State of California (Department of Corrections) (PERB 1967S)

STATE OF CALIFORNIA
DECISION OF THE
PUBLIC EMPLOYMENT RELATIONS BOARD
UNION OF AMERICAN PHYSICIANS &
DENTISTS,
Charging Party,
V.
STATE OF CALIFORNIA (DEPARTMENT OF
CORRECTIONS),
Respondent.
Case No. SF-CE-228-S
PERB Decision No. 	1967-S
June 27, 2008
Appearances: Davis, Cowell & Bowe by Paul L. More, Attorney, for Union
of
American
Physicians & Dentists; State
of
California (Department
of
Personnel Administration)
by
Edmund K. Brehl, Labor Relations Counsel, for State
of
California (Department
of
Corrections).
Before Neuwald, Chair; McKeag and Wesley, Members.
DECISION
NEUW ALD, Chair: 	This case is before the Public Employment Relations Board
(Board) on appeal by the Union
of
American Physicians and Dentists
of
an administrative law
judge's
( ALJ) proposed decision ( attached). 	The amended unfair practice charge alleged that
the State
of
California (Department
of
Corrections) violated the Ralph C. Dills Act (Dills Act) 1
by changing the performance appraisal provision
of
a memorandum
of
understanding without
negotiating the decision in violation
of
the Dills Act section 3159(c), and derivatively,
section 3 519( a) and (b ).
The Board reviewed the entire record in this matter. In light
of
our review, the Board
adopts the ALJ' s proposed decision as a decision of the Board itself.
1The Dills Act is codified at Government Code section 3512 et seq.

ORDER
The complaint and underlying unfair practice charge in Case No. SF-CE-228-S are
hereby DISMISSED WITHOUT LEA VE TO AMEND.
Members McKeag and Wesley joined in this Decision.
2

STATE OF CALIFORNIA
PUBLIC EMPLOYMENT RELATIONS BOARD
UNION OF AMERICAN PHYSICIANS &
DENTISTS,
Charging Party,
V.
STATE OF CALIFORNIA (DEPT. OF
CORRECTIONS),
Respondent.
UNFAIR PRACTICE
CASE NO. SF-CE-228-S
PROPOSED DECISION
(9/1/06)
Appearances: Davis, Cowell and Bowe, by Andrew J. Kahn and Paul L. More, for Union of
American Physicians and Dentists; K. William Curtis, Warren C. Stracener, Edmund K. Brehl
and Jennifer M. Garten, for State of California (Department of Corrections and Rehabilitation).
Before Fred D'Orazio, Administrative Law Judge.
PROCEDURAL HISTORY
The Union of American Physicians and Dentists (UAPD) initiated this action on
October 15, 2004, by filing an unfair practice charge against the Stateof California
(Department of Corrections and Rehabilitation) (State or CDCR).1 The General Counsel of the
Public Employment Relations Board (PERB or Board) issued a complaint on March 10, 2005.
The complaint, as amended, alleges the CDCR changed the performance appraisal provision in
a memorandum of understanding (MOU) with UAPD without negotiating about the decision
and/or the effects of the decision, in violation of the Ralph C. Dills Act (Dills Act) section
3519(c), and, derivatively, sections 3519(a) and (b).2 By letter dated the same day, UAPD
withdrew its allegation that the State failed to bargain about the effects of the decision.
1 CDCR was formerly known as the California Department of Corrections. (CDC)
CDCR and CDC are used interchangeably below.
2 The Dills Act is codified at Government Code section 3512 et seq. 	Unless otherwise
indicated, all statutory references refer to the Government Code. 	Section 3519 states in
relevant part that it shall be unlawful for the state to do anyof the following:

The State answered the complaint on April 1, 2005, generally denying all allegations
and setting forth various affirmative defenses. Denials and defenses will be addressed below,
as necessary. A settlement conference was conducted by a Board agent on May 25, 2005, but
the matter was not resolved.
The undersigned conducted a formal hearing in Oakland on September 27, 2005, and
in Sacramento on September 29, 2005. After submission of post-hearing briefs, the parties
requested the undersigned take judicial notice of certain documents in related federal court
litigation. On March 16, 2006, the receipt of the final argument related to these requests was
received and the case was submitted for proposed decision.
FINDINGS OF FACT
Jurisdiction
UAPD is an exclusive representative of an appropriate unit of physicians, dentists and
podiatrists (Unit 16) within the meaning of section 35 l 3(b ). 	The State and CDCR are
employers within the meaning of section 35 l 3(i). At all relevant times, UAPD and CDCR
were parties to an MOU ending in binding arbitration.
(a) Impose or threaten to impose reprisals on employees, to
discriminate or threaten to discriminate against employees, or
otherwise to interfere with, restrain, or coerce employees because
of their exercise of rights guaranteed by this chapter. For
purposes of this subdivision, "employee" includes an applicant
for employment or reemployment.
(b) Deny to employee organizations rights guaranteed to them by
this chapter.
( c) Refuse or fail to meet and confer in good faith with a
recognized employee organization.
2

Background
UAPD represents some 650 medical practitioners who work for CDCR in Unit 16.
About 2 72 of these are classified as Physicians and Surgeons, Correctional Facility. 	The
minimum qualification for the class, as determined by the California State Personnel Board, is
that the physician hold a valid medical license. To obtain a medical license in California, the
practitioner must have had one year of post-medical school training. Although much of the
work performed by physicians and surgeons involves primary care, the CDCR employs
specialists in a number of fields whose only responsibility is work within their field of
expertise. For example, a surgeon may perform only minor surgery or other procedures.
CDCR also employs specialists whose primary responsibility is to provide care in their area of
specialty, but who also provide some primary care to inmates. For example, a neurologist
may perform 80 percent of his work in neurology and 20 percent in primary care.
Although the minimum qualification for CDCR physicians and surgeons is that they
have a valid medical license, most physicians and surgeons possess greater qualifications, such
as eligibility or certification by certain boards. In the field of Internal Medicine, for example,
board-eligibility requires completion of three years of medical school and a residency. 	Board-
certification by the American Board of Internal Medicine requires completion of a proctored
two-day examination. 	Similar eligibility and certification exists in other fields, such as
neurology. An alternative route to eligibility and certification is through the American
Osteopathic Association. For example, a practitioner can become board-eligible in Family
Practice through the American Osteopathic Board of Family Practice by completing the
required years of practice, acquiring medical education credits, and holding membership in
certain societies.· The American Osteopathic Board of Family Practice then determines
whether the practitioner is qualified to sit for the exam that leads to certification.
3

The MOU and Physician Evaluations
Section 12.5 (Performance Appraisal) of the MOU provides:
A. 	The performance appraisal system of each department shall
include annual written performance appraisals for permanent
employees. Such appraisals shall be completed at least once each
12 calendar months after an employee completes the probationary
period for the class in which he/she is serving.
B. A performance appraisal of a bargaining unit employee shall
not be based solely on a numerical rating, statistical analysis, or
percentage rating of the employee's professional work.
C. The State and UAPD encourage periodic informal
pe_rformance evaluations and conferences between Unit 16
en\ployees and their supervisors to discuss work performance, job
satisfaction, and work-related problems. 	Such conferences shall
be held in a private setting.
D. 	When a Performance Appraisal Summary results in any
"improvement needed" rating, the employee may grieve the
evaluation up to and including the third step of the grievance
procedure.
E. A management peer of the employee's profession shall
countersign any Unit 16 employee's rating which indicates "I" or
improvement needed and which involves the employee's licensed
professional competency.
Section 16.2 (Peer Review) provides:
Peer review shall be a committee of the organized medical staff
and its makeup is a prerogative of the medical staff to be
determined in the Medical Staff by-laws.
In facilities with medical staffs all questions of professional
competence may be referred to peer review for review and
recommendation. Based on the peer review a recommendation
for disciplinary action may be made.
UAPD Executive Director Gary Robinson testified that section 12.5 has been in the
MOU since the first round of negotiations in 1982. Section 12.5.B was added in 2003 to make
sure unit members were not evaluated by the Quality Medical Assessment Team (QMA T)
strictly on statistics or the number of forms submitted; instead, evaluations would take into
4

account the "totality
of
their practice."3
If
the "[QMAT] rating was going to be included, it
would have
to
be put in context," Robinson said. Peer review was made part
of
the
MOU
in
the early 1980s
to
prevent non-physicians from exceeding their authority in evaluating
physicians.
Prior to September 2004, CDCR physicians were evaluated in three ways. 	First, they
were given annual performance appraisals under section 12. 5 by the Chief Medical Officer or
the Chief Physician and Surgeon at the facility. 	The standard evaluation form includes nine
categories in which physicians were rated "I" for improvement needed, "M" for fully meets
expected standards, or "E" for consistently exceeds expected standards.4 The form also
contains a section for comments about performance in the listed categories, as well as other
categories.
Second, CDCR physicians were evaluated under a peer review process. 	Under section
16.2
of
the MOU, peer review
is
conducted by a committee
of
the "organized medical staff."
Dr. Scott Anderson, chief physician and surgeon at Napa State Hospital, described the peer
review process:
Well, Peer Review involves a number
of
different activities, one
of
which, for example, was a Morbidity and Mortality
Conference. And in that conference, every death was carefully
reviewed by a team
of
physicians in an effort to improve medical
care. 	And
if
the care was felt to be lacking in any respect, that
could be referred on for more detailed Peer Review
of
the doctor
who cared for the patient. 	That would be one example .
. . . . It was both directed and non-directed Peer Review.
Directed Peer Review is Peer Review in response to a specific
allegation or complaint about the care
of
the doctor. So
if
anyone
3 QMAT site evaluations were being conducted in connection with related litigation.
The purpose of the QMA T audits was to determine under various indicators if a facility was
providing adequate health care.
4 The categories are quality of work, quantity of work, work habits, relationships with
other people, taking action independently, meeting work commitments, analyzing situations
and materials, supervising the work of others, and personnel management practices.
5

complained about the care of a doctor, that the care, the quality of
care rendered by a doctor for any particular patient, that triggered
Peer Review automatically.
And the allegation did not need to come only from another
doctor. 	It could come from anyone, including relatives of
patients, nurses, other medical personnel, technicians, anyone .
. . . . Then there was what was called non-directed Peer Review.
That took the form of the doctors coming together in a room
about this size and reviewing charts. And we would each be
assigned to review a certain number of charts, perhaps half a
dozen, and we would look for specific aspects of whether or not
the patient care was documented, it was thorough and was
carefully, both performed and written down on the chart.
Dr. Nicholas Capozzoli works in the psychiatric program at the California Medical Facility in
Vacaville. 	He described directed peer review as "focused Peer Review" that is requested by
someone, while non-directed peer review is "routine Peer Review."
Section 16.1.A of the MOU permits an organized medical staff to be fonned for the
purpose of peer review at any hospital where there are more than ten Unit 16 employees
providing direct patient care. Anderson testified that the organized medicalstaff
.... exists under the medical staff bylaws and it represents the
medical staff in its interactions with administration and contains
various officers in various roles who are elected, including Chief
of Staff, Vice Chief of Staff, Secretary and so forth.
The medical staff would meet and discuss issues, past [sic]
resolutions, and make recommendations to various other bodies
within the hospital.
The peer review process could result in specific recommendations to higher levels -- such as
the Department of Medicine, Medical Executive Committee, the governing body, or the
administration -- to improve quality of care.
Acting Director of the CDCR' s Division of Correctional Health Care Services, Dr.
Renee Kanan, testified that the peer review process was not standard throughout the
department. 	She said institutions with a licensed facility were required to conductpeer
6

