El Camino Hospital District * * * OVERRULED IN PART by Alliance College-Ready Public Schools (2017) PERB Decision No. 2545 (PERB 2033M)

OVERRULED IN PART by Alliance College-Ready
Public Schools (2017) PERB Decision No. 2545
STATE OF CALIFORNIA
DECISION OF THE
PUBLIC EMPLOYMENT RELATIONS BOARD
SERVICE EMPLOYEES INTERNATIONAL
UNION, LOCAL 715,
Charging Party,
V.
EL CAMINO HO SPIT AL DISTRICT,
Respondent.
Case No. SF-CE-309-M
PERB Decision No. 	2033-M
May 29, 2009
Appearances: Weinberg, Roger and Rosenfield by Vincent A. Harrington, Jr., Attorney, for
Service Employees International Union, Local 715; Howard Rice Nemerovski Canady Falk &
Rabkin, by David J. Reis, Attorney, for El Camino Hospital District.
Before McKeag, Neuwald and Wesley, Members.
DECISION
McKEAG, Member: 	This case comes before the Public Employment Relations Board
(PERB or Board) on appeal by the El Camino Hospital District (District) of a proposed
decision by an administrative law judge (ALJ). 	The charge alleged that the El Camino
Hospital (Hospital), an entity closely affiliated with the District, violated the Meyers-Milias-
Brown Act (MMBA or Act) 	when it refused to participate in an agency shop election pursuant
to the statutory provisions of the MMBA on the ground that the Hospital is not a "public
agency" within the meaning of the Act. 	Service Employees International Union, Local 715
(SEIU) alleged that this conduct constituted a violation of MMBA sections 3502.5,
1
MMBA is codified at Government Code section 3500 et seq. Unless otherwise indicated,
all statutory references herein are to the Government Code.
1

subdivision (b), 3506 and 3509, subdivision (b)
of
the MMBA and PERB Regulation 32603,
subdivisions (a) and (g).2
We have reviewed the entire record and conclude the Hospital is a public agency,
subject to the provisions
of
the MMBA. In the alternative, we conclude the District and the
Hospital are a single employer for collective bargaining purposes. Accordingly, for the
reasons set forth below, we find the Hospital, like the District, is subject to the provisions
of
the MMBA and, therefore, violated the MMBA when it refused to participate in an agency
shop election.3
FINDINGS OF FACT
The District is a public agency within the meaning
of
MMBA section 3501,
subdivision (c
).
	SEIU is an employee organization within the meaning
of
Section 3501,
subdivision (a).
A. 	Background
California's Local Health Care District Law (Health & Saf. Code, § 32000 et seq.)
authorizes the establishment
of
governmental agencies dedicated to furnishing hospital
services in areas where hospital facilities are lacking. The governing board
of
a hospital
district is initially appointed by the county board
of
supervisors in the county in which the
district is located; thereafter, the board members are subject to popular election. (See Health &
PERB regulations are codified at California Code of Regulations, title 8,
section 31001 et seq.
2
The District requested oral argument in this matter. The Board has historically denied
requests for oral argument when an adequate record has been prepared, the parties submitted
comprehensive briefs, and the issues before the Board are sufficiently clear to make oral
argument unnecessary. (United Teachers
of
Los Angeles (Valadez, et al.) (2001) PERB
Decision No. 1453; Monterey County Office
of
Education (1991) PERB Decision No. 913.)
These criteria are met in this case. Therefore, the District's request for oral argument is hereby
denied.
3

Saf. Code,§ 32100.) In this case, the District's governing board consists
of
five elected
members.
The District was established in 1957 by approval
of
a ballot measure and comprises an
area in Santa Clara County encompassing Mountain View, Los Altos, Los Altos Hills, as well
as portions
of
Sunnyvale, Cupertino and Palo Alto. In 1961, the District established the
Hospital in Mountain View. The Hospital has operated successfully from its inception.
The 1990s marked a period
of
change in the provision
of
health care services
throughout the country. One
of
the significant changes during this time was the emergence
of
managed care plans which achieve cost containment through various measures including case
management, utilization review, and capitation
of
insurance reimbursements.
B. 	Privatization
of
the Hospital
According to the District's own history, "The El Camino Story," the District's
governing board concluded in the early 1990s that it could only survive the changing climate in
health care services by "privatizing" itself. In 1992, the board voted to transfer all Hospital-
related assets to a newly created non-profit public benefit corporation (an Internal Revenue
Service "501(c)(3)" corporation). The transfer included the hospital building, improvements,
fixtures and other related assets to the corporation.
The Hospital's articles
of
incorporation state that it was organized under the California
Nonprofit Public Benefit Corporation Law "for charitable purposes." One of its specific
purposes is to operate acute care hospitals in Mountain View, Cupertino, Los Altos, Los Altos
Hills, or Sunnyvale, establish medical clinics, and provide health care services to meet
community needs.

