Courtesy of James R. Touchstone, Esq.
In Boling v. Public Employment Relations Board, 2018 Cal. LEXIS 5674 (Cal. Aug. 2, 2018), the Supreme Court of California found that a mayor who was the city’s designated bargaining agent and had used the powers and resources of his office to change the terms and conditions of employment by means of a ballot initiative had a duty, under Gov. Code section 3505, to meet and confer with public employee organizations. In reaching its conclusion, the Court gave deference to the ruling of the Public Employment Relations Board (“PERB”) in the matter because it was settled that courts generally defer to PERB’s construction of labor law provisions within its jurisdiction.
Per city charter, San Diego has a “strong mayor” form of government in which the mayor acts as the city’s chief executive officer. In this CEO-function, the mayor recommends measures and local ordinances to the City Council, conducts collective bargaining with the city employee unions, and addresses compliance with the meet-and-confer requirements of the Meyers-Milias-Brown Act (“MMBA”) as codified in Government Code section 3500 et seq. Under the MMBA, governing bodies or their designated representatives (such as the San Diego mayor-CEO) are required to engage with unions on appropriate matters “‘prior to arriving at a determination of policy or course of action’” (Gov. Code section 3505).
Beginning in November 2010, San Diego city officials proposed public employee pension reforms in response to budget deficit concerns. In one plan proposed by a member of the City Council (the “DeMaio plan”), all newly-hired city employees would not receive defined benefit pensions, but 401(k)-style plan benefits instead. Mayor Jerry Sanders came up with another plan to develop a citizens’ initiative that eliminated traditional pensions for new hires, except in the police and fire departments, and replace them with a 401(k)-style plan.
Generally, proposals to amend a city’s charter can be submitted to voters either: (1) by the city’s governing body on its own motion, or (2) by an initiative petition signed by 15% of the city’s registered voters.
Here, Mayor Sanders had concluded that the San Diego’s City Council was unlikely to put his own proposal on the ballot and that the meet-and-confer process might lead to comprises. In an interview, he had said “‘…you do that so that you get the ballot initiative on that you actually want. … [A]nd that’s what we did. Otherwise, we’d have gone through the meet and confer and you don’t know what’s going to go on at that point.’” Sanders held a press conference with other City officials announcing City voters would soon see “‘signature-gatherers for a ballot measure that would end guaranteed pensions for new [c]ity employees.’” This announcement was heralded using official communications like news releases and emails showing the City seal and the Mayor’s signature.
Following the announcement, Sanders developed and publicized his pension reform proposal into 2011. After some negotiation, the DeMaio and Sanders plans were merged into a new plan. These negotiations were between the two proponents of the competing plans. The merged plan, among other things, allowed newly hired police to continue with a pension plan, but new firefighters would have the 401(k)-style plan. The new measure was called the “Citizens’ Pension Reform Initiative.”
In April 2011, Sanders and other City officials were with the citizens who would become the formal citizen proponents of the plan as they held a press conference to announce the start of a petition for the plan. Mayor Sanders and his staff subsequently supported the signature-gathering campaign in public appearances, speeches, interviews, solicitations for assistance, and media statements. The proponents gathered enough signatures, the measure was certified in November 2011, and the city council passed a resolution of intent to place the initiative on the June 2012 ballot.
On the June 2012 ballot, Sanders provided the pro-initiative argument. The voters approved the initiative. That election night, Sanders lauded it as the latest of his pension reform efforts over the years.
Beginning in July 2011, the San Diego Municipal Employees Association (“Union”) wrote repeated letters to Sanders and City officials, claiming the City was obligated under the MMBA to meet and confer regarding the initiative because Sanders was acting in his official role as Mayor to promote it. He thus had made a determination of policy for the City of San Diego related to “mandatory subjects of bargaining.” The Union said the citizens’ initiative process was a pretense to dodge the City’s MMBA obligations. The general response was minimal and maintained an inability to legally interject in the citizen-sponsored initiative “at this point in the process.” The City declined to meet and confer.
