Public Transportation Services Corporation (PERB 1637M)

STATE OF CALIFORNIA
DECISION OF THE
PUBLIC EMPLOYMENT RELATIONS BOARD
STATE OF CALIFORNIA
DECISION OF THE
PUBLIC EMPLOYMENT RELATIONS BOARD
ENGINEERS & ARCHITECTS ASSOCIATION,
Charging Party,
V.
PUBLIC TRANSPORTATION SERVICES
CORPORATION,
Respondent.
ENGINEERS & ARCHITECTS ASSOCIATION,
Charging Party,
V.
PUBLIC TRANSPORTATION SERVICES
CORPORATION,
Respondent.
Case No. LA-CE-12-M
PERB Decision No. 	16 3
7-M
June
	7, 	2004
Case No. LA-CE-12-M
PERB Decision No. 1637-M
June 7, 2004
Appearances:	Appearance 	Levy, Stem & Ford
by
David P. Myers, Attorney, for Engineers & Architects
Association; Liebert Cassidy Whitmore by Bruce A. Barsook and Lucy Siraco, Attorneys, for
Public Transportation Services Corporation.
s: Levy, Stern & Ford by David P. Myers, Attorney, for Engineers & Architects
Association; Liebert Cassidy Whitmore by Bruce A. Barsook and Lucy Siraco, Attorneys, for
Public Transportation Services Corporation.
Before Duncan, Chairman; Whitehead and Neima, Members.	Before Duncan, Chairman; Whitehead and Neima, Members.
DECISION	DECISION
NEIMA, Member: This case is before the Public Employment Relations Board (PERB
or Board) on exceptions filed by the Public Transportation Services Corporation (PTSC) to a
proposed decision (attached)
of
the administrative law judge (ALJ). The proposed decision
found that the PTSC is a public agency within the meaning
of
the Meyers-Milias-Brown Act
(MMBA)
NEIMA, Member: This case is before the Public Employment Relations Board (PERB
1 and therefore subject to its provisions. In its exceptions, PTSC argues that since it
is an organizational unit
of
the Metropolitan Transportation Authority (MTA), it is subject to
the labor relations provisions set forth in the Public Utilities Code (PUC) rather than the
provisions
of
the MMBA.
is an organizational unit of the Metropolitan Transportation Authority (MTA), it is subject to
or Board) on exceptions filed by the Public Transportation Services Corporation (PTSC) to a
proposed decision (attached) of the administrative law judge (ALJ). The proposed decision
found that the PTSC is a public agency within the meaning of the Meyers-Milias-Brown Act
(MMBA)' and therefore subject to its provisions. In its exceptions, PTSC argues that since it
the labor relations provisions set forth in the Public Utilities Code (PUC) rather than the
provisions of the MMBA.
The Board has reviewed the entire record in this matter, including the proposed
decision, PTSC's exceptions, and the response of the Engineers and Architects Association.
The Board has reviewed the entire record in this matter, including the proposed
1The MMBA is codified at Government Code section 3500, et seq.	The MMBA is codified at Government Code section 3500, et seq.
decision, PTSC's exceptions, and the response of the Engineers and Architects Association.

The Board finds the ALJ' s findings of fact to be free of prejudicial error and adopts them as
the findings of the Board itself. The Board declines to adopt the ALJ' s conclusions of law.
Instead, as explained below, the Board finds that the PTSC is not a public agency subject to the
MMBA. As a result, the complaint is dismissed.
The Board finds the ALJ's findings of fact to be free of prejudicial error and adopts them as
the findings of the Board itself. The Board declines to adopt the ALJ's conclusions of law.
Instead, as explained below, the Board finds that the PTSC is not a public agency subject to the
MMBA. As a result, the complaint is dismissed.
DISCUSSION	DISCUSSION
2
Jurisdictional Scope of the MMBA	Jurisdictional Scope of the MMBA
In 1961, the Legislature enacted the George M. Brown Act (Brown Act) which gave a
broad spectrum of public employees the right to meet and confer with their employers
regarding terms and conditions of employment. (See California Federation of Teachers v.
Oxnard Elementary Sch. (1969) 272 Cal.App.2d 514, 522 [77 Cal.Rptr. 497].) In 1968, the
Brown Act was amended by enactment of the MMBA. As currently written, the MMBA is the
collective bargaining statute covering most local public agencies.
In 1961, the Legislature enacted the George M. Brown Act (Brown Act) which gave a
2
collective bargaining statute covering most local public agencies.
As a jurisdictional matter, the MMBA covers employers who meet the definition of
"public agency." As defined in the text of the statute, a "public agency" includes:
As a jurisdictional matter, the MMBA covers employers who meet the definition of
... every governmental subdivision, every district, every public
and quasi-public corporation, every public agency and public
service corporation and every town, city, county, city and county
and municipal corporation, whether incorporated or not and
whether chartered or not. As used in this chapter, 'public agency'
does not mean a school district or a county board of education or
a county superintendent of schools or a personnel commission in
a school district having a merit system as provided in Chapter 5
(commencing with Section 45100) of Part 25 and Chapter 4
(commencing with Section 88000) of Part 51 of the Education
Code or the State of California. [MMBA sec. 3501(c).]
. . . every governmental subdivision, every district, every public
On its face, the MMBA's definition of "public agency" is a broad one. If all entities which
met this literal definition came under the MMBA' s jurisdiction, there would be little doubt that
On its face, the MMBA's definition of "public agency" is a broad one. If all entities which
2In 2001, the MMBA was added to PERB 's jurisdiction.	In 2001, the MMBA was added to PERB's jurisdiction.
2
broad spectrum of public employees the right to meet and confer with their employers
regarding terms and conditions of employment. (See California Federation of Teachers v.
Oxnard Elementary Sch. (1969) 272 Cal.App.2d 514, 522 [77 Cal.Rptr. 497].) In 1968, the
Brown Act was amended by enactment of the MMBA. As currently written, the MMBA is the
"public agency." As defined in the text of the statute, a "public agency" includes:
and quasi-public corporation, every public agency and public
service corporation and every town, city, county, city and county
and municipal corporation, whether incorporated or not and
whether chartered or not. As used in this chapter, 'public agency'
does not mean a school district or a county board of education or
a county superintendent of schools or a personnel commission in
a school district having a merit system as provided in Chapter 5
(commencing with Section 45100) of Part 25 and Chapter 4
(commencing with Section 88000) of Part 51 of the Education
Code or the State of California. [MMBA sec. 3501(c).]
met this literal definition came under the MMBA's jurisdiction, there would be little doubt that

the PTSC, and indeed, even the MTA itself, would fall under the MMBA's coverage.
However, MMBA section 3501(c) cannot be read in isolation when determining whether a
particular entity falls under the jurisdiction of the MMBA. As explained below, this is because
the Legislature has repeatedly carved out exceptions to what would seem to be the MMBA's
extensive jurisdiction.
the PTSC, and indeed, even the MTA itself, would fall under the MMBA's coverage.
However, MMBA section 3501(c) cannot be read in isolation when determining whether a
particular entity falls under the jurisdiction of the MMBA. As explained below, this is because
the Legislature has repeatedly carved out exceptions to what would seem to be the MMBA's
extensive jurisdiction.
When it enacted the Brown Act, the Legislature knew that certain public employees
were already covered by labor relations statutes. (See Rae v. Bay Area Rapid Transit
Supervisory Etc. Assn. (1980) 114 Cal.App.3d 147, 150 [170 Cal Rptr. 448] (Rae).) 	Chief
among these employees were those of various transit districts, for example, employees of the
Bay Area Rapid Transit (Stats. 1957, ch. 1056, sec. 3, p. 2291). As for these employees, the
Legislature declared in the MMBA that:
When it enacted the Brown Act, the Legislature knew that certain public employees
Nothing contained herein shall be deemed to supersede the
provisions of existing state law and the charters, ordinances, and
rules of local public agencies that establish and regulate a merit
or civil service system or which provide for other methods of
administering employer-employee relations nor is it intended that
this chapter be binding upon those public agencies that provide
procedures for the administration of employer-employee relations
in accordance with the provisions of this chapter. [MMBA
sec. 3500(a).]
Nothing contained herein shall be deemed to supersede the
were already covered by labor relations statutes. (See Rae v. Bay Area Rapid Transit
Supervisory Etc. Assn. (1980) 114 Cal.App.3d 147, 150 [170 Cal Rptr. 448] (Rae).) Chief
among these employees were those of various transit districts, for example, employees of the
Bay Area Rapid Transit (Stats. 1957, ch. 1056, sec. 3, p. 2291). As for these employees, the
Legislature declared in the MMBA that:
provisions of existing state law and the charters, ordinances, and
rules of local public agencies that establish and regulate a merit
or civil service system or which provide for other methods of
administering employer-employee relations nor is it intended that
this chapter be binding upon those public agencies that provide
procedures for the administration of employer-employee relations
in accordance with the provisions of this chapter. [MMBA
sec. 3500(a).]
Based on this express language, the courts have held that the MMBA was never intended to
include in its coverage transit districts with their own statutory framework for administering
labor relations. (See Rae, at pp. 150-151.)
Based on this express language, the courts have held that the MMBA was never intended to
include in its coverage transit districts with their own statutory framework for administering
labor relations. (See Rae, at pp. 150-151.)
Los Angeles Metropolitan Transportation Authority	Los Angeles Metropolitan Transportation Authority
3
The MT A was created in 1992 as the single successor agency to the merger of the
Southern California Rapid Transit District (RTD) and the Los Angeles County Transportation
Commission (LACTC). (PUC sec. 130050.2.) As the successor agency, the MTA assumed all
The MTA was created in 1992 as the single successor agency to the merger of the
3
Southern California Rapid Transit District (RTD) and the Los Angeles County Transportation
Commission (LACTC). (PUC sec. 130050.2.) As the successor agency, the MTA assumed all

the powers, duties and obligations of the formerRTD and LACTC. (PUC sec. 130051.13.)
Neither party disputes that among MTA's obligations are those involving labor relations under
PUC section 30750, et seq.
the powers, duties and obligations of the former RTD and LACTC. (PUC sec. 130051.13.)
As MTA's labor relations are governing by PUC Section 30750, it is undisputed that
the MTA is not subject to the MMBA. This is true even though the MTA would presumably
constitute a "public agency" under MMBA section 3501(c). It is further undisputed that the
PTSC was created by the MT A and in many respects, is financially dependent upon the MT A.
Given these facts, the issue before the Board is not whether the PTSC meets the definition of a
"public agency" under MMBA section 3501(c). It clearly does. Rather, the issue is whether
the PTSC is sufficiently linked to the MTA such that it is subject to the PUC.
As MTA's labor relations are governing by PUC Section 30750, it is undisputed that
Silver v. Los Angeles County Metropolitan Transportation Authority	Silver v. Los Angeles County Metropolitan Transportation Authority
Relying on Silver v. Los Angeles County Metropolitan Transportation Authority (2000)
79 Cal.App.4 th 338 [94Cal.Rptr.2d	Cal.Rptr.2d 287] (Silver), the ALJ concluded that the PTSC must be
treated as an independent entity. 	In Silver, several unions representing MT A employees
challenged the fact that PTSC employees did not participate in social security. These unions
alleged that the MTA created the PTSC for the specific purpose of evading its obligations
under social security. According to the employee unions, PTSC was a "sham" corporation
with only the illusion of being an independent entity. In defense, the MTA argued that the
PTSC was an independent and autonomous public agency.
Relying on Silver v. Los Angeles County Metropolitan Transportation Authority (2000)
3
Neither party disputes that among MTA's obligations are those involving labor relations under
PUC section 30750, et seq.
the MTA is not subject to the MMBA. This is true even though the MTA would presumably
constitute a "public agency" under MMBA section 3501(c). It is further undisputed that the
PTSC was created by the MTA and in many respects, is financially dependent upon the MTA.
Given these facts, the issue before the Board is not whether the PTSC meets the definition of a
"public agency" under MMBA section 3501(c). It clearly does. Rather, the issue is whether
the PTSC is sufficiently linked to the MTA such that it is subject to the PUC.
79 Cal.App.4 338 [94 	287] (Silver), the ALJ concluded that the PTSC must be
treated as an independent entity. In Silver, several unions representing MTA employees
challenged the fact that PTSC employees did not participate in social security. These unions
alleged that the MTA created the PTSC for the specific purpose of evading its obligations
under social security. According to the employee unions, PTSC was a "sham" corporation
with only the illusion of being an independent entity. In defense, the MTA argued that the
PTSC was an independent and autonomous public agency."
In its decision, the court recognized that the primary reason the MT A created the PTSC
was to allow employees to continue their participation in the Public Employees Retirement
System (PERS). The court commented that such a purpose was appropriate since the
In its decision, the court recognized that the primary reason the MTA created the PTSC
was to allow employees to continue their participation in the Public Employees Retirement
System (PERS). The court commented that such a purpose was appropriate since the
3Ironically, the parties' positions in Silver are the exact opposite from their positions in
this matter.
Ironically, the parties' positions in Silver are the exact opposite from their positions in
4
this matter.

Legislature intended that no employee of RTD or LACTC should be made worse off by the
creation of the MTA. (Silver, at pp. 353-354; PUC sec. 30753.) Had the MTA not created the
PTSC, former employees of the LACTC, who were participants of PERS, would have suffered
a reduction in salary. (Silver, at p. 354.)
Legislature intended that no employee of RTD or LACTC should be made worse off by the
creation of the MTA. (Silver, at pp. 353-354; PUC sec. 30753.) Had the MTA not created the
PTSC, former employees of the LACTC, who were participants of PERS, would have suffered
a reduction in salary. (Silver, at p. 354.)
In the end, the Silver court concluded that the PTSC was a "public agency" for
purposes of PERS. However, the fact that the PTSC is a "public agency" for purposes of
PERS is not determinative of whether it is subject to the MMBA. Indeed, the former LACTC
was also a "public agency" for purposes of PERS yet it was not subject to the MMBA.
Accordingly, the Board finds that Silver is not controlling on the issues before PERB.
In the end, the Silver court concluded that the PTSC was a "public agency" for
The Evidence Supports Finding the PTSC to be An Organizational Unit of the MTA	The Evidence Supports Finding the PTSC to be An Organizational Unit of the MTA
purposes of PERS. However, the fact that the PTSC is a "public agency" for purposes of
PERS is not determinative of whether it is subject to the MMBA. Indeed, the former LACTC
was also a "public agency" for purposes of PERS yet it was not subject to the MMBA.
Accordingly, the Board finds that Silver is not controlling on the issues before PERB.
The statutes creating the MTA give it the express authority to establish "departments,
divisions, subsidiary units; or similar entities" which are referred to as "organizational units."
(PUC sec. 130051.11 (emphasis added).) As discussed below, the Board finds that the PTSC
is a "subsidiary unit" or "similar entity" for purposes of determining which labor relations
statute, PUC or MMBA, it is subject to. Based on this finding, the Board concludes that the
PTSC is subject to the PUC and not the MMBA.
The statutes creating the MTA give it the express authority to establish "departments,
divisions, subsidiary units, or similar entities" which are referred to as "organizational units."
(PUC sec. 130051.11 (emphasis added).) As discussed below, the Board finds that the PTSC
is a "subsidiary unit" or "similar entity" for purposes of determining which labor relations
statute, PUC or MMBA, it is subject to. Based on this finding, the Board concludes that the
PTSC is subject to the PUC and not the MMBA.
5
The Board basis its conclusion on several undisputed facts. 	First, it is undisputed that
the PTSC was created primarily to provide the MTA a vehicle to offer its employees PERS
benefits. The facts establish that the PTSC was initially staffed by the transfer of
approximately 2000 employees from the MTA. Other than its staff, the PTSC has no assets.
The Board basis its conclusion on several undisputed facts. First, it is undisputed that
5
Further, the PTSC does not adopt a separate budget. Instead, MTA adopts an aggregate
budget, which includes a budget for PTSC. As part of the budget process, the MTA typically
controls salaries, which are forwarded to the PTSC for consideration.
Further, the PTSC does not adopt a separate budget. Instead, MTA adopts an aggregate
the PTSC was created primarily to provide the MTA a vehicle to offer its employees PERS
benefits. The facts establish that the PTSC was initially staffed by the transfer of
approximately 2000 employees from the MTA. Other than its staff, the PTSC has no assets.
budget, which includes a budget for PTSC. As part of the budget process, the MTA typically
controls salaries, which are forwarded to the PTSC for consideration.

The management structure
of
the PTSC is also integrally intertwined with that
of
the
MT A. For example, three individuals currently comprise the board
of
directors for the PTSC.
As these, one is chief executive officer
of
the PTSC and also chief
of
staff for the MTA.
Another is secretary to both the PTSC board and the MT A board. The last is chief financial
officer
of
the PTSC and the executive officer
of
finance and treasurer ofMTA. Finally, both
MTA and PTSC are served by the same labor relations staff.
The management structure of the PTSC is also integrally intertwined with that of the
MTA. For example, three individuals currently comprise the board of directors for the PTSC.
As these, one is chief executive officer of the PTSC and also chief of staff for the MTA.
Another is secretary to both the PTSC board and the MTA board. The last is chief financial
officer of the PTSC and the executive officer of finance and treasurer of MTA. Finally, both
MTA and PTSC are served by the same labor relations staff.
Certainly, the ALJ made factual findings which could support a conclusion that the
PTSC is not a "subsidiary" or "similar" entity
of
the MTA. However, the Board finds that the
weight
of
the evidence supports the opposite conclusion. As a result, the Board finds that the
PTSC is subject to the labor relations provisions
of
PUC section 30750 rather than the MMBA.
Certainly, the ALJ made factual findings which could support a conclusion that the
PTSC is not a "subsidiary" or "similar" entity of the MTA. However, the Board finds that the
weight of the evidence supports the opposite conclusion. As a result, the Board finds that the
PTSC is subject to the labor relations provisions of PUC section 30750 rather than the MMBA.
Public Policy	Public Policy
In addition to being supported by the evidence, the Board's finding that the PTSC is
subject to PUC section 30750 is supported by public policy. In considering public policy, the
Board notes that similar rights are conferred by both PUC section 30750 and the MMBA.
Thus, under any holding, the employees
of
PTSC will be able to organize and seek recognition.
In addition to being supported by the evidence, the Board's finding that the PTSC is
subject to PUC section 30750 is supported by public policy. In considering public policy, the
Board notes that similar rights are conferred by both PUC section 30750 and the MMBA.
Thus, under any holding, the employees of PTSC will be able to organize and seek recognition.
6
As the rights
of
employees are not substantially affected by the Board's decision, the
public policy goals
of
PERB are best achieved by promoting the most efficient labor relations
system possible. Given that the PTSC is an organizational unit
of
the MTA, it would be most
efficient to have MT A and PTSC employees under the same labor relations system. Absent
clear legislative intent, the Board sees little benefit to placing two groups
of
employees, who
are integrally linked, under separate labor relations systems.
As the rights of employees are not substantially affected by the Board's decision, the
6
public policy goals of PERB are best achieved by promoting the most efficient labor relations
system possible. Given that the PTSC is an organizational unit of the MTA, it would be most
efficient to have MTA and PTSC employees under the same labor relations system. Absent
clear legislative intent, the Board sees little benefit to placing two groups of employees, who
are integrally linked, under separate labor relations systems.

Transit Employer-Employee Relations	Transit Employer-Employee Relations
Further supporting the Board's finding is the structure
of
the newly enacted Transit
Employer-Employee Relations Act (TEERA) in 2003.
Further supporting the Board's finding is the structure of the newly enacted Transit
4 The TEERA, which is under PERB's
jurisdiction, is a collective bargaining statute covering only the supervisory employees
of
the
MTA. Since TEERA was enacted recently, the ALJ did not have the benefit
of
this statute in
drafting his proposed decision.
jurisdiction, is a collective bargaining statute covering only the supervisory employees of the
Employer-Employee Relations Act (TEERA) in 2003.* The TEERA, which is under PERB's
MTA. Since TEERA was enacted recently, the ALJ did not have the benefit of this statute in
drafting his proposed decision.
7
In enacting the TEERA, the Legislature noted that public transit employees are not
subject to a statewide statutory scheme governing labor relations. (TEERA sec. 99560(b).)
This is in contrast to non-transit public employees whom the Legislature noted were subject to
statewide schemes, such as the MMBA. (TEERA sec. 99560(c).)
In enacting the TEERA, the Legislature noted that public transit employees are not
According to the Legislature, the purpose
of
the TEERA is to:	According to the Legislature, the purpose of the TEERA is to:
...
provide the means by which relations between the Los
Angeles County Metropolitan Transportation Authority and their
supervisory employees may assure that the responsibilities and
authorities granted to each transit district by statute are carried
out in an atmosphere that permits the fullest participation by
employees in the determination
of
conditions
of
employment
which affect them. [TEERA sec. 99560(e), emphasis added.]
. . . provide the means by which relations between the Los
In the text
of
TEERA, MT A is referred to as the "transit district employer." Significantly, the
TEERA states that:
In the text of TEERA, MTA is referred to as the "transit district employer." Significantly, the
'Employer' or 'transit district employer' shall also include the
Public Transportation Services Corporation established by the
Los Angeles County Metropolitan Transportation Authority,
including any person acting as an agent
of
the employer.
[TEERA sec. 99560.l(g)(2).]
Employer' or 'transit district employer' shall also include the
The Legislature's definition
of
public transit employer to include the PTSC is
significant. The issue in this matter has essentially been one of legislative intent. Specifically,
The Legislature's definition of public transit employer to include the PTSC is
4TEERA is codified at PUC section 99560, et seq. This legislation was enacted after
issuance of the ALJ's proposed decision.
TEERA is codified at PUC section 99560, et seq. This legislation was enacted after
7
subject to a statewide statutory scheme governing labor relations. (TEERA sec. 99560(b).)
This is in contrast to non-transit public employees whom the Legislature noted were subject to
statewide schemes, such as the MMBA. (TEERA sec. 99560(c).)
Angeles County Metropolitan Transportation Authority and their
supervisory employees may assure that the responsibilities and
authorities granted to each transit district by statute are carried
out in an atmosphere that permits the fullest participation by
employees in the determination of conditions of employment
which affect them. [TEERA sec. 99560(e), emphasis added.]
TEERA states that:
Public Transportation Services Corporation established by the
Los Angeles County Metropolitan Transportation Authority,
including any person acting as an agent of the employer.
[TEERA sec. 99560.1(g)(2).]
significant. The issue in this matter has essentially been one of legislative intent. Specifically,
issuance of the ALJ's proposed decision.

