Board Enforces Union Member’s Right to Financial Records

California School Employees Association & its Chapter 47 (Shampine, et al) (2014) PERB Decision No. 2355-E (Issued on 2/14/14)

This is a duty of fair representation case under EERA.  One of the allegations was that the union failed to make financial records available to a union member.  At issue is EERA section 3546.5, which provides, in part:

Every recognized or certified employee organization shall keep an adequate itemized record of its financial transactions and shall make available annually, to the board and to the employees who are members of the organization, within 60 days after the end of its fiscal year …

The Board agent dismissed the unfair practice charge because the request from the union member was not made within 60 days after the end of the union’s fiscal year.  In other words, the Board agent interpreted EERA section 3546.5 to provide a 60-day window in which a union member can request to view financial records.  The Board disagreed with this interpretation.  The Board held that:

Instead of requiring a member of an employee organization to request financial reports within 60 days of the end of the employee organization’s fiscal year, we hold that the better reading of EERA section 3546.5 gives a union up to 60 days from the end of its fiscal year to prepare and make available the requested financial reports.

The Board also clarified that the six-month statute of limitations to file an unfair practice charge runs from the date of the union’s refusal or failure to provide its financial report to the member who asked for it.  Finally, the Board held that the union member’s request for a “Treasurer’s Report” was sufficient to trigger the union’s duty to provide financial information under EERA section 3546.5.

The usual remedy would have been to remand the case back to the Office of the General Counsel for issuance of a complaint.  However, the Board noted that it has the authority to issue a compliance order on its own motion.  Under the circumstances of this case, the Board held that it was appropriate to issue a compliance order directly.  Accordingly, the Board ordered the union to produce “a detailed written financial report thereof in the form of a balance sheet and an operating statement.”

Comments:

  1. As a management lawyer I don’t often deal with the issues raised in this case.  However, the Board’s interpretation of the 60-day period in EERA section 3546.5 seems logical and reasonable.
  2. The more interesting part of this decision was the Board’s direct issuance of a compliance in lieu of remanding the case back to the Office of the General Counsel.  I don’t know if I’ve seen that before; certainly not in recent history.  I assume the Board concluded there were no factual disputes remaining and therefore no need for further investigation.  It will be interesting to see if this becomes a trend in future Board decisions.
  3. In a footnote, the Board took the opportunity to emphasize that EERA section 3546.5 provides rights only to union members.  Non-member agency fee payers derive their right to financial information pursuant to Chicago Teachers Union v. Hudson (1986) 475 U.S. 292 and its progeny.
  4. Finally, it should be noted that this case was designated a precedential decision by the Board.  The Board’s practice appears to be to include a footnote at the beginning of every case involving an appeal from a dismissal stating whether the decision is precedential.  Practitioners should note that non-precedential cases are still being given Board decision numbers; so to tell whether a decision is precedential or not, you have to look at the footnote at the beginning of the decision.
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