Professional Firefighters Association of Omaha et al v. City of Omaha et al
Filing
457
CONSENT DECREE - Ordered by Chief Judge Joseph F. Bataillon. (Copy to Finance) (AOA)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
PROFESSIONAL FIREFIGHTERS
ASSOCIATION OF OMAHA,
LOCAL 385, et al.,
Plaintiffs,
v.
CITY OF OMAHA, NEBRASKA, et al.,
Defendants.
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CASE NO.: 8:10‐CV‐198
CONSENT DECREEE
THIS MATTER is before the Court on the joint stipulation of the Plaintiffs,
Defendants, and Intervenors (the “Parties”). The Parties advise the Court that they
have reached a settlement in this matter and request that the Court approve the
settlement and enter a consent decree. A fairness hearing on the proposed settlement
was held on December 6, 2010.
Being fully advised in the premises, the Court finds that the settlement
agreement reached by the Parties is fair, reasonable, and adequate. Accordingly, with
the consent of the Parties, the Court approves and enters the following consent decree:
The action, Professional Firefighters Association of Omaha, Local 385, et al. Plaintiffs v.
City of Omaha, Nebraska, et al. Defendants, Case No. 8:10‐CV‐198 was brought by a group
of collective bargaining agents and individual class representatives seeking temporary
and permanent injunctive relief, claiming the passage of an ordinance by the City
Council on May 18, 2010 constituted an impairment of contractual rights held by the
Class Plaintiffs to retiree health coverage, both in the amount of contribution for that
coverage from the retired employee and plan design of benefits applicable to those
retired persons. The complaint alleged violations under the Fifth and Fourteenth
Amendments to the Constitution of the United States alleging an unlawful taking and
equal protection violation. In addition, Plaintiffs made certain state law claims,
including breach of rights under Article 6 of the City Charter and a cause of action
under an equitable estoppel theory.
The City of Omaha expressly denies that it is or has been guilty or responsible for
any wrongdoing or violation of the rights as complained of by the Class Plaintiffs. It is
understood that this decree does not, in any manner, constitute an admission by the
Defendants that they have violated any state or federal law or other right held by Class
Plaintiffs.
That Intervenors were allowed to join the suit as separate Plaintiffs with a
separate Complaint and causes of action.
That the Parties wish to settle these actions by appropriate decree, and they
therefore agree to the jurisdiction of this Court over the respective Parties and the
subject matter of this action, and waive the entry of findings of fact and conclusions of
law. The City of Omaha and its officials, desiring to avoid protracted and unnecessary
litigation, accept this decree as final and binding among the Parties signatory hereto as
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to the issues resolved herein, as well as all persons affected by the relief hereinafter
provided for that class of individuals who were retired and receiving retiree health care
coverage as of May 18, 2010.
DEFINITIONS
As used herein, the following terms shall have the following meanings:
ʺAECʺ means individuals employed by the City who work in positions falling
within the Administrative and Executive Classification.
ʺBusiness Daysʺ means Monday through Friday, except Federal and State
holidays.
ʺCBAʺ means collective bargaining agreement.
ʺCityʺ or ʺDefendantʺ means the City of Omaha including its elected officials,
employees, agents and officers, including the named defendants in the Lawsuit.
ʺCivilian Retiree Classʺ means (1) members of the Class who retired from
employment with the City on or before May 18, 2010, and their Spouses and
Dependents, whose position at the time of their retirement was covered by the Omaha
Civilian Employees Association, Local 251, CMPTEC, or Functional bargaining groups
and (2) members of the Class who retired from employment with the City on or before
May 18, 2010, and their Spouses and Dependents, whose position at the time of their
retirement fell within AEC.
ʺCivilian Unionʺ means the Civilian Employees Association, Local 251.
ʺClassʺ means those individuals who fit within the ʺClass Definitionʺ as
established by the Courtʹs order dated July 16, 2010, which is attached hereto as Exhibit
“A.”
ʺCMPTECʺ means the Civilian Management Professional & Technical Employees
Council.
ʺCollective Bargaining Agentsʺ means Professional Firefighters Association of
Omaha, Local 385, the Omaha Police Officers Association, Local 101, the Civilian
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Employees Association, Local 251, Civilian Management, Professional and Technical
Employees Council, Fire Management, Police Management, and Functional.
