Decision 2900M – * * * JUDICIAL APPEAL PENDING * * * County of Santa Clara

Irrespective of whether a decision falls within the scope of representation, if the decision has reasonably foreseeable effects on represented employees’ terms and conditions of employment, the employer must provide adequate advance notice and opportunity to bargain in good faith over the decision’s implementation and effects. (International Assn. of Fire Fighters, Local 188, AFL-CIO v. Public Employment Relations Bd. (2011) 51 Cal.4th 259, 265 & 276 (Richmond Firefighters).) PERB uses the word “effects” as shorthand for the broad category that comprises both the effects and implementation of a decision on a non-mandatory bargaining subject. (Oakland Unified School District (2023) PERB Decision No. 2875, p. 10 (Oakland).) Negotiations over implementation typically include proposed alternatives. (Id. at p. 11.) For instance, even though an employer has no duty to bargain over a decision to lay off employees, the California Supreme Court has noted that the scope of required effects bargaining includes “the timing of layoffs and the number and identity of the employees affected.” (Richmond Firefighters, supra, at pp. 265, 276.) Thus, one purpose of effects bargaining is to permit the exclusive representative an opportunity to persuade the employer to consider alternatives that may diminish the impact of the decision on employees. (Oakland, supra, p. 11.) Effects bargaining violations are equally harmful as decision bargaining violations, as each disrupts and destabilizes employer-employee relations. In other words, the effects bargaining obligation is not an inferior duty. (Ibid.) (p. 22.)

To establish a prima facie case that a respondent employer made an unlawful unilateral change, a charging party union that exclusively represents a bargaining unit must prove: (1) the employer changed or deviated from the status quo; (2) the change or deviation concerned a matter within the scope of representation; (3) the change or deviation had a generalized effect or continuing impact on represented employees’ terms or conditions of employment; and (4) the employer reached its decision without first providing adequate advance notice of the proposed change to the union and bargaining in good faith over the decision, at the union’s request, until the parties reached an agreement or a lawful impasse. (Kern County Hospital Authority v. Public Employment Relations Bd. (2024) 100 Cal.App.5th 860, 878; City and County of San Francisco (2022) PERB Decision No. 2846-M, pp. 9-10.) (pp. 11-12.)

Where it is unclear whether the employer has a duty to bargain, it must meet with the exclusive representative in good faith to clarify the extent to which all or part of its contemplated change is subject to bargaining. (Healdsburg Union High School District and Healdsburg Union School District/San Mateo City School District (1984) PERB Decision No. 375, p. 10 [failure to seek clarification violates the duty to negotiate in good faith]; accord City of Palo Alto v. Public Employment Relations Bd. (2016) 5 Cal.App.5th 1271, 1309 [a party asserting it need not bargain over a topic has a duty to meet with its counterpart, give its rationale, and enter into negotiations over any aspects that, after clarification, fall within the scope of bargaining]; Cerritos Community College District (2022) PERB Decision No. 2819, pp. 23-24, fn. 9 [employer obligation to clarify]; State of California (Department of Personnel Administration) (1986) PERB Decision No. 574-S, p. 16 [same].) (p. 12.)

Under the MMBA, the scope of representation “shall include all matters relating to employment conditions and employer-employee relations, including, but not limited to, wages, hours, and other terms and conditions of employment, except, however, that the scope of representation shall not include consideration of the merits, necessity, or organization of any service or activity provided by law or executive order.” (Gov. Code, § 3504.) If precedent does not already delineate whether a matter falls within the scope of representation, the first analytical step is to place the matter in one of three categories, each with its own implications for the scope of representation: (1) “decisions that ‘have only an indirect and attenuated impact on the employment relationship’ and thus are not mandatory subjects of bargaining,” such as advertising, product design, and financing; (2) “decisions directly defining the employment relationship, such as wages, workplace rules, and the order of succession of layoffs and recalls,” which are “always mandatory subjects of bargaining”; and (3) “decisions that directly affect employment, such as eliminating jobs, but nonetheless may not be mandatory subjects of bargaining because they involve ‘a change in the scope and direction of the enterprise’ or, in other words, the employer’s ‘retained freedom to manage its affairs unrelated to employment.’” (City and County of San Francisco (2022) PERB Decision No. 2846-M, pp. 15-18, citing International Assn. of Fire Fighters, Local 188, AFL-CIO v. Public Employment Relations Bd. (2011) 51 Cal.4th 259, 272-273.) (pp. 13-14.)