The District, on the other hand, retained title to the land on which the Hospital was
situated and entered into a ground lease with the newly created corporation. One
of
the recitals
of
the ground lease states:
Tenant [the Hospital] is a nonprofit public benefit corporation
that is organized and operated for the purpose
of
providing
integrated health care services, including hospital services, to its
communities. Tenant conducts its operations independently
of
Landlord [the District], and serves its own charitable purposes
independently
of
Landlord's governmental purposes.
(Italics added.)
The purpose
of
the arrangement was to establish an "integrated delivery
system" by partnering with community physician groups. Under this concept,
the Hospital would take on a wider scope
of
services in order to become more
of
a full-service operation and remain competitive in the market.
So far as the record indicates, the Hospital was the principal ongoing health care facility
operated by the District and, after the transfer, the District ceased operation
of
Hospital
services. Coincidently, the vote by the District governing board to transfer its assets was taken
shortly before legislation took effect on January 1, 1993, requiring that such asset transfers by
hospital districts only take place after public notice and a vote
of
the electorate.
The governing board
of
the integrated delivery system, known as Camino Healthcare,
included "community" members as well as members from the District's governing board. A
short time later, a newly formed local physicians' group, known as Camino Medical Group,
entered into contractual agreements with Camino Healthcare. Within a very short time,
however, the integrated delivery system's plan to absorb the private physicians into Camino
Healthcare encountered financial difficulties. In addition to these financial issues, a iocal

physician voiced complaints about declining quality of care at the Hospital and raised issues
regarding reduced Hospital staffing in nursing and housekeeping.
C. 	Return of the Hospital to District Control
In the meantime, the California Attorney General's office contacted the District's
governing board to discuss possible conflict-of-interest law violations in connection with the
1992 transfer of assets and the extremely favorable terms granted to Camino Healthcare. 	The
District filed suit against Camino Healthcare seeking to void the transfer-of-assets transaction.
In so doing, the District sought to "regain public control" of the Hospital. 	Soon thereafter, the
Camino Medical Group severed its relationship with Camino Healthcare.
The litigation led to a settlement in December 1996. Pursuant to this settlement, the
"private board" of the Hospital agreed to resign from Camino Healthcare, leaving the District
as the "sole member" of the corporation. This act "allow[ed] El Camino Hospital and its assets
to be returned to public control." The settlement was finalized on December 31, 1996, when
the District's governing board appointed three new members to fill the vacancies resulting
from resignations of the Camino Healthcare board's community members. Two of these
appointees were themselves District governing board members.
In 1998, the Hospital returned to operating under its original name (i.e., El Camino
Hospital), but remained legally constituted as a 50l(c)(3) corporation. The change was
described as stating "more clear[ly] that the hospital no longer operates under the policies of
the past," while operations of the hospital itself did not undergo change.
D. 	Composition of the Hospital Board
The Hospital's corporate bylaws state:
The Corporation shall have one voting Member: El Camino
Hospital District, a political subdivision of the State of California

(the "Member"). The Corporation shall have no other voting
members.
The Hospital board consists of six board members. The District board, as the only
voting member of the Hospital corporation, has appointed its own board to serve in five of
these six Hospital board seats. The remaining seat is held by the Hospital's chief executive
officer (CEO) as an "ex officio director."
The Hospital's CEO is hired by, and serves at the pleasure of, the Hospital board. In
one instance, the same person, Richard Warren, served as CEO of both the District and the
Hospital. 	At the time of this dispute, Marla Gularte served as both the Hospital's interim CEO
and the Hospital's chief financial officer.
From the District's standpoint, it scrupulously honors the legal line demarcating the two
entities. The District governing board meets at different times from the Hospital board. 	As a
matter of practice, however, the District governing board meets on the same day and in the
same place as the Hospital governing board. The Hospital board meets more frequently on a
monthly basis. The District governing board meets regularly on a quarterly basis. The District
board keeps its own minutes and issues separate meeting notices. The District board members
continue to be elected by ballot in Santa Clara County. 	(Health & Saf. Code,§ 32100.5,)4
E. 	The District's Relationship with the Hospital
The District board does not propose or approve the Hospital's budget. The District has
a separate budget. As a matter of protocol, however, both budgets are approved on the same
day. Additionally, the District has the power to tax and exercise eminent domain, but the
Hospital does not.
The District asserts that there is no legal requirement that the Hospital board members
be the same as the District board members. While this may be true, the "sole shareholder"
provision and right of removal ultimately make this point moot.
4

The Hospital owns the Hospital building and all the assets associated with it. The
District owns the land on which the Hospital is located and receives rent amounting to
approximately $70,000 annually. The Hospital's articles of incorporation have a reversionary
clause requiring return of all of its assets to the District in the event of dissolution. In 1999,
Senate Bill No. 719 was adopted, imposing transfer-of-assets restrictions on the Hospital,
which mirror those applying to hospital districts. If the Hospital intends to transfer 50 percent
or more of its assets, it must secure approval from the voters of the District. (Health & Saf.
Code, § 32121.7.) The District must also approve "all initial Board members" of any entity to
which any assets are transferred, and any assets transferred must be returned to the District
upon termination of the transfer agreement.
Currently, the District is responsible for providing between $2 million and $2.5 million
in funds annually to the Hospital. These funds are dedicated for capital expenditures only.
From its tax base, the District generates a total of $6 million to $7 million annually. After
remitting the capital funds to the Hospital, the District retains and invests the balance of those
funds. 	The District recently prevailed in a parcel tax measure that will result in $148 million
for capital improvements to the Hospital.
The Hospital's total annual operating expenses are approximately $300 million. The
bulk of the Hospital's revenues come from third-party payer sources (e.g., managed care health
insurance plans and government health care financing) and directly-paid patient fees.
F. 	The Hospital's Labor Relations
In 2000, SEIU prevailed in a consent representation election. The unit includes
professional, licensed, technical, and maintenance employees, which currently numbers
between 950 and 1000 bargaining unit members. In 2000, SEIU successfully negotiated its