reviews, and they did so based on local policies and bylaws. The requirement did not extend to
all institutions. Kanan said she has reviewed peer review findings related to deaths of inmate
patients and found the process "inadequate."
Third, CDCR investigated physicians' performance on an ad hoc basis, according to
Anderson and Capozolli. For example, CDCR referred individual cases or physicians to the
peer review process; CDCR has the option of investigating physicians and patient care issues
using their administrative protocols; and CDRC has referred physicians suspected of
incompetence to the California Medical Board for chart review and investigation. 	Inmates
sometimes initiate such referrals. 	Investigations have led to remedial training, continuing
medical education, and psychological testing.
The Plata Case 	'
On April 2001, a class of California state prisoners sued the Governor and other state
officials in the Federal District Court for the Northern District of California, alleging that
plaintiffs were not receiving constitutionally adequate medical care as required by the Eighth
Amendment to the U.S. Constitution.5 The parties had conducted informal negotiations since
July 1999 in an effort to resolve plaintiffs' demand that medical services be improved, but they
reached no resolution.
In June 2002, the parties agreed to settle the suit through a Stipulation for Injunctive
Relief, which was entered by Judge Thelton Henderson. The 2002 Consent Decree stated that
"a dispute exists between the parties as to the extent to which [CDCR' s] provision of inmate-
medical care meets constitutionally-mandated minimum standards" and required that the
CDCR implement the Health Care Services Division Policies and Procedures that had been
filed with the court. The parties stipulated that implementation of the Policies and Procedures
5 Marciano Plata et al. v. Arnold Schwarzenegger et al. No. C-01-1351. (Plata)
7

would ensure constitutionally adequate medical service. The CDCR was to implement the
Policies and Procedures on a staggered basis.
The 2002 Stipulation for Injunctive Relief also created the QMAT audit program
referred to earlier. According to testimony by a court expert in a later evidentiary hearing,
QMA T was intended to be "the link between the Central Office and the institutions for the
implementation of the medical policies required by the injunction" and to "assist the
institutions with implementing the medical policies with doctors, nurses and custody staff from
Central Office." Dennis Beaty is assistant general counsel for CDCR's health care team. He
described QMA T as a group of medical practitioners who go into the field and audit facilities
against the Policies and Procedures, a "quality assurance group."
QMAT teams would audit each facility and assign a numerical rating based on the
degree to which the facility had adopted the Policies and Procedures in the Stipulation for
Injunctive Relief: For example, an 85 percent compliance rating would signify the facility was
in substantial compliance with the Policies and Procedures and auditing requirements. 	Court
appointed experts had the discretion to find prisons in compliance if they fell within the 75-85
percent range.
As part of the 2002 Stipulation for Injunctive Relief, the parties agreed to the court's
appointment of Dr. Joe Goldenson, Dr. Michael Puisis, and Nurse Practitioner Madde LaMarre
as experts under Federal Rule of Evidence 706. At the request of any party, the experts were
authorized to visit facilities and evaluate, among other things, implementation of the Policies
and Procedures, the QMAT audit procedure, and overall compliance.
Adoption of Program to Evaluate Competency of Physicians
Early in 2004, CDCR began discussions with the Physician Assessment and Clinical
Education (PACE) program at the University of California, San Diego, (UCSD) to develop a
8

program to evaluate physicians.6 In brief, PACE is a physician evaluation and remedial
education program at UCSD. The California Medical Board refers physicians determined to
have competency problems to PACE for evaluation and remediation. Kanan testified that the
discussions with UCSD began in May 2004, including the services provided by PACE and
development of training programs for the CDCR. CDCR also discussed training and
evaluation options with the California Medical Association, Institute of Medical Quality, at
around the same time.
On July 16, 2004, after the Plata court experts visited three facilities, they produced a
report concluding, among other things, that "there appears to be an emerging pattern of
inadequate and seriously deficient physician quality in [CDCR] facilities." The report was
highly critical of CDCR's credentialing and physician qualifications. For example, the report
stated that "credentialing considers not only licensure but other qualitative factors such as
moral character, whether a physician is impaired physically or mentally, and the training that a
physician has. However, the current CDC credentialing rules are not selective and it is
extremely difficult to weed out poor quality physicians." In addition, the report stated that
CDCR had no job description requirements other than licensure, and physicians see patients for
conditions that they have never been trained to treat. In one chart review, for example,
.... at one of the CDC acute care hospitals a patient who was
breathing fast because of bilateral pneumonia was seen by a
retired neurosurgeon who thought the patient was having an
anxiety attack and prescribed anti-anxiety medication and
medication for psychosis when instead he needed intravenous
antibiotics and oxygen. This was a potentially life threatening
mistake that was remedied when the patient was seen by a
different physician the next day and admitted to a community
hospital.
6 The PACE Program as applied to CDCR was later renamed Quality Improvement in
Correctional Medicine (QICM).
9

"Physicians without training are approving physicians for practice in which they are not
trained," the report stated. Also, the report noted that of the 20 credentialed physicians at one
facility, seven "have problems, including mental health disorders, prior alcoholism, or loss of
privileges or license because of substance abuse or incompetence or both."
The report was critical of the peer review process, noting a lack of qualified physicians
in the managerial ranks. "Thus, when mistakes are made by staff physicians there is no
supervisory physician with experience who can correct or amend mistakes," the report stated.
The report recommended establishment of an effective system of peer review.
According to Goldenson's testimony in this proceeding, the experts "found a medical
system that was totally broken in almost every aspect." He said there were "numerous
episodes" where the medical care was "substandard;" there were physicians in the peer review
process "who weren't competent" reviewing the work of other physicians; and deaths occurred
as a result of substandard care. The report recommended a new peer review policy using
physicians trained in primary care internal medicine with supervisory authority.
Goldenson also testified about so-called "death reviews" where cases are reviewed to
determine quality of care and emergency responses by physicians. The experts found about
300 cases of inmates who had died during the last few years where CDCR had not performed
death reviews. He testified that "in a significant number, there were .... pretty egregious
mistakes made on the part of medical staff. And that a significant number of the deaths from
the information we had would have been preventable." Goldenson said after it became clear
that the health care situation was worse than initially thought, "the court asked us to become
more involved in both assessing the situation of the different facilities and working with the
state to come up with ways to address those problems."

The idea to use the PA CE program to evaluate the competency
of
physicians did not
originate with the court experts. Kanan discussed the program with PACE before raising it
with the experts. According to Goldenson, "none
of
us had a real clear idea
of
exactly what
PACE was or what they did or how they did it. Which was why we decided to
go
down to San
Diego and actually meet with the people from the program so that they could tell
us
what
to
do."
In August 2004, the experts visited UCSD to evaluate the PACE program. 	Goldenson
testified that "we were all extremely impressed with the program and thought it would be an
excellent evaluation tool." He said the experts formed the opinion that "PACE was the only
program
of
its sort that evaluated the competency
of
physicians in California. 	And that it was
the most comprehensive program
of
its type in the country." Asked
if
PACE was the only way
to deal with the problem, Goldenson testified:
I don't remember specifically talking about whether it was the
only way, but, you know, there are other ways it could have been
done in other settings. The feeling was that in CDC, because
of
the scale
of
the problem and the lack
of
supervisory staff as we
talked about, in terms
of
the Chief Medical Officers and the Chief
Physicians, that ways that it would work in other systems where
you had that kind
of
supervision above the physicians wouldn't
work here.
So that things like Peer Review and depending on someone's
supervisor to make sure that they do a good job, you know, which
could work somewhere else and works, for example, in my
system, wouldn't work in CDC.7
Goldenson said "preventing as many
of
the further deaths that are preventable as possible, that
PACE is the quickest way to do it." Goldenson also testified that the performance appraisal
system in the MOU had not identified significant problems in health care and CDCR lacked
7 Goldenson is the medical director for jail health services in San Francisco. He is
responsible for providing all medical and mental health services to prisoners in the San
Francisco county jail.
11

competent people to perform the appraisal. "Physicians who really shouldn't be practicing
were still practicing," he said.8
The experts reported their findings to the Plata court. Goldenson testified Judge
Henderson "thought it was an excellent idea and wanted them to move forward as quickly as
possible with it." By August 30, 2004, Beaty testified, the PACE program had been discussed
along with other options during status conferences with the Plata court and was "probably the
choice." In fact, the Joint Status Conference Statement of August 30, 2004, states that the
parties were working on a proposed order that will provide for, among other things,
"evaluation and training of primary care providers and supervisors by a non-CDC entity
approved by the experts and plaintiffs' counsel."
September 17, 2004, Stipulated Order Re Quality of Patient Care
On September I 0, 2004, CDCR and the plaintiffs in Plata entered into a stipulated
agreement to engage an independent entity to test physicians for competency. Judge
Henderson signed the agreement one week later, on September 17.
The Patient Care Order required CDCR to engage an independent entity within 60 days
"to evaluate and train [CDCR] physicians." It set a timeline for the completion of evaluations,
requiring that physicians at the 2003-2005 so-called "roll-out institutions" be evaluated prior to
December 31, 2005, and physicians at the other institutions by December 31, 2006. The
Patient Care Order also required evaluation and, if appropriate, training of "all other CDC
8 Goldenson testified along similar lines at a hearing in the Plata case on June 2, 2005.
Asked why he approved of QICM, he said it was "basically sort of an admission on the part of
the Department that they were unable to really evaluate the physicians who work for them, and
wanted to find some other mechanism for doing that." He said QICM would be a good "first
cut in the sense that I don't believe that if someone passes QICM that necessarily means that
they are going to be a qualified physician, but if they don't pass QICM, then they shouldn't be
practicing."
12

physicians with clinical responsibilities, including but not limited to the Chief Deputy of
Clinical Services, and any Assistant Deputy Director with a medical degree by June 30, 2005."
Pursuant to the Patient Care Order, the independent entity was to classify each
examined physician in one of three categories. 	Category one physicians were defined as
"competent to provide care to class members without remedial training." Category two
physicians were defined as "competent to provide care to class members pending successful
completion ofremedial training by the independent entity." Category three physicians were
defined as "not competent to provide care to class members, or failed to successfully complete
remedial training required by the independent entity."
The Patient Care Order also provided that "upon notification by the independent entity,
physicians in Category 3 shall not engage in direct patient care, direct the activities of persons
engaged in patient care, prepare or supervise the preparation of case histories, supervise
persons engaged in patient care, or participate in any oversight or management of patient care."
Lastly, the Patient Care Order stated that "this order is necessary to correct a current and
ongoing violation of the federal right, and is narrowly drawn and the least intrusive means to
correct the violation."
Bargaining During Fall 2004
CDCR notified UAPD of the pending Patient Care Order on September 16, 2004, when
Kanan told Robinson that Judge Henderson was considering signing an order requiring all
physicians to be evaluated for competency by an independent entity. He told Kanan the
doctors are going to be "furious," and that it would be a "big, big problem." Kanan and
Robinson discussed the reasons for the Patient Care Order and the competency evaluation.
In a September 24, 2004, letter, CDCR formally informed Robinson that it intended to
implement the Patient Care Order, and that it "anticipated" the implementation would occur in
13

