California PERB Blog

Visit the new Blog Site

2011-08-17T12:36:00.000-07:00

We've launched a new version of this blog, the same features and information, but at a new address. As of August 2011, updates will be made at CAPERB.com (instead of the site you're reading now).
Visit CAPERB.com, read articles, archives, find out more about Tim Yeung.
Thank you!

AB 455 Vetoed

2011-07-26T23:20:00.000-07:00

On July 25, 2011, Governor Brown vetoed AB 455. AB 455 would have given unions the power to appoint half the members of civil service commisions and personnel boards. The Governor provided the following veto message:

To the Members of the Califomia State Assembly:

I am returning Assembly Bill 455 without my signature. This bill prescribes how all local merit or personnel commission members should be appointed. It requires that half of the members be selected by the employer and half by largest employee bargaining unit. While intended to create more balanced commissions and address concerns relating to individual commissions, this measure imposes a top down, one-size-fits-all solution on all merit and personal commissions statewide. This measure seeks to impose a level of state control that is inconsistent with my administration's efforts to realign state services and to increase local control. Concerns relating to specific commissions should be addressed on a case-by-case basis at the local level.

AB 455: Gives Unions Power to Appoint Half of Civil Service Commission Members

2011-07-06T12:08:00.000-07:00

AB 455 was introduced by Assemblymember Campos on February 15, 2011 and amended on March 31, 2011. AB 455 has passed both the Assembly and Senate and was ordered enrolled on July 5, 2011. It now awaits signature from the Governor. AB 455 would add section 3507.7 to the MMBA, which would provide:

(a) When a public agency has established a personnel commission or merit commission to administer personnel rules or a merit system, the governing board of the public agency shall appoint one-half of the members of the commission, and one-half of the members of the commission, nominated by the recognized employee organization, shall be appointed by the governing board of the public agency. Whenever multiple bargaining units are represented by different recognized employee organizations, the employee organization representing the largest number of employees shall be the one empowered to designate commission members pursuant to this section.
(b) The commission members selected under subdivision (a) shall elect jointly one additional member of the commission, who will act as chairperson of the commission.

Comments:

According to the legislative analysis, the author of the bill states that it is needed because, “… despite the importance of merit and personnel commissions to employment relations, the MMBA is silent as to how these commissions should be composed.” This is true, however, the silence is by design. The preamble to the MMBA expressly states that, “Nothing contained herein shall be deemed to supersede the provisions of existing state law and the charters, ordinances, and rules of local public agencies that establish and regulate a merit or civil service system …” (Gov. Code, § 3500, subd. (a).) Thus, the MMBA was never intended to regulate civil service commissions. That function was reserved to the public agencies.
The practical effect of AB 455 would be to require civil service commissions to use a form of “tripartite” arbitration. Under the system created by AB 455, the jointly elected chair of the commission essentially becomes an arbitrator. Whether there are three, five, seven, or nine members of the commission basically becomes irrelevant. It is the chairperson who will get the deciding vote. Faced with such a situation, many cities and counties may find it easier (and cheaper) just to use an arbitrator in civil service proceedings instead of a civil service commission. This is probably exactly what the unions hope to gain.
As with several other union-sponsored bills before the legislature, this one poses significant “home rule” issues for charter cities and counties. My personal opinion (and again, I’m a management lawyer) is that this bill cannot trump the constitutional home rule provisions governing charter cities and counties. However, that will be an issue to be litigated in the event the Governor signs AB 455.
One last note, this bill as written would apply to both the City of Los Angeles and Los Angeles County. Both the city and county of Los Angeles are not subject to PERB, although both are subject to the MMBA. The language and placement of this bill in the MMBA means that both the city and county of Los Angeles are covered by it. I don’t know whether this was intended by the author or a drafting oversight. However, my friends in Los Angeles are usually extremely protective of their governance structure and I’m surprised this bill made it through the legislature without Los Angeles trying to get an exemption.

Supreme Court Grants Review on Whether Right to Privacy Prevents Release of Non-Member Employee Addresses to Union

2011-06-17T18:03:00.000-07:00

County of Los Angeles v. Los Angeles County Employee Relations Commission (Supreme Court Case No. S191944) (Reviewed granted on 6/16/11)

I discussed this case in a couple of prior blog posts. (Click here and here for prior posts.) The Court of Appeal decision held that under California’s right to privacy, non-union members of a bargaining unit (i.e. agency fee payers) have a reasonable expectation of privacy that their personal information will remain confidential. The Court held that before the home addresses of non-union members can be released, the employer must provide these employees with notice and an opportunity to object to the disclosure of their personal information.

On June 16, 2011, the Supreme Court granted review of this case. The specific issues that the Court granted review on are:

(1) Under the state Constitution (Cal. Const., art. I, § 1), do the interests of non-union-member public employees in the privacy of their personal contact information outweigh the interests of the union representing their bargaining unit in obtaining that information in furtherance of its duties as a matter of labor law to provide fair and equal representation of union-member and non-union-member employees within the bargaining unit? (2) Did the Court of Appeal err in remanding to the trial court with directions to apply a specific notice procedure to protect such employees' privacy rights instead of permitting the parties to determine the proper procedure for doing so?

DPA Director Ron Yank to Speak at IRANC Luncheon on July 14

2011-06-16T15:38:00.000-07:00

If you're going to be in Sacramento on July 14, 2011, please come hear Department of Personnel Administration (DPA) Director Ron Yank speak at a luncheon sponsored by the Industrial Relations Association of Northern California (IRANC). As DPA Director, Ron Yank is Governor Jerry Brown’s Chief Labor Negotiator. Prior to becoming DPA Director, Mr. Yank was a well-known labor lawyer at Carroll Burdick & McDonough LLP where he represented employees and unions in all areas labor relations.

Here are the details:

Date: Thursday, July 14, 2011
Time: 11:30 A.M. Registration & Networking; Noon – Lunch & Speaker; 1:00 P.M. Adjourn
Location: Firehouse Restaurant, Golden Eagle Room, 1112 Second Street, Old Sacramento, CA 95814
Menu: Choice of 1) Pork Tenderloin Puttanesca; 2) Salmon Nantua; or 3) French Onion Steak Sandwich
Cost: Reservation by July 5 = $20.00 Members, $30.00 Non Members; After July 5 or at the Door = $25.00 Members, $35.00 Non Members

RSVP by Tuesday, July 5 to Marcia Mooney (916) 928-0399 or email mmooney@local39.org with lunch choice. Make checks payable to IRANC and mail to 1017 L Street #159, Sacramento, CA 95814-3805.

SB 931: Prohibits Public Funds for “Union Avoidance” Campaigns

2011-06-05T10:50:00.000-07:00

SB 931 was introduced by Senator Vargas on February 18, 2011 and amended on April 25, 2011. SB 931 would prohibit public agencies from using public funds to pay for what is sometimes euphemistically called a “union avoidance” campaign. Specifically, this bill would add language to EERA, HEERA, Dills, and the MMBA providing that:

“Public agencies shall not use public funds to pay outside consultants or legal advisors for the purpose of counseling the public employer about ways to minimize or deter the exercise of rights guaranteed under this chapter.”

The bill was amended on April 25th to clarify that:

“Nothing in this section shall be construed to apply to payments for representation of a public sector employer before any court, administrative agency, or tribunal of arbitration, or for payments for engaging in collective bargaining on behalf of the employer with respect to wages, hours, or other terms and conditions of employment.”

Comments:

SB 931 is the public sector progeny of AB 1889 which passed the Legislature and was signed by Governor Davis in 2000. AB 1889 prohibited government contractors receiving more than $50,000 in state funds (or $10,000 in certain situations) from using those funds “to assist, promote, or deter union organizing.” Private sector employers challenged the constitutionality of AB 1889 and the case eventually reached the United States Supreme Court. In Chamber of Commerce of U.S. v. Brown (2008) 554 U.S. 60, the Supreme Court held that the provisions of AB 1889 that applied to private sector employers (Gov. Code §§16645.2 and 16645.7) were invalid because they were preempted by the National Labor Relations Act.
One interesting note about AB1889 is that buried within the bill is a provision that applies to public employers. Specifically, Government Code section 16645.6 provides that: “(a) A public employer receiving state funds shall not use any of those funds to assist, promote, or deter union organizing. (b) Any public official who knowingly authorizes the use of state funds in violation of subdivision (a) shall be liable to the state for the amount of those funds.” In Chamber of Commerce of U.S. v. Brown, the Court only addressed the two provisions of AB 1889 that applied to private sector employers. Thus—as far as I can tell—Government Code section 16645.6 remains good law. However, because Government Code section 16645.6 is not incorporated into any of the acts administered by PERB, it cannot be enforced through PERB.
AB 931 goes beyond Government Code section 16645.6 by incorporating its provisions directly into EERA, HEERA, Dills, and the MMBA. Thus, a violation of AB 931 can be enforced by PERB.
However, AB 931 also goes beyond Government Code section 16645.6 in its scope. Section 16645.6 only applies to “state funds” received by public employers. In contrast, AB 931 applies to a public employer’s “public funds,” which presumably would mean all funds possessed by a public employer. In my opinion, the scope of AB 931 raises serious constitutional questions as applied to charter cities and counties and other public entities with constitutional spending authority. While the State can generally put restrictions on the use of its own money, it is a different thing to put restrictions on the use of someone else’s money. Not all money received by public employers are “state funds.” So to the extent a public employer receives non-State money, it’s not clear to me that the State can be restrictions on the use of those non-State funds in this manner.
According to the Legislative analysis, the sponsor of this bill is the American Federation of State, County and Municipal Employees. Other unions in support include the California Conference of Machinists and the California Nurses Association. Those in opposition include the California State Association of Counties and the League of California cities.

SB 259 Would Open Door to Unionizing Student Research Assistants

2011-05-31T10:38:00.000-07:00

SB 259 was introduced by Senator Hancock on February 10, 2011. SB 259 would amend the Higher Education Employer-Employee Relations Act (HEERA) to cover student employees whose employment is contingent upon their status as students, without any other conditions. Currently, HEERA section 3562(e) defines “employee” to include student employees if the employment is contingent on their status as students and “only if the services they provide are unrelated to their educational objectives, or that those educational objectives are subordinate to the services they perform and that coverage under this chapter would further the purposes of this chapter.” SB 259 eliminates the latter requirement.

According to the Legislative analysis, the genesis of this bill is PERB’s decision in Regents of the UC & Association of Student Employees, UAW, et al (1998) (PERB Order No. 1301-H) in which PERB held that University of California Teaching Assistants (TAs), Readers, and Tutors had bargaining rights under HEERA, but that Research Assistants (RAs) did not. This bill would grant RAs bargaining rights under HEERA by deleting the statutory language that student employees only have bargaining rights if their employment is unrelated to their educational objectives.

AB 1318 Would Limit Damages for Unlawful Strikes

2011-05-26T11:01:00.000-07:00

AB 1318 was introduced by Assemblymember Davis on February 18, 2011. No action has been taken on this bill yet. AB 13818 would limit an employer’s ability to obtain a “make-whole” remedy when faced with an unlawful strike. Specifically, this bill provides that an employer may not obtain damages for 1) revenue losses caused by an unlawful strike; and 2) expenses incurred by the employer in anticipation of, or in preparation for, the strike.

This bill was obviously motivated by the California Nurses Association’s threatened strike against the University of California (UC) in 2005. That threatened pre-impasse strike was found to be an unlawful pressure tactic by PERB in 2010. (California Nurses Association (2010) PERB Decision No. 2094-H.) As part of that decision, PERB ordered CNA to pay for any damages suffered by UC. Proceedings before PERB on the amount of those damages are continuing to this day.

Governor Appoints New PERB Chair, Board Member and General Counsel

2011-05-02T15:22:00.000-07:00

Governor Brown has appointed Anita Martinez and Eugene Huguenin to the five-member Public Employment Relations Board (PERB). They will join Alice Dowdin Calvillo and Sally McKeag as the four members of PERB. There is still one vacancy to be filled. Anita Martinez was also named Chair of PERB. The Governor also appointed Suzanne Murphy as PERB's new General Counsel. Here are the bios of the appointees from the Governor's new release:

Anita Martinez, 58, of Oakland, has been appointed member and chair of the Public Employment Relations Board. She has worked for the Board since 1976, where she currently serves as a regional director. Previously, Martinez was a board agent for the Agricultural Labor Relations Board from 1975 to 1976. She was an intern at the National Labor Relations Board from 1973 to 1976. This position requires Senate confirmation and the compensation is $132,179. Martinez is a Democrat

A. Eugene Huguenin, 68, of Rancho Murieta, has been appointed to the Public Employment Relations Board. He has been the owner of the Huguenin Law Office since 2001. Huguenin was staff counsel at the California Teachers Association from 1979 to 2000, after serving as a consultant from 1973 to 1979. Huguenin has also served as a commissioner on the Fair Political Practices Commission from 2005 to 2009. This position requires Senate confirmation and the compensation is $128,109. Huguenin is a Democrat.

M. Suzanne Murphy, 58, of Lafayette, has been appointed general counsel of the Public Employment Relations Board. She has been a law clerk to the late Honorable Cynthia Holcomb Hall, senior judge on the U.S. Court of Appeals, Ninth Circuit since 2009, and where she previously clerked from 1988 to 1989. Murphy was the executive director of Worksafe from 2008 to 2009. She was legal counsel for the California Nurses Association from 2006 to 2007. Previously, Murphy was an appellate and litigation attorney with Weinberg, Roger and Rosenfeld from 2003 to 2006. She also worked for the Administrative Office of the Courts where she was managing attorney at the Center for Families, Children & the Courts from 2002 to 2003 and supervising attorney for the rules and projects unit in the Office of the General Counsel from 2000 to 2002. Previously, she was a senior research attorney to the Honorable Patricia Sepulveda from 1999 to 2000 and to the Honorable Michael Phelan from 1993 to 1998, both of the California Court of Appeal, First District. Murphy was an associate with Heller, Ehrman, White & McAuliffe from 1992 to 1993 and with Cooley, Godward, Castro, Huddleston & Tatum from 1989 to 1991. This position does not require Senate confirmation and the compensation is $126,864. Murphy is registered decline-to-state.

CPER Presents "Practicing Before PERB" Seminar on May 5th

2011-04-28T15:59:00.000-07:00

Ever wonder why so many unfair practice charges are dismissed or if you stand a chance of getting a board agent’s decision overturned by the board? Then you should attend, "Practicing Before PERB" sponsored by the California Public Employee Relations Program (CPER). The seminar will feature experts discussing the what to do when a charge is filed, what happens when a charge goes to hearing, and how to appeal a dismissal or proposed decision.

The seminar is being held on May 5, 2011, at the Junipero Serra State Building, Carmel Room, 320 W. 4th Street, Los Angeles, California. (Click here for the brochure). Advance registration is only $100. It should be a great program so if you're in the Los Angeles area you should consider attending!

PERB Remains Without a Quorum

2011-04-13T18:13:00.000-07:00

Board Member Kari Miner's last day was March 31, 2011. Because she was appointed by Governor Schwarzenegger on one of his last days in office she had not been confirmed by the Senate. That meant Governor Brown could withdraw her appointment at any time. That has left PERB with only two Board members and without a quorum to conduct any business.

So what happens if PERB receives a request for injunctive relief involving a strike? Remember, under City of San Jose v. Operating Engineers Local Union No. 3 (2010) 49 Cal.4^th 597, the courts have held that PERB has exclusive initial jurisdiction to consider whether a strike constitutes an unfair practice. PERB actually considered that such a situation might occur and promulgated PERB Regulation 32470. That regulation provides that:

In the event that a quorum of the Board itself is unavailable to act upon the request for injunctive relief within 24 hours after the time the General Counsel's recommendation is filed, the Board authorizes the General Counsel to seek injunctive relief in every case in which the General Counsel has reasonable cause to believe that such action is in accordance with Board policy and that legal grounds for injunctive relief are present.

The question on everyone's mind is when Governor Brown will appoint new Board members and who they might be. Hopefully we'll find out soon.

PERB Advisory Committee Meeting on April 14th, 2011

2011-03-31T20:16:00.000-07:00

The Public Employment Relations Board (PERB) has a set a meeting of its Advisory Committee for April 14, 2011 at 11 am. The location will be at the PERB headquarters in Sacramento at 1031 18th Street, First Floor, Room 103, Sacramento, CA.

The purpose of the advisory committee is to help PERB "obtain feedback and ideas from PERB constituents relating to our mission in administering the seven collective bargaining statues over which we have jurisdiction with the overall intent of making PERB more efficient." The agenda includes presentations by PERB staff on various topics followed by a roundtable discussion.

Court: City Has Inherent Authority to Furlough Employees

2011-03-27T23:50:00.000-07:00

City of Los Angeles v. Superior Court (Engineers and Architects Association) (Court of Appeal Case No. B228732) (Issued on 3/25/11)

Facing a $500 million deficit, the City of Los Angeles (City) passed an ordinance furloughing civilian employees for up to 26 days per fiscal year. Many of the furloughed employees filed grievances under their union contracts arguing that the furloughs were impermissible. After the grievances were denied, the Engineers and Architects union requested arbitration. When the City refused to arbitrate, the union filed a petition to compel arbitration of over 400 such grievances.

The trial court granted the petition to compel arbitration finding that the grievances were arbitrable. The City appealed. The Court of Appeal found there to be legitimate questions as to whether the furloughs are arbitrable under the parties’ Memorandum of Understanding (MOU). However, the court nevertheless ruled in the City’s favor by finding that any agreement to arbitrate the furloughs constituted an improper delegation of discretionary policymaking power vested in the City Council.

With respect to the holding that arbitration would constitute an improper delegation of authority, the court began its analysis by discussing three different types of improper delegation. First, there can be an improper delegation to a private individual under California Constitution, article XI, section 11. However, this provision only applies to State delegations of municipal power to private individuals, and does not apply to a City’s delegation of its own power. Second, there can be an improper delegation by a legislative body to another actor, such as an arbitrator. Here, however, the City passed an ordinance authorizing furloughs and did not delegate the authority to another individual. Third, there can be an improper delegation of a public agency’s discretionary power. The court cited to prior cases holding that: “As a general rule, powers conferred upon public agencies and officers which involve the exercise of judgment or discretion are in the nature of public trusts and cannot be surrendered or delegated to subordinates in the absence of statutory authorization.” (California Sch. Employees Assn. v. Personnel Commission (1970) 3 Cal.3d 139, 144; San Francisco Fire Fighters v. City and County of San Francisco (1977) 68 Cal.App.3d 896, 901.)

In examining whether this case involves an improper delegation of discretionary authority, the court noted that the City’s Charter vests budgeting discretion in the City Council and the Mayor. The City Charter also provides that the City Council “shall set salaries for all officers and employees of the City.” The court held that, “Clearly, a mandatory furlough is encompassed within salary setting [citation omitted] and a furlough imposed in a fiscal emergency is encompassed within budget making. Moreover, it cannot legitimately be disputed that setting salaries is a discretionary function.”

Applying these findings to the case at hand, the court held that by seeking to arbitrate the grievances, the union was attempting to “have an arbitrator determine issues of discretionary policymaking which have been assigned to the City Council." The court further held that, "The Union wants a determination made that the City violated the salary and workweek provisions of the MOU by instituting furloughs, and that the furloughs were therefore improper. Grievance after grievance argued that the furloughs were improper and that the employees should be returned to full-time work and repaid for the days on which they were furloughed.” In such a situation, the court held that the union’s petition to compel arbitration was a clear, “… challenge to a City Council’s decision to impose furloughs as a response to the City’s dire financial condition. If the City Council had agreed to arbitral review of such a decision, it would have been an improper delegation of its salary setting and budget making powers.”

Comments:

According to the court, the issue that the union wanted to arbitrate was whether the City had the authority to furlough employees. The court held that this issue could not be deleted to an arbitrator as it was an inherent power of the City. The court, however, did not address whether the City had to bargain with the union before exercising its power to furlough employees. In a footnote, the court noted that the City offered to bargain over the effects of the furloughs but not the decision to furlough employees. The court acknowledged that, “… the issue of whether furloughs could be imposed without prior consultation with the Union is different from the issue of whether furloughs could be imposed at all.” As for whether the City had to bargain, that issue is pending before the City’s Employee Relations Board on an unfair practice charge filed by the union. Thus, this decision does not directly address whether furloughs have to be bargained.
On the issue of whether furloughs have to be bargained, there was another interesting comment in a footnote: “… While the City argues that section 1.9 of the MOU permits it to unilaterally furlough employees, the City also argues that, even if the MOU does not permit the imposition of furloughs, the City nonetheless may implicitly suspend operation of the MOU by emergency ordinance properly enacted.” The court did not address this issue. However, whether a public entity can suspend operation of a MOU during a fiscal emergency is an issue that has to be addressed sooner or later in this economic climate. Answering that question in the negative might push more public agencies to consider Chapter 9 bankruptcy ... something that most public agencies are loath to even mention ...

A Little History on the Labor Movement

2011-03-25T00:10:00.000-07:00

Today is the 100 year anniversary of the Triangle Shirtwaist Factory fire that killed 146 young women and girls in New York City on March 25, 1911. It was one of the worst workplace disasters in our nation’s history. The sight of immigrant girls and women leaping to their deaths—some with their clothes on fire, some holding hands—horrified the entire nation. The tragedy not only helped spark the growth of the International Ladies Garment Workers Union but the entire labor movement in the United States.

Fast forward to 2011 … I’ve received a couple of comments from readers on how Governor Jerry Brown has been wrongly “blamed” for giving California public sector workers the right to unionize. For example, the Wall Street Journal ran an opinion article stating:

The sharp rise in public union membership in the 1960s and 1970s coincides with the movement to give public unions collective bargaining rights. Wisconsin was the first state to provide those rights in 1959, other states followed, and California became the biggest convert in 1978 under Jerry Brown in his first stint as Governor. (A Union Education, Wall Street Journal On-line.)

It’s true that during his first two terms as Governor (1975-1983), Jerry Brown signed the Educational Employment Relations Act of 1976 giving collective bargaining rights to schools and community college employees, the State Employer-Employee Relations Act of 1978 (now called the Dills Act) giving collective bargaining rights to state employees, and the Higher Education Employer-Employee Relations Act of 1979, giving collective bargaining rights to higher education employees.

However, those laws were not truly ground-breaking because they were not the first laws in California giving public sector employees the right to collective bargaining. The first law that gave public sector employees the right to collective bargaining is the Meyers-Milias-Brown Act (MMBA). The MMBA was signed in 1968 and gave city and county employees the right to collective bargaining. The MMBA was signed by a former union president. No, it wasn’t Jerry Brown. It was Ronald Reagan. By signing the MMBA, Governor Reagan made California the second state in the nation to allow public sector collective bargaining. The first was Wisconsin in 1959.

Court Affirms Duty of Fair Representation under MMBA

2011-03-21T14:01:00.000-07:00

Paulsen v. Local No. 856 (Court of Appeal Case No. A126633) (Issued on 3/18/11)

Plaintiffs are Deputy Probation Officers employed by the County of Marin (County) who brought a wage and hour lawsuit against both the County and their union, Local 856. The lawsuit alleged that the County and the union entered into a “secret” deal to falsely designate plaintiffs as exempt employees under the Fair Labor Standards Act. The plaintiffs brought three (3) causes of action alleged against the union: 1) breach of the duty of fair representation, 2) common law breach of fiduciary duty, and 3) fraudulent concealment.

The trial court sustained the union’s demurrer to the first cause of action on the ground that PERB has exclusive jurisdiction over an alleged breach of the duty of fair representation. The trial court also sustained the union’s demurrer to the 2nd and 3rd causes of action on the ground that the “essence” of those claims also was for breach of the duty of fair representation.

On appeal, the plaintiffs made the novel argument that under the MMBA there is no duty of fair representation. Because there is no duty of fair representation, plaintiff s argued that there could be no unfair practice. The court acknowledged that in Andrews v. Board of Supervisors (1982) 134 Cal.App.3d 274, 283 (“Andrews”), another appellate court concluded that the MMBA does not contain an implied duty of fair representation. However, based on subsequent case-law, the court questioned the validity of the Andrews decision and noted that PERB has consistently held that a duty of fair representation exists under the MMBA. Accordingly, the court held that a claim for breach of the duty of fair representation is clearly an unfair practice under the MMBA.

Comments:

In addition to the above holding, the court also affirmed that MMBA section 3511 only exempts from PERB’s jurisdiction peace officers designated under Penal Code 830.1. Deputy Probation Officers are designated peace officers under Penal Code 830.5, and therefore are subject to PERB’s jurisdiction.
With respect to the duty of fair representation, the court emphasized that the duty arises from the union’s role as the “exclusive” representative of employees. The decision notes that, "there is ordinarily no such duty when the union does not occupy that position, or as to particular matters for which the union does not act as the employees’ exclusive agent." Typically, the duty of fair representation attaches to negotiations and contractually based remedies under the union’s exclusive control. What this means is that if the union voluntarily takes on a role—for example, representing an employee in a civil service hearing where the employee is free to represent himself or herself or obtain independent counsel—the duty of fair representation may not attach. I've always seens this as an unnecessary loophole in the law. In my opinion, if a union voluntarily undertakes representation of an employee the duty of fair representation should attach. Granted, I'm a management attorney so I'm biased. But it seems to me that an employee should expect the union to treat him or her fairly and not to make arbitrarty decisions regardless of whether the union is acting in an "exclusive" capacity or not.

SB 609: Requires Board Decision in 180 Days in Representation Cases

2011-03-17T20:04:00.000-07:00

SB 609 was introduced by Senator Negrete McLeod on February 17, 2011. Under SB 609, PERB would have 180 days to issue a decision in an appeal of an Administrative Law Judge's decision in a representation case (ie. requests for recognition, unit modification, severance, decertification, etc.). Currently, there are no time limits governing how long PERB has to issue a decision on any matter before the Board.

Comments:

This bill is obviously aimed at shortening the time its takes to get a final decision from PERB. In years past, it could take up to two years for the Board to issue a decision on an appeal of an ALJ’s proposed decision. However, that was when the Board’s docket of cases approached 150. Currently, the Board has a docket of about 50-60 cases. So today I think the longest delays are at the initial charge processing stage rather than at the Board.
Although the Board can take up to two years (or more in some isolated cases) to issue a decision, it has always prioritized representation cases. I do not know how many cases, if any, there have been where the Board took more than 180 days to issue a decision in a representation case. I suspect there must be at least one, which is what prompted this bill.
Although I support the goal of this bill, I'm concerned with the way it is written because it does not provide any exceptions and singles out representation cases for priority. Under this bill, the 180 days would run from the date the appeal is filed. However, this doesn’t take into account that after an appeal is filed there is briefing that must be done. Sometimes a transcript must be prepared. As an example of unanticipated delay, during the last budget impasse PERB was unable to pay for transcription services until the budget was passed which caused a delay in the processing of cases at the Board level. None of these factors would be taken into account under this bill.
As mentioned, I am absolutely in favor of PERB having timelines for the issuance of decisions. My preference would be for PERB to issue its own regulations setting forth timelines rather than having those timelines set in statute. My recommendation to PERB would be to have a timeline of 90 days to issue a decision in an appeal of a dismissal and 180 days to issue a decision in an appeal of an ALJ decision. I would apply these timelines to all cases, not just representation ones. Contrary to SB 609, I would run the timelines from when a case is placed on the Board’s docket (ie. after briefing is complete) instead of when an appeal is filed.

AB 501 Would Bring JPA’s Under EERA; But Is It Necessary?

2011-03-14T09:21:00.000-07:00

AB 501 was introduced by Assemblymember Nora Campos (D-San Jose) on February 15, 2011. AB 501 would expand the definition of “public school employer” under EERA to include a joint powers agency (JPA) if: 1) the JPA is separate from the contracting parties to the joint powers agreement; 2) the JPA has its own employees; and, 3) the JPA is designated under statute or provides services primarily performed by either a “school district, county board of education, or county superintendent of schools” or is comprised solely of school agencies.

This bill was just introduced so there is no legislative analysis available. However, the impetus for this bill appears to be PERB’s decision in North Orange County Regional Occupational Program (1990) PERB Decision N. 857-E (“North Orange County”) issued in 1990. In that case, PERB overturned prior precedent by holding that a JPA created by five school districts was not a “public school employer” for purposes of EERA. In 1999, Assemblymember Hertzberg introduced AB 91 which would have overturned the North Orange County decision and brought JPAs under EERA’s jurisdiction. That bill was vetoed by the Governor because of the potential costs to the state and school districts.

In 2007, Assemblymember Eng introduced AB 1463 which would have accomplished the same result as AB 91. That bill did not make it out of the Legislature. Now, Assemblymember Campos has introduced AB 501, which is nearly identical to the prior AB 1463.

In addition to overturning North Orange County, AB 501 would also likely overturn the Board's decision in Castaic Union School District (2010) PERB Decision No. Ad-384 ("Castaic") (Note: Castaic is currently on appeal) which held that school noon-duty aides are not "employees" within the meaning of EERA. The Board's decision in Castaic was based on EERA section 3540.1 which states that an exclusive representative under EERA must represent either classified or certificated employees. Since the noon-duty aides at issue were neither, Board held that they were not covered by EERA. AB 501 would change section 3540.1 to remove the requirement that an employee be either a classified or certificated employee.