first memorandum of understanding (MOU) with the Hospital. That contract, as well as two
successor agreements negotiated with SEIU, were ratified by the Hospital board, not the
District board.
The District is not involved in the day-to-day management of hospital personnel. 	The
Hospital has its own human resources division which administers the collective bargaining
agreement with SEIU and the other recognized unions. The director of the human resources
division takes the lead in negotiating all collective bargaining agreements. The District has no
authority to dictate wages, hours or other terms and conditions of employment for employees
of the Hospital. Employees of the Hospital have no employment relationship with the District.
The Hospital's CEO retains ultimate authority over personnel decisions, including hiring and
termination and serves at the pleasure of the Hospital board.
In 2003, SEIU filed unfair labor practice charges with the National Relations Labor
Board (NRLB) against the Hospital. 	On September 30, 2003, the regional director of
Region 32 issued a decision refusing to issue a complaint on the following basis:
The investigation of these charges disclosed that the Employer is
owned and operated by the El Camino Hospital District, a local
community hospital district. 	The investigation further disclosed
that the operations of the Employer are governed by the
El Camino Hospital District Board, a five member publicly
elected board of directors. 	In such circumstances, I find that the
Employer is exempt for the Board's jurisdiction as a political
subdivision under the second prong of NLRB v. Natural Gas
Utilities District of Hawkins County, 402 U.S. 600 (1971).
On January 20, 2004, after receiving further argument by the Hospital, the NLRB gave
SEIU notice of its intent to rely on evidence that "the El Camino Hospital District, through the
District Board, had the authority to appoint the members of the El Camino Healthcare Board
and that the members of the El Camino Healthcare Board serve 'at the pleasure' of the

El Camino Hospital District board." In one
of
the documents relied upon by the NLRB in its
investigation, the author explains that despite this exercise
of
control, the Hospital board's
existence is still needed:
for two key reasons: 	immediacy and legal settlement
requirements. Most fundamentally, the Settlement Agreement
that was reached to return El Camino to public control required
the continued existence
of
Camino Healthcare. [F]urthermore,
with numerous legal, licensing and accreditation requirements to
be met, it was critical that an appropriate structure be in place to
move forward with operational and professional issues. To
transition the existing 501(c)(3) governance structure back to the
District structure would take considerably longer and cost a great
deal at a time
of
intense competitive pressures. The District
Governing Body determined that El Camino Hospital would
benefit the most by leaving the existing Camino Healthcare
structure in place and operating under the Brown Act, with public
oversight by the elected District Board.
(Emphasis added.)
G. 	Agency Shop Proposal
On April 19, 2005, SEID and the Hospital commenced negotiations on a
successor MOU to the one expiring on June 30, 2005. SEIU submitted a
proposal to amend the organizational security article to require payment
of
agency fees in order to supplement the existing maintenance
of
membership
prov1s10ns.
In its proposal, dated April 19, 2005, SEIU sought to change the organizational security
article in the following ways. First the title of the section dealing with union security
payments would be retitled from "Maintenance of Union Membership" to "Agency Shop."
Subsection A would be retained:
Every bargaining unit employee will have the choice of whether
or not to become a member of the Union. However, every

employee who becomes a member
of
the Union after the date
of
this Agreement shall maintain his or her membership in the
Union for the duration
of
this Agreement.
Subsection B established the agency shop provisions which would require employees
upon hire, and as a condition
of
continuing employment to: 	(1) "[j]oin and maintain
membership in the Union;" (2) "[c]hoose not to join the Union and pay an agency fee
equivalent to the costs the Union incurs for collective bargaining, contract enforcement and
grievance processing;" or (3) allow, on the basis ofreligious objection to union security
provisions, for deduction
of
the fair share amount for donation to a charity. An additional
provision calls for defaulting the employee to an agency fee,
if
he/she fails to choose option (1)
or (3). Lastly, the section retains the language allowing opting out
of
membership during a
seven-day-window period preceding the expiration
of
the contract, and adds language that such
withdrawing members will be treated as agency fee payers.
The Hospital refused to agree to changes in the existing language. Sensing little
prospect
of
movement on the matter, SEIUwithdrew its proposal on June 28, 2005.
Withdrawal
of
the proposal, together with the presentation
of
a comprehensive settlement
offer, led the way to the conclusion
of
the negotiations. SEIU simultaneously informed its
membership
of
its intent to seek an agency shop election pursuant to the petition/election
procedure in the MMBA. Petitions were circulated, SEIU obtained the required proof-of-
support, and that proof-of-support was presented to the State Mediation and Conciliation
Service. When the State Mediation and Conciliation Service presented the Hospital with
SEIU' s demand for an election, the Hospital refused to enter into such an election. The instant
unfair practice charge followed.

ISSUES
1. 	Is the Hospital a public agency within the meaning of Section 3501,
subdivision (c) so as to come under jurisdiction of the MMBA?
2. 	Is the Hospital a public agency under the MMBA by virtue of the single
employer or joint employer doctrines?
3. 	If the Hospital is a public agency, was it entitled to refuse participation in the
agency fee election because SEIU failed to first rescind the contractual
maintenance of membership provisions?
DISCUSSION
PERB is a quasi-judicial administrative agency charged with administering the
collective bargaining statutes covering public employees. PERB only has jurisdiction over
public employees and does not have any authority over collective bargaining laws covering
employees of private companies. (City of Santa Clarita (2006) PERB Decision No. 1865.)
Under the MMBA, a "public employee" is defined in Section 3501, subdivision (d) as any
person employed by any "public agency." A "public agency" is defined in Section 3501,
subdivision (c) as:
[E]very 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.
The District was established in 1957 by approval of a ballot measure pursuant to
California's Local Health Care District Law. The District's governing board consists of five

