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The union representing 3,000 state-employed attorneys has quietly dropped a controversial provision from its latest contract that would have allowed members to opt out of California’s public pension system. Union leaders aren’t saying why, at least not publicly. Calls to elected executives and a consultant of the California Attorneys, Administrative Law Judges & Hearing Officers in State Employment, or CASE, were not returned Monday or Tuesday. But a Jan. 18 memo signed by both state and CASE negotiators suggests the small attorneys’ union was caught in an ongoing power struggle between Gov. Arnold Schwarzenegger’s administration and labor-backed Democrats in the Legislature. The memo says simply that the opt-out language was dropped “in the interest of promoting and maintaining harmonious labor relations.” The state’s largest labor unions had slammed CASE’s tentative pact, approved by 74 percent of those voting in the bargaining unit’s December election. The union represents attorneys working in various state departments, including many in the Department of Justice. The deal would have given members the option to stay in the California Public Employees Retirement System, better known as CalPERS, or drop out in exchange for a cash stipend equal to about 5 percent of their salaries. The opt-out provision — the first ever agreed to in a state-union labor pact — was a win for Schwarzenegger’s administration. It was supposed to save taxpayers money, since the state typically has to contribute to CalPERS about 10 percent of a worker’s salary. The governor had touted alternatives to CalPERS in his failed public-pension reform campaign last year. But CASE’s fellow labor unions attacked the opt-out clause as a dangerous precedent that would weaken the multibillion dollar pension system and embolden the governor in negotiations over 18 other public-employee contracts scheduled for renewal in 2006. “Obviously we are concerned that the administration will demand the inclusion of this dangerous precedent in other collective bargaining agreements,” Jim Hard, president of Service Employees International Union Local 1000, which represents 87,000 state workers, wrote in a recent letter to Schwarzenegger. “As the largest union of state employees, we fundamentally reject that notion.” That distaste was reflected in the Legislature, which must approve labor contracts. Lanell Jolley, spokeswoman for the state Department of Personnel Administration, said lobbyists for the state and union “met resistance” from Democratic leaders when they tried to find a lawmaker to carry a bill introducing the contract. Labor unions are among state Democrats’ biggest political and campaign supporters. Unions also spent millions to defeat Schwarzenegger’s initiatives in November’s special election. Lawmakers with key labor oversight posts did not return phone calls Tuesday. State and union negotiators agreed late last week to scrap the opt-out pension clause to make the contract more palatable to lawmakers, Jolley said. The surviving terms of the contract give CASE members a 2.5 percent retroactive pay raise and a boost in base salaries for some job classifications. The deal also requires state attorneys to pay higher retirement contributions and creates a separate, less lucrative benefits-calculation formula for new hires.

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