A San Francisco Superior Court judge has ruled that Gov. Arnold Schwarzenegger shouldn't have furloughed state employees working for the State Compensation Insurance Fund.
The unexpected ruling from the bench by Judge Peter Busch came this morning after about 90 minutes of debate by attorneys for the Schwarzenegger administration and other representing California Attorneys, Administrative Law Judges and Hearing Officers in State Employment and three SCIF employees.
The lawsuit named Schwarzenegger, DPA Director Dave Gilb, Controller John Chiang and SCIF President Jan Frank. Attorneys for CASE and the employees successfully argued that since SCIF is financially and administratively independent, the furlough order shouldn't have included its 8,000 employees.
Frank submitted a brief that sided with the plaintiffs. In this e-mail to SCIF staff following the decision, Frank said, "This ruling raises a number of questions and we ask for your patience as we sort through the issues."
Department of Personnel spokeswoman Lynelle Jolley said the administration had no comment other than it would review the judge's decision.
UPDATE @ 2:40 p.m. SCIF spokeswoman Jennifer Vargen said that the implications of the ruling still need to be hammered out.
"The issue is extremely complex. At this point we don't know if there's going to be an appeal. There's a pending labor agreement.with SEIU. There are a lot of things to be worked out."
Patrick Whalen, one of the attorneys that represented SCIF legal staff, pointed out that the ruling only directly impacts the 500 state workers at SCIF who are in Bargaining Unit 2.
"The case has logical implications that apply to all SCIF employees," he said. "If I was a secretary and learned that my attorney wasn't going to have furloughs, I'd be asking, 'What about me?'"
Whalen said that the petition wasn't aimed at covering all SCIF employees, but it rests on Insurance Code provisions that apply to SCIF as a whole.
There's also some question whether the judge's final decision will be formally rendered in time for the Controller's Office to adjust its payroll apparatus for April, Whalen said. He thought the deadline is April 19.
We have a call in to the Controller to find out.