Los Angeles Must Negotiate Furloughs with Union

Financially strapped cities must abide by their agreements to arbitrate employee wage disputes, even when a financial emergency prompts furloughs, a divided California Supreme Court ruled Thursday.

The court, in a 4-3 decision, said Los Angeles must arbitrate its order that civilian city employees take one unpaid furlough day during each 80-hour pay period, beginning in 2009.  The city was attempting to close a $500 million deficit.

Some 400 workers in the engineers and architects union filed grievances, asserting the furloughs violated wage and work week provisions of the Memorandum of Understanding governing their jobs.  The city denied the grievances at each stage of the process, including submission to binding arbitration.

The union argued the order improperly delegated the city’s political power to an arbitrator.

The city maintained it reserved management rights to itself to “relieve city employees from duty” and thus furlough them.  Not so, says the union.  That refers to layoffs, not furloughs.

“In essence, the city’s argument here is that construing the MOUs as prohibiting mandatory furloughs for employees covered by the MOUs… would impermissibly conflict with the city council’s discretionary salary-setting and budget-making authority,” said Justice Joyce Kennard.  “That argument fails,” she said.

In dissent, Justice Carol Corrigan said, “The majority does not honor the terms of the parties’ agreement, and deprives the city of Los Angeles of its rightful authority to act in a fiscal emergency.”  She was joined by Justices Marvin Baxter and Ming Chin.

Even the union agreed that whether furloughs are subject to arbitration or not is a question for courts, rather than an arbitrator.  The Los Angeles MOU did not specifically authorize an arbitrator so it was for the court to decide if one was called for.

But the opinion states that under the terms of the MOU the “city has assumed a general contractual obligation to arbitrate disputes concerning the interpretation of the MOUs.”

“The arbitrator’s role would be limited to interpreting the MOUs for the purpose of determining whether the furlough program violates the terms of those MOUs,” Kennard wrote.

“Accordingly, submission to the arbitrator of the employees’ claim here that the furlough program violates the MOUs does not constitute an improper delegation to the arbitrator of any of the city’s discretionary authority,” she said.

Joining Kennard in the majority were Chief Justice Tani Cantil-Sakauye and Justices KathrynWerdegar and Goodwin Liu.

Case: City of Los Angeles v. Sup. Ct. of Los Angeles Co., No. S192828