Comments:

According to the Assembly analysis of AB 1463, the result of the North Orange County decision was that JPAs became subject to the MMBA instead of EERA. The analysis stated that, “JPAs must comply with the MMBA which calls for a "meet and confer" process but does not provide all of the procedural elements of the EERA which could result in egregious labor abuses. For example, it is possible for a JPA to lay off workers and hire them back with reduction in salary, hours, working conditions, and classification changes without regard to negotiated criteria under MMBA.”
The Senate analysis stated that because of the North Orange County decision, “JPAs were not required to engage in collective bargaining. JPAs, thus, are subject only to ‘meet and confer in good faith’ provisions, which are not subject to PERB oversight.”
First, it's interesting that both the Assembly and Senate analyses for AB 1463 assume that collective bargaining under the MMBA is different from that under EERA. Both analyses suggest that the term “meet and confer” is a lesser requirement than that under EERA. I don’t know what gave them that idea but it’s certainly not true today. The requirement to “meet and confer” under the MMBA is no different than the requirement to “meet and negotiate” under EERA. Both require collective bargaining as that term is generally understood.
Second, the Assembly analysis suggests that under the MMBA, an employer can abrogate a collective bargaining agreement by simply laying off employees and hiring them back under different terms and conditions. I would like to see the support for that proposition because I'm not aware of any legal authority for that.
Third, one of the criticisms of the North Orange County decision has been that it allows school districts to “legally join together in a way that evades EERA and results in the loss of employees' statutory rights.” (San Jose/Evergreen Community College District (2005) PERB Decision No. 1928-E, dissent of Member Shek, p. 21, fn. 5; Clovis Unified School District (2002) PERB Decision N0. 1504-E, p. 15, fn 11.) It’s certainly true that under North Orange County, JPAs are not subject to EERA. But that does not mean employees of JPAs have no statutory right to collective bargaining. They are still subject to the MMBA. More important, back in 1990, the MMBA was not subject to PERB. However, today the MMBA is subject to PERB just like EERA.
Because the MMBA is now subject to PERB’s jurisdiction and provides employees with substantially the same right to collective bargaining, it’s not clear to me that the reasons given during former attempts to pass this bill are still valid today.

Court: Cross-Unit Bumping Is Negotiable; No Pre-Layoff Hearing Required for Economic Layoffs

2011-03-10T14:52:00.000-08:00

Alameda County Management Employees Ass’n. v. Superior Court (Case No. A128697) (Issued on 3/7/11)

In response to a budget deficit for the 2009-2010 fiscal year, the Superior Court of Alameda County (Court) laid off 28 members in the bargaining unit represented by the Alameda County Management Employees Association (ACMEA). Under the Court’s personnel rules, an employee who is laid off has the right to “bump” into a position he or she previously held. However, the Court negotiated a MOU with SEIU providing that an employee loses any “seniority” for calculating bumping rights if the employee leaves his or her position for more than six months. The SEIU MOU had the effect of preventing management employees from “bumping” into the SEIU unit because the management employees lost seniority per the SEIU MOU provision.

ACMEA argued that the Court could not apply the SEIU MOU to its members. ACMEA also argued that the laid off employees were entitled to pre-layoff hearings. The trial court rejected both arguments. The court of appeal reversed the trial court on the issue of whether the Court violated the Trial Court Employment Protection and Governance Act (TCEPGA) by applying the SEIU MOU to ACMEA unit members, but affirmed the trial court holding that no pre-layoff hearings were required.

With respect to the SEIU MOU, the court held that under the TCEPGA the Court had the duty to meet and confer with ACMEA over terms and conditions of employment, which include seniority rights. The “status quo” with respect to seniority rights was contained in the Court’s personnel rules. The appellate court held that if the Court wanted to apply the SEIU provision to ACMEA, it should have provided ACMEA notice and an opportunity to bargain over the seniority language. Because it didn’t, the court violated the TCEPGA.

As for the right to pre-layoff hearings, the court cited to Duncan v. Department of Personnel Administration (2000) 77 Cal.App.4th 1166 ("Duncan") for the holding that pre-layoff hearings are not required when the layoff is due to budgetary constraints. Here, the court held that there is no dispute that the layoffs were due to budgetary constraints. The court also noted that the layoffs involved multiple people and were done according to seniority which is an objective criteria. These factors greatly lessened any chance that the layoffs were “targeted” at particular individuals. Under these facts, the court held that pre-layoff due process hearings are not necessary.

Comments:

Cross-unit bumping is becoming more of an issue now that layoffs are a reality in the public sector. Many unions take the position that members of other unions should not be able to "bump" into their bargaining unit. However, it's fairly rare to find actual contract language prohibiting employees from "bumping" into a unit. Most public entities allow cross-unit bumping if the employee previously held the position he or she is bumping into. In this case, the SEIU language had the practical effect of protecting existing SEIU unit members from being bumped by employees coming back into the unit. Under this decision, such contract language must be negotiated with not only the union demanding it, but every other union which might be affected. I think trying to implement this decision and actually negotiate such language with multiple unions would be a nightmare. The practical result of this decision is that employers are going to refuse to agree to the SEIU language found in this case.
The more interesting aspect of this case is the issue of pre-layoff due process hearings. This is the first published decision discussing pre-layoff due process hearings since the Levine v. City of Alameda (9th Cir. 2008) 525 F. 3d 903, decision in 2008. That decision created a stir because it suggested that pre-layoff due process hearings are required. However, this decision makes clear that if there is no evidence that employees are being specifically "targeted" for layoff in lieu of discipline or as a form of reprisal, then no pre-layoff due process hearing is required. What's interesting is that the court does not directly discuss Levine in reaching this holding. However, the court cites to Levine in other portions of the case and also cites to other federal cases on the issue of due process rights. So although I would have liked a more robust discussion of Levine versus Duncan, I think this decision gives public entities some much needed guidance as to when pre-layoff hearings are required.

Isolated Reference to Union Activity During Termination Not Enough To Establish Retaliation

2011-03-08T09:42:00.000-08:00

Fallbrook Union Elementary School District (2011) 2171-E (Issued on 3/01/11)

This case involved an allegation that the Fallbrook Union Elementary School District (District) decided not to reemploy a teacher because of her activities as a union site representative. For a retaliation case, the facts are fairly short and simple. The teacher was employed on a series of temporary contracts in 2005-06, 2006-07, and 2007-08. She received satisfactory evaluations the first two years. However, in 2007-08 she was not recommended for re-hire purportedly because of her classroom management skills. The teacher alleged that immediately after she was informed by the Principal that she would not be re-hired the next year, he stated, “On a side bar, off the record, I believe that your Union activities have gotten in the way of your teaching objectives this year. . ." Based on this statement, the union alleged that the teacher was retaliated against for her union activities as a site representative.

The Administrative Law Judge (ALJ) found in favor of the teacher. However, on exceptions by the District the Board rejected the ALJ’s proposed decision and dismissed the charge. The Board’s decision focused on whether the union had established the required “nexus” between the adverse action and the protected activity. According to the Board, there were two factors proffered to establish nexus. First, the union argued that the Principal failed to follow the contract by having a conference with the teacher within a certain time period after the classroom observation. Second, the union argued that the Principal’s statement, “I believe that your Union activities have gotten in the way of your teaching objectives this year …” evidenced discriminatory intent.

The Board rejected both of these factors as supporting the required nexus. As for the failure to follow the contract, the Board found that the Principal had failed to follow the contract in prior years when he gave the teacher a favorable rating. Based on this fact, the Board set forth a rule that, “[W]hen an employer fails to comply with an MOU provision both before the employee engaged in protected conduct and after the employee engaged in such conduct, the later failure to comply with the MOU is not a reliable predictor of discriminatory intent.” As for the alleged statement by the Principal, the Board held that, by itself, it was a “relatively benign statement that does not convey union animosity.” The Board acknowledged that it could indicate anti-union animus if coupled with other facts. But here, the Board found no other facts supporting anti-union animus. Accordingly, the Board rejected the ALJ’s proposed decision and dismissed the complaint.

Member Wesley dissented. Member Wesley stated that the District’s failure to adhere to the contract meant that the teacher was not apprised of her performance prior to the decision not to re-hire. According to Member Wesley, the teacher “had no way of knowing she was at risk of not being reemployed and she was not given the opportunity to improve as required in the evaluation procedure.” As for the statement by the Principal, Member Wesley agreed that it was not “blatant anti-union animosity ...” However, she would have found that the statement, “does imply that union activity is inconsistent with professional achievement and further supports the inference that the District’s actions were unlawfully motivated.” Accordingly, Member Wesley would have found that the District unlawfully retaliated against the teacher for her protected activity.

Comments:

Historically, it’s rare for the Board to overturn an ALJ’s proposed decision in a retaliation case because such cases are very fact-intensive and often rely on credibility determinations that the Board is loath to reject. It’s also fairly rare for a decision to draw a dissent, so this case is doubly interesting.
It terms of new law, the Board held that, “[W]hen an employer fails to comply with an MOU provision both before the employee engaged in protected conduct and after the employee engaged in such conduct, the later failure to comply with the MOU is not a reliable predictor of discriminatory intent.” I think this makes sense. A classic example is the annual performance evaluation. Many public entities have an express requirement that an employee is supposed to get an annual performance evaluation. But it’s very common for supervisors to fail to comply with this requirement. In a situation where a supervisor fails to comply with this requirement for all employees, can it really be said that the failure is evidence of any discriminatory intent? Clearly, it’s not a good personnel practice and if the issue was “just cause” it would absolutely make a difference. But in a retaliation case under PERB, the issue is not “just cause” but whether the action was taken for discriminatory intent. The key to proving discrimination is showing that the employee was treated differently. If the employer’s non-compliance with the contract applies to everyone, then it cannot be said that any particular employee was treated differently. So I think the Board’s rule makes sense. However, I will add that failure to comply with rules and procedures can absolutely be evidence of discriminatory intent in other circumstances. So I think the application of this rule will be very fact specific.
The most interesting part of this decision is the Board’s treatment of the Principal’s statement, “I believe that your Union activities have gotten in the way of your teaching objectives this year …” The Board found that by itself, this statement wasn’t enough to establish retaliation. Presumably, this is because the Board felt that the Principal could merely have been saying that the teacher did not focus enough on her core reaching duties. Fortunately for the school district, there was no other evidence of unlawful retaliation. If there was other evidence, I believe the result would have been very different. The reality is that it’s very dangerous for a supervisor to reference an employee’s union conduct during a performance review. An employee can easily view such references as a form of retaliation. If an employee is inappropriately spending time on union duties there is a legitimate way to address that. But it must be done carefully to avoid charges of retaliation like the one in this case.

Proof of Majority Support Not Always Required When Adding Employees to a Bargaining Unit

2011-03-06T09:50:00.000-08:00

County of Riverside (2011) PERB Decision No. 2163M (Issued on 2/18/11)

This case began with a petition from SEIU to add unrepresented ‘per diem’ nurses to an existing bargaining unit. The County denied the petition because it was not accompanied by proof of majority support of the per diem nurses being added to the unit. SEIU filed an unfair practice charge asserting that it was unreasonable for the County to impose a majority support requirement on SEIU’s petition because the County’s local rules did not contain such a requirement. In defending against the unfair practice charge, the County acknowledged that its local rules were silent regarding proof of support but argued that a majority support requirement had to be implied in the rules in order to prevent unrepresented employees from being "involuntarily unionized against their will." The Administrative Law Judge (ALJ) rejected the County’s defense. The ALJ held that the County’s position was contrary to PERB regulations which only require proof of majority support if the added employees would increase the existing bargaining unit by 10% or more.

On exceptions, the Board affirmed the ALJ’s proposed decision. The Board noted that the National Labor Relations Board (NLRB) only requires a showing a majority support when the employees to be added to an existing bargaining unit historically have been excluded from the unit, typically (but not necessarily) by agreement between the union and the employer. (Teamsters National United Parcel Service Negotiating Committee v. National Labor Relations Rd. (D.C. Cir. 1994) 17 F.3d 1518, 1522; Laconia Shoe Co. (1974) 215 NLRB 573, 576.) However, PERB does not follow the NLRB ’s approach to accretion. Instead, PERB regulations require a showing of majority support when adding the requested employees "would increase the size of the established unit by ten percent or more." (PERB Regs. 32781(e)(1); 61450(e)(1); 81450(e)(1); 91450(e)( 1).) If the addition would not increase unit size by ten percent or more, no showing of majority support is required. (Regents of the University of California (2010) PERB Decision No. 2107-H.) Based on PERB’s regulation on accretion, the Board rejected the County’s argument that a showing of majority support must be implied whenever employees are added to an existing bargaining unit.

Comments:

The majority support requirement for adding employees into an existing bargaining unit is one of the areas where PERB’s rules differ from those under the NLRB. Under PERB’s regulations, proof of majority support is required only if the added employees increase the bargaining unit by 10% of more. It’s a more objective standard than that under the NLRB. I personally like PERB’s rule because it provides much more certainty to both the employee organization attempting to organize the employees and to the employer attempting to apply its local rules.
However, this decision leaves unanswered a very significant question. What if a public entity has in its local rules a requirement for proof of majority support whenever employees are being added to an existing bargaining unit, even if the increase to the bargaining unit is less than 10%? Clearly, the Board is saying that PERB does not require proof of majority support if the bargaining unit does not increase by 10% of more. But what if a public entity wants to impose such a requirement in those situations where the increase is less than 10%? Does this decision make such a “requirement” unreasonable? In other words, is PERB imposing a minimum standard of 10% such that a public entity may not impose any contrary requirement? It's unclear from this decision. I believe there are certainly public policy reasons why a public entity may want to require proof of majority support in situations even where a bargaining unit isn’t increased by 10%. It seems to me such a requirement wouldn't be that onerous to employee organizations. But again, whether PERB would find such a requirement an “unreasonable” local rule is not answered by this decision.

PERB Chair Alice Dowdin Calvillo to Speak at IRANC Luncheon on March 10th

2011-03-01T17:27:00.000-08:00

If you're going to be in Sacramento on March 10, 2011, please make plans to attend a luncheon sponsored by the Industrial Relations Association of Northern California (IRANC) featuring Alice Dowdin Calvillo, Chair of PERB. Chair Dowin Calvillo will be speaking on, "PERB: Past – Present – Future" and will talk about her time at PERB.

Here are the details:

Date: Thursday, March 10, 2011 Meeting
Time: 11:30 A.M. Registration & Networking; Noon – Lunch & Speaker; 1:00 P.M. Adjourn
Location: Firehouse Restaurant, Golden Eagle Room, 1112 Second Street, Old Sacramento, CA 95814
Menu: Choice of 1) Vegetarian Sandwich; 2) Chicken Breast Forestiere, or 3) Mahi Mahi

RSVP by March 2 to Marcie Mooney at (916) 928-0399 or email her at: mmooney@local 39.org with lunch choice.

AB 646 Would Impose Mandatory Mediation and Factfinding under the MMBA

2011-02-17T22:22:00.000-08:00

AB 646 was introduced by Assemblymember Toni Atkins (D-San Diego) on February 16, 2011. AB 646 would repeal the right of local agencies to impose a last, best, final offer (LBFO) upon reaching impasse. AB 646 would instead introduce mandatory mediation and factfinding into the MMBA. Under this bill, a local agency could not impose its LBFO until after the completion of these post-impasse procedures. The language of the bill can be found here. The language in the bill establishing mediation and factfinding essentially mirrors the language under the Educational Employment Relations Act (EERA).

Comments:

When PERB took over jurisdiction for administering the MMBA in 2001, cities and counties were extremely concerned that PERB would try to override existing local rules governing labor relations with PERB's own rules. As enacted, Senate Bill 739—which brought the MMBA under PERB’s jurisdiction—expressly provided that a local agency could adopt its own local rules and regulations. (Gov. Code, §3507.) This bill would eat away at that right by taking away the ability of a local agency to adopt impasse procedures.
Virtually every local agency that has adopted local rules has adopted impasse procedures. Many of the procedures simply allow the local agency to take appropriate action, including imposition of the LBFO, upon impasse. Many, if not most, provide for mediation. Some local agencies even provide for factfinding.
Under AB 646, mediation would become mandatory. I don’t have an objection to mediation as a post-impasse tool and almost always advise my clients to attempt mediation after a declaration of impasse, whether it is required or not. However, I think a local entity should have the right to decide for itself whether to require mediation in its local rules.
Factfinding is more problematic. AB 646 does leave open the possibility that factfinding will not be required if the mediator does not recommend it. However, if EERA and HEERA are a guide, factfinding will almost always be recommended, and therefore required by AB 646. I believe there are many situations where factfinding is not helpful to the process and only serves as a tool for delay. If asked, I almost always advise local entities not to require factfinding in local rules.
Perhaps a bigger problem with AB 646 is that PERB simply does not have the money to pay all the mediators and factfinders that would be required. For the last few years, the MMBA has either generated the most, or second most, number of unfair practice charges before PERB. There are over 2 million employees covered by the MMBA. Unless PERB is given a serious injection of funding, I don’t see how PERB could possibly fund this bill’s mandate.

PERB: Poor Personnel Practices Do Not Prove Discrimination

2011-02-15T20:45:00.000-08:00

City of Alhambra (2011) PERB Decision No. 2161-M (Issued 2/08/11)

This case involved an employee who was rejected during probation. The employee alleged that he was rejected during probation because of protected activities, in violation of the MMBA. Specifically, the employee argued that the City retaliated against him because of comments he made criticizing his supervisor during an employee meeting.

The Administrative Law Judge (ALJ) issued a proposed decision finding that the City rejected the employee during probation because of his protected activities. To establish unlawful motive, the ALJ found that the City decided to reject the employee less than eight hours after the employee’s complaints at the meeting. The ALJ also found that the decision-maker, who knew about the employee’s complaint, decided to reject the employee based on complaints from others even though no investigation was conducted.

On exceptions filed by the City, the Board agreed that these facts could establish a prima facie case of retaliation. However, the Board first questioned whether the employee even engaged in protected activity. The Board noted that under the MMBA, employees have the right to represent themselves individually in their employment relations with their employer. (Gov. Code, §3502.) But individual employee complaints generally have been held to be unprotected when they are undertaken for the employee’s sole benefit or are the result of a personal grudge. (See Los Angeles Unified School District (2003) PERB Decision No. 1552.) Here, the Board found no evidence the employee’s complaints were related to group activity or intended to group action.

The Board also acknowledged that an employee’s reporting of workplace safety concerns is protected activity. However, the Board held that the employee’s references to safety concerns during the meeting involved safety to the public, not to employees. Accordingly, the Board reversed the ALJ’s finding that the employee engaged in protected activity.

Even if the employee had engaged in protected activity, the Board held that the City met its burden to demonstrate that it would have rejected the employee during probation even absent the protected activity. In reaching its decision, the Board made several interesting findings. First, the Board found that an employer’s failure to give an "at will" employee a reason for dismissal does not indicate unlawful motive in the absence of evidence that the employer was required by policy or past practice to do so. (Sacramento City Unified School District (2010) PERB Decision No. 2129.)

In addition, the Board found that the evidence established that the employee was rejected solely because of complaints about his attitude and work conduct. Acknowledging that the decision-maker did not investigate the complaints, the Board held that, “while this may demonstrate a poor personnel practice, it does not establish that [the decision-maker] rejected [the employee] on probation because of his complaints about being worked too hard. Instead, the Board found that the decision-maker reasonably believed the employee’s performance would not improve.

Comments:

When it comes to proving discrimination, it’s very rare to have “smoking gun” evidence of discriminatory intent. Therefore most discrimination cases involve circumstantial evidence. In this case, the Board clarified how it will treat circumstantial evidence that can be indicia of discriminatory intent.
First, the Board held that, “[W]e find an employer’s failure to offer justification at the time it took action is not a reliable indicator of discriminatory intent unless the employer was required by law, policy, or past practice to give a reason.” Practically, this will not apply often in the public sector as employees entitled to civil service protection have due process rights that include the right to know the grounds for any discipline. However, exceptions exist for probationary employees, limited-term employees, and other types of temporary employees. In those situations, this holding may be helpful to employers.
Board also affirmed that merely proving that the employer made a unwise or unjust decision to discipline or terminate an employee is not enough to find that there was discrimination. This is a concept the Board has upheld before. This case, however, provides a good illustration that an employer’s “poor personnel practice” does not establish unlawful discrimination.
Finally, it is worth noting that this decision continues a trend of the Board reversing cases where the ALJ’s proposed decision has found a violation. Since July 1, 2010, the Board has considered seven (7) cases, including this case, where the ALJ’s proposed decision found a violation. The Board overturned, either partially or entirely, every one of those decisions. During that same time, the Board considered seven (7) cases where the ALJ’s proposed decision found no violation. The Board affirmed every one of those decisions.

John Liebert Passes Away …

2011-02-07T18:47:00.000-08:00

I’m saddened to report that John Liebert, a founding partner of Liebert Cassidy Whitmore, passed away today. You can visit Liebert Cassidy’s website (click here) for further information. John Liebert was truly one of the great pioneers of public sector labor law in California and in the nation. He will be missed by all of us in the field.

Jeff Sloan, a partner in my firm, knew John well and had this to say, “John was and is the most esteemed public sector labor lawyer in California, and beyond that an extraordinarily kind, compassionate and forward-thinking person. From its very humble beginnings, he built LCW into what is now by far the largest public sector labor and employment law firm in California. Our firm and our partners will miss him.”

AB 195 Would Codify Employer Unfair Practices Under MMBA

2011-02-06T10:08:00.000-08:00

Last week Assembly members Roger Hernandez and Michael Allen introduced AB 195 which would codify employer unfair practices under the MMBA. The bill would delete Government Code section 3506 and replace it with the following:

3506. A public agency shall not do any of the following:

(a) Impose or threaten to impose reprisals on employees, to discriminate or threaten to discriminate against employees, or otherwise to interfere with, restrain, or coerce employees because of their exercise of rights guaranteed by this chapter. For purposes of this subdivision, "employee" includes an applicant for employment or reemployment.

(b) Deny to employee organizations the rights guaranteed to them by this chapter.

(c) Refuse or fail to meet and negotiate in good faith with a recognized employee organization. For purposes of this subdivision, knowingly providing a recognized employee organization with inaccurate information, whether or not in response to a request for information, constitutes a refusal or failure to meet and negotiate in good faith.

(d) Dominate or interfere with the formation or administration of any employee organization, contribute financial or other support to any employee organization, or in any way encourage employees to join any organization in preference to another.

(e) Refuse to participate in good faith in an applicable impasse procedure.

Comments:

The MMBA is unique among the four major public sector labor relations statutes because it does not set forth specific unfair practices in the statute itself. Because of this, PERB promulgated regulations setting forth unfair practices under the MMBA for both employers and employee organizations. (PERB Regs. 32604, 32604.) The regulations are substantially similar to the language defining unfair practices under the other acts. (See, e.g., Gov. Code, § 3519, 3543.5, 3571.)
Interestingly, AB 195 uses language from EERA (Gov. Code, § 3543.5) rather than just using the current MMBA regulation language. The big difference is that EERA contains language making it an unfair practice for a school employer to provide “inaccurate information” regarding its financial resources to an exclusive representative. (Gov. Code, § 3543.5.) AB 195 adopts this language but tweaks it slightly. Under AB 195, it would become an unfair practice to provide an exclusive representative with “inaccurate information” whether related to finances or not.
Finally, it should be noted that Gov. Code section 3506 currently prohibits both employers and employee organizations from intimidating or discriminating against employees. AB 195 would delete this language and replace it with language only prohibiting employers from such actions. There would be no similar prohibition against unions from engaging in such conduct. Is the intent therefore that unions would be free to intimidate and discriminate against employees—for example, by pressuring employees to vote a certain way during representation elections? It’s not clear. Because the bill was just introduced there isn't an analysis yet for the bill. Once the analysis is released perhaps we'll learn more.

Court: Fiscal Impact of MOU Must Be Presented to Legislature

2011-02-01T15:38:00.000-08:00

Cal. Statewide Law Enforcement Assn. v. Dept. Personnel Admin. (Case No. C061102) (Issued on 1/26/11)

This case involved a Memorandum of Understanding (MOU) between the California Statewide Law Enforcement Association (CSLEA) and the State of California reached in 2002. Under the new MOU, CSLEA bargaining unit members were to be reclassified as “safety members” effective July 1, 2004 and allowed to participate in the more generous safety retirement pension plan. A dispute arose over whether the reclassification into safety member status was intended to be retroactive; in other words, whether the employees' past years of service would also be credited for safety retirement. According to the court, applying the reclassification retroactively would cost the State “[m]any millions of dollars …” The dispute was submitted to arbitration. The arbitrator ruled for CSLEA and held that the safety retirement provision was intended to apply retroactively. Over the State’s objection, the superior court confirmed the arbitration award.

On appeal, the court reversed the superior court’s judgment. The court based its decision on the ground that the bill presenting the CSLEA MOU to the Legislative did not expressly inform the Legislature that safety retirement was being conferred retroactively. Under the Dills Act, any MOU must be presented to the Legislature for approval. (Gov. Code, § 3517.5.) Because the Legislature was never informed of the fiscal consequences of the retroactive provision, the court held that the MOU failed to meet the Dills Act requirement of being presented to the Legislature. The court expressly rejected CSLEA’s argument that it was sufficient that the Legislature knew that there was the potential that safety retirement could be applied retroactively. Instead, the court held that under the Dills Act, “The Legislature had to (1) be informed explicitly that DPA and CSLEA did enter into such an agreement, (2) be provided with a fiscal analysis of the cost of retroactive application of the agreement, and (3) with said knowledge, vote to approve or disapprove the agreement and expenditure.” Because that did not occur in this case, the court held that the “retroactive part of the agreement may be enforced only if it and its fiscal consequences are explicitly submitted to, and approved by vote of, the Legislature.”

Comments:

This is an interesting decision. Presumably, the union can still push to have the retroactive pension provision presented to the Legislature for approval. However, given the fiscal situation facing the state I suspect the Legislature would face pressure to reject it.
This decision also gives state employee unions an incentive to pay attention to the bills presenting their MOU’s to the Legislature. Unions will want to make sure that the full fiscal impact of their MOU’s are clearly set forth so there is no dispute that the Legislature has approved the an agreement.
Finally, it will be interesting to see if the courts give this decision application beyond the Dills Act. For example, section 3505.1 of the MMBA is very similar to section 3517.5 of the Dills Act. Both require that any MOU reached between the employer and recognized union be presented to the Legislature or the governing body for approval. Arguably, the court’s holding that under the Dills Act any presentation must include a full disclosure of the fiscal effects of the MOU should also apply to the MMBA since the statutory provisions are similar. If so, both employers and union will want to keep that in mind during negotiations.

Supreme Court: Layoffs Are Management Right

2011-01-24T10:18:00.000-08:00

The California Supreme Court has just issued its decision in International Association of Fire Fighters, Local 188, AFL-CIO v. Public Employment Relations Board (City of Richmond) (Case No. S172377) ("Richmond").

Here's the holding:

Here, we address two issues: (1) If, after receiving an unfair labor practice charge, PERB decides not to issue a complaint, is that decision ever subject to judicial review? (2) Is a city's decision to lay off firefighters for fiscal reasons a matter that is subject to collective bargaining?

On the first question, we agree with the Court of Appeal that although PERB's refusal to issue a complaint is generally not subject to judicial review, this general rule has narrow exceptions. One of these exception applies when, as the union alleges here, PERB's refusal is based on a clearly erroneous statutory construction.

On the second question, we conclude, as did the Court of Appeal, that when a city, faced with a budget deficit, decides that some firefighters must be laid off as a cost-saving measure, the city is not required to meet and confer with the firefighters' authorized employee representative before making that initial decision. In this situation, the city's duty to bargain with the employee representative extends only to the implementation and effects of the layoff decision, including the number and identity of the employees to be laid off, and the timing of the layoffs.

As I predicted, the Court answered "yes" to the first question and "no" to the second. I'll have more on this decision after I've had a chance to thoroughly read it.

IAFF v. City of Richmond Decision Expected on Monday

2011-01-22T12:39:00.000-08:00

The California Supreme Court has given notice that a decision in International Association of Fire Fighters, Local 188, AFL-CIO v. Public Employment Relations Board (City of Richmond) (Case No. S172377) ("Richmond") will be issued on Monday morning.

As a recap, the Richmond case presents the following issues:

(1) Is the decision by the Public Employment Relations Board not to issue an unfair labor practices complaint under the Meyers-Milias-Brown Act (Gov. Code, § 3500 et seq.) subject to judicial review? (2) Is a decision to lay off firefighters for fiscal reasons a matter that is subject to collective bargaining under the act?

Given the questions asked by the Justices at oral argument, my prediction is that the Court will answer the first question "yes" and the second question "no." We'll see if I'm right.

