Decision 2958M – * * * JUDICIAL APPEAL PENDING * * * City and County of San Francisco

The City engaged in bad faith bargaining when it repeatedly and preemptively stated that union’s job protection proposals would be ineligible for interest arbitration. These statements were misrepresentations and amounted to an unsupportable and unilaterally announced ground rule that frustrated negotiations by artificially separating job protection proposals from all the other issues under discussion. (Cf. County of Ventura (2021) PERB Decision No. 2758-M, pp. 36-37 [county’s material misrepresentation evidenced bad faith bargaining]; City of Arcadia (2019) PERB Decision No. 2648-M, p. 40 [employer may not unilaterally establish ground rules]; City of San Jose (2013) PERB Decision No. 2341-M, pp. 19-20 [insistence on fragmented or “piecemeal” bargaining evidences bad faith because it arbitrarily limits the range of possible compromises].) In these circumstances, PERB rejected the City’s claim that it engaged in lawful hard bargaining and instead concluded that the City bargained in bad faith in violation of MMBA section 3506.5(c). (Consolidated Irrigation District (2024) PERB Decision No. 2905-M, p. 28 [“hard bargaining” defense fails if the totality of the circumstances shows that respondent’s bargaining conduct manifested bad faith].) (p. 32.)

The City engaged in bad faith bargaining when it repeatedly and preemptively stated that union’s job protection proposals would be ineligible for interest arbitration. These statements were misrepresentations and amounted to an unsupportable and unilaterally announced ground rule that frustrated negotiations by artificially separating job protection proposals from all the other issues under discussion. (Cf. County of Ventura (2021) PERB Decision No. 2758-M, pp. 36-37 [county’s material misrepresentation evidenced bad faith bargaining]; City of Arcadia (2019) PERB Decision No. 2648-M, p. 40 [employer may not unilaterally establish ground rules]; City of San Jose (2013) PERB Decision No. 2341-M, pp. 19-20 [insistence on fragmented or “piecemeal” bargaining evidences bad faith because it arbitrarily limits the range of possible compromises].) In these circumstances, PERB rejected the City’s claim that it engaged in lawful hard bargaining and instead concluded that the City bargained in bad faith in violation of MMBA section 3506.5(c). (Consolidated Irrigation District (2024) PERB Decision No. 2905-M, p. 28 [“hard bargaining” defense fails if the totality of the circumstances shows that respondent’s bargaining conduct manifested bad faith].) (p. 32.)

Precedent requires PERB to harmonize the San Francisco City Charter with the MMBA if possible. (Building Material & Construction Teamsters’ Union v. Farrell (1986) 41 Cal.3d 651, 665 [noting important goal of harmonizing the San Francisco City Charter with the MMBA, if possible].) (p. 29.)

Under the MMBA, a local agency may adopt reasonable rules and regulations about resolution of collective bargaining disputes. (Gov. Code, § 3507(a)(5).) MMBA section 3509(b) makes it unlawful to violate a reasonable local rule adopted under section 3507, and section 3509(b) further provides that PERB shall process any such claim as an unfair practice charge. This means that a party must normally use PERB’s unfair practice process to challenge any alleged violation of a local rule adopted under section 3507. (City and County of San Francisco v. International Union of Operating Engineers, Local 39 (2007) 151 Cal.App.4th 938, 944 (CCSF v. Operating Engineers).) A party seeking to enforce a local rule cannot eschew filing an unfair practice charge in favor of filing a lawsuit in superior court. (Id. at pp. 944-950.) Thus, in CCSF v. Operating Engineers, when the City filed a petition to compel arbitration against a union for refusing to engage in interest arbitration and thereby allegedly violating Charter section A8.409-4, the superior court lacked jurisdiction to adjudicate the claim. (Ibid.) This was true even though the City’s petition did not frame its claim as an unfair practice and did not mention the MMBA. (Id. at p. 945 [PERB’s exclusive jurisdiction derives from the conduct at issue rather than how a party chooses to describe or challenge such conduct].) (pp. 15-16.)

