Trustees of the California State University (2009) PERB Decision No. 1876-Ha (Issued on 4/15/09)
Is where an employee can park his or her car—as opposed to how much the employee must pay to park—a subject within the scope of representation (ie negotiable) under HEERA? In Trustees of the California State University (2006) PERB Decision No. 1876-H (Trustees I), the Board answered in the negative. There, the Board analyzed whether the location of employee parking qualified as a “term and condition” of employment under a three-part test. Under that test, a subject is within the scope of representation if it: (1) involves the employment relationship; (2) the subject is of such concern to management and employees that conflict is likely to occur, and the mediatory influence of collective negotiations is the appropriate means of resolving the conflict; and (3) the employer's obligation to negotiate would not significantly abridge its freedom to exercise those managerial prerogatives essential to the achievement of its mission. In Trustees I, the Board found that the location of employee parking did not meet the first prong of the test—involve the employment relationship—and dismissed the charge.
The union appealed and in California Faculty Ass’n v. Public Employment Relations Board (2006) 160 Cal.App.4th 609, the court of appeal overturned Trustees I. The court found the Board’s holding that the location of parking did not involve the employment relationship to be “clearly erroneous” because it conflicted with both federal precedent and the Board’s own precedent. The court then remanded the case back to the Board to consider other factors which the Board had not reached in its decision.
In Trustees of the California State University (2009) PERB Decision No. 1876-Ha (Trustees II), the Board considered the two other prongs of the three-part test for determining whether a subject matter is a term and condition of employment. First, the Board considered the second-prong of the test which asks whether the subject is of such concern to employees and management that conflict is likely to occur. The Board noted that the location of parking had often changed over the years and there was little evidence that the subject spawned grievances in the past. In addition, the Board held that even if the subject was likely to cause conflict, negotiations were not the proper method of resolving the conflict because the needs of students would not be properly represented.
Next, the Board considered the third-prong of the test which is whether requiring negotiations would abridge a fundamental management prerogative. The Board found that it would. Specifically, the Board found that the primary reason that CSU built the new parking facilities was to provide parking to students. Requiring CSU to negotiate over whether employees could park in these facilities would, according to the Board, significantly abridge CSU’s freedom to manage its campus operations. Because the Board found that the union had failed to establish the second and third prongs of the test, it dismissed the charge.
Comments:
1. I thought the Board’s holding on the second-prong of the test—whether the subject is of such concern to management and employees that conflict is likely to occur—was interesting. I don’t recall another case with a similar holding. (There may be one out there I just don’t ever recall one). Usually, the parties just concede the second prong on the assumption that since you’re currently fighting over it, it must be something likely to cause conflict. I’m not sure how viable this argument is going to be in the future on other subjects. My personal feeling is that this was a very limited holding on this specific issue and I don’t expect PERB to find many other subjects failing the second-prong.
2. The more important holding in this case involves PERB’s finding that students are third parties who can be taken into consideration in determining whether a subject infringes on fundamental management rights. How far this will be taken in the future remains to be seen. However, I can certainly see this having an impact under HEERA and EERA where student learning is involved. I can also see this argument being made under the Dills Act and MMBA in the context of providing services to the public. I expect in all these situations management will argue that requiring negotiations on certain subjects will infringe on the its fundamental mission to teach students, provide services, etc.
3. Because the court of appeal overturned the Board once already in this matter, I expect that CFA will again appeal. It’s interesting to note that the MOU between CSU and CFA that was in effect when this dispute began in 2002 has long expired. A new MOU has been negotiated and is in effect to 6/30/10. The new MOU does not mention parking locations, which means that how this decision ends will still have real meaning.
4. One final note, the California Supreme Court issued its Claremont decision in 2006; about a year and a half before the court of appeal issued its decision overturning Trustees I. Claremont dealt with the scope of representation under the MMBA, not HEERA, but the two statutes are very similar and both are (somewhat) modeled after the NLRA. The test imposed by the Court in Claremont is a little different than the Anaheim test historically used by PERB. In the future, it will be interesting to see if the courts or PERB attempt to reconcile these two tests.
(Correction: My initial post incorrectly said that the court of appeal decision was issued in 2006, a few months before Claremont was issued. That's incorrect. The court of appeal decision was issued in 2008. The version of the court of appeal decision on Westlaw actually has an incorrect date of 2006 in the body of the decision which is what threw me off.)