8
did the Legislature intend that subsidiary entities created by MTA would also be subject to the
labor relations provisions
of
PUC section 30750? At least with respect to TEERA, it is clear
that the Legislature's intent was to treat the MTA and PTSC together as the "employer" for
purposes
of
that statute.
did the Legislature intend that subsidiary entities created by MTA would also be subject to the
Admittedly, the fact that the PTSC is considered part
of
the MT A for purposes
of
certainly an	TEERA does not mandate the same conclusion here. However, the TEERA is
indicator
of
the Legislature's view in regards to the existing status
ofMTA
and PTSC
employees. Thus, the language
of
TEERA supports the Board's finding that the PTSC is
subject to PUC section 30750, and not the MMBA.
Admittedly, the fact that the PTSC is considered part of the MTA for purposes of
As the Board finds that the non-supervisory employees
of
the PTSC continue to be
subject
to
PUC section 30750, and not the MMBA, there is no need to address the other issues
raised in the proposed decision. Instead, the complaint must be dismissed.
As the Board finds that the non-supervisory employees of the PTSC continue to be
ORDER	ORDER
unfair	The 	practice charge in Case No. LA-CE-12-M is hereby DISMISSED
WITHOUT LEAVE TO AMEND.
The unfair practice charge in Case No. LA-CE-12-M is hereby DISMISSED
Chairman Duncan and Member Whitehead joined in this Decision.	Chairman Duncan and Member Whitehead joined in this Decision.
8
labor relations provisions of PUC section 30750? At least with respect to TEERA, it is clear
that the Legislature's intent was to treat the MTA and PTSC together as the "employer" for
purposes of that statute.
TEERA does not mandate the same conclusion here. However, the TEERA is certainly an
indicator of the Legislature's view in regards to the existing status of MTA and PTSC
employees. Thus, the language of TEERA supports the Board's finding that the PTSC is
subject to PUC section 30750, and not the MMBA.
subject to PUC section 30750, and not the MMBA, there is no need to address the other issues
raised in the proposed decision. Instead, the complaint must be dismissed.
WITHOUT LEAVE TO AMEND.

STATE OF CALIFORNIA
PUBLIC EMPLOYMENT RELATIONS BOARD
STATE OF CALIFORNIA
PUBLIC EMPLOYMENT RELATIONS BOARD
ENGINEERS & ARCHITECTS ASSOCIATION,
Charging Party,
V .
PUBLIC TRANSPORTATION SERVICES
CORPORATION,
Respondent.
ENGINEERS & ARCHITECTS ASSOCIATION,
Charging Party,
V.
PUBLIC TRANSPORTATION SERVICES
CORPORATION,
Respondent.
UNFAIR PRACTICE
CASE NO. LA-CE-12-M
PROPOSED DECISION
(10/29/02)
UNFAIR PRACTICE
CASE NO. LA-CE-12-M
PROPOSED DECISION
(10/29/02)
Appearances:	Appearances: Levy, Stem and Ford by Lewis Levy and Adam Stem, Attorneys, for
Engineers and Architects Association; Liebert, Cassidy and Whitmore by Bruce Barsook
and Lucy Siroco, Attorneys, for Public Transportation Services Corporation.
Levy, Stern and Ford by Lewis Levy and Adam Stern, Attorneys, for
Engineers and Architects Association; Liebert, Cassidy and Whitmore by Bruce Barsook
and Lucy Siroco, Attorneys, for Public Transportation Services Corporation.
Before Fred D'Orazio, Administrative Law Judge.	Before Fred D'Orazio, Administrative Law Judge.
PROCEDURAL HISTORY	PROCEDURAL HISTORY
This action was initiated on September 5, 2001, when the Engineers and Architects
Association (EAA) filed this unfair practice charge against the Public Transportation Services
Corporation (PTSC). After an investigation, the Office of the General Counsel of the Public
Employment Relations Board (PERB or Board) issued a complaint alleging that PTSC refused
to voluntarily recognize EAA as the exclusive representative of a unit of employees in PTSC's
planning and development department, or, alternatively, adopt reasonable rules and regulations
regarding the recognition of employee organizations. By this conduct, the complaint alleges,
PTSC unlawfully withheld recognition of EAA in violation of the Meyers-Milias-Brown Act
(MMBA or Act) section 3507 and PERB Regulation section 32603(g).
This action was initiated on September 5, 2001, when the Engineers and Architects
1 The complaint further
Association (EAA) filed this unfair practice charge against the Public Transportation Services
Corporation (PTSC). After an investigation, the Office of the General Counsel of the Public
Employment Relations Board (PERB or Board) issued a complaint alleging that PTSC refused
to voluntarily recognize EAA as the exclusive representative of a unit of employees in PTSC's
planning and development department, or, alternatively, adopt reasonable rules and regulations
regarding the recognition of employee organizations. By this conduct, the complaint alleges,
PTSC unlawfully withheld recognition of EAA in violation of the Meyers-Milias-Brown Act
(MMBA or Act) section 3507 and PERB Regulation section 32603(g). ' The complaint further
1 The MMBA is codified at Government Code section 3500 et seq. Unless otherwise
indicated, all statutory references are to the Government Code. In relevant part, section 3507
reads as follows:
The MMBA is codified at Government Code section 3500 et seq. Unless otherwise
indicated, all statutory references are to the Government Code. In relevant part, section 3507
reads as follows:

alleges that PTSC interfered with the right of employees to be represented by EAA, in
violation of MMBA section 3506 and PERB Regulation 32603(a).
alleges that PTSC interfered with the right of employees to be represented by EAA, in
2 By the same conduct, the	violation of MMBA section 3506 and PERB Regulation 32603(a). By the same conduct, the
2
A public agency may adopt reasonable rules and regulations after
consultation in good faith with representatives of an employee
organization or organizations for the administration of employer-
employee relations under this chapter (commencing with Section
3500).
A public agency may adopt reasonable rules and regulations after
Such rules and regulations may include provisions for	Such rules and regulations may include provisions for
(a) verifying that an organization does in fact represent
employees of the public agency
(a)
(b) verifying the official status of employee organization officers
and representatives
(b)
consultation in good faith with representatives of an employee
organization or organizations for the administration of employer-
employee relations under this chapter (commencing with Section
3500).
verifying that an organization does in fact represent
employees of the public agency
verifying the official status of employee organization officers
and representatives
(c) recognition of employee organizations	(c)
(d) 	exclusive recognition of employee organizations formally
recognized pursuant to a vote of the employees of the agency or
an appropriate unit thereof, subject to the right of an employee to
represent himself as provided in Section 3502
d)
No public agency shall.unreasonably withhold recognition of
employee organizations.
No public agency shall.unreasonably withhold recognition of
recognition of employee organizations
exclusive recognition of employee organizations formally
recognized pursuant to a vote of the employees of the agency or
an appropriate unit thereof, subject to the right of an employee to
represent himself as provided in Section 3502
employee organizations
In relevant part, PERB Regulation 32603(g) reads as follows (PERB regulations are
codified at Cal. Code of Regs., tit. 8, sec. 31001 et seq.):
In relevant part, PERB Regulation 32603(g) reads as follows (PERB regulations are
It shall be an unfair practice for a public agency to do any of the
following:
It shall be an unfair practice for a public agency to do any of the
following:
(g) In any other way violate MMBA or any local rule adopted
pursuant to Government Code section 3507.
(g)
2 Section 3506 reads as follows:	2 Section 3506 reads as follows:
Public agencies and employee organizations shall not interfere
with, intimidate, restrain, coerce or discriminate against public
employees because of their exercise of their rights under Section
3502.
Public agencies and employee organizations shall not interfere
In any other way violate MMBA or any local rule adopted
pursuant to Government Code section 3507.
with, intimidate, restrain, coerce or discriminate against public
employees because of their exercise of their rights under Section
3502.
2
In relevant part, section 3502 gives employees "the right to form, join, and participate in the
activities of employee organizations of their own choosing for the purpose ofrepresentation on
all matters of employer-employee relations."
In relevant part, section 3502 gives employees "the right to form, join, and participate in the
codified at Cal. Code of Regs., tit. 8, sec. 31001 et seq.):
activities of employee organizations of their own choosing for the purpose of representation on
all matters of employer-employee relations."

complaint also alleges, PTSC denied EAA the right to represent employees in violation of
MMBA section 3503 and PERB Regulation 32603(b).
complaint also alleges, PTSC denied EAA the right to represent employees in violation of
3
PTSC answered the complaint on November 5, 2001, denying all allegations and
asserting a number of affirmative defenses. Among other things, PTSC asserted that it is not
subject to MMBA jurisdiction, and even if the MMBA applies here, it had no obligation to
adopt reasonable rules and regulations under section 3507. Denials and defenses will be
addressed below, as necessary.
PTSC answered the complaint on November 5, 2001, denying all allegations and
A PERB agent held a settlement conference on November 7, 2001, but the matter was
not resolved. The undersigned conducted a formal hearing on April 16-17, 2002, in Los
Angeles. With the receipt of the final brief on June 26, 2002, the matter was submitted for
proposed decision.
A PERB agent held a settlement conference on November 7, 2001, but the matter was
PERB Regulation 32603(a) reads as follows:	PERB Regulation 32603(a) reads as follows:
It shall be an unfair practice for a public agency to do any of the
following:
It shall be an unfair practice for a public agency to do any of the
following:
(a) Interfere with, intimidate, restrain, coerce or discriminate
against public employees because of their exercise of rights
guaranteed by Government Code section 3502 or by any local
rule adopted pursuant to Government Code section 3507.
(a) Interfere with, intimidate, restrain, coerce or discriminate
against public employees because of their exercise of rights
guaranteed by Government Code section 3502 or by any local
rule adopted pursuant to Government Code section 3507.
MMBA section 3503 and PERB Regulation 32603(b).
asserting a number of affirmative defenses. Among other things, PTSC asserted that it is not
subject to MMBA jurisdiction, and even if the MMBA applies here, it had no obligation to
adopt reasonable rules and regulations under section 3507. Denials and defenses will be
addressed below, as necessary.
not resolved. The undersigned conducted a formal hearing on April 16-17, 2002, in Los
Angeles. With the receipt of the final brief on June 26, 2002, the matter was submitted for
proposed decision.
3 In relevant part, section 3503 reads as follows:	In relevant part, section 3503 reads as follows:
Recognized employee organizations shall have the right to
represent their members in their employment relations with
public agencies.
Recognized employee organizations shall have the right to
PERB Regulation 32603(b) reads as follows:	PERB Regulation 32603(b) reads as follows:
represent their members in their employment relations with
public agencies.
3
It shall be an unfair practice for a public agency to do any of the
following:
It shall be an unfair practice for a public agency to do any of the
(b)	(b) Deny to employee organizations rights guaranteed to them by	Deny to employee organizations rights guaranteed to them by
Government	Government Code section 3503, 3504.5, 3505.1, 3505.3, 3508(c)	Code section 3503, 3504.5, 3505.1, 3505.3, 3508(c)
or	or 3508.5 or by any local rule adopted pursuant to Government	3508.5 or by any local rule adopted pursuant to Government
Code section 3507.	Code section 3507.
3
following:

FINDINGS OF FACT	FINDINGS OF FACT
Formation of PTSC	Formation of PTSC
In approximately 1992, the California Legislature merged the Los Angeles County
Commission (LACTC) with the Southern California Rapid Transit District	Transportation Commission (LACTC) with the Southern California Rapid Transit District
(RTD) to create the Los Angeles County Metropolitan Transportation Authority (MTA). 	The
MT A is responsible for planning, funding, constructing and operating surface transportation in
Los Angeles County, including bus transit, paratransit, urban rail, commuter rail, subways, and
freeways. 	MTA has approximately 7,000 employees and is located at One Gateway plaza in
Los Angeles.
In approximately 1992, the California Legislature merged the Los Angeles County
Transportation
(RTD) to create the Los Angeles County Metropolitan Transportation Authority (MTA). The
MTA is responsible for planning, funding, constructing and operating surface transportation in
Los Angeles County, including bus transit, paratransit, urban rail, commuter rail, subways, and
freeways. MTA has approximately 7,000 employees and is located at One Gateway plaza in
Los Angeles.
The merger created an issue regarding retirement benefits that eventually led to the
creation of PTSC. Before the merger, union and nonunion employees ofRTD participated in
RTD-sponsored retirement plans and in the federal Social Security program. In contrast,
LACTC's employees did not participate in the Social Security program. Instead, their
retirement benefits were provided through the California Public Employees Retirement System
(PERS), with the entire cost being borne by the LACTC and without employee participation.
The merger created an issue regarding retirement benefits that eventually led to the
From its inception, MTA unsuccessfully sought to provide a unified and cost-effective
retirement plan for its employees. The details of this attempt need not be here. At some point,
PERS advised MT A that the former LACTC employees would not be permitted to remain in
PERS permanently unless substantially all ofMTA's employees were also eligible to
participate in PERS. The MTA then decided to create a new entity, the PTSC, to contract with
PERS. The new arrangement would provide uninterrupted coverage to employees who
participated in PERS, as well as to provide other employees with the opportunity to obtain
PERS retirement benefits.
From its inception, MTA unsuccessfully sought to provide a unified and cost-effective
creation of PTSC. Before the merger, union and nonunion employees of RTD participated in
RTD-sponsored retirement plans and in the federal Social Security program. In contrast,
LACTC's employees did not participate in the Social Security program. Instead, their
retirement benefits were provided through the California Public Employees Retirement System
(PERS), with the entire cost being borne by the LACTC and without employee participation.
retirement plan for its employees. The details of this attempt need not be here. At some point,
PERS advised MTA that the former LACTC employees would not be permitted to remain in
PERS permanently unless substantially all of MTA's employees were also eligible to
participate in PERS. The MTA then decided to create a new entity, the PTSC, to contract with
PERS. The new arrangement would provide uninterrupted coverage to employees who
participated in PERS, as well as to provide other employees with the opportunity to obtain
PERS retirement benefits.
44

In August 1997, PTSC became operative as a public corporation under articles of
incorporation, bylaws and an acquisition agreement with MT A that set forth in detail the extent
of PTSC's authority as a corporation.
In August 1997, PTSC became operative as a public corporation under articles of
4 Approximately 2,000 MTA employees voluntarily
transferred to PTSC. They had no break in service, their terms and conditions of employment
remain the same, and they perform essentially the same duties in the same location. PTSC is
also located at One Gateway Plaza in Los Angeles. PTSC then negotiated a contract with
PERS to provide retirement benefits to its employees who had transferred from MT A.
transferred to PTSC. They had no break in service, their terms and conditions of employment
PTSC' s main function is to provide MT A with staff for planning, programming,
construction and management of transit operations, which include the bus and rail systems.
Apart from its staff, PTSC has no assets. It does not own bus lines or busses, nor does it own
other assets associated with mass transit operations.
PTSC's main function is to provide MTA with staff for planning, programming,
PTSC is governed by a three-member board of directors appointed by the mayor of Los
Angeles, the chairperson of the Los Angeles County Board of Supervisors, and the League of
Cities City Selection Committee. Maria Guerra (Guerra), Michelle Jackson (Jackson), and
Terry Matsumoto (Matsumoto) make up the current PTSC board. The PTSC board meets
quarterly. The MTA board, on the other hand, is made up of five Los Angeles County
supervisors, the mayor of Los Angeles, three appointees of the mayor, and four members
selected by the League of Cities City Selection Committee.
PTSC is governed by a three-member board of directors appointed by the mayor of Los
Several individuals hold positions in PTSC and MTA. For example, Guerra is the chief
executive officer (CEO) of PTSC and chief of staff for MTA. She reports to Roger Snob le
(Snoble), the CEO ofMTA. Snoble is a PTSC employee. Jackson is secretary of both the
Several individuals hold positions in PTSC and MTA. For example, Guerra is the chief
4 On December 19, 1997, PTSC amended its articles of incorporation, bylaws and
acquisition agreement to clarify that it was formed as a public entity under Government Code
section 811.2. These documents and relevant Government Code sections are more fully
addressed below.
*On December 19, 1997, PTSC amended its articles of incorporation, bylaws and
5
incorporation, bylaws and an acquisition agreement with MTA that set forth in detail the extent
of PTSC's authority as a corporation." Approximately 2,000 MTA employees voluntarily
remain the same, and they perform essentially the same duties in the same location. PTSC is
also located at One Gateway Plaza in Los Angeles. PTSC then negotiated a contract with
PERS to provide retirement benefits to its employees who had transferred from MTA.
construction and management of transit operations, which include the bus and rail systems.
Apart from its staff, PTSC has no assets. It does not own bus lines or busses, nor does it own
other assets associated with mass transit operations.
Angeles, the chairperson of the Los Angeles County Board of Supervisors, and the League of
Cities City Selection Committee. Maria Guerra (Guerra), Michelle Jackson (Jackson), and
Terry Matsumoto (Matsumoto) make up the current PTSC board. The PTSC board meets
quarterly. The MTA board, on the other hand, is made up of five Los Angeles County
supervisors, the mayor of Los Angeles, three appointees of the mayor, and four members
selected by the League of Cities City Selection Committee.
executive officer (CEO) of PTSC and chief of staff for MTA. She reports to Roger Snoble
(Snoble), the CEO of MTA. Snoble is a PTSC employee. Jackson is secretary of both the
acquisition agreement to clarify that it was formed as a public entity under Government Code
section 811.2. These documents and relevant Government Code sections are more fully
addressed below.

6
PTSC board and the MTA board. Matsumoto is the chief financial officer (CFO) of PTSC and
the executive officer of finance and treasurer of MTA. He reports to Richard Brumbaugh
(Brumbaugh), the CFO ofMTA. Matsumoto also is on the board of the PTSC/MTA Risk
Management Association (PRIMA) and the MTA pension board. PRIMA is a joint powers
authority established for the purchase of workers compensation insurance and other liability
programs. PTSC has a contract with PRIMA for workers compensation benefits. Despite these
connections, members of the PTSC board have a fiduciary obligation to the PTSC as a
corporation that is independent from any duties they may have as MTA employees.
PTSC board and the MTA board. Matsumoto is the chief financial officer (CFO) of PTSC and
"
In addition, Brenda Diederichs (Diederichs) is the chief of labor relations for MTA.
She also provides labor relations services for PTSC. Diederichs reports to CEO Snoble;
previously, she reported to Guerra. A general counsel, who is not an employee, serves both
MTA and PTSC.
In addition, Brenda Diederichs (Diederichs) is the chief of labor relations for MTA.
The MT A adopts an aggregate budget, which includes the PTSC budget. PTSC does
not adopt a separate budget. Ninety-nine percent of PTSC's budget comes from MTA; the
remaining part comes from services rendered by PTSC to the Southern California Regional
Rail Authority (SCRRA) based on a contract between PTSC and SCRRA. PTSC derives its
budgetary goals based on the projected work program for the year. 	Specifically, the goals are
based on the cost of providing services and generally doing business with MT A, including
salaries, benefits, staff and incidental expenses.
The MTA adopts an aggregate budget, which includes the PTSC budget. PTSC does
6
PTSC maintains is own bank accounts, subject to the control of PTSC officers. PTSC
and MTA invest their funds jointly from money in a pooled account. Returns on investments
are allocated by percentage of money invested, and the PTSC board must approve all
investments of PTSC funds. 	On at least one occasion Matsumoto recommended the PTSC
board adopt a resolution authorizing up to a $30 million investment in the Local Agency
PTSC maintains is own bank accounts, subject to the control of PTSC officers. PTSC
the executive officer of finance and treasurer of MTA. He reports to Richard Brumbaugh
(Brumbaugh), the CFO of MTA. Matsumoto also is on the board of the PTSC/MTA Risk
Management Association (PRIMA) and the MTA pension board. PRIMA is a joint powers
authority established for the purchase of workers compensation insurance and other liability
programs. PTSC has a contract with PRIMA for workers compensation benefits. Despite these
connections, members of the PTSC board have a fiduciary obligation to the PTSC as a
corporation that is independent from any duties they may have as MTA employees.
She also provides labor relations services for PTSC. Diederichs reports to CEO Snoble;
previously, she reported to Guerra. A general counsel, who is not an employee, serves both
MTA and PTSC.
not adopt a separate budget. Ninety-nine percent of PTSC's budget comes from MTA; the
remaining part comes from services rendered by PTSC to the Southern California Regional
Rail Authority (SCRRA) based on a contract between PTSC and SCRRA. PTSC derives its
budgetary goals based on the projected work program for the year. Specifically, the goals are
based on the cost of providing services and generally doing business with MTA, including
salaries, benefits, staff and incidental expenses.
and MTA invest their funds jointly from money in a pooled account. Returns on investments
are allocated by percentage of money invested, and the PTSC board must approve all
investments of PTSC funds. On at least one occasion Matsumoto recommended the PTSC
board adopt a resolution authorizing up to a $30 million investment in the Local Agency

