Status of Binding Interest Arbitration in California

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In June 2010, voters in the City of Vallejo passed Measure A which repealed the binding interest arbitration requirement from the City’s charter.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In November 2010, voters in the City of Stockton passed Measure H which repealed the binding interest arbitration requirement for firefighters.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:

1. Alameda
2. Anaheim
3. Gilroy
4. Hayward
5. Modesto
6. Monterey
7. Napa
8. Oakland
9. Oroville
10. Palo Alto
11. Petaluma
12. Redwood City
13. Sacramento City
14. Sacramento County
15. Salinas
16. San Francisco
17. San Jose (Amended 2010)
18. San Leandro
19. San Luis Obispo
20. Santa Cruz
21. Santa Rosa
22. Stockton
23. 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 Vallejo had it too, but Vallejo repealed binding interest arbitration in 2010.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?

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

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

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:

1. 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.  
2. 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.
3. 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….

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:

1. March 19, 2008: Severance petition filed
2. April 14, 2008: PERB determines there is sufficient proof of support
3. May 6, 2008: Settlement conference held
4. August 15, 2008: Formal hearing held
5. October 28, 2008: Transcripts completed. (PERB noted that the transcripts were delayed due to the lack of a state budget).
6. November 27, 2008: Closing briefs filed.
7. December 17, 2008: Proposed decision issued. Appeal filed.
8. 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

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