Decision 2670M – * * * JUDICIAL APPEAL PENDING * * * County of Santa Clara

SF-CE-1648-M

Decision Date: September 20, 2019

Decision Type: PERB Decision

Description:  Charging Party claimed that it remained the exclusive representative of former private sector hospital employees after Respondent purchased the hospitals in a bankruptcy sale, thus alleging that Respondent was required to recognize and bargain with Charging Party as the hospital employees’ representative.

Disposition:  The Board found that Respondent lawfully accreted its new hospital employees to two existing bargaining units already represented by other exclusive representatives.  Respondent had no obligation to recognize and bargain with Charging Party.

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Decision Headnotes

101.00000 – PERB: OPERATION, JURISDICTION, AUTHORITY; APPLICABILITY OF AND CONFLICTS WITH OTHER STATUTES
101.01000 – In General

The Legislature’s failure to address successorship in the MMBA does not mean it intended to prohibit application of the successorship doctrine to local public agencies. Legislative silence is not the equivalent of positive legislation. (p. 18.) Because the NLRA and MMBA similarly protect employees’ rights to bargain collectively through an employee representative of their own choosing and bar employers from refusing to negotiate with their employees’ chosen representative, there is no statutory reason to preclude application of the successorship doctrine in California’s public sector. (pp. 18-19.) However, differences between private and public sector employment require a more flexible accretion policy in the public sector to ensure that bargaining units are appropriately and rationally structured. (p. 19.)

101.00000 – PERB: OPERATION, JURISDICTION, AUTHORITY; APPLICABILITY OF AND CONFLICTS WITH OTHER STATUTES
101.01000 – In General

The federal presumption in favor of single facility bargaining units in the healthcare industry is incompatible with PERB’s preference for broad bargaining units in the public sector. (p. 27, fn. 24.) PERB seeks to avoid both unit fragmentation and proliferation to protect employee representation rights and to balance those rights with public employers’ interest in maintaining operational efficiency. (p. 27.) The final question in successorship analysis is therefore whether accreting the new employees to the successor’s existing units is appropriate. (Ibid.)

1101.00000 – CASE PROCESSING PROCEDURES; LIMITATION PERIOD FOR FILING CHARGE
1101.01000 – In General 101.00000 – PERB: OPERATION, JURISDICTION, AUTHORITY; APPLICABILITY OF AND CONFLICTS WITH OTHER STATUTES
101.01000 – In General

Though PERB may look to analogous federal precedent for guidance in construing California’s public sector labor relations statutes, it is not controlling authority. Thus, when federal law and the PERB-administered statutes serve dissimilar purposes, we are not constrained to follow federal precedent. (p. 28.)

101.00000 – PERB: OPERATION, JURISDICTION, AUTHORITY; APPLICABILITY OF AND CONFLICTS WITH OTHER STATUTES
101.03000 – NLRA/LMRDA Precedent

The Legislature’s failure to address successorship in the MMBA does not mean it intended to prohibit application of the successorship doctrine to local public agencies. Legislative silence is not the equivalent of positive legislation. (p. 18.) Because the NLRA and MMBA similarly protect employees’ rights to bargain collectively through an employee representative of their own choosing and bar employers from refusing to negotiate with their employees’ chosen representative, there is no statutory reason to preclude application of the successorship doctrine in California’s public sector. (pp. 18-19.) However, differences between private and public sector employment require a more flexible accretion policy in the public sector to ensure that bargaining units are appropriately and rationally structured. (p. 19.)

101.00000 – PERB: OPERATION, JURISDICTION, AUTHORITY; APPLICABILITY OF AND CONFLICTS WITH OTHER STATUTES
101.03000 – NLRA/LMRDA Precedent

The federal presumption in favor of single facility bargaining units in the healthcare industry is incompatible with PERB’s preference for broad bargaining units in the public sector. (p. 27, fn. 24.) PERB seeks to avoid both unit fragmentation and proliferation to protect employee representation rights and to balance those rights with public employers’ interest in maintaining operational efficiency. (p. 27.) The final question in successorship analysis is therefore whether accreting the new employees to the successor’s existing units is appropriate. (Ibid.)