Saturday, April 18, 2009
Wednesday, April 1, 2009
Alexander v. Gardner-Denver is Dead (No Fooling)
14 Penn Plaza LLC v. Pyett (U.S. Supreme Court Case No. 07-581) (Issued 4/1/09)
Can an individual employee be forced to arbitrate an employment discrimination claim (e.g. a Title VII complaint for race discrimination) where the employee is covered by an arbitration provision in a CBA or MOU that expressly covers such claims? If you had asked me this question yesterday I would have said absolutely not, citing to Alexander v. Gardner-Denver (1974) 415 U. S. 36 (Gardner-Denver). Today it’s different. That’s because of the Supreme Court’s decision in 14 Penn Plaza LLC v. Pyett issued on April 1st. At issue in 14 Penn Plaza was the following provision in a CBA between an employer and SEIU:
“§30 NO DISCRIMINATION. There shall be no discrimination against any present or future employee by reason of race, creed, color, age, disability, national origin, sex, union membership, or any other characteristic protected by law, including, but not limited to, claims made pursuant to Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the New York State Human Rights Law, the New York City Human Rights Code, . . . or any other similar laws, rules, or regulations. All such claims shall be subject to the grievance and arbitration procedures (Articles V and VI) as the sole and exclusive remedy for violations. Arbitrators shall apply appropriate law in rendering decisions based upon claims of discrimination.”
The Court of Appeal, relying on Gardner-Denver, had ruled that the above provision was unenforceable. The Supreme Court reversed in a 5-4 decision authored by Justice Thomas and joined by Roberts, Scalia, Kennedy, and Alito.
The majority opinion first held that Gardner-Denver was not controlling since that decision did not involve an arbitration provision that expressly covered discrimination claims. After distinguishing Gardner-Denver, the Court went on to attack the “broad dicta” contained in the Gardner-Denver decision and argued that the dicta “rested on a misconceived view of arbitration that this Court has since abandoned.”
The majority opinion drew a dissent authored by Souter and joined by Stevens, Ginsburg and Breyer. According to the dissent, “The issue here is whether employees subject to a collective-bargaining agreement (CBA) providing for conclusive arbitration of all grievances, including claimed breaches of the Age Discrimination in Employment Act . . . lose their statutory right to bring an ADEA claim in court, §626(c). Under the 35-year-old holding in Alexander v. Gardner-Denver Co., 415 U. S. 36 (1974), they do not, and I would adhere to stare decisis and so hold today."
Comments:
1. This decision is huge. Gardner-Denver has been a foundational decision in labor law for over 35 years. It’s one of the first cases you read in any labor law class. For all those years, the dominant view has always been that under Gardner-Denver an individual employee's statutory right to bring an employment discrimination claim in court trumped any arbitration provision in a union contract.
2. Given the significance of this decision, I was surprised that the dissent was so tame. I would have expected more fireworks. Perhaps the dissent was comforted by the fact that the majority decision rested on statutory interpretation of the NLRA and ADEA. Given the political make-up of Congress and the Presidency, the dissent may be thinking that there is a good chance this decision will be overturned.
3. In the meantime, I expect a rush among private sector employers to try to get provisions like the one in 14 Penn Plaza into their CBA’s. This is because private sector employers have never lost their love affair with binding arbitration, despite the hostility the courts have shown towards binding arbitration in the employment context.
4. I think the initial reaction among public sector employers will be the same. However, I think once public sector employers consider the pros and cons of such provisions, whether to pursue one will depend on individualized factors for each entity. For example, from a purely monetary standpoint, an employer would probably save money if all employment claims had to be arbitrated, but not necessarily so. Certainly, I think judgments would be lower with an arbitrator versus a jury. Attorneys fees would be lower, but not necessarily by much depending on how much discovery is allowed. However, assuming arbitration is cheaper than civil litigation more cases may go to arbitration than would have been filed in court. An example of this can be seen with the MMBA. Prior to PERB taking jurisdiction over the MMBA, few unions brought unfair practice charges in court because it was time-consuming and expensive. Now, with PERB providing an administrative remedy, far more unfair practice charges are being filed every year than were filed with the courts prior to PERB's assumption of jurisdiction.
5. In addition, if the arbitration provision is structured such that a union has a duty of fair representation with respect to employment discrimination claims, I think far more claims would be arbitrated than would be litigated in court. This is because traditional plaintiff-side attorneys - who all work on contingency - only select the best cases. In contrast, if there was a duty of fair representation, I think a union would be forced to arbitrate some cases that a traditional plaintiff-side attorney would not take.
