State of California (Department of Personnel Administration) (PERB 0574S)

STATE 	OF 	CALIFORNIA
DECISION OF 	THE
PUBLIC 	EMPLOYMENT RELATIONS 	BOARD
ASSOCIATION OF 	CALIFORNIA 	STATE
ATTORNEYS 	AND HEARING OFFICERS,
Charging 	Party.
v.
STATE 	OF 	CALIFORNIA 	(DEPARTMENT 	OF
PERSONNEL 	ADMINISTRATION).
Respondent.
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) 	Case No. 	S-CE-137-S
PERB 	Decision No. 	574-S
June 	3 1986
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Appearances: 	Ernest F. 	Schulzke, 	Attorney for Association of
California 	Attorneys 	and 	Hearing Officers;
Christopher W. 	Waddell, 	Attorney for 	State 	of 	California
(Department of Personnel Administration).
Before Hesse, 	Chairperson; 	Morgenstern and Burt. 	Members.
DECISION
BURT. 	Member: 	This 	case 	is 	before the Public Employment
Relations Board 	(PERB or 	Board) 	on exceptions 	filed 	by the
State 	of 	California 	(Department 	of 	Personnel 	Administration)
(DPA) 	to 	a decision of 	the administrative 	law 	judge 	(ALJ)
finding 	that DPA violated 	section 	3519(b) 	and 	(c) 	of 	the 	State
Employer-Employee Relations Act 	(SEERA) l by 	its 	refusal 	to
meet 	and 	confer 	with 	the Association 	of 	California 	State
1SEERA 	is 	codified 	at 	Government 	Code 	section 	3512
et 	seq. 	All 	statutory references 	herein are 	to 	the Government
Code unless 	otherwise 	noted.
Section 3519 	provides, 	in pertinent part:
It 	shall 	be unlawful 	for 	the 	state 	to:
______ )

(a) 	Impose 	or 	threaten to 	impose 	reprisals
on employees, 	to discriminate or 	threaten to
discriminate against 	employees, 	or 	otherwise
to 	interfere with, 	restrain, 	or coerce
employees 	because of 	their 	exercise of
rights 	guaranteed 	by 	this 	chapter.
(b) 	Deny to 	employee 	organizations 	rights
guaranteed 	to 	them by 	this 	chapter.
(c) 	Refuse 	or 	fail 	to meet 	and 	confer 	in
good 	faith with 	a 	recognized 	employee
organization.
Attorneys 	and Hearing Officers 	(ACSA) 	about decisions 	to
subcontract. 	ACSA filed 	exceptions 	to 	the ALJ's 	finding 	that
it wished 	to 	negotiate about decisions 	to 	contract out. 	It 	is
ACSA's 	position that 	it 	sought 	to 	negotiate 	the 	criteria 	for
doing 	so.
The Board 	has 	reviewed 	the 	proposed 	decision 	in 	light 	of
the 	parties' 	exceptions 	and 	the 	entire 	record 	in the 	case. 	For
the 	reasons 	outlined 	below, 	we 	affirm the ALJ's 	proposed
decision.
FACTS
The ALJ's 	findings 	of 	fact 	are 	essentially undisputed, 	and
we 	adopt 	them for 	purposes 	of 	this Decision.
In March 1982, 	ACSA was 	certified 	as 	the exclusive
representative 	for 	employees 	in bargaining Unit 	2. 	This 	unit
consists 	of 	approximately 	1,727 	attorneys, 	hearing officers 	and
deputy 	labor 	commissioners 	employed 	in various 	agencies
throughout 	the 	State.
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The 	negotiations 	between 	the 	parties 	opened 	on May 	5. 	1982.
and 	lasted 	through June 	1982. 	Eventually, 	a memorandum of
understanding 	covering 	the 	period 	from July 	1. 	1982 	to
June 30. 	1984. 	was signed by the parties. 	In addition to
representatives 	of 	the parties, 	negotiations were attended 	by a
representative of 	the State Personnel Board 	(SPB). 	There 	is 	no
indication that 	any party objected 	to 	the 	presence 	of 	the 	SPB's
representative. 	Negotiations were 	also 	attended 	by
representatives 	of 	various 	State 	departments 	and 	agencies whose
employees 	comprise Unit 	2.
In April 	1982. 	during the 	"sunshine" 	process 	for 	these
negotiations. 	ACSA proposed 	to 	"prohibit 	contracting out."
DPA's written response was 	as 	follows:
The 	State Employer 	proposes 	to 	keep 	total
discretion over 	the 	decision of 	when 	to
"contract 	out" 	in accordance with applicable
law. 	The 	State Employer will 	notify ACSA of
its 	decision to 	"contract 	out" 	and 	negotiate
over 	the 	impact 	of 	its 	decision on 	terms 	and
conditions 	of 	employment.
No 	discussions 	followed 	the 	sunshining 	process.
At 	the May 5 	and May 24 	meetings. 	ACSA offered 	proposals 	on
contracting 	out. 	The 	second 	differed 	from 	the 	first
principally 	in 	that 	ACSA 	proposed 	to 	use 	the 	contract 	grievance
procedure 	rather 	than arbitration 	to 	resolve disputes 	under 	the
proposed 	contract 	language. 	For 	purposes 	of 	this 	discussion.