ʺDependentsʺ means the lawful Dependents of an employee or retiree, as
applicable, who are eligible to participate in a Health Care Plan pursuant to the terms of
such Health Plan at the time a medical expense is incurred.
ʺFire Retiree Classʺ means members of the Class who retired from employment
with the City on or before May 18, 2010, including the Intervenors, and their Spouses
and Dependents, whose position at the time of their retirement was covered by the
Professional Firefighters Association of Omaha, Local 385 or Fire Management
bargaining groups,
ʺFire Managementʺ means the Professional Fire Service Manager Association.
ʺFire Unionʺ means the Professional Firefighters Association of Omaha, Local
385.
ʺFunctionalʺ means the Functional Employee Bargaining Unit.
ʺHealth Care Planʺ means a plan established by a CBA or City ordinance that
provides certain City employees and/or retirees (and their Spouse and Dependents(s))
with medical, surgical, or hospital care or benefits, or benefits in the event of sickness or
accident. A Health Care Plan also means all costs including, but not limited to,
deductibles, co‐pays, and co‐insurance established by a CBA or City ordinance relating
to the benefits described in the previous sentence.
ʺIntervenorsʺ means collectively, Rich Bergholz, Stephen Bosiljevac, Dale Gruber,
Mark Lloyd, and Stephen Tyler.
ʺLawsuitʺ means the civil action styled Professional Firefighters Association of
Omaha, et al. v. City of Omaha, Nebraska, Case No. 8:10cv198, in the United States
District Court for the District of Nebraska.
ʺPlaintiff Classʺ means, collectively, the Plaintiffs, the Class, and Intervenors.
ʺPlaintiffsʺ means collectively, the Professional Firefighters Association of
Omaha, Local 385, the Omaha Police Officers Association, Local 101, the Civilian
Employees Association, Local 251, Civilian Management, Professional and Technical
Employees Council, Jim Andrlik, Michael Piernicky, Bill Love and Terry Leahy.
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ʺPolice Managementʺ means the Omaha Police Managers Union.
ʺPolice Retiree Classʺ means members of the Class who retired from employment
with the City on or before May 18, 2010, and their Spouses and Dependents, whose
position at the time of their retirement was covered by the Police Omaha Police Officers
Association, Local 101 or Police Management bargaining groups.
ʺPolice Unionʺ means the Police Omaha Police Officers Association, Local 101.
ʺOrdinanceʺ means City Ordinance No. 38733 enacted on May 18, 2010.
ʺSpouseʺ means the lawful Spouse of an employee or retiree, as applicable, who
is eligible to participate in a Health Care Plan pursuant to the terms of such Health Plan
at the time a medical expense is incurred.
ʺTentative CBAʺ means a collective bargaining agreement which has been
approved by the respective bargaining agents of the City and the Union but which has
not yet been ratified by the Union membership or approved by the City Council and
Mayor of the City.
PROVISIONS APPLICABLE TO RETIREES WHO RETIRED ON OR BEFORE MAY
18, 2010
1.
Health Care Premiums for Retirees Who Retired on or Before May 18,
2010. All members of the Plaintiff Class, including their Spouses and Dependents, who
as of May 18, 2010, were receiving health care coverage under a City sponsored Health
Care Plan, will, as long as they are eligible for coverage under a Health Care Plan
sponsored by the City, be held at the status quo with respect to their obligation to
contribute a premium for retiree health care coverage under the Ordinance; that is,
members of the Plaintiff Class who retired from employment with the City on or before
May 18, 2010, will be charged the same premium rate percentage (or zero premium, as
applicable) that they were being charged as of May 18, 2010, before the enactment of the
Ordinance.
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2.
Transfer into Applicable Plans. Subject to the other terms of this
Agreement, on January 1, 2011, members of the Class, and their Spouses and
Dependents, and Intervenors, who retired from employment with the City on or before
May 18, 2010, and who are currently receiving health care coverage under a City
sponsored Health Care Plan, will be transferred into one of the following three Health
Care Plans:
a.
Members of the Civilian Retiree Class will be transferred into the
Health Care Plan for employees covered by the Omaha Civilian Employees Association,
Local 251, which is in effect on January 1, 2011 (the ʺCivilian Planʺ).
b.
