State of California (Department of Personnel Administration) (PERB 0648S)

STATE 	OF 	CALIFORNIA
DECISION OF 	THE
PUBLIC 	EMPLOYMENT 	RELATIONS 	BOARD
PROFESSIONAL 	ENGINEERS 	IN
CALIFORNIA 	GOVERNMENT,
Charging 	Party,
v.
STATE 	OF 	CALIFORNIA 	(DEPARTMENT 	OF
PERSONNEL 	ADMINISTRATION,
Respondent.
Case No. 	S-CE-125-S
PERB Decision No. 	648-S
December 18, 	1987
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Appearances; 	Christopher W. 	Waddell, 	Attorney for 	the
Department 	of Personnel Administration; 	Ernest 	F. 	Schulzke,
Attorney, 	for 	Professional 	Engineers 	in California Government.
Before Hesse, 	Chairperson; 	Shank and Cordoba, 	Members.
DECISION
HESSE, 	Chairperson: 	This 	case arose 	out of 	the 	course 	of
bargaining between 	the 	State of 	California, 	Department of
Personnel 	Administration 	(DPA or 	Employer) 	and 	the 	Professional
Engineers 	in California Government 	(PECG or Union). 	The
bargaining 	took place 	in 	the 	first half 	of 	1982. 	During
negotiations, 	PECG 	filed an unfair 	practice 	charge 	against 	DPA
with 	the 	Public 	Employment 	Relations 	Board 	(PERB or Board),
alleging 	that 	the 	Employer 	was 	refusing 	to 	negotiate 	various
subjects, 	a violation of 	the 	Ralph C. 	Dills Act.1 (Gov. 	Code
1Formerly 	known 	as 	the 	State 	Employer-Employee 	Relations
Act.
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secs. 	3512, 	et seq.) 	An administrative 	law judge 	(ALJ) 	of 	this
agency heard 	testimony, 	and 	in 	1984 	a 	proposed 	decision was
rendered. 	The ALJ 	ruled 	in 	favor 	of 	PECG on a number 	of 	items,
and 	DPA appealed his 	ruling. 	We 	now 	affirm 	in part 	and 	reverse
in part 	the decision of the ALJ.2
II. 	FACTUAL SUMMARY
PECG 	is 	the 	exclusive 	representative 	for 	employees
designated 	to Bargaining Unit 	#9, 	professional 	engineers,
architects 	and 	similar 	workers. 	The majority of 	the bargaining
unit 	members 	are 	employed by 	the 	Department 	of Transportation,
with 	the 	remainder 	of 	the 	employees 	employed by 	the 	Department
of Water 	Resources, 	the Water Resources 	Control Board, 	the
Division 	of 	Occupational 	Safety and Health, 	and 	other 	state
agencies.
On February 	2, 	1982, 	DPA and PECG began bargaining 	for 	the
first 	collective bargaining agreement between 	the parties. 	In
attendance 	at 	the 	majority of bargaining 	sessions 	was 	a
representative 	from the 	State 	Personnel 	Board 	(SPB). 	The
parties 	met 	on 	18 	occasions, 	and concluded 	their 	negotiations
upon reaching agreement on June 23, 	1982.
During 	the negotiations, 	however, 	PECG 	filed an unfair
practice 	charge 	against 	DPA, 	charging 	that 	the 	state had
22since	since 	the present 	case before 	the 	Board 	involves 	a
narrow and 	restricted appeal 	of 	the ALJ's 	decision, 	we 	do not
consider 	whether 	an 	employer 	may 	lawfully 	refuse 	to bargain
about promotions, position allocations 	and 	staffing ratios,
out-of-class 	claims, 	employee designations, 	and assignments.
22

3
violated 	the 	Dills 	Act 	sections 	3519(b) 	and 	(c) 	by refusing 	to
negotiate 	with PECG 	concerning 	eight 	specific 	subjects. 3 	The
eight 	specific 	subjects 	that 	DPA 	refused 	to 	negotiate 	about
encompassed: 	(1) 	contracting-out; 	(2) 	discipline procedures;
(3) layoffs; 	(4) promotions; 	(5) position allocations and
staffing ratios; 	(6) 	job action interference; 	(7) 	out-of-class
claims; 	and 	(8) 	employee designations 	and assignments. 	Upon
issuance 	of 	a 	complaint by the 	general 	counsel, 	DPA answered by
way of 	an 	admission 	that 	it had 	refused 	to 	negotiate 	those
subjects, 	but 	raising as 	a defense 	that 	its 	refusal 	to
negotiate 	was 	based 	upon 	the 	"exclusive 	and 	constitutional
jurisdiction of 	the 	State 	Personnel 	Board" 	in 	those 	areas.