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the 	two 	proposals 	are 	in essence 	the 	same. 	ACSA's 	second and
final 	proposal was 	as 	follows:
Services which 	can be 	or 	have 	been 	performed
by 	employees 	in 	existing 	classifications
shall 	not 	be 	contracted 	to 	or 	performed 	by
the 	private 	sector 	or 	other 	public
agencies. 	Services 	shall 	be 	contracted 	out
only 	if 	it 	can be 	clearly demonstrated
(based 	on a 	preponderance 	of 	the 	evidence)
that 	existing 	classifications 	are 	not
capable 	of 	performing 	the work 	(even 	if
additional employees are hired); 	it would be
more 	economical 	to 	contract 	out 	the
services; 	the quality of 	the work will 	be
higher 	under 	contracting out, 	as 	opposed 	to
creating 	the 	capability 	in 	state 	service;
ACSA 	is 	provided 	a 	minimum of 	sixty days
written notice 	in advance 	of 	any decision to
contract 	out; 	and 	the meet 	and 	confer
process 	is 	utilized 	to 	resolve 	matters
relating 	to 	the 	impact 	of 	the 	contracting
out 	on bargaining unit 	employees. 	Disputes
regarding any of 	the 	above 	shall 	be 	resolved
through 	the 	Grievance Procedure 	prior 	to
implementation 	of 	contracting 	out.
At 	the June 	2 	meeting, 	DPA presented 	the 	following
counterproposal 	on 	contracting 	out:
The 	State 	agrees 	to 	notify ACSA of 	any
decisions 	to 	contract 	out which will 	have 	an
impact 	on the working 	conditions 	of Unit 	2
employees. 	The State also agrees 	to meet
and 	confer 	on the 	impact 	of 	these 	decisions.
Discussions 	of 	this 	proposal were minimal. 	Throughout
negotiations. 	DPA took 	the position that 	the decision to
contract 	out was 	a 	management 	right 	and 	therefore
nonnegotiable, 	but 	that 	it would meet 	and 	confer 	on the 	impact
of 	decisions 	to 	contract 	out. 	According 	to ACSA's 	negotiator.
Bruce Blanning, 	the 	SPB 	took 	the 	position that 	contracting 	out
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was 	within SPB's 	jurisdiction. 	ACSA made 	no 	further
counterproposals 	on 	the 	grounds 	that 	that would 	have 	been
futile.
During negotiations, 	on May 20. 	1982. 	ACSA filed the
instant 	unfair 	practice 	charge 	alleging 	that 	DPA violated 	SEERA
section 3519(b) 	and 	(c) 	by its 	refusal 	to negotiate about
salary compaction, 	staffing ratios, 	and 	contracting out. 	In
its 	answer, 	DPA admitted 	that 	it 	refused 	to 	negotiate 	about
these 	subjects, 	but 	asserted as 	a 	defense 	that 	the 	subjects 	of
salary 	compaction 	and 	staffing 	ratios 	were within 	the 	exclusive
jurisdiction of 	the 	SPB, 	and 	that 	all 	three 	subjects were
within 	the 	State's 	managerial 	prerogative 	and 	thus 	outside 	the
scope 	of 	representation.
Hearing 	in this 	case was 	delayed 	due 	to 	a 	lawsuit 	filed 	on
November 	9, 	1982, 	by the SPB against PERB, 	challenging PERB's
right 	to 	conduct 	a 	hearing 	in 	this 	and 	similar 	cases. 	On
October 	24, 	1983, 	the formal 	hearing 	in this 	case was 	conducted
by a 	PERB ALJ. 	Post-hearing 	briefs 	were 	filed 	by 	the 	parties
and by the SPB. 	On July 5, 	1984, 	the parties were 	informed
that 	the 	matter was 	transferred 	to 	another 	PERB ALJ 	for
decision, 	pursuant 	to PERB Regulation 	32168(b).2 Both DPA
2PERB 	Regulations 	are 	codified 	at 	California
Administrative Code, 	title 8, 	section 31001 et seq.
Regulation 32168(b) 	provides:
A Board 	agent 	may 	be 	substituted 	for 	another
Board 	agent 	at 	any 	time 	during 	the
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proceeding 	at 	the 	discretion 	of 	the Chief
Administrative 	Law Judge 	in unfair 	practice
cases 	or 	the General 	Counsel 	in
representation matters. 	Substitutions 	of
Board 	agents 	shall 	be 	appealable 	only 	in
accordance with section 32200 	or 	32300.
and ACSA filed 	exceptions 	to 	the ALJ's 	decision, 	and DPA filed
a 	response 	to ACSA's 	exceptions. 	The 	SPB 	has 	not 	filed 	a 	brief
before 	the Board 	itself.
DPA did 	not 	except 	to 	the ALJ's 	disposition of 	the 	salary
compaction and 	staffing ratio 	issues. 	Therefore, 	this Decision
deals 	only with ACSA's 	proposals 	concerning 	subcontracting.
The ALJ 	found 	that ACSA's 	proposal was 	within 	the 	scope 	of
representation 	set 	out 	in SEERA section 	3516. 	He 	also 	found 	no
statutory 	conflict 	that 	would 	render 	the 	proposal
nonnegotiable, 	and 	he found no 	conflict with the SPB's
constitutional 	authority.