30 days. 	The letter also stated that the Department of Personnel Administration (DPA) had
delegated authority to CDCR to meet and confer "over the impact of this decision."
A negotiations meeting was held on October 7, 2004. Asked by Robinson why UAPD
received no advance notice, Beaty responded that the experts were interviewed, PACE was
selected, and it would be hard to change the court order at this point. Beaty said the parties at
the October 7 meeting also discussed the experts' reports and the standard of care required to
satisfy the Eighth Amendment claims in the litigation. Beaty testified that he discussed the
newly evolved "separate QICM program," but he didn't know much about it at the time.9 He
told Robinson "we didn't unilaterally pick this group. We had to get court expert approval.
We had several discussions with the court and this is where we finally ended up, after this long
process."
According to Robinson, the CDCR representatives at the October 7 meeting were
unable to answer basic questions about the examination, such as whether physicians who failed
it would be fired. 	The meeting ended with CDCR Labor Relations Representative Sandra
Samaniego asking Robinson for written proposals. He agreed to provide them and the parties
set another date to meet.
UAPD submitted a written proposal on October 13, 2004. UAPD proposed that CDCR
not use the PACE program because UCSD had a conflict of interest in conducting the program.
UAPD proposed Goldenson be appointed as the evaluator and additional independent entities
engaged, as necessary. UAPD also submitted the following set of proposals.
[T]he independent entity agreed upon by the CDC and the UAPD
to do the evaluations will go into the CDC facilities, review
patient charts, interview patients and CDC doctors, and use
whatever other techniques are appropriate to evaluate the work of
the physicians and nurse practitioners. The physician or nurse
practitioner who is found to be below standard as the result of the
9 PACE was renamed QICM around this time.
14

evaluation will be informed
of
the reasons for the poor evaluation
and be given an opportunity to appeal the evaluation to a neutral
primary care physician agreed upon by the CDC and the UAPD.
Physicians and nurse practitioners who, as a result
of
the
evaluations, are considered to be below standard will have their
assignments limited to those areas in which they are fully
competent, will be given training in the areas
of
their
deficiencies, will be allowed to take additional continuing
education in the areas
of
deficiency, and their practices will be
monitored in those areas in which they are deficient until they
reach acceptable standard
of
practice.
U APD also submitted proposals in the event an outside entity was selected.
[A] syllabus for the evaluation and/or training programs must be
supplied to all Physicians and Surgeons in the CDC at least 90
days before the doctors are to be evaluated.
Physicians must have 10 CME days to study for the evaluation
and/or education process. 	These days are in addition to the CME
days currently available in the MOU.
Physicians must have actual costs
of
tuition, travel to CME
courses, materials, hotels, meals, and related costs reimbursed
when taking CME to study for this program.
Physicians must be able to choose the time when they are to
attend the evaluation
if
they are to take an
off
site evaluation
and/or training.
When attending any evaluation and/or training, physicians must
be on full pay status.
If
there is off site evaluation and/or training, physicians must
receive paid travel time and payment for full costs
of
transportation, material, hotels, and meals while they are
attending evaluations and/or training.
When off work for CME or for evaluation and/or training in
connection with this program, all bargaining unit physicians must
be replaced on an hour for hour basis by qualified physicians.
The UAPD reserves the right to make additional proposals
concerning matters contained in the Plata stipulation signed by
CDC and the [plaintiffs] on September 10, 2004.
15

UAPD received no response to these proposals. Two negotiation meetings were set for
October and November, but CDCR cancelled both, according to Robinson.
UAPD Intervention in Plata
On October 15, 2004, as negotiations continued, UAPD moved to intervene in the Plata
case and modify the Patient Care Order to clarify its bargaining rights under the Dills Act. 	On
December 8, 2004, the court permitted a limited intervention, ruling as follows: "UAPD
reasonably argues that it should not have anticipated earlier that the CDC would enter into a
stipulation which (in the UAPD's view) violates the UAPD's state law bargaining rights. 	This
is particularly so given that the CDC previously met and conferred to the UAPD's satisfaction
in advance of entering into an earlier stipulation with the plaintiffs in this case." Accordingly,
the court found UAPD did not umeasonably delay in bringing its motion.
Regarding UAPD's request to modify the Patient Care Order, the court wrote:
As the UAPD emphasizes, state officials cannot enter into
stipulations or agreements with third parties that violate state law.
See, e.g., S. Ca. Edison Co. v. Lynch 307 F.3d 794, 809 (9 th Cir.
2002). In this case, the UAPD argues that the CDC improperly
agreed to a stipulation that violates the UAPD's state law
bargaining rights, as set forth in California Government Code
sections 3517 and 3516.5, and the Stipulated Order should
therefore by modified to avoid this conflict.
The court concluded, however, that modification of the Patient Care Order to guarantee
UAPD's Dills Act bargaining rights was unnecessary.
First, there is nothing on the face of the Stipulated Order that
expressly abrogates any bargaining rights provided by state law.
Rather, the Stipulated Order is silent with respect to such rights
and obligations. Second, the UAPD has failed to show that any
express terms of the Stipulated Order violated state law
bargaining rights. The objected to portions of the Stipulated
Order essentially require that the CDC (1) develop proposals on
various subjects, and (2) engage an independent entity to evaluate
the competency level of CDC physicians and provide remedial
training where appropriate. 	The substance of the agreement with
the independent entity is not addressed. The UAPD has not
16

persuasively demonstrated that these provisions - which on their
face do not preclude the CDC from meeting and conferring or
negotiating with the UAPD regarding any proposal that may be
developed or any other subject that is addressed in the Stipulated
Order - create any direct or irreconcilable conflict with the
UAPD's state law bargaining rights. Third, the CDC asserts that
it did not intend the Stipulated Order to discharge or release it
from any of its state law bargaining obligations. 	[Citation
omitted.] 	The plaintiffs concur in this interpretation.
Consistent with the parties' expressed intent, the Court construes
the Stipulated Order to not release or discharge the CDC from
any of its state law bargaining obligations. 	[Citation omitted.] 	In
light of this interpretation, and the fact that the UAPD has not
satisfactorily shown that any express provision of the Stipulated
Order necessarily violates the UAPD's state law bargaining
rights, the Court concludes that the Stipulated Order itself does
not violate state law. Accordingly, a modification on this ground
is not warranted.
The court also addressed UAPD's argument that CDCR had violated its Dills Act
bargaining rights by failing to negotiate about the Patient Care order.
While it is proper for this Court to address the UAPD's
contention that that Stipulated Order itself violates state law, the
UAPD's claim that the CDC is committing an unfair labor
practice by failing to satisfy its negotiation or meet and confer
obligations with respect to the Stipulated Order - under either
state labor laws governing California public employees or its
contract with UAPD - must be raised before the California Public
Employees [sic] Relation Board ("PERB") - not this court.
Indeed, the UAPD could point to no case, and the Court could
find none, in which a federal court had resolved a claim that a
California state employer had engaged in an unfair labor practice.
Notably, the UAPD has filed an unfair labor practice claim before
PERB, and that is the proper forum for resolution of this issue.
Accordingly, the Court declines to be drawn into any disputes
between the UAPD and the CDC concerning whether the CDC
has violated any state laws governing public employee bargaining
(or its contract with the UAPD) in the course of implementing the
Stipulated Order. Modification of the Stipulated Order is simply
not an appropriate vehicle for addressing such issues. 	[Italics in
original.]
A status conference report dated December 1, 2004, indicates that the court experts
agreed that the PACE program was by far the most appropriate entity to evaluate and train
17

physicians, some ofUAPD's concerns about PACE had been addressed, and CDCR had set a
meeting for December 9, 2004, to finalize the agreement with UCSD. The conference report
also confirmed that UCSD had developed the QICM program for CDCR and PACE had been
renamed QICM.
The December 9; 2004, Meeting
An information session with UAPD and physicians was conducted on December 9,
2004. 	QICM representative Dr. Joseph Scherger made a presentation about the program,
which CDCR announced had been officially renamed QICM. Kanan testified the CDCR staff
explained that it was important to evaluate the core knowledge and skills of primary care
physicians based upon the Plata case, expert reports, and analysis of peer reviews and death
reviews. Robinson testified that Scherger conceded that neither he nor his staff had experience
dealing with correctional institutions. According to Robinson, Scherger also said there would
be no exemptions for board-certified physicians, and physicians who failed the test would be
referred to the California Medical Board.
At the December 9, 2004, informational meeting, DPA representative Diane Navarro
announced that DP A would be reassuming responsibility for the negotiations about matters
addressed in the Patient Care Order. Navarro said there was a concern about how the
negotiations were conducted on October 7, and CDCR asked DPA for assistance. 	Robinson
testified he "felt a little sorry" for Navarro because she walked into the December 9 meeting "a
little blind." Although UAPD had submitted proposals on October 13, Navarro apparently had
not seen them. 	She asked Robinson for a copy of the proposals.
On December 10, 2004, Robinson sent Navarro a copy of UAPD's proposals and
related documents. He asked her to provide dates when DP A was available to resume
negotiations. In a lengthy follow-up letter to Navarro on February 8, 2005, Robinson stated
18

that "it is very important that we expedite our next meeting" because CDCR was unilaterally
setting an early date for testing UAPD members. Robinson reiterated requests for information,
argued that an adverse evaluation by QICM need not be reported to the California Medical
Board, and requested assurances from CDCR that adverse evaluations will not be reported.
Navarro did not immediately respond to Robinson. Instead, she said she encouraged
CDCR to get its policies and procedures in place because of the responsibility "to negotiate the
impact of those policies and procedures with UAPD. And before we sent any physicians to
undergo a QICM evaluation, we needed to conclude the negotiations on impact bargaining."
As Robinson was communicating with Navarro, CDCR and UCSD were negotiating to
implement QICM. Kanan testified that an agreement was reached on or about January 31,
2005. 	During a teleconference on February 1, 2005, Scherger officially announced that board-
certified physicians in primary care specialties such as Family Practice and Internal Medicine
would be exempt from QICM. In late February 2005, Navarro sent Robinson QICM's actual
policies and procedures, and a meeting was scheduled for March 4, 2005.
March and April 2005 Negotiations
A few days before the March 4, 2005, negotiating session, DP A sent UAPD a copy of
QICM' s program and the Due Process Policy designed to implement the Patient Care Order.10
Robinson testified that Navarro started the meeting "by saying that the decision to have the
QICM exam was not negotiable. The decision to have the .... two policies, the QICM
Evaluation policy and the .... Due Process Policy was not negotiable. But they would
negotiate on the impact effects." Navarro agreed. 	She testified that she stated at the outset of
the meeting that "it was not the state's position that we were going to negotiate who the
Department identified as the entity to evaluate or train the doctors. 	That had already been done
10 The QICM program and Due Process Policy are more fully discussed below.
19

