Decision 2691M – * * * JUDICIAL APPEAL PENDING * * * City and County of San Francisco

SF-CE-1154-M

Decision Date: January 17, 2020

Decision Type: PERB Decision

Description:  City and County of San Francisco (City) and Service Employees International Union Local 1021 (SEIU) filed cross-exceptions to a proposed decision of an administrative law judge (ALJ).  The complaint alleged that the City violated the MMBA by maintaining and enforcing certain sections of the City Charter setting forth procedures for resolving a collective bargaining impasse via binding interest arbitration.  The challenged provisions established a “submission deadline” by which bargaining parties must submit a successor MOU for ratification.  If parties submit no MOU whatsoever by the deadline, the Charter imposes a penalty, viz., a delay in the implementation of new economic enhancements.  The ALJ found that the Charter submission deadline and associated penalty are inconsistent with the MMBA, both facially and as applied in this case, because they tilt bargaining toward the employer’s priorities and prevent the bargaining parties from devoting sufficient time to good faith negotiations and impasse resolution.

Disposition:  The Board upheld SEIU’s as-applied challenge, but did not uphold SEIU’s facial challenge.  The Board found that the City could in the future lawfully interpret the challenged Charter provisions to harmonize them with the MMBA.  To be lawful, the Board found, the Charter sections must be interpreted to require good faith negotiations by the parties over an adequate length of time.  They must also be interpreted to allow the parties to agree upon, or an arbitration board to order, an MOU provision providing for mid-contract negotiations and associated mid-contract interest arbitration proceedings that may lead to a full range of mid-year or retroactive MOU adjustments.

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Decision Headnotes

601.00000 – EMPLOYER REFUSAL TO BARGAIN IN GOOD FAITH; REFUSAL TO BARGAIN IN GOOD FAITH (FOR SPECIFIC SUBJECTS, SEE SCOPE OF REPRESENTATION, SEC 1000)
601.01000 – In General, Per Se and Totality of Conduct; Prima Facie Case

A bona fide impasse exists if parties’ differences are so substantial and prolonged that further meeting and conferring is futile, despite good faith negotiations that were free from unfair labor practices. (City of San Ramon (2018) PERB Decision No. 2571-M, p. 6 (San Ramon); County of Riverside (2014) PERB Decision No. 2360-M, p. 13 (Riverside). A party evidences bad faith if it rushes to impasse or issues an impasse declaration that is premature, unfounded, or insincere. (San Ramon, supra, PERB Decision No. 2571-M, p. 10.) If an employer declares impasse without reaching a bona fide impasse after good faith negotiations, but the employer neither changes employment terms nor refuses to continue bargaining, PERB considers that evidence under the totality of conduct test. (San Ramon, supra, PERB Decision No. 2571-M, p. 7, fn. 9; Riverside, supra, PERB Decision No. 2360-M, p. 12.) In contrast, if the employer in those circumstances refuses to bargain further or proceeds to change employment terms, that constitutes further evidence of bad faith under the totality test, and it also constitutes a per se violation. (San Ramon, supra, PERB Decision No. 2571-M, p. 7, fn. 9; Riverside, supra, PERB Decision No. 2360-M, p. 12.)

601.00000 – EMPLOYER REFUSAL TO BARGAIN IN GOOD FAITH; REFUSAL TO BARGAIN IN GOOD FAITH (FOR SPECIFIC SUBJECTS, SEE SCOPE OF REPRESENTATION, SEC 1000)
601.01000 – In General, Per Se and Totality of Conduct; Prima Facie Case

The “reasonable period of time” that the MMBA requires for good faith negotiations will vary greatly from negotiation to negotiation, depending on many factors. (City of San Jose (2013) PERB Decision No. 2341-M, p. 41.) In determining the existence of impasse on a given date, PERB focuses on numerous factors, including: the number and length of negotiation sessions; the extent to which the parties have exchanged information and thoroughly discussed proposals and counterproposals in good faith; and the nature of the unresolved issues and the parties’ discussions of such issues to date. (City of San Ramon (2018) PERB Decision No. 2571-M, pp. 9-12 (San Ramon); County of Riverside (2014) PERB Decision No. 2360-M, pp. 13-14 (Riverside).) Continued movement on minor issues will not prevent a finding of impasse if the parties remain deadlocked on one or more major issues. (Regents of the University of California (1985) PERB Decision No. 520-H, p. 17.) However, both parties must believe they are at the “end of their rope,” which is typically negated if a party displays continuing movement, or if a party references a deadline for completion of negotiations and acts in accordance with that deadline. (Riverside, supra, PERB Decision No. 2360-M, p. 13.)

