SB 402 AND SB 739 : THEY'RE MORE THAN JUST NUMBERS
With the recent passage of the new binding arbitration bill S.B. 402 (html version, pdf file) and its related legislation S.B. 739 (html version, pdf file), there is the prospect for some significant change in the way Employee-Employer relations matters are conducted in California. This has the potential for a wide-ranging modification to the whole public sector representation process.
At the past October E & E Seminar in Sacramento, attendees were treated to a lecture and discussion of these matters by a very knowledgeable individual:
Robert Bergeson; Arbitrator, Factfinder, and Mediator.
Mr. Bergeson has been involved in many arbitrations and mediations over the years on a vide variety of issues and employment situations. He was formerly the Los Angeles Regional Director, California Public Employee Relations Board. He holds a Master of Public Administration, San Diego St. University (1981), and a Bachelor of Arts, California St. University, Northridge (1976). He is also an Adjunct Professor, California Lutheran University.
As a result I am pleased to present the following article by Mr. Bergeson:
With binding interest arbitration having become effective January 1, 2001, and the impending ability of firefighter organizations to file unfair practice charges with a neutral state agency, collective bargaining on behalf of firefighters with the cities, counties or special districts for which they work will take on a new dimension, perhaps profoundly so. Assuming SB 402, the binding interest arbitration law, is upheld from constitutional attack (and the failure of such attacks in the great majority of other states enacting such laws suggests that it will be), SB 402 will, in combination with SB 739, present all firefighter organizations within California with options heretofore available only to a select few.
Amending Meyers-Milias-Brown Long Overdue
As originally enacted more than 30 years ago, the Meyers-Milias-Brown Act was a relatively progressive means of establishing collective bargaining rights for the employees of local governments as only a handful of states had then granted public employees a right to organize and bargain on a collective basis with their employer. Although the "MMBA" was beneficial to public employees in that sense, it was at least as significant for what it did not do, such as providing a viable means of resolving bargaining impasses or providing for a process through which claims of bad faith and union-based discrimination could be adjudicated. While the MMBA remained largely unamended over the next three decades, many other states saw fit to place their public employees on reasonably even footing with management by enacting more comprehensive bargaining laws creating such rights.
That California's lawmakers essentially decided the MMBA was acceptable as written is not to say that all participants in bargaining under the statute were happy with the status quo. A number of bills were introduced in Sacramento, only to fall victim to the vagaries of the legislative process. As an alternative, since the MMBA is considered "enabling legislation," in some cases employee organizations were successful in lobbying local governments to enact laws accomplishing the same ends sought at the state level. As examples, Los Angeles City and County established neutral agencies to adjudicate alleged unfair labor practices and to order disputing parties to mediation in the event of a bargaining impasse, while more than 20 charter cities passed initiatives allowing for the resolution of certain impasses through binding interest arbitration.
What are unfair practices, mediation and interest arbitration? Reduced to their core, "unfairs" amount to conduct which is prohibited because of its negative affect on the bargaining process. For example, employers and employee organizations are obligated to bargain in good faith and not to discriminate against employees for exercising their rights on behalf of an employee organization. As more fully discussed below, unfairs are ultimately litigated in the same basic manner as are grievances, in other words through a quasi-judicial hearing involving the presentation of evidence to a neutral person, typically referred to as a hearing officer or administrative law judge in the former case and an arbitrator in the latter example.
The Mediation Process
By definition, mediation will never involve the holding of a hearing to present evidence, nor is the result ever binding on the employee organization and the employer. Normally, a mediator will meet jointly with the parties to discern the nature of the dispute, after which union and management representatives are separated, with the mediator carrying proposals back and forth in an effort to help the parties reach a settlement. An arbitrator's authority is limited to performing such tasks whether the issue concerns interpretation of an existing memorandum of understanding or the terms of a new MOU. If the process is successful and a settlement is reached, the agreement is typically reduced to writing. Although the mediator may also assist the parties in writing the settlement agreement, he will never be involved in enforcement of the agreement. That function is within the jurisdiction of a court of law.
Arbitration in General
Arbitration may or may not follow, but it never precedes, mediation. Whereas mediation only very rarely involves more than a single neutral, disputes are frequently adjudicated before a "board" or "panel" of arbitrators. Such boards are normally composed of three individuals, all of whom may be impartial, or of a "tripartite" panel consisting of a neutral chairman and representatives of the employer and the employee organization. Whether the decision of the arbitrator(s) is final and binding on the disputing parties, or merely advisory, is determined by the contract or statute under which the process operates.
As used in arbitration, the terms "final" and "binding" should not be taken literally because even decisions so labeled are appealable to the courts. Regardless of that apparent lack of finality, however, as a practical matter the award of an arbitrator whose authority is described as binding can be invalidated only in exceptional cases. A reviewing court can overturn the substance of a binding arbitration award only in the very rare case where it is found to be inconsistent with public policy. For example, an arbitrator's award reinstating a commercial airline pilot previously discharged for intoxication on the job was overturned on the ground that the award violated an FAA regulation.
