City Not Required to Implement Last, Best, Final Offer

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.