State of California (Department of Personnel Administration) (PERB 2152S)

STATE OF CALIFORNIA
DECISION OF THE
PUBLIC EMPLOYMENT RELATIONS BOARD
STATE OF CALIFORNIA
DECISION OF THE
PUBLIC EMPLOYMENT RELATIONS BOARD
INTERNATIONAL UNION OF OPERA TING
ENGINEERS, UNIT 12,
Charging Party,
V.
STATE OF CALIFORNIA (DEPARTMENT OF
PERSONNEL ADMINISTRATION),
Respondent.
INTERNATIONAL UNION OF OPERATING
ENGINEERS, UNIT 12,
Charging Party,
V .
STATE OF CALIFORNIA (DEPARTMENT OF
PERSONNEL ADMINISTRATION),
Respondent.
Case No. LA-CE-664-S
PERB Decision No. 2152-S
December 16, 2010
Case No. LA-CE-664-S
PERB Decision No. 2152-S
December 16, 2010
Appearances:	Appearances: 	Levy, Stern & Ford by Trina R. Roderick, Attorney, for International Union of
Operating Engineers, Unit 12; Shaun R. Spillane and Will M. Yamada, Labor Relations
Counsel, for State of California (Department of Personnel Administration).
Levy, Stern & Ford by Trina R. Roderick, Attorney, for International Union of
Operating Engineers, Unit 12; Shaun R. Spillane and Will M. Yamada, Labor Relations
Counsel, for State of California (Department of Personnel Administration).
Before Dowdin Calvillo, Chair; McKeag and Wesley, Members.	Before Dowdin Calvillo, Chair; McKeag and Wesley, Members.
DECISION	DECISION
WESLEY, Member: This case is before the Public Employment Relations Board
(PERB or Board) on appeal by the International Union of Operating Engineers, Unit 12
(IUOE) of a Board agent's dismissal of its unfair practice charge. The charge alleged that the
State of California (Department of Personnel Administration) (State or DP A) violated the
Ralph C. Dills Act (Dills Act)
WESLEY, Member: This case is before the Public Employment Relations Board
1 by unilaterally implementing a plan to furlough state employees
three days each month pursuant to executive orders issued by the Governor. The Board agent
found the charge did not state a prima facie case and dismissed the charge.
three days each month pursuant to executive orders issued by the Governor. The Board agent
1 The Dills Act is codified at Government Code section 3 512 et seq. Unless otherwise
indicated, all statutory references herein are to the Government Code.
The Dills Act is codified at Government Code section 3512 et seq. Unless otherwise
(PERB or Board) on appeal by the International Union of Operating Engineers, Unit 12
(IUOE) of a Board agent's dismissal of its unfair practice charge. The charge alleged that the
State of California (Department of Personnel Administration) (State or DPA) violated the
Ralph C. Dills Act (Dills Act)' by unilaterally implementing a plan to furlough state employees
found the charge did not state a prima facie case and dismissed the charge.
indicated, all statutory references herein are to the Government Code.

The Board has reviewed the dismissal and the record in light
ofIUOE's
appeal,	The Board has reviewed the dismissal and the record in light of IUOE's appeal, the
2 the
State's response thereto, and the relevant law. Based on this review, the Board affirms the
dismissal as discussed below.
State's response thereto, and the relevant law. Based on this review, the Board affirms the
BACKGROUND	BACKGROUND
IUOE is the exclusive representative
of
employees in State Bargaining Unit 12. IUOE
and the State are parties to a memorandum
of
understanding that expired on June 30, 2008.
IUOE is the exclusive representative of employees in State Bargaining Unit 12. IUOE
On December 19, 2008, the Governor issued Executive Order S-16-08, which declared
that a fiscal emergency existed within the State
of
California and ordered DP A to implement a
plan to furlough state employees two days per month, effective February
1,
2009 through
June 30, 2010. Executive Order S-16-08 described the State's fiscal situation, including
declarations that without effective action the deficit was estimated to grow to a $42 billion
budget shortfall, that there was a substantial risk that California would be unable to meet its
financial obligations beginning February 2009, and that failure to substantially reduce the
deficit would make it likely the State would miss payroll and other essential services payments
in early 2009.
On December 19, 2008, the Governor issued Executive Order S-16-08, which declared
that a fiscal emergency existed within the State of California and ordered DPA to implement a
plan to furlough state employees two days per month, effective February 1, 2009 through
June 30, 2010. Executive Order S-16-08 described the State's fiscal situation, including
declarations that without effective action the deficit was estimated to grow to a $42 billion
budget shortfall, that there was a substantial risk that California would be unable to meet its
financial obligations beginning February 2009, and that failure to substantially reduce the
deficit would make it likely the State would miss payroll and other essential services payments
in early 2009.
