California sues Labor Department over pension changes

SACRAMENTO -- The state of California on Friday sued the U.S. Department of Labor, alleging that the agency improperly denied federal grants to public transit projects in the state after erroneously deciding state pension reforms interfere with the collective bargaining rights of workers.

Gov. Jerry Brown said the federal lawsuit was necessary to protect an overhaul of California’s public pension systems approved last year to cut costs for the state.

“Bringing this lawsuit is just another step to ensure that our pension system is viable long into the future,” Brown said.

The governor signed legislation on Friday that exempts local transit agencies’ workers from the California Public Employee Pension Reform Act of 2013 while the state pursues its case in court.

AB 1222 also establishes a state loan program to assist transit operators that have lost federal transit grants. Brown has said the bill should keep $1.6 billion in funds flowing while the state pursues the lawsuit.

The lawsuit, filed in U.S. District Court, alleges that the federal government is mistaken in concluding that California’s pension overhaul “diminishes the collective bargaining rights” of transit workers.

“If allowed to stand, the practical effect of the department’s conclusion ... would be to prevent state legislatures from amending any law that affects the employment terms of transit workers,” the lawsuit said.

A Sacramento transit district affected by the federal decision is also a plaintiff in the case.

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patrick.mcgreevy@latimes.com