General Rule - Unilateral Actions Prohibited

It is a fundamental tenet of labor law that an employer must refrain from taking any unilateral action that would change a mandatory subject of bargaining until it has given the recognized employee organization notice and an adequate opportunity to bargain, and if bargaining is requested, until the parties have either reached an agreement or reached impasse and have exhausted any mandatory impasse resolution procedures.^[1] Absent some legally recognized defense, failure of an employer to comply with these obligations constitutes, in and of itself, a "per se" violation of the duty to negotiate in good faith.^[2]

Exceptions to the General Rule

There are four legally recognized defenses to employer-initiated unilateral action: 1) waiver; 2) necessity; 3) expiration of the collective bargaining agreement; and 4) impasse. Since the essence of collective bargaining is bilateralism, courts and labor boards construe these exceptions reluctantly and narrowly.^[3] PERB has held that the employer not only bears the burden of proving the affirmative defense of waiver, but that any doubts must be resolved against the party asserting waiver.^[4]

1. Waiver

An exclusive representative may waive its right to negotiate a proposed change in the terms and conditions of employment by: agreeing to waive its right to bargain during the term of the agreement (contract waiver); or failing to request negotiations despite notice and a reasonable opportunity to negotiate before the implementation of the proposed change.

In order to justify a unilateral action the contract must contain specific language that clearly and unmistakably waives the right to bargain over a change in a particular matter. Such a waiver is most often found when the specific subject is covered by the express terms of an existing agreement.

For example, in one case the Public Employment Relations Board (PERB) held that a provision in a collective bargaining agreement permitting "one duty free lunch period of no less than 30 minutes each day," constituted a clear waiver of the union’s right to bargain over a reduction of the teachers’ lunch period from 50 to 30 minutes.^[5]

On the other hand, general provisions such as "zipper" clauses, which extinguish the employer’s duty to bargain during the term of the agreement, generally will not be held to constitute the requisite clear and unmistakable waiver. Such provisions serve only to "shield" the employer from union requests to negotiate during the term of the contract, they do not provide the employer with the "sword" to unilaterally adopt changes in employment terms.^[6]

Management rights clauses, which may reserve to management the "exclusive" right to take action with respect to a list of specified employment condition, are generally not considered to be a sufficiently clear and unmistakable waiver allowing unilateral employer action. Thus, it has been held that even though a "county rights" clause in a memorandum of understanding reserved for the county 'the exclusive right to . . . Assign its employees," the county could not unilaterally change shift assignments because the language did not constitute a "clear and unmistakable relinquishment" of the union’s right to bargain.^[7]

A public employer may act unilaterally if it offers written notice and a reasonable opportunity to meet before the intended action, and the employee organization fails to request bargaining.^[8] Simply protesting an employer’s contemplated unilateral action is not the same as a demand to bargain.^[9] An employee organization however, need not request bargaining when such a request would be futile or if a firm decision has already been made by the employer.^[10] Under such circumstances, a unilateral change would be unlawful.

PERB has also suggested that under some circumstances a union’s failure to negotiate in good faith, following the employer’s notice and opportunity to negotiate, may constitute a waiver of the union’s right to negotiate, and hence authorize an employer’s unilateral action.^[11]

2. Necessity

While compelling business or operational necessity may sometimes justify unilateral action, courts and labor boards have usually looked with disfavor at these employer claims. In order to justify unilateral action the necessity must be the unavoidable consequence of a sudden change in circumstances beyond the employer’s control, there must be no alternative course of action available, and the timing must preclude the opportunity for bargaining.^[12]

Alleged financial emergencies have traditionally fared poorly as a ground for unilateral action. For example, speculative concern over the impact of Proposition 13 was determined by both the courts and PERB to be inadequate as a reason to engage in unilateral action.^[13] Claims regarding the constitutional requirement that public agencies submit a balanced budget and the constitutional debt limitation provision have also been rejected.^[14] Indeed, the Supreme Court suggested in the Sonoma County case that contractual monetary commitments could only be deferred if the fiscal emergency was so disastrous that the agency would be forced to cease operations if the crisis were not resolved.^[15]

Operational necessity has been accepted in situations in which the public employer was compelled by statute to take action. Thus, in Mt. Diablo USD, the PERB determined that mandatory provisions of the Education Code regarding teacher layoffs, permitted the district to send out notices and implement some aspects of the layoff where the code provided for immutable dates for action.^[16]

