Dissenters Worries About Practical Consequences of Arbitrating Furlough Dispute In Budgetary Crisis
With this post, I inaugurate a new sidebar category: Collective Bargaining.
Facing a fiscal emergency, the City of Los Angeles adopted a mandatory furlough program for its civilian employees. Represented by a union, the employees filed grievances, arguing the furloughs violated memorandums of understanding (MOUs) governing the employees’ terms and conditions of employment. After the grievances were denied, the union petitioned to compel the City to arbitrate the furlough dispute. The superior court granted the union’s petition, but the Court of Appeal reversed, finding arbitration would constitute an unlawful delegation to the arbitrator of discretionary policymaking powers that the city charter vests in its city council.
Los Angeles City Hall. 1931. Wikimedia Commons.
Now the California Supreme Court has ruled, in a 4 to 3 decision, that the City is contractually obligated under the MOUs to arbitrate the employee furlough dispute. City of Los Angeles, Petitioner, v. Superior Court of Los Angeles County, Respondent, Engineers & Architects Association, Real Party in Interest (Sup. Ct. June 6, 2013). Justice Kennard wrote for the majority, with Chief Justice Cantil-Sakauye, Justice Werdegar, and Justice Liu, concurring.
The City argued that allowing arbitration would constitute an unlawful delegation to the arbitrator of discretionary policy making powers – salary setting and budget making – that the City’s charter vests in the city council. [Note: Los Angeles is a charter city, meaning its governing system is defined by its charter, rather than by state laws.] But the Supreme Court disagreed with the City, holding “the arbitrator’s role would be limited to interpreting the MOUs for the purpose of determining whether the furlough program violates the terms of those MOUs.” In short, the role of the arbitrator would be adjudicative, not legislative.
Justice Corrigan dissented, with Justices Baxter and Chin concurring. Whereas the majority believed that the contract was ambiguous, and did not want to get down into the weeds interpreting it, the dissenters believed that the arbitration provision could not reasonably be interpreted to exclude furlough disputes from arbitration. What really perturbs the dissenters is that “[a]n important question of public policy and a matter of considerable budgetary significance is committed to the discretion of an unelected arbitrator, whose decision is unreviewable.”
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