Court rules against Calif. furlough orders

SACRAMENTO (AP) - A California judge on Thursday ruled that Gov. Arnold Schwarzenegger had abused his discretion in ordering furloughs of state workers, dealing a blow to the administration's efforts to cope with the state's ongoing fiscal crisis.

Alameda County Superior Court Judge Frank Roesch said the administration must halt the furloughs for workers represented by three unions, including Service Employees International Union Local 1000, which represents 95,000 state employees.

SEIU spokesman Jim Zamora said the ruling could affect up to 50,000 employees across state government who work at so-called "special fund" agencies, or those that receive money from sources other than the state general fund.

Roesch ruled against Schwarzenegger's furlough orders on two fronts: He said the administration could not take the action against employees in special fund agencies. He also said Schwarzenegger had overstepped his authority by claiming the furloughs were necessary to deal with a budgetary emergency.

Roesch said the governor can overstep the Legislature's normal authority in an emergency only for a temporary period, a period the judge said ended once the Legislature approved the state budget.

"The Executive Orders themselves appear to recognize that the emergency necessitating them was the failure of the Legislature to pass the budgets, though the reach of the orders extended long after those budgets were subsequently passed and signed into law," the judge wrote.

Schwarzenegger this year forced most state employees to take three days off a month without pay as the state faced a massive budget deficit. The mandatory furloughs, which began in February and were extended over the summer, affected about 200,000 state workers and were expected to save the state $2 billion.

Schwarzenegger spokesman Aaron McLear said the administration would appeal Thursday's decision.

"In these tough economic times, there's no reason why state workers should be shielded from the same economic reality that the rest of the state faces," he said.

An appeal would automatically stay the ruling, although union leaders said they intend to ask the judge to immediately implement the order because state employees are suffering financially.

Union attorney Felix De La Torre said he and other union representatives were analyzing the ruling to determine whether it also would apply to workers in general fund agencies.

He estimated the state could owe workers at least $100 million in back pay if the ruling is upheld on appeal.

The ruling cannot be seen as a total victory for state employees, however. About two dozen lawsuits have been filed over the furloughs, and the administration has prevailed in the initial stages on some of them.

In January, a Sacramento County Superior Court judge found the governor had the authority to furlough state employees because the state was in a fiscal emergency. A San Francisco judge in December sided with Schwarzenegger in reducing work hours for employees at the state's public pension fund.

In a separate lawsuit, Roesch in December ordered the state to pay the 30,000-member California Correctional Peace Officers Association for the days its members worked without pay.

Roesch's ruling on Thursday applied to three consolidated cases. They were filed by the SEIU and two other state employee unions, one representing attorneys and administrative law officers, and another representing doctors and dentists.

The specific question before his court was whether Schwarzenegger had the authority to order furloughs of employees from special fund agencies, such as the departments of insurance, managed health care, real estate and motor vehicles. They receive their operating money from fees or assessments and not the general fund, which is the state's main checkbook.

The administration argued in part that the money saved by furloughing those employees could be borrowed and sent to the state general fund to fill a multibillion dollar budget gap.

The court found that the across-the-board furloughs were ordered without consideration to the departments' missions and interfered with their ability to serve the public, violating state law.

Roesch noted that the furloughs had slowed the processing of unemployment claims, impeded state workers' ability to respond to losses in the state pension fund and delayed moving disabled people from state to federal disability rolls.

Since the furloughs began, the special fund departments have incurred $102 million in overtime costs, according to the court ruling.

"When furloughs are implemented to save money, yet their implementation in some agencies saves nothing and increases costs, such a policy is arbitrary, capricious and unlawful," the judge wrote.

Yvonne Walker, president of SEIU Local 1000, praised the judge for acknowledging the furloughs were not saving the state money.

"I think the judge has done the right thing," she said. "It's a wonderful way to start the new year."