Initial Thoughts on PERB’s Proposed Regulations

Since my last post PERB has added two more regulatory packages for consideration at its June 13, 2019 meeting. There are now a total of five: 1) exceptions; 2) recusal; 3) subpoenas and motions; 4) e-filing; and 5) SMCS. The proposed regulations are substantial and I encourage practitioners to take some time to review them.

Overall, I think the regulations are well-written and will provide much needed guidance in these areas. Because I may not be able to attend the meeting on June 13, I prepared extensive written comments to the Board. My letter to the Board is available by clicking this link: 2019-06-04 (ltr)(TGY)(PERB) Comments on Reg Packages – Fnl

In short, there are only two proposed regulations to which I expressed objection:

32150(h) – Adverse Inference for Failing to Comply with Subpoenas

PERB is proposing a regulation that expressly allows the Board to draw an adverse inference from a party’s failure to comply with a subpoena as an alternative to PERB seeking compliance with the subpoena in court. But here’s my objection. A responding party, typically an employer, may have good faith objections to a subpoena. Currently, the employer will have the opportunity for court review of the subpoena because enforcement can only be obtained from a superior court. But under this new regulation, the party issuing the subpoena can forego court enforcement and just ask for an adverse inference. This places the employer in an untenable situation since the employer will have no readily available means to obtain court review yet risks an adverse inference if it fails to comply. I think an adverse inference would only be appropriate if a party fails to comply after a final court order has been issued.

32700 – Electronic Signatures

Next, PERB is proposing a regulation to allow for electronic signatures. This is presumably in response to the Board’s decision in Regents of the University of California (2018) PERB Order Ad-459-H. I’m not opposed to electronic signatures; I think they are the future. But PERB’s regulation merely requires electronic signatures using “generally accepted security protocols or their equivalent.” I think this is far too vague of a standard given the importance of this issue. There are already regulations elsewhere in California that allow for digital signatures and provide for robust security protocols. For example, the regulations from the Secretary of State (SOS) require the use of technologies that comport to Public Key Cryptography, Signature Dynamics, or some other technology approved by the SOS. (2 Cal. Code of Regs., §22000 et. seq.)  I think PERB’s regulations should be much more specific as to the security protocols required for using electronic signatures.

Other than these two issues I only had a few additional comments on the regulations that I set forth in my letter.

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PERB Invites Comments on Regulatory Packages

PERB has published draft regulatory packages in three areas: 1) filing of exceptions; 2) standards for recusal of PERB personnel; and 3) subpoenas and motions. The draft regulatory packages can be found here. PERB is asking that stakeholders provide comments in person at its meeting on June 13, 2019, or in writing before that date.

The proposed regulations are substantial and significant and are definitely worth taking the time to review.  I hope to have some initial comments on the draft regulations soon….

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AB 1066: Striking Employees Eligible for Unemployment Benefits

AB 1066 was introduced by Assembly Member Gonzalez on February 21, 2019. This bill amends the Unemployment Insurance Code to allow striking employees to be eligible for unemployment insurance benefits after four weeks.  Specifically, AB 1066 currently provides that:

(b) The ineligibility of an individual to receive benefits pursuant to subdivision (a) shall expire after the first two four weeks of the trade dispute and shall, thereafter, be eligible.The one-week waiting period required by Section 1253 shall not be required in addition to the waiting period established in this subdivision.

This bill passed the Assembly on May 22, 2019, and is now in the Senate. According to the author, “Workers involved in a labor dispute merit support from the state, and this bill is one small step in ensuring all workers can exercise their right to strike.”

Comments:

  1. The California Chamber of Commerce has placed AB 1066 on its annual “job killers” list of bills.
  2. In reading the bill analyses for AB 1066, its crystal clear to me that the intent is to provide unemployment insurance benefits after four weeks of not working.  In other words, the “four weeks of the trade dispute” have to be continuous.
  3. For the public sector, I can’t think of a strike in recent times that lasted more than four continuous weeks. So this bill will practically have little effect on the public sector.
  4. However, I do believe the bill as written contains some ambiguity regarding the intent that the strike last a continuous four weeks. I’m specifically worried about intermittent strikes.  For example, if employees go on strike for 2 days on April 1st, and then go on strike again for two days on May 15th, would the employees striking on May 15th be eligible?  The intent is clear that they wouldn’t be eligible. But technically, the trade dispute would have lasted “four weeks” by that time. So ideally this language would be cleaned up to make that clear.
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Supreme Court: Not Yet Time to Examine “California Rule” On Pensions

Cal Fire Local 2881 et al. v. California Public Employees’ Retirement System et al. (State of California) (2019) Case No. S239958 (Issued on 3/4/19)

Today the California Supreme Court issued its long-awaited decision in the Cal Fire case. The issue was whether PEPRA unlawfully eliminated the opportunity for employees to purchase “air time” service credit. The Court held that because the Legislature did not intend to create a contractual right to the purchase of air time, there was no contractual impairment when that option was eliminated. Further, the Court held that air time was not a core pension right because it was not granted as deferred compensation for work performed.

However, all eyes were on this case to see whether the Court would take the opportunity to address the “California Rule” on pensions.  The Court declined the invitation:

The state and many amici curiae have urged us to use this decision as an occasion to re-examine the California Rule, the doctrine developed in our prior decisions defining the scope of constitutional protection afforded pension rights. … Underlying the California Rule is the constitutional contract clause, which prohibits state laws that impair contractual obligations. Because we conclude that California’s public employees have never had a contractual right to the continued availability of the opportunity to purchase ARS credit, the question of whether PEPRA worked an unconstitutional impairment of protected rights does not arise. … Our decision in this matter therefore expresses no opinion on the various issues raised by the state and amici curiae relating to the scope of the California Rule.

Comments:

  1. Based on the oral arguments, this holding was not unexpected. Indeed, the decision was unanimous (although Justice Kruger wrote a concurring opinion).
  2. Because the Court avoided addressing the California Rule, all eyes will now be on the Marin Ass’n of Public Employees v. Marin County Employees’ Retirement Ass’n case (Supreme Court Case No. S237460). That case has been on hold pending this case so there still needs to be briefing.
  3. To the extent one can “read into” this decision, I think it’s significant that the Court recognized the existence of a “California Rule” and even characterized the request of the State—made at the direction of Governor Brown—as seeking to modify or depart from the California Rule. Perhaps it is insignificant, but framing the issue as such potentially makes any change to the California Rule that much harder.

 

 

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Gov. Newsom Makes First Appointment to PERB

Lou Paulson at LA County Fire Department news conference in 2015

In one of his first acts, Governor Newsom has appointed Lou Paulson to the Board of the Public Employment Relations Board (PERB).  Mr. Paulson is the immediate past President of the California Professional Fire Fighters association, the officially chartered state council for the International Association of Fire Fighters. He has served on numerous state and national boards and committees, including the Executive Board of the California Federation of Labor and the Advisory Board for the University of California Labor Center.

Mr. Paulson joins the three other members of the Board at PERB: Eric Banks, Arthur Krantz, and Erich Shiners. A fifth board seat remains open.

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