2
On January 9, 2009, IUOE filed the instant unfair practice charge alleging that the
State's implementation
of
the furlough plan was an unlawful unilateral change in policy.
On January 9, 2009, IUOE filed the instant unfair practice charge alleging that the
On July
1,
2009, citing new evidence
of
a continuing fiscal emergency, the Governor
issued Executive Order S-13-09, directing DPA to increase employee furloughs to three days
per month. Executive Order S-13-09 included declarations that revenue projections continued
to drop, putting the State's budget shortfall at more than $24 billion for fiscal years 2008-09
and 2009-10, and that the State Controller determined that without effective action the State
On July 1, 2009, citing new evidence of a continuing fiscal emergency, the Governor
I IUOE's subsequent request to withdraw its appeal and charge is discussed herein.	UOE's subsequent request to withdraw its appeal and charge is discussed herein.
2
dismissal as discussed below.
and the State are parties to a memorandum of understanding that expired on June 30, 2008.
State's implementation of the furlough plan was an unlawful unilateral change in policy.
issued Executive Order S-13-09, directing DPA to increase employee furloughs to three days
per month. Executive Order S-13-09 included declarations that revenue projections continued
to drop, putting the State's budget shortfall at more than $24 billion for fiscal years 2008-09
and 2009-10, and that the State Controller determined that without effective action the State

would have insufficient cash to meet its obligations starting July 2009 and would need to issue
registered warrants.
would have insufficient cash to meet its obligations starting July 2009 and would need to issue
On August 10, 2009, IUOE amended its charge to allege the State unilaterally
implemented a third furlough day.
On August 10, 2009, IUOE amended its charge to allege the State unilaterally
In a December 16, 2009 warning letter to IUOE, the Board agent cited Sonoma County
Organization Employees
v.
County
of
Sonoma (1991) 1 Cal.App.4 th 267 (County
of
Sonoma) in
support
of
the determination that the implementation
of
the furlough plan fell within the
emergency exception
of
Dills Act section 3516.5.
In a December 16, 2009 warning letter to IUOE, the Board agent cited Sonoma County
3 In County
of
Sonoma, the court held that a
declaration
of
emergency is presumed valid and the party challenging the declaration bears the
burden
of
proving it invalid. The Board agent found that IUOE did not allege any facts to
rebut the emergency presumption. IUOE declined to file an amended charge in response to the
warning letter to add new factual allegations or legal theories. Thereafter, the Board agent
dismissed the charge.
emergency exception of Dills Act section 3516.5." In County of Sonoma, the court held that a
3
Dills Act section 3516.5 states:	Dills Act section 3516.5 states:
Except in cases
of
emergency as provided in this section, the
employer shall give reasonable written notice to each recognized
employee organization affected by any law, rule, resolution, or
regulation directly relating to matters within the scope
of
representation proposed to be adopted by the employer, and shall
give such recognized employee organizations the opportunity to
meet and confer with the administrative officials or their
delegated representatives as may be properly designated by law.
Except in cases of emergency as provided in this section, the
In cases
of
emergency when the employer determines that a law,
rule, resolution, or regulation must be adopted immediately
without prior notice or meeting with a recognized employee
organization, the administrative officials or their delegated
representatives as may be properly designated by law shall
provide such notice and opportunity to meet and confer in good
faith at the earliest practical time following the adoption of such
law, rule, resolution, or regulation.
In cases of emergency when the employer determines that a law,
rule, resolution, or regulation must be adopted immediately
without prior notice or meeting with a recognized employee
organization, the administrative officials or their delegated
representatives as may be properly designated by law shall
provide such notice and opportunity to meet and confer in good
faith at the earliest practical time following the adoption of such
law, rule, resolution, or regulation.
County
of
Sonoma interpreted a nearly identical statutory provision under the Meyers-
Milias-Brown Act (MMBA). (The MMBA is codified at§ 3500 et seq.)
County of Sonoma interpreted a nearly identical statutory provision under the Meyers-
Milias-Brown Act (MMBA). (The MMBA is codified at $ 3500 et seq.)
33
registered warrants.
implemented a third furlough day.
