For the last five years, the City of Houston and its firefighters have been locked in litigation over the firefighters’ pay and pension benefits. There were three cases. The Texas Supreme Court handed down decisions in two cases last week, which dealt with how much firefighters should be paid. In a third case, in which firefighters challenged the constitutionality of the 2017 changes to their pension plan, the Supreme Court recently turned down hearing that case, effectively ending that challenge.
Under Texas law, cities can adopt collective bargaining for police and firefighters. Houston has done so. Once collective bargaining is in place, there is a Texas statute (Texas Local Gov’t Code, Chp. 174) that sets out a procedure for how collective bargaining is to be conducted and critically, how disputes will be resolved.
Ultimately, if the union and the city reach an impasse, the statute empowers the court to set the compensation based on standards found in the statute. The statute also specifically preempts any other law, including any city ordinance, that conflicts with the statute. This statute is at the heart of the two cases recently decided by the Supreme Court.
When the firefighters were unable to reach an agreement with the City in 2018, they filed a lawsuit under Chapter 174, asking the court to resolve the dispute. In that case, the City took the position that the statute was unconstitutional, an argument which, in my opinion was spurious, and was rejected by the trial court.
However, Texas procedural rules allow governmental entities to appeal such decisions before the case is tried on the merits. This is called an interlocutory appeal. Because the appeals courts move like molasses in the winter time, an interlocutory appeal can delay the resolution of a case for years, which is what happened to the firefighters’ case to enforce Chapter 174.
Out of frustration with the City’s refusal to negotiate in good faith and the delay in having their case heard, the firefighters took the unusual step of going to Houston voters and asking them to adopt an ordinance which would require the City to pay firefighters the same as police officers, which is substantially higher. That effort resulted in the now infamous Proposition B, which the Houston voters approved by nearly a 2-to-1 margin.
After Proposition B passed, the City filed suit seeking to invalidate it on the basis that it was preempted by Chapter 174. This put the City in the contorted position of arguing that Proposition B violated Chapter 174 in one case and that Chapter 174 was unconstitutional in the other case. The obvious inconsistency in the City’s position was not missed by the Supreme Court and it consolidated the two cases, I believe, to deal with that inconsistency during the oral arguments.
In its decision, the Supreme Court ruled that Chapter 174 is constitutional. As a result, the City will be forced to go to trial on the merits of what the firefighters should be paid. The Court also found that Proposition B violated the preemption provisions of Chapter 174 and, as a result, was invalid. So, after five years of litigation and millions in legal fees, we are back at square one and the City and the firefighters will now will go to trial to determine their compensation.
It is hard to know how much the City may ultimately owe the firefighters. That statute provides only the general guidance that the court should set the fire fighters pay so that it is “substantially equal to compensation that prevail in comparable employment in the private sector.” That obviously allows the trial court substantial latitude.
The union will offer evidence that City firefighters are paid about 40% below similar jobs in the private sector. That would cost the City something in the range of $100-150 million per year. Unfortunately, because of the City’s delaying tactics, the dispute dates back to 2018. So, if the firefighters prevail, the City might owe back pay of something in the $500-750 million range. If you add interest and attorneys’ fees, the total tab could approach one billion dollars.. That would be financially catastrophic for the City. That is probably a worst case scenario, but the amount is going to be substantial in any case.
But a trial on the merit could easily drag on for another year and either side could appeal the trial court’s determination. So, the bottom line is that the pay case is unlikely to be resolved during the remainder of Turner’s term and all of this will be dumped in the lap of the new mayor.
Hopefully the next mayor will be able heal the toxic relationship between the firefighters and the City and will be able to make a deal with the firefighters that will not create too severe of a financial hardship on the City and its taxpayers yet makes the fire fighters feel they are fairly compensated. It would certainly be nice not be in a legal battle with the men and women that come to come to our aid in an emergency.