101.00000 – PERB: OPERATION, JURISDICTION, AUTHORITY; APPLICABILITY OF AND CONFLICTS WITH OTHER STATUTES
101.03000 – NLRA/LMRDA Precedent

Though PERB may look to analogous federal precedent for guidance in construing California’s public sector labor relations statutes, it is not controlling authority. Thus, when federal law and the PERB-administered statutes serve dissimilar purposes, we are not constrained to follow federal precedent. (p. 28.)

201.00000 – PARTIES; DEFINITIONS; WHO IS AN EMPLOYER?
201.03000 – Successor Employers; Alter Egos

Under the successorship doctrine, a successor determination creates a presumption that the union which represented its predecessor’s employees continues to enjoy majority status with the successor’s employees, thus requiring the successor employer to recognize and bargain with that union. (p. 14-15.)

201.00000 – PARTIES; DEFINITIONS; WHO IS AN EMPLOYER?
201.03000 – Successor Employers; Alter Egos

Under the successorship doctrine, an employer generally succeeds to the collective-bargaining obligation of a predecessor if a majority of its employees, consisting of a “substantial and representative complement,” in an appropriate bargaining unit are former employees of the predecessor and if the similarities between the two operations manifest a “‘substantial continuity’ between the enterprises. (p. 15.)

201.00000 – PARTIES; DEFINITIONS; WHO IS AN EMPLOYER?
201.03000 – Successor Employers; Alter Egos

The Legislature’s failure to address successorship in the MMBA does not mean it intended to prohibit application of the successorship doctrine to local public agencies. Legislative silence is not the equivalent of positive legislation. (p. 18.) Because the NLRA and MMBA similarly protect employees’ rights to bargain collectively through an employee representative of their own choosing and bar employers from refusing to negotiate with their employees’ chosen representative, there is no statutory reason to preclude application of the successorship doctrine in California’s public sector. (pp. 18-19.) However, differences between private and public sector employment require a more flexible accretion policy in the public sector to ensure that bargaining units are appropriately and rationally structured. (p. 19.)

201.00000 – PARTIES; DEFINITIONS; WHO IS AN EMPLOYER?
201.03000 – Successor Employers; Alter Egos

PERB applies the three-part federal test when determining successorship but follows PERB precedent to determine whether employees hired from a private sector predecessor employer are appropriately accreted to existing public sector bargaining units after a transfer of ownership. (p. 20.)

201.00000 – PARTIES; DEFINITIONS; WHO IS AN EMPLOYER?
201.03000 – Successor Employers; Alter Egos

PERB’s three-part test to determine successorship examines: (1) whether the alleged successor employer hired a “substantial and representative complement” of the predecessor’s employees, (2) whether a substantial continuity of operations exists between the predecessor and successor employers, and (3) whether accretion of the predecessor’s employees into the successor employer’s existing units is appropriate. (pp. 20, 22, 25-28.)

201.00000 – PARTIES; DEFINITIONS; WHO IS AN EMPLOYER?
201.03000 – Successor Employers; Alter Egos

Whether a successor employer has hired a substantial and representative complement of the predecessor’s employees turns on whether the majority of employees in the successor bargaining unit worked for the predecessor employer. (p. 20.) Majority status is determined by comparing the number of predecessor employees the successor hired with the total number of employees in the bargaining unit the union claims to still represent. (p. 21.)

201.00000 – PARTIES; DEFINITIONS; WHO IS AN EMPLOYER?
201.03000 – Successor Employers; Alter Egos

To determine whether a substantial continuity of operations exists, the Board examines whether the business of both employers is essentially the same; whether the successor’s employees are doing the same jobs in the same working conditions under the same supervisors; and whether the new entity has the same production process, produces the same products, and maintains the same body of customers. (p. 23.) These factors are based upon the totality of the circumstances and assessed primarily from the perspective of the retained employees. (Ibid.) An employer cannot rely on prospective operational changes that may or may not be implemented in the future to create doubt as to the substantial continuity of operations. (p. 25.)