elected members. Clearly, the District is a public agency subject to the MMBA. The question
in this case, however, is whether the Hospital is a public agency under the MMBA.5
A. 	The Roseville Community Hospital Case
In Service Employees' Internat. Union, Local No. 22 v. Roseville Community Hosp.
(1972) 24 Cal.App.3d 400 (Roseville), the court considered whether a hospital was a public
agency subject to MMBA. In that case, the City of Roseville built a hospital. 	Shortly after
completing construction, the city entered into an agreement to operate the hospital with a non-
profit hospital corporation called "Roseville District Hospital."
The union in Roseville argued that the hospital was a public agency because the City
owned the premises and facilities of the hospital and because the hospital was constructed with
funds raised by municipal election. In further support of its argument, the union noted: 	(1) the
lease agreement between the city and the hospital referred to the operation of the hospital as a
municipal affair; (2) the hospital paid monthly rent to the city; (3) the parties included
statements in their operational agreement that the city reserved the right to terminate the
contract and take over operation of the hospital in the event of a breach of contract; and (4) that
the city required quarterly and annual reports from the hospital. (Roseville at pp. 404-405.)
The hospital, on the other hand, argued that it was not a public agency because it had
never been a hospital district. Instead, the hospital claimed it had been a non-profit
In its appeal, the District claims the complaint should be dismissed because the
Hospital is not named as a respondent in the charge. Such a defect could have easily been
cured had the District raised the defense at an earlier point in the proceedings. The District,
however, did not clearly raise such a defense. (See East Side Union High School District
(2004) PERB Decision No. 1713.) Moreover, at the conclusion of the hearing, SEIU made a
motion to amend the complaint to specifically add to paragraph two of the complaint,
"Respondent acts by and through its joint employer and/or alter ego, El Camino Hospital."
The ALJ granted the motion. Accordingly, we find no due-process, notice defect evident from
these proceedings and, therefore, find no merit in this defense.
5

corporation from its inception, and that it was governed by a separate board
of
directors who
had sole authority to operate the hospital and manage its employees. To further support its
argument, the hospital noted that it paid the city monthly rent, it was governed by an
independent board
of
directors, and it exercised complete responsibility for the administration,
operation and maintenance
of
the hospital. (Roseville at
p.
405.)
Looking to the express language
of
Section 3501, the court determined that in order to
be a public employer subject to the MMBA, the hospital would have to be a "public
corporation," "quasi-public corporation" or a "public service corporation."
The court found that in order to be a public corporation the entity must be "formed for
political and governmental purposes and vested with political and governmental powers."
(Roseville at p. 407.) With regard to quasi-public corporations and public service corporations,
the court found that the entity "must have the characteristics
of
a 'public agency' within the
purposes for which the [MMBA] was enacted, that is, to compel the governing bodies
of
public
agencies to meet and confer in good faith regarding conditions
of
employment with
representatives
of
recognized employee organizations." (Roseville at pp. 407-408.)
Examining the MMBA, the court concluded that the purpose
of
the statute was to
establish organizational/representational rights for employees "who are without the traditional
means
of
enforcing their demands by collective bargaining and striking, thus providing an
alternative which would discourage strikes and yet serve the public employees' interests."
(Roseville at p. 408.) According to the court:
Viewed in this light we believe the phrases 'quasi-public
corporation' and 'public service corporation' must refer only to
entities which are specifically designated as such by the statutes
under which they are organized and under which they operate
....
There is no claim here that the Roseville Community Hospital is
not subject to ordinary collective bargaining procedures and other

B. 	The Roseville Case was Based on an Erroneous Interpretation
of
the Law
It is noteworthy that the court's discussion regarding employees without the "traditional
means
of
enforcing their demands" by collective bargaining and striking was based on its
premise that "in the absence
of
specific legislative authorization it is doubtful that public
employees have the right to strike." (Roseville at p. 408.) Based in large part on this premise,
the court narrowly defined the terms "quasi-public corporation" and "public service
corporation."
However, subsequent to the issuance
of
Roseville, the California Supreme Court ruled
that strikes by public employees are not unlawful unless it is clearly demonstrated that such a
strike creates a substantial and imminent threat to the health or safety
of
the public. (County
Sanitation Dist. No. 2
v.
Los Angeles County Employees' Assn. (1985) 38 Cal.3d 564 (County
Sanitation).) Thus, the fundamental premise upon which the court in Roseville based its
decision was altered by the Supreme Court in County Sanitation. Accordingly, it is unclear
whether the court's rigid interpretation
of
MMBA section 3501 survived the issuance
of
County Sanitation.
C. 	The Roseville Case is Distinguishable
Assuming the rule in Roseville is still good law, the facts in the instant case are
markedly different from the facts in Roseville. As indicated above, the Hospital was privatized
in 1992. The District board of directors voted to transfer all Hospital-related assets to a newly

created non-profit public benefit corporation (an Internal Revenue Service "501(c)(3)"
corporation). The asset transfer to the Hospital corporation included the hospital building,
improvements, fixtures, etc. The District retained title to the land on which the Hospital was
situated and entered into a ground lease with the newly created corporation. So far as the
record indicates, prior to the transfer, the Hospital was the principal ongoing health care
facility operated by the District. After the transfer, however, the Hospital was operated
independently by the newly created corporate board.
Under this operational model, the relationship between the District and the Hospital
was substantially similar to the relationship between the city and the hospital in the Roseville
case. In both instances, the hospitals were operated by independent boards. Moreover, these
boards were granted relative autonomy by contract and exercised complete responsibility for
the administration, operation and maintenance
of
their respective institutions.
These similarities changed, however, in December
of
1996, when litigation led to a
settlement whereby the "private board"
of
the Hospital agreed to resign from Camino
Healthcare, leaving the District as the "sole member"
of
the Hospital corporation. This act
"allow[ed] El Camino Hospital and its assets to be returned to public control." The settlement
was finalized on December 31, 1996, when the District's governing board appointed three new
members to fill the vacancies resulting from resignations
of
the Camino Healthcare board's
community members. Two
of
these appointees were themselves District governing board
members. The third appointee was the Hospital's CEO who served at the pleasure
of
the
Hospital board.
As indicated above, the purpose of the lawsuit was to "regain public control" of the
Hospital. By ousting the independent board, obtaining control of the Hospital's assets and

