PERB Overrules Contracting-Out Waiver Case

Long Beach Community College District (PERB Dec. No. 1941E) (Issued on 1/30/08)

The MOU between the Long Beach Community College District (District) and its Police Officers Association contained a management rights clause which reserved to management the right to “contract out work.” Relying on this clause, the District made the decision to contract out all of its police services to the City of Long Beach without negotiating with the union. The union asserted in its unfair practice charge that the waiver was intended only to apply to contracting out for armed services during special campus events, and was not intended as a general waiver over all contracting out decisions.

In 2003, PERB’s Office of the General Counsel dismissed the union’s unfair practice charge on the ground that the MOU language constituted a waiver of the union’s right to negotiate over contracting out decisions. The union appealed the dismissal to the Board which overturned the dismissal in Long Beach Community College District (2003) PERB Dec. No. 1568E (Long Beach I). In Long Beach I, the Board found that the phrase “contract out work” was ambiguous because some contracting out decisions were negotiable or some were not, and it was not clear from the MOU language itself what rights were being waived. The Board did hold, however, that the District could assert its defense at a hearing before an Administrative Law Judge (ALJ) where presumably the District would submit extrinsic evidence on the meaning of the disputed MOU language. In reaching its decision in Long Beach I the Board expressly overruled Barstow Unified School District (1996) PERB Dec. No. 1138.

The case then went before an ALJ. The proposed decision of the ALJ found that the District failed to demonstrate that the union had waived its right to negotiate over all contracting out decisions. Accordingly, the ALJ found that the District had committed an unfair practice.

The District then filed exceptions with the Board. In its decision, Long Beach Community College District (2008) (PERB Dec. No. 1941E) (Long Beach II), the Board overruled Long Beach I finding that the MOU language “contract out work” was a clear and unambiguous waiver of the union’s right to negotiate over the District’s decision.

Noteworthy is the fact that the Board gave very little weight to the union’s extrinsic evidence that the MOU language was not a far-reaching waiver. Prior PERB decisions have suggested that extrinsic evidence may be utilized by a party to demonstrate a “clear and unmistakable” waiver. This decision may signal a distaste by the Board for resorting to extrinsic evidence to prove a waiver. Such a move makes sense since logically, contract language cannot be “clear and unmistakable” if one has to resort to extrinsic evidence to ascertain its meaning.

Other Notes

Interestingly, this is not the first time the Board has overturned a prior Board’s decision in the same case, when that case came back before the Board. Two years ago, the Board in State of California (Department of Corrections) (2006) (PERB Dec. No. 1826S) overturned the prior Board’s decision in State of California (Department of Corrections) (2003) PERB Decision No. 1579-S (Corrections). As a side note, in that decision the Board ordered the prior Board’s decision to be “vacated.” In Long Beach II, the Board ordered the prior Board’s decision reversed and overruled. It is not clear whether vacating a decision is any different than overruling it; however, the effect presumably is the same.

Also interesting in Long Beach II is that the Board found that the District failed to negotiate with the union over the “effects” of its decision. To remedy that violation, the Board ordered the District to provide backpay to all the police officers who were laid off going back to August 1, 2003. Depending on how much the officers were able to mitigate their damages, the District’s backpay liability could be significant. The backpay order probably assures that neither party is fully satisfied with the Board’s decision in Long Beach II. It will be interesting to see if one or both of the parties attempt to take this case to the Court of Appeal.