CALPELRA Alert/CA Court Of Appeal And PERB's City Of Palo Alto Decision

CALPELRA Alert/CA Court Of Appeal And
PERB's City Of Palo Alto Decision

When PERB determined that the City of Palo Alto violated the MMBA by refusing to meet and consult with the local firefighters union before placing a measure on the ballot, PERB ordered the city council to rescind its ballot resolution that was approved by the voters. The City appealed PERB’s decision. With the exception of PERB’s chosen remedy, the Court of Appeal affirmed PERB’s decision.[1]

Background
Palo Alto is a charter city. Many years ago, Palo Alto voters approved binding interest arbitration as the final step in the impasse procedure for MMBA negotiations with police and fire bargaining units. The current dispute arose when the city council considered placing a referendum on the ballot repealing binding interest arbitration for police and fire unions as the final step of the impasse procedure.

Arguing that interest arbitration was not a mandatory subject of bargaining under the MMBA , the City refused to meet and confer with the fire union. In its decision, PERB determined that even though binding interest arbitration is not a mandatory subject of meet and confer, it was a mandatory subject of “meet and consult” under Government Code Section 3507. PERB found that the City refused to meet and consult before placing the City’s proposal on the ballot. As its remedy, PERB ordered the City to restore the status quo and to rescind the city council’s action placing the matter on the ballot.[2]

Court Of Appeal Decision
PERB’s original 2014 decision against the City of Palo Alto was far reaching in at least three ways: (1) PERB’s definition of the “duty to consult” under the MMBA; (2) PERB’s interpretation of a charter city’s home rule powers; and (3) PERB’s finding that the union did not waive the right to consult. The Court of Appeal’s lengthy decision addressed these and several other issues on appeal. The League of Cities as Amicus Curiae supported the City’s arguments.

The City Was Required To Meet And Consult Under Section 3507 Of MMBA

Binding arbitration is a mandatory subject of consultation.
The City argued that because interest arbitration was not a mandatory subject of meet and confer under Section 3505, it should not be a mandatory subject of the duty to consult under 3507. The Court disagreed and determined that the City failed to distinguish between Section 3505’s duty to negotiate wages hours and other terms and conditions of employment as compared with Section 3507’s duty to consult over the agencies’ reasonable local rules and regulations regarding employer-employee relations. The Court determined that the City and League had not offered valid legal support for their contention that the scope of meet and confer under Section 3405 also limits matters that are subject to good faith consultation under Section 3507. For this reason, the Court deferred to PERB’s expertise in interpreting the MMBA, and found that interest arbitration, as a local rule, was a mandatory subject of consultation.
There are differences between meet and confer under Section 3505 and meet and consult under Section 3507.
The Court rejected the City’s contention that consultation under Section 3507 is different from the duty to meet and confer under 3505. The Court rejected the City’s argument citing four prior Court of Appeals decisions all holding that there are no clear differences between “consultation in good faith” and “meet and confer in good faith.” But like PERB, the Court left unanswered the question of whether the City would be required to enter into the established impasse procedures after failing to reach an agreement under Section 3507 consultation in good faith. Rather the Court concluded, “And PERB’s decision did not state that under section 3507, the parties must, in good faith, reach an agreement that will become binding. Under PERB’s decision, if the parties have consulted in good faith and attempted – but failed – to reach an agreement, the requirements of section 3507 would be satisfied.”
PERB’s application of the duty to consult did not violate charter city home rule provisions of the California Constitution and the city council's constitutional right to propose charter amendments.
The Court rejected the City’s and League’s argument that requiring the City to engage in mandatory consultation on a charter amendment for binding interest arbitrations impinged upon a charter city’s constitutional rights. Like the California Supreme Court’s decision in Seal Beach[3] requiring MMBA agencies to meet and confer before adopting a ballot initiative covering mandatory subjects of negotiations, the Court distinguished between the substance of a public employee labor issue and the procedure by which it is resolved, and concluded, “The City retains the authority to suggest a repeal of binding arbitration. And once it has, in good faith, consulted with those recognized employee organizations that have requested to meet, it can ultimately reject any suggestions made by the organizations and proceed to make its own decisions on the matter.”

The City also argued that interest arbitrations raises constitutional concerns because of its intrusive, unique nature as determined by the California Supreme Court in County of Riverside.[4] The Court rejected the Palo Alto City’s contention that the issue before the Court of whether a binding interest arbitration law was constitutional. Instead, the Court concluded that the issue is whether a binding interest provision is first subject to good faith consultation. Once again the Court decided, “Compliance with section 3507 [consultation] merely requires the City to, in good faith, consult with recognized labor organizations before deciding how the pertinent issue should be resolved. In the context of this case, the City still retains the ultimate authority to determine if binding arbitration should be repealed.”