601.00000 – EMPLOYER REFUSAL TO BARGAIN IN GOOD FAITH; REFUSAL TO BARGAIN IN GOOD FAITH (FOR SPECIFIC SUBJECTS, SEE SCOPE OF REPRESENTATION, SEC 1000)
601.01000 – In General, Per Se and Totality of Conduct; Prima Facie Case

City and union were not actually at impasse when the City declared impasse. The City declared impasse mainly due to the upcoming submission deadline, by which bargaining parties must submit to the City’s Board of Supervisors a successor MOU for ratification or suffer a penalty, viz., a delay in the implementation of new economic enhancements. PERB’s finding that the City relied on the Charter’s submission deadline to declare impasse prematurely provided significant evidence that the submission deadline, as applied in the case, prevented the parties from devoting sufficient time to hear and reflect on one another’s positions and endeavor in good faith to reach a mutual accommodation. In addition, the bargaining was rushed and there was insufficient time for the process to play out. The parties’ negotiations, then, were entirely antithetical to the MMBA’s core purpose of promoting “full communication” between public employers and employees’ chosen organizations, through a robust duty to meet and confer in good faith for a reasonable period of time. (MMBA, § 3500, subd. (a).) For these reasons, PERB found in union’s favor on its as-applied challenge.

606.00000 – EMPLOYER REFUSAL TO BARGAIN IN GOOD FAITH; NEGOTIATIONS; INDICIA OF SURFACE OR BAD FAITH BARGAINING; TOTALITY OF CIRCUMSTANCES
606.06000 – Time Limit on Negotiations

The MMBA’s “centerpiece” is its requirement that every local agency “meet and confer in good faith regarding wages, hours, and other terms and conditions of employment” with unions representing the agency’s employees. (Boling v. PERB (2018) 5 Cal.5th 898, 913.) This central requirement is spelled out at MMBA section 3505, which requires that the parties should meet and confer for a reasonable period of time. The process should include adequate time for the resolution of impasses where specific procedures for such resolution are contained in local rule, regulation, or ordinance, or when such procedures are utilized by mutual consent. An employer cannot use its budget cycle as a reason for shortening negotiations, if doing so does not permit sufficient time for good faith negotiations. An employer may not insist on completing negotiations in time to adopt or implement its budget, or declare impasse merely because a particular deadline attached to the public entity’s budget process is approaching.

606.00000 – EMPLOYER REFUSAL TO BARGAIN IN GOOD FAITH; NEGOTIATIONS; INDICIA OF SURFACE OR BAD FAITH BARGAINING; TOTALITY OF CIRCUMSTANCES
606.06000 – Time Limit on Negotiations

To withstand a facial challenge, PERB determines that the San Francisco City Charter, by requiring good faith bargaining, mandates that negotiations “continue for a reasonable period of time,” where Charter’s interest arbitration mechanism is intended to apply after the parties have reached impasse. The “reasonable period of time” that the MMBA requires for good faith negotiations will vary greatly from negotiation to negotiation, depending on many factors. (City of San Jose (2013) PERB Decision No. 2341-M, p. 41.) In determining the existence of impasse on a given date, PERB focuses on numerous factors, including: the number and length of negotiation sessions; the extent to which the parties have exchanged information and thoroughly discussed proposals and counterproposals in good faith; and the nature of the unresolved issues and the parties’ discussions of such issues to date. (City of San Ramon (2018) PERB Decision No. 2571-M, pp. 9-12 (San Ramon); County of Riverside (2014) PERB Decision No. 2360-M, pp. 13-14 (Riverside).) Continued movement on minor issues will not prevent a finding of impasse if the parties remain deadlocked on one or more major issues. (Regents of the University of California (1985) PERB Decision No. 520-H, p. 17.) However, both parties must believe they are at the “end of their rope,” which is typically negated if one party displays continuing movement, or if the other party references a deadline for completion of negotiations and acts in accordance with that deadline. (Riverside, supra, PERB Decision No. 2360-M, p. 13.)

606.00000 – EMPLOYER REFUSAL TO BARGAIN IN GOOD FAITH; NEGOTIATIONS; INDICIA OF SURFACE OR BAD FAITH BARGAINING; TOTALITY OF CIRCUMSTANCES
606.06000 – Time Limit on Negotiations

PERB addressed open questions regarding how to apply provisions of facially valid San Francisco City Charter when the parties approach Charter-mandated submission deadline but have not had enough time to complete good faith negotiations. PERB upheld union’s as-applied challenge to provisions of the San Francisco City Charter where union demonstrated that there was insufficient time for good faith negotiations and/or to reach a legitimate impasse prior to Charter-imposed submission deadline.

