Pyle Rome Partners Win Unanimous SJC Ruling Protecting the Right of SEIU, Local 509 to Challenge Privatization of State Jobs

On Friday, August 15, 2012, the Massachusetts Supreme Judicial Court issued a unanimous decision affirming that SEIU, Local 509 has direct standing, on its own behalf, to challenge privatization decisions by state agencies when those agencies fail to follow the statutory pre-contracting requirements that give Unions representing state workers the opportunity to take steps to save their members’ jobs.

The case stemmed from the 2009 decision of the Department of Mental Health to contract out certain screening, assessment, and case management functions that were historically performed by DMH employees represented by Local 509. Deciding for itself that the contracts were not privatization contracts, DMH failed to follow any of the pre-contracting requirements set forth in the so-called Pacheco Law, which deprived the Union of the chance to take steps to retain the work for its members. One hundred represented case managers were laid off during that fiscal year.

Upon learning of the unlawful contracting out, the Union notified the Auditor of the Commonwealth and requested an investigation. After a thorough review, the Auditor agreed that the contracts were privatization contracts that were entered into in violation of the Pacheco Law, but the State took no action to correct the matter. Thereafter, Local 509 filed suit in the Superior Court, arguing that the contracts must be nullified because of DMH’s failure to comply with the law. However, the trial court dismissed the case based on a finding that the Union itself did not have the right to bring this claim in court.

In an appeal conceived and supervised by Kate Shea; researched and briefed by Ian Russell and Shea; and argued in Court by Al Gordon O’Connell, the Supreme Judicial Court reversed the trial court’s order of dismissal. In reaching its decision, the SJC upheld the principle that Unions have direct standing to sue for relief under the Pacheco Law because the law provides substantive rights directly to Unions and because the failure of the State to comply with its statutory obligations caused direct harm to the Union — and not merely harm to the represented employees. Using language with ramifications outside of this specific context, the Court reiterated that a Union is not merely the sum of its members and held that a Union itself suffers cognizable harm when it loses the opportunity to represent and bargain on behalf of its members.

The case will now return to the trial court, where the Union will press its claim that the contracts should be nullified.