3. Expiration of Prior Contract

Generally, upon expiration of a collective bargaining agreement, the duty to bargain requires the employer to maintain the status quo without taking unilateral action as to wages, hours or other working conditions until the parties have negotiated to an agreement or exhausted the impasse procedures.^[17]

On the other hand, contractual terms which are solely a product of the contract itself (e.g., provisions that relate to the employee organization’s statutory rights) form an exception to this general rule. Since the existence of these terms presupposes the existence of a contract, once the agreement has expired, an employer may alter these conditions without bargaining with the union.^[18] Examples include union security (private sector), management rights clauses, zipper clauses and no strike clauses.^[19]

PERB has also adopted the reasoning of the U.S. Supreme Court in Litton Financial Division^[20] and held that arbitration clauses do not continue in effect after expiration of a collective bargaining agreement except if: 1) the dispute involves facts and occurrences that arose before expiration; 2) the dispute involves post-expiration conduct that infringes on rights accrued or vested under the agreement; or 3) under normal principles of contract interpretation, the agreement to arbitrate survives expiration of the agreement. This holding however, was later modified by the State Legislature so that arbitration clauses under the Dills Act (applicable to state employees) and other provisions of a memorandum of understanding, survive the expiration of the agreement.^[21]

If a provision in a collective bargaining agreement relates to a non-mandatory subject of bargaining (permissive subject), PERB has held that the employer may make changes to the provision following expiration of the contract. Thus, in Eureka City School District, PERB found that a school district’s unilateral change to a smoking policy was permissible following expiration of the contract.^[22]

4. Impasse

A public employer may unilaterally implement changes to working conditions if it negotiates in good faith, the parties reach a bona fide impasse, and the employer exhausts its impasse procedure obligations in good faith.^[23]

Good Faith. The obligation to negotiate in good faith has been interpreted by the courts and the PERB to mean the subjective attitude which requires a genuine desire to reach agreement. In establishing the presence or absence of good faith, PERB and the courts generally review the totality of the circumstances. A party’s willingness to exchange reasonable proposals and its attempts to reconcile differences during the bargaining process indicate an intent to bargain in good faith. However, the duty to bargain does not compel either party to make concessions. Insistence on a firm position, if sincerely held and explained, can also be consistent with the obligation to negotiate in good faith.

Existence of Impasse. The state’s public sector bargaining laws for public schools, higher education and state employees set forth the definition of impasse and the procedure for identifying the existence of an impasse. So too, do most local agency employer-employee relations resolutions/ordinances enacted pursuant to the Meyers-Milias Brown Act (MMBA), which does not define the term.^[24]

The State Employer-Employee Relations Act (SEERA or Dills Act), which covers state employees, does not specifically define impasse or provide for formal determination of when an impasse exists. Instead, SEERA authorizes the parties to move on to mediation when no agreement has been reached after a reasonable period of time.^[25] The Trial Court Employment Protection and Governance Act (TCEPGA) and the Trial Court Interpreter Employment and Labor Relations Act (TCIELRA) have provisions similar to those of the SEERA.^[26]

The Educational Employment Relations Act (EERA)^[27] provides a good working definition of an impasse. The EERA defines an impasse as "a point during negotiations over matters within the scope of representation at which the parties’ differences in positions are so substantial or prolonged that future meetings would be futile."^[28]

Unless the parties agree that they are at impasse, the existence of a bona fide impasse is a question of fact that must be determined on a case by case basis. PERB’s regulations for determining the existence of an impasse provide helpful guidance to the parties.

In determining whether an impasse exists, the Board shall investigate and may consider the number and length of negotiating sessions between the parties, the time period over which the negotiations have occurred, the extent to which the parties have made and discussed counter-proposals to each other, the extent to which the parties have reached tentative agreement on issues during the negotiations, the extent to which unresolved issues remain, and other relevant data.^[29]

Exhaustion of Impasse Procedures. Unlike the private sector, which has no mandatory impasse procedures, most public sector laws require the parties to participate in good faith in the impasse procedures. Both EERA and HEERA impose such a duty. A breach of this duty, in the absence of a valid defense, is unlawful, and if committed by the employer, would preclude the employer from taking unilateral action.^[30] Impasse procedures under these laws are not considered complete until the parties have met with a mediator, gone to fact finding, considered the fact finders’ report and engaged in any post-fact finding negotiations.^[31] Indeed, in Modesto City Schools^[32], PERB held that if one party makes significant concessions after issuance of the fact finders’ report, the duty to bargain is reactivated and the other party commits an unfair practice if it refuses to negotiate (or unilaterally implements). If the parties again reach a deadlock, the obligation to negotiate ceases, and the employer is then free to implement terms and conditions of employment.

