Governor Didn't Have To Meet And Confer On Overtime Changes

State of California (Department of Personnel Administration) (2009) PERB Decision No. 2085-S (Issued on 12/22/09)

Facts:

Local 39 and the State of California were parties to a Memorandum of Understanding (MOU) covering employees in Unit 13 (Stationary Engineers) that expired on June 30, 2008. The MOU provided that in calculating overtime, “all compensable time (i.e., sick leave, vacation, annual leave, holiday credit, CTO and personal leave) shall be considered as time worked.”

On February 19, 2009, the Legislature passed SBX3 8 as part of a comprehensive plan to close the State budget deficit. Among other changes, SBX3 8 added section 19844.1 to the Government Code. That section states:

“Notwithstanding any other provision of law, personal leave, sick leave, annual leave, vacation, bereavement leave, holiday leave, and any other paid or unpaid leave, shall not be considered as time worked by the employee for the purpose of computing cash compensation for overtime or compensating time off for overtime.”

After section 19844.1 was enacted, the State changed the method it used to calculate overtime for Unit 13 employees. Local 39 argued that the State was obligated to meet and confer before implementing any changes. Local 39 asserted that the State committed an unfair practice by acting unilaterally.

Decision:

The Board agent dismissed the charge. On appeal, the Board affirmed. First, the Board considered whether the State had an obligation to meet and confer over implementation of section 19844.1 after its enactment. Relying on State of California (Department of Personnel Administration) (2008) PERB Decision No. 1978-S (“DPA”), the Board said no. Quoting from the DPA decision, the Board held that:

“The California Constitution provides that the Legislature ‘may exercise any and all legislative powers which are not expressly, or by necessary implication denied to it by the Constitution.’ [Citations omitted] The Dills Act is a limited delegation of authority by the Legislature to the Governor, allowing DPA, as the State employer’s representative, the authority to bargain with the State’s unions to determine terms and conditions of employment. [Citations omitted] The Dills Act, however, does not preclude the Legislature itself from unilaterally adopting, enacting or implementing terms and conditions of employment which, if implemented by DPA without legislative direction, would have been an unfair practice if not negotiated.”

Next, the Board considered whether the Governor was obligated to meet and confer with Local 39 prior to signing the new law. Relying on State of California, Department of Personnel Administration (1988) PERB Decision No. 706-S, the Board held that, “[W]hen the Governor is acting as a participant in the legislative process and is fulfilling his/her constitutional responsibilities thereby, those acts are to be viewed separate and apart from his/her responsibilities as a chief executive and employer of State employees.” Thus, the Board held that the Governor was not obligated to meet and confer with Local 39 prior to signing SBX3 8.

After dismissing the remaining bad faith bargaining allegation, the Board affirmed the dismissal of the entire unfair practice charge.

Comments:

The Board’s holding that the Governor didn’t have to meet and confer with the union over the implementation of section 19844.1 seems straight-forward. One of the exceptions to the meet and confer requirement has always been where the employer has no choice because of a change in law. Here, that was the case.
More interesting was the Board’s holding that the Governor wasn’t required to meet and confer with the union prior to signing the new law. Under the Board’s reasoning, its holding would be the same even if the Governor had proposed the legislative change (which was probably the case here, but the decision didn’t say). This holding is significant because the same would likely not be true for cities and counties under the MMBA, and likely for school districts under EERA. This is because under the California Supreme Court’s decision in Seal Beach Police Officers Association v. City of Seal Beach (1984) 36 Cal.3d 591 (“Seal Beach“), a city or county must generally give notice to the union and engage in the meet and confer process before taking legislative actions involving subjects within the scope of bargaining. Thus, unlike the Governor, a city or county cannot generally separate its “legislative” function from its function as an “employer.
Interestingly, the Board’s decision in State of California, Department of Personnel Administration (1988) PERB Decision No. 706-S did not discuss Seal Beach. However, there is another precedential Board decision that does, State of California, Governor Pete Wilson (1992) PERB Decision No. 927-S. That decision involved an initiative proposed by the Governor that would have allowed the Governor to impose furloughs on state employees upon a declaration of a fiscal emergency. The union argued that under Seal Beach, the Governor had to meet and confer over the initiative. PERB avoided answering that question directly. Instead, PERB held that the subject matter of the initiative was not within the scope of bargaining. Specifically, PERB held that, “the mediatory influence of negotiations is not suited to the resolution of conflict over whether the Governor should have the power, when a fiscal emergency is declared, to reduce the salaries of state employees, or furlough state employees. In addition imposing such an obligation would unduly abridge the State employer’s freedom to exercise those managerial prerogatives essential to the achievement of the State’s mission.” Accordingly, PERB held that: “… the subject of the Governor obtaining the power, through the initiative process, to reduce the salaries of state employees or to furlough state employees when a fiscal emergency is declared is not a subject within the scope of representation.”
The State of California, Governor Pete Wilson (1992) PERB Decision No. 927-S decision is significant because it is the clearest precedential decision that I know of that states that a furlough of employees during a fiscal emergency is not within the scope of bargaining. Obviously, this is a huge area of contention right now in the public sector. The unions have vigorously asserted that any change in hours is negotiable; and there are certainly precedential decisions supporting that contention. However, none of those decisions have addressed changes in hours (i.e. furloughs) in the context of a fiscal emergency. While PERB has acknowledged the concept of a “fiscal emergency” there are few cases actually finding one. Will this latest fiscal crisis—considered by many to be the worse since the Great Depression—qualify as a “fiscal emergency”? If it doesn’t, I don’t know what would. If it does constitute a fiscal emergency, the State of California, Governor Pete Wilson decision suggests that PERB might find furloughs and other actions to be outside the scope of bargaining.