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Public Sector Unions Win Big at the California Supreme Court in Getting San Diego Pension Reforms Overturned

California citizens must now meet and confer with union bosses before qualifying any compensation-related initiatives for the ballot.

A recent California Supreme Court decision, striking down a San Diego initiative that rolled back pension benefits for new public employees, has rightly been portrayed as a win for public-sector unions—and something that could cost San Diego taxpayers more money as a lower court hashes out a remedy. But the decision is more consequential than the news coverage would suggest.

Quite simply, it was an assault on the constitutional right to qualify initiatives for the state or local ballot. Union demands have now officially trumped our voting rights. California citizens must now meet and confer with union bosses before qualifying any compensation-related initiatives for the ballot if any city officials were actively involved in the process.

The matter goes back to 2010, when San Diego Mayor Jerry Sanders and Councilman Carl DeMaio came up with an idea to replace defined-benefit pension plans with 401-k plans for most newly hired employees (police and firefighters were exempted) via a voter initiative. The reform was necessary given how the city's pension costs were consuming so much of the municipal budget. San Diego was on the cutting edge of a statewide pension-reform movement, as the state faced a budget mess and cities were wrestling with unfunded pension liabilities.

As the high court explained, there are two ways to propose an initiative in charter cities. A city council can qualify a measure and place it on the ballot on its own. Or voters can place an initiative on the ballot by collecting signatures on a petition from 15 percent of the city's voters. Given that the San Diego City Council majority was opposed to such pension reforms, the two council members helped spearhead a citizen campaign to place the measure on the June 2012 ballot.

Before the measure hit the ballot, the San Diego Municipal Employees Association demanded that the city "meet and confer" with the union over the proposed changes, which is required before cities place measures on the ballot. It's obviously not required, however, when citizens place measures on the ballot. The crux of the union argument was that the initiative was a "sham" city initiative designed to circumvent the city's requirement to negotiate with union officials. Their evidence: A couple of city officials were involved in the effort.

This bizarre argument gained traction after the union enlisted the help of the Public Employment Relations Board, which describes itself as "a quasi-judicial administrative agency charged with administering the eight collective bargaining statutes." That creates a sense of impartiality. Of its current board members, however, one has had multiple positions at SEIU and another was a top attorney for the California Teachers Association. A third was an adviser to public agencies. The final member is an attorney who "worked in his college dining hall and was a shop steward for UNITE HERE Local 35." Draw your own conclusions, but mine is that the taxpayer doesn't stand a chance in the halls of PERB's union-friendly bureaucracy.

So it was predictable that PERB would side with the city's union. But its actions really raised concerns when it went to court to have the measure removed from the ballot. It failed on that mission. Voters had their say and the measure passed with nearly 70 percent "yes" votes, but that didn't stop the union and PERB from trying to then invalidate the election. They were rebuked by a state court of appeals for a pretty solid reason. The law doesn't require citizens to meet and confer with unions over voter initiatives. This was a voter initiative. There's no case here, which makes the high court's final judgment hard to fathom.

The Supreme Court justices gave great deference to PERB. They quoted a previous decision noting that PERB is "one of those agencies presumably equipped or informed by experience to deal with a specialized field of knowledge, whose findings within that field carry the authority or an expertness which courts do not possess and must respect." This shows a deep and troubling misunderstanding of the nature of government bureaucracy. Sure, PERB has expertise in applying California's labor laws, but it does so with a strong institutional bias.

The state Supreme Court concluded that Sanders used "the power and resources of his office to play a major role in the promotion" of the ballot initiative, so his "activity created an obligation to meet and confer." It is uncertain how the lower court will fix the situation. That court could overturn parts of Proposition B or impose a fine on the city, according to a statement from DeMaio, who vowed continued legal action if the court changes the law.

It's worth recalling the argument that former San Diego city attorney Jan Goldsmith made in the San Diego Union-Tribune in 2012. He wrote that PERB "doesn't seem to understand that the city charter does not allow the mayor to put a measure on the ballot unilaterally and, in fact, he has no power to adopt, change or veto a city-sponsored measure." Goldsmith was aghast that the agency would dismiss the rights of the 116,000 people who signed the petitions and therefore "have no constitutional right unless they first bargain for it with labor unions."

As Goldsmith added, "The power of initiative is a constitutional right, not something for which people must bargain. It is unconditional and nonnegotiable, like the First Amendment. Never in the history of California has there ever been a requirement to negotiate with labor unions over terms of a citizens' initiative placed on the ballot by voter signatures. In fact, governments can't change those terms. And the mayor doesn't give up his constitutional rights simply because he's the mayor."