Unlike EERA and HEERA, impasse resolution under SEERA is limited to mediation. Like EERA and HEERA however, SEERA requires the parties to participate in good faith in the impasse procedures. A breach of this duty constitutes an unfair practice, and if committed by the employer would preclude the employer from taking unilateral action.^[33] Mediation is permissive under both the TCEPGA and the TCIELRA. However, like the other laws described above, the employer’s failure to participate in the impasse procedure in good faith is unlawful.^[34]

Under the MMBA, local agencies, based on procedures they adopt pursuant to the MMBA, generally have an impasse meeting/governing body hearing procedure, as well as occasionally, mediation and interest arbitration.^[35] Local agencies must strictly adhere to their own procedures. Failure to participate in the agency’s mandated impasse procedures is an unlawful practice and will preclude an employer from taking unilateral action.^[36]

Authorized Unilateral Actions. If the public employer has negotiated in good faith, reached impasse and exhausted the impasse procedures in good faith, it may legally and unilaterally adopt changes to wages, hours and other terms and conditions of employment. Under most public sector labor laws the employer may implement changes consistent with offers it made to and which were rejected by the union. Thus, the changes implemented need not be exactly those offered during negotiations, but must have been reasonably comprehended within the prior proposals.^[37] In practice, most public employers implement their last, best and final offer.

Under SEERA and the MMBA statutory language provides that following exhaustion of the impasse procedures an employer may implement its last, best and final offer.^[38]

Where a public employer seeks to unilaterally implement proposals which are less generous than the status quo, the law may restrict the employer’s ability to act. Certain benefits are deemed by the courts to be vested rights (e.g., pensions, longevity pay, vacation, retiree health insurance and other benefits that accrue based on years of employment). An employer is generally precluded from making unilateral changes to such benefits unless it provides comparable benefits to those affected by the change.^[39]

Duration of the Unilateral Action. Unilateral actions have a limited duration. Although an employer may lawfully implement a provision that defines the period for which the terms and conditions will be effective, from a practical standpoint, that period will not last longer than twelve (12) months. The reason is that most public sector laws provide that the recognized employee organization shall have a right to negotiate with the employer prior to the adoption by that agency of its next budget.^[40] In addition, even though an employer has unilaterally changed terms and conditions of employment, the employer can be forced to return to bargaining table if there are changed circumstances, such as a substantive bargaining concession by the union.^[41]

Conclusion

The duty to bargain in good faith is one of the hallmarks of public sector labor law. Unilateral employer actions without good faith negotiations and exhaustion of the impasse procedures usually constitute a violation of applicable public sector laws. While there are exceptions to this general rule - waiver, necessity, and contract expiration - these exceptions are narrowly construed.

If a public employer has negotiated in good faith, reached impasse, then exhausted required impasse procedures (in good faith), then the employer may unilaterally implement certain changes to wages, hours and working conditions.

¹Public Employment Relations Bd. v. Modesto City Sch. Dist., 136 Cal. App. 3d 881, 900 (1982), following NLRB v. Katz, 369 U.S. 736, 745 (1962). The duty of the employer and exclusive representative to negotiate in good faith regarding mandatory subjects of bargaining is codified at Government Code §§ 3543.5(c) and 3543.6(c) of the Educational Employment relations Act (public school and community college districts); Government Code §§ 3571(c) and 3571.1(c) of the Higher Education Employer-Employee Relations Act (CSU, U.C system employees); Government Code §§ 3519(c) and 3519(c) of the State Employer-Employee Relations Act (state employees); Government Code § 3505 of the Meyers-Milias-Brown Act (local agency employees); Public Utilities Code §§ 99563.7(c) and 99563.8(c) of the Los Angeles County Metropolitan Transportation Authority Transit Employer-Employee Relations Act (MTA supervisors); Government Code § 71634.2 of the Trial Court Employment Protection and Governance Act (court employees); Government Code § 71818 of the Trial Court Interpreter Employment and Labor Relations Act (court interpreters); and 29 U.S.C.§§ 158(a)(5) and 158(b)(3) of the National Labor Relations Act (private sector employees). When interpreting the duty to negotiate the courts and the Public Employment Relations Board take guidance from cases interpreting the NLRA and California labor relations statutes with parallel provisions. (See Firefighters Union v. City of Vallejo, 12 Cal. 3d 608 (1974); City of Whittier, PERB Dec. No. 1761-M (2005).)

