A judge recently ruled that the city of Guadalupe acted unlawfully when it suddenly announced in 2017 that employees would no longer be eligible for merit-based salary step increases.
In the proposed decision, which was filed by a California Public Employment Relations Board judge on May 24, the judge wrote that the city of Guadalupe violated California law when it failed to give employees salary increases as required by a contractual agreement between the city and its employees. Despite the city’s claims that the salary increase suspensions are necessary to improving its poor financial situation, the judge wrote that the city failed to adequately inform and bargain with union representatives before making the decision.
“ … even when an employer faces an ‘economic collapse of unknown proportions,’” the judge wrote, “it must bring its concerns to the bargaining table before taking unilateral action on negotiable subjects.”
Although the city could appeal the decision, Guadalupe City Attorney Philip Sinco said he does not plan to do so.
“Although the city of Guadalupe does not agree with the reasoning of the decision issued by the administrative law judge, the city has decided not to appeal the decision,” Sinco wrote in a statement to the Sun. “Instead, the city wishes to move forward and put this matter behind it.”
The unfair practices complaint was filed in August 2017 by Santa Barbara-based field representatives of Service Employees International Union (SEIU) Local 620, a workers union that represents 11 Guadalupe city employees.
In the complaint, SEIU claims that Guadalupe City Administrator Cruz Ramos unfairly suspended the possibility of merit-based salary increases for all employees in June 2017 without prior notice. Ramos, according to the complaint, then denied salary advancements to at least five city employees who were owed them after July 2017, even though three employees who were due to receive salary increases before July 2017 did get raises.
In an email sent to Guadalupe SEIU representatives on June 14, 2017—after employees were informed of the salary increase suspension—Ramos wrote that “in lieu of ‘furloughs’ there will be no step increases this upcoming fiscal year due to a continuing budget deficit.”
Ramos wrote that the decision was an effort to take control of the city’s spending, reduce its long-standing $700,000 deficit, and help pay the ever-increasing yearly costs of California Public Employees Retirement System (CalPERS) contributions. She also wrote that the city would continue working to find other ways to reduce expenses and address its financial shortfalls.
“The city regrets this action,” she wrote, “as our employees are all hard-working, dedicated employees.”
In a formal hearing in September 2018, Ramos testified that when she was hired as the city’s administrator in October 2017, she promised the Guadalupe City Council that she would do all she could to improve the city’s financial woes. While looking over Guadalupe’s financial reports from 2012 to 2017, she found that each report concluded that the city’s financial liabilities exceeded its assets, and questioned the city’s ability to continue running independently.
The city can’t afford to give out raises, she said.
Ramos and the city also argued that Guadalupe’s contract with SEIU employees does not automatically require salary step increases, but that those increases are subject to the approval of the city administrator.
Still, the California Public Employment Relations Board ruled that the contract language clearly requires the increases, and that because the city’s financial issues are not new or unanticipated, it is not an adequate defense for the sudden suspensions. The city’s contract with SEIU was drawn up before City Administrator Ramos was hired, but well after Guadalupe first started struggling with its finances.
“Thus, absent a valid defense,” the judge wrote, “the city had no legal authority to repudiate the terms it negotiated over and reached agreement on with SEIU.”
The judge ordered Guadalupe to meet and confer in good faith with SEIU and grant salary step increases to all deserving employees.
This article appears in Jun 13-20, 2019.