It's simply astounding that the court could place the demands of a special-interest group above the constitutional rights of California citizens. Such legal activism is troubling for another reason. The court will soon review a crucial case that could upend the California Rule, which forbids local governments from rolling back pension benefits. If that rule isn't amended, governments will face few choices as pension debts soar. If the Supreme Court is so ideological on union matters, then perhaps reformers have misplaced optimism about the California-Rule case. The San Diego ruling is yet a reminder of how deeply union tentacles go into every aspect of this state.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org. This column was first published by the California Policy Center.

Photo Credit: Gala Images/agefotostock/Newscom

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  • Scarecrow Repair & Chippering||

    Good grief. There's such a thin thread of plausible logic in that decision.

    Unions must be in pretty deep doodoo if they depend on such shenanigans.

  • Mickey Rat||

    The California Courts go with a results oriented jurisprudence. I am shocked at such a development!

  • JesseAz||

    Liberals love talking about election integrity but will never ask the FBI to investigate the union and state corruption in California. The state court just ruled unions can veto the citizens. And it's not the first time.

  • Conchfritters||

    ......the Public Employment Relations Board, which describes itself as "a quasi-judicial administrative agency charged with administering the eight collective bargaining statutes.

    "All animals are equal, but some animals are more equal than others."

  • Mithrandir||

    But this gets appealed, right?

  • BigT||

    Gorsuch and Kavanaugh to the rescue!

  • Overt||

    How? On what grounds? The "Constitutional Right" to do initiatives is in the CA constitution. Where is the federal issue here? Maybe "forfeiture of rights without due process"?

  • Scarecrow Repair & Chippering||

    The Constitution guarantees / requires each state have a specific form of government (republic? democracy? I am too lazy to look it up). There's also equal protection from the 14th amendment.

  • JesseAz||

    Feds often step in on election matters.

  • Rossami||

    Nope. It's a purely California issue that's now been decided by California's top court. You don't get to go to Federal Court on purely state issues.

    Unless you count the "court of public opinion" as an appeal. They could always run the initiative again.

  • Flinch||

    California has a problem in that it is a republic. Initiatives therefore are sitting ducks outside of a limited scope. A recall initiative for example should be rock solid, but stepping into the shoes of elected authorized representatives who have standing to negotiate a contract is the weeds the judge got tripped up by. And shame on the alleged opposition [if there was any] - the very idea of a public sector union should have been attacked to deny any reason for looking at 'due process' in the first place: unions aren't elected except by a targeted select group and the people we do elect can't get rid of them once the barn door gets opened. This formation process skirts the wards & districts of regular voting and locks interested parties out - it is anti competetive from the get go. Most structures only allow union members to vote on internal matters, [including disbanding] which is the kingpost for their corruptions, firewalling them from a proper ballot box. I recall Lundgren pretty much laying down on 187 and the state fell into one party control immediately afterwards, so the real story here is who served up the public supporting the initiative to the unions? I wonder where the lawyers went out for lunch together after the judge rubber stamped the proceedings...

  • chemjeff radical individualist||

    Well, not terribly surprising, unfortunately.

  • Longtobefree||

    Welcome to the people's republic.
    Next California will form a union of all citizens, with mandatory dues which are not taxes, so they can be raised without bothersome legal constraints. Then no one will be able to do this again.

  • Conchfritters||

    Remember to promise them 8% growth into perpetuity on their pension plan.

  • JesseAz||

    Don't forget to increase benefit whenever the market exceeds 8% since that is the floor.

  • Jimbo||

    13th pension check, FTW!

  • Stephen Lathrop||

    Why are police and firefighters always exempted?

  • Overt||

    Because they always stand up on commercials and say "I am a hero, and my buddy died protecting you, and my dad was a firefighter and he burnt ta death in 95. Why are you taking away my retirement?"

    So, any initiative is harder to sell to the public if it harms our "heroes"

  • Unicorn Abattoir||

    Why are you taking away my retirement?

    Well, judging by your buddy and your dad, you're not going to make it to retirement, and probably won't need that pension.

  • C. S. P. Schofield||

    Remind me again? Public Sector Unions are different from Criminal Extortion Gangs, how exactly?

  • JesseAz||

    Many criminals lost their voting rights so Dems don't care to protect them.

  • Dizzle||

    Let them collapse under their weight. California started dieing a long time ago, the san Andreas can't swallow it quick enough

  • loveconstitution1789||

    Get this to the US Supreme Court on some federal issue STAT.

  • BestUsedCarSales||

    I've consistently seen Labor type people use an idea that a failing of democracy is that people will not band together when they need to protect labor, so this is fairly consistent with their views at least.

  • albo||

    DeMaio came up with an idea to replace defined-benefit pension plans with 401-k plans for most newly hired employees (police and firefighters were exempted) via a voter initiative.

    Doesn't the city have a normal legislative process? I and R is the worst thing to come out of last century's progressive movement. It shows that the people, as a whole, are dumber than they are individually.

