San Jose Firefighters Again Battle Pension Reform Referendum
San Jose Fire Fighters, IAFF Local 230 continued their pension battle against the City of San Jose by filing a lawsuit challenging a pension reform measure which San Jose voters approved on June 4, 2012. The suit, filed yesterday in Santa Clara County Superior Court, challenges San Jose’s controversial voter-approved pension reform, Measure B, which passed by a 70-percent margin. Measure B authorizes the city to move ahead with pension reforms to reduce costs.
San Jose Mayor Chuck Reed introduced the measure to control escalating pension costs that he claims have increased from $73 to $245 million in the past 10 years. City officials claim that pension costs have forced the city to introduce several austerity measures including staffing cuts.
The firefighters union along with the police union filed separate complaints challenging the authority of the ballot measure, stating that it violates earlier court rulings which prohibit government employers from unilaterally reducing employees’ pension benefits. Both unions previously filed suits challenging the referendum.
The attorney for IAFF Local 230, Christopher Platten, publically stated “Measure B is unlawful and unconstitutional…[because it] impairs promises made to current and retired San Jose employees for decades.”
The union asked for an injunction to stop the city from implementing Measure B until the case can be decided on its merits.
The City of San Jose meanwhile filed a suit in Federal court on June 5, 2012 seeking a declaratory judgment arguing that Measure B does not violate the “Contract Clause” of the US Constitution. That provision prohibits a state from interfering with any pre-existing contract.
Article 1 Section 10 reads (my emphasis added):
No state shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or grant any title of nobility.
The employees allege that the referendum alters (“impairs”) their contract with the city.
Mayor Chuck Reed said that “Measure B will withstand legal challenges because the state constitution and city charter grant its elected leaders authority over employee compensation” and “The California constitution grants charter cities complete authority over employee compensation, and our own charter provides that the council can from time to time amend or change any retirement plan.”
Here is the firefighter’s suit. FFs v City of San Jose
Here is the city’s suit for declaratory judgment. City of San Jose Suit for Declaratory Judgment
While CalPERS (the state pension program) is a hot topic in the news, it should be mentioned that San Jose (and San Diego, for that matter) have separate city-run pensions, and are not part of CalPERS.
It looks like the SJ FF’s union is seeking to avoid going to District Court; everything is brought under California law, and the CA Constitution. Perhaps they feel their chances are better in a state court.
I imagine a lot of other cities will be watching this closely. If the courts (and I’m guessing this will go to the state Supreme Court) find that a ballot measure can force pension reform, I wouldn’t be surprised to see a domino effect result: unions could either scramble to work a deal for pension reform, or have it forced down their throats.
By an odd stroke of luck, yesterday afternoon I heard the opinion of an attorney representing a public safety union, and last night I managed to hear the opinions of an attorney in the employ of a city. I’ll let you guess which one said what, but both had differing opinions on the likelihood of this suit’s success, and both seemed quite confident in their position.
At any rate, knowing the speed of the California legal system we should have an answer sometime in late 2014.
Ferg
There is something inherently unfair when an employer agrees to pay an employee $X to do a job, and then renegs on that promise. Everyone realizes that. Its even worse when the employee has already done the work.
However, when the government is the employer and government (through the legislature or a referendum) renegs on the promise – some people find a way to rationalize the unfairness as good business – necessary in a tough economy. I think it is the equilavent of larceny – and that is why the Constitution includes the Contract Clause (well… it is one reason – the other is to protect people from politicians and their robber baron financial supporters from being able to change the terms of contracts after the fact… but you get my point).
As this “Drama” unfolds, we’ll see how this impacts both a California General Law and Charter City.
there have been discussion’s that the City Mayor of San Jose has been using Faulty Math.