The fact that the County’s Board of Supervisors (BOS) has a limited role in changing medical staff bylaws does not equate to the existence of an immutable, externally imposed mandate. (County of Sacramento (2020) PERB Decision No. 2745-M, p. 18.) Rather, the BOS retained certain discretion and the County had to negotiate to the extent of that discretion. (Ibid.) Pursuant to statute, the extent of the County’s discretion was that its BOS could not unreasonably withhold approval. (Bus. & Prof. Code, § 2282.5, subd. (a)(6); Cal. Code Regs., tit. 22, § 70701, subd. (a)(8).) Thus, while the County might lawfully tell the union in negotiations that its BOS had little choice absent clear problems with the proposed revisions, that is not what the County did. Indeed, at a minimum, the County had a duty to continue meeting with SEIU to clarify the extent of any decision bargaining obligation and to bargain effects. Instead, it flatly refused to bargain. (p. 16.)

The County violated its duty to bargain when it flatly refused to bargain, to the extent of the discretion vested in its Board of Supervisor, over bylaw revisions on allied health professionals’ practice privileges. Even if the County had a good faith basis to doubt the extent of its bargaining duty, the County at least had a duty to meet with the union in good faith and seek to clarify, which it did not do. (p. 19 & fn. 9.)

County’s claim that it had no duty to bargain over certain proposals because the responsibility for making the changes lie foremost with another entity ignores both the requirement that an employer bargain to the extent of its discretion, as well as an equally important principle: a bargaining party can lawfully make a proposal that is contingent on its counterpart attempting in good faith to convince a third party to take a specified action. (See, e.g., State of California (Department of Personnel Administration) (1998) PERB Decision No. 1249-S, adopting warning letter at p. 4 [employer lawfully proposed that union support specified future legislation].) (p. 24.)

Under the MMBA, the scope of representation “shall include all matters relating to employment conditions and employer-employee relations, including, but not limited to, wages, hours, and other terms and conditions of employment, except, however, that the scope of representation shall not include consideration of the merits, necessity, or organization of any service or activity provided by law or executive order.” (Gov. Code, § 3504.) If precedent does not already delineate whether a matter falls within the scope of representation, the first analytical step is to place the matter in one of three categories, each with its own implications for the scope of representation: (1) “decisions that ‘have only an indirect and attenuated impact on the employment relationship’ and thus are not mandatory subjects of bargaining,” such as advertising, product design, and financing; (2) “decisions directly defining the employment relationship, such as wages, workplace rules, and the order of succession of layoffs and recalls,” which are “always mandatory subjects of bargaining”; and (3) “decisions that directly affect employment, such as eliminating jobs, but nonetheless may not be mandatory subjects of bargaining because they involve ‘a change in the scope and direction of the enterprise’ or, in other words, the employer’s ‘retained freedom to manage its affairs unrelated to employment.’” (City and County of San Francisco (2022) PERB Decision No. 2846-M, pp. 15-18, citing International Assn. of Fire Fighters, Local 188, AFL-CIO v. Public Employment Relations Bd. (2011) 51 Cal.4th 259, 272-273.) (pp. 13-14.)

If a decision falls within the third Richmond Firefighters category, PERB first determines whether the decision has “a significant and adverse effect on the wages, hours, or working conditions of the bargaining-unit employees” that “arises from the implementation of a fundamental managerial or policy decision.” (City and County of San Francisco (2022) PERB Decision No. 2846-M, pp. 15-18 (San Francisco), citing International Assn. of Fire Fighters, Local 188, AFL-CIO v. Public Employment Relations Bd. (2011) 51 Cal.4th 259, 272-273 (Richmond Firefighters) and Claremont Police Officers Assn. v. City of Claremont (2006) 39 Cal.4th 623, 638.) The “significant and adverse” standard requires PERB to look at effects from the perspective of a reasonable employee. (County of Sonoma (2023) PERB Decision No. 2772a-M, pp. 16-22.) If there are significant and adverse effects, the remaining question is whether “the employer’s need for unencumbered decision-making in managing its operations is outweighed by the benefit to employer-employee relations of bargaining about the action in question.” (Id. at pp. 14 & 23; San Francisco, supra, PERB Decision No. 2846-M, pp. 18-19.) For most types of decisions, PERB need not “reinvent the wheel” by applying the Richmond Firefighters framework from scratch, because precedent establishes subject-specific standards that show how the framework applies to a given topic. (County of Santa Clara (2023) PERB Decision No. 2876-M, pp. 24-25 [judicial appeal pending]; Oakland Unified School District (2023) PERB Decision No. 2875, p. 16, fn. 11; San Francisco, supra, PERB Decision No. 2846-M, p. 18, fn. 15.) (pp. 14-15.)