6. Finally, all this may be moot in California unless the California courts follow the lead of the Supreme Court. This is because most employment claims in California are brought under the Fair Employment and Housing Act since it is much broader than federal law. It is not at all clear whether California courts would follow the reasoning in 14 Penn Plaza with respect to FEHA claims. If the California courts didn't go along, I think the effect of 14 Penn Plaza in California will be very limited.
Can an individual employee be forced to arbitrate an employment discrimination claim (e.g. a Title VII complaint for race discrimination) where the employee is covered by an arbitration provision in a CBA or MOU that expressly covers such claims? If you had asked me this question yesterday I would have said absolutely not, citing to Alexander v. Gardner-Denver (1974) 415 U. S. 36 (Gardner-Denver). Today it’s different. That’s because of the Supreme Court’s decision in 14 Penn Plaza LLC v. Pyett issued on April 1st. At issue in 14 Penn Plaza was the following provision in a CBA between an employer and SEIU:
“§30 NO DISCRIMINATION. There shall be no discrimination against any present or future employee by reason of race, creed, color, age, disability, national origin, sex, union membership, or any other characteristic protected by law, including, but not limited to, claims made pursuant to Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the New York State Human Rights Law, the New York City Human Rights Code, . . . or any other similar laws, rules, or regulations. All such claims shall be subject to the grievance and arbitration procedures (Articles V and VI) as the sole and exclusive remedy for violations. Arbitrators shall apply appropriate law in rendering decisions based upon claims of discrimination.”
The Court of Appeal, relying on Gardner-Denver, had ruled that the above provision was unenforceable. The Supreme Court reversed in a 5-4 decision authored by Justice Thomas and joined by Roberts, Scalia, Kennedy, and Alito.
The majority opinion first held that Gardner-Denver was not controlling since that decision did not involve an arbitration provision that expressly covered discrimination claims. After distinguishing Gardner-Denver, the Court went on to attack the “broad dicta” contained in the Gardner-Denver decision and argued that the dicta “rested on a misconceived view of arbitration that this Court has since abandoned.”
The majority opinion drew a dissent authored by Souter and joined by Stevens, Ginsburg and Breyer. According to the dissent, “The issue here is whether employees subject to a collective-bargaining agreement (CBA) providing for conclusive arbitration of all grievances, including claimed breaches of the Age Discrimination in Employment Act . . . lose their statutory right to bring an ADEA claim in court, §626(c). Under the 35-year-old holding in Alexander v. Gardner-Denver Co., 415 U. S. 36 (1974), they do not, and I would adhere to stare decisis and so hold today."
Comments:
1. This decision is huge. Gardner-Denver has been a foundational decision in labor law for over 35 years. It’s one of the first cases you read in any labor law class. For all those years, the dominant view has always been that under Gardner-Denver an individual employee's statutory right to bring an employment discrimination claim in court trumped any arbitration provision in a union contract.
2. Given the significance of this decision, I was surprised that the dissent was so tame. I would have expected more fireworks. Perhaps the dissent was comforted by the fact that the majority decision rested on statutory interpretation of the NLRA and ADEA. Given the political make-up of Congress and the Presidency, the dissent may be thinking that there is a good chance this decision will be overturned.
3. In the meantime, I expect a rush among private sector employers to try to get provisions like the one in 14 Penn Plaza into their CBA’s. This is because private sector employers have never lost their love affair with binding arbitration, despite the hostility the courts have shown towards binding arbitration in the employment context.
4. I think the initial reaction among public sector employers will be the same. However, I think once public sector employers consider the pros and cons of such provisions, whether to pursue one will depend on individualized factors for each entity. For example, from a purely monetary standpoint, an employer would probably save money if all employment claims had to be arbitrated, but not necessarily so. Certainly, I think judgments would be lower with an arbitrator versus a jury. Attorneys fees would be lower, but not necessarily by much depending on how much discovery is allowed. However, assuming arbitration is cheaper than civil litigation more cases may go to arbitration than would have been filed in court. An example of this can be seen with the MMBA. Prior to PERB taking jurisdiction over the MMBA, few unions brought unfair practice charges in court because it was time-consuming and expensive. Now, with PERB providing an administrative remedy, far more unfair practice charges are being filed every year than were filed with the courts prior to PERB's assumption of jurisdiction.