Court Grants Rehearing on Whether Right to Privacy Prevents Release of Non-Member Employee Addresses to Union

2011-01-18T10:57:00.000-08:00

County of Los Angeles v. Los Angeles County Employee Relations Commission (Court of Appeal Case No. B217668) (Issued on 12/14/10; Rehearing granted on 1/11/11)

I discussed this case in a prior blog post. (Click here for prior post) In short, the Court of Appeal held that under California’s right to privacy, non-union members of a bargaining unit (i.e. agency fee payers) have a reasonable expectation of privacy that their personal information will remain confidential. The Court held that before the home addresses of non-union members can be released, the employer must provide these employees with notice and an opportunity to object to the disclosure of their personal information.

After this ruling was issued, the Service Employees International Union (SEIU) filed a petition for rehearing. On January 11, 2011, the Court of Appeal granted the request for rehearing with the following order:

“In order to allow sufficient time for consideration of the issues raised in the petition for rehearing filed by real party in interest and respondent Service Employees International Union, Local 721, and in order to obtain an answer to the petition for rehearing from appellant the County of Los Angeles, Chief Executive Office, the court grants rehearing on its own motion as of this date. Appellant has 15 days from the date of this order file and serve an answer to the petition for rehearing. (Cal. Rules of Court, rule 8.268.) Klein, P.J., Croskey, J., Aldrich, J.)”

Under Rule 8.268, subdivision (d), of the California Rules of Court, “An order granting a rehearing vacates the decision and any opinion filed in the case and sets the cause at large in the Court of Appeal.” Accordingly, the underlying published decision in this case has been vacated.

Comments:

It’s rare for a court to grant a petition for rehearing. It’s not clear from Court’s order whether the Court is focused on a specific part or section of the decision. Without knowing more it’s hard to speculate how the Court may rule on rehearing the case. As soon as I know more I’ll post another entry.

Governor's Budget Spares PERB From Cuts

2011-01-12T10:32:00.000-08:00

On Monday, Governor Brown released his proposed budget for 2011-2012. The overall budget picture is grim. However, the budget picture for PERB isn't that bad. PERB's proposed budget for 2011-2012 is $6,235,000, which is slightly higher (about 4.4%) than PERB's estimated expenditures for 2010-2011 of $5,971,000. I don't know for sure, but I'm guessing the increase is due to the fact that PERB employees were subject to a 3-day per month furlough in 2010-2011 (a roughly 14% paycut) while in 2011-12 PERB employees will be subject to a combination of cuts totally about 10% of pay. The difference would explain why PERB's budget increased slightly. In terms of personnel, the 2011-2012 budget anticipates 40 FTE's; the same as in 2010-2011.

Below are the excerpts from the Governor's proposed budget for PERB:

Retired Annuitants Not Automatically In Bargaining Unit

2011-01-09T15:39:00.000-08:00

State of California (Department of Corrections & Rehabilitation) (2010) PERB Dec. No. 2154-S (Issued on 12/30/10)

This case considered whether retired annuitants (individuals who have retired from State service and are then hired back for part-time work) working as correctional officers are automatically members of State Bargaining Unit 6 (BU6), represented by the California Correctional Peace Officers Association (CCPOA). The administrative law judge (ALJ) ruled in favor of CCPOA. The ALJ held that retired annuitants were included in BU6 by operation of the original unit determination by PERB in 1979. That unit determination placed all state employees working as correctional officers, parole agents, and correctional counselors into BU6.

Relying upon Unit Determination for Technical, Skilled Crafts, Service and Professional Employees of the University of California (Lawrence Livermore National Laboratory Casual Employees) (1983) PERB Decision Nos. 290-H and 290a-H (Lawrence Livermore I), a Board majority rejected the ALJ’s proposed decision. The majority held that because there are substantial differences between retired annuitants and full-time employees, any unit determination decision must analyze whether including retired annuitants in a bargaining unit is appropriate. The Board held that:

“Lawrence Livermore I stands for the proposition that retired annuitants are not automatically placed in units containing full-time employees performing similar tasks. Rather, retired annuitants will be placed in such units if they are included in a unit determination or modification petition and if, following a full unit hearing, the Board determines they are appropriately placed in that unit.”

Accordingly, the Board majority dismissed the unfair practice charge.

Board Member Wesley dissented from the majority’s holding that retired annuitants are not members of BU6. Member Wesley stated that the original 1979 unit determination found "a unit of corrections employees to be appropriate." She noted that the unit determination specifically considered which employees to exclude and only excluded employees in managerial, confidential, or supervisory positions. According to Member Wesley, there is no indication the unit determination decision in 1979 intended to exclude employees in the same classifications who work in less than permanent, full-time positions, such as retired annuitants.

Comments:

At first blush, this decision seems to involve a unit issue unique to the State’s BU6. However, the legal principle enunciated by the Board majority in this decision has wide-ranging implications. Namely, the notion that retired annuitants are not automatically included in bargaining units containing full-time employees performing similar tasks presumably would apply to all of the statutes administered by PERB.
The impact of this decision is also wide-ranging because retired annuitants are fairly common among public employers who are members of CalPERS, which includes many more employers than just the State. Also, this decision presumably would apply to employees who are similarly situated to the retired annuitants in this case. For example, many public employers utilize deferred retirement option plans (DROP’s) that function similarly to the retired annuitant system.
Lastly, the statement of facts in the decision notes that it was CCPOA attorney Ronald Yank who filed the grievance over the State’s use of retired annuitants to perform BU6 work. Ron was recently appointed to be director of the Department of Personnel Administration, which defended this case against CCPOA. It will be interesting to see whether CCPOA attempts to appeal this case to the courts or whether it will attempt to modify its unit determination to include retired annuitants.

Governor Appoints Kari Miner to PERB

2011-01-02T16:09:00.000-08:00

As one of his last acts in office, Governor Schwarzenegger announced a slew of appointments to various commissions and boards. Among the appointments was a new member to PERB. Here's the announcement:

Kari Miner, 47, of Sacramento, has been appointed to the Public Employment Relations Board. Since 2003, she has been an independent consultant to small businesses focusing on image and efficiency. Prior to that, Miner was a statewide development and programs officer at the Department of Alcohol and Drug Programs from 1996 to 2002. Previously, she was a paralegal for the law firm Burger and Plavan from 1993 to 1996. This position requires Senate confirmation and the salary is $128,109. Miner is a Republican.

Status of Binding Interest Arbitration in California

2010-12-29T19:27:00.000-08:00

2010 witnessed several changes to the binding interest arbitration landscape in California. I thought it would be helpful to review those changes and take a look at the status of binding interest arbitration in California.

June 2010: Vallejo Repeals Binding Interest Arbitration

In June 2010, voters in the City of Vallejo passed Measure A which repealed the binding interest arbitration requirement from the City’s charter. This was a watershed event as Vallejo was the .first local entity in California to establish binding interest arbitration in 1970.

November 2010: Stockton Repeals Binding Interest Arbitration; San Jose Amends It

In November 2010, voters in the City of Stockton passed Measure H which repealed the binding interest arbitration requirement for firefighters. Also in November voters in the City of San Jose passed Measure V, which amended the city’s binding interest arbitration provision to require arbitration decisions to be based primarily on the City’s ability to pay and prohibit any decision from creating an unfunded liability.

So where do things stand? There are now 23 local entities in California that have some form of binding interest arbitration. Those entities are:

Alameda
Anaheim
Gilroy
Hayward
Modesto
Monterey
Napa
Oakland
Oroville
Palo Alto
Petaluma
Redwood City
Sacramento City
Sacramento County
Salinas
San Francisco
San Jose (Amended 2010)
San Leandro
San Luis Obispo
Santa Cruz
Santa Rosa
Stockton
Watsonville

Of these 23:

Sacramento County is the only county with binding interest arbitration (unless you count San Francisco, then there are 2);
Anaheim is the only public entity in Southern California with binding interest arbitration;
San Francisco is the only public entity with binding interest arbitration covering non-safety employees. Vallejo had it too, but Vallejo repealed binding interest arbitration in 2010.
To my knowledge, binding interest arbitration has actually been used in 13 of the 23 entities. They are: Alameda, Anaheim, Gilroy, Hayward, Modesto, Oakland, Palo Alto, Redwood City, Sacramento City, Sacramento County, San Francisco, San Jose, and San Luis Obispo.

Subtle Footnote … Has PERB Changed its Discrimination Standard?

2010-12-22T19:49:00.000-08:00

Fontana Unified School District (2010) PERB Decision No. 2147-E (Issued on 12/10/10)

This case is a run-of-the-mill appeal of a Board agent’s dismissal. What caught my attention was what the Board put in a footnote:

“The Board does not adopt the references to Campbell Municipal Employees Assn. v. City of Campbell (1982) 131 Cal.App.3d 416 and San Leandro Police Officers Assn. v. City of San Leandro (1976) 55 Cal.App.3d 553 at p.3 dismissal letter and pp. 3-4 warning letter, as support for the well-established discrimination test set forth in Novato Unified School District (1982) PERB Decision No. 210 (Novato).”

The footnote was in reference to the following statement by the Board agent in the warning and dismissal letters:

... to state a prima facie case for unlawful retaliation, the charging party must show: (1) the employee exercised rights under EERA; (2) the employer had knowledge of the exercise of those rights; (3) the employer took adverse action against the employee; and (4) the employer took the action because of the exercise of those rights. (Novato Unified School District (1982) PERB Decision No. 210 (Novato); Campbell Municipal Employees Assn. v. City of Campbell (1982) 131 Cal.App.3d 416 (Campbell); San Leandro Police Officers Assn. v. City of San Leandro (1976) 55 Cal.App.3d 553 (San Leandro).

The Board agent cited to Campbell and San Leandro as support for PERB’s standard on establishing a prima facie case of discrimination. This was nothing new. A quick Westlaw search reveals that the exact language used by the Board agent in this case has been used in at least 27 ALJ and Board decisions in the past few years. In fact, the exact language used by the Board agent has been cited by the Board in at least 7 precedential decisions (See PERB Decisions Nos. 2112, 2091, 2086, 2065, 2057, 2021, 2020.) So what does this footnote mean? It’s not entirely clear.

Certainly, Campbell and San Leandro don’t enumerate the elements for establishing a prima facie case of discrimination. Campbell and San Leandro arguably deal more with how to establish a case of interference, as opposed to discrimination. So I think the Board is just saying that in the future Campbell and San Leandro should not be cited as support for the Novato elements. The confusing part is that there still remain at least 7 precedential decisions using the exact same language the Board chose not to adopt in this case. The Board didn't explicitly overrule those prior decisions. So without a more thorough explanation it's difficult to tell what the Board intended to be the effect of the footnote.

My personal opinion is that the footnote is just an instructional comment from the Board to its Board agents. I don't think there is any intent to change the Novato standard or somehow alter it by removing Campbell and San Leandro as supporting decisions. I think the Board just realized, perhaps belatedly, that Campbell and San Leandro are unnecessary citations to support the Novato elements.

PERB Agrees to Judicial Review of Noon-Duty Aides Decision

2010-12-19T10:43:00.000-08:00

Castaic Union School District (2010) PERB Decision No. J025-M (Issued on 12/7/10)

PERB has granted a request for judicial review by the California School Employees Association (CSEA) over the Board’s decision in Castaic Union School District (2010) PERB Decision No. A384E (“Castaic”). In Castaic, the Board overturned longstanding precedent by holding that school district employees in part-time playground positions, also referred to as "noon-duty aides," who do not otherwise hold a position in the classified service, are not covered by the Educational Employment Relations Act (EERA).

Under EERA, PERB decisions on unit determination issues are not reviewable by the courts unless PERB grants a request for judicial review. (Gov. Code, § 3542.) It’s a procedure that is rarely requested. Here, PERB held that the unit determination issue was a “novel” one and of “special importance.” Accordingly, PERB granted the request for judicial review. CSEA is now free to file a petition for relief with the courts.

Court: Right to Privacy Prevents Release of Employee Addresses to Union

2010-12-15T22:19:00.000-08:00

County of Los Angeles v. Los Angeles County Employee Relations Commission (Court of Appeal Case No. B217668) (Issued on 12/14/10)

Facts:

The Service Employees International Union, Local 721 (SEIU) represents several bargaining units in the County of Los Angeles (County). The Memorandum of Understanding (MOU) between the County and SEIU contains an agency-shop agreement. In order to collect its agency fees, SEIU sends an annual Hudson notice to all employees. Historically, the union prepares the Hudson notice, the County prepares the mailing labels, and the County’s Employee Relations Commission (Commission) mails the notices. Using this process the union does not have access to the addresses of agency fee payers.

During negotiations in 2006, SEIU proposed that the process for mailing Hudson notices be changed so that SEIU would be provided the names and home addresses of the agency fee payers in the bargaining unit. The County refused. The Union then filed an unfair practice charge with the Commission.

Following a hearing, the Commission held that agency fee payers’ personal information was presumptively relevant to SEIU’s representation and therefore the union had a right to the information. The Commission rejected the County’s argument that the disclosure of agency fee payers’ personal information would violate their privacy rights. Although the Commission acknowledged that privacy interests were at stake, it relied on NLRB and PERB precedent—including Teamsters Local 517 v. Golden Empire Transit District (2004) PERB Decision No. 1704-M (Golden Empire Transit)—to hold that the interests of the union outweighed that of the agency fee payers.

The case eventually went before the court of appeal. The court acknowledged that federal and state labor law recognized that employee home addresses of constituted information that is necessary to the collective bargaining process. (See, e.g., United States Department of Defense v. Federal Labor Relations Authority (1994) 510 U.S. 487, 493; Golden Empire Transit.) However, the court held that these authorities did not control over California’s constitutional right to privacy.

The Court held that under California’s right to privacy, County agency fee payers have a reasonable expectation of privacy that their personal information will remain confidential. Citing to Pioneer Electronics (USA), Inc. v. Superior Court (2007) 40 Cal.4th 360, the Court held that agency fee payers are entitled to notice and an opportunity to object to the disclosure of their personal information. Responding to SEIU’s arguments, the Court held that:

“This opt-out notice procedure does not provide an unfair advantage to the County or a disadvantage to the Union in collective bargaining matters. (Citations omitted.) Rather, it recognizes the previously overlooked individual rights of the County employees. If, as the Union represented during oral argument, non-member County employees will not respond to the opt-out notice, the Union will obtain the personal information it wants and will do so in accordance with California’s privacy laws. In sum, we conclude before the County discloses the personal information of non-member County employees, it must give them notice and an opportunity to object.”

Comments:

This case highlights the unique structure of the MMBA. Los Angeles County is subject to the MMBA. However, the County is expressly exempted from PERB. An unfair practice charge involving the County goes to the County’s Employee Relations Commission, not to PERB.
The Court’s holding in this decision is far-reaching. The decision essentially overturns PERB’s Golden Empire Transit decision for all of California’s public employers. This is because the court based its decision on the right to privacy under the California constitution. The California constitution trumps the MMBA and all the other labor relations statutes governing public employers. Therefore if the California constitution requires an opt-out procedure before disclosing employee addresses to a union, that would trump any contrary decisional law by PERB.
What should public employers do? Under court precedent, an individual may bring a cause of action for damages for a violation of the constitutional right to privacy. (Hill v. National Collegiate Athletic Assn. (1994) 7 Cal.4th 1, 39-40.) That’s why employers must be extremely cautious when dealing with issues involving privacy. Employers would be wise to err on the side of caution. Under this decision, employers who have provided employee addresses to the union in the past must consider implementing an opt-out system before making such disclosures in the future.

Why You Need Local Rules….

2010-12-13T13:25:00.000-08:00

City of Lodi (2010) PERB Decision No. 2142-M (Issued on 11/16/10)

I recently participated in a seminar sponsored by the California Public Employee Relations Program on local rules under the MMBA. One piece of advice I gave to the audieence was that every local entity in California should have its own local rules. Surprisingly, there many local jurisdictions that have not adopted local rules under the MMBA. By not adopting local rules, the PERB model rules (2 Cal. Code of Regs., §61000 et. seq.) apply to the local jurisdiction by default.

One important point to remember is that if you are a local entity subject to PERB's local rules by default, PERB will decide unit determination issues and conduct elections - not you. One huge disadvantage to relying on PERB is that you have little control over how long the process takes. The recent City of Lodi decision is a great example of this. PERB got involved in the City of Lodi case because the City's local rules didn't have a severance provision. Here is the timeline in the Lodi case:

City of Lodi Timeline:

March 19, 2008: Severance petition filed
April 14, 2008: PERB determines there is sufficient proof of support
May 6, 2008: Settlement conference held
August 15, 2008: Formal hearing held
October 28, 2008: Transcripts completed. (PERB noted that the transcripts were delayed due to the lack of a state budget).
November 27, 2008: Closing briefs filed.
December 17, 2008: Proposed decision issued. Appeal filed.
November 16, 2010: Board decision issued.

Granted, I don’t know the background facts. Some of the delay may have been by mutual agreement or caused by circumstances that no one could control. But the reality is that most cities and counties could have issued a decision on a severance petition faster than nine (9) months. So if you’re a local entity and you want to control your own destiny – I strongly advise you to adopt local rules.

PERB Issues 2009-2010 Annual Report

2010-12-10T11:23:00.000-08:00

PERB recently released its annual report for fiscal year 2009-2010. (The report is available here.) Here are the highlights for the 200-2010 fiscal year:

Unfair Practice Charges

802 unfair practice charges (UPCs) were filed in fiscal year 2009-10. This represents a 7.6% decrease from fiscal year 2008-09 in which 868 UPCs filed. It’s also the lowest number of UPCs filed since 2002, when 802 UPCs were also filed.

The decrease in UPCs can be attributed to the Dills Act (82 UPCs versus 167 in 2008-09) and MMBA (267 UPCs versus 310 in 2008-09). UPCs under EERA stayed roughly the same (308 UPCs versus 303 in 2008-09) and actually increased under HEERA (117 UPCs versus 72 in 2008-09).

The decrease in UPC filings goes against the prediction I made last year. I had thought that with the economic situation UPCs would increase under EERA and the MMBA. That turned out not to be the case. However, I know many local entities entered into short-term deals requiring furloughs and temporary concessions. Many of those deals will need to be renegotiated this year. So I anticipate UPC filings in 2010-11 under EERA and MMBA will at least stay the same if not increase.

In contrast, I think we will see a continued decrease in UPCs under the Dills Act and HEERA. This is because the largest state employee unit, SEIU, now has a contract. Similarly, several large units in the UC system now have contracts too. So the level of UPCs will likely continue to drop under those two statutes.

ALJ Proposed Decisions

In 2009-10, the ALJs at PERB issued 57 proposed decisions. This is an increase from the 52 decisions issues in 2008-09. The average number of days to render a decision in 2009-10 was 86 days, a decrease from the 94 days on average it took to render a decision in 2008-09.

Year: # of Proposed Decisions (Average # of Days)

2009-10: 57 (86)

2008-09: 52 (94)

2007-08: 44 (94)

2006-07: 41 (85)

2005-06: 46 (100)

2004-05: 49 (63)

2003-04: 47 (53)

2002-03: 52 (53)

Board Decisions

For 2009-10, the Board itself issued 79 decisions. It also considered 13 injunctive relief (IR) requests. The 79 decisions issued represent an 11% decrease from the 89 decisions issued in 2008-09. Unfortunately, for 2010-11 I expect the number of Board decisions to further decrease. This is because the Board has only three members currently with two vacancies. Even if new members are appointed, it will take some time for them to get up to speed. Current statistics bear this out. With almost half the fiscal year over, PERB has issued 30 Board decisions. Even if a few more decisions are issued before the end of the year, and assuming PERB can remain just as productive during the second half of the fiscal year, I would expect the number of Board decisions for the full fiscal year to be in the mid- to high-60’s.

The chart below lists the number of decisions issued by the Board since 2001. (In past years, the Board has sometimes included IR requests in its decision count. So to make things easier, I have listed the number of Board decisions, IR requests, and the total.)

Year: # of Board Decisions/IR Requests/Combined Total

2009-10: 79/13/92

2008-09: 89/19/108

2007-08: 65/28/93

2006-07: 87/16/103

2005-06: 80/23/103

2004-05: 142/14/156

2003-04: 128/13/141

2002-03: 73/14/87

2001-02: 44/23/67

PERB: Minimum Job Requirements Not Within Scope of Bargaining

2010-11-11T07:15:00.000-08:00

City of Alhambra (2010) PERB Decision No. 2139-M (Issued on 10/26/10)

Facts

The City of Alhambra (City) operates under a merit system that requires competitive employment examinations. The City’s municipal code requires that any classification plan be adopted by the City Council. Under the City’s local employer-employee relations rules, the City retains the right to “establish and determine job classifications.”

In 2005, the City proposed and the City Council approved changes to the class specification for Fire Captain. Previously, the job classification for Fire Captain required both an Alhambra Fire Department Fire Engineer certification and Driver 1A and 1B certification for current fire engineers employed by the City. The change in 2005 made the requirement an Alhambra Fire Department Fire Engineer certification or Driver 1A and 1B certification for current fire engineers employed by the City. The City's goal was to expand the pool of potential applicants for Fire Captain.

The City did not notify the union of the proposed changes or seek to negotiate them. Instead, the City believed that pursuant to its local rules, it retained the management right to make changes to job classifications. The ALJ found that the change to the Fire Captain job classification involved a matter within the scope of bargaining. Because the City did not give the union notice of the change and an opportunity to bargain, the ALJ found that the City committed an unlawful unilateral change.

On exceptions filed by both parties, the Board reversed. The issue before the Board was whether the change fell within the scope of bargaining. In deciding this issue, the Board relied upon the three-part test set forth in Claremont Police Officers Assn. v. City of Claremont (2006) 39 Cal.4th 623 (“Claremont”). Under Claremont, the first inquiry is whether the management action has a significant and adverse effect on the wages, hours, or working conditions of the bargaining-unit employees. If so, the second inquiry is whether the significant and adverse effect arises from the implementation of a fundamental managerial or policy decision. If not, then the meet-and-confer requirement applies. However, if both the first two factors are present, the third inquiry is whether the employer’s need for unencumbered decisionmaking in managing its operations is outweighed by the benefit to employer-employee relations of bargaining about the action in question.

Significant and Adverse Effect

Addressing the first inquiry, the Board held that the change did not adversely impact wages or hours. The Board noted that the City’s change actually expanded the pool of potential applicants. In reaching this holding, the Board distinguished several prior precedential decisions finding changes to job classifications within scope. The Board held that those prior decisions must be read in light of Claremont. Under Claremont, the Board held that changes to the minimum qualifications for a job may be within the scope of bargaining if the change has a significant adverse impact. Here, the Board found that it did not.

Fundamental Managerial or Policy Decision

Even though it answered the first question in the negative, the Board considered the other two factors. The Board held that the “establishment of minimum [job] qualifications” was a fundamental managerial or policy decision under the MMBA. In reaching this decision, the Board drew a distinction between “promotional procedures, which are bargainable, and job qualifications, which are not.” The Board also considered that the position of Fire Captain affects the health and safety services provided by the City to the public.

Balancing Test

Finally, the Board held that even if the first two factors were present, it would find that the employer’s need for unencumbered decision making in this situation outweighs the benefit of bargaining over the decision. Specifically, the Board held that:

“This standard is not met in this case, as there is no evidence that bargaining over the expansion of the candidate pool for fire captains would outweigh the City’s need to determine the qualifications necessary to provide public fire protection services to its citizens. Accordingly, the charge and complaint must be dismissed.”

Comments

Prior to this decision, if you had asked me whether changing the minimum qualifications of an existing job classification in a bargaining unit was within the scope of bargaining, I would have answered yes (with rare exceptions; e.g. state mandated licensing requirements, etc.) Certainly, I would have advised notifying the union of any changes in case there were any negotiable effects. So at first blush, this decision seems to be a significant departure from existing PERB precedent. While the Board went to great lengths to argue that there was no precedent on the specific subject of “minimum qualifications” versus promotional procedures, the rationale underlying PERB’s existing decisions certainly pointed towards a change in minimum qualifications being negotiable. So I do believe this decision represents a departure; if not in actual precedential authority, then certainly in direction by the Board
That said, when you read the decision carefully it’s potentially much more narrow than at first blush. First, on its face it only applies to minimum qualifications versus promotional procedures. Obviously, there is a gray area between these two subjects and what happens in that gray area will have to be litigated in the future.
However, even though the holding is narrow, I believe this decision does represent a significant change in Board “direction”. The way the Board analyzed the second and third factors can be applied to many other areas that many people currently consider within the scope of bargaining. For example, grounds for discipline, including certain work rules, and other aspects of the disciplinary process would arguably satisfy the second and third Claremont factors under the Board’s analysis. In contrast, this decision suggests that the disciplinary process itself would be within the scope of bargaining.
While this decision may represent a change in Board “direction,” how long it will last remains to be seen. This decision was issued only a week before the November election. There are currently three Board members and one Board member’s term expires at the end of 2010. Therefore Governor Brown can appoint three Board members—a majority—immediately upon taking office. So while this decision may represent a change in direction, employers would be wise to consider that it's coming at the end of an administration and that another "change" could be on its way.

Plan to Attend CPER Seminar on MMBA Local Rules

2010-11-04T09:53:00.000-07:00

Do your local rules address unit modification petitions and other second generation representation issues? Do they still require a majority of the unit vote for an amendment of certification? Does amendment of outdated rules seem daunting because so many parties will bargain over any changes? Then you should make plans to attend, "Your Local Rules – Is It Time for a Makeover?" sponsored by the California Public Employee Relations Program (CPER).

The seminar is being held on December 3, 2010 in Oakland, California. (Click here for the brochure). Registration is only $90 ($110 if requesting MCLE credit). It should be a great program so sign up early!

PERB: Unfair Practice Charge Does Not Block Election Certification

2010-11-02T16:40:00.000-07:00

Salinas Valley Memorial Healthcare System (2010) PERB Decision No. A387-M (Issued on 10/25/10)

This case arose from a decertification election at the Salinas Valley Memorial Healthcare System (SVMHS). The National Union of Healthcare Workers (NUHW) sought to decertify SEIU-United Healthcare Workers West Local 2005 as the exclusive representative and to establish itself as the new exclusive representative. NUHW won the election. SEIU then filed objections to the result of the decertification election. The objections alleged that the SVMHS interfered with employees’ free choice in the election by: (1) changing its access rules for non-employee SEIU representatives; (2) allowing a management employee’s photograph to be used on a flyer supporting the NUHW; and (3) discriminating against, retaliating against, and/or interfering with the rights of several employees who supported SEIU. SEIU also filed an unfair practice charge against SVMHS based on the same allegations. The Regional Director held that SEIU failed to establish that SVMHS’s conduct interfered with employees’ free choice and therefore dismissed SEIU's objections. The Board affirmed.

In its appeal, SEIU argued that its objections to the election should not have been dismissed—and the election should not have been certified—until its unfair practice charge based on the same facts was decided. The Board has never addressed this issue before; namely, whether findings and conclusions in an election objection decision have any preclusive effect on identical allegations raised in an unfair practice charge. Citing NLRB precedent, PERB held that findings and conclusions in an election objection decision do not have preclusive effect in a related unfair practice charge. PERB emphasized that there are “significant differences between representation and unfair practice proceedings … PERB may refuse to set aside an election even when the employer's conduct constituted an unfair practice if the conduct did not actually affect, or have a natural or probable effect on, employee free choice ... On the other hand, the employer's conduct need not constitute an unfair practice for PERB to set aside an election.”

Here, PERB noted that the Regional Director did not address whether SVMHS' alleged conduct constituted an unfair practice under applicable PERB standards. Rather, the Regional Director only determined that none of the alleged conduct actually influenced, or had the potential to influence, employee free choice in the decertification election. Therefore, PERB held that ruling on SEIU’s objections would not affect the subsequent unfair practice charge.

Comments:

PERB’s approach in separating the representation issues from the unfair practice issues makes sense and is practical. PERB has always prioritized representational issues, as it should. Delaying the certification of an election while an unfair practice charge is pending doesn’t make sense if the conduct has already been determined not to have influenced the election.
Here, SEIU filed its unfair practice charge two (2) days before the ballots were counted. It is important to note that SEIU apparently did not request that its unfair practice charge be considered a “blocking charge” and that the election be stayed. Like the NLRB, PERB does allow for “blocking charges” prior to an election. A party must ask that an unfair practice charge be treated as a blocking charge and the Regional Director makes a decision on whether the stay the election. The test is whether the conduct "will so effect the election process as to prevent the employees from freely selecting their representatives." See Jefferson School District (1979) PERB Decision No. Ad-66.

Court of Appeal Denies CNA's Challenge to Strike Award

2010-10-10T16:05:00.000-07:00

California Nurses Association v. Public Employment Relations Board of the State of California (Court of Appeal Case No. A127766)

On October 7, 2010, the First District Court of Appeal summarily denied a challenge by the California Nurses Association (CNA) to PERB’s decision in California Nurses Association (2010) PERB Decision No. 2094-H. In the underlying decision, PERB held that CNA improperly threatened to engage in a pre-impasse, one-day strike against the University of California (University). (Click here for my blog post on that decision.) As a result of CNA’s actions, PERB held that the University was entitled to monetary damages against CNA for the costs it occurred to prepare for the threatened strike.

