PERB Clarifies MMBA Test for Evaluating Whether Managerial Decisions Are Negotiable


On October 31, 2019, the Public Employment Relations Board (“PERB” or “Board”) rearticulated the test under the Meyers-Milias-Brown Act (“MMBA”) for determining when a public employer must negotiate with unions about managerial or policy decisions.  (County of Santa Clara (2019) PERB Decision No. 2680-M.)  The Board explained that it would apply the Richmond Firefighters and Claremont tests, provided by the California Supreme Court, in evaluating the negotiability of managerial decisions. 


The County of Santa Clara (“County”) operated a comprehensive healthcare system that included primary care clinics, inpatient and outpatient facilities, and a trauma center hospital.  The County employed dozens of Protective Service Officers (“PSOs”), and assigned several of them to provide security services at its clinics and hospital.  PSOs were represented by the Service Employees International Union, Local 521 (“SEIU”). 

Prior to 1995, the County contracted with the local Sheriff’s Office to provide security services at its healthcare-related facilities.  Deputy Sheriffs are sworn officers, possess more expansive authority relative to PSOs (for instance, authority to arrest), receive full POST training, and are otherwise distinguishable from PSOs.  By contrast, PSOs are non-sworn officers, do not carry firearms, wear peace officer badges, and possess limited equipment (such as radios, pepper spray, and handcuffs).  In 1995, the County’s contract with the Sheriff’s Office expired, and it chose to use PSOs to fill this role instead. 

In approximately 2013 or 2014, the County decided to contract with the Sheriff’s Office to provide discrete security services in several instances.  These personnel would supplement rather than supplant the assigned work provided by PSOs.  The County based this decision on several recent violent incidents in its facilities, and cited safety as the primary rationale for the change in a written plan circulated among management.  The County solicited input from SEIU about its proposed change.  SEIU did not oppose the decision.  Following the change, violent incidents dropped by nearly 50%.

The County opened a new primary care clinic facility in June 2016.  Prior to its opening, the County assigned PSOs to provide security.  Upon review of crime reports and other data, the Sheriff’s Office determined that safety concerns required it to reconsider the security staff assigned to the new facility.  The Sheriff’s Office recommended that a deputy sheriff be assigned in lieu of PSOs.  After holding a public hearing, the County decided to staff the new facility with deputy sheriffs.  The County did not notify SEIU about its proposed change, as it believed deputy sheriffs would not be performing bargaining unit work.

SEIU filed an unfair practice charge alleging that the County violated the MMBA by unilaterally contracting out bargaining unit work without negotiating with the union.  The ALJ found that the County’s actions were outside the scope of representation, and dismissed the complaint.  SEIU appealed this dismissal to the Board.

Board’s Analysis

The Board began by finding that SEIU had established three of the four factors for a unilateral change unfair practice claim, as the County had taken firm action about a subject that sufficiently affected bargaining unit employees, and had not provided the union with prior notice about the change.  As a result, the Board held that the County would be liable for failing to bargain with the union only if its decision to utilize deputy sheriffs fell within the scope of representation.

The Board agreed with the ALJ’s conclusion that the County’s decision was not negotiable, but found that the ALJ had used the wrong standard.  The ALJ had applied the California Supreme Court’s balancing test for assessing the negotiability of managerial decisions, outlined in its Claremont Police Officers Assn. v. City of Claremont (“Claremont”) (2006) 39 Cal.4th 623 decision.  Under this test, the court (or PERB) first considers whether the “implementation of a fundamental managerial or policy decision significantly or adversely affects a bargaining unit’s wages, hours, or working conditions.”  (Claremont, supra, 39 Cal.4th at 637, citing First National Maintenance Corp. v. NLRB (1981) 452 U.S. 666.)  Under these circumstances, a managerial decision is negotiable “only if the employer’s need for unencumbered decisionmaking in managing its operations is outweighed by the benefit to employer-employee relations of bargaining about the action in question.  (Ibid, at p. 638.)

