CHICAGO (Reuters) – The Idaho state legislature approved a bill on Tuesday to strip public school teachers of many of their collective bargaining rights while protesters in six states rallied against Republican efforts to curb union power.

The Idaho bill, which excludes issues like class size and workloads from negotiations for the state's 12,000 unionized teachers, was given final approval by the Republican-led House and is expected to be signed by Republican Governor Butch Otter.

The bill also eliminates teacher tenure, limits the duration of teacher labor contracts to one year and removes seniority as a factor in determining the order of layoffs.

Idaho is one of several U.S. states to take up Republican plans for sweeping restrictions on public sector unions in what has become a growing national debate over labor union power.

Republicans say the proposals are needed to rescue recession-battered budgets from deficits, but Democrats and union supporters say they are an attack on organized labor that could linger as an issue into the 2012 presidential elections.

Most national attention has focused on the stalemate in Wisconsin over Republican Governor Scott Walker's proposal to curb union rights, which sparked large protests in the capital Madison.

Wisconsin Senate Democrats have fled the state to block a vote on Walker's proposal, but e-mails released on Tuesday showed Walker has indicated he may be willing to compromise on elements of his plan.

The e-mails, released following a Freedom of Information Act request from the Milwaukee Journal Sentinel newspaper, show Senate Democrats and a senior Walker aide discussed some flexibility on issues such as his demand for annual votes to keep unions in existence.

Protests against Walker's plan continued in Madison on Tuesday. Similar Republican plans to curb public union rights and benefits sparked new protests in Indiana, Ohio, Michigan, Iowa and Florida.

DEATH OF THE MIDDLE CLASS

In Indianapolis, where most Indiana House Democrats remain out of state to block a vote on a bill they say is anti-worker, union protesters staged a mock "funeral" for the middle class with a New Orleans-style musical procession in honor of Mardi Gras.

In Ohio, Republican Governor John Kasich touted a plan that passed the state Senate last week to curb collective bargaining rights of public employees and ban them from going on strike.

In his "State of the State" speech, Kasich said the bill, which still must be passed by the Ohio House, was necessary to give local governments more flexibility in their budgets.

"Frankly, folks, the provisions of collective bargaining reform are examples of what we want to do to allow people to control their costs," said Kasich, setting off cat-calls from the gallery in the legislative chamber.

Pro-union demonstrators packed the Capitol rotunda after the speech, shouting, "Kill the bill."

In Michigan's state capital Lansing, hundreds of pro-union protesters jammed the rotunda and gathered outside the Capitol to oppose a bill to give emergency authority to break labor contracts to revive failing schools and cities. The state's largest school district of Detroit is under emergency management.

The Michigan House approved the measure in February. A final vote in the Senate, where Republicans hold a 26-12 majority, is expected on Wednesday.

In Iowa, hundreds of union workers crowded the state House chamber to protest a bill that would prevent negotiations on healthcare benefits for government workers and forbid union workers from negotiating layoff schedules.

The measure will be debated in the Republican-led Iowa House on Wednesday. It is expected to run into trouble in the Democratic-majority state Senate.

In Florida, facing a $3.6 billion budget deficit, union supporters held events in a number of cities as lawmakers returned to state capital Tallahassee to begin the 2001 legislative session.

In Tallahassee several hundred union backers took up positions across the street from the capitol building, where a few hundred conservative Tea Party members and their supporters held a counter rally. The two factions are expected to play major roles as lawmakers deal with the deficit.

Republican Governor Rick Scott has called for significant tax cuts on businesses and property owners while asking lawmakers to require state employees to pay 5 percent of their salaries toward their retirement plan. Florida now does not require an employee contribution.

Scott also wants new employees funneled into a 401(k)-type retirement plan instead of the traditional pension now offered to members of the Florida Retirement System.

(Additional reporting by Kay Henderson, David Bailey, Andrew Stern, Jim Leckrone, Susan Guyett, Laura Zuckerman and Michael Peltier; Editing by John Whitesides)

NEW YORK (Reuters) – The biggest Wall Street insider trading criminal case in a generation goes to trial on Wednesday, when prosecutors open their case against Galleon Group founder Raj Rajaratnam whose arrest 16 months ago shook the hedge fund world.

A jury of New Yorkers will hear prosecutors outlining how they believe Sri Lankan-born Rajaratnam broke the law by designing a complex web of stock tippers who helped him reap $45 million in illicit profit between 2003 and March 2009.

For the first time, the jury and observers of the high-profile case will be given an insight into the defense trial strategy, which faces seemingly overwhelming evidence of leaked corporate secrets, tapped telephones and friends-turned-government witnesses.

"The defense doesn't really get to show the whole picture until the trial and then it really can be quite different and end up with surprising results," said Stuart Gasner, securities fraud defense lawyer at Keker & Van Nest law firm in San Francisco and a former prosecutor.

The selection of a jury of 12 and six alternates began on Tuesday and is expected to be completed on Wednesday.

Presiding U.S. District Judge Richard Holwell sent prospective jurors home with a warning not to read anything about the highly-publicized case. He then told prosecutors and Rajaratnam's multimillion dollar defense team that opening statements would go ahead "for sure" on Wednesday.

Since arresting 53-year-old U.S. citizen Rajaratnam in October 2009 and announcing criminal charges against 26 former traders, executives and lawyers, the U.S. government has pressed ahead with what it calls the biggest probe of insider trading in the $1.9 trillion hedge fund industry.

Nineteen people have pleaded guilty in the Galleon case. It stands apart from past insider trading investigations because of the government's wide-scale use of phone taps. As many as 173 audio recordings will be played to the jury during the two-month long trial.

Rajaratnam was mobbed by photographers and TV crews when he walked into the courthouse on Tuesday morning and as he left at the end of the day. Dressed in a brown coat and a suit, he said nothing on both occasions.

Chief defense lawyer John Dowd has argued in court papers that prosecutors have broadened the definition of insider trading. He said a money manager's liberty should not be at risk because he trades on a stock while knowing something about the company.

The burden of proof is on prosecutors to convince the jury that their evidence shows Rajaratnam knew he was trading on confidential information provided by someone who had a fiduciary duty not to disclose it.

In the week before the trial, U.S. market regulators and prosecutors uncorked allegations against Rajaratnam's friend and former Goldman Sachs Group Inc director Rajat Gupta. They described phone calls in which he tipped Rajaratnam about confidential Goldman information before it became public.

Gupta faces a civil proceeding brought by the U.S. Securities and Exchange Commission but he has not been criminally charged. Lloyd Blankfein and David Viniar -- the Goldman Sachs chief executive and chief financial officer -- were on a list of people who might testify or be mentioned during the trial.

The case is USA v Raj Rajaratnam, U.S. District Court for the Southern District of New York, No. 09-01184.

(Reporting by Grant McCool, editing by Andrew Marshall)