Decision 2610H – Regents of the University of California (Berkeley) (University Council-American Federation of Teachers)

Like the other PERB-administered statutes, the statutory scheme under HEERA presumes that notice of changes to negotiable matters will be provided “in a meaningful manner at a meaningful time.” (City of Sacramento (2013) PERB Decision No. 2351-M, pp. 29-30.) What constitutes meaningful notice will necessarily vary depending on the circumstances of each case, but, at minimum, an employer must give notice sufficiently in advance of reaching a firm decision to allow the representative an opportunity to consult its members and decide whether to request information, demand bargaining, acquiesce to the change, or take other action. By any measure, the University failed to provide UC-AFT with meaningful notice of the decision to transfer the Young Musician’s Program’s operations to a non-University entity. As early as November 2012, the University’s principal decisionmaker asked the campus general counsel to research two options, “each of which would get [the Program] out from under all the personnel issues without damaging the program.” Despite having decided as early as March 2013 to have the Program separate from the University, a University Labor Relations Specialist advised UC-AFT in April 2013 that the University was “seriously considering whether it should continue with the [Program].” In May 2013, the University informed UC-AFT that it had decided to close the Program, effective June 1, 2013. Throughout these communications, the University made no mention of its plans to subcontract or “transfer” the Program’s operations to a successor organization. By the time UC-AFT learned of the University’s decision to transfer the Program to the successor program (as opposed to simply closing it), the transfer was already well underway. (pp. 45-47.)

The University failed to provide UC-AFT with adequate notice of its decision to outsource the Young Musician’s Program. By no later than March 6, 2013, the University’s principal decisionmaker acted in consultation with the Young Musician Program’s director and its advisory board to transfer the Program to an outside entity. At that time, the University had not advised UC-AFT of the Program’s impending closure nor that it planned to continue the Program under the auspices of a non-University entity. (pp. 33-34.)

The University’s decision to subcontract the Young Musician’s Program was negotiable under either of two lines of PERB and federal cases. First, it was substantially motivated by labor costs and personnel problems which were peculiarly suitable for resolution through collective bargaining. University’s principal decisionmaker acknowledged that his decision to transfer the Program to a non-University entity was influenced by concerns that the Program consumed revenue from another department needed to cover salaries and other human resources expenditures, and that the Program was undergoing a period of growth and expansion, portending additional expenses in the future. Second, its practical effect was to replace University employees with those of another employer, the Young Musicians Choral Orchestra (YMCO), to perform essentially the same services under similar circumstances. The YMCO later “restored” the Program’s operations, pursuant to contractual agreements with the University. The YMCO uses University space for its performances. Its director is the same, its board president is the same, its marketing identity is largely the same, including its use of University trademarks and scripts, its musical instruments are the same, several of its teachers are the same, and the students served by the Program are also the same. We conclude that the University was not authorized to act unilaterally to close the Program and transfer operations to YMCO. (pp. 33, 38, 41.)

A union cannot waive bargaining over a negotiable matter when it had no actual or constructive notice of the issue until after the employer had already reached a firm decision. Even if an employer does not implement the change in policy until later, or perhaps not at all, its act of reaching a firm decision to do so without first providing meaningful notice and opportunity for bargaining violates the bilateral scheme of collective bargaining contemplated by our statutes. Where, as here, the bargaining representative has no actual or constructive notice of plans to alter negotiable matters, there is no meaningful notice, and thus no issue of waiver of the right to bargain. (p. 47.)

Like the other PERB-administered statutes, the statutory scheme under HEERA presumes that notice of changes to negotiable matters will be provided “in a meaningful manner at a meaningful time.” (City of Sacramento (2013) PERB Decision No. 2351-M, pp. 29-30.) What constitutes meaningful notice will necessarily vary depending on the circumstances of each case, but, at minimum, an employer must give notice sufficiently in advance of reaching a firm decision to allow the representative an opportunity to consult its members and decide whether to request information, demand bargaining, acquiesce to the change, or take other action. By any measure, the University failed to provide UC-AFT with meaningful notice of the decision to transfer the Young Musician’s Program’s operations to a non-University entity. As early as November 2012, the University’s principal decisionmaker asked the campus general counsel to research two options, “each of which would get [the Program] out from under all the personnel issues without damaging the program.” Despite having decided as early as March 2013 to have the Program separate from the University, a University Labor Relations Specialist advised UC-AFT in April 2013 that the University was “seriously considering whether it should continue with the [Program].” In May 2013, the University informed UC-AFT that it had decided to close the Program, effective June 1, 2013. Throughout these communications, the University made no mention of its plans to subcontract or “transfer” the Program’s operations to a successor organization. By the time UC-AFT learned of the University’s decision to transfer the Program to the successor program (as opposed to simply closing it), the transfer was already well underway. (pp. 45-47.)

