Two recent 401(k) litigation court decisions will allow city labor unions to make a case against city-approved labor pension plan changes in front of a state government panel.
Recently, the city of San Diego voted on Proposition B, a plan that replaces city workers’ 401(k) pension plans with an altered and reduced form of pension as part of the state’s attempts to control budget overruns. In one of the recent cases however, Superior Court Judge Luis Vargas issued a temporary stay on the implementation of the proposition B pension replacements, effective until June 27th. In a related ruling, the California Supreme Court ruled that the state could not consolidate the multiple cases brought against Prop B into one case. The state had hoped to get the court to rule directly on the legality of the matter, but it seems that instead multiple cases will continue, potentially requiring years of litigation. This keeps options open for the plaintiffs in the matter.
The crux of the issue is that city and state union workers in San Diego feel that they have been circumvented by the legal process, and simply wish to have their day in court to discuss the particulars of the reforms, as well as voice their objections to specific instances of the language.
“All we’ve ever asked for was to have our day at the PERB administrative hearing and that’s something the city has fought literally tooth and nail for months now,” said Michael Zucchet, head of the Municipal Employees Association. MEA represents a large number of the city’s white-collar workers.
This litigation goes back as far as February. Courts found even then that it was likely there had been violations in putting Proposition B into place. However, acting on the matter was delayed until after the June 5th elections, at the urging of Judge Vargas. The hope was to minimize distractions or turning the matter into a political, rather than legal, issue.