Litigation Status

SCREA DROPS LAWSUIT AGAINST COUNTY

We lost, they won and it wasn’t fun!

By Mike DeBord

The SCREA Board of Directors decided not to appeal a Summary Judgment ruling regarding our lawsuit against the County to retain retiree medical subsidies.   A Federal Judge ruled on September 30, 2013 that there was insufficient evidence that the County intended to provide retiree subsidies in perpetuity.

SCREA had provided the court with significant supporting documentation and many declarations by former County employees.  What we were unable to provide to the court (and the primary reason that we did not appeal the judge’s decision) were Board of Supervisors resolutions or other written communications that clearly documented the County’s intent to provide retiree subsidies in perpetuity (forever).  Employees and retirees had relied on verbal understandings, three decades of past practice, statements by County employees, and “trust”.

We trusted the County and the County let us down!

Our lawsuit wasn’t the first legal action related to the loss of retiree medical subsidies.  Back in 2007, the County eliminated the retiree medical subsidies for employees who retired after June 1, 2007.  But the County refused to bargain this issue with the unions.  Some of the unions then filed charges of unfair labor practices with the Public Employment Relations Board (PERB).  These unions won their case on June 30, 2009.  The County was required to re-instate the retiree subsidies and pay interest (make whole anyone who was impacted by the unlawful change).  The County did so, but only for those members of unions that had filed formal charges against the County.  All of the management, administrative and other unrepresented employees, as well as all of the members of bargaining units that didn’t file formal charges against the County, got nothing.  They received no reinstatement of the retiree subsidies.  This action by the County sent a strong message to the unions, its workforce and to SCREA.

We then met with the Interim County Executive and he refused to allow discussion of this topic and threatened to end the meeting with SCREA representatives if we brought it up again.  When the County subsequently terminated the retiree subsides, SCREA Board members met with our attorney and our attorney requested the opportunity to discuss these issues with County Counsel.  We received no response.  We then drafted a lawsuit related to our retiree subsidies and provided a copy of the lawsuit to County Counsel and asked him again for the opportunity to discuss the matter before we filed it with the court.  Again we received no response.  SCREA then filed the lawsuit.  It is unfortunate that all opportunities to discuss this topic prior to court action were not accommodated.

It is important to note that in 2010, the Management employees felt strongly that it was necessary to unionize and voted overwhelmingly to become an exclusive bargaining unit.  The following year, the Administrative employees also did the same.   These previously unrepresented Management and Administrative employees are now in bargaining units like the other County unions and are now covered by formal labor contracts rather than just trusting the County.

SCREA Board Members have painfully learned in the past few years that long-term “past practice” and “trust” cannot be relied on.  Important policy issues like retiree health and dental subsidies should be reduced to writing in understandable language by the County and distributed to all employees and retirees, and there should to be a formal process to address these kinds of issues.  The County Management and Administrative employees now have that kind of formal process since they became exclusive bargaining units, but SCREA cannot formally bargain on behalf of County retirees.

In the past, we have achieved success by meeting with County officials and Members of the Board of Supervisors, and have presented at the Board of Supervisors meetings when retiree related topics were on the agenda.  On more than one occasion, the Board of Supervisors even voted in favor of our position on retiree issues rather than approving the County Executive’s recommendations. But more recently, as illustrated above, discussions with County officials have become more difficult.

The loss of the retiree health subsidies doesn’t just affect current retirees, it also affects current employees (future retirees), many of whom were hoping we would prevail.  In the end, I think employees, retirees and County all lost something important in the last few years….the element of ”trust”.   I hope that in the future there will be opportunities to re-build the trust between the County and those who work, or have worked, for them.  In the meantime, your SCREA Board will continue to represent all County retirees to the best of our abilities.

Other Related Court Decisions

SCREA wasn’t the only retiree organization to recently get disappointing news regarding legal decisions involving the loss of retiree medical benefits.  The Retired Employee Association of Orange County, on February 13, 2014, lost their appeal on a case involving the elimination of “pooled health premiums”.  After decades of past practice and much supporting evidence, the California Court of Appeals ruled against retirees who had filed suit against San Diego County after the County eliminated blended insurance premiums for retirees under 65 years old, an action that increased retirees’ medical premiums dramatically.

Legal issues in this lawsuit against Orange County had previously been to the California State Supreme Court in 2011 where a unanimous decision had been issued that found that “a county may be bound by an implied contract under California law if there is no legislative prohibition against such arrangements, such as a statue or ordinance”.  Further, the State Supreme Court stated that “a contract is either express or implied”.  In other words, a contract can be formed by either words or conduct.  However, the recent legal rulings show that decades of “past practice” and other supporting evidence do not protect County retirees’ rights regarding the loss of their medical benefits.

Yet another appeal was lost involving Sonoma County retirees – a case similar to Orange County retirees.

Also, a lawsuit was filed and won in Court on behalf of a retired police officer who sued the City of San Diego because it placed a cap on the premiums it would pay on her retiree health benefits.  While the retirees initially won their lawsuit, they recently lost on the City’s appeal to the California Court of Appeals.  A press report in San Diego reads: “Potentially precedent setting ruling opens the door for governments statewide to slash worker benefits”.