.... as a management decision." She testified that she agreed to "negotiate impact, but not the
decision. And I made that very clear." She also testified "we would agree to disagree" on the
obligation to negotiate the decision, and that issue would be resolved in another forum. 	There
was a sense of urgency and the State had to move forward, according to Navarro. 	Robinson
responded that the QICM program was contrary to the MOU, but Navarro reiterated the
position that the MOU doesn't take into account the Plata order.
Robinson next raised a series of questions, including whether doctors who failed QICM
would be fired. He pointed out that QICM had three categories - pass, need more training, and
fail - and asked what standards would be used under QICM to make the decision. 	Robinson
objected to the QICM management committee that would conduct peer review, arguing that the
committee was not truly a committee of peers. He raised questions about definitions, such as
"community standards," used in the Due Process Policy. 	Would QICM use the CDCR
standard or the UCSD standard? Robinson questioned the validation of the test itself.
Robinson testified that DPA "definitely" did negotiate about effects of the policy. 	For
example, the time to appeal a decision of the peer review committee was discussed along with
issues such as study time and paid time off to take the test. He said these issues were "really
negotiated." However, Robinson said DPA took the position that "not a single word [of
QICM] can be changed. This is the way the test is. Nothing will be changed." He said DPA
would negotiate ''around the fringes" of the Due Process Policy, but topics such as "who the
evaluator would be and what the evaluation would be was not negotiated." Nothing was
resolved at the March 4 meeting.
After the meeting, Navarro testified, she became "concerned that the Union was stalling
negotiations or going to draw out negotiations." She explained that "we had to go through two
policies and one was actually pretty thick. And as I recall, it took two hours to go through, I
20

think the first page or the second page. I mean, it was extremely slow and some of the
questions, with all due respect were, they seemed like forgone conclusions." Another meeting
was held on March 8, but the parties' positions remained unchanged.
In a March 10, 2005, letter to Robinson, Navarro announced that CDCR planned to
implement the QICM program on May 2. 	In an attempt to move the negotiations forward in a
more expeditious manner to meet the time frames mandated by the court, Navarro asked that
UAPD provide a list of questions concerning the procedures and specific "impact issues" for
discussion at the next session on March 18.
Robinson responded by letter on March 11, noting that PERB had issued the instant
complaint the previous day. He asked Navarro to expand the negotiations to include "the
decision to implement the change in policy." He noted that he and the UAPD negotiating team
had other commitments and Navarro's requests left little time to respond by March 18. 	He
recognized the need to rapidly conclude negotiations, but asserted that CDCR created the
deadline by starting to work on the evaluation process in early 2004 without informing UAPD
of the plan until September 2004. Lastly, Robinson said the May 2 deadline surprised him and
he asked Navarro for the reasons DPA selected that particular date.
On March 16, 2005, Navarro responded that the PERB complaint had not changed
DP A's position. She reiterated that DP A would negotiate only the effects of the court order,
and CDCR planned to implement the plan on May 2.
Another meeting was held on March 18, 2005, but the parties' respective positions
remained essentially unchanged. Navarro reiterated the May 2 deadline to reach agreement.
According to Robinson, Navarro stated two reasons for the deadline: it permitted sufficient
time to negotiate an agreement and the evaluations could be completed by December 31 if
implementation started May 2.
21

The last negotiations session was on April 29, 2005, and soon thereafter PERB declared
an impasse at Navarro's request. 	A mediation session was held in early June, and the parties
eventually reached agreement on effects. CDCR began to send out notices to physicians on or
about June 5.
The agreement on effects was memorialized in an addendum to the MOU dated June 9,
2005. Among other things, the agreement provides that the information provided by CDCR to
UCSD would be limited to the physician's name and scope of practice, physicians selected to
attend the QICM evaluation would be notified of the reasons for selection in accord with
QICM policy, and the physician's referral letter would not be placed in his or her personnel
file. 	Other areas covered by the agreement include scheduling, travel reimbursement, release
time, study time, and reimbursement costs.
OICM and Due Process Policy
QICM covers the evaluation of physicians and the Due Process Policy covers the rights
of physicians who are being tested. Physicians with board-certification in Internal Medicine or
Family Practice were exempted from examination, unless an individualized suspicion of
clinical practice problems emerged through peer review, death review or other significant
clinical outcomes.
The QICM evaluation consists of two phases and a chart review. 	Phase lA is "a two
day assessment utilizing a variety of methods, including written, oral, and standardized
computer based examinations to provide an overall picture of a physician's medical and
communications skills, knowledge, and professionalism." Dr. Ben Chapnick, Chief Medical
Officer of QMAT, testified that this component of the test includes "some pencil and paper,
multiple choice type tests, which include some basic science, aspects of medicine,
pharmacology, ethics." Kanan testified before the Plata court that the exam includes a
22

computer simulation in which physicians must demonstrate their clinical decision-making and
patient management skills, examine a mock patient, and review charts. At the conclusion
of
Phase lA, the physician is assigned to one
of
the three categories set out in the Patient Care
Order.
	If
a physician is determined to have failed Phase 1A, he or she could be categorized as
"not competent to provide care to patients," according to the agreement between
CDCR and
UCSD.
Phase
1B
is
"a
one-day assessment whereby QICM staff observes scripted physician
diagnosing and managing simulated patients with carefully scripted conditions relevant to the
physician's normal scope
of
practice." The standardized assessments are conducted
in
a
laboratory and videotaped. 	At the end
of
Phase 1B, physicians are again placed in one
of
the
three categories in the Patient Care Order. Physicians who are placed in category three
in
the
Patient Care Order are subject to "intensive chart review" for 25 inmate-patients over a 12
month period and given the opportunity to attend a five day remedial training program at
UCSD.
Chart Review includes assessment
of
selected inmate-patient charts. Charts are
assessed for overall quality, organization, legibility, and proper documentation.
The Due Process Policy established the Professional Practices Executive Committee
(PPEC) in the central office
of
CDCR. The PPEC is made up
of
three physicians, one dentist,
one psychiatrist, one psychologist, and a physician-chairperson. All members are managers.
The policy states that the PPEC "shall be the peer review body for the Department
of
Corrections
....
and shall be responsible for managing the peer review process for both
routine peer reviews and for those required for a medical disciplinary cause or reason
....
"
The policy sets out the responsibilities of the PPEC. 	For example, it describes the
circumstances under which the "routine" and "for cause" peer review procedures maybe
23

initiated and the principles the PPEC must follow. 	It permits the PPEC tomake findings and
recommendations to CDCR, including revocation of privileges, further monitoring and
evaluation, or suspension/limitation of clinical privileges. 	The policy also permits the PPEC to
recommend revocation or denial of clinical privileges as a result of the QICM peer review
process. 	The ultimate authority to take action based on recommendations is vested in CDCR.
Order to Show Cause and Hearings
On May 10, 2005, the Plata court issued an Order to Show CauseRe Civil Contempt
and Appointment oflnterim Receiver. In the introduction to the Order, Judge Henderson
wrote:
In the four years since this case was filed, which includes
the year and a half that this Court has been meeting with the
parties on a regular basis, two things have become ever
increasingly clear: (1) the Governor has appointed, and the State
has hired, a number of dedicated individuals to tackle the difficult
task of addressing this crisis in the delivery of health care in the
California Department of Corrections ("CDC"), and, (2) despite
the best efforts of these individuals, little real progress is being
made. 	The problem of a highly dysfunctional, largely decrepit,
overly bureaucratic, and politically driven prison system, which
these defendants have inherited from past administrations, is too
far gone to be corrected by conventional methods.
The prison medical delivery system is in such a blatant
state of crisis that in recent days defendants have publicly
conceded their inability to find and implement on their own
solutions that will meet constitutional standards. The State's
failure has created a vacuum of leadership, and utter disarray in
the management, supervision, and delivery of care in the
Department of Corrections' medical system.
Defendants have devised a long-term strategy to contract
out health care management and much of the delivery of care.
However, full implementation of that plan is, by defendants' own
estimates, years away. 	In the meantime, roughly 162,000
prisoners are being subjected to an unconstitutional system
fraught with medical neglect and malfeasance. Defendants
themselves have conceded that a significant number of prisoners
have died as a direct result of this lack of care, and it is clear to
24

the Court that more are sure to suffer and die if the system is not
immediately overhauled.
In light of this crisis and defendants' concession that the
constitutional violations will not be corrected for a long time to
come, the Court is compelled to take it upon itself to construct a
remedy that will cure the violations as soon as possible. Having
considered the range of options available, the Court believes that
the appointment of an interim receiver to manage the CDC's
delivery of health care services may be necessary. 	Therefore, the
Court issues this Order requiring defendants to show cause why a
receiver is not the appropriate remedy and, if not, why not.
Defendants also shall address the issue of contempt, which may
be procedurally necessary as a predicate to the appointment of a
receiver.
Six days of evidentiary hearings were held between May 31 and June 30, 2005. 	Puisis
testified that, in his opinion, the QICM program was necessary because CDCR could not
otherwise fire or discipline incompetent physicians.
As I said in my testimony, would one normally construct a
process like QICM if you had a reasonable management staff, and
the answer is no, or a reasonable personnel policy, and the answer
is no, because you would be able to discipline people with the
staff you had. Because you don't, and because you have a union
that opposes the firing of physicians, QICM seemed like a
reasonable step to take.
Puisis continued:
.... I have managed for years, when you have a disciplinary
problem such as the doctors were finding, it would take a day,
you would sit down, counsel them and give them due process,
and if you needed to, you would fire them.
The CDC has to use QICM because they can't do that, ...
Because their - perhaps because their managerial staff is
nonexistent. They can't supervise their physicians, so they have
to invent a mechanism whereby everyone, is quote, "treated
fairly." 	So everyone is tested.
Well, not everyone needs to be tested. 	Some of the doctors are
competent. They have board certification, yet they are required
to go to QICM. 	The reason why they do that is because of the
union and personnel rules.
25

They have to reinvent and reconstruct ways
of
doing things to
satisfy this bureaucracy that
is so
cumbersome and complex, but
the solution is really just do it. Just fire someone. Just hire
someone.
Goldenson testified at the same hearing:
I'm
extremely concerned that in a number
of
the cases that I have
looked at that people have been dying unnecessarily, that their
deaths could have been prevented. So that the question here is a
lot bigger than just saying whether it's a constitutional system in
terms
of
providing constitutional health care, because I've seen
systems where constitutional health care is the issue, but people
aren't dying in the numbers they are dying in the [California]
system in terms
of
preventable deaths.
Goldenson went on during the hearing to describe in detail specific cases where he discovered
substandard health care.
During the hearing, UAPD submitted a letter
to
the court asking to participate. 	In an
exchange with defendants' counsel about UAPD's collective bargaining rights under the Dills
Act in the event a receiver was appointed, Judge Henderson stated: "No, I understand that, and
I will take that into account. And I will not empower the receiver to interfere with those
rights." Judge Henderson allowed UAPD to file an amicus curiae brief.
Appointment
of
Receiver
On October 3, 2005, the court issued its Findings
of
Fact and Conclusions
of
Law Re
Appointment
of
Receiver. Judge Henderson wrote:
By all accounts, the California prison medical care system is
broken beyond repair. The harm already done in this case to
California's prison inmate population could not be more grave,
and the threat of future injury and death is virtually guaranteed in
the absence of drastic action. The Court has given defendants
every reasonable opportunity to bring its prison medical system
up to constitutional standards, and it is beyond reasonable dispute
that the State has failed. 	Indeed, it is an uncontested fact that, on
average, an inmate in one of California's prisons needlessly dies
every six to seven days due to constitutional deficiencies in the
CDCR's medical delivery system.
26