201.00000 – PARTIES; DEFINITIONS; WHO IS AN EMPLOYER?
201.03000 – Successor Employers; Alter Egos

The federal presumption in favor of single facility bargaining units in the healthcare industry is incompatible with PERB’s preference for broad bargaining units in the public sector. (p. 27, fn. 24.) PERB seeks to avoid both unit fragmentation and proliferation to protect employee representation rights and to balance those rights with public employers’ interest in maintaining operational efficiency. (p. 27.) The final question in successorship analysis is therefore whether accreting the new employees to the successor’s existing units is appropriate. (Ibid.)

201.00000 – PARTIES; DEFINITIONS; WHO IS AN EMPLOYER?
201.03000 – Successor Employers; Alter Egos

In accretion cases, the inquiry is whether the classifications to be added to the existing unit share a “community of interest” with employees in the existing unit. In its analysis, PERB examines: job function and duties; wages; method of compensation; hours; employment benefits; supervision; qualifications, training, and skills; contact and interchange with other employees; integration of work functions; and common goals. (p. 28.) This determination is based on the totality of the circumstances. (p. 29.)

201.00000 – PARTIES; DEFINITIONS; WHO IS AN EMPLOYER?
201.03000 – Successor Employers; Alter Egos

Under the MMBA, local public agencies may adopt reasonable rules and regulations governing unit determinations and representation elections. (p. 32.) Where a successor employer hires its predecessor’s employees to existing classifications and appropriately accretes them to an existing bargaining unit, it has not modified the unit or otherwise run afoul of its unit modification rules. (pp. 32-33.)

601.00000 – EMPLOYER REFUSAL TO BARGAIN IN GOOD FAITH; REFUSAL TO BARGAIN IN GOOD FAITH (FOR SPECIFIC SUBJECTS, SEE SCOPE OF REPRESENTATION, SEC 1000)
601.02000 – Persons Required to Bargain; Alter Egos, Joint Employers (See also 201)

Under the successorship doctrine, a successor determination creates a presumption that the union which represented its predecessor’s employees continues to enjoy majority status with the successor’s employees, thus requiring the successor employer to recognize and bargain with that union. (p. 14-15.)

601.00000 – EMPLOYER REFUSAL TO BARGAIN IN GOOD FAITH; REFUSAL TO BARGAIN IN GOOD FAITH (FOR SPECIFIC SUBJECTS, SEE SCOPE OF REPRESENTATION, SEC 1000)
601.02000 – Persons Required to Bargain; Alter Egos, Joint Employers (See also 201)

Under the successorship doctrine, an employer generally succeeds to the collective-bargaining obligation of a predecessor if a majority of its employees, consisting of a “substantial and representative complement,” in an appropriate bargaining unit are former employees of the predecessor and if the similarities between the two operations manifest a “‘substantial continuity’ between the enterprises. (p. 15.)

601.00000 – EMPLOYER REFUSAL TO BARGAIN IN GOOD FAITH; REFUSAL TO BARGAIN IN GOOD FAITH (FOR SPECIFIC SUBJECTS, SEE SCOPE OF REPRESENTATION, SEC 1000)
601.02000 – Persons Required to Bargain; Alter Egos, Joint Employers (See also 201)

The Legislature’s failure to address successorship in the MMBA does not mean it intended to prohibit application of the successorship doctrine to local public agencies. Legislative silence is not the equivalent of positive legislation. (p. 18.) Because the NLRA and MMBA similarly protect employees’ rights to bargain collectively through an employee representative of their own choosing and bar employers from refusing to negotiate with their employees’ chosen representative, there is no statutory reason to preclude application of the successorship doctrine in California’s public sector. (pp. 18-19.) However, differences between private and public sector employment require a more flexible accretion policy in the public sector to ensure that bargaining units are appropriately and rationally structured. (p. 19.)

750.00000 – EMPLOYER ADOPTION/ENFORCEMENT OF UNREASONABLE RULE
750.01000 – In General

Under the MMBA, local public agencies may adopt reasonable rules and regulations governing unit determinations and representation elections. (p. 32.) Where a successor employer hires its predecessor’s employees to existing classifications and appropriately accretes them to an existing bargaining unit, it has not modified the unit or otherwise run afoul of its unit modification rules. (pp. 32-33.)

