State of California (Department of Personnel Administration) (PERB 2210S)

STATE OF CALIFORNIA
DECISION OF THE
PUBLIC EMPLOYMENT RELATIONS BOARD
UNION OF AMERICAN PHYSICIANS &
DENTISTS,
Charging Party,
V.
STATE OF CALIFORNIA (DEPARTMENT OF
PERSONNEL ADMINISTRATION),
Respondent.
Case No. SA-CE-1754-S
PERB Decision No. 	2210-S
October 13, 2011
Appearances: Davis, Cowell & Bowe by Andrew
J.
Kahn, Attorney, for Union
of
American
Physicians & Dentists; Shaun
R.
Spillane, Legal Counsel, for State
of
California (Department
of
Personnel Administration).
Before Martinez, Chair; McKeag and Dowdin Calvillo, Members.
DECISION
DOWD IN CALVILLO, Member: This case is before the Public Employment Relations
Board (PERB or Board) on appeal by the Union
of
American Physicians & Dentists (UAPD)
of
a Board agent's dismissal
of
its unfair practice charge. The charge alleged that the State
of
California (Department
of
Personnel Administration) (State or DP A) violated the Ralph C.
Dills Act (Diils Act) 1 by unilaterally implementing a plan to furlough state employees three
days a month pursuant to executive orders issued by then Governor Arnold Schwarzenegger.
The Board agent found the charge did not state a prima facie case and dismissed the charge.
The Board has reviewed the dismissal and the record in light
of
UAPD's appeal, the
State's response thereto, and the relevant law. 	Based on this review, the Board affirms the
dismissal for the reasons discussed below.
1 The Dills Act is codified at Government Code section 3512 et seq. Unless otherwise
indicated, all statutory references herein are to the Government Code.

BACKGROUND2
UAPD is the exclusive representative of employees in State Bargaining Unit 16.
UAPD and the State are parties to a memorandum of understanding that expired on June 30,
2008.
On December 19, 2008, Governor Schwarzenegger issued Executive Order S-16-08,
which declared that a fiscal emergency existed within the State of California and ordered DPA
to implement a plan to furlough state employees two days per month, effective February 1,
2009 through June 30, 2010. Executive Order S-16-08 described the State's fiscal situation,
including declarations that without effective action the deficit was estimated to grow to a
$42 billion budget shortfall, that there was a substantial risk that California would be unable to
meet its financial obligations beginning in February 2009, and that failure to substantially
reduce the deficit would make it likely the State would miss payroll and other essential
services payments in early 2009.
On December 24, 2008, UAPD filed the instant unfair practice charge alleging that the
State's implementation of the furlough plan was an unlawful unilateral change in policy.
On July 1, 2009, citing new evidence of a continuing fiscal emergency, Governor
Schwarzenegger issued Executive Order S-13-09, directing DPA to increase employee
furloughs to three days per month. Executive Order S-13-09 included declarations that
revenue projections continued to drop, putting the State's budget shortfall at more than
$24 billion for fiscal years 2008-09 and 2009-10, and that 	State Controller determined that
without effective action the State would have insufficient cash to meet its obligations starting
July 2009 and would need to issue registered warrants.
2
2 Most of the underlying facts in this case are identical to those set forth in the Board's
decision in State of California (Department of Personnel Administration) (2010) PERB
Decision No. 2152-S (Department of Personnel Administration).

On December 16, 2009, the Board agent issued a warning letter to UAPD in which the
Board agent, relying on Sonoma County Organization Employees v. County of Sonoma (1991)
1 Cal.App.4 th 267 (County of Sonoma), determined that the implementation of the furlough
plan fell within the emergency exception of Dills Act section 3516.5.3 In County of Sonoma,
the court held that a declaration of emergency is presumed valid and the party challenging the
declaration bears the burden of proving it invalid. The Board agent found that UAPD did not
allege any facts to rebut the emergency presumption.
On December 23, 2009, UAPD amended its charge to allege that the State unilaterally
implemented a third furlough day. 4
3 Dills Act section 3516.5 states:
Except in cases of emergency as provided in this section, the
employer shall give reasonable written notice to each recognized
employee organization affected by any law, rule, resolution, or
regulation directly relating to matters within the scope of
representation proposed to be adopted by the employer, and shall
give such recognized employee organizations the opportunity to
meet and confer with the administrative officials or their
delegated representatives as may be properly designated by law.
In cases of emergency when the employer determines that a law,
rule, resolution, or regulation must be adopted immediately
without prior notice or meeting with a recognized employee
organization, the administrative officials or their delegated
representatives as may be properly designated by law shall
provide such notice and opportunity to meet and confer in good
faith at the earliest practical time following the adoption of such
law, rule, resolution, or regulation.
County of Sonoma interpreted a nearly identical statutory provision under the Meyers
Milias-Brown Act (MMBA). (The MMBA is codified at§ 3500 et seq.)
4 In addition to the amended charge, UAPD filed "supplemental" documents on
December 29, 2009, January 4, 2010, and February 3, 2010. The State filed a response to each
supplemental filing. 	The Board agent treated the supplemental filings as part of the amended
charge.
3

