The Dills Act and Impasse. Charlotte Clarke

Transcription

1 1 The Dills Act and Impasse Charlotte Clarke Civil service employees who work for the State of California are covered for their employer-employee relations, by the Ralph C. Dills Act. The Public Employment Relations Board governs the collective bargaining process for the State of California and the California public Schools (K-12). The Public Employment Relations Board (PERB) is a quasi-judicial agency that oversees public sector collective bargaining in California. Among other things, PERB administers seven collective bargaining statutes and adjudicates disputes between the parties subject to them. Those statutes include, among others: the Educational Employment Relations Act (EERA) (covering California's public schools (K-12) and community colleges); the State Employer-Employee Relations Act (Dills Act) (covering state government employees); and the Higher Education Employer-Employee Relations Act (HEERA) (which covers the California State University System, the University of California System and Hastings College of Law). Upon expiration of a collective bargaining agreement, an employer is required to meet at reasonable times and to confer in good faith with the bargaining representative for its employees with respect to wages, hours, and other terms and conditions of employment. This is known as an employer s duty to bargain. A violation of an employer s duty to bargain may result in an unfair labor practice charge being filed. THE EXISTANCE OF IMPASSE Once the parties make it clear that they remain firm on issues of importance to them, such as wages or benefits, and refuse to accept anything other than their position, an impasse in bargaining is reached. Before an employer actually implements its pre-impasse proposals, they must be sure an impasse does indeed exist. An impasse is defined in the law as the point at which further discussions would be futile. THE DILLS ACT IMPASSE PROCEDURE Section 3518 of the Dills Act provides that If after a reasonable period of time the Governor and the recognized employee organization fail to reach agreement, the Governor and the recognized employee organization may agree on the appointment of a mediator mutually agreeable to the parties, or either party may request the board to appoint a mediator. When both parties agree on agree upon a mediator, costs of mediation shall be divided one-half to the state and one-half to the recognized

2 2 employee organization. If the board appoints a mediator, the costs of mediation shall be paid by the board. THE IMPLEMENTATION AFTER IMPASSE STRATEGY Once an impasse has been reached, the duty to bargain is temporarily stopped but is not terminated. The employer does not need to meet with the union after impasse is reached if the union continues to offer the same proposals which led to the impasse. Once an employer believes the parties are at an impasse, it will present its last, best and final offer to the union. An employer should elicit from the union whether or not it will recommend the final offer to the rank-and-file for ratification. A refusal by the union to recommend the final offer is further evidence of an impasse. Then, if the final offer is voted and rejected by the rank-and-file, there is additional evidence of an impasse. This paper discusses an impasse in negotiations between The State of California (Department of Personnel Administration) and the California Correctional Peace Officers Association (CCPOA). Since neither party requested the appointment of a mediator, the state proceeded to implement its Last, Best, Final Offer (LBFO) on September 18, Talks between DPA and CCPOA regarding a new labor agreement broke down. The administration announced its intent to invoke a rarely used provision of state law and impose its last, best, and final offer on CCPOA, subject to legislative approval of expenditures and any statutory changes needed to implement the offer. The plan gives officers a 5 percent raise and increased benefits in (at an estimated annual cost of $260 million) and institutes changes that the administration says will increase management control of the prisons (which was crucial for the State), curb abuse of leave time, and reduce employee grievances. Major provisions of Administration s Last, Best, and Final Offer given to the California Correctional Peace Officers Association: Increase salaries 5 percent, retroactive to July 1, 2007 Increase State contributions to officers health premiums in 2008 New bonus payment for officers who recruit a person who subsequently graduates from the academy. Increase recruitment and retention payments for officers at several institutions Increase pay for officers who work night and weekend shifts Increase uniform allowance for officers. Reinstate parts of sick leave management program eliminated by prior agreement. More flexibility for department to assign personnel. Change grievance and arbitration procedures. Legislative approval was not given for the fiscal increases in the contract. They found little evidence that current compensation levels are insufficient to attract the number of qualified officers needed to staff California s prisons. In addition, the state faces other