1100.00000 – CASE PROCESSING PROCEDURES; CHARGE
1100.02000 – Investigation of Charge

Under PERB Regulation 32147, the Board itself may expedite the processing of a case presenting an important question of law, the early resolution of which is likely to improve labor relations, at all levels before PERB. (pp. 11-12.)

1104.00000 – CASE PROCESSING PROCEDURES; PROCEDURE BEFORE ALJ
1104.01000 – In General; Conduct of Hearing

Under PERB Regulation 32215, the Board may order the Division of Administrative Law to conduct an expedited hearing and, upon completion of the hearing, that the record be submitted to the Board itself for a decision on the merits. (p. 12.)

1104.00000 – CASE PROCESSING PROCEDURES; PROCEDURE BEFORE ALJ
1104.01000 – In General; Conduct of Hearing

In a case submitted under PERB Regulation 32215 to the Board itself for a decision on the merits of the case, the administrative law judge correctly declined to rule on a motion at the hearing to dismiss the underlying complaint. (p. 13, fn. 14.)

1104.00000 – CASE PROCESSING PROCEDURES; PROCEDURE BEFORE ALJ
1104.02000 – Motions

In a case submitted under PERB Regulation 32215 to the Board itself for a decision on the merits of the case, the administrative law judge correctly declined to rule on a motion at the hearing to dismiss the underlying complaint. (p. 13, fn. 14.)

1104.00000 – CASE PROCESSING PROCEDURES; PROCEDURE BEFORE ALJ
1104.03000 – Proposed Decision

Under PERB Regulation 32215, the Board may order the Division of Administrative Law to conduct an expedited hearing and, upon completion of the hearing, that the record be submitted to the Board itself for a decision on the merits. (p. 12.)

1105.00000 – CASE PROCESSING PROCEDURES; EVIDENCE
1105.01000 – In General

Under PERB Regulation 32176, a factual finding cannot be based solely on uncorroborated hearsay that does not satisfy one of the statutory exceptions. But Respondent’s evidence sufficiently corroborated Charging Party’s hearsay exhibits such that Charging Party met its burden of proof to demonstrate majority status. The Board rejected Respondent’s argument that it must ignore relevant evidence merely because it was not presented in the Charging Party’s case-in-chief but by the party without the burden of proof. (p. 21, fn. 23.)

1105.00000 – CASE PROCESSING PROCEDURES; EVIDENCE
1105.03000 – Burden of Proof; Weight of Evidence; Presumptions and Inferences; Affirmative Defenses

Under PERB Regulation 32176, a factual finding cannot be based solely on uncorroborated hearsay that does not satisfy one of the statutory exceptions. But Respondent’s evidence sufficiently corroborated Charging Party’s hearsay exhibits such that Charging Party met its burden of proof to demonstrate majority status. The Board rejected Respondent’s argument that it must ignore relevant evidence merely because it was not presented in the Charging Party’s case-in-chief but by the party without the burden of proof. (p. 21, fn. 23.)

1105.00000 – CASE PROCESSING PROCEDURES; EVIDENCE
1105.06000 – Hearsay

Under PERB Regulation 32176, a factual finding cannot be based solely on uncorroborated hearsay that does not satisfy one of the statutory exceptions. But Respondent’s evidence sufficiently corroborated Charging Party’s hearsay exhibits such that Charging Party met its burden of proof to demonstrate majority status. The Board rejected Respondent’s argument that it must ignore relevant evidence merely because it was not presented in the Charging Party’s case-in-chief but by the party without the burden of proof. (p. 21, fn. 23.)

1107.00000 – CASE PROCESSING PROCEDURES;PROCEDURES BEFORE THE BOARD
1107.20000 – Other

Under PERB Regulation 32215, the Board may order the Division of Administrative Law to conduct an expedited hearing and, upon completion of the hearing, that the record be submitted to the Board itself for a decision on the merits. (p. 12.)