establishing itself as the sole voting member
of
the Hospital corporation, the District was
successful in regaining public control
of
the Hospital. Moreover, in light
of
the fact
that
the
five elected members
of
the District board continue to serve as five
of
the six Hospital board
members, it is clear that the District board continues to maintain public control
of
the Hospital.
We find this distinction to the significant.
In Roseville, the appellant argued that the hospital should be deemed a public agency
based on Evans
v.
Newton (1966) 382 U.S. 296 (Evans). 	In Evans, a parcel
of
land was
devised to the City
of
Macon to be used as a park for white people only. The Supreme Court
ruled that the public character
of
the park required it to be treated as a public institution and,
therefore, subject to the prohibitions
of
the Fourteenth Amendment.
The court in Roseville distinguished Evans on three grounds. First, the court noted that
Evans involved a civil rights case decided on Fourteenth Amendment grounds. Next, the court
noted there was nothing in the record to suggest the transaction between the city andthe
hospital was a sham to avoid its legal responsibilities. Last, unlike the City
of
Macon and its
park, the court noted that the city was not "actively involved in the operation
of
the hospital."
Based on the last two factors, it is clear the court in Roseville ascribed great
significance to the operational independence
of
the hospital as it related to the city. 	In the
instant case, however, this operational independence is lacking. Indeed, the District took
extraordinary measures via litigation to regain public control
of
the Hospital and continues to
exert control
of
the Hospital as the only voting member
of
the Hospital corporation. In so
doing, the District board members, by virtue
of
their self-appointment to the Hospital board,
are ultimately responsible for the operation
of
the Hospital. Under these circumstances, we

conclude the Roseville case is distinguishable and, therefore, does not dictate the outcome
of
this case.
D. 	The Political Subdivision Exemption under the National Labor Relations
Act (NLRA)
The NLRB' s jurisdiction expressly excludes "any State or political subdivision
thereof." (29 U.S.C. § 152(2).) In 1971, the U.S. Supreme Court developed a test to determine
whether an employer is a political subdivision and, therefore, excluded from NLRB
jurisdiction. (NLRB
v.
Natural Gas Utility District (1971) 402 U.S. 600 (Hawkins).)
Acknowledging that the NLRA did not define the term "political subdivision," and that the
NLRA's
legislative history failed to help define the term, the Supreme Court relied
on
the
premise that the exemption was intended to exclude federal, state and municipal governments
from the NLRB's jurisdiction. Consequently, the Supreme Court concluded that an entity is a
political subdivision
if
it is either: (1) created directly by the state, so as to constitute a
department or administrative arm
of
the government, or (2) administered by individuals who
are responsible to public officials or the general electorate. (Ibid.)
The test under Hawkins was applied by the Board in Options For Youth-Victor Valley,
Inc. (2004) PERB Decision No. 1701 (Options for Youth-Victor Valley, Inc.). 	In that case, the
regional director applied the Hawkins test to determine that a charter school, Options
for
Youth-Victor Valley, Inc., was a political subdivision under both the first and the second prongs
of
the Hawkins test. The Board adopted the proposed decision and held the school was a
public employer subject to the provisions
of
the Educational Employment Relations Act
(EERA).6
6 EERA is codified at Government Code section 3540 et seq.

Applying Hawkins to the present case, the District is the sole voting member of
the Hospital corporation. The members of the District board -- who are publicly elected
officials -- have appointed themselves as five-sixths of the Hospital board. Acting in their
capacity as members of the Hospital board, these members employ the Hospital's CEO who,
by virtue of that employment, is the sixth Hospital board member. Further, these members,
acting in their capacity as Hospital board members may terminate the CEO's employment upon
30 days written notice. Thus, the members of the Hospital board are "responsible to public
officials" because five-sixths of the Hospital board are public officials. Moreover, they are
also responsible to the "general electorate" because five-sixths of the Hospital board are
elected by voters in the District.
For these reasons, we find the Hospital meets the second prong of the Hawkins test and
is therefore, a public entity subject to the provisions of the MMBA.7
E. 	The Hospital is Subject to the MMBA by Virtue of the Single Employer Doctrine
Assuming, arguendo, the Hospital is not properly characterized as a public entity
pursuant to the Roseville decision, the Hospital may nonetheless be subject to the MMBA
pursuant to the "single employer" or "joint employer" doctrines.
A single employer status exists where two nominally separate entities are actually part
of a single integrated enterprise so that there is, in reality, only a single employer. (Public
As indicated above, the NLRB similarly concluded the Hospital was a political
subdivision pursuant to the second prong of the Hawkins test. However, decisions by the
NLRB are not binding on the Board. In Fresno Unified School District (1979) PERB Decision
No. 82, the Board, quoting the hearing officer, explained, "[t]here is nothing in the EERA
which expresses a legislative intent that the jurisdiction of the [Board] should extend up to the
boundaries of NLRB jurisdiction." Still, both the Board and the California courts have long
held that NLRB decisions may be used for guidance when interpreting similar issues. (Fire
Fighters Union v. City of Vallejo (1974) 12 Cal.3d 608.)
7

