Metropolitan News-Enterprise


Wednesday, May 18, 2011


Page 1


C.A. Upholds Schwarzenegger Three-Day Furlough Program




A program initiated during Gov. Arnold Schwar­zenegger’s administration, furloughing state employees two—and later three—days per month, was lawful, both as to state- and federally funded workers, the First District Court of Appeal has ruled.

Div. Five Monday reversed Alameda Superior Court Judge Frank Roesch’s Dec. 31, 2009 order that the governor cease furloughing employees of specified departments and agencies. The court had previously stayed the order pending appeal.

In November 2008, Schwarzenegger published a letter addressed to all state employees, announcing that in order to cope with the state’s worsening fiscal situation he was proposing a one-day-a-month furlough that would result “in a pay cut of about 5 percent.”

Executive Order

By December, citing the worsening economy and the possibility that the state would soon lack sufficient cash to meet its payroll and other obligations, 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.

One of those, filed by the Union of American Physicians and Dentists, led to Roesch’s ruling that the governor had violated Government Code Secs. 19851 and 16310.

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.”

Trial Judge Ruling

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 appeal from Roesch’s ruling still pending, the state Supreme Court decided Professional Engineers in California Government v. Schwar­zenegger, 50 Cal.4th 989. 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.

Presiding Justice Barbara J.R. Jones, writing Monday for the Court of Appeal, said the Professional Engineers ruling foreclosed the union’s argument with respect to Sec. 19851, and that the trial judge erroneously interpreted Sec. 16310.

Union’s Claim

The union, supported by the federal government as amicus, had contended that the Supreme Court’s decision does not permit furloughs of federally paid workers, because placing those workers on leave saves no money. But Jones said her court is bound by the high court’s ruling that furloughs are legal “regardless of funding source.”

Professional Engineers also forecloses the argument that the third furlough day is illegal, Jones wrote, explaining:

“No party to this appeal disputes that the reductions in employee compensation mandated by the revised 2009 Budget Act were premised on state employees taking three, not just two furlough days per month. We conclude that when the Legislature used the same language in the revised 2009 Budget Act as it had used in the 2009 revisions to the 2008 Budget Act, it intended the same result.”

With respect to the fund transfer issue, Jones said the trial judge read more into the statute than was there. “We conclude the trial court erred when it ruled that a statute that prohibits one act, the transfer of funds, was ipso facto violated by a different act, the furloughing of state employees,” she said.

The case is Union of American Physicians and Dentists v. Brown, 11 S.O.S. 2558.


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