After reviewing testimony provided during the evidentiary hearings between May and June,
the judge concluded that appointment of a receiver was necessary. The judge did not name a
receiver at that time. Instead, he stated that a search was underway and that the receiver would
be appointed in the future. The judge <lid issue an Order Appointing Court Expert "to assist
the Court in identifying discrete, urgently needed, remedial measures that can be undertaken
immediately without interfering with the comprehensive and systemic reform that the Receiver
will necessarily undertake." Among other things, the expert was authorized by the court to
meet and confer with the parties to the Plata case and the Coalition of CDCR Health C are
Unions concerning concrete measures that can be undertaken to address issues such as staffing,
adequate peer review and investigations following serious injury or death of an inmate.
On November 14, 2005, Correctional Expert John Hagar issued a Report Regarding
Clinical Staffing. He found that, in terms of staffing, the CDCR' s health care system was in
worse shape than the conditions existing at the time of the evidentiary hearings in May and
June, and the vacancy rate had climbed from 15 percent to 30 percent. Hagar set out several
reasons the health care system had deteriorated. The report also stated that the failure to
manage the QICM program had actually increased the physician shortage in CDCR. While
raising the bar to require board certification or eligibility, CDCR failed to implement
improvements in its hiring and recruitment process and failed to communicate the new
standard to companies that traditionally provide contract physicians to CDCR. Hagar wrote:
Likewise, for a variety of reasons, including the need to bargain
with the UAPD concerning QICM (a dispute which led to
litigation between the union and the State), this quality related
program was not implemented in a timely manner.
Unfortunately, QICM also appears to have limited impact in
identifying substandard physicians. 11
11 Hagar noted that only two CDCR physicians had been found unsuitable for practicing
medicine in the correctional environment.
27

Moreover, as a direct consequence
of
QICM, according to CDCR
officials and affirmed by UAPD, almost 60 physicians have quit
their jobs. While CDCR and the UAPD disagree concerning why
certain
of
these doctors terminated their employment, there is
consensus that some left because they believed they may fail the
QICM examination while others quit out
of
frustration because
of
bad working conditions and a lack
of
leadership at Health
Services Headquarters. To some CDCR doctors, QICM was "the
last straw."
Hagar recommended a series
of
reforms in CDCR's hiring and employment policies.
CDCR raised numerous objections to Hagar's report. 	With respect to QICM,
CDCR
asserted that
....
it is simply too early in QICM implementation to draw this
conclusion. QICM has had a dramatic impact as about twenty
percent
of
the total physician workforce left CDCR between July
2004 and July 2005.
Of
those 52 physicians who left CDCR, the
vcfst
majority lacked board certification or admissibility in Family
Practice or Internal Medicine or left under adverse circumstances.
Furthermore, these physicians have been replaced by better
credentialed and better qualified physicians. Finally, it is
important to recall that QICM was developed in conjunction with
Court experts, Plaintiffs, and Defendants. Following such
development, the Court ordered its implementation.
On December
1,
2005, Judge Henderson issued an Order Re Interim Remedies Relating to
Clinical Staffing adopting Hagar's recommendations.
Appointment
of
Receiver
On February 14, 2006, Judge Henderson issued an Order Appointing Receiver. The
Receiver was given the authority to "negotiate new contracts and to renegotiate existing
contracts, including contracts with labor unions, in the event that such action is necessary for
the Receiver to fulfill his duties under this Order. The Receiver was also given authority with
respect to "Governing State Laws, Regulations, and Contracts."
The Receiver shall make all reasonable efforts to exercise his
powers, as described in this Order, in a manner consistent with
California state laws, regulations, and contracts, including labor
contracts. In the event, however, that the Receiver finds that a
28

state law, regulation, contract, or other state action or inaction
is
clearly preventing the Receiver from developing or implementing
a constitutionally adequate medical health care system, or
otherwise clearly preventing the Receiver from carrying out his
duties as set forth in this Order, and that other alternatives are
inadequate, the Receiver shall request the Court to waive the state
or contractual requirement that is causing the impediment. Upon
receipt
of
any such request, the Court shall determine the
appropriate procedures for addressing such request on a case-by-
case basis.
Robert Sillen was appointed to serve as Receiver. In a separate order, Correctional Expert
Hagar was appointed to assist the Receiver.
12
ISSUE
(
1)	
Should this dispute be deferred to arbitration?
(2)	
If
not, did the State refuse to negotiate about the decision to implement the QICM
program, in violation
of
its duty to bargain under the Dills Act?
CONCLUSIONS OF LAW
The State argues as a threshold matter that the complaint should be deferred to
arbitration under section 3514.5(a)(2). That section provides in relevant part that PERB shall
not
....
issue a complaint against conduct also prohibited by the
provisions
of
the agreement between the parties until the
grievance machinery
of
the agreement,
if
it exists and covers the
matter at issue, has been exhausted, either by settlement or
binding arbitration. However, when the charging party
demonstrates that resort to contract grievance procedure would be
futile, exhaustion shall not be necessary.
12
On October 31, 2005, CDCR requested judicial notice of the Findings of Fact and
Conclusions of Law Re Appointment of Receiver. 	On November 30, 2005, UAPD requested
judicial notice of the Correctional Expert's Report Re Clinical Staffing. 	On December 8, 2005,
UAPD requested judicial notice of the Order Re Interim Remedies Relating to Clinical Staffing
and Associated Briefing. On March 9, 2006, CDCR requested judicial notice of the Order
Appointing Receiver and the Class Action Order appointing the Correctional Expert to assist
the Receiver. These requests are hereby granted.
29

The State argues that the MOU covers the matter at issue here and section 3514.5(a)(2) creates
a jurisdictional bar that precludes PERB from adjudicating the issue raised by the complaint.
The State also argues under section 3514.5(b) that PERB has no jurisdiction
over
this
matter. 	That section provides in relevant part:
The board shall not have authority to enforce agreements between
the parties, and shall not issue a complaint on any charge based
on alleged violation
of
such an agreement that would not also
constitute an unfair practice under this chapter.
The State claims this provision similarly constitutes a jurisdictional bar to PERB adjudicating
this matter.
In response, UAPD argues that deferral is an affirmative defense that is waived
if
not
timely asserted, and the State has not raised the defense in a timely manner. 	UAPD argues,
moreover, that the issue raised by the complaint is not a mere contract violation but
rather a
complete abrogation
of
the MOU.
The State's argument rests on a rationale reflected in Lake Elsinore School District
(1987) PERB Decision No. 646. (Lake Elsinore) In that case, the Board held that section
3541.5(a)(2)
of
the Educational Employment Relations Act (EERA),
13
which contains
language identical to Dills Act section 3514.5(a)(2), established a jurisdictional rule that a
charge must be dismissed and deferred arbitration if: (1) the grievance machinery
of
the
agreement covers the matter at issue and culminates in binding arbitration; and (2) the conduct
complained
of
in the charge is prohibited by the provisions
of
the agreement between the
parties. However, Lake Elsinore is no longer controlling in deferral cases. 	In State
of
California (Department
of
Food and Agriculture) (2002) PERB Decision No. 1473-S
(Department of Food and Agriculture), the Board reversed Lake Elsinore and held that section
3514.5(a)(2) requires deferral to arbitration only when doing so results in a decision on the
13
EERA is codified at Government Code section 3540 et seq.
30

merits. 	When deferral to arbitration does not result in a decision on the merits because the
employer asserts a procedural defense as justification for refusing to participate in an
arbitration, deferral is inappropriate because it would be futile. (Id., at pp. 7-8.) Thus, the
Board held in Department of Food and Agriculture that it will not defer to arbitration unless
the employer agrees to waive procedural defenses.
In East Side Union High School District (2004) PERB Decision No. 1713 (East Side),
the Board further clarified its post-Lake Elsinore deferral doctrine, holding that it would no
longer treat deferral as a jurisdictional bar. In East Side the Board declared it will treat
deferral as an affirmative defense that must be raised in a timely manner, or waived. 	(East
Side, at p. 4.)
The State has not raised the affirmative defense of deferral in a timely manner. 	The
State raised deferral for the first time at the outset of the hearing. 	Therefore, it is untimely and
deemed waived. (East Side, at p. 4.)
Nevertheless, the State insists that it raised the deferral defense in its answer, which
asserts that "the complaint does not state facts sufficient to constitute a cause of action under
the Ralph C. Dills Act." According to the State, this defense is derived from Code of Civil
Procedure section 430.10, which provides that a party may demurrer or answer on the ground
that the pleading does not state facts sufficient to constitute a cause of action. 	Code of Civil
Procedure section 480.30(a) provides that "[i]f the party against whom a complaint or cross-
complaint has been filed fails to object to the pleading, either by demurrer or answer, that party
is deemed to have waived the objection unless it is an objection that the court has no
jurisdiction of the subject matter of the cause of action alleged in the pleading or an objection
that the pleading does not state facts sufficient to constitute a cause of action." The State
31

argues that "this broad affirmative defense
is
asserted when a party is testing the
power or
jurisdiction
of
the court."
As UAPD argues, the State's argument is yet another untimely challenge to the
Board's
jurisdiction. The purpose
of
requiring that an affirmative defense be raised in a timely manner
is to provide the agency and opposing counsel with notice so that a claim can be addressed and
disposed
of
in advance
of
hearing to prevent prejudice to opposing counsel, insure a fair
litigation process, and avoid unnecessary expenditure
of
resources in preparation for hearing
if
the claim is meritorious. 	(See e.g., Beverly Hills Unified School District (1990) PERB
Decision No. 789, pp. 13-14.) The State's assertion in its answer that the complaint
"does
not
state facts sufficient to constitute a cause
of
action" is overly broad and did not reasonably put
either the Board or opposing counsel on notice
of
the deferral claim. 	It does not qualify as an
explicit, timely assertion
of
a deferral defense. And, it bears repeating that deferral is
an
affirmative defense under current Board precedent, not a jurisdictional doctrine. Where, as
here, the defense is not clearly raised in a timely manner, it is considered waived. (East Side,
p. 4.)
The State also has failed to meet the requirements for deferral set out in Dry
Creek
Joint Elementary School District (1980) PERB Order No. Ad-8la. (Dry Creek.) Under Dry
Creek, the requirements for deferral are that (1) the dispute must arise within a stable
bargaining relationship; (2) the employer must be willing to proceed to arbitration and waive
procedural defenses; and (3) the contract and its meaning must lie at the center
of
the dispute.
The State has not indicated that it is willing to arbitrate and will waive procedural defenses;
and, as noted above, the meaning
of
the contract does not lie at the center
of
the complaint.
Therefore, even assuming the dispute is subject to deferral, the State has not raised the defense
32

in a timely manner, nor has it satisfied the Dry Creek requirements. The deferral claim is
rejected. 	(Id.; Department
of
Food and Agriculture, at
p.
13.)
It is unnecessary to address the State's argument that various sections
of
the
MOU
cover the issue raised by the complaint. These claims have already been rejected on the record
at the outset
of
the hearing. 	Suffice it to say that the allegation in the complaint is not that the
State merely defaulted on a contractual obligation that may be resolved by interpretation
of
the
performance evaluations provisions in sections 12.5, 16.2, or the various Government Code
sections covering performance evaluations incorporated by reference in section 17
.2
of
the
MOU. Nor does the allegation involve interpretation
of
the duty to engage in "impact"
bargaining under sections 17.1
of
the MOU. Rather, the allegation in the complaint is that the
State unilaterally implemented an entirely new policy to evaluate the competency
of
physicians. As such, it
is
not subject to deferral. (Grant Joint Union School District (1982)
PERB Decision No. 196, p. 9 (Grant)
The Plata Case Defense
The State argues that neither the Dills Act nor the MOU create barriers that prevent
CDCR from addressing "life and death" matters in the prison system, and it had no obligation
to bargain with UAPD before entering into a stipulation or consent decree in the context
of
the
Plata case. UAPD was permitted to intervene in Plata on a limited basis, but the court refused
to modify the Patent Care Order. According to the State, the court "balanced the life and death
interests
of
the inmates against the collective bargaining interests
of
the physicians and
concluded the health and safety issues had to prevail."
Even assuming it had a duty to bargain before entering into the stipulated order, the
State continues, it had no duty to bargain in this instance because applicable case law holds
that"[ e]xcept as part of court-ordered relief after a judicial determination of liability, an
33

