‘Exploding Offers’ Can Be Bad-Faith Bargaining

This article appears in the September 2019 issue of our monthly newsletter Public Safety Labor News.

In collective bargaining parlance, an offer that expires on a fixed date is known as an ‘exploding offer.’ In a lengthy opinion, the California Public Employment Relations Board analyzed when exploding offers amount to bad-faith bargaining.

The case involved the City of Arcadia and the Arcadia Police Civilian Employees Association. In September 2013, the City announced that it wanted to conclude negotiations by November because of City Council elections that would be held in April 2014. The City informed the Association that if no agreement was reached by the end of November, it would shut down bargaining and not recommence until after the elections. A key point of the City’s announcement was that signing bonuses would likely not be on the table if negotiations were not concluded by November 2013.

The Association filed an unfair labor practice charge alleging that the City’s exploding offer amounted to bad-faith bargaining. PERB agreed, finding that “a party cannot in good faith make an exploding proposal unless it can adequately explain a legitimate basis for doing so.

“While the City’s exploding offer was not a per se violation, it is an indicator of bad faith under the totality conduct test unless the City adequately explained to the Association a legitimate basis for its deadline and its regressive posture after that deadline. We find no such adequate explanation on these facts. As an initial matter, the City’s exploding offer was inextricable from its unilaterally-imposed ground rules. Moreover, the City’s stated reason for establishing a November deadline was that the City would be holding a City Council election the following spring. We find that the City’s exploding offer evidenced bad faith, given the significant time lag between the City’s unilaterally-imposed deadline and the City Council election, and also given the inherent uncertainty as to whether the eventual election would lead to a new Council majority favoring new budgetary expenditures so significant as to require the City to take a less generous bargaining position with the Association.

“However, because of the unique procedural posture of this case, we order only a limited remedy. The Association leadership elected on November 14, 2013 bargained with the City and agreed to a successor memorandum of understanding, the Association has not demonstrated the City caused the change in leadership, and the parties reached a sui generis partial settlement prior to the formal hearing in this matter. In these unusual circumstances, the appropriate remedy for the City’s conduct is a cease and desist order and the posting of a notice, and we find no need for any additional remedies that might otherwise be available.”

City of Arcadia (2019) PERB Decision No. 2648-M (Cal. PERB 2019).

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