BILL ANALYSIS Ó
SB 950
Page 1
SENATE THIRD READING
SB
950 (Nielsen)
As Amended June 29, 2016
Majority vote
SENATE VOTE: 39-0
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Public |6-0 |Waldron, Cooley, | |
|Employees | |Cooper, Cristina | |
| | |Garcia, O'Donnell, | |
| | |Wagner | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Judiciary |10-0 |Mark Stone, Wagner, | |
| | |Alejo, Chau, Chiu, | |
| | |Gallagher, | |
| | | | |
| | | | |
| | |Cristina Garcia, | |
| | |Holden, Maienschein, | |
| | |Ting | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |20-0 |Gonzalez, Bigelow, | |
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| | |Bloom, Bonilla, | |
| | |Bonta, Calderon, | |
| | |Chang, Daly, Eggman, | |
| | |Gallagher, Eduardo | |
| | |Garcia, Holden, | |
| | |Jones, Obernolte, | |
| | |Quirk, Santiago, | |
| | |Wagner, Weber, Wood, | |
| | |McCarty | |
| | | | |
| | | | |
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SUMMARY: Establishes the Excluded Employee Arbitration Act
which would authorize binding arbitration on behalf of an
excluded state employee for alleged violations of working
conditions, as specified, whose grievance has not been resolved
after the fourth level of review. Specifically, this bill:
1)Creates the Excluded Employee Arbitration Act which authorizes
an employee organization that represents an excluded employee
to request binding arbitration when the following conditions
are met:
a) The excluded employee has filed a grievance with the
California Department of Human Resources (CalHR) alleging a
violation of Title 2, California Code of Regulations.
b) The grievance has not been resolved satisfactorily at
the fourth level of review.
c) In cases where there is no fourth level of review, the
employee organization requests arbitration in writing to
CalHR within 21 days of a decision rendered at the third
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level of review.
2)Defines arbitration as the binding ruling that resolves an
excluded employee grievance at the fifth level of the excluded
employee grievance process.
3)Requires CalHR and the employee organization, following a
request for arbitration, to designate a standing panel of at
least 20 arbitrators to be made available for resolving
arbitrations authorized by this bill.
4)Provides that if fewer than three arbitrators are available,
then the employee organization or the employer may obtain the
names of an additional five arbitrators from the California
State Mediation and Conciliation Service within the Department
of Industrial Relations.
5)Sets forth a process whereby the employee organization and the
employer may consecutively strike any arbitrator from the
arbitration panel until the name of one arbitrator is agreed
upon, or, if no agreement is made, the last remaining person
on the panel shall be designated the arbitrator. The name of
that arbitrator shall be submitted in writing to CalHR.
6)Provides that if the employee organization does not submit its
choice of an arbitrator within 45 days after requesting
arbitration, the request for arbitration shall be considered
withdrawn. A request that is withdrawn will not prevent the
employee from pursuing other grievance procedures available by
law.
7)Specifies that a party to the arbitration has the right to
have a certified shorthand reporter transcribe the proceeding
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and the transcription will be the official record of the
proceeding.
8)Requires the arbitrator to apply California law to the facts
and to issue a decision for each grievance heard during the
arbitration. The decision shall be based solely on the
written record in the grievance, the grievance response, and
the oral presentations made at the arbitration.
9)Makes the arbitrator's decision legally binding.
10)Requires the arbitrator to issue a written decision within 45
days of the conclusion of the hearing.
11)Requires the arbitrator to order that the non-prevailing
party pay the cost of the arbitration, including the cost of a
certified shorthand reporter. The arbitrator is prohibited
from ordering the excluded employee to pay the cost of
arbitration and specifies that the cost of arbitration cannot
be passed on to the excluded employee.
12)Codifies the intent of the Legislature that: a) state
excluded employees shall have the right to arbitration as a
fifth step to the excluded employee grievance procedure; b)
the present grievance procedure leaves too many grievances
unresolved; and c) this lack of resolution has caused more
cases to be filed in California's courts, which should have
been resolved at a lower level.
EXISTING LAW:
1)Establishes the Ralph C. Dills Act (Dills Act) which sets
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forth a framework that governs labor relations between the
state and state employees.
2)Excepts from the Dills Act's definition of state employee:
managerial employees, confidential employees, supervisory
employees, and other employees, as defined.