Although CNA's challenge was summarily denied, the issue is significant enough that CNA will likely file a petition before the California Supreme Court. So stay tuned ...

California Supreme Court: Past State Employee Furloughs Legal

2010-10-04T12:18:00.000-07:00

Professional Engineers in California Govt. v. Schwarzenegger (Supreme Court Case No. S183411)

The Supreme Court issued its decision today on the legality of the state employee furloughs imposed by the Governor. If you haven’t been following this issue, here’s a brief summary of the facts. On December 1, 2008, the Governor declared a fiscal emergency and called the Legislature into special session to address a projected $40 billion deficit by the end of fiscal year 2009-2010. On December 19, 2008, the Governor issued an executive order imposing 2-day per month furloughs on state employees. Several employee unions sued the Governor challenging his authority to unilaterally impose furloughs. In mid-February 2009, the Legislature passed and the Governor signed the revised Budget Act of 2008, which included the savings attributable to the 2-day per month furlough program.

Supreme Court’s Decision

In an 81-page decision authored by Chief Justice Ron George, the Supreme Court concluded that the Governor did not have unilateral authority to impose furloughs on state employees, but that the furloughs were nevertheless legal because they were “ratified” by the Legislature via the revised Budget Act of 2008. In its analysis, the Court considered two broad questions: 1) On December 19, 2008, did the Governor possess authority to impose unilaterally a mandatory two-day-a-month unpaid furlough for state employees by issuing an executive order? 2) Did the Legislature’s enactment in February 2009 of the revised 2008 Budget Act and the initial 2009 Budget Act affect the validity of the Governor’s executive order or the remedy that the employee organizations may be entitled to obtain in the present proceeding?

Issue 1: Did Governor Possess Authority to Unilateral to Impose Furloughs?

Court’s Answer: No.

The Court quickly rejected the Governor’s contention that he possessed inherent authority to impose furloughs on state employees as a function of his constitutional powers. The Court affirmed that under the state constitution, “it is the Legislature, rather than the Governor, that generally possess the ultimate authority to establish or revise the terms and conditions of state employment through legislative enactments.” The Court also rejected the Governor’s argument that the Legislature had delegated to the Governor the power to impose furloughs through specific statutory provisions—specifically, Government Code sections 19851, 19849, and 3516.5. The Court held that section 19851 was not relevant to furloughs as imposed and that 19849 did not confer any substantive authority to the Governor. Similarly, the Court held that section 3516.5 of the Dills Act did not give the Governor authority to impose furloughs; it merely provided a method to avoid the collective bargaining process.

In conclusion, the Court held that:

“[W]ith regard to represented employees we are of the view that clearly, unless the Governor or the DPA had been granted the authority unilaterally to impose a mandatory unpaid furlough on affected represented employees by the terms of an applicable MOU, the Governor and the DPA lacked authority unilaterally to institute such a furlough through the December 19, 2008, executive order with respect to those employees.”

“Accordingly, unless the MOU’s specifically authorized the mandatory unpaid furlough imposed by the executive order, it would appear that at that time the executive order was not valid.”

Issue 2: Did the Legislature “Ratify” the Furloughs in the revised Budget Act of 2008

Court’s Answer: Yes.

After concluding that the Governor did not have the authority to unilaterally impose furloughs in December 2008, the Court examined the language of the revised Budget Act of 2008. Section 3.90 of the Budget Act of 2008 provided:

“Sec. 3.90. (a) Notwithstanding any other provision of this act, each item of appropriation in this act, with the exception of those items for the California State University, the University of California, Hastings College of the Law, the Legislature (including the Legislative Counsel Bureau), and the judicial branch, shall be reduced, as appropriate, to reflect a reduction in employee compensation achieved through the collective bargaining process for represented employees or through existing administration authority and a proportionate reduction for nonrepresented employees (utilizing existing authority of the administration to adjust compensation for nonrepresented employees) in the total amount of $385,762,000 from General Fund items and $285,196,000 from items relating to the other funds. It is the intent of the Legislature that General Fund savings of $1,024,326,000 and other fund savings of $688,375,000 in the 2009-10 fiscal year shall be achieved in the same manner described above. The Director of Finance shall allocate the necessary reduction to each item of appropriation to accomplish the employee compensation reductions required by this section.”

In examining the impact of this language, the Court found that the amount of reduction in employee compensation clearly included the savings from 2-day per month furloughs. The Court then cited several budget documents that referenced the continuing furloughs imposed on state employees. Based on these facts, the Court concluded that:

"[I]n view of the exigent circumstances facing the Legislature, it intended to permit the then-existing furlough program to be used as an alternative to other means that might be agreed upon through the collective bargaining process, without regard to whether the appellate courts ultimately determined that the Governor or the DPA possessed the authority to impose an unpaid furlough program unilaterally.”

“Accordingly, we conclude that the phrase “existing administration authority” — as used in section 36 of Senate Bill 3X 2 — was intended to encompass the then-existing furlough program. By enacting this provision, the Legislature, through the exercise of its own legislative prerogative, authorized the substantial reduction in the appropriations for employee compensation, mandated in the revised budget legislation, to be achieved through the two-day-a-month furlough plan.”

Thus, even though the Governor lacked the authority to impose furloughs initially, the Court concluded that the Legislature approved the furloughs when it enacted the revised Budget Act of 2008.

Comments

As expected, the decision was authored by Chief Justice Ron George. There was a concurrence by Justice Corrigan regarding a technical issue on the “single-subject” rule but she ultimately joined in the majority’s conclusion that the Legislature ratified the furloughs in the revised Budget Act of 2008. Notably, the decision was issued less than a month after oral arguments; an indication, I believe, of the importance of this decision.
The majority decision was 81 pages long and Justice Corrigan’s concurrence another 3 pages. I thought the court’s discussion of the Governor’s powers under the constitution and various statutes was extremely thorough. Indeed, the Court spent the first 67 pages of the decision explaining why the Governor does not have the unilaterally authority to furlough state employees. In contrast, the portion of the decision analyzing the language of the revised Budget Act of 2008 only took 13 pages. I believe that’s due largely to the lack of much evidence as to the Legislature’s intent in enacting section 3.90. Further, I don’t believe either of the parties imagined that the case would turn on the language of section 3.90.
What is the effect of this decision? Because the 2-day per month furloughs were ratified by the Legislature, they were legal. So state employees will not be getting any back-pay for those furlough days.
What about the 3rd furlough day? On July 1, 2009, the Governor issued another executive order imposing a 3rd furlough day on state employees. The Court’s decision did not rule on the validity of this 3rd furlough day. However, the decision noted that on July 24, 2009, the Legislature passed the revised Budget Act of 2009 which contained the same “existing administration authority” language as section 3.90 of the revised Budget Act of 2008. Therefore, even though this decision did not directly rule on the legality of the 3rd furlough day, it’s clear that the 3rd furlough day was also ratified by the Legislature and thus will be found legal.
What about the current furloughs? On July 28, 2010, the Governor issued yet another executive order. This order reinstituted 3-day per months furloughs for fiscal year 2009-2010. The Court’s decision expressly does not address the legality of the current furloughs. However, unlike the furloughs in fiscal year 2008-09 and 2009-10, the current furloughs have not been ratified by the Legislature. Thus, I have to assume that the current furloughs will be found to be illegal unless ratified by the Legislature. Whether the Legislature will do so in the Budget Act of 2010 remains to be seen.
What didn’t the court address? Although the Court addressed several key issues related to the Governor’s authority, it expressly declined to address others. These include:

Whether Government Code section 19581 might allow the Governor to impose furloughs at selected agencies for selected employees based on specific needs. The Court concluded only that section 19581 did not authorize “across-the-board” furloughs.
Whether section 3516.5 of the Dills Act—which provides an emergency exception to the collective bargaining requirement—applies to “fiscal” emergencies, as opposed to only natural disasters such as an earthquake or flood.
Whether the Governor has the authority to impose furloughs or simlar measures on nonrepresented employees (although the Court strongly suggested that there would be similar limitations with respect to nonrepresented employees).

Supreme Court: State Furloughs Legal

2010-10-04T10:06:00.000-07:00

Professional Engineers in California Govt. v. Schwarzenegger (Supreme Court Case No. S183411)

The Supreme Court ruled today that the furloughs ordered by the Governor are legal. The Court's conclusion was:

Although, for the reasons discussed above, we disagree with much of the trial court‟s reasoning, in light of the legislative measures enacted after the trial court‟s ruling we conclude that plaintiffs are not entitled to the relief sought in this litigation. Accordingly, the judgment rendered by the trial court, denying the relief sought in these mandate proceedings, is affirmed.

I'll have more once I've had a chance to thoroughly read the decision.

Governor Vetoes Pay Reform Bills

2010-10-01T09:36:00.000-07:00

As I posted earlier (link), only 2 of the 6 bills that comprised the Legislature’s response to the City of Bell salary scandal passed the Legislature. Those two bills were AB 194 and AB 827. On September 30, the Governor vetoed both bills with the following veto messages:

AB 194 Veto Message:

To the Members of the California State Assembly:

I am returning Assembly Bill 194 without my signature. The bill limits the salary that retirement benefits are based on for individuals, prospectively after January 1, 2011, to 125% of the Governor’s salary, as specified. The current compensation limit imposed by the federal government to determine public employee retirement benefits is $245,000. Currently, this bill would cap the compensation counted towards retirement at $217,483. While this two tiered cap that would be created by this bill would make a very small dent in the pension problem California faces, it cannot be considered real pension reform. I am still hopeful that the Legislature will pass an acceptable bill that addresses the real cost issues that have driven up the liability in public pension systems.

For these reasons, I am unable to sign this bill.

Sincerely,

Arnold Schwarzenegger

AB 827 Veto Message:

To the Members of the California State Assembly:

I am returning Assembly Bill 827 without my signature. The scandal with the City of Bell was a disgraceful use of public funds. I share the public outrage expressed over the abuses attributed to the City of Bell’s management of employee contracts. Assembly Bill 827 presents good public policy in that it provides transparency with regards to some municipal personnel contracts, but it should be applied to all public employees, including labor union members and state employees. I encourage the Legislature to enact thoughtful and meaningful solutions rather than a rushed proposal that is severely limited in its application.

For this reason I cannot sign this bill.

Sincerely,

Arnold Schwarzenegger

State Correctly Imposed Last, Best, Final Offer

2010-09-27T15:57:00.000-07:00

State of California (Department of Personnel Administration) (2010) PERB Dec. No. 2130-S (Issued on 9/20/10)

The State of California (State) and the California Correctional Peace Officers Association (CCPOA) were parties to a memorandum of understanding (MOU) with a term of July 1, 2001 through July 2, 2006. Negotiations for a successor MOU reached an impasse in May 2007. Mediation was unsuccessful and in September 2007 the State notified CCPOA that it was implementing its last, best, final offer (LBFO) pursuant to Government Code 3517.8.

CCPOA then filed this unfair practice charge alleging, among other allegations, that the State unlawfully imposed its LBFO for a three-year term. The State denied that it implemented its LBFO for any set duration. Based on the evidence, PERB agreed with the State and dismissed the charge. However, PERB went on to hold that even if the State had imposed a “term” on its LBFO, that in itself was not unlawful. Citing to Rowland Unified School District (1994) PERD Decision No. 1053, PERB held that, “an employer may lawfully implement a term of agreement provision contained in its LBFO because such a provision, standing alone, does not act as a waiver of the union’s bargaining right for the specified period.” What is prohibited is imposing a waiver on the union; in essence, refusing to bargain during the term imposed. Here, PERB found that the State never indicated that it was refusing to bargain going forward. Accordingly, PERB held that even if the State had imposed a term of three years on its LBFO, that by itself was not an unfair practice.

Comments

In this decision, PERB has clarified that under the Dills Act, imposing a term on a LBFO is permissible as long as the employer remains willing to bargain during that term should impasse be broken.
Is this decision applicable to the other acts administered by PERB? I don’t see any reason why the rationale in this case wouldn’t also apply under EERA and HEERA. The MMBA, however, presents a more difficult question. Under the MMBA, upon impasse an employer may impose its LBFO but “shall not impose a memorandum of understanding.” (Gov. Code 3505.4.) This is commonly understood to mean that an employer cannot impose a set term on its LBFO whereby the employer refuses to bargain during that term—an interpretation that is consistent with this decision. However, the provision in the MMBA that an employer “shall not impose a memorandum of understanding” could be interpreted to mean that an employer cannot impose any term at all, regardless of whether or not the employer stands ready to bargain.
Practically, there really isn’t a difference between imposing a LBFO without any term versus imposing a LBFO with a term but being willing to bargain at any time. The latter is essentially imposing a contract with a re-opener that can be triggered by the union at any time—it basically renders the term provision meaningless.

Plan to Attend "The Basics of Practicing Before PERB" Seminar on Oct 12

2010-09-15T13:43:00.000-07:00

Would you like to learn more about practicing before PERB? Here's your chance! The Labor & Employment Law Section of the State Bar of California, with the participation of the California Public Employee Relations Program (CPER) and PERB, is sponsoring a seminar on "The Basics of Practicing Before PERB."

The seminar will be held on October 12, 2010, at the Sheraton Grand in Sacramento from 9:00 am. to 12:00 pm. The cost is only $45 for members of the Labor & Employment Law Section and $60 for everyone else. In 2006 and 2007, PERB sponsored similar seminars that completely sold out. So if you want to attend, please sign up early!

Click here for a link to the State Bar's website with the registration information.

California Supreme Court Hears Furlough Case

2010-09-09T13:34:00.000-07:00

As has widely been reported, the California Supreme Court yesterday heard arguments in Professional Engineers in California Government et al. v. Schwarzenegger (Case No. S183411). The issue before the Court is whether the Governor legally imposed furloughs on state employees. This was one of the rare cases that the Court televised so I was able to watch the arguments. (To watch the arguments, click on this link). Here are my thoughts:

Does the Governor Have the Inherent Power to Furlough?

The Governor’s attorney argued that the Governor has the inherent authority to unilaterally furlough employees during a fiscal emergency. The unions’ attorneys argued that there wasn’t any constitutional or statutory authority for such an assertion. The justices – including Chief Justice George and Justice Corrigan – appeared skeptical to the Governor’s argument. Justice Corrigan described an inherent power to furlough as “CEO-type” powers. Based on the questions asked, I’m not sure the Court is prepared to give the Governor such “CEO-type” powers.

Are Furloughs a Lesser Form of Layoffs?

Justice George asked whether furloughs are a less drastic measure than layoffs and Justice Chin repeated that question at the end. In essence, the thinking of the Justices may be that if the Governor has the authority to lay off employees (which no one disputes) then shouldn’t he have the authority to furlough. The union attorneys vigorously disputed that furloughs are a lesser harm than layoffs and also disputed the argument that the state statute authorizing layoffs implicitly authorizes furloughs.

I thought this was an interesting line of questioning by Chief Justice George. In the realm of public employment, there certainly is the concept of “temporary layoffs.” I know of at least one major arbitral decision holding that temporary layoffs are just a form of layoffs and holding that it’s a management right. But I don’t think the Court will issue such a holding.

However, the policy implications behind this question may drive the Court’s decision. This is because if the Court says the Governor can’t furlough, then the only way the Governor could have achieved the salary savings in the budget was through layoffs. From the Court’s questioning, it seems they are bothered by the unions’ arguments which would essentially force layoffs over furloughs; when to the casual observer furloughs are far less drastic.

Did the Legislature Ratify the Governor’s Furloughs?

The Court asked a lot of questions about whether the Legislature ratified the Governor’s furloughs when it adopted a budget that relied upon salary savings in the exact amount of the anticipated furlough savings. Several commentators have suggested that the Court may take this approach to resolving the case. After listening to the oral arguments, I have to agree that this appears very likely. I personally don’t like this approach since it doesn’t answer the central question of whether the Governor has the authority to furlough employees during a fiscal emergency. Under such a holding, this exact situation could arise again in the future. But it’s a way for the Court to resolve this case without addressing the more difficult constitutional questions regarding the Governor’s authority.

Would Back-pay be a Gift of Public Funds?

I thought the most interesting comment came from the Controller’s attorney at the very end of her argument. She said that even if the Court finds the Governor’s furlough order illegal, the issue of back-pay needs to be briefed; and she specifically mentioned the issue of “gift of public funds.” Under the California constitution, it’s illegal to make a gift of public funds. So I guess the argument would be that giving back-pay to employees for time they did not work would be a gift of public funds. That’s certainly a novel argument. In the context of wrongful termination cases, public employees have been able to obtain back-pay just like private employees and I’m not aware of back-pay ever being prohibited as a “gift of public funds.”

A Tribute to Bernard McMonigle

2010-09-07T19:46:00.001-07:00

I was greatly saddened today to learn that Chief Administrative Law Judge Bernard McMonigle passed away this weekend. Bernie was both a friend and mentor to me at PERB. I first met Bernie when he was a Regional Attorney at PERB and I was an attorney at the Department of Personnel Administration. I later had the pleasure to appear before him when he was an Administrative Law Judge and was working at PERB he when was promoted to Chief ALJ.

Bernie was a great attorney and ALJ. He knew the law, but more importantly he understood the realities of the workplace. You could also be assured that you would get a fair hearing in front of him. Because of that, he was greatly respected by both unions and management.

One my fondest memories of Bernie doesn’t involve PERB; but rather seeing him regularly at the Gym. He and Bob Thompson, PERB’s former General Counsel, were religious about going to the gym everyday at lunch. Even when he turned 50 years old, Bernie could still bench press 225 lbs, six times – a fact that he took great pride in taunting me over …

I know I’m not alone in saying that I’m going to greatly miss Bernie.

Only 2 of 6 Pay Reform Bills Pass Legislature

2010-09-01T22:02:00.000-07:00

The 2009-2010 Legislative session is officially over. Of the six bills that comprised the Legislature’s response to the City of Bell salary scandal, only two bills made it out of both the Assembly and Senate: AB 194 and AB 827.

AB 194 (Limits on Pensions) was passed without any major amendments. The only change was that urgency language was added so that the law will take effect as soon as it is signed by the Governor. For a description of what AB 194 entails, see my blog post on August 27, 2010.

AB 827 (Limits on Local Employment Contracts) was substantially amended. The bill still prohibits both automatic renewals of contracts and automatic increases in salary above the cost-of-living. However, the bill was amended to allow for automatic cost-of-living increases. The bill also still requires a performance review for any salary increase, except a cost-of-living increase. Most significantly, the bill was amended to eliminate the requirement that performance reviews be conducted in open session. This change eliminates the privacy issue I highlighted in my prior blog post. Finally, the urgency language was also added.

UPDATE: I should add that even though AB 827 contains urgency language, the bill itself states that it only applies to contracts entered into or renewed on or after January 1, 2011. Thus, the urgency language in AB 827 appears to be meaningless.

AB 194: Limits on Pensions

2010-08-27T17:19:00.000-07:00

AB 194 is part of a six-bill package of legislation in response to the salary scandal at the City of Bell. AB 194 would cap compensation that could be considered in calculating a public employee's pension at 125% of the Governor's current salary, which is $173,987. (The Governor's salary was $212,179 but the Citizen's Compensation Commission voted on May 20, 2010 to reduce that salary by 18%, to $173,987, effective December 7, 2009.) So the cap would be $217,483.75. The cap would only apply to individuals joining a pension system on or after January 1, 2011 and the cap would be subject to an annual cost-of-living increase.

This bill isn't all that radical as there is already a federal IRS rule that limits the amount of compensation that can be considered in calculating a public employee retirement benefit to $245,000. (IRC section 401(a) (17).) (There is apparently a special provision that allows some governmental plans to consider up to $360,000 of compensation provided certain requirement were met in 1993 - but I don't think that applies to any governmental plan in California). But the federal rule doesn't apply to individuals who were part of the pension system prior to 1996.

AB 827: Limits on Local Employment Contracts

2010-08-26T14:16:00.000-07:00

AB 827 is part of a six-bill package of legislation in response to the salary scandal at the City of Bell. AB 827 would prohibit any employment contract for a local, unrepresented employee from including: 1) an automatic renewal provision; 2) an automatic raise in excess of a cost-of-living adjustment; or 3) an automatic compensation increase, including any increase that is linked to a third-party contract. The bill itself is a “gut and amend” of a prior bill dealing with the archival of county records. Perhaps because the bill was so quickly written, the language – although extremely short – contains several ambiguities.

1. The bill would add to the MMBA the following language:

“3511.1. For the purposes of this chapter, "excluded employee" means any unrepresented individual who is or will be employed by, and report directly to, the legislative body of the local agency. "Excluded employee" includes any person contracted with the local agency as well as any person who is considered an at-will employee.”

The first question that arises is whether the second sentence modifies or adds to the first. Specifically, the first sentence says that an “excluded” employee is any unrepresented employee who reports directly to the legislative body. The second sentence says that “excluded employee” includes contract employees and at-will employees. Does that just clarify what is an “unrepresented” employee in the first sentence? In other words, unrepresented employees, whether contract or at-will, who report directly to the legislative body are covered.

You could read the second sentence as being in addition to the first. In other words, unrepresented employees who report directly to the legislative body are covered. And in addition, any contract or at-will employee is also covered, regardless of whether that employee reports directly to the legislative body. Given the history behind this bill, I don’t think the latter interpretation is correct. I believe the bill was only intended to apply to the few individuals who report directly to a legislative body. However, the language is certainly less than clear.

2. The bill also adds the following to the MMBA:

“3511.2. For any contract executed or renewed on or after January 1, 2011, an excluded employee's employment contract shall not include any clause that provides for any of the following: (a) An automatic renewal. (b) An automatic raise in excess of a cost-of-living adjustment. (c) An automatic compensation increase, including any increase that is linked to a third-party contract. (d) Notwithstanding Section 53260, a severance payment greater than 12 months' salary."

I’m not sure why you need (b) when you have (c). If you prohibit all automatic increases, why do you need to say that automatic increases above the cost-of-living are prohibited? It doesn’t make sense.

Other than that, the language of 3511.2 is clear. What I find confusing is why this language is being placed in the MMBA. Because excluded employees are not represented, this isn’t an issue related to collective bargaining. Perhaps because it deals with the terms and conditions of employment, the Legislature thought it made sense to include it in the MMBA. However, it seems to me that it would be better placed in the part of the Government Code dealing with local compensation.

3. Finally, the bill would add the following to the Government Code:

“54957.05. (a) For any unrepresented individual who is or will be employed by, and report directly to, the legislative body of the local agency, before implementing a raise in excess of a cost-of-living adjustment, the following requirements shall be met: (1) A performance review of that individual shall be completed. A completed summary of the performance review shall be discussed at open session. The performance review shall be publicly available upon request. (2) The vote to implement the raise in excess of a cost-of-living adjustment shall be conducted in an open session meeting. (b) For the purposes of this section, the board shall use the Bureau of Labor Statistics' Consumer Price Index to determine the cost-of-living adjustment each year.”

The big change here is the requirement that any performance review of an unrepresented employee who reports directly to a legislative body be conducted in open session of the legislative body. The issue that comes to mind is whether such individuals have privacy rights preventing a performance evaluation from being discussed in open session. In California, the right to privacy is constitutionally protected and could potentially trump any legislation. However, because this bill only applies to the very few individuals who report directly to a legislative body – people who are usually very high in the chain of command – I think this requirement is probably permissible. This is because the right to privacy must be balanced against the public’s right to information about its government. For the people at the very top, the courts have generally found that the public’s right to information generally outweighs any individual right to privacy. However, it’s certainly a balancing act. To the extent a performance evaluation touches on highly personal areas (for example, if a City Manager who is HIV positive has to take time off for medical treatment and that affects his attendance), I’m not sure that such issues should be aired in public. So even if this bill passes, there may be some areas related to an individual’s performance that are not properly subject to the provisions of this bill requiring a public hearing.

Proposed Legislation in Response to City of Bell Scandal

2010-08-23T23:29:00.000-07:00

The Legislature has unveiled a six-bill package of legislation in response to the salary scandal involving the City of Bell. The six bills are:

AB 827: Prohibits any employment contract for a local, unrepresented employee from including an evergreen provision, severance payments greater than 12 months in salary, automatic compensation increases, and automatic raises that exceed the cost of living.
AB 192: Requires cities to pay for any higher pension payments that stem from their luring a municipal employee away from another city by offering exorbitant pay.
AB 194: Establishes a cap on the total compensation that can be used to calculate a pension benefit.
AB 1955: Requires charter cities to be penalized by the state if they pay city council salaries higher than allowed in general-law cities. Councilmembers would be slapped with a 50% personal income tax on any ”excess” amounts and the city's redevelopment agency would be restricted from approving new plans or issuing new debt.
AB 2064: Requires the Legislature to post on its website the salaries of its elected members and employees. The bill also requires cities, counties, special districts, school districts and joint powers authorities to post the salaries of its elected officials and key employees.
SB 501: Requires officials of cities, counties, special districts, school districts and joint powers agencies to file an annual statement that discloses their compensation to the public.

Comments:

I’m going to try to provide comments on these bills over the next couple of weeks. I’m going to start with AB 1955 because I think it’s the most interesting.

1. This bill would slap a 50% tax on the amount of a Councilmember’s “excess” salary. According to the Senate analysis, taxing income based on source is “unusual” in California. However, the analysis notes that the tax is similar to the “AIG bonus tax” passed by Congress.

2. Under this bill, a charter city would be deemed an “excess compensation city” if Councilmember pay exceeds the statutory limit for general law cities. What is the limit for general law cities? Under Government Code section 36516, how much a general law city may pay a Councilmember depends on the city’s population. Here is the chart:

Up to and including 35,000 residents = $300 a month
Over 35,000 and up to and including 50,000 = $400 a month
Over 50,000 and up to and including 75,000 = $500 a month
Over 75,000 and up to and including 150,000 = $600 a month
Over 150,000 and up to and including 250,000 = $800 a month
Over 250,000 residents = $1,000 a month

3. However, it’s not as simple as just looking at the chart. The amounts in section 36516 have not changed since 1984. However, the statute allows a city to increase Councilmember salaries by ordinance up to 5% a year. (In addition, council salaries can be increased beyond these limits if submitted to and approved by the voters.) So what effect does that 5% annual increase have? If a general law city paid a Councilmember $1000 a month in 1984, and increased that amount 5% every year, Councilmember pay would be approximately $3556 per month (or $42,672 annually) today. That amount would be the maximum amount a general law city could pay a Councilmember under section 36516 without submitting the issue to the voters.

4. Now, here comes the big caveat. Under AB 1955, an “excess compensation city” by definition cannot be a charter city with a population over 285,000 individuals. In other words, any charter city with a population over 285,000 is exempt from this bill. How many cities are there with more than 285,000 people? There are 13 cities in California with populations over 285,000: Los Angeles, San Diego, San Jose, San Francisco, Fresno, Long Beach, Sacramento, Oakland, Santa Ana, Anaheim, Bakersfield, Riverside, and Stockton. All 13 of these cities are also charter cities. Under AB 1955, all 13 would be exempt from this bill.

Dismissals Not Entitled to Preclusive Effect

2010-08-19T16:30:00.000-07:00

Grossmont Union High School District (2010) PERB Decision No. 2126E (Issued on 8/13/10)

This case involved an employee who alleged that he received a negative performance evaluation and was demoted because of protected activities. Specifically, the employee alleged that the adverse actions were taken after he wrote a letter to the principal accusing the principal of violating the applicable collective bargaining agreement and because he requested union representation during a meeting with his manager. The Office of the General Counsel issued a complaint. After a formal hearing, the ALJ found no nexus between the adverse actions and the protected activities, and on that basis, dismissed the complaint.

Of interest was the fact that the employee had filed an unfair practice charge against his union for breach of the duty of fair representation (DFR) arising from the same set of facts. (See Service Employees International Union, Local 221 (Meredith) (2008) PERB Decision No. 1982.) In the DFR case, the Board found that the employee failed to state a prima facie case that his union caused or attempted to cause the District to reject him on probation. Relying on that decision, District in this case moved to dismiss the complaint.

In its decision, the Board declined to give preclusive effect to the prior DFR decision. Here’s what the Board held:

“In City of Porterville (2007) PERB Decision No. 1905-M, the Board, citing the "doctrines of res judicata and collateral estoppel," gave preclusive effect to a Board agent’s dismissal of identical allegations in a separate unfair practice charge. However, a Board agent’s review of a charge to determine whether it establishes a prima facie case of an unfair practice does not meet the "actually litigated" requirement for collateral estoppel. To be "actually litigated" for purposes of collateral estoppel, an issue must have been decided based on the presentation of evidence at a hearing. (Groves v. Peterson (2002) 100 Cal.App.4th 659, 668.) The Board has consistently held that the function of a Board agent’s investigation is not to resolve the merits of the case because such resolution is reserved for PERB ’ s hearing process. (Golden Plains Unified School District (2002) PERB Decision No. 1489; Eastside Union School District (1984) PERB Decision No. 466.) We therefore overrule City of Porterville, supra, to the extent it granted preclusive effect to a dismissal of an unfair practice charge based solely on a Board agent’s charge investigation.”

