DWP Plan for Layoffs Is Upheld

Flatly rejecting union arguments, a Superior Court judge has upheld the Los Angeles Department of Water and Power’s right to lay off hundreds of workers as it prepares for a new era of competition in the deregulated electric power business.

In a major defeat for the Engineers and Architects Assn., Judge Kurt J. Lewin denied a preliminary injunction to halt the impending layoffs of 635 of its members who work at the DWP. However, Lewin restrained the utility from proceeding with the layoffs for five business days so the union can appeal his ruling.

But there was nothing in his two-page decision, completed late Thursday and made available Friday, to give the union comfort. “Clearly we’re disappointed,” spokesman Mark Siegel said. “We wanted to win in this round.”

Although Lewin indicated at a hearing in late January that he would issue his ruling last Monday, he did not do so. Instead, during a brief court session that day, he apologized for not completing the decision and blamed a heavy caseload and a lack of support staff, such as law clerks, for the delay. Before leaving the bench, he complained that compared to the federal courts, the Superior Court is “a poor and deprived stepchild.”

In the end, Lewin’s ruling was just 31 lines long and did not cite a single case to support his decision.

Siegel said the engineers and architects group will file an appeal Monday seeking to halt the layoffs.

“The employees are reeling, to say the least,” said union member Heidi Bass. “This is devastating.”

The decision seemed certain to heighten pressure on the union’s leaders to restart stalled negotiations with DWP General Manager S. David Freeman over a costly buyout and severance package that could obviate the need for layoffs.

Indeed, Freeman expressed the hope that the union representatives would return to the bargaining table to negotiate a package similar to the one accepted by the International Brotherhood of Electrical Workers and the association representing DWP managers.

“What we have here is a very, very large package that is available for the employees affected,” Freeman said. “I hope and pray and trust we are not going to have to lay off these people.”

In an appeal to the rank and file, Freeman said the union’s leaders are the only thing that stands between them and a settlement that includes enhanced retirement benefits or cash severance payments of $25,000 to $50,000. “If they decide they don’t want to settle, there will be layoffs,” he warned.

Freeman expressed the hope that “the facts of life will sink in” for those union members whose jobs are in jeopardy.

Siegel said the last offer Freeman made was unacceptable. But the union spokesman did not rule out a resumption in talks that began four months ago. “We’re ready to get back to the bargaining table,” he said. “We’re awaiting a call.”

In his brief decision, Lewin said, in effect, that he did not have the power to stop the deregulation of the electric business in California, which will create competition for utilities that have long operated as regulated monopolies.

Echoing comments he made at the January hearing, Lewin said: “There is no more pervasive or complete change in the environment in which any enterprise operates than the elimination of its monopolistic posture vis-a-vis a world filled with hungry competitors. That is what inevitably occurs in deregulation, and no amount of negotiation can restore the protection afforded by regulation.”

Lewin said that if the DWP had a choice, it would clearly opt for continued regulation and protection from competitors. But with state law requiring private utilities to open their territory to competition at the end of this month, municipal utilities will face increasing pressure to do the same in coming years.

The judge rejected the union’s contention that the inevitable consequence of layoffs in terms of lost wages, hours and changed working conditions makes the issue subject to negotiation. The DWP has refused to bargain with its unions over the layoffs themselves.

“Under this reasoning every decision to downsize for lack of work, lack of funds or withdrawal from some part of an operation which results in the laying off of even a single employee would require a meet and confer” session, Lewin said. “That is clearly not the law.”

The decision was hailed by Freeman, who insists that the DWP has no choice but to cut its work force as part of multiyear effort to slash operating costs and pay off $4 billion in debt on its power plants. Otherwise, it will be unable to compete with lower-cost power suppliers, he says.

“The impact of deregulation is like a juggernaut that cannot be stopped,” he said. “It is relentlessly moving along, and we are using up the time we need to get ready.”

However, union spokesman Siegel said Freeman’s approach will damage the DWP and make it less competitive by reducing the quality of its service. “It is not to the long-run benefit of the department or its customers,” he said.

Patt Sanders, a vice president of the engineers and architects group, sharply criticized Freeman. “It is really unfortunate that his plan is no plan,” she said. “He is out to destroy the utility.”