Metropolitan News-Enterprise


Friday, May 6, 2011


Page 3


C.A. Rules Governor Cannot Order Furlough of Insurance Fund Workers


By a MetNews Staff Writer


The First District Court of Appeal ruled yesterday for the second time that the governor may not impose mandatory furloughs on employees of the State Compensation Insurance Fund.

Last March, Div. Three upheld a decision by San Francisco Superior Court Judge Peter J. Busch granting a petition for writ of mandate prohibiting then-Gov. Arnold Schwarzenegger from reducing the number of hours worked by SCIF employees.

Following remand of the case from the Supreme Court and a change in administration, the parties stipulated to dismissal of the appeal and issuance of a remittitur affirming the trial court’s judgment as the final judgment in the matter.

Writing again for the panel, Justice Stuart R. Pollak declined to dismiss the appeal since the authority of the governor to order the furlough of State Fund employees is an issue of continuing public interest.

In December 2008, Schwarzenegger issued Executive Order No. S-16-08, declaring that the state was facing a fiscal and cash crisis and that a furlough of state employees was necessary to reduce spending and improve the state’s ability to meet its financial obligations.

Schwarzenegger directed the Department of Personnel Administration to “adopt a plan to implement a furlough of represented state employees and supervisors for two days per month, regardless of funding source.”

The California Attorneys, Administrative Law Judges and Hearing Officers in State Employment—which goes by the acronym CASE and is the exclusive collective bargaining representative for approximately 3,400 legal professionals in more than 80 different state departments, boards, and commissions—then filed suit in Sacarmento Superior Court, seeking to enjoin enforcement of the order.

CASE contended that the governor lacked statutory authority to order a furlough, that salary-setting is a legislative rather than an executive function, and that a furlough would contravene provisions of the Government Code and of the memoranda of understanding between the state and the unions.

A Sacramento Superior Court judge denied CASE’s petition, but before judgment was entered, issued a minute order clarifying that the ruling only applied to represented employees of executive branch agencies and did not address the governor’s authority to order furloughs for any independently elected constitutional officers or other elected statewide officials and their employees.

Shortly thereafter, CASE and three individual plaintiffs filed suit in the San Francisco Superior Court against Schwarzenegger, the Department of Personnel Administration, the state controller, and the president of SCIF seeking an injunction prohibiting the imposition of furloughs on represented employees of employed by SCIF on the basis of Insurance Code Sec. 11873.

That code section provides that “the positions funded by the State Compensation Insurance Fund are exempt from any hiring freezes and staff cutbacks otherwise required by law.”

After briefing and argument, the trial court agreed with CASE that Sec.11873 prohibits the governor from furloughing State Fund employees. Pollak, joined by Presiding Justice William R. McGuiness and Justice Peter J. Siggins, affirmed this decision.

Last May, the California Supreme Court granted review, and following its decision in Professional Engineers in California Government v. Schwarzenegger (2010) 50 Cal.4th 989, transferred the matter back to the appellate court for reconsideration.

After considering supplemental briefs submitted by the parties, Pollak said “we find nothing in the Supreme Court decision inconsistent with our prior conclusions and therefore again affirm the trial court’s judgment.”

McGuiness and Siggins again joined Pollak in his decision.

The case is California Attorneys, Administrative Law Judges and Hearing Officers in State Employment v. Brown, 11 S.O.S. 2333.


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