October 1, 2010
A Guide to Furloughs Litigation
By Gregg Adam and Jonathan Yank
Despite rumors of a pending state budget deal—which may or may not end the present round of furloughs—Unit 6 members remains subject to the onerous terms of the Governor’s furlough orders and CDCR/DPA efforts to implement them. Employee salaries are reduced by 15% and—to add insult to injury—many (if not most) of our members actually work on their “supposed” furlough days.
There are more than thirty cases file by labor unions representing state employees slowly working their way through the California courts. Two of those are being pursued by our office on behalf of CCPOA-represented employees. This short summary is intended to update members regarding the status of those cases and to speculate on when final decisions may be forthcoming. The good news is that relevant decisions should issue in fairly short order; the bad news is that those decisions may themselves trigger further litigation.
Before turning to the CCPOA-cases, we offer a brief summary of the September 8, 2010 oral argument in the California Supreme Court on other furlough-related cases. CCPOA was not directly involved in those consolidated cases, but a decision by the Supreme Court in those matters certainly has potential implications for CCPOA’s cases. The arguments there concerned whether the Governor generally has the authority to implement furloughs in response to a declared state of financial emergency (putting aside any illegalities in how they are implemented).
The Governor’s attorney argued that during any state of emergency (including a fiscal crisis), the Governor has sweeping, inherent executive powers, including the power to furlough state employees. The labor unions countered that the Governor had exceeded his powers because a number of statutes and provisions of the California Constitution clearly provide that only the Legislature, and not the Governor or others in the executive branch, can change state employees’ salaries.
Most commentators and practitioners (many noting that six of the seven justices were appointed by Republican Governors Deukmejian and Wilson) believe that the Supreme Court will rule for the Governor. Our hope is that, if that happens, it will be a narrow ruling, and not one that suggests that the Governor does indeed have unlimited power under the circumstances.
Now to CCPOA’s cases:
CCPOA v. Schwarzenegger I
CCPOA filed this case in March of 2009 in the Alameda County Superior Court. The furloughs had been implemented at the beginning of February, 2009, and by the beginning of March, the February paycheck had confirmed—what CCPOA suspected—that the paychecks received by our members made no distinction between those who had actually been able to take their furlough days off and those who had worked (i.e., our members’ paychecks were reduced whether or not they were able to take days off). Our lawsuit raised two sets of claims: (1) that the reduction of salaries effectuated by the furlough orders violated the separation of powers doctrine and clear language in the Government Code stating that only the Legislature has the power to change state employees’ salaries ; and (2) by paying no salary and only a “furlough credit” for certain work performed (i.e., furlough days when employees were required to work), the State was violating California’s wage-and-hour laws. These claims were filed for Unit 6 members and for supervisory employees represented by CCPOA.
Despite our best efforts to have the claims heard as soon as possible, Judge Frank Roesch, who was assigned the case, decided that he wanted to hear all furloughs cases on his calendar at once. (A number of other unions also filed in Alameda after CCPOA.) Accordingly, it was not until mid-November that the parties argued their claims to the judge in front of a packed courtroom.
On December 17, 2009, Judge Roesch issued an 11-page ruling in CCPOA’s favor on both sets of claims. He found that, based on undisputed evidence, the State had violated the separation of powers doctrine and California wage-and-hour laws. Consequently, he issued a Writ of Mandate (a type of court order) directing the State to immediately begin paying employees who worked on furlough days.
Now it begins to get complicated: On the day after Judge Roesch issued his Writ of Mandate, the State filed a Notice of Appeal to the First District Court of Appeal in San Francisco. CCPOA objected, pointing out that remedial claims for up to 30,000 employees still needed to litigated and, therefore, that the Notice of Appeal was premature and defective. The State Controller agreed with CCPOA and indicated that he would execute full paychecks. The State then asked the Court of Appeal to issue a stay of Judge Roesch’s Writ to prevent the order from taking effect, which it did. CCPOA then challenged the State’s Notice of Appeal as defective for the reasons stated above, but suggested that if the Court of Appeal believed the issues to be of sufficient importance (as we certainly agreed they were), then it should take the case “outside its normal rules” as an expedited appellate Writ of Mandate proceeding (yes, the terminology is often duplicative). We also asked the Court of Appeal to lift its stay, which we contended would simply cost the State additional money through monetary remedies and legal fees.
The Court of Appeal agreed with us that the notice of appeal was defective, and it also agreed with our suggestion that it should accept the case for an expedited Writ of Mandate proceeding. It would not, however, agree to lift the stay despite our request (and others we have made since).
Expeditious briefing took place, with the party submitting all of their briefs by mid-May (believe it or not, this was “expedited” for an appellate court). However, we still await a ruling from the Court of Appeal.
To be fair to the Court of Appeal, with a Supreme Court decision on this subject pending, it is likely that it has decided to await that decision to ensure there is no conflict with any decision it will issue in our case.
It is possible that once the Supreme Court rules, the parties may be asked in our case to analyze and submit further briefing as to whether the ruling affects our case. We tend to think that the Supreme Court’s decision will not affect our case because the issues are different—the Governor’s authority to order actual furloughs (meaning employees actually getting time off without pay) versus the State’s obligation to pay employees for all time for which they are actually required to work.
CCPOA v. Schwarzenegger II
We filed a second lawsuit in early August 2010 seeking to challenge the Governor’s emergency order to implement a second wave of furloughs (on account of the new state budget impasse). Again we filed in the Alameda County Superior Court.
Our lawsuit was one of a number of challenges by state employee unions to the Governor’s authority to order the second round of furloughs. Most of the challenges focused (again) on the lack of authority for the Governor to implement the furloughs.
Before our case was heard, several other unions successfully persuaded Alameda Superior Court Judge Stephen Brick to issue a temporary restraining order (“TRO”) prohibiting the Governor from implementing the second round of furloughs. The Governor made an emergency appeal to the Court of Appeal, but that was denied.
Our application for a TRO was heard shortly afterwards, and Judge Brick tentatively indicated he would also be inclined to issue the TRO in our case. Before he could, however, the California Supreme Court intervened and issued a stay, proclaiming that the cases were too similar to the matters then (and now) under consideration by the Court (i.e., the cases discussed above that were argued on September 8).
Accordingly, our second challenge to the furloughs remains stayed pending a ruling by the Supreme Court.
What comes next …
As stated, we expect a ruling by the Supreme Court in the near future on whether the Governor has the authority to unilaterally implement furloughs. Once that decision is issued, it should clarify whether we are likely to prevail on our challenge in CCPOA v. Schwarzenegger II.
In addition, once the Supreme Court weighs in, the Court of Appeal is likely to issue its decision in CCPOA v. Schwarzenegger I. If, as we hope, the Court of Appeal affirms Judge Roesch’s ruling, then the Writ of Mandate would be reinstated, and we would return to Judge Roesch’s courtroom to litigate the amount of back pay and other monetary remedies due to our members for the violations of California’s wage-and-hour laws.