The University failed to provide UC-AFT with adequate notice of its decision to outsource the Young Musician’s Program. By no later than March 6, 2013, University’s principal decisionmaker acted in consultation with the Young Musician Program’s director and its advisory board to transfer the Program to an outside entity. At that time, the University had not advised UC-AFT of the Program’s impending closure nor that it planned to continue the Program under the auspices of a non-University entity. (pp. 33-34.)

A union cannot waive bargaining over a negotiable matter when it had no actual or constructive notice of the issue until after the employer had already reached a firm decision. Even if an employer does not implement the change in policy until later, or perhaps not at all, its act of reaching a firm decision to do so without first providing meaningful notice and opportunity for bargaining violates the bilateral scheme of collective bargaining contemplated by our statutes. Where, as here, the bargaining representative has no actual or constructive notice of plans to alter negotiable matters, there is no meaningful notice, and thus no issue of waiver of the right to bargain. (p. 47.)

A union cannot waive bargaining over a negotiable matter when it had no actual or constructive notice of the issue until after the employer had already reached a firm decision. Even if an employer does not implement the change in policy until later, or perhaps not at all, its act of reaching a firm decision to do so without first providing meaningful notice and opportunity for bargaining violates the bilateral scheme of collective bargaining contemplated by our statutes. Where, as here, the bargaining representative has no actual or constructive notice of plans to alter negotiable matters, there is no meaningful notice, and thus no issue of waiver of the right to bargain. (p. 47.)

A union cannot waive bargaining over a negotiable matter when it had no actual or constructive notice of the issue until after the employer had already reached a firm decision. Even if an employer does not implement the change in policy until later, or perhaps not at all, its act of reaching a firm decision to do so without first providing meaningful notice and opportunity for bargaining violates the bilateral scheme of collective bargaining contemplated by our statutes. Where, as here, the bargaining representative has no actual or constructive notice of plans to alter negotiable matters, there is no meaningful notice, and thus no issue of waiver of the right to bargain. (p. 47.)

Even if the University’s subcontracting decision was not itself negotiable, the University nonetheless had an obligation to provide notice and opportunity to bargain over negotiable effects before implementation. Because University failed to provide adequate notice of and opportunity to bargain over its decision to subcontract the Young Musician’s Program, it necessarily also failed to provide adequate notice and opportunity for effects bargaining. (p. 49.)

PERB and California courts have often looked to private-sector precedent under the National Labor Relations Act and/or California’s Agricultural Labor Relations Act as persuasive authority for interpreting parallel provisions in the PERB-administered statutes or doctrines borrowed from private-sector decisional law and codified in our statutes. However, while federal authorities “undoubtedly provide a useful starting point,” they “do not necessarily establish the limits of California public employees’ representational rights” (Social Workers’ Union, Local 535 v. Alameda County Welfare Dept. (1974) 11 Cal.3d 382, 391), and PERB is not constrained by private-sector precedent where our statutes differ from federal law or serve a dissimilar purpose. In each instance, the touchstone for whether private-sector decisional law or other foreign authority is applicable to California public-sector labor relations is whether its underlying reasoning is consistent with the language, policies and purposes of the PERB-administered statutes. (p. 51.)

In Carlsbad Unified School District (1979) PERB Decision No. 89, the Board expressly rejected the National Labor Relations Act’s bifurcation of interference and discrimination allegations in favor of a single, comprehensive test covering all employer violations of employee rights, regardless of whether the conduct at issue is characterized as reprisal, discrimination, interference, restraint, coercion, or a threat to engage in such conduct. Although PERB has since adopted and refined other tests for employer violations of employee rights, it has never overruled the holding in San Dieguito Union High School District (1977) EERB Decision No. 22, as modified and affirmed by Carlsbad, that a single, comprehensive test applies for all employer violations of employee rights. To the contrary, because the employee rights and employer unfair practice provisions of HEERA and other PERB-administered statutes are virtually identical to those in EERA, PERB has repeatedly extended the Carlsbad test to the other PERB-administered statutes. (pp. 54-55.)