Organization Employees v. County of Sonoma (1991) 1 Cal.App.4" 267 (County of Sonoma) in
support of the determination that the implementation of the furlough plan fell within the
declaration of emergency is presumed valid and the party challenging the declaration bears the
burden of proving it invalid. The Board agent found that IUOE did not allege any facts to
rebut the emergency presumption. IUOE declined to file an amended charge in response to the
warning letter to add new factual allegations or legal theories. Thereafter, the Board agent
dismissed the charge.
employer shall give reasonable written notice to each recognized
employee organization affected by any law, rule, resolution, or
regulation directly relating to matters within the scope of
representation proposed to be adopted by the employer, and shall
give such recognized employee organizations the opportunity to
meet and confer with the administrative officials or their
delegated representatives as may be properly designated by law.

IUOE appealed the dismissal
of
the charge on February 11, 2010. The State filed an
opposition to the appeal on March
1,
2010. Subsequently, in a letter to the Board dated
April 28, 2010, IUOE sought to withdraw its appeal and dismiss its unfair practice charge.
The State opposed the request asserting the appeal involves significant matters
of
public
importance.
IUOE appealed the dismissal of the charge on February 11, 2010. The State filed an
4
While this matter was pending, the California Supreme Court considered related cases
involving the State's imposition
of
employee furloughs and, on October 4, 2010, issued its
decision in Professional Engineers in California Government
v.
Schwarzenegger (2010)
50 Cal.4 th 989 (Professional Engineers).
While this matter was pending, the California Supreme Court considered related cases
DISCUSSION	DISCUSSION
(Emphasis added.)
4
5
IUOE contends that PERB Regulation 32625 	mandates that PERB grant any request
for withdrawal
of
a charge when the request occurs prior to the issuance
of
a complaint. 	The
IUOE contends that PERB Regulation 32625' mandates that PERB grant any request
4 IUOE filed a further motion to withdraw its charge on May 28, 2010. The State
continued to oppose the request to withdraw the appeal and charge. IUOE's reply was filed on
June 14, 2010. IUOE's motion and DPA's opposition thereto provided further legal argument.
* IUOE filed a further motion to withdraw its charge on May 28, 2010. The State
5 PERB regulations are codified at California Code
of
Regulations, title 8,
section 31001 et seq. PERB Regulation 32625 states, in relevant part:
PERB regulations are codified at California Code of Regulations, title 8,
Any request for withdrawal
of
the charge shall be in writing,
signed by the charging party or its agent, and state whether the
party desires the withdrawal to be with or without prejudice.
Request for withdrawal
of
the charge before complaint has issued
shall be granted. 	Repeated withdrawal and refiling
of
charges
alleging substantially identical conduct may result in refusal to
issue a complaint.
	If
the complaint has issued, the Board agent
shall determine whether the withdrawal shall be with or without
prejudice. If, during hearing, the respondent objects to
withdrawal, the hearing officer may refuse to allow it.
Any request for withdrawal of the charge shall be in writing,
signed by the charging party or its agent, and state whether the
party desires the withdrawal to be with or without prejudice.
Request for withdrawal of the charge before complaint has issued
shall be granted. Repeated withdrawal and refiling of charges
alleging substantially identical conduct may result in refusal to
issue a complaint. If the complaint has issued, the Board agent
shall determine whether the withdrawal shall be with or without
prejudice. If, during hearing, the respondent objects to
withdrawal, the hearing officer may refuse to allow it.
(Emphasis added.)
4
opposition to the appeal on March 1, 2010. Subsequently, in a letter to the Board dated
April 28, 2010, IUOE sought to withdraw its appeal and dismiss its unfair practice charge.
The State opposed the request asserting the appeal involves significant matters of public
importance.*
involving the State's imposition of employee furloughs and, on October 4, 2010, issued its
decision in Professional Engineers in California Government v. Schwarzenegger (2010)
50 Cal.4 989 (Professional Engineers).
for withdrawal of a charge when the request occurs prior to the issuance of a complaint. The
continued to oppose the request to withdraw the appeal and charge. IUOE's reply was filed on
June 14, 2010. IUOE's motion and DPA's opposition thereto provided further legal argument.
section 31001 et seq. PERB Regulation 32625 states, in relevant part:

State asserts PERB Regulation 323206 governs such requests made to the Board after an appeal
has been filed, and argues that PERB has the discretion to grant or deny a request to withdraw
a charge. The State contends that this case involves a matter
of
significant public importance
that will provide guidance in similar cases pending before PERB.
State asserts PERB Regulation 32320" governs such requests made to the Board after an appeal
PERB has long held that the Board has the discretion to grant or deny requests to
withdraw and dismiss cases pending before the Board itself. (PERB Reg. 32320; Grossmont-
Cuyamaca Community College District (2009) PERB Order No. Ad-380; Oakland Unified
School District (1988) PERB Order No. Ad-171 ( Oakland Unified School District);
ABC
Unified School District (1991) PERB Decision No. 83lb.)