7
Investment Fund. The amount of interest, Matsumoto wrote in the recommendation, would
reduce operational funding from PTSC's primary funding source, MTA, by an equal amount.
PTSC has the authority to borrow money and to enter into contracts.
Investment Fund. The amount of interest, Matsumoto wrote in the recommendation, would
PTSC is referenced in MTA's comprehensive annual financial report as a "component
unit," a term with legal significance that is more fully discussed below. Matsumoto described
a component unit as one that is blended into the financial statements of a parent corporation,
similar to a subsidiary. PTSC and MT A maintain separate books and records and they are
audited by an independent auditor, Price Waterhouse Coopers. There is no legal requirement
that MT A and PTSC books and records be blended; they are treated as such based on generally
accepted principles of accounting.
PTSC is referenced in MTA's comprehensive annual financial report as a "component
The PTSC payroll system is integrated with the MTA system; that is, both entities use
the same processing service and software. Probusiness is a company that provides paychecks,
handles direct deposits and makes payroll tax deposits for PTSC and MTA. The Probusiness
contract is with MT A, although PTSC pays for its share of services. PTSC retains the right to
contract with another service provider. Funding for the PTSC payroll comes from PTSC
accounts, not from MT A accounts.
The PTSC payroll system is integrated with the MTA system; that is, both entities use
PTSC sponsors PERS benefits for its employees, and has the authority to approve
increases to the contribution base required by PERS. PTSC and MTAjointly sponsor other
fringe benefits. PTSC' s share of the costs for employee benefits is paid for with money from
PTSC accounts, subject to approval by the PTSC board.
PTSC sponsors PERS benefits for its employees, and has the authority to approve
When PTSC was first incorporated, its board adopted various MT A policies for use.
Among others, these included policies covering procurement, employment and personnel,
equal employment opportunity, employee relations, drug and alcohol use, finance and budget.
The PTSC resolution which adopted the policies noted that the adoption would permit
When PTSC was first incorporated, its board adopted various MTA policies for use.
7
reduce operational funding from PTSC's primary funding source, MTA, by an equal amount.
PTSC has the authority to borrow money and to enter into contracts.
unit," a term with legal significance that is more fully discussed below. Matsumoto described
a component unit as one that is blended into the financial statements of a parent corporation,
similar to a subsidiary. PTSC and MTA maintain separate books and records and they are
audited by an independent auditor, Price Waterhouse Coopers. There is no legal requirement
that MTA and PTSC books and records be blended; they are treated as such based on generally
accepted principles of accounting.
the same processing service and software. Probusiness is a company that provides paychecks,
handles direct deposits and makes payroll tax deposits for PTSC and MTA. The Probusiness
contract is with MTA, although PTSC pays for its share of services. PTSC retains the right to
contract with another service provider. Funding for the PTSC payroll comes from PTSC
accounts, not from MTA accounts.
increases to the contribution base required by PERS. PTSC and MTA jointly sponsor other
fringe benefits. PTSC's share of the costs for employee benefits is paid for with money from
PTSC accounts, subject to approval by the PTSC board.
Among others, these included policies covering procurement, employment and personnel,
equal employment opportunity, employee relations, drug and alcohol use, finance and budget.
The PTSC resolution which adopted the policies noted that the adoption would permit

8
employees to perform their functions immediately under familiar practices until such time as
the need for specific separate policies is identified. PTSC has the authority to rescind these
policies and adopt new ones.
employees to perform their functions immediately under familiar practices until such time as
Matsumoto testified that PTSC has the authority to set terms and conditions of
employment for its employees. Regarding salaries, he said the MT A budget structure typically
controls salaries, even those that are forwarded to PTSC for consideration. However, nothing
prohibits PTSC from recommending a different salary structure than that proposed by MT A.
In such a circumstance, the matter would be a subject of negotiation between the PTSC and
MT A boards, according to Matsumoto.
Matsumoto testified that PTSC has the authority to set terms and conditions of
PTSC and MT A have separate employment applications, and they advertise separately
in filling vacancies. MTA maintains an internet website that includes announcements for
PTSC and MTA vacancies, but there are separate pages on the website devoted to PTSC and
MT A vacancies. The webpage has a link to PTSC benefits, but there is no such link to MTA
benefits. MTA also maintains an intranet which includes information about MTA and PTSC.
PTSC and MTA have separate employment applications, and they advertise separately
MT A new hires and PTSC new hires have separate orientation sessions. The primary
reason for the different orientation sessions is that unions represent MT A employees and
different information is communicated to them as a result of the representation. Another
reason is that some MT A new hires are temporary employees who are treated differently.
MT A employees wear badges that indicate "MTA" and PTSC employees wear badges that
indicate "MT A" and "PTSC."
MTA new hires and PTSC new hires have separate orientation sessions. The primary
The MT A human resources department provides many services. It is responsible for
recruitment and selection. It contains a personnel support component, which includes an
information system and personnel records database. It has a special services component which
administers legal compliance, alcohol and drug testing, leave programs, and light duty
The MTA human resources department provides many services. It is responsible for
8
the need for specific separate policies is identified. PTSC has the authority to rescind these
policies and adopt new ones.
employment for its employees. Regarding salaries, he said the MTA budget structure typically
controls salaries, even those that are forwarded to PTSC for consideration. However, nothing
prohibits PTSC from recommending a different salary structure than that proposed by MTA.
In such a circumstance, the matter would be a subject of negotiation between the PTSC and
MTA boards, according to Matsumoto.
in filling vacancies. MTA maintains an internet website that includes announcements for
PTSC and MTA vacancies, but there are separate pages on the website devoted to PTSC and
MTA vacancies. The webpage has a link to PTSC benefits, but there is no such link to MTA
benefits. MTA also maintains an intranet which includes information about MTA and PTSC.
reason for the different orientation sessions is that unions represent MTA employees and
different information is communicated to them as a result of the representation. Another
reason is that some MTA new hires are temporary employees who are treated differently.
MTA employees wear badges that indicate "MTA" and PTSC employees wear badges that
indicate "MTA" and "PTSC."
recruitment and selection. It contains a personnel support component, which includes an
information system and personnel records database. It has a special services component which
administers legal compliance, alcohol and drug testing, leave programs, and light duty

programs. 	A compensation unit handles salary and reclassification matters, as well as salary
surveys. The department also contains an employee center which handles miscellaneous
matters such as discount tickets for movies and amusement parks. The MT A human resources
department also serves PTSC. There is no separate human resources department in PTSC.
programs. A compensation unit handles salary and reclassification matters, as well as salary
Kathi Harper (Harper) is a PTSC employee who is a human resources manager for
MT A. 	She reports to Ida Lagrimas (Lagrimas), executive officer of administration for MT A
and PTSC. Lagrimas reports to Carolyn Flores (Flores), the PTSC executive officer for
administration who oversees administration for PTSC and MT A.
Kathi Harper (Harper) is a PTSC employee who is a human resources manager for
Harper is responsible for recruitment and selection ofMTA and PTSC employees. She
administers MT A Policy HR 3-1 (Recruitment and Selection) in carrying out her duties in this
regard.
Harper is responsible for recruitment and selection of MTA and PTSC employees. She
5 She said an employee processing packet is used for MT A and PTSC hires.
Information from the packet is entered into a database that identifies MT A and PTSC
employees by agency.
regard." She said an employee processing packet is used for MTA and PTSC hires.
Harper also testified that a transfer policy applies to employer-initiated transfers and
employee-initiated transfers. Under the policy, an MTA employee may transfer to a PTSC
position in the same salary grade and vice versa with no impact on benefits, except retirement
benefits.
Harper also testified that a transfer policy applies to employer-initiated transfers and
The employee appraisal policy, MTA Policy HR 3-15, applies to MTA and PTSC
employees. 	Among other things, the policy covers how and when employees are to be
evaluated, standards of measuring employee performance, and a process to appeal an
evaluation. The policy is administered by Harper's office.
The employee appraisal policy, MTA Policy HR 3-15, applies to MTA and PTSC
5 The process for modification of existing MTA policies typically begins with a
recommended revision and travels up the MT A chain of command to final approval or
rejection by the CEO. Adoption of new MTA policies follows the same route, except that they
are subject to review by the policy and procedure task force. The task force is a committee
made up of representatives from various departments in MT A and PTSC.
The process for modification of existing MTA policies typically begins with a
9
surveys. The department also contains an employee center which handles miscellaneous
matters such as discount tickets for movies and amusement parks. The MTA human resources
department also serves PTSC. There is no separate human resources department in PTSC.
MTA. She reports to Ida Lagrimas (Lagrimas), executive officer of administration for MTA
and PTSC. Lagrimas reports to Carolyn Flores (Flores), the PTSC executive officer for
administration who oversees administration for PTSC and MTA.
administers MTA Policy HR 3-1 (Recruitment and Selection) in carrying out her duties in this
Information from the packet is entered into a database that identifies MTA and PTSC
employees by agency.
employee-initiated transfers. Under the policy, an MTA employee may transfer to a PTSC
position in the same salary grade and vice versa with no impact on benefits, except retirement
benefits.
employees. Among other things, the policy covers how and when employees are to be
evaluated, standards of measuring employee performance, and a process to appeal an
evaluation. The policy is administered by Harper's office.
recommended revision and travels up the MTA chain of command to final approval or
rejection by the CEO. Adoption of new MTA policies follows the same route, except that they
are subject to review by the policy and procedure task force. The task force is a committee
made up of representatives from various departments in MTA and PTSC.

10
The compensation and classification section establishes starting salaries, conducts
salary surveys, and deals with classification issues. In responding to a salary survey, for
example, the human resources staff presents the survey up the MTA chain of command to the
CEO. If the CEO approves, the survey is presented to the MTA board for final approval before
implementation. Harper said no distinction is made between MTA positions and PTSC
positions in this process.
The compensation and classification section establishes starting salaries, conducts
The MT A human resources department administers a leave policy that covers a number
of specific leaves; among others, these include family medical, sick, military, personal, and
vacation leave. The leave policies are the same for MTA and PTSC employees. However, pay
for leave is made from an MT A account or a PTSC account, depending on whether the
individual who used the leave is an MTA or a PTSC employee.
The MTA human resources department administers a leave policy that covers a number
10
Discipline is covered by MTA Policy HR 3-10 and is administered jointly by the MTA
human resources department and the MT A labor relations department. The policy applies to
MT A employees and PTSC employees. It covers all aspects of discipline, including types of
discipline and appeal procedures. There is no separate discipline policy for PTSC employees.
Discipline is covered by MTA Policy HR 3-10 and is administered jointly by the MTA
MT A Labor Relations Chief Diederichs said there are five unions that currently
represent employees at MT A and PTSC. The Transportation Communications Union (TCU)
represents MT A clerical and custodial employees. The Amalgamated Transit Union (ATU)
represents MT A mechanics. The United Transportation Union represents MT A bus/train
operators and schedulers. The Teamsters represent PTSC security guards. And the American
Federation of State, County and Municipal Employees (AFSCME) represents two units, a unit
of supervisors and a unit of senior supervisors. According to Diederichs, some of the
employees represented by AFSCME are MT A employees and some are PTSC employees. The
MTA Labor Relations Chief Diederichs said there are five unions that currently
salary surveys, and deals with classification issues. In responding to a salary survey, for
example, the human resources staff presents the survey up the MTA chain of command to the
CEO. If the CEO approves, the survey is presented to the MTA board for final approval before
implementation. Harper said no distinction is made between MTA positions and PTSC
positions in this process.
of specific leaves; among others, these include family medical, sick, military, personal, and
vacation leave. The leave policies are the same for MTA and PTSC employees. However, pay
for leave is made from an MTA account or a PTSC account, depending on whether the
individual who used the leave is an MTA or a PTSC employee.
human resources department and the MTA labor relations department. The policy applies to
MTA employees and PTSC employees. It covers all aspects of discipline, including types of
discipline and appeal procedures. There is no separate discipline policy for PTSC employees.
represent employees at MTA and PTSC. The Transportation Communications Union (TCU)
represents MTA clerical and custodial employees. The Amalgamated Transit Union (ATU)
represents MTA mechanics. The United Transportation Union represents MTA bus/train
operators and schedulers. The Teamsters represent PTSC security guards. And the American
Federation of State, County and Municipal Employees (AFSCME) represents two units, a unit
of supervisors and a unit of senior supervisors. According to Diederichs, some of the
employees represented by AFSCME are MTA employees and some are PTSC employees. The

11
recognition clause in one of the AFSCME agreements refers to MT A and PTSC "collectively"
as the "Authority."
recognition clause in one of the AFSCME agreements refers to MTA and PTSC "collectively"
In negotiating the Teamster agreement covering PTSC security employees, Diederichs
met with the MTA board to receive her parameters. She did not meet with or receive direction
from the PTSC board. The agreement is signed by then MTA CEO Julian Burke (Burke). The
collective bargaining relationship with the Teamsters predated the formation of PTSC, and it
has continued. Diederichs followed the same line of authority in receiving parameters for the
negotiations with AFSCME.
In negotiating the Teamster agreement covering PTSC security employees, Diederichs
EAA Request for Recognition	EAA Request for Recognition
EAA first sought to represent an MTA bargaining unit. In a February 2001 letter, EAA
Executive Director Robert Aquino (Aquino) demanded recognition for a bargaining unit of
professional and administrative employees in the MTA planning and development department.
The demand was made under the California Public Utilities Code (PUC), which governs
collective bargaining rights of certain transit employees. In the event MTA doubted majority
support of employees in the unit, Aquino wrote, EAA would be willing to submit to a card
check under the auspices of the California State Mediation and Conciliation Service (SMCS).
Also in February 2001, EAA filed a formal petition for certification with SMCS pursuant to
PUC sections 30750 and 30751.
EAA first sought to represent an MTA bargaining unit. In a February 2001 letter, EAA
On March 8, 2001, Ronald Stamm (Stamm), senior deputy county counsel, responded
in a letter to SMCS setting forth several arguments in opposition to the petition. First, Stamm
questioned the appropriateness of a departmental unit composed of professional and
administrative employees -- including managers, supervisors, and their subordinates -- in job
classifications that cross departmental lines. 	makes	It 	little sense, Stamm wrote, to offer union
representation to classes of employees in one department when the same classifications exist
On March 8, 2001, Ronald Stamm (Stamm), senior deputy county counsel, responded
11
as the "Authority."
met with the MTA board to receive her parameters. She did not meet with or receive direction
from the PTSC board. The agreement is signed by then MTA CEO Julian Burke (Burke). The
collective bargaining relationship with the Teamsters predated the formation of PTSC, and it
has continued. Diederichs followed the same line of authority in receiving parameters for the
negotiations with AFSCME.
Executive Director Robert Aquino (Aquino) demanded recognition for a bargaining unit of
professional and administrative employees in the MTA planning and development department.
The demand was made under the California Public Utilities Code (PUC), which governs
collective bargaining rights of certain transit employees. In the event MTA doubted majority
support of employees in the unit, Aquino wrote, EAA would be willing to submit to a card
check under the auspices of the California State Mediation and Conciliation Service (SMCS).
Also in February 2001, EAA filed a formal petition for certification with SMCS pursuant to
PUC sections 30750 and 30751.
in a letter to SMCS setting forth several arguments in opposition to the petition. First, Stamm
questioned the appropriateness of a departmental unit composed of professional and
administrative employees -- including managers, supervisors, and their subordinates -- in job
classifications that cross departmental lines. It makes little sense, Stamm wrote, to offer union
representation to classes of employees in one department when the same classifications exist

throughout MT A. 	Stamm also stated that the employees identified in EAA's petition lack a
community of interest that sets them apart from other professional and administrative
employees ofMTA. Stamm next pointed out that PUC section 30751 makes federal labor law
applicable to questions of representation at MTA, and the federal law applies only to
employees. It does not apply to supervisors or managers who are not considered employees
and thus have no collective bargaining rights.
throughout MTA. Stamm also stated that the employees identified in EAA's petition lack a
EAA modified its position in a June 27, 2001, letter from Aquino to CEO Burke.
Aquino pointed out that independent research had revealed that PTSC, not MTA, is the
employer of the employees covered by the petition; and the MMBA, not the PUC, governs
EAA's demand for recognition. In relevant part, Aquino's letter states:
EAA modified its position in a June 27, 2001, letter from Aquino to CEO Burke.
The ramifications of PTSC 	and not MTA 	as the actual
employer require a legal analysis completely separate from the
previous position taken by your office in your position letter of
March 8, 2001. PTSC's employees are not subject to the labor
provisions in the Public Utilities Code because they are not
employees ofMTA. Indeed, in Silver v. Los Angeles County
Metropolitan Authority ("Silver") (79 Cal.App.4 th 338; 94
Cal.Rptr.2d 287) your agency successfully argued this point. To
quote from the Silver holding: PTSC "was created for a proper
purpose; it is a discrete entity, and [the] attempt to characterize
PTSC's employees as MTA personnel is unpersuasive." (Silver
79 Cal.App.4 th at 354.) The statutory scheme that provided for
the creation of PTSC (or any other governmental nonprofit
benefit corporation) is simply not governed by the Public Utilities
Code, as was the holding in the Silver action.
The ramifications of PTSC - and not MTA - as the actual
employer require a legal analysis completely separate from the
previous position taken by your office in your position letter of
March 8, 2001. PTSC's employees are not subject to the labor
provisions in the Public Utilities Code because they are not
employees of MTA. Indeed, in Silver v. Los Angeles County
Metropolitan Authority ("Silver") (79 Cal.App.4" 338; 94
Cal.Rptr.2d 287) your agency successfully argued this point. To
quote from the Silver holding: PTSC "was created for a proper
purpose; it is a discrete entity, and [the] attempt to characterize
PTSC's employees as MTA personnel is unpersuasive." (Silver
79 Cal.App.4" at 354.) The statutory scheme that provided for
the creation of PTSC (or any other governmental nonprofit
benefit corporation) is simply not governed by the Public Utilities
Code, as was the holding in the Silver action.
12
According to PTSC's corporate bylaws, the certificate of
incorporation, the separation agreement with MTA and the
holding in Silver, amongst other documents, [PTSC] is a separate
and distinct entity with its own obligations. Your office
successfully argued this exact point on PTSC's behalf in Silver,
where the Court held that PTSC is not a sham corporation. The
holding turned on a finding that PTSC is not an empty shell, but
an entity staffed by employees transferred from MTA to PTSC.
After the transfer, PTSC became the employer. As you surely
agree, PTSC cannot be an employer for pay and pension purposes
only and otherwise jettison its legal obligations.
According to PTSC's corporate bylaws, the certificate of
12
community of interest that sets them apart from other professional and administrative
employees of MTA. Stamm next pointed out that PUC section 30751 makes federal labor law
applicable to questions of representation at MTA, and the federal law applies only to
employees. It does not apply to supervisors or managers who are not considered employees
and thus have no collective bargaining rights.
Aquino pointed out that independent research had revealed that PTSC, not MTA, is the
employer of the employees covered by the petition; and the MMBA, not the PUC, governs
EAA's demand for recognition. In relevant part, Aquino's letter states:
incorporation, the separation agreement with MTA and the
holding in Silver, amongst other documents, [PTSC] is a separate
and distinct entity with its own obligations. Your office
successfully argued this exact point on PTSC's behalf in Silver,
where the Court held that PTSC is not a sham corporation. The
holding turned on a finding that PTSC is not an empty shell, but
an entity staffed by employees transferred from MTA to PTSC.
After the transfer, PTSC became the employer. As you surely
agree, PTSC cannot be an employer for pay and pension purposes
only and otherwise jettison its legal obligations.

