PERB General Counsel: Governor's Emergency Furloughs Permissible

IUOE, Unit 12 v. State of California (Department of Personnel Administration) (2009) PERB Unfair Practice Case No. LA-CE-664-S (The dismissal letter can be found on the Sacramento Bee’s website here.)

PERB’s Office of the General Counsel (OGC) has issued its first decision on the legality of the Governor’s decision to unilaterally implement furloughs of state employees. Back in January 2009, IUOE filed an unfair practice charge alleging that the State unlawfully implemented two day per month furloughs, which the Governor later increased to three days per month. IUOE argued that furloughs were a mandatory subject of bargaining and therefore the State could not act unilaterally.

In its decision, the OGC agreed that furloughs are generally subject to bargaining since they are in essence a reduction in hours. However, the OGC recognized that Government Code section 3516.5 provides that in an “emergency” the State can act before it bargains with the union. To determine what constitutes an “emergency” the OGC looked to the MMBA which contains almost identical statutory language. (Gov. Code, §3504.5.) Relying on Sonoma County Organization Employees v. County of Sonoma (1991) 1 Cal.App.4th 267, a court case interpreting the MMBA language, the OGC held that the burden fell upon the union to disprove the existence of an “emergency.” More important, the OGC held that “an emergency declaration is presumed valid and a party challenging the declaration has ‘the burden of proving its invalidity.’” Here, the OGC found that the Governor’s Executive Orders contained enough facts to establish that an emergency existed and that IUOE had provided no facts showing otherwise. Accordingly, the OGC dismissed the unfair practice charge.

Comments:

This case could be ground-breaking. As it stands, both the Dills Act and the MMBA have language allowing an employer to act unilaterally in an “emergency.” That’s really nothing new as the NLRA has long recognized that an employer can act unilaterally in an emergency. The same doctrine has been recognized under the other acts administered by PERB, such as EERA. The problem for employers is how “emergency” has traditionally been defined. The unions have always argued that a true emergency does not exist unless the employer can show that it had no other choice but to take the action it did. Here, however, the OGC did not discuss at all whether the Governor had options other than furloughs (e.g. layoffs). Is that not a requirement of an “emergency”? If so, that’s a very favorable clarification for public employers.
The decision is also significant because it holds that the declaration of an emergency is “presumptively” valid. That means the burden of proof rests on the union. Prior cases discussing emergencies could be read to place the burden of proof on the employer to establish an emergency.
This decision also does not bode well for state employees in the coming fiscal year. The unions have been publicly complaining that furloughs are bad public policy because they reduce state services to the public. The unions have been making this argument hoping that the Governor would reduce or eliminate the furloughs. However, state employees should recognize that the Governor could just as well impose a straight salary cut. Under this decision, where there is a bona fide emergency, the Governor could just as well impose salary cuts as impose furloughs. Salary cuts have the benefit of not reducing state services. I’m not saying that salary cuts makes sense—especially in classifications where state employees are already paid less than employees in comparable jurisdictions—but it’s certainly an option the Governor must examine given the dire fiscal situation.
Finally, it should be noted that this case is not precedential. However, if IUOE files an appeal to the full Board of PERB, any decision rendered will be precedential. My bet is that an appeal will be filed and if the Board affirms—which it does more than 90% of the time—it will be a very favorable decision for pubic employers.

[ADDENDUM: Got an email regarding the notion of the Governor imposing salary cuts. My comments above are aimed at what the Governor can or can’t do under the Dills Act, since that’s what the case was about. Obviously, you still have the Department of Personnel Administration v. Superior Court (1992) 5 Cal.App.4th 155, 174-175 case (which I talked about before here) which says that only the Legislature can directly change salaries. However, there are ways to reduce compensation without violating that case and those options appear to be open to the Governor if the rationale in this decision is adopted by the Board at PERB. (Further, in my mind it’s at least conceptually possible that the Governor could circumvent the Department of Personnel Administration case and lower salaries in a true emergency, but’s that for another post) In any event, my point was that things could get a lot worse than the current furloughs – which is still true.]