In January 2012, the Union filed an unfair practice charge based on the City’s failure to meet and confer and claiming the initiative was intended by the “‘City’s ‘Strong Mayor’” to enable the City to evade its MMBA obligations. Other unions followed. In February 2012, after the council had voted to put the initiative on the June 2012 ballot, PERB alleged the failure to meet and confer constituted an unfair labor practice in a complaint against the City. PERB appointed an administrative law judge (“ALJ”) to hold a hearing on a consolidated claim. PERB also filed a superior court action to prevent the initiative from being on the June 2012 ballot.
The trial court decided against a preliminary injunction. It granted the City’s request to stay the ALJ’s scheduled June 2012 hearing. The Union sought writ relief. The Court of Appeal granted relief and vacated the stay of the administrative proceedings, stating the City’s activity as alleged “arguably violated public employment labor law.”
As mentioned above, the initiative passed on the June 2012 ballot. In July 2012, the ALJ found Sanders had a duty to meet and confer with the unions because his conduct amounted to a policy determination on a negotiable matter.
PERB affirmed, concluding that the City’s determined refusal to respond to the Unions’ meet-and-confer requests “‘consummated the Mayor’s policy decision to reform pension benefits and thereby alter terms and conditions of employment.’” PERB adjusted the ALJ’s proposed remedy to vacate the results of the election. Invoking its “make-whole” and “restoration” powers for remedying MMBA violations, PERB required the City to pay its employees for adjusted lost pension benefit compensation – payments to continue for as long as the initiative was in effect, or until the parties mutually agreed otherwise.
The decision by PERB’s decision was challenged by a consolidated writ petition from the City and initiative’s citizen proponents. The Court of Appeal ruled that the City was not required to meet and confer before placing the initiative on the ballot, holding that a City’s decision to place a citizens’ initiative measure on the ballot was “purely ministerial and did not trigger the obligation to meet and confer.”
On appeal, the California Supreme Court explained as an initial matter that the standard of review for an agency’s legal determinations was “one in which the judiciary, although taking ultimate responsibility for the construction of the statute, accords great weight and respect to the administrative construction.” “As noted in Cumero v. Public Employment Relations Bd. (1989) 49 Cal.3d 575, 586, interpretation of a public employee labor relations statute ‘“‘falls squarely within PERB’s legislatively designated field of expertise,’” dealing with public agency labor relations. Even so, courts retain final authority to ‘“state the true meaning of the statute.’” The Supreme Court added that, pursuant to Government Code section 3509.5(b), it must uphold PERB’s decision if it was supported by substantial evidence on the whole record.
The Court noted that, under the MMBA and other statutes, the Legislature granted PERB the power to adjudicate unfair labor practice claims. The Court explained that it was “settled” that courts generally defer to PERB’s construction of labor law provisions within its jurisdiction because PERB was “‘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.’” “We follow PERB’s interpretation unless it is clearly erroneous.” The Supreme Court found the Court of Appeal erred in reviewing PERB’s MMBA construction de novo, instead of the more deferential standard.
The Supreme Court observed that the focus of the MMBA is Government Code section 3505, which mandates that a governing body of a local public agency, or its designated representative, meet and confer in good faith on employment terms and conditions with representatives of recognized employee organizations. The Court noted that “‘[t]he duty to meet and confer in good faith has been construed as a duty to bargain with the objective of reaching binding agreements between agencies and employee organizations …. The duty to bargain requires the public agency to refrain from making unilateral changes in employees’ wages and working conditions until the employer and employee association have bargained to impasse … .” (Santa Clara County Counsel Attys. Assn. v. Woodside (1994) 7 Cal.4th 525, 537.)
Here, the Court narrowed the question to whether the mayor’s efforts in pursuit of pension reform by means of the initiative required him to meet and confer with the unions. Reviewing People ex rel. Seal Beach Police Officers Assn. v. City of Seal Beach, the Court explained that MMBA objectives include fostering full communication between public employers and employees and improving employer-employee relations. These goals required compliance with Section 3505, which placed a relatively “minimal” burden on a local agency’s governing functions, even when an agency chose to take a proposal directly to the voters.