Transportation Services Corporation (2004) PERB Decision No. 1637-M (Public
Transportation).) The Board looked to the following four factors to determine the existence of
a single employer relationship: (1) functional integration of operations; (2) centralized control
of labor relations; (3) common management; and (4) common ownership. (Public
Transportation; Trustees of the California State University (2006) PERB Decision
No. 1839-H; NLRB v. Browning-Ferris Industries (1982) 691 F.2d 1117, 1124 (Browning-
Ferris).) It has been ruled that while no single factor is controlling and all need not be present
(Ibid.;; NLRB v. O'Neill (9th Cir. 1992) 965 F.2d 1522, 1529), the first three ordinarily are
more critical than the fourth. (Public Transportation.)
1. 	The District and the Hospital are Functionally Integrated
The first element of the single employer test requires a charging party to demonstrate
the entities in question are functionally integrated. Here, the District claims there is no
interrelationship between it and the Hospital because, among other things, the Hospital's
managers and supervisors control the day-to-day operations of the Hospital, the Hospital owns
the supplies and equipment in the Hospital, and the District provides a relatively small amount
of money to the Hospital for capital improvements. We disagree.
The Hospital owes its existence to the District, and the District has a significant interest
in the continued viability of the Hospital. Indeed, the District resumed control of the Hospital
to strengthen the Hospital's financial condition. The District owns the land upon which the
Hospital is situated, receives rent from Hospital for the Hospital building and possesses a
reversionary interest in the Hospital's corporate assets.
In addition, as a result of the lawsuit, the District is now the sole voting member of the
Hospital corporation. Moreover, the District board members have appointed themselves as

five-sixths of the Hospital board. Therefore, even if the Hospital technically owns its
equipment, and even if its staff performs the day-to-day operations, the Hospital's
independence is illusory. Under these circumstances, the District has clearly assumed control
of the Hospital and is, therefore, ultimately responsible for the administration of the Hospital.
Accordingly, we conclude the first element of the single employer test is satisfied.
2. 	The District Controls the Hospital's Labor Relations
To establish the second element of the single employer test, the charging party must
demonstrate centralized control of labor relations. The District argues that there is no
centralized control of labor relations because it is not involved in the day-to-day management
of hospital personnel. Instead, the District argues that the Hospital has its own human
resources division which administers the collective bargaining agreement with SEIU and the
other recognized unions.
As indicated above, however, the District deliberately sought to regain public control of
the Hospital. As part of that control, the District is the sole voting member of the Hospital
corporation and the District's board members have appointed themselves as five-sixths of the
Hospital board. In this capacity, the District board members have taken direct control of the
Hospital. Relative to this discussion, the District board members, in their capacity as Hospital
board members, were responsible for ratifying the first three MOUs between SEIU and the
Hospital. Thus, the District, through its board members, has direct control over this aspect of
the Hospital's labor relations.
The District also argues that there is no centralized control of labor relations because
the director of the human resources division takes the lead in negotiating all collective

bargaining agreements. 	In addition, the District alleges it has no authority to dictate wages,
hours or other terms and conditions
of
employment for employees
of
the Hospital.
However, the District, through its board members, has assumed the responsibility
of
ratifying the MO Us between SEID and the Hospital. Thus, although the director
of
the human
resources division may perform the actual negotiations, the director lacks the authority to
approve an agreement. 	That authority lies with the Hospital board, and since the District has
assumed control
of
the Hospital, the authority lies with the District. Thus, the District has
clearly assumed the authority to dictate wages, hours or other terms and conditions
of
employment for employees
of
the Hospital. Accordingly, we conclude the second element
of
the single employer test is satisfied.
3. 	The District and the Hospital Share Common Management
To establish the third element
of
the single employer test, the charging party must
demonstrate the entities in question share common management. As discussed above, the
District is the sole voting member
of
the Hospital corporation and has assumed control
of
the
operation
of
the Hospital. The sixth member
of
the Hospital board is the CEO. 	Although the
CEO retains ultimate authority over personnel decisions, including hiring and termination, the
CEO serves at the pleasure
of
the Hospital board, and, therefore, at the pleasure
of
the District
board. Accordingly, we conclude the third element
of
the single employer test is satisfied.
4. 	The District and the Hospital Share Common Ownership
The last element
of
the single employer test requires the charging party to demonstrate
common ownership between entities in question. Presently, the District owns the land upon
which the Hospital is located and receives rent in the amount
of
approximately $70,000 per
year. 	The Hospital, on the other hand, owns the hospital building and all the assets associated

