PERB’s End of Fiscal Year Numbers for 2018-19

Overview: PERB issued 92 decisions

PERB’s annual report for fiscal year 2018-19 is not due until October 15, 2019. But for the first time in my memory, PERB has provided a “PERB Fiscal Year in Review 2018-19” on its website. It’s worth a read. However, based on my tracking of PERB cases I have some addition numbers that might be of interest to practitioners.

PERB issued a total of 92 decisions this past fiscal year. The prior year PERB issued 61 decisions. That’s an increase of over 50%. In addition, according to PERB’s news release there are only 45 cases pending on the Board’s docket. That’s a tremendous improvement from years past.

Here are some additional statistics:

Decisions by Statute (Including Non-Precedential Decisions):

EERA: 47
MMBA: 25
HEERA: 8
Dills Act: 7
Trial Court: 4
Court Interpreter: 0
LA Met: 1

Decisions by Precedence:

Precedential: 74
Non-Precedential: 18

Decisions by Type:

Appeals from Dismissals: 21
Exceptions to ALJ Decisions: 51
Approval of Settlement/Withdrawal: 2
Administrative Appeal (AA): 8
Reconsideration: 4
Judicial Review: 1
Unit Modification: 3
Injunctive Relief: 2

Decisions by Outcome:

Dismissals Affirmed: 19
Dismissals Overturned/Partially Overturned: 3
ALJ Decisions Affirmed: 36
ALJ Decisions Overturned/Partially Overturned: 14
Miscellaneous (Admin Decisions, Judicial Review, Settlements, Recon’s, Unit Mod’s, IR): 20

Decisions by Board Member:

[Board Member: # Precedential + # Non-Precedential = Total #]
Banks: 21+5=26
Shiners: 17+6=23
Winslow: 16+1=17
Krantz: 19+2=21
Paulson: 1+3=4
Per Curium: 1

Other Interesting Facts:

  1. The Board’s affirmance rate of ALJ decisions was 72% (36 out of 50). Of the 14 ALJ decisions that were not adopted, 12 had originally gone in favor of the employer. Thus, in the 28% of decisions that the Board rejected, 85% of those decisions went against the employer. In only 2 cases did the Board overturn a finding that initially went against the employer.
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PERB: We Have Jurisdiction Over Cops

County of Orange (2019) PERB Decision No. 2657-M (Issued on 7/15/19)

The saga continues. In this most recent case PERB provides its most comprehensive explanation yet for why it believes it has jurisdiction over “employee organizations” comprised of Penal Code 830.1 peace officers under the Meyers-Milias-Brown Act (MMBA). There is a very long history to this issue. (Click here for one of my prior post). The dispute essentially involves the interpretation of MMBA section 3511 which states: “The changes made to Sections 3501, 3507.1, and 3509 of the Government Code by legislation enacted during the 1999–2000 Regular Session of the Legislature shall not apply to persons who are peace officers as defined in Section 830.1 of the Penal Code.” For years, I believe everyone understood that this meant Penal Code 830.1 peace officers were not under PERB’s jurisdiction. Period. There was no distinction between peace officers as individuals versus the unions representing peace officers.

Then in 2015, PERB issued its decision in County of Santa Clara (2015) PERB Decision No. 2431-M, in which it held that PERB has jurisdiction over “mixed” units containing both peace officers and non-peace officers. From that decision, PERB’s jurisprudence has morphed into its current position that PERB has jurisdiction over unions representing bargaining units comprised entirely of peace officers. If you have read my prior posts on this issue you know I think PERB is absolutely wrong.

In the recent County of Orange case, PERB addressed a lot of different arguments on this issue. But there was one argument that really stood out to me. The County had cited to some court cases involving peace officer unions as evidence that the courts, and not PERB, have jurisdiction over such cases. PERB replied that, “We put little weight on the fact that courts have heard disputes brought by employee organizations that represent peace officers, where no party briefed jurisdictional issues and the courts did not address jurisdiction. It is axiomatic that cases are not authority for propositions not considered.” PERB is correct that cases are not authority for issues that were not raised or litigated. But here’s the rub. If you go back to the original County of Santa Clara decision, PERB cited two cases—County of Calaveras (2012) PERB Decision No. 2252-M and County of Yolo (2013) PERB Decision No. 2316-M—for the notion that PERB previously took jurisdiction over units involving peace officers. However, the issue of jurisdiction over peace officers was never raised or even discussed in both those cases. Thus, under PERB’s reasoning in County of Orange it should not have relied on the two cases cited in County of Santa Clara.

In any event, for me it all comes down to this: from the day PERB took over jurisdiction of the MMBA on July 1, 2001 until—at earliest—the County of Santa Clara decision in 2015 no one asserted that there was a distinction between peace officers as individuals and peace officer unions under MMBA section 3511. This means that for about 14 years none of the labor attorneys in California were able to figure out what PERB now says is the clear intent of the Legislature. Obviously, I don’t buy it.

