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November 5, 2014

AG Clarifies Rules Governing Public Officials’ Approval of Collective Bargaining Agreements Impacting Spouse


The California Attorney General recently issued an Opinion clarifying that community college district board members may participate in collective bargaining, including negotiating salary and benefits between the district and the bargaining unit that employs their spouse, without violating the conflict of interest provisions of Government Code Section 1090, so long as: (1) the spouse attained the position more than a year before the board member took office; and (2) the collective bargaining agreement does not result in new or different employment for the spouse.  Opinion of the California Attorney General, No. 13-702 (Oct. 15, 2014). 

In the same Opinion, the California Attorney General also reiterated that community college district board members who receive retirement health benefits identical to those provided to active employees may not participate in in the process of renegotiating health benefits for active employees without violating the conflict of interest provisions of Government Code Section 1090.

I. Collective Bargaining Involving Board Member’s Spouse

Government Code Section 1090 prohibits a public officer or employee from making a contract in which he or she is financially interested.  The prohibitions of Section 1090 are interpreted broadly and exceptions are narrowly construed.  As a general rule, abstaining from participation in the making of the contract and/or full disclosure of the board member’s interest does not remedy a Section 1090 violation.  (Thompson v. Call (1985) 38 Cal.3d 633, 649, 214 Cal.Rptr. 139, 149.)

It is well established that community college board members have a community property interest in their spouse’s compensation, and, thus, a financial interest in any Board action impacting their spouse’s compensation.  Thorpe v. Long Beach Community College District (2000) 83 Cal.App.4th 655; (94 Ops.Cal.Atty.Gen. 22 (2011)).  Further, it is clear that community college board members may be “financially interested” in the terms of a collective bargaining agreement.  (89 Ops.Cal.Atty.Gen. 217).

There are, however, certain statutory exceptions to Section 1090.  Of particular note is the exception contained in Government Code Section 1091.5(a)(6), which identifies as a “noninterest” (i.e. not a conflict of interest) the interest of “an officer or employee of a public agency in his or her spouse’s employment or officeholding if his or her spouse’s employment or officeholding has existed for at least one year prior to his or her election or appointment.”

Here, as the board member’s spouse had been employed for at least one year prior to the Board Member’s election or appointment, the California Attorney General concluded the exception contained in Government Code Section 1091.5(a)(6) was applicable, and permitted the board member to participate in collective bargaining, including with respect to salary and benefits, for the spouse’s bargaining unit.
 
The California Attorney General made clear, however, that the exception does not permit the board member to participate in the “making of any contracts involving unique benefits to the spouse, such as decisions to promote, reclassify, or hire the spouse.”  For example, in Thorpe, supra, the court held that Section 1091.5(a)(6) did not apply where a community college district board sought to promote an employee who was married to a board member, insofar as the “new position would have resulted in a pay increase . . ., a new title, a new job description, substantial additional duties, and movement . . . to a supervisory position.”  Thorpe, supra, at pg. 664.
 
II. Board Member With Right to Same Benefits As Active Employees Cannot Participate In Collectively Bargaining Those Benefits

The California Attorney General concluded in 2006 that a community college board member is financially interested in a collective bargaining agreement where the board member is entitled, by virtue of prior district employment, to post-retirement health benefits that are directly tied to health benefits provided by that collective bargaining agreement.  (89 Ops.Cal.Atty.Gen. 217 (2006)).  The California Supreme Court has also stated that the 2006 Attorney General’s Opinion was correctly decided.  Lexin v. Superior Court (2010) 47 Cal.4th 1050.  In these circumstances, the Attorney General easily confirmed the validity of its 2006 opinion.  The California Attorney General additionally observed that, notwithstanding the conflict of interest, the “rule of necessity” allows the Board as a whole to make decision relating to health benefits.

Conclusion
This Opinion makes clear school and community college district board members may participate in collective bargaining of salary and benefits for bargaining units which include their spouse, so long as the spouse attained the position more than a year before the board member took office, and the collective bargaining agreement does not result in new or different employment for the spouse.  However, board members, by virtue of prior district employment, with the right to the same post-retirement health benefits cannot participate in discussions relating to the negotiation of such benefits.

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