New Orleans Mayor Held in Contempt of Court After Using Back Pay Payment as Leverage in Pension Reform Negotiations

New Orleans for years has not paid out annual pay raises to its firefighters; but after a decade of court battles, current city Mayor Mitch Landrieu was ordered by a court last year to give the firefighters $75 million in back pay.

But that money never came, because Landrieu was using the money as leverage to force firefighters to negotiate reforms to their pension system, which is severely underfunded.

On Friday, a judge held Landrieu in contempt of court for using the money as a bargaining chip instead of paying it out.

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Civil District Judge Kern Reese held New Orleans Mayor Mitch Landrieu in contempt Friday (Sept. 4), but said he would give Landrieu one week to come up with a reasonable plan to pay the city’s firefighters before imposing a house arrest sentence.

Reese said that he understood Landrieu was constrained by a tight budget, but that did not mean he had the right to shirk a legal judgment. “This is a legal issue,” Reese said. “We all have responsibilities and those responsibilities have to be met.”

The contempt order stems from a decades-long legal battle centered on state-mandated raises that previous administrations did not pay in accordance with the law. The city agreed last year to pay $75 million to satisfy the firefighters’ backpay claims but never actually came up with the money.

After Reese made it clear that the city would have to pay, Landrieu’s offered to fulfill a $75 million judgment by paying $15 million upfront and the balance in payments stretched out over three decades. In exchange, the administration wanted the firefighters to agree to significant changes to their pension fund.

The firefighters said the offer was still unacceptable because the payment period was far too long and half the upfront money was to have come from their moribund pension system.

Needless to say, the firefighters and Landrieu never agreed on reforms; instead, the firefighters felt that a 30-year timeline was too long, and so they went back to the courts.

Photo by Joe Gratz via Flickr CC License