California Nurses Association (O'Malley) (PERB 1607H)

STATE OF CALIFORNIA
DECISION OF THE
PUBLIC EMPLOYMENT RELATIONS BOARD
ROBERT
J.
O'MALLEY,
Charging Party,
V.
CALIFORNIA NURSES ASSOCIATION,
Respondent.
Appearance: Robert
J.
O'Malley, on his own behalf.
Before Duncan, Chairman; Whitehead and Neima, Members.
DECISION
WHITEHEAD, Member: This case is before the Public Employment Relations Board
(PERB or Board) on appeal by Robert
J.
O'Malley (O'Malley)
of
a Board agent's dismissal
of
his unfair practice charge. The charge alleged that the California Nurses Association (CNA)
violated the Higher Education Employer-Employee Relations Act (HEERA) 1 by unilaterally
returning agency fees collected from O'Malley and failing to follow the agency fee appeal
procedure. 	O'Malley alleged that this conduct constituted a violation
of
HEERA section
3583.5 and PERB Regulations 32994(a), (b), 32995(b), and 32997.2
Based upon review
of
the record, including the unfair practice charge, the amended
charge, the warning and dismissal letters, and O'Malley's appeal, the Board affirms the Board
agent's dismissal consistent with the discussion below.
1HEERA is codified at Government Code section 3560 et seq. Unless otherwise
indicated, all statutory references herein are to the Government Code.
2PERB regulations are codified at California Code of Regulations, title 8, section 31001
et seq.
Case No. SA-CO-20-H
PERB Decision No.
	1607-H
March
	18,
	2004

BACKGROUND
O'Malley alleges that CNA sent him a Hudson3 agency fee notice in May 2002. He
sent a protest letter dated June
6,
2002 to CNA. O'Malley filed an unfair practice charge in
Case No. SA-CO-15-H, alleging that CNA did not permit O'Malley to challenge CNA's
agency fee calculations. O'Malley later withdrew the charge when CNA agreed to proceed to
arbitration on the challenge. In July 2003, CNA returned in full the agency fees collected from
him for fiscal year 2002-2003. During the August 29, 2003 arbitration hearing, CNA
challenged O'Malley's standing to participate in the arbitration, citing Los Rios College
Federation
of
Teachers, Local 2279, CFT/AFT (Deglow) (1992) PERB Decision No. 950 (Los
Rios). As a result, according to O'Malley, the arbitrator excluded him from the arbitration
hearing. O'Malley contends that even though CNA returned the fees, he still has standing to
challenge the calculations. This is because CNA collected the fees for the entire year in
question and refunded them only after the year ended. O'Malley further alleges that
amendments to HEERA and the Educational Employment Relations Act (EERA),4 in SB 645
and SB 1960, respectively, enacted during the 1999-2000 legislative session, require either
membership in a recognized employee organization or payment
of
fair share service fees as a
condition
of
employment; and, he is concerned that these amendments require his termination
from employment with the University
of
California, Davis Medical Center (University). 	In the
warning letter, the Board agent relied upon Los Rios to conclude that where the exclusive
representative refunds in full the agency fees, the objecting nonmember lacks standing to
challenge the fees. 	O'Malley states that because
of
the amendments to HEERA and EERA, he
3The reference to "Hudson" pertains to the U.S. Supreme Court's decision in Chicago
Teachers Association v. Hudson (1986) 475 U.S. 292 [106 S. Ct. 1066].
4EERA is codified at Government Code section 3540 et seq.
2

lacks any option to pay agency fees and must pay them to retain his employment with the
University. Therefore, CNA violated HEERA section 3583.5 by returning his agency fees and
not proceeding with the agency fee appeal procedure.
The Board agent dismissed the charge for failure to state a prima facie case.
O'MALLEY'S APPEAL
O'Malley filed a timely appeal on September 27, 2003. He reiterates his argument that
HEERA section 3583.5(a)(l) requires that he either join CNA or pay fair share fees as a
condition of employment. O'Malley disputes the Board agent's interpretation that nothing
precludes CNA from refunding agency fees collected from nonmembers. Even if the Board
agrees with the Board agent, O'Malley asserts that once agency fees are collected, he should be
allowed to challenge the amount of agency fees.
O'Malley further contends that Los Rios does not apply to his charge. In Los Rios, the
union refunded agency fees deducted on certain dates and then did not collect any more fees.
In contrast, in O'Malley's case, CNA collected agency fees for all of fiscal year 2002-2003 and
did not refund the fees until July following the end of that fiscal year. He again states that
once fees are collected, he should have the right to challenge them. 	O'Malley argues that the
dismissal letter did not rebut any of these facts.
O'Malley next asserts that there are no facts indicating CNA's improper expenditure of
his agency fees. 	He states that no documentation was provided indicating that CNA in fact put
his agency fees in an escrow account.
O'Malley finally argues that regardless of whether CNA failed to place the fees in
escrow or instead, placed the fees in escrow and refunded them, CNA violated PERB
Regulation 32995.
3

