Costa Mesa wanted to outsource several city services. CMCEA filed suit to stop the City’s outsourcing plan for violations of Government Code sections 37103 and 53060. The lawsuit also alleged the plan violates the parties’ Memorandum of Understanding (MOU) because the City did not meet with CMCEA to determine which jobs should be contracted out and how to mitigate layoffs; rather, it unilaterally decided to outsource many jobs. The trial court granted a preliminary injunction and the Fourth District affirmed.
In its opinion, the Fourth District decided there would be irreparable harm if CMCEA members lost their jobs. The Court also decided a preliminary injunction was appropriate because losing a job and income is a greater harm than the citizenry’s interest in cost-effective government.
The Fourth District found that the City’s outsourcing plan violated both the parties’ MOU and state law. The Court found that the City violated the MOU because there was no evidence the City included CMCEA in the decision-making process. The Court also found that Government Code sections 37103 and 53060 generally prohibit cities from contracting with a private entity, unless the contract is for “special services.” The Court decided the only things that counted as “special services” in Costa Mesa are operation of the City’s jail and administration of its payroll services. As a result, the Court concluded that there was enough evidence that CMCEA would win its lawsuit since CMCEA members were able to do the work.