Cities May Void CBAs Under Bankruptcy Code

Law360, New York (March 17, 2009, 12:00 AM EDT) -- A federal judge has ruled that Chapter 9 of the Bankruptcy Code permits municipalities to reject collective bargaining agreements with their public employee unions, a decision that could spell trouble for two labor unions mired in negotiations with a bankrupt California city.

The ruling Friday by Judge Michael S. McManus in the U.S. Bankruptcy Court for the Eastern District of California comes in a bitter battle between the city of Vallejo, Calif., and two unions that claim the San Francisco suburb failed to hold good faith...
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