Job qualifications fall within the scope of representation unless the employer does no more than comply with an externally imposed change. (County of Sacramento (2020) PERB Decision No. 2745-M, pp. 17-18.) “[W]hen external law establishes immutable provisions in an area otherwise within the scope of representation, matters are negotiable only to the extent of the employer’s discretion, that is, to the extent that the external law does not ‘set an inflexible standard or [e]nsure immutable provisions.’” (Id. at p. 18 [quoting Berkeley Unified School District (2012) PERB Decision No. 2268, p. 9 and San Mateo City School Dist. v. Public Employment Relations Bd. (1983) 33 Cal.3d 850, 864-865].) Practice privilege qualifications are not identical to job qualifications, but the two topics are closely related, and precedent on job qualifications is a persuasive guide. (p. 15.)

Job qualifications fall within the scope of representation unless the employer does no more than comply with an externally imposed change. (County of Sacramento (2020) PERB Decision No. 2745-M, pp. 17-18.) “[W]hen external law establishes immutable provisions in an area otherwise within the scope of representation, matters are negotiable only to the extent of the employer’s discretion, that is, to the extent that the external law does not ‘set an inflexible standard or [e]nsure immutable provisions.’” (Id. at p. 18 [quoting Berkeley Unified School District (2012) PERB Decision No. 2268, p. 9 and San Mateo City School Dist. v. Public Employment Relations Bd. (1983) 33 Cal.3d 850, 864-865].) Practice privilege qualifications are not identical to job qualifications, but the two topics are closely related, and precedent on job qualifications is a persuasive guide. (pp. 15-16.)

Applying the test articulated in International Assn. of Fire Fighters, Local 188, AFL-CIO v. Public Employment Relations Bd. (2011) 51 Cal.4th 259, 272-273, PERB determined that the County had a decision bargaining obligation with respect to medical practice privileges. First, from the perspective of reasonable employees, changes that make it more difficult to earn and maintain practice privileges have a significant and adverse impact, potentially even causing them to lose their employment altogether. And the County does not have a need for unencumbered decision-making that outweighs the benefit to employer-employee relations of bargaining, as patient safety would not be at risk if the County had to bargain before its Board of Supervisors voted on bylaws that changed practice privilege standards. Moreover, qualifications for practice privileges fall within the ambit of a traditionally bargainable subject, because they focus on an employment-related issue and primarily operated on County employees. (pp. 17-18 & fn. 8.)

The Board may take administrative notice of the record in its own case files. (Lake Elsinore Unified School District (2019) PERB Decision No. 2633, adopting proposed decision at p. 3, fn. 2.) (p. 8, fn. 4.)

The Legislature has vested PERB with broad authority to decide what remedies are necessary to effectuate the purposes and policies of the MMBA and the other acts we enforce. (MMBA, § 3509, subd. (b); Mt. San Antonio Comm. College Dist. v. Public Employment Relations Bd. (1989) 210 Cal.App.3d 178, 189.) PERB remedies must serve the dual purposes of compensating for the harm a violation causes and deterring further violations. (County of San Joaquin v. Public Employment Relations Bd. (2022) 82 Cal.App.5th 1053, 1068.) Moreover, a “properly designed remedial order seeks a restoration of the situation as nearly as possible to that which would have obtained but for the unfair labor practice.” (Modesto City Schools (1983) PERB Decision No. 291, pp. 67-68.) (p. 25.)

