BILL ANALYSIS Ó
SB 950
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Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 950
(Nielsen) - As Amended June 29, 2016
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|Policy |Public Employees, |Vote:|6 - 0 |
|Committee: |Retirement/Soc Sec | | |
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| |Judiciary | |10 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill creates the Excluded Employee Arbitration Act in order
to permit an organization that represents certain excluded
employees to request arbitration of an employee grievance.
Specifically, this bill:
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1)Authorizes an employee organization that represents an
excluded employee to request binding arbitration if that
employee has filed a grievance with the California Department
of Human Resources (CalHR) alleging a violation of Title 2,
California Code of Regulations, and that grievance has not
been resolved by either the fourth or third level review,
whichever is applicable.
2)Requires CalHR and the employee organization to designate a
standing panel of at least 20 arbitrators to be made available
for resolving arbitrations, and creates a process by which the
employee organization and the employer may select arbitrators.
3)Requires the arbitrator to order the non-prevailing party to
pay the costs of arbitration and prohibits the arbitrator from
ordering the employee to pay the costs of arbitration.
4)Requires the arbitrator to apply California law and facts in
the decision and that the decision must be based on the
written record in the grievance, the grievance response, and
the oral presentations. The arbitrator is required to issue a
written decision within 45 days of the conclusion of the
hearing, and the arbitrator's decision is legally binding.
FISCAL EFFECT:
Unknown fiscal impact. While the additional costs of this new
arbitration to CalHR are approximately $40,000 GF per
arbitration, there is considerable uncertainty about the total
cost to the state. Specifically, the fiscal effect of this bill
is dependent on the following factors:
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1)Case outcomes. The costs of arbitration would be offset in
instances when CalHR wins arbitration proceedings and is
therefore compensated for its costs.
2)The impact of arbitration on other parts of the formal
grievance procedure. The new arbitration process could create
competing incentives within the grievance process. Currently,
CalHR processes an average 150 grievances per year for
excluded employees. It can be assumed a number of these would
have been elevated to arbitration if such an option were
available to employees, since arbitration is perceived as
producing better outcomes for workers. Even a handful of
additional cases that are elevated to arbitration would result
in GF costs in excess of $150,000. However, SB 950 may also
result in savings that are difficult to calculate in advance.
The threat of arbitration could mean that an agreement between
the employee and employer is reached earlier in the formal
grievance process, thereby reducing administrative costs.
Moreover, to the extent that arbitration is pursued instead of
taking a case to court, CalHR could see significant reduction
in litigation costs.
COMMENTS:
1)Background. Existing law authorizes excluded employee
organizations to represent excluded employees in employment
relations, including grievances, with the State. Current state
regulations provide a standard grievance procedure which
requires each party involved to attempt to resolve the
grievance promptly and within the time limits contained in the
grievance procedure, unless the parties mutually consent to
extend a time limit. The grievance procedure is required to be
completed in as few levels of review as possible, but no more
than four levels, as follows:
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a) Informal Discussion. The excluded employee or the
excluded employee's representative shall discuss the
grievance with the excluded employee's immediate
supervisor. If the grievance is not settled within five
work days, a written grievance may be filed.
b) Formal Grievance - Level 1. A formal grievance may be
filed no later than 10 work days after the event or
circumstances occasioning the grievance. The first level of
review shall respond to the grievance in writing within 10
work days after the receipt of the formal grievance.
c) Formal Grievance - Level 2. The grievant may appeal the
decision of the first level within 10 work days after
receipt of the response. Within 15 work days after receipt
of the appealed grievance, the person designated by the
appointing power as the second level of review shall
respond in writing to the grievance.
d) Formal Grievance - Level 3. The grievant may appeal the
decision of the second level within 10 work days after
receipt of the response to the appointing power or his/her
designee. Within 15 work days after receipt of the appeal,
the appointing power or his/her designee shall respond in
writing to the grievance.
e) Formal Grievance - Level 4. The grievant may appeal the
decision of the third level within 10 work days after
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receipt of the response to the Director, Department of
Personnel Administration or his/her designee. Within 20
work days the Director, or his/her designee shall respond
in writing to the grievance
1)Purpose. According to the author, SB 950 will improve the
excluded grievance process to make it more effective for
workers. The author argues that the current system doesn't
function properly for excluded employees, and 99% of all
grievances are denied. Therefore, excluded employees have few
options except for litigation, which can be costly and
prohibitive. SB 950 creates a fifth level of review by
allowing an employee organization to request binding
arbitration as an alternative to bringing an action in court.
2)Arbitration. Arbitration is a form of alternative dispute
resolution held outside of courts where a third-party (rather
than a judge) makes a binding (and rarely appealable) award.
Because most arbitration is created by entering into a
contract (usually a contract that is adhesive or
take-it-or-leave-it), the arbitration agreement will lay out
the procedures that will be followed during the arbitration
hearing. For example, the terms of the arbitration agreement
may stipulate that the award need not be written or justified
(unlike in court), and that the entire process be kept in
secret (rather than in public view). Arbitrators do not need
to be lawyers, nor do they need to be trained in the law.
Analysis Prepared by:Luke Reidenbach / APPR. / (916)
319-2081
SB 950
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