Calif. High Court to Hear Appeal Against San Diego Pension Cuts

City could be forced to create pensions for 3,000 workers if overturned.

The California Supreme Court said it will review an appeals court ruling that upheld San Diego’s pension cutbacks enacted in 2012 If the Court overturns the lower court’s decision, the city could be required to spend millions of dollars creating retroactive pensions for more than 3,000 workers hired over the past five years.

In April, the Court of Appeal, Fourth District of California, overturned a ruling by the state Public Employment Relations Board (PERB) that concluded that San Diego violated the Meyers-Milias-Brown Act (MMBA) when floating Proposition B, a pension reform measure supported by the then-mayor, Jerry Sanders. The MMBA requires that government employers meet and confer in good faith with labor unions and representatives of recognized unions regarding wages, hours, and other terms and conditions of employment.

PERB ruled that San Diego violated the MMBA by failing and refusing to meet and confer with four recognized employee organizations representing city employees over Proposition B.  

Proposition B gives new city workers a 401(k) with a city match instead of a guaranteed pension, and states that the guaranteed pension for newly hired public-safety workers will max out at 80% of the individual’s salary, instead of 90%. It also stipulated that San Diego’s overall payroll will be capped for five years at its 2011 level of less than $600 million annually.

The San Diego city charter in effect at the time Proposition B was approved had a provision that required a majority vote of all city employees to approve any changes to retirement benefits. Proposition B eliminated that provision from the charter.

But the appeals court ruled that “under relevant California law, the meet-and-confer obligations under the MMBA have no application when a proposed charter amendment is placed on the ballot by citizen proponents through the initiative process, but instead apply only to proposed charter amendments placed on the ballot by the governing body of a charter city.”

After the ruling by the appeals court reversed the PERB decisions, the San Diego labor unions filed a petition for a review in May. The unions claimed the April ruling created confusion about when management must negotiate with labor, which could disrupt labor relations across the state. The PERB also filed a petition for review.

The California Supreme Court will attempt to answer two questions:

  1. When a final decision of the PERB under the MMBA is challenged in the Court of Appeal, what standard of review applies to the board’s interpretation of the applicable statutes and its findings of fact?
  2. Is a public agency’s duty to “meet and confer” under the Act limited to situations in which the agency’s governing body proposes to take formal action affecting employee wages, hours, or other terms and conditions of employment?



Tags: , , ,