SANTA ANA (AP) — An Orange County appellate panel has upheld a lower court’s ruling halting Costa Mesa officials from laying off city employees and outsourcing jobs to private companies.

The decision announced Friday by the Fourth District Court of Appeals affirms a Superior Court ruling on a preliminary injunction in favor of the Costa Mesa City Employees’ Association.

The union filed suit last year, arguing that the city’s plan to outsource municipal jobs violates state law and the union contract.

In March 2011, the City Council majority approved the jobs plan in a drastic move to plug a $15 million budget hole.

Last June, Superior Court Judge Barbara Tam Nomoto Schumann issued the injunction blocking the city from outsourcing to the private sector.

The city appealed that decision to the Fourth District Court.

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