Metropolitan News-Enterprise


Monday, July 11, 2011


Page 1


C.A. Says Some Employees May Have Been Furloughed Illegally




Employees of five state agencies that are not funded directly through the state budget may have been illegally included in employee furloughs, the First District Court of Appeal ruled Friday.

Div. Two overturned the bulk of an Alameda Superior Court judge’s ruling in favor of furloughed workers. The panel held that the Supreme Court’s ruling in Professional Engineers in California Government v. Schwarzenegger (2010) 50 Cal.4th 989, establishes the legality of furloughs for workers in 58 of the 63 agencies affected by the litigation.

Professional Engineers “is virtually dispositive” of the issues raised in Service Employees International Union, Local 1000 v. Brown, 11 S.O.S. 3748, Justice James Richman explained, because it upheld furloughs as long as they are tied to an “item of appropriation” by the Legislature.

But it does leave the door open for a different outcome as to employees of five of the defendant entities, Richman said.

The five are the California Children and Families Commission, also known as First 5 California; the Prison Industry Authority; the California Earthquake Authority; the California Housing Finance Agency; and the Office of Administrative Hearings.

Not in Budget

None of the five, Richman explained, received funding in the budget acts for 2008 and 2009, the years for which the plaintiffs sought back pay for furlough days. But because each of the agencies was, or may have been, funded by appropriations outside of those acts, and because the specific issue was not addressed in the trial court and “knowledge of the state budget process is not an ordinary judicial qualification,” the justice said, the case must go back to the trial court.

In December 2008, then-Gov. Arnold Schwarzenegger issued an executive order calling for the furlough of over 200,000 state workers on a twice a month basis, beginning Feb. 1, 2009. He later expanded his order to three days a month, and more than two dozen lawsuits were filed by employee organizations in response to Schwarzenegger’s directive.

The SEIU suit was brought suit on behalf of 95,000 employees, and was assigned to Judge Frank Roesch, who ruled in that case, and in a separate case brought by another union, that the governor violated violated Government Code Secs. 19851 and 16310.

Code Sections

The former section establishes the eight-hour workday and 40-hour week as “the policy of the state,” except as necessary “to meet the varying needs of the different state agencies.” The latter establishes procedures by which the state may transfer money between accounts when necessary, but prohibits “any transfer that will interfere with the object for which a special fund was created.”

The trial judge reasoned that Sec. 19851 was violated because the furlough program failed to consider the specific needs of each agency. Sec. 16310, Roesch said, was violated because closing agencies whose operations are paid for by special funds several days each month was “at least a prima facie showing of interference with the object” of the agencies.

Last October, with the state’s appeals from Roesch’s rulings still pending, the state Supreme Court decided Professional Engineers. The high court concluded that even if the governor lacked the power to institute the furlough program at the time he initiated it, the Legislature ratified his action when it approved the 2009 budget bill the following February.

Case Reargued

Two months ago, the First District’s Div. Five, Roesch’s ruling in the other case. That panel said Professional Engineers foreclosed the union’s argument with respect to Sec. 19851, and that the trial judge erroneously interpreted Sec. 16310.

The SEIU case was reargued in Div. Two following the Supreme Court ruling.

 The union conceded that many of its earlier arguments could not survive, but contended that the judgment should be affirmed with respect to agencies funded through dedicated or “special funds” or entirely by the federal government.

Richman noted that the five agencies as to which the court was ordering remand “are not your standard bureaucracies,” but are unique in that they are not mentioned in the budget acts.

“Because the five agencies are not tied to an ‘item of appropriation’ in the Budget Acts, their inclusion in the furlough program is not ‘mandated’ by an act of the Legislature, and thus, strictly speaking, are outside the holding of Professional Engineers.,” he explained. “...Nevertheless, we do not categorically exclude the possibility that the five agencies may be brought within the furlough program for reasons not disclosed by the made-obsolete-by-subsequent‑events record before us. We must allow for the possibility that not every answer can be found in the 763 pages (including the Governor’s line item reductions) of the 2008 Budget Act ...the 666 pages of the 2009 Budget Act...or the 639 pages of revisions.”


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