Furthermore, 	DPA asserted 	that 	certain of 	the 	subjects 	that 	it
had 	refused 	to negotiate 	about, 	while 	not 	in the 	jurisdiction
of 	the 	SPB were 	within 	the 	state's 	managerial 	prerogative 	and,
thus, 	were outside 	the scope of negotiation.
w
III. 	THE ALJ'S DECISION AND THE
EXCEPTIONS 	THERETO
The 	ALJ 	ruled 	that 	the 	Employer 	must bargain 	over 	proposals
3Government 	Code 	sections 	3519 	(b) 	and 	(c) 	state:
It 	shall be unlawful 	for 	the 	state 	to:
(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.
• 	• 	• 	• 	• 	•
3

concerning contracting out, 	promotions, 	the decision to lay
off, 	disciplinary procedures, 	job action interference, 	work
preservation, 	job 	specification revisions, 	and out-of-class
claims. 	The state was excused, 	however, 	from bargaining over
qualifications 	of 	supervisors 	and managers.
On appeal, 	DPA excepts 	to 	the ALJ's 	findings 	as 	to 	the
negotiability of proposals on contracting out, 	layoffs, 	job
action 	interference, 	discipline, 	and work preservation. 	PECG
did 	not 	except 	to 	any 	finding by 	the 	ALJ.
IV. 	THE NEGOTIABILITY OF 	THE 	CHALLENGED
PROVISIONS
A. 	Contracting 	Out
PECG 	submitted 	the 	following 	language 	to 	DPA 	concerning 	a
proposal 	to 	contract 	out 	state 	work:
Services 	which 	can be 	performed by 	existing
classifications 	shall 	be 	performed by
employees 	in 	those 	classifications 	and 	shall
not be 	"contracted out" 	to or 	performed by
the private 	sector, 	other public 	agencies,
or 	other bargaining units. 	Services 	shall
be 	contracted 	out 	only 	if 	PECG 	is 	provided
sixty days 	notice 	in advance 	of 	any decision
to contract 	out, 	a preponderance 	of 	the
evidence 	clearly 	demonstrates 	that 	existing
classifications 	are 	not 	capable 	of
performing 	the 	work 	(even 	if 	additional
employees 	are hired), 	and 	it would be more
economical 	to have 	the 	services 	performed by
the private 	sector 	than 	to 	create 	that
capability 	in state 	service. 	If 	services
are 	contracted out, 	the 	employer 	shall
maintain 	and 	make 	public 	upon 	request
adequate 	records 	to 	justify 	the 	contracting
out based 	on 	the 	above 	criteria.
PECG 	later 	amended 	its 	proposal 	to 	include 	the 	following
language:
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If 	services 	are 	to be 	contracted out, 	the
state 	employer 	shall 	meet 	and 	confer 	in good
faith with 	the 	PECG 	regarding 	the 	impact 	of
the 	contracting out 	in advance 	of 	making 	or
implementing 	decisions 	affecting 	such 	impact.
DPA 	responded by 	stating 	that 	the 	decision 	to 	contract 	out
was 	an 	issue within management's 	prerogative, 	but 	on May 25 	DPA
did 	offer 	to 	negotiate 	the 	impact 	of 	a 	decision 	to 	contract 	out
with 	PECG.
The ALJ held 	that 	DPA had 	failed 	to 	negotiate 	in 	good 	faith
on 	the 	issue 	of 	contracting out. 	The 	ALJ 	relied 	upon 	the
decisions 	of 	PERB 	in Arcohe 	Union 	School 	District 	(1983) 	PERB
Decision No. 	360; 	Oakland Unified School 	District 	(1983) 	PERB
Decision No. 	367; 	Healdsburg Union High School District, 	et al.
(1984) 	PERB Decision No. 	375. 	These decisions were based upon
the 	US 	Supreme 	Court's 	decision 	in 	Fibreboard Paper 	Products
Corporation v. 	NLRB 	(1964) 	379 US 203 	[57 LRRM 2609]. 	Relying
on private 	sector 	precedent, 	the ALJ 	ruled 	that 	the 	decision 	to
subcontract 	was 	a mandatory subject 	of bargaining, 	and 	that 	DPA
breached 	its 	obligations 	to 	the 	exclusive 	representative 	when
it 	refused 	to bargain.