In Coast Community College District (1982) PERB Decision No. 251, the Board distinguished between the Carlsbad interference and Novato discrimination standards, but also explained that, employer conduct directed against union officials or organizers may be appropriately analyzed under either or both standards, as such conduct not only constitutes discrimination, but also “clearly interferes with the right of employees to form and participate in employee organizations.” (Id. at p. 20; Carlsbad Unified School District (1979) PERB Decision No. 89; Novato Unified School District (1982) PERB Decision No. 210.) Accordingly, under PERB precedent, and unlike private-sector precedent, such conduct may be deemed “inherently destructive” for either a discrimination or interference allegation. (p. 60, fn. 25.)

In Coast Community College District (1982) PERB Decision No. 251, the Board distinguished between the Carlsbad interference and Novato discrimination standards, but also explained that, employer conduct directed against union officials or organizers may be appropriately analyzed under either or both standards, as such conduct not only constitutes discrimination, but also “clearly interferes with the right of employees to form and participate in employee organizations.” (Id. at p. 20; Carlsbad Unified School District (1979) PERB Decision No. 89; Novato Unified School District (1982) PERB Decision No. 210.) Accordingly, under PERB precedent, and unlike private-sector precedent, such conduct may be deemed “inherently destructive” for either a discrimination or interference allegation. (p. 60, fn. 25.)

In Coast Community College District (1982) PERB Decision No. 251, the Board distinguished between the Carlsbad interference and Novato discrimination standards, but also explained that, employer conduct directed against union officials or organizers may be appropriately analyzed under either or both standards, as such conduct not only constitutes discrimination, but also “clearly interferes with the right of employees to form and participate in employee organizations.” (Id. at p. 20; Carlsbad Unified School District (1979) PERB Decision No. 89; Novato Unified School District (1982) PERB Decision No. 210.) Accordingly, under PERB precedent, and unlike private-sector precedent, such conduct may be deemed “inherently destructive” for either a discrimination or interference allegation. (p. 60, fn. 25.)

Although an employer may terminate programs or services for financial or operational reasons aimed at the fulfilment of its mission, such decisions are not immune from scrutiny where they are alleged to violate protected rights. Thus, while employees’ rights to engage in protected activity are not absolute and must coexist with the employer’s inherent managerial interests, neither are there any forms of employer conduct, including those involving fundamental policy decisions at the core of the employer’s mission, which are categorically immune from interference liability under the statute. (pp. 62-63.)

Notwithstanding similarities with the NLRB’s analysis for interference under National Labor Relations Act section 8(a)(1), the Carlsbad Board expressly rejected the notion of an implied management rights clause in the statute which would immunize managerial decisions from interference liability, and we have found no subsequent decision in which PERB has endorsed the logic of Textile Workers’ Union of America v. Darlington Manufacturing Company (1965) 380 U.S. 263 or held that an employer’s conduct is immune from interference liability, simply because it involves a managerial prerogative. (Carlsbad Unified School District (1979) PERB Decision No. 89.) To the contrary, PERB has continued to recognize an “inherent and substantial distinction” between the property interests of private-sector employers and the manner in which our statutes govern public-sector labor relations. Thus, whether the University’s decision to close and subcontract the Young Musician’s Program was negotiable or a fundamental managerial prerogative has no bearing on whether it interfered with protected rights. Rather, for analyzing an interference allegation under Carlsbad, we ask whether, under the circumstances, the University’s conduct had an actual or reasonably likely adverse effect on the exercise of protected rights, including those of the laid off Program instructors or other University employees. Because a layoff removes employees from the workplace, and may terminate the employment relationship altogether, we conclude that the University’s layoff of Program Instructors involved in protected activity would reasonably tend to discourage the laid off employees from engaging in present or future protected activity, regardless of whether it would likely discourage protected activity by other employees. (p. 65, 67.)

Employer communications to employees and their representative which misrepresent or omit material information about pending employment decisions may state an interference violation, separate from an alleged bargaining violation, because they would reasonably tend to discourage the representative from requesting negotiations, filing a grievance, or taking other action necessary to represent the employees’ or the organization’s interests. While this theory of liability overlaps factually with the inadequate notice element of UC-AFT’s unilateral subcontracting theories, it is not purely derivative of the unilateral change allegations. Employer conduct allegedly constituting a unilateral change may also state a prima facie case of reprisal or interference with protected rights, where it was allegedly undertaken for a discriminatory purpose or would reasonably tend to discourage protected activity. In such instances, establishing a bargaining violation is not necessary for proving up an independent interference or discrimination allegation. (pp. 67-68.)

