BILL ANALYSIS Ó SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: AB 646 Gloria Negrete McLeod, Chair Hearing date: June 27, 2011 AB 646 (Atkins) as amended 6/22/11 FISCAL: YES LOCAL PUBLIC EMPLOYEE ORGANIZATIONS: IMPASSE PROCEDURES HISTORY : Sponsor: American Federation of State, County and Municipal Employees (AFSCME), AFL-CIO Prior legislation: None ASSEMBLY VOTES : PER & SS 4-2 5/04/11 Appropriations 12-5 5/27/11 Assembly Floor 50-25 6/01/11 SUMMARY : This bill would allow local public employee organizations to request fact-finding if a mediator is unable to effect a settlement of a labor dispute within 30 days of appointment; defines certain responsibilities of the fact-finding panel and interested parties; and, makes specified exemptions from its provisions. BACKGROUND AND ANALYSIS : 1)Existing law , as established by the Meyers-Milias-Brown Act (MMBA): a) contains various provisions intended 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; Michael Bolden Date: 6/23/11 Page 1 b) provides that if, after a reasonable amount of time, representatives of the public agency and the employee organization fail to reach agreement, the two parties may mutually agree on the appointment of a mediator and equally share the cost. If the parties reach impasse, the public agency is not required to proceed to interest arbitration and may implement its last, best and final offer; c) authorizes a local public agency to 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 the MMBA, and d) delegates jurisdiction over the employer-employee relationship to the Public Employment Relations Board (PERB) and charges the PERB with resolving disputes and enforcing the statutory duties and rights of local public agency employers and employee organizations. 2)This bill : a) would allow an employee organization to request fact-finding when a mediator has been unsuccessful at effectuating a resolution to a labor dispute within 30 days of appointment; b) specifies that the fact-finding panel consist of one member selected by each party and a chairperson selected by the PERB or by agreement of the parties; c) requires the fact-finding panel to meet with the parties within 10 days after appointment, and take other steps it deems appropriate; d) authorizes the panel to make inquiries and investigations, hold hearings, and take any other steps it deems appropriate, and to issue subpoenas requiring the attendance and testimony of witnesses and the production of witnesses; e) requires state and local public agencies, if Michael Bolden Date: 6/23/11 Page 2 requested by the panel, to furnish the panel with all records, papers and information in their possession relating to any matter under investigation by the panel; f) specifies the criteria the fact-finding panel should be guided in by arriving at their findings and recommendations; g) requires the fact-finding panel to make findings of fact and recommend terms of a settlement if the dispute is not settled within 30 days. This information must first be provided to the parties before being made available to the public; h) requires the costs of the chairperson of the fact-finding panel to be paid for by both parties whether or not PERB selected the chairperson. Any other costs incurred will be borne equally by the parties, as specified; i) allows an employer to implement its last, best and final offer, excluding implementation of a Memorandum of Understanding, once any applicable mediation and fact-finding procedures have been exhausted; j) allows a recognized employee organization the right each year to meet and confer, despite the implementation of the best and final offer, and aa) exempts a charter city, charter county, or a charter city and county that has a procedure, as specified, that applies if an impasse has been reached between the public agency and a bargaining unit regarding negotiations to which the impasse procedure applies. FISCAL : According to the Assembly Appropriations Committee: 1)Based on the staffing that PERB estimated was necessary to administer the bill, the fiscal impact of administering the provisions of this bill are approximately $200,000. Michael Bolden Date: 6/23/11 Page 3 2)There could be substantial state mandated reimbursement of local costs. The amount would depend on the number of requests for fact-finding. PERB staff raised the possibility of exceeding 100 cases annually in the first years of the program. Assuming an individual case is likely to cost around $5,000, with the local agency footing half the bill, reimbursable costs could exceed $2.5 million. The Commission on State Mandates has approved a test claim for any local government subject to the jurisdiction of PERB that incurs increased costs as a result of a mandate, meaning their costs are eligible for reimbursement. 3)Increasing the waiting time before fact-finding could begin, should reduce the costs slightly. COMMENTS : 1)Arguments in Support According to the author: "Although the MMBA requires employers and employees to bargain in good faith, some municipalities and agencies choose not to adhere to this principle and instead, attempt to expedite an impasse in order to unilaterally impose their last, best, and final offer when negotiations for collective bargaining agreements fail. This creates an incentive for surface bargaining in which local governments rush through the motions of Ŭa] meet-and-confer process to unilaterally meet the goal of the agency's management. Although some municipalities have elected to include local impasse rules and procedures, no standard requirement exists for using impasse procedures. This lack of uniformity causes confusion and uncertainty for workers. Fact-finding is an effective tool in labor relations because it can facilitate agreement through objective determinations that help the parties engage in productive discussions and reach reasonable decisions." Michael Bolden Date: 6/23/11 Page 4 According to the sponsor: "Impasse procedures are crucial parts of the collective bargaining process and without them, negotiations may not be fully effective, and bargaining may break down before all avenues of agreement have been explored. Fact-finding panels facilitate agreement through their objective determinations that can help the parties engage in productive discussions and reach reasonable decisions. If a public agency has already promulgated its own impasse procedures, Ŭthis bill] will not prevent that public agency from using those procedures, as long as the procedures are agreed upon by the employee organization." 2)Arguments in Opposition Opponents contend that: "ŬThis bill] removes local authority by giving full discretion to public employee unions to request fact-finding once an impasse is reached. The significant costs that will be imposed on agencies for a process that is at the sole discretion of a local bargaining unit and not the agency is financially impractical for cities. In addition, there is limited funding available to allow PERB to meet this measurable mandate. ŬThis bill] undermines a local agency's authority to establish local rules for resolving impasse; delays the conclusion of contract negotiations - which inevitably will create more adversarial relations between the negotiating parties; could lead to significant delays in labor negotiations between public employers and employee organizations, and could provide a disincentive for employee organizations to negotiate in good faith when a subsequent option exists." Opponents such as several cities also contend that they provide impasse procedures in collective bargaining, bargain in good faith with their respective employee organizations, and that they are unaware of any problems with the current process such that a change is necessary. Michael Bolden Date: 6/23/11 Page 5 3) SUPPORT : American Federation of State, County and Municipal Employees (AFSCME), AFL-CIO, Sponsor California Labor Federation (CLF) California Nurses Association (CNA) California State Employees Association (CSEA) Orange County Labor Federation (OCLF) Peace Officers Research Association of California (PORAC) San Diego and Imperial Counties Labor Council, AFL-CIO 4) OPPOSITION : Association of California Healthcare Districts (ACHD) Association of California Water Agencies (ACWA) California Association of Sanitation Agencies (CASA) California Municipal Utilities Association (CMUA) California Special Districts Association (CSDA) California State Association of Counties (CSAC) City of Cerritos City of Kingsburg City of Murrieta City of Red Bluff City of Torrance City of Vista County of San Diego Desert Water Agency (DWA) East Valley Water District (EVWD) El Dorado Irrigation District (EID) League of California Cities (LCC) Orange County Board of Supervisors Placer County Board of Supervisors Regional Council of Rural Counties (RCRC) Sacramento County Board of Supervisors Sacramento Municipal Utility District (SMUD) Solano County Board of Supervisors ##### Michael Bolden Date: 6/23/11 Page 6 Michael Bolden Date: 6/23/11 Page 7