Management is not obligated to negotiate over subjects that are outside the scope of bargaining. Hence, it may make unilateral changes to practices which are outside the scope of representation. See Glendora Unified Sch. Dist., PERB Dec. No. 876 (1991). However, before unilaterally implementing any decision on a subject outside the scope of representation, the agency must first negotiate over the effects of that decision insofar as they affect matters within the scope of bargaining.

A unilateral change in practice that does not change a term or condition of employment is not a breach of the duty to negotiate in good faith. See City of Whittier, PERB Dec. No. 1761-M (April 8, 2005) (overtime policy); Trustees of the California State Univ., PERB Dec. No. 1751-H (February 8, 2005) (workplace violence prevention policy and guidelines).

²Public Employment Relations Bd v. Modesto City Sch. Dist., supra.

³Fibreboard Paper Products Corp. v. NLRB, 379 U.S. 203, 211 (1964); Oakland Unified Sch. Dist. v. Public Employment Relations Bd., 120 Cal. App. 3d 1007, 1011 (1981)

⁴Placentia Unified Sch. Dist., PERB Dec. No. 595, (1986)

⁵Marysville Jt. Union High Sch. Dist., PERB Dec. No. 314 (1983); See also California Dept. of Personnel Admin., PERB Dec. No. 995-S (1993) (change in released time); Antelope Valley Union High Sch. Dist., PERB Dec. No. 1287 (1998) (change in promotional interview policy).

⁶Los Angeles Community College Dist., PERB Dec. No. 252 (1982); Marin Community College Dist., PERB Dec. No. 1092 (1995).

⁷Independent Union of Pub. Serv. Employees v. County of Sacramento, 147 Cal. App. 3d 482, 487-488 (1983). However, PERB has held that a general management rights clause that reserved to the employer the right to suspend employees allowed unilateral imposition of a short disciplinary suspension unlike anything used or contemplated by the parties at the time the clause was negotiated. Mammoth Unified Sch. Dist., PERB Dec. No. 371 (1983).

⁸See Stockton Police Officers’ Assn. v City of Stockton, 206 Cal. App. 3d 62, 66 (1988) (request to negotiate not made until over three months after notice of proposed change); Stationary Engineers v. San Juan Suburban Water Dist., 90 Cal. App. 3d 796, 802; Sylvan Elementary Sch. Dist., PERB Dec. No. 919 (1992); Newman Crows Landing Unified Sch. Dist., PERB Dec. No. 223 (1982).

⁹Santee Elementary Sch. Dist., PERB Dec. No. 1822 (2006) (although union held to have waived its right to negotiate adoption of board policy, it did not waive right to negotiate impact of board policy after its adoption where policy not immediately implemented, policy indicated that Superintendent would develop a written plan to implement the policy, and policy stated that to the extent the policy modified existing contractual provisions employee organizations would be given an opportunity to bargain); Delano Jt. Union High Sch. Dist., PERB Dec. No. 307 (1983)

¹⁰Morgan Hill Unified Sch. Dist., PERB Dec. No. 554a (1985)

¹¹See Compton Community College Dist., PERB Dec. No. 720 (1989)

¹²Calexico Unified Sch. Dist., PERB Dec. No. 357 (1983); Compton Community College Dist., supra.

¹³Sonoma County Org. of Pub. Employees v. County of Sonoma, 23 Cal. 3d 296 (1979); San Mateo Community College Dist., PERB Dec. No. 94 (1979); San Francisco Community College Dist., PERB Dec. No. 105 (1979).

¹⁴See Calexico Unified Sch. Dist., supra; San Mateo Community College Dist., supra; San Francisco Community College Dist., supra.

¹⁵Sonoma County Org. of Pub. Employees v. County of Sonoma, supra

¹⁶Mt. Diablo Unified Sch. Dist., PERB Dec. No. 373 (1983).

¹⁷California School Employees Assn. v. Public Employment Relations Bd., 51 Cal. App. 4th 923, 936 (1996); San Mateo Community College Dist., supra; San Joaquin County Employees Assn. v. City of Stockton, 161 Cal. App. 3d 813, 818-819 (1984); NLRB v. Katz, supra; NLRB v. Hinson, 428 F. 2d 133, 136 (8th Cir. 1970); NLRB v. Cone Mills Corp., 373 F. 2d 595, 598-599 (4th Cir. 1967).