When interpreting the San Francisco Charter to discern whether it exempts a proposal from interest arbitration, the “primary guide” is the Charter’s “plain meaning.” (San Francisco Fire Fighters Local 798 v. City and County of San Francisco (2006) 38 Cal.4th 653, 671.) The City’s argument that attorneys’ job protection proposals were not amenable to interest arbitration is at odds with the Charter’s language. San Francisco Charter section A8.409-4, which provides for interest arbitration, is a local agency rule on resolution of bargaining disputes. Charter section A8.409-4 includes narrow exceptions which show that the Charter drafters were fully aware how to remove matters from interest arbitration, and in fact did so for a limited set of disciplinary matters—those related to police officers, deputy sheriffs, and firefighters---but there is no exclusion for attorney discipline. (pp. 15, 18.) The plain language of a second provision, Charter section A8.409-3, declares the City must “bargain in good faith on all matters within the scope of representation as defined by [MMBA] section 3504, relating to the wages, hours, benefits and other terms and conditions of [City] employment, including . . . agreements to provide binding arbitration of discipline and discharge.” (Emphasis supplied.) The carve-out from section A8.409-3 for employees and certain matters that fall under the civil service merit system does not exclude the explicitly included topic of “binding arbitration of discipline and discharge.” Thus, even if attorneys fell within the merit system, which they do not, the City could not argue that there was a carve-out for the attorneys’ job protection proposals. Moreover, the carve-out provides that the civil service commission (CSC) is the bargaining entity for those matters falling under the carve-out, and the City never referred the union’s job protection proposals to the CSC or suggested that the union do so. Rather, the City’s negotiators bargained over the job protection proposals, further confirming that such proposals do not fall within the CSC carve-out. (pp. 19-23.)

San Francisco Charter section 10.104 states that certain City employees, including attorneys, “shall be exempt from competitive civil service selection, appointment and removal procedures,” and that “the person serving in the position shall serve at the pleasure of the appointing authority.” This provision exempts attorneys from the civil service merit system. However, job protection proposals are fully bargainable and eligible for interest arbitration under the City Charter. Serving “at the pleasure” of management has no single, uniform meaning, as it leaves open what protections management may adopt relative to the positions in question. Thus, while employees serving at the pleasure of management normally have no property interest giving rise to constitutional due process, they are fully able to avail themselves of job protections that may be in place by MOU or by any other lawful policy. (Bishop v. Wood (1976) 426 U.S. 341, 345 [employee who “held his position at the will and pleasure” of a local agency had “no right to continued employment,” but employee’s removal was conditioned on compliance with procedures set out in the local agency’s procedures]; Mervin v. Federal Trade Commission (D.C. Cir. 1978) 591 F.2d 821, 828-830 [government attorney who “served at the pleasure of his superiors,” had “no property right to continued employment cognizable under the due process clause,” but had the right to pursue administrative remedies to enforce protections afforded under an administrative manual and a regulation regarding layoff order.]; accord Bogacki v. Bd. of Supervisors (1971) 5 Cal.3d 771, 775-777 [employees who served “at the pleasure of their department heads” were, nonetheless, afforded certain dismissal appeal procedures].) The title of section 10.104 (“Exclusions from Civil Service Employment”) confirms that its purpose is to exclude employees from civil service merit protections rather than to specify what alternate job protections may result from bargaining and interest arbitration, or from policy determinations for unrepresented employees. (pp. 26-29.)

Disciplinary procedures and criteria and other job protection proposals are within the scope of representation. (Healdsburg Union High School District and Healdsburg Union School District/San Mateo City School District (1984) PERB Decision No. 375, p. 69.) This includes proposals that require employers to show cause for imposing discipline. (Id. at pp. 69-70; accord Cerritos Community College District (2022) PERB Decision No. 2819, pp. 27-29; City of Davis (2016) PERB Decision No. 2494-M, pp. 28-30; Fairfield-Suisun Unified School District (2012) PERB Decision No. 2262, p. 12.) Indeed, investigatory and disciplinary procedures “lie at the core of traditional labor relations” and are “particularly amenable to collective bargaining.” (County of Sonoma (2023) PERB Decision No. 2772a-M, p. 24.) (pp. 26, 30.)

The City waived its argument that its civil service rules carved-out attorney discipline from binding interest arbitration by not raising it before the ALJ. (Los Angeles County Superior Court (2018) PERB Decision No. 2566-C, p. 12 [noting well-established rule that the Board will not normally review a matter never raised before the ALJ].)