Members of the Fire Retiree Class will be transferred into the Health
Care Plan for employees covered by the Professional Firefighters Association of Omaha,
Local 385, which is in effect on January 1, 2011 (the ʺFire Planʺ).
c.
Members of the Police Retiree Class will be transferred into the Health
Care Plan for employees covered by Omaha Police Officers Association, Local 101,
which is in effect on January 1, 2011 (the ʺPolice Planʺ).
3.
Status Quo Until Transfer. All members of the Civilian Retiree Class, the
Fire Retiree Class, and the Police Retiree Class, who are currently receiving health care
coverage under a City sponsored Health Care Plan, will be held at status quo regarding
both coverage and premiums until January 1, 2011, when open enrollment into the
Civilian Plan, the Fire Plan, and the Police Plan occurs. The Civilian Plan, the Fire Plan
and the Police Plan shall become fully effective as to the members of the Civilian Retiree
Class, the Fire Retiree Class, and the Police Retiree Class, on January 1, 2011, after open
enrollment, subject to the other terms of this Agreement.
4.
Future Changes to Health Care Plans. Except as otherwise provided in
this Agreement, from and after January 1, 2011, any and all changes to the Civilian Plan,
the Fire Plan, and the Police Plan in the future, except for changes in premiums, will
also be applicable to all members of the Civilian Retiree Class, the Fire Retiree Class,
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and the Police Retiree Class. In other words, on and after January 1, 2011, members of
the Civilian Retiree Class, the Fire Retiree Class, and the Police Retiree Class will be
covered by the same Health Care Plan, and will pay the same deductible, co‐pays, and
co‐insurance, etc., but not the premium, as is provided to employees under the
applicable CBA, CIR decision, or ordinance then in effect for those respective retiree
classes at the time the medical expense is incurred.
5.
Civilian Plus One Plan. The single exception to the applicability of the
transfer into the three plans identified in Section 2 applies to members of the Civilian
Retiree Class, including their Spouses and Dependents, who retired either: (I) prior to
the June, 2001 CBA between the City and the Civilian Union and/or ordinances
establishing terms and conditions of employment for civilian employees in effect at the
time, and (II) under the 2001 – August 2006 CBA between the City and the Civilian
Union, and/or ordinances in effect establishing terms and conditions of employment for
civilian employees at that time. In only those specific cases, the members of the Civilian
Retiree Class to whom this section is applicable shall pay the same prescription costs,
and prescription deductibles, and receive the same prescription benefits, as which
existed under the CBAs identified in (I) and (II) listed above on the date he or she
retired. In addition, the Civilian Retirees subject to this paragraph shall pay the same
health insurance deductible ($150 single/$300 family) until the earlier of (a) legal
execution of a new Civilian Union CBA or (b) upon an order of the CIR affecting
calendar year 2013.
6.
Right to Elect Retiree Class Representative. As of the date of execution
of this Agreement, members of the Civilian Retiree Class, the Fire Retiree Class, and the
Police Retiree Class, including their Spouses and Dependants, are eligible to vote to
elect a single class representative (the ʺRetiree Class Representativeʺ) for each respective
class. The Retiree Class Representative shall have the right to participate as a board
member in collective bargaining sessions dedicated to changes in design to the Civilian
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Plan, the Fire Plan, and the Police Plan. The Retiree Class Representative for the
Civilian Retiree Class may only participate as a board member in collective bargaining
sessions relating to the Civilian Plan. The Retiree Class Representative for the Fire
Retiree Class may only participate as a board member in collective bargaining sessions
relating to the Fire Plan. The Retiree Class Representative for the Police Retiree Class
may only participate as a board member in collective bargaining sessions relating to the
Police Plan. The City will provide the most up‐to‐date list of persons eligible to receive
Retiree Health Care Coverage from the City upon request by the collective bargaining
unit.
7.
Eligibility to Vote for the Retiree Class Representative. Only members
of the Civilian Retiree Class, and their Spouses and Dependents, who are eighteen (18)
years or older shall have the right to vote in the election of the Retiree Class
Representative of the Civilian Retiree Class. Only members of the Fire Retiree Class,
and their Spouses and Dependents, who are eighteen (18) years or older shall have the
right to vote in the election of the Retiree Class Representative of the Fire Retiree Class.
