Prison guard union's appeal denied

A COMMONWEALTH Court panel yesterday denied an appeal by the city prison guards union of a 2012 arbitration award that resulted in less generous pension benefits for new hires and lower wage increases than the union had sought.

The union, Local 159 of AFSCME District Council 33, argued that the arbitration award was flawed because it took into account the city's financial condition.

But Commonwealth Judge Bernard McGinley wrote in yesterday's decision that the city's ability to pay is applicable in deciding the award, siding with lawyers for Mayor Nutter's administration and the Common Pleas Court decision that was under appeal.

Local 159 president Lorenzo North said he had not yet made a decision on whether to appeal again. The award covered an arbitration period that ended earlier this year, and the two sides are in talks over the current period.

The arbitration award, initially issued in 2012, was a bright spot for Nutter in his struggle to reduce the city's long-term pension costs.

It forced new hires of the 2,200-member union to enroll in a "hybrid" pension plan that combines a limited defined-benefit pension with a 401(k)-style investment.

Nutter has been unsuccessful in attempts to get new hires in the city's four largest unions, where employees have a full defined-benefit pension, enrolled in the hybrid plan.

The issue of whether arbitrators should consider the city's ability to pay - established through a law passed during the city's early 1990s financial crisis - has become contentious under Nutter, who has sought to reduce labor costs with the firefighters union through that provision.

State Rep. John Taylor, R-Northeast Philadelphia, introduced a bill this year that would eliminate the clause from that law, the Pennsylvania Intergovernmental Cooperation Authority Act.

Union officials, many of whom have warred with Nutter for years as he sought to cut labor costs during and after the recession, are supporting the bill.