In a recently issued opinion, the Maryland Court of Appeals upheld the decision of two lower courts stating that the Montgomery County Council is not bound by labor contract negotiations of the unions and the County Executive.  As reported by the Washington Post:

Specifically, the court ruled that the council did not violate collective bargaining law when it rejected a 3.5 percent wage hike and other retirement and health benefits proposed by police for funding in the FY 2012 budget. The union representing Montgomery officers, the Fraternal Order of Police Lodge 35, filed a lawsuit challenging the decision in June 2011. It argued that the council did not have the authority to unilaterally change the benefits package.

The labor dispute began during the recession in 2010 when County Executive Leggett and the FOP reached an impasse in negotiations. To resolve negotiations, the matter went before a neutral arbitrator who ruled in favor of the FOP for a 3.5% wage increase. The County Council rejected the settlement and then adopted a fiscal 2012 budget that did not include the wage increase and changed contract provisions covering police pensions, prescription drugs and group insurance.

The court held that the council had the authority to make changes when the two sides (FOP and Leggett) could not reach a renegotiated agreement and did not pursue binding arbitration.