On January 21, 2004, O'Malley filed a supplement to his appeal. This document was
received three months after the appeal was due and provided new information regarding
CNA's escrow account and corroboration for the refund of O'Malley's agency fees. 	(PERB
Reg. 32635.)
DISCUSSION
O'Malley untimely filed a supplement to his appeal on January 21, 2004. Under PERB
Regulation 32136, a late filing may only be excused for good cause. 	O'Malley has not
provided any facts that would excuse the late filing. 	In addition, new supporting evidence may
not be raised absent good cause. (PERB Reg. 32635(b).) O'Malley has failed to allege any
facts showing good cause to raise new supporting evidence on appeal and therefore, the
supplement will not be considered.
With regard to the original appeal, we find that O'Malley has failed to state a prima
facie violation ofHEERA section 3583.5 or the agency fee regulations. HEERA section
3583.5 provides, in pertinent part:
(a)(l) Notwithstanding any other provision of law, any employee
of the California State University or the University of California,
other than a faculty member of the University of California who
is eligible for membership in the Academic Senate, who is in a
unit for which an exclusive representative has been selected
pursuant to this chapter, shall be required, as a condition of
continued employment, either to join the recognized employee
organization or to pay the organization a fair share service fee.
The amount of the fee shall not exceed the dues that are payable
by members of the employee organization, and shall cover the
cost of negotiation, contract administration, and other activities of
the employee organization that are germane to its functions as the
exclusive bargaining representative. Upon notification to the
employer by the exclusive representative, the amount of the fee
shall be deducted by the employer from the wages or salary of the
employee and paid to the employee organization.
(Emphasis added.)
4

O'Malley is concerned that since CNA refunded his agency fees, the underlined
provision would require termination of his employment with the University. 	O'Malley has not
cited any legislative history that would support such an interpretation of this section.
However, the parallel provision under EERA section 3540. l(i)(2),5 has been interpreted by the
California Supreme Court not to require the termination of nonmembers for failing to pay
agency fees as required by a collective bargaining agreement. (San Lorenzo Education Assn.
v. Wilson (1982) 32 Cal. 3d 841, 847 [187 Cal. Rptr. 432].) Instead, the court opined that a
civil action is the appropriate mechanism for enforcing an agency shop obligation, and the
union and the employer should otherwise be allowed to choose an appropriate remedy. 	(Id.)
Indeed, in the instant case, CNA voluntarily refunded O'Malley's fees and there is no
indication in the charge that either CNA or the University have any interest in terminating
O'Malley's employment.
Next, O'Malley contends that although CNA has refunded his agency fees, he should
still have the right to challenge the amount of the fees to ensure that they were not spent on
nonchargeable expenditures while still held by CNA. PERB Regulation 32992 requires that
O'Malley exhaust the Agency Fee Appeal Procedure in objecting to collected fees.
O'Malley's objections were submitted to arbitration under CNA's agency fee appeal
5EERA section 3540. l(i)(2) provides, in part:
As used in this chapter:
(i) 'Organizational security' is within the scope ofrepresentation,
and means either of the following:
(2) An arrangement that requires an employee, as a condition of
continued employment, either to join the recognized or certified
employee organization, or to pay the organization a service fee in
an amount not to exceed the standard initiation fee, periodic dues,
and general assessments of the organization for the duration of
the agreement, or a period of three years from the effective date
of the agreement, whichever comes first.
5

