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March 31, 2016

MMBA Factfinding Provisions Apply to All Bargaining Disputes and Do Not Violate Public Employer’s Home Rule Powers


On March 30, 2016, the California Court of Appeal issued two decisions in consolidated cases that impact the requirements for resolving bargaining disputes. In San Diego Housing Commission, the court held that the Meyers-Milias-Brown Act’s ("MMBA") factfinding provisions apply both to single-issue disputes and negotiations over comprehensive labor agreements. (Cal. Gov. Code §§ 3505.4 – 3505.7.) (San Diego Housing Commission v. Public Employment Relations Board (March 30, 2016 D066237) _ Cal.App.4th _ (2016 WL 1242539)) That same day, the court in County of Riverside found that the MMBA’s factfinding provisions do not violate the County’s constitutional home rule powers. (County of Riverside v. Public Employment Relations Board (March 30, 2016, D069065) _ Cal.App.4th _ (2016 WL 1238737)) The County of Riverside ("County") plans to seek review by the California Supreme Court.

San Diego Housing Commission v. PERB
The San Diego Housing Commission ("SDHC") engaged in negotiations with the Service Employees International Union, Local 221 ("SEIU" or "union") over the effects of layoffs. After the parties reached impasse, PERB granted the union’s request that the dispute be submitted to factfinding under Section 3505.4 of the MMBA. Consequently, the SDHC petitioned the San Diego Superior Court for a writ of mandate, prohibiting PERB from ordering the use of factfinding for this single-issue dispute. The SDHC also filed a complaint for declaratory relief with respect to the scope of factfinding under the MMBA. The trial court granted SDHC’s motion for summary judgment as to both claims, finding that the MMBA’s factfinding provisions only apply to impasses arising from comprehensive labor negotiations. The trial court also granted the SDHC’s petition, ordering PERB to rescind any requirement to proceed in factfinding. PERB and the union appealed these holdings to the California Court of Appeal.

The Court of Appeal reversed the trial court, finding in favor of PERB and the union. The appellate court held that factfinding is available under the MMBA for impasses arising from any bargainable disputes, whether concerning single-issue disputes or comprehensive MOUs. Crucially, all parties agreed that the MMBA does not include language expressly limiting factfinding to particular types of impasse. Rather, the SDHC raised four reasons for narrowly interpreting the scope of the MMBA’s factfinding provisions. The Court of Appeal rejected each argument.

First, the Court of Appeal found that the MMBA (i.e. Section 3505.4(d)) included similar "factfinding panel criteria" as set forth in the Educational Employment Relations Act ("EERA"). While the SDHC insisted that several of these criteria only made sense in the context of comprehensive negotiations, the court noted that the Board applied comparable EERA provisions to all types of impasse. Presumably, the Legislature knew of this practice when it amended the MMBA to include Section 3505.4(d).

Second, the Court of Appeal found that Section 3505.7 did not indirectly suggest an intention to limit factfinding to disputes on negotiations of comprehensive MOUs. The appellate court instead interpreted Section 3505.7’s prohibition on implementation of an MOU following factfinding, as recognition that there has been no agreement upon a last, best and final offer imposed by the public agency.

Third, the Court of Appeal dismissed the SDHC’s references to the legislative history of the MMBA’s factfinding provisions, noting that these references were "not illuminating because they focus on the mandatory nature of" factfinding rather than "the scope of their application."

Fourth, the Court of Appeal considered whether the differences between the MMBA and EERA’s factfinding procedures required that the MMBA be interpreted differently. For instance, the MMBA permits only the union to request factfinding, while EERA provides either party with the discretion to make the request. The court noted that these distinctions were irrelevant, and instead emphasized the similar scope of both factfinding schemes — i.e. to "differences" or "disputes." The court also rejected that the meaning of these terms differed in comparison to EERA. Finally, the court found that limiting factfinding would impede the MMBA’s general purpose, to provide reasonable methods for resolving any disputes.

County of Riverside v. PERB
The County implemented a new background check policy that applied to workers represented by SEIU. The parties met and conferred on the effects of the policy, but did not reach agreement. After the union declared impasse, PERB granted the union’s request for factfinding. The County then petitioned the Riverside County Superior Court for a writ of mandate to nullify PERB’s administrative decision, arguing that the MMBA’s factfinding provisions apply only to impasses arising from comprehensive labor negotiations, rather than single-issue disputes (as in San Diego Housing). The County also filed a complaint for declaratory relief, injunctive relief, and statutory and constitutional violations, claiming that the MMBA’s factfinding provisions violated the County’s constitutional right to establish compensation for its employees.

While the trial court denied the County’s constitutional challenge, it held that the MMBA’s factfinding provisions applied only to impasses arising from negotiations over comprehensive MOUs. Each party appealed portions of the trial court’s decision to the California Court of Appeal.

On appeal, the Court of Appeal found in favor of PERB and the union. It first held that the MMBA’s factfinding provisions broadly apply to impasses arising from negotiations over any bargainable matter, incorporating its analysis in the San Diego Housing Commission companion case.

Second, the court considered the County’s constitutional challenge. Unlike the federal Constitution, the court noted that the California Constitution limits, rather than supplies, the state Legislature’s power. Article XI, section 11(a) supplies one of these limitations, forbidding the Legislature from delegating power to a private person or body to interfere with local public entities’ municipal functions. Therefore, a statute is unconstitutional if it divests local authorities of their final decision-making authority. Crucially, the MMBA does not permit factfinding panels to issue binding decisions affecting agency operations. The agency retains the authority to refuse a panel’s recommendations and take alternative action. Consequently, the court found that the MMBA’s factfinding provisions did not violate the County’s home rule powers.

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