The board of directors of the Utah Public Employees' Association voted unanimously to sue the state over the recently passed House Bill 213, which ended a 20-year program that converted unused sick leave into post-retirement health insurance.

Despite concerns that a lawsuit could sour relationships with those who set the pay for 25,000 public employees, association President Larry Evans said: "We felt we had to take a stand."

"The Legislature was unfair and in some ways even unethical in the way they treated employees," Evans said. "We believe some real harm has been done to the employees."

The association is in the process of hiring a law firm to represent it in court.

Lawmakers were not shocked to hear about the impending lawsuit. In fact, they drafted HB213 with the expectation of a legal challenge.

"We tried to do all we could to avoid this possibility," said Rep. David Clark, R-Santa Clara, who sponsored the bill. "I think it is very defensible."

The old program allowed employees to trade eight hours of sick leave for one month of medical benefits. Any hours banked by the end of this year will fall into this program, but starting next year, 25 percent of the unused sick leave will be deposited in a 401(k) account.

The rest can be traded for medical benefits, but at a reduced rate. The program ends in 2014.

The rising costs of health care have made the medical retirement benefit unaffordable, said Clark.

He estimated keeping the benefit would cost hundreds of millions of dollars, placing a crimp on the state's $9 billion budget or forcing tax increases.

"I am deeply sorry we had to change this particular benefit," Clark said. "I wish there was an alternative."

Lawmakers claimed money set aside to raise the salary of the most underpaid employees is a "substantial substitute" for the loss of the medical retirement benefit.

Evans said public employees wanted more and lawmakers refused to work with the association to find a mutually acceptable solution, forcing them into a lawsuit.

House Speaker Greg Curtis said he wouldn't hold a grudge against the association for suing, but he wouldn't be surprised if other lawmakers did.

"The bottom-line reality of it is they are going to be asking to overturn legislation and I imagine that some people will get frustrated with that," he said. "Essentially it seems to be the American way. If something happens that you don't like you file suit."

mcanham@sltrib.com