PERB has long held that the Board has the discretion to grant or deny requests to
7TThe Board has also held that when
an appeal involves a matter
of
continuing public interest and a ruling on the matter will be
instructive to parties similarly situated, the Board should exercise its discretion in the interests
of
justice. (Oakland Unified School District.) The Board finds this case presents significant
legal issues and there is a need to provide guidance for similar cases pending before PERB.
Therefore, the Board declines to grant IUOE's request for withdrawal.
an appeal involves a matter of continuing public interest and a ruling on the matter will be
withdraw and dismiss cases pending before the Board itself. (PERB Reg. 32320; Grossmont-
Cuyamaca Community College District (2009) PERB Order No. Ad-380; Oakland Unified
School District (1988) PERB Order No. Ad-171 (Oakland Unified School District); ABC
Unified School District (1991) PERB Decision No. 831b.)' 	he Board has also held that when
instructive to parties similarly situated, the Board should exercise its discretion in the interests
of justice. (Oakland Unified School District.) The Board finds this case presents significant
legal issues and there is a need to provide guidance for similar cases pending before PERB.
Therefore, the Board declines to grant IUOE's request for withdrawal.
IUOE's charge alleges the State unlawfully implemented a furlough plan requiring
bargaining unit employees to be furloughed three days each month through June 30, 2010.
As noted above, the California Supreme Court considered the same facts and some
of
the same legal arguments that are raised in the present charge.
IUOE's charge alleges the State unlawfully implemented a furlough plan requiring
(Emphasis added.)
6 PERB Regulation 32320 states, in relevant part:	PERB Regulation 32320 states, in relevant part:
(a) The Board itself may:	(a) The Board itself may:
(2) Affirm, modify or reverse the proposed decision, order the
record re-opened for the taking of further evidence, or take such
other action as it considers proper.
(2)
(Emphasis added.)
7 PERB Regulation 32625 applies to proceedings below, before a decision not to issue a
complaint is appealed to the Board itself.
" PERB Regulation 32625 applies to proceedings below, before a decision not to issue a
5
has been filed, and argues that PERB has the discretion to grant or deny a request to withdraw
a charge. The State contends that this case involves a matter of significant public importance
that will provide guidance in similar cases pending before PERB.
bargaining unit employees to be furloughed three days each month through June 30, 2010.
As noted above, the California Supreme Court considered the same facts and some of
the same legal arguments that are raised in the present charge.
Affirm, modify or reverse the proposed decision, order the
record re-opened for the taking of further evidence, or take such
other action as it considers proper.
complaint is appealed to the Board itself.

In Professional Engineers, the Court determined whether the Governor had the
authority to implement the furlough plan at issue in the present charge. The Court held the
emergency exception in Dills Act section 3516.5, did not independently authorize the
Governor to implement the furlough plan. Rather, the Court decided that the Legislature
retained the authority to modify terms and conditions
of
employment without first requiring
collective bargaining. The Court stated:
In Professional Engineers, the Court determined whether the Governor had the
[N]othing in the Dills Act precludes the Legislature from
adopting such a furlough plan through a legislative enactment as
one method
of
reducing the compensation
of
state employees
when such cuts are found necessary and appropriate in light
of
the state's fiscal condition.
[Njothing in the Dills Act precludes the Legislature from
adopting such a furlough plan through a legislative enactment as
one method of reducing the compensation of state employees
when such cuts are found necessary and appropriate in light of
the state's fiscal condition.
(Professional Engineers, p. 1048; emphasis in original.)	(Professional Engineers, p. 1048; emphasis in original.)
The Court found the Legislature ratified the Governor's initial two day per month
furlough plan when it adopted a revision to the Budget Act
of
2008. (Professional Engineers,
p. 1005; SB 3X 2, Stats. 2009, 3d Ex. Sess. 2009-2010, ch. 2.)
The Court found the Legislature ratified the Governor's initial two day per month
8
PERB has similarly held the Dills Act does not limit the Legislature's authority to enact
unilateral changes in terms and conditions
of
employment. In State
of
California (Department
of
Personnel Administration) (2008) PERB Decision No. 1978-S, the Legislature enacted an
alternate retirement program for state employees hired after August 11, 2004. In State
of
California (Department
of
Personnel Administration) (2009) PERB Decision No. 2085-S, the
Legislature changed the method
of
calculating overtime compensation for state employees.
