Furloughs in the News

The National Law Journal just did an article on the likely effect of the Maryland furlough case and also a recent case out of Hawaii. The article includes some comments I provided the reporter on the potential effect (really, none) of those cases in California. The article can be found here.

Are Furloughs Unconstitutional? Unions Claim Victory in Maryland

Fraternal Order of Police v. Prince Geroge's County (U.S. District Court, Maryland) (Issued on 8/18/09)

Unions representing public employees throughout the nation have been crowing about a recent federal court decision in Maryland finding that Prince George’s County violated the federal Constitution when it furloughed nearly 6,000 county employees for 80 hours during fiscal year 2009.

Facts

Facing a $57 million budget deficit, the county implemented a furlough plan for employees. The unions sued the county arguing that the furlough plan violated the Contracts Clause of the Constitution. The district court agreed. The court held that the furloughs substantially impaired the bargaining agreements which were voluntarily entered into by both the unions and the county. Central to the court’s holding was the fact that—according to the court—the county did not fully explore alternatives to furloughs. The court also noted that the county had over $230 million in reserves—half of which were unrestricted funds—and that the county had recently touted its fiscal health in order to bolster its financial rating when issuing over $100 million in bonds.

Comments

The unions have been widely circulating this case since it represents one of the few victories unions can claim on this issue. However, what effect might this decision have in California? In my opinion, none.

First, the decision is a district court decision. While the decision is intriguing, it has no precedential value. Second, this case involved a constitutional claim and did not address any issues under labor law. This is because Maryland labor law only covers employees of the state and its school system. In contrast, all of California’s public sector employers are subject to one of several collective bargaining statutes and most of California’s public employees have exclusive representatives. Thus, in California, most furlough programs have been negotiated with unions. When furloughs are negotiated there cannot be any violation of the federal Constitution’s contracts clause.

I suppose the constitutional issue could arise if a California public employer unilaterally imposed furloughs on employees while an MOU was in effect. However, such an action is far more likely to draw an unfair practice charge with PERB. (The exception is the State of California itself which pursuant to the Dills Act, Gov Code 3516.5, has the authority to implement changes within the scope of representation during in emergency situations). Presumably, a union could also bring a breach of contract action under state law in such a situation.

The only other situation where furloughs might be imposed would be upon impasse as part of an employer's last, best, and final offer. However, in an impasse situation the MOU has already expired. So again, there cannot be any violation of the federal Constitution’s contracts clause.

So while unions around the nation may consider this case a victory, I don’t see it having any effect in California.

[Many thanks to Genevieve Ng for helping me draft this post]

Alameda Minimum Staffing Fight Continued to November 2011

I’ve been following with interest a battle over a minimum staffing initiative in the City of Alameda (City). In January of this year, the City began engine company “brownouts” because of the budget crisis. In response, the firefighters’ union began circulating a petition for a local ballot measure that would mandate a minimum staffing level of 27 firefighters per shift. At the time, the City had 24 firefighters per shift.

In March, while the petition was still circulating, the City took the unusual step of filing a lawsuit against the measure’s backers. The City argued that the measure constituted “an improper exercise of the initiative power pursuant to Article II, Section 8, of the California Constitution and the City Charter” and requested that the court relieve the City Clerk from having to validate and tabulate any signatures that were gathered. While the lawsuit was still pending, the firefighters were able to gather signatures from about 25% of the electorate by June, more than enough to qualify the measure. The City then had no choice but to schedule the measure for a vote.

According to news articles, the big debate was whether the measure should be put on the ballot in November 2009, at a substantial cost to the City since it would be a stand alone matter on the ballot, or some later time. At its August 3, 2009 meeting, the City Council voted to put the measure on the ballot in November 2011—the latest it could do so. The City Council also voted to drop its lawsuit.

At first blush, it seems like a clever move by the City Council—talk about putting a measure on ice! However, if the economy improves substantially by November 2011, it might actually be harder to defeat the measure. Everyone knows that the public likes to support public safety and if there is plenty of money, people are going to be inclined to vote for anything that makes them feel safer. Had the measure been put on the ballot this year or even June 2010, given the current economic climate, the additional cost to the City from the minimum staffing measure (estimated at $4 million/year by City staff) measure might have doomed it.