County of Riverside (PERB 2132M)

STATE OF CALIFORNIA
DECISION OF THE
PUBLIC EMPLOYMENT RELATIONS BOARD
SEIU LOCAL 721,
Charging Party,
V.
COUNTY OF RIVERSIDE,
Respondent.
Case No. LA-CE-456-M
PERB Decision No. 2132-M
September 21, 2010
Appearances: 	Weinberg, Roger & Rosenfeld by James Rutkowski, Attorney, for SEIU Local
721; The Zappia Law Firm by Edward P. Zappia and Day B. Hadaegh, Attorneys, for County
of Riverside.
Before Dowdin Calvillo, Chair; McKeag and Wesley, Members.
DECISION
DOWD IN CALVILLO, Chair: This case is before the Public Employment Relations
Board (PERB or Board) on exceptions filed by the County of Riverside (County) to the
proposed decision of an administrative law judge (ALJ). The complaint issued by PERB's
Office of the General Counsel alleged that the County violated the Meyers-Milias-Brown Act
(MMBA) 1 by ceasing its policy of paying overtime to employees who are exempt from the Fair
Labor Standards Act (FLSA)2 without providing SEIU Local 721 (SEIU) with notice of the
change and an opportunity to request to meet and confer over the decision and/or its effects.
The ALJ ruled that SEIU' s unfair practice charge was untimely as to the County's decision to
1 The MMBA is codified at Government Code section 3500 et seq. Unless otherwise
indicated, all statutory references are to the Government Code.
2 The FLSA is codified at 29 U.S.C. section 201 et seq. The FLSA requires employers
to pay covered employees at least 15 0% of their regular pay rate for time worked in excess of
their regular workweek. Employees who are exempt from the FLSA are not entitled to
overtime compensation under the statute.

change its overtime policy, but concluded that the County had unlawfully refused to bargain
over the effects
of
the policy change on certain bargaining unit employees.
The Board has reviewed the proposed decision and the record in light
of
the County's
exceptions, SEIU' s response thereto, and the relevant law. Based on this review, the Board
reverses the proposed decision and dismisses the complaint for the reasons discussed below.3
FACTUAL BACKGROUND
SEIU is the exclusive representative
of
four bargaining units
of
County employees. SEIU
and the County have been parties to a series
of
memoranda
of
understanding (MOU) since at
least 1997. The 1997-2000 and 2000-2004 MOUs provided that employees who are not exempt
from the FLSA would receive overtime pay beyond that mandated by the FLSA. Specifically,
non-exempt employees would be paid for actual hours worked in excess
of
their regular work
day and the workweek would be calculated based on paid status, i.e. vacation and other leave
time would count toward hours worked for purposes
of
determining eligibility for overtime
compensation.
Both MOUs were silent regarding overtime compensation for FLSA-exempt employees.
Despite this silence, it is undisputed that the County paid FLSA-exempt employees overtime
pursuant to the applicable MOU provisions from 1997 through 2005. Thus, both exempt and
non-exempt employees received overtime on the same terms during those years.
The County requested oral argument in this matter. Historically, the Board has denied
requests for oral argument when an adequate record has been prepared, the parties had ample
opportunity to present briefs and have availed themselves of that opportunity, 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
ofEducation (1991) PERB Decision No. 913.) Based on our review of the record, all of the
above criteria are met in this case. Therefore, the County's request for oral argument is denied.
2

In 2005, the parties engaged in negotiations for a successor to the 2000-2004 MOU.4
The County proposed, and SEIU agreed, to eliminate overtime compensation beyond
that
required by the FLSA. Under the amended overtime provisions, non-exempt employees would
receive overtime pay for hours actually worked beyond a 40-hour workweek and only time
actually worked during that week would be used to determine overtime eligibility.
	The
2006-
2009 MOU took effect January
1,
2006. As with the previous two MOUs, this MOU
was
silent regarding overtime compensation for FLSA-exempt employees.
In early 2006, the County began two projects necessary for implementation
of
the
change in overtime policy: (1) reprogramming its payroll system; and (2) conducting a
complete review
of
the FLSA classification
of
County employees. These projects took longer
than the County expected and the new overtime policy was not implemented until July 1, 2008.
The County continued to pay both exempt and non-exempt employees overtime pursuant to the
2000-2004 MOU provisions until July 1, 2008.
On August 29, 2007, SEIU and the County executed a side letter to the 2006-2009
MOU. The side letter stated, in relevant part:
WHEREAS the parties negotiated a Memorandum
of
Understanding
('MOU')
that, with some limited exception, pays
overtime in accordance with the rules established in the Fair
Labor Standards Act ('FLSA');
AND WHEREAS the County has reviewed all the classifications
in the bargaining units represented by SEIU to determine which
classifications are exempt from the FLSA overtime provisions;
AND WHEREAS the County recognizes that immediately
applying the FLSA rules to certain exempt classifications would
result in a recruiting and/or retention problem;
NOW THEREFORE the parties hereto agree as follows:
By mutual agreement, the parties extended the term of the 2000-2004 MOU through
December 31, 2005.
3