Like PERB, the California Court of Appeal has held that the “inherently destructive”/“comparatively slight” framework from NLRB v. Great Dane Trailers, Inc. (1967) 388 U.S. 26, may be appropriate in interference cases, as when an employer applies workplace rules that, regardless of motive, have the effect of penalizing employees who are distinguishable only by their prior participation in protected activity. (M.B. Zaninovich, Inc. v. Agricultural Labor Relations Bd. (1981) 114 Cal.App.3d 665, 670, 675–676.) Additionally, the California Supreme Court has held that wholesale replacement of unionized with non-union employees is inherently destructive under Great Dane and similar cases, because it “has a manifest and substantial adverse impact on organizational rights.” (Rivcom Corp. v. Agricultural Labor Relations Bd. (1983) 34 Cal.3d 743, 758.) (pp. 70-71.)

Where employer conduct is deemed “inherently destructive” of protected rights, it will be excused only when caused by circumstances beyond the employer’s control and when no alternative course of action was available. The Board rejected University’s argument that it was justified in eliminating the Young Musician’s Program because 1) the Program did not fit into the strategic goals of other University departments or programs; and 2) transferring the Program’s operations to a non-University entity, which would retain significant affiliations with the University, was the most practical solution for disposing of endowed funds specifically earmarked for the Program. Even accepting these contentions as true, the Board found that they did not account for the alternatives that were available to the University, including providing UC-AFT with adequate notice of the decision to subcontract the Program, and, upon request, to bargain with UC-AFT over negotiable aspects of this decision. Nothing in HEERA required the University to choose different priorities, to reallocate its resources in a different manner, or to come to a different decision than the one University’s primary decisionmaker reached to close the Program and continue operations under a different organization. HEERA section 3570 does, however, require the University or its representatives to “engage in meeting and conferring with the employee organization selected as exclusive representative of an appropriate unit on all matters within the scope of representation.” This obligation is not extinguished, even in emergency circumstances, and, in any event, the University identified no immutable deadline or managerial interest that would have been negated had implementation been delayed. (pp. 71-72.)

In those relatively rare cases involving direct evidence of unlawful motive, it is unnecessary to resort to Novato’s analysis of nexus factors to evaluate circumstantial evidence of unlawful motive. (Novato Unified School District (1982) PERB Decision No. 210.) While reliance on circumstantial evidence of motive has undoubtedly become the primary avenue for proving discrimination or retaliation allegations, Novato itself indicates that circumstantial evidence is only necessary if there is no direct evidence of unlawful motive, as there was in Campbell Municipal Employees Assn. v. City of Campbell (1982) 131 Cal.App.3d 416. (p. 77.)

Conduct which “directly and unambiguously penalizes or deters protected activity” may appear in a simultaneous form, as where an employer is alleged to have offered, provided or maintained differential pay, benefits, hours, or working conditions between different groups of employees on the basis of union or other protected activity. Facially discriminatory conduct may also be sequential or non-contemporaneous, as when an employer changes policy in response to protected activity. For sequential discrimination, the relevant baseline for comparison is not different treatment between groups of employees, but between the employer’s policies before and after the exercise of protected rights. Here, the allegation is that the University laid off all Young Musician’s Program Instructors in response to the protected activity of some Program employees and their representative in asserting their collectively-bargained rights and prosecuting the Churning Grievance. This allegation is more aptly characterized as one involving sequential discrimination or reprisal for protected activity, rather than simultaneous discrimination against Program Instructors vis-à-vis other, University employees about whom no evidence was presented. (pp. 81-82.)

Board found direct evidence of nexus in the form of Program Director’s well-documented disdain for UC-AFT and Program Instructors’ protected activity, in addition to suspicious timing and other circumstantial evidence of unlawful motive. Regardless of University decisionmaker’s stated motives, it was clear that his decision-making process was tainted by Program Director’s hostility to the University’s collective bargaining obligations in general and to UC-AFT in particular. Under the subordinate bias liability theory, unlawful motive of a supervisor, manager or other lower-level official may be imputed to the decision-maker responsible for authorizing an adverse action, when the lower-level official recommended taking adverse action, the recommendation was motivated by protected activity, and the recommendation was a motivating factor or proximate cause of the decision to take adverse action. Even where the decision-maker’s action was entirely free of animus, the employer will nonetheless be held liable, if the decision was influenced by the unlawful animus of the lower-level official. Thus, to the extent Program Director’s demonstrably anti-union views were a contributing factor in the University’s decision to close and subcontract the Young Musician’s Program, there is direct evidence of nexus or inherently discriminatory conduct. (p. 84.)

