Members of the American Federation of State, County and Municipal Employees filed suit against the University in federal court Friday, demanding severance pay when the hospital merges with Fairview Health System Jan. 1.
The suit alleges that the University is in breach of its contract with union Local 1164. The contract allows for severance benefits when University Hospital employees are laid off.
Geoff Hahn, president of AFSCME Local 1164, said the University is using the merger with Fairview as a reason not to pay employees severance that they normally would receive if they were laid off. He said employees are being told they will not be laid off because many will soon work at Fairview.
“Our position is that they are having their jobs with the University terminated, regardless of whether they accept jobs with Fairview,” said Marshall H. Tanick, the attorney for Local 1164.
Hahn said he and other union members think that Fairview will lay off some former University employees after the merger. Union members are concerned, he said, because if employees are laid off from Fairview, the severance pay is not as much as what they would have received from the University.
“For a good number of people these are actually fake jobs,” Hahn said. “This is a big scam for the University to get out of our contract.”
The severance package outlined in the current union contract allows for one week of pay for each year employees have worked for the University. If employees have worked at the University for 25 years, then they would receive 25 weeks worth of pay.
Under the current severance package, employees also receive continued health insurance until they reach retirement age.
Tanick said by eliminating the current severance package, the University could stand to save several million dollars.
“I think the University is trying to save money by doing it the way they’re doing it,” he said.
Mark Rotenberg, General Counsel for the University, said the lawsuit is premature because the union and the University are still bargaining over severance benefits.
“The union is not in the position to say what the University will or will not do because we are still bargaining,” he said.
Hahn said the union does not want to negotiate severance benefits because they are already stated in the contract.
“(The University) wants to reopen articles of our contract for re-negotiation,” he said. “If they wanted to make changes in our contract, they should have done that a year and a half ago when our contract was negotiated.”
Rotenberg said he thought a judge would throw the lawsuit out of court.
“The right place to settle this is at the bargaining table, not in the courtroom,” he said. “The University intends to bargain with the union in good faith.”
AFSCME has also filed a grievance with University Hospital Human Resources about the severance issue. Hahn said the grievance cannot be resolved until the union and the University agree upon a neutral arbitrator to settle it.