Only members of the Police Retiree Class, and their Spouses and Dependents, who are
eighteen (18) years or older shall have the right to vote in the election of the Retiree
Class Representative of the Police Retiree Class. Hereinafter, those members of the
respective retiree classes who are eligible to vote for a Retiree Class Representative are
referred to collectively as the ʺEligible Voters.ʺ
When a member of the Civilian Retiree Class, the Fire Retiree Class, or the Police
Retiree Class ceases to have health care coverage from the City due to death or reaching
the age in which he or she is eligible for Medicare, that member, and his or her Spouse
and Dependents, is no longer an Eligible Voter and shall not vote in the election of the
Retiree Class Representative.
8.
Status of Retiree Class Representative. It is expressly understood and
agreed that the Civilian Retiree Class, the Fire Retiree Class, and the Police Retiree
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Class, are not bargaining units, and the Retiree Class Representative from each class is
not a bargaining agent, and will not be recognized as such.
9.
Election of the Retiree Class Representative. Upon receipt or issuance of
a notice of intent to modify or negotiate a CBA, the Union whose contract is to be
negotiated shall immediately hold an election, pursuant to rules established by the
Union, to elect a single Retiree Class Representative whose rights and duties are set
forth below.
The Union shall immediately notify the City of the name of, and contact
information for, the Retiree Class Representative who was elected.
The Retiree Class Representativeʹs term ends upon the legal execution of the
CBA.
10.
Right to Participate in Negotiations. The Fire Union, the Police Union,
and the Civilian Union, shall agree to allow the applicable Retiree Class Representative
of the respective retiree class to participate as a board member in collective bargaining
sessions solely dedicated to such changes in Health Care Plan design that affect the
applicable Retiree Class. This participation is for the sole and limited purpose of
monitoring whether proposed changes in Health Care Plan design agreed to by the
Unions, if any, which directly affect the Civilian Retiree Class, the Fire Retiree Class, or
the Police Retiree Class, are fair and reasonable considering the economic and financial
circumstances then facing the City, the Union, and the respective retiree Class.
11.
Right to Object and Seek Binding Arbitration: The applicable Retiree
Class Representative has the right to object to any proposed change in Health Care Plan
design proposed by the Union and the City in a Tentative CBA on the sole and
exclusive basis that the proposed change is not fair and reasonable to those members of
the Civilian Retiree Class, the Fire Retiree Class, or the Police Retiree Class, considering
the economic and financial circumstances facing the City, the Union, and the respective
retiree class. The applicable Retiree Class Representative’s right to object is limited
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solely to terms of the proposed change in health care plan design which directly affects
the retiree class from which he or she is elected. For example, if the Tentative CBA
increases premiums for active employees, but none of the retiree class members’
premiums would increase due to the terms of this Agreement, the applicable Retiree
Class Representative is prohibited from objecting to the Tentative CBA on that basis.
No one other than the duly elected applicable Retiree Class Representative shall have
the right to object or seek a vote to determine whether the Civilian Retiree Class, the
Fire Retiree Class, or the Police Retiree Class should seek binding arbitration.
12.
Procedure for Objecting. The applicable Retiree Class Representative
may only object to the health care plan design in a Tentative CBA under the following
conditions:
(A) Within three (3) business days after the City and the Union notify, in
writing, the applicable Retiree Class Representative they have agreed upon a Tentative
CBA, the Retiree Class Representative must notify the City and the Union, in writing,
whether he or she objects to the proposed change in health care plan design in the
Tentative CBA.
(B) If the applicable Retiree Class Representative does not provide written
objection within three (3) business days after receiving notification, the applicable
Retiree Class Representative, and all individuals in the respective retiree class,
irrevocably waives all claims and objections on behalf anyone in the respective retiree
class relating to changes in health care plan design in the Tentative CBA. Upon the
expiration of the period in which the applicable Retiree Class Representative may
object, the Union and City may ratify the Tentative CBA.
13.
