The issue of whether pension multipliers can be reduced during active employment without an employee’s consent has been making its way through the Wisconsin court system. Both the Milwaukee County Circuit Court and the state Court of Appeals have so far sided against the county and its efforts to reduce pension multipliers agreed upon in an employment contract. The Wisconsin Supreme Court heard this case regarding employment rights on the first of October. One justice has already stated that the case hinges on the wording of relevant statutes and the employment contracts. Another justice has suggested that an agreement between the union and the county trumps the individual’s disagreement.
The plaintiff in the case was hired with a multiplier of 1.5 percent, and this was later increased to 2 percent applied retroactively for employees choosing to remain on the job. The issue is an ordinance that set the multiplier to 1.6 percent. The county applied the rate to all employees instead of new hires and those with contracts set at or below the new limit.
The attorneys are largely focusing on the issue of vested rights. The county argued that employment rights in the contract are not vested until earned. The defendants made the case that contracted rights are meaningless unless the employer is required to fulfill the agreed upon obligation.
When employees enter into a contract, they agree to work for a specified time period. In this case, the employer is attempting to change the terms of the contract without an employee’s consent. If the action stands, it may open the door to other employers presenting an attractive contract and removing the benefits that swayed the potential employee into signing it. When employee rights are harmed through an employer’s actions, the only remedy may be through court action with the assistance of an experienced attorney.
Source: Courthouse News Service, “Wisconsin Supremes Hear Pension Arguments“, Molly Willms, October 02, 2014