To serve the dual purposes of compensating for the harm a violation causes and deterring further violations, PERB must expunge the consequences of an unfair practice and restore “the economic status quo that would have obtained but for the respondent’s wrongful act.” (County of Kern & Kern County Hospital Authority (2019) PERB Decision No. 2659-M, p. 26; City of Pasadena (2014) PERB Order No. Ad-406-M, p. 13 (Pasadena). cf. Local Joint Executive Bd. of Las Vegas v. NLRB (9th Cir. 2018) 883 F.3d 1129, 1139-1140 [failure to afford full make-whole relief was abuse of discretion].) PERB therefore attempts to “recreate the conditions and relationships that would have been had there been no unfair labor practice, even when doing so necessarily entails some degree of uncertainty as to the precise relationships.” (Pasadena, supra, PERB Order No. Ad-406-M, p. 13.) While make-whole relief therefore must typically rely on estimates, such estimates are preferable to allowing uncertainty—caused by unlawful conduct—to leave an unfair practice without a fully effective remedy. (City and County of San Francisco (2023) PERB Decision No. 2858-M, pp. 14-15.) For all categories of make-whole relief, a charging party normally has the burden to establish in compliance proceedings the nature and extent of compensable harms that resulted in material part from the respondent’s violations. (Id. at p. 15; Antelope Valley Community College District (2023) PERB Decision No, 2854, p. 7; Regents of the University of California (2021) PERB Decision No. 2783-H, p. 32.) (pp. 27-28.)

A successful charging party can normally recover compensation for direct or foreseeable harms resulting in material part from a violation. (See, e.g., Palomar Health (2024) PERB Decision No. 2895-M, pp. 63-67 [legal expenses related to defending against employer’s lawsuit seeking to enjoin certain union activity]; City and County of San Francisco (2024) PERB Decision No. 2891-M, p. 26 [potential recovery of costs resulting from failure to provide information]; City and County of San Francisco (2023) PERB Decision No. 2858-M, p. 17 [bargaining costs]; Valley Union High School District (2022) PERB Decision No. 2822, pp. 23-24 [cost of deposition defense]; Alliance Judy Ivie Burton Technology Academy High et al. (2022) PERB Decision No. 2809, pp. 14 & 31-32 [organizing and bargaining costs materially caused by unfair practice]; Bellflower Unified School District (2022) PERB Decision No. 2544a, pp. 46-50 [lost dues]; Sacramento City Unified School District (2020) PERB Decision No. 2749, p. 21 [attorney fees for litigating petition to compel arbitration necessitated by employer’s violation]; City of San Diego (2019) PERB Decision No. 2464a-M, p. 4 [fees for litigating quo warranto suit to rescind voter initiative unlawfully placed on the ballot]; Omnitrans (2009) PERB Decision No. 2030-M, p. 30 [fees union paid for defense of criminal case resulting from employer’s unfair practice].) (p. 32.) PERB also compensates harms that employees incur in material part from a violation, irrespective of whether the employees themselves were charging parties. (pp. 32, fn. 19 [exhaustive list of harms for which employees are compensated].)

The Board awarded union compensation consistent with make-whole principles, including compensation for bargaining and representation costs that increased, or which SEIU wasted or diverted, because of the County’s violation. Such damages are compensable if they are reasonably feasible to estimate. (pp. 35-36.)

PERB’s standard remedy for a unilateral change includes invalidating a decision made in violation of the duty to bargain. However, in a case involving unusual circumstances, where the County failed to bargain only one paragraph of the extensive bylaws which concerned only the physician’s assistant (PA) classification, PERB required the County to hold union-represented PAs harmless until good faith negotiations are complete. (p. 26.)

The Board denied a union’s request to augment the customary means of affording employees notice of its decision by ordering the County to provide spoken notice, as the union did not establish that customary notice mechanisms are insufficient. (See County of San Joaquin (Sheriff’s Department) (2018) PERB Decision No. 2619-M, p. 14, fn. 14; Alliance College-Ready Public Schools et al. (2017) PERB Decision No. 2545, pp. 17-18; cf. Mt. San Jacinto Community College District (2023) PERB Decision No. 2865, pp. 42-43 [spoken notice needed to “blunt the impact of the District’s unlawful conduct, which may otherwise persist to some degree”].) (p. 26.)

Except in cases in which there is a statutory right to attorney fees (see Gov. Code, § 3551.5, subd. (b) & § 3558, subd. (d)(4)), PERB usually follows the “American Rule,” pursuant to which a successful party normally has no claim to fee shifting. (Sacramento City Unified School District (2020) PERB Decision No. 2749, p. 12 (Sacramento City).) Rather, a party in a PERB case seeking to recover attorney fees and costs for litigation work done in relation to the same case must normally show that its opponent maintained a claim, defense, or motion, or engaged in another action or tactic, that was without arguable merit and pursued in bad faith. (Palomar Health (2024) PERB Decision No. 2895-M, p. 63 (Palomar) [judicial appeal pending].) However, PERB applies a different standard when deciding if a respondent found to have committed an unfair practice must pay attorney fees and costs related to a separate proceeding—whether the proceeding is in court, in arbitration, or in a separate PERB charge or representation matter. (City and County of San Francisco (2024) PERB Decision No. 2891-M, p. 24.) A charging party need not establish an egregious violation; instead, the charging party need only establish that it (or a party in privity with it) engaged in the separate proceeding in material part to remedy, lessen, make up for, or stave off the impacts of the unfair practice at issue. (Ibid., citing Victor Valley Union High School District (2022) PERB Decision No. 2822, pp. 23-24; Sacramento City, supra, PERB Decision No. 2749, pp. 11-12; City of San Diego (2019) PERB Decision No. 2464a-M, p. 4); Omnitrans (2009) PERB Decision No. 2030-M, p. 30; County of San Joaquin (Health Care Services) (2003) PERB Decision No. 1524-M, p. 3.) (pp. 27-28.)