5. In addition, if the arbitration provision is structured such that a union has a duty of fair representation with respect to employment discrimination claims, I think far more claims would be arbitrated than would be litigated in court. This is because traditional plaintiff-side attorneys - who all work on contingency - only select the best cases. In contrast, if there was a duty of fair representation, I think a union would be forced to arbitrate some cases that a traditional plaintiff-side attorney would not take.
6. Finally, all this may be moot in California unless the California courts follow the lead of the Supreme Court. This is because most employment claims in California are brought under the Fair Employment and Housing Act since it is much broader than federal law. It is not at all clear whether California courts would follow the reasoning in 14 Penn Plaza with respect to FEHA claims. If the California courts didn't go along, I think the effect of 14 Penn Plaza in California will be very limited.
Monday, March 23, 2009
Just in Case You Didn't Know . . .
International Union of Operating Engineers v. County of Plumas (Case No. 07-16001) (9th Cir. 2009)
The introduction to this recent Ninth Circuit case says it all:
“James M. Cain, whose novels were often adapted into film noir, described his body of work by saying ‘I write of the wish that comes true—for some reason, a terrifying concept.’ The plight of Plumas County would have doubtless piqued his interest."
"Plumas County thought that federal court would provide a more hospitable forum for its defense against a suit seeking to compel arbitration, so it removed the action to federal court. The district court ordered Plumas County to arbitrate. Now, the County argues that the district court had no business deciding the question because the court lacked subject matter jurisdiction over the case that the County removed. We conclude that Plumas was not barred from raising the jurisdictional argument and that the district court lacked subject matter jurisdiction. We remand to the district court the question of whether attorneys fees should be assessed.”
If you have a few minutes in your day, this case is worth a read. The Ninth Circuit was clearly annoyed at having to issue a decision on what should have been obvious – that the National Labor Relations Act does not apply to public entities – and directs some choice language at both parties.
The introduction to this recent Ninth Circuit case says it all:
“James M. Cain, whose novels were often adapted into film noir, described his body of work by saying ‘I write of the wish that comes true—for some reason, a terrifying concept.’ The plight of Plumas County would have doubtless piqued his interest."
"Plumas County thought that federal court would provide a more hospitable forum for its defense against a suit seeking to compel arbitration, so it removed the action to federal court. The district court ordered Plumas County to arbitrate. Now, the County argues that the district court had no business deciding the question because the court lacked subject matter jurisdiction over the case that the County removed. We conclude that Plumas was not barred from raising the jurisdictional argument and that the district court lacked subject matter jurisdiction. We remand to the district court the question of whether attorneys fees should be assessed.”
If you have a few minutes in your day, this case is worth a read. The Ninth Circuit was clearly annoyed at having to issue a decision on what should have been obvious – that the National Labor Relations Act does not apply to public entities – and directs some choice language at both parties.
Friday, March 20, 2009
Layoffs Are a Management Right
International Association of Fire Fighters, Local 188, AFL-CIO v. PERB (2009) __ Cal.App.4th __. (Challenge to City of Richmond (2004) PERB Decision No. 1720-M.)
Facing significant economic constraints, in late 2003 the City of Richmond decided to lay off 78 city employees, including 18 firefighters. The firefighter’s union, Local 188, made a request to bargain over the City’s decision to lay off firefighters but failed to request to bargain the effects of the layoff decision. When the City declined to bargain over the decision, Local 188 responded by filing an unfair practice charge with PERB, asserting that the reduced staffing level presented a threat to employee safety and affected workload, and therefore the layoff decision itself was subject to bargaining. A PERB regional attorney dismissed that aspect of the unfair practice charge, holding that the decision to lay off personnel is not within the scope of bargaining. The regional attorney further held that while the effects of such a decision are subject to bargaining, Local 188 never demanded to bargain over effects. On appeal, PERB sustained the dismissal, declining to issue a complaint that would have sent the matter to a full hearing. Local 188 then sought to compel PERB to issue a complaint.
