Union Victory in San Jose Pension Suit

The following message was sent to AEA, AMSP and CAMP Members in the City of San Jose regarding a pro-Union decision on the City's illegal pension reform, Measure B.

AEA, AMSP and CAMP Members,

After digesting the Measure B decision which was released yesterday, we wanted to provide a more detailed analysis of the decision.  Click here to view the tentative ruling.  

1.    Vested rights were upheld, despite the existing Charter language which states there is a reservation of rights. This is a major victory for the unions as it does not allow the City to change the pensions for existing employees.
2.    City employees have a vested right to have the City fully fund the unfunded liabilities of the retirement system and Measure B impaired that right and is invalid. This is a huge win for City employees
3.    The one time ‘voluntary’ election program is illegal because the plan cannot get IRS approval.
4.    The City did win its argument on the disability retirement, but we disagree with the court’s ruling.  We may appeal this ruling.
5.    The Court struck down the ability for the City to suspend COLA’s on the declaration of a fiscal emergency. A huge win for the unions.
6.    The Court upheld the elimination of the SRBR.  We may appeal this ruling.
7.    The Court ruled that Measure B violated the vested rights of City employees by allowing the City to require them to pay more than 50% of contributions to fund retiree healthcare but did not violate vested rights in requiring them to fund a portion of retiree healthcare unfunded liability.  Taken together, this ruling is a win for the unions since it prevents an increase in retiree health care employee contributions more than 50% of the total cost of the benefit.
8.    On Retiree Health Low Cost Plan, the court ruled that the Measure B’s provision that ties the City’s contributions toward retiree healthcare to the lowest cost plan took away the right under the Federated Plan to have access to retiree healthcare benefits that are fully paid for therefore violated vested rights.
9.    On the wage reduction, the Judge ruled against the unions arguments that this was an unconstitutional limitation on free speech and petition. However, the court made this ruling on the basis that, in her opinion, the section simply restated existing law that wage’s are negotiable. Because we have a contract in place, the City cannot unilaterally reduce wages and would have to do so through the normal negotiation process.  Moreover, the parties have stipulated, and the court has ordered that no such reductions may occur under any circumstance before July 1, 2014.

Despite the anticipated spin machine that the City is trying to use to justify the millions of dollars they spent on this illegal act, the law was on our side on the most important issues before the court.

We are considering our appeal options. We will keep you updated as we move forward.

Click here and here for some news coverage of the Measure B decision.

Thank you for your support.

John Mukhar, AEA President
Dale Dapp, AMSP President
Kara Capaldo, CAMP President

See full ruling.