Aquino asserted that the supervisory, managerial and other unit issues raised in Stamm's
March 8 letter are moot because the MMBA grants rights to such employees. In conclusion,
Aquino demanded recognition and indicated that EAA would submit to a card check under
supervision of SMCS if PTSC doubted EAA had majority support.
Aquino asserted that the supervisory, managerial and other unit issues raised in Stamm's
On July 12, 2001, EAA counsel Lewis Levy (Levy), wrote to Stamm reiterating EAA's
position that PTSC, not MTA, is the employer of the employees covered by the demand for
recognition, and, therefore, the PUC is inapplicable. Rather, Levy contended in the letter, the
MMBA covers employees of PTSC and EAA's demand for recognition. Levy demanded (1) a
copy of the recognition/certification ordinance adopted by PTSC, or (2) a statement that PTSC
has no such ordinance and has adopted no procedures with respect to recognition/certification
demands by labor organizations.
On July 12, 2001, EAA counsel Lewis Levy (Levy), wrote to Stamm reiterating EAA's
On July 30, 2001, Diederichs responded to EAA. She noted that the concerns
expressed in PTSC's March 8 letter were still valid, and she disagreed with EAA's contention
that the MMBA applies to EAA's request for recognition. 	She took the position that the PUC
is the governing labor relations law. She stated that the PUC permits MT A to establish
subsidiary units or similar entities, and PTSC is such a "subsidiary or similar entity."
Diederichs concluded:
On July 30, 2001, Diederichs responded to EAA. She noted that the concerns
Every day, PTSC employees work side-by-side with MTA
employees on the same transit projects. Since PTSC is a creation
of the MTA and performs similar functions as the MTA, it makes
sense that the same statutory labor provisions apply to the two
entities. In part, the PTSC functions as a transit district by
providing administrative support services for the operation of
MT A's bus and rail system. For these reasons, we believe that
questions of union representation at PTSC are governed by the
same federal law that applies to such issues at the MT A in
accordance with PUC§ 30751.
Every day, PTSC employees work side-by-side with MTA
employees on the same transit projects. Since PTSC is a creation
of the MTA and performs similar functions as the MTA, it makes
sense that the same statutory labor provisions apply to the two
entities. In part, the PTSC functions as a transit district by
providing administrative support services for the operation of
MTA's bus and rail system. For these reasons, we believe that
questions of union representation at PTSC are governed by the
same federal law that applies to such issues at the MTA in
accordance with PUC $ 30751.
Diederichs concluded, "if you wish to discuss these issues in greater detail, please do not
hesitate to contact me."
Diederichs concluded, "if you wish to discuss these issues in greater detail, please do not
hesitate to contact me."
13	13
March 8 letter are moot because the MMBA grants rights to such employees. In conclusion,
Aquino demanded recognition and indicated that EAA would submit to a card check under
supervision of SMCS if PTSC doubted EAA had majority support.
position that PTSC, not MTA, is the employer of the employees covered by the demand for
recognition, and, therefore, the PUC is inapplicable. Rather, Levy contended in the letter, the
MMBA covers employees of PTSC and EAA's demand for recognition. Levy demanded (1) a
copy of the recognition/certification ordinance adopted by PTSC, or (2) a statement that PTSC
has no such ordinance and has adopted no procedures with respect to recognition/certification
demands by labor organizations.
expressed in PTSC's March 8 letter were still valid, and she disagreed with EAA's contention
that the MMBA applies to EAA's request for recognition. She took the position that the PUC
is the governing labor relations law. She stated that the PUC permits MTA to establish
subsidiary units or similar entities, and PTSC is such a "subsidiary or similar entity."
Diederichs concluded:

On August 1, 2001, EAA formally withdrew the request for recognition previously
submitted to SMCS. In an August 6, 2001, letter to Levy, Stamm reiterated PTSC's position as
set forth in his March 8 letter. There was no further communication between the parties before
EAA filed this unfair practice charge on September 5, 2001.
On August 1, 2001, EAA formally withdrew the request for recognition previously
submitted to SMCS. In an August 6, 2001, letter to Levy, Stamm reiterated PTSC's position as
set forth in his March 8 letter. There was no further communication between the parties before
EAA filed this unfair practice charge on September 5, 2001.
After a complaint issued, EAA and PTSC met on three occasions, including the
informal conference. During these meetings, PTSC again explained why it believed the unit
proposed by EAA was not appropriate and provided lists of employee classifications. At no
time did PTSC propose an alternate unit or modification of the unit proposed by EAA. 	Stamm
and Diederichs testified that they didn't believe it was PTSC's obligation to do so. The parties
also discussed formation of the AFSCME unit. Diederichs informed EAA representatives that
the MTA board recognized the AFSCME unit for "political" reasons, the board had "buyer's
remorse," and was "not happy with supervisors being organized." That really "came home to
roost," Diederichs said, "when we were on strike and half of our supervisors crossed the picket
line and the other half did not." According to Diederichs, the MT A board is "not interested in
having another supervisory unit."
After a complaint issued, EAA and PTSC met on three occasions, including the
ISSUES	ISSUES
1 . 	Is PTSC a public agency under MMBA section 3501(c) and therefore subject to
PERB jurisdiction?
1. 	Is PTSC a public agency under MMBA section 3501(c) and therefore subject to
PERB jurisdiction?
2. 	Did PTSC refuse to voluntarily recognize EAA as the exclusive representative
of a unit of employees in the PTSC planning and development department, or, alternatively,
adopt reasonable rules and regulations regarding recognition of employee organizations?
2.
6
adopt reasonable rules and regulations regarding recognition of employee organizations?"
Did PTSC refuse to voluntarily recognize EAA as the exclusive representative
of a unit of employees in the PTSC planning and development department, or, alternatively,
14
6
" Throughout this proceeding, PTSC has disputed the appropriateness of the unit
requested by EAA. The issues here concern PERB jurisdiction and the underlying allegations
unfair practices. The unit matter was not litigated and is not considered in this proceeding.
(Reporter's Transcript, Vol. I, pp. 12, 84.)
Throughout this proceeding, PTSC has disputed the appropriateness of the unit
14
informal conference. During these meetings, PTSC again explained why it believed the unit
proposed by EAA was not appropriate and provided lists of employee classifications. At no
time did PTSC propose an alternate unit or modification of the unit proposed by EAA. Stamm
and Diederichs testified that they didn't believe it was PTSC's obligation to do so. The parties
also discussed formation of the AFSCME unit. Diederichs informed EAA representatives that
the MTA board recognized the AFSCME unit for "political" reasons, the board had "buyer's
remorse," and was "not happy with supervisors being organized." That really "came home to
roost," Diederichs said, "when we were on strike and half of our supervisors crossed the picket
line and the other half did not." According to Diederichs, the MTA board is "not interested in
having another supervisory unit."
requested by EAA. The issues here concern PERB jurisdiction and the underlying allegations
of unfair practices. The unit matter was not litigated and is not considered in this proceeding.
(Reporter's Transcript, Vol. I, pp. 12, 84.)

CONCLUSIONS OF LAW	CONCLUSIONS OF LAW
Public Agency Status Under the MMBA	Public Agency Status Under the MMBA
EAA argues that it qualifies as an "employee organization" under section 3501 (a),
employees of PTSC are "public employees" under section 3501(d), and PTSC is a "public
agency" under section 3501(c). In support of its argument, PTSC contends that the issue of
MMBA jurisdiction is controlled largely by a court of appeal decision holding that PTSC is a
public corporation. Therefore, PTSC and its employees are governed by the MMBA for labor
relations purposes and PERB has jurisdiction over this dispute.
EAA argues that it qualifies as an "employee organization" under section 3501(a),
In addition, EAA contends that the evidence here supports a finding that PTSC is a
joint employer with MIA and under relevant National Labor Relations Board (NLRB)
precedent PTSC has a duty to bargain under the MMBA to the extent of its authority. 	In a
related argument, EAA asserts that PTSC and MT A do not constitute a single employer under
relevant case law, and PTSC's argument under a single employer theory should be rejected.
In addition, EAA contends that the evidence here supports a finding that PTSC is a
joint employer with MTA and under relevant National Labor Relations Board (NLRB)
precedent PTSC has a duty to bargain under the MMBA to the extent of its authority. In a
related argument, EAA asserts that PTSC and MTA do not constitute a single employer under
relevant case law, and PTSC's argument under a single employer theory should be rejected.
PTSC, in response, contends that the PUC section 30751 requires questions of union
representation concerning transit district employees or public utility employees to be
determined in accordance.with the National Labor Relations Act (NLRA),
PTSC, in response, contends that the PUC section 30751 requires questions of union
7 as administered by	determined in accordance with the National Labor Relations Act (NLRA), ' as administered by
the SMCS.	the SMCS. According to PTSC, it is an "organizational unit" of MTA and, as such,
8 According to PTSC, it is an "organizational unit" of MIA and, as such,
representation concerning transit district employees or public utility employees to be
15
7 The NLRA is codified at 29 U.S.C. section 141 et seq.	The NLRA is codified at 29 U.S.C. section 141 et seq.
8 PUC section 30751 provides as follows.	8 PUC section 30751 provides as follows.
Any question which may arise with respect to whether a majority
of the employees in an appropriate unit desire to be represented
by a labor organization shall be submitted to the Director of the
Department of Industrial Relations. In resolving such questions of
representation including the determination of the appropriate unit
or units, petitions, the conduct of hearings and elections, the
director shall apply the relevant federal law and administrative
practice developed under the Labor Management Relations Act,
194 7, as amended, and for this purpose shall adopt appropriate
Any question which may arise with respect to whether a majority
of the employees in an appropriate unit desire to be represented
by a labor organization shall be submitted to the Director of the
Department of Industrial Relations. In resolving such questions of
representation including the determination of the appropriate unit
or units, petitions, the conduct of hearings and elections, the
director shall apply the relevant federal law and administrative
practice developed under the Labor Management Relations Act,
1947, as amended, and for this purpose shall adopt appropriate
15
employees of PTSC are "public employees" under section 3501(d), and PTSC is a "public
agency" under section 3501(c). In support of its argument, PTSC contends that the issue of
MMBA jurisdiction is controlled largely by a court of appeal decision holding that PTSC is a
public corporation. Therefore, PTSC and its employees are governed by the MMBA for labor
relations purposes and PERB has jurisdiction over this dispute.

representation and organization of its employees must be governed by federal law under the
PUC. Therefore, PTSC argues, PERB lacks jurisdiction over this matter.
representation and organization of its employees must be governed by federal law under the
In addition, PTSC would reject the EAA argument favoring a finding of joint employer
status. Rather, it is MTA's contention that PTSC and MTA are so interrelated that they
constitute a single employer under relevant NLRB precedent.
In addition, PTSC would reject the EAA argument favoring a finding of joint employer
status. Rather, it is MTA's contention that PTSC and MTA are so interrelated that they
constitute a single employer under relevant NLRB precedent.
MMBA section 3501(c) covers public agencies and defines such an agency as follows:	MMBA section 3501(c) covers public agencies and defines such an agency as follows:
Except as otherwise provided in this subdivision, "public agency"
means every governmental subdivision, every district, every
public and quasi-public corporation, every public agency and
public service corporation and every town, city, county, city and
county and municipal corporation, whether incorporated or not
and whether chartered or not. As used in this chapter, "public
agency" does not mean a school district or a county board of
education or a county superintendent of schools or a personnel
commission in a school district having a merit system as provided
in Chapter 5 (commencing with Section 45100) of Part 25 and
Chapter 4 (commencing with Section 88000) of Part 51 of the
Education Code or the State of California.
Except as otherwise provided in this subdivision, "public agency"
PTSC' s articles of incorporation provide that "this corporation is a nonprofit public
benefit corporation and is not organized for the private gain of any person. It is organized
under the California Nonprofit Public Benefit Corporation Law for public purposes and is a
n fact, several months	public entity within the meaning of Government Code Section 811.2."
PTSC's articles of incorporation provide that "this corporation is a nonprofit public
9
I In fact, several months
after its incorporation, PTSC amended the articles of incorporation to clarify that it is a public
corporation under the Government Code. In addition, PTSC's bylaws and the acquisition
agreement between PTSC and MTA define PTSC's authority and reiterate its status as a public
after its incorporation, PTSC amended the articles of incorporation to clarify that it is a public
benefit corporation and is not organized for the private gain of any person. It is organized
under the California Nonprofit Public Benefit Corporation Law for public purposes and is a
public entity within the meaning of Government Code Section 811.2."
corporation under the Government Code. In addition, PTSC's bylaws and the acquisition
agreement between PTSC and MTA define PTSC's authority and reiterate its status as a public
16
rules and regulations. Said rules and regulations shall be
administered by the State Conciliation Service and shall provide
for a prompt public hearing and a secret ballot election to
determine the question of representation.
rules and regulations. Said rules and regulations shall be
9 Government Code section 811.2 provides that a "public entity" includes the "State,
the Regents of the University of California, a county, city, district, public authority, public
agency, and any other political subdivision or public corporation in the State."
"Government Code section 811.2 provides that a "public entity" includes the "State,
16
PUC. Therefore, PTSC argues, PERB lacks jurisdiction over this matter.
means every governmental subdivision, every district, every
public and quasi-public corporation, every public agency and
public service corporation and every town, city, county, city and
county and municipal corporation, whether incorporated or not
and whether chartered or not. As used in this chapter, "public
agency" does not mean a school district or a county board of
education or a county superintendent of schools or a personnel
commission in a school district having a merit system as provided
in Chapter 5 (commencing with Section 45100) of Part 25 and
Chapter 4 (commencing with Section 88000) of Part 51 of the
Education Code or the State of California.
administered by the State Conciliation Service and shall provide
for a prompt public hearing and a secret ballot election to
determine the question of representation.
the Regents of the University of California, a county, city, district, public authority, public
agency, and any other political subdivision or public corporation in the State."

corporation. When these documents are read against the clear language in section 3501(c) that
a "public agency" means any "public and quasi-public corporation" or "public service
corporation," it must be concluded that PTSC is a public agency.
corporation. When these documents are read against the clear language in section 3501(c) that
17
The	The conclusion finds strong support in a related case. As EAA points out, a court of
appeal in 2000 determined PTSC's status as an independent public corporation. In Silver v.
Los Angeles County Metropolitan Transportation Authority (2000) 79 Cal.App.4 338 [94
Cal.Rptr.2d 287] (Silver), several unions representing MTA employees alleged, among other
things, that "the MTA was required by state statute to obtain Social Security coverage for its
employees and that the MTA had evaded its statutory obligation by creating a sham
corporation, i.e., the PTSC, in order to give the illusion of legitimacy to its withdrawal of its
nonrepresented employees from Social Security." The unions also alleged this was
accomplished "by the MTA's putatively transferring the nonrepresented employees, as well as
employees in two bargaining units, Teamsters and transit police officers, to the PTSC." (Silver
at p. 345.) Ironically, MTA took the opposite position in Silver, contending that PTSC is an
independent corporation.
Some of the evidence presented to the trial court in Silver is similar to that presented
here. For example, in support of the contention that PTSC is a sham corporation, the unions
argued in Silver that PTSC 's entire 1998 budget of $140 million came from MT A and was for
employee salaries and benefits, with few exceptions. The unions further asserted in Silver that
PTSC had no budgeted item for expenses such as rent, liability or property insurance, or
depreciation and all costs were billed to the MT A or its client SCRRA. The unions contended
that PTSC has no function other than to issue payroll checks and administer employees' salary
and benefits,
Some of the evidence presented to the trial court in Silver is similar to that presented
here. For example, in support of the contention that PTSC is a sham corporation, the unions
argued in Silver that PTSC's entire 1998 budget of $140 million came from MTA and was for
employee salaries and benefits, with few exceptions. The unions further asserted in Silver that
PTSC had no budgeted item for expenses such as rent, liability or property insurance, or
depreciation and all costs were billed to the MTA or its client SCRRA. The unions contended
that PTSC has no function other than to issue payroll checks and administer employees' salary
and benefits.
17
a "public agency" means any "public and quasi-public corporation" or "public service
corporation," it must be concluded that PTSC is a public agency.
conclusion finds strong support in a related case. As EAA points out, a court of
appeal in 2000 determined PTSC's status as an independent public corporation. In Silver v.
Los Angeles County Metropolitan Transportation Authority (2000) 79 Cal.App.4 th 338 [94
Cal.Rptr.2d 287] (Silver), several unions representing MTA employees alleged, among other
things, that "the MT A was required by state statute to obtain Social Security coverage for its
employees and that the MTA had evaded its statutory obligation by creating a sham
corporation, i.e., the PTSC, in order to give the illusion of legitimacy to its withdrawal of its
nonrepresented employees from Social Security." The unions also alleged this was
accomplished "by the MT A's putatively transferring the nonrepresented employees, as well as
employees in two bargaining units, Teamsters and transit police officers, to the PTSC." (Silver
at p. 345.) Ironically, MTA took the opposite position in Silver, contending that PTSC is an
independent corporation.

The appellate court upheld the lower court's conclusion that PTSC is not a sham
corporation and is a "lawfully created non-profit public benefit corporation in good standing,
whose business has been conducted in accordance with its articles
of
incorporation and
bylaws." The court concluded, moreover, "the PTSC was formed for the proper purpose
of
making PERS retirement benefits available to its employees and for other proper business
purposes, including providing transportation and planning services to other governmental
agencies." (Silver at pp. 352-353.)
The appellate court upheld the lower court's conclusion that PTSC is not a sham
PTSC argues that Silver is not controlling here because the decision in that case was
limited to determining whether the PTSC was an independent public corporation for the
purpose
of
providing PERS benefits, not coverage under a labor relations statute. In addition,
PTSC argues, it is an "organizational unit" or a "similar entity"
of
the MT A and thus is
covered by the PUC. I find these arguments unpersuasive.J
PTSC argues that Silver is not controlling here because the decision in that case was
limited to determining whether the PTSC was an independent public corporation for the
purpose of providing PERS benefits, not coverage under a labor relations statute. In addition,
PTSC argues, it is an "organizational unit" or a "similar entity" of the MTA and thus is
covered by the PUC. I find these arguments unpersuasive,
The plain language
of
section 3501(c) cannot be ignored. Section 3501(c) makes no
distinction based on the purpose for which a public agency is created. It provides that "every
public and quasi-public corporation" and "every public service corporation" is a "public
agency" for MMBA purposes. And the court's opinion was not limited to a finding that PTSC
is a public corporation only for PERS coverage. The court found that PTSC was formed to
provide PERS coverage to its employees "and for other purposes, including providing
transportation and planning services, to other governmental agencies." (Silver at p. 354.) A
contrary finding would, in essence, create an exception
fo
section 3501(c) that is not present in
the language.
The plain language of section 3501(c) cannot be ignored. Section 3501(c) makes no
MT A has advanced several arguments that PTSC is an organizational unit
of MTA and
therefore not covered by the MMBA. PUC section130051.11 provides in relevant part:
MTA has advanced several arguments that PTSC is an organizational unit of MTA and
therefore not covered by the MMBA. PUC section 130051.11 provides in relevant part:
130051.11. (a) The Los Angeles County Metropolitan
Transportation Authority may determine its organizational
130051.11. (a) The Los Angeles County Metropolitan
Transportation Authority may determine its organizational
18	18
corporation and is a "lawfully created non-profit public benefit corporation in good standing,
whose business has been conducted in accordance with its articles of incorporation and
bylaws." The court concluded, moreover, "the PTSC was formed for the proper purpose of
making PERS retirement benefits available to its employees and for other proper business
purposes, including providing transportation and planning services to other governmental
agencies." (Silver at pp. 352-353.)
distinction based on the purpose for which a public agency is created. It provides that "every
public and quasi-public corporation" and "every public service corporation" is a "public
agency" for MMBA purposes. And the court's opinion was not limited to a finding that PTSC
is a public corporation only for PERS coverage. The court found that PTSC was formed to
provide PERS coverage to its employees "and for other purposes, including providing
transportation and planning services, to other governmental agencies." (Silver at p. 354.) A
contrary finding would, in essence, create an exception to section 3501(c) that is not present in
the language.

structure, which may include, but is not limited to, the
establishment of departments, divisions, subsidiary units, or
similar entities. Any department, division, subsidiary unit, or
similar entity established by the authority shall be referred to in
this chapter as an "organizational unit." The authority shall, at a
minimum, establish the following organizational units: (1) A
transit construction organizational unit to assume the construction
responsibilities for all exclusive public mass transit guideway
construction projects in Los Angeles County. (2) An operating
organizational unit with the following responsibilities: (A) The
operating responsibilities of the Southern California Rapid
Transit District on all exclusive public mass transit guideway
projects in the County of Los Angeles. (B) The operation of bus
routes operated by the Southern California Rapid Transit District,
and all the duties, obligations, and liabilities of the district
relating to those bus routes. (3) A transportation planning and
programming organizational unit with all planning
responsibilities previously performed by the Southern California
Rapid Transit District and the Los Angeles County
Transportation Commission.
structure, which may include, but is not limited to, the
MT A first asserts PTSC is an organizational unit of MT A because it's functions and
responsibilities include providing construction for public transit projects, and thus it meets the
definition of a transit construction organizational unit under PUC section 130051.11 ( a)(l ).
PTSC next contends PTSC's other functions and responsibilities include planning and
programming duties formerly carried out by RTD and LACTC and thus it meets the definition
of a transportation planning and programming organizational unit under PUC section
130051.1 l(a)(3). Even if PTSC is not one of the specified organizational units required by
section 130051.11 (a)(l) or (3), it is a "similar entity" under section 130051.11 (a), PTSC
claims. In support of the latter argument, PTSC asserts that it conducts activities essential to
public transportation in and around Los Angeles County, it is contractually recognized (in the
contract with SCRRA) as a component unit ofMTA, and it has been assigned powers granted
to the MTA by the PUC.
MTA first asserts PTSC is an organizational unit of MTA because it's functions and
1 Finally, PTSC contends that it does not possess duties and powers	°
responsibilities include providing construction for public transit projects, and thus it meets the
definition of a transit construction organizational unit under PUC section 130051.11(a)(1).
PTSC next contends PTSC's other functions and responsibilities include planning and
programming duties formerly carried out by RTD and LACTC and thus it meets the definition
of a transportation planning and programming organizational unit under PUC section
130051.11(a)(3). Even if PTSC is not one of the specified organizational units required by
section 130051.11(a)(1) or (3), it is a "similar entity" under section 130051.11(a), PTSC
claims. In support of the latter argument, PTSC asserts that it conducts activities essential to
public transportation in and around Los Angeles County, it is contractually recognized (in the
contract with SCRRA) as a component unit of MTA, and it has been assigned powers granted
to the MTA by the PUC. " Finally, PTSC contends that it does not possess duties and powers
19
10 PUC section 130051.1 l(f) provides that the MTA may "administratively delegate to
an organizational unit ... any powers and duties it deems appropriate." The acquisition
"PUC section 130051.11(f) provides that the MTA may "administratively delegate to
19
establishment of departments, divisions, subsidiary units, or
similar entities. Any department, division, subsidiary unit, or
similar entity established by the authority shall be referred to in
this chapter as an "organizational unit." The authority shall, at a
minimum, establish the following organizational units: (1) A
transit construction organizational unit to assume the construction
responsibilities for all exclusive public mass transit guideway
construction projects in Los Angeles County. (2) An operating
organizational unit with the following responsibilities: (A) The
operating responsibilities of the Southern California Rapid
Transit District on all exclusive public mass transit guideway
projects in the County of Los Angeles. (B) The operation of bus
routes operated by the Southern California Rapid Transit District,
and all the duties, obligations, and liabilities of the district
relating to those bus routes. (3) A transportation planning and
programming organizational unit with all planning
responsibilities previously performed by the Southern California
Rapid Transit District and the Los Angeles County
Transportation Commission.
an organizational unit . . . any powers and duties it deems appropriate." The acquisition

