BILL ANALYSIS Ó SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: AB 537 Jim Beall, Chair HEARING DATE: June 24, 2013 AB 537 (Bonta) as amended 6/17/13 FISCAL: YES PUBLIC AGENCIES: COLLECTIVE BARGAINING HISTORY : Sponsor: American Federation of State, County and Municipal Employees (AFSCME) California Professional Firefighters (CPF) Service Employees International Union California (SEIU) Other legislation:AB 616 (Bocanegra) 2013 Currently in Senate PE&R Committee AB 1181(Gray) 2013 Currently in Senate PE&R Committee AB 1606 (Perea), Chapter 314, Statutes of 2012 AB 646 (Atkins), Chapter 680, Statues of 2011 ASSEMBLY VOTES : PER & SS 5-2 4/24/13 Appropriations 12-5 5/24/13 Assembly Floor 54-24 5/30/13 SUMMARY : AB 537 makes changes to the Meyers-Milias-Brown Act (MMBA) governing collective bargaining between local public agencies and their employees with respect to ground rules, ratifications of MOUs, mediation, arbitration and factfinding. BACKGROUND AND ANALYSIS : 1)Existing law : a) establishes the Meyers-Milias-Brown Act (MMBA), which provides a statutory framework for local government Glenn A. Miles Date: June 24, 2013 Page 1 employer-employee relations by providing a reasonable method of resolving disputes regarding wages, hours, and other terms and conditions of employment between local public employers and public employee organizations. b) under MMBA, authorizes local public agencies to adopt reasonable rules and regulations after consultation in good faith with representatives of an employee organization or organizations. c) requires a public agency to meet and confer in good faith with the representatives of a recognized employee organization regarding wages, hours, and other terms and conditions of employment. d) delegates jurisdiction over the employer-employee relationship to the Public Employment Relations Board (PERB) and charges PERB with resolving disputes and enforcing the statutory duties and rights of local public agency employers and employee organizations. e) provides that an agreement between the parties shall not be final and binding upon the parties to the negotiations until it is presented to the public agency's governing body or statutory representative for determination. f) provides that if, after a reasonable amount of time, representatives of the public agency and the employee organization fail to reach agreement, either party may request mediation. Within 5 days of the mediation request, existing law requires both parties to agree on the appointment of a mediator and equally share the cost. However, there is no provision for when the parties cannot agree on a mediator. g) authorizes an employee organization to request that the parties' differences be submitted to a factfinding panel following the appointment of a mediator or entering into a mediation process, or following a written notice of a declaration of impasse. h) allows a public agency to implement its last, best and final offer once any applicable mediation and factfinding Glenn A. Miles Date: June 24, 2013 Page 2 procedures have been exhausted and provides that even with implementation of the best and final offer a recognized employee organization has the right each year to meet and confer with the public agency. 2)This bill : a) prohibits a public agency from proposing, as a condition for meeting and conferring, ground rules that limit the right of an employee or employee organization to communicate with officials of the public agency. b) requires that if a tentative agreement is reached by the authorized representatives of the public agency and a recognized employee organization or recognized employee organizations, that agreement shall be presented to the governing body for determination and provides that the governing body has thirty (30) days to reject the tentative agreement or it shall be deemed adopted. c) clarifies that a decision by the governing body not to adopt the tentative agreement shall not bar the filing of an unfair practice charge for failure to have met and bargained in good faith through authorized representatives. d) requires, if the governing body adopts the tentative agreement, that the parties shall jointly prepare a written memorandum of such understanding. e) authorizes either party to request mediation if they fail to reach agreement, with the following stipulations: i) requires both parties to agree upon the appointment of a mediator within five days of the request. ii) specifies that if the parties fail to agree on the appointment of a mediator, either party may request PERB appoint a mediator. iii) requires PERB to appoint a mediator within five days of receiving the request. f) specifies that an arbitration agreement contained in a Glenn A. Miles Date: June 24, 2013 Page 3 MOU is enforceable, as specified, with the following stipulations: i) prohibits assertions of failing to satisfy procedural requirements from being a basis for refusing to submit the dispute to arbitration. ii) requires