Dec. 20 (Bloomberg) -- New York City is using a 1967 law that bans public employee strikes to force bus and subway workers back to work after they halted service on the biggest U.S. mass transit system, their first large-scale walkout since 1980.

Talks between the Transport Workers Union Local 100 and the Metropolitan Transportation Authority broke down last night. City public buses and subways stopped running early this morning, forcing millions of commuters to seek other ways to get to work.

The 1967 Public Employees-Fair Employment Act, known as the Taylor Law, says, ``No public employee or employee organization shall engage in a strike, and no public employee or employee organization shall cause, instigate, encourage, or condone a strike.''

State Supreme Court Justice Theodore Jones of Brooklyn imposed a $1 million-a-day fine today on Local 100 for going on strike. Last week he issued a preliminary injunction barring a walkout. He found the union in contempt of his order after its lawyers had argued the law should not be applied because the MTA had not bargained in good faith. Jones will consider contempt citations tomorrow against another local and union officers, including Roger Toussaint, president of Local 100.

Peter S. Kalikow, the chairman of the MTA, the parent agency for the city's transit authority, had said earlier that he and New York Attorney General Eliot Spitzer would ask Jones for the contempt citation against the union and its 33,700 members.

Transit employees risk losing two days' pay for every day of work they miss, under provisions of the Taylor Law.

$22 Million in Damages

The city has filed a suit against the union seeking another $22 million in damages per day, to cover lost revenue and the cost of police overtime. These damages would be on top of fines levied under the Taylor Law.

Jones issued two additional injunctions overnight, Kate O'Brien Ahlers, a spokeswoman for the city law department, said in an e-mailed statement this morning. She didn't immediately have the details of those court orders.

``We have been told by Corporation Counsel Michael A. Cardozo that the court `entered new injunction orders' early this morning,'' she said in an e-mailed statement.

The Taylor Law was passed in response to a 12-day strike by transit workers in 1966, according to the Web site of the United Federation of Teachers labor union, which is covered by the act. That strike violated a 1947 law banning strikes by government workers. Transport union leader Michael Quill was jailed for contempt, the UFT Web site says.

After then-New York City Mayor John Lindsay settled the strike, Governor Nelson Rockefeller appointed a panel headed by George W. Taylor, a labor law expert, to devise ways to keep such stoppages from happening again, the union Web site says.

New Penalties

The Taylor panel's recommendations, embodied in the 1967 law, kept the prohibition on striking and changed the scale of penalties, the UFT site says.

Under the 1947 law, striking workers could be fired and, if reinstated, have their pay frozen for three years, the site says. Taylor's panel recommended the current penalty of two days' pay for every day on strike, according to the Web site.

The new law also directs courts to file injunctions against potential striking public employee unions and makes it harder for striking unions to levy dues on their members. In exchange, public workers were guaranteed the right to organize and bargain collectively, according to the Web site.

To contact the reporter on this story: Andrew Dunn in New York at adunn8@bloomberg.net.

Last Updated: December 20, 2005 16:41 EST