Effect of Objection by the Retiree Class Representative. If the applicable
Retiree Class Representative objects to any proposed change in health care plan design
in a Tentative CBA, on the basis that the change will adversely affect, and is not fair and
reasonable to, the majority of the Civilian Retiree Class, the Fire Retiree Class, or the
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Police Retiree Class, as the case may be, considering the economic and financial
circumstances facing the City, the Union, and the respective retiree class, the applicable
Retiree Class Representative must then, in writing: (A) Inform the Eligible Voters of the
affected retiree class of the proposed changes in the health care plan, (B) notify the
Eligible Voters of the affected retiree class of the reason the Retiree Class Representative
objects to the proposed changes, (C) mail numbered ballots to the Eligible Voters of the
affected retiree class, including Spouses and Dependents, at their last known address
asking whether they support or oppose the applicable Retiree Class Representative
initiating fast track arbitration to determine whether the proposed change in health care
plan design is fair and reasonable considering the economic and financial circumstances
facing the City, the Union, and the affected retiree class (D) advise the Eligible Voters of
the affected retiree class that each party will bear their own cost of the arbitration,
including attorney fees, and (E) notify the Eligible Voters of the affected retiree class
that their ballots must be postmarked within fourteen (14) calendar days of the date the
applicable Retiree Class Representative notified the City and the Union of his or her
objection.
14. Tallying the Vote. Only ballots postmarked within fourteen (14) calendar
days of the date the applicable Retiree Class Representative notified the City and the
Union of his or her objection (the ʺPostmark Deadlineʺ) will be counted. Within five (5)
days of the Postmark Deadline, the ballots must be counted and the results of the
election announced to the Union and the City.
The applicable Retiree Class Representative shall certify that he or she mailed
ballots to all Eligible Voters. The applicable Retiree Class Representative shall preserve
the ballots and postmarked envelopes from the vote and allow the Union and/or the
City to inspect the ballots to verify the election results.
15.
Effect of the Vote. (A) If a majority of the Eligible Voters, including
Spouses and Dependents, in the affected retiree class, not just those casting ballots,
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supports the applicable Retiree Class Representative initiating arbitration, the
applicable Retiree Class Representative shall immediately notify the Union and the City
of the election result and request the appointment of an arbitrator. An Eligible Voterʹs
failure to cast a ballot shall count as a vote in opposition to arbitration.
(B) If a majority of the Eligible Voters, including Spouses and Dependents, in the
affected retiree class, not just those casting ballots, opposes the applicable Retiree Group
Representative initiating arbitration, then the Union and the City may ratify the
Tentative CBA and the members of the affected retiree class are prohibited from
thereafter challenging the enforceability of the CBA.
16.
Fast Track Arbitration. Upon receiving notice from the applicable Retiree
Class Representative that the affected retiree class has voted in support of arbitration,
the Union and the applicable Retiree Class Representative shall request an arbitrator
through the Federal Mediation Service who has expertise in health care and employee
benefits. The City shall have the right, but not the obligation, to participate in the
arbitration if in its sole discretion it chooses to do so.
The sole issue to be decided by arbitration is whether the changes in health care
plan design in the Tentative CBA are fair and reasonable to the Union and the
respective retiree Class as a whole considering the economic and financial
circumstances then facing the City, the Union, and the retiree Class as a whole. During
the pendency of any objection or arbitration pursuant to this paragraph, health care
coverage and costs shall be held at the status quo.
17.
Timing of Arbitration. The arbitration hearing must be held, and the
arbitrator’s decision must be issued within, thirty (30) days after the applicable Retiree
Class Representative notifies the Union and the City that the Retiree group has voted in
support of arbitration.
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18.
Effect of Arbitration
a.
Finding of Not Fair and Reasonable: If the arbitrator rules in favor of
the affected retiree Class by determining that the Health Care Plan design in the
Tentative CBA is not fair and reasonable to the affected retiree Class considering the
economic and financial circumstances then facing the City, the Union, and the retiree
Class as a whole, said finding will prohibit the Union from agreeing to only those
proposed health care plan design changes in the Tentative CBA expressly found to be
impermissible.
b.
Finding of Fair and Reasonable: If the arbitrator finds that the health
care plan design in the Tentative CBA are fair and reasonable considering the economic
and financial circumstances then facing the City, the Union, and the retiree Class as a
whole, the Union will have a right to seek ratification of the Tentative CBA with the
City including said changes and the affected class retirees will have no further remedy
against the City and/or Union including, but not limited to, claims for failure of
adequate representation of their interests.
19.