The Union Did Not Waive Its Right To Meet And Consult

There was no evidence the union failed to request consultation.
The Court found that PERB’s determination that the union did not waive its right to consult was supported by substantial evidence. The City contended that the union officials had actual notice of the proposed change and failed to timely demand to meet and consult. But the Court found that the City continually failed to address the union’s requests, and several times rejected the notion that the City was even required to meet with the union. Such a record did not show that the union “clearly and unmistakably waived” the statutory right to bargain.
PERB's decision did not shift the burden of requesting consultation to the employer.
The City and the League contended that PERB’s decision shifted the burden to employers to request negotiations or consultation. The Court instead concluded that PERB decisions have consistently required a union to effectively convey to the employer that it desires to negotiate; and that “the particular language that is required in order to request a negotiations is not vital. The decisions still make clear that the labor organization bears the duty of effecting such communication to the public agency.”
PERB correctly followed prior decisions requiring the duty to clarify on questions of scope of bargaining.
The City claimed that PERB’s order – to seek clarification from the Union on matters falling outside the scope of bargaining – departed from prior PERB decisions. The Court pointed to numerous PERB decisions that articulated the duty to meet and clarify with the union when there is a question regarding the scope of bargaining.

PERB's Proposed Remedy – Ordering The City Council To Rescind Its Resolution To Submit The Charter Amendment To Voters – Was In Error
The City argued that PERB lacked authority to direct the city council to rescind its prior resolution. The Court agreed with the City and found that PERB could not compel a legislative act contrary to the doctrine of separation of powers. As a quasi-judicial agency, PERB cannot order the city council to take legislative action such as rescinding a vote. Ordering rescission of a legislative act is in itself a legislative act prohibited by the separation of powers.

The Court went on to conclude that PERB, however, could have achieved its purpose more directly without violating the separation of powers. Instead of ordering the city council to take legislative action, PERB could have declared the legislation void. The Court cited numerous cases where courts have declared legislatively passed ordinances as void, and concluded “that such a remedy may be proper in circumstances similar to the ones presented here.”

The Court remanded the case back to PERB on the issue of a proper remedy that would include ordering the city council’s action as void.

Practitioner Tips

Meet And Consult Under The MMBA Is Now Defined
Assuming Palo Alto does not appeal to the California Supreme Court, this case establishes clear guidelines for consultation under the MMBA. When taken together with the original PERB decision, this case defines the process of Section 3507 consultation and what matters are subject to the consultation process. MMBA practitioners should now understand and clearly apply the following “meet and consult” principles.

First, consultation involves those items mentioned in Section 3507, which does not include wages, hours, and terms and conditions of employment as defined by Section 3505. Section 3507 consultation is limited to “reasonable rules and regulations … for the administration of employer-employee relations under [the MMBA].” Those local rules involve recognition and unit determination, procedures for resolutions of meet and confer disputes, access of union to work locations, use of bulletin board and other means of communication, and furnishing non-confidential information pertaining to employment relations.
Second, the Court upheld PERB’s requirement that if a question arises as to the scope of bargaining, the parties are required to “meet and clarify” the extent to which the proposal is within the scope of negotiations or consultation. This requirement cannot be satisfied with a mere exchange of written responses, but requires actual engagement.
Finally, PERB has defined the consultation process as follows:
- The public agency must provide a timely written notice to each organization affected by a rule or regulations proposed for change;
- The affected organizations must have a reasonable opportunity to meet and discuss the rule or regulation;
- Both parties are required to meet and confer regarding consultation subjects promptly upon request;
- Both parties must continue to meet and confer for a reasonable period of time in order to exchange freely information, opinions and proposals; and
- Both parties must endeavor in good faith to reach an agreement.

Speculation On PERB's Approach To The Remedy After Court Decision

Although the Court in Palo Alto rejected PERB’s proposed remedy for the City’s failure to meet and consult, the Court nonetheless suggested that PERB had the legal authority to void the city council’s action in referring the matter for referendum. Whether PERB will exercise this newly announced authority will depend upon PERB’s decision on remand. In either instance, practitioners should understand that PERB has a powerful set of remedies for any MMBA agency that fails to meet the duty to consult.

Question Of Whether Meet And Consult Is Subject To Impasse Procedures Under The MMBA

One matter left outstanding by both the Court and PERB’s decision is whether an impasse involving consultation is subject to established impasse procedures, including factfinding. An agency could conclude that the language of the Court’s decision, when taken as a whole, suggests that those impasse procedures would not apply. Nonetheless, out of an abundance of caution for practitioners, we would suggest that the less costly and effective approach would be to accommodate those impasse processes until PERB has answered this question in a future case.

[1] City of Palo Alto v. Public Employment Relations Board and International Association of Firefighters, Local 1319, AFL-CIO (Nov. 23, 2016, H041407).
[2] City of Palo Alto (2014) PERB Dec. No. 2388-M.
[3] People ex rel. Seal Beach Police Officers Assn. v. City of Seal Beach (1984) 36 Cal.3d 591.
[4] County of Riverside v. Superior Court (2003) 30 Cal.4th 278.

2016 CALPELRA President: Lori Walsh, County of Placer

Alert No. 16-23 Authors: William F. Kay, CALPELRA Labor Relations Academy Creator/Co-Director
and M. Carol Stevens, CALPELRA Executive Director

This Alert summarizes a significant recent court case, arbitration decision, legislation, or other important information. The Alert format is not intended as a periodic review of all significant cases, but instead provides labor relations practitioners with key information for immediate guidance in day-to-day activities.

The information contained in this publication is not intended to constitute professional counsel or a legal opinion. Although we consider the information to be timely and accurate, there is no substitute for personal counsel with a professional. Provided with specific facts, your attorney can fashion a solution sensitive to your needs.

unsubscribe from this list