California Electric Utility's Plans to Outsource Call Center Threatened with Legal Action by Union

Officials with California’s Redding Electric Utility had plans to outsource its call center from its present in-house situation. This decision isn’t sitting well with the Service Employees International Union (SEIU), which is threatening legal action if the city continues with the plans.

The union has filed a grievance to this effect.

Redding Electric Utility (REU) is locally owned and controlled by the Redding City Council. The utility, which employs 162 workers, provides power to more than 86,000 Redding area residential and business customers.

The city has until October 8 to respond to the SEUI’s letter dated September 19, which argues that Redding is breaking the labor contract by considering outsourcing jobs to a private company and transferring the call center workers to other city departments, the local Redding.com news website is reporting this week.

The union says the utility’s plan to outsource call center functions is contrary to a ruling published last month by the Fourth District Court of Appeal that bars general-law cities in California from laying off employees by outsourcing their municipal jobs to companies in the private sector. The ruling was based on Costa Mesa, CA’s (News - Alert) attempt in 2011 to lay off more than 100 employees and contract out companies for city services.

Redding's assistant city manager and utility director said he and his staff were unaware of the Costa Mesa ruling at the time the plans to outsource the REU call center were drafted, and that they are reviewing the decision. The utility director, Barry Tippin, said his department plans to leave it to attorneys to interpret what the appellate court's ruling means for the REU’s plans.

The city had planned to contract with Vertex (News - Alert) Business Services to upgrade the city's billing system and absorb REU's call center, reported Redding.com.

Stephen Cutty, SEIU field representative based in Redding, said the city's plans with Vertex, a customer service management firm, did not include the union's input, and in his view, violate government code because they do not fall into the definition for "special services."

Noted Cutty: "The government code is very specific about what special services are and how cities can outsource items through the government code." 

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