1310.00000 – REPRESENTATION ISSUES; UNIT MODIFICATION
1310.07000 – Accretion, Adding classification(s) to existing unit (PERB jurisdictions)

The Legislature’s failure to address successorship in the MMBA does not mean it intended to prohibit application of the successorship doctrine to local public agencies. Legislative silence is not the equivalent of positive legislation. (p. 18.) Because the NLRA and MMBA similarly protect employees’ rights to bargain collectively through an employee representative of their own choosing and bar employers from refusing to negotiate with their employees’ chosen representative, there is no statutory reason to preclude application of the successorship doctrine in California’s public sector. (pp. 18-19.) However, differences between private and public sector employment require a more flexible accretion policy in the public sector to ensure that bargaining units are appropriately and rationally structured. (p. 19.)

1310.00000 – REPRESENTATION ISSUES; UNIT MODIFICATION
1310.07000 – Accretion, Adding classification(s) to existing unit (PERB jurisdictions)

PERB applies the three-part federal test when determining successorship but follows PERB precedent to determine whether employees hired from a private sector predecessor employer are appropriately accreted to existing public sector bargaining units after a transfer of ownership. (p. 20.)

1310.00000 – REPRESENTATION ISSUES; UNIT MODIFICATION
1310.07000 – Accretion, Adding classification(s) to existing unit (PERB jurisdictions)

PERB’s three-part test to determine successorship examines: (1) whether the alleged successor employer hired a “substantial and representative complement” of the predecessor’s employees, (2) whether a substantial continuity of operations exists between the predecessor and successor employers, and (3) whether accretion of the predecessor’s employees into the successor employer’s existing units is appropriate. (pp. 20, 22, 25-28.)

1310.00000 – REPRESENTATION ISSUES; UNIT MODIFICATION
1310.07000 – Accretion, Adding classification(s) to existing unit (PERB jurisdictions)

Whether a successor employer has hired a substantial and representative complement of the predecessor’s employees turns on whether the majority of employees in the successor bargaining unit worked for the predecessor employer. (p. 20.) Majority status is determined by comparing the number of predecessor employees the successor hired with the total number of employees in the bargaining unit the union claims to still represent. (p. 21.)

1310.00000 – REPRESENTATION ISSUES; UNIT MODIFICATION
1310.07000 – Accretion, Adding classification(s) to existing unit (PERB jurisdictions)

To determine whether a substantial continuity of operations exists, the Board examines whether the business of both employers is essentially the same; whether the successor’s employees are doing the same jobs in the same working conditions under the same supervisors; and whether the new entity has the same production process, produces the same products, and maintains the same body of customers. (p. 23.) These factors are based upon the totality of the circumstances and assessed primarily from the perspective of the retained employees. (Ibid.) An employer cannot rely on prospective operational changes that may or may not be implemented in the future to create doubt as to the substantial continuity of operations. (p. 25.)

1310.00000 – REPRESENTATION ISSUES; UNIT MODIFICATION
1310.07000 – Accretion, Adding classification(s) to existing unit (PERB jurisdictions)

The federal presumption in favor of single facility bargaining units in the healthcare industry is incompatible with PERB’s preference for broad bargaining units in the public sector. (p. 27, fn. 24.) PERB seeks to avoid both unit fragmentation and proliferation to protect employee representation rights and to balance those rights with public employers’ interest in maintaining operational efficiency. (p. 27.) The final question in successorship analysis is therefore whether accreting the new employees to the successor’s existing units is appropriate. (Ibid.)

1310.00000 – REPRESENTATION ISSUES; UNIT MODIFICATION
1310.07000 – Accretion, Adding classification(s) to existing unit (PERB jurisdictions)

In accretion cases, the inquiry is whether the classifications to be added to the existing unit share a “community of interest” with employees in the existing unit. In its analysis, PERB examines: job function and duties; wages; method of compensation; hours; employment benefits; supervision; qualifications, training, and skills; contact and interchange with other employees; integration of work functions; and common goals. (p. 28.) This determination is based on the totality of the circumstances. (p. 29.)