20
that must be retained by MTA under the PUC, including execution of labor agreements and the
adoption of an aggregate budget for all organizational units.
that must be retained by MTA under the PUC, including execution of labor agreements and the
11
adoption of an aggregate budget for all organizational units."
The unions in Silver presented an argument similar to that raised by PTSC here.
Specifically, the unions argued that PTSC cannot lawfully be an independent public agency
because it is an organizational unit ofMTA under PUC section 130051.11. MTA in Silver
argued against the union position, taking precisely the opposite stance as PTSC advances here.
The unions in Silver presented an argument similar to that raised by PTSC here.
Deferring to a PERS finding that PTSC is an independent public corporation which is
legally permitted to contract for retirement benefit purposes, the court wrote .
Deferring to a PERS finding that PTSC is an independent public corporation which is
. . . PERS by necessity is called upon to determine whether an
entity is a public agency within the meaning of the statutory
scheme. Pursuant thereto, PERS concluded that PTSC qualifies
for participation. In making that determination, PERS found,
inter alia: PTSC met the requirement for membership to be
confined to public agencies. 	[Citation.] Further, PTSC had a
sufficient degree of autonomy from the MTA because PTSC was
created under California statute and had its own board of
directors, which board had various powers, including: the power
to select and remove all the officers of the corporation, to borrow
money and incur indebtedness for the purpose of the corporation,
to appoint committees, and to enter contracts. . . . [Silver at
p. 356.]
. . . PERS by necessity is called upon to determine whether an
Accordingly, the court rejected the claim that PTSC is an organizational unit of MTA under
PUC section 130051.11.
Accordingly, the court rejected the claim that PTSC is an organizational unit of MTA under
agreement between PTSC and MT A provides that PTSC has the following duties:
transportation planning with Los Angeles County; programming of federal, state and local
funds for transportation projects; overseeing subway and other public transportation
construction projects; providing security services and administrative support for the foregoing
and the MTA's bus and rail system.
agreement between PTSC and MTA provides that PTSC has the following duties:
11 PUC section 130051.12(b) provides that MTA must retain the authority to adopt an
aggregate budget for all organizational units and section 13005 l.12(e) provides that MTA must
retain authority to approve labor agreements covering its employees and employees of an
organizational unit.
"PUC section 130051.12(b) provides that MTA must retain the authority to adopt an
aggregate budget for all organizational units and section 130051.12(e) provides that MTA must
retain authority to approve labor agreements covering its employees and employees of an
20
Specifically, the unions argued that PTSC cannot lawfully be an independent public agency
because it is an organizational unit of MTA under PUC section 130051.11. MTA in Silver
argued against the union position, taking precisely the opposite stance as PTSC advances here.
legally permitted to contract for retirement benefit purposes, the court wrote.
entity is a public agency within the meaning of the statutory
scheme. Pursuant thereto, PERS concluded that PTSC qualifies
for participation. In making that determination, PERS found,
inter alia: PTSC met the requirement for membership to be
confined to public agencies. [Citation.] Further, PTSC had a
sufficient degree of autonomy from the MTA because PTSC was
created under California statute and had its own board of
directors, which board had various powers, including: the power
to select and remove all the officers of the corporation, to borrow
money and incur indebtedness for the purpose of the corporation,
to appoint committees, and to enter contracts. . . . [Silver at
p. 356.]
PUC section 130051.11.
transportation planning with Los Angeles County; programming of federal, state and local
funds for transportation projects; overseeing subway and other public transportation
construction projects; providing security services and administrative support for the foregoing
and the MTA's bus and rail system.

21
Granted, there may be similarities between the actual duties performed by PTSC
employees and the actual duties that would be performed by employees in a so-called
organizational unit under the MTA. However, the PTSC articles of incorporation, the bylaws
and the acquisition agreement contain no indication that PTSC was formed as an
organizational unit under the PUC. These documents clearly indicate that PTSC was formed
as an independent public corporation under the Government Code. And any similarities
between the duties of PTSC employees and those of employees in an organizational unit are
outweighed by the Silver decision and PTSC's actual authority over terms and conditions of its
employees, as expressly defined in the acquisition agreement. 	If PTSC and MT A intended to
form PTSC as an organizational unit, it seems they would have said so in the relevant
documents.
Granted, there may be similarities between the actual duties performed by PTSC
In addition, it is difficult to reconcile the express terms of the acquisition agreement
and PTSC's assertion that it is merely an organizational unit of MT A. The acquisition
agreement supports the conclusion that PTSC is an independent public corporation, not an
organizational unit under MT A. Several provisions in the agreement are consistent with the
ruling in Silver and indicate that PTSC has significant control over its operations. For
example, the agreement states that PTSC is "a public entity and a governmental nonprofit
public benefit corporation organized for public purposes under the California Nonprofit Public
Benefit Corporation law." Governed by a separate board, PTSC has sweeping authority under
the agreement to "enter into contracts and to perform any other acts that may be necessary or
expedient to further the public purpose for which it was created." The agreement provides that
PTSC is "solely responsible" for conducting its business, consistent with PTSC's "own rules
and regulations," applicable California and federal laws and regulations, and the "public
purpose for which [PTSC] was created." The agreement provides that such rules and
In addition, it is difficult to reconcile the express terms of the acquisition agreement
and PTSC's assertion that it is merely an organizational unit of MTA. The acquisition
agreement supports the conclusion that PTSC is an independent public corporation, not an
organizational unit under MTA. Several provisions in the agreement are consistent with the
ruling in Silver and indicate that PTSC has significant control over its operations. For
example, the agreement states that PTSC is "a public entity and a governmental nonprofit
public benefit corporation organized for public purposes under the California Nonprofit Public
Benefit Corporation law." Governed by a separate board, PTSC has sweeping authority under
the agreement to "enter into contracts and to perform any other acts that may be necessary or
expedient to further the public purpose for which it was created." The agreement provides that
PTSC is "solely responsible" for conducting its business, consistent with PTSC's "own rules
and regulations," applicable California and federal laws and regulations, and the "public
purpose for which [PTSC] was created." The agreement provides that such rules and
21
employees and the actual duties that would be performed by employees in a so-called
organizational unit under the MTA. However, the PTSC articles of incorporation, the bylaws
and the acquisition agreement contain no indication that PTSC was formed as an
organizational unit under the PUC. These documents clearly indicate that PTSC was formed
as an independent public corporation under the Government Code. And any similarities
between the duties of PTSC employees and those of employees in an organizational unit are
outweighed by the Silver decision and PTSC's actual authority over terms and conditions of its
employees, as expressly defined in the acquisition agreement. If PTSC and MTA intended to
form PTSC as an organizational unit, it seems they would have said so in the relevant
documents.

22
regulations shall include policies related to "procurement, accounting, budgeting, financial
matters, personnel matters, equal employment opportunity, drug and alcohol use, and public
relations." The agreement provides that the rules "shall initially be substantially similar to
those of [MT A]," but PTSC has the authority to adopt its own rules in place of the adopted
rules. Thus, PTSC's overall authority over its operations and terms and conditions of
employment indicates that it has the requisite control of key matters to be considered an
independent public corporation, as the Silver court found.
regulations shall include policies related to "procurement, accounting, budgeting, financial
Further, the acquisition agreement contains several labor and employment provisions
that lend support to the conclusion that PTSC is an independent public corporation. For
example, MT A guaranteed to PTSC that it was in compliance with all labor and employment
laws; there were no outstanding unfair labor practices, grievances, or arbitrations; there was no
strike or other dispute pending relating to the acquired employees; there was no employment
claim pending before any government agency established to regulate labor practices; and there
was no pending question concerning representation with respect to the acquired employees.
The agreement gives PTSC the "power and responsibility to hire employees in addition to the
Acquired Personnel, and to make all personnel decisions, including promotions, discipline, and
terminations, for all employees." The MTA represented that there were no existing collective
bargaining agreements or other employment contracts covering the acquired employees; the
MT A was in material compliance with all applicable labor and employment laws; there has
been no negotiations with any labor organization regarding the acquired employees, nor does
an organization hold bargaining rights for such employees. The agreement states that "to the
extent permitted by law, [PTSC] shall succeed to the rights and responsibilities of [MTA] with
regard to any currently existing written employment contracts, [or] collective bargaining
agreements."
Further, the acquisition agreement contains several labor and employment provisions
that lend support to the conclusion that PTSC is an independent public corporation. For
example, MTA guaranteed to PTSC that it was in compliance with all labor and employment
laws; there were no outstanding unfair labor practices, grievances, or arbitrations; there was no
strike or other dispute pending relating to the acquired employees; there was no employment
claim pending before any government agency established to regulate labor practices; and there
was no pending question concerning representation with respect to the acquired employees.
The agreement gives PTSC the "power and responsibility to hire employees in addition to the
Acquired Personnel, and to make all personnel decisions, including promotions, discipline, and
terminations, for all employees." The MTA represented that there were no existing collective
bargaining agreements or other employment contracts covering the acquired employees; the
MTA was in material compliance with all applicable labor and employment laws; there has
been no negotiations with any labor organization regarding the acquired employees, nor does
an organization hold bargaining rights for such employees. The agreement states that "to the
extent permitted by law, [PTSC] shall succeed to the rights and responsibilities of [MTA] with
regard to any currently existing written employment contracts, [or] collective bargaining
agreements."
22
matters, personnel matters, equal employment opportunity, drug and alcohol use, and public
relations." The agreement provides that the rules "shall initially be substantially similar to
those of [MTA]," but PTSC has the authority to adopt its own rules in place of the adopted
rules. Thus, PTSC's overall authority over its operations and terms and conditions of
employment indicates that it has the requisite control of key matters to be considered an
independent public corporation, as the Silver court found.

These are matters that traditionally have been the responsibility of an employer, not a
discrete organizational unit of an employer. If it were envisioned that MT A would remain the
employer of employees who voluntarily transferred to PTSC, it seems there would have been
little purpose in addressing such important topics relating to labor and employment matters in
the agreement. The decision by MT A and PTSC to include such items in the acquisition
agreement supports the inference that the parties intended PTSC, not MT A, would be
responsible for dealing with these and related matters as the employer of the acquired
employees.
These are matters that traditionally have been the responsibility of an employer, not a
discrete organizational unit of an employer. If it were envisioned that MTA would remain the
employer of employees who voluntarily transferred to PTSC, it seems there would have been
little purpose in addressing such important topics relating to labor and employment matters in
the agreement. The decision by MTA and PTSC to include such items in the acquisition
agreement supports the inference that the parties intended PTSC, not MTA, would be
responsible for dealing with these and related matters as the employer of the acquired
employees.
I recognize that PUC section 13005 l.12(b) requires MTA to adopt an aggregate budget
including organizational units and section 130051.12( e) prohibits MT A from delegating
approval of labor agreements. However, those provisions are not controlling as far as PTSC's
status as a public agency is concerned. They apply to organizational units. 	Subsection (b)
applies to adoption of an aggregate budget "for all organizational units of[MTA]," and
subsection (e) states specifically that MT A must approve labor contracts "covering employees
of [MTA] and organizational units of[MTA]." As found elsewhere in this proposed decision,
the employees at issue here are PTSC employees, not MTA employees, and PTSC is an
independent public corporation, not an organizational unit of MT A.
I recognize that PUC section 130051.12(b) requires MTA to adopt an aggregate budget
including organizational units and section 130051.12(e) prohibits MTA from delegating
approval of labor agreements. However, those provisions are not controlling as far as PTSC's
status as a public agency is concerned. They apply to organizational units. Subsection (b)
applies to adoption of an aggregate budget "for all organizational units of [MTA]," and
subsection (e) states specifically that MTA must approve labor contracts "covering employees
of [MTA] and organizational units of [MTA]." As found elsewhere in this proposed decision,
the employees at issue here are PTSC employees, not MTA employees, and PTSC is an
independent public corporation, not an organizational unit of MTA.
23
I also recognize that PTSC's funding comes from MT A. But the lack of control over
the source of funding is not unusual in public sector bargaining. As more fully discussed
below, source of funding does not undermine PTSC's status as a public agency in any
significant way, nor does it preclude meaningful negotiations. Therefore, PTSC's argument
based on section l 3005 l. l 2(b) and ( e) is rejected.
I also recognize that PTSC's funding comes from MTA. But the lack of control over
23
the source of funding is not unusual in public sector bargaining. As more fully discussed
below, source of funding does not undermine PTSC's status as a public agency in any
significant way, nor does it preclude meaningful negotiations. Therefore, PTSC's argument
based on section 130051.12(b) and (e) is rejected.

PTSC's next argument is based on the wording of the SCRRA contract. Under the
articles of incorporation, PTSC has the authority to enter into contracts to further the purpose
for which it was formed. The contract with SCRRA states in relevant part:
PTSC's next argument is based on the wording of the SCRRA contract. Under the
WHEREAS the Public Transportation Services Corporation (the
"PTSC") is a public entity organized pursuant to California
Public Utilities Code§§ 30253,130051.11 and California Code
§ 5110 et seq. in part to provide certain support services to
transportation agencies; 	[CP Ex. No. 6, p. l.]
WHEREAS the Public Transportation Services Corporation (the
Based on the references to§§ 30253 and130051.11 	PTSC argues that the agreement is
evidence that it is an organizational unit of MT A. PTSC points out that section 130051.11
grants the MT A authority to establish component units, and requires it to establish a "transit
construction organizational unit" and a "transportation planning and programming
organizational unit." PTSC also points out that section 30253 generally gives the RTD
authority to enter into contracts, and the R TD merged with the LACTC to form the MTA.
PTSC concludes, therefore, that the SCRRA contract treats PTSC as an entity "characteristic of
the RTD" and therefore a part of the MTA.
Based on the references to $ 30253 and 	130051.11,	, PTSC argues that the agreement is
evidence that it is an organizational unit of MTA. PTSC points out that section 130051.11
grants the MTA authority to establish component units, and requires it to establish a "transit
construction organizational unit" and a "transportation planning and programming
organizational unit." PTSC also points out that section 30253 generally gives the RTD
authority to enter into contracts, and the RTD merged with the LACTC to form the MTA.
PTSC concludes, therefore, that the SCRRA contract treats PTSC as an entity "characteristic of
the RTD" and therefore a part of the MTA.
Considered in the totality of the evidence here, the SCRRA contract does not compel
the conclusion that PTSC is an organizational entity of MT A. The mere reference in the
contract to these PUC provisions is far outweighed by the evidence pointing to the conclusion
that PTSC is an independent public corporation governed by MMBA. Moreover, as a public
agency under section 350l(c), PTSC cannot unilaterally opt out ofMMBAjurisdiction merely
by indicating in such a contract that it is acting in accord with the PUC.
Considered in the totality of the evidence here, the SCRRA contract does not compel
the conclusion that PTSC is an organizational entity of MTA. The mere reference in the
contract to these PUC provisions is far outweighed by the evidence pointing to the conclusion
that PTSC is an independent public corporation governed by MMBA. Moreover, as a public
agency under section 3501(c), PTSC cannot unilaterally opt out of MMBA jurisdiction merely
by indicating in such a contract that it is acting in accord with the PUC.
24
Based on the foregoing, I conclude that PTSC is a public agency under MMBA
section 350l(c), not a component unit ofMTA under the PUC.
Based on the foregoing, I conclude that PTSC is a public agency under MMBA
24
articles of incorporation, PTSC has the authority to enter into contracts to further the purpose
for which it was formed. The contract with SCRRA states in relevant part:
"PTSC") is a public entity organized pursuant to California
Public Utilities Code $$ 30253, 	130051.11and California Code
$ 5110 et seq. in part to provide certain support services to
transportation agencies; [CP Ex. No. 6, p. 1.]
section 3501(c), not a component unit of MTA under the PUC.

25
Joint Employer-Single Employer Issue	Joint Employer-Single Employer Issue
EAA argues that it should be immediately apparent that the Silver decision destroys any
notion that PTSC is a single employer. "PTSC cannot be a single employer with MTA,
if
for
no other reason than the Court
of
Appeals determined that PTSC is independent," EAA argues.
Because a single employer finding requires proof that there was no arms-length transaction
between the entities, EAA contends, by definition PTSC and MTA cannot be candidates for the
single employer approach. EAA argues further that a finding that PTSC is a joint employer
does not preclude negotiations with EAA. According to EAA, under applicable NLRB case
law PTSC should be required to bargain with EAA to the extent
of
its authority and
obligations, notwithstanding any connection with MTA. Such a bargaining obligation renders
PUC competing jurisdiction moot because it focuses entirely on PTSC's obligation, EAA
concludes.
EAA argues that it should be immediately apparent that the Silver decision destroys any
PTSC argues that the MTA and PTSC are so substantially interrelated that they should
be regarded
as
a single employer for jurisdictional purposes, and therefore covered by the same
labor law. Specifically, PTSC contends that PTSC's operations are significantly interrelated
with those
of
the MTA; management
ofMTA
and PTSC are integrated; control
oflabor
relations for MTA and PTSC is centralized; and there is common financial control over the
MT A and PTSC.
PTSC argues that the MTA and PTSC are so substantially interrelated that they should
The Board has adopted the following test to determine joint employer status: "where
two or more employers exert significant control over the same employees -- where from the
evidence it can be shown that they share or co-determine those matters governing essential
terms and conditions
of
employment -- they constitute joint employers." (United Public
Employees v. Public Employment Relations Board (1989) 213 Cal.App.3d 1119, 1128 [262
Cal.Rptr. 158]; NLRB v. Browning-Ferris Industries Inc. (3 rd
Cir. 1982) 691 F.2d 1117, 1124
The Board has adopted the following test to determine joint employer status: "where
25
notion that PTSC is a single employer. "PTSC cannot be a single employer with MTA, if for
no other reason than the Court of Appeals determined that PTSC is independent," EAA argues.
Because a single employer finding requires proof that there was no arms-length transaction
between the entities, EAA contends, by definition PTSC and MTA cannot be candidates for the
single employer approach. EAA argues further that a finding that PTSC is a joint employer
does not preclude negotiations with EAA. According to EAA, under applicable NLRB case
law PTSC should be required to bargain with EAA to the extent of its authority and
obligations, notwithstanding any connection with MTA. Such a bargaining obligation renders
PUC competing jurisdiction moot because it focuses entirely on PTSC's obligation, EAA
concludes.
be regarded as a single employer for jurisdictional purposes, and therefore covered by the same
labor law. Specifically, PTSC contends that PTSC's operations are significantly interrelated
with those of the MTA; management of MTA and PTSC are integrated; control of labor
relations for MTA and PTSC is centralized; and there is common financial control over the
MTA and PTSC.
two or more employers exert significant control over the same employees -- where from the
evidence it can be shown that they share or co-determine those matters governing essential
terms and conditions of employment -- they constitute joint employers." (United Public
Employees v. Public Employment Relations Board (1989) 213 Cal.App.3d 1119, 1128 [262
Cal.Rptr. 158]; NLRB v. Browning-Ferris Industries Inc. (3" Cir. 1982) 691 F.2d 1117, 1124

26
[111 LRRM 2748] (Browning-Ferris).) "[A] finding that companies are 'joint employers'
assumes in the first instance that companies are 'what they appear to
be'
- - independent legal
entities that have merely 'historically chosen to handle jointly
...
important aspects
of
their
relationship." (Browning-Ferris.)employer-employee relationship." (Browning-Ferris.)
[1 1 1 LRRM 2748] (Browning-Ferris).) "[A] finding that companies are 'joint employers'
On the other hand, single employer status exists where two nominally separate entities
are actually part
of
a single integrated enterprise so that there is in fact only a single employer.
The central inquiry in determining single employer status is whether the two nominally
independent enterprises, in reality, constitute only one integrated enterprise. In answering this
integration
of
operations; (2) centralized	question, courts look to four factors: (1) functional
control
of
labor relations; (3) common management; and (4) common ownership. (Browning-
Ferris at p. 1516; Turlock School District (1977) EERB
On the other hand, single employer status exists where two nominally separate entities
12 Order No. Ad. -18, pp. 15-16
(Turlock).) While no single factor is controlling and all need not be present (NLRB v. O'Neill
(9 th Cir. 1992) 965 F.2d 1522, 1529 [140 LRRM 2557]), the first three ordinarily are more
critical than the fourth. 	(See Parklane Hosiery and Retail Store Employees Local Union 1001
(1973) 203 NLRB 597, 612 [83 LRRM 1630].)
(Turlock).) While no single factor is controlling and all need not be present (NLRB v. O'Neill
Notwithstanding this precedent, the joint and single employer issues presented here are
affected by the fact that PTSC and MT A are covered by different collective bargaining
statutes, thus raising questions about PERB
's
jurisdiction over a joint or single employer which
includes employees or an employer beyond PERB jurisdiction. Although PERB case law in
this area is not well developed, the Board has on occasion dealt with situations that involved
interrelated operations between an entity that fell under PERB jurisdiction and one that did not.
In these cases, the Board has approached the issue from two angles. It has said it would not
Notwithstanding this precedent, the joint and single employer issues presented here are
12
Prior to January 1, 1978, PERB was known as the Educational Employment
Relations Board (EERB).
2 Prior to January 1, 1978, PERB was known as the Educational Employment
26
assumes in the first instance that companies are 'what they appear to be' - - independent legal
entities that have merely 'historically chosen to handle jointly . . . important aspects of their
employer-employee
are actually part of a single integrated enterprise so that there is in fact only a single employer.
The central inquiry in determining single employer status is whether the two nominally
independent enterprises, in reality, constitute only one integrated enterprise. In answering this
question, courts look to four factors: (1) functional integration of operations; (2) centralized
control of labor relations; (3) common management; and (4) common ownership. (Browning-
Ferris at p. 1516; Turlock School District (1977) EERB" Order No. Ad. -18, pp. 15-16
(9th Cir. 1992) 965 F.2d 1522, 1529 [140 LRRM 2557]), the first three ordinarily are more
critical than the fourth. (See Parklane Hosiery and Retail Store Employees Local Union 1001
(1973) 203 NLRB 597, 612 [83 LRRM 1630].)
affected by the fact that PTSC and MTA are covered by different collective bargaining
statutes, thus raising questions about PERB's jurisdiction over a joint or single employer which
includes employees or an employer beyond PERB jurisdiction. Although PERB case law in
this area is not well developed, the Board has on occasion dealt with situations that involved
interrelated operations between an entity that fell under PERB jurisdiction and one that did not.
In these cases, the Board has approached the issue from two angles. It has said it would not
Relations Board (EERB).