procedure. According to O'Malley, the arbitrator ruled that O'Malley lacked standing to
participate in the arbitration proceeding because CNA refunded all the collected fees.
Generally, the Board will defer to an arbitrator's award so long as: 	(1) the arbitration
proceedings were fair and regular, and (2) the decision of the arbitrator is not clearly repugnant
to the purposes of the Act. (California Faculty Association (Malamud) (2002) PERB Decision
No. 1482-H, citing standard set forth in ABC Federation of Teachers, AFT Local 2317
(Murray, et al.) (1998) PERB Decision No. 1295.)
O'Malley has not alleged sufficient facts showing that the arbitration proceedings were
unfair and procedurally defective.
We further find that O 'Malley has not provided sufficient information to prove the
arbitrator's decision repugnant to HEERA. The test for repugnancy was ultimately decided by
the National Labor Relations Board in Inland Steel Company (1982) 263 NLRB 1091 [111
LRRM 1193]:
The test of repugnancy under Spielberg6 is not whether the Board
would have reached the same result as an arbitrator, but whether
the arbitrator's award is palpably wrong as a matter of law.
This test was affirmed in Olin Corp. (1984) 268 NLRB 573 [115 LRRM 1056), which defined
"palpably wrong" as "not susceptible to an interpretation consistent with the Act." This
standard was adopted by the Board in Yuba City Unified School District (1995) PERB
Decision No. 1095.
O'Malley asserts that after CNA refunded the collected agency fees, at CNA's motion,
the arbitrator excluded him from the arbitration proceeding. 	O'Malley did not provide a copy
of the arbitrator's decision for review, only a sentence summarizing the ruling. 	O'Malley then
cites and distinguishes Los Rios in support of his claim that despite CNA's full refund of the
6Spielberg Mfg. Co. (1955) 112 NLRB 1080 [36 LRRM 1152].
6

collected fees, O'Malley is entitled to have his challenge heard. According to O'Malley, in
Los Rios, the union quickly refunded the challenged fees; whereas, in the instant matter, CNA
waited until one month before the arbitration proceeding to refund the fees. 	We find that the
principles of Los Rios apply. Citing with approval a non-precedential Board decision, the
Board in Los Rios reasoned that:
[B]ecause the fees had been returned, there was no real remedy
that PERB could afford the charging parties that they had not
already received. As the ALJ stated, 'since the charging parties
in this case have suffered no harm, nor do they have any potential
for any harm, they have no standing to challenge the union's
refusal to provide them with arbitration.'
(Warning letter pp. 2-3, emphasis added.)
Once CNA refunded the collected fees in full to O'Malley, CNA could not use the fees
in any way, let alone wrongfully use them.7 There is no possibility for harm to O'Malley that
the Board could remedy. 	To hold otherwise would lead to an absurd result: that individuals
may challenge the use of funds no longer in the possession of the exclusive representative or of
funds held by the exclusive representative but collected from other employees. 8 Similarly,
O'Malley claims that CNA violated PERB's agency fee regulations (PERB Regs. 32990 -
32997) when it refunded in full the collected agency fees. 	Those regulations presume
possession of the collected fees by either the exclusive representative or deposit in an escrow
7O'Malley has not alleged that he did not receive interest with the full refund of agency
fees.
8O'Malley may not assert agency fee objections on behalf of other unit employees. The
courts have historically held that the individual agency fee payer has the burden to challenge
the use of funds collected from him/her and held by the exclusive representative.
(International Assn. of Machinists v. Street (1961) 361 U.S. 740, 774 [81 S. Ct. 1784];
Railway Clerks v. Allen (1963) 373 U.S. 113, 119; Cumero v. Public Employment Relations
Bd. (1989) 49 Cal. 3d 575, 590 [262 Cal.Rptr. 46].) O'Malley cannot and does not claim to
object to CNA's use of funds collected from other nonmembers who may believe the
expenditures to be a valid use of those funds by CNA. (Id.)
7

account pursuant to PERB Regulation 32995. Any other interpretation of those regulations
would be unreasonable as described above.
We therefore find that the arbitrator's award is not "palpably wrong," i.e., not
repugnant to HEERA. In light of the above discussion, we conclude that the charge does not
state a prima facie case and affirm the Board agent's dismissal.
ORDER
The unfair practice charge in Case No. SA-CO-20-H is hereby DISMISSED
WITHOUT LEA VE TO AMEND.
Chairman Duncan and Member Neimajoined in this Decision.
8