that all procedural defenses shall be presented to the arbitrator for resolution. iii) prohibits a court from refusing to order arbitration because the issue could also constitute an unfair labor practice under the jurisdiction of PERB. g) requires a public agency to engage in the meet and confer process before adopting reasonable rules and regulations governing the administration of employer-employee relations and specifies that disputes arising under this provision will be resolved pursuant to the factfinding procedures of the MMBA. h) provides that if the Commission on State Mandates determines that this bill contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to current law governing state mandated local costs. FISCAL : According to the Assembly Appropriations Committee, the fiscal impact of administering the provisions of this bill is: 1) approximately $750,000 for necessary staffing as estimated by PERB; and 2) potential state mandated reimbursement of local costs that would depend on the number of requests for arbitration and mediation but could be in the millions of dollars. 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. There are several thousand local governments, many with dozens of bargaining units that would be subject to the bill. Glenn A. Miles Date: June 24, 2013 Page 4 COMMENTS : 1)Arguments in Support : According to the California Professional Firefighters (CPF), "AB 537 proposes to enact changes that will advance the parties' mission of protecting the health and welfare of the public, providing impasse remedies necessary to afford public employers the opportunity to safely alleviate the effects of labor strife that would otherwise lead to the disruption of the efficient delivery of public services to the people of California." The Service Employees International Union (SEIU) notes that by addressing 5 concerns, including arbitration agreements, mediation, ground rules, contract ratification, and employee relations ordinances, AB 537 is intended " to ensure meaningful dialogue between employers and employees, as well as provide a reasonable method for resolving disputes." The Association for Los Angeles Deputy Sheriffs states the bill "clarifies that a public agency must meet and confer in good faith with recognized employee organizations before adopting reasonable rules and regulations governing the administration of employer-employee relations." 2)Arguments in Opposition : The California State Association of Counties (CSAC) argues that "AB 537 ignores decades of local rulemaking on collective bargaining procedures and undermines counties' constitutional right to provide for the compensation of employees." CSAC also believes that the bill would result in increased costs to counties and PERB due to the expansion of access to mediation. CSAC questions whether AB 537 "can be implemented as a practical matter" because with 58 counties, 482 cities, and over 2000 special districts, many with dozens of bargaining units, it is unlikely that there are enough mediators to meet the new demand for mediation that would be Glenn A. Miles Date: June 24, 2013 Page 5 created by the bill and thus, the collective bargaining process would become long and drawn out. "Factfinding and mandatory mediation will add 90 days or more each to the bargaining timeline, a process that can already take 6 months or more." 3)SUPPORT : American Federation of State, County and Municipal Employees (AFSCME), AFL-CIO, Co-Sponsor California Professional Firefighters (CPF), Co-Sponsor Service Employees International Union California (SEIU), Co-Sponsor Association for Los Angeles Deputy Sheriffs (ALADS) California Association of Professional Employees (CAPE) California Labor Federation (CLF) Glendale City Employees Association (GCEA) Laborers International Union of North America (LIUNA), Locals 777 & 792 Los Angeles Probation Officers' Union, AFSCME, Local 685 Organization of SMUD Employees Riverside Sheriffs' Association San Bernardino Public Employees Association San Luis Obispo County Employees Association Santa Rosa City Employees Association 4)OPPOSITION : Association of California Water Agencies (ACWA) Butter County Board of Supervisors California Association of Sanitation Agencies (CASA) California State Association of Counties (CSAC) City of Brawley City of Ceres City of Del Mar City of El Centro City of Livingston City of Lodi City of San Luis Obispo City of San Mateo City of Santa Barbara City of Santa Maria City of Vista Contra Costa County Glenn A. Miles Date: June 24, 2013 Page 6 County of Sutter County of Tehama El Dorado Irrigation District (EID) League of California Cities Los Angeles County Board of Supervisors Marin County Board of Supervisors Napa County Board of Supervisors Orange County Board of Supervisors Placer County Board of Supervisors Rural County Representatives of California (RCRC) Sacramento County Board of Supervisors Urban Counties Caucus (UCC) ##### Glenn A. Miles Date: June 24, 2013 Page 7