Unfortunately, because the County of Orange prevailed on the merits of this case it has no reason to appeal. However, this doesn’t mean that another MMBA employer can’t challenge PERB’s position in the future. It’s my hope that someone out there will do just that…

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PERB: “Exploding” Offers Can Be Evidence of Bad Faith

City of Arcadia (2019) PERB Decision No. 2648-M (Issued on 6/12/19)

This is another very long decision involving several legal issues. I am just going to focus on one issue: PERB’s holding that, ”a party cannot in good faith make an exploding proposal unless it can adequately explain a legitimate basis for doing so.” An “exploding” proposal is one that expires on a given date.

Here are the essential facts. The City of Arcadia (City) and the Arcadia Police Civilian Employees Association (Union) were parties to a Memorandum of Understanding (MOU) that expired on June 30, 2014. In September 2013, the City notified the Union that it wanted to begin successor negotiations with the goal finishing by the end of November 2013. The stated reason was that city council elections were in April 2014 and at least two incumbents could not run for re-election. By November, the City apparently had reached tentative “deal points” with other labor groups but not the Union. The City told the Union that it would close negotiations if no deal was reached by the end of November and not re-open them until the Spring. The Union objected to the City’s “need for speed” since the MOU did not expire until June 30, 2014. The Union also objected to the City’s offer of “signing bonuses” only if a deal was reached by the end of November. The City acceded that negotiations could reconvene in the Spring but confirmed that signing bonuses would likely “not be on the table” at that time. The Union then filed an unfair practice charge.

The ALJ dismissed the charge alleging bad faith bargaining relating to the “exploding” offer. The Board reversed. The Board characterized exploding offers as a form of regressive bargaining since subsequent offers become less generous. Typically, to avoid bad faith bargaining a party “must show changed economic conditions or other changed circumstances to support its regressive posture.” In addition, the Board argued that, “when a party issues an exploding offer without an adequate explanation as to why its bargaining position should become less generous on a given date in the future, it effectively imposes its own ground rule and deadline, evidences unlawful inflexibility, and manifests a take-it-or-leave-it attitude.”

As an example, the Board noted that when an employer offers a retroactive wage increase, its initial lump sum wage cost invariably escalates the longer negotiations continue. However, according to the Board, many employers in such circumstances can set aside the money needed to pay the retroactive wage increase as time goes on without a ratified contract. Therefore, an employer asserting that it cannot set aside money in this manner, or asserting a different basis for its exploding offer, “must be in a position to prove its rationale if requested to do so.”

Here, the City defended its offer because the spring city council elections could result in a new majority with different goals. However, the Board held that this explanation was insufficient because there were several months remaining between the City-imposed deadline and the spring elections and also because the possibility of a new council majority with different goals was speculative. As a result, based on the totality of the circumstances, the Board held that the City’s “exploding” offer constituted evidence of bad faith bargaining.

Comments:

  1. I don’t have an issue with the Board’s central holding that an employer must explain why a proposal has an expiration date. My bigger concern is the Board’s apparent willingness to “second-guess” the employer’s proffered explanation. Here, the City said it wanted to get successor agreements in place before the upcoming council elections. This doesn’t seem unreasonable.  A new city council could have different spending priorities. Or the existing city council may want to have a deal in place as its “legacy.” Either rationale seems legitimate to me. Admittedly, at least based on the facts set forth by PERB, there was no explanation for why a deal had to be reached by the end of November, more than four months before the spring election. The failure to explain that gap likely caused the Board not to fully credit the City’s stated rationale in this case. But the key lesson here is that PERB will examine the legitimacy of the explanation for an exploding offer.
  2. In discussing possible legitimate reasons for an exploding offer, the Board focused primarily on economic ones. However, employers often have policy reasons for such offers. For example, some employers will offer a signing bonus to the first union that “comes in” when multiple tables are open. Getting the first union to reach agreement often times is the most difficult and has the benefit of setting a “pattern” for the rest of the unions.  I would think that such an explanation would be sufficient to demonstrate that the employer is not bargaining in bad faith. However, the Board did not discuss such an example.
  3. As another example, many employers have a policy of “no retro” salary increases. While this is not a traditional exploding offer, it has a potential “regressive” effect in that employees will not receive a salary increase for the time between expiration of a MOU and the the new one. Employers have such policies to encourage the conclusion of negotiations before the expiration of a MOU, which helps avoid strikes and avoids the disruption of being in a “status quo” period. Are these explanations sufficient to demonstrate that the employer is not bargaining in bad faith? I would think so but unfortunately the Board didn’t discuss such situations.
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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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