Partner Charles Sakai sat on a panel with Chris Platten moderated by Katherine Thomas and discussed the latest trends in public sector labor relations.  Partner Nikki Hall gave conference attendees an update on disability law during her presentation titled “Disability Law Update: The Top Five Things Every Public Employer Needs to Know.”  Associate Erich Shiners moderated a discussion on the changes and trends happening at PERB since Governor Brown took office.

Thank you to the State Bar Association for putting on another great event.  We hope all attendees enjoyed the day.

Like most California public entities, the City of Menlo Park has struggled with the ever-increasing burden of post-employment benefits. In an effort to address this, the City’s voters placed an initiative on the November 2010 ballot that would limit pension benefits for new city employees and require voter approval for any future labor agreement providing pension benefits exceeding those established by the measure.

Two of the City’s unions, AFSCME and SEIU, brought a pre-election challenge to the measure in San Mateo County Superior Court. The Court rejected this attempt to stop the election, concluding that the Unions failed to meet their burden of proving that the measure was clearly invalid, and allowed the measure to be put to the voters. More than 70% of the electorate voted to approve Measure L.

After the election, the Unions renewed their challenge. They first argued that the measure is invalid because Government Code section 36506 delegates exclusive authority over employee compensation – including pension benefits – to the city councils of general law cities.[1] The Court rejected this argument, concluding that section 36506 does not divest the voters of their constitutional right of initiative with respect to pension benefits because, in Government Code section 45306, the Legislature specifically contemplates a role for direct voter input in the establishment of local pension systems.[2] The Court held that because Measure L creates a new tier of pension benefits for employees hired after the measure’s effective date – rather than modifying benefits for current employees – it fits squarely within the voters’ authority under section 45306.

The Unions next argued that Measure L conflicts with the bargaining obligations imposed by the MMBA, claiming that the measure prevents the City from bargaining in good faith with an open mind over pension benefits. The Court also rejected this claim, holding that Measure L is no different from a statute passed by the Legislature placing limits on public employee pension benefits, which the Unions conceded would be valid. The Court explained that a law constraining the pension benefits available to local public employees has no effect on the City’s duty and ability to negotiate in good faith within those constraints and thus does not conflict with the MMBA. Moreover, the Court found that the City had negotiated in good faith with the Unions over pension benefits both before and after the passage of Measure L.

Conclusion

While an appeal is certainly possible, this well-reasoned trial court decision is good news for public agencies that plan to rein in growing pension obligations. Most critically, the Court’s view that voter-imposed constraints on pensions do not violate the MMBA addresses a point frequently raised by opponents of pension reform both in general law and charter cities and counties.

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Contact:
Jonathan Holtzman
(415) 678-3800 or jholtzman@publiclawgroup.com

[1] Government Code section 36506 states: “By resolution or ordinance, the city council shall fix the compensation of all appointive officers and employees. Such officers and employees hold office during the pleasure of the city council.”
[2] Government Code section 45306 states: “The ordinance establishing a retirement system may be adopted either by a majority vote of the electorate of the city or by approval of a two-thirds majority of the legislative body of the city. The ordinance shall not be repealed except by a vote of the electorate.”

The City of Richmond honors RSHS for its years of service to the City.

During the nearly 5 years Louise, Randy, and Scott provided City Attorney services to Richmond, the team oversaw:

• The approval of a new $1 billion Chevron Refinery project, and the subsequent environmental litigation;
• The transfer of the Point Molate Naval Fuel Depot from the U.S. Navy to the City, and the related development of the site;
• The development of a groundbreaking wireless telecommunications ordinance;
• Litigation and eventual settlement over the 2007 Cosco Busan Oil Spill;
• The development of a medical marijuana collective ordinance, regulations, and application process;
• The development of a municipal ID card ordinance;
• City election process in 2008, 2010, and 2011;
• The defense of dozens of state and federal lawsuits; and
• The defense of a property tax allocation matter involving billions of dollars in assessed value.

By now, you likely know that Stockton has entered a prebankruptcy mediation process under Assembly Bill (AB) 506 and that if the mediation doesn’t succeed, it may become the largest California city to seek bankruptcy protection. The causes of Stockton’s fiscal distress are well-known and include the housing market crash, pensions, retiree health, excessive labor contracts, and overly optimistic development plans.  READ MORE

Sometimes a case is only as good as its weakest allegation

After a 12-week trial, a Contra Costa jury ruled in favor of the city of Richmond in one of the most significant employment cases of the year. The case was filed by seven African American police officers of various ranks, from sergeant to captain. They alleged they were denied promotional opportunities in the Richmond Police Department as a result of their race. They also alleged that after complaining about the lack of promotions, they were subjected to harassment and retaliation by the management of the Richmond Police Department and the Richmond City Manager’s Office. A second, federal case is still pending on the retaliation claims.  READ MORE.