Judge Bars O.C. Layoffs Until Proved Legal

A federal judge barred Orange County from firing government workers Tuesday, ordering that officials must first show that the layoffs are legal and necessary because of the county’s financial crisis.

Elated union leaders said the ruling came just one day before 86 employees would have lost their jobs.

“This is really a great win for labor,” said David L. Hamilton, a representative of one of 10 labor groups who banded together to sue the county Tuesday.

U.S. Bankruptcy Judge John E. Ryan issued the temporary restraining order halting further layoffs. The judge ordered county officials to return to court Friday--and said they must show that the layoffs were necessary because of the county’s Dec. 6 bankruptcy filing.

Hamilton and other labor leaders concede that layoffs ultimately may be necessary. But they contend that county officials wrongly suspended labor contracts and allowed department heads broad discretion in firing more than 400 workers, while at the same time hiring dozens of outside employees for other positions.

“There is no emergency situation which would allow the county to act in violation of state law, the labor agreements and the Constitution,” said Marc A. Beilinson, another attorney for the coalition that represents nearly 16,000 of the county’s 18,000 employees. “They are laying off senior people who have served the county, some of them between 20 and 30 years.”

But the county’s attorneys say the Board of Supervisors was forced to act when it began issuing layoff notices last month, as part of cutbacks aimed at saving an estimated $40 million by summer.

“This is a crisis and the county had to act,” attorney Lee Bogdanoff said. “The county believes that it acted in good faith under extremely difficult situations.”

Supervisor William G. Steiner said that the judge’s order might force the county to consider even more layoffs if it does not receive the full savings from the original round of cuts. “Any delays in implementing these layoffs means that a larger number of people would be in jeopardy of being laid off,” he said.

In other developments Tuesday:

* A real estate specialist said Orange County developers will build 1,000 fewer homes this year because of lingering uncertainty among buyers about the county’s bankruptcy. The bankruptcy could “throw cold water on a buyer’s mental willingness to change his or her financial situation and take on new debt,” according to a study prepared by Walter Hahn, a director with the Newport Beach office of Kenneth Leventhal & Co., an accounting firm.

* Supervisor Marian Bergeson said she would submit a proposal to the board today calling for an independent management audit of the county. The audit, which would be conducted by an outside firm, would examine the county’s supervisor-to-worker ratio and scrutinize performance and productivity with an eye to restructuring, she said.

* Merrill Lynch and Orange County hammered out a negotiated agreement that will safeguard more than $250 million in disputed securities until a federal judge can determine which party owns them.

* About 130 people packed the Irvine council chambers expressing anger about the financial debacle’s toll on their city. A handful called for Irvine City Manager Paul O. Brady Jr. to resign.

Across town, another 100 residents filled the Irvine Unified School District’s meeting, where the board members painted a bleak picture of the school system’s financial future. Deputy Supt. Paul Reed said that the district expects to have only enough money to operate through April.

* Huntington Union High School District officials said they might be forced to seek state aid if they lost 27% of the $19.8 million they have invested in the county pool. Officials said such a hit would wipe out their reserves.

* Supervisor Jim Silva met with city leaders to discuss their differences over the release of county bankruptcy documents. Officials from cities and school districts with investments in the frozen county pool have criticized the county for delays in providing them with financial information. Silva plans to meet with leaders from all 31 cities over the next few days.

But Tustin Mayor Thomas R. Saltarelli said the county’s failure to provide the records “continues to put us in an adversarial position.” He also said the county’s attorneys are trying to condition pool participants to accept losses from the pool. “We won’t accept that,” Saltarelli said.

In Santa Ana, employee unions sued the county Tuesday, seeking to stop layoffs. Judge Ryan said he was issuing the temporary restraining order reluctantly and needed more information from both sides before he could make a final decision. Because employees were set to be laid off so soon, a three-day delay was the only fair recourse, Ryan said.

“I think the Orange County Employees Assn. has a right for a judge to make a determination on the issues,” he said. “I believe there is irreparable harm to the employees who will have their employment terminated.”

On Friday, labor lawyers will ask Ryan to extend the restraining order until the lawsuit goes to trial. If they succeed, the county must keep laid off workers on the payroll, but can begin new layoffs in accordance with labor contracts.

Steiner added that the order was not totally unexpected.

“It is not unusual in matters like this that (a restraining order) is issued,” he said. “In cases like this, it’s hard for the judge to (immediately) sort out all the facts.”

Steiner said he hopes the order will not result in any long delays in implementing the layoffs. “I think the county’s position (regarding the layoffs) is strong and justified by emergency conditions,” he said.

The coalition of labor groups--who have never before banded together--was formed after the Board of Supervisors suspended key portions of labor contracts that govern layoffs and tapped into workers deferred compensation retirement funds.

Beilinson said the lawsuit is based on labor’s contention that the county violated a state law known as the Meyers-Milias-Brown Act, which requires local governments to meet and confer “in good faith” with collective bargaining units before unilaterally changing any terms.

Labor leaders say that what angers them most is that the county appeared to target mainly older, more experienced employees in layoffs--not any of the 150 employees hired since Dec. 6. Lawyers estimate that the average age of the laid-off workers is 47.

Times staff writer James S. Granelli and correspondents Russ Loar and Bill Billiter contributed to this report.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Orange County Employees in Profile

Most of the county employees receive health and other benefits and all have labor union representation. Sheriff’s Department employees, firefighters and others in the public protection field make up the majority of the county work force.

Employee Division

Eleven percent of the county work force is classified as extra help. These seasonal employees work less than one year at a time and receive no benefits as regular workers do. As of Dec. 24: Worker Classification Regular employees: 89% Extra help: 11% Work Force Strength Public protection: 42% Community & social services: 21% General government & services: 14% Health services: 13% Environmental, other: 10% ***

Pay Scale

Each county job carries a broad salary range that increases incrementally, depending on tenure and performance. A sampling of county positions and monthly pay scales: Fire safety specialist II: $2,988-$4,028 Library specialist: $2,486-$3,330 Park maintenance worker: $1,964-$2,614 Deputy sheriff I: $3,148-$4,212 Public health medical officer: $5,878-$7,927 ***

Unionized Employees

All Orange County employees are represented by a labor union, but actual membership is voluntary. Four unions with the largest Orange County employee membership: UNION: MEMBERS Orange County Employees Assn.: 11,000 Assn. of Orange County Deputy Sheriffs: 1,300 American Federation of State County & Municipal Employees: 1,300 Los Angeles and Orange Counties Firefighters Local 1014: 500 Sources: County of Orange, individual labor unions

Researched by CAROLINE LEMKE / Los Angeles Times