with it. However, the Hospital's articles
of
incorporation have a reversionary clause requiring
return
of
all
of
the corporation's assets to the District in the event
of
dissolution. In 1999,
Senate Bill No. 719, an act
of
special legislation, was adopted, imposing transfer-of-assets
restrictions on the Hospital which mirror those applying to hospital districts. Moreover,
if
the
Hospital intends to transfer 50 percent or more
of
its assets, it must secure approval from the
voters
of
the District. (Health & Saf. Code, § 32121. 7.) The District must also approve "all
initial Board members"
of
any entity to which any assets are transferred and any assets
transferred must be returned to the District upon termination
of
the transfer agreement.
Under these circumstances, we find the District and the Hospital share common
ownership. Accordingly, we conclude the fourth element
of
the single employer test is
satisfied. Because all four elements have been satisfied, we find the District and the Hospital
are properly characterized as a single employer. We, therefore, conclude the Hospital, like the
District, is subject to the MMBA.
F. 	The Joint Employer Doctrine does not Apply in this Case
In addition to the single employer doctrine, the Board also recognizes the joint
employer doctrine. A "joint employer" situation arises "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." (San Jose/Evergreen Community College District (2007) PERB Decision
No. 1928 (San Jose/Evergreen); United Public Employees
v.
Public Employment Relations Bd.
(1989) 213 Cal.App.3d 1119, 1128, quoting Browning-Ferris; The Regents
of
the University
of
California (1999) PERB Order No. Ad-293-H.) As explained by the Board in San
Jose/Evergreen, a joint employer theory does not depend upon the existence of a single

integrated enterprise; instead, it assumes the enterprises are independent legal entities that
historically have chosen to jointly address important aspects
of
their employer-employee
relationship. Consequently, these cases focus on the level
of
control exerted over the
employees by the enterprises in question.
As discussed above, the District has assumed control
of
the Hospital. Thus, the instant
case does not involve a situation in which the District and the Hospital share or co-determine
matters governing essential terms and conditions
of
employment. Rather, this case involves
the existence
of
a single integrated enterprise. Under these circumstances, we find the joint
employer doctrine does not apply in this instance.
G. 	Failure to Remove Maintenance
of
Membership Provisions
The District contends that even
if
the Hospital is bound by the provisions
of
the
MMBA, it was excused from participating in the agency fee election because the existing
maintenance
of
membership provision in the expiring MOU is inconsistent with the proposed
agency fee arrangement.	
It
bases this argument on a California Attorney General opinion
(86 Ops. Att. Gen. 169 (2003)), which opines that the voting mechanism may be used to
change a contract's organizational security provision only
if
the existing provision is first
removed from the MOU by negotiation. 8
In that case, the union sought to have an election during the term
of
the agreement. The
existing "service fee" was equal to the regular union membership dues. The analysis
concludes that the election procedure is intended only for those situations where negotiations
fail to produce an agency fee arrangement and thus the election may not be held during the
It
should be noted that opinions of the Attorney General, although persuasive are not
binding on the Board. It is also noteworthy that the Attorney General is not charged with
interpreting the MMBA in the first instance. That job rests soundly with the Board. (City
of
Monterey (2005) PERB Decision No. 1766-M.)
8

term
of
the agreement
if
there is an existing agency fee provision that conflicts with the
existing one. Based on this case, the District asserts that SEIU was required to have the
maintenance
of
membership provisions removed by an election.
The Attorney General begins by explaining that removal
of
an agency fee provision is
by negotiation between the union and the employer. The very end
of
the opinion adds that an
existing provision may be rescinded by election. This statement, however, merely restates the
law. 	(MMBA § 3502.5, subd. (d).) Nothing in the opinion suggests that the union must
initiate such an election. Rather, the opinion states the obvious. Namely, that
if
a provision
has been eliminated by vote, there is no impediment to a new election initiated by the union
during the term
of
the existing MOU (other than the statutory waiting period). Because we
find no authority supporting a requirement that the union is required to initiate an election for
rescission, we find the District's argument lacks merit.
In addition, the maintenance
of
membership provision in the existing MOU and the
proposed agency fee provision are two materially different provisions. The current
maintenance
of
membership provision provides: "Every bargaining unit employee will have
the choice
of
whether or not to become a member
of
the Union. However, every employee
who becomes a member
of
the Union after the date
of
this Agreement shall maintain his or her
membership in the Union for the duration
of
this Agreement." An "agency shop," on the other
hand is defined in Section 3502.5, subdivision (a) is:
an arrangement that requires an employee, as a condition
of
continued employment, either to join the recognized employee
organization or to pay the organization a service fee in an amount
not to exceed the standard initiation fee, periodic dues, and
general assessments of the organization.

The maintenance
of
membership provision merely gave bargaining unit members the
choice
of
becoming a union member and imposed an obligation upon them to remain members
during their employment. Based on our review
of
MMBA section 3502.5, we find the
maintenance
of
membership provision in the MOU is not an agency fee provision, and
therefore, not subject to Section 3502.5.
Last, we find these two provisions are not incompatible. The proposed agency fee
provision would apply only to non-members. On the other hand, the current members
participating in the automatic dues deductions pursuant to the maintenance
of
membership
provisions had their opportunity during the window period
of
the expiring MOU to withdraw
their membership, or have it continued for the term
of
the new agreement. Thus, the agency
fee provisions would only serve to supplement the fees being directed to SEIU by now
covering employees who decline union membership. Therefore, we find the maintenance
of
membership fee provision and the proposed agency fee provision are not mutually
incompatible. Consequently, SEIU need not rescind the maintenance
of
membership
provisions before seeking an agency fee election.
Based on the foregoing, we find that the District and Hospital unlawfully denied SEIU
its right to invoke the agency fee election procedure pursuant to MMBA section 3505.2(b).
H. 	Remedy
Pursuant to MMBA section 3509, subdivision (a), the PERB under EERA
section 3541.3, subdivision (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.