On exception. 	DPA contends 	that 	contracting out 	is 	not
within the 	scope 	of 	negotiations under 	SEERA. 	It 	argues 	that
the 	scope 	language 	of 	SEERA conforms 	to 	that 	in the National
Labor Relations Act, 	and 	that 	private 	sector 	precedent 	is
therefore 	controlling. 	It 	also 	argues 	that ACSA never
demonstrated 	in negotiations 	that 	contracting 	out 	is 	of
sufficient 	concern 	to 	its 	members 	to meet PERB's 	scope 	test.
ACSA excepts 	to 	a footnote 	in 	the ALJ's 	decision 	implying
that 	it wished 	to 	negotiate 	decisions 	to 	contract 	out 	rather
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than 	the 	criteria 	for 	doing so. 	although 	it 	does 	not 	concede
that 	the 	decisions 	themselves 	are 	outside 	of 	scope.
DISCUSSION
The 	Scope 	of 	Representation Under 	Section 	3516
The 	scope 	of 	representation under 	SEERA 	is 	set 	forth 	in
section 3516:
The 	scope 	of 	representation shall 	be 	limited
to wages, 	hours, 	and other terms and
conditions of employment, 	except, 	however,
that 	the 	scope 	of 	representation shall 	not
include 	consideration of 	the merits,
necessity, 	or 	organization of 	any service 	or
activity 	provided 	by 	law or 	executive 	order.
In State 	of 	California 	(Department 	of 	Transportation)
(1983) PERB Decision No. 	361-S. 	at p. 	10, 	the Board articulated
its 	scope 	test under 	section 3516. 	Thus, 	matters 	are within
scope under 	section 	3516,
. 	. 	. 	if they involve the employment
relationship 	and 	are 	of 	such 	concern 	to 	both
management 	and 	employees 	that 	conflict 	is
likely to occur, 	and 	if 	the mediatory
influence 	of 	collective 	negotiations 	is 	an
appropriate means 	of 	resolving 	the 	conflict.
Such 	subjects 	will 	be 	found 	mandatorily
negotiable 	under 	SEERA unless 	imposing 	such
an 	obligation would 	unduly 	abridge 	the 	State
employer's 	freedom 	to 	exercise 	those
managerial 	prerogatives 	(including 	matters
of 	fundamental policy) 	essential 	to the
achievement 	of 	the 	State's 	mission.
The 	Board 	determined 	that 	the 	statutory 	language 	that 	excludes
"the merits, 	necessity, 	or organization of any service or
activity" 	reflects 	the 	same 	principle 	as 	that 	portion of 	the
scope 	test 	adopted 	by 	the 	Board 	in Anaheim Union High 	School
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District 	(1981) 	PERB Decision No. 	177 which recognizes 	that
essential 	management 	prerogatives 	are 	outside 	the 	scope 	of
representation. 	In sum, 	the Board's 	decision in State of
California 	(Department of Transportation), 	supra, 	concluded
that 	the 	scope 	test under 	SEERA 	is 	parallel 	to 	the Anaheim test
for 	analyzing whether 	or 	not 	issues 	are within 	the 	scope 	of
negotiations 	under 	the 	Educational 	Employment 	Relations 	Act
(EERA).3
In Anaheim, 	supra, 	the Board determined 	that 	a 	subject
which was 	not 	enumerated 	in the 	scope 	section of 	EERA would 	be
found 	to 	be 	negotiable 	if: 	(1) 	it 	is 	logically and 	reasonably
related 	to wages, 	hours, 	or 	an enumerated 	term and 	condition of
employment; 	(2) 	the subject 	is of 	such concern to 	both
management 	and 	employees 	that 	conflict 	is 	likely 	to 	occur 	and
the 	mediatory 	influence 	of 	collective 	negotiation 	is 	the
appropriate means 	of 	resolving the conflict; 	and 	(3) 	the
employer's 	obligation 	to 	negotiate would 	not 	significantly
abridge 	its 	freedom to 	exercise 	those 	managerial 	prerogatives
(including matters 	of 	fundamental 	policy) 	essential 	to 	the
achievement 	of 	the 	district's 	mission.
This 	test was 	approved 	by 	the 	California 	Supreme 	Court 	in
its decision in Healdsburg et al. 	v. 	PERB 	(1983) 	33 	Cal.App.3d
850. 	and was 	subsequently applied 	by the Board 	in 	its
3EERA 	is 	codified 	at 	Government 	Code 	section 	3540 	et 	seq.
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decision 	in Healdsburg Union High School 	District 	and
Healdsburg Union 	School 	District/San Mateo 	City 	School 	District
(1984) PERB Decision No. 	375.
Using 	this 	test, 	the Board 	found 	that 	the 	decision 	to
subcontract was 	within 	the 	scope 	of 	representation under 	EERA,
and 	that 	the 	employer 	must 	therefore 	negotiate 	over 	proposals
concerning 	that 	decision. 	See Arcohe Union School 	District
(1983) 	PERB Decision No. 	360; 	Oakland Unified School District
(1983) PERB Decision No. 	367; Healdsburg, 	supra, 	at pp. 	85-87.
In Healdsburg, 	for 	example, 	the Board found negotiable a
proposal 	providing 	that 	the 	employer 	district 	would 	not
contract 	out without 	the 	approval 	of 	the 	representative 	of 	its
classified 	employees 	and 	providing 	for 	notice 	to 	the
representative as well.