27
take jurisdiction over entities that are not covered by the statutes it administers, but it has also
applied the legal tests to determine joint or single employer status.
take jurisdiction over entities that are not covered by the statutes it administers, but it has also
In Fresno Unified School District and Abbey Transportation System, Inc. (1979) PERB
Decision No. 82 (Fresno) the Board held that Abbey Transportation System, a privately held
corporation which relied on the district for nearly half of its business, did not fall under the
definition of an employer in the Educational Employment Relations Act (EERA) and therefore
was not a public school employer under PERB jurisdiction. The Board went on, however, to
determine that the district and Abbey did not constitute a single employer under the Browning-
Ferris test. 	(Fresno at pp. 5-6.) In San Diego Community College District (1988) PERB
Decision No. 662, rev. on other grounds San Diego Adult Educators v. Public Employment
Relations Board (1990) 223 Cal.App.3d 1124 [273 Cal.Rptr. 53] (San Diego), the Board
determined that the San Diego Community College District Foundation, Inc., a non-profit
corporation, was not itself an BERA-covered employer. However, the Board again determined
it was not a joint or single employer with the district under the Browning-Ferris test. And in
The Regents of the University of California (1999) PERB Order No. Ad-293-H (Regents), the
Board found that a union did not state a prima facie case that the University of California and
University of California (San Francisco )/Stanford Health Care (USHC), a private nonprofit
corporation, were joint or single employers. The Board reiterated that it would not exercise
jurisdiction over employers that do not fall under its statutory jurisdiction. Also in Regents,
PERB observed in dictum that the NLRB has held that it is unnecessary to determine joint
employer status when two entities have interrelated operations and the labor board has no
jurisdiction over one of the entities.
In Fresno Unified School District and Abbey Transportation System, Inc. (1979) PERB
In a leading NLRB case, a private employer's operations were interrelated with those of
a governmental entity exempt from NLRB jurisdiction. Declining to apply a joint employer
In a leading NLRB case, a private employer's operations were interrelated with those of
a governmental entity exempt from NLRB jurisdiction. Declining to apply a joint employer
27
applied the legal tests to determine joint or single employer status.
Decision No. 82 (Fresno) the Board held that Abbey Transportation System, a privately held
corporation which relied on the district for nearly half of its business, did not fall under the
definition of an employer in the Educational Employment Relations Act (EERA) and therefore
was not a public school employer under PERB jurisdiction. The Board went on, however, to
determine that the district and Abbey did not constitute a single employer under the Browning-
Ferris test. (Fresno at pp. 5-6.) In San Diego Community College District (1988) PERB
Decision No. 662, rev. on other grounds San Diego Adult Educators v. Public Employment
Relations Board (1990) 223 Cal.App.3d 1124 [273 Cal.Rptr. 53] (San Diego), the Board
determined that the San Diego Community College District Foundation, Inc., a non-profit
corporation, was not itself an EERA-covered employer. However, the Board again determined
it was not a joint or single employer with the district under the Browning-Ferris test. And in
The Regents of the University of California (1999) PERB Order No. Ad-293-H (Regents), the
Board found that a union did not state a prima facie case that the University of California and
University of California (San Francisco)/Stanford Health Care (USHC), a private nonprofit
corporation, were joint or single employers. The Board reiterated that it would not exercise
jurisdiction over employers that do not fall under its statutory jurisdiction. Also in Regents,
PERB observed in dictum that the NLRB has held that it is unnecessary to determine joint
employer status when two entities have interrelated operations and the labor board has no
jurisdiction over one of the entities.

analysis as part of its holding that it had jurisdiction over the private employer, the NLRB
stated:
analysis as part of its holding that it had jurisdiction over the private employer, the NLRB
[W]e will not employ a joint employer analysis to determine
jurisdiction. Whether the private employer and the exempt entity
are joint employers is irrelevant. The fact that we have no
jurisdiction over governmental entities and thus cannot compel
them to sit at the bargaining table does not destroy the ability of
private employers to engage in effective bargaining over terms of
employment within their control. . . . [Management Training
Corporation (1995) 317 NLRB 1355, 1358, fn. 16 [149 LRRM
1313]; see also NLRB v. Young Women's Christian Association
th
of Metropolitan St. Louis (8 	Cir. 1999) 192 F .3d 1111, 1116
[162 LRRM 2268].]
[Wje will not employ a joint employer analysis to determine
Under the approach adopted by the NLRB, an employer under its jurisdiction is obligated to
bargain only to the extent of its authority.
Under the approach adopted by the NLRB, an employer under its jurisdiction is obligated to
In retrospect, we think the emphasis in [prior decisions] on
control of economic terms and conditions was an
oversimplification of the bargaining process. While economic
terms are certainly important aspects of the employment
relationship, they are not the only subject sought to be negotiated
at the bargaining table. Indeed, monetary terms may not
necessarily be the most critical issues between the parties. In
times of downsizing, recession, low profits, or when economic
growth is uncertain or doubtful, economic gains at the bargaining
table are minimal at best. Here the focus of negotiations may be
upon such matters as job security, job classifications, employer
flexibility in assignments, employee involvement or participation
and the like. Consequently, in those circumstances, it may be that
the parties' primary interest is in the noneconomic area. It was
shortsighted, therefore, for the Board to declare that bargaining is
meaningless unless it includes the entire range of economic
issues. [Management Training Corporation at p. 1357.]
In retrospect, we think the emphasis in [prior decisions] on
control of economic terms and conditions was an
oversimplification of the bargaining process. While economic
terms are certainly important aspects of the employment
relationship, they are not the only subject sought to be negotiated
at the bargaining table. Indeed, monetary terms may not
necessarily be the most critical issues between the parties. In
times of downsizing, recession, low profits, or when economic
growth is uncertain or doubtful, economic gains at the bargaining
table are minimal at best. Here the focus of negotiations may be
upon such matters as job security, job classifications, employer
flexibility in assignments, employee involvement or participation
and the like. Consequently, in those circumstances, it may be that
the parties' primary interest is in the noneconomic area. It was
shortsighted, therefore, for the Board to declare that bargaining is
meaningless unless it includes the entire range of economic
issues. [Management Training Corporation at p. 1357.]
The same reasoning applies here.	The same reasoning applies here.
PTSC and its employees are covered by the MMBA for labor relations purposes, while
MT A and its employees are covered by the PUC. It follows that PERB may exercise
jurisdiction over PTSC and its employees, while it may not exercise jurisdiction over MT A and
its employees. (See Fresno; San Diego; Regents.) 	This is true even if PTSC and MTA
PTSC and its employees are covered by the MMBA for labor relations purposes, while
MTA and its employees are covered by the PUC. It follows that PERB may exercise
jurisdiction over PTSC and its employees, while it may not exercise jurisdiction over MTA and
its employees. (See Fresno; San Diego; Regents.) This is true even if PTSC and MTA
28	28
stated:
jurisdiction. Whether the private employer and the exempt entity
are joint employers is irrelevant. The fact that we have no
jurisdiction over governmental entities and thus cannot compel
them to sit at the bargaining table does not destroy the ability of
private employers to engage in effective bargaining over terms of
employment within their control. . . . [Management Training
Corporation (1995) 317 NLRB 1355, 1358, fn. 16 [149 LRRM
1313]; see also NLRB v. Young Women's Christian Association
of Metropolitan St. Louis (8" Cir. 1999) 192 F.3d 1111, 1116
[162 LRRM 2268].]
bargain only to the extent of its authority.

operations are interrelated in certain respects. Under the reasoning of Management Training
Corporation, I conclude that joint employer status is irrelevant when one of the entities is under
PERB jurisdiction and the other is not. A finding that PTSC and MTA are joint employers
would not alter PTSC's obligation under the MMBA. Nor would such a finding effect MTA in
any way, for PERB has no jurisdiction over MT A. The same holds true, even if MTA and
PTSC are interrelated in certain respects and arguably would constitute a single employer
under the Browning-Ferris test. As an independent public corporation, PTSC has a duty under
the MMBA to negotiate regarding matters within its control, regardless of its interrelation with
MT A. Therefore, it is unnecessary to reach the joint and single employer issues here.
operations are interrelated in certain respects. Under the reasoning of Management Training
13
MTA. Therefore, it is unnecessary to reach the joint and single employer issues here.
It is noteworthy that meaningful bargaining can take place between EAA and the PTSC
in the event EAA is certified as an exclusive representative in an appropriate unit. PTSC has
the authority to enter into contracts to provide services, such as the agreement with SCRRA. It
has control over its bank accounts. It is authorized to borrow money and make investments. It
has the authority to provide retirement and other benefits. It has the authority to increase or
decrease the salaries of its employees within the framework of its budget, or negotiate with
MT A for different salaries. It has the authority to hire and terminate employees, and make
personnel decisions that apply to its employees. And it has the authority to adopt employment-
related policies covering topics such as evaluations, transfers, and leaves.
It is noteworthy that meaningful bargaining can take place between EAA and the PTSC
The extent to which PTSC and MT A have shared personnel does not alter the
conclusion that PTSC is an independent public agency under MMBA with the authority to
negotiate. The dual roles played by management officials and executives below the board
The extent to which PTSC and MTA have shared personnel does not alter the
conclusion that PTSC is an independent public agency under MMBA with the authority to
negotiate. The dual roles played by management officials and executives below the board
29
13 With respect to PTSC's single employer argument, the Silver decision again is
applicable, for it supports a finding that PTSC is an independent public corporation rather than
an organizational unit of MT A. And consistent with Silver, I have found that PTSC is an
independent public agency, not an organizational unit.
With respect to PTSC's single employer argument, the Silver decision again is
29
Corporation, I conclude that joint employer status is irrelevant when one of the entities is under
PERB jurisdiction and the other is not. A finding that PTSC and MTA are joint employers
would not alter PTSC's obligation under the MMBA. Nor would such a finding effect MTA in
any way, for PERB has no jurisdiction over MTA. The same holds true, even if MTA and
PTSC are interrelated in certain respects and arguably would constitute a single employer
under the Browning-Ferris test. As an independent public corporation, PTSC has a duty under
the MMBA to negotiate regarding matters within its control, regardless of its interrelation with
in the event EAA is certified as an exclusive representative in an appropriate unit. PTSC has
the authority to enter into contracts to provide services, such as the agreement with SCRRA. It
has control over its bank accounts. It is authorized to borrow money and make investments. It
has the authority to provide retirement and other benefits. It has the authority to increase or
decrease the salaries of its employees within the framework of its budget, or negotiate with
MTA for different salaries. It has the authority to hire and terminate employees, and make
personnel decisions that apply to its employees. And it has the authority to adopt employment-
related policies covering topics such as evaluations, transfers, and leaves.
applicable, for it supports a finding that PTSC is an independent public corporation rather than
an organizational unit of MTA. And consistent with Silver, I have found that PTSC is an
independent public agency, not an organizational unit.

level may indicate that PTSC and MT A have decided to share certain personnel, but this does
not detract from the independent nature of the respective boards and the authority vested in
PTSC by its articles of incorporation, bylaws and acquisition agreement. Indeed, as Stamm
testified, the PTSC board owes a fiduciary duty to the corporation separate from the duty owed
to MTA.
level may indicate that PTSC and MTA have decided to share certain personnel, but this does
not detract from the independent nature of the respective boards and the authority vested in
PTSC by its articles of incorporation, bylaws and acquisition agreement. Indeed, as Stamm
testified, the PTSC board owes a fiduciary duty to the corporation separate from the duty owed
to MTA.
Nor does Diederichs' role in negotiating contracts covering PTSC employees alter the
decision reached here. 	Granted, in the past, she received her direction from MTA and the
contracts were approved by MT A. However, it appears that this approach was one of choice
by PTSC and MT A. Diederich' s role in the negotiations and the ultimate approval of the
agreements apparently was based on the assumption that PTSC is an organizational unit under
PUC section	PUC section 130051.11	130051.11 and that MTA had no authority to delegate approval of the agreements
under PUC section 130051.12(e). As I have found earlier, PTSC is not an organizational unit;
it is a public corporation and nothing precludes it from entering into negotiations regarding
topics within its authority.
Nor does Diederichs' role in negotiating contracts covering PTSC employees alter the
topics within its authority.
Similar reasoning applies to Harper's role in administering MTA policies to PTSC
employees. After its formation, PTSC adopted certain MTA policies for continuity in the
workplace. The fact that Harper administered these policies is little more than another
example of shared personnel. More importantly, PTSC has the authority under the acquisition
agreement to rescind the policies and adopt others in their place, thus suggesting further
control over employment matters.
Similar reasoning applies to Harper's role in administering MTA policies to PTSC
Finally, it's true that PTSC's budget is part of the aggregate budget adopted by MTA,
and 99 percent of its budget comes from MTA. However, PTSC also receives income from its
contract with SCRRA and it has the authority to enter into similar contracts for additional
funding. 	Moreover, as the NLRB has pointed out, the mere fact that an employer does not
Finally, it's true that PTSC's budget is part of the aggregate budget adopted by MTA,
and 99 percent of its budget comes from MTA. However, PTSC also receives income from its
contract with SCRRA and it has the authority to enter into similar contracts for additional
funding. Moreover, as the NLRB has pointed out, the mere fact that an employer does not
30	30
decision reached here. Granted, in the past, she received her direction from MTA and the
contracts were approved by MTA. However, it appears that this approach was one of choice
by PTSC and MTA. Diederich's role in the negotiations and the ultimate approval of the
agreements apparently was based on the assumption that PTSC is an organizational unit under
and that MTA had no authority to delegate approval of the agreements
under PUC section 130051.12(e). As I have found earlier, PTSC is not an organizational unit;
it is a public corporation and nothing precludes it from entering into negotiations regarding
employees. After its formation, PTSC adopted certain MTA policies for continuity in the
workplace. The fact that Harper administered these policies is little more than another
example of shared personnel. More importantly, PTSC has the authority under the acquisition
agreement to rescind the policies and adopt others in their place, thus suggesting further
control over employment matters.

have control over its budget is not fatal to its duty to bargain. (Management Training
Corporation at p. 1357.)
have control over its budget is not fatal to its duty to bargain. (Management Training
Therefore, I conclude that it is unnecessary to determine if PTSC and MT A are joint or
single employers. PTSC is covered by the MMBA and is obligated to negotiate with EAA to
the extent of its authority if EAA becomes the exclusive representative in an appropriate unit.
Therefore, I conclude that it is unnecessary to determine if PTSC and MTA are joint or
single employers. PTSC is covered by the MMBA and is obligated to negotiate with EAA to
the extent of its authority if EAA becomes the exclusive representative in an appropriate unit.
MMBA Violations	MMBA Violations
EAA first argues that PTSC has unlawfully refused (1) to recognize it as the employee
representative of employees in the planning and development department, and (2) to adopt
reasonable rules and regulations that would establish a procedure for recognizing employee
organizations. Based on these refusals, EAA contends, PTSC has violated its obligations under
the MMBA and PERB regulations. EAA also asserts that PTSC acted in bad faith in the
manner in which it responded to the request for recognition.
EAA first argues that PTSC has unlawfully refused (1) to recognize it as the employee
representative of employees in the planning and development department, and (2) to adopt
reasonable rules and regulations that would establish a procedure for recognizing employee
organizations. Based on these refusals, EAA contends, PTSC has violated its obligations under
the MMBA and PERB regulations. EAA also asserts that PTSC acted in bad faith in the
manner in which it responded to the request for recognition.
31
PTSC argues that, assuming the MMBA applies here, it has not violated the Act or
PERB regulations. First, PTSC contends it has no statutory obligation to promulgate rules
regarding recognition because section 3507 is not mandatory; it provides only that a public
agency may adopt reasonable rules and regulations for recognition of employee organizations.
Even if an obligation to promulgate rules and regulations does exist, PTSC continues, there is
no evidence that EAA made an appropriate request for adoption of such rules or that PTSC
refused any request. PTSC argues, moreover, that it is not required to voluntarily recognize
EAA. 	In June 2001, PTSC points out, section 3507 provided for recognition only "pursuant to
a vote" of employees 	an appropriate unit, and neither the MMBA or PERB regulations
PTSC argues that, assuming the MMBA applies here, it has not violated the Act or
31
Corporation at p. 1357.)
PERB regulations. First, PTSC contends it has no statutory obligation to promulgate rules
regarding recognition because section 3507 is not mandatory; it provides only that a public
agency may adopt reasonable rules and regulations for recognition of employee organizations.
Even if an obligation to promulgate rules and regulations does exist, PTSC continues, there is
no evidence that EAA made an appropriate request for adoption of such rules or that PTSC
refused any request. PTSC argues, moreover, that it is not required to voluntarily recognize
EAA. In June 2001, PTSC points out, section 3507 provided for recognition only "pursuant to
a vote" of employees in an appropriate unit, and neither the MMBA or PERB regulations

32
required voluntary recognition. Lastly, PTSC argues, the evidence shows that its response to
EAA's request for recognition was reasonable.
required voluntary recognition. Lastly, PTSC argues, the evidence shows that its response to
17
EAA's request for recognition was reasonable."
The first allegation in the complaint is that PTSC refused to voluntarily recognize EAA
as the exclusive representative of a unit of PTSC employees. Section 3507 provides that a
public agency may adopt rules and regulations after consultation with employee organizations
for the administration of 	relations. Section 3507(d) provides that such
rules may include provisions for exclusive recognition of employee organizations "pursuant to
a vote of the employees." The MMBA also provides that a "public agency shall grant
exclusive or majority recognition to an employee organization based on a signed petition,
authorization cards, or union membership cards showing that a majority of the employees in an
appropriate bargaining unit desire representation." (Sec. 3507.l(c).) However, section
3507. l(c) is a recent amendment to the MMBA and did not become effective until January 1,
2002.
The first allegation in the complaint is that PTSC refused to voluntarily recognize EAA
18 EAA filed its request for exclusive recognition under the MMBA in June 2001, prior
to the effective date of section 3507.l(c). Therefore, PTSC had no obligation under the
MMBA to recognize EAA without an election at the time of the events at issue here. The
allegation that PTSC unlawfully refused to voluntarily recognize EAA is hereby dismissed.
2002." EAA filed its request for exclusive recognition under the MMBA in June 2001, prior
17 PTSC argues that its response to EAA was reasonable in that it was based on
legitimate concerns consistent with unit determinations under both the MMBA and the PUC.
These concerns may be summarized as follows: (a) inclusion of managerial and/or supervisory
employees in the EAA unit; (b) inclusion of classes in the unit that cross departmental lines;
(c)	(c) the lack of community of interest in the unit; (d) failure to include all professional and
administrative classes in the unit; and (e) inclusion of classes the unit that both MTA and
PTSC employees occupy. Although some evidence was received regarding unit issues, as
noted earlier, these issues were not litigated in this proceeding. Therefore, these matters will
not be addressed here. For purposes of this proceeding, suffice it to say that PTSC had
reasonable concerns about the unit requested by EAA.
"PTSC argues that its response to EAA was reasonable in that it was based on
18 The Senate passed AB 1281, which included the voluntary recognition provision in
section 3507.l(c), on September 10, 2001, and by the Assembly on September 12, 2001. The
Governor signed the bill into law on October 12, 2001. The law became effective on
January 1, 2002.
The Senate passed AB 1281, which included the voluntary recognition provision in
32
as the exclusive representative of a unit of PTSC employees. Section 3507 provides that a
public agency may adopt rules and regulations after consultation with employee organizations
employer-employeefor the administration of employer-employee relations. Section 3507(d) provides that such
rules may include provisions for exclusive recognition of employee organizations "pursuant to
a vote of the employees." The MMBA also provides that a "public agency shall grant
exclusive or majority recognition to an employee organization based on a signed petition,
authorization cards, or union membership cards showing that a majority of the employees in an
appropriate bargaining unit desire representation." (Sec. 3507.1(c).) However, section
3507.1(c) is a recent amendment to the MMBA and did not become effective until January 1,
to the effective date of section 3507.1(c). Therefore, PTSC had no obligation under the
MMBA to recognize EAA without an election at the time of the events at issue here. The
allegation that PTSC unlawfully refused to voluntarily recognize EAA is hereby dismissed.
legitimate concerns consistent with unit determinations under both the MMBA and the PUC.
These concerns may be summarized as follows: (a) inclusion of managerial and/or supervisory
employees in the EAA unit; (b) inclusion of classes in the unit that cross departmental lines;
the lack of community of interest in the unit; (d) failure to include all professional and
administrative classes in the unit; and (e) inclusion of classes the unit that both MTA and
PTSC employees occupy. Although some evidence was received regarding unit issues, as
noted earlier, these issues were not litigated in this proceeding. Therefore, these matters will
not be addressed here. For purposes of this proceeding, suffice it to say that PTSC had
reasonable concerns about the unit requested by EAA.
section 3507.1(c), on September 10, 2001, and by the Assembly on September 12, 2001. The
Governor signed the bill into law on October 12, 2001. The law became effective on
January 1, 2002.

