Two years ago, long before Republican Scott Walker used the Wisconsin governorship to launch a national fight over public employee unions, Montgomery County Executive Isiah Leggett won a startling victory in the union-friendly county’s collective-bargaining process.

A county labor umpire, appointed with the blessing of local union officials, essentially ruled that Montgomery’s binding arbitration process wasn’t actually binding.

But after wielding the ruling to extract wage concessions in a bad budget year, Leggett (D) agreed with spooked union leaders that the decision should be forgotten. “The parties agree that they will neither cite nor attempt to rely on the vacated decision in any way,” they wrote in a joint agreement.

Now, however, the exercise in legal make-believe is unraveling in the aftermath of two years of fiscal pain in the wealthy Maryland county and across the country.

On Friday, Montgomery’s fight over collective bargaining is set to land in court, an unpredictable venue where the outcome could have a profound impact on the way the county negotiates with employees and crafts multibillion-dollar budgets.

Leaders of the county’s main government employees union sued Leggett last month, seeking to force him to abide by the results of the county’s binding arbitration process, which he disregarded in proposing his $4.35 billion budget. Although mediators had ruled for the unions, Leggett proposed cutting health and pension benefits anyway.

The legal dispute has raised questions in Montgomery that echo broader national fights over the legal rights of unions and the fiscal responsibilities of local governments. Among them: Do Montgomery’s collective bargaining laws mean anything, or can they just be ignored?

Union leaders and some county employees have slammed the county executive as a Walker wannabe and questioned Leggett’s fitness to lead the heavily Democratic county. “He wants to break the unions,” said Rick Sullivan, a psychotherapist who works for the county health department. “I don’t see him as a liberal politician. He’s called ‘liberal,’ but . . . in my book, trying to bust the back of the unions is not liberal.”

Union attorneys struck a fighting tone in their legal filings, calling Leggett “Nixonesque” and accusing him of relying on “an ancient but disfavored (at least in our democracy) notion that the Executive knows what is best for his subjects and can ignore the law as he sees fit.”

Attorneys for the Municipal and County Government Employees Organization say Leggett “has arrogantly deprived the union of its proper role in determining the ultimate economic fate of the 7,500 members it represents.”

The union wants the court to force Leggett to recommend a budget that reflects the contract provisions it won during binding arbitration.

In an interview, Leggett said he supports collective bargaining and has for years taken steps to improve county finances for the benefit of residents as well as employees.

“I believe in collective bargaining. I believe in the rights of unions. I’ve fought for that repeatedly,” he said. “I just believe, given where we are today, we have to make adjustments” in the compensation the county provides. “All we’re doing is defending ourselves, pure and simple. . . . I didn’t ask to go to court.”

In court filings, county attorneys have argued that it would be irresponsible, not to mention unconstitutional, to require Leggett to recommend a budget he opposes.

“How can it be just for a court to compel the elected executive representing the interest of nearly 1 million residents to recommend that the council approve a budget that the executive does not believe is in the public interest?” county attorneys asked in legal filings.

County attorneys said there is a conflict between the county charter, which is treated as Montgomery’s constitution, and the law that set up collective bargaining. In such a conflict, the charter trumps, they said. Under the charter, Leggett has “virtually unchecked” authority to propose the budget he sees fit, they argued. The only exception is that his budget has to “be consistent with” the county’s six-year capital improvements program. They also made the broader argument that proposing a budget is a “legislative function” that can’t be delegated to an arbitrator.

Earlier this year, with Montgomery facing a $300 million shortfall and the county and the union at an impasse, a county labor arbitrator selected the union’s final offer. The arbitrator said the $25 million in concessions offered by the union and the union’s approach to limiting long-term health-care and retirement costs were more reasonable than the county’s final proposal.

According to county law, whatever the arbitrator chooses becomes “the final agreement” between the county executive and the union, and “any provision which requires action in the county budget must be included in the budget” sent to the County Council by the county executive. The council has the final word.

Last month, Leggett sent a budget to the council that he said reflected his best effort to deal with the county’s long-term fiscal problems.

On the same day, Leggett’s county attorney also sent a letter to the leader of the county firefighters union.

It was a dispute over firefighters’ raises that led the labor relations administrator, Andrew Strongin, to make the 2009 ruling in favor of Leggett. Strongin was sharply criticized by the firefighters and was not reappointed.

In an interview last year, Leggett said: “I never wanted the opinion in the first place. . . . I’m not one who wants to see an unnecessarily strong position from the county executive that would trump, in all cases, the collective-bargaining process.”

Now, the issue is coming before a judge with a different union. But the arguments are similar.

The fact that the ruling was vacated “does not diminish the strength or correctness of the underlying argument,” the county attorney wrote in the letter.