PERB Reinforces Deferral to Arbitration Doctrine in Context of Retaliation Unfair Practice Claims Brought Under MMBA
On October 6, 2022, the Public Employment Relations Board (“PERB” or “Board”) reinforced the importance of its deferral to arbitration doctrine, when it affirmed an Administrative Law Judge’s (“ALJ”) deferral order and found no basis to the Charging Party’s post-arbitration repugnancy claim. (County of Orange (Orange County Sheriffs’ Department) (2022) PERB Order No. Ad-496-M.) The decision highlights the importance of raising this argument when a public employer faces an unfair practice charge and a grievance resting on the same grounds, particularly when they arise in the context of disciplinary action.
The Orange County Sheriffs’ Department (“Department”) discharged Jaime Avila, a senior correctional services technician in November 2020. Prior to his termination, Mr. Avila had served as a union steward. Mr. Avila filed a grievance, alleging that the County violated the parties’ MOU given that his termination lacked reasonable cause and rested on retaliatory motives. He also filed an unfair practice charge, raising analogous allegations.
The County filed an answer to the complaint in January 2021, which included a deferral to arbitration affirmative defense. The County specifically averred that: (1) the matter at issue was subject to the grievance procedure in the parties’ MOU, and culminated in binding arbitration; (2) the allegations raised in the parallel unfair practice charge was also prohibited by the parties’ MOU; (3) both parties were ready and willing to proceed to arbitration; and (4) the County waived all procedural defenses to arbitration. In November 2021, the County filed a prehearing motion to defer to arbitration, and to place the pending unfair practice claims alleged in the Complaint in abeyance under Section 3505.8 of the Government Code and PERB Regulation 32620(b)(6). The ALJ vacated the scheduled hearing dates, and took the motion under consideration.
While the motion remained pending, the parties held an arbitration hearing from February 1-4, 2022. The parties explicitly authorized the arbitration hearing officer to issue findings “consistent with the MOU, MMBA, and PERB protocols.” While the County presented its case at arbitration, Mr. Avila left the hearing after presenting part of his case-in-chief based on alleged fairness issues, and did not return. The hearing officer permitted the hearing to proceed, accepted rebuttal evidence from the County, and closed the hearing. The hearing officer invited both parties to file post-hearing briefs. The County did and Mr. Avila did not. On July 15, 2022, the ALJ issued an order granting the County’s deferral motion, and placed the case in abeyance. On July 20, 2022, the hearing officer issued a final and binding decision, finding no violation of the MOU, the MMBA, or PERB Regulations. As to Mr. Avila’s claim of anti-union retaliation, the hearing officer concluded that Mr. Avila had not presented any persuasive evidence of unlawful animus but merely “vague and general allegations.” Mr. Avila filed an administrative appeal of the ALJ’s ruling.
PERB began by highlighting the two-step process involved in the “deferral to arbitration” doctrine. The first is known as “pre-arbitration deferral,” in which the Board will grant a deferral motion and place an unfair practice charge in abeyance if the parties’ dispute is subject to final and binding arbitration under an MOU. The second step involves “post-arbitration deferral.” There, the Board will dismiss an unfair practice charge once the arbitration process concludes unless the charging party demonstrates that the ultimate arbitration award, decision, or settlement is “repugnant” to the purposes of the MMBA. PERB found that the ALJ had properly granted the County’s motion under the first part of the doctrine, and concluded that Mr. Avila had failed to state a case on appeal under the second part of the doctrine.
Under “pre-arbitration deferral,” the Board will defer an unfair practice charge to arbitration if the respondent demonstrates: (1) the dispute arises within a stable collective bargaining relationship; (2) the respondent is willing to waive procedural defenses and to arbitrate the merits of the dispute; (3) the contract and its meaning lie at the center of the dispute; (4) no recognized exception to deferral applies; and (5) the parties’ grievance procedures must culminate in final and binding arbitration.