Thus, the Board has overruled City of Porterville and will no longer give preclusive effect to a dismissal. This issue doesn’t arise very often but practitioners should take note of this change in law.

PERB: School Noon-Duty Aides Not Covered by EERA

2010-08-13T12:47:00.000-07:00

Castaic Union School District (2010) PERB Decision No. A384E (Issued on 8/09/10)

In an unexpected decision, PERB has held that school district employees in part-time playground positions, also referred to as "noon-duty aides," who do not otherwise hold a position in the classified service, are not covered by the Educational Employment Relations Act (EERA). This decision overturns the Board’s holding in Pittsburg Unified School District (1976) EERB Decision No. 3 (“Pittsburg”). What is significant is that the Pittsburg decision has been binding precedent for over 30 years; indeed it was the third decision ever issued by PERB (then known as EERB).

The Board based its decision on the language of Education Code section 45103, subdivision (b)(4), which states:

Part-time playground positions shall not be a part of the classified service, where the employee is not otherwise employed in a classified position. Part-time playground positions shall be considered a part of the classified service when the employee in the position also works in the same school district in a classified position.

Then Board then compared Education Code section 45103 with Government Code section 3540.1, subdivision (e), which states:

“Exclusive representative means the employee organization recognized or certified as the exclusive negotiating representative of certificated or classified employees in an appropriate unit of a public school employer.”

The Board interpreted the “plain language of the statute to mean that an exclusive representative may only represent a bargaining unit of certificated or classified employees and, therefore, cannot represent employees who do not fall into one of those two categories.” According to the Board, the definition of "exclusive representative" limits the definition of "public school employee" to certificated or classified employees. Thus, part-time playground employees are not considered “employees” for purposes of EERA.

As a result of the Board’s holding, the petition in this case to add part-time playground positions to an existing unit was dismissed. However, in the interesting move, PERB stated that it would only apply the holding in this case prospectively. Specifically, the Board stated that:

“We recognize that classified bargaining units may currently exist which include parttime playground positions. Because of the potential disruption to stable employer-employee relations that would result from application of this decision to such units, PERB will only apply this decision prospectively. (Palo Alto Unified School District, et al. (1979) PERB Decision No. 84; Peralta Community College District (197 8) PERB Decision No. 77.) Consequently, this decision does not affect existing units that include part-time playground positions.”

Member Wesley dissented from the Board’s decision that EERA does not cover part-time playground positions. Member Wesley argued that the definition of “employee” under EERA does not limit it to classified or certificated employees. Further, Member Wesley asserted that being excluded from the classified service has little bearing on whether an employee should be covered by EERA, as the purposes of the two statutory sections are different.

Comments:

It is fairly rare for the Board to overturn one of its prior decisions. It probably occurs once a year on average; perhaps a little more when there is a change of Governor. However, I can’t remember the Board ever overturning a decision as old as Pittsburg. As mentioned above, Pittsburg has been around for over 30 years and it was only the third decision ever issued by the Board. In terms of the merits of the decision, I think both sides have valid points. But given how long Pittsburgh has been around, I’m sure CSEA will appeal this case. It will be interesting to see how the Court rules.
For me, the really interesting portion of this case was the Board’s guidance on how this decision will be applied in the future. The Board acknowledged that many districts have part-time playground positions in bargaining units and that this decision could cause substantial disruption to those districts and employees. Therefore, the Board stated that it would only apply this decision prospectively. However, can the Board do that? I personally think it’s questionable. Here, the Board said that the plain language of the statute required that it hold that part-time playground employees are not covered by EERA. However, PERB cited to a couple of prior cases where it declined to apply a statutory interpretation retrospectively where such an application would “cause disruption and instability.” I think those prior decisions are distinguishable. But in its basic form, the legal question is this: Can an administrative agency charged with enforcing a statute decide not to enforce the plain language of the statute because it would cause disruption and instability? I believe the answer is no; such a decision is one for the Legislature. My view is that if PERB says that under the plain language of EERA that these positions are not covered, it has no choice but to enforce that interpretation. Any “disruption or instability” in this situation is caused by the language of the statute, which is something for the Legislature to address. I certainly understand why PERB only wants to apply this holding prospectively, I just don't know that it can do that when it says that the language of the statute is plain and clear.

A Guide to PERB Abbreviations

2010-07-21T13:36:00.000-07:00

Have you ever wondered what the letters and numbers in a PERB charge mean? Here's what you need to know. All PERB charges follow the same rule: The first two letters denote the PERB office where the charge was filed; the next two letters denote the type of case; next the number is the number of the charge under the Act; and the last letter is the Act under which the charge was filed.

Here's a guide to the abbreviations used:

Location:

SA = Sacramento
SF = San Francisco (Note: For those of you wondering, yes, PERB's office is in Oakland. But it used to be in SF)
LA = Los Angeles

Charge types:

AC Amendment of Certification Request
AR Arbitration Request
CE Unfair Practice Charge against Employer (Note: Most common type of charge)
CO Unfair Practice Charge against Employee Organization (Note: Second most common type of charge)
DP Decertification Petition
FS Financial Statement Complaint
HS HEERA Student Participation Complaint
IM Impasse Request (Mediation and Factfinding)
OS Organizational Security Election Request
PC Petition for Certification
PN Public Notice Complaint
RR Request for Recognition
SV Severance Request or Petition
UM Unit Modification Petition

Acts:

E = EERA
H = HEERA
S = Dills (Note: It was initially referred to as "SEERA" before being renamed for the late Senator Ralph Dills)
M = MMBA
C = Trial Court Employment Protection and Governance Act
I = Trial Court Interpreter Employment and Labor Relations Act
T = Los Angeles County Metropolitan Transportation Authority Transit Employer-Employee Relations Act

PERB’s End of Fiscal Year Numbers

2010-07-18T08:03:00.000-07:00

Fiscal year 2009-2010 is over. PERB’s annual report for 2009-2010 is not due until October 1, 2010. However, I have been keeping track of PERB’s decisions throughout the year. So unless there are additional cases issued before June 30th that PERB has not posted on its website, I have the final tally for the year. For fiscal year 2009-2010, PERB issued 79 decisions. The year before, fiscal year 2008-2009, PERB issued 89 decisions. However, PERB had five board members in 2008-09, while it had only four board members for most of 2009-2010, and ended the last few months with only three board members. So given that PERB only had about 3.5 board members this year, and was subject to 3-day a month furloughs, 89 decisions is not bad at all.

Here are some other statistics for the 2009-2010 fiscal year:

Decisions by Statute:

MMBA: 33
Dills Act: 17
EERA: 15
HEERA: 12
Court Interpreter: 2

Decisions by Type:

Appeals from Dismissals: 49 (15 of which were DFR’s)
Exceptions to ALJ Decisions: 23
Approval of Settlement: 1
Administrative Appeal: 2
Reconsideration: 2
Unit Modification: 1
Amend Certification: 1

Decisions by Outcome:

Dismissal Affirmed: 44
Dismissal Overturned/Partially Overturned: 5
ALJ Decisions Affirmed: 14
ALJ Decision Overturned/Partially Overturned: 9

Decisions by Board Member:

Dowdin: 29
Wesley: 20
McKeag: 15
Neuwald (Term ended 2/28/10): 15

Other Interesting Facts:

There were 5 dissents in the last year: 2058M (Neuwald); 2107H (McKeag); 2106S (McKeag); 2103M (Dowdin); 2094H (Neuwald).

Comments:

I need to confirm this, but I believe this is the first year that the MMBA has generated the most cases from the Board. Last year, the MMBA and EERA were tied at 34 each. I believe that before that EERA has always been the dominant Act. This year, it wasn’t close. The MMBA generated 33 cases while EERA only generated 17.
The only other major statistic that stands out to me is the Board’s affirmance rate. The rate that dismissals were affirmed by the Board was 89.7%, which is consistent with the historical average of 90%+. However, what is surprising to me is that only 60.8% of the proposed ALJ decisions were affirmed in their entirety. 9 out of 23 proposed ALJ decisions were partially or completely overturned. This is a significant statistic because I think it will only drive more cases to the Board. As a litigant, I’m much more likely to appeal a case to the Board if I have a 40% chance of success (even if it's only a partial success) versus only a 10% chance. 40% isn’t good, but it’s a whole lot better than 10%.

PERB: State Properly Imposed Layoffs Prior to Completion of Effects Negotiations

2010-07-14T14:17:00.000-07:00

State of California (Department of Corrections & Rehabilitation, Department of Personnel Administration) (2010) PERB Decision No. 2115-S (Issued on 6/10/10)

Facts

This case stems from the State’s decision to close the El Paso De Robles Youth Correctional Facility (El Paso) and the DeWitt Nelson Youth Correctional Facility (DeWitt) in response to an anticipated drop in the juvenile population held by the Department of Corrections and Rehabilitation (CDCR) resulting from the passage of SB 81. In November 2007, CDCR developed preliminary plans to close both the El Paso and the DeWitt facilities effective July 31, 2008. Given the language of SB 81, CDCR determined that closure of these two facilities was required in fiscal year 20082009. The Governor incorporated the closure of these facilities into his proposed budget in January 2008 by not including funding for juvenile services at those facilities.

On March 24, 2008, the State gave written notice to the California Correctional Peace Officers Association (CCPOA) that the two facilities were closing and that affected employees would be subject to layoff. The parties then met and conferred over the effects of the layoffs on six occasions prior to the July 31, 2008 implementation date. When no "effects" agreement was reached by July 31 the State went ahead and imposed the layoffs.

Decision

In its decision, PERB affirmed that the decision itself to lay off employees is a fundamental management right that is not subject to bargaining. At the same time, PERB affirmed that the “effects” of a layoff are subject to bargaining. In terms of timing, PERB held that in such a situation the notice, “must be given sufficiently in advance of a firm decision to make a change to allow the exclusive representative a reasonable amount of time to decide whether to make a demand to negotiate."

However, PERB then noted that there is an exception to this rule. Specifically, PERB has held that it is permissible to implement a managerial decision before the completion of bargaining over “effects” where:

1. The implementation date is not an arbitrary one, but is based upon either an immutable deadline or an important managerial interest, such that a delay in implementation beyond the date chosen would effectively undermine the employer’s right to make the nonnegotiable decision;

2. Notice of the decision and implementation date is given sufficiently in advance of the implementation date to allow for meaningful negotiations prior to implementation; and

3. The employer negotiates in good faith prior to implementation and continues to negotiate in good faith after implementation as to those subjects not necessarily resolved by virtue of the implementation.

Here, the Board found all 3 factors present. The Board also rejected the union’s contention that the State negotiated in bad faith. Accordingly, the charge was dismissed.

Comments

Many public agencies are currently considering layoffs because the budget situation for this fiscal year is not much better than last year. When public agencies do seek to impose layoffs, some unions adopt a tactic to try to delay the layoffs for as long as possible in the hope that the public agency will change its mind due to external political pressures. These unions will submit voluminous information requests, refuse to meet promptly, and/or otherwise engage in tactics to prevent the employer from quickly reaching impasse on "effects" negotiations. In these situations, employers should remember that is it possible to impose a managerial decision, such as a layoff, even when effects negotiations have not been completed if the elements in this case are present. Obviously, it’s better to have reached agreement and/or impasse prior to implementation. However, it’s good to keep this exception in mind.

Supreme Court: PERB Has Initial Jurisdiction Over Strikes

2010-07-01T10:15:00.000-07:00

City of San Jose v. Operating Engineers Local Union No. 3 (Case No. S162647) (Issued on July 1, 2010)

The California Supreme Court has just issued its decision in City of San Jose. The key holding is as follows:

"California allows public employees to go on strike to enforce their collective bargaining demands unless the striking employees perform jobs that are essential to public welfare. But whether a particular employee’s job is so essential that the employee may not legally strike is a complex and fact-intensive matter, and one on which public employee organizations and public entities may disagree.

Here, we address this issue: If a public entity is of the view that a threatened strike by its employees will be unlawful because a strike by some or all of the employees creates a substantial and imminent threat to public health and safety, must the public entity first file an unfair labor practice complaint with PERB and await PERB’s adjudication of the complaint before asking a court for an injunction prohibiting the strike?

We agree with the Court of Appeal that PERB has initial jurisdiction over a claim by a public entity that a strike by some or all of its employees is illegal. In addition, we conclude that a public entity must exhaust its administrative remedies before PERB before seeking judicial relief unless one of the recognized exceptions to the exhaustion of administrative remedies requirement is established."

I'll try to have more on this decision tomorrow.

California Supreme Court to Decide “Vesting” Issue Regarding Retiree Health Benefits

2010-06-29T23:09:00.000-07:00

Retired Employees v. County of Orange (9th Cir. 09-56026 6/29/10)

Since approximately 1966, Orange County has provided health care benefits to its retired employees. In 1985, the County began “pooling” the retired employees with the active employees in the rate-setting process. Because retirees generally require more health services than active employees, who are generally younger and healthier, pooling the two groups allowed retirees to pay lower premiums and receive greater coverage than they otherwise would. As the cost of health care continued to rise over the years, the County found its employee health plans underfunded and needing adjustment. On September 12, 2006, the
Board of Supervisors approved a resolution to “split the pool,” which created different premium pools for active and retired employees and became effective on January 1, 2008. Retirees then faced significantly higher health insurance premiums. A group of them brought a lawsuit against the County.

In federal court, the retirees – in essence – argued that the County’s past practice of “pooling” retirees with active employees created a “vested” right that the County could not now eliminate. The court quickly rejected the retirees’ argument, holding that:

“The law is clear: California courts have refused to find public entities contractually obligated to provide specified retirement benefits like those Plaintiff seeks in the absence of explicit legislative or statutory authority. This law also suggests that the requirement to provide lifetime health benefits does not establish a right to a specific method of rate-setting. Here, Plaintiff has failed to provide evidence of any explicit legislative or statutory authority requiring the County to continue providing retirees the pooling benefit in setting rates.”

The retirees then appealed to the Ninth Circuit Court of Appeal. Today, the Ninth Circuit certified to the California Supreme Court the following question:

"Whether, as a matter of California law, a California county and its employees can form an implied contract that confers vested rights to health benefits on retired county employees.

Defendant-Appellee in this case contends that decisions of the Supreme Court of California and the California Courts of Appeal support a conclusion that an implied contract to which a county is one party cannot confer such vested rights. Plaintiff-Appellant contends the contrary.

We understand that the Supreme Court of California may reformulate our question, and we agree to accept and follow the court’s decision. To aid the Supreme Court in deciding whether to accept the certification, we provide the following background."

Having a question certified to the California Supreme Court is fairly rare. More important, how the Court answers this question may have a tremendous impact on the public sector. Everyone knows that there is a huge unfunded liability for future retiree health benefits in the public sector. Many public employers have begun to address this unfunded liability to cutting back on benefits going forward. If the Court rules that employees and/or retirees have a “vested” right to accrue health benefits at a certain level even absent explicit legislature action, that will greatly weaken the ability of public agencies to scale back benefits.

Vallejo Repeals Binding Interest Arbitration

2010-06-09T17:09:00.000-07:00

... But Not All the Votes Are Counted Yet ....

It looks like the voters in the City of Vallejo have repealed the City charter provision requiring binding interest arbitration to resolve collective bargaining disputes. Although it was initially reported that Measure A had passed, the Times Herald was reporting as of this afternoon that thousands of mail-in and provisional ballots remain to be counted. (See article here.) According to the Solano County Registrar's website, Measure A is currently ahead by 454 votes (7014 to 6065).
Assuming that the measure passes, it may be a harbinger of things to come. In 1970, Vallejo became the first city or county in California to pass a local provision requiring binding interest arbitration. Since then 23 other cities and counties have passed similar measures, the most recent (to my knowledge) being the City of Oroville in 2004. Now, Vallejo has become the first city or county in California to repeal its binding interest arbitration requirement. I believe many other local entities will try to follow Vallejo's lead by sponsoring similar measures in the November elections. Whether those measures succeed or not remains to be seen. Without a doubt, public employee unions will vehemently oppose such measures. The unions in Vallejo opposed Measure A, but were greatly weakened financially and had lost a lot of public support by the bankruptcy proceedings involving the City. Unions elsewhere will not face the same financial constraints. However, will they face the same public backlash? We'll have to wait to find out.

Carlsbad Imposes Reduced Pension Benefits on New Firefighters

2010-05-27T15:27:00.000-07:00

There was an interesting story out of Carlsbad last week. (See articles in the North County Times here and here.) The Carlsbad City Council voted to impose a two-tiered retirement system on its firefighters after reaching impasse in bargaining. Under the two-tiered retirement system, existing employees will continue to accrue benefits under the 3% at 50 formula that is widely used in public safety. However, new firefighters will be under a 2% at 50 formula. According to the article, the move was necessitated to keep Carlsbad in "good fiscal health."

What is interesting is that the city is also planning a ballot initiative that would require voter approval to increase pensions in the future. That will likely require additonal bargaining with the union under Seal Beach Police Officers Association v. City of Seal Beach (1984) 36 Cal.3d 591. However, once bargaining has been completed (or impasse reached) there is nothing preventing the citizens of Carlsbad from adopting such an initiative. Up in Northern California, Menlo Park is attempting a similar type of initiative. (See article here.) There are also several other cities considering similar measures. It will be interesting to see which of these pass on election day.

Public Safety Employer-Employee Cooperation Act of 2009: What California Public Employers Need to Know

2010-05-25T09:42:00.001-07:00

According to some reports, the Senate may be voting on S. 3194 as early as this week as part of a larger appropriations bill. S. 3194 is titled the “Public Safety Employer-Employee Cooperation Act of 2009” and would establish collective bargaining for state and local firefighters, police officers, and paramedics throughout the nation. Currently, state and local employees are excluded from the National Labor Relations Act (NLRA). Under S. 3194, state and local public safety employees would come under the jurisdiction of the Federal Labor Relations Authority (FLRA). Upon enactment, the FLRA would have 180 days to determine, “whether a State substantially provides for the rights and responsibilities” provided in S. 3194. If the FLRA finds that a state already provides the rights and responsibilities set forth in S. 3194, then the state would be exempted from the requirements of the new law.

Pursuant to S. 3194, a state would have to provide substantially the following rights and responsibilities in order to be exempted from the law:

(1) Granting public safety officers the right to form and join a labor organization, which may exclude management employees, supervisory employees, and confidential employees, that is, or seeks to be, recognized as the exclusive bargaining representative of such employees.

(2) Requiring public safety employers to recognize the employees' labor organization (freely chosen by a majority of the employees), to agree to bargain with the labor organization, and to commit any agreements to writing in a contract or memorandum of understanding.

(3) Providing for the right to bargain over hours, wages, and terms and conditions of employment.

(4) Making available an interest impasse resolution mechanism, such as fact-finding, mediation, arbitration, or comparable procedures.

(5) Requiring enforcement of all rights, responsibilities, and protections provided by State law and enumerated in this section, and of any written contract or memorandum of understanding between a labor organization and a public safety employer, through--

(A) a State administrative agency, if the State so chooses; and

(B) at the election of an aggrieved party, the State courts.

In California, state law (EERA, HEERA, MMBA, and the Dills Act) already provides all of these rights to public safety employees with one possible exception. Under S. 1394, a state would have to make available “an interest impasse resolution mechanism, such as fact-finding, mediation, arbitration, or comparable procedures.” I'm not sure what this means. The term “interest” when used with “arbitration” has a very distinct meaning in labor relations. In California, there is a statute providing for interest arbitration for police and firefighters. (See CCP, §1299.) However, that statute has been found unconstitutional by the courts and never enforced. So would S. 3194 require interest arbitration? It’s not clear. What’s confusing is that S. 3194 also allows for “fact-finding” and “mediation.” However, there really is no such thing as “interest fact-finding” or “interest mediation” in the labor relations world. So it's really not clear from the statute what meaning is attached to the term "interest." The fear would be that because of the ambiguity, the FLRA might promulgate regulations interpreting S. 3194 as requiring some form of interest arbitration. If so, that would definitely be a change for California public employers.

Regardless of whether S. 3194 requires interest arbitration, it certainly does require some type of “impasse resolution mechanism.” That may be an issue under the MMBA which does not require any form of mediation or anything similar upon impasse. However, the vast majority of local agencies have mediation or fact-finding as part of their local rules. So this particular requirement won’t affect the vast majority of local employers, but may affect a few.

Supreme Court to Review State Furlough Case

2010-05-23T21:25:00.000-07:00

California Attorneys, Administrative Law Judges and Hearing Officers in State Employment v. Schwarzenegger (2010) 182 Cal.App.4th 1424, review granted, 106 Cal.Rptr.3d 702.

The California Supreme Court has granted review in CASE v. Schwarzenegger. Pursuant to the order granting review, the issue before the Court is, “Does the Governor have the authority to furlough the state employees at issue in this case by executive order?” While this sounds like something that might have far-reaching effect throughout the state, the reality is that the decision will likely be much more limited. In CASE v. Schwarzenegger, the issue is whether the Governor’s furlough authority extends to employees of the State Compensation Insurance Fund (SCIF). Both the trial court and appellate court held that the Governor could not impose furloughs on SCIF employees because of Insurance Code section 11873, which provides:

“Notwithstanding any provision of the Government Code or any other provision of law, the positions funded by the State Compensation Insurance Fund are exempt from any hiring freezes and staff cutbacks otherwise required by law.”

If this case is decided solely based on Insurance Code section 11873—which is unique to SCIF—then it will have virtually no impact on other public employees.

However, what is interesting is the other part of the Court’s order granting review in which the Court states, “Review in this case may be undertaken in conjunction with possible consideration of similar issues in cases that are pending in the courts of appeal.” So what does that mean? It seems like the court is saying that it might extend the CASE v. Schwarzenegger case to include arguments raised in the state employee furlough cases pending in the lower courts. Those cases directly raise the issue of whether the Governor has the authority to impose furloughs on state employees absent Legislative action. Thus, CASE v. Schwarzenegger could have far-reaching implications if the Court considers those other cases.

The briefing schedule set by the Court is very quick. The Governor's brief is due June 9, 2010 and the union's brief is due on June 29, 2010. With this schedule, we could have oral argument by the Fall.

Mendocino Attorneys Not Entitled To 1% Raise Under Former MOU

2010-05-19T08:49:00.000-07:00

[UPDATE (5/20/10): Just received word that MCPAA has filed an appeal of this decision, so it's not yet final.]

County of Mendocino (2010) PERB Decision No. 2104-M (Issued on 4/21/10)
Facts:

In 2006, the Mendocino County Public Attorneys Association (MCPAA) successfully petitioned to remove several attorney classifications from bargaining units represented by two other unions, the Mendocino County Management Employees Association (MCMEA) and Service Employees International Union (SEIU). Under the MCMEA and SEIU contracts, the attorneys would have gotten a 1% salary increase effective September 2006 if they had remained in those bargaining units. The County’s position was that the attorneys were no longer entitled to the 1% salary increase since they were no longer part of the bargaining units represented by MCMEA and SEIU; and because the MCPAA had not yet negotiated a similar raise for its new unit.

However, in September 2006, all the attorney classifications nevertheless received a 1% salary increase. The County claimed that the increases were given by mistake and stopped them after 3 months. The County also took steps to recoup the mistakenly granted increases but stopped those efforts in response to objections from the MCPAA. MCPAA then brought this unfair practice charge alleging that the County committed an unlawful unilateral change by refusing to give attorneys the 1% salary increase. MCPAA also argued that the County’s efforts to recoup the money constituted a separate unlawful unilateral change.

Decision:

With respect to the denial of the 1% salary increase, PERB affirmed the ALJ’s proposed decision dismissing that charge. PERB held that since the attorneys were no longer in the bargaining units represented by MCMEA or SEIU, they were not entitled to the raises negotiated by MCMEA or SEIU. Specifically, the Board affirmed the ALJ’s finding that:

“Not inconsistent with the same line of authority, the NLRB has found that absent other proof [of] interference with employee free choice an employer is entitled to withhold benefits that employees would have obtained had they remained unorganized so long as the employer engages in good faith bargaining. (Chevron Oil Co. (1970) 182 NLRB 445, 449, citing Shell Oil Co. (1948) 77 NLRB 1306; McGraw-Edison Co. (1968) 172 NLRB 1604, 1609-1610.)”

With respect to the County’s attempted recoupment of the mistakenly given increases, PERB also affirmed the ALJ’s dismissal of that charge. In the proposed decision, the ALJ held that:

“Although the complaint alleges that the recoupment action constituted another aspect of the unilateral change, I find no violation because the County in reasonably short order desisted from collection of the overpaid compensation. The evidence does not demonstrate a change of generalized effect or continuing impact (i.e., a conscious creation of a new policy). [citations omitted]”

Comments:

This case is instructive because it involves an issue that arises fairly often in the public sector, but not too often with any single employer: what happens when there is a change in representation? Here, PERB affirmed that employees must take the bad along with the good when it comes to exercising free choice in representation. In this case, because the attorneys chose to create their own bargaining unit with a new exclusive representative, they weren't entitled to the salary increases due under their prior contract. That makes sense but its something employees, and employers, often don't realize.
My only other comment is on the issue of the County’s attempted recoupment of the money. The ALJ dismissed that charge—and the Board affirmed—because the County never actually recouped the money so there wasn’t any “unilateral change.” However, given that PERB had already held that the attorneys were not entitled to the money, and especially since everyone agreed that the raises were given by mistake, why would it have been a unilateral change if the County actually recouped the money? Seems to me the County would have been within its right to recoup the money; and arguably had a duty to the public to do so. So that part of the decision doesn’t make sense to me. However, one can argue that since PERB found no change, it didn’t have to reach the issue of whether the subject matter (ie recoupment of mistakenly given money) was within the scope of representation. That’s true; and that’s how I think that portion of the case should be interpreted.

PERB: It's Interference To Offer Better Benefits to Non-Union Members

2010-05-16T22:36:00.000-07:00

State of California (Department of Personnel Administration) (2010) PERB Decision No. 2106-S (Issued on 4/30/10)

Facts:

The contract between the State of California (State) and the California Correctional Peace Officer Association (CCPOA) provided that dental and vision benefits would be provided to bargaining unit members through the CCPOA Benefit Trust Fund, an independent corporation established by CCPOA. Through the CCPOA Benefit Trust Fund, an employee with two dependents would pay $41.80 per month for the dental benefit.

In October 2007, CCPOA informed the State that non-members (ie fair share fee payers) would no longer be provided dental and vision benefits through the CCPOA Benefit Trust Fund. As a result, the State informed the fair share fee payers that they would automatically be enrolled in the state-sponsored dental and vision plans. Under the state-sponsored dental plan, an employee with two dependents would pay $30.94 per month. CCPOA then filed an unfair practice charge alleging both discrimination and interference. CCPOA asserted that the State unlawfully offered a lower cost dental benefit not provided to CCPOA members.

Decision:

In its decision, the Board affirmed the dismissal of the discrimination charge based upon its finding that there was no adverse action. However, the Board reversed the dismissal of the interference charge. The Board stated:

“[T]he lower cost dental benefit was not offered to union members. Providing benefits at a lower cost to non-union members, while excluding union members from this option, tends to result in at least slight harm to employees who choose to exercise the right to join a union. A reduced benefit cost available only to non-union members may influence an employee’s decision to join the union. Accordingly, the charge states a prima facie case of interference.”

The Board noted that because the only issue was whether CCPOA stated a prima facie case, the issue of whether the State’s actions were justified due to operational necessity and/or circumstances beyond the employer’s control would be addressed at a formal hearing.

Member McKeag dissented from the majority opinion. In her dissent, she stated:

"In the instant case, CCPOA members continued to enjoy the exact same dental benefits after the implementation of the State’s last best and final offer. When CCPOA Benefit Trust Fund refused to provide dental benefits to the former CCPOA agency fee payers, the State was faced with a choice to either offer these employees the dental benefit currently offered to non-CCPOA members or to provide no dental benefit. Clearly, the latter option was untenable and would have likely resulted in litigation. Therefore, the State had only one legitimate option, benefits available to other non-Bargaining Unit 6 members simply does not constitute a harm in this instance.”

Comments:

My initial reaction was that CCPOA had a lot of nerve bringing this case. This whole situation was started when CCPOA kicked its fair share fee payers out of the CCPOA Benefit Trust Fund. CCPOA had a right to do this—and maybe it even had a good reason—but clearly CCPOA itself was “discriminating” against non-union members. For CCPOA to then bring a charge against the State for “discriminating” against union members is a classic case of the pot calling the kettle black.
With respect to the interference charge, it’s a close call if you’re solely focused on the prima facie case. Is it interference for an employer to offer non-union members a better benefit than union members? Sure, by itself that’s a problem. However, here the State had to provide the fair share fee payers a dental plan. Could the State have also offered its plan to union members? We need more facts but that likely would just have brought a separate unfair practice charge by CCPOA.
Regardless, it seems clear to me that the State is going to prevail at hearing based on its legitimate business reasons. I’m assuming that the dental-plan the State offered to the fair share fee payers was the same plan offered to other State employees. If so, there’s nothing the State can really do if it just happens that its own plan is cheaper than CCPOA’s.
The dissent would have short-circuited the formal hearing by just ruling on the State’s legitimate business reasons at the charge review stage. As a management attorney, I certainly see the benefit of taking that approach. There are a lot of cases where I would like the Board agent to consider my client’s legitimate business reasons before deciding whether to issue a complaint. However, as it stands, the rule is still that a respondent’s affirmative defenses are to be considered at the formal hearing state, and not at the charge review stage.

