A new law in the state of Rhode Island overhauling its pension plan is the focus of a dispute between the State and five public sector unions representing police, firefighters, teachers, and other government employees. The mediation will be handled by the Federal Mediation and Conciliation Service. Allison Alcasabas (partner) and Annemarie Jones (associate) from our New York office report on this development.
The unions claim that the State breached a contract when it passed the pension overhaul law, which amongst other things, raised the age at which retirees are eligible for pension benefits, suspended cost of living adjustment increases for current retirees, and changed the pension plan from a defined-benefit plan to a defined-contribution plan. The State claims that the retirement system is not a contract, and that it may change the terms of the retirement system in its discretion. The unions counter that the contract is implied in law.
Rhode Island’s legal team includes noted U.S. litigator, David Boies. Among other headlining litigation, Mr. Boies represented former Presidential candidate, Al Gore, in his court battle over the disputed Florida electoral vote in the 2000 Presidential election against incumbent, George W. Bush; represented the US Department of Justice in its antitrust suit against Microsoft; and was part of the legal team that worked to overturn the state of California’s ban on gay marriage. Attorneys for both sides must report the results of the mediation in court on 1 February 2013.