Metropolitan News-Enterprise


Monday, March 28, 2011


Page 1


L.A. City Employees Cannot Arbitrate Furloughs—Court of Appeal




Los Angeles city employees cannot arbitrate furloughs implemented as a budget-cutting measure, the Court of Appeal for this district ruled Friday.

Div. Three granted the city’s petition for writ of mandate and directed that a Los Angeles Superior Court judge’s order requiring arbitration of over 400 employee grievances be overturned. The Engineers and Architects Association, representing the employees, had obtained the writ compelling arbitration from Judge Gregory Alarcon.

Justice Walter Croskey, writing for the court, said that there was some question as to whether the memorandum of understanding between the city and the union subjects furloughs to the grievance process. But even if it purports to do so, the justice explained, the grievances cannot be arbitrated because the charter gives the mayor and City Council non-delegable power to decide whether furloughs are necessary.

Fiscal Emergency

The city implemented the furloughs under the mayor’s May 2009 declaration of fiscal emergency and a subsequently enacted emergency ordinance directing the mayor to implement a furlough plan. The ordinance was accompanied by findings that the city’s general fund deficit had reached $529 million and would grow to more than $1 billion by the end of the 2010-2011 fiscal year absent changes, that the city needed to cut expenses and borrow funds to avoid running out of cash, and that labor-related costs had to be reduced because they were 80 percent of the city’s expenses.

The city cited Government Code Sec. 3404.5, and the city’s own Administrative Code, both of which provide an “emergency” exception to the city’s obligation to consult with employee unions prior to adopting ordinances relating to matters within the scope of union representation.

The city began furloughing employees one day per 80-hour pay period, although benefits based on an 80-hour pay period were maintained. Employee grievances over the furloughs were denied on the ground that the emergency ordinance trumped any conflicting provision of the MOUs.

Binding Arbitration

The EAA invoked the clauses of its MOUs that allow the union and its represented employees to obtain binding arbitration after all prior steps of the grievance process have been completed. It argued that the issue of whether furloughs violated the workweek and salary provisions of the MOUs would involve the “interpretation or application” of those agreements, thus rendering the issue grievable.

Alarcon ruled that the broad language of the grievance clauses encompassed the furloughs and granted the petition.

Croskey, writing Friday for the Court of Appeal, said the trial court may have erred in failing to consider extrinsic evidence on whether the city’s authority, under the MOUs, to “relieve...employees from duty because of...lack of funds” applied to furloughs, or—as the union argued—only to layoffs. If the language applied to furlougs, the justice explained, then the furloughs were not grievable and the judge erred in ordering arbitration.

But the jurist went on to say that it was unnecessary to resolve the issue because even if it intended to do so, the city could not lawfully delegate its “discretionary salary setting and budget making authority” to an arbitrator.

The charter, he noted, empowers the council to “set salaries for all officers and employees of the city.” That power, Croskey said, encompasses furloughing employees to reduce the city’s overall salary costs.

‘Terms Over Substance’

The union’s argument that the arbitrator would not be determining budget policy, but merely interpreting the wage and hour provisions of the MOUs, “is an elevation of terms over substance,” Croskey said.

“This is not a case where a single employee, or a single class of employees, is questioning a departmental decision to change their schedules or cut their pay,” the justice emphasized. “This is a challenge to a City Council’s decision to impose furloughs as a response to the City’s dire financial condition.”

Deputy City Attorneys Janis Levart Barquist and Jennifer Maria Handzlik represented Los Angeles on appeal, while Adam N. Stern and Lewis N. Levy of Levy, Stern, Ford & Wallach represented the union. Amicus briefs were authored by David W. Tyra and Meredith H. Packer of Kronick, Moskovitz, Tiedemann & Girard for the League of California Cities, supporting Los Angeles, and by Ellen Greenstone and Jonathan Cohen of Rothner, Segall & Greenstone for District Council 36 of the American Federation of State, County and Municipal Employees in support of the EAA.

The case is City of Los Angeles v. Superior Court (Engineers & Architects Association), B228732.


Copyright 2011, Metropolitan News Company