Applying the 	SEERA scope 	test 	here, 	we 	reach a 	similar
conclusion. 	Clearly, 	the decision to 	subcontract 	involves 	the
employment 	relationship. 	As 	the Board 	has 	stated 	previously 	in
Arcohe, supra:
Subcontracting 	. 	. 	. work formerly performed
by unit 	employees 	is 	a 	subject 	logically and
reasonably related to wages, 	hours, 	and
transfer 	and 	promotional 	opportunities 	for
incumbent employees in existing 	. 	. 	.
classifications. 	Actual 	or 	potential work
is withdrawn from unit 	employees, 	and wages
and 	hours 	associated 	with 	the 	contracted-out
work are 	similarly withdrawn. 	Further, 	such
diminution 	of 	unit work weakens 	the
collective 	strength of 	employees 	in the
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unit 	and 	their 	ability 	to 	deal 	effectively
with 	the 	employer. 	Such 	impact 	affects work
hours 	and conditions, 	and 	thus 	is 	logically
and 	reasonably 	related 	to 	specifically
enumerated 	subjects 	within 	the 	scope 	of
representation.
We also 	find, 	based 	on the 	foregoing discussion, 	that 	the
subject 	of 	subcontracting 	is 	of 	such concern to management 	and
employees 	that 	conflict 	is 	likely to 	occur. 	In so 	concluding,
we 	must 	dismiss DPA's 	argument 	that 	the 	subject 	of
subcontracting was 	not 	of 	great 	concern 	to 	the members 	of 	the
unit 	represented 	by ACSA since 	its 	negotiators 	could 	not 	come
up with 	specific 	examples 	of 	subcontracting 	that 	were
problematic.
To 	the 	contrary, 	the 	record 	contains 	testimony about
instances 	of 	subcontracting 	in 	the 	State 	Public Defender's
Office 	that were 	of 	concern to members 	of 	the Unit. 	Moreover,
we 	find 	it 	immaterial whether 	specific 	examples 	of
objectionable 	subcontracting 	were 	offered 	during
negotiations.4 As 	noted 	above, 	we 	previously have 	had 	the
opportunity 	to 	consider 	other 	subcontracting 	situations 	and 	we
find 	it 	reasonable to conclude that, 	in general, 	subcontracting
is 	the 	kind 	of 	issue 	that 	tends 	to 	cause 	labor 	relations
conflict.
4The 	ALJ 	found 	it unnecessary 	to 	resolve 	a 	dispute 	in 	the
record 	as 	to whether 	ACSA had 	presented 	concrete 	examples 	of
contracting 	out 	in Unit 	2. 	in view of DPA testimony 	that
concrete 	examples 	would 	not 	have 	changed DPA's 	position.
10

DPA argues 	that 	the ALJ 	erred 	in 	finding 	that 	negotiations
are 	an effective 	manner 	of 	addressing 	these 	concerns 	just
because 	subcontracting 	is 	of 	concern to 	employees. 	It 	claims
that 	this 	analysis 	runs 	together 	two 	parts 	of 	PERB's 	scope
test. 	We agree 	that 	the 	fact 	that an 	issue 	is 	of 	concern to
the 	parties 	does 	not necessarily mean that 	it 	is 	amenable 	to
resolution by negotiations. 	Here, 	however, 	we find 	that 	the
meet 	and 	confer 	process 	is 	the 	appropriate 	place 	to 	consider
the 	"ground 	rules" 	for 	subcontracting. 	Clearly, 	the 	subject 	is
important 	to 	the parties, 	and 	it 	is 	in the 	interest of
fostering 	stable 	relations 	between 	them 	to 	determine 	in 	advance
the 	procedures 	they will 	use 	to 	resolve 	the 	problems 	that will
certainly 	arise.
This 	conclusion 	is 	the 	same 	as 	that 	reached 	by 	the National
Labor Relations Board 	(NLRB) 	in private 	sector 	cases, 	finding
that 	subcontracting 	is 	a mandatory subject 	of 	bargaining. 	See
Fibreboard Paper Products 	Corporation v. 	NLRB 	(1964) 	379 U.S.
203 	[57 LRRM 2609]. 	In Fibreboard, 	the NLRB and the U.S.
Supreme 	Court 	found 	that 	the 	employer 	was 	required 	to 	negotiate
over 	the 	decision 	to 	contract 	out 	maintenance work which had
previously been done 	by the 	employer's 	own employees. 	In
reviewing 	the NLRB's 	action, 	the Court 	found 	that:
To hold, 	as 	the Board has done, 	that
contracting 	out 	is 	a 	mandatory 	subject 	of
collective 	bargaining would 	promote 	the
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fundamental purpose of 	the 	[NLRA] 	by
bringing a 	problem of 	vital 	concern to 	labor
and 	management within 	the 	framework
established 	by Congress 	as 	most 	conducive 	to
industrial 	peace.
In his 	concurrence 	in that case. 	Justice Potter 	Stewart
expressed 	reservations 	about 	the 	breadth 	of 	the 	Court's
decision, 	suggesting that 	"such managerial decisions, 	which 	lie
at 	the 	core 	of entrepreneurial control," 	should 	fall 	outside 	the
duty to 	bargain. 	He agreed, 	however, 	that 	the 	subcontracting
decision 	in the 	case 	at 	issue was 	subject 	to 	the 	duty 	to
bargain.
