Boling v PERB (Cal. Supreme Court Case No. S242034)

In 2012, San Diego Mayor Jerry Sanders helped launch the “Citizens Pension Reform Initiative” (CPRI) in an effort to address the unsustainability of the City’s pension obligations. CPRI supporters gathered enough signatures to qualify the CPRI for the ballot. In November 2012, over 65% of the citizens of San Diego voiced their support for pension reform by voting for the CPRI.

The unions then filed unfair practice charges against the City arguing that Mayor Sanders was acting in his official capacity in supporting the CPRI and therefore the City had an obligation to bargain the initiative with the unions, which it failed to do. The City lost at PERB but prevailed at the Court of Appeal.  Today, the California Supreme Court issued a decision overturning the appellate decision and remanding this case for further proceedings.

The key issue in this case was whether Mayor Sanders’ involvement in Proposition B turned it into an action by the City, which in turn required the City to meet and confer with the unions. The Supreme Court held that since Mayor Sanders was the city’s chief executive and empowered by the city charter to make policy recommendations in labor relations matter, he was required to meet and confer with the unions prior to advocating for Proposition B. The Supreme Court reached this holding even though it was undisputed that Proposition B actually met the support requirements for a citizen’s initiative. According to the Supreme Court, “Allowing public officials to purposefully evade the meet-and confer requirements of the MMBA by officially sponsoring a citizens’ initiative would seriously undermine the policies served by the statute: fostering full communication between public employers and employees, as well as improving personnel management and employer-employee relations.”

But the Supreme Court said that, “The line between official action and private activities undertaken by public officials may be less clear in other circumstances… Whether an official played such a major role will generally be a question of fact, on which PERB’s conclusion is entitled to deference.”

Comments

1. [Disclosure: I helped represent the City in this case before PERB.] This decision is disappointing but not unexpected given the questions at oral argument. Without a doubt, this is a big victory for PERB. The Supreme Court decision gives tremendous deference to PERB’s factual and legal findings. Such deference will continue to make it very difficult to overturn any PERB decision in the appellate courts.
2. With respect to the merits of the case, because the Supreme Court deferred to PERB’s determination that Mayor Sanders was acting on behalf of the City, it was an easy call to require the City to bargain with the unions. One of the questions left unanswered is what, if anything, Mayor Sanders could have done to separate his advocacy of Proposition B from his official duties. The Supreme Court did leave open the possibility that government officials can separate their official actions from their private activities.  However, the Court did not provide any guidance on what a government official would have to do to make such a distinction clear.
3. In terms of a remedy, the Supreme Court remanded this case back to the court of appeal for consideration.

Rebecca Friedrichs is back. But for the death of Justice Scalia, everyone would be talking about “Friedrichs” instead of Mark Janus. But earlier this month, Friedrichs, along with several other teachers, filed a class-action lawsuit against the California Teachers Association and the National Education Association seeking to recoup the agency fees taken from them prior to the Janus decision. The case is titled Scott Wilford et al v. National Education Association (C.D. Cal. 8:18-cv-01169-JVS-ADS).  The primary cause of action is for violation of plaintiffs’ constitutional rights under 42 U.S.C. 1983.

I think the plaintiffs have a tough road ahead of them.  After the Supreme Court’s decision in Harris v. Quinn—which held that agency fees may not be taken from IHSS workers—a similar lawsuit was brought against the State of Washington and SEIU.  (Hoffman v. Inslee (W.D. Wash. Oct. 20, 2016) 2016 WL 6126016.)  That lawsuit also involved a cause of action under §1983. In the Washington case, the court rejected plaintiffs’ claims on the ground that a private party sued under §1983 is not liable for money damages if that party was acting in good faith reliance on a facially valid state law. The decision was a district court decision so it’s not binding here. But Friedrichs and the other plaintiffs will have to deal with the same argument: that the public agencies and unions were relying on state law that was supported by the Abood decision which stood for 40 years.