606.00000 – EMPLOYER REFUSAL TO BARGAIN IN GOOD FAITH; NEGOTIATIONS; INDICIA OF SURFACE OR BAD FAITH BARGAINING; TOTALITY OF CIRCUMSTANCES
606.06000 – Time Limit on Negotiations

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].) PERB did so by reasonably and necessarily interpreting the Charter’s penalty provision, which delays the implementation of new economic enhancements, to have no impact so long as the parties submit some type of MOU by the Charter-imposed submission deadline, and by noting that what the parties submit by that deadline may take a variety of forms. PERB found the Charter provisions survived a facial challenge because the Charter does not proscribe the submitted MOU from including provisions that provide for mid-contract negotiations and mid-contract interest arbitration allowing potential economic enhancements to take effect mid-year and/or retroactive to any date. Such MOU provisions may be agreed-upon or ordered by the arbitrator, and may be included for any reason, including if there was insufficient time to complete good faith negotiations or good faith interest arbitration before the deadline. If the parties fail to reach agreement on certain issues by the submission deadline, they can agree to continue the meet and confer process on those issues in the body of a timely-submitted successor MOU. In this way, the MOU could be submitted in time, and the parties could still have additional time to negotiate on issues which they were prevented on reaching because of the submission deadline. During such mid-contract negotiations and interest arbitration, enhancements may be agreed upon, or ordered, to be retroactive to any date, because the parties will have satisfied the submission deadline by submitting an MOU as of that date.

606.00000 – EMPLOYER REFUSAL TO BARGAIN IN GOOD FAITH; NEGOTIATIONS; INDICIA OF SURFACE OR BAD FAITH BARGAINING; TOTALITY OF CIRCUMSTANCES
606.06000 – Time Limit on Negotiations

Adopting an interest arbitration framework in a city’s charter does not immunize the city from MMBA compliance. Interest arbitration procedures must be neutral and compliant with the MMBA, even if the city was not required to adopt them in the first place. Similarly, adopting an interest arbitration mechanism does not allow charter city to evade the rule that an MMBA employer must devote sufficient time to negotiations and dispute resolution.

606.00000 – EMPLOYER REFUSAL TO BARGAIN IN GOOD FAITH; NEGOTIATIONS; INDICIA OF SURFACE OR BAD FAITH BARGAINING; TOTALITY OF CIRCUMSTANCES
606.06000 – Time Limit on Negotiations

City and union were not actually at impasse when the City declared impasse. The City declared impasse mainly due to the upcoming submission deadline, by which bargaining parties must submit to the City’s Board of Supervisors a successor MOU for ratification or suffer a penalty, viz., a delay in the implementation of new economic enhancements. PERB’s finding that the City relied on the Charter’s submission deadline to declare impasse prematurely provided significant evidence that the submission deadline, as applied in the case, prevented the parties from devoting sufficient time to hear and reflect on one another’s positions and endeavor in good faith to reach a mutual accommodation. In addition, the bargaining was rushed and there was insufficient time for the process to play out. The parties’ negotiations, then, were entirely antithetical to the MMBA’s core purpose of promoting “full communication” between public employers and employees’ chosen organizations, through a robust duty to meet and confer in good faith for a reasonable period of time. (MMBA, § 3500, subd. (a).) For these reasons, PERB found in union’s favor on its as-applied challenge.

608.00000 – EMPLOYER REFUSAL TO BARGAIN IN GOOD FAITH; DEFENSES
608.07000 – Waiver by Union; Contract Waivers; Bargaining History Estoppel; Disclaimer; Supersession

Equitable waiver or laches defenses rejected as a matter of sound labor relations. When an employer approaches a union to initiate Seal Beach negotiations over a proposed ballot measure, a union should not normally be found to have waived its right to later challenge the resulting rules to the extent they violate the MMBA, either facially or as-applied.

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

Under the MMBA, a local agency may adopt reasonable rules and regulations pertaining to resolution of collective bargaining disputes. (MMBA, § 3507, subd. (a)(5).) In order to be lawful, such rules and regulations may not undercut or frustrate the MMBA’s policies and purposes. Therefore, whether a local agency has adopted its rules, regulations, or charter provisions via a vote of its electorate, a vote of its governing board, or through any other means, the resulting policies must be consistent with the MMBA. PERB starts from the position of presuming that an employer’s rule is reasonable, which means the burden of proof is on the party challenging such a rule. (San Bernardino County Sheriff’s Assn. v. Bd. of Supervisors (1992) 7 Cal.App.4th 602, 613.)

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

The home rule doctrine does not alter the fact that a city’s charter must be consistent with the MMBA. (Boling v. PERB (2018) 5 Cal.5th 898, 913, citing People ex rel. Seal Beach Police Officers Association v. City of Seal Beach (1984) 36 Cal.3d 591, 600 [“[G]eneral law prevails over local enactments of a chartered city, even in regard to matters which would otherwise be deemed to be strictly municipal affairs, where the subject matter of the general law is of statewide concern.”].