Costs of Arbitration: The Union and the members of affected retiree class
who brought the arbitration are to bear their own costs of arbitration including attorney
fees, and the non‐prevailing party shall assume the cost of the arbitrator, unless it is
shown that the arbitration was commenced in bad faith by one of the Parties, which
finding will allow the prevailing party to recover its costs and attorney fees. The City
shall bear no costs, or other liability, with respect to the arbitration.
20.
Termination of Retiree Class Representative Procedures: When the
number of Eligible Voters, including their Spouses and Dependents, who are above the
age of eighteen (18), in the Civilian Retiree Class, the Fire Retiree Class, or the Police
Retiree Class, is thirty (30) or less, that classʹs right to elect a Retiree Class
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Representative and seek fast‐track arbitration, and all rights identified in Sections 6 to
19 herein, will terminate.
PROVISIONS APPLICABLE TO RETIREES WHO RETIRE AFTER MAY 18, 2010
21.
Health Care Premiums for Those Who Retire After May 18, 2010. Any
member of the Class who is or was employed by the City and who retires after May 18,
2010, will be subject to the terms of the applicable CBA, ordinance, or the terms and
conditions of employment established by the CIR, regarding health care premiums in
effect on the date they retire, including provisions which provide for prospective
changes in premiums or variable premiums going forward. As an example, under the
current Police CBA, effective on September 19, 2010, a person who retires after the
effective date of that CBA will be subject to the premiums being charged to active
employees under that CBA or any subsequent CBA. As another example, a current
member of the Civilian Union who retires after the effective date of the current CBA,
will be required only to pay premiums at the rate provided in that CBA. However, any
person retiring under a subsequent CBA which allows for prospective changes in
premiums or variable premiums will be subject to such changes in premiums as those
changes are made in subsequent CBAs and ordinances.
22.
Health Care Coverage for Those Who Retire After May 18, 2010.
Individuals, including their Spouses and Dependents, who retire from employment
with the City after May 18, 2010, shall be subject to the terms of the Civilian Plan, Fire
Plan, and Police Plan, currently in effect at the time the medical expense is incurred.
That is:
a.
Members of the Class covered by the Omaha Civilian Employees
Association, Local 251, CMPTEC, and Functional bargaining groups, and their Spouses
and Dependents, and members of the Class who at the time of their retirement were
employed in a position falling within AEC, and their Spouses and Dependents, who
retire after May 18, 2010, will receive the health care plan in effect for employees
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covered by the Omaha Civilian Employees Association, Local 251, at the time the
medical expense is incurred.
b.
Members of the Class covered by the Professional Firefighters Association
of Omaha, Local 385 and Fire Management groups, and their Spouses and Dependents,
who retire after May 18, 2010, will receive the health care plan in effect for employees
covered by the Professional Firefighters Association of Omaha, Local 385, at the time
the medical expense is incurred.
c.
Members of the Class covered by the Police Omaha Police Officers
Association, Local 101 and Police Management groups, who retire after May 18, 2010,
will receive the health care plan in effect for employees covered by the Omaha Police
Officers Association, Local 101, at the time the medical expense is incurred.
GENERAL PROVISIONS
23.
Defendant acknowledges that under Section 6.09 of the Omaha Home
Rule Charter and the current state of the law, the Plaintiff Classʹs legal right to a pension
is effective when such pensions or benefits become payable, and the same shall not be
impaired, abrogated, or diminished thereafter.
24.
In the event that the City terminates all health insurance coverage for
active employees which, under this Consent Decree, would lead to the elimination of
coverage for members of the Civilian Retiree Class, the Fire Retiree Class, or the Police
Retiree Class, and such termination of coverage becomes effective on or before
December 31, 2017, then the members of the Civilian Retiree Class, the Fire Retiree
Class, and the Police Retiree Class, shall continue to receive the Health Care Plan in
effect for such active employees immediately before coverage is terminated until the
Retirees reach age sixty‐five (65) or later Medicare eligibility date set by Congress, or
death, whichever comes first.
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25.
The preliminary injunction issued by the Court on June 10, 2010 is hereby
dissolved and vacated, and the Clerk is directed to release the Plaintiffsʹ bond to the
Plaintiffs.
It is so ordered, adjudged, and decreed.
Dated this 12th day of April, 2011.
BY THE COURT:
s/ Joseph F. Bataillon
Chief District Judge
559940.03
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