AB 537: How Does It Change The MMBA?

As introduced, AB 537 would have made dramatic changes to the MMBA. Many of those dramatic changes were removed from the bill as it advanced through the legislature. As signed by the Governor, AB 537 only amends two sections of the MMBA. Here’s a closer look at what it does.

Voting on a Tentative Agreement

AB 537 amends section 3505.1 of the MMBA to provide that:

If a tentative agreement is reached by the authorized representatives of the public agency and a recognized employee organization or recognized employee organizations, the governing body shall vote to accept or reject the tentative agreement within 30 days of the date it is first considered at a duly noticed public meeting. A decision by the governing body to reject the tentative agreement shall not bar the filing of a charge of unfair practice for failure to meet and confer in good faith. If the governing body adopts the tentative agreement, the parties shall jointly prepare a written memorandum of understanding.

Comments:

AB 537 introduces the term “tentative agreement” (TA). In labor relations, TA is usually a term of art. A TA is an agreement reached by the bargaining teams that is still subject to ratification by the principals. Often times individual articles of a contract will be ‘TA’d’ during bargaining. That means the parties have reached agreement on that particular article and each side agrees that the other will not have to bargain over that article again during negotiations. Once agreement is reached on all articles, then there is a TA on the memorandum of understanding (MOU).
AB 537 says the governing body has to accept or reject the TA within 30 days of the date it is first considered at a duly noticed meeting. Significantly, there is no requirement in the MMBA that a TA be placed for consideration at a noticed meeting by a certain deadline. However, once it is placed on the agenda of a noticed meeting the governing body has 30 days to approve or reject it. That really shouldn’t be an issue for public entities as most of the time action is taken on the same day an agreement comes up for consideration.
One difficulty with AB 537 is that it says the governing body must vote to accept or reject the TA. In the vast majority of negotiations, here is what happens: 1) the parties reach a TA on a MOU; 2) the union submits the TA for ratification by its membership, often supplying its membership a summary of the agreement; 3) once the union ratifies, the final MOU is drafted by the parties and that document is then submitted to the governing body for approval. So typically, the TA itself is not the document that is submitted to the governing body. It’s the MOU. Granted, sometimes the two documents are one and the same. However, more often than not the TA will not contain all the language necessary for the MOU.
Furthering the confusion, AB 537 says that if the governing body adopts the tentative agreement, the parties shall jointly prepare a written MOU. However, the bill is silent on whether the MOU must be approved. That begs the question, what if the TA is approved but a dispute arises over the MOU which it is not approved? It’s unclear what happens.
Here’s one way to proceed: I don’t see anything in AB 537 prohibiting a governing body from voting to accept or reject the TA at the same time it votes to accept or reject the MOU. In other words, I don’t see why the MOU couldn’t be drafted and submitted for approval along with the TA. Assuming that it’s safest to have the governing body approve the MOU, and not just the TA, this might be the way to proceed.

Deferral to Arbitration

AB 537 amends section 3505.8 of the MMBA to provide that:

An arbitration agreement contained in a memorandum of understanding entered into under this chapter shall be enforceable in an action brought pursuant to Title 9 (commencing with Section 1280) of Part 3 of the Code of Civil Procedure. An assertion that the arbitration claim is untimely or otherwise barred because the party seeking arbitration has failed to satisfy the procedural prerequisites to arbitration shall not be a basis for refusing to submit the dispute to arbitration. All procedural defenses shall be presented to the arbitrator for resolution. A court shall not refuse to order arbitration because a party to the memorandum of understanding contends that the conduct in question arguably constitutes an unfair practice subject to the jurisdiction of the board. If a party to a memorandum of understanding files an unfair practice charge based on such conduct, the board shall place the charge in abeyance if the dispute is subject to final and binding arbitration pursuant to the memorandum of understanding, and shall dismiss the charge at the conclusion of the arbitration process unless the charging party demonstrates that the settlement or arbitration award is repugnant to the purposes of this chapter.

Comments:

It’s very common for a grievant to miss a contractual deadline during the grievance process and for the employer to refuse to arbitrate the grievance based on that failure. The union then has to bring a motion to compel arbitration in superior court. The addition of 3505.8 attempts to stop this practice by requiring that such a defense be submitted to the arbitrator.
3505.8 also codifies PERB’s deferral doctrine. Deferral to arbitration is contained within the statutory language of EERA, HEERA, and the Dills Act. However, prior to AB 537, it was not in the MMBA. Instead, PERB adopted a regulation for deferral. (PERB Reg. 32620.) AB 537 codifies the deferral doctrine. Because it was already enforced pursuant to PERB regulation, I don’t expect this particular change to have much of an impact.