City of Los Angeles v. Superior Court: City Must Arbitrate Mandatory Furloughs for Civilian Employees

The California Supreme Court has issued its decision in City of Los Angeles v. Superior Court (Engineers and Architects Assn) (6/20/13) --- Cal.4th ---, holding that the City of Los Angeles must arbitrate its decision to furlough civilian employees: 

After declaring a fiscal emergency, a charter city adopted a mandatory furlough program for its civilian employees. Many employees represented by a union filed grievances against the city, arguing that the furloughs violated duly ratified memorandums of understanding (MOUs) governing the terms and conditions of their employment. When their grievances were denied, these employees requested arbitration, and when the city refused to arbitrate, their union petitioned the superior court for an order compelling the city to arbitrate the furloughs dispute. The superior court granted the union’s petition.  

The city then petitioned the Court of Appeal for a writ of mandate, asking it to overturn the superior court’s decision. After issuing an order to show cause, and setting the matter for a hearing, the Court of Appeal granted the city’s petition. Assuming, without deciding, that the employees’ grievances are subject to arbitration under the terms of the MOUs, the Court of Appeal concluded that the city could not be compelled to arbitrate because arbitration would constitute an unlawful delegation to the arbitrator of discretionary policymaking powers that the city’s charter vested in its city council.  

To address the important issues raised by the Court of Appeal’s decision, this court granted the union’s petition for review. The issue presented in that petition is whether a charter city may arbitrate disputes over collectively bargained wage and hour provisions without unlawfully delegating to the arbitrator its discretionary budgeting and salary-setting authority. At this court’s request, the parties also briefed another issue, which is whether, under the MOUs at issue here, the city has a contractual duty to arbitrate the employee furloughs dispute.  

We conclude, first, that arbitration of the dispute at issue here does not constitute an unlawful delegation of discretionary authority to the arbitrator and, second, that the city is contractually obligated to arbitrate the employee furloughs dispute. Thus, we reverse the Court of Appeal’s judgment. 

Slip op. at 1-2.  

The opinion is written by Justice Kennard, with Chief Justice Cantil-Sakauye and Justices Werdegar and Liu joining.  Justice Corrigan wrote in dissent, joined by Justices Baxter and Chin.  

The opinion is available here.