PERB Provides Guidance on Bargaining Obligations Post-Accretion

01.12.2024

On December 6, 2023, the Public Employment Relations Board (“PERB” or “Board”) addressed a novel legal issue, and provided clarity on public employers’ bargaining obligations following a modification petition adding unrepresented positions to a bargaining unit (“accretion petition”) while a memorandum of understanding (“MOU”) is in effect. (Regents of University of California (2023) PERB Dec. No. 2884-H.)

The Board broke with ambiguous federal NLRB precedent, namely Baltimore Sun Co. (2001) 335 NLRB 163, and found that parties have a broad duty to bargain in good faith mid-contract regarding positions newly added to a unit following an accretion petition. The Board also clarified that employers still had a duty to maintain status quo terms in effect for newly added employees, concurrent with its post-accretion bargaining obligations. PERB utilized traditional rules of contract interpretation to discern which status quo terms were in effect, observing that they may arise from an MOU or unwritten practices if they were “sufficiently clear.” However, if it is “legitimately unclear” which terms newly represented employees are entitled to, the status quo may be measured by the terms which would have applied to them before being represented.

Background

The UC Irvine Medical Center, UC San Francisco Medical Center and UC Davis Medical Center (collectively “Regents”) each had Incentive Award Programs (“IAPs”) in place setting employee eligibility for performance-based and achievement-based bonuses. The yearly bonuses were based on performance and achievement for the preceding year. The IAP contained more favorable terms for non-represented employees than for represented employees.

The Administrative Officer II position (“AO2s”) was unrepresented until October 2020. At that time, Teamsters filed an accretion petition with the Regents to add AO2s to the Clerical Unit. The Board granted Teamsters’ petition. Prior to representation, AO2 wage ranges were continuous, and they were eligible for performance-based and achievement-based bonuses under the IAPs for each medical center.

Before the AO2s joined the Clerical Unit, the Regents and Teamsters had negotiated an MOU that mandated a three-percent across-the-board wage increase, as well as five subsequent three-percent across-the-board wage increases scheduled to take effect each year on July 1^st from 2017 to 2021.

The parties began post-accretion negotiations in October 2020. Prior to entering into negotiations, the Regents had agreed that AO2s would receive the same across-the-board increases as other eligible members of the bargaining unit, instead of receiving any wage increase that they would have received had they remained unrepresented. However, during post-accretion bargaining, the parties disagreed over which IAP criteria for the 2021-2022 fiscal year would apply to the newly added employees. Before the parties reached agreement, Teamsters chose to file an unfair practice charge in July 2021.

Pending a decision on this charge, the parties completed their post-accretion bargaining (while the MOU remained broadly in effect) in February 2022. The agreement did not mention the IAP issue, but provided specific wage increases for AO2s. The Regents ultimately removed AO2s from the IAP eligibility list in fall 2022, which they had previously participated in as unrepresented employees.

Following expiration of the parties’ 2017-2022 MOU, the Regents and Teamsters reached agreement on a successor MOU extending through March 31, 2026. The new MOU explicitly established a procedure for wage adjustments for future mid-contract accretions, provided several wage adjustments to unit employees (including AO2s), and noted the Regents’ right to modify IAPs.

In its unfair practice charge, Teamsters alleged that the Regents unilaterally changed the status quo when it ceased allowing AO2s to participate in IAPs following their addition to the bargaining unit.[1] The administrative law judge ruled in the Regents’ favor and dismissed the unfair practice claims at issue. Teamsters appealed this proposed decision to the Board.

Board Decision

The Board framed the dispute simply as “defining the University’s duty to maintain the status quo during post-accretion negotiations.” PERB noted that both parties relied to some extent on the NLRB’s Baltimore Sun Co. decision, which contained two broad holdings: (i) an existing MOU should immediately apply to employees newly added to a unit; and (ii) the parties must bargain over “how to apply” the MOU’s terms, particularly as to “unique” issues affecting the newly added employees. (See Baltimore Sun Co., supra, 335 NLRB at 163.)

However, the Board chose not to wholly adopt federal precedent on this issue for several reasons. PERB observed that Baltimore Sun was unclear about which terms were subject to bargaining post-accretion, and conversely which terms “compromise the status quo” and needed to be maintained “pending negotiations.” The Board specifically rejected the NLRB’s decision to limit post-accretion bargaining to “unique issues”, opting for a “broader” standard for public employers. The Board also noted the negative impact on public sector bargaining if post-accretion negotiations were protracted:

“Protracted post-accretion negotiations can lead to labor strife and instability if newly added employees’ pay remains frozen or otherwise in limbo for an extended period while the amount of potential retroactive payment grows.”

In adopting a “broader” duty to bargain post-accretion, the Board found that the parties are in the best position to identify what post-accretion issues are “unique, unclear, interconnected, or otherwise significant enough that discussion should not await contract expiration.”

The Board then turned to the second legal issue of the case, namely how the Regents’ “duty to maintain the status quo” interacted with its obligation to bargain as to newly accreted employees. The Board followed status quo doctrine in discerning whether the parties’ MOU or past practices supplied “sufficiently clear” indication that AO2s were entitled to a wage adjustment. For the first fiscal year following accretion, “both parties concurred that AO2 wages should be adjusted like unrepresented employee wages” based on its practice of doing so. The status quo at this stage was set by the employees’ pre-representation wage expectations. However, for the next wage adjustment cycle, the MOU “superseded the wage adjustments that AO2s would have received had they remained unrepresented” due to its “sufficiently clear” language. “The University therefore maintained the status quo when it provided AO2s with the contractually required across-the-board increases” while shifting their IAP participation.

The Board emphasized that tenets of contract interpretation guided this status quo doctrine analysis. Specifically, had the terms in the parties’ MOU as to AO2s’ eligibility for wage adjustments been “unclear”, the status quo for AO2s would have been measured by the terms applicable to unrepresented employees. In dicta, PERB noted that past practices can inform how to apply unclear MOU provisions (e.g. eligibility on wages), another tenet of contract interpretation not at issue in the dispute. The Board also found that these principles (i.e. for the status quo in effect during post-accretion bargaining) “are comparable to those that apply pending first contract negotiations,” as “employees’ previous expectations” constitute status quo terms given the absence of a prior MOU defining any expectation on wages or other terms. (Regents, supra, Dec. No. 2884, citing County of Kern (2018) PERB Dec. No. 2615-M.)

Significance of Decision

The Board’s decision provides practical guidance on how public employers should approach their bargaining obligations following modification petitions occurring during active MOUs. While PERB chose to impose broader bargaining obligations on public employers than under federal labor law, the Board did root its novel holding in relatively clear and practical legal principles. Of particular note, the Board explained its decision to break from federal law by citing the practical differences between the private sector and the public sector in California, concluding that the unique procedural and practical challenges facing public agencies required more latitude over what to negotiate post-accretion and mid-contract.

The Board’s decision also sought to streamline how general bargaining principles, including the status quo doctrine, apply in different contexts. While it is non-binding dicta, PERB noted that its summary of post-accretion bargaining obligations was “comparable” to prior standards governing “first contract negotiations” for newly represented employees. This attempt at consistency in labor doctrine allows public employers to approach negotiations evenly, with all units governed by similar standards.

Please feel free to contact the Authors of this Alert or your regular AALRR counsel with any questions.

[1] Teamsters also alleged that the Regents engaged in discrimination when it removed AO2s from participating in the IAP.