3 3 pressing recruitment and retention issues in other bargaining units, as well as serious budgetary challenges. The Legislature then rejected the administration s current proposal to increase pay and benefits for correctional officers retroactive to July 1, The administration s proposals to increase management control of the prisons, however, have merit. The LAO said, The administration s proposals to reduce sick leave abuse enhance CDCR s authority to assign personnel as needed, and streamline grievance and arbitration processes are sound. We generally agree with the administration s point of view that improving the operations of the prison system requires a stronger degree of managerial control. Strong managerial authority will be necessary to implement prison and parole system reforms, address orders of the Receiver and the courts, contain overtime expenses, reduce any sick leave abuse that may persist in the department, and operate CDCR in a cost efficient manner. We recommend that the Legislature approve measures to implement parts of the administration s offer that accomplish these general goals. BACKGROUND The background is extremely important and sets the stage for the 2007 impasse and LBFO between the State of California and CCPOA. Their Salaries Are Largest Share of General Fund Personnel Costs. Bargaining Unit 6 is the second largest of 21 bargaining units now recognized under the state collective bargaining law (known as the Ralph C. Dills Act). Unit 6 has around 30,000 rank and file members. This represents one of every seven state employees, however, salaries and related expenses for Unit 6 members and their supervisors total about 40 percent of all dollars paid from the General Fund. (Unit 1, representing administrative professionals, is the state s largest bargaining unit and accounts for the General Fund s second largest expenditures.) This figure results from the relatively high salary levels of correctional officers, as well as the fact that personnel costs for correctional staff unlike many other groups of state employees are funded almost entirely from the General Fund. The CCPOA represents Unit 6 members in their employer/employee relationships, including labor negotiations. Legislative Policy Prior to Chapter 290, Statutes of 1986 (SB 1373, Keene), establishes general state policy for correctional officer pay and benefits. Chapter 290 states the broad intent of the Legislature that the administration consider compensation levels of other peace officers in the state when negotiating with Unit 6. Chapter 290 is similar to several laws passed by the Legislature since 1974 related to the California Highway Patrol (CHP), which require the executive branch to consider compensation levels of officers in five urban police departments when determining pay and benefits of CHP officers. (The five departments are those for the cities of Los Angeles, Oakland, San Diego, and San Francisco, as well as the Los Angeles County Sheriff s Office.)

4 Labor Agreement. Unit 6 s last labor agreement with the state known as a memorandum of understanding (MOU) instituted major changes in correctional officer personnel policy (salaries, benefits, and other personnel matters) and, therefore, in prison system operations. Chapter 1, Statutes of 2002 (SB 65, Burton), which ratified this MOU, took effect on January 16, 2002, although certain provisions of the MOU were retroactive to July 1, The agreement expired on July 2, (Accordingly, the MOU is known as the MOU.) The five year duration of the agreement was unusual, but under the Dills Act, the Legislature has the choice whether to fully fund or not to fully fund expenditures under an MOU in the annual budget act. (If the Legislature opts not to fully fund such expenditures, the Dills Act provides that negotiations may reopen on all or part of the MOU.) As discussed below, the prior CCPOA MOU was renegotiated in Relationship Between Correctional and Highway Patrol Salaries. The original version of the MOU, as ratified by the Legislature in 2002, provided for salary increases on four specific dates: July 1 of each of the years 2003, 2004, 2005, and The salary increases were to be based on a law enforcement comparative methodology mutually agreed to by the parties. Described in a document labeled as an unpublished side letter (an agreement signed by officials of DPA and CCPOA), this methodology linked correctional officer pay to that of CHP officers, which in turn had been linked to that of the five police departments since The unpublished side letter listed a complicated formula involving the base pay and several other categories of compensation of both Unit 6 members and CHP officers. The results of the formula showed that correctional peace officers were paid $666 per month less than CHP officers as of June As a part of the MOU, CCPOA agreed to forego salary increases for the first two years of the agreement. The subsequent salary increases were structured to bring the compensation of Unit 6 members back to within $666 per month of comparable CHP officers by the MOU s expiration date in Along with ratifying the MOU, Chapter 1 made another important change to state employee salaries effectively requiring the state (except upon mutual agreement with the CHP officers union) to pay CHP officers each year in line with the pay given to comparable officers of the five urban police departments listed earlier. Previously, the law required only that DPA consider local pay in this manner. 3 Percent at 50 Retirement Benefits. Prior to 2000, retiring correctional officers were eligible for 2.5 percent at 55 retirement benefits through the California Public Employees Retirement System (CalPERS). This was funded from both employer and employee contributions. Chapter 555, Statutes of 1999 (SB 400, Ortiz), increased various categories of CalPERS pension benefits, including an increase in correctional officers benefits from the 2.5 percent at 55 formula to a 3 percent at 55 formula. In 2002, Chapter 1 further increased the benefits from the 3 percent at 55 formula to a 3 percent at 50 formula for officers who retire in 2006 or thereafter. This means that an officer retiring at or after age 50 is eligible for a pension equal to 3 percent of final compensation multiplied by his or her number of years of service. Maximum pension

