In pushing for changes to layoffs procedures, Mayor Mike Johnston is taking on entrenched interests that have often discounted skills and abilities that could make government more efficient, a source close to the mayor’s office argued. 

The city government should encourage the kind of innovations permeating the private sector, and keeping a seniority-based system could stifle that aspiration, said the source, who spoke on condition of anonymity in order to provide the Johnston administration’s rationale in pursuing the changes.  

The Career Services Board voted last week to make it easier to shed employees in light of a projected $200 million budget deficit, even as unions vowed to fight the changes a month before city hall is set to begin employee layoffs. 

For decades, the city’s rules have “long placed a heavy emphasis on seniority, using a ‘last in, first out’ method of making layoff decisions,” a source not authorized to speak publicly on the matter told The Denver Gazette. 

The old rules, the source said, fueled the perception that government is ineffective. By allowing agency heads to not only consider seniority in firing decisions, it would help the city attract and retain the best talent, the source said. 

It’s an argument often made in support of a merit-based system. Supporters of the changes are making the argument amid a major fight with the unions, in which combatants from each side are expected to aggressively sway the public’s opinion.  

Union representatives and labor organizers have accused the Johnston administration of “changing the rules” before the city’s voter-approved collective bargaining can begin.

Proponents have argued that Johnston and the city have demonstrated the necessary grit to “modernize” the city’s “dated” employment policies.

“We’re not aware of any city — in recent memory — who has taken the brave and bold step to push back against employee unions and entrenched political interests to update their seniority system to match the needs of this moment,” the source said. “Denver and Mayor Johnston did this week — and they should be commended for it.”

The city’s need to revise Rule 14 was first prompted by the projected budget shortfall in 2026, according to Theresa Marchetta, spokesperson for the Denver Office of Human Resources.

Under the changes made by the career board to Rule 14, seniority — or length of service — would no longer play a major role in inoculating city employees from layoffs. Instead, it would be considered, along with other factors, such as performance, skills and merit.

Union members in support of city workers have publicly vowed to fight both Johnston and the city on the matter, rallying outside of the Webb Building on July 1 prior to the CSB’s final vote.

City officials said that the rule changes were drafted with significant input from the City Attorney’s Office and that “great care” has been taken to ensure department heads use the tools provided by Human Resources to make layoff decisions.

“Yes, organizers are serious about fighting this — and I will do everything I can to help them, including recruiting attorneys to refer terminated workers to,” said former mayoral candidate and city employee Lisa Calderón. “If the city proceeds with these changes in violation of labor laws or due process rights, workers should be prepared to challenge them through every available legal channel.”

Johnston spokesperson Jordan Fuja said the new changes align the city with the same merit-based system used to determine employee pay increases and promotions.

“Using a wider range of criteria, rather than just seniority, is what is most fair to city employees — whether they’ve been here for two years or 20,” Fuja said.

A Denver business leader drew parallels between the private and public sectors.

“This kind of tough, strategic decision making is something small businesses confront every day as they evaluate who they can hire, where they must cut back, and how to best serve their customers,” Denver Metro Chamber President and CEO J. J. Ament said of the city’s decision to move to a more merit-based system for retaining employees. “In business, we work to retain the best and brightest by prioritizing performance, skills, and ability, not just tenure. That balance is critical for delivering exceptional service, and the same principles should apply to city government.”

Eleven of Denver’s 13 councilmembers have also publicly opposed changes to Rule 14, urging the Denver Career Services Board to “reject the proposed revisions and reconsider this approach.”

“As we’ve seen time and again during moments of crisis, the City of Denver’s greatest asset is its workforce (of) dedicated public servants who provide critical services to our residents,” Denver City Council President Amanda Sandoval wrote on June 30. “The proposed changes to Rule 14 would significantly undermine trust in the city as an employer, reduce transparency in personnel decisions, and leave employees more vulnerable to discrimination, favoritism, and retaliation.”

District 9 Councilmember Darrell Watson, one of two council members whose name did not appear on the letter, said now that the changes have been approved, the City Council’s role is to “ensure these steps are being followed fairly and equitably.”

In November 2024, Denver voters approved a city charter change expanding collective bargaining rights to about 8,500 additional city employees.

According to Denver’s Ballot Information Book, published prior to the November 2024 election, implementation costs for the new collective bargaining measure were estimated at $3 million for 2025 and $2.2 million for 2026 and onward.

City human resources officials said the rule change is unrelated to collective bargaining.

“While employees have always been able to join a union, they will not have a right to bargain until January 1, 2026, and the bargaining agreements reached will not take effect until January 1, 2027,” Marchetta said. “These updates are urgent and necessary to address the upcoming financial challenges the city faces and are not intended to undermine the potential for collective bargaining in the future.”

Layoff notices are expected to begin in early August.

The details of any type of severance have not yet been determined, officials said.