Side Letter Agreement Reached

Dear Member of Bargaining Unit 2:

We have reached an agreement with the state on the central elements of a side letter agreement addressing the $54 billion dollar budget crisis caused by COVID-19. The side letter contains the basic economic issues that will govern our salaries for the next two years. We fought very hard to ensure CASE members have maximum flexibility using any Personal Leave Program (PLP) days, maintain current healthcare supplements, and avoid negative impacts to their pensions. We continue to fight to improve salaries, modernize family leave, and fix structural classification changes which require more time to reach a consensus over the best long-term plan for CASE members. Those items will be addressed in a comprehensive Memorandum of Understanding when practicable.

The side letter agreement includes the following:

  1. PLP Program. Rather than mandatory furlough days set by the state, CASE members receive 2 flexible PLP days per month during fiscal years 2020-2021 and 2021-2022. This equates to a 9.23% salary cut for all members but is mitigated by several provisions detailed below:

  • The PLP days can be reduced or eliminated if state finances improve or the Federal government provides the state with aid to help with the budget crisis.

  • PLP hours do not expire and can be used when convenient in the same way that vacation/annual leave is used. PLP hours have no cash value but should be used in lieu of vacation/annual leave hours which do have cash value. PLP hours only have cash value upon separation from employment.

  • Pension rates will not be affected by the PLP program. Retiring CASE members’ final rate of pay will be based on the pre-PLP rate without the reduction from the PLP program. Any accrued leave balances will also be paid out at the pre-PLP rate without PLP reductions.

  • The full-time status of CASE members in loan forgiveness programs is protected and will not be changed by the PLP program.

  • Merit Salary Adjustments and Class Promotions will not be affected by the PLP program.

  • For 5 years, the 640 hour limit on vacation/annual leave is lifted by the amount of PLP hours received.

Despite our best efforts, the Legislature passed its budget bill expressly including all CASE members in PLP 2020, even those in departments that are exempted from furloughs by statute, legal decision, or settlement such as State Fund. Legislative budget language, enacted last Friday, included budgetary changes to furlough protections such as those contained in Insurance Code section 11873. Our efforts to prevent furloughs were hampered by other bargaining units agreeing to PLPs for their members in these departments prior to the legislative changes removing the exemptions.

  1. $260 Healthcare Supplement Continued. To prevent CASE members from suffering additional salary cuts beyond the two days of PLP, those currently eligible will continue receiving the monthly $260 healthcare supplement through June 30, 2022 or the end of the PLP program.

  2. 2% Deduction for Retiree Healthcare Suspended. As mitigation to the PLP program, CASE members’ contribution of 2% of their salary to the retiree healthcare fund (OPEB/CERBT on pay stubs) will be suspended for two years.

  3. Increases in Healthcare Rate Covered Under CoBen during PLP. For two years, members of BU2 will receive the Consolidated Benefits (CoBen) Allowance for any increases in state administered healthcare costs between July 1, 2020 and June 30, 2022, in the same 80/20 percentage sharing formula set out in Article 11 of the CASE MOU. (Premiums in 2021 are projected to increase by 4.4%, equal to an average of .36% of salary. Larger increases are expected in 2022 for likely savings of at least .5% of salary.)

  4. 2.5% General Salary Increase (GSI). On July 1, 2022, all CASE members will receive a 2.5% GSI. Under certain economic circumstances, the GSI could be moved ahead to 2021 or back to 2023. If the GSI is delayed until 2023, CASE members will have 2023 healthcare rate increases covered by normal CoBen 80/20 cost sharing rather than paying the entire increase.

  5. .5% Reduction in Pension Contribution. On July 1, 2022, all CASE members (other than those in safety retirement) will have their deduction for retirement reduced by .5%. In combination with the 2.5% GSI, the effective salary increase in 2022 will be 3%.

The net result of all the items above is the average CASE member will have two years of salary reductions of 5.55% instead of 9.23%. The only other option available to us was to refuse to enter into an agreement in which case, the Governor would impose mandatory furloughs amounting to a 9.23% pay cut without PLP flexibility, without the $260 healthcare supplement, without the 2% reduction in OPEB payments, and without coverage of over two years of healthcare increases. The chart below shows a comparison between entering into this agreement and holding out and having furloughs imposed on us. The clear savings for all members by entering an agreement versus holding out is the reason we recommend all Voting, Dues-paying Members vote “Yes” when you receive your notification for the electronic acceptance/rejection vote in the next few days.



As the chart above shows, this agreement realizes significant savings for all CASE members. For example:

  • A typical Attorney B will save $439 per month or $5,268 per year.

  • A typical Attorney IV will save $635 per month or $7,500 per year.

  • A typical ALJ II will save $592 per month or $7,104 per year.

This agreement allows us to significantly lessen the impact of the PLP program while we continue working on our successor MOU. Delaying the successor MOU is to our benefit because, in the midst of the COVID-19 crisis, the state is unwilling to address our long-term salary deficits or find solutions to our other important issues such as improving family leave. However, the state and CASE have committed to resolving the impacted Worker’s Compensation Judge classifications within six months despite the budget deficit. For the MOU, we will be seeking to establish a framework for, and commitment to, improvements in our salaries and benefits. We will need your help in volunteer time and ideas as we go through that process.

These negotiations were very challenging because of the COVID-19 budget crisis. The CASE Board and bargaining team had to work extremely hard to get every improvement to the PLP program and to find ways to mitigate the impact the budget cuts would have on CASE members. We are exceedingly grateful to those of you who are Voting, Dues-paying members. In difficult times like these, it is more important than ever that we stand together and support each other. If you are not a Voting, Dues paying member, we ask you to join the vast majority of your colleagues as members of CASE. To join, please click here for a membership application.

This email may not reach all CASE members. Accordingly, CASE encourages you to pass this email along to any of your colleagues who may not have received it. If you are not receiving CASE emails and wish to receive future communications from CASE, please send an email to info@calattorneys.org and request to be added to the distribution list. CASE also encourages you to send responses from your personal email address as opposed to your state email address. Please keep in mind that all responses will be treated as confidential by CASE.


As always, your support of CASE and your colleagues in Bargaining Unit 2 is greatly appreciated.


Sincerely,

The CASE Board of Directors



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Dear Member of Bargaining Unit 2: Pursuant to Article III, section 3.14 of the CASE Bylaws, the electronic ballots cast in the 2020 general election for the CASE Board of Directors have been submitted

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