Governor Signs AB 646: Factfinding Becomes Mandatory Under MMBA

Governor Brown has signed AB 646, which establishes factfinding for public employers subject to the Meyers-Milias-Brown Act (MMBA). Under AB 646, upon impasse “the employee organization may request that the parties’ differences be submitted to a
factfinding panel.” At the end of the process, the public employer may still implement its “last, best, and final offer” but only after holding a public hearing.

Comments:

AB 646 is probably the most significant change to any of California’s public sector labor relations acts since the days of Governor Davis. For those of you who practice under EERA and HEERA, you’re probably wondering what the fuss is all about since you have long had to contend with factfinding. However, for cities, counties and other jurisdictions subject to the MMBA this new requirement is a very big deal.
Practically, AB 646 means that you have to add 60-90 days to your bargaining timeline as that is how long it takes to go through the factfinding process. Yes, I know that the statute actually provides shorter timelines but don’t believe it. If you’re up against a savvy union trying to buy time to stop imposition of a LBFO, the process can be dragged out.
For those of you new to factfinding, it is essentially non-binding interest arbitration. Contrary to the term “factfinding,” it’s not just about determining “facts” like the cost-of-living, comparable market salaries, or historical salary data. Instead, factfinding almost always results in “recommendations” on the terms and conditions subject to impasse, such as salaries, health care benefits, and retirement benefits. If you would like to see examples of factfinding reports, just take a look at the PERB website which publishes factfinding reports issued under EERA and HEERA. (Click here for link).
One criticism of this bill is that only unions have the right to demand factfinding. Yes, that does seem to be one-sided but the reality is that no employer in its right mind would want to go to factfinding anyway. (Ok, there may be some rare exceptions but not many …)
Initially, this bill also imposed mandatory mediation in addition to factfinding. However, the bill was later amended to remove the provisions requiring mediation. Nevertheless, the first sentence of MMBA section 3505.4, which was amended by this bill, still states: “(a) If the mediator is unable to effect settlement of the controversy within 30 days after his or her appointment …” which may suggest to some readers that mediation is required. However, having thoroughly read the bill’s history, I do not believe it was intended to require mediation. An Assembly analysis issued on May 3, 2011, states that, “The Committee is informed the author will be offering amendments in Committee that do the following … Remove all of the provisions related to mediation, making no changes to existing law.” Subsequently, on May 5, 2011, AB 646 was amended to remove the provisions related to mandatory mediation. This history, I believe, makes it clear that AB 646 does not require mediation.
One other difference between AB 646 and factfinding under EERA and HEERA is that under AB 646, the cost of the PERB-appointed factfinder is to be split between the parties instead of paid by PERB. Practically, that’s probably better than under EERA and HEERA as the amount PERB pays factfinders is so low that it would be difficult to staff all the potential factfinding panels caused by this new law. The good news is that the final Assembly analysis hints that the cost for the factfinder will be considered a “state mandate” subject to reimbursement. The analysis estimates that there may be 100 factfinding panels a year under this new law at a cost of approximately $5,000 per factfinding. That estimate seems awfully low to me. $5,000 buys you maybe two days of factfinding, not including time for decision writing at the normal rate of most factfinders. So exactly how much the Commission on State Mandates is going to reimburse local entities remains to be seen.
So what does this all mean? If you’re a public employer you might think that because you can still implement your LBFO at the end of the day that the goal is to just get through factfinding as quick as possible. That’s potentially dangerous thinking. In the hands of a smart union, a favorable factfinding decision is a very powerful public relations tool. Therefore a public employer would be wise to approach factfinding carefully and strategically.