The remaining allegation in the complaint is that PTSC unlawfully refused to
promulgate rules and regulations regarding recognition of employee organizations. PTSC
argues that it has no mandatory obligation under MMBA to promulgate such rules. PTSC
asserts that its only obligation was to meet and confer with EAA before making a final
determination regarding the scope of an appropriate unit, it satisfied its obligation in this
regard, and therefore no violation of the MMBA has occurred.
The remaining allegation in the complaint is that PTSC unlawfully refused to
The purpose of the MMBA is to provide uniform rules which encourage
communication between public agencies and employee organizations in a manner that fosters a
stable system of collective bargaining.
The purpose of the MMBA is to provide uniform rules which encourage
communication between public agencies and employee organizations in a manner that fosters a
stable system of collective bargaining.
33
It is the purpose of this chapter to promote full communication
between public employers and their employees by providing a
reasonable method of resolving disputes regarding wages, hours,
and other terms and conditions of employment between public
employers and public employee organizations. It is also the
purpose of this chapter to promote the improvement of personnel
management and employer-employee relations within the various
public agencies in the State of California by providing a unifonn
basis for recognizing the right of public employees to join
organizations of their own choice and be represented by those
organizations in their employment relationships with public
agencies. Nothing contained herein shall be deemed to supersede
the provisions of existing state law and the charters, ordinances,
and rules of local public agencies that establish and regulate a
merit or civil service system or which provide for other methods
of administering employer-employee relations nor is it intended
that this chapter be binding upon those public agencies that
provide procedures for the administration of employer-employee
relations in accordance with the provisions of this chapter. This
chapter is intended, instead, to strengthen merit, civil service and
other methods of administering employer-employee relations
through the establishment of uniform and orderly methods of
communication between employees and the public agencies by
which they are employed. 	[Sec. 3500(a).]
It is the purpose of this chapter to promote full communication
The California Supreme Court has recognized this purpose repeatedly. (See e.g., Santa Clara
County Counsel Attorneys Association v. Woodside (1994) 7 Cal.4 th 525, 537 [28Cal.Rptr.2d
The California Supreme Court has recognized this purpose repeatedly. (See e.g., Santa Clara
33
promulgate rules and regulations regarding recognition of employee organizations. PTSC
argues that it has no mandatory obligation under MMBA to promulgate such rules. PTSC
asserts that its only obligation was to meet and confer with EAA before making a final
determination regarding the scope of an appropriate unit, it satisfied its obligation in this
regard, and therefore no violation of the MMBA has occurred.
between public employers and their employees by providing a
reasonable method of resolving disputes regarding wages, hours,
and other terms and conditions of employment between public
employers and public employee organizations. It is also the
purpose of this chapter to promote the improvement of personnel
management and employer-employee relations within the various
public agencies in the State of California by providing a uniform
basis for recognizing the right of public employees to join
organizations of their own choice and be represented by those
organizations in their employment relationships with public
agencies. Nothing contained herein shall be deemed to supersede
the provisions of existing state law and the charters, ordinances,
and rules of local public agencies that establish and regulate a
merit or civil service system or which provide for other methods
of administering employer-employee relations nor is it intended
that this chapter be binding upon those public agencies that
provide procedures for the administration of employer-employee
relations in accordance with the provisions of this chapter. This
chapter is intended, instead, to strengthen merit, civil service and
other methods of administering employer-employee relations
through the establishment of uniform and orderly methods of
communication between employees and the public agencies by
which they are employed. [Sec. 3500(a).]
County Counsel Attorneys Association v. Woodside (1994) 7 Cal.4" 525, 537 [28 	Cal.Rptr.2d

617]; Building Material and Construction Teamsters' Union v. Farrell (1986) 41 Cal.3d 651,
657 [224 Cal.Rptr. 688].)
617]; Building Material and Construction Teamsters' Union v. Farrell (1986) 41 Cal.3d 651,
Three provisions of the MMBA are relevant here. Section 3507 provides for adoption
of rules and regulations covering a number of topics. It states:
Three provisions of the MMBA are relevant here. Section 3507 provides for adoption
of rules and regulations covering a number of topics. It states:
A public agency may adopt reasonable rules and regulations after
consultation in good faith with representatives of an employee
organization or organizations for the administration of employer-
employee relations under this chapter (commencing with Section
3500).
A public agency may adopt reasonable rules and regulations after
Section 3 507 (d) states that such rules and regulations may include provisions for	Section 3507(d) states that such rules and regulations may include provisions for
(d) exclusive recognition of employee organizations formally
recognized pursuant to a vote of the employees of the agency or
an appropriate unit thereof, subject to the right of an employee to
represent himself as provided in Section 3502
(d) exclusive recognition of employee organizations formally
And section 3507 provides:	And section 3507 provides:
No public agency shall unreasonably withhold recognition of
employee organizations.
No public agency shall unreasonably withhold recognition of
employee organizations.
PTSC argues that the use of the word "may" in section 3507 renders any obligation it has to
promulgate rules dealing with exclusive recognition permissive. However, the permissive
language in section 3507 cannot be read in a vacuum. "The words of a statute must be
construed in context, keeping in mind the statutory purpose, and statutes or statutory sections
relating to the same subject must be harmonized, both internally and with each other, to the
extent possible." (Dyna-Med, Inc. v. Fair Employment and Housing Commission (1987) 43
Cal.3d 1379, 1386-1387 [241 Cal.Rptr. 67].)
PTSC argues that the use of the word "may" in section 3507 renders any obligation it has to
I am aware of no case law that squarely addresses the failure of a public agency to
adopt any rules and regulations for recognition. However, at least one commentator has
observed:
I am aware of no case law that squarely addresses the failure of a public agency to
adopt any rules and regulations for recognition. However, at least one commentator has
observed:
34
A purely permissive reading of section 3507 would produce the
anomalous result that an agency could implement unreasonable
A purely permissive reading of section 3507 would produce the
34
657 [224 Cal.Rptr. 688].)
consultation in good faith with representatives of an employee
organization or organizations for the administration of employer-
employee relations under this chapter (commencing with Section
3500).
recognized pursuant to a vote of the employees of the agency or
an appropriate unit thereof, subject to the right of an employee to
represent himself as provided in Section 3502
promulgate rules dealing with exclusive recognition permissive. However, the permissive
language in section 3507 cannot be read in a vacuum. "The words of a statute must be
construed in context, keeping in mind the statutory purpose, and statutes or statutory sections
relating to the same subject must be harmonized, both internally and with each other, to the
extent possible." (Dyna-Med, Inc. v. Fair Employment and Housing Commission (1987) 43
Cal.3d 1379, 1386-1387 [241 Cal.Rptr. 67].)
anomalous result that an agency could implement unreasonable

policies without consultation so long as it did so on an ad hoc
basis. Moreover, the absence of formal rules tends to frustrate
the legislative policy, expressed in the 1970 amendment that
employee organizations not be denied recognition unreasonably.
[Citation.] In the absence of rules, an employee organization
cannot know clearly what it must do in order to obtain
recognition, and the courts are likely to have difficulty in
measuring the agency's acts against the legislative standard.
Thus, the potential for arbitrary or discriminatory action, with
concomitant chilling effects upon employee organizations, would
be enhanced. 	[Grodin, Public Employee Bargaining in
California: The Meyers-Milias-Brown Act in the Courts (1972)
23 Hastings Law Journal 719, 737.]
policies without consultation so long as it did so on an ad hoc
basis. Moreover, the absence of formal rules tends to frustrate
the legislative policy, expressed in the 1970 amendment that
employee organizations not be denied recognition unreasonably.
[Citation.] In the absence of rules, an employee organization
cannot know clearly what it must do in order to obtain
recognition, and the courts are likely to have difficulty in
measuring the agency's acts against the legislative standard.
Thus, the potential for arbitrary or discriminatory action, with
concomitant chilling effects upon employee organizations, would
be enhanced. [Grodin, Public Employee Bargaining in
California: The Meyers-Milias-Brown Act in the Courts (1972)
23 Hastings Law Journal 719, 737.]
35
Precedent in analogous situations is in accord with Grodin's view. In cases where local
rules are challenged as unreasonable, courts have measured the reasonableness of the contested
rules against the provisions of the MMBA itself to resolve disputes. In Los Angeles County
Firefighters Local 1014 v. City of Monrovia (1972) 24 Cal.App.3d	Cal.App.3d 289 [101 Cal.Rptr. 78]
(City of Monrovia), a municipal employee association represented city employees under a
local ordinance providing that the association is the only organized group which can speak on
behalf of city employees. A union sought recognition for a unit of fire fighters. 	Without
formally recognizing the union, the city permitted it to participate in salary and wage
discussions. Unsatisfied, the union filed a petition for writ of mandate seeking recognition for
employees in the fire department for the purpose of meeting and conferring. Ruling in favor of
the union, the court observed that the Legislature intended to set forth "reasonable, proper and
necessary principles which agencies must follow in their rules and regulations for
administering their employer-employee relations, including therein specific provisions for the
right of public employees, as individuals and as members of employee organizations of their
own choice to negotiate on equal footing." (Id. at p. 295.) The court observed that the
Legislature did not intend to preempt the field of employer-employee relations
Precedent in analogous situations is in accord with Grodin's view. In cases where local
.... except where public agencies do not provide reasonable
"methods of administering employer-employee relations through .
. . . . except where public agencies do not provide reasonable
35
rules are challenged as unreasonable, courts have measured the reasonableness of the contested
rules against the provisions of the MMBA itself to resolve disputes. In Los Angeles County
Firefighters Local 1014 v. City of Monrovia (1972) 24 	289 [101 Cal.Rptr. 78]
(City of Monrovia), a municipal employee association represented city employees under a
local ordinance providing that the association is the only organized group which can speak on
behalf of city employees. A union sought recognition for a unit of fire fighters. Without
formally recognizing the union, the city permitted it to participate in salary and wage
discussions. Unsatisfied, the union filed a petition for writ of mandate seeking recognition for
employees in the fire department for the purpose of meeting and conferring. Ruling in favor of
the union, the court observed that the Legislature intended to set forth "reasonable, proper and
necessary principles which agencies must follow in their rules and regulations for
administering their employer-employee relations, including therein specific provisions for the
right of public employees, as individuals and as members of employee organizations of their
own choice to negotiate on equal footing." (Id. at p. 295.) The court observed that the
Legislature did not intend to preempt the field of employer-employee relations
"methods of administering employer-employee relations through .

.. uniform and orderly methods of communication between
employees and the public agencies by which they are employed."
(Section 3500); and that if the rules and regulations of a public
agency do not meet the standard established by the Legislature,
the deficiencies of those rules and regulations as to rights, duties
and obligations of the employer, the employee, and the employee
organization, are supplied by appropriate provisions of the act.
(Id.)
. . uniform and orderly methods of communication between
Other courts, including the California Supreme Court, have long adopted this reasoning. 	(See
International Brotherhood of Electrical Workers v. City of Gridley (1983) 34 Cal.3d 191, 198
[193 Cal.Rptr. 518] (City of Gridley) and cases cited therein; Service Employees International
Union v. Superior Court (2001) 89 Cal.App.4 th 1390 [108Cal.Rptr.2d 	505].)
Other courts, including the California Supreme Court, have long adopted this reasoning. (See
Granted, a public agency's obligation to adopt rules under section 3507 is permissive in
a general sense. However, as noted above, this provision cannot be read in a vacuum. 	Like the
adoption of rules which are unreasonable and do not meet the standards established by the
Legislature, it follows that failure to adopt any rules may be unlawful when it has the effect of
interfering with protected rights and thus undermines standards established by the Legislature.
Granted, a public agency's obligation to adopt rules under section 3507 is permissive in
It is self-evident that, absent specific rules providing a framework for exclusive
recognition of employee organizations there would be no formal procedure for an employee
organization to request and achieve such recognition. As Professor Grodin points out, "an
employee organization cannot know clearly what it must do in order to obtain recognition, and
the courts are likely to have difficulty in measuring the agency's acts against the legislative
standard." Indeed, the recognition process under other PERB-administered statutes operates
under a detailed set ofregulations precisely to avoid the difficulty cited by Grodin.
It is self-evident that, absent specific rules providing a framework for exclusive
19
under a detailed set of regulations precisely to avoid the difficulty cited by Grodin.
recognition of employee organizations there would be no formal procedure for an employee
organization to request and achieve such recognition. As Professor Grodin points out, "an
employee organization cannot know clearly what it must do in order to obtain recognition, and
the courts are likely to have difficulty in measuring the agency's acts against the legislative
standard." Indeed, the recognition process under other PERB-administered statutes operates
36
19 See e.g., PERB Regulation 33015 et seq. (EERA); PERB Regulation 40130 et seq.
(Ralph C. Dills Act); and PERB Regulation 51010 et seq. (Higher Education Employer-
Employee Relations Act.)
See e.g., PERB Regulation 33015 et seq. (EERA); PERB Regulation 40130 et seq.
(Ralph C. Dills Act); and PERB Regulation 51010 et seq. (Higher Education Employer-
Employee Relations Act.)
36
employees and the public agencies by which they are employed."
(Section 3500); and that if the rules and regulations of a public
agency do not meet the standard established by the Legislature,
the deficiencies of those rules and regulations as to rights, duties
and obligations of the employer, the employee, and the employee
organization, are supplied by appropriate provisions of the act.
(Id.)
International Brotherhood of Electrical Workers v. City of Gridley (1983) 34 Cal.3d 191, 198
[193 Cal.Rptr. 518] (City of Gridley) and cases cited therein; Service Employees International
Union v. Superior Court (2001) 89 Cal.App.4" 1390 [108 	Cal.Rptr.2d505].)
a general sense. However, as noted above, this provision cannot be read in a vacuum. Like the
adoption of rules which are unreasonable and do not meet the standards established by the
Legislature, it follows that failure to adopt any rules may be unlawful when it has the effect of
interfering with protected rights and thus undermines standards established by the Legislature.

In this case, a total absence of local rules for recognition unreasonably interfered with
the representation process and is at odds with a key purpose of the MMBA, which is to provide
a "uniform basis for recognizing the right of public employees to join organizations of their
own choice and be represented by such organizations in their employment relationships with
public agencies." (Sec. 3500.) 	Aquino submitted a request for recognition and asked for a
card check to be administered by SMCS. Levy followed with a similar request and expressly
asked for the local ordinance "for EAA to determine the appropriate methodology for
proceeding before PERB." Absent a local rule, EAA could not have known clearly what it
needed to do to obtain recognition. There was no provision for a card check or an election, nor
was there any concrete basis for EAA to proceed.
In this case, a total absence of local rules for recognition unreasonably interfered with
20
The result was foreseeable. In the midst of an organizing drive, when timing frequently
is critical, the drive stalled. No basis existed to resolve disputes associated with EAA's
request, frustrating the overall purpose of the MMBA. The absence of local rules, in tum,
violated specific provisions of the MMBA. It interfered with the right of employee
organizations to represent their members in their employment relations with public agencies.
(Sec. 3503.) It interfered with the right of employees to form, join and participate in the
activities of employee organizations of their own choosing for the purpose ofrepresentation on
The result was foreseeable. In the midst of an organizing drive, when timing frequently
is critical, the drive stalled. No basis existed to resolve disputes associated with EAA's
request, frustrating the overall purpose of the MMBA. The absence of local rules, in turn,
violated specific provisions of the MMBA. It interfered with the right of employee
organizations to represent their members in their employment relations with public agencies.
(Sec. 3503.) It interfered with the right of employees to form, join and participate in the
activities of employee organizations of their own choosing for the purpose of representation on
20 PERB adjudicates representation and recognition disputes under the MMBA by way
of a petition for Board review. PERB Regulation 60000(a) states in relevant part.
2PERB adjudicates representation and recognition disputes under the MMBA by way
of a petition for Board review. PERB Regulation 60000(a) states in relevant part.
Any party to a determination by a public agency concerning unit
determination, representation, recognition or elections may file a
petition requesting the Board review the determination. Such a
petition may only be filed within 30 days following exhaustion of
administrative remedies available under the applicable local rules.
A challenge to the validity of a local rule may not be filed under
this section and may only be filed as an unfair practice charge
pursuant to Section 32602 of these regulations.
Any party to a determination by a public agency concerning unit
determination, representation, recognition or elections may file a
petition requesting the Board review the determination. Such a
petition may only be filed within 30 days following exhaustion of
administrative remedies available under the applicable local rules.
A challenge to the validity of a local rule may not be filed under
this section and may only be filed as an unfair practice charge
pursuant to Section 32602 of these regulations.
It is not even clear if PTSC's response was a "determination" subject to PERB review.	It is not even clear if PTSC's response was a "determination" subject to PERB review.
37
was there any concrete basis for EAA to proceed.20
37
the representation process and is at odds with a key purpose of the MMBA, which is to provide
a "uniform basis for recognizing the right of public employees to join organizations of their
own choice and be represented by such organizations in their employment relationships with
public agencies." (Sec. 3500.) Aquino submitted a request for recognition and asked for a
card check to be administered by SMCS. Levy followed with a similar request and expressly
asked for the local ordinance "for EAA to determine the appropriate methodology for
proceeding before PERB." Absent a local rule, EAA could not have known clearly what it
needed to do to obtain recognition. There was no provision for a card check or an election, nor

38
matters of employer-employee relations. 	(Sec. 3502.) And it unreasonably interfered with the
recognition process. (Sec. 3507.) As Professor Grodin noted, the lack of local rules opens the
door to "arbitrary or discriminatory action, with concomitant chilling effects upon employee
organizations." (Grodin at p. 737.) Therefore, I conclude that the absence oflocal rules to
process EAA' s request violates the Act and runs afoul of the standards established by the
Legislature. (City of Monrovia; City of Gridley.)
matters of employer-employee relations. (Sec. 3502.) And it unreasonably interfered with the
PTSC argues that Covina-Azusa Fire Fighters Union v. City of Azusa (1978) 81
Cal.App.3d 48 [146 Cal.Rptr. 155] (City of Azusa) supports its claim that it has no obligation
to adopt rules regarding representation. In that case, a union sought recognition to represent a
unit of fire fighters, fire engineers and fire captains. The union alleged that the city had failed
to follow the requirements of the MMBA when it unilaterally excluded fire captains from the
unit as managers. The court agreed and held that a public agency is required to meet and
consult with an employee organization conceded to represent the agency's employees before
making a final determination as to the scope of the appropriate unit. PTSC points out that the
court made no finding that the city was required to adopt rules under section 3507, even though
it was clear that no such rules had been adopted. PTSC argues that "the implicit" finding in
City of Azusa, i.e., that a public agency need only meet and consult with an employee
organization before making a final determination as to the scope of the bargaining unit, applies
here and relieves it of any obligation to adopt rules regarding recognition.
PTSC argues that Covina-Azusa Fire Fighters Union v. City of Azusa (1978) 81
I find that the holding in City of Azusa is limited and adds little to the resolution of this
dispute. The union in that case argued only that "a local agency must meet and consult in good
faith with representatives of an employee organization actually conceded to represent
employees, prior to making a determination as to what is an appropriate bargaining unit,
whether or not the employee organization has officially become a 'recognized' employee
I find that the holding in City of Azusa is limited and adds little to the resolution of this
38
recognition process. (Sec. 3507.) As Professor Grodin noted, the lack of local rules opens the
door to "arbitrary or discriminatory action, with concomitant chilling effects upon employee
organizations." (Grodin at p. 737.) Therefore, I conclude that the absence of local rules to
process EAA's request violates the Act and runs afoul of the standards established by the
Legislature. (City of Monrovia; City of Gridley.)
Cal. App.3d 48 [146 Cal.Rptr. 155] (City of Azusa) supports its claim that it has no obligation
to adopt rules regarding representation. In that case, a union sought recognition to represent a
unit of fire fighters, fire engineers and fire captains. The union alleged that the city had failed
to follow the requirements of the MMBA when it unilaterally excluded fire captains from the
unit as managers. The court agreed and held that a public agency is required to meet and
consult with an employee organization conceded to represent the agency's employees before
making a final determination as to the scope of the appropriate unit. PTSC points out that the
court made no finding that the city was required to adopt rules under section 3507, even though
it was clear that no such rules had been adopted. PTSC argues that "the implicit" finding in
City of Azusa, i.e., that a public agency need only meet and consult with an employee
organization before making a final determination as to the scope of the bargaining unit, applies
here and relieves it of any obligation to adopt rules regarding recognition.
dispute. The union in that case argued only that "a local agency must meet and consult in good
faith with representatives of an employee organization actually conceded to represent
employees, prior to making a determination as to what is an appropriate bargaining unit,
whether or not the employee organization has officially become a 'recognized' employee