The remainder
of
the side letter sets out overtime compensation formulas for certain
FLSA-exempt social services and nurse classifications.
On April 3, 2008, Employee Relations Division Manager Tom Prescott (Prescott)
emailed SEIU Regional Director George Daniels (Daniels) a chart that displayed the results
of
the County's FLSA classification review. The chart indicated that no FLSA-exempt
classification would receive overtime compensation under the new policy.
On April 11, 2008, Daniels wrote a letter to Prescott that stated in full:
Per our rights under the Myers[sic]-Milias-Brown Act SEIU
Local 721 wishes to meet and confer over the impact
of
impending changes to the FLSA non-exempt to exempt status
of
our Information Technology members.
Due to the devastating financial impact to our members we wish
to meet at your earliest possible convenience. I can be contacted
at [phone number]. I look forward to your prompt response.
Prescott responded by letter dated April 14, 2008. He acknowledged receipt
of
Daniels' letter, then stated, "Unfortunately, we are unable to agree to this request as we already
met and conferred with your predecessors about this issue before concluding our current
MOU."5
SEIU filed the instant unfair practice charge on May 22, 2008. On October 6, 2008,
PERB' s Office
of
the General Counsel issued a complaint alleging that the County violated the
MMBA by unilaterally changing its overtime policy. The complaint also alleged that the
County notified SEIU
of
the intended change on or about May 5, 2008.
Proposed Decision, Exceptions and Response
The ALJ found that SEIU had actual knowledge
of
the County's intent to cease paying
overtime compensation to FLSA-exempt employees no later than August 29, 2007, when it
5 The 2006-2009 MOU was negotiated with SEIU Local 1997. In 2007, Local 1997
merged with six other Southern California locals to form Local 721.
4

signed the side letter exempting certain classifications from the policy change. Based on this
finding, the ALJ concluded the charge was untimely as to the County's decision to change the
overtime policy.
The ALJ further found, however, that SEIU's failure to request bargaining in August
2007 did not waive its right to bargain over the effects of the overtime policy change. 	She
therefore concluded that the County unlawfully refused SEIU's request to bargain over the
effects of the change on Information Technology (IT) department employees.
The County's primary argument on appeal is that the parties negotiated and agreed to
the cessation of overtime payments to FLSA-exempt employees in the 2006-2009 MOU.
Thus, the County contends, it was merely implementing the MOU when it ceased paying
exempt employees overtime effective July 1, 2008. The County also argues that this case is
moot because the parties subsequently agreed to revisions of the overtime provisions in the
2009-2010 MOU.
SEIU counters that the parties never agreed to cease overtime payments to exempt
employees and that the County unilaterally changed its established past practice of doing so on
July 1, 2008. SEIU also objects to the County's inclusion of documents not presented at the
hearing as part of its exceptions and argues that this case is not moot because PERB can
provide a remedy for the period of July 1, 2008 to August 1, 2009.
DISCUSSION
1. 	New Documents on Appeal
Attached to the County's exceptions are minutes from labor-management committee
meetings on April 13, 2006, and August 9 and November 8, 2007, and an email dated
September 25, 2007. SEIU objects to the inclusion of these documents because they were
5

never offered at trial and the County did not request to keep the record open to submit
additional exhibits.
When considering a request to reopen the record to admit new evidence, the Board
applies the standard set forth in PERB Regulation 32410(a)6 for a request for reconsideration
based on the discovery
of
new evidence. (State
of
California (Department
of
Parks
and
Recreation) (1995) PERB Decision No. 1125-S.) The regulation provides, in relevant part:
A request for reconsideration based upon the discovery
of
new
evidence must be supported by a declaration under the penalty
of
perjury which establishes that the evidence: (1) was not
previously available; (2) could not have been discovered prior to
the hearing with the exercise
of
reasonable diligence; (3) was
submitted within a reasonable time
of
its discovery; ( 4) is
relevant to the issues sought to be reconsidered; and (5) impacts
or alters the decision
of
the previously decided case.
The County's new exhibits fail to meet this standard for two reasons. First, the exhibits
are not supported by a declaration under penalty
of
perjury. Second, it is clear from the dates
of
the documents that they were in the County's possession at the time
of
the April 20, 2009
hearing in this matter. The County has provided no reason why these exhibits could not have
been introduced at the hearing. Therefore, we decline to consider the four exhibits attached to
the County's exceptions as well as any exceptions based upon those exhibits.
2. 	Mootness
The County argues that this case is moot because after the hearing the parties reached
agreement on a new MOU effective August
1,
2009, through June 30, 2010, which contains
changes to the overtime provisions of the 2006-2009 MOU. According to the County, it would
be pointless for PERB to order the parties to bargain about overtime compensation under these
circumstances.
6 PERB regulations are codified at California Code of Regulations, title 8, section
31001 et seq.
6

