No Safe Harbor for Employer Who Rescinded Unilateral Change

County of Sacramento (PERB Dec. No. 1943-M) (Issued on 2/14/08)

In January 2006, the County of Sacramento notified two of its unions that it was considering changing its Retiree Health Insurance Program (RHIP). The RHIP is a non-vested County benefit that provides a monetary allowance to retirees to offset the cost of health insurance. The County’s proposal called for limiting the number of current employees who would be eligible for the RHIP upon retirement. The unions demanded to bargain over the County’s decision to change the RHIP’s eligibility requirements. The County refused on the ground that the decision to change the RHIP was not within the scope of bargaining.

In March 2006, the County approved and implemented the proposed RHIP changes. However, in September 2006, prior to the effective date of the eligibility changes for current employees, the County rescinded the RHIP changes and agreed to begin “discussions” with the unions. The unions subsequently brought an unfair practice charge which went to a hearing before an Administrative Law Judge (ALJ). The ALJ held that the unfair practice charge was moot because the County had rescinded the RHIP changes.

On exceptions filed by the unions, the Board reversed the ALJ’s proposed decision. Citing to Amador Valley Joint Union High School District (1978) PERB Decision No. 74, the Board held:

“That the later reversal or recission [sic] of a unilateral action or subsequent negotiation on the subject of a unilateral action does not excuse a violation. . . . 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.”

Analysis

There are several aspects of the Board’s decision in County of Sacramento that are problematic, especially for employers. The first involves what the Board will consider an unlawful unilateral “change.” Past Board decisions have uniformly held that to be unlawful, a unilateral change must not be merely an isolated breach of the contract or past practice, but constitute a change in policy. (Sonoma County Office of Education (1997) PERB Decision No. 1225.) In other words, the change must have “a generalized effect or continuing impact upon bargaining members’ terms and conditions of employment.” (See Walnut Valley Unified School District (1981) PERB Decision No. 160; Grant Joint Union High School District (1982) PERB Decision No. 196.)

Here, it is difficult to see what generalized effect the County’s actions had on bargaining unit members since the County rescinded the changes to the RHIP before the changes ever became effective. True, the County did not waiver from its position that the changes were outside of scope of bargaining. However, once the County rescinded the changes, it never took action on its position; in other words, there was no longer any “change.”

In finding an unlawful unilateral change despite the rescission, the Board cited to Amador Valley Joint Union High School District (1978) PERB Decision No. 74 and Marin Community College District (1980) PERB Decision No. 145 for the proposition that an unlawful unilateral change can exist even where the change is rescinded. True enough, those cases do hold that discontinuing an unfair practice does not render the prior violation moot. However, a strong argument can be made that Amador only applies where the rescission of the unilateral change does not undo the actual harm that has already occurred. Where there has been no actual harm—as the case in Sacramento County—early PERB cases have recognized a “safe harbor” type doctrine (sometimes also referred to as the “de minimus” doctrine). For example, in Muroc Unified School District (1978) PERB Decision No. 80, the Board held that a unilateral change is not unlawful where: 1) it is promptly rescinded, and 2) employees are either not harmed or made whole. (See Oakland Unified School District (1983) PERB Decision No. 367; County of Monterey (2004) PERB Decision No. 1663-M, adopting ALJ's proposed decision at p. 27.)

At first blush, the Muroc line of cases seem to conflict with Amador. However, Amador and its line of cases can be best understood as holding that even small changes are unlawful when made unilaterally. In contrast, Muroc applies in situations where a change has been promptly rectified so that it can be said that there has been no change at all.

Here, based on the facts set forth in the decision, it seems to this practitioner that the Muroc line of cases should have been applied instead of Amador. Sacramento County rescinded the proposed RHIP changes before they ever became effective and it appears no employee suffered any harm. Under these facts, it seems the County should have been allowed to utilize the “safe harbor” doctrine in Muroc.