1310.00000 – REPRESENTATION ISSUES; UNIT MODIFICATION
1310.07000 – Accretion, Adding classification(s) to existing unit (PERB jurisdictions)

Under the MMBA, local public agencies may adopt reasonable rules and regulations governing unit determinations and representation elections. (p. 32.) Where a successor employer hires its predecessor’s employees to existing classifications and appropriately accretes them to an existing bargaining unit, it has not modified the unit or otherwise run afoul of its unit modification rules. (pp. 32-33.)

1407.00000 – GENERAL LEGAL PRINCIPLES; STATUTORY CONSTRUCTION
1407.01000 – General Principles

The Legislature’s failure to address successorship in the MMBA does not mean it intended to prohibit application of the successorship doctrine to local public agencies. Legislative silence is not the equivalent of positive legislation. (p. 18.) Because the NLRA and MMBA similarly protect employees’ rights to bargain collectively through an employee representative of their own choosing and bar employers from refusing to negotiate with their employees’ chosen representative, there is no statutory reason to preclude application of the successorship doctrine in California’s public sector. (pp. 18-19.) However, differences between private and public sector employment require a more flexible accretion policy in the public sector to ensure that bargaining units are appropriately and rationally structured. (p. 19.)

1407.00000 – GENERAL LEGAL PRINCIPLES; STATUTORY CONSTRUCTION
1407.01000 – General Principles

Though PERB may look to analogous federal precedent for guidance in construing California’s public sector labor relations statutes, it is not controlling authority. Thus, when federal law and the PERB-administered statutes serve dissimilar purposes, we are not constrained to follow federal precedent. (p. 28.)

1503.00000 – MISCELLANEOUS ISSUES; REGULATIONS
1503.01000 – In General

Under PERB Regulation 32147, the Board itself may expedite the processing of a case presenting an important question of law, the early resolution of which is likely to improve labor relations, at all levels before PERB. (pp. 11-12.)

1503.00000 – MISCELLANEOUS ISSUES; REGULATIONS
1503.01000 – In General

Under PERB Regulation 32215, the Board may order the Division of Administrative Law to conduct an expedited hearing and, upon completion of the hearing, that the record be submitted to the Board itself for a decision on the merits. (p. 12.)

1503.00000 – MISCELLANEOUS ISSUES; REGULATIONS
1503.01000 – In General

Under PERB Regulation 32176, a factual finding cannot be based solely on uncorroborated hearsay that does not satisfy one of the statutory exceptions. But Respondent’s evidence sufficiently corroborated Charging Party’s hearsay exhibits such that Charging Party met its burden of proof to demonstrate majority status. The Board rejected Respondent’s argument that it must ignore relevant evidence merely because it was not presented in the Charging Party’s case-in-chief but by the party without the burden of proof. (p. 21, fn. 23.)

1503.00000 – MISCELLANEOUS ISSUES; REGULATIONS
1503.03000 – Regulations Considered (By Number) (Continued)

Under PERB Regulation 32147, the Board itself may expedite the processing of a case presenting an important question of law, the early resolution of which is likely to improve labor relations, at all levels before PERB. (pp. 11-12.)

1503.00000 – MISCELLANEOUS ISSUES; REGULATIONS
1503.03000 – Regulations Considered (By Number) (Continued)

Under PERB Regulation 32215, the Board may order the Division of Administrative Law to conduct an expedited hearing and, upon completion of the hearing, that the record be submitted to the Board itself for a decision on the merits. (p. 12.)

1503.00000 – MISCELLANEOUS ISSUES; REGULATIONS
1503.03000 – Regulations Considered (By Number) (Continued)

Under PERB Regulation 32176, a factual finding cannot be based solely on uncorroborated hearsay that does not satisfy one of the statutory exceptions. But Respondent’s evidence sufficiently corroborated Charging Party’s hearsay exhibits such that Charging Party met its burden of proof to demonstrate majority status. The Board rejected Respondent’s argument that it must ignore relevant evidence merely because it was not presented in the Charging Party’s case-in-chief but by the party without the burden of proof. (p. 21, fn. 23.)