Binding Interest Arbitration (SB 402) Passes Out of Senate Committee

The other shoe dropped last Thursday when the substantive provisions to SB 402 were released. As expected, the bill provides for binding interest arbitration for negotiation deadlocks involving police and fire employees.

The bill was heard this past Monday by the Senate Public Employment and Retirement Committee. John Liebert, on behalf of our client, the City of Los Angeles, and representatives of the California League of Cities and the California State Association of Counties, testified in opposition, but it was clear that the Committee had already decided beforehand to pass the bill.

Recognizing that the bill’s authors are Senate Pro Tem John Burton and Assembly Speaker Villaregosa, and that the Governor had indicated support during the campaign, it would be surprising indeed if a binding interest arbitration bill will not be signed into law by the Governor. However, hopefully, at the very least, the scope and coverage of the bill can be substantially narrowed.

The bill is in the form of an amendment to the Code of Civil Procedure (not the Government Code.) Its key provisions are:

The bill covers all law enforcement officers, including correctional officers, and all firefighters, including emergency medical personnel and arson investigators, who are working for the State, any local agency, any district, and any private employer. It is not clear whether the bill covers community college and school districts, though the language would seem to indicate that it does.

The arbitration process covers all negotiable subjects.

The bill does not require that a bonafide impasse had occurred after good faith negotiations. All that is necessary is a “dispute.” After voluntary mediation, only the employee organization may call for the binding arbitration process to commence.

The bill calls for a tri-partite arbitration panel, with a neutral arbitrator serving as chairperson. Five days prior to the hearing, each side shall submit its last best offer of settlement on an issue-by-issue basis. The arbitrator must select one party’s offer on each issue. Except that the union, and only the union, may within five days of establishment of the arbitration panel, select instead an approach of last best offer on a total package basis. That is, the union looks at the agency’s last best offers on an issue-by-issue basis, and then decides whether it is in a more favorable position on a total package last best offer basis.

Another “cute” wrinkle included by the fire and police unions is that if the parties agree, the jointly incurred costs, including the fees of the arbitrator, shall be borne by the employer. Of course it is left unclear whether a dispute on this issue is itself subject to the arbitration process.

The bill in its present form is a disaster for public employers. We will continue to work with others in opposition to address as many of the concerns as possible. We will keep you advised. Please do not hesitate to call us if you have any questions.

SB 739, the (somewhat humorously) titled “Local Government Labor Relations Improvement Act,” which provides for some PERB coverage for MMBA agencies, has not been amended and has not been scheduled for hearing as yet. We will keep you posted in that regard as well.