PERB: Employer Must Negotiate "Number" Of Employees Subject To Layoff

Salinas Valley Memorial Healthcare System (2012) PERB Decision No. 2298-M (Issued on 12/20/12)

This case doesn’t necessarily break new legal ground, but it highlights an area of law that has not been fleshed-out very well by the courts or PERB. The issue is this: Once an employer decides to layoff employees, does the employer have to bargain with the union over the number of employees to be laid off?

Facts:

In late 2010, the employer in this case, a public hospital, notified the union that it would have to lay off employees by the end of the year in order to ensure continued profitability. The union responded by demanding to bargain over the layoff decision itself, in addition to demanding to bargain over the timing, identity, and number of employees to be laid off. The employer declined to bargain with the union over these issues which the employer considered management prerogatives.

At the end of the year, 20 employees were laid off. The union then filed an unfair practice charge with PERB alleging that the employer unlawfully refused to bargain over items within the scope of bargaining. The Board agent agreed with the employer that the issues involved were management prerogatives and dismissed the charge. The Board partially affirmed and partially reversed the Board agent’s decision.

Board Decision

1. The Decision to Lay off Employees is a Management Right

The good news is that the Board affirmed that a decision to lay off employees is a management right. According to the Board’s decision, “[T]he MMBA imposes a duty to meet and confer over the implementation and the impacts and effects of a layoff decision, but not the decision itself.” Therefore the Board affirmed this part of the Board agent’s dismissal.

2. The Number of Employees to be Laid Off is Negotiable

In affirming that the decision to lay off employees is a management right, the Board also affirmed that any “impacts” or “effects” of the layoffs are negotiable. Among the negotiable impacts or effects of a layoff are the number and identity of the employees to be laid off, and the timing of the layoffs. Because the employer refused to negotiate over the timing, number and identity of the employees to be laid off, the Board overturned the Board agent’s dismissal on those issues and remanded this case back for the issuance of a complaint.

Comments:

The issue I want to focus on is the “number” of employees subject to a layoff. The Board’s holding that the “number” of employees is negotiable is not novel, but comes directly from language in the seminal Vallejo case (Fire Fighters Union v. City of Vallejo (1974) 12 Cal.3d 608, 621) and stated again in the recent Richmond case (International Ass’n of Fire Fighters, Local 188, AFL-CIO v. Public Employment Relations Bd. (2011) 51 Cal.4th 259, 264.) However, despite this language appearing in those cases, there really has been no published decision explaining what it means to bargain over the “number” of employees subject to layoff.

Here’s the problem, let’s say an employer tells the union that it is facing a $1 million deficit and therefore has decided to lay off 20 employees. What exactly does it mean to say that the “number” of employees is negotiable? Can the union come in and say that the employer doesn’t really need to lay off 20 employees because the deficit isn’t $1 million but something less? Can the union argue that the employer should cut its budget elsewhere in order to lay off less than 20 employees? Can the union argue that the instead of layoffs the employer should dip into its reserves? I don’t think so because this would make having to negotiable over the “number” of employees the same as negotiating over the layoff decision itself.

So then what does it mean to negotiate over the number of employees? The only case cited in the original Vallejo decision is N. L. R. B. v. United Nuclear Corp., 381 F.2d 972 (C.A.N.M. 1967). In that case, the employer refused to tell the union how many and which employees were going to be laid off before the actual layoff. The union in that case did not challenge the employer’s decision to lay off employees; the union just wanted to know who was going to be laid off.

So when you look at the history of this issue, the “number” of employees is always connected to the “identify” of the employees. In essence, the union has a right to know who is going to be laid off. And when you identify who is going to be laid off you necessarily provide information on the number of employees being laid off. I do not think that the intent of Vallejo and Richmond was to require an employer to bargain over the number of employees subject to a layoff where such negotiations would invade the employer’s right to make the decision itself. However, those decisions certainly don’t provide any definitive guidance.

Because this decision was an appeal from a dismissal, there is no factual record. So we don’t have facts that might provide us a good example of what it means to negotiate over the number of employees to be laid off. However, any employer contemplating a layoff should be prepared to respond to a request by the union to negotiate over the number of employees to be laid off. Until we get further guidance on what exactly that means, employers will have to proceed with caution.