Because arbitration awards are almost never vacated on substantive grounds, in the typical case, court review is limited to determining whether the arbitration process was flawed. For example, an arbitrator's award will be overturned where it is determined that the arbitrator acted beyond the authority he was granted by the MOU or statute under which he was appointed. Alternatively, an award will be overturned where it is determined that the arbitrator denied the appealing party its due process; in other words, the arbitrator rejected evidence offered by the appealing party which the court believes should have been allowed to be presented. In the event of such a procedural problem, the reviewing court will normally only remand the case back to the arbitrator with an order that the process be performed a second time in the manner the court holds to be proper.
When the issue being arbitrated involves a disagreement over the terms of an existing MOU, the process is known as a "rights" dispute. When the issue concerns the terms of a new MOU, or reopeners under an existing MOU, the process is referred to as an "interest" dispute.
Rights disputes proceed to arbitration by the initiation of a grievance, subsequent unresolved processing of the grievance through the pre-arbitration steps of the contractual procedure, and the employee organization's ensuing appeal to arbitration.
Interest Arbitration Under SB 402
Under SB 402, interest disputes proceed to arbitration where (1) impasse is "declared," (2) a written request is made from an employee organization to a city, county or fire district, and (3a) the parties cannot agree to the appointment of a mediator or (3b) they have participated in mediation but that process has not resulted in a settlement. What is meant by the requirement that an impasse be "declared" is uncertain, as are a number of other provisions of SB 402, including the meaning of the phrase "other forms of remuneration" as a supplement to "salaries, wages an overtime pay, health and pension benefits, vacation and other leave, reimbursements, incentives [and] differentials" which comprise the "scope of arbitration." It will undoubtedly be a number of years before the legislature's intent with regard to such nebulous terminology is sorted out by the courts.
Among the provisions of SB 402 which are clear is that within three days of the employer's receipt of the employee organization's written request to proceed to arbitration, each party is to designate its representative to the arbitration panel, and within five days of that date those partisan panel members are to decide who is to chair the panel. The latter individual is to be a person "with experience in labor and management dispute resolution."
If the partisan panel members cannot agree as to who should chair the panel, SB 402 provides that a list of names may be jointly obtained from either the American Arbitration Association or the State Mediation/Conciliation Service. The SMCS has created a list of arbitrators for submission to disputing parties the members of which SMCS has decided meet the quoted requirement above. Although I am on AAA's general roster of arbitrators, if AAA has similarly compiled such a list, I am unaware of it. It is my assumption that the AAA will charge a nominal fee for submission of such a list to firefighter organizations and public employers, as AAA does in rights arbitration cases. SMCS will presumably provide a list of names at no charge to the parties, as is its custom in rights cases.
After receipt of the submitted names, the parties are to take turns striking names from the submitted list until one name remains, who shall chair the panel. Unless the parties agree otherwise, within 10 days of its creation the panel is to formally begin work and at least five days before that time the parties are to submit to the panel their "last best offer of settlement as to each of the issues within the scope of arbitration . . . made in bargaining as a proposal or counterproposal and not previously agreed to by the parties prior to any arbitration request." In addition to such explicit direction as to how the process is to commence, SB 402 expressly directs how the arbitration process is to conclude.
Specifically, within 30 days of presentation of the evidence or the parties' agreement to a lengthier time period, the panel is to choose the last, best offer of one of the parties on each issue without modification thereto or, at the parties' direction, all of one party's last, best offers on all issues as a package, also without modification. The statute is far less succinct as to what is to occur between the time of establishment of the panel and the issuance of its decision on the issues.
SB 402 talks about "inquiries," "investigations" and "mediation," thus suggesting the legislature wished to empower the panel to utilize various means of assisting the parties to reach agreement through the arbitration process. The fact that the legislature has dictated that a panel format be used, rather than a single arbitrator system as is utilized in some states, further connotes a legislative intent that the process be a flexible one. Indeed, "factfinding" as set forth in public school bargaining statutes similarly uses tripartite panels which the Public Employment Relations Board ("PERB") and the courts have interpreted as encouraging the parties to reach their own settlement, with the issuance of a report of the panel being necessary only in the event settlement cannot be achieved.
Anticipated Results of the Interest Arbitration Process
If the PERB-administered factfinding process is any indication, several things can be anticipated with regard to implementation of interest arbitration under SB 402. First, many employee organizations will see interest arbitration as a panacea to every problem they have experienced at the bargaining table. In reality, although virtually none will find that interest arbitration solves all their problems, most will believe it to be a helpful process, particularly with regard to equalizing the parties' bargaining power.
Second, many employers will see interest arbitration as a process which will result in employee wages rising at a geometrical rate, perhaps to such a degree as to require the cutting of services or raising of taxes to fund them. The reality will be that although many employers will find the additional bargaining power gained by employee organizations to be frustrating, virtually none will be forced to cut programs or raise taxes as the direct result of the arbitration process.
Third, because of ignorance, a desire to make a name for themselves, or other reasons, a number of participants will over-formalize the arbitration process to the detriment not only of the opposing party, but also the party they are representing because the results will be less settlement and more acrimony than would otherwise be the case.