Considering Sanders’ conduct in San Diego, the Court observed: “…Mayor Sanders conceived the idea of a citizens’ initiative pension reform measure, developed its terms, and negotiated with other interested parties before any citizen proponents stepped forward. He relied on his position of authority and employed his staff throughout the process. He continued using his powers of office to promote the [i]nitiative after the proponents emerged.”
The Court of Appeal applied what the Supreme Court here called a “novel interpretation” of a notice requirement in Section 3504.5 to limit the MMBA’s meet-and-confer requirements to only those the City’s governing body proposed, which would have excluded the initiative. However, the Supreme Court rejected this interpretation because the lower court “failed to give PERB’s statutory interpretation the deference to which it was due.” Sections 3504.5 and 3505 fell squarely within PERB’s legislatively designated field of expertise. Moreover, there was no support in the statutory language or case precedent for the lower court’s interpretation. Thus, the Supreme Court found the Court of Appeal should have followed PERB’s interpretation of those statutes unless it was clearly erroneous.
The Court recalled that Section 3505 expressly imposed the duty to meet and confer on the governing body of a public agency, or such boards, commissions, administrative officers “‘or other representatives as may be properly designated by law or by such governing body.’” The Court noted that here, “the mayor was the city’s chief executive, empowered by the city charter to make policy recommendations with regard to city employees and to negotiate with the city’s unions. Under the terms of Section 3505, he was required to meet and confer with the unions ‘prior to arriving at a determination of policy or course of action’ on matters affecting the ‘terms and conditions of employment.’” The Court viewed this construction as promoting the Legislature’s statutory intent and the MMBA’s objectives of fostering employer-employee communication and harmonious personnel management, rather than one that would allow public officials to purposefully evade the MMBA’s meet-and-confer requirements by officially sponsoring a citizens’ initiative.
The Court noted Sanders told citizens of his intention to reform pensions by means of the initiative before he left office, repeated it formally in public speeches, engaged his staff and worked with others in City government to have the initiative be publicized, gain acceptance, gather signatures, and be placed on the ballot. “He consistently invoked his position as mayor and used city resources and employees to draft, promote, and support the [i]nitiative.” Under the facts here, the Court found that Sanders, the city-CEO “strong mayor” with authority over labor relations, pursued pension reform as a matter of policy by means of the promotion of the ballot initiative. The Court thus concluded that substantial evidence supported PERB’s conclusion that Sanders’s activity created an obligation to meet and confer. Accordingly, the California Supreme Court reversed the Court of Appeal.
The Court remanded with instructions that the lower court should address the appropriate judicial remedy for the violation identified in this opinion because the Court of Appeal did not consider the remedy issue after its judgment that the city had no meet-and-confer duty. PERB had ordered a make-whole remedy based on lost compensation noting that it was the province of courts alone to invalidate the results of an initiative election.
HOW THIS AFFECTS YOUR AGENCY
The Court here concluded that great deference must be shown by courts to PERB in its “statutory construction” of the MMBA, in particular as regarding Section 3505’s meet-and-confer requirements. Agencies should note that the mayor’s efforts in promoting pension reform as a long-term goal leading to a specific and high-profile spearheading of the ballot initiative was seen as an evasion of its duties under those statutes. The Court deemed that the initiative process, in consideration with the other facts relied upon, was not sufficient to avoid triggering a duty to meet and confer with the public unions prior to enacting pension reform measures.
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 Or 10% for amendments to a combined city and county charter.
 Elec. Code, section 9255, former subd. (a)(2)-(4).
 Yamaha Corp. of America v. State Bd. of Equalization, 19 Cal.4th 1 (1998).
 “The findings of the board with respect to questions of fact, including ultimate facts, if supported by substantial evidence on the record considered as a whole, shall be conclusive.”
 Banning Teachers Assn. v. Public Employment Relations Bd., 44 Cal.3d 799, 804 (1988).
 County of Los Angeles v. Los Angeles County Employee Relations Com., 56 Cal.4th 905, 922 (2013).
 36 Cal.3d 591 (1984).