MBJ Client Victory: Court Upholds Law Mandating Health Care Changes for Public Employees

On April 13, 2011, Morgan, Brown, and Joy achieved an important victory for our client when Massachusetts Superior Court Judge Linda Giles granted the Massachusetts Bay Transportation Authority (“MBTA”) summary judgment in complex litigation brought by various transit unions concerning the Commonwealth’s health care programs.

In Local 589, Amalgamated Transit Union, et al. v. The Commonwealth of Massachusetts, et al., the Court upheld the validity of a landmark state law reorganizing the Commonwealth’s transportation organization, which mandated health care changes for MBTA employees and retirees.  The plaintiffs (various transit unions) sought a declaration that certain portions of the Transportation Reform Act of 2009 were unconstitutional or violated federal statutory protective arrangements.  The challenged legislation transferred current MBTA employees and retirees from their existing health care plan to the Massachusetts Group Insurance Commission (“GIC”) and required a monthly contribution of 20% to 25% of the premium.  These changes took effect upon the expiration of the unions’ most recent collective bargaining agreements, which began to expire July 1, 2010.  By placing active employees and retirees into the GIC and requiring minimum premium contributions, the MBTA  will realize annual savings estimated to exceed $30M, while employees and retirees will receive the same health care as other state employees.

The unions alleged that this transition violated the Massachusetts Declaration of Rights, the United States Constitution, and labor protective arrangements under Federal transportation laws.   In her opinion, Judge Giles explained, “With regard to the [p]laintiffs [Constitutional Argument], the record is devoid of any admissible evidence that the MBTA ever promised, or was authorized to promise, any of its present employees free, unaltered healthcare for life.”  She went on to explain that “plaintiffs are unable to demonstrate an enforceable contractual obligation to unchangeable, free health care benefits, or, if so, a substantial impairment of that obligation by [the Transportation Reform Act], or, if so, the lack of reasonableness and necessity of the impairment.”  Judge Giles granted the MBTA and Commonwealth’s Motion for Summary Judgment, effectively terminating the unions’ claims.  The unions have informed the MBTA that they will appeal the decision.

Judge Giles’ ruling complements the December 24, 2009 decision of Judge Christine Roach, which denied the plaintiffs’ Motion for Preliminary Injunction.  There, Judge Roach held that the unions were unlikely to succeed on their claims and pointed to a lack of irreparable harm, denying plaintiffs’ request to enjoin the enforcement of the statute.

Morgan, Brown, and Joy attorneys Philip BoyleLaurence Donoghue, and Robert Morris represented the MBTA throughout the proceedings.  Mr. Boyle successfully argued in support of the MBTA’s Motion for Summary Judgment at a hearing in Suffolk Superior Court on March 15, 2011.  Attorneys from the Massachusetts Attorney General’s office represented the Commonwealth.