Court Upholds Constitutionality Of California Factfinding Law

California has a variety of collective bargaining laws, but most employees bargain under the Meyers-Milias-Brown Act. The Act was originally written to call for a meet-and-confer process, after which an employer could unilaterally implement its last best offer. Years later, the California Legislature amended the Act to provide for binding arbitration of negotiations involving public safety employees, but the California Supreme Court struck down the provision, finding it conflicted with a peculiar “home-rule” section in the California Constitution. In response, the Legislature again amended the Act to call for non-binding factfinding as a step between bargaining and final implementation.

In factfinding, the parties make a presentation on their bargaining proposals, including how factors such as the cost of living, an employer’s ability to pay, and wage-and-benefit comparisons relate to those proposals. The factfinder then makes a recommendation, which the employer is free to accept or reject.

Several California employers challenged the factfinding statute in two separate cases, essentially making two arguments: (1) That factfinding, like binding arbitration, violates the “home-rule” provisions of the California Constitution; and (2) That even if factfinding were constitutional, it only applied to bargaining for a new contract, and not to mid-contract bargaining that occurs when an employer wants to make a change in a mandatory subject of bargaining not referenced in the contract.

The California Court of Appeals rejected both challenges and upheld the statute. With respect to the “home-rule” issue, the Court distinguished between the decisions of arbitrators, which bind an employer, and the recommendations of factfinders, which do not. The Court found that “the Act’s factfinding provisions are designed to provide a public agency at an impasse in negotiations with a union additional information and recommendations before the public agency makes a decision to impose its last, best, and final offer. The factfinding provisions do not delegate to factfinding panels any power to make any binding decisions affecting public agency operations. The public agency still retains the ultimate power to refuse an agreement and make its own decisions. Therefore, the factfinding provisions do not unconstitutionally interfere with the public agency’s home rule powers.”

On the question of whether factfinding applied to mid-contract negotiations over potential changes in working conditions, the Court commented that “the Public Employment Relations Board based its holding on several factors. First, the Act does not contain any language expressly limiting its factfinding provisions to impasses occurring during the negotiation of a comprehensive MOU. Second, the Board had consistently applied the analogous factfinding provisions in the Educational Employment Relations Act and Higher Education Employer–Employee Relations Act to all types of bargaining disputes, not just disputes arising in the context of a negotiation for a comprehensive MOU. Third, interpreting the Act’s factfinding provisions to apply to any bargaining disputes is consistent with the legislative history of the Act. Finally, interpreting the Act’s factfinding provisions to apply to any bargaining dispute is consistent with the parties’ continuous duty to bargain on any bargainable issue and prepare an MOU after reaching an agreement.

“Athough statutory interpretation is ultimately a judicial function, the Board is vested with the authority to interpret the Act. The Board is one of those agencies presumably equipped or informed by experience to deal with a specialized field of knowledge, whose findings within that field carry the authority of an expertness which courts do not possess and therefore must respect. Consequently, we must defer to the Board’s interpretation of the Act unless the Board’s interpretation is clearly erroneous.”

The practical impact of the Court’s decisions will likely be most dearly felt in the area of mid-term bargaining. Factfinding entails a hearing, the presentation of evidence, and the development of a recommendation by a factfinder, all of which takes time. Having factfinding in the middle of mid-term bargaining will, at a minimum, slow down an employer’s ability to change past practices.

County of Riverside v. PERB, 2016 WL 1238737 (Cal. App. 2016); San Diego Housing Commission v. PERB, 2016 WL 1242539 (Cal. App. 2016).