Board found direct evidence of nexus in the form of Program Director’s well-documented disdain for UC-AFT and Program Instructors’ protected activity, in addition to suspicious timing and other circumstantial evidence of unlawful motive. Regardless of University decisionmaker’s stated motives, it was clear that his decision-making process was tainted by Program Director’s hostility to the University’s collective bargaining obligations in general and to UC-AFT in particular. Under the subordinate bias liability theory, unlawful motive of a supervisor, manager or other lower-level official may be imputed to the decision-maker responsible for authorizing an adverse action, when the lower-level official recommended taking adverse action, the recommendation was motivated by protected activity, and the recommendation was a motivating factor or proximate cause of the decision to take adverse action. Even where the decision-maker’s action was entirely free of animus, the employer will nonetheless be held liable, if the decision was influenced by the unlawful animus of the lower-level official. Thus, to the extent Program Director’s demonstrably anti-union views were a contributing factor in the University’s decision to close and subcontract the Young Musician’s Program, there is direct evidence of nexus or inherently discriminatory conduct. (p. 84.)

The University’s decision to close and subcontract the Young Musician’s Program may be fairly characterized as “inherently discriminatory” or what the Campbell and Great Dane courts referred to as “discrimination in its simplest form.” (Campbell Municipal Employees Assn. v. City of Campbell (1982) 131 Cal.App.3d 416, 423, citing NLRB v. Great Dane Trailers, Inc. (1967) 388 U.S. 26, 32.) While the layoff and subcontracting decisions did not facially distinguish between groups of employees on the basis of protected activity, as a response to the Churning Grievance, they “directly and unambiguously penalize[ ] or deter[ ] protected activity” by laying off employees and replacing them with a non-unionized workforce to perform what are, essentially, the same duties. (Rivcom Corp. v. Agricultural Labor Relations Bd. (1983) 34 Cal.3d 743, 757-758.) Moreover, laying off employees severs the employment relationship altogether and thus “creat[es] visible and continuing obstacles to the future exercise of employee rights,” while wholesale replacement of unionized employees with a non-union workforce has “far reaching effects which could hinder future bargaining,” because it negates employee choice and removes the very basis for collective bargaining. (Esmark, Inc. v. NLRB (7th Cir. 1989) 887 F.2d 739, 748.) Because we find that Program Director’s animus can be imputed to University’s decisionmaker inasmuch as it prompted his proposal and eventual decision to layoff and subcontract the Program, the University’s conduct also demonstrates hostility to the process of collective bargaining itself and makes it appear futile in the eyes of employees. (pp. 88-89.)

If the effect of the employer’s conduct on protected rights is comparatively slight, the balancing analysis focuses on whether that conduct was “reasonably adapted” to achieve the legitimate business purposes asserted. (NLRB v. Brown (1965) 380 U.S. 278, 288.) In such cases, the question of the employer’s motive is still very much at issue. In “comparatively slight” cases, if the employer comes forward with evidence that it acted for a legitimate and substantial purpose, the charging party must produce evidence of unlawful motive to sustain the charge. However, because we find the University’s conduct was inherently destructive of protected rights, no further proof of anti-union motive is necessary. Under Carlsbad Unified School District (1979) PERB Decision No. 89, an employer’s inherently destructive conduct “will be excused only on proof that it was occasioned by circumstances beyond the employer’s control and that no alternative course of action was available.” (Id. at pp. 10-11.) Private-sector authorities decided both before and after Campbell Municipal Employees Assn. v. City of Campbell (1982) 131 Cal.App.3d 416 articulate a slightly different standard, whereby the Board must balance the employer’s asserted business interest against the severity of the harm to protected rights. If the employer’s asserted business justification outweighs the harm to protected rights, there is no liability. However, if the asserted justification is insufficient to outweigh the harm to protected rights, the employer will be held liable for an unfair labor practice. Under this balancing analysis, the Board may find an unfair labor practice, even if the employer produces evidence that it acted for a legitimate business purpose. In the present circumstances, we find it unnecessary to reconcile the divergent tests under Carlsbad and the private-sector authorities from which Campbell draws its inspiration. Both lines of cases derive from NLRB v. Great Dane Trailers, Inc. (1967) 388 U.S. 26 and, under either analysis, the University has failed to justify its inherently destructive conduct. Program Director’s animus toward UC-AFT, which both prompted and infected University decisionmaker’s decision, was not a circumstance beyond the University’s control. Even under the apparently more lenient private-sector standard, the resulting harm outweighed the University’s asserted business justification. The permanent separation of the employees from their employment through layoffs, and their wholesale replacement with other, nonunionized employees, coupled with the destruction of the collective bargaining relationship itself resulting from subcontracting Young Musician’s Program, outweighs any legitimate business purpose asserted by the University in this case. (pp. 90-93.)