Mr. Avila did not dispute four of the five elements. Instead, he argued that the third element was not met, as the MOU’s non-discrimination clause (which was at issue in his grievance) was too broad and vague to ensure that the arbitrator would apply the proper standard. While finding this argument waived, the Board nonetheless considered and rejected this contention. The MOU clause prohibited discrimination “under state and federal law,” which necessarily included discrimination for union activity under the MMBA. The Board also rejected Mr. Avila’s related argument on appeal that it was unproven that the arbitrator would apply the proper statutory retaliation standard. PERB noted that the parties stipulated to the issues before the hearing officer, and that they included an MMBA retaliation claim. This stipulation was also explicitly listed in the hearing officer’s arbitration decision. As a result, the Board affirmed the ALJ’s pre-arbitration deferral order.
Under “post-arbitration deferral,” the Board will defer to a final arbitration decision and dismiss a pending, parallel unfair practice case if four elements are met: (a) the unfair practice issues were presented to and considered by the arbitrator; (b) the arbitration process was fair and regular; (c) the parties agreed to be bound by the arbitration decision and award; and (d) the decision of the arbitrator was not “clearly repugnant” to the purposes and policies of a labor statute.
The Board offered clarity on the final element, emphasizing that “repugnancy” is a “term of art.” Further, it noted:
An arbitration decision or settlement is repugnant to the governing act if it is palpably wrong or not susceptible to an interpretation consistent with the [applicable labor statute]. The mere possibility that the Board may have reached a different conclusion does not render the award repugnant. As noted, however, a repugnancy claim can also focus, in whole or in part, on allegedly unfair procedures or simply on the fact that the arbitrator did not consider the unfair practice issues. Irrespective of whether the party alleging repugnancy focuses on the ultimate result, the process, or a combination, that party has the burden of affirmatively demonstrating the defects in the arbitral process or award. (County of Orange, supra, Order No. Ad-496 at p. 8, emphasis added.)
Mr. Avila contended that the arbitration award was “repugnant” to the MMBA, such that the Board should not defer to it and should permit him to litigate the pending UPC, for three reasons. First, he argued that the hearing officer improperly limited his time to present evidence. Second, the hearing officer did not consider all evidence in the record. Third, the hearing officer refused his request for an extension of time to file a post-hearing brief.
The Board summarized the history of the parties’ proceedings in arbitration, and concluded that Mr. Avila’s claims had no merit. Contrary to his claims, the arbitration decision reflected that he had ample opportunity to present evidence at hearing, and that he chose to leave the hearing prematurely following a reasonable recommendation provided by the hearing officer (i.e. to introduce witness testimony rather than read from a prepared statement). Further, the record illustrated that the hearing officer had offered to provide a “reasonable” extension of the deadline to file a post-hearing brief (by April 25, 2022), and that Mr. Avila delayed seeking one until nearly three months later (on July 15, 2022).
In sum, “the hearing transcript shows that [the hearing officer] afforded [Mr.] Avila great latitude in the presentation of his case, and agreed to give [Mr.] Avila the extra time that [Mr.] Avila said he ended. [Mr.] Avila may not defeat deferral by improperly refusing to take part in the arbitration.” (County of Orange, supra, Order No. Ad-496 at p. 12.) While Mr. Avila may have demonstrated that his actions were unreasonable, his appeal failed to meet the standard for rejecting an arbitration decision under the “repugnancy” standard. As a result, the Board dismissed the complaint.
This decision highlights several key issues tied to the arbitration deferral doctrine. First, the factual circumstances and MOU language remain critical to considering whether the Board will defer to a pending contractual grievance and place a parallel unfair practice claim in abeyance. The Board’s consideration of both the MOU and the allegations raised in the grievance illustrate that deferral may not be granted if the ultimate arbitration decision will not address the claims involved in an unfair practice claim.
Second, the Board’s decision rests on careful consideration of the parties’ history and interactions in arbitration, including both the hearing officer’s ultimate decision as well as the parties’ communications. A post-arbitration challenge under the “repugnancy” standard will need to grapple with these circumstances, or the reasoning on the merits utilized by the arbitrator, to persuade the Board to decline deferral and allow the unfair practice claim to proceed.
Finally, public employers should remain mindful for a few threshold considerations, such as that the pre-arbitration deferral is an affirmative defense which must be raised or may be deemed waived. (See State of California (Department of Corrections) (2008) PERB Dec. No. 1967-S.) Additionally, the deferral doctrine requires final and binding arbitration.
Please feel free to contact the Authors of this Alert or your regular AALRR counsel with any questions.