Governor's Communication To Employees Was Permissible

State of California (Department of Personnel Administration) (2009) PERB Decision No. 2078-S (Issued on 11/24/09)

Facts

This unfair practice charge arose out of bargaining between the State of California (State) and the Stationary Engineers Local 39, International Union of Operating Engineers, AFL-CIO (Local 39) in 2008. Local 39 alleged that the State committed an unfair practice by: (1) failing to make or respond to economic proposals during bargaining; (2) failing to respond to information requests; (3) making bargaining proposals directly to employees; and (4) claiming it had no authority to bargain over economic items after stating at the outset of negotiations that it had such authority. The Board agent dismissed the charge in its entirety. Local 39 appealed the dismissal to the Board on all its allegations, except for allegation number 2 (failure to provide information).

The parties began bargaining in April 2008. According to the charge, negotiators from the Department of Personnel Administration (DPA) told Local 39 that they had authority to negotiate over all issues. However, in May 2008, Local 39 alleged that DPA negotiators told it they had no authority to address economic proposals until after the State budget was passed. Even after the budget passed, Local 39 alleged that DPA negotiators continued to claim they had no authority to negotiate over economic items.

In November 2008, DPA told Local 39 that the Governor would be holding a press conference to discuss the State budget crisis. The DPA representatives said the Governor was considering several proposals that would impact State employees, including one furlough day per month, a reduction in holiday premium pay, changes in overtime calculation methods, and the elimination of Columbus Day and Lincoln’s Birthday as State holidays. Also in November, the Governor issued a letter to all State employees informing them of “a projected $11 billion revenue shortfall this fiscal year.” The letter detailed four measures affecting State employees that would be proposed to the Legislature as part of the Governor’s plan to close the budget gap: (1) one furlough day per month for 18 months; (2) elimination of Columbus Day and Lincoln’s Birthday as State holidays; (3) increased ability to work four ten-hour days per week (4/10 workweek); and (4) elimination of leave time from overtime calculation. The letter assured State workers that, “we are working closely with union leadership to achieve results in the least painful way possible. All the actions we’re proposing must first be approved by the Legislature.”

Board’s Decision

On appeal, the Board held that DPA’s failure to make economic proposals was not, by itself, sufficient to establish bad faith bargaining. Importantly, the Board affirmed the principle that, “it is permissible for an employer to defer bargaining over economic items when its financial situation is uncertain.” (State of California (Department of Personnel Administration) (1986) PERB Decision No. 569-S.) The Board also affirmed that it does not constitute bad faith bargaining for an employer to defer making a firm economic proposal until it “has had an opportunity to review the final budget in good faith in order to determine the funds potentially available for salary increases.” (State of California, Department of Personnel Administration (1990) PERB Decision No. 823-S.)

Similarly, the Board rejected Local 39’s contention that it constituted bad faith bargaining for DPA negotiators to claim a lack of authority to negotiate economic proposals. The Board affirmed that in the public sector, “it is not an unfair practice for a negotiator to discuss issues and make proposals that are subject to ratification by the employer.” (Oakland Unifed School District (1983) PERB Decision No. 326.) A negotiator’s lack of authority only constitutes an unfair practice when it is used to foreclose the achievement of any agreement.

Finally, the Board addressed Local 39’s contention that the Governor’s communication to employees constituted unlawful direct dealing. The Board found that there was no allegation that the Governor was attempting to bargain directly with employees. Further, the Governor’s communication did not contain any threats of reprisal or promise of benefit. The only theory that Local 39 appeared to allege was that the communication “undermined” its authority in the eyes of its bargaining unit members. The Board noted that it had found a violation under such a theory in only one case, California State University (1989) PERB Decision No. 777-H.

In that case, the California State University had published an article in its newsletter stating that it had offered a 4% raise and implied that it would take effect. The Board found that the publication “tend(ed) to diminish the authority of the exclusive representative at the table, as well as in the eyes of bargaining unit employees.” Here, however, the Board distinguished California State University because the Governor’s communication clearly indicated that the State would fulfill its bargaining obligations. Accordingly, the Board affirmed the dismissal.

Comments:

There are several items in this decision that are helpful for public employers. First, public employers should be pleased that the Board has affirmed the rule that it is not an unfair practice to delay economic bargaining until the budget is passed. This should be especially comforting to schools, local agencies, and universities who all find themselves at the mercy of the State legislature and Governor each year during the budget process.
Next, I think the Board’s treatment of California State University is important. In my opinion, that 20-year old decision was wrongly decided and should be overturned. I have never understood why completely factual information transmitted by the employer to employees should be considered an unfair practice. It’s not as if the unions are prohibited from responding. To the contrary, unions regularly communicate with employees regarding the status of bargaining. Often, unions will make claims that the employer feels are untrue. What happens is that the employees who view those untrue claims then take out their frustration and/or anger on the employer, including supervisors, managers, and governing board members. It seems only fair that when that occurs an employer should be able to respond with completely factual information. To the extent such communications may “diminish” the union in the eyes of its members—it seems to me—that is a function of the facts, and should not be an unfair practice. So I would have preferred that the Board just overturn California State University. However, I can live with the holding here: that California State University doesn’t apply (at least) where the employer makes it clear in the communication that bargaining is continuing and/or that it will meet its bargaining obligations.