By closing the Young Musician’s Program at the UC Berkeley campus, laying off employees, and transferring the Program to an outside entity, the University changed policy. This change also had a generalized effect and continuing impact on terms and conditions of employment, inasmuch as “a bargaining unit is adversely affected when a work transfer results in layoffs or the failure to rehire bargaining-unit workers who would otherwise have been rehired.” (Building Material & Construction Teamsters’ Union v. Farrell (1986) 41 Cal.3d 651, 659.) (pp. 32-33.)

The University’s decision to subcontract the Young Musician’s Program was negotiable under either of two lines of PERB and federal cases. First, it was substantially motivated by labor costs and personnel problems which were peculiarly suitable for resolution through collective bargaining. University’s principal decisionmaker acknowledged that his decision to transfer the Program to a non-University entity was influenced by concerns that the Program consumed revenue from another department needed to cover salaries and other human resources expenditures, and that the Program was undergoing a period of growth and expansion, portending additional expenses in the future. Second, its practical effect was to replace University employees with those of another employer, the Young Musicians Choral Orchestra (YMCO), to perform essentially the same services under similar circumstances. The YMCO later “restored” the Program’s operations, pursuant to contractual agreements with the University. The YMCO uses University space for its performances. Its director is the same, its board president is the same, its marketing identity is largely the same, including its use of University trademarks and scripts, its musical instruments are the same, several of its teachers are the same, and the students served by the Program are also the same. We conclude that the University was not authorized to act unilaterally to close the Program and transfer operations to YMCO. (pp. 33, 38, 41.)

HEERA neither expressly enumerates nor excludes subcontracting decisions from the scope of representation. While such decisions involve managerial decisions regarding the merits, necessity or organization of services, activities or programs, they also unquestionably affect wages, hours and working conditions, including whether employees who have previously performed such work will be employed at all. Where a management decision affects the merits, necessity or organization of any service or activity provided by law, it may nonetheless be negotiable if intertwined with a negotiable decision. Put another way, a decision affecting negotiable matters does not become non-negotiable simply because other, non-negotiable matters are also implicated by the decision. (pp. 34-35.)

Using the test PERB set forth in Anaheim Union High School District (1981) PERB Decision No. 177 for the negotiability of subjects not specifically enumerated by statute as within the scope of representation, the Board has found subcontracting decisions to be negotiable if the management decision does not change the scope or direction of the enterprise. While a subcontracting decision may involve a managerial decision “at the core of entrepreneurial control” and “be based on factors not amenable to negotiation” (Ventura County Community College District (2003) PERB Decision No. 1547, p. 19), decisions involving personnel matters, such as absenteeism, workplace efficiency and employee turnover, are suitable for collective bargaining. Decisions to outsource which are based on labor costs, viz., “overall enterprise costs,” are “peculiarly suitable for resolution through the collective bargaining framework,” because the union has control over some enterprise costs (labor costs) and may make concessions through negotiations that “substantially mitigate the concerns underlying the employer’s decision, thereby convincing the employer to rescind its decision.” (Ibid.) (pp. 36-37.)

In addition to the test for negotiability set forth in Anaheim Union High School District (1981) PERB Decision No. 177, where an employer contemporaneously decides to terminate bargaining unit work and replace employees with those of an independent contractor to do the same work under similar conditions, such decisions do not involve a change in the scope and direction of the enterprise or a core entrepreneurial decision beyond the scope of the collective bargaining obligation. When this kind of subcontracting is involved, there is thus no need to inquire into labor costs or to apply Anaheim or any other tests for negotiability, as the U.S. Supreme Court, the NLRB, and PERB have all concluded that, as a matter of law, such decisions are negotiable. (p. 37.)