Beginning around 1980, the City of Los Angeles and its Department of Water and Power (DWP) maintained a reciprocal retirement benefits arrangement allowing employees who transferred between the two to carry pension service credits between the Los Angeles City Employees’ Retirement System (LACERS) and the Water and Power Employees’ Retirement Plan (WPERP). Because both are defined-benefit plans calculating pensions from years of service, compensation, and a multiplier, Reciprocity meaningfully increased pensions for employees who moved between the systems.
In 2010, a WPERP study found that more employees transferred from the City to DWP than the reverse, adding roughly $183 million to WPERP’s unfunded liability, and the WPERP Board voted to suspend Reciprocity. The City Council initially vetoed that change, prompting litigation among the City, DWP, and International Brotherhood of Electrical Workers Local 18 that settled in November 2013. The Coalition of City of Los Angeles Unions — a group of AFSCME locals, SEIU Local 721, Laborers Local 777, the Building & Construction Trades Council, Operating Engineers Local 501, and Teamsters Local 911, representing LACERS-covered employees — was not a party to that litigation.
On November 7, 2013, the Coalition notified the City it was required to bargain over the suspension under state law and the City’s Employee Relations Ordinance (ERO). The City took the position it would provide information but had no duty to formally meet and confer. On December 10, 2013, the City Council adopted Ordinance No. 182824, effective January 1, 2014, ending Reciprocity so that LACERS would credit prior WPERP service only for determining retirement eligibility, not for calculating benefits. Employees could “purchase” WPERP service, but at a steep price: an employee earning $100,000 annually would pay $60,000 to buy two years of credit. The City stipulated that a Senior Clerk Typist with 15 years in LACERS and 15 in WPERP would receive $16,195 less per year under the ordinance than under Reciprocity.
The Coalition filed unfair employee relations practice charges before the Los Angeles Employee Relations Board (ERB), the City-specific agency that, under an MMBA carve-out at Government Code section 3509, subdivision (d), handles City labor violations in place of the state Public Employment Relations Board (PERB). After evidentiary hearings, an ERB hearing officer found the City violated the ERO by failing to bargain over the effects of ending Reciprocity, though not over the decision itself. Finding full restoration of the status quo impossible — WPERP was not a party and could not be compelled to participate — but the City’s disregard of its bargaining duty “blatant,” he recommended a bargaining order plus a make-whole remedy.
In June 2022, the ERB adopted those recommendations, emphasizing that make-whole relief in an effects-bargaining case should be of limited duration, ending when bargaining concludes. It ordered the City to meet and confer over enumerated effects (disability retirement, benefits credit, retiree health subsidies, protected leave, and transfers), to make whole Coalition-represented employees for losses from January 1, 2014 forward, and to cease applying the post-2013 code provisions — all until the parties reached agreement or impasse, or the Coalition failed to bargain in good faith.
The City petitioned for writ of mandate in Los Angeles County Superior Court. Notably, it did not challenge the finding that it violated its bargaining duty; it contested only the remedy. The trial court denied the City’s petition, granted the Coalition’s cross-petition to enforce the order, and later awarded the Coalition attorney fees under Code of Civil Procedure section 1021.5.
In the published case of City of Los Angeles v. American Federation of State, County and Municipal Employees, Nos. B336981 and B340065 (Cal. Ct. App., 2d Dist., Div. 7, August 2026) — the Court of Appeal affirmed the judgment and the attorney fees order.
The panel first addressed the ERB’s authority to order make-whole relief at all. The City argued ERO section 4.810, subdivision (f)(4), which empowers the ERB to “issue orders to cease and desist,” confines it to prospective relief. The panel disagreed, pointing to subdivision (f)(12), which authorizes the ERB to perform “such other duties as may be necessary” to carry out its responsibilities. Because the City adopted the ERO to implement the Meyers-Milias-Brown Act (MMBA) and local rules cannot conflict with it, the ordinance must be read in harmony with Government Code section 3509, subdivision (d), which gives the ERB power to issue orders it “deem[s] necessary” consistent with MMBA policies. Since PERB has consistently held retroactive make-whole relief serves MMBA’s core purposes — compensating for harm, deterring violations, and restoring the situation that would have existed absent the unfair practice — the panel deferred to the ERB’s interpretation of its own remedial powers as not clearly erroneous, applying the deference framework from Boling v. Public Employment Relations Bd. (2018) 5 Cal.5th 898.
The panel next held make-whole relief is an appropriate remedy for an effects-bargaining violation specifically, noting PERB treats effects bargaining as “just as important” as decision bargaining, since both destabilize employer-employee relations by creating a power imbalance. Matters subject to effects bargaining expressly include pensions, citing Claremont Police Officers Assn. v. City of Claremont (2006) 39 Cal.4th 623.
On the specific remedy, the panel rejected the City’s argument that make-whole relief conflicted with the same court’s 2025 decision in American Federation of State, County and Municipal Employees v. City of Los Angeles (2025) 109 Cal.App.5th 179, which held Coalition employees had no vested contractual right to Reciprocity under the contracts clause.
The panel found the remedy closely tracked Boling v. Public Employment Relations Bd. (2019) 33 Cal.App.5th 376, where the appellate court approved compensatory relief for a City of San Diego effects-bargaining violation but limited it to the duration of the bargaining process, holding that where a labor board “has no power to directly undo an action,” its remedy is to order effects bargaining plus back pay during that process. Because the ERB expressly capped its make-whole relief at agreement, impasse, or the Coalition’s own failure to bargain in good faith, it fell within those limits.