San Diego Superior Court Judge Luis Vargas ruled Tuesday that San Diego can move forward with eliminating city pensions and implementing a 401(k)-style retirement system for most new hires.
The California Public Employment Relations Board, or PERB, had asked the judge to issue an injunction against the city to prevent it from implementing the pension measure, Proposition B, until the board can determine whether any labor laws were violated while city leaders campaigned for the measure.
Vargas ruled that he believes substantial progress is being made toward implementing Proposition B and that the city can continue its efforts.
PERB’s hearing on Prop B has concluded, but the administrative law judge has yet to make a decision. That decision could take several months. Vargas ruled that if Prop B is ultimately found to be invalid, then the city can simply revert to the pension system, but it doesn’t have to hold of implementing a 401(k) system for now.
Mayor Jerry Sanders issued a statement in response to the decision.
“Judge Vargas made the right decision to allow this measure to move forward," the statement said. "The voters have spoken and now the city will act to implement their will. This initiative, which has now become a national model, will save taxpayers hundreds of millions of dollars that can instead be used to extend library hours and hire more police officers and firefighters.”
City Attorney Jan Goldsmith said in a statement the ruling allows the city and labor unions to come to the negotiating table.
“We need to implement Proposition B according to its terms in a legal and fair manner,” Goldsmith said. “We’re happy to continue meeting and negotiating with our labor unions to help make that happen.”
Mike Zucchet, the general manager of the San Diego Municipal Employees Association, which brought the suit against Prop B to PERB, said in an email that the decision shows the traditional "balancing of equities" practice for any injunction.
"Here, Judge Vargas decided that employees' harm can be cured by restoring them to the lawful level of benefits if Prop B is ultimately found unlawful," he wrote.
"The decision represents a rejection of the City Attorney's entire argument with respect to the probability of our ultimate success on the PERB unfair labor practice charge," he added. "Instead it recognizes that, while voters are entitled to see implementation efforts continue, employees will have a remedy in the end if Prop B is unlawful as to them."
