Wage & Hour
City of Los Angeles v. AFSCME (2d Dist., 2026): City May Owe Make-Whole Relief for Skipped Effects Bargaining
Updated
In City of Los Angeles v. American Federation of State, County and Municipal Employees, the Second District Court of Appeal affirmed a labor board order requiring the City to make represented employees whole after it failed to bargain over the effects of ending a pension reciprocity arrangement. The court held the board had authority to order that relief, that the relief was not an abuse of discretion, and that the trial court properly awarded the unions their attorney fees. The opinion was certified for publication on August 28, 2026.
Background
Since around 1980, the Los Angeles Department of Water and Power and the City maintained a reciprocity arrangement that let employees carry pension service credits between two retirement systems. In 2013, after the utility withdrew from the arrangement, the City adopted an ordinance suspending it.
A coalition of City unions demanded bargaining over the change. The City provided information but took the position that it had no duty to meet and confer, and it adopted the ordinance effective January 1, 2014. The City later conceded that its duty to bargain over the effects of ending reciprocity had arisen no later than November 2013.
The Los Angeles Employee Relations Board found the City had violated its duty to engage in “effects bargaining.” It ordered the City to bargain and to make whole any employees who lost pension or other benefits, with that relief ending once bargaining concluded. The superior court denied the City’s writ petition and enforced the order.
What the Court Held on the Board’s Remedial Authority
The City did not dispute that it violated its duty to bargain; it challenged only the remedy. It argued the board could issue prospective cease-and-desist orders but lacked power to award retroactive make-whole relief.
The court disagreed. It read the City’s Employee Relations Ordinance in harmony with the Meyers-Milias-Brown Act, which directs the board to issue orders it deems necessary consistent with that act’s policies. Applying deference to the board’s interpretation of its own ordinance, the court found no clear error in its conclusion that a catch-all grant of authority let it order make-whole relief.
A city labor board may order retroactive make-whole relief, not just prospective cease-and-desist orders, to remedy an employer’s failure to engage in effects bargaining under the Meyers-Milias-Brown Act.
What the Court Held on the Specific Remedy
The court next held that the particular remedy was not an abuse of discretion. Reviewing remedial orders deferentially, it explained that the board did not restore reciprocity permanently. Instead, it temporarily returned employees to the position they occupied when the duty to bargain arose, with relief ending once the parties reached agreement or impasse.
The court rejected the City’s argument that the remedy conflicted with an earlier decision holding employees had no vested right to reciprocity, reasoning that a lack of vested rights is distinct from the right to bargain over a decision’s effects. It also found no separation-of-powers violation, because the temporary relief did not invalidate the ordinance, and it held the cease-and-desist order was neither vague nor overbroad.
What the Court Held on Attorney Fees
Finally, the court affirmed the trial court’s award of attorney fees under Code of Civil Procedure section 1021.5. It held the unions were successful parties who prevailed on the central issue, vindicated an important public right to bargaining under the Meyers-Milias-Brown Act, and conferred a significant benefit reaching beyond the affected employees.
The court affirmed the judgment and the fee order in full, and directed the trial court to award the unions their reasonable fees and costs on appeal.
What This Means for You
This decision confirms that Los Angeles’s Employee Relations Board may order temporary make-whole relief, not only prospective orders, when the City fails to bargain over the effects of a decision. It also clarifies that such relief may stand even where employees hold no vested right to the underlying benefit, and that fee awards are available under Code of Civil Procedure section 1021.5 in these public-sector labor disputes.
I write these summaries as general information about developments in California employment law. They are not legal advice and don’t create a mediator–client relationship. For guidance on a specific matter, consult a qualified attorney.