If state appellate judges uphold the rulings of their predecessors in a three-year-old lawsuit, New Mexico may be on the hook to pay millions—if not tens of millions—of dollars to current and former state employees.

Two public employee unions, the American Federation of State, County and Municipal Employees and the Communications Workers of America, are challenging a years-old wage increase that affected approximately 20,000 state employees.

The unions contend that the State Personnel Office didn't give unionized employees the correct wage hikes negotiated in both AFSCME's and CWA's 2007 collective bargaining agreements. The contracts that grew out of those negotiations covered employees through 2009, when then-Gov. Bill Richardson froze state employee wages.

If the unions prevail, the state will have to deal with "tens of millions of dollars for back pay and a real big headache," Miles Conway, a political coordinator with CWA, tells SFR.

The case is currently awaiting a decision by the state Court of Appeals, where oral arguments were heard on March 29. The lawsuit dates back to 2009, when the state appealed two separate arbitrations for AFSCME and CWA in district court.

When the unions originally negotiated a pay raise for state employees in 2007, they got it. But since 2009, they've been arguing that the state delivered the wrong type of pay raise to the wrong employees.

The state and the unions agreed on a sliding-scale wage, rewarding the lowest-paid employees with larger pay hikes.

"The point was to try to bring people below the midpoint up," Conway says.

Instead, however, the state implemented a flat, 2.9 percent pay hike across the board. To the unions, that meant that some employees who were earning far less than their positions' median didn't get the hand up they needed.

In what SPO Director Gene Moser describes as "a question of equity," the state also delivered the same 2.9 percent pay increase to 10,000 state employees who didn't belong to unions. Traditionally, the state grants the same wage increases to both unionized and nonunionized employees. The reason for the flat 2.9 percent increase, according to SPO, was that the state didn't have enough money to pay out the union-negotiated raises to all state employees.

But Conway says that decision unfairly favored nonunionized state workers—when it was the unions who had negotiated the wage increase.

"It's been historical," Conway says. "The state doesn't want to empower the union."

While Conway says he appreciates that the state was trying to be generous to all employees, he dubs the result a "slap in the face" because of the added work unions have to do after negotiating contracts: convincing lawmakers to provide the necessary funding to fill them.

After the 2007 contracts were approved, SPO told the unions that state lawmakers would need to approve $15.5 million in order to allow the state to adequately fund the negotiated raises. The Legislature did just that, amid heavy lobbying from the unions—but SPO then argued that the money wasn't enough to pay all employees.

Ken Long, a highway maintenance worker with the Department of Transportation and president of AFSCME Local 1211, says his membership was "very disappointed" with the state's decision.

"We expected that raise and it didn't happen," Long, who makes about $15 an hour, tells SFR.

Long adds that for many unionized employees, the small percentage difference means a tank of gas or doctor co-pays.

Shane Youtz
, an attorney representing AFSCME and CWA, says the state must first meet the union contract requirements before it can worry about nonunion employee raises. But the state argues that the language in the negotiated contract wasn't specific enough to justify the increases.

In 2008, the disputes for AFSCME and CWA went to impasse, meaning an independent arbitrator must decide one side's proposal over another. In both cases, the arbitrators sided with the unions and upheld the negotiated pay increases. In 2010, the Second Judicial District Court followed suit.

Moser says that, if the Appeals Court sides with the union, appealing to the state Supreme Court would be on the table. He says the amount of money New Mexico has spent defending the case is "far less that the potential implications" of losing the lawsuit. He did not have specific dollar amounts for either category. The Tinnin Law Firm, the state's former attorneys in the case, charges the state between $125 and $150 an hour for services.

Youtz estimates losing the case would cost the state somewhere around the $10 million mark. If the state ultimately loses, Moser says he's not quite sure what it would have to do to meet the wage increases.

"Do we have to go back and look at all of these people [who worked for the state at the time]? Those are legal questions in and of themselves," Moser says.