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City of Los Angeles and Does 1 Through 50, Inclusive v. the Superior Court of Los Angeles County

March 25, 2011

CITY OF LOS ANGELES AND DOES 1 THROUGH 50, INCLUSIVE, PETITIONER,
v.
THE SUPERIOR COURT OF LOS ANGELES COUNTY, RESPONDENTS, ENGINEERS & ARCHITECTS ASSOCIATION, PETITIONER AND REAL PARTY IN INTEREST.



(Los Angeles County Super. Ct. No. BS126192) ORIGINAL PROCEEDINGS in mandate. Gregory W. Alarcon, Judge. Petition for writ of mandate is granted and remanded to the trial court for further proceedings.

The opinion of the court was delivered by: Croskey, J.

CERTIFIED FOR PUBLICATION

Faced with a deficit exceeding $500 million and an impending cash flow crisis, the Mayor and City Council of Los Angeles (City) approved an ordinance directing the Mayor to adopt a plan to furlough City civilian employees for up to 26 days per fiscal year. The Mayor adopted such a plan, and many employees filed grievances challenging the furloughs to which they were subjected. The grievances were denied and the employees, supported by their union, the Engineers and Architects Association (Union), requested arbitration of the grievances. When the City refused to arbitrate, the Union filed a petition to compel arbitration of over 400 such grievances. Concluding that the grievances were arbitrable, the trial court granted the petition to compel. The City challenged the order compelling arbitration by petition for writ of mandate. We issued an order to show cause and now grant the petition. While there are questions as to whether the issue of furloughs is grievable under the terms of the controlling Memoranda of Understanding (MOUs),*fn1 we conclude that any agreement to arbitrate the issue of furloughs would constitute an improper delegation of discretionary policymaking power vested in the City Council.

FACTUAL AND PROCEDURAL BACKGROUND

On May 12, 2009, Mayor Villaraigosa sent a letter to the City Council requesting the City Council to declare a fiscal emergency and adopt an urgency ordinance permitting reduced workweeks of less than 40 hours. The Mayor indicated his intent to propose and implement a plan of mandatory work furloughs for virtually all civilian employees of the City. In response to the Mayor's request, the City Council passed a resolution declaring an emergency and directing the Mayor to adopt a furlough plan. The resolution was approved by the Mayor on May 22, 2009, and thus became an ordinance.*fn2

The resolution set forth the fiscal circumstances which justified the declaration of emergency. These included: (1) a $529 million general fund deficit for the 2009-2010 fiscal year; (2) ongoing revenue sources had plunged nearly $300 million; (3) continued declines in property tax revenues were expected; (4) taxes could not be raised; (5) the deficit was expected to grow to over $1 billion by the end of the 2010-2011 fiscal year if no changes were made; (6) 80% of the City's expenses were linked to salaries and benefits; (7) if no changes were made, the City would face a cash flow crisis; and (8) if the City could not borrow funds, it would be out of cash by the end of August 2009. As a result of these and other circumstances, the City declared a fiscal emergency.

The fiscal emergency was declared pursuant to Government Code section 3504.5 and Los Angeles Administrative Code section 4.850. These sections relate to the City's obligation to consult with employee unions prior to the adoption of ordinances relating to matters within the scope of the unions' representation, with an exception allowing for consultation after the adoption of such an ordinance, in cases of "emergency." The timing and extent of the City's attempts to meet and confer with the Union, as well as the legal sufficiency of those attempts, is beyond the scope of this opinion. Indeed, the Union brought an unlawful employee relations practice claim raising the issue before the Employee Relations Board (ERB); that matter is currently proceeding. Suffice it to say, however, that, according to the Union, the City indicated a willingness to negotiate only the impact of the furloughs, not the furloughs themselves.*fn3

Furloughs of one day per 80-hour pay period were implemented. Numerous employees filed grievances regarding the furloughs, arguing that furloughs violated the wage and workweek provisions in their MOUs.*fn4 The grievances were denied, generally on the basis that the furloughs were implemented in accordance with City Council action and were therefore not grievable.*fn5

Under the MOUs, the final step of the six-step grievance process is submission to binding arbitration before the ERB; the request is to be jointly filed by the grievant and the Union. In this case, the employees and the Union requested arbitration of the denied grievances; the City refused arbitration.

On April 29, 2010, the Union filed its petition to compel arbitration of over 400 grievances.*fn6 The Union subsequently filed points and authorities in support of its petition, arguing that furloughs violated the salary and workweek provisions of the applicable MOUs and were grievable (and therefore arbitrable) under the terms of the MOUs. Specifically, the Union relied on the language of section 3.1 of the MOUs, which states, "A grievance is defined as any dispute concerning the interpretation or application of this written MOU or departmental rules and regulations governing personnel practices or working conditions applicable to employees covered by this MOU. An impasse in meeting and conferring upon the terms of a proposed MOU is not a grievance." The Union took the position that determining whether furloughs violated the workweek and salary provisions of the MOUs would involve the "interpretation or application" of the MOUs, thus rendering furloughs grievable.

The City opposed the petition, arguing that furloughs implemented pursuant to a declaration of emergency are not grievable. The City relied on language in section 1.9 of the MOUs, which it argued granted the City the absolute management right to furlough employees. As section 1.9 of the MOUs will play a significant part in our analysis, we set it forth in detail: "As the responsibility for the management of the City and direction of its work force is vested exclusively in its City officials and department heads whose powers and duties are specified by law, it is mutually understood that except as specifically set forth herein no provisions in this MOU shall be deemed to limit or curtail the City officials and department heads in any way in the exercise of the rights, powers and authority which they had prior to the effective date of this MOU. The Association recognizes that these rights, powers, and authority include but are not limited to, the right to . . . relieve City employees from duty because of lack of work, lack of funds or other legitimate reasons . . . take all necessary actions to maintain uninterrupted service to the community and carry out its mission in emergencies; provided, however, that the exercise of these rights does not preclude employees and their representatives from consulting or raising grievances about the practical consequences that decisions on these matters may have on wages, hours, and other terms and conditions of employment." (Italics added.)

In its opposition to the petition to compel arbitration, the City relied on the language first italicized. That is, the City argued that the language retaining to the City the right to relieve employees from duty because of lack funds permitted it to implement mandatory furloughs. However, the City did not call the trial court's attention to the second phrase we have italicized, the language indicating that employees retained the right to grieve "the practical consequences" that such decisions may have on wages, hours, and other terms and conditions of employment.

The trial court rejected the City's arguments and granted the petition to compel arbitration, concluding that the issue of furloughs fit within the broad definition of a grievance found in section 3.1 of the MOUs. The court also concluded that any conflict between (1) the language in section 1.9 permitting the City to reduce work hours and (2) the workweek and salary provisions in other sections of the MOU would involve issues of interpretation and application of the MOU, which were left to the grievance procedure under section 3.1.

The City filed a petition for writ of mandate, challenging the trial court's order compelling arbitration of the approximately 400 grievances. In the City's brief, it relied on section 1.9 of the MOU, but focused on the language permitting the City to take necessary actions to carry out its mission in emergencies, not the language allowing the City to relieve employees from duty due to lack of funds. Again, the City did ...


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