A charge that an employer's unilateral change to a particular term or condition of
employment was unlawful does not become moot merely because the parties reach agreement
on that term or condition in subsequent negotiations. (Amador Valley Joint Union High School
District (1978) PERB Decision No. 74.) Only when the agreement clearly settles the issue of
whether the respondent's conduct was unlawful or explicitly waives the charging party's right
to pursue the charge will PERB find a case moot under these circumstances. (Oakland Unified
School District (1980) PERB Decision No. 126, affd. Oakland Unified School District v.
Public Employment Relations Board (1981) 120 Cal.App.3d 1007.)
The excerpts of the 2009-2010 MOU in the record7 do not show that the parties agreed
that the County's alleged unilateral change in overtime policy was lawful or unlawful, nor do
they show that SEIU explicitly waived its right to pursue the instant charge. Further, it appears
that the issue of whether the County's FLSA-exempt employees will receive overtime
compensation was not resolved in the MOU and thus remains active. Therefore, if PERB was
to find that the County made an unlawful unilateral change to its overtime policy, it would be
appropriate to order the County to bargain over the change upon request by SEIU. Moreover,
even if the issue was resolved in the 2009-2010 MOU, that resolution would be prospective
only and hence PERB could order a remedy for the period of July 1, 2008 to August 1, 2009.
Consequently, this case is not moot.
3. 	Timeliness
PERB is prohibited from issuing a complaint with respect to any charge based upon an
alleged unfair practice occurring more than six months prior to the filing of the charge.
(Coachella Valley Mosquito and Vector Control District v. Public Employment Relations
7 The MOU excerpts were attached to the County's post-hearing brief. Because the
hearing record was still open when the excerpts were submitted and SEIU did not object to the
submission, the excerpts are part of the record on appeal.
7

Board (2005) 3 5 Cal.4th 1072.) "In a unilateral change case, the statute
of
limitations begins
to run on the date the charging party has actual or constructive notice
of
the respondent's intent
to implement a change in policy
....
[A] charging party that rests on its rights until actual
implementation
of
the change bears the risk
of
running afoul
of
the statute
of
limitations."
(South Placer Fire Protection District (2008) PERB Decision No. 1944-M.) The charging
party bears the burden
of
demonstrating that the charge is timely filed. 	(Long Beach
Community College District (2009) PERB Decision No. 2002.)
We agree with the ALJ that SEIU had actual notice no later than August 29, 2007,
of
the County's intent to cease paying overtime to FLSA-exempt employees. On that date,
Daniels signed the side letter agreement providing overtime compensation to certain exempt
classifications. While the side letter's reference to applying "FLSA rules" to those
classifications could be interpreted as referring only to the FLSA method
of
overtime
calculation, the letter also states:
AND WHEREAS the County has reviewed all the classifications
in the bargaining units represented by SEIU to determine which
classifications are exempt from the FLSA overtime provisions;
If
the County intended to continue providing the same overtime benefit to exempt and
non-exempt employees, it would not have needed to undertake a costly and time-consuming
classification review. The fact that it conducted such a review indicates an intent to treat
exempt employees differently than non-exempt employees for overtime purposes. Further,
if
the County was not planning to cease paying overtime to exempt employees, there would have
been no reason for SEIU to negotiate the side letter. For these reasons, we find that SEIU
knew, or should have known, on August 29, 2007, that the County was planning to cease
paying overtime to FLSA-exempt employees at the same time it implemented the overtime
changes contained in the 2006-2009 MOU.
8

As noted, the ALJ found the charge untimely as to the County's decision to change the
overtime policy but not as to the County's refusal to bargain over effects of the change on IT
department employees. We find no basis for making a distinction between the County's
decision and its effects for statute of limitations purposes. Whether the intended change is
subject to decision and/or effects bargaining, it is the charging party's knowledge of the
respondent's intent to unilaterally implement the change that starts the six-month statute of
limitations period. (Long Beach Community College District (2003) PERB Decision
No. 1568.) SEIU knew, or should have known, on August 29, 2007, that the County intended
to cease paying overtime to FLSA-exempt employees yet did not file the instant charge until
May 22, 2008, almost nine months after it had actual notice of the County's intent. We
therefore conclude that SEIU's charge was untimely.
ORDER
The complaint and underlying unfair practice charge in Case No. LA-CE-456-M are
hereby DISMISSED.
Members McKeag and Wesley joined in this Decision.
9