Oral Argument Held in San Jose Case

2010-05-13T15:23:00.000-07:00

City of San Jose v. Operating Engineers Local Union No. 3 (Case No. S162647)

Oral argument was held in the San Jose case on May 5, 2010. The issue in this case is:

Does the Public Employment Relations Board have the exclusive initial jurisdiction to determine whether certain "essential" public employees covered by Meyers-Milias-Brown Act (Gov. Code, sections 3500 3511) have the right to strike, or does that jurisdiction rest with the superior court?

Practically, the dispute is over whether employers must initially go to PERB when seeking injunctive relief against an essential employee strike or whether the employer can go directly to court. Employers have taken the position that they should be allowed to proceed directly to court, while the unions have argued that PERB has initial jurisdiction.

The case is incredibly important to those of us who practice public sector labor law. However, the case is apparently a sleeper for the Supreme Court. I heard from those in attendance that the justices only asked two substantive questions. And not very probing ones at that. One question was from Justice Moreno who asked whether the doctrine of exhaustion of administrative remedies has an emergency exception. Justice Chin asked whether strikes are "arguably" potential unfair practices. Those in attendance, both from the union and management, told me that the questions didn't really reveal how any of the justices were leaning.

So we'll have to wait. A decision is expected in 90 days.

One final note - a congratulations to both Ari Krantz from Leonard Carder and Rob Fabela from the City of San Jose for jobs well done in arguing before the Court!

AFSCME's Leafletting Was Not an Unfair Practice

2010-05-12T17:06:00.000-07:00

AFSCME, Local 3299 (2010) PERB Decision No. 2105-H (Issued on 4/21/10)

Facts:

This case involved an unfair practice charge filed by the University of California (UC) against AFSCME. During bargaining, AFSCME began leafleting in front of several medical centers at various UC campuses. The expired contract between UC and AFSCME required the union to abide by specific access guidelines promulgated at each campus. Those guidelines set forth exactly where AFSCME could engage in leafleting and where it couldn’t (for example, because of patient access issues). During the leafleting at issue, it appears undisputed that AFSCME violated the access guidelines by leafleting in prohibited areas. According to the PERB decision, UC officials asked the AFSCME members engaged in the leafleting to move, which they did.

AFSCME then went to court to seek a temporary restraining order (TRO) to enjoin UC from prohibiting the leafletting. The court granted the TRO but later denied a preliminary injunction on the ground that PERB had initial jurisdiction.

In its decision, PERB assumed that AFSCME was in violation of the contract when it engaged in leafleting in areas where the guidelines prohibited such conduct. However, because AFSCME agreed to move when confronted by UC officials, PERB held that AFSCME’s conduct was just an isolated breach of the contract, and not a repudiation of the contract that would constitute an unlawful unilateral change.

Comments:

First, I thought it was ironic that the union went straight to court to seek injunctive relief instead of going to PERB. As many of you know, the issue of whether PERB has exclusive jurisdiction over essential employee strikes is before the California Supreme Court in City of San Jose v. Operating Engineers Local Union No. 3 (Case No. S162647). (In fact, oral argument in San Jose occurred on May 5, 2010—but more on that tomorrow.) The unions have all lined-up solidly in favor of PERB having jurisdiction so that employers cannot go directly to court for injunctive relief. So it’s ironic that the union here went straight to court.
With respect to the merits of this case, the key holding was the Board’s finding that because the union stopped the “breach” (ie stopped leafletting) when asked by UC, it was just an isolated contract violation and not a complete repudiation of the contract. Because isolated breaches do not constitute an unlawful unilateral change, PERB affirmed the dismissal of the charge. By itself, I don’t have a problem with this holding.
I’ve argued before that there should be some type of “safe harbor” provision whereby a party can correct a breach and not be guilty of an unfair practice. For example, in County of Sacramento (2008) PERB Decision No. 1943-M, the Board found a violation even though the County rescinded the change before it ever took effect. My position was that given the rescission, PERB should not have found that the County committed an unfair practice.
Indeed, it’s worth taking a look at what PERB said in County of Sacramento:
“The County argues that by rescinding the ordinance, there is no longer any policy change even arguably subject to meet and confer requirements, and the issue is now moot. In Amador Valley Joint Union High School District (1978) PERB Decision No. 74, however, the Board held that the later reversal or rescission of a unilateral action or subsequent negotiation on the subject of a unilateral action does not excuse a violation. [Citation.] … The fact that the County reversed its position and restored the status quo before the new policy went into effect, does not cure the unlawful unilateral change.”
It’s difficult for me to square what PERB said in County of Sacramento with what happened in this case. I believe the two cases are inconsistent. Here, there was an undisputed breach. It was actually worse than in County of Sacramento since AFSCME actually did engage in leafleting in areas where it was prohibited. In contrast, in County of Sacramento the County rescinded the change before it ever took effect. Yet PERB found a violation in County of Sacramento but not one here. Nevertheless, if I had to choose which holding I like better, it's the one in this case. Even though the union prevailed in this case, in the future this will benefit employers more than unions since the vast majority of unfair practice charges alleging unlawful unilateral changes are directed against employers.
Lastly, in the interest of full disclosure, I must note that I currently represent the University of California in several PERB cases; although I was not involved in this one. As for the remainder of this case, I do think that there was sufficient evidence that AFSCME improperly disrupted university operations so that a complaint should have been issued. However, that was not the main focus of the Board’s decision so I didn’t delve into that aspect of the case.

AB 1744: Public Employees' Bill of Rights Act

2010-04-27T15:19:00.000-07:00

AB 1744 (Portantino)—the “Public Employees' Bill of Rights Act”—recently passed the Assembly Committee on Public Employees, Retirement and Social Security and is now headed to Appropriations. AB 1744 is a “gut and amend” that started out as a bill on enforcing monetary judgments. As currently written, the bill sets forth a “Bill of Rights” that applies only to state civil service employees. Most of the bill just reaffirms existing law. However, there is one significant change. Currently, the statute of limitations for taking disciplinary action against a state employee is 3 years from the date of the misconduct. (Gov. Code 19635.) AB 1744 would amend the limitations period to be 1 year.

I have several major objections to this change. First, the change is purportedly modeled after the Public Safety Officers Procedural Bill of Rights (PSOBOR) (Gov. Code 3300 et. seq.) and the Firefighters Procedural Bill of Rights Act (FPBOR) (Gov. Code 3250 et. seq.) It’s true that both the PSOBOR and FPBOR have a 1-year limitations period for bringing disciplinary actions. However, those statutes differ significantly from the proposed language in AB 1744. For example, the 1-year limitations period under both the PSOBOR and FPBOR is triggered by the date of discovery of the underlying misconduct, not that date the misconduct actually occurred. In contrast, under AB 1744 the limitations period is based on when the misconduct actually occurred. The difference is significant since misconduct is not always discovered right away, even with due diligence. Indeed, that's the reason why the current limitations period is 3 years. If the Legislature wants to shorten the limitations period to 1 year, it should also change the triggering event to be discovery of the misconduct, instead of when the conduct actually occurred.

Second, the current 3-year limitations period under Government Code section 19635 expressly recognizes the problem of late discovery by providing that disciplinary actions, “based on fraud, embezzlement, or the falsification of records shall be valid, if notice of the adverse action is served within three years after the discovery of the fraud, embezzlement, or falsification.” (Emphasis added.) AB 1744 completely erases this sentence from Government Code section 19635. Thus, under AB 1744, an employee can commit fraud against the state, and as long as he or she hides it for more than a year, no discipline can be brought.

Third, AB 1744 does not provide for any “tolling” of the 1-year limitations period. Generally, I do agree that 1 year from discovery should be sufficient time to investigate and bring a disciplinary action. However, there are certain situations where it may not be enough time. This primarily occurs where the misconduct has also triggered a criminal investigation. In that situation, the employer often has to wait to take any administrative action pending completion of the criminal proceedings. Both the PSOBOR and FPBOR provide that the 1-year limitations period is “tolled” in the event of any criminal proceeding. AB 1744 does not provide this same protection.

I can certainly understand an employee’s frustration with being served a notice of discipline for misconduct that occurred 3 years earlier. From a human resources perspective, discipline is most effective if given close in time to the misconduct or performance problem. So as I mentioned above, I generally don’t have a problem with a 1-year limitations period. However, I do have a problem with how AB 1744 is written since it is based on when the conduct actually occurred instead of discovery, and doesn’t provide for tolling where necessary.

AB 1744 is sponsored by various state employee unions, such as the Union of American Physicians and Dentists, Service Employees International Union Local 1000, and American Federation of State, County and Municipal Employees. As of this date, there is no recorded opposition.

AB 155 Bankruptcy Bill is Back

2010-04-25T19:40:00.000-07:00

AB 155 has gotten a lot of press lately. The measure recently passed the Senate Local Government Committee where it had been stalled for over a year. As written, AB 155 would require a local agency to obtain permission from the California Debt and Investment Advisory Commission (CDIAC) before filing for bankruptcy. The obvious effect of AB 155 would be to make it much more difficult for local agencies, like the City of Vallejo, to declare bankruptcy. I first commented on AB 155 in April 2009 (click here for the post), when I called it an overreaction.

However, now that AB 155 has passed its first hurdle, it's worth taking a look at the merits of the bill.  Under AB 155, a public entity must demonstrate to the CDIAC several factors, including: 1) that it cannot pay its debts, 2) that it has exhausted all other options; and 3) that it has a plan for restoring itself to fiscal health. However, those are all factors that are already considered by the bankruptcy court in any bankruptcy filing.  Is there any reason to believe that the CDIAC, which has no experience dealing with Chapter 9 bankruptcies, can evaluate these factors better than a bankruptcy court? I think not. To the contrary, because the CDIAC is comprised of 7-9 elected officials, politics will invariably come into play in any decision of the CDIAC.

That begs the question, why is AB 155 needed?  In the Senate analysis, the primary justification for AB 155 is the idea that a local bankruptcy has statewide ramifications, and thus, the state should regulate a local agency's ability to seek bankruptcy protection. As stated in the Senate analysis, "…local and state finances are inextricably linked, the state has a direct interest in the fiscal health of its local governments. A municipal bankruptcy can have statewide repercussions, including higher borrowing costs for other local entities and the state.” Well, that certainly seems plausible. However, I wonder if that has been the case. For example, has the City of Vallejo's bankruptcy filing adversely affected its neighbors? I'm sure Vallejo's bankruptcy caused all the various bond rating agencies to take a closer look at the finances of California local agencies. However, apart from that stricter scrutiny I'm not sure that Vallejo's bankruptcy has had the statewide ramifications prophesied by AB 155.

The reality is that AB 155 remains a special interest bill designed to help unions at the bargaining table during these tough economic times.  As I mentioned last year, the possibility of more local agencies actually filing for bankruptcy is fairly remote. However, that hasn’t stopped many local agencies from threatening to “do a Vallejo.”  And that’s really what is driving this bill. The unions want to prevent cities and counties from using the threat of bankruptcy to leverage concessions. While the unions' position may be understandable, it doesn't make this a good bill—which it isn't.

PERB: San Diego City Attorney Improperly Bypassed Union

2010-04-22T12:42:00.000-07:00

City of San Diego (Office of the City Attorney) (2010) PERB Dec. No. 2103-M (Issued on 3/26/10)

Facts:

This case arises from the pension funding crisis in San Diego. Very briefly, the crisis resulted from a series of poor decisions by City officials and trustees of the San Diego City Employees’ Retirement System (SDCERS) in the 1990’s. The poor decisions included twice delaying the City’s contributions to the retirement system, increasing future benefits for City employees, and underpricing employee purchases of retirement service credits. The net effect of these decisions was to grossly underfund the retirement system. As a result of the pension funding crisis, state and federal officials initiated civil and criminal investigations into the actions of public officials and others. State and federal prosecutors ultimately filed criminal charges against some of the SDCERS trustees, including the Local 145 president.

In 2004, Michael Aguirre (Aguirre) was elected the City Attorney on a campaign promising to clean up the financial mess facing the City. As part of that vow, Aguirre took aim at the underpricing of retirement credits by SDCERS. Specifically, under the union contract with Local 145, employees were allowed to purchase up to five years of retirement service credit at cost. However, in calculating the price for service credits, SDCERS staff grossly underestimated the true cost of the credits. Aguirre estimated it was a $147 million mistake. After he took office, Aguirre filed a civil action in an attempt to reverse the effects of the underpricing of the service credits. In addition, Aguirre issued a press release which gave rise to this unfair practice charge. The press release Aguirre issued directed employees to a form on the internet that they could submit to voluntarily rescind the prior purchase of service credits. Local 145 argued, among other allegations, that Aguirre’s actions constituted “direct dealing” with employees.

Decision:

While PERB dismissed the other allegations, the Board found that Aguirre’s press release constituted an attempt to bargain directly with employees, and was thus an unfair practice. In its decision, PERB held:

“This action goes beyond correcting the price shortfall and disregards the MOU language that expressly authorizes employee purchases of service credit at a price set by the retirement system. By soliciting employees to rescind their purchase of service credits, made in accordance with the MOU, the City has gone directly to the employees to obtain their waiver of a benefit negotiated by Local 145, based on the City’s subsequent determination that the credits were underpriced to the detriment of the City. Consequently, the city attorney’s direct request to employees to rescind service credit purchases, constituted bypass of the exclusive representative in violation of the MMBA.”

Comments:

This decision drew a dissent from member Dowdin. It was her first dissent as a Board member and only the 3rd dissent in a decision this fiscal year. (Both the other dissents were by member Neuwald. See PERB Decision Nos. 2058 and 2094.) Dowdin argued that merely informing employees of the rescission option did not interfere with the role of the exclusive representative since Aguirre’s goal was not to change the negotiated contract, but to correct a mistake.
I agree. Take, for example, a situation where the contract provides employees with 10 hours of vacation a month. By mistake, an employee receives 30 hours one month. Does the employer have to bargain with the union before it can correct the mistake? I think not. (Arguably, how the time is taken back may be negotiable as an “effect” but the decision itself, in my opinion, is not). In this example, the employer is not changing the terms and conditions of employment; namely, an employee’s entitlement to 10 hours of vacation a month. The employer is merely insisting on that condition by correcting a mistake.
In addition, I thought the majority too easily dismissed Aguirre’s argument that he was acting in his capacity as the City Attorney as opposed to acting in the role of the employer. As an illustration, let’s say in a prosecution for workers’ compensation fraud a District Attorney’s Office seeks restitution from the defendant. Let’s say the defendant happens to be an employee of the county. Does that fact mean that the DA must bargain with the union during this criminal proceeding in order to ask for the money back? Again, I think not. In this example, the DA is acting in his official capacity as opposed to an employer for purposes of collective bargaining. Granted, the situation in this case is slightly different, since this was not a criminal proceeding and Aguirre's role as City Attorney versus employer is much more blurred. However, I thought the argument that Aguirre was acting in his capacity to enforce city laws was persuasive. Certainly, as I read the facts, it was not Aguirre's intent to bargain with employees in order to change a contractual provision. He was merely attempting to correct a mistake; a mistake that appeared to be undisputed.
Given how much litigation has already occurred in San Diego on this issue, I wouldn’t be surprised if this case is appealed. So it's not over yet.

PERB Recognizes Unconstitutionality of Binding Interest Arbitration Under SB 440

2010-04-14T17:39:00.000-07:00

County of Sonoma (2010) PERB Decision No. 2100-M (Issued 2/25/10)

(Sorry for the delay, I’ve been in trial for almost a month)

In this case, PERB recognized that it was bound by the court of appeal’s decision in County of Sonoma v. Superior Court (2009) 173 Cal.App.4th 322, review denied. In that case, the court held that SB 440, which requires public agencies to submit to binding arbitration in certain disputes with public safety unions, was unconstitutional. Accordingly, it is not an unfair practice for a public agency to refuse a request for binding arbitration under SB 440, which is codified in Code of Civil Procedure section 1299 et. seq.

PERB Recognizes "Unfair Practice Strike" Under HEERA

2010-02-10T15:16:00.000-08:00

California Nurses Association (2010) PERB Decision No. 2094-H (Issued on 2/02/10)

These consolidated cases involved allegations of bad faith bargaining brought by the California Nurses Association (CNA) and the University of California (University) against each other. The dispute culminated in a threatened pre-impasse, one-day strike by CNA. Because pre-impasse strikes are presumptively an unfair practice under PERB precedent, CNA justified its threatened strike by characterizing it as an “unfair practice strike,” as opposed to an economic strike. The ALJ agreed, finding that the University engaged in unfair practices which “provoked” CNA’s strike threat.

On exceptions, the Board rejected the ALJ’s proposed decision. With respect to the threatened strike, the Board, relying on EERA precedent, held for the first time that strikes are not a per se violation of HEERA. The Board also refused to find strikes at health care institutions to be per se violations of HEERA; but the Board did acknowledge the need to address threats to public health and safety on a case-by-case basis. Moreover, the Board recognized that a strike provoked by an employer’s unfair practice (i.e. an “unfair practice” strike) was permissible pre-impasse. The Board held that, “To establish that a strike is an unfair practice strike, the employee organization must prove that: (1) the employer committed an unfair practice; and (2) the employer's unfair practice provoked the strike." Here, because the Board found that the University did not engage in bad faith bargaining, it necessarily followed that CNA’s strike threat could not be justified as an “unfair practice” strike. Accordingly, the Board dismissed CNA’s unfair practice charge.

The remainder of the Board’s decision then addressed what damages, if any, PERB could award to the University. After an extensive discussion of court cases and its statutory authority, the Board concluded that it could order damages as part of a make-whole remedy. The Board emphasized that, “our holding does not diminish the importance of seeking injunctive relief to prevent an unlawful strike from occurring nor do we hold or imply that damages are a substitute for injunctive relief. To this end, we reaffirm the Board's holding … that damages will not be awarded unless the employer first seeks "to mitigate its losses or bring about the termination of the strike by requesting that PERB seek an injunction against it." The failure to seek injunctive relief may also be a factor in determining whether the employer sought to mitigate damages arising from a strike threat or strike preparations. The Board then remanded the case to the ALJ to take evidence on any damages suffered by the University.

Comments:

1. The major ruling in this case is the Board’s holding that it has the authority to award damages to an employer subjected to an unlawful strike (or unlawful threatened strike). The Board’s decision on this issue is well-written, especially the discussion on the differences between strikes in the public sector versus private sector. Of note is the Board’s statement that, “[F]or all practical purposes, a public employer lacks the "economic weapons" to effectively combat a pre-impasse economic strike”; which is why such strikes are presumptively unlawful under the statutes administered by PERB.

2. However, the most interesting part of this decision for me is the Board’s recognition of an “unfair practice strike.” Admittedly, the concept of an “unfair practice” strike versus an “economic” strike has long been recognized in the private sector, and by early PERB decisions. But the early PERB decisions never set forth a sound rationale for recognizing such strikes in the public sector and I was hoping the Board would eliminate "unfair practice" strikes as an exception to the rule against pre-impasse strikes. In my opinion, here are the reasons why:

Allowing an “unfair practice” strikes creates a huge exception to PERB’s rule that pre-impasse strikes are presumptively an unfair practice. Indeed, given how easy it is to allege an unfair practice, this exception has the potential to swallow the rule. This problem doesn’t exist under the NLRA which doesn’t have a presumption against the use of economic weapons prior to impasse. Because PERB departed from the NLRA on pre-impasse strikes it should do the same for "unfair practice" strikes.
The very concept of an “unfair practice” strike goes against public policy which discourages people from taking the law into their own hands. In California, the Legislature has provided a remedy for unfair practices: it’s called PERB. Why in the world should a union (or an employer for that matter) be allowed to utilize its economic weapons to remedy a legal violation for which there is a remedy? I can’t think of any other law where someone who believes he or she has been wronged can go and inflict economic pain on the perpetrator and have that sanctioned by the judicial system.
While I do again concede that unfair practice strikes have long been recognized in the private sector, the public sector is different. Indeed, in this decision PERB extensively discussed the differences between the public and private sectors. PERB itself noted how public employers simply do not have the same weapons as private employers to respond to unions. That’s why pre-impasse strikes are presumptively an unfair practice. How then does it make sense for PERB to recognize the concept of an “unfair practice” strike? In my humble opinion all pre-impasse strikes—whether characterized as economic or unfair practice—should be presumptively an unfair practice. If a union believes it is the subject of an unfair practice, then it should file a charge with PERB. If it needs urgent relief, it should seek injunctive relief. Given these legal remedies, I see no public policy reason for allowing an "unfair practice" strike.
Finally, it is worth noting that in this decision PERB affirmed its standard for determining provocation. Unlike the NLRB, which requires that the unfair practice be a motivating factor for the strike, PERB requires that the unfair practice be a “but for” cause of the strike. This difference in standards will hopefully at least put a partial check on “unfair practice” strikes by unions. Nevertheless, I am hoping that the Board will re-consider this issue in the future.

Alameda Deputies Agree To Drop 3 @ 50 Pension Formula

2010-02-03T13:03:00.000-08:00

Alameda County and its Deputy Sheriff's Association (DSA) have reached a new six-year contract. According to news reports, the DSA made significant concessions regarding wages, and medical and pension benefits. For example, the contract provides for no salary increases over the first three years, and then allows for increases to bring pay in line with other similarly sized law enforcement agencies during the final three years.

Most significant, the contract calls for new deputies to receive a 2-percent-at-50 pension instead of the current 3-percent-at-50 pension arrangement. However, new deputies may opt for a 3-perecnt-at-55 formula which requires an additional employee contribution of 5 percent of salary annually for five years.

Comments:

The DSA’s agreement to drop 3 @ 50 for new hires may be a harbinger of things to come. I’m sure it wasn’t an easy thing for the DSA to agree to. For those public safety employees without the 3 @ 50 formula, getting it has been priority number one for many years. However, it’s no secret that 3 @ 50 is hugely expensive and perhaps even “unsustainable” in the opinion of many experts. So what’s the solution? Well, dropping 3@ 50 for new hires is certainly one solution. Here, the contract allows employees to buy into a slightly better 3 @ 55 formula which probably made it an slightly easier sell. With public safety accounting for 50-60% on average of a city’s or county’s budget, I expect what happened in Alameda to be repeated elsewhere throughout the state.

PERB General Counsel: Governor's Emergency Furloughs Permissible

2010-01-22T00:21:00.000-08:00

IUOE, Unit 12 v. State of California (Department of Personnel Administration) (2009) PERB Unfair Practice Case No. LA-CE-664-S (The dismissal letter can be found on the Sacramento Bee’s website here.)

PERB’s Office of the General Counsel (OGC) has issued its first decision on the legality of the Governor’s decision to unilaterally implement furloughs of state employees. Back in January 2009, IUOE filed an unfair practice charge alleging that the State unlawfully implemented two day per month furloughs, which the Governor later increased to three days per month. IUOE argued that furloughs were a mandatory subject of bargaining and therefore the State could not act unilaterally.

In its decision, the OGC agreed that furloughs are generally subject to bargaining since they are in essence a reduction in hours. However, the OGC recognized that Government Code section 3516.5 provides that in an “emergency” the State can act before it bargains with the union. To determine what constitutes an “emergency” the OGC looked to the MMBA which contains almost identical statutory language. (Gov. Code, §3504.5.) Relying on Sonoma County Organization Employees v. County of Sonoma (1991) 1 Cal.App.4th 267, a court case interpreting the MMBA language, the OGC held that the burden fell upon the union to disprove the existence of an “emergency.” More important, the OGC held that “an emergency declaration is presumed valid and a party challenging the declaration has ‘the burden of proving its invalidity.’” Here, the OGC found that the Governor’s Executive Orders contained enough facts to establish that an emergency existed and that IUOE had provided no facts showing otherwise. Accordingly, the OGC dismissed the unfair practice charge.

Comments:

This case could be ground-breaking. As it stands, both the Dills Act and the MMBA have language allowing an employer to act unilaterally in an “emergency.” That’s really nothing new as the NLRA has long recognized that an employer can act unilaterally in an emergency. The same doctrine has been recognized under the other acts administered by PERB, such as EERA. The problem for employers is how “emergency” has traditionally been defined. The unions have always argued that a true emergency does not exist unless the employer can show that it had no other choice but to take the action it did. Here, however, the OGC did not discuss at all whether the Governor had options other than furloughs (e.g. layoffs). Is that not a requirement of an “emergency”? If so, that's a very favorable clarification for public employers.
The decision is also significant because it holds that the declaration of an emergency is “presumptively” valid. That means the burden of proof rests on the union. Prior cases discussing emergencies could be read to place the burden of proof on the employer to establish an emergency.
This decision also does not bode well for state employees in the coming fiscal year. The unions have been publicly complaining that furloughs are bad public policy because they reduce state services to the public. The unions have been making this argument hoping that the Governor would reduce or eliminate the furloughs. However, state employees should recognize that the Governor could just as well impose a straight salary cut. Under this decision, where there is a bona fide emergency, the Governor could just as well impose salary cuts as impose furloughs. Salary cuts have the benefit of not reducing state services. I’m not saying that salary cuts makes sense—especially in classifications where state employees are already paid less than employees in comparable jurisdictions—but it’s certainly an option the Governor must examine given the dire fiscal situation.
Finally, it should be noted that this case is not precedential. However, if IUOE files an appeal to the full Board of PERB, any decision rendered will be precedential. My bet is that an appeal will be filed and if the Board affirms—which it does more than 90% of the time—it will be a very favorable decision for pubic employers.

[ADDENDUM: Got an email regarding the notion of the Governor imposing salary cuts. My comments above are aimed at what the Governor can or can't do under the Dills Act, since that's what the case was about. Obviously, you still have the Department of Personnel Administration v. Superior Court (1992) 5 Cal.App.4th 155, 174-175 case (which I talked about before here) which says that only the Legislature can directly change salaries. However, there are ways to reduce compensation without violating that case and those options appear to be open to the Governor if the rationale in this decision is adopted by the Board at PERB. (Further, in my mind it's at least conceptually possible that the Governor could circumvent the Department of Personnel Administration case and lower salaries in a true emergency, but's that for another post) In any event, my point was that things could get a lot worse than the current furloughs - which is still true.]

Union Didn't Misrepresent Contract to Members

2010-01-18T13:06:00.000-08:00

Santa Ana Educators Association (2009) PERB Decision No. 2087-E (Issued on 12/30/09)

This case was brought by a couple of union members dissatisfied with a contract negotiated by their union, the Santa Ana Educators Association (SAEA). In the contract, SAEA agreed to concessions to which the dissenting union members strongly objected. They felt the contract was a bad deal and alleged that the SAEA violated its duty of fair representation by agreeing to it.

The fact that some union members objected to a contract is nothing new. There are always some people who feel the union bargaining team didn’t get enough. Here, the objecting union members went further and alleged that the union lied to its members in describing the provisions of the proposed contract. In considering this claim, PERB set forth a test for determining when a union breaches its duty of fair representation by misrepresenting facts to secure a contract ratification. To establish such a claim, the charging party must show that: "(1) the exclusive representative made an untrue assertion of fact (or conduct equivalent to an untrue assertion of fact); (2) the exclusive representative's assertion was made with knowledge of its falsity; (3) the exclusive representative's assertion was made to secure ratification of a contract; and (4) the fact misrepresented must have a substantial impact on the relationships of the unit members to their employer."

Here, PERB found that those elements were not established and affirmed the dismissal.

Governor Releases Budget: Salary Cuts Planned for Employees

2010-01-08T17:26:00.000-08:00

The Governor released his proposed budget for 2010-11 today. Of interest to a lot of people are the Governor’s proposals for employee compensation. Under the proposed budget, the 3-day per month furloughs of state employees will end. However, the Governor still plans to save $1.6 billion in employee compensation costs. Here's how he plans to do it (from page 68-69 of the Governor’s budget):

Governor’s Proposed Reductions:

Workforce Cap — A reduction of $449.6 million achieved through a five-percent increase in salary savings. An Executive Order will require that Agency Secretaries and Department Directors immediately act to achieve the five-percent reduction by July 1, 2010. It is expected that attrition will be the primary factor in achieving the increased salary savings. The constitutional offices are not included in the workforce cap because the fiscal year 2009-2010 budget for each of those officers included a permanent reduction that achieves savings to the level of the workforce cap or a higher amount.
Five-Percent Salary Reduction — A reduction of $529.6 million achieved through an across-the-board reduction in salaries by five percent.
Increased Employee Retirement Contribution — A reduction of $405.8 million achieved by increasing employees’ retirement contribution by 5 percent and reducing the employer contribution accordingly.
Lower Cost Health Care — A reduction of $152.8 million in health care costs beginning in January 2011 achieved by contracting for lower-cost health care coverage either directly from an insurer or through CalPERS. Savings beginning in 2011-12 will pre-fund other post-employment benefit costs.
Pre-funding for Health and Dental Benefits for Annuitants — A decrease of $98.1 million for pre-funding other post-employment benefits.

