PERB: One Indicator Of Bad Faith Is Now Enough

City of San Jose (2013) PERB Decision No. 2341-M (Issued on 12/06/13)

“One indicia of bad faith is not enough to demonstrate a prima facie case of bad faith or surface bargaining.” This rule, or a variation of it, has been cited in dozens upon dozens of PERB cases. But it’s no longer good law.

This case involved an allegation of bad faith bargaining by the City in its negotiations with AFSCME Local 101. The Board decision is 51 pages. For the sake of brevity I won’t recite all the facts but just highlight the key legal holdings.

Establishing Bad Faith Bargaining

The Office of the General Counsel found that the allegations in the unfair practice charge established a single indicator of bad faith bargaining. Relying on Board precedent, the Office of the General Counsel dismissed the charge because more than one indicator of bad faith bargaining is required under the totality of the circumstances test.

The Board reversed. The Board held that early cases merely stated that one indicator of bad faith bargaining is usually not sufficient. The Board said that there was never intended to be a categorical rule that a single indicator of bad faith bargaining is insufficient. According to the Board, such a rule would ignore situations where a single instance of bad faith bargaining has a detrimental effect on the parties’ bargaining relationship.

Indicia of Bad Faith Bargaining

The Board also held that the Office of the General Counsel failed to consider all the possible indicia of bad faith bargaining alleged by AFSCME. Among the Board’s holdings:

1. Proposals to Defer Bargaining On Mandatory Subjects. The City proposed a reopener proposal on the issue of retiree healthcare. Presumably, the City wanted to wait until all the other contracts were open and then bargain this issue collectively with all the unions. However, the Board held that a proposal to delay bargaining on a mandatory subject is tantamount to a refusal to bargain. The Board held that, “[A] party may not refuse to discuss a mandatory subject by insisting on a “proposal” that postpones negotiations on certain mandatory subjects until agreement on all others is secured.”

2. “Rush to Impasse.” AFSCME also alleged that the City merely went through the motions of bargaining in a “rush to impasse.” Obviously, there are a lot of facts set forth in the decision. However, the key fact the Board appeared to focus on were last minute concessions made by the union right before the declaration of impasse. The Board—again, this is a simplification of the facts—held that the City’s decision to declare impasse instead of countering the last minute concessions raised an “inference” that the City was intent on reaching impasse.

3. Insisting on Prohibited Subject of Bargaining. Finally, AFSCME alleged that the City improperly insisted to impasse on a proposal to change sick leave payouts. AFSCME asserted that the payout formula was a vested right and refused to bargain over it. After the dismissal, there was a superior court decision on this issue in favor of the union’s position. The Board held that under these circumstances there was enough to issue a complaint.

Comments:

The Board was careful to note that at this stage of the proceedings, the facts are just allegations. The City will have the full opportunity to defend itself at the administrative hearing. So with that in mind, it’s probably a bit premature to talk about the long-term effects of this decision on substantive law.
However, what this decision will certainly do is cause the Office of the General Counsel to issue more complaints. The Board’s discussion about a “rush to impasse” is especially likely to cause more complaints to issue. For example, suppose I tell the union that I need concessions totaling 10%. Throughout bargaining the union will not give me more than 5%. At the last minute, the union gets wind that I am about to declare impasse and proposes 6%. I immediately reject it because it falls short of my 10% goal. Now, you can accuse me of engaging in ‘take it or leave it” bargaining, which might be evidence of bad faith. But how does the mere fact that I didn’t counter your last minute 6% offer evince bad faith? Especially when I’ve told you I need 10% all along? Again, I’m oversimplifying the Board’s decision but its seems to me that even if the ALJ concludes that there is no bad faith bargaining, this decision will still cause Board agents to issue more complaints when it comes to bargaining. So employers will want to keep this in mind throughout bargaining and especially if a declaration of impasse is contemplated.