This guest post was authored by Melanie L. Chaney.

Since the California Supreme Court issued its ruling at the end of last month upholding the 2011 statute (AB 1X 26) that eliminated redevelopment agencies (RDAs) throughout the State as of February 1, 2012, we have received many questions about the impact this law will have on public agencies. One hot topic is how public agencies, who are already facing financial difficulties, should deal with potential layoffs resulting from the elimination of RDAs.

While AB 1X 26 is quite lengthy, there is very little in it that addresses what an agency should do with RDA employees.  The law only eliminates RDAs; it does not serve to separate RDA employees automatically.  In today’s tough economic times, many agencies cannot afford to keep all, or even some, of the RDA employees and must now consider layoffs.  Below is a general overview for handling the layoff process. 

If layoffs are being considered, agencies need to review and comply with any procedures relating to layoffs contained in memoranda of understanding (MOUs), personnel rules and other policies. This includes compliance with any timelines associated with the layoff process.  Agencies should pay specific attention to:

  • any “no layoff” provisions in current MOUs;
  • written agency procedures establishing the manner in which employees may be selected for layoff and any exceptions to the established order of layoff;
  • provisions regarding seniority or bumping rights (general law cities may be required to “observe the seniority rule” in implementing a layoff for economic reasons [Government Code section 45100]);
  • provisions regarding rights to transfer to vacant positions; and
  • provisions regarding reemployment lists or recall from layoff, including restoration of seniority and benefits.

In addition, an agency that does not already have a comprehensive layoff provision in its MOU may have to meet and confer with employee organizations regarding the impacts of any layoffs. Agencies should also think about how news about the layoffs should be communicated to employees. 

Absent specificity in an agency’s layoff policy, we recommend the following process for initiating layoffs.

  • Consider giving a courtesy notice to the affected labor representatives that a layoff resolution is coming forward for approval. 
  • Have the governing body pass the necessary resolution approving the layoff plan with its anticipated effective date.  If the agency does not already have a comprehensive layoff provision in its contract, the resolution should specify that implementation of the layoff plan is subject to meet and confer to the extent required by law.
  • Give formal notice to the affected labor representatives. If there isn’t already a comprehensive layoff provision in the MOU, give reasonable advance notice before the implementation of the layoffs so that the applicable exclusive representative(s) can request bargaining over any impacts of the decision to lay off.  Potential impacts may include such issues as timing and order of layoffs, displacement rights, reemployment rights, severance pay, and continuance of health insurance benefits. 
  • Send individual notices to the affected employees in accordance with the agency’s layoff policy. 
  • Meet and confer over impacts prior to effective date, if requested by exclusive representative(s).  Although the duty to negotiate generally requires employers to continue negotiations until agreement or impasse is reached, under these circumstances employers may be able to implement portions of the layoff (while continuing negotiations on other aspects) before the process is completed.  Contact your legal counsel for further guidance on this subject. 

There are many more issues raised by the law that are too complicated to address here. For example, in many agencies, RDA employees were considered city or county employees, so there may be obligations on the city or county regardless of whether it chooses to become a successor agency to the RDA.  LCW plans to provide a more comprehensive analysis of the effects of AB 1X 26 in a separate article.  In the meantime, if you have questions, please contact our Los Angeles, San Francisco, Fresno, or San Diego office