A charging party can obtain damages for increased bargaining or representation costs, resource diversion, or waste of resources resulting in material part from a violation, irrespective of whether the violation was egregious. (See, e.g., City and County of San Francisco (2024) PERB Decision No. 2891-M, pp. 24-25, citing City and County of San Francisco (2023) PERB Decision No. 2858-M, pp. 15-17 and Alliance Judy Ivie Burton Technology Academy High et al. (2022) PERB Decision No. 2809, pp. 14, 31-32 & 34 (Alliance).) Bargaining or representation damages may include fees based on consulting with an attorney, and/or an attorney’s appearance at the bargaining table or in another representational context. (See, e.g., National Labor Relations Bd. v. Ampersand Publishing, LLC (9th Cir. 2022) 43 F.4th 1233, 1238- 1239.) However, such damages normally do not include fees for any stage of researching or drafting the charge at issue, nor work on later stages of the case (ibid.), except in unusual circumstances (see, e.g., Bellflower Unified School District (2022) PERB Decision No. 2544a, p. 51, fn. 32 [discussing ancillary enforcement proceedings].) (pp. 29-30.)

The Board declined to amend its established make-whole standards to award a successful charging party in a PERB proceeding attorney fees in that case without showing that its opponent maintained a litigation stance that was without arguable merit and pursued in bad faith. The Board found a decision of the National Labor Relations Board (NLRB): Thryv, Inc. (2022) 372 NLRB No. 22 (Thryv), persuasive. Thryv clarified that make-whole relief includes both “direct or foreseeable” economic harms resulting from a violation. However, the NLRB noted that it does not apply the “direct or foreseeable” standard to cover a successful party’s claim for automatic fee shifting. (Id. at p. 12, fn. 13.) The Board also considered a second NLRB decision, Grill Concepts Services (2022) 372 NLRB No. 30. There, the NLRB ordered an employer to reimburse bargaining costs to both the charging party union and its employee negotiators. (Id. at pp. 2-3.) The Board noted that PERB’s remedial standards already cover most direct or foreseeable harms resulting in material part from a violation, and that the American Rule on fee shifting is an exception to this principle. While at times broader remedies are available under California public sector labor relations law, compared to the federal framework governing the private sector, there is no blanket rule that all California public sector remedial standards are necessarily broader than their federal counterparts. The Board found no cause to deviate from the American Rule on fee shifting. (pp. 30-31, 33-34.)

The Board awarded union compensation consistent with make-whole principles, including compensation for bargaining and representation costs that increased, or which SEIU wasted or diverted, because of the County’s violation. Such damages are compensable if they are reasonably feasible to estimate. (pp. 35-36.)

PERB’s standard remedy for a unilateral change includes invalidating a decision made in violation of the duty to bargain. However, in a case involving unusual circumstances, where the County failed to bargain only one paragraph of the extensive bylaws which concerned only the physician’s assistant (PA) classification, PERB required the County to hold union-represented PAs harmless until good faith negotiations are complete. (p. 26.)

The Board accepted an arbitrator’s relevant factual findings as true, where the arbitration decision was final and the parties to the arbitration were the same as in the matter before PERB. (Code Civ. Proc., § 1287.6 [“An award that has not been confirmed or vacated has the same force and effect as a contract in writing between the parties to the arbitration”]; see also JPV I L.P. v. Koetting (2023) 88 Cal.App.5th 172, 192 [collecting cases on collateral estoppel effect of arbitration decisions]; State of California (Correctional Health Care Services) (2024) PERB Decision No. 2888-S, pp. 23-28 [discussing PERB’s application of collateral estoppel].) (pp. 4-5.)