Flailing Wisconsin teachers union suit tossed out of court

Nov 4, 2014 by

Victor Skinner –

MILWAUKEE, Wis. – Gov. Scott Walker’s 2011 Act 10 legislation gave public school officials the power to manage their budgets and operations without employee union interference.

Act-10-October-2014_resizedDistricts administrators across the state used the new freedoms to rework employee health insurance, retirement benefits, and other expenses that were previously subjected to the collective bargaining process. They used the massive savings to weather the recent recession and recalibrate school budgets for a more sustainable future.

That’s precisely what officials in Wisconsin’s Whitefish Bay school district hoped to accomplish when they made a slight modification to employee retirement health insurance coverage in the spring of 2012.

Instead of paying 92 percent of health insurance costs for retiring teachers for 10 years, or until Medicare benefits took over, the district capped the benefit at 2012 rates, which required retirees to cover future rate increases. It was part of a plan to phase out the unaffordable benefit entirely for future employees.

The Whitefish Bay school board acted completely within its legal rights under Act 10 when it made the insurance changes.

But that didn’t stop the Wisconsin Education Association Council (WEAC), the state’s largest teachers unions, from challenging the new policy in court.

Not only did WEAC lawyers sue the school district over the benefit change, they sued the district’s human resources director Mark Kapocius individually, alleging he was “personally liable for damages suffered by Plaintiffs,” according to court files.

Kapocius, who is also a municipal judge in southwest Milwaukee suburb of Greendale, said it was obvious the lawsuit “was dead in the water as a matter of law,” but “on top of that, I think it was done out of spite, and frankly for other political motivations.”

The case, he said, is an example of the union’s pattern of pursuing “sympathetic cases in friendly courtrooms to advance their interests, more so for its leadership than its rank-and-file members.

“I think it’s really what WEAC is now,” Kapocius said. “It’s a legal department grasping at straws.

“It’s a desperate organization.”

Retirement change

Following the implementation of Act 10, the Whitefish Bay Board of Education sent a notice to employees that the retirement health insurance benefit would likely go away in the future, but those close to retirement would face minimal changes.

“It was a very rich benefit relative to the market, and that was the problem,” Kapocius said, adding that coverage cost around $17,000 a year for a family plan. “The district wasn’t going to save a ton on the front end, but reduced their liability down the road.”

The intent was to shift from a defined benefit plan to a defined contribution plan, “so we could tell what our expenses were going to be” in the future without attempting to predict rate increases, he said.

As board members looked into the issue, eight teachers requested retirements, and Kapocius sent letters informing them that an ongoing board study into benefit costs wasn’t yet complete, but likely would result in a cap on post-retirement health insurance “not to exceed the 2011-12 rates,” according to the letter.

“It is understood that retirement applicants are very interested in Board action on their requests. However, the Board would like to see the outcome of the study prior to making any decision about employee retirements,” Kapocius wrote on March 7, 2012.

“In an effort to address employee and Board concerns in a timely manner, we have developed the following proposal. If you would be willing to agree that, as a retiree, you are eligible to remain on the District’s health insurance plan, at premiums not to exceed 2011-12 rates, and any increases beyond the 2011-12 rates would be borne by the retiree, then the Board will act upon your request on March 21, 2012.”

Four retiring employees agreed to the terms without issue, “happy the board kept intact largely” the health insurance benefit, Kapocius said, but the other half objected, and sent in signed agreements with hand-written conditions. School officials required signed copies without conditions, and the teachers complied.

A week before the board approved the retirements, WEAC lawyers sent a threatening letter to board members and Kapocius.

“Further be advised, that a purported discretionary authority to refuse to accept the requested retirement benefits if our members decline to accept reduced benefits as Mr. Kapocius advised Ms. Kim Provencher, UniServ Director (union representative), is legally indefensible,” WEAC legal counsel Randall R. Garczynski wrote March 15, 2012.

“Finally, if the thinly veiled coercion of conditioning acceptance of retirement applications upon the surrender of benefits to which professional staff are entitled to and have relied upon in planning their retirement persists, the Board risks litigation of this issue by (Wisconsin Employee Benefits Advisors/ WEAC).”

When the district didn’t acquiesce to WEAC’s demands, the union made good on its promise.

Garczynski filed a lawsuit on July 1, 2013 on behalf of four teachers and the local teachers union against the Whitefish Bay Board of Education, and Kapocius specifically.

“There was no case law to support their case,” Kapocius said. “It really was ridiculous.”

“Even the judge was offended they named me in the lawsuit.”

The bulk of the union lawsuit relied on the language of the district’s policy handbook, which still contained the old retirement benefit language. District officials changed the handbook language at the same time they approved the teachers’ retirements, and union lawyers argued that constituted a breach of contract.

“The acts of Kapocius, the Board and the District have damaged Plaintiffs, and continue to damage Plaintiffs each month they are required to pay premiums for group health insurance in excess of those set by the District Handbook and in force and effect at the time they made application for retirement by February 1, 2012,” according to the lawsuit.

WEAC also alleged “tortious interference” by Kapocius.

The lawsuit alleged “the acts of Kapocius interfering with Plaintiffs’ contract rights were intentional,” and he was “personally liable for damages suffered by Plaintiffs.”

It called for compensatory damages for the insurance premiums above the cap, interest, an order directing the district to reverse its benefit change, and attorney fees.

On Monday, Sept. 15, 2014, Milwaukee County Circuit Court Judge Christopher R. Foley dismissed the case in its entirety.

Kapocius wasn’t the least bit surprised by the ruling, and the whole thing seemed to be the union’s attempt to retain control through litigation following Act 10, a trend that’s also impacted other districts around the state.

“I think there was a lot of bluster and WEAC thought they could intimidate some of these boards or administrators,” Kapocius said.

The experience was especially disappointing as a former WEAC member, he said.

“When I was a counselor, I was paying over $1,000 per year in membership dues,” he said. “For years I paid into WEAC … and frankly they burned any bridges they had with me.”

WEAC thrives on an adversarial relationship between school staff and administrators, and Act 10 has made it increasingly harder for union bosses to justify their existence, Kapocius said.

He thinks that’s a good thing.

“Things are … pretty positive, and I think that also weakens their value,” he said.

via Flailing Wisconsin teachers union sues school HR director ‘out of spite’ – and gets tossed out of court – EAGnews.org.

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