City of Los Angeles: Effects Bargaining and Make-Whole Relief for Public Employees

Read the source decision.

When a California public employer makes a managerial decision it may still have a duty to bargain over the decision’s effects on represented employees. In City of Los Angeles v. American Federation of State, County and Municipal Employees, a published California Court of Appeal decision upheld a make-whole remedy tied to the City’s failure to bargain over the effects of suspending pension reciprocity.

Pension reciprocity and the bargaining dispute

For decades, a reciprocal arrangement allowed employees transferring between the Los Angeles Department of Water and Power and other City departments to carry pension service credit between retirement systems. DWP withdrew, and the City later suspended the arrangement.

City employees and their unions filed an unfair labor practice claim with the Los Angeles Employee Relations Board. The Board found that the City failed to bargain over ways to mitigate the suspension’s effects and ordered bargaining plus make-whole relief for represented employees who sustained losses until the City fulfilled its obligation.

Why California Effects Bargaining Mattered

The City did not dispute that it had an effects-bargaining duty. Its appeal challenged the remedy. Effects bargaining recognizes that an employer may retain authority over the underlying policy decision while still having to meet and confer about foreseeable consequences for wages, hours, retirement benefits, or other employment conditions.

The duty is procedural but consequential. Bargaining after implementation may not place employees in the same position they would have occupied had bargaining occurred before losses accrued.

Court Upholds the Make-Whole Remedy

The Court of Appeal rejected arguments that the Employee Relations Board lacked authority, selected the wrong status quo, entered a vague or overbroad order, or violated separation-of-powers principles. It affirmed the judgment enforcing the remedy and the attorney-fee order, and directed the trial court to award the coalition reasonable appellate fees and costs.

The opinion does not guarantee a particular payment to every City employee. Individual relief depends on representation, transfer history, pension consequences, the remedial proceedings, and proof of actual loss.

Practical lessons for public-sector disputes

• Identify whether a change affects represented employees even if the underlying policy is nonnegotiable.
• Give notice early enough to permit meaningful bargaining over effects.
• Preserve benefit statements, transfer records, service-credit calculations, and union communications.
• Define the pre-violation status quo and the period during which losses allegedly accrued.
• Distinguish a systemwide remedial order from each employee’s eventual proof of damages.

The case arose from Los Angeles public employment and retirement systems. Private-sector workers and employees governed by different labor statutes should not assume that its administrative-remedy analysis applies unchanged to their dispute.