U.S. Secretary of Labor Thomas Perez has waded into the effort to reform California's public pension system by standing on the side of labor unions – and against Gov. Jerry Brown's plan.

Perez sent a letter that did not come to light until last week, when the Sacramento Bee newspaper obtained a copy of it. In it, he gave the state until this past Friday to exempt the workers from a September 2012 law or risk losing billions in federal transportation funds, including $1.5 billion this year. The unions and the state were holding negotiations Monday.

In his letter, Perez said the reform "diminishes both the substantive rights of transit employees under current collective bargaining agreements and narrows the future scope of collective bargaining over pensions."

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