The most significant facet of the court’s opinion is its interpretation of the California Supreme Court’s decision in Firefighters Union v. City of Vallejo (1974) 12 Cal.3d 608. The Vallejo Court held that due to the dangerous nature of firefighting, “to the extent [] that the decision to lay off some employees affects the workload and safety of the remaining workers, it is subject to bargaining . . .” Vallejo, supra, 12 Cal.3d at p. 622. Local 188 argued that the Vallejo decision thus requires public employers to bargain over firefighter staffing, meaning that the employer cannot lay off firefighter personnel unless and until it bargains fully over that decision – an interpretation that would cause extensive delays before layoffs could be implemented, and that would intrude on the basic management prerogative of determining the necessity for layoffs. Rejecting Local 188’s argument, the court of appeal held that, under Vallejo, the decision to reduce staffing levels through layoffs is a managerial prerogative and not subject to bargaining. The court further confirmed that the Union may bargain over residual safety and workload issues which occur for the “remaining employees” after the reduction in staffing is achieved.
Comments
This decision should finally bring an end to the 30-year debate over the meaning of the Vallejo decision. For years, unions - particularly firefighters - have asserted that layoffs are negotiable if the workload and safety of remaining employees is affected. In contrast, management has always interpreted Vallejo to mean that only the effects of a layoff decision are negotiable (e.g. safety and workload) and that the layoff decision itself remains a management right. Here, the court unequivacally held that layoffs decision are a management right. Hopefully end of the story.
Facing significant economic constraints, in late 2003 the City of Richmond decided to lay off 78 city employees, including 18 firefighters. The firefighter’s union, Local 188, made a request to bargain over the City’s decision to lay off firefighters but failed to request to bargain the effects of the layoff decision. When the City declined to bargain over the decision, Local 188 responded by filing an unfair practice charge with PERB, asserting that the reduced staffing level presented a threat to employee safety and affected workload, and therefore the layoff decision itself was subject to bargaining. A PERB regional attorney dismissed that aspect of the unfair practice charge, holding that the decision to lay off personnel is not within the scope of bargaining. The regional attorney further held that while the effects of such a decision are subject to bargaining, Local 188 never demanded to bargain over effects. On appeal, PERB sustained the dismissal, declining to issue a complaint that would have sent the matter to a full hearing. Local 188 then sought to compel PERB to issue a complaint.
The most significant facet of the court’s opinion is its interpretation of the California Supreme Court’s decision in Firefighters Union v. City of Vallejo (1974) 12 Cal.3d 608. The Vallejo Court held that due to the dangerous nature of firefighting, “to the extent [] that the decision to lay off some employees affects the workload and safety of the remaining workers, it is subject to bargaining . . .” Vallejo, supra, 12 Cal.3d at p. 622. Local 188 argued that the Vallejo decision thus requires public employers to bargain over firefighter staffing, meaning that the employer cannot lay off firefighter personnel unless and until it bargains fully over that decision – an interpretation that would cause extensive delays before layoffs could be implemented, and that would intrude on the basic management prerogative of determining the necessity for layoffs. Rejecting Local 188’s argument, the court of appeal held that, under Vallejo, the decision to reduce staffing levels through layoffs is a managerial prerogative and not subject to bargaining. The court further confirmed that the Union may bargain over residual safety and workload issues which occur for the “remaining employees” after the reduction in staffing is achieved.
Comments
This decision should finally bring an end to the 30-year debate over the meaning of the Vallejo decision. For years, unions - particularly firefighters - have asserted that layoffs are negotiable if the workload and safety of remaining employees is affected. In contrast, management has always interpreted Vallejo to mean that only the effects of a layoff decision are negotiable (e.g. safety and workload) and that the layoff decision itself remains a management right. Here, the court unequivacally held that layoffs decision are a management right. Hopefully end of the story.
Thursday, March 19, 2009
Card Check Already a Reality in California’s Public Sector
As I noted in my previous blog entry, both unions and employers are gearing up for a huge fight over the Employee Free Choice Act (EFCA). Because the EFCA amends the National Labor Relations Act, which does not cover the public sector, it will not directly affect California public employers. Even if it did, California public employers have been living with card check for years. In California, all the statutes covering the public sector, except for the Dills Act, require the recognition of an exclusive representative solely by a showing of majority support (ie card check). (See MMBA (Gov Code 3507.1); EERA (Gov. Code 3544; 3544.1); HEERA (Gov Code 3573; 3574 (Note: HEERA is unique in that the employer can initially challenge recognition by card check if it reasonable doubts that the union has majority support); TCEPGA (Gov Code 71636.3); TCIELRA (Gov Code 71823); TEERA (PUC Code 99564.1).)
Arguably, card check in the public sector is not that significant because the vast of majority of public sector employees in California are already unionized, and have been for years. In the private sector, the advent of card check will surely spawn a wave of organizing efforts around the country. While not all of those efforts will be successful even with card check, many of them will be. The possibility of unionizing thousands of unorganized workplaces throughout the country is why the EFCA is such a huge issue.
