Unwilling to concede the fight, attorney's for Governor Arnold Schwarzenegger yesterday filed a notice of appeal with the First District Court of Appeal to challenge a ruling that exempts some State Compensation Insurance Fund employees from his furlough order. If the ruling by San Francisco Superior Court Judge Peter Busch is allowed to stand it would be the first chink in the armor of the furlough order, which requires state workers to take time off without pay to help close the state's budget gap.

SCIF workers are state employees, but their salary and benefits are paid out of the workers' comp premiums the carrier collects. Thus subjecting them to the furlough order does nothing to ease the general fund's cash-flow problems.

The governor's notice of appeal is light on details, merely stating that they are appealing the order granting the writ of mandate and the final judgment in the case. The notice says that by filing the notice of appeal, the writ and the final judgment are automatically stayed.

While the governor's appeal was not unexpected, other expected legal action around the issue of a SCIF furlough has not materialized.

The Service Employees International Union last week issued a letter to SCIF management demanding that the order apply to their members working for SCIF and threatened to take legal action if the carrier did not comply. Under Judge Busch's ruling, the order applies only to the members of the California Attorneys, Administrative Law Judges and Hearing Officers (CASE), which brought the lawsuit.

"We haven't filed a lawsuit specifically for SCIF. CASE went forward with their own thing at a time when our people were experiencing two furloughs and we were negotiating a contract to try and protect all 95,000 of our members," says SEIU spokesman Jim Zamora, noting that they are following the developments. "Whether or not we file our own action or an amicus brief is something that is up to our attorneys."

But it looks like they already have SCIF management on their side.

When the Governor's appeal came down, SCIF was working with the State Controller's Office and the Department of Personnel Administration to implement the initial order and it wasn't planning on limiting it only to the CASE attorneys. "We had requested that it apply to all employees and that was under review," says Jennifer Vargen, SCIF spokeswoman, noting that all of this is now on hold in light of the appeal.

A copy of the Governor's notice of appeal is available by clicking here.

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