It 	is DPA's 	contention that 	cases 	decided 	subsequent 	to
Fibreboard 	suggest 	that 	the 	decision 	to 	subcontract 	is 	within
the 	prerogative 	of 	management 	to make without 	negotiating with
the employees' 	representative and that, 	under 	SEERA, 	imposing
an 	obligation 	to 	meet and 	confer 	over 	the 	decision 	to
subcontract would 	"unduly 	abridge 	the 	State 	employer's 	freedom
to 	exercise 	[its] 	managerial prerogatives."
DPA 	cites 	Westinghouse 	Electric 	Corp 	(Mansfield 	Plant)
(1965) 	150 NLRB 136 	[58 LRRM 1257] 	as a 	subsequent case 	in
which 	the NLRB 	found 	that 	the 	employer 	may unilaterally decide
to 	contract 	out when certain conditions 	are met. 	We 	note,
however, 	that 	that 	case 	concerned 	an alleged unlawful
unilateral 	change, 	and 	the NLRB's 	inquiry focused 	on whether 	or
not 	the 	subcontracting at 	issue was 	in fact a 	change, 	or 	simply
12

action taken 	in 	line with past 	practice. 	Indeed, 	the NLRB
there 	affirmed 	the 	negotiability of 	subcontracting 	as 	follows:
We do 	not mean to 	suggest 	that, 	because
subcontracting 	in 	accordance with 	an
established 	practice 	may 	stand 	on 	a
different 	footing 	from 	that 	of
subcontracting 	in other 	contexts, 	an
employer 	is 	any 	less under 	an obligation to
bargain with the 	union 	on 	request 	at 	an
appropriate 	time with 	respect 	to 	such
restrictions 	or 	other 	changes 	in 	current
subcontracting 	practices 	as 	the 	union may
wish to 	negotiate.
DPA also argues 	that, 	under 	the most 	recent NLRB precedent,
the 	decision 	to 	contract 	out 	is 	a managerial 	prerogative unless
the 	decision turns upon a 	direct modification of 	labor 	costs,
citing United Technologies 	(Otis Elevator Company) 	(1984) 	269
NLRB No. 	162 	[115 LRRM 1281], 	That case marks 	the NLRB's
reexamination of 	those 	managerial 	decisions 	that 	must 	be
bargained 	in 	light 	of 	the U.S. 	Supreme Court's 	decision 	in
First National Maintenance v. 	NLRB 	(1981) 	452 U.S. 	666 	[107
LRRM 2705].5
5m First National 	Maintenance, 	the 	Court 	found 	that 	an
employer's decision to 	close 	down part 	of 	its 	business without
negotiating was 	not 	an unlawful 	unilateral 	change. 	The
employer 	was 	not 	required 	to 	negotiate 	over 	the 	decision 	to
close down part 	of 	its 	business 	because:
[B]argaining 	over 	management 	decisions 	that
have 	a 	substantial 	impact 	on 	the 	continued
availability of 	employment 	should 	be
required 	only if 	the benefit, 	for
labor-management 	relations 	and 	the
13

collective 	bargaining process, 	outweighs 	the
burden placed 	on the 	conduct 	of 	the 	business.
The 	Court 	noted 	that 	the 	Fibreboard 	Court 	had 	"implicitly"
engaged 	in 	this 	analysis 	in 	finding 	the 	decision 	to 	subcontract
in that 	case 	subject 	to 	negotiation. 	The Court 	in First
National Maintenance 	also 	noted 	the 	fact 	that 	in Fibreboard,
the employer's 	desire to 	reduce 	labor 	cost, 	a matter
"peculiarly 	suitable 	for 	resolution with 	the 	collective
bargaining 	framework." 	was 	the 	basis 	of 	the 	employer's 	decision
to 	subcontract. 	The Court 	specifically declined 	to 	speculate
about 	the 	negotiability of 	other 	kinds 	of 	management 	decisions,
such as 	subcontracting.
Following 	this 	decision. 	Otis Elevator was 	remanded 	to 	the
NLRB 	for 	reconsideration 	in 	light 	of 	First National Maintenance.
Otis 	Elevator 	involved 	a 	charge 	that 	the 	employer 	made 	an
unlawful 	unilateral 	change 	by 	transferring 	and 	consolidating
work 	from one 	facility 	to 	another 	without 	negotiating. 	Two
members 	of 	the NLRB 	held 	that 	the 	decisions 	"which affect 	the
scope, 	direction and 	nature of 	business" 	need not 	be
negotiated, 	but 	that 	only those decisions 	that 	turn on 	labor
costs 	are 	subject 	to 	negotiation, 	citing Fibreboard 	as 	an
example 	of 	the 	latter 	category. 	In her 	concurrence. 	Member
Dennis 	advocated 	a 	balancing 	test 	requiring 	that, 	in order 	to
find 	a management decision negotiable, 	it must 	be proved 	that:
(1) 	a 	factor 	over 	which the union has 	control was 	a 	significant
consideration in the employer's 	decision; 	and 	(2) 	the 	benefit
to 	the 	collective 	bargaining 	process 	outweighs 	the 	burden on
the 	business. 	In his 	concurrence. 	Member 	Zimmerman found
management decisions 	to 	be 	negotiable when a 	decision 	is
"amenable 	to 	resolution 	through 	collective 	bargaining." 	The
1
14

NLRB. 	then, 	was unanimous 	in its 	conclusion that some
management decisions, 	such as 	the decision to 	close 	one
facility and 	transfer work 	to 	another, 	need 	not 	be 	negotiated
and 	such unilateral 	action will 	not 	be 	found 	to 	be 	a
violation. 	There was, 	however, 	no majority on the test to be
applied 	in 	categorizing 	those 	decisions.