The Board explained that the ALJ had erred in relying exclusively on the Claremont test for weighing whether the County’s managerial decision was negotiable.  Instead, the Board clarified that this test had been modified by the California Supreme Court in International Association of Fire Fighters, Local 188 v. Public Employment Relations Board (“Richmond Firefighters”) (2011) 51 Cal.4th 259. In this subsequent case, the Court identified three types of managerial decisions: (1) decisions that have “only an indirect and attenuated impact on the employment relationship, and thus are not mandatory subjects of bargaining”, (2) “decisions directly defining the employment relationship, such as wages [and] workplace rules” which are “always mandatory subjects of bargaining”, and (3) decisions that “directly affect employment, such as eliminating jobs, but nonetheless may not be mandatory subjects of bargaining because they involve a change in the scope and direction of the enterprise, or in other words, the employer’s retained freedom to manage its affairs unrelated to employment.”  (County of Santa Clara, supra, Dec. No. 2680 at pp. 9-10, citing Richmond Firefighters, supra, 51 Cal.4th at 272-73.)  The Board indicated that the Claremont balancing test applied only to the third category of managerial decisions, given that the first and second categories did not require further consideration.

Upon applying the Richmond Firefighters test to the dispute, PERB found that the County’s decision to assign deputy sheriffs to the new facility rather than PSOs “directly affected” unit members by diminishing the number of PSO jobs in the unit.  (Ibid at p. 10.)  Consequently, the County’s decision fell within the third category of managerial decisions, and thus required application of the Claremont balancing test.  Under this test, the Board found that the County had “demonstrated a legitimate concern for the health and safety of its employees and the public, given the [clinic’s] location in an area with a high level of crime” and potential lag time for soliciting assistance from local law enforcement.  (Id. at p. 11.)  The Board also noted that the County’s prior experience with assigning deputy sheriffs at other clinics or health facilities, and noting a corresponding decline in violent incidents, buttressed its credibility in relying on this safety rationale for its decision.  (Id.)   Finally, the Board agreed with the ALJ that this rationale outweighed any benefits of bargaining in this instance.  (Id.)  As a result, the County did not violate its duty to bargain by failing to meet and confer with SEIU about its staffing decision.

However, the Board found that the County violated its duty to bargain with SEIU about the effects of that decision.  PERB emphasized that a public employer may owe effects bargaining obligations, even when the decision itself is non-negotiable.  (Id. at pp. 11-12 [citing cases].)  An employer breaches this duty unless it provides notice to the union about a proposed change and extends an opportunity to bargain about any negotiable effects before implementing that change.  (Id.)  Given that the County failed to provide SEIU with prior notice and an opportunity to bargain about any effects of its staffing decision, the Board found that the County failed to satisfy its effects bargaining obligation.  (Id. at pp. 12-13.)

The Board concluded that the County’s actions did not result in any harm to SEIU-represented employees, and thus declined to order the County to rescind its staffing decision.  Instead, the Board ordered the County to engage in effects bargaining upon demand by SEIU.

Significance for MMBA Employers

This case provides important guidelines for MMBA employers in evaluating whether it must negotiate with unions about a proposed managerial decision.  In these instances, employers must use a two-step process.  First, it must consider which of the three categories outlined in Richmond Firefighters best describes a proposed managerial decision.  In particular, the MMBA employers should consider whether its proposed course of action involves a change to wages, hours, or other terms of employment but also involves a change in the services provided by the employers or how they provide those services. This case highlights that the employer proceeds to the second step, and applies the Claremont balancing test, only if the management decision falls within Richmond Firefighters’ third category of actions.

This case also reminds public employers of the importance of effects bargaining, and the consequences of failing to satisfy this separate obligation.  Even if a managerial decision is itself not subject to the duty to meet and confer, a public employer must still provide affected unions with advance notice about the proposed change, and an opportunity to identify negotiable effects and bargain about those effects.  A public employer risks an automatic violation of the duty to engage in effects bargaining if it does not provide affected unions with prior notice about its proposed change, regardless of whether the decision itself is negotiable. 

This AALRR publication is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. Applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other AALRR publication does not create an attorney-client relationship. The Firm is not responsible for inadvertent errors that may occur in the publishing process. 

© 2019 Atkinson, Andelson, Loya, Ruud & Romo



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