August 10, 2013
By Neal Tepel
New York, NY – The Municipal Labor Committee (MLC) today filed in the Supreme Court of the State of New York a breach of contract action against the City of New York and Mayor Michael Bloomberg stating that the defendants have violated a validly enforceable agreement, and to obtain injunctive relief to prevent the City from moving forward with a planned Request for Proposal to change health benefit services for City employees. The MLC representing approximately 500,000 active and retired New York City workers.
"The City's rush to release the RFP has been a deeply flawed process," said New York City Municipal Labor Committee Chair Harry Nespoli. "First, the City's unilateral action, without including the views of the City workers who receive those services in the decision-making process, goes directly against previous agreements. Second, making a $7 billion spending decision for services beginning six months after the Mayor's last day in office prevents any accountability for this important decision.
"We support the City's efforts to reduce healthcare costs, but there is a right and wrong way to go about it. As recently as 2009 the MLC came forward and helped the City realize $400 million in healthcare savings. Now, instead of sitting down and listening to us in good faith, the City is going it alone and pretending we are standing in the way.
"The truth is that for months the City and outside consultants secretly crafted an RFP without our knowledge. Then in June, with little warning, they dropped a 1,000-page highly-technical RFP on us and demanded we sign off without giving us sufficient time to review.
"This isn't Wisconsin. In New York, we don't unilaterally abolish the negotiating rights of unions.
"While we remain willing to continue our negotiations with the City, they have told us in no uncertain terms that they plan to go ahead without our agreement and willfully disregard a binding agreement. As a result, we have had no choice but to ask the courts to intervene."
The City's stated plan to unilaterally issue the Request for Proposal is in direct violation of "Agreement Relating to Procurement of Employee Health Benefit Contracts" dated July 10, 1992 that was signed by the City and the MLC. The agreement stated that the City and the MLC "shall jointly continue to participate in all aspects of the procurement process by which the choice of vendors of collectively bargained health benefits shall be made."
The City, without the MLC's participation or knowledge, worked with an outside vendor, Aon Hewitt, for more than six months to create a voluminous RFP soliciting proposals "to provide health benefit services.for the various components of the City's Health Benefits Program." Only in April was the MLC first informed and only in June did the MLC first receive a copy of the 1,000-page RFP.
Since June, the MLC has participated in meetings with the city to alert them to some major red flag issues critical to health benefit coverage contained in the RFP. However, the MLC still has major concerns regarding the content of the RFP – how it impacts prescription drug coverage and overall quality of care – and has informed the City that there is still no agreement on issuing the RFP.
Because the City has stated publicly that it plans to issue the RFP next week, the MLC has asked the Court for a Temporary Restraining Order and other injunctive relief.