We 	agree with 	the NLRB 	and 	the 	Court 	that 	there 	are 	some
management 	decisions 	that 	are 	not 	negotiable 	-- 	decisions 	so
fundamental 	to 	the 	direction 	of 	the 	enterprise 	that 	they do 	not
require 	negotiation with 	the 	elected 	representative. 	We 	are
persuaded, 	as well, 	that there 	is 	no need for 	negotiation when
there 	is 	nothing useful 	that 	the 	representative 	can offer. 	To
that 	extent, 	we 	agree with DPA's 	contention 	that 	not 	all
decisions 	to 	subcontract 	are 	negotiable.
However, 	it should be obvious 	by this 	point 	that, 	in its
effort 	to 	prove 	that 	not 	all 	decisions 	to 	subcontract 	are
-
negotiable under 	federal 	law, 	DPA has 	succeeded 	in firmly
establishing 	that 	at 	least 	some 	decisions 	to 	subcontract 	are
indeed 	mandatory 	subjects 	of 	negotiation 	even under 	the 	federal
law upon which 	it 	relies. 	This Board 	has 	had 	little 	occasion
to 	consider 	the 	negotiability of 	unilateral 	management
decisions 	to 	subcontract under 	SEERA, 	and we have 	no 	need 	to 	do
so here, 	since 	the heart of 	this 	case 	is 	not a unilateral
change 	but 	a 	negotiating proposal 	to meet 	and 	confer. 	There
are 	no 	specific 	issues 	of 	economics 	or 	motivation to 	address
15

because we 	are 	not 	dealing with a 	specific 	situation 	in which
action was 	taken, 	but a 	preliminary proposal 	to 	structure 	how
the 	parties will 	make 	those 	decisions 	in 	the 	future. 	Under 	the
circumstances, 	we 	have 	no 	difficulty determining 	that ACSA's
broadly worded 	proposal 	was 	within 	scope, 	and 	that DPA violated
SEERA by 	its 	flat 	refusal 	to 	negotiate 	about 	a 	proposal
involving 	the decision 	to 	subcontract. 	As 	the Board 	noted 	in a
similar 	situation in Healdsburg, 	supra, 	the proper means 	to
address 	broadly-worded 	proposals 	is 	to 	utilize 	the
give-and-take 	of 	the 	bargaining 	process 	to 	resolve 	the
ambiguities 	in 	bargaining 	proposals.
This 	requires 	the 	objecting 	party to 	make 	a
good 	faith effort 	to 	seek 	clarification of
questionable 	proposals 	by voicing 	its
specific 	reasons 	for 	believing 	that 	a
proposal 	is 	outside 	the scope of
representation 	and 	then 	entering 	into
negotiations 	on 	those 	aspects 	of 	proposals
which, 	following 	clarification by 	the 	other
party, 	it finally views as 	negotiable.
Where 	a 	proposal 	is 	arguably negotiable 	in
whole or 	in part, 	a failure 	to 	seek
clarification is. 	in itself, 	a violation of
the duty to negotiate 	in good faith, 	and
will 	result 	in an order 	requiring 	the
objecting 	party 	to 	return 	to 	the 	negotiating
table 	and 	seek 	clarification 	of 	the
ambiguous proposal. 	Healdsburg, 	supra, 	at
pp. 	9-10.
Here, 	DPA flatly refused 	to 	discuss 	proposals 	concerning
the decision to 	subcontract, 	never 	acknowledging 	in
negotiations 	that 	some decisions 	to 	contract out might 	be
within 	scope 	or 	that ACSA's 	proposal 	contained 	both 	negotiable
16

and 	nonnegotiable 	elements. 	It 	simply maintained 	the 	position
that 	the 	decision 	to 	contract 	out was 	a 	management
prerogative. 	We 	find 	that 	such a 	posture 	fails 	to 	satisfy
SEERA's 	direction 	to 	meet 	and 	confer 	in good 	faith.6
Based 	on 	the 	foregoing discussion, 	we 	conclude 	that DPA
unlawfully 	refused 	to 	meet 	and 	confer 	with ACSA 	over 	its
proposal 	concerning 	subcontracting. 	Such 	conduct 	constitutes 	a
violation of 	section 3519(c) 	of 	SEERA and. 	derivatively,
section 3519(a) and (b).7
ORDER
Upon the foregoing facts, 	conclusions 	of 	law, 	and 	the
entire record 	in this case, 	and pursuant 	to section 3514.5(c),
it 	is 	hereby ORDERED 	that 	the 	State 	of 	California 	(Department
of Personnel Administration) 	and 	its 	representatives 	shall:
A. 	CEASE AND DESIST FROM:
(1) 	Failing and 	refusing 	to meet 	and 	confer 	in good
6Having 	found 	the 	general 	subject 	of 	subcontracting 	to 	be
within scope, 	and 	having found 	as well 	that DPA refused 	to
negotiate at 	all 	about 	the decision to do 	so, 	it 	is unnecessary
to 	consider 	ACSA's 	assertion 	that 	the ALJ 	erred 	in finding 	that
ACSA wished 	to 	negotiate 	over 	individual 	decisions 	to
subcontract 	rather 	than the 	criteria 	to 	do 	so.