3)Establishes the Bill of Rights for State Excluded Employees
which defines excluded employees as those employees excepted
from the Dills Act.
4)Provides that the purpose of the Bill of Rights for State
Excluded Employees includes informing excluded employees of
their rights and terms and conditions of employment and also
serves to promote harmonious personnel relations among those
representing state management in the conduct of state affairs.
5)Prohibits excluded employees from holding office in employee
organizations representing rank and file employees or
participating in any employee representational matters on
behalf of non-excluded employees.
6)Provides that excluded employee organizations shall have the
right to represent their excluded members in their employment
relations, including grievances, with the State of California.
7)Authorizes supervisory employees to form, join and participate
in the activities of supervisory organizations of their own
choosing for purposes of representation on all matters of
supervisory employee relations, as provided, or to refrain
from so doing. They also have the right to represent
themselves individually in their employment relations with the
state employer.
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8)Authorizes CalHR to adopt reasonable rules and regulations for
the administration of employer-employee relations.
FISCAL EFFECT: According to the Assembly Appropriations
Committee:
Unknown fiscal impact. While the additional costs of this new
arbitration to CalHR are approximately $40,000 General Fund (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:
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, this bill 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.
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COMMENTS: Current law authorizes CalHR to adopt reasonable
rules and regulations for the administration of
employer-employee relations. CalHR has adopted regulations that
set out a Grievance and Appeal Procedure for excluded employees.
Under California Code of Regulations Title 2, Section 599.859,
supervisory employee organizations or individual supervisors may
pursue resolution of disagreements over issues with their
employer that fall within the jurisdiction of CalHR through a
grievance procedure that typically includes an informal review
and four formal levels of review by the employer according to
the following timeline:
Informal Level: Within five work days of the incident, an
informal discussion between the excluded employee and the
employee's supervisor or manager.
Level 1: If unsatisfied with the informal review, the
employee may file a formal grievance within 10 work days of
the incident and the employer's designee for the first level
of review must respond within 10 working days.
Level 2: The employee may appeal the employer's Level 1
decision within 10 work days of receipt of the employer's
response and the employer's designee for the second level of
review must respond within 15 work days.
Level 3: The employee may appeal the employer's Level 2
decision within 10 work days of receipt of the employer's
response and the employer's designee for the third level of
review must respond within 15 work days.
Level 4: The employee may appeal the employer's Level 3
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decision to CalHR within 10 work days of receipt of the
employer's response and CalHR's designee for the fourth level
of review must responds within 20 work days.
Upon denial at the fourth level of review, the employee or the
employee organization representing the employee may pursue a
claim with the State Personnel Board, the Department of Fair
Employment and Housing, or the State Superior Court depending
on the issue in dispute.
According to the sponsor, "This bill would improve the excluded
employee grievance process to make it effective. Currently, the
excluded employee grievance system is virtually illusory for
excluded employees and is functioning at an unenforceable level.
Of all the grievances filed, 99% are denied because there is no
consequence for the state agency to not follow the rules, and
there is no objective oversight. As it stands now, the state
agencies will deny all grievances because it's in their best
interest and there is nowhere for the excluded employee to go,
it is a closed system. To combat this, excluded employee
organizations have been going to Superior Court of the State
Personnel Board. This is very costly for the state and the
employee organizations and takes years to resolve. This means
that a simple low-cost or no-cost grievance can and has cost the
stat thousands of dollars because they do not want to admit when
they are wrong."
Prior/Related Legislation:
AB 526 (Evans) of 2007 would have permitted an excluded employee
to request mediation after the fourth level of review. The bill
was held on suspense in the Assembly Appropriations Committee.
AB 1584 (Evans) of 2006 would have permitted an excluded
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employee to request mediation after the fourth level of review.
The bill was held in the Senate Appropriations Committee.
AB 1258 (Matthews) of 2003 would have established arbitration
procedures for supervisory employees of the Department of
Corrections and the Department of the Youth Authority. The bill
died at the Assembly Desk without committee referral.
AB 2802 (Strom-Martin) of 2002 would have established
arbitration procedures for supervisory employees of the
Department of Corrections and the Department of the Youth
Authority. The bill was held on suspense in the Assembly
Appropriations Committee.
Analysis Prepared by:
Karon Green / P.E.,R., & S.S. / (916) 319-3957
FN:
0003994