School & District Management

Cancellation of Phila. Teachers’ Contract Ignites Firestorm

By Benjamin Herold — October 27, 2014 6 min read
Marc Gosselin, center, the principal of Anna L. Lingelbach Elementary School in Philadelphia, started the year with a discretionary budget of $160. The district’s board recently canceled its contract with the teachers’ union to send more resources to schools.

Three weeks after the School Reform Commission that governs this labor-friendly city’s public schools activated its “nuclear option,” the shock waves are still being felt around the country.

Beset by an epic budget crunch, the SRC unilaterally canceled its expired contract with the Philadelphia Federation of Teachers earlier this month and declared that the union’s 11,500 members will begin paying a portion of their health-insurance costs.

Observers across the political spectrum view the action as the latest salvo in an ongoing national battle over the collective bargaining rights of public-sector workers. In recent years, teachers and other public employees from Louisiana to Wisconsin have found themselves on the defensive as management has sought to roll back benefits and job protections.

“There’s a drumbeat across the country that this is the way to deal with your public-sector unions,” said Linda Kaboolian, a public-policy lecturer at Harvard University.

“The people who are advocating this kind of aggressive stance sense that labor is on the run,” she said, “and they sense that private taxpayers can be roused by highlighting the difference between their own insecurity and the benefits enjoyed by public-sector workers with a collective bargaining agreement paid with tax dollars.”

But even against that backdrop, the SRC’s actions present a dramatic new threat to labor, experts on such issues say. Never before in recent memory has an appointed body, acting without clear legislative authority, sought to rip up a contract and impose new costs on public workers.

Educators, parents, students, and community and labor groups rally outside the School District of Philadelphia headquarters earlier this month to protest a move by district officials that would require members of the Philadelphia Federation of Teachers to pay some health-insurance costs. Crippled by deep budget cuts, the city’s School Reform Commission says the action is necessary to send much-needed resources to schools.

“I think it can set an important precedent,” said Daniel R. DiSalvo, a senior fellow at the Manhattan Institute, a right-leaning think tank in New York City.

“If a big, ‘blue’ city like Philadelphia can be pushed to do this, people are definitely going to pay attention,” he said.

City and district officials are adamant that the school panel’s action was driven not by ideology or politics, but by money.

In recent years, the beleaguered district has closed schools, slashed administration, extracted steep concessions from unions representing principals and blue-collar workers such as janitors, persuaded city leaders to increase taxes, and pleaded—mostly unsuccessfully—with Pennsylvania’s governor and lawmakers for more state funding.

The city’s schools opened in September able to offer only minimal supplies and supports to 128,000 students, 87 percent of whom qualify for free or reduced-price school meals.

Schools such as Anna L. Lingelbach Elementary teetered on the brink. The administration there—reduced in recent years to just a principal, secretary, and part-time non-teaching assistant to serve 373 students in grades K-8—got just $160 to cover supplies, textbooks, technology, and enrichment activities for the year.

The system was also facing a shortfall of more than $70 million for next school year. Officials had few remaining places to cut, other than teacher salaries and benefits, by far the largest nonmandated expense in the district’s $2.3 billion budget.

The district’s contract with the PFT had expired in August 2013. With negotiations at a standstill after 21 months, the SRC played its final card.

The vote to cancel the PFT’s contract and require members to pay between 5 percent and 13 percent of the cost of their health-care premiums was unanimous. The three appointees of Gov. Tom Corbett, a Republican, and the two appointees of Democratic Mayor Michael A. Nutter—including Marjorie Neff, a retired educator and former PFT member— were all in favor.

Officials say the move will generate almost $50 million in recurring annual savings, most of which will go directly into classrooms.

“What the SRC has done was necessitated by the dire fiscal situation facing city schoolchildren,” Mark McDonald, a spokesman for Mr. Nutter, who grudgingly supported the commission’s move, wrote in an email. “The action was not part of any broad design.”

Broader Implications?

Because public-sector labor relations are mostly governed by state law or municipal ordinances, each fight over collective bargaining rights is its own animal, experts say.

But most share a common thread: Conservative elected officials have consistently sought to enact legislation that will give public managers the power to dismantle what Mr. DiSalvo of the Manhattan Institute described as “structures that over time have become skewed in favor of union interests.”

Unions on the Defensive

Education experts and labor leaders can recall no neat precedent for recent events in Philadelphia, where the appointed School Reform Commission voted to unilaterally cancel its expired contract with the Philadelphia Federation of Teachers and impose new health-care costs on the union’s 11,500 members. But observers say the SRC’s decision echoes other actions taken in recent years by states and school boards to control rising personnel costs and rein in the political influence of public-employee unions, especially those representing teachers.

Buffalo, N.Y.
In 2003, New York state lawmakers set up the Buffalo Fiscal Authority and vested it with the power to impose wage and hiring freezes on public employees to help the city and school district out of a fiscal crisis. School employees, including teachers, were denied a 2 percent pay raise they had negotiated into their contract.

