On Wednesday, November 28, 2012, the California Supreme Court rejected the City of Costa Mesa’s challenge to a ruling by the Fourth District Court of Appeal which upheld an injunction enjoining the general law city from privatizing many of its municipal functions and laying off a large portion of its workforce. In a further victory, the California Supreme Court denied a request for depublication, which would have prevented other public sector unions from relying on the case in the future. The Court of Appeal’s decision remains good law and curbs general law cities and counties’ ability to privatize government functions at a time when many public employers are seeking to do so primarily for political purposes.

The Supreme Court’s rulings confirm that California law prohibits private contracting for the performance of a general law city’s municipal functions, except where such contracting is specifically authorized by statute or is for services that cannot be performed by city employees.

The case was handled by Silver Hadden Silver Wexler + Levine Partner Richard Levine and Carroll Burdick Labor Partners Jonathan Yank and Gonzalo Martinez.