Comments:

Workforce Cap: The Governor wants a generalized 5% reduction in employee compensation from all agencies and departments. The budget says this will be accomplished primarily through attrition. Since it's at the agency/department level, I can't see how else it could be accomplished since agencies/departments don't have the delegated authority to negotiate salary cuts. Therefore the only way to achieve a reduction in total compensation is to have fewer workers. Fortunately, the state has enough turnover that a 5% reduction achieved through attrition shoudn't be a problem.
Five-Percent Salary Reduction: This is going to be tough for the Governor. Here's why. It's true that this can be accomplished without bargaining with the unions, but only if the Legislature cooperates. (All the Legislature has to do is put the magic words in a bill, "Notwithstanding the requirements of Goverment Code section 3512 et. seq." - which is the Dills Act.) However, I can't see the Legislature agreeing to impose a 5% salary cut on state employees without requiring the Governor to bargain that with the unions. But if the Governor goes to the bargaining table, here's what likely will happen. The unions know that under the Dills Act, the Governor can't impose salary cuts on them even at impasse. (Department of Personnel Administration v. Superior Court (1992) 5 Cal.App.4th 155, 174-175.) So what the unions will do (and have done) is counter the Governor's salary cut proposal with a slew of "savings" proposals, none of which involve cutting state employee compensation. Some of these proposals will have merit, but many will not, and in either event they won't equate to a 5% salary reduction. Then when it gets close to July 1st, the Governor will ask the Legislature to impose the salary cuts but the unions will argue that the Governor has been bargaining in bad faith because he has ignored the unions' "savings" proposals. In the end, the Governor might be forced to impose layoffs which can be done without bargaining, and which is what I think will happen (and quite frankly, layoffs may make more sense from a policy standpoint - but that's for another blog).
Increased Employee Retirement Contribution: Currently, most non-safety state employees pay 5% of their salary for the Tier 1 defined benefit pension plan. The state picks up the remainder of the cost. The "normal" actuarial cost for non-safety pensions is approximatley 10%. [Note: It's currently above 15% because of CalPERS recent loses] So this basically means that most state employees will be paying the full cost of their pensions. However, the problem here is the same as with salary cuts. The Governor needs the cooperation of the unions or Legislature and neither is a sure thing.
Lower Cost Health Care: Interesting. You would think that if there was a lower cost health plan out there the state would already be using it. Maybe there is. However, my gut feeling is that the only way you're going to decrease health care costs is to provide less coverage and benefits. Again, not easy to do without the unions or the Legislature and/or CalPERS agreeing to it.
Pre-funding for Health and Dental Benefits for Annuitants: Not sure why this is here but pre-funding certainly makes sense. It's something that local entities are trying to do, but obviously is very difficult in these economic times.

Mid-Year Review of PERB

2010-01-07T21:53:00.000-08:00

Half of fiscal year 2009-10 is over. As I mentioned in prior posts, this year I’ve been keeping statistics of all the Board’s decisions. So let’s take a look at some of the key statistics through December 31, 2009.

Total Number of Board Decisions (from 7/1/09-12/31/09):
43

Decisions by Statute:
MMBA: 21
EERA: 11
Dills Act: 8
HEERA: 3

Decisions by Type:

Appeals from Dismissals: 31 (11 of which were DFR’s)

Exceptions to ALJ Decisions: 7
Approval of Settlement: 1
Administrative Appeal: 2
Reconsideration: 2

Decisions by Outcome:

Decisions affirmed: 39
Decisions overturned: 2

- 1 ALJ decision overturned (2077-M)
- 1 dismissal overturned (2079-M)
Decisions partially overturned: 2
- Decisions 2069-H and 2070-H

Decisions by Board Member:
Dowdin: 20
Neuwald: 9
McKeag: 7
Wesley: 7

Other Interesting Facts:

42 of the 43 decisions were unanimous. Only 1 decision drew a dissent: 2058-M by Member Neuwald

Comments:

The main thing that stands out to me is the affirmance rate, which was above 90%. That means a party's chances of getting a decision overturned was less than 10%. At that's only if you count the 2 partial dismissals.
Also, with only 1 case drawing a dissent, this Board has been remarkably unanimous in its decisions.
Finally, it's worth noting that oral argument remains the rarest of all Board actions. The last time the Board granted oral argument was in 2004 in a case involving the right of teachers to wear union buttons at work. (PERB Dec. No. 1727-E). The next most recent time (as far as I know) was in 1994 when the Board granted oral argument twice, one in a case involving CSU (PERB Dec. No. 1093-H) and one involving the University of California (PERB Dec. No. 1039-H). So only 3 times in the last 15 years and not once during the Schwarzenegger administration. I would enjoy watching another oral argument before the Board (I saw the one in 2004) so I'm hoping the Board grants a request in the next year.

AG: Joint Labor-Management Benefits Committee Not Subject to Open Meeting Act

2010-01-07T11:55:00.000-08:00

Attorney General’s Opinion (AG Opn. 08-806 12/31/09)

The Attorney General has issued an opinion finding that a Joint Labor-Management Benefits Committee (JLMBC) created as part of a Memorandum of Understanding between an employer and exclusive representative is not subject to the Brown Act (open meeting law).

State Court Furlough Ruling: Judge Says "Labor Parity" is Not Rational

2010-01-05T11:39:00.000-08:00

SEIU Local 1000 v. Arnold Schwarzenegger (Alameda County Superior Court Case No. RG09456750) (The decision can be found on the Sacramento Bee’s website here.)

By now everyone has heard that an Alameda superior court judge has held that the Governor’s imposition of furloughs on state employees was improper. For me, the most interesting part of the decision was the judge’s holding that the state’s “labor parity” argument was not rational. Basically, there are some employees in the state whose salaries are funded from special pots of money such that furloughs do not create savings that the state can spend elsewhere. These employees were still subjected to furloughs on the ground that all employees should help bear the burden of the financial pain. The court said that requiring all employees to “suffer equally” without regard to actual savings to the General Fund was “not rationally related to any governmental purpose.”

Comments

I believe the judge got it wrong. Many public agencies throughout the state have imposed furloughs, including furloughs of employees paid from special funds. Although furloughing these employees does not create spendable savings, there are solid reasons to do so anyway from a human resources and organizational behavior standpoint.

Specifically, not having specially funded employees share the pain creates a financial incentive for employees in general fund areas to move special funds areas. I don’t know of any public agency that has a different pay scale depending on the funding source for salaries. An Office Assistant in a general fund area makes the same as an Office Assistant in a special fund area in every agency that I am aware of. Allowing special fund employees to avoid furloughs means they get paid more, and therefore everyone will want to move into a specially funded position. That creates a human resources issue for the employer. Does the employer allow that movement? How does the employer address the recruitment problem in general fund areas? Should general fund employees then be paid more to account for the possibility of furloughs? But that opens the door to differing pay scales based on how an employee’s salary is funded. Does that make sense from a human resources perspective? From an organizational behavior standpoint? In my mind no, especially if the furloughs are intended to be short-term.

I’m not saying that furloughing specially funded employees always makes sense. It may not in certain situations. All I’m saying is that there are solid, rational reasons why an employer might want to subject specially funded employees to furloughs even if it doesn’t create “savings” that can be spent elsewhere. Simply put, there are competing public policy arguments for both sides. In my humble opinion, the balancing of those competing arguments should be done by the public agency’s governing body, not by the courts. So I respectfully disagree with Judge Roesch’s holding that there is no “rational” reason to furlough employees paid with special funds.

Governor Didn't Have to Meet and Confer on Overtime Changes

2010-01-04T00:22:00.000-08:00

State of California (Department of Personnel Administration) (2009) PERB Decision No. 2085-S (Issued on 12/22/09)

Facts:

Local 39 and the State of California were parties to a Memorandum of Understanding (MOU) covering employees in Unit 13 (Stationary Engineers) that expired on June 30, 2008. The MOU provided that in calculating overtime, “all compensable time (i.e., sick leave, vacation, annual leave, holiday credit, CTO and personal leave) shall be considered as time worked.”

On February 19, 2009, the Legislature passed SBX3 8 as part of a comprehensive plan to close the State budget deficit. Among other changes, SBX3 8 added section 19844.1 to the Government Code. That section states:

"Notwithstanding any other provision of law, personal leave, sick leave, annual leave, vacation, bereavement leave, holiday leave, and any other paid or unpaid leave, shall not be considered as time worked by the employee for the purpose of computing cash compensation for overtime or compensating time off for overtime."

After section 19844.1 was enacted, the State changed the method it used to calculate overtime for Unit 13 employees. Local 39 argued that the State was obligated to meet and confer before implementing any changes. Local 39 asserted that the State committed an unfair practice by acting unilaterally.

Decision:

The Board agent dismissed the charge. On appeal, the Board affirmed. First, the Board considered whether the State had an obligation to meet and confer over implementation of section 19844.1 after its enactment. Relying on State of California (Department of Personnel Administration) (2008) PERB Decision No. 1978-S (“DPA”), the Board said no. Quoting from the DPA decision, the Board held that:

“The California Constitution provides that the Legislature 'may exercise any and all legislative powers which are not expressly, or by necessary implication denied to it by the Constitution.' [Citations omitted] The Dills Act is a limited delegation of authority by the Legislature to the Governor, allowing DPA, as the State employer's representative, the authority to bargain with the State's unions to determine terms and conditions of employment. [Citations omitted] The Dills Act, however, does not preclude the Legislature itself from unilaterally adopting, enacting or implementing terms and conditions of employment which, if implemented by DPA without legislative direction, would have been an unfair practice if not negotiated.”

Next, the Board considered whether the Governor was obligated to meet and confer with Local 39 prior to signing the new law. Relying on State of California, Department of Personnel Administration (1988) PERB Decision No. 706-S, the Board held that, “[W]hen the Governor is acting as a participant in the legislative process and is fulfilling his/her constitutional responsibilities thereby, those acts are to be viewed separate and apart from his/her responsibilities as a chief executive and employer of State employees.” Thus, the Board held that the Governor was not obligated to meet and confer with Local 39 prior to signing SBX3 8.

After dismissing the remaining bad faith bargaining allegation, the Board affirmed the dismissal of the entire unfair practice charge.

Comments:

The Board’s holding that the Governor didn’t have to meet and confer with the union over the implementation of section 19844.1 seems straight-forward. One of the exceptions to the meet and confer requirement has always been where the employer has no choice because of a change in law. Here, that was the case.
More interesting was the Board’s holding that the Governor wasn’t required to meet and confer with the union prior to signing the new law. Under the Board’s reasoning, its holding would be the same even if the Governor had proposed the legislative change (which was probably the case here, but the decision didn’t say). This holding is significant because the same would likely not be true for cities and counties under the MMBA, and likely for school districts under EERA. This is because under the California Supreme Court’s decision in Seal Beach Police Officers Association v. City of Seal Beach (1984) 36 Cal.3d 591 ("Seal Beach"), a city or county must generally give notice to the union and engage in the meet and confer process before taking legislative actions involving subjects within the scope of bargaining. Thus, unlike the Governor, a city or county cannot generally separate its “legislative” function from its function as an “employer.
Interestingly, the Board’s decision in State of California, Department of Personnel Administration (1988) PERB Decision No. 706-S did not discuss Seal Beach. However, there is another precedential Board decision that does, State of California, Governor Pete Wilson (1992) PERB Decision No. 927-S. That decision involved an initiative proposed by the Governor that would have allowed the Governor to impose furloughs on state employees upon a declaration of a fiscal emergency. The union argued that under Seal Beach, the Governor had to meet and confer over the initiative. PERB avoided answering that question directly. Instead, PERB held that the subject matter of the initiative was not within the scope of bargaining. Specifically, PERB held that, “the mediatory influence of negotiations is not suited to the resolution of conflict over whether the Governor should have the power, when a fiscal emergency is declared, to reduce the salaries of state employees, or furlough state employees. In addition imposing such an obligation would unduly abridge the State employer's freedom to exercise those managerial prerogatives essential to the achievement of the State's mission.” Accordingly, PERB held that: "... the subject of the Governor obtaining the power, through the initiative process, to reduce the salaries of state employees or to furlough state employees when a fiscal emergency is declared is not a subject within the scope of representation."
The State of California, Governor Pete Wilson (1992) PERB Decision No. 927-S decision is significant because it is the clearest precedential decision that I know of that states that a furlough of employees during a fiscal emergency is not within the scope of bargaining. Obviously, this is a huge area of contention right now in the public sector. The unions have vigorously asserted that any change in hours is negotiable; and there are certainly precedential decisions supporting that contention. However, none of those decisions have addressed changes in hours (i.e. furloughs) in the context of a fiscal emergency. While PERB has acknowledged the concept of a "fiscal emergency" there are few cases actually finding one. Will this latest fiscal crisis—considered by many to be the worse since the Great Depression—qualify as a "fiscal emergency"? If it doesn't, I don't know what would. If it does constitute a fiscal emergency, the State of California, Governor Pete Wilson decision suggests that PERB might find furloughs and other actions to be outside the scope of bargaining.

PERB Issues 2008-2009 Annual Report

2009-12-23T09:02:00.000-08:00

PERB released its annual report for fiscal year 2008-2009 back in October. (The report is available here.) I’ve been remiss in reporting on it; but better late than never. Here are the highlights for 2008-2009:

Unfair Practice Charges

868 unfair practice charges (UPCs) were filed in fiscal year 2008-09. This represents a 6.3% increase from the 816 UPCs filed in 2007-08. Since PERB assumed jurisdiction over the MMBA in 2001, UPC filings have been averaging over 800 a year, roughly double the number before 2001.

The increase in UPCs for 2008-09 can be largely attributed to the Dills Act and MMBA. The Dills Act went from 137 UPCs in 2007-08 to 167 in 2008-09; a 22% increase. The MMBA went from 261 UPCs in 2007-08 to 310 in 2008-09; a 19% increase. All the other statutes only increased or decreased nominally.

The increase in UPCs for 2008-09 is consistent with what I predicted last year. For the coming year, I predict that UPC filings will rise again. However, I believe the big increase will come under EERA, and to a lesser extent, the MMBA. This is because the budget situation appears to be just as bad this coming year as last. And unlike last year, there will be no stimulus funds to save the day for schools and in all public jurisdictions the less-painful cuts have already been made. That combination is going to create a lot of tension between management and labor as both sides search for money to close the budget gap.

ALJ Proposed Decisions

In 2008-09, the ALJs at PERB issued 52 proposed decisions; taking an average of 94 days for each decision. This is an increase from the 44 decisions issued in 2007-08. However, the length of time it takes to issue a decision stayed the same. I expect these numbers to remain at these levels in 2008-09.

Year: # of Proposed Decisions (Average # of Days)
2008-09: 52 (94)
2007-08: 44 (94)
2006-07: 41 (85)
2005-06: 46 (100)
2004-05: 49 (63)
2003-04: 47 (53)
2002-03: 52 (53)

Board Decisions

For 2008-09, the Board itself issued 89 decisions. It also considered 19 injunctive relief (IR) requests. The 89 decisions issued represent a 37% increase from the 65 decisions issued in 2007-08. For 2009-10, I don’t expect the number of Board decisions to increase much, if at all, since the 5-member Board already has one vacancy and could possibly see another in early 2010.

The chart below lists the number of decisions issued by the Board since 2001. In past years, the Board has sometimes included IR requests in its decision count. So to make things easier, I have listed the number of Board decisions, IR requests, and the total.

Year: # of Board Decisions/IR Requests/Combined Total
2008-09: 89/19/108
2007-08: 65/28/93
2006-07: 87/16/103
2005-06: 80/23/103
2004-05: 142/14/156
2003-04: 128/13/141
2002-03: 73/14/87
2001-02: 44/23/67

So as you can see, the number of decisions issued by the Board this past year is the highest it has been since the 2003-04 and 2004-05 years. As I mentioned above, I don’t expect the number of decisions to increase in 2009-10 because of the Board member vacancy. So far this year (2009-10), the Board has issued 38 decisions and I expect a few more will come out before the end of the calendar year. That’s right on track for approximately 80 decisions this coming year.

Governor's Communication to Employees was Permissible

2009-12-21T17:47:00.000-08:00

State of California (Department of Personnel Administration) (2009) PERB Decision No. 2078-S (Issued on 11/24/09)

Facts

This unfair practice charge arose out of bargaining between the State of California (State) and the Stationary Engineers Local 39, International Union of Operating Engineers, AFL-CIO (Local 39) in 2008. Local 39 alleged that the State committed an unfair practice by: (1) failing to make or respond to economic proposals during bargaining; (2) failing to respond to information requests; (3) making bargaining proposals directly to employees; and (4) claiming it had no authority to bargain over economic items after stating at the outset of negotiations that it had such authority. The Board agent dismissed the charge in its entirety. Local 39 appealed the dismissal to the Board on all its allegations, except for allegation number 2 (failure to provide information).

The parties began bargaining in April 2008. According to the charge, negotiators from the Department of Personnel Administration (DPA) told Local 39 that they had authority to negotiate over all issues. However, in May 2008, Local 39 alleged that DPA negotiators told it they had no authority to address economic proposals until after the State budget was passed. Even after the budget passed, Local 39 alleged that DPA negotiators continued to claim they had no authority to negotiate over economic items.

In November 2008, DPA told Local 39 that the Governor would be holding a press conference to discuss the State budget crisis. The DPA representatives said the Governor was considering several proposals that would impact State employees, including one furlough day per month, a reduction in holiday premium pay, changes in overtime calculation methods, and the elimination of Columbus Day and Lincoln's Birthday as State holidays. Also in November, the Governor issued a letter to all State employees informing them of “a projected $11 billion revenue shortfall this fiscal year.” The letter detailed four measures affecting State employees that would be proposed to the Legislature as part of the Governor's plan to close the budget gap: (1) one furlough day per month for 18 months; (2) elimination of Columbus Day and Lincoln's Birthday as State holidays; (3) increased ability to work four ten-hour days per week (4/10 workweek); and (4) elimination of leave time from overtime calculation. The letter assured State workers that, “we are working closely with union leadership to achieve results in the least painful way possible. All the actions we're proposing must first be approved by the Legislature.”

Board's Decision

On appeal, the Board held that DPA’s failure to make economic proposals was not, by itself, sufficient to establish bad faith bargaining. Importantly, the Board affirmed the principle that, “it is permissible for an employer to defer bargaining over economic items when its financial situation is uncertain.” (State of California (Department of Personnel Administration) (1986) PERB Decision No. 569-S.) The Board also affirmed that it does not constitute bad faith bargaining for an employer to defer making a firm economic proposal until it "has had an opportunity to review the final budget in good faith in order to determine the funds potentially available for salary increases." (State of California, Department of Personnel Administration (1990) PERB Decision No. 823-S.)

Similarly, the Board rejected Local 39’s contention that it constituted bad faith bargaining for DPA negotiators to claim a lack of authority to negotiate economic proposals. The Board affirmed that in the public sector, “it is not an unfair practice for a negotiator to discuss issues and make proposals that are subject to ratification by the employer.” (Oakland Unifed School District (1983) PERB Decision No. 326.) A negotiator's lack of authority only constitutes an unfair practice when it is used to foreclose the achievement of any agreement.

Finally, the Board addressed Local 39’s contention that the Governor’s communication to employees constituted unlawful direct dealing. The Board found that there was no allegation that the Governor was attempting to bargain directly with employees. Further, the Governor’s communication did not contain any threats of reprisal or promise of benefit. The only theory that Local 39 appeared to allege was that the communication “undermined” its authority in the eyes of its bargaining unit members. The Board noted that it had found a violation under such a theory in only one case, California State University (1989) PERB Decision No. 777-H.

In that case, the California State University had published an article in its newsletter stating that it had offered a 4% raise and implied that it would take effect. The Board found that the publication “tend(ed) to diminish the authority of the exclusive representative at the table, as well as in the eyes of bargaining unit employees.” Here, however, the Board distinguished California State University because the Governor’s communication clearly indicated that the State would fulfill its bargaining obligations. Accordingly, the Board affirmed the dismissal.

Comments:

There are several items in this decision that are helpful for public employers. First, public employers should be pleased that the Board has affirmed the rule that it is not an unfair practice to delay economic bargaining until the budget is passed. This should be especially comforting to schools, local agencies, and universities who all find themselves at the mercy of the State legislature and Governor each year during the budget process.
Next, I think the Board’s treatment of California State University is important. In my opinion, that 20-year old decision was wrongly decided and should be overturned. I have never understood why completely factual information transmitted by the employer to employees should be considered an unfair practice. It’s not as if the unions are prohibited from responding. To the contrary, unions regularly communicate with employees regarding the status of bargaining. Often, unions will make claims that the employer feels are untrue. What happens is that the employees who view those untrue claims then take out their frustration and/or anger on the employer, including supervisors, managers, and governing board members. It seems only fair that when that occurs an employer should be able to respond with completely factual information. To the extent such communications may “diminish” the union in the eyes of its members—it seems to me—that is a function of the facts, and should not be an unfair practice. So I would have preferred that the Board just overturn California State University. However, I can live with the holding here: that California State University doesn’t apply (at least) where the employer makes it clear in the communication that bargaining is continuing and/or that it will meet its bargaining obligations.

Beyond Furloughs

2009-12-17T08:56:00.000-08:00

I’ve been meaning to write on the issue of furloughs for a while as our firm has been dealing with the issue throughout the state. As I’ve commented publicly, part of the reason we’ve been successful in negotiating furloughs in a number of jurisdictions is because the unions have largely been cooperative. From the perspective of unions, furloughs allow them to save jobs. The unions also believe—correctly in my view—that once the economy recovers, it will be a lot easier to end furloughs than it will be to fill positions where people have been laid off. However, with next year’s state budget not looking that much better, many public agencies are going to have a make tough choices. Continue furloughs? Impose layoffs? Cut services? Or something else?

Layoffs v. Furloughs

A recent article out of the Wharton School of Business helps shed some light on why furloughs have been in vogue during this recession. According to the article, in the past the investment community favored layoffs in response to economic downturns. “If you laid people off, it looked like you were taking action. It looked like you were cutting costs, and the investment community used to reward companies every time they announced that. As a result, there was strong evidence that employers announced more layoffs than they actually executed.” Thus, by laying-off employees companies were often rewarded by investors (ie their stock price went up).

However, recently that thinking has begun to change. Many companies have discovered that layoffs extract a heavy price in terms of severance payments, potential litigation, decreased productivity and morale among those remaining, and general dissatisfaction among employees. According to the article, “many companies have discovered in this most recent downturn that having an effective layoff -- one that actually helps the organization rather than inflicting strategic damage on the organization -- is fairly difficult to do.” The investment community has also taken notice of the negative side-effects of layoffs. As a result, the investment community does not seem to be “rewarding” companies for layoffs today in the way it did in the past.

With the realization that layoffs may not be the best option in response to an economic downturn, many companies and public entities turned to furloughs as the next obvious choice.

What Happens Next?

However, the notion of furloughs as a better alternative to layoffs necessarily requires that the furloughs be short-term. If maintained long-term, furloughs become nothing more than pay-cuts that harm employee morale and may cause the best employees to look for jobs elsewhere. Thus, furloughs only make a lot of sense if you expect your financial problems to only last a year or two. The problem for public agencies is that economic conditions in California may not improve significantly anytime soon.

According to a Pew study, the recession has been so deep that many states may not see revenues rebound until late in the next decade. It’s difficult to imagine furloughs lasting that long. So instead, according to the Pew study, “some states are moving beyond short-term fixes to rethink the role and structure of government with the goal of delivering high quality, but fewer services, at lower costs. Targeted are functions and agencies that overlap or are no longer relevant.” Thus, cutting services may have to be part of the discussion in California. Quite simply, as a state we may not be able to afford the level of services that has been provided in the past.

The Pew study also noted that, “After hiring freezes, furloughs are the preferred short-term option for most states, because they preserve morale and keep talented workers on the job for better days ahead.” However, according to the study, “A better way for states to weather fiscal ups and downs is to increase the number of contract workers.” Most corporations maintain about 25 percent of their workforce through flexible contracts, while most states have a contingent workforce in the single digits.

Thus, in addition to cutting services, contracting out may have to be considered. Contracting out certainly makes sense economically. If you maintain a permanent workforce at a level sufficient to handle the “valleys” and contract out temporary employees to handle the “peaks” you can avoid layoffs and furloughs altogether, at least in theory. However, any discussion of contracting out in the public sector must take into account the role (and opposition) of unions. Contracting out existing bargaining unit work is generally negotiable. And because unions consider contracting out a direct attack on their very existence, you can expect that they will fight tooth and nail to oppose any contracting out. More important, in any discussion about contracting-out you can expect unions to use their political might as well. So it is doable? Will public agencies go that route? We’ll have to wait and see …

Pre-Layoff Due Process Hearings: What’s Required?

2009-12-15T14:45:00.000-08:00

Alameda County Management Employees Association v. Alameda County Superior Court (Alameda Superior Court Case No. RG09-464432) (Tentative ruling issued 12/9/09)

In 2008, the Ninth Circuit Court of Appeal issued a surprise ruling in Levine v. City of Alameda, 525 F.3d 903 (9th Cir. 2008) suggesting that a public employee who is laid-off from work is entitled to a pre-layoff due process hearing. That decision shocked public employers because no other decision had suggested such a requirement. Levine also seemed to conflict with Duncan v. Department of Personnel Administration, 77 Cal.App.4th 1166 (2000), a California appellate decision which held that pre-layoff due process hearings are not required. After Levine became final, the consensus among most public practitioners was that pre-layoff hearings are only potentially required in situations where the employee argues that he or she has been targeted for layoff, in lieu of discipline. In situations involving mass layoffs, it was believed that Duncan would still apply. However, because of the uncertainty and risk, many public agencies decided to offer pre-layoff Skelly-type hearings just to be safe.

Recently, the court in Alameda County Management Employees Association v. Alameda County Superior Court issued a tentative ruling on whether pre-layoff hearings are required. To my knowledge, this is one of the first times any court has addressed this issue.

Are Pre-Layoff Hearings Required?

In considering whether pre-layoff due process hearings are required, the court quoted extensively from Duncan. The court seemed to agree with Duncan that a layoff, unlike a disciplinary action, carries no “stigma” that attaches to the employee. This is especially true in the case of mass layoffs. The court also agreed with Duncan that, “It is one thing for the State to provide a predeprivation hearing for a single employee who has been demoted because of misconduct. [Citation omitted] It is quite another to require the State to conduct pre-layoff hearings for 95 employees in the midst of a financial crisis. Indeed, the cost of such hearings would simply exacerbate the crisis, primarily because the State would have to keep the affected employees on the payroll pending the outcome of the hearings.”

However, despite this favorable language from Duncan, the court noted that Levine held that an employee selected for layoff is entitled to a pre-layoff hearing where there is evidence that the employee was targeted for layoff. Here—not surprisingly—all the employees in the lawsuit were alleging that they were targeted for layoff as a pretext for discipline.

If so, What Exactly Is Required?

Instead of ruling on whether pre-layoff hearings are required, the court was able to avoid the issue by finding that even if a pre-layoff hearing was required, the employees here received that.

Specifically, that court noted that due process in these situations does not require a full trial-type evidentiary hearing. Instead, the court held that as a minimum, what was required was, “notice of the proposed action, the reasons therefore, a copy of the charges and materials upon which the action is based, and the right to respond, either orally or in writing, to the authority initially imposing discipline.” Here, all the employees received the following notice with the layoff paperwork:

“If you think that the [Employer] has incorrectly determined to lay off your position, you may within three (3) working days from receipt of this notice, submit an explanation in writing to the Assistant Executive Officer.”

The court held that such notice and the opportunity to respond in writing was sufficient to meet any pre-layoff due process rights. This was especially true, according to the court, since the employees all had the right to a post-layoff evidentiary hearing.

Comments:

This is a tentative ruling in a superior court case, so you can’t read too much into it. However, it should be noted that the ruling was authored by Justice Mallano, the Presiding Justice of Division One of the Second District Court of Appeal. (He was appointed to avoid a conflict of interest by the Alameda superior court judges)
The tentative ruling largely confirms the consensus among practitioners that Levine kicks in only when there is an allegation that the layoff is pretextual. Of course, the problem is that unions aren’t stupid and that given Levine, they are going to advise employees to argue pretext in every layoff situation. This case is a prime example of that. Here, the layoffs were done by seniority. Nevertheless, all 13 of the laid-off employees argued that they were “targeted.”
So what’s an employer to do? Well, if you want to play it absolutely safe, an employer should give employees some opportunity to respond to the layoff notice. This ruling says that the response can be in writing, which certainly makes things easier. But again, it’s just a tentative ruling in a non-precedential superior court case so you can’t read too much into it. Hopefully, in the near future we’ll get some more clarification from the courts.

If You Don't Want to Bargain Over a Permissive Subect, Say So...