5 5 benefits typically are 90 percent of final compensation. In addition to its contributions for the CalPERS benefits, the state makes contributions to a defined contribution retirement plan for correctional officers equal to about 2 percent of each eligible union member s base pay. Reduced Work Period. The federal Fair Labor Standards Act (FLSA) and its regulations include rules about overtime wages. Generally, overtime must be paid at 150 percent of the employee s regular rate of pay for each hour worked over 160 hours in a 28 day work period (essentially, each hour over a 40 hour work week). There are specific FLSA rules for law enforcement officers, including correctional officers. In 2002, Davis Administration officials stated that FLSA permits an exception for law enforcement personnel but only if the employees union agrees. In its labor agreement, Unit 6 agreed to be paid overtime after working 168 hours each 28 days (160 hours of regular post duty, 4 hours of pre and post shift activities, and 4 hours of training). The MOU, however, changed that provision, effective July 1, 2004, to one where officers would receive overtime after working 164 hours (excluding the 4 hour training requirement) every 28 days. Because officers posts need to be covered while they are attending training, this led to increased overtime costs (estimated by the Bureau of State Audits to be at least $38 million annually beginning in ). The administration stated in 2002 that this was cheaper than having no FLSA exemption at all from CCPOA. Sick Leave and Overtime. As we discussed in our Analysis of the Budget Bill (see page D 51), CDCR has had problems managing the use of sick leave by its employees. The MOU eliminated a program that institutions previously used to track and identify sick leave use. In addition, a provision of the CCPOA MOU included sick leave as time worked in calculating overtime. Moreover, the MOU assigned overtime by seniority, meaning that the most senior and, therefore, the most highly paid employees were able to work more overtime. Since overtime compensation is based on the employee s base salary, these provisions increased CDCR overtime costs. Other factors, including unfilled officer positions and institution specific factors, also have contributed to CDCR s recurring, high overtime expenditures. Unit 6 members accounted for $471 million of overtime costs in an average of over $16,000 per Unit 6 member. This was an increase from $402 million of overtime costs in , a 17 percent increase in one year. Entire Agreement Clause. Numerous state employee labor agreements contain an Entire Agreement Clause similar to that in CCPOA s MOU. It requires the administration and the union to negotiate concerning the impact of workplace changes when all three of the following factors exist: The changes would affect the working conditions of a significant number of employees in Unit 6. The subject matter of the change is within the scope of representation for the union under state law. The union requests to negotiate with the state.

6 6 The clause provides that if there is a disagreement on whether a proposed change is subject to negotiation, that disagreement may be submitted to binding arbitration. The Schwarzenegger Administration stated that CCPOA s use of this clause requires the state employer to negotiate continuously with CCPOA over the impact of matters within its management discretion. The administration also cited the clause as one reason for a backlog of over 550 pending arbitrations related to CCPOA as of September In 2003 and 2004, the current and prior administrations sought various concessions from state employee unions in order to help address the state s fiscal problems. Chapter 217, Statutes of 2004 (SB 1110, Cedillo), approved a renegotiated agreement with CCPOA. Chapter 217 was estimated to result in $108 million of reduced General Fund costs over two fiscal years: and Deferred Salary and Benefit Increases. Under the comparative pay methodology in the original MOU, Unit 6 members were scheduled to receive a 10.9 percent salary increase on July 1, Under the renegotiated agreement, CCPOA agreed that its members instead would receive an increase of 5 percent on that date, another 5 percent on January 1, 2005, and another 0.9 percent on June 30, In , the state also was permitted to suspend a portion of its payments to correctional officers defined contribution retirement plan. The renegotiated agreement provided that the comparative pay methodology the monthly $666 compensation difference between Unit 6 members and CHP officers was to be reestablished in full on July 1, THE IMPACT OF A BARGAINING IMPASSE The relationship between the California Correctional Peace Officers Association (CCPOA) and the state was marked by constant, time consuming, expensive, and, sometimes, strident conflict and appears to be completely dysfunctional. This conflict results in scores of arbitration cases that distract CDCR and Department of Personnel Administration (DPA) staff members from tending to other issues in prisons and the broader state workforce. This conflict also manifests itself at the bargaining table, and makes it more difficult to implement prison and parole system reforms. CHRONOLOGY OF DISPUTED ISSUES: CCPOA alleges the State of California (DPA) violated the Ralph C. Dills Act (Dills Act) by engaging in conditional bargaining. Specifically CCPOA alleged the State insisted to impasse on the following non-mandatory subjects of bargaining that would require a waiver of employees statutory rights. The non-mandatory subjects of bargaining were LBFO section 10.02D (use of sick leave), LBFO section 11.11F2 (Fair Labor Standards Act (FLSA) exception), and LBFO section (entire agreement). On May 10, 2007 the State filed with PERB a Request for Impasse Determination/Appointment of Mediator. CCPOA opposed the request but the request was approved and a mediator was appointed on May 17, 2007.