organization." (City of Azusa at p. 58.) The court found that such a duty existed, and it was
clear that local rules for recognition did not exist. However, the court was not presented with
the arguably related but somewhat different question that is at issue here; that is, whether a
public agency has a duty to promulgate local rules dealing with exclusive recognition. I do not
construe City of Azusa as resolving this question, "implicitly" or otherwise. Therefore, I
conclude that PTSC's reliance on that case is misplaced.
organization." (City of Azusa at p. 58.) The court found that such a duty existed, and it was
Even if a duty exists to promulgate rules and regulations regarding representation and
recognition, PTSC argues further, no evidence was offered to support a claim that EAA
requested that such rules be adopted or that PTSC refused. I disagree.
Even if a duty exists to promulgate rules and regulations regarding representation and
Aquino submitted EAA's first request for recognition under the MMBA on June 27,
2001. 	In addition to requesting recognition, the letter disputed PTSC's position with respect to
the appropriateness of the unit. It agreed to a card check under the auspices of the SMCS in
the event PTSC doubted the showing of support. And it indicated EAA's willingness to
petition the "appropriate forum" for a representation election. If Aquino's letter didn't identify
the need for a uniform set of rules to process the request, Levy's July 12, 2001, letter did.
Aquino submitted EAA's first request for recognition under the MMBA on June 27,
The July 12 letter again demanded recognition. Levy wrote:	The July 12 letter again demanded recognition. Levy wrote:
PERB has now adopted regulations governing the processing or
demands for recognition under MMB. Those regulations provide
for the filing of a petition for an election or, where the local entity
has adopted its own recognition/certification ordinance, a Petition
for Review.
PERB has now adopted regulations governing the processing or
demands for recognition under MMB. Those regulations provide
for the filing of a petition for an election or, where the local entity
has adopted its own recognition/certification ordinance, a Petition
for Review.
39
Because PTSC has not responded to [Aquino's] June 25 demand,
EAA is unaware as to whether PTSC has adopted its own
ordinance with respect to recognition/certification proceedings.
As such, and in order for EAA to determine the appropriate
methodology of proceeding before PERB, demand is hereby
made that your office provide the undersigned with either (1) a
copy of the recognition/certification ordinance adopted by PTSC
or (2) a statement that PTSC has no such ordinance and has
adopted no procedures with respect to recognition/certification
Because PTSC has not responded to [Aquino's] June 25 demand,
39
clear that local rules for recognition did not exist. However, the court was not presented with
the arguably related but somewhat different question that is at issue here; that is, whether a
public agency has a duty to promulgate local rules dealing with exclusive recognition. I do not
construe City of Azusa as resolving this question, "implicitly" or otherwise. Therefore, I
conclude that PTSC's reliance on that case is misplaced.
recognition, PTSC argues further, no evidence was offered to support a claim that EAA
requested that such rules be adopted or that PTSC refused. I disagree.
2001. In addition to requesting recognition, the letter disputed PTSC's position with respect to
the appropriateness of the unit. It agreed to a card check under the auspices of the SMCS in
the event PTSC doubted the showing of support. And it indicated EAA's willingness to
petition the "appropriate forum" for a representation election. If Aquino's letter didn't identify
the need for a uniform set of rules to process the request, Levy's July 12, 2001, letter did.
EAA is unaware as to whether PTSC has adopted its own
ordinance with respect to recognition/certification proceedings.
As such, and in order for EAA to determine the appropriate
methodology of proceeding before PERB, demand is hereby
made that your office provide the undersigned with either (1) a
copy of the recognition/certification ordinance adopted by PTSC
or (2) a statement that PTSC has no such ordinance and has
adopted no procedures with respect to recognition/certification

40
demands by labor organizations. Please provide such information
by July 18, 2001.
demands by labor organizations. Please provide such information
It is difficult to construe Levy's letter as anything but a request for copies of local rules
governing recognition or adoption of such rules.
It is difficult to construe Levy's letter as anything but a request for copies of local rules
In any event, the request was futile. It cannot be overlooked that, on July 30, 2001,
Diederichs responded to Aquino's letter, indicating that the MMBA was not applicable to
EAA's request for recognition and PTSC was governed by the PUC, not the MMBA. Stamm
reiterated the PTSC position in an August 6 letter to Levy. EAA responded with this unfair
practice charge on September 5. Even if EAA had failed to formally request that PTSC adopt
rules dealing with recognition, the failure would not be fatal in the face of PTSC's clear
assertion that MMBA did not apply.
In any event, the request was futile. It cannot be overlooked that, on July 30, 2001,
In a lengthy argument, PTSC contends its response to EAA's request for recognition
was reasonable. PTSC argues that Diederichs responded in a reasonable and timely manner,
explaining its legal position with respect to MMBA application and its view that the unit was
inappropriate. Even after the unfair practice was filed, PTSC points out, the parties met and
PTSC provided lists of employee classifications in connection with a discussion of its claim
that the unit was inappropriate.
In a lengthy argument, PTSC contends its response to EAA's request for recognition
It is true that PTSC engaged in various unit and other discussions with EAA, most of
which took place after the unfair practice charge was filed. It is also true that PTSC may have
had good faith doubts about the appropriateness of the unit requested by EAA, and even
expressed a desire at one of the meetings to have an election. However, in view of the
unwavering position taken by Diederichs and Stamm that the MMBA does not apply to PTSC
employees or EAA's request, these discussions were an exercise in futility. 	It is unnecessary at
this stage to address in detail the various unit issues raised by PTSC. It is enough to say, as
PTSC does in its brief, that the MMBA and the NLRA, the law covering MTA employees,
It is true that PTSC engaged in various unit and other discussions with EAA, most of
40
by July 18, 2001.
governing recognition or adoption of such rules.
Diederichs responded to Aquino's letter, indicating that the MMBA was not applicable to
EAA's request for recognition and PTSC was governed by the PUC, not the MMBA. Stamm
reiterated the PTSC position in an August 6 letter to Levy. EAA responded with this unfair
practice charge on September 5. Even if EAA had failed to formally request that PTSC adopt
rules dealing with recognition, the failure would not be fatal in the face of PTSC's clear
assertion that MMBA did not apply.
was reasonable. PTSC argues that Diederichs responded in a reasonable and timely manner,
explaining its legal position with respect to MMBA application and its view that the unit was
inappropriate. Even after the unfair practice was filed, PTSC points out, the parties met and
PTSC provided lists of employee classifications in connection with a discussion of its claim
that the unit was inappropriate.
which took place after the unfair practice charge was filed. It is also true that PTSC may have
had good faith doubts about the appropriateness of the unit requested by EAA, and even
expressed a desire at one of the meetings to have an election. However, in view of the
unwavering position taken by Diederichs and Stamm that the MMBA does not apply to PTSC
employees or EAA's request, these discussions were an exercise in futility. It is unnecessary at
this stage to address in detail the various unit issues raised by PTSC. It is enough to say, as
PTSC does in its brief, that the MMBA and the NLRA, the law covering MTA employees,

treat supervisors and managers differently. Absent agreement by the parties on the
fundamental question of which law applied, discussions about the appropriateness of the
requested unit seem useless. The first step in any meaningful discussion about the unit
depended on agreement about which law applied, and the parties were far apart on that issue.
In these circumstances, PTSC's claim that its conduct was reasonable does not provide a valid
defense.
treat supervisors and managers differently. Absent agreement by the parties on the
REMEDY	REMEDY
As a remedy, EAA requests that PTSC be required to immediately recognize it as an
employee representative, adopt recognition rules and regulations under PERB supervision and
time schedule, hold exclusive recognition elections, and for any additional relief that is deemed
appropriate. 	For its part, PTSC requests the complaint be dismissed for lack of jurisdiction
under the MMBA. Even if the MMBA applies here, PTSC contends in the alternative, the
evidence falls short of establishing an unfair practice. PTSC contends, moreover, that EAA
has provided no evidence that it represents PTSC employees in the countywide planning and
development department, nor has it proven that a countywide planning and development
department unit is appropriate. Accordingly, PTSC concludes, if the MMBA applies a unit
determination hearing should occur before the EAA is eligible for recognition as the employee
representative of "PTSC (and/or MTA)."
As a remedy, EAA requests that PTSC be required to immediately recognize it as an
employee representative, adopt recognition rules and regulations under PERB supervision and
time schedule, hold exclusive recognition elections, and for any additional relief that is deemed
appropriate. For its part, PTSC requests the complaint be dismissed for lack of jurisdiction
under the MMBA. Even if the MMBA applies here, PTSC contends in the alternative, the
evidence falls short of establishing an unfair practice. PTSC contends, moreover, that EAA
has provided no evidence that it represents PTSC employees in the countywide planning and
development department, nor has it proven that a countywide planning and development
department unit is appropriate. Accordingly, PTSC concludes, if the MMBA applies a unit
determination hearing should occur before the EAA is eligible for recognition as the employee
representative of "PTSC (and/or MTA)."
41
Pursuant to section 3509(a), the PERB under section 3541.3(i) is empowered to:	Pursuant to section 3509(a), the PERB under section 3541.3(i) is empowered to:
... take any action and make any determinations in respect of
these charges or alleged violations as the board deems necessary
to effectuate the policies of this chapter.
. . . take any action and make any determinations in respect of
It has been found that PTSC is a public agency under section 350l(c), and PTSC has
unlawfully refused to acknowledge that the MMBA applies to PTSC and its employees. It also
has been found that PTSC refused to adopt reasonable rules and regulations relating to
It has been found that PTSC is a public agency under section 3501(c), and PTSC has
unlawfully refused to acknowledge that the MMBA applies to PTSC and its employees. It also
has been found that PTSC refused to adopt reasonable rules and regulations relating to
41
fundamental question of which law applied, discussions about the appropriateness of the
requested unit seem useless. The first step in any meaningful discussion about the unit
depended on agreement about which law applied, and the parties were far apart on that issue.
In these circumstances, PTSC's claim that its conduct was reasonable does not provide a valid
defense.
these charges or alleged violations as the board deems necessary
to effectuate the policies of this chapter.

42
recognition of employee organizations, in violation of section 3507 and PERB Regulation
32603(g). By this conduct, PTSC interfered with EAA's right to represent its members, in
violation of section 3503 and PERB Regulation 32603(b ). 	The same conduct interfered with
employees right to form, join, and participate in the activities of employee organizations of
choice for the purpose of representation on all matters of employer-employee relations, in
violation of sections 3502 and 3506, and PERB Regulation 32603(a). It is, therefore,
appropriate to order PTSC to cease and desist from such conduct.
recognition of employee organizations, in violation of section 3507 and PERB Regulation
It is also appropriate to order PTSC to take the following affirmative actions. Within
thirty workdays from service of a final decision in this matter, PTSC is directed to begin the
process of adopting reasonable rules and regulations relating to recognition of employee
organizations. Adoption of such rules and regulations shall be in accordance with the
requirements of section 3507. PTSC is further ordered to process any request for recognition
submitted by EAA in accordance with such rules and regulations and the MMBA.
It is also appropriate to order PTSC to take the following affirmative actions. Within
It is not appropriate to direct PTSC to recognize EAA and conduct an election. EAA's
showing of support in an appropriate unit has not been established. The outstanding unit issues
were not litigated in this proceeding, and thus an appropriate unit has not been established.
Under the legislative scheme embodied in the MMBA and PERB regulations, recognition and
election matters are to be resolved in the first instance pursuant to reasonable rules adopted by
the public agency, unless the public agency or the parties jointly agree to be bound by PERB's
regulations. 	(See PERB Reg. 60070 et seq.) The same local governance reasoning applies fo
the unit questions. "Unit determinations and representation elections shall be determined and
processed in accordance with rules adopted by a public agency in accordance with this
chapter." (Sec. 3507.1.) Challenges to local rules may be pursued as an unfair practice
(PERB Reg. 32602) and determinations under such rules may be contested as a petition for
It is not appropriate to direct PTSC to recognize EAA and conduct an election. EAA's
42
32603(g). By this conduct, PTSC interfered with EAA's right to represent its members, in
violation of section 3503 and PERB Regulation 32603(b). The same conduct interfered with
employees right to form, join, and participate in the activities of employee organizations of
choice for the purpose of representation on all matters of employer-employee relations, in
violation of sections 3502 and 3506, and PERB Regulation 32603(a). It is, therefore,
appropriate to order PTSC to cease and desist from such conduct.
thirty workdays from service of a final decision in this matter, PTSC is directed to begin the
process of adopting reasonable rules and regulations relating to recognition of employee
organizations. Adoption of such rules and regulations shall be in accordance with the
requirements of section 3507. PTSC is further ordered to process any request for recognition
submitted by EAA in accordance with such rules and regulations and the MMBA.
showing of support in an appropriate unit has not been established. The outstanding unit issues
were not litigated in this proceeding, and thus an appropriate unit has not been established.
Under the legislative scheme embodied in the MMBA and PERB regulations, recognition and
election matters are to be resolved in the first instance pursuant to reasonable rules adopted by
the public agency, unless the public agency or the parties jointly agree to be bound by PERB's
regulations. (See PERB Reg. 60070 et seq.) The same local governance reasoning applies to
the unit questions. "Unit determinations and representation elections shall be determined and
processed in accordance with rules adopted by a public agency in accordance with this
chapter." (Sec. 3507.1.) Challenges to local rules may be pursued as an unfair practice
(PERB Reg. 32602) and determinations under such rules may be contested as a petition for

board review. (PERB Reg. 60000.) Therefore, an order directing PTSC to recognize EAA and
conduct an election is premature.
board review. (PERB Reg. 60000.) Therefore, an order directing PTSC to recognize EAA and
It is further appropriate that PTSC be directed to post a notice incorporating the terms
of the order. Posting of such a notice, signed by an authorized agent of PTSC, will provide
employees with notice that PTSC has acted in an unlawful manner, is being required to cease
and desist from this activity, and will comply with the order. It effectuates the purposes of the
MMBA .that employees are informed of the resolution of this controversy and PTSC's
readiness to comply with the ordered remedy. (See Placerville Union School District (1978)
PERB Decision No. 69.)
It is further appropriate that PTSC be directed to post a notice incorporating the terms
PROPOSED ORDER	PROPOSED ORDER
43
Upon the foregoing findings of fact and conclusions of law, and the entire record
herein, it has been found that the Public Transportation Services Corporation (PTSC) violated
the Meyers-Milias-Brown Act (MMBA or Act), Government Code sections 3502, 3503, 3506
and 3507 and Public Employment Relations Board (PERB or Board) Regulations 32603(a), (b)
and (g) (Cal. Code Regs., tit. 8, sec. 31001 et seq.) when it refused to acknowledge MMBA
and PERB jurisdiction, and failed to adopt reasonable rules and regulations relating to
recognition of employee organizations. By this conduct, PTSC interfered with the right of
PTSC employees to participate in the activities of an employee organization of their own
choosing for the purpose of representation on all matters of employer-employee relations, and
interfered with the right of the Engineers and Architects Association (EAA) to represent its
members in their employment relations with a public agency. All other allegations are hereby
dismissed.
Upon the foregoing findings of fact and conclusions of law, and the entire record
Pursuant to Government Code section 3509, it is hereby ORDERED that PTSC, its
governing board and its representations shall:
Pursuant to Government Code section 3509, it is hereby ORDERED that PTSC, its
43
conduct an election is premature.
of the order. Posting of such a notice, signed by an authorized agent of PTSC, will provide
employees with notice that PTSC has acted in an unlawful manner, is being required to cease
and desist from this activity, and will comply with the order. It effectuates the purposes of the
MMBA that employees are informed of the resolution of this controversy and PTSC's
readiness to comply with the ordered remedy. (See Placerville Union School District (1978)
PERB Decision No. 69.)
herein, it has been found that the Public Transportation Services Corporation (PTSC) violated
the Meyers-Milias-Brown Act (MMBA or Act), Government Code sections 3502, 3503, 3506
and 3507 and Public Employment Relations Board (PERB or Board) Regulations 32603(a), (b)
and (g) (Cal. Code Regs., tit. 8, sec. 31001 et seq.) when it refused to acknowledge MMBA
and PERB jurisdiction, and failed to adopt reasonable rules and regulations relating to
recognition of employee organizations. By this conduct, PTSC interfered with the right of
PTSC employees to participate in the activities of an employee organization of their own
choosing for the purpose of representation on all matters of employer-employee relations, and
interfered with the right of the Engineers and Architects Association (EAA) to represent its
members in their employment relations with a public agency. All other allegations are hereby
dismissed.
governing board and its representations shall:

A.	A. 	CEASE AND DESIST FROM:	CEASE AND DESIST FROM:
1 .	1. 	Refusing to acknowledge the MMBA as applying to PTSC and its
employees.
Refusing to acknowledge the MMBA as applying to PTSC and its
employees.
2.2. 	Refusing to adopt reasonable rules and regulations relating to recognition
of employee organizations.
Refusing to adopt reasonable rules and regulations relating to recognition
of employee organizations.
3 .	3. 	Interfering with the right of PTSC employees to participate in the
activities of an employee organization of their own choosing for the purpose ofrepresentation
on all matters of employer-employee relations; and
Interfering with the right of PTSC employees to participate in the
activities of an employee organization of their own choosing for the purpose of representation
on all matters of employer-employee relations; and
4.	4. 	Interfering with the right of EAA to represent employees in their
employment relations with a public agency.
Interfering with the right of EAA to represent employees in their
employment relations with a public agency.
B.	B. 	TAKE THE FOLLOWING AFFIRMATIVE ACTIONS DESIGNED TO
EFFECTUATE THE POLICIES OF THE ACT:
TAKE THE FOLLOWING AFFIRMATIVE ACTIONS DESIGNED TO
EFFECTUATE THE POLICIES OF THE ACT:
1 .	1. 	Within thirty (30) workdays from service of a final decision in this
matter, begin the process of adopting reasonable rules and regulations relating to recognition of
employee organizations. Adoption of such rules and regulations shall be conducted in
accordance with Government Code section 3507.
Within thirty (30) workdays from service of a final decision in this
matter, begin the process of adopting reasonable rules and regulations relating to recognition of
employee organizations. Adoption of such rules and regulations shall be conducted in
accordance with Government Code section 3507.
2.	2. 	Process any request for recognition by EAA pursuant to such rules and
regulations.
Process any request for recognition by EAA pursuant to such rules and
regulations.
3.3. 	Within (10) workdays of service of a final decision in this matter, post at
all work locations at PTSC, where notices to employees customarily are posted, copies of the
Notice attached hereto as an Appendix. The Notice must be signed by an authorized agent of
PTSC, indicating that PTSC will comply with the terms of this Order. Such posting shall be
maintained for a period of thirty (30) consecutive workdays. Reasonable steps shall be taken
to ensure that the Notice is not reduced in size, altered, defaced or covered with any other
material.
Within (10) workdays of service of a final decision in this matter, post at
all work locations at PTSC, where notices to employees customarily are posted, copies of the
Notice attached hereto as an Appendix. The Notice must be signed by an authorized agent of
PTSC, indicating that PTSC will comply with the terms of this Order. Such posting shall be
maintained for a period of thirty (30) consecutive workdays. Reasonable steps shall be taken
to ensure that the Notice is not reduced in size, altered, defaced or covered with any other
material.
44	44

4.	4. 	Upon issuance of a final decision, make written notification of the
actions taken to comply with the Order to the San Francisco Regional Director of the Public
Employment Relations Board in accord with the director's instructions.
Upon issuance of a final decision, make written notification of the
actions taken to comply with the Order to the San Francisco Regional Director of the Public
Employment Relations Board in accord with the director's instructions.
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
Board itself within 20 days of service of this Decision. The Board's address is:
Pursuant to California Code of Regulations, title 8, section 32305, this Proposed
Public Employment Relations Board
Attention: Appeals Assistant
1031 18th Street
Sacramento, CA 95814-4174
FAX: (916) 327-7960
Public Employment Relations Board
. 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. Code Regs. tit. 8, sec. 32300.)
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. Code Regs. tit. 8, sec. 32300.)
A document is considered "filed" when actually received before the close of business
(5 p.m.) on the last day set for filing or when mailed by certified or Express United States mail,
as shown on the postal receipt or postmark, or delivered to a common carrier promising
overnight delivery, as shown on the carrier's receipt, not later than the last day set for filing.
(Cal. Code Regs., tit. 8, secs. 32135(a) and 32130.)
A document is considered "filed" when actually received before the close of business
(5 p.m.) on the last day set for filing or when mailed by certified or Express United States mail,
as shown on the postal receipt or postmark, or delivered to a common carrier promising
overnight delivery, as shown on the carrier's receipt, not later than the last day set for filing.
(Cal. Code Regs., tit. 8, secs. 32135(a) and 32130.)
45
A document is also considered "filed" when received by facsimile transmission before
the close of business on the last day for filing together with a Facsimile Transmission Cover
Sheet which meets the requirements of California Code of Regulations, title 8,
135( 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. Code Regs. tit. 8, sec. 32135(b ),
(c) and (d); see also Cal. Code Regs., tit. 8, secs. 32090 and 32130.)
A document is also considered "filed" when received by facsimile transmission before
45
Decision and Order shall become final unless a party files a statement of exceptions with the
Board itself within 20 days of service of this Decision. The Board's address is:
Attention: Appeals Assistant
1031 18th Street
Sacramento, CA 95814-4174
FAX: (916) 327-7960
the close of business on the last day for filing together with a Facsimile Transmission Cover
Sheet which meets the requirements of California Code of Regulations, 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. Code Regs. tit. 8, sec. 32135(b),
(c)and (d); see also Cal. Code Regs., 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. Code Regs. tit. 8, secs. 32300, 32305,
32140, and 32135(c).)
Any statement of exceptions and supporting brief must be served concurrently with its
Administrative 	Law Judge
FRED D' ORAZIO
Administrative Law Judge
46	46
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. Code Regs. tit. 8, secs. 32300, 32305,
32140, and 32135(c).)