Furlough Of Correctional Officers Did Not Violate Labor Code

The Governor’s mandate through executive order of a three-day-per-month furlough of employees represented by the California Correctional Peace Officers Association (“CCPOA”) did not violate the labor code. David W. Tyra, Kristianne T. Seargeant, Meridith H. Packer, and several other attorneys from Kronick Moskovitz Tiedemann & Girard successfully represented the Governor in defense of the validity of the executive order that established the furlough. Brown v. The Superior Court of Alameda County (— Cal.Rptr.3d —-, Cal.App. 1 Dist., October 3, 2011, petition for rehearing denied November 2, 2011).)

Facts

In December 2008, Governor Arnold Schwarzenegger issued an executive order mandating that the Department of Personnel Administration ("DPA") implement a furlough of two days per month for state employees. Due to further decreases in revenue, in July 2009, Governor Schwarzenegger issued a second Executive Order that expanded the furlough program to three days per month. CCPOA represents Bargaining Unit 6, which is composed of over 30,000 state civil service employees who work at correctional facilities. Bargaining Unit 6 was place on a "self-directed" furlough, pursuant to which employees were encouraged to take furlough days off within each month, but if they were unable to do so, the furlough hours accumulated for use at a future date.

CCPOA brought a lawsuit to challenge the furlough system against the Governor, the DPA, the State Controller, and the state agencies employing Bargaining Unit 6 employees. CCPOA alleged that because of the nature of the work performed by Bargaining Unit 6 employees, the majority of the employees cannot use the furlough days each month and must work their regular work schedule. The employees alleged that the furlough program resulted in a 13.5 percent reduction in salaries without a corresponding reduction in hours. The trial court held the furlough program violated Government Code section 19826, Labor Code section 223, and California's minimum wage law and ordered the Governor to make sure that Bargaining Unit 6 and correctional sergeants and lieutenants receive their full salaries. The Governor appealed.

Decision

The Court of Appeal found in favor of the Governor. The Court first noted the Supreme Court had already upheld the legality of the two-day-per-month furlough in Professional Engineers in California Government v. Schwarzenegger (2010) 50 Cal.4th 989. In Professional Engineers, another case where the Governor was represented by Kronick Moskovitz Tiedemann & Girard, the Supreme Court held that when the Legislature enacted revisions to the 2008 Budget Act, it “in effect retroactively validated the furlough program by reducing the appropriate funds for the agencies whose employees were then being furloughed.” A Court of Appeal held in Service Employees International Union, Local 1000 v. Brown (2011) 197 Cal.App.4th 252, that the reasoning of Professional Engineers was equally applicable to the three-day-per-month furlough mandated by the Governor’s Second Executive Order and the Legislature’s revisions to the 2009 Budget Act. The trial court decided CCPOA’s case before the Supreme Court handed down its decision in Professional Engineers. However, the Court of Appeal held that the trial court erred in finding the three-day-per-month furlough violated California statutes.

The trial court erred in finding the furlough violated Government Code § 19826(b), which provides DPA cannot adjust, establish, or recommend a salary range for an employee who is represented for purposes of collective bargaining. This issue was previously decided by the Supreme Court in Professional Engineers. The Legislature has the ultimate authority on the subject of state employee compensation but has delegated partial authority to the DPA. The Legislature exercised its ultimate control over state employees’ salary and wages on the issue of furloughs when it passed the revised 2008 and 2009 budgets and ratified the furloughs.

CCPOA asserted the Professional Engineers decision dealt with a facial challenge to the furlough program and CCPOA was asserting the three-day-per-month furlough is illegal as applied to employees in Bargaining Unit 6. CCPOA claimed the furlough program violated Labor Code § 1223, which provides that if a statute or contract requires an employer to maintain a designated wage scale, the employer may not pay a lower wage while still purporting to pay the mandated wage. This statute, which is designed to prevent an employer from keeping the underpayment of wages a secret from enforcement authorities, is inapplicable to the furlough program. The furlough program was not a secret and there was no contract because the memorandum of understanding between the state and CCPOA had expired.

Labor Code section 1171 et seq., along with implementing regulations, set California’s minimum wage. CCPOA argued correctional employees were required to work the same number of hours per pay period but were not paid for three days, thus resulting in a failure to pay minimum wage. There is no expiration date for unused furlough days so there is no deadline for CCPOA employees to take their compensatory time off or lose it. The Court of Appeal held that it is premature for the court to determine whether the furlough program violates the minimum wage law. The Court declined to address whether a public employee can make a minimum wage claim. However, assuming a public employee can make a minimum wage claim, the claim would not be justiciable until a particular CCPOA has ceased employment with the state. Because furlough days are a type of deferred compensation, they can be used by an employee at any time during employment and therefore a claim will not accrue until the employee is no longer employed by the state.

The furlough program also does not contravene Labor Code section 212, which is a measure intended to prevent employers from paying employees with checks that cannot be cashed.

Questions

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David W. Tyra | 916.321.4500