California judge rules against Biden administration in pension law fight, freeing up grants

A federal judge has cleared the way for California public transit agencies to receive billions in federal grants, ruling against the Biden administration in a legal fight over a state pension law.

The U.S. Labor Department determined in October that California hampered the collective bargaining rights of its public transit employees eight years ago, when the state passed a law that trimmed pension benefits for newly hired civil servants.

That decision put in jeopardy an estimated $12 billion in grants, including money included in the federal infrastructure bill recently approved by Congress.

California asked the U.S. District Court for the Eastern District of California to pause the Labor Department’s decision while the state appealed. On Monday, Judge Kimberly Mueller granted that request.

Mueller’s decision cited directors of regional transit authorities including Bay Area Rapid Transit and the Los Angeles Metropolitan Transit Agency who said the determination would force them to make major service reductions and lay off employees.

With a federal grant deadline of Dec. 27, there isn’t time to fully resolve long-standing legal issues before irreparable harm is caused at the transit agencies, Mueller wrote in her decision.

She ruled out one potential fix — exempting transit employees from the state pension law — because it would require legislative approval, and the Legislature won’t return to session until January.

The legal fight dates to 2012, when the Legislature and former Gov. Jerry Brown passed the Public Employees’ Pension Reform Act. The law made retirement formulas less generous for all public employees in California, outlawed some pension perks and required public employees to contribute more toward their pensions.

The Amalgamated Transit Union sued, saying the changes violated a 1964 federal law aimed at protecting public employees’ collective bargaining rights.

By reducing retirement benefits through legislation instead of negotiations, California’s law violated the federal law, the union argued.

The U.S. Labor Department initially agreed with the union, but courts sided with transit agencies twice.

Under the administration of former Republican President Donald Trump, the Labor Department dropped its objections to California’s law. But the Biden administration initiated a new review, arriving at the October determination.

This story was originally published December 20, 2021 at 3:52 PM.