2009-12-08T21:33:00.000-08:00

State of California (Department of Personnel Administration) (2009) PERB Decision No. 2081-S (Issued on 11/24/09)

This case involved an appeal from a dismissal. The California Correctional Peace Officers Association (CCPOA) alleged that the State committed an unfair practice by insisting to impasse on a permissive subject of bargaining. Specifically, CCPOA asserted that the State included several provisions in its last, best and final offer that constituted waivers of employee rights. For example, the State proposed a continuance of a contract provision whereby CCPOA agreed that it would not directly bring an action against the State for violations of the Fair Labor Standards Act. The Board agent dismissed the charge on the ground that CCPOA failed to make known its objections to the State’s proposals on such permissive subjects of bargaining.

On appeal, the Board affirmed the well-established rule that a party may not legally insist upon the acceptance of a proposal involving a permissive subject of bargaining "in the face of a clear and express refusal by the union to bargain" over them. (Citing to Lake Elsinore School District (1986) PERB Decision No. 603.) However, the Board held that its precedent also established that the party objecting to a non-mandatory subject “clearly communicate its opposition to further consideration of the proposal.” Once a party makes its objection clear, the party proposing the non-mandatory subject of bargaining may not insist to impasse on it.

Here, CCPOA asserted that its response to that State that, “YOUR CURRENT PROPOSAL HAS SEVERAL SECTIONS THAT REQUIRE US TO AGREE TO WAIVE STATE LAW FOR OUR MEMBERS. THAT IS NOT A LEGITIMATE EFFORT TOWARDS AN AGREEMENT” placed the State on notice of the union’s objection. The Board disagreed, finding that such a response and CCPOA’s other actions failed to communicate “clear opposition” to the State’s permissive proposals. Accordingly, the Board affirmed the dismissal.

Comments:

This is not a ground-breaking case, but a good reminder that if you don’t want to negotiate over permissive subjects of bargaining you must clearly say so.

The reality is, however, that most permissive subjects of bargaining find their way into contracts as the quid pro quo for a mandatory subject of bargaining. Most employers also realize that you can’t insist to impasse on a permissive subject of bargaining. However, nothing prevents an employer from offering something “extra” in exchange for agreement on a permissive subject as long as the employer continues to bargain in good faith over other mandatory subjects. That’s how most permissive subjects are bargained.

PERB: Complaint Must Issue on Union's Violation of DFR

2009-12-07T21:17:00.000-08:00

IBEW Local 1245 (Flowers) (2009) PERB Decision No. 2079-M (Issued on 11/24/09)

Of the 35 Board decisions issued so far this year, 9 have been brought against unions alleging a violation of the duty of fair representation. That's not unusual as DFR cases typically make up 25% of the Board's caseload. In eight of the cases this year, the Board affirmed the dismissal of the unfair practice charge. In IBEW Local 1245 (Flowers), the Board actually overturned the Board agent’s dismissal. Getting a complaint issued on a DFR charge is not easy, so I thought this case was worth highlighting.

There are not a lot of facts. The employee was terminated from his employment. Under the collective bargaining agreement, the employee’s right to challenge his termination through arbitration was controlled by the union. The union filed a grievance on the employee’s behalf. However, the employee never heard from the union again until a few months later when a union representative called the employee and said that union would not take the case to arbitration. The union representative offered no explanation.

Under these facts, the Board held that the employee had stated a prima facie violation of the duty of fair representation. First, the Board held that it could be inferred from the facts as alleged that the union did not undertake any investigation or evaluation into the merits of the employee’s case. Second, the Board affirmed that the DFR requires a union to offer the employee an explanation as to why it will not elevate a case to arbitration. Here, the union allegedly failed to provide such an explanation. Accordingly, the Board overturned the dismissal and ordered a complaint to be issued.

Comments:

1. The facts in this case are unusual as most unions are acutely aware of their DFR obligations. As long as a union does its due diligence and makes an informed decision about whether to take a case to arbitration, getting a DFR complaint issued is virtually impossible. So congrats to Steve Bassoff for getting the Board to issue a complaint.

2. However, the employee should not start celebrating just because a complaint has issued. The hard part is still ahead: the employee has to actually prove a violation of the DFR. Undoubtedly, the union will come into the hearing and provide an explanation as to why it did not take the case to arbitration. However, does that cure the fact that the union didn't provide that explanation to the employee at the time? In my mind it shouldn't. However, even if it doesn't what's the remedy? That's the problem with the current DFR jurisprudence - in the extremely rare instance where an employee can actually prove a DFR violation the remedy almost always falls short of making the employee whole. Hopefully, given the right case, the Board will address this issue sometime in the future.

City Not Required to Implement Last, Best, Final Offer

2009-11-08T22:53:00.000-08:00

City of Clovis (2009) PERB Decision No. 2074-M (Issued on 10/30/09)

This case involved an allegation by the Clovis Public Works Employees' Affiliation (Union) that the City of Clovis committed an unfair practice by refusing to implement its last, best, and final offer of a three percent wage increase.

Facts:

The parties began negotiations on a wage re-opener in May 2007. After multiple bargaining sessions the parties were unsuccessful in reaching agreement. On July 13, 2007, the City proffered its last, best, and final offer of a three percent salary increase, effective July 1, 2007. On July 17, 2007, the Union rejected the offer and declared impasse. After unsuccessful mediation attempts the parties resumed negotiations but made no progress. On September 28, 2007, the Union’s chief negotiator sent a letter to the City's chief negotiator stating that the City's proposal had been voted down by the membership and the Union again declared impasse. Soon thereafter the Union also informed the City that it intended to file an unfair practice charge.

The Union’s chief negotiator assumed that the City would implement its last, best, and final offer of a three percent salary increase. However, by late January 2008, the City had not implemented the three percent wage increase. On February 1, 2008, after discussions with union membership, the Union’s chief negotiator left the City’s chief negotiator a message stating that the Union would dismiss the pending unfair practice charge if the City would implement the three percent salary increase contained in its last, best, and final offer.

At the PERB hearing, the City’s chief negotiator testified that he understood the Union’s proposal to be nothing more than a settlement offer of the unfair practice charge. However, based on the facts described above the ALJ found that the Union’s message was an acceptance of the City’s last, best and final offer and therefore created a binding agreement between the parties. Because the City didn't implement the offer, the ALJ concluded that the City committed an unfair practice.

The Board’s Decision

For the first time this year (2009-2010), the Board rejected the ALJ’s proposed decision. First, the Board noted that under MMBA section 3505.4, once an impasse has been properly reached between the parties, a public agency "may implement its last, best, and final offer." (Emphasis added.) The Board held that this provision is permissive, not mandatory. Therefore the City was under no obligation to implement its last, best, and final offer at impasse.

Next, the Board found that the evidence at hearing was inadequate to establish an unconditional acceptance of the City’s offer. More importantly, the Board held that even if the Union had validly accepted the City's last, best, and final offer, that alone did not create a binding and enforceable agreement under the MMBA. This is because MMBA section 3505.1 requires that any agreement be reduced to writing and ratified by the City Council before it becomes binding on the parties. Accordingly, the Board rejected the proposed decision and dismissed the complaint.

Comments:

1. The Board’s decision is absolutely correct. Because the Board rejected the ALJ’s decision, a copy of the proposed decision was not attached. You have to go to the “CA-PER” database in Westlaw to find the ALJ’s proposed decision. When you look at the ALJ’s proposed decision, you will see that the ALJ exclusively cited to private sector NLRB cases. But there is a huge difference between the NLRB and MMBA when it comes to the concept of who has the ultimate authority to bind the employer. Under NLRB precedent, it is potentially an unfair practice to send a negotiator who doesn’t have authority to bind the employer. However, under MMBA section 3505.1, it is plain that only the governing body of a local agency has the authority to ratify an agreement for the City. In the same way the union’s membership can reject a contract, a City Council or County Board of Supervisors can also reject a contract. Thus, the City's chief negotiator did not have the authority to "bind" the City in the manner the ALJ found.

2. This is (I believe) the first case under the MMBA that expressly affirms two very important principles. One, under the MMBA only the governing body of a local agency can bind the agency. As mentioned above, this is a critical difference between the MMBA and the NLRB, and to some extent even with the other public sector statutes. Second, the imposition of an employer’s last, best, and final offer is not mandatory, but rather permissive. Thus, where a union rejects an offer of a raise because it isn't enough, it bears the risk that the employer will choose not to implement any raise at all. Here, in retrospect, I'm sure the Union wishes it would have accepted the 3% offer back in 2007.

PERB: Police Search Was Adverse Employment Action

2009-10-25T23:33:00.000-07:00

Trustees of the California State University (San Marcos) (2009) PERB Dec. No. 2070-H (Issued on 10/15/09)

This case involved an appeal from a dismissal. The unfair practice charge alleged that the California State University (San Marcos) (“CSU”) violated the Higher Education Employer-Employee Relations Act (HEERA) by: (1) unilaterally transferring bargaining unit work to non-unit employees; and (2) retaliating against an employee for using union representation in a dispute over his work assignments. The Board agent dismissed both allegations for failure to state a prima facie case. The Board affirmed the dismissal of the allegation that CSU unlawfully transferred bargaining unit work. However, the Board reversed the dismissal on the retaliation charge.

With respect to the retaliation charge, the union alleged that one of its bargaining unit members, Rafael Lopez, was retaliated against for filing grievances and utilizing union representation. One of the issues PERB considered was whether the union established that Lopez suffered an adverse employment action. The unfair practice charge alleged that Lopez’ supervisor initiated a false complaint against him that resulted in Lopez’ car being searched by campus police.

In its decision, PERB noted that it had previously held that the filing of a citizen's complaint against an employee with the knowledge that it would lead to an investigation by the employer can constitute an adverse employment action. (California Union of Safety Employees (Coelho) (1994) PERB Decision No. 1032-S.) Here, the union alleged that Lopez’ supervisor filed a complaint with campus security claiming that Lopez had stolen state property. The complaint resulted in campus police searching Lopez' personal vehicle. Under these facts, PERB held that, “A reasonable person would be concerned about the effect of the search on his or her employment because it could lead to discipline, criminal charges, or both. Thus, despite the fact that Lopez was never disciplined or charged based on the search, we find the vehicle search was an adverse action.”

Comments:

This case caught my attention because of the report to campus police. The fact that the alleged adverse employment action was based on a police report should normally trigger the absolute protection of Civil Code section 47(b). Significantly, Section 47(b) was apparently not raised by the parties; or at least it was not addressed by PERB.

Section 47(b) establishes an absolute privilege for statements made during judicial proceedings. The courts have held that Section 47(b) “gives all persons the right to report crimes to the police, the local prosecutor or an appropriate regulatory agency, even if the report is made in bad faith.” (Hagberg v. California Federal Bank (2004) 32 Cal.4th 350.) Section 47(b) has been held that bar all tort causes of action, except a claim for malicious prosecution, based on statements made in a judicial proceeding such as a report to law enforcement.

One of the key cases in this area is Brown v. Department of Corrections (2005) 132 Cal.App.4th 520 (“Brown”). In Brown, an employee of the Department of Corrections filed a whistle-blower complaint under Labor Code section 1102.5 alleging that the department made a police report against him because of his whistleblower activities. The court held that the department’s report to the police was absolutely privileged under Section 47(b). While acknowledging the public policy underlying the whistleblower statute, the court nevertheless found that the “importance of providing to citizens free and open access to governmental agencies for the reporting of suspected illegal activity outweighs the occasional harm that might befall a defamed individual. Thus the absolute privilege is essential.”

Under Brown, the absolute privilege of Section 47(b) has been held to trump discrimination statutes. Similarly, I believe the statutory protections of HEERA must similarly yield to the absolute privilege of Section 47(b). While there is certainly a public policy in preventing retaliation against employees who participate in protected union conduct, that public policy cannot trump the policy in favor of promoting the reporting of crimes—even if made in bad faith—to law enforcement. Indeed, that’s exactly the point of the absolute privilege.

Thus, even though this decision is precedential, I believe that if the Section 47(b) defense is properly raised, PERB will have no choice but to recognize that a police report cannot form the basis of an adverse employment action.

PERB Stops Strike in Palo Alto

2009-10-16T08:45:00.000-07:00

On September 23, 2009, PERB sought and received a temporary restraining order (TRO) from the superior court prohibiting certain health and safety employees in the City of Palo Alto from engaging in a strike called by SEIU Local 521. That TRO applied to public safety dispatchers, water quality control operators, mechanics, and electrical workers, among other employee classifications. On October 15, 2009, the court issued a preliminary injunction, extending the injunction set forth in the TRO indefinitely. In the preliminary injunction, the court specifically found that:

“1. Plaintiff has established the probable validity of its claims and the probability that there is an immediate danger that Defendant SEIU will violate the Government Code by engaging in a strike or work stoppage. Failure to issue this Preliminary Injunction would result in an imminent threat to public health, safety and welfare.

2. This is a proper case for issuance of a Preliminary Injunction, and unless a Preliminary Injunction issues, the City of Palo Alto will face substantial and irreparable injury.”

Comments

This is only the second time this year that PERB has sought injunctive relief on behalf of a party. The first was back in July when PERB obtained a TRO against AFSCME Local 3299, prohibiting it from engaging in a strike against the University of California. Since then PERB has received several requests for injunctive relief, mainly by unions seeking to prevent employers from imposing last, best and final offers. To date, all those requests have been denied, presumably because PERB found no “irreparable harm" as any violation could be remedied later on.

In contrast, PERB has appeared willing to grant requests for injunctive relief when health and safety employees threaten to strike. In my opinion, this is as it should be. By definition, strikes by health and safety employees have the potential to cause irreparable harm to the general public. As such, these situations are tailor-made for PERB’s injunctive relief powers. Quite frankly, I still believe it would be more efficient and make more sense to allow public entities to go directly to superior court to seek injunctive relief, instead of having to detour to PERB first. However, I'm glad that PERB has acted aggressively in stopping these strikes.

10 New Employment Laws You Probably Haven't Heard Of . . .

2009-10-14T12:55:00.000-07:00

Last week the Governor signed over two hundred bills and vetoed at least that many. Over the next few weeks, I’m sure we will all be receiving various bulletins describing the major new labor and employment laws in California. So instead of duplicating that effort, I decided to highlight 10 obscure new laws that affect public sector employment in California. Have fun reading.

1. AB 32 (D-Lieu) - Public officials: Personal Information.
Allows an elected or appointed official, or his or her employer, to obtain an injunction against any person or entity that publicly posts on the Internet the home address or telephone number of that official.

2. AB 381 (D-Block) - Unemployment Compensation Disability Benefits: Academic Employees. Allows community college districts to elect to provide state disability insurance (SDI) coverage to academic employees who are permanent, part-time, or temporary; and, to management, confidential, and employees who are not part of a bargaining unit.

3. AB 485 (D- Carter) - Civil Air Patrol: California Wing: Employment Leave.
Requires an employer to provide 10 days of unpaid leave to an employee called to service by the Civil Air Patrol. (Not just a public sector law)

4. AB 567 (R- Villines) - Government Practices.
Amends the California Whistleblower Protection Act (CWPA) to cover as “employees” those persons appointed to state boards or commissions

5. AB 681 (D- Hernandez) - Confidentiality of Medical Information: Psychotherapy.
Allows for the disclosure of confidential medical information (as opposed to a mere Tarasoff warning) by a psychotherapist when there is a serious imminent threat to the health and safety of a reasonably foreseeable victim or victims. Disclosure must be pursuant to a request for information from law enforcement or the target of the threat (which presumably would include employers and/or employees that are targeted). (Not just a public sector law)

6. AB 955 (D- León) - Public Safety Officers Procedural Bill of Rights Act: Discipline.
Amends the Public Safety Officers Procedural Bill of Rights Act to clarify that a public agency is not be required to impose discipline within the one-year limitations period; only the investigation and notice of discipline must be completed within the year.

7. AB 1227 (D- Feuer) - Workers’ Compensation: Public Employees: Leaves of Absence.
Expands the availability of Labor Code 4850 leave—which allows injured peace officers to receive a full year’s pay tax-free—to include local park rangers, community college police, and school district police officers.

8. AB 1245 (D- Monning) - Recovery of Public Records.
Establishes a procedure by which the Secretary of State can recover governmental records, belonging to the state or a local agency that are found in possession of non-governmental entities or persons (for example, a former employee).

9. SB 169 (R- Benoit) - Identification: Honorably Retired Peace Officers.
Empowers the head of a local agency that employs peace officers to bestow upon retirees an honorary badge or other emblem that states that person's position as an honorable retired peace officer from that agency.

10. SB 644 (R- Denham) - Civil Service Examinations: Veterans’ Preference.
Increases the veterans' preference points provided on open, non-promotional state civil service entrance examinations from 10 to 15 points for disabled veterans, and from 5 to 10 points for all other veterans.

SB 656 Vetoed

2009-10-13T09:09:00.000-07:00

Back in May, I wrote about SB 656 (DeSaulnier) which sought to remove from PERB’s jurisdiction any bargaining unit comprised of a majority of peace officers as defined by Penal Code section 830.1. (830.1 officers.). I was partly ambivalent on the bill but opposed to it on the principle that it’s bad public policy to have certain employees covered by PERB and not others. I’m pleased to report that the Governor has vetoed SB 656 for the same reasons. Here is the Governor’s veto message:

“To the Members of the California State Senate:

I am returning Senate Bill 656 without my signature.

While I am supportive of employee rights, this bill would create an inconsistent treatment of non-peace officer employees in unions with peace officer majorities and similar non-peace officer employees that are in unions without a peace officer majority. I do not believe a sufficient case can be made why one group should circumvent the existing dispute resolution process that currently exists through the Public Employment Relations Board. For these reasons, I am unable to sign this bill.

Sincerely,

Arnold Schwarzenegger”

An Employee Must Expressly Request Representation Under Weingarten Doctrine

2009-09-16T15:14:00.000-07:00

San Bernardino County Public Defender (2009) PERB Decision No. 2058-M (Issued on 9/03/09)

This was a fairly typical Weingarten case. In order to establish a violation of the right to union representation, the charging party must demonstrate that: 1) the employee requested representation; 2) for an investigatory meeting; 3) which the employee reasonably believed might result in disciplinary action; and (4) the employer denied the request. Here, the employee alleged that she was forced to attend an investigatory interview where she was denied union representation. The employer’s main defense was that the meeting was not investigatory in nature.

In the proposed decision, the ALJ commented that the employee satisfied the first element when she “at least expressed her reluctance to attend the meeting without union representation.” In its decision, the Board found the ALJ’s statement “inconsistent with long-standing PERB precedent that requires employees to affirmatively request union representation in order to invoke their rights to representation at an investigatory interview. Instead, the Board held that, “expressing reluctance to attend an investigatory interview without union representation is insufficient, standing alone, to invoke the right to union representation.”

Comments:

This decision isn't particularly ground-breaking. It's always been the case that an employer has no obligation to offer an employee a union representative if the employee doesn't ask for one. This case just makes it clear that the request from the employee must be explicit.

Hawaii Court Stops Furloughs

2009-09-11T16:50:00.000-07:00

Hawaii State Teachers Ass'n et. al. v. Linda Lingle, Governor, State of Hawaii et. al. (Hawaii Circuit Court, First Circuit, Case No. 09-1-1372-06 KKS) (Issued on 7/29/09)

Many people have mentioned that in addition to a federal district court in Maryland, a trial court in Hawaii has also enjoined public employee furloughs. Unlike the case in Maryland, the Hawaii case involved a state court ruling. Hawaii is one of only five states in the nation where the right to engage in collective bargaining is enshrined in the state constitution (the other states are New York, Florida, Missouri, and New Jersey). The scope of representation in Hawaii includes, “wages, hours, and other conditions of employment.” In June 2009, Governor Lingle announced that the state was going to unilaterally impose 3 furlough days per month on all state employees. Not surprisingly, the state employee unions brought suit to stop the planned furloughs.

Instead of filing a charge with the Hawaii Labor Relations Board (“HLRB”), the unions went directly to court. Under Hawaii law, the HLRB has “exclusive original jurisdiction” over controversies involving the state’s collective bargaining laws. However, the law expressly provides that “nothing herein shall prevent the pursuit of relief in courts of competent jurisdiction.” Based on the latter language, the court held that the unions were entitled to seek relief directly with the courts instead of having to go through the HLRB.

On the merits, the state court had little trouble finding that a plan imposing 3 furlough days per month affected the “wages, hours, and other conditions of employment.” Indeed, from the decision it wasn’t even clear if the state itself thought it had a valid defense. I think the state’s primary argument was that there was an “emergency” justifying the Governor’s unilateral actions. However, the court found that the Governor failed to properly raise an “emergency” defense; instead, the Governor justified the furloughs on the need to achieve labor cost savings.

Comments:

All in all, I don’t consider this case to be ground-breaking. It was a trial court decision in Hawaii so it has no precedential value either. I think the California courts and PERB would have reached the same result given these facts. I do think that the public sector labor relations statutes in California allow some flexibility for employers to unilaterally change terms and conditions of employment in "emergencies." (That right is expressly provided for in the Dills Act.) Unfortunately, what constitutes an emergency has never been clearly delineated by PERB or the courts. Governor Schwarzenegger, unlike Governor Lingle, expressly raised the "emergency" defense in response to challenges to the furloughs. So the California cases will be much more interesting than the one in Hawaii.

Effort to Block Municipal Bankruptcies is Back

2009-09-09T08:59:00.000-07:00

I previously wrote about AB 155 (DeSaulnier, D-Concord), which would have prohibited municipalities from declaring bankruptcy without first obtaining approval from the California Debt and Investment Advisory Commission. AB 155 was sponsored by unions hoping to prevent another “Vallejo” situation from occurring. Fortunately, AB 155 got bogged down in committee and was going no where fast. Unfortunately, the provisions in AB 155 have now been resurrected into SB 88 in a “gut and amend.”

As I stated previously, I believe such a bill is completely unnecessary. I think the bankruptcy court’s recent decision in Vallejo throwing out the IBEW contract actually supports my position. Although the court threw out the IBEW contract, it did so only after an exhaustive analysis under applicable law. It’s hard to imagine that a “commission” stacked with partisans could do a better job than the bankrtupcy court at such an analysis. While you may disagree with the court’s ultimate conclusion, I think even unions would be hard pressed to deny that they got a fair hearing. I doubt the same could be said of any proceeding before a "commission" of politicians.

Bankruptcy Court Rejects Vallejo MOU

2009-09-04T09:32:00.000-07:00

In re Vallejo (U.S.E.D. Bankruptcy Case No. 08-26813-A-9) (Issued 8/31/09)

The federal judge hearing the City of Vallejo’s bankruptcy case has tossed out the MOU between the City and the International Brotherhood of Electrical Workers (IBEW). The City had initially asked the court to toss out all its MOUs. However, the City was able to reach agreements with all its unions, with the sole exception of the IBEW. Even the firefighters—the group most responsible for pushing the City into bankruptcy—agreed to dissolve their MOU in exchange for an expedited negotiations process for a new one. The last holdout was the IBEW.

Most observers did not expect the judge to toss the IBEW MOU without trying to apply more pressure on the parties. So the timing of the court’s decision was a bit of a surprise. In its decision, the court held that the City had met the standards set forth in NLRB v. Bildisco & Bildisco, 465 U.S. 513, 521-22 (1984) (Bildisco) for rejection of a collective bargaining agreement in bankruptcy. Specifically, the court made the following findings:

1. The Court found that the IBEW MOU was “burdensome” within the meaning of Bildisco. The court based this finding on the fact that the IBEW MOU would require another salary increase in fiscal year 2009-10 and further imposed “significant burdens, such as costs related to active and retiree health benefits and compensated absences” on the City. The court also found that the City’s financial situation will likely continue to deteriorate in the next two years. Given these facts, the court concluded that the “City cannot afford the IBEW [MOU].”

2. The court held that the balance of equities supported rejection of the MOU. This conclusion was based on the findings that compensation under the IBEW MOU is above market. Also, the court noted that all the other employee unions voluntarily agreed to modify their respective MOUs—even the firefighters. Based on these facts, the court held that, “It is equitable to reject the IBEW [MOU]”

3. Finally, the court found that the City had made reasonable efforts to reach voluntary agreement with IBEW. This was based on the fact that the parties met numerous and exchanged several proposals. The court also found that the City had negotiated in good faith as evidenced by the agreements reached with all the other unions.

Based on these findings, the court concluded that the IBEW MOU should be rejected.

Furloughs in the News

2009-08-31T15:17:00.000-07:00

The National Law Journal just did an article on the likely effect of the Maryland furlough case and also a recent case out of Hawaii. The article includes some comments I provided the reporter on the potential effect (really, none) of those cases in California. The article can be found here.

Are Furloughs Unconstitutional? Unions Claim Victory in Maryland

2009-08-25T08:57:00.000-07:00

Fraternal Order of Police v. Prince Geroge's County (U.S. District Court, Maryland) (Issued on 8/18/09)

Unions representing public employees throughout the nation have been crowing about a recent federal court decision in Maryland finding that Prince George’s County violated the federal Constitution when it furloughed nearly 6,000 county employees for 80 hours during fiscal year 2009.

Facts

Facing a $57 million budget deficit, the county implemented a furlough plan for employees. The unions sued the county arguing that the furlough plan violated the Contracts Clause of the Constitution. The district court agreed. The court held that the furloughs substantially impaired the bargaining agreements which were voluntarily entered into by both the unions and the county. Central to the court’s holding was the fact that—according to the court—the county did not fully explore alternatives to furloughs. The court also noted that the county had over $230 million in reserves—half of which were unrestricted funds—and that the county had recently touted its fiscal health in order to bolster its financial rating when issuing over $100 million in bonds.

Comments

The unions have been widely circulating this case since it represents one of the few victories unions can claim on this issue. However, what effect might this decision have in California? In my opinion, none.

First, the decision is a district court decision. While the decision is intriguing, it has no precedential value. Second, this case involved a constitutional claim and did not address any issues under labor law. This is because Maryland labor law only covers employees of the state and its school system. In contrast, all of California’s public sector employers are subject to one of several collective bargaining statutes and most of California’s public employees have exclusive representatives. Thus, in California, most furlough programs have been negotiated with unions. When furloughs are negotiated there cannot be any violation of the federal Constitution’s contracts clause.

I suppose the constitutional issue could arise if a California public employer unilaterally imposed furloughs on employees while an MOU was in effect. However, such an action is far more likely to draw an unfair practice charge with PERB. (The exception is the State of California itself which pursuant to the Dills Act, Gov Code 3516.5, has the authority to implement changes within the scope of representation during in emergency situations). Presumably, a union could also bring a breach of contract action under state law in such a situation.

The only other situation where furloughs might be imposed would be upon impasse as part of an employer's last, best, and final offer. However, in an impasse situation the MOU has already expired. So again, there cannot be any violation of the federal Constitution’s contracts clause.

So while unions around the nation may consider this case a victory, I don’t see it having any effect in California.

[Many thanks to Genevieve Ng for helping me draft this post]

Alameda Minimum Staffing Fight Continued to November 2011

2009-08-14T16:37:00.000-07:00

I’ve been following with interest a battle over a minimum staffing initiative in the City of Alameda (City). In January of this year, the City began engine company “brownouts” because of the budget crisis. In response, the firefighters’ union began circulating a petition for a local ballot measure that would mandate a minimum staffing level of 27 firefighters per shift. At the time, the City had 24 firefighters per shift.

In March, while the petition was still circulating, the City took the unusual step of filing a lawsuit against the measure’s backers. The City argued that the measure constituted “an improper exercise of the initiative power pursuant to Article II, Section 8, of the California Constitution and the City Charter” and requested that the court relieve the City Clerk from having to validate and tabulate any signatures that were gathered. While the lawsuit was still pending, the firefighters were able to gather signatures from about 25% of the electorate by June, more than enough to qualify the measure. The City then had no choice but to schedule the measure for a vote.

According to news articles, the big debate was whether the measure should be put on the ballot in November 2009, at a substantial cost to the City since it would be a stand alone matter on the ballot, or some later time. At its August 3, 2009 meeting, the City Council voted to put the measure on the ballot in November 2011—the latest it could do so. The City Council also voted to drop its lawsuit.

At first blush, it seems like a clever move by the City Council—talk about putting a measure on ice! However, if the economy improves substantially by November 2011, it might actually be harder to defeat the measure. Everyone knows that the public likes to support public safety and if there is plenty of money, people are going to be inclined to vote for anything that makes them feel safer. Had the measure been put on the ballot this year or even June 2010, given the current economic climate, the additional cost to the City from the minimum staffing measure (estimated at $4 million/year by City staff) measure might have doomed it.

Furlough Fridays Return to PERB

2009-07-07T16:45:00.001-07:00

I've been told that "Furlough Fridays" are returning to PERB. In July, PERB will be closed on July 10, 17, and 24. After that, PERB will be closed the 1st, 2nd, and 3rd Fridays of each month. If you have a filing due on a furlough Friday, refer to PERB reg. 32130. Note, PERB has not yet announced the Friday closures on its website. Until it does, I recommend confirming the closures with the Board agent or Appeal's office if you have something due just to be safe.