DPA objects 	to 	the hearing 	officer's 	conclusion 	that 	the
decision 	to contract 	out 	is 	negotiable. 	DPA relies
specifically upon 	two private 	sector 	cases: 	Otis 	Elevator
Company, 	a wholly owned 	subsidiary of 	United 	Technologies 	and
Local 	989 	International 	Union United Automobile, 	Aerospace 	and
Agricultural 	Implement Workers 	of America 	(1984) 	269 NLRB 891
[116 LRRM 1075], 	issued by the National 	Labor 	Relations 	Board
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(NLRB) 	after 	the 	US 	Supreme 	Court 	decided 	the 	other 	case 	relied
upon by DPA, 	First National 	Maintenance 	Corporation v. 	NLRB
(1981) 	452 US 666 	[107 LRRM 2705]. 	DPA argues 	that 	those cases
hold 	that 	the 	decision 	to contract 	out 	is 	not 	necessarily
automatically a 	negotiable 	one, 	but 	rather 	the 	negotiability
depends 	upon 	the 	nature 	of 	the 	decision 	to be made 	and 	the
reasoning behind 	it. 	A decision 	to 	contract 	out 	is
non-negotiable 	unless 	the 	decision 	turns 	upon 	labor 	costs. 	A
decision 	that 	turns 	upon 	a 	change 	in 	the 	nature 	and 	direction
of 	a 	significant 	facet 	of business 	is 	not 	negotiable.
The 	decision of 	the NLRB 	in Otis 	Elevator, 	relying upon 	the
decision 	of 	the 	Supreme 	Court 	in First 	National 	Maintenance
Corporation, 	does 	not 	disturb 	the 	Fibreboard 	ruling. 	Indeed,
it 	reinforces 	it. 	But 	the 	later 	two decisions 	reemphasize 	that
Fibreboard 	is dependent upon certain factors, 	specifically, 	a
savings 	in 	labor 	costs being 	the 	motivating 	factor 	for 	the
decision to subcontract. 	Significantly, 	Otis Elevator and
First National 	Maintenance, 	as 	well 	as 	the 	original 	Fibreboard
decision, 	all dealt with a unilateral 	change 	in the 	terms 	and
conditions 	of employment. 	In 	this 	case, 	the DPA is being taken
to 	task 	for 	refusal 	to negotiate 	an initial bargaining
proposal. 	The question 	is 	whether 	the 	proposal 	made by the
Union 	is 	such 	that 	it 	is 	narrow enough 	to bring 	it 	under 	the
protection of 	Fibreboard, 	or whether 	it 	is 	so broad 	that 	no
duty 	to 	negotiate 	arises because 	there 	is 	no way 	to 	tell
whether 	or 	not 	the 	decision 	to contract 	out 	is 	made 	for 	reasons
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dependent 	upon 	labor 	costs.
The proposal 	made 	by PECG 	is both 	comprehensive 	and broad.
The 	initial 	statement 	is 	that 	"[s]ervices 	which 	can be
performed 	by 	existing 	classifications 	shall 	be 	performed by
employees 	in 	those 	classifications 	and 	shall 	not be 	contracted
out 	to or 	performed by the private 	sector, 	other public
agencies, 	or other bargaining units." 	(Emphasis 	added.) 	Such
prohibitions 	are 	very broad, 	prohibiting 	any kind 	of
subcontracting 	out 	for 	any 	reason.
The 	second part 	of 	the proposal 	made by PECG does 	provide
for 	contracting out, 	but only 	in 	the 	limited circumstance 	of
where PECG has been given 60 days' 	notice, 	and where a
preponderance 	of 	the 	evidence 	clearly demonstrates 	that
existing 	classifications 	are 	not 	capable 	of 	performing 	the
work, 	and 	it 	would be more 	economical 	to have 	the 	services
performed by the private sector 	(emphasis 	added). 	Thus, 	PECG
would have 	the 	state 	prohibited 	from 	contracting 	out 	for 	any
reason 	other 	than 	that 	employees 	in 	existing 	classifications
could 	not 	do 	the 	work 	and 	such 	contracting 	out 	would be 	more
economical. 	This 	does 	not 	recognize 	that 	there 	may be 	several
other 	reasons 	why 	the 	employer 	may not 	want 	to perform 	a
particular 	service, 	and wishes 	to contract 	out. 	For 	example,
the 	state might 	desire 	to hire 	a particular 	private 	firm 	for
disposal 	of hazardous waste on grounds 	that 	it has better
equipment 	and 	is 	more expert 	than 	state 	employees, 	even 	though
using 	the 	outside 	firm would 	not be 	more 	economical. 	The 	state
77

could have 	satisfied 	the 	first half 	of 	the 	PECG 