7 7 On August 22, 2007, DPA presented a completed package offer and governing language proposals to CCPOA. CCPOA was given until September 5, 2007 to respond. On August 31, 2007, CCPOA responded to the package offer. They invited DPA to attend a CCPOA training conference held on August 28, and 29, 2007, so the State could explain content and answer questions about the voluminous proposal. Their delegates passed a motion to submit questions to the States bargaining team. The Director of the Department of Personnel Administration (Dave Gilb) responded to CCPOA s letter on September 4, CCPOA responded on September 5, 2007 and asserted Dave Gilb left the questions posed substantially unanswered. On September 12, 2007 DPA presented CCPOA with a Last, Best, Final (LBFO), modestly modified from the offer of August 22, DPA s letter announcing the LBFO assumed CCPOA s rejection in contradiction to the specific intent stated in the response. DPA s letter reaffirmed rejection of any part of a package proposal constitutes a rejection of the entire package proposal. On September 18, 2007, DPA announced implementation of a modified form of the LBFO. It is well established that parties are free to negotiate over the inclusion of nonmandatory subjects of bargaining. (Lake Elsinore School District (1986) PERB Decision No. 603 (Lake Elsinore); San Mateo; Chula Vista.) A party may not, however, legally insist upon the acceptance of such proposals "in the face of a clear and express refusal by the union to bargain" over them. (Lake Elsinore.) Thus, the insistence to impasse on non-mandatory subjects of bargaining is a per se unfair practice. (Travis; Chula Vista; Lake Elsinore; Modesto City Schools (1983) PERB Decision No. 291; Ross School District Board of Trustees (1978). CCPOA argues that Travis and Chula Vista set forth a burden on CCPOA to establish that it "merely needs to put the employer on notice that it was unwilling to agree to language that it believes deprives it or its members of statutory rights," even though it has not refused to bargain over the proposal. CCPOA states that in Travis, the Board found it sufficient that the union "did make it clear its contention that it was improper for the District to insist on language which it believed deprived it of statutory rights." CCPOA also points out that in Chula Vista the Board found that "The Association's statements were sufficient to put the District on notice that the Association was unwilling to waive its right to represent its members." PERB did not find CCPOA's arguments persuasive. Lake Elsinore, Travis and Chula Vista all make it clear the party opposing the non-mandatory subject must communicate its opposition to further negotiation about the non-mandatory proposal.

8 8 In Chula Vista, the Board stated: While the parties may engage in negotiations over proposals dealing with permissive, nonmandatory subjects of bargaining, when one party subsequently decides to take the position that the nonmandatory proposal not be included in the contract, that party must express its opposition to further negotiation on the proposal as a prerequisite to charging the other party with bargaining to impasse on a nonmandatory subject of bargaining. In Travis, the school district insisted to impasse on maintaining a contract provision limiting the union's right to file grievances on its own behalf. This subject has been determined to be non-mandatory in Chula Vista and South Bay Union School District (1990). PERB Decision No The union rejected the employer's proposal to maintain the status quo and continued to insist on its own proposal to modify the contract provision so as not to waive its statutory rights. Finding the facts of this case to be very similar to those of Chula Vista, the Board found that the union's continued refusal to waive its statutory rights, while at the same time continuing to press for inclusion of its proposal, "made clear its contention that it was improper for the district to insist on language which it believed deprived the union of its statutory rights." In all of these cases, the Board required a showing that the parties objecting to the inclusion of the non-mandatory subject clearly communicate its opposition to further consideration of the proposal. CCPOA failed to meet this burden. Sally M. McKeag and Robin Wesley s decision conclude CCPOA did not meet its burden of communicating a clear opposition to further negotiations over the disputed sections; we need not and do not reach the issue of whether, in fact, the proposals required a waiver of statutory rights and therefore were non-mandatory subjects of bargaining. Conclusion Because CCPOA opposed giving management more control of their sick leave usage, more flexibility for department to assign personnel, nor did they want to change the grievance and arbitration procedures, the State of California implemented its last, best, final offer. This offer was amended by the legislature and monetary increases were removed. Hopefully this difficult lesson was well learned by both the Union and Mangement. Charlotte Clarke Labor Relations Specialist Department of Food and Agriculture

9 N Street Sacramento, Ca Charlotte.m.clarke.nfg@mail.mil REFERENCES: Chapter 1, Statutes of 2002 (SB 65, Burton) Chapter 555, Statutes of 1999 (SB 400, Ortiz)Chapter 217, Statutes of 2004 (SB 1110, Cedillo) Fair Labor Standards Act (FLSA) Memorandum of Understanding with Unit 6, 7/1/2001 to 7/2/2006 Chapter 290, Statutes of 1986 (SB 1373, Keene The Dills Act Government Code section 3512 et se Information has been taken from the contents of PERB's files concerning the related impasse case, PERB Case No. SA-IM-3041-S. Chula Vista City School District (1990) PERB Decision No. 834 South Bay Union School District (1990) PERB Decision No. 791 Lake Elsinore School District (1986) PERB Decision No. 603 (Lake Elsinore); see also South Bay Union School District v. Public Employment Relations Board (1991) 228 Cal.App.3d 502.)