PERB: Decision To Conduct Open V Internal Recruitment Is Negotiable

City of Santa Maria (2020) PERB Dec. No. 2736-M (Issued on 6/30/20)

In this case the Board held that a city’s decision to conduct an open recruitment (one open to outside candidates) versus an internal recruitment (one limited to city employees) was within the scope of bargaining. This was an “easy” decision for the Board. However, to understand how the Board got to this decision you will need a little history…

County of Orange (2018) PERB Dec. No. 2594-M

For many years practitioners relied on the three-part test for negotiability set forth in City of Alhambra (2010) PERB Decision No. 2139-M (“Alhambra“). The Alhambra test was derived from the California Supreme Court’s decision in Claremont Police Officers Association v. City of Claremont (2006) 39 Cal.4th 623 (“Claremont“). However, in County of Orange (2018) PERB Dec. No. 2594-M, the Board ruled that Claremont no longer provides the best test for determining a subject’s negotiability. Instead, according to the Board, the better test is set forth in the California Supreme Court’s decision in International Assn. of Fire Fighters, Local 188, AFL-CIO v. PERB (2011) 51 Cal.4th 259, 272-273 (“Richmond Firefighters“). Under Richmond Firefighters, there are three distinct categories of managerial decisions:

(1) “decisions that ‘have only an indirect and attenuated impact on the employment relationship’ and thus are not mandatory subjects of bargaining,” such as advertising, product design, and financing; (2) “decisions directly defining the employment relationship, such as wages, workplace rules, and the order of succession of layoffs and recalls,” which are “always mandatory subjects of bargaining” (emphasis added); and (3) “decisions that directly affect employment, such as eliminating jobs, but nonetheless may not be mandatory subjects of bargaining because they involve ‘a change in the scope and direction of the enterprise’ or, in other words, the employer’s ‘retained freedom to manage its affairs unrelated to employment.’”

The big difference is that under Claremont and Alhambra, there is arguably always a balancing between a decision’s effect on the terms and conditions of employment versus an employer’s need for unencumbered decision-making. However, under the Board’s interpretation of Richmond Firefighters, no balancing is necessary if a decision directly “defines” the employment relation (category 2). To avoid any confusion, the Board overruled Alhambra to the extend it always requires a balancing test to determine a subject’s negotiability.

County of Orange (2019) PERB Dec. No. 2663-M

One year later the Board had the opportunity to apply its new test for negotiability in another Orange County case. (County of Orange (2019) PERB Decision No. 2663-M.) In that case, the county modified its promotional procedures to allow promotional opportunities to go only to those with desirable qualifications, as opposed to those with the minimum qualifications. Applying Richmond Firefighters, the Board held that promotional procedures and criteria fall into category 2, which does not require any balancing of interests. Instead, since the decision “defines” the employment relationship the Board held it is automatically negotiable.

City of Santa Maria (2020) PERB Dec. No. 2736-M

That gets us to the Board’s recent decision in City of Santa Maria. The issue in this case involved the employer’s decision to conduct an “open” recruitment (one that allows outside candidates to apply) versus an internal recruitment (one open only to city employees). Relying on its past decisions involving Orange County, the Board affirmed that changes to promotional procedures and criteria usually fall in category 2 of the Richmond Firefighters test and therefore are automatically negotiable. Accordingly, the Board held that the city’s decision to conduct an open recruitment was negotiable with the union.

Comments:

The problem I have with this case is not the Richmond Firefighters test but how the Board applied it. While I can accept that promotional procedures and criteria are generally negotiable, the decision to conduct an open recruitment versus an internal recruitment seems to me to be a step removed from one that “defines” the employment relationship. In my opinion, this type of decision falls neatly under category 3 of the Richmond Firefighters test.
In justifying its decision, the Board argued that an open versus internal recruitment can impact seniority and opportunity for advancement. That’s true. But just like a layoff, the decision to “create” a job via a promotion can also represent an employer’s determination of its enterprise. For example, an employer’s decision to conduct an open recruitment may be based on the principles underlying its merit system or other public policy concerns. In my opinion, that’s exactly the type of decision that falls under category 3 of Richmond Firefighters and requires a balancing of interests. Now, its possible that even if the Board had applied a balancing test it would have reached the same result. Nevertheless, I believe some balancing of interests should have been applied.