BILL ANALYSIS Ó SB 857 Page 1 Date of Hearing: August 17, 2011 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair SB 857 (Lieu) - As Amended: July 7, 2011 Policy Committee: PERSSVote:4-1 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill would prohibit an employer's recovery of damages resulting from expenses incurred in anticipation of, or in preparation for, an employee strike and states that this bill is declarative of existing law. FISCAL EFFECT This bill will not have a significant fiscal effect. COMMENTS 1)Purpose. According to the author, "In February of 2010, PERB was hearing an unfair labor practice case between the University of California system and the California Nurses Association (CNA). Largely made up of Schwarzenegger appointees, PERB created out of whole-cloth a right which had previously not existed: strike damages due to the threat of a strike." The author argues this decision flies in the face of previous case law, specifically City and County of San Francisco v. United Assn. of Journeymen, etc. (1986) 42 Cal.3d 810. 2)Background . In this 2010 decision, PERB held it had the authority to award damages as restitution to an employer which suffered pre-strike preparation damages. ((California Nurses Association v. Regents of the University of California) (2010) PERB Decision No. 2094-H.) PERB found that the failure by CNA to exhaust their remedies before striking violated state law. PERB awarded damages to UC for costs incurred in preparation of the one-day strike. PERB stated it had the power to award strike damages because no Supreme Court decision had held that SB 857 Page 2 PERB has no authority to award damages as restitution for an employer for unlawful strike activity. The Court of Appeals has declined to overturn the PERB decision (Cal. Nurses Assn. v. Regents of the Univ. of Cal. (2010). The case is still active at PERB with regards to the damages. 3)Support. The California Nurses Association (CNA), a supporter of this bill and plaintiff in the case at issue, writes: "CNA strongly supports 857 because of our contentious labor relations with the UC since having a 2005 strike enjoined and the fact that the UC has spent over $3.5 million on a notorious union-busting law firm . . . Ýwhich] is being used in efforts to strip workers of fundamental rights and/or to shackle unions with costly and time-consuming litigation when workers exercise these rights. In 2005, UC nurses planned to strike over UC's failure to bargain in good faith over CNA's proposals for safe staffing to provide and protect patient care in the UC Medical Centers. . . . Later that year the contract was settled. Nevertheless, UC pursued charges against CNA, and has claimed $9 million in damages." 4)Opposition . Opponents argue SB 857 would remove the authority of PERB to award damages resulting from an unlawful strike, and as a result would encourage more unlawful strikes, costing state and local governments significant amounts at a time when they can least afford such costs. UC states this bill would perhaps be most problematic in its effects on the UC medical centers, where modifying operations and hiring replacement staff during strikes is particularly costly, and impacts patient service. "If the law is rewritten as proposed in SB 857 to ensure that there will be no significant negative consequences for violations of unlawful strike laws, there is little to no incentive for unions to exercise caution in their approach to a strike." Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081 SB 857 Page 3