Timothy L Johnson v. Public School Employees Retirement System

**What Happened** Timothy Johnson and other public school employees in Michigan sued the Public School Employees Retirement System over wage reductions. In 2010, the state passed a law (Public Act 75) that automatically cut 3% from these workers' paychecks to help fund their retirement system. The employees argued this violated their employment contracts, which had promised certain wage levels. **What the Court Decided** The Michigan Supreme Court sided with the workers. The court ruled that the 2010 law was unconstitutional because it broke existing employment contracts by forcing workers to accept lower wages than originally agreed upon. The court ordered the retirement system to refund the money that had been taken from workers' paychecks between 2010 and 2012, when a new law replaced the problematic one. **Why This Matters for Workers** This ruling reinforces that employers—including government employers—cannot simply change the terms of existing employment contracts to reduce workers' pay, even through new laws. Workers have legal protection when their contracts promise specific wages or benefits. If an employer tries to unilaterally cut your agreed-upon compensation, you may have grounds to challenge those cuts in court.