Janus v. American Federation of State, County, and Municipal Employees (2018) 585 U. S. ____

The Supreme Court issued its much-anticipated decision in Janus v AFSCME today. In a 5-4 decision, the majority held that forcing public employees to pay “agency fees” to their union, even if they choose not to join and strongly object to the positions the union takes in collective bargaining and related activities, violates the free speech rights of nonmembers by compelling them to subsidize private speech on matters of substantial public concern.

In reaching this holding the majority overturned Abood v. Detroit Bd. of Ed. (1977) 431 U. S. 209, which for 41 years has sanctioned the collection of agency fees as a careful balance between an employee’s first amendment rights and the right of public employers to manage their workforces. In overturning Abood, the majority rejected the arguments that agency fees are necessary to achieve “labor peace” and to avoid free-riders. According to the majority, many states and the federal government don’t allow agency fees yet have been able to achieve “labor peace.”  The majority was also dismissive of the “free-rider” issue, stating that,

Petitioner strenuously objects to this free-rider label. He argues that he is not a free rider on a bus headed for a destination that he wishes to reach but is more like a person shanghaied for an unwanted voyage.

The majority asserted that in right-to-work states unions are clamoring to achieve exclusive representative status despite the threat of free-riders.

The dissent strongly rejected the majority’s criticism of Abood. On the issue of free-riders, the dissent asserted that the majority avoided the key question, “which is whether unions without agency fees will be able to (not whether they will want to) carry on as an effective exclusive representative.” As to this question, the dissent argued that agency fees the number of non-union members will surely increase. “And as more and more stop paying dues, those left must take up the financial slack (and anyway, begin to feel like suckers)—so they too quit the union.”

But the dissent reserved its strongest criticism for the majority’s refusal to respect stare decisis, the doctrine that established precedent should be allowed to stand even if the soundness of the decision comes into doubt. Justice Kagan’s dissent stated that, “Rarely if ever has the Court overruled a decision—let alone one of this import—with so little regard for the usual principles of stare decisis... Reliance interests do not come any stronger than those surrounding Abood. And likewise, judicial disruption does not get any greater than what the Court does today.”

Comments:

1. I will try to have more on the impact of this decision in the coming days.  But here are some initial thoughts.
2. This decision is not a surprise to anyone following this issue.  Indeed, as Justice Alito noted in this majority opinion, he and the other conservative Justices have hinted at this outcome for some time.
3. Timing:  The biggest question I’ve been getting is when does a public agency have to stop collecting agency fees. I was hoping that the Court would give some guidance on this question given that people have relied on Abood for 41 years. But there was none.  But it’s crystal clear that the decision holds that such fees are unconstitutional.  So my advice: stop collecting agency fees as soon as practical. I say as soon as practical because with most payroll systems it’s not possible to do it today; even though most employers collect the fees in arrears the payroll for the end of the month has been submitted and/or processed for most public employers.  So practically, it means stopping the collection of fees by the next pay period in July.
4. What notice to the union?  This is the other question I’ve been getting.  Obviously, stopping the collection of agency fees is mandated by law and therefore not a “negotiable” subject of bargaining.  But there might be negotiable effects.  Ideally public employers would have been in touch with their unions to discuss this already.  If not, it would be wise to reach out to the unions as soon as possible. [Note: Some MOU severability provisions may require a meet and confer if any provision-such as an agency fees requirement -becomes unlawful.]
5. SB 866.  The Governor signed this bill today. Under SB 866, the unions will tell employers who to deduct dues/fees from.  So once an employer stops collecting agency fees, most will want to wait to hear from the union on re-starting collections.  The good news with SB 866 is that there is a statutory indemnity clause for employers.
6. Communicating to employees.  Be very careful on this.  I think an employer can inform agency fee payers that it will stop collecting such fees as a result of Janus.  But anything more than that will have to comply with Government Code section 3550 and SB 866.  Section 3550 prohibits deterring employees from becoming members of a union. SB 866 requires that employers meet and confer with unions before sending any “mass communication” to employees “concerning public employees’ rights to join or support an employee organization, or to refrain from joining or supporting an employee organization…”
7. These are my initial thoughts.  I and other members of my firm will be providing additional thoughts and tips soon.  I’ll provide a link to that guidance when it becomes available.