California agencies and public unions continue fight over contracted labor

When state agencies don’t have the internal expertise or staff to handle a task, outside contractors will often be tapped to fill in. But the hiring of private entities is a major sore spot between departments and labor groups representing public employees.

Last week we covered the latest development in a dispute between California’s prison health care department and Service Employees International Union Local 1000 over a contract with the nonprofit Pride Industries. The group hired workers with disabilities, including veterans, for specialized janitorial work in a Vacaville prison as part of a contract the California Correctional Health Care Services approved.

But that contract was declared illegal by the State Personnel Board after the state’s largest labor union successfully argued that those employees should be state workers, represented by SEIU Local 1000. The department maintained it couldn’t successfully recruit state workers to fill those vacancies, and thus had to rely on contracted employees.

A similar situation related to contracted lawyers hired to defend a state agency in an employment discrimination case has reached the Sacramento Superior Court after the State Controller’s Office challenged the personnel board’s ruling.

In 2022, former Controller’s Office employee Vi Tran accused the agency of employment discrimination, among other allegations, asserting she was terminated by managers over physical disabilities, according to a lawsuit filed in Sacramento Superior Court.

After the Attorney General’s office declined to defend the Controller’s Office against the allegations due to lack of staffing, the agency hired the outside law firm Loeb & Loeb LLP, according to a complaint filed earlier this month. The agency said its own attorneys lacked the technical skills to fight the discrimination claim.

But when the state attorney union, California Attorneys, Administrative Law Judges, learned a private group was tapped to handle the employment dispute, the lawyers’ group challenged the Controller’s Office contract with the personnel board.

Last November, the personnel board sided with the attorneys union, even after SCO appealed the decision, according to the agency’s lawsuit.

Now, the Controller’s Office is going to the next level — Sacramento Superior Court — to get permission to hire contracted lawyers to fight Tran’s employment discrimination claim.

The agency’s continued efforts to outsource the legal labor has frustrated the union that represents Controller’s Office attorneys.

“They have plenty of money to spend on outside counsel,” said Timothy O’Connor, president of CASE, the lawyers’ union, “but they don’t have the resources for the lawsuit?”

SCO spokesperson Bismarck Obando declined to comment on the agency’s behalf, citing pending litigation. A spokesperson for CalHR, which handles communications for the personnel board, also declined to comment.

Although departments seem to be outsourcing public attorneys’ work less as CASE continues challenging those efforts that the labor group believes violate state employment laws, O’Connor said hiring of outside counsel is a “long-term, systemic problem.”

Regardless of how the latest employment dispute is resolved in the courts, the ongoing struggle between public labor unions and private contractors hired by the state is likely to continue.