  • Hunthjof||

    While I would laugh and say well Californians you get what you vote for I can't laugh. I can't laugh cause I know that when California's Pension system goes KABOOOMMM the rest of the nation will pay. California will come hat in hand to good old Uncle Sugar Daddy in DC. Even if the Grand Coward Party maintians control of the Legislature they will do nothing to stop it. Sure they might talk a tough game for a little while. The Democrats and the media however will spotlight some poor 70 year old retired teacher who will have to eat cat food. Then the cowards will give in and like magic a bailout. Any attempts to restrict future pensions as a part of the bailout will again meet with opposition and in the end will be missing from any bailout legislation. The California politicians know this. Therefore they can make these promises and not foist the true costs on the citizens of California.

  • JesseAz||

    The auto bailout under Obama was just a test run.

  • Hunthjof||

    Yup the UAW were the big winners in that one. They even threw other unions under the bus.

  • Slocum||

    I kind of doubt it. First of all, this won't go bust all at once, but rather one municipality at a time. And that 'poor' 70 year old retired teacher? People will quickly find out that she retired at age 54 and that her pension was way higher than anything they have coming (and will remain so even after any bankruptcy haircut) and sympathy will evaporate pretty quickly.

  • Hunthjof||

    Sadly CALPERS the statewide fund that many of those municipalities are a part of is a ticking time bomb of multi-billion dollar proportions. Heck if an investment firm had given the rosy return on investment projections the SEC would be crawled up their butts with a microscope. I would like to believe you that the sympathy would evaporate and the cowards in DC would grow a spine. Sadly I don't have faith they will. How many "healthcare" sad stories that were found out to be bull do you still hear spread today. You know the DNC playbook is to go for the feelz.

  • DarrenM||

    I just wonder how many Democrats would really vote for this. I think there would be many swing voters who'd get rather PO'd about it and Democrats in those states would not want to risk blowback. Democrats already have California locked up politically. The only reason I can see why Democrats from other states would support a bailout is if California was in danger of turning Republican in response to a budget crisis, which I think this is unlikely.

  • Hunthjof||

    I would like to think that. Remember a number of those swing states have a strong union backing. That would play well with them. With media backers the spin would be easy.

  • Rock Lobster||

    But dude... California's too big to fail!

  • Trollificus||

    California is too big to fail!!

  • Johnny B||

    The end game to this is that since the cities are responsible for pensions no matter how extravagant, as people start leaving town trying to avoid the high taxes, property prices drop and drop until the last people in town can only get out by selling at a negative price. Cool stuff.

  • Flinch||

    Bad news. Civil service protections plus a union? Corruption is now cemented in place and firewalled. At some point public sector unions need to be outlawed, but I'm afraid they have to [figuratively] blow something up first such as the states bond rating while they launder tax dollars back into the one party rule driving the state into oblivion. It's coming... and it's going to be super ugly. When it does, they should not get one red cent from the federal government without putting the entire state constitution on the table. No exclusions or set asides are worth consideration when the government has willingly chartered a course for implosion. Let them re-form, and begin with a clean sheet of paper. If they draft what they had before or worse, make them reapply for statehood to get their minds right and declare them a territory until further notice. Bunch of feckin loons...

  • BYODB||


    It's simply astounding that the court could place the demands of a special-interest group above the constitutional rights of California citizens.


    Only if you've been living under a rock for the last 100 years, I guess.

  • Slocum||

    What's to stop a new replacement initiative with the same ballot language as before but no involvement of city officials (and therefore no obligation to confer with the unions)?

  • Hunthjof||

    I have a feeling the Union lawyers already have their quivers full ready to fight that. I think to survive another challenge there would have to be series changes. If it is identical they will try to play that it is still their influence. Any new initiative will likely be watered down.

  • Trollificus||

    They will find names on the ballot initiative of people who are RELATED to city officials, who have done work for city officials, or who are friends with city officials. Then they will find a sympathetic judge.

    Step 3: PROFIT!

  • perlchpr||

    And you were wondering why the CA Supreme Court is so supportive of gun control...

  • tommhan||

    Well we can certainly see who actually runs California.

  • tommhan||

    So now another gathering of signatures is needed and the process starts all over again. Ludicrous.

  • drisco304||

    I don't see how people fail to understand how the court works. They want a result. They vote so as to obtain that result. Any and all constitutions have nothing to do with it.

  • Spookk||

    Simple cure for this is to make the control of pensions, etc a state-wide ballot initiative.

  • Huh18?||

    Take it to SCOTUS. End this bullshit

  • Mark22||

    It's simply astounding that the court could place the demands of a special-interest group above the constitutional rights of California citizens.

    No, it's not. It's California.

  • para_dimz||

    This unmentioned part is confusing to me. How is it that employees not yet hired have union rights? How is it that a union can negotiate for someone not even payong union dues? The way the initiative seems to have been structured exisitng employees under contract would not have been affected.

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