employer cannot unilaterally change a collective bargaining agreement as a means of settling a
dispute over whether the employer has engaged in constitutional violations." The State asserts
that the June 2002 Stipulation for Injunctive Relief was prepared to avoid a lengthy trial that
all parties to the Plata case acknowledged would result in a finding that CDCR was not
providing constitutionally adequate health case to inmates. The Stipulation was adopted by
Judge Henderson shortly thereafter. It provides that "the court shall find that this stipulation
satisfies the requirements of 18 U.S.C. section 3626(a)(l)(A) and shall retain jurisdiction to
enforce its terms."14 According to the State, this aspect of the Stipulation constitutes a specific
finding of liability concerning the Eighth Amendment violations, and it permitted the court to
assert continuing jurisdiction over the dispute. Thus, the September 17, 2004, Patient Care
Order constitutes court-ordered relief after a determination of liability.
UAPD cites two main reasons to reject the claim that the Patient Care Order required
CDCR to conduct independent competency testing. First, the Plata court made it clear that the
Patient Care Order did not absolve CDCR of its state bargaining obligations. 	Second, even had
the court not made this point explicit, the case law is clear that an employer may not avoid its
bargaining obligations through a consent decree with a third-party.
UAPD argues that the State has misinterpreted the PLRA, which was designed to limit
incursions by federal courts adjudicating prison reform cases into state law and state authority.
Thus, UAPD contends, the PLRA provides that "the court shall not order any prospective relief
that requires or permits a government official to exceed his or her authority under State or local
law or otherwise violates state law" unless certain stringent standards are met, including a
requirement that "no other relief will correct the violation of the federal right." (18 U.S.C.
section 3626(a)(l)(B).) According to UAPD, the Plata court did not make such a finding, and
1 This section is part of the Prison Litigation Reform Act (PLRA).
34

therefore the prospective relief contained in the Patient Care Order does not authorizethe
CDCR to override state law bargaining rights.
It is unnecessary to address the various arguments advanced by the State in asserting
this defense. Judge Henderson refused to set the Patient Care Order as a bar to Dills Act
claims, and the State acknowledged in the Plata litigation that it did not intend the Stipulated
Order to release it from its bargaining obligation. 	Responding to UAPD's motion to modify
the Patient Care Order, Judge Henderson wrote:
First, there is nothing on the face of the Stipulated Order that
expressly abrogates any bargaining rights provided by state law.
Rather, the Stipulated Order is silent with respect to such rights
and obligations. 	Second, the UAPD has failed to show that any
express terms of the Stipulated Order violated state law
bargaining rights. The objected to portions of the Stipulated
Order essentially require that the CDC (1) develop proposals on
various subjects, and (2) engage an independent entity to evaluate
the competency level of CDC physicians and provide remedial
training where appropriate. 	The substance of the agreement with
the independent entity is not addressed. The UAPD has not
persuasively demonstrated that these provisions - which on their
face do not preclude the CDC from meeting and conferring or
negotiating with the UAPD regarding any proposal that may be
developed or any other subject that is addressed in the Stipulated
Order - create any direct or irreconcilable conflict with the
UAPD's state law bargaining rights. Third, the CDC asserts that
it did not intend the Stipulated Order to discharge or release it
from any of its state law bargaining obligations. 	[Citation
omitted.] 	The plaintiffs concur in this interpretation.
In addition, Judge Henderson expressly noted that Dills Act claims are appropriately
resolved by PERB:
While it is proper for this Court to address the UAPD's
contention that that Stipulated Order itself violates state law, the
UAPD's claim that the CDC is committing an unfair labor
practice by failing to satisfy its negotiation or meet and confer
obligations with respect to the Stipulated Order - under either
state labor laws governing California public employees or its
contract with UAPD - must be raised before the California Public
Employees [sic] Relations Board ("PERB") - not this court.
35

Notably, the UAPD has filed an unfair labor practice claim before
PERB, and that is the proper forum for resolution of this issue.
Accordingly, the Court declines to be drawn into any disputes
between the UAPD and the CDC concerning whether the CDC
has violated any state laws governing public employee bargaining
(or its contract with the UAPD) in the course of implementing the
Stipulated Order. Modification of the Stipulated Order is simply
not an appropriate vehicle for addressing such issues.
Based on Judge Henderson's rulings, I conclude that the Plata case presents no bar to PERB
adjudicating the Dills Act claims advanced here by UAPD.
The Unilateral Change
It is well established that a pre-impasse unilateral change in a matter within the scope of
representation violates the duty to meet and negotiate in good faith. 	(San Mateo County
Community College District (1979) PERB Decision No. 94 (San Mateo); NLRB v. Katz
(1962) 369 U.S. 736 [50 LRRM 2177].) Unilateral changes are inherently destructive of
employee rights and are a per se failure of the duty to negotiate in good faith. 	(San Mateo;
Davis Unified School District, et al. (1980) PERB Decision No. 116.)
To prevail on a complaint of unilateral change, UAPD must establish by a
preponderance of the evidence that (1) CDCR implemented a change in practice, policy or
terms of an agreement; (2) the action was taken without giving UAPD notice or an opportunity
to bargain; (3) the action was not merely an isolated incident, but amounted to a change that
had a generalized effect or continuing impact on terms and conditions of employment; and (4)
the change concerned a matter within the scope of representation. (Grant, at pp. 9-10.)
It is clear that CDCR added a new component to the existing performance appraisal
system under the MOU and established practice. Prior to September 2004, physicians were
evaluated in three ways. First, they received annual performance appraisals under section 12.5
of the MOU in quality of work, analyzing situations, meeting work commitments, and other
related areas. 	Second, physicians were evaluated by the organized medical staff under a
36

"directed" or "non-directed" peer review process under section 16.2
of
the MOU. 	Third,
CDCR investigated the performance
of
physicians on an ad hoc basis, using peer review,
administrative protocols, and referrals to the California Medical Board. While these provisions
remained in effect as part
of
the MOU and practice, CDCR added an entirely new aspect to the
process when it implemented QICM.
QICM was a departure from the MOU and the established practice. 	QICM is an
independent entity which has authority to evaluate physicians for competency. Unlike the
MOU, the QICM evaluation consists
of
two phases and a chart review. 	Phase
lA
is a two-day
assessment using a variety
of
methods, including written, oral, and standardized computer
based examinations. It provides an overall picture
of
medical and communications skills,
knowledge, and professionalism. At the conclusion
of
Phase lA, the physician
is
assigned to
one
of
the three categories set out in the Patient Care Order. A physician who fails Phase IA
may be categorized as not competent to provide care to patients.
Phase lB is a one-day assessment whereby QICM staff observes physicians diagnosing
and managing simulated patients with scripted conditions relevant to the physician's normal
scope
of
practice. At the end
of
Phase lB, physicians are again placed in one
of
the three
categories in the Patient Care Order. Physicians who are placed in category three are subject to
"intensive chart review" for 25 inmate-patients over a
12
month period and given the
opportunity to attend a five day remedial training program at UCSD.
The Due Process Policy established the PPEC, a peer review body made up
of
three
physicians, a dentist, a psychiatrist, a psychologist, and a physician-chairperson. The PPEC is
responsible for managing the peer review process for routine reviews and for those required for
discipline. The PPEC makes findings and recommendations to CDCR, including revocation of
privileges, further monitoring and evaluation, or suspension/limitation of clinical privileges.
37

The policy also provides that the PPEC "shall recommend the revocation or denial of clinical
privileges of a practitioner identified as Category 3 as a result of the QICM peer review
process.
QICM had a generalized effect and a continuing impact on terms and conditions of
employment. 	QICM has wide application in that it impacts a large number of bargaining unit
employees because it requires them to undergo a competency evaluation unlike the system in
the MOU or practice. A physician who fails the QICM test may face revocation of clinical
privileges and be reported to the California Medical Board.
It is not disputed that the State refused to negotiate about the decision to implement
QICM. On September 10, 2004, CDCR and plaintiffs in the Plata case entered into a stipulated
agreement to engage an independent entity to evaluate physicians for competency, and Judge
Henderson signed the agreement one week later. Kanan gave Robinson notice of the
agreement in general and PACE in particular on September 16. On September 17, 2004,
CDCR informed Robinson that it anticipated implementing the Patient Care Order in about 30
days.
The parties began negotiations on October 7, 2004. 	Several sessions were held between
October and April 29, 2005. While the parties were negotiating, CDCR and UCSD were
deciding to implement QICM. They reached an agreement on January 31, 2005, and in late
February Navarro sent Robinson the actual policies and procedures.
At a March 4, 2005, negotiating session, Navarro made it clear that CDCR did not
intend to negotiate about the decision to select the independent entity: "it was not the state's
position that we were going to negotiate who the Department identified as the entity to
evaluate or train the doctors. 	That had already been done .... as a management decision."
Navarro said the State would negotiate only the effects of the decision.
38

Despite Robinson's objection to QICM and questions about the program, he said DPA
took the position that "not a single word [of QICM] can be changed. This is the way the test
is. Nothing will be changed." He said DP A would negotiate only "around the fringes" of the
policy, but topics such as "who the evaluator would be and what the evaluation would be was
not negotiated." After several meetings, the positions of the parties remained unchanged.
Bargaining over effects ended in late April or May, and PERB declared an impasse at
Navarro's request. An unsuccessful mediation session was held in early June and CDCR
began to send out evaluation notices to doctors on or about June 5. The parties' agreement on
effects was memorialized in an addendum to the MOU dated June 9, 2005, but no decision-
bargaining took place.
The main issue here is whether the decision to adopt QICM is a negotiable matter or a
fundamental management right. UAPD argues that the decision falls within the scope of
representation, and the MOU is evidence that CDCR has already negotiated with UAPD about
evaluations in general, the criteria for evaluations, and the persons who perform the evaluation.
CDCR's unilateral adoption of the QICM policy to evaluate the competence of physicians was
a departure from the MOU and established an entirely new system to accomplish this task.
In response, CDCR argues that the decision to adopt the QICM program does not fall
under the scope of representation. The State argues that the steps CDCR takes to provide
health care for inmates may involve wages, hours or other terms of employment, but
nevertheless implicate fundamental managerial prerogatives and thus are outside the scope of
representation. 	The State asserts that California courts have for decades recognized that some
decisions are so fundamental to the government's role in providing services to the public that
the decision should not be placed on the bargaining table.
Section 3516 provides:
39

