BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair AB 537 (Bonta) - Local Government Impasse Procedures Amended: August 12, 2013 Policy Vote: PE&R 3-2 Urgency: No Mandate: Yes Hearing Date: August 19, 2013 Consultant: Maureen Ortiz This bill meets the criteria for referral to the Suspense File. Bill Summary: AB 537 makes several changes to the Meyers-Milias-Brown Act (MMBA) governing impasse procedures for local agencies and their respective employee representation organizations with respect to ground rules, ratifications of MOUs, mediation, and arbitration procedures. . Fiscal Impact: Approximately $940,000 in annual costs to the Public Employees' Relations Board (General Fund) Unknown, potentially significant reimbursable mandate costs to local agencies (General Fund) Background: Existing law establishes the Meyers-Milias-Brown Act, which provides a statutory framework for local government 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. Under MMBA, local public agencies are authorized to adopt reasonable rules and regulations after consultation in good faith with representatives of an employee organization or organizations. A public agency is required 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. The Public Employment Relations Board (PERB) is charged with resolving disputes and enforcing the statutory duties and rights of local public agency employers and employee organizations. AB 537 (Bonta) Page 1 Current law further 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. If, after a reasonable amount of time, representatives of the public agency and the employee organization fail to reach an 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. Current law 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. A public agency is allowed to implement its last, best and final offer once any applicable mediation and factfinding procedures have been exhausted. Current law 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. Proposed Law: AB 537 contains the following provisions: 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. AB 537 (Bonta) Page 2 d) Requires, if the governing body adopts the tentative agreement, that the parties shall jointly prepare a written memorandum of understanding. e) Authorizes either party to request mediation if they fail to reach agreement. f) Provides that an arbitration agreement contained in a MOU is enforceable, as specified. 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) Extends the period of time whereby the parties must mutually agree upon the appointment of a mediator from 5 days to 14 days of a request by one of the parties. Related Legislation: AB 616 (Bocanegra), pending on this committee's Suspense File also makes several changes to local government impasse procedures. Staff Comments: AB 537 makes changes to the MMBA that will require additional workload to the PERB similar to its workload under provisions of the Educational Employment Relations Act (EERA), also under the jurisdiction of the Public Employment Relations Board. In deriving the cost estimates, PERB is basing the additional workload on a significant increase in mediation workload resulting from a number of cases that are comparable to those it receives annually under the EERA and the State Mediation and Conciliation Service. Current estimates are based on the need for 40 new mediator appointments each month, entailing approximately 13 hours of work for each case, to assist parties in resolving MMBA bargaining impasses. Additionally, PERB estimates a significant increase in workload due to the new provision requiring negotiations for the adoption of local rules governing employer-employee relations. The exact increase in workload to PERB is unknown, however, new AB 537 (Bonta) Page 3 regulations will need to be promulgated as well as the potential for a large number of new unfair practice charges which will require additional staff in the General Counsel's office to process the charges, issue complaints or dismissals, and conduct informal settlement conferences. Also, the Administrative Law Division will need to conduct formal hearings and issue written proposed decisions, process injunctive relief requests, and handle court litigation whenever a local rule that was adopted without the benefit of a meet-and-confer process is alleged to be "unreasonable". Local agencies will incur potentially significant costs related to arbitration, mediation, and rule making procedures. These costs will be reimbursable as a state mandate and paid from the General Fund.