rate
of 10 percent since 1994. The lawsuit sought a refund of all contributions in excess
of 8 percent made by employees since 1997. Very roughly, this could have
amounted to about 2 percent of payroll for all classified employees since 1997.
The City filed a claim in this same lawsuit against the three general employee
unions because the unions all had ratified contracts in which they had bargained
and agreed to the 10 percent contribution rate. The City's claim against the unions
would have come into play only in the event the Plaintiffs won the lawsuit.
The facts in this case were never in dispute. The City made a number of legal
arguments against the Plaintiff Class Action theory, including: (1) that the claims
were barred by the statute of limitations; (2) that, because the unions had agreed to
the 10 percent rate, the covered employees could not now go back on those
agreements; (3) that, because the Florida Constitution protects collective bargaining
as a fundamental right, any requirement by state or local law permitting an electoral
veto of collectively bargained agreements would be pre-empted by the Constitution;
(4) and other arguments.
These issues were briefed by the parties and were argued before the Court on two
occasions, most recently on November 22, 2005. After hearing arguments from all
parties on that day, the Court ruled orally in favor of the City. Judge Gisselle
Cardone Ely ruled that all members of the Class were barred by the statute of
limitations. She also ruled that all members of the class whose positions were
covered by bargaining units could not now challenge the 10 percent contribution
rate to which they had agreed through their unions.
The parties have been directed to submit a proposed order embodying the Court's
decision. When that order is rendered, the Plaintiff Class will have 30 days within
which to file an appeal, should they choose to do so.
If you should any further questions, please feel free to contact me directly.
Thank you.
F:llABOlLABORRELlLabor RelationslCommission LetterslL TC McKinnon lawsuit update.doc
-:If!l.j J ,.... C' '!\I."J"'" ~ I j--'
..:J-lU _ - ~ ..:.~!~ '):1 };;.;\ ,:J ~- ,") /\ J. i -,..,,'
22 :6 ~riJ DE 110N SO
031\1383