On behalf of Kadish & Anthony Law Group posted in Contract Disputes on Thursday, July 30, 2015.
Some people here in Arizona may think contracts are only entered into between business parties. However, it is not uncommon for public workers to enter into contracts with their employers, especially for pension funds. Sadly, when there is a contract, there is the possibly that a breach of contract occurs and leads to contract disputes. It appears that this is what has happened in a state in the Northeast.
Three companies who hold pension funds for public workers have filed a lawsuit against another state for billions in monetary damages. Apparently, the pension funds are asserting that the state breached contracts. The breach allegedly occurred when the government failed to contribute as much as it had initially planned and agreed to.
The dispute has been going on for over a year now. It began when the New Jersey’s governor decided to veer from the 2011 pension funding plan due to a shortened budget. The Supreme Court for the state says that it cannot make the state to put money into pension funds at any certain time. However, it has ruled that the public workers are entitled to the pensions in the amount that each of them have been previously and contractually guaranteed.
Although the state needs to maintain a balanced budget, workers in the public sector should be fully respected and their contracts should be enforced. This is true in any situation, whether it is an employment contract or a pension fund contract. Pensions are an important part of Arizona workers’ futures, and workers who have had their rights violated may be able to recover damages from the state in a contract disputes lawsuit.
Source: Fox Business, “3 pension funds suing New Jersey for breach of contract, seeking billions in damages”, July 27, 2015