7Although 	the 	original 	charge 	alleged 	only 	that 	DPA
violated 	section 3519(b) 	and 	(c). 	the ALJ 	found 	that 	the
refusal 	to 	meet 	and 	confer 	in 	good 	faith which violated 	section
3519(c) 	was 	derivatively a violation of 	section 3519(a) 	and 	(b)
as well. 	This 	conclusion follows 	the Board's 	precedent under
EERA, 	articulated 	in San Francisco 	Community College District
(1979) 	PERB Decision No. 	105. 	See also Healdsburg, 	supra. 	DPA
did 	not 	separately except 	to 	the 	finding of 	an 	(a) 	violation,
and we 	see 	no 	reason to 	overturn 	the ALJ's 	conclusion.
17

faith with 	the Association 	of 	California 	State Attorneys 	and
Hearing Officers 	about 	proposals 	on 	subcontracting, 	staffing
ratios 	and 	salary 	compaction.
(2) 	By the same conduct, 	denying the Association of
California 	State 	Attorneys 	and 	Hearing 	Officers 	rights
guaranteed 	by 	the 	State 	Employer-Employee 	Relations 	Act,
including the 	right 	to represent 	its members.
(3) 	By the 	same 	conduct, 	interfering with employees 	in
the 	exercise 	of 	rights 	guaranteed 	by 	the 	State
Employer-Employee Relations Act, 	including the 	right 	to 	be
represented.
B. 	TAKE 	THE 	FOLLOWING AFFIRMATIVE ACTIONS 	DESIGNED TO
EFFECTUATE THE POLICIES 	OF 	THE ACT:
(1) 	Upon request, 	meet and 	confer 	in good 	faith with
the 	Association 	of 	California 	State Attorneys 	and 	Hearing
Officers 	about 	subcontracting, 	staffing 	ratios 	and 	salary
compaction.
(2) 	Within thirty-five 	(35) 	days 	following 	the date
this Decision is 	no 	longer 	subject 	to 	reconsideration, 	post at
all 	work 	locations 	where 	notices 	to 	employees 	customarily are
placed, 	copies 	of 	the Notice 	attached 	as 	an Appendix hereto,
signed 	by an authorized 	agent 	of 	the 	employer. 	Such posting
shall 	be maintained 	for 	a 	period 	of 	thirty 	(30) 	consecutive
workdays. 	Reasonable steps 	shall 	be 	taken to 	insure 	that this
Notice 	is 	not 	reduced 	in size, 	defaced, 	altered 	or 	covered 	by
any material.
18

(3) 	Written notification of 	the 	actions 	taken 	to
comply with 	this 	Order 	shall 	be 	made 	to 	the 	Sacramento 	Regional
Director 	of 	the 	Public Employment Relations 	Board 	in accordance
with his 	instructions.
Member Morgenstern 	joined 	in 	this 	Decision.
Chairperson Hesse's Dissent 	begins 	on page 	20.
19

Hesse, 	Chairperson, 	dissenting: 	I 	dissent. 	The majority
decision 	that 	ACSA's 	proposal 	is 	negotiable 	essentially 	turns
on whether 	the proposal, 	as presented, 	intrudes 	on an
inherently managerial 	prerogative. 	As 	the 	U.S. 	Supreme 	Court
has 	noted, 	some 	management 	decisions 	are 	not 	negotiable 	if 	the
burden 	placed 	on 	the 	conduct 	of 	business 	outweighs 	the 	benefit
to 	labor-management 	relations 	and 	the 	collective 	bargaining
process.1l I 	agree 	that, 	under 	some circumstances, 	a decision
to 	subcontract may be 	negotiable. 	But 	I 	reject 	the majority's
decision 	that 	the 	broadly 	worded 	proposal 	in 	this 	case 	was
necessarily 	subject 	to 	bargaining. 	To 	reach 	that 	conclusion,
the 	majority 	cites 	the 	"duty 	to 	seek 	clarification" 	imposed 	on
negotiators 	in Healdsburg, 	supra.
Imposition of a duty to clarify, 	in effect, 	places 	the
burden 	of 	explaining 	a 	proposal 	on 	the 	party 	to whom 	the
proposal 	is made, 	not 	on 	the 	author 	of 	the proposal. 	While 	I
agree 	that 	a 	refusal 	to bargain on a matter 	in 	scope 	is
unlawful, 	I 	find 	it 	anomalous 	that 	a party 	could be 	guilty 	of
refusing 	to 	bargain 	in 	good 	faith 	merely 	because 	it 	guessed,
correctly, 	that a subject was out of scope and, 	thus, 	it did
not 	seek 	"clarification."
Here, 	the broadly worded proposal, 	on its face, 	appears 	to
intrude 	on management's 	right 	to manage. 	If 	the 	proposal 	was
meant 	to 	be 	narrower 	and 	fit 	within 	the 	confines 	of 	the 	Anaheim
1See 	majority 	text, 	footnote 	5, 	and 	accompanying
discussion.
