American Federation of Teachers President Randi Weingarten said the bankruptcy court ruling that Detroit is eligible for bankruptcy protection is morally and legally troubling, and her union will be part of an appeal.
U.S. Bankruptcy Judge Steven Rhodes’s Tuesday ruling dealt a major blow to unions, which had argued that pension cuts are protected by a provision in Michigan’s constitution. During his 90-minute presentation outlining his ruling, Judge Rhodes said the power of the federal court superseded that state provision.
“Pension rights are contract rights under the Michigan constitution” and contracts are at risk for cuts under federal bankruptcy law, Judge Rhodes said. The state is one of only seven with constitutional provisions protecting government-worker pensions, according to the Center for Retirement Research at Boston College.
Ms. Weingarten sees it differently. “Pension benefits are deferred wages” that people expected to get and need, she told reporters Wednesday morning at a Christian Science Monitor breakfast in downtown Washington, D.C.