The scope
of
representation shall be limited to wages, hours, and
other terms and conditions
of
employment, except, however, that
the scope
of
representation shall not include consideration
of
the
merits, necessity, or organization
of
any service or activity
provided by law or executive order.
At the outset, it
is
instructive to review the cases relied on by the parties in support
of
their
respective positions.
The phrase "wages, hours, and other terms and conditions
of
employment," construed
broadly, "could encompass practically any conceivable bargaining proposal;" and the phrase
"merits, necessity, or organization
of
any service or activity provided by law or executive
order," broadly construed, "could swallow the whole provision for collective negotiations and
relegate determination
of
all labor issues to the city's discretion." (Firefighters Union v. City
of
Vallejo (1974)
12
Cal.3d 608, 615 [116 Cal.Rptr. 507] (City
of
Vallejo).) 	In applying these
overlapping phrases, the court observed that "apparently the Legislature included the limiting
language not to restrict bargaining on matters directly affecting employees' legitimate interests
in wages, hours and working conditions but rather to forestall any expansion
of
the language
of
'wages, hours and working conditions' to include the more general managerial policy
decisions." (Id., at p. 616.)
In City
of
Vallejo, a union
of
firefighters proposed negotiations about a manning
procedure. The union claimed that its manpower proposal was not directed at general fire
prevention policy; rather, the union claimed it involved a matter
of
workload and safety
of
employees, both negotiable subjects. The city claimed that the proposal involved a matter of
fire prevention policy, and, as such, was a managerial prerogative. The court observed that if
the relevant evidence demonstrated the union's manpower proposal was directed at
maintaining a particular standard of fire prevention, as opposed to workload and employee
safety, the city's position would be well taken. (Id., at p. 619.) However, the court did not
40

resolve the question. The court remanded the matter to arbitration to establish a factual record
on which to base a decision. "The nature of the evidence presented to the arbitrators should
largely disclose whether the manpower issue primarily involves the workload and safety of the
men ('wages, hours and working conditions') or the policy of fire prevention of the city
('merits, necessity or organization of any government service'). On the basis of such a record,
the arbitrators can properly determine in the first instance whether or not, and to what extent,
the present manpower proposal is arbitrable." (Id., at pp. 620-621)
In Building Material and Construction Teamsters Union, Local 216 v. Farrell (1986) 41
Cal.3d 651 [224 Cal.Rptr. 688] (Building Material), the issue was whether elimination of two
positions and creation of new positions in a separate bargaining unit involved negotiable
topics, or a managerial prerogative. The court observed that "even when the action of an
employer has a significant and adverse effect on the wages, hours, or working conditions of the
bargaining unit employees, the employer may yet be excepted from the duty to bargain under
the 'merits, necessity, or organization"' limitation. "If the action is taken pursuant to a
fundamental managerial or policy decision, it is within the scope of representation only if the
employer's need for unencumbered decisionmaking in managing its operations is outweighed
by the benefit to employer-employee relations of bargaining about the action in question."
(Id., at p. 660) When decisions directly affect the "quality and nature of public services" the
"burden of requiring an employer to meet and confer about such fundamental decisions clearly
outweighs the benefits to employer-employee relations that bargaining would provide." (Id., at
p. 664) Finding the decision "to reorganize certain work hours" negotiable, the court
concluded it was hardly "fundamental" and had "little, if any, effect on public services."
Rather, "it primarily impacted the wages, hours, and working conditions of the employees in
question and thus was a proper subject for mandatory collective bargaining." (Id.)
41

Courts
of
appeal have taken a similar approach. In Berkeley Peace Officers Assn.
v.
City
of
Berkeley (1977) 76 Cal.App.3d
931
[143 Cal.Rptr. 255] (City
of
Berkeley), the
proposal involved a city's decision
to
(1) allow a member
of
the police commission to attend
hearings conducted by the police department to investigate complaints
of
officer misconduct,
and (2) send a representative to commission trial board meetings
to
answer questions
of
commission members concerning the department's position on individual complaints. 	The
decision was consistent with an existing regulation and therefore did not constitute a change in
working conditions. Applying City
of
Vallejo, the court found the decision not negotiable
because it involved "a matter
of
police-community relations" and a "fundamental policy
decision." (City
of
Berkeley, at p.
93
7)
In San Jose Peace Officers Assn.
v.
City
of
San Jose (1978)
78
Cal.App.3d 935 [ 144
Cal.Rptr. 638] (City
of
San Jose) a union
of
police officers attempted to negotiate about the
city's use
of
force policy governing when a peace officer may discharge his firearm. 	In
concluding the decision to implement the policy was not within the scope
of
representation, the
court recognized that the safety
of
police officers is clearly a negotiable term or condition
of
employment, but the danger posed to a police officer by a suspected criminal must be balanced
against difficult considerations
of
when an escaping criminal should pay the price
of
death for
ignoring a peace officer's command to stop. Viewed in this context, the court concluded, "the
safety of the policeman, as important as it is, is so inextricably interwoven with important
policy considerations relating to the basic concept
of
the entire system of criminal justice that
we cannot say that the use of force policy concerns 'primarily' a matter
of
wages, hours or
working conditions." (City of San Jose, at p. 946.)
In Holliday v. City of Modesto (1991) 229 Cal.App.3d 528 [280 Cal.Rptr. 206] (City of
Modesto), the court determined a decision to implement a drug testing policy fell within the
42

scope of representation. The appellate court found significant the lack of evidence at the trial
court level concerning the purpose the city sought to accomplish by ordering the drug testing.
Although public safety was one of the concerns in ordering the drug test, the city offered no
evidence that public safety was its primary consideration. "Because of the fundamental
differences between the use of force policy reviewed in [City of San Jose] and the drug-test
order involved here, and because of the absence of evidence showing that respondents' primary
purpose was protection of public safety, we cannot apply [City of San Jose] in this case." (City
of Modesto, at p. 539.) Accordingly, the court found the drug testing policy negotiable.
The most recent California Supreme Court case to address the scope of representation
in the public sector is Claremont Police Officers Association v. City of Claremont et al. (2006)
_Cal.4 th _ 	[47 Cal.Rptr.3d 69] (Claremont).) A lower appellate court held that a city's
decision to take measures to combat the practice of racial profiling was a fundamental policy
decision that directly affects the police department's mission to protect and serve the public
and thus was not negotiable. However, the lower court held that implementation of the policy
was not itself a fundamental policy decision and thus was negotiable. 	The issue before the
Supreme Court was whether the effects of the decision to implement a racial profiling policy
were negotiable. Reversing the appellate court, the Supreme Court applied a three-part test to
determine if the effects of the racial profiling policy was a matter within the scope of
representation or a managerial prerogative.
First, we ask whether the management action has "a significant
and adverse effect on the wages, hours, or working conditions of
the bargaining-unit employees." 	[Citation omitted.] If not, there
is no duty to meet and confer. 	[Citation omitted.] 	Second, we
ask whether the significant and adverse effect arises from the
implementation of a fundamental managerial or policy decision.
If not, then as in Building Material, the meet-and-confer
requirement applies. 	[Citation omitted.] 	Third, if both factors are
present - if an action taken to implement a fundamental
managerial or policy decision has a significant and adverse effect
43

on the wages, hours, or working conditions of the employees -
we apply a balancing test. The action "is within the scope of
representation only if the employer's need for unencumbered
decision-making in managing its operations is outweighed by the
benefit to employer-employee relations of bargaining about the
action in question." (Building Materials, supra, 41 Cal.3d at p.
660.) In balancing the interests to determine whether parties
must meet and confer over a certain matter [Citation omitted.], a
court may also consider whether the "transactional cost of the
bargaining process outweighs its value." [Citation omitted.]
(Claremont, 47 Cal.Rptr.3d at p. 80.)
The court concluded that the city had no duty to negotiate before implementing the policy
because the evidence did not establish that employees suffered any significant or adverse
effect. Thus, the court found no need to balance the city's need for unencumbered decision-
making against the benefit to be derived from collective bargaining.
In deciding whether a subject is negotiable or a management prerogative, PERB has
adopted an approach similar to that in Claremont and the cases cited above. In Anaheim Union
High School District (1981) PERB Decision No. 177 (Anaheim), the Board held that a subject
not expressly stated as within the scope of representation is negotiable if (1) it is logically and
reasonably related to wages, hours, or employment conditions; (2) the subject is of such
concern to both management and employees that conflict is likely to occur and the mediatory
influence of collective bargaining is an appropriate means of resolving the conflict; and (3) the
employer's obligation to negotiate would not significantly abridge its freedom to exercise
those managerial prerogatives essential to the achievement of its mission. (Id., at pp. 4-5.)
Applying Anaheim, PERB has on two occasions held that the criteria and procedures
for evaluating competency of employees, under normal circumstances, is a negotiable topic. In
Holtville Unified School District (1982) PERB Decision No. 250 (Holtville), a teachers' union
requested negotiations about a mandatory retirement policy that involved evaluating the
competency of teachers over the age of 70. Under the policy, three district-appointed
44

educators would conduct the evaluations. The Board held that the subject was
of
concern
to
both management and employees and likely to create conflict "because
of
its profound effect
on
a most fundamental aspect
of
employer-employee relations - termination
of
employment,"
and the process
of
collective bargaining is a viable means
of
resolving such disputes since it
"furthers the statutory objective
of
bringing a matter
of
mutual vital concern within the
framework
of
peaceful, private resolution and provides employees with the opportunity to
dissuade the employer or offer alternatives to the employer's chosen course
of
action." 	(Id., at
p. 7)
Because
of
the pervasive impact
of
compelled retirement
on
the
subjects enumerated in section 3543.2
[of
the Educational
Employment Relations Act], we cannot limit negotiation
of
such
a policy to the procedures to be employed in determining whether
aged employees are to be retained or terminated.
15
To so limit
bargaining is to give management virtually unlimited and total
control over this fundamental employment relationship which the
Legislature intended to be subject to the collective negotiation
scheme. 	Without the opportunity to negotiate the standards for
compelled retirement, the employee would be limited to little
more than deciding through which door he or she must exit. (Id.,
at p. 9.)
Thus, the Board found that negotiations would not interfere with a management prerogative
and the achievement
of
its mission. (Id., at pp. 8-9.)
In Walnut Valley Unified School District (1983) PERB Decision No. 289 (Walnut
Valley), a school district unilaterally adopted an evaluation policy governing the issuance
of
certificates
of
competence to certificated employees over the age
of
65. 	The policy included
15
Section 3543.2(a)
of
the Educational Employment Relations Act (EERA) provides:
The scope
of
representation shall be limited to matters relating to
wages, hours
of
employment, and other terms and conditions
of
employment. 	"Terms and conditions
of
employment" mean
health and welfare benefits as defined by Section 53200, leave,
transfer and reassignment policies, safety conditions
of
employment, class size, procedures to be used for the evaluation
of employees
.... 
45

six criteria for determining competency: capabilities; effectiveness; classroom management
and control; professionalism; planning and preparation; and mental and physical health. The
policy also included the procedure to be followed, including a requirement that an employee
request continued employment, a physical and/or psychological examination, final
determination by the superintendent and the school board, and timelines to complete the
procedure. 	(Id., at pp. 5-6.) Following its reasoning in Holtville, the Board held negotiable the
.... criteria for determining competency to continue employment
because they establish the areas the District will evaluate. As
such they are negotiable because they relate to wages, hours and
terms and conditions of employment. This matter is of such
concern to both the employees and the employer that conflict is
likely to occur for it touches the most fundamental aspect of the
employment relationship, its continuity. 	The mediatory influence
of collective negotiations would help to assure that all concerned
have the opportunity to discuss a matter of mutual interest within
the framework of peaceful, private resolution. Finally, the
evidence does not indicate that these [criteria] are issues of
fundamental policy which would significantly abridge the
employer's freedom to manage the enterprise or achieve its
mission. We conclude, therefore, that Policy No. 6460 in its
entirety, including both the procedure and the criteria to be
employed in evaluating the competency of employees over 65 to
continue employment was negotiable. 	(Id., at p. 9.).
UAPD argues that Holtville and Walnut Valley squarely hold that competency
evaluations are negotiable and thus are controlling here. 	The State would distinguish these
cases. 	It argues that the school district in Holtville presented no business reasons to establish
that teachers aged 70 or older, as a class, were incompetent or otherwise unfit for continued
employment. (Holtville, at pp. 8-9.) Hence, the district faced no immediate threat to its right
to manage its operation. 	The same was true in Walnut Valley. 	There was no evidence that the
criteria to evaluate competency of teachers interfered with the district's right to manage its
operation or achieve its mission. (Walnut Valley, at p. 9.) Therefore, the State argues, these
cases stand only for the proposition that, under normal circumstances, the decision to
46