20

test, 	it was ACSA's 	duty 	to so structure 	the 	proposal 	so 	that
it was within scope.
The 	"duty 	to 	clarify," 	while 	seemingly 	innocuous 	on 	its
face, 	results 	in an 	imbalance at 	the 	bargaining table: 	all
proposals 	made 	will 	be 	considered 	in 	scope 	until 	enough
information 	is 	gathered 	that 	makes 	one 	party 	refuse 	to 	bargain
further 	because 	the 	subject 	then 	appears 	out 	of 	scope.
Clearly, 	the 	statutes 	never 	envisioned 	that 	the 	duty 	to 	bargain
would 	be 	so 	all-encompassing. 	Interestingly, 	neither 	did 	the
original 	decision 	by 	Member 	Barbara 	Moore 	adopt 	the 	"duty 	to
clarify."2 ;
By 	the 	time 	Healdsburg 	again 	reached 	the 	Board
after 	remand, 	a 	new 	author 	was 	assigned 	and 	the 	Board 	adopted
the 	duty 	to 	clarify. 	I 	believe 	that 	imposition of 	such 	a 	broad
duty 	is 	in 	error, 	and 	results 	in 	the parties 	negotiating about
subjects 	outside 	scope. 	The 	duty 	to 	clarify 	belongs 	to 	the
author 	of 	the 	proposal. 	Just 	as 	a 	responding 	party 	risks 	an
unfair 	practice 	when 	it 	refuses 	to 	negotiate 	about 	a 	subject
this 	Board 	finds 	in 	scope, 	so 	too 	the 	party who 	drafts 	an
overbroad 	proposal 	risks 	having 	the 	other 	side 	refuse 	to
negotiate 	unless 	the 	proposal 	is 	presented 	in 	such 	a manner 	as
to 	lead 	a 	reasonable 	person 	to 	believe 	that 	the 	subject 	is
within 	scope.
Because 	of 	the 	ambiguity 	and 	overbreadth 	of 	the 	proposal 	on
2With 	regard 	to 	some 	proposals 	which 	contained 	no
limitation 	in the 	language, 	the overbreadth 	is fatal, 	and 	I
have 	found 	them 	nonnegotiable." 	Decision 	of 	Member 	Moore, 	page
9, 	(1980) 	PERB Decision No. 	132.
21

contracting 	out, 	I 	would 	hold 	that 	DPA was 	under 	no 	duty 	to
negotiate 	until 	ACSA made 	clear 	that 	the 	proposal 	was 	within
the 	limits 	of Anaheim.
22

APPENDIX
NOTICE 	TO EMPLOYEES
POSTED BY ORDER 	OF 	THE
PUBLIC EMPLOYMENT 	RELATIONS 	BOARD
An Agency of 	the 	State 	of 	California
After 	a 	hearing 	in Unfair 	Practice Case No. 	S-CE-137-S.
Association 	of 	California 	State Attorneys 	and 	Hearing Officers 	v.
State of 	California 	(Department of Personnel Administration), 	in
which all 	parties 	had 	the 	right 	to 	participate, 	it has 	been found
that 	the 	State 	of 	California 	(Department 	of 	Personnel
Administration) 	violated 	the 	State 	Employer-Employee 	Relations
Act, 	Government Code section 3519(a). 	(b) 	and 	(c) 	by refusing to
meet 	and 	confer 	with 	the 	Association 	of 	California 	State
Attorneys 	and 	Hearing Officers 	about 	proposals 	on 	subcontracting,
staffing 	ratios 	and 	salary 	compaction.
As 	a 	result 	of 	this 	conduct, 	we have 	been ordered 	to 	post
this 	notice 	and we will:
A. 	CEASE AND DESIST FROM:
(1) 	Failing and 	refusing 	to meet 	and 	confer 	in good
faith with 	the Association of 	California 	State Attorneys 	and
Hearing Officers 	about 	proposals 	on 	subcontracting, 	staffing
ratios 	and 	salary 	compaction.
(2) 	Denying the Association of 	California 	State
Attorneys 	and 	Hearing Officers 	rights 	guaranteed 	by 	the 	State
Employer-Employee Relations Act, 	including 	the 	right 	to 	represent
its members.
(3) 	Interfering with employees 	in the 	exercise 	of
rights 	guaranteed 	by 	the 	State Employer-Employee Relations 	Act.
including 	the 	right 	to 	be 	represented 	by 	their 	chosen
representative.
B. 	TAKE 	THE 	FOLLOWING AFFIRMATIVE ACTIONS 	DESIGNED TO
EFFECTUATE THE 	POLICIES 	OF THE ACT:
Upon request, 	meet 	and 	confer 	in good 	faith with 	the
Association 	of 	California 	State 	Attorneys 	and 	Hearing Officers
about 	those 	subjects 	enumerated 	above.
Dated: 	STATE 	OF 	CALIFORNIA 	(DEPARTMENT 	OF
PERSONNEL 	ADMINISTRATION)
By Authorized 	Representative
THIS 	IS 	AN OFFICIAL NOTICE. 	IT MUST REMAIN POSTED FOR THIRTY
(30) 	CONSECUTIVE WORKDAYS FROM THE DATE OF 	POSTING AND MUST NOT
BE ALTERED, 	REDUCED IN SIZE, 	DEFACED OR COVERED BY ANY MATERIAL.
•