Fourth, because of the complexity of the process, CSFA and other organizations regularly utilizing the process will gradually begin to appoint partisan and neutral panel members with experience and a comfort level with the process. (Factfinding being nearly unheard of in the private sector, I have seen a number of cases in which partisan panel members and neutrals without public sector experience have needed to be educated about the process. Because interest arbitration is also rarely used in private industry, those without public sector experience will be equally at a disadvantage.).
Finally, because public sector factfinding and interest arbitration awards are a matter of public record, some union and management representatives will search neutrals' awards for the correct purpose, i.e., to learn the extent to which a labor-management neutral was able to obtain unanimity of the panel or, at least as positive, closure of an arbitration case without the need for a decision at all. Other advocates will search published awards for the wrong reason, i.e., to attempt to obtain the neutral's philosophical bent. (Although, like everybody else, neutrals are creatures of their environment and so have opinions about issues brought before them, those wishing to continue to work know better than to allow their personal feelings to dictate how they handle a case. Therefore, it can be said with some degree of certainty that a neutral's decision in one case will have little, if any, bearing on how he decides another case where the circumstances are completely different.)
SB 739 and the Adjudication of Unfair Practice Charges
Although SB 739 is not effective until July 1, 2001, and it has received far less attention than SB 402, that law should have at least as much significance on the bargaining relationship between firefighter organizations and public employers.
As mentioned above, SB 739 grants to the Public Employment Relations Board authority to determine whether employers and employee organizations otherwise subject to the MMBA have committed unfair employee relations practices. PERB will do so through the receipt of unfair practice "charges" filed within six months of the purportedly unfair event or within six months of its discovery. Unfair charges must be filed on the appropriate PERB form, after which PERB staff investigates the charge to determine whether it states a prima facie case, in other words, whether the charge alleges facts which, if true, would state the elements of the cause of action being asserted.
For example, a charge that an employer has discriminated against an employee for his activities on behalf of an employee organization requires that the employee engaged in such conduct, that the employer was aware of that activity, and that the employer then took adverse action against the employee, plus something from which it can be inferred that the adverse action was motivated by the activity on behalf of the union. Disparate treatment of the employee, the employer's changing justification for the adverse action, and the like establish such an inference.
In addition to the requirements of timeliness and filing on the proper form, unfair practice charges must be submitted to the appropriate PERB regional office. Regional offices are located in Sacramento, Oakland and Los Angeles. The Los Angeles office processes cases which originate in Kern and San Luis Obispo counties and all Southern California counties, while Oakland handles Central and Northern California coastal areas and the Sacramento regional office processes cases originating in the remainder of the state. PERB is in the process of amending its regulations to determined exactly how it will exercise authority over MMBA jurisdictions. For further information, PERB's website may be consulted at www.perb.ca.gov.
After a charge is filed with the appropriate regional office, it is assigned to a PERB staff person for investigation. The PERB agent is authorized to dismiss the charge (see below). However, if, after consultation with the charging party's representative, the PERB employee determines that a prima facie case has been stated, a "complaint" is issued, to which the "respondent" is required to reply, thereby admitting to or denying the facts alleged in the complaint. Another PERB staff person will subsequently conduct an "informal conference," which is essentially an attempt to mediate a settlement to the complaint. If no settlement is reached, the matter is set for hearing before an administrative law judge, who has not previously been involved with the case.
Hearings before ALJs are conducted in the same manner as a rights arbitration, with the examination of witnesses and introduction of other evidence and the making of arguments, usually through the submission of post-hearing briefs, after closure of the record. The ALJ thereafter issues what is referred to as a "proposed decision," so called because the parties are given a period of time in which to appeal the decision to the five members of the "Board itself" appointed by the governor. If no "exceptions" are filed to the proposed decision, it becomes binding on the disputing parties.
If an unfair practice is not found, either by the Board agent originally investigating the unfair charge (for failure to state a prima facie case) or by the ALJ or the Board itself (for failing to prove the facts alleged in a complaint or because the respondent has proved a valid affirmative defense for its action), the case is dismissed. Dismissals made by Board staff are appealable to the Board itself. Dismissals by the Board itself are appealable to the courts of appeal, however, the grounds for appeal are equally as narrow as those for appealing a binding arbitration decision.
If an unfair practice is determined, PERB is authorized to fashion a remedy which will "make whole" the charging party, in other words, to place the charging party is the same position it would have been in had the unfair practice not occurred. Thus, where the respondent is determined to have unlawfully deprived an employee of wages, back pay will be ordered. Culpable respondents are also typically ordered to "cease and desist" from the unlawful conduct and required to post a notice to employees indicating that they have been so ordered.
The constitutionality of SB 402 is in dispute and SB 739 is not yet in effect. Even when and if interest arbitration under SB 402 and SB 739's mechanism for the adjudication of unfair practices become a reality, they will not solve every problem faced by firefighter organizations. However, in the likely event this new legislation becomes available to firefighter organizations, particularly in the vast majority of cities, counties and fire districts where these processes have not previously been available, representatives of unions utilizing them judiciously will likely find collective bargaining to be a far more evenhanded system than was previously the case.