The Legislature's action in these cases eliminated any obligation to bargain over the changes in
terms and conditions
of
employment. Accordingly, as the Court found in the present case, the
PERB has similarly held the Dills Act does not limit the Legislature's authority to enact
unilateral changes in terms and conditions of employment. In State of California (Department
of Personnel Administration) (2008) PERB Decision No. 1978-S, the Legislature enacted an
alternate retirement program for state employees hired after August 11, 2004. In State of
California (Department of Personnel Administration) (2009) PERB Decision No. 2085-S, the
Legislature changed the method of calculating overtime compensation for state employees.
The Legislature's action in these cases eliminated any obligation to bargain over the changes in
terms and conditions of employment. Accordingly, as the Court found in the present case, the
T The Legislature adopted identical language in the Budget Act of 2009 and the revision
to the Budget Act of 2009, thus, authorizing the imposition of the third furlough day.
(Professional Engineers, pp. 1006-1007; SB 3X 1, Stats. 2009, 3d Ex. Sess. 2009-2010, ch. 1;
AB 4X 1, Stats. 2009, 4 th Ex. Sess. 2009-2010, ch. 1.)
he Legislature adopted identical language in the Budget Act of 2009 and the revision
to the Budget Act of 2009, thus, authorizing the imposition of the third furlough day.
Professional Engineers, pp. 1006-1007; SB 3X 1, Stats. 2009, 3d Ex. Sess. 2009-2010, ch. 1;
AB 4X 1, Stats. 2009, 4" Ex. Sess. 2009-2010, ch. 1.)
66
authority to implement the furlough plan at issue in the present charge. The Court held the
emergency exception in Dills Act section 3516.5, did not independently authorize the
Governor to implement the furlough plan. Rather, the Court decided that the Legislature
retained the authority to modify terms and conditions of employment without first requiring
collective bargaining. The Court stated:
furlough plan when it adopted a revision to the Budget Act of 2008. (Professional Engineers,
p. 1005; SB 3X 2, Stats. 2009, 3d Ex. Sess. 2009-2010, ch. 2.)*

Legislature authorized the furlough plan by enacting and revising the Budget Acts of 2008 and
2009. Thus, the charge must be dismissed.
Legislature authorized the furlough plan by enacting and revising the Budget Acts of 2008 and
2009. Thus, the charge must be dismissed.
Finally, on appeal IUOE raises new allegations and legal theories. IUOE contends the
furlough plan violated the Emergency Services Act (Gov. Code, § 8625) and Article IV of the
California Constitution.
Finally, on appeal IUOE raises new allegations and legal theories. IUOE contends the
PERB' s jurisdiction is limited to the determination of unfair practice claims arising under
the Dills Act and related public sector labor relations statutes. PERB does not have jurisdiction
to enforce other statutes or provisions of the California Constitution. (Union of American
Physicians & Dentists (Menaster) (2007) PERB Decision No. 1918-S.) Thus, these claims are
dismissed.
PERB's jurisdiction is limited to the determination of unfair practice claims arising under
the Dills Act and related public sector labor relations statutes. PERB does not have jurisdiction
to enforce other statutes or provisions of the California Constitution. (Union of American
Physicians & Dentists (Menaster) (2007) PERB Decision No. 1918-S.) Thus, these claims are
dismissed.
Furthermore, IUOE alleges for the first time on appeal that after implementing the
furlough plan pursuant to Dills Act section 3516.5, the State failed to bargain with IUOE at the
earliest practical time.
Furthermore, IUOE alleges for the first time on appeal that after implementing the
furlough plan pursuant to Dills Act section 3516.5, the State failed to bargain with IUOE at the
earliest practical time.
7
PERB Regulation 32635(b) requires that, "unless good cause is shown, a charging party
may not present on appeal new charge allegations or new supporting evidence." IUOE's
appeal does not demonstrate that good cause exists to consider this allegation for the first time
on appeal. Therefore, this allegation cannot be considered on appeal.
PERB Regulation 32635(b) requires that, "unless good cause is shown, a charging party
ORDER	ORDER
The unfair practice charge in Case No. LA-CE-664-S is hereby DISMISSED
WITHOUT LEA VE TO AMEND.
The unfair practice charge in Case No. LA-CE-664-S is hereby DISMISSED
Chair Dowdin Calvillo and Member McKeag joined 	this Decision.	Chair Dowdin Calvillo and Member Mckeag joined in this Decision.
7
furlough plan violated the Emergency Services Act (Gov. Code, $ 8625) and Article IV of the
California Constitution.
may not present on appeal new charge allegations or new supporting evidence." IUOE's
appeal does not demonstrate that good cause exists to consider this allegation for the first time
on appeal. Therefore, this allegation cannot be considered on appeal.
WITHOUT LEAVE TO AMEND.