As discussed above, we find the District and Hospital violated MMBA section 3502.5,
subdivision (b) by refusing to participate with SEIU in an agency fee election. Accordingly, it
is appropriate to order the employer(s) to cease and desist from its unlawful conduct and
participate in the election process as demanded by SEIU. (Antelope Valley Community College
District (1979) PERB Decision No. 97; Rio Hondo Community College District (1983) PERB
Decision No. 292;
Mt.
San Antonio Community College Dist.
v.
Public Employment Relations
Bd. (1989) 210 Cal.App.3d 178, 189.)
In addition to the forgoing remedies, the proposed decision included the following:
In the event the agency fee provision is approved through
election, make SEIU whole by remitting an amount equivalent to
the fees SEIU otherwise would have collected had the election
not been delayed, together with interest at the legal rate
of
seven
percent.
Based on our review
of
this matter, we find such a remedy is, at best, speculative and
unwarranted. (State
of
California, California Department
of
Transportation,
and
Governor's
Office
of
Employee Relations (1981) PERB Decision No. 159b-S) We, therefore, do not find a
monetary award appropriate under the facts
of
this case.
CONCLUSION
Because the members
of
the Hospital board are responsible to both "public officials"
and the "general electorate," we find the Hospital is properly characterized as a public agency
and, therefore, subject to MMBA. Further, even if the Hospital is not properly characterized as
a public agency, we find the District and the Hospital are single employers and, therefore,
conclude the Hospital's violations of the MMBA may be imputed to the District. Based on
these findings, we conclude both the District and the Hospital violated the MMBA when SEIU

was unlawfully denied its right to invoke the agency fee election procedure pursuant to
Section 3505 .2, subdivision (b ).
ORDER
Upon the foregoing findings
of
fact and conclusions
of
law, and the entire record in this
case, it has been found that the El Camino Hospital District (District), acting by and through
the El Camino Hospital (Hospital), violated the Meyers-Milias-Brown Act (MMBA) by
refusing to participate in an agency fee election pursuant to the provisions
of
the MMBA,
Government Code section 3502.5, subdivision (b). By this conduct, the District and Hospital
also interfered with the right
of
employees to participate in the activities
of
an employee
organization
of
their own choosing, in violation
of
MMBA section 3506 and PERB
Regulation 32603, subdivision (a).
Pursuant to section 3509, subdivision (a)
of
the MMBA, it hereby is ORDERED that
the District and Hospital, their respective governing boards and their representatives shall:
A. 	CEASE AND DESIST FROM:
Refusing to participate in an agency fee election pursuant to the
provisions ofMMBA section 3502.5, subdivision (b).
1.
By said conduct, interfering with bargaining unit members' right to
participate in the activities
of
an employee organization
of
their own choosing.
2.
B. 	TAKE THE FOLLOWING AFFIRMATIVE ACTIONS DESIGNED TO
EFFECTUATE THE POLICIES OF THE MMBA:
Participate in an agency fee election pursuant to the provisions
of
the
MMBA section 3502.5, subdivision (b), upon demand by the Service Employees International
Union, Local 715 (SEIU).
1.

Within ten (10) workdays
of
service
of
a final decision in this matter,
post at all work locations in the District and Hospital, where notices to employees customarily
are placed, copies
of
the Notice attached hereto as an Appendix. The Notice must be signed by
an authorized agent
of
the District and/or Hospital, indicating that the District and Hospital
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.
2.
Written notification
of
the actions taken to comply with this Order shall
be made to the General Counsel
of
the Public Employment Relations Board, or the General
Counsel's designee. The District shall provide reports, in writing, as directed by the General
Counsel or his/her designee. All reports regarding compliance with this Order shall be
concurrently served on SEIU Local 715.
3.
It is further Ordered that all other allegations in Case No. SF-CE-309-M are
hereby DISMISSED.
Members Neuwald and Wesley joined in this Decision.

APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
PUBLIC EMPLOYMENT RELATIONS BOARD
An Agency
of
the State
of
California
After a hearing in Unfair Practice Case No. SF-CE-309-M, Service Employees
International Union, Local 715
v.
El Camino Hospital District, in which the parties had the
right to participate, it has been found that the El Camino Hospital District and the El Camino
Hospital (Hospital) violated the Meyers-Milias-Brown Act (MMBA), Government Code
sections 3506, 3502.5, subdivision (b), and PERB Regulation 32603, subdivision (a) (Cal.
Code Regs., tit. 8, sec. 31001 et seq.), when they refused to participate with the Service
Employees International Union, Local 715 (SEIU) in an agency fee election pursuant to the
provisions
of
MMBA section 3502.5, subdivision (b
).
	This conduct also interfered with the
right
of
Hospital employees to participate in the activities
of
an employee organization
of
their
own choosing in violation
of
MMBA section 3506.
As a result
of
this conduct, we have been ordered to post this Notice and we will:
A. 	CEASE AND DESIST FROM:
Refusing to participate in an agency fee election pursuant to the
provisions ofMMBA section 3502.5, subdivision (b).
1.
By said conduct, interfering with bargaining unit members' right to
participate in the activities
of
an employee organization
of
their own choosing.
2.
B.	
TAKE THE FOLLOWING AFFIRMATIVE ACTIONS DESIGNED TO
EFFECTUATE THE POLICIES OF THE MMBA:
Participate in an agency fee election pursuant to the provisions
of
MMBA
section 3502.5, subdivision (b), upon demand by SEIU.
Dated: 	EL CAMINO HOSPITAL DISTRICT AND
EL CAMINO HO SPITAL
By:
---------------
Authorized Agent
THIS IS AN OFFICIAL NOTICE. IT MUST REMAIN POSTED FOR AT LEAST THIRTY
(30) CONSECUTIVE WORKDAYS FROM THE DATE OF POSTING AND MUST NOT BE
REDUCED IN SIZE, DEF ACED, ALTERED OR COVERED WITH ANY OTHER
MATERIAL.