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

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].) PERB did so by reasonably and necessarily interpreting the Charter’s penalty provision, which delays the implementation of new economic enhancements, to have no impact so long as the parties submit some type of MOU by the Charter-imposed submission deadline, and by noting that what the parties submit by that deadline may take a variety of forms. For instance, PERB found that the Charter does not proscribe the submitted MOU from including provisions that provide for mid-contract negotiations and mid-contract interest arbitration allowing potential economic enhancements to take effect mid-year and/or retroactive to any date. Such MOU provisions may be agreed-upon or ordered by the arbitrator, and may be included for any reason, including if there was insufficient time to complete good faith negotiations or good faith interest arbitration before the deadline. If the parties fail to reach agreement on certain issues by the submission deadline, they can agree to continue the meet and confer process on those issues in the body of a timely-submitted successor MOU. In this way, the MOU can be submitted in time, and the parties can still have additional time to negotiate on issues they had not completed due to the submission deadline. During such mid-contract negotiations and interest arbitration, enhancements may be agreed upon, or ordered, to be retroactive to any date, because the parties will have satisfied the submission deadline by submitting an MOU as of that date.

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

A facial challenge is based only on the text of the rule. A facial challenge is an appropriate means to challenge an employer rule or policy that is alleged to have a chilling effect on employees or a union, or otherwise to interfere with or impinge on protected rights, even before being applied. A facial challenge to a rule will be sustained if it conflicts with the MMBA “in the generality or great majority of cases.” (Guardianship of Ann S. (2009) 45 Cal.4th 1110, 1126.) PERB determined that Charter sections survived a facial challenge if but only if they are interpreted to avoid titling the playing field in the City’s favor and to allow adequate time for good faith negotiations and good faith impasse resolution. To save the challenged Charter provisions from facial invalidity, PERB necessarily interpreted the provisions as follows: the submission deadline’s language merely establishes a cutoff by which the parties must submit those portions of their next MOU that have been agreed-upon or ordered by that date, together with any needed reopener provisions covering those issues that have not yet been fully negotiated or ordered. PERB sustained union’s as-applied challenge where the Charter had the effect in the case at issue of cutting short bargaining after an insufficient opportunity for good faith negotiations and good faith dispute resolution.

1101.00000 – CASE PROCESSING PROCEDURES; LIMITATION PERIOD FOR FILING CHARGE
1101.01000 – In General

A charging party timely challenges a local rule by filing a charge within six months of any independent instance in which the employer has applied the rule, or, alternatively, at any time under the continuing violation doctrine, if a union or employee would risk an adverse consequence by violating the rule. Union’s challenge was timely under both theories. First, union risked an adverse consequence under the Charter’s penalty provision, should union have missed the submission deadline. Second, union filed its charge early in the negotiations cycle, just as the City was beginning to apply its Charter provisions. The new negotiations cycle qualified as an independent application of the Charter, which triggered a new statute of limitations.

1101.00000 – CASE PROCESSING PROCEDURES; LIMITATION PERIOD FOR FILING CHARGE
1101.04000 – Continuing Violation

A charging party timely challenges a local rule by filing a charge within six months of any independent instance in which the employer has applied the rule, or, alternatively, at any time under the continuing violation doctrine, if a union or employee would risk an adverse consequence by violating the rule. Union’s challenge was timely under both theories. First, union risked an adverse consequence under the Charter’s penalty provision, should union have missed the submission deadline. Second, union filed its charge early in the negotiations cycle, just as the City was beginning to apply its Charter provisions. The new negotiations cycle qualified as an independent application of the Charter, which triggered a new statute of limitations.

1107.00000 – CASE PROCESSING PROCEDURES;PROCEDURES BEFORE THE BOARD
1107.13000 – Administrative and Judicial Notice

PERB declined to resolve the parties’ numerous disagreements regarding the City’s request that it take administrative notice of certain records and documents, as none of its findings would differ based on the outcome of the City’s request. (County of Santa Clara (2019) PERB Decision No. 2629-M, p. 6, fn. 5.)

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

PERB granted City’s request to file a reply brief regarding its exceptions, where union raised new matters in its responsive briefing.

1200.00000 – REMEDIES FOR UNFAIR PRACTICES; CEASE AND DESIST ORDERS
1200.01000 – In General

PERB orders the City, in future negotiations with union, to interpret its Charter consistently with PERB’s decision, and to cease and desist from failing or refusing to devote a reasonable and adequate amount of time to good faith negotiations, mediation, and interest arbitration.