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Order seeks to allow union cases from being stayed under Puerto Rico oversight law

By on April 4, 2018

SAN JUAN – Puerto Rico’s Fiscal Agency and Financial Advisory Authority (Aafaf by its Spanish acronym) has issued an administrative order to modify the automatic stay on claims under the federal Promesa law to allow certain complaints and grievances filed by five unions under collective agreements to continue their course.

Since July 28, 2017, the International Union; the United Automobile, Aerospace and Agricultural Implement Workers of America, AFLCIO (UAW); the Service Employees International Union (SEIU), the American Federation of State, County and Municipal Employees International Union, AFL-CIO (AFSCME); and the American Federation of Teachers, AFL-CIO (AFT) have been in talks with the government, seeking to continue the grievance procedures related to events that occurred before May 3, 2017, when the commonwealth filed for bankruptcy under Title III of Promesa.

According to the April 2 administrative order, the government signed a stipulation with the AFL-CIO and the American Federation of Teachers on March 6 to partially modify the automatic stay under Promesa in certain cases. The UAW and the SEIU did not accept the stipulation but agreed to follow its terms temporarily.

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The administrative order establishes a protocol to identify cases that may continue their course. It also establishes that agencies and departments must identify cases of employees represented by unions that have been presented in claims, grievances and arbitration procedures of the collective bargaining agreements,  to separate those whose cause of action occurred before May 3, 2017.

Claims or grievances that relate to conduct that occurred after May 3, 2017, will not be subject to the stay on litigation or the administrative order, thus can continue their course.

Cases or claims involving events that occurred before May 3 will be subject to the automatic stay but the administrative order establishes an “automatic exception” to allow some to continue their course. The exception covers cases that challenge the constitutionality of a law essential to the implementation of the government’s fiscal plan; procedures whose final remedy prevents or is inconsistent with any law essential to the implementation of the fiscal plan; and cases in which a requested injunction prevents or contravenes the implementation of public policy or the administrative duties of departments. The exception does not cover injunctions aimed at reinstating public officials or employees.

However, cases of events that occurred before May 3, 2017, that involve only warnings, disciplinary suspensions or dismissals and disciplinary dismissals will not be subject to the Promesa stay.

The order establishes criteria for agencies to identify cases that would be stayed and include those that challenge the classification of employees, that affect more than five employees or that pursue a monetary compensation of more than $200,000.

Cases involving events that occurred before the aforementioned date will be subject to the stay after Aafaf notifies the unions, agencies and departments via a process established in the administrative order.

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