Boston Globe | By David Scharfenberg | May 27, 2015

The MBTA’s largest employee union is vowing to sue the state, or petition the federal government to cut off millions of dollars in aid for the agency, if state lawmakers approve a key provision of Governor Charlie Baker’s T overhaul plan.

Union officials argue the proposal, which would give a new Baker-appointed board final approval of labor contracts, runs afoul of a federal law designed to protect the collective bargaining rights of the nation’s public transit employees.

Specifically, the governor’s board would be able to reject the binding ruling of a neutral arbitrator, an arrangement used for decades to decide MBTA contract disputes.

James M. O’Brien, president of the Boston Carmen’s Union Local 589, said he does not relish the idea of choking off federal transportation funds. But the governor’s plan, he said, amounts to a reckless and fundamentally unfair shift in the bargaining process.

“It doesn’t make sense,” he said, of Baker’s push. “You’re [risking] hundreds of millions of dollars in grants.”

Baker administration officials play down the risk. They note the courts have given states wide latitude to alter public transit labor policy and they argue their proposed change is a modest, procedural one rather than a substantial blow to collective bargaining.

Tim Buckley, a spokesman for the governor, said the administration “is confident that the limited changes that we have proposed” will be approved by the federal government. And he hinted that the state, after passage of the law, could simply rewrite it if the federal government moved to withhold funds and the courts upheld the move.

“The administration will not forfeit any available federal dollars under any circumstances,” he said.

The conflict, if it comes to a head, would be the latest in a string of high-stakes fights over workers’ rights and federal funding for mass transit — some breaking for labor and some for management.

Wisconsin lawmakers, fearing losing millions in federal funding, exempted certain transit workers from Governor Scott Walker’s high-profile push to roll back public employees’ collective bargaining rights four years ago.

But in California, a federal judge ruled in February that US Labor Secretary Thomas Perez had gone too far in cutting off funds for transit agencies in that state after the Legislature passed a pension reform law that trimmed benefits for transit employees, among others.

The disputes here and elsewhere turn on a transportation law signed by President Lyndon B. Johnson in 1964 that launched an era of substantial federal funding for the nation’s transit system.

One section of the legislation requires the US labor secretary to certify that a public transit agency is protecting its employees’ collective bargaining rights before the federal government disburses funds.

The Massachusetts Bay Transportation Authority and its unions came to a 20-page agreement in 1974 meant to satisfy the requirements of the law. The secretary has repeatedly cited it, in the decades since, to authorize federal grants for the agency.

The agreement, among other things, mandates that labor disputes should be settled by arbitration procedures set out in any “then-applicable collective bargaining agreement.”

The current Carmen’s agreement mandates binding arbitration when the union and the T come to an impasse in contract negotiations — allowing a neutral arbitrator to impose changes in wages and benefits.

Baker’s legislation, now before the Legislature’s Joint Committee on Transportation, would give a new MBTA fiscal and management control board the right to approve or deny any arbitrator’s award.

Douglas Taylor, a lawyer representing the Carmen’s union, said the move would make the arbitration no longer binding, giving veto power to management and fundamentally altering the balance of power between the T and its workers.

“Collective bargaining means co-determination,” he said. “Co-determination means that both sides have a say. . . . Binding arbitration accomplishes that. It does it in an imperfect way. . . . But at least each side’s got an equal shot.”

Baker officials maintain they are not doing away with binding arbitration but merely adding another step to the process. They point out that, under state law, city councils, town councils, and town meetings have the right to vote up or down on arbitrators’ awards for police and fire contracts.

Harold Lichten, a labor lawyer who represents unions, said the police and fire system works “relatively well.” But he said there is a difference between giving a representative body such as a city council veto power and handing that authority to an arm of the executive branch.

“I think by giving the governor veto power, it really does render fairly meaningless the whole process,” said Lichten, who has represented a union of mid-level managers at the T.

Joseph E. Slater, a professor at the University of Toledo College of Law who has written about public sector labor law, said in an e-mail that he has “never heard of a body that is that directly involved in day-to-day managing having the power to reject a contract ordered by an . . . arbitrator.”

A spokesman for the US Department of Labor declined to comment on the debate in Massachusetts.

Supporters of Baker’s proposal say binding arbitration has long favored the T’s unions. In their view, the changes would help rein in costs.

“There is no chance that the state government will be able to bring T costs under control unless they address this question of binding arbitration,” said Gregory Sullivan, research director for the conservative-leaning Pioneer Institute, who testified before the Legislature in favor of the measure.

Sullivan and administration officials add that the courts have given states broad discretion to alter transit labor policy. But Taylor said effectively eliminating binding arbitration — particularly for a union that does not have the right to strike — would be such a blow to collective bargaining that the courts would be compelled to side with the union.

And whatever the legality of the move, he noted, the union could go to the US secretary of labor and attempt to block federal grants for the T, arguing the state is not protecting workers’ collective bargaining rights.

The federal Labor Department does not always side with the unions. In the 1980s it sided with the state in a dispute over management rights such as the power to hire part-time workers. But when T unions objected to a 2009 state attempt to change workers’ health care plan, federal officials sided with labor and directed both sides to negotiate a resolution.

David Scharfenberg can be reached at david.scharfenberg @globe.com. Follow him on Twitter @dscharfGlobe