When Must An Employer Bargain A Managerial Decision? PERB “Harmonizes” Its Test With The California Court Of Appeal’s Direction In County Of Sonoma

CATEGORY: Client Update for Public Agencies, Fire Watch, Law Enforcement Briefing Room
CLIENT TYPE: Public Employers, Public Safety
DATE: Jan 05, 2023

The City of San Francisco’s Health Officer issued an order in the Summer of 2021 requiring employees of businesses and governmental entities who regularly work in high-risk settings to be fully vaccinated against COVID-19 within 10 weeks of the U.S. Food and Drug Administration’s approval of a vaccine.

In addition, the City created its own vaccination and face-covering policy (Policy) which required all employees to disclose their vaccination status and provide proof of vaccination or proof of eligibility for an exemption. Those exempted were required to submit to COVID-19 testing at least once a week.

SEIU filed an unfair practice charge against the City with the Public Employment Relations Board (PERB) regarding the Policy.

PERB’s Office of the General Counsel (OGC) analyzed SEIU’s charge and allowed SEIU to proceed with only some of its allegations.  The allegations the OGC allowed SEIU to pursue included that the City violated the Meyers-Milias-Brown Act (MMBA) by failing to bargain the negotiable effects of the Policy; requiring employees to sign a form consenting to discipline for failure to comply with the Policy; adding a COVID-19 vaccination requirement to the minimum qualifications in job descriptions without bargaining; unilaterally changing its policy on the religious exemptions to vaccination requirements; and failing to inform SEIU about employees’ applications for exemptions to the Policy.

The OGC dismissed several other of SEIU’s allegations, including that the City violated the MMBA by 1) unilaterally deciding to adopt the mandatory vaccination Policy; 2) requiring employees to disclose their vaccination status; and 3) refusing to allow employees to submit SEIU-created vaccination forms in lieu of the City’s forms.  The OGC determined that the City’s decision to adopt the Policy was a managerial decision that was outside the scope of representation under PERB’s 2021 decision in Regents of UC, and therefore not subject to bargaining.  SEIU appealed the OGC’s partial dismissal.  PERB took up the matter.

The key question before PERB was whether the City’s adoption of the Policy was a management decision outside the scope of representation. The MMBA defines the scope of representation as: “[A]ll matters relating to employment conditions and employer-employee relations, including, but not limited to, wages, hours, and other terms and conditions of employment, except, however, that the scope of representation shall not include consideration of the merits, necessity, or organization of any service or activity provided by law or executive order.”

PERB proceeded carefully in its analysis because the California Court of Appeal had determined only months earlier in County of Sonoma v. PERB (2022) 80 Cal. App. 5th 167, that PERB had applied the wrong test to evaluate whether a management decision was subject to bargaining.

PERB reviewed several California Supreme Court precedents and harmonized PERB’s method of analysis with the California Court of Appeal’s analysis in Sonoma.  First, PERB’s test categorizes the type of management decision at issue into one of the following: 1) decisions that have only an indirect and attenuated impact on the employment relationship are not mandatory subjects of bargaining, such as advertising, product design, and financing; 2) decisions directly defining the employment relationship, such as wages, workplace rules, and the order of succession of layoffs and recalls are always mandatory subjects of bargaining; and 3) decisions that directly affect employment, such as eliminating jobs, may not be mandatory subjects of bargaining if they involve a change in the scope and direction of the enterprise or the employer’s retained freedom to manage its affairs.

Second, if the decision falls within the third category, PERB’s test analyzes whether the implementation of the fundamental managerial or policy decision has a “significant and adverse effect on the wages, hours, or working conditions of the bargaining-unit employees.”  If so, then PERB determines whether “the employer’s need for unencumbered decision-making in managing its operations is outweighed by the benefit to employer-employee relations of bargaining about the action in question.”

Using its test, PERB then distinguished its 2021 decision in Regents of the University of California (2021) PERB Decision No. 2783-H, which held that a mandatory influenza vaccine policy was a managerial decision outside the scope of bargaining.  PERB said the OGC had improperly relied upon Regents to determine that City’s Policy was a managerial decision because SEIU might be able to overcome the holding in Regents.  PERB directed the OGC to allow SEIU to proceed with the decisional bargaining allegations.

PERB next examined the OGC’s decision to dismiss SEIU’s allegation that required employees to disclose “their vaccination status under penalty of perjury” The OGC had dismissed this allegation on the grounds that:  PERB does not enforce laws governing employees’ privacy, and questions about employees’ vaccination status do not implicate employees’ MMBA rights.   PERB agreed with SEIU that the OGC should have reviewed this allegation as a unilateral change.  Because the City had never required employees to disclose their vaccination status until after the Policy was implemented, PERB found the Policy fell within the “newly created policy” category of unlawful unilateral change.

Finally, PERB analyzed SEIU’s claim that the City’s decision to require employees to disclose their vaccination status constituted unlawful direct dealing with employees.  In general, an employer violates the duty to bargain in good faith if it directly approaches employees to effect a change in terms or conditions of employment within the scope of representation.  Further, an employer may not communicate directly with employees to undermine a union’s exclusive authority to represent unit members.  PERB held that SEIU’s charge did not contain any allegations regarding direct dealing, and upheld the OGC’s dismissal of that claim.

PERB remanded the case to the OGC to issue an amended complaint that was consistent with its decision.

SEIU Local 1021 v. City and County of San Francisco (2002) PERB Decision 2846-M.

Note:  Public employers should follow the test that PERB has outlined in this case for determining whether to bargain a managerial decision and/or its effects. This case also shows that employers cannot rely on the Regents case to insulate all vaccine policy decisions from bargaining.

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