While the charge remained pending before the Board agent, on December 31, 2009,
Alameda County Superior Court Judge Frank Roesch issued an order granting a writ of
mandate in an action brought by UAPD and other labor organizations that the furloughs were
invalid as applied to employees performing services funded by special funds including federal
funds, rather than by the general fund. (Alameda County Superior Court Case No.
RG09456684.) The State appealed that ruling, and it was still pending on appeal when the
parties submitted briefing in this matter on appeal before the Board.
In addition, while the charge remained pending before the Board agent, on October 4,
2010, the California Supreme Court issued its decision in Professional Engineers in California
Government v. Schwarzenegger (2010) 50 Cal.4 th 989 (Professional Engineers). In that
decision, the Court held that the emergency exception in Dills Act section 3516.5 did not
independently authorize the Governor to implement the furloughs. 	The court further
determined, however, that the Legislature had the authority to modify terms and conditions of
employment without first requiring collective bargaining and that, by adopting the Budget Acts
of 2008 and 2009 and revisions to those acts, the Legislature effectively ratified the Governor's
furlough orders. (Id., at p. 1005.) Relying on Professional Engineers, on December 16, 2010,
the Board reached the same result in Department of Personnel Administration, holding that the
Legislature's action in authorizing the furlough plan by enacting and revising the Budget Acts
of 2008 and 2009 did not violate the Dills Act.
On January 10, 2011, the Board agent dismissed the instant charge based upon the
decision of the California Supreme Court in Professional Engineers and the Board's decision
in Department of Personnel Administration.
U APD appealed the dismissal of the charge on January 25, 2011. The State filed an
opposition to the appeal on February 15, 2011.
4

On May 16, 2011, while this matter was pending before the Board, the California Court
of Appeal for the First Appellate District issued a published decision in Union of American
Physicians and Dentists v. Brown (2011) 195 Cal.App.4th 691 (UAPD v. Brown), holding that,
based on Professional Engineers, the Governor could lawfully furlough state employees who
are paid by the federal government. Thus, the Court of Appeal stated:
In Professional Engineers, our high court ruled the Legislature's
2009 revisions to the 2008 Budget Act operated to validate the
"then existing furlough program" (Professional Engineers, supra,
50 Cal.4th at p. 104 7), and the "then existing furlough program"
was the program that had been implemented by the Governor on
December 19, 2008, and that called for a mandatory furlough of
represented state employees "regardless offunding source."
(Id. at p. 1003, italics added.) It is not our place to question our
Supreme Court's rulings on this point. (Auto Equity Sales, Inc. v.
Superior Court (1962) 57 Cal.2d 450, 455.) Based on
Professional Engineers, we conclude the Governor could validly
furlough state employees who are paid by the federal
government.
(UAPD v. Brown, at p. 700.)5
On July 27, 2011, the California Supreme Court denied review of the Court of Appeal's
decision in UAP D v. Brown.
DISCUSSION
On appeal, UAPD requested that the charge be placed in abeyance pending the decision
of the First District Court of Appeal in UAPD v. Brown. In the alternative, UAPD
incorporated by reference its arguments before the First District Court of Appeal, in which it
5 The court also rejected arguments that the furlough of federally funded employees
violated Government Code section 19851 (governing eligibility for overtime compensation, an
argument rejected by the Supreme Court in Professional Engineers) and Government Code
section 16310, subdivision (a) (prohibiting the transfer of monies from special fund agencies to
the general fund where to do so would interfere with the object for which a special fund was
created). (UAPD v. Brown, at pp. 697-699.) In addition, the court rejected arguments that the
third furlough day, which was not specifically addressed in Professional Engineers, was
unauthorized, holding that, because the Legislature used the same language in the revised 2009
Budget Act as it had used in the 2009 revisions to the 2008 Budget Act, it intended the same
result. 	(Id., at pp. 703-704.)
5

asserted that the Legislature lacked the authority to approve furloughs for special fund
agencies.
Given that the First District Court of Appeal has issued its decision in UAP D v. Brown
and that decision has become final, UAPD's request to place the instant charge iri abeyance is
now moot. Moreover, given that the First District Court of Appeal rejected UAPD's
substantive arguments on the same facts and legal issues, that decision is dispositive on the
issues before the Board in this case. As determined by the Courts in both Professional
Engineers and UAP D v. Brown, and by the Board in Department of Personnel Administration,
the Dills Act does not limit the Legislature's authority to enact unilateral changes to terms and
conditions of employment. In UAPD v. Brown, the Court rejected UAPD's argument that an
exception to this rule exists for federally funded employees. Accordingly, the charge must be
dismissed.
UAPD also asserted on appeal that it was denied due process when the Board agent
dismissed the charge for reasons other than those set forth in the Board agent's December 16,
2009 warning letter. Given our disposition of this case, we need not address this issue.
ORDER
The unfair practice charge in Case No. SA-CE-1754-S is hereby DISMISSED
WITHOUT LEAVE TO AMEND.
Chair Martinez and !vierr1ber !vfcKeag joir1ed in this Decisio11.
6