A federal judge on Thursday threw out a wage freeze imposed on Nassau County workers by a financial control board in 2011, in a decision that could force the county to repay tens of millions of dollars in back wages to union employees.
U.S. District Court Judge Leonard D. Wexler in Central Islip found that the Nassau Interim Finance Authority's power to suspend pay hikes and annual step increases expired four years ago.
Wexler delayed execution of his decision pending appeal. NIFA chairman Ronald Stack said the control board will take the case to the U.S. Court of Appeals, "confident that the continuing validity of its wage freeze power will be upheld." County Attorney John Ciampoli said he was reviewing the ruling.
NIFA is still expected to extend the wage freeze, which will expire March 23. Nassau Comptroller George Maragos' office calculates the freeze has saved the county $80 million through 2012 -- money that would have to be repaid if the board loses its appeal. Nassau continues to struggle to balance its books.
Nassau Police Benevolent Association president James Carver noted that he had proposed a renegotiated PBA contract that would have dropped the lawsuit while saving future police costs, but neither county officials nor NIFA acted on it. Some Nassau officials who had heard the terms said they had been unsure of the deal's savings.
"The way I'm looking at this, they had no right to freeze wages and we should be owed everything back," Carver said of Wexler's decision.
The ruling came in a lawsuit filed by the PBA, the Nassau Detectives' Association and Superior Officers Association after NIFA froze wages when it took control of the county's finances in 2011. Similar lawsuits by the Civil Service Employees Association and correction officers union are waiting to be decided by Wexler.
"We have made the same argument on the timing issues; we expect the same result," CSEA president Jerry Laricchiuta said.
The unions argued that freezing contractual salary increases was unconstitutional and violated state labor law. They also contended that NIFA's authority to suspend wage increases ended in 2008 when the "interim finance period" described in the state statute expired.
The state legislature created NIFA in 2000 to monitor Nassau's finances following the county's near-bankruptcy in 1999. Under the law, NIFA was to continue monitoring the county's finances after the interim period expired, but with fewer active powers such as borrowing on Nassau's behalf.
Wexler did not rule on any of the arguments against the freeze except its timing. He agreed with the unions that NIFA's authority to freeze wages ended when the interim finance period ended.
Wexler noted that the law states that the wage freeze must end by the conclusion of the interim finance period. To interpret the law, Wexler said, "the court begins with the plain language of the statute." That language, he said, "unambiguously limits NIFA's power to impose a . . . wage freeze to the end of the interim finance period -- which period ended in 2008."
The decision immediately sparked partisan wrangling in a county election year. "The pay freeze was the only savings in Mangano's budgets. With that gone, boy, what a deficit," said Legis. David Denenberg (D-Merrick), ranking member of the county legislature's Finance Committee.
"County Executive Mangano has saved tens of millions of dollars by cutting wasteful spending, including the elimination of patronage jobs added to government by [former Democratic county executive] Tom Suozzi and the Democrats," responded aide Brian Nevin.