The commonwealth Supreme Court has declared that Law 7, the Fiscal Emergency Law, is constitutional, in a 4-3 ruling in which the justices took jabs at each other.
Justice Erick Kolthoff wrote the majority opinion. He was joined by Justices Rafael Martínez Torres, Efraín Rivera Pérez and Mildred Pabón Charneco. Chief Justice Federico Hernández Denton and Justices Anabelle Rodríguez and Lianna Fiol Matta each wrote dissenting opinions.
“We ruled that Law 7 … is constitutional in all of the aspects contained in this opinion,” the majority opinion reads.
The top court consolidated four cases involving 20 employees who were laid off from their jobs at the Justice, Family and Sports and Recreation departments, the Corrections Administration, the Child Support Services Administration and the Human Resources Office. The plaintiffs, who received pink slips in November and January, included employees in career positions and unionized workers.
Law 7 enabled the layoffs of more than 17,000 government workers who were informed of their right to appeal before the Appeals Commission of the Administration System of Human Resources in the case of career workers, or to the Labor Relations Commission in the case of unionized workers. The law created the Economic and Fiscal Restructuring Board, known as JREF in Spanish, to enforce the layoffs, transfer workers and subcontract help.
The first stage of the law gave workers a specific time period to decide if they wanted to quit or cut their working hours. The subsequent stages of the law called for the freezing of new benefits in all collective bargaining agreements and negotiations.
The plaintiffs argued that Law 7 was unconstitutional because it violated their acquired rights, impaired contractual obligations, violated their due process, violated their equal protection rights under the law and improperly delegated powers to the JREF. They requested an injunction to halt the implementation of the law, which was rejected by the top court.
In its majority opinion, the court ruled that while in the case of the career workers they had a property right over their jobs since they have the expectation of continuous employment, they noted that the right is not absolute and is superseded by the state’s police power to ensure general welfare, especially in times of economic crisis.
The top court cited most of Law 7’s exposition of goals to sustain the government’s contention of a severe fiscal crisis and a $3.2 billion deficit, but did not provide other evidence to sustain the claim. The majority dismissed the plaintiffs contentions that the government had other options such as reducing the working week and eliminating benefits before resorting to the layoffs.
After accepting the argument of a fiscal crisis, the majority ruled that in determining if a public worker’s property rights over their jobs were being violated, the justices must side with the Legislature that there is a rational link between the actions established in the law and the desired goal.
“The layoffs of the plaintiffs along with those of thousands of workers will create real savings to the government. Such a situation justifies the state of emergency declared by the Legislature and their actions,” the ruling states.
No violation of workers’ due process
The top court also ruled that Law 7 did not violate the workers’ right to due process because the displaced employees were given the rights to be heard by an impartial forum and to appeal. “The workers have a right to be heard before the layoff goes into effect if they request it,” the majority said.
Regarding arguments that Law 7 impairs contractual obligations obtained in collective bargaining agreements in violation of the Constitution, the court stated that not all acquired rights are protected when a law repeals them. “There is no right to not be laid off,” the court says.
The top court noted that the state’s police power allows states to legislate freely on social and economic powers, modifying the law to meet changing needs and conditions. While the justices noted that arguments against impairment measures are only valid if they affect substantial obligations and frustrate expectations, such as in the case of the workers, they said that impairment measures are valid if there is a compelling interest from the state in the wake of a fiscal emergency.
The justices in the majority dismissed the plaintiffs’ arguments that Law 7 hinders workers’ constitutional right to equal protection since it affects only agency workers and not employees from the legislative and judicial branches. The justices noted that equal protection applies only in certain situations and to certain classes of people and ruled that the law “respects the separation of powers of the three government branches.”
Regarding the plaintiffs’ contention that powers to enforce Law 7 were improperly delegated to the JREF, the top court ruled that it is permissible to delegate powers to an entity so long as guidelines are provided. The justices noted that Law 7 allowed the JREF to lay off workers using seniority as a criteria and also allows it to transfer workers and subcontract help. The justices also dismissed claims that the law unduly delegated to the governor powers that belong to the legislative branch.
Dissenters counterattack
Rivera Pérez chastised Fiol Matta, Hernández Denton and Rodríguez for criticizing the fact that the justices in the majority ruling cut the amount of time they had to write their dissenting opinions. Rivera Pérez reminded the three that in the 2004 case Suarez v. CEE (State Elections Commission), the justices in the majority gave three hours for the dissenting justices to write their opinions even though the case involved the voting rights of thousands of citizens.
Meanwhile, Hernández Denton criticized the majority vote for issuing a ruling in a supposedly hasty fashion using a file “that did not have the needed evidence for an adequate ruling” and using as evidence only the exposition of the stated goals of Law 7. He also objected to the majority arguments to justify the impairment of contractual obligations protected by the Constitution, and said that in times of fiscal crisis constitutional protection serves as a limit to the state’s power.
Rodríguez blasted the majority for certifying the case without having all of the evidence at hand and said the justices “struggled” to justify what was unjustifiable. She said the decision that workers do not have an acquired right over their jobs goes against what the top court decided in the case of the police escorts, which upheld the rights of former Govs. Rafael Hernández Colón and Carlos Romero Barceló to have police bodyguards.
Fiol Matta, on the other hand, lamented that law students will be taught the law “prior and after Law 7.” She disputed claims that the workers’ right to due process was not affected since they were not given a chance to be heard.
Fortuño, PDP reactions
“[The law] is valid. That is what we have always said, that the law is valid,” was Gov. Fortuño’s response to the news of the Supreme Court’s decision.
Popular Democratic Party Rep. Jaime Perelló decried the decision, saying the justices ruled along ideological lines and upheld the violation of the constitutional rights of workers. “They had to go beyond the ideological thoughts,” he said.
Labor Secretary Miguel Romero said the decision shows the Fortuño administration was careful in making sure Law 7 was drawn up “within a legal framework.”
Romero declined to say categorically whether he thought the decision was a blow to the labor movement, noting it was “part of a process in which unions have the right to challenge.”
Romero said reissuing seniority and layoff notifications that were successfully challenged in the courts would not be affected because this was a matter of “complying with the law.” This process is being carried out in 33 agencies and has yet to conclude, he said.
He said that as a result of the court decision, Seniors Advocate Rossana López León would have to implement the layoffs she was ordered to do, despite the fact that much of her budget is made up of federal funding, noting that Law 7 applies to agencies that hire employees with federal funds.
Daily Sun staff writers José Alvarado and Xavira Neggers Crescioni contributed to this report.
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