City of Los Angeles v. Superior Court, 56 Cal. 4th 1086

Charter city Los Angeles declared a fiscal emergency and imposed mandatory furloughs for civilian employees.
About 400 union-represented employees filed grievances alleging furloughs violated MOUs governing wages and hours.
The City denied grievances; the Union sought arbitration, but the City refused, leading to a petition to compel arbitration in superior court, which granted it.
Court of Appeal reversed, holding arbitration would unlawfully delegate discretionary salary-setting and budget-making powers to an arbitrator.
The Supreme Court granted review to decide (1) if arbitration of wage/hour disputes can occur without unlawful delegation of discretionary power, and (2) if MOUs require arbitration of furlough disputes.
The Court reverses the Court of Appeal, holding arbitration is not an unlawful delegation and the City is contractually obligated to arbitrate the furloughs dispute.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Is arbitration of the furloughs dispute an unlawful delegation of discretionary authority?	Union: arbitration interprets MOUs, not policy; no delegation.	City: management rights reserved; arbitration would surrender discretionary powers.	No; arbitration would not delegate discretionary authority.
Do the MOUs require arbitration of the furloughs dispute?	MOUs’ grievance/arbitration provisions cover wage/hour disputes; arbitration required.	Arbitration exempt due to management-rights and emergency budgeting.	Yes; City is contractually obligated to arbitrate.
Is there a presumption of arbitrability in deciding arbitrability here?	Arbitration generally favored when contract interpretation is involved.	Arbitration should be limited by express exemptions.	Presumption applied; ambiguities resolved in favor of coverage, but MOUs do not unmistakably exempt furloughs.
Does the MOUs’ management-rights clause expressly bar arbitration of furloughs?		Article 1.9 reserves broad rights; subject to explicit exceptions.	Not expressly exempt; arbitration permissible.
Is there direct conflict with City Charter that would negate arbitration?		Arbitration would conflict with Charter powers over budgeting.	No direct conflict; arbitration consistent with contract.

AT&T Technologies v. Communications Workers, 475 U.S. 643 (U.S. 1986) (disputes over scope of arbitration governed by contract; court resolves arbitrability questions)
Warrior & Gulf Co. v. Robins, 363 U.S. 574 (U.S. 1960) (presumption of arbitrability; arbitration governs contract interpretation)
Steelworkers v. American Mfg. Co., 363 U.S. 564 (U.S. 1960) (arbitrability scope; courts should not weigh merits when determining arbitrability)
Glendale City Employees’ Assn., Inc. v. City of Glendale, 15 Cal.3d 328 (Cal. 1975) (arbitration as ministerial, not legislative, when interpreting MOUs)
Coachella Valley Mosquito & Vector Control Dist. v. California Public Employment Relations Bd., 35 Cal.4th 1072 (Cal. 2005) (MMBA scope; meet and confer; arbitration of wages/hours)
United Teachers of Los Angeles v. Los Angeles Unified School Dist., 54 Cal.4th 504 (Cal. 2012) (arbitrability in public employment contracts; court construes underlying agreement)
Wright v. Universal Maritime Service Corp., 525 U.S. 70 (U.S. 1998) (statutory claims not covered by arbitration unless contract unambiguously so provide)
Professional Engineers in California Government v. Schwarzenegger, 50 Cal.4th 989 (Cal. 2010) (state rights language in MOUs; limits of interpreting management-rights clauses)