implement procedures and criteria to evaluate the competency of employees are negotiable.
The difference between the evidence in this case and the evidence in those cases, the State
reasons, distinguishes them from this case and should lead to a different conclusion. 	I agree.
As the cases drawing the line between the scope of representation and managerial
prerogative make clear, courts and the Board balance the benefit of negotiations against an
employer's right to make fundamental policy decisions on a case-by-case basis, considering
the precise factual context in which a union proposal or a management decision is made.
Following the same approach, I find that the evidence plays a key role here, for the context in
which this dispute arose is extraordinary.
A summary of the conditions identified by the experts is necessary to balance the
competing rights recognized in section 3516. The experts' July 16, 2004, report indicated
there was an "emerging pattern of inadequate and seriously deficient physician quality in
[CDCR] facilities." The report severely criticized CDCR's credentialing process and the basic
qualifications of its physicians. The report said it was "extremely difficult" under the existing
structure to "weed out poor quality physicians." Physicians were treating patients outside their
field of training, and potentially life threatening mistakes were being made. At one facility, the
experts found some physicians had problems such as mental health disorders, and some
physicians lost privileges due to substance abuse or incompetence. 	The criticism was not
limited to Unit 16 employees. Because of a serious lack of qualified supervisory physicians,
the peer review process was not working and mistakes in patient care were not corrected.
Goldenson corroborated these findings in his testimony. He credibly testified that the
experts "found a system that was totally broken in almost every aspect," "numerous episodes"
where medical care was "substandard," physicians in the peer process "who weren't
competent," and deaths had occurred as a result of the substandard care. The experts also
47

found 300 cases where death reviews were not performed, a significant number reflected
"pretty egregious" mistakes, and "a significant number of the deaths from the information we
had received would have been preventable," Goldenson said. He testified the situation was
worse than the experts initially thought.
CDCR' s selection of QICM to address the problem was dictated by the extraordinary
circumstances presented here. 	Granted, the experts did not select QICM as the independent
entity, and they were not familiar with the program initially. 	After a visit to UCSDin August
2004, however, they were "extremely impressed," and thought it would be an"excellent
evaluation tool," 	Goldenson testified. According to Goldenson, the experts formed the
opinion that "PACE was the only program of its sort that evaluated the competency of
physicians in California. 	And that it was the most comprehensive program of its type in the
country."
Goldenson could not recall any discussion about whether it was the only alternative,
and he said there are ways such an evaluation could have been done "in other settings."
However, the
.... feeling was that in CDC, because of the scale of the problem
and the lack of supervisory staff as we talked about, in terms of
the chief Medical Officers and the Chief Physicians, that ways
that it would work in other systems where you had that kindof
supervision above the physicians wouldn't work here.
So that things like Peer Review and depending on someone's
supervisor to make sure that they do a good job, you know, which
could work somewhere else and works, for example, in my
system, wouldn't work here.
Goldenson credibly testified the current system of evaluation had failed, it lacked competent
people to perform appraisals, "physicians who really shouldn't be practicing were still
practicing," and "PACE was the quickest way" to prevent "as many of the further deaths that
are preventable as possible." Because of the magnitude of the problem, approaches that may
48

have worked in other settings simply would not work in CDCR. 	During his testimony during
the Order to Show Cause hearing in June 2005, Goldenson reiterated his opinion.
I'm extremely concerned that in a number of the cases that I have
looked at that people have been dying unnecessarily, that their
deaths could have been prevented. 	So that the question here is a
lot bigger than just saying whether it's a constitutional system in
terms of providing constitutional health care, because I've seen
systems where constitutional health care is the issue, but people
aren't dying in the numbers they are dying in the [California]
system in terms of preventable deaths.
Judge Henderson shared a similar view. 	In his May 10, 2005, Order to Show Cause, he
pointed out that "defendants themselves have conceded that a significant number of prisoners
have died as a direct result of this lack of care, and it is clear to the Court that more are sure to
suffer and die if the system is not immediately overhauled." In his order appointing a receiver
after the hearings, Judge Henderson concluded that the situationhad not changed.
By all accounts, the California prison medical care system is
broken beyond repair. 	The harm already done in this case to
California's prison inmate population could not be more grave,
and the threat of future injury and death is virtually guaranteed in
the absence of drastic action. 	The Court has given defendants
every reasonable opportunity to bring its prison medical system
up to constitutional standards, and it is beyond reasonable dispute
that the State has failed. 	Indeed, it is an uncontested fact that, on
average, an inmate in one of California's prisons needlessly dies
every six to seven days due to constitutional deficiencies in the
CDCR's medical delivery system.
It is against this background that the parties' rights must be weighed.
As the court observed in Building Trades, "even when the action of an employer has a
significant and adverse effect on the wages, hours, or working conditions of the bargaining unit
employees, the employer may yet be excepted from the duty to bargain under the 'merits,
necessity, or organization"' limitation. "If the action is taken pursuant to a fundamental
managerial or policy decision, it is within the scope of representation only if the employer's
need for unencumbered decision-making in managing its operations is outweighed by the
49

benefit to employer-employee relations of bargaining about the action in question." (Building
Trades, at p. 660) When decisions directly affect the "quality and nature of public services"
the "burden of requiring an employer to meet and confer about such fundamental decisions
clearly outweighs the benefits to employer-employee relations that bargaining would provide."
(Building Trades, at p. 664)
Although the decision to implement QICM impacted wages, hours and employment
conditions of Unit 16 physicians, the decision was not made primarily to alter these matters.
Unlike the decision to eliminate positions in a bargaining unit and create new positions an a
separate bargaining unit in Building Trades, the primary purpose of the decision to implement
QICM involved a fundamental policy matter related to "the quality and nature of public
service." (Building Trades, at p. 664.) The primary purpose of the decision was to weed out
incompetent physicians and bring health care in the prisons to a constitutionally acceptable
level. As in City of San Jose, negotiable terms and conditions of employment may have been
"inextricably interwoven" with the decision to implement QICM, but the decision was made
primarily to address the substandard health care delivered to inmates. Nor is this case like City
of Modesto, where a court found the decision to implement a drug testing policy negotiable
because the record lacked evidence that the purpose of the testing was primarily to protect
public safety. The evidence in this matter clearly shows that the primary purpose of the
decision to implement QICM was to establish constitutionally acceptable health care in the
prisons.
In addition, the record in this case stands in stark contrast to the records in Holtville and
Walnut Valley. In Holtville, the Board recognized that there was no evidence that teachers
over the age of 70, as a class, were incompetent or otherwise unfit for duty, and in Walnut
Valley the Board pointed out that there was no evidence that the criteria to evaluate involved a
50

fundamental policy which would significantly abridge the district's freedom to manage the
enterprise or achieve its mission. In applying the Anaheim balancing test in those cases, the
Board was not faced with evidence that incompetent teachers actually had undermined the
educational process on a large scale, or that even a single student had suffered in any way. In
contrast, the overwhelming evidence here is that the level of health care for inmates had fallen
below constitutionally acceptable standards, and inmate deaths had occurred as a result.
Moreover, unlike Holtville and Walnut Valley, this case does not involve a single institution;
rather, it involves an attempt to remedy a deficiency in a public service throughout a huge
statewide correctional health care system. The marked difference between the record evidence
here and the records in Holtville and Walnut Valley distinguishes this case from those cases
and leads to a different conclusion under the Anaheim balancing test.
Lastly, it is noteworthy that the serious lack of qualified supervisory physicians in
CDCR rendered existing rating systems such as the performance appraisal and peer review
processes inadequate to realistically address a crisis of this magnitude in the conventional way.
Goldenson confirmed in his testimony that an evaluation of physician competency could have
been made "in other settings," but because the "scale of the problem and the lack of
supervisory staff .... in terms of the chief Medical Officers and the Chief Physicians, that
ways that it would work in other systems where you had that kind of supervision above the
physicians wouldn't work here." In terms of alternatives, Goldenson, the other experts, and
Judge Henderson thought QICM was an excellent idea. 	And the experts formed the opinion
that QICM was the only program of its kind in California and the country to evaluate
physicians on the scale needed in CDCR. Plainly, the options available to address the health
care crisis in a meaningful fashion were limited.
51

Therefore, I conclude the decision to implement the QICM program primarily involved
the need to provide constitutionally acceptable health care and prevent inmate deaths. 	The
decision may impact wages, hours and other terms and conditions of employment, but the
decision was made primarily to implement a fundamental policy decision related to the quality
and nature of essential public services. Under the tests articulated by the Board in Anaheim
and by the courts in a line of cases beginning with City of Vallejo, when the right of CDCR to
manage its operations and achieve its mission by providing constitutionally required health
care for inmates in the California prison system is balanced against the benefits to be achieved
under the duty to bargain the decision with UAPD, the balance tips in favor of CDCR. 16
Accordingly, I find CDCR had no duty to negotiate about the decision to implement QICM.
PROPOSED ORDER
Based on the foregoing findings of fact, conclusions of law and the entire record in this
case, the complaint and underlying unfair practice charge in Case No. SF-CE-228-S, Union of
American Physicians and Dentists v. State of California (Department of Corrections and
Rehabilitation) are hereby dismissed.
Pursuant to California Code of Regulations, title 8, section 32305, this Proposed
Decision and Order shall become final unless a party files a statement of exceptions with the
Public Employment Relations Board (PERB or Board) itself within 20 days of service of this
Decision. The Board's address is:
Public Employment Relations Board
Attention: Appeals Assistant
1031 18th Street
Sacramento, CA 95814-4174
(916) 322-8231
FAX: (916) 327-7960
52
16Given these conclusions, it is unnecessary to address CDCR's waiver and business
necessity defenses.

In accordance with PERB regulations, the statement of exceptions should identify by
page citation or exhibit number the portions of the record, if any, relied upon for such
exceptions. (Cal. CodeRegs., tit. 8, sec. 32300.)
A document is considered "filed" when actually received during a regular PERB
business day. (Cal. Code Regs., tit. 8, secs. 32135(a) and 32130; Gov. Code sec. 11020(a).) A
document is also considered "filed" when received by facsimile transmission before the close
of business together with a Facsimile Transmission Cover Sheet which meets the requirements
of California Code ofRegulations, title 8, section 32135(d), provided the filing party also
places the original, together with the required number of copies and proof of service, in the
U.S. mail. (Cal. CodeRegs., tit. 8, sec. 32135(b), (e) and (d); see also Cal. CodeRegs., tit. 8,
secs. 32090 and 32130.)
Any statement of exceptions and supporting brief must be served concurrently with its
filing upon each party to this proceeding. Proof of service shall accompany each copy served
on a party or filed with the Board itself. (See Cal. CodeRegs., tit. 8, secs. 32300, 32305,
32140, and 32135(c).)
53
Fred D'Orazio
Administrative Law Judge