Court Allows Challenge Of San Diego Pension Measure To Proceed Before PERB

San Diego Municipal Employees Association v. Superior Court (Court of Appeal Case No. D061724) (Issued 6/19/12)

On June 5, voters in the City of San Diego (City) overwhelmingly approved Proposition B, a citizen-initiated pension reform measure. Proposition B will place most new city employees into a 401(k) program instead of a traditional defined benefit plan. Among other changes, the measure also provides for a five-year freeze on the amount of salary used for pension calculations.

Not surprisingly, employee unions vehemently opposed Proposition B. Led by the San Diego Municipal Employees Association (MEA), the unions launched a pre-election challenge to the legality of Proposition B. One avenue of attack was an unfair practice charge filed with PERB alleging that the City was required to bargain over Proposition B pursuant to People ex rel. Seal Beach Police Officers Assn. v. City of Seal Beach (1984) 36 Cal.3d 591, 597. As I discussed in a prior blog post, PERB granted MEA’s request for injunctive relief and went into court to prevent Proposition B from appearing on the ballot. The superior court denied PERB’s request for injunctive relief, finding that the electorate should have the opportunity to vote on Proposition B. Subsequently, the superior court issued a stay of PERB’s proceedings until after the election. MEA then filed a writ in the court of appeal challenging the stay issued against PERB.

In its decision, the court started with the premise that PERB “has exclusive initial jurisdiction over conduct that arguably violates the MMBA.” The court rejected the City’s argument that this case involved constitutional free speech rights that went beyond PERB’s jurisdiction over unfair labor practices. The court held that even such allegations could be heard by PERB as unfair practices.

The court then went on to address the City’s argument that it should be excused from exhausting PERB’s administrative proceedings because it would be futile. The court acknowledged that in Coachella Valley Mosquito & Vector Control Dist. v. California Public Employee Relations Bd. (2005) 35 Cal.4th 1072, the Supreme Court found that the futility exception applied because PERB lacked authority for its actions. However, the court found the Coachella case distinguishable because it involved pure questions of law while the present situation requires adjudication of some factual disputes. Accordingly, the court held that the superior court erred in ordering a stay of PERB’s proceedings.

Comments:

The pension reform measures in San Diego and San Jose garnered national attention as ground-breaking attempts to deal with the public sector pension crisis. While the voters spoke loud and clear on election day, everyone knew that these measures, if successful, would spark vigorous litigation in multiple forums. As so they have.
This case is just one battle in what will surely be a series of battles involving Proposition B. At some point, PERB will issue a decision on whether it believes the MMBA requires a city to bargain over citizen-initiated ballot measures. I believe the answer to that question has to be no. But either way, PERB’s decision will likely be challenged in court. So this case is just a warm-up … the real fight is yet to come.