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Union says Detroit bankruptcy disrupting contract negotiations

WASHINGTON (Reuters) - Detroit's largest union said on Monday that the city's historic bankruptcy proceedings have given the management of the water and sewer department opportunities to disrupt bargaining units and strip union members of job protections.

The American Federation of State, County and Municipal Employees Michigan Council 25 filed a motion late Monday to clarify or lift an automatic court stay on litigation against Detroit during the bankruptcy process.

The state's employment commission, which settles labor disputes, has decided against holding hearings regarding the city until after the bankruptcy process is concluded. But AFSCME is pressing for the commission to hear two complaints that it filed against the Detroit Water and Sewerage Department sooner than that. The union contends that the stay applies only to those seeking monetary judgments.

DWSD representatives could not be reached after business hours for comment.

The hearing to confirm Detroit's plan to exit bankruptcy is scheduled to begin at the end of the month and is expected to run at least for part of September. AFSCME's members support the plan, which includes cuts to their pensions.

Some AFSCME units are negotiating new contracts with DWSD, and "talks have not progressed well," the union said in the filing.

Specifically, AFSCME said the DWSD is placing 380 out of the 1,050 workers it represents at the department in other unions, which the union says is intended to disrupt bargaining and is illegal.

AFSCME also said many of its members are being placed in positions deemed "at will," meaning they could lose their jobs without just cause.

The union emphasized its complaints were separate from the bankruptcy case and it "does not need to pursue collection against the city without further order of this court, or until the resolution of the bankruptcy proceedings."

Detroit has faced a rocky time with its water and sewer department since it filed for bankruptcy in July 2013.

Last week, the city rushed to turn on the taps again after it cut off service to 7,200 delinquent bill payers, raising an international outcry. At the same time, water and sewer bondholders have been some of the biggest holdout creditors in the bankruptcy, and reached a settlement refinancing their debt with the city only last week.

(Reporting by Lisa Lambert; Editing by Jan Paschal)

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