“SB 0001… constitutes a unilateral attempt to modify public employees’ employment agreements with the State, even with respect to those employees who have already retired… A unilateral reduction of pension rights is unconstitutional, even if coupled with an equally unilateral benefit that the [Illinois] General Assembly imagines retired and active public employees might theoretically find desirable. Accordingly, SB 0001 and other legislation that similarly seeks to unilaterally modify the pension rights of retired public employees would fail constitutional scrutiny (4)…
Commentary on SB 1, Pt. B (Revised)
Though perhaps most contracts have an element of duress, where one side has something the other has no legal right to, Illinois legislators will be breaching a contract by forcing public employees to make a choice to diminish their originally-vested and paid-for guarantee. Legislators will be attempting to break an enforceable contractual promise, one that is bilateral and emphasizes an agreement between the State of Illinois and its retired and current public employees as to their future rights and benefits.
The courts will likely find this “illusory promise [of health care]… grossly inadequate and accompanied by unfairness because the employer [the state] is using its superior bargaining position to take undue advantage of the employee and substantially impaired the employee’s exercise of free will” (250 Ill. App. 3d 423, 620 N.E.2d 1328, 1st Dist. 1993: footnote to Is Welching on Public Pension Promises an Option for Illinois? An Analysis of Article XIII, Section 5 of the Illinois Constitution by Eric M. Madiar, pg. 62).
It is a diminution of the public employees’ contract to receive less than what the original vested right and benefit guaranteed. A choice between the COLA and uncertain state-sponsored health care offers public employees and retirees no ethical and lawful alternatives except to consent to the General Assembly’s demands to make an illicit choice.
Consider that “A contract is a promise or set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty (Professor of Law, Emeritus, Claude D. Rohwer and Professor of Law, Emeritus, Anthony M. Skrocki, Contracts in a Nutshell). Based upon both past and current legislators’ dereliction of duty to pay for the public employees’ constitutionally-guaranteed pensions, a court of law could find that the Illinois General Assembly has been and will be currently in “violation of any standard of good faith and fair dealing.”
Any modification of the “Pension Clause” should be seen as “the result of a violation of fair dealing,” as an accommodation for “only” the General Assembly who have stolen money from the public pension systems for decades and are, thus, “avoiding a pre-existing duty rule” (Rohwer & Skrocki).
“The significance of any modification of the “Pension Clause” is “the extent to which [public employees] will be deprived of the benefit [they] reasonably expected; the extent to which [public employees] can be adequately compensated for the part of that benefit [COLA, for instance] of which [they] will be deprived; […and] the extent to which the behavior of the party [Illinois General Assembly] failing to perform or to offer to perform [or] comports with standards of good faith and fair dealing” (Rohwer & Skrocki).
The promise to honor commitments and pay for the public employees’ pension is of “sufficient importance” to all citizens of Illinois. To pass pension reform is “an unequivocal manifestation of intention not to perform… legal duties…under a contract… When there is a duty of immediate performance of a promise, failure to perform in full is a breach” (Rohwer & Skrocki).
Though many legislators would rather dispute one of the Bill of Rights contained in both the Illinois and U.S. Constitutions instead of addressing the “real causes” of the state's budget deficits (the pension ramp, the pension debt, and the state’s insufficient revenue), legislators should reexamine the concept of justice and what lawfulness demands: that people must keep their covenants with one another. In particular, no justice is accomplished when diminishing public employees' earned benefits and rights because of decades of legislators' irresponsibility, corruption and incompetence.
Let us not forget how the State of Illinois has arrived in this financial predicament. The state’s unfunded liability has increased to $96 billion (and it is increasing). Forty-six percent of that amount ($44.2 billion) is the result of legislators’ “diversion” of money (a polite euphemism for stealing) from the public pension systems to pay for other services without increasing taxes.
All citizens of the State of Illinois are vulnerable because of the fiscal morass caused primarily by past incompetent, unethical and negligent General Assemblies, but also because of today’s scheming Illinois legislators who are attempting to seize political opportunity via “pension reforms” that violate a contract.
There should not be any contract modification of the retirees’ and current public employees’ guaranteed, earned benefits. To respect a contractual promise as a legitimate right and moral concern is at stake for all retirees and public employees, as well as for every other citizen in Illinois.
For more constitutional analyses, please also read: