A state appellate court on Monday gave Mayor Andre Sayegh’s administration a legal victory in a multimillion-dollar battle over the medical benefits the city provides its police officers and firefighters.
The decision will affect the health care for more than 1,000 municipal public safety workers and retirees.
At issue was the Sayegh administration’s 2018 decision to switch all municipal workers from a costly self-insurance program for employee health coverage to the state benefits plan, a move city officials said saved about $20 million per year.
Monday’s appeals court decision negated previous rulings by a state arbitrator and lower courts. The lower courts had said the city had to resume the self-insurance system because Paterson violated its police and fire employment contracts by making the change without union consent. The unions had argued that state plan was not as good as the benefits called for in their contract.
The appeals court cited Paterson’s “distressed financial state” and determined that the arbitrator and trial court made errors in ordering the city to go back to self-insurance.
The appeals court decision did not address whether the healthcare change violated the labor contracts, but simply said the proposed fix was flawed. The appeals court recommended the city set up a reimbursement system to address the disparities in the two medical plans.
“We have received the appellate division’s decision and are reviewing it,” said Mayor Andre Sayegh. “We are obviously pleased with the overall outcome. We value all of our unions and want to provide the best health, prescription, and dental care possible within the confines of our budget.”
Mark Rushfield, a lawyer for the police unions, said he would be consulting with his counterpart for Paterson’s firefighters for a possible appeal to the state Supreme Court. Rushfield said he was shocked the appeals court cited the city’s fiscal problems as the basis for a decision in an arbitration contract case.
Rushfield said the decision represented a “slippery slope,” in which fiscal factors could be cited by cities as the basis for changing other aspects of union contracts.
“It’s no different than if the city unilaterally decided to cut wages by 50%,” Rushfield asserted.
Rushfield also asserted that there are flaws in the appeals court’s proposal for a health care reimbursement system to compensate for the difference in the state plan and the defunct city self-insurance. He argued that the reimbursement proposal would end up costing the city all the money it hoped to save by switching plans.