Appellate court upholds determination that state constitution precludes payment of full salary in absence of budget
Source: editor@cslea.com
Date: 7/2/2010
On July 1, in a letter delivered to State Controller John Chiang, the Department of Personnel Administration (DPA) issued a pay letter directing that the salaries of all state employees (with the exception of the six bargaining units that have recently reached tentative agreements), be reduced to the federal minimum wage. It is DPA's position that absent a budget, the California Constitution prohibits the payment of wages beyond what is required by federal law.
Thursday's order came as no surprise. Last July, a similar directive was issued that ordered the State Controller's Office (SCO) to reduce employees' salaries to the minimum wage. Chiang refused to comply with the order and the governor sued to force compliance.
CSLEA intervened on the Controller's behalf in the state court litigation and removed the case to federal court, thereby biding time for the Legislature to enact a budget. Although the case was ultimately remanded to the state court, by the time the court ruled in the governor's favor, a budget was already in place which temporarily mooted the issue. However, the SCO and other labor groups, including CSLEA, appealed the lower court's decision to the Third District Court of Appeal.
Today (July 2), the appellate court affirmed the decision of the superior court and ruled that in the absence of a budget, the SCO is required to adhere to the instructions from DPA to reduce employees' salaries to the minimum wage. The court further held that, to the extent the SCO disagrees with the content of the pay instructions from DPA, it is incumbent on the SCO to seek judicial relief challenging the directive.
Attorneys for the SCO and CSLEA are still in the process of analyzing the decision to determine where the SCO stands legally in challenging the July 1, 2010 instructions from DPA and whether or not to seek a California Supreme Court review of the matter.
In anticipation of a possible adverse appellate decision, CSLEA has continued to work diligently at reaching an equitable tentative agreement with DPA which would provide safe harbor to Unit 7 members. For the past several months CSLEA has been in both off-table, conceptual discussions, as well as in formal bargaining with DPA. CLSEA has passed proposals which recognize the need for reasonable pension reform.
On June 29, CSLEA again passed a proposal which seeks tentative agreement on terms agreed to by DPA with the other bargaining units. Although avoiding the imposition of federal minimum wage on Unit 7 members is of paramount concern, CSLEA cannot agree to a deal which seeks greater concessions, without justification, than what DPA has negotiated with other bargaining units.
To the extent that DPA takes the unreasonable position that Unit 7 members should be treated less fairly than other represented employees, CSLEA is prepared to lobby the Legislature with proof that CSLEA was willing to agree to the terms DPA negotiated with other units. Evidence of the reasonableness of CSLEA's position could sway the Legislature to act in passing a continuous appropriations bill which would safeguard members' salaries.
As there are likely to be significant new developments at any time, CSLEA will issue updates as they become available.
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