YOU ARE HERE: LAT HomeCollections

County, Unions Compromise on Layoff Policies


SANTA ANA — U.S. Bankruptcy Judge John E. Ryan approved a compromise Thursday that requires Orange County to respect employee seniority rights in layoffs resulting from its financial crisis but limits the appeal process for anyone who loses a job.

The agreement between the county and 10 unions that represent 16,000 employees requires the rehiring of 30 to 40 employees who were laid off in January, attorneys and union representatives said. But those employees will displace the same number of workers who have shorter tenures with the county.

The rest of the laid-off workers have the right to appeal, but must do it within a month instead of the average of seven months they have been allotted in the past.

Both sides hailed the compromise as a way to meet the county's need for speedy, money-saving cutbacks while protecting the jobs of longtime employees.

"It's a definite victory," said county firefighter William C. Cuthbertson Jr. "It shows the county that, yes, it does have rights, but they aren't unbridled and they have to give due consideration to our rights."

The agreement, which settled several major disputes over layoff procedures, came after 2 1/2 weeks of on-again, off-again negotiations between labor and management representatives, including an eight-hour closed session with Ryan on Tuesday.

Ryan's ruling allows the county to move forward with more cuts to help ease its massive cash shortfall, which is pegged at $172 million for the fiscal year ending June 30. The county has announced that it intends to lay off as many as 400 workers, including the 152 that have already been let go.

County attorney Jeffrey Krause said officials have not yet made a final decision on the number or timing of future layoffs. "But I think at some point it's inevitable there will be additional labor cuts," he said.

Both sides praised Ryan for guiding the groups through the sometimes vitriolic battle that erupted when county officials announced in December they would lay off workers and suspend some parts of employee contracts without first meeting with union representatives.

The unions took the matter to court, and on Jan. 20 Ryan issued a temporary restraining order that prohibited additional layoffs until an agreement could be reached.

In other developments Thursday:

* Bruce Bennett, the county's bankruptcy attorney, responded to criticism of a proposed plan to allocate funds remaining in the investment pool that was unveiled earlier this week, saying some investors' demands were unrealistic.


"It's a package deal," he said. "You can't pick and choose the parts you agree with. . . . If you change the numbers, you're not going to come up with a workable plan."

Bennett challenged disgruntled investors to come up with a plan "the county can live with, the bondholder constituency can live with and the pool investors constituency can live with." For now, Bennett said, the only alternative to the plan is "some pretty ugly, pretty lengthy and pretty difficult litigation."

* Interim County Treasurer Thomas E. Daxon said eight employees from his office who were placed on leave Jan. 27 will return to their jobs today, apparently cleared in an investigation of whether they played any role in questionable transactions by the office. Another staff member is expected to return to work Tuesday, Assistant Treasurer Keith Johnson said.

Fifteen employees were suspended after officials discovered that former Treasurer-Tax Collector Robert L. Citron's office may have improperly shifted at least $140 million in county losses into pool accounts shared by other public agencies during Citron's tenure.

* Daxon also said in an interview with the Associated Press that a tax increase may not be necessary to meet obligations and pay off schools, cities and agencies with money in the bankrupt county investment pool. Cost cutting, aggressive sales of county property and opening services to competitive bidding may be enough to fill the gaping holes created by the pool's $1.69-billion loss.

"I think it would be wrong--it's certainly wrong to me--to recommend that we finance this through taxes until we've done our homework on all the other alternatives," said Daxon, a former Oklahoma state auditor hired to help sort out the Orange County mess.

The proposal brokered by Orange County Business Council leaders and approved by all five county supervisors this week called for paying off the 186 non-county investors in full within 15 years. The business leaders said, though, that temporary new taxes would be needed for it to succeed.

* Without specifically calling for higher taxes, California Treasurer Matt Fong pleaded with county leaders Thursday to rule out defaulting on municipal bond payments. The county has more than $1 billion due by early summer, with a shortfall in reserves to make the payments of about $385 million.

"Confidence in government cannot be restored if the county defaults on an obligation," Fong said in a statement.

Los Angeles Times Articles