The Buffalo Teachers’ Federation led seven school-employee unions in contesting the action. Federal district and appeals courts rejected the unions’ lawsuit, and in 2007, the U.S. Supreme Court refused to hear the case.

New Orleans
In 2005, following Hurricane Katrina, the Orleans Parish school board fired 7,500 unionized teachers and other employees en masse after losing control over most of the city’s schools. The Recovery School District, created by state officials, relied largely on charter operators to manage schools.

A group of terminated Orleans Parish employees sued, arguing that state tenure law required creation of a recall list and rehiring of teachers based on seniority. The plaintiffs won class certification and asked for compensation for lost wages and benefits, the total sum of which has been estimated to be as high as $1.5 billion.

The employees won their initial suit, in 2012, and an appeal earlier this year. The Louisiana Supreme Court is now considering the case.

Tennessee
In 2011, Gov. Bill Haslam, a Republican, and the legislature enacted a law abolishing the right of teachers in the state to bargain collectively, part of a national wave of similar efforts that year, most notably in Wisconsin.

The Tennessee law replaced collective bargaining with “collaborative conferencing,” in which teacher representatives, rather than union leaders, negotiate contract terms with school boards. The law also prohibited payroll deductions of union dues if that money was to be used for political purposes.

Normandy, Mo.
Earlier this year, state education leaders dissolved the Normandy district and replaced it with a new, state-run entity known as the Normandy Schools Collaborative. All existing teacher and administrator contracts were voided. The system lost its accreditation in 2013, after years of poor academic performance and after it was nearly bankrupted by a controversial state law that forced the district to pay for students to transfer to schools in an accredited district.

—Benjamin Herold

Some of Pennsylvania’s neighbors in the Rust Belt and Great Lakes regions, for example, have squarely targeted the collective bargaining powers of public employees, including teachers.

The most prominent example came in 2011 in Wisconsin, where Gov. Scott K. Walker, a Republican, pushed through Act 10, which severely curtailed the power of public workers to negotiate. A similar law was enacted in Ohio that same year before being overturned by voters. In 2012, Indiana and Michigan passed “right to work” laws, prohibiting unions from requiring nonmembers to pay fees.

By comparison, Pennsylvania has been “quite mild” in its efforts, Mr. DiSalvo said, mostly pursuing one-off legislative and policy strategies.

The most important turned out to be the laws and amendments that created the School Reform Commission more than a decade ago.

That law prohibits city teachers from striking. It frees the SRC from traditional school boards’ obligation to negotiate with unions over such issues as layoffs, job-placement rules, and teachers’ preparation time.

Lawyers for the SRC argue that the law also goes much further, indirectly giving the commission the power to cancel contracts it can no longer afford.

For more than a decade, the commission chose not to test such authority.

Then last spring, the SRC flexed its muscles, announcing along with Superintendent William R. Hite Jr. that it would no longer consider seniority rights in hiring and staffing assignments. Some hoped that action would help persuade Gov. Corbett and the Republican-controlled legislature to increase funding to city schools.

But the best local officials could wangle from state lawmakers this year was the right to impose a $2-per-pack cigarette tax on Philadelphians, which is not projected to yield nearly enough revenue to balance the district’s books.

Conflicting Interests

The Philadelphia Federation of Teachers has now challenged the School Reform Commission’s cancellation of its contract in court. The union won a preliminary injunction that temporarily prevents the imposition of health-insurance-premium payments from moving forward.

More than 50 labor unions have denounced the commission’s action, and a number of community and activist groups—some funded by the PFT and its parent union, the American Federation of Teachers—have also demonstrated in support of teachers.

But for many city residents, the reaction has been more complicated.

The new reality is that most Americans contribute to their health-care premiums. And the influx of money that the contract change would bring into Philadelphia schools—roughly $46,000 in the case of Lingelbach Elementary, where 88 percent of students are African-American and money has been so short that the new principal, Marc Gosselin, could not afford to mail letters to parents introducing himself—is welcome relief.

Ms. Kaboolian of Harvard said such tensions are no accident.

Efforts to weaken public-sector unions, she said, “are dependent on getting private taxpayers to see public employees as some kind of leech.”

Regardless of the SRC’s intent, agreed Mr. DiSalvo of the Manhattan Institute, its decision is “part of a much bigger story.”

The battle over public-sector collective bargaining rights used to divide Democrats and Republicans, he said. But the events in Philadelphia, he argued, demonstrate how such fights, when they occur in K-12, might instead pit poor and minority families against teachers’ unions, splintering two key factions of the traditional liberal coalition.

“The friction now is really inside the Democratic Party,” Mr. DiSalvo said. “I think that in big cities where public-employee unions are still relatively strong, we’ll continue to see conflict over these issues.”

A version of this article appeared in the October 29, 2014 edition of Education Week as Repeal of Phila. Teachers’ Contract Ignites Furor

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