Just one day after the U.S. Supreme Court’s decision in Friedrichs v. CTA, California employee organizations scored a second victory. Yesterday, the Fourth District Court of Appeal issued its long-awaited decisions in San Diego Housing Commission v. Public Employment Relations Board and County of Riverside v. Public Employment Relations Board. Both cases challenged the Public Employment Relations Board’s (PERB) granting of an employee organization’s request for fact finding under the Meyers-Milias-Brown Act (MMBA).

In a unanimous decision, the Court in San Diego Housing Commission held that the MMBA’s fact finding procedures apply to all bargaining disputes, not just disputes arising from comprehensive negotiations for a memorandum of understanding (MOU). In so holding, the Court relied heavily on PERB’s rationale in County of Contra Costa and City and County of San Francisco , which found that AB 646’s fact finding procedures, codified at MMBA sections 3505.4 through 3505.7, apply not only to impasses over MOU negotiations, but also to bargaining impasse over any matters within the scope of representation. It summarized PERB’s rationale as follows:

  • pertaining to comprehensive MOU negotiations;
  • PERB already applies similar fact finding procedures to discrete bargaining impasses under two other statutes within PERB’s jurisdiction (EERA and HEERA);
  • Interpreting the MMBA to apply to all disputes is consistent with the legislative history of AB 646; and
  • Interpreting the MMBA fact finding procedures to apply to all bargaining disputes is consistent with the parties’ obligation to bargain on any bargainable issue, and prepare an MOU to reflect that agreement.

The Court identified PERB as “one of those agencies presumably equipped or informed by experience to deal with a specialized field of knowledge, whose findings within that field carry the authority of an expertness which courts do not possess and therefore must respect.” The Court explained that it must defer to PERB’s interpretation, unless clearly erroneous. In response to amicus arguments that PERB’s interpretations warranted no deference because they were issued to assist PERB in this litigation, the Court declined to speculate as to PERB’s motives.

It also rejected each of the arguments put forth by the Commission. The Court dismissed the Commission’s argument that the requisite fact finding criteria only made sense for impasses related to comprehensive MOU negotiations by noting that similar criteria apply to EERA fact finding which is not limited to MOU negotiations.

The Court also dismissed the Commission’s argument that the reference to “any applicable mediation and fact finding procedures” and “implementation of an MOU” also proves that the fact finding procedures only applied to comprehensive MOU negotiations. As the Court explained, the language at issue existed before the Legislature added the fact finding provisions to the MMBA, so offered no assistance in interpreting the statute. The Court also noted the language was more reasonably read to reflect that, absent a request, mediation and fact finding may not occur following a declaration of impasse.

In those situations, there would be no applicable impasse resolution procedures preventing a public agency from imposing its last, best, and final offer.

As for the Commission’s argument that references in AB 646’s legislative history demonstrate that the statute was meant only to apply to MOU negotiations, the Court pointed out that those references were not made by the author of the statute, but by AB 646’s supporters and opponents. The Court also noted that even if it could consider those references, they referred solely to the mandatory nature of the fact finding procedures, not the scope of its application.

While the Court agreed that the EERA and HEERA’s impasse and fact finding rules differed procedurally from the MMBA, it noted that the Commission had not explained how those procedural distinctions limited MMBA fact finding to comprehensive MOU negotiations. Finally, the Court noted that since the purpose of the MMBA is to promote full communication between public agencies and public employee organizations and provide for reasonable method of dispute resolution, it was not reasonable to presume that the reasonable resolution of disputes should be limited to just MOU negotiations and not discrete bargainable issues.

The Court applied this same rationale to its decision in County of Riverside, and remanded both cases back to their respective trial courts.

So what does this mean for agencies going forward? First, since any dispute regarding a matter within the scope of representation could result in fact finding, you can expect a delay before implementation if the fact finding is sought by the employee association or labor union. Make sure to factor in that additional time when meeting and conferring on discrete issues. Second, when faced with a bargaining dispute on matters not involving comprehensive MOU negotiations, be prepared to issue a last, best and final offer as that will be what you will have to defend in a fact finding hearing. Third, make sure to issue a written declaration of impasse as that will be what triggers the timeline for the union to request fact finding. Finally, don’t worry – as noted above, EERA and HEERA agencies have been dealing with fact finding on single-item issues for years, and they have survived. You will too.

The Commission and the County could seek California Supreme Court review. If that occurs and review is accepted, we will update our clients at that time.