Jerry Sanders, then the Mayor of the City of San Diego, announced in November 2010 that he would pursue an amendment to the City Charter to reduce pension benefits for City employees. Elimination of the defined benefit plan for new hires and its replacement with a defined contribution plan was the key feature of his proposal. Previously in his role as the City’s chief negotiator, the Mayor had negotiated to achieve pension reforms with the City’s unions, some in connection with proposed ballot initiatives he had developed.
On this occasion, the Mayor chose to pursue a citizens’ initiative measure rather than invoke the City Council’s authority to place his plan on the ballot because he doubted the Council’s willingness to agree with him and because he sought to avoid concessions to the unions. The Mayor gathered support of taxpayer groups, enlisted City Council members in his efforts, and held press conferences to describe his goals. After achieving a compromise between the language of his proposed ballot measure and that of a City Council member’s competing reform plan, the Mayor announced to the public that the proposal would be pushed forward as a citizens’ initiative. The measure prevailed at the June 2012 election.
A group of unions challenged the ballot measure through filing an unfair labor practice complaint with California’s Public Employment Relations Board. The heart of the complaint was that the Mayor’s actions amounted to a unilateral change in a mandatory subject of bargaining, and thus violated the City’s obligation to collectively bargain, or as it is called in California, to “meet and confer.”
The City argued that any public official, including the mayor of a city, acting as a private citizen, is lawfully entitled to draft an initiative measure and seek private citizens to carry it forward. The City contended that since a charter amendment to change the City’s retirement system could only be prompted by the City Council or the citizens, the Mayor was lawfully entitled to pursue the citizens’ initiative strategy, when, as was the case in San Diego, the Mayor considered the City Council disinterested in such a charter amendment.
An administrative law judge (ALJ) for the Board upheld the unions’ complaint. The ALJ started with the basic elements of a “unilateral change violation”: (1) The employer breached or altered the parties’ written agreement or its own established past practice; (2) such action was taken without giving the employee organization notice or an opportunity to bargain over the change; (3) the change was not merely an isolated breach of the contract, but amounts to a change in policy; and (4) the change in policy concerns a mandatory subject of bargaining.
The ALJ noted that “PERB has held that a unilateral change occurs when the employer demonstrates a clear intent to change a policy affecting terms and conditions of employment with no subsequent wavering of that intent, and the employer has taken concrete steps to effectuate the change even if its action falls short of actual implementation. The record establishes that the Mayor announced his intention to seek implementation of a new policy regarding pensions. He did so at the November 2010 press conference, his State of the City speech, and again at the April 2011 press conference. The Mayor emphasized that his latest proposal was a critical objective of his administration and the focus of his remaining years in office.
“The City does not dispute that the Mayor’s proposal contained matters within the scope of representation and that the City rejected the unions’ demands to meet and confer over that proposal prior to the reforms being enacted through the passage of the ballot measure. The critical question is whether the Mayor’s announced commitment to pursue a citizens’ initiative triggered a duty to meet and confer on the part of the City.
“The City’s claim that the Mayor lacks authority to make a policy decision in terms of a ballot measure (only the City Council has that right), and any attempt to do so would amount to an unlawful delegation of legislative power, is misdirected. The policy decision is to change negotiable subjects, not whether to seek placement of a policy to that effect on the ballot. By the same reasoning invoked by the Mayor, a majority of the City Council’s members could propose an initiative measure as private citizens for the express purpose of circumventing the duty to meet and confer. The City, as the public agency, has a duty to refrain from unilateral action undertaken by the Mayor, not simply because he is a City official with policymaking discretion, but because he is a statutory agent for purposes of meeting and conferring.
“The Mayor exercised his discretion in a manner he believed would permanently fix the problem with pensions. The City is responsible for the Mayor’s pursuit of the citizens’ initiative because a principal is responsible for its agent’s conduct, so long as that conduct is within the general scope of the agent’s authority, even though the principal may not have authorized the specific acts in question or ratified them. The City Council was well aware of the Mayor’s policy decision and his efforts to implement it. By want of ordinary care, the City Council allowed the Mayor to believe he could pursue his citizens’ initiative and that no conflict existed between his roles as elected official and private citizen.”
By way of remedy, the ALJ ordered the City to “rescind the provisions of Proposition B adopted by the City and return to the status quo that existed at the time the City refused to meet and confer, including restoration of the pension system as it existed prior to the adoption of Proposition B and make affected bargaining unit employees whole for lost pension benefits, plus interest at the rate of seven percent per annum.”
City of San Diego, Case No. ULP-LA-CE-758 (Cal. PERB ALJ 2013).