Also, I was reminded today that a few years ago the Legislature amended the Agricultural Labor Relations Act to provide for mandatory interest arbitration (or what the Legislature referred to as “mandatory mediation” – a misnomer if there ever was one) of the first contract after a new exclusive representative has been certified. I’m not sure how many times, if any, that law has been utilized since its enactment. But anyone wondering what the interest arbitration system under the EFCA might look like can take a look at the ALRB’s statutes and regulations to get an idea.
Wednesday, March 18, 2009
Employee Free Choice Act More Than Just Card Check
Both unions and employers around the country are marshaling their forces for the upcoming war over the Employee Free Choice Act (EFCA) (H.R. 1409, S. 560). Dubbed “card check” by employers, the EFCA would easily be the most significant amendment to the National Labor Relations Act since its enactment. Under the EFCA, the NLRB would be required to certify a union as the exclusive representative if it presented evidence (usually signed authorization cards) of majority support. In such a situation, there would be no secret ballot election.
However, the EFCA does a lot more than just authorize card check. The EFCA also imposes a system of mandatory interest arbitration for the first contract after certification. Specifically, the EFCA would amend Section 8 of the NLRA to require the following:
1. Within 10 days of a request from the newly certified exclusive representative, the parties must begin bargaining and “shall make every reasonable effort to conclude and sign a collective bargaining agreement.”
2. 90 days after bargaining begins, either party may request mediation with the Federal Mediation and Conciliation Service (FMCS).
3. The FMCS then has 30 days to mediate the dispute. If the FMCS is unable to resolve the dispute within 30 days after the request for mediation, the FMCS shall refer the dispute to an arbitration board (which will be established through regulations). The EFCA provides that the “arbitration panel shall render a decision settling the dispute and such decision shall be binding upon the parties for a period of 2 years.”
Thus, the EFCA not only provides for a card check system, but virtually guarantees that any newly certified union will have a 2-year contract in place before expiration of the statutory one-year contract bar.
Stay tuned.... in the coming weeks I intend to blog more about the EFCA...
However, the EFCA does a lot more than just authorize card check. The EFCA also imposes a system of mandatory interest arbitration for the first contract after certification. Specifically, the EFCA would amend Section 8 of the NLRA to require the following:
1. Within 10 days of a request from the newly certified exclusive representative, the parties must begin bargaining and “shall make every reasonable effort to conclude and sign a collective bargaining agreement.”
2. 90 days after bargaining begins, either party may request mediation with the Federal Mediation and Conciliation Service (FMCS).
3. The FMCS then has 30 days to mediate the dispute. If the FMCS is unable to resolve the dispute within 30 days after the request for mediation, the FMCS shall refer the dispute to an arbitration board (which will be established through regulations). The EFCA provides that the “arbitration panel shall render a decision settling the dispute and such decision shall be binding upon the parties for a period of 2 years.”
Thus, the EFCA not only provides for a card check system, but virtually guarantees that any newly certified union will have a 2-year contract in place before expiration of the statutory one-year contract bar.
Stay tuned.... in the coming weeks I intend to blog more about the EFCA...
Saturday, March 14, 2009
Vallejo MOUs May Be Voided in Bankruptcy
According to the Vallejo Times Herald, the bankruptcy judge for the City of Vallejo ruled on Friday that the City might be able to void its labor contracts as a way to escape bankruptcy. The ruling by the bankruptcy judge answers a question that has never been answered in California: whether public agencies in California can void labor contracts through Chapter 9 bankruptcy proceedings. Although the judge held that labor contracts may be voided through bankruptcy, the judge declined to rule on whether the City of Vallejo could do so in its situation. Instead, the court urged the parties to continue negotiations.
Based on the court's decision, it's obvious the judge is hoping to place pressure on the parties - especially the unions - to reach a settlement so that the court won't have to take the next step and rule on whether the contracts should be voided. The ball appears to be in the unions' court, and it will be interesting to see what they do. The eyes of unions and public agencies throughout California will be watching.
Based on the court's decision, it's obvious the judge is hoping to place pressure on the parties - especially the unions - to reach a settlement so that the court won't have to take the next step and rule on whether the contracts should be voided. The ball appears to be in the unions' court, and it will be interesting to see what they do. The eyes of unions and public agencies throughout California will be watching.
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