¹⁸NLRB v. Haberman Constr. Co., 618 F. 2d 288 (5th Cir 1980), affirmed on rehearing 373 F. 2d 351 (5th Cir 1981); see also Industrial Union of Marine & Shipbuilding Workers Union, 320 F. 2d 618 (1963). The Dills Act, however, which covers State employees, explicitly provides that the provisions of a memorandum of understanding will remain in effect unless and until a new agreement is reached or the parties reach an impasse (Govt. Code § 3517.8).

¹⁹See e.g., California Dept. of Youth Authority, PERB Dec. No. 962-S (1992); Antelope Valley Union High School Dist., supra; Rowland Unified Sch. Dist., PERB Dec. No. 1053 (1994).

²⁰Litton Financial Div. v. NLRB, 501 U.S. 190 (1991)

²¹Govt. Code § 3517.8

²²Eureka City Sch. Dist., PERB Dec. No. 955 (1992). See also City and County of San Francisco, PERB Dec. No. 1608-M (2004) (changes in duties reasonably related to existing duties). In the Eureka case PERB found that a smoking policy was not within the scope of representation, largely because of legislative mandates regarding the desire to eliminate smoking on school campuses. The same holding may not apply to other jurisdictions.

²³See Placentia Fire Fighters v. City of Placentia, 57 Cal. App. 3d 9 (1976); County of Riverside, PERB Dec. No. 1715-M (2004); Oakland Unified Sch. Dist., PERB Dec. No. 275 (1982)

²⁴The Meyers-Milias-Brown Act is codified at Govt. Code § 3500 et seq.

²⁵See Govt. Code § 3518.

²⁶Govt. Code § 71634.4 (TCEPGA); Govt. Code § 71820 (TCIELRA)

²⁷Govt. Code § 3540 et seq.

²⁸Govt. Code § 3540.1(f). See also Govt. Code § 3562(j) (HEERA)

²⁹8 Cal. Code Reg. § 32793.

³⁰Govt. Code § 3543.5(e) (EERA); Govt. Code § 3571(e) (HEERA). See also Temple City Unified Sch. Dist., PERB Dec. No. 841 (1990) (overruled in part by ,i>Charter Oak Unified Sch. Dist., PERB Dec. No. 873 (1991)).

³¹See Modesto City Schools, PERB Dec. No. 291 (1983)

³²Id.

³³Govt. Code §§ 3517, 3519(e)

³⁴8 Cal. Code Reg. § 32696(e) (TCEPGA); 8 Cal. Code Reg. § 32608(e) (TCIELRA)

³⁵Mediation may be permissive or mandatory - more often it’s permissive. Interest arbitration is contained in the local agency’s charter. Code of Civil Procedure § 1299 et seq. (SB 402, SB 442) requires local agencies to take police and firefighter economic disputes to binding interest arbitration. SB 402, passed in 2000, was declared unconstitutional by the California Supreme Court in County of Riverside v. Super. Ct., 30 Cal. 4th 278 (2003). In 2003, the Legislature passed SB 442, which largely duplicates the provisions of SB 402. The constitutionality of this statute is also being litigated.

³⁶8 Cal. Code Reg. § 32603(e)

³⁷Public Employment Relations Bd. v. Modesto City Sch. Dist., supra, 136 Cal. App. 3d at 900-901 (citing private sector precedent); Laguna Salada Union Sch. Dist., PERB Dec. No. 1103 (1995)

³⁸Govt. Code § 3517.8 (SEERA); Govt. Code § 3505.4

³⁹See e.g., Betts v. Board of Admin. Of the Pub. Employees’ Retirement System 21 Cal. 3d 859 (1978) (pension benefits); Olson v. Cory, 27 Cal. 3d 203 (1980) (pension benefits); Thorning v. Hollister Sch. Dist., 11 Cal.App.4th 1598 (1992) (retiree medical insurance); Ventura County Retired Employees’ Ass’n, Inc. v. County of Ventura, 228 Cal.App.3d 1594 (1991) (retiree medical insurance); Cal. League of City Employee Ass’ns, SEIU Local 660 v. Palos Verdes Library Dist., 87 Cal. App. 3d 135 (1978) (longevity pay, vacation and sabbatical leave policies); San Bernardino Pub. Employees’ Ass’n v. City of Fontana, 67 Cal.App.4th 1215 (1999) (distinguishing Palos Verdes case in matter involving collective bargaining agreement).

⁴⁰Govt. Code § 3543.7 (EERA); Govt. Code § 3517 (SEERA); Govt. Code § 3505.4 (MMBA); Govt. Code §§ 3572, 3572.1, 3572.3 (HEERA)