A Sacramento Superior Court judge this afternoon listened to arguments in a lawsuit over whether Controller John Chiang can refuse an order to adjust state worker pay, then ended the hearing without rendering a final ruling.
Judge Timothy M. Frawley will probably issue a decision in the next few days. This afternoon's session lasted about 45 minutes with attorneys representing Chiang and Dave Gilb, director of the Department of Personnel Administration, debating whether Chiang was legally obligated to follow an administration order last summer to temporarily cut about 200,000 state workers' hourly wages to the federal minimum $6.55.
Pay amounts to salaried workers such as managers and administrators also would have been reduced with all pay and back wages restored only after the money was approved in a new budget.
Governor Arnold Schwarzenegger last summer ordered the temporary wage reductions as a way to save money after lawmakers failed to agree on a budget by June 30, the end of the state's fiscal year. Gilb's office then issued letters to Chiang detailing how to reduce the pay amounts. Chiang refused to comply.
The controller's lawyer, Steven Rosenthal, told Frawley this afternoon that the pay letter instructions went beyond DPA's authority, that the order violated federal labor law and that the contoller literally couldn't comply because the state's aging systems made adjusting pay amounts "infeasible."
"The resources and systems are not in ... the controller's possession," Rosenthal said.
Attorney Christopher Thomas, representing Gilb, argued that DPA has "broad authority" in personnel matters that includes the temporary pay reductions, that the order didn't violate federal law and that Chiang hadn't offered a legal reason that "infeasibility" was a legal defense to refuse the order.
Frawley on Thursday issued a tentative ruling that the state controller doesn't have the authority to disregard a DPA pay letter and must "leave review of the decision (to alter pay) to the courts and/or the Legislature." The judge will probably hand down his final decision in a few days after considering this afternoon's arguments, but it's rare for a judge to change a tentative ruling.
Even if Frawley holds to his initial decision, it's unlikely to impact state worker pay any time soon. Lawmakers passed a budget that runs through June 2010, so money is appropriated to pay wages. A governor would need to issue another order to trigger the reduction.
And it's possible that the Chiang camp, which includes support from several state worker unions, would appeal a loss, although none so far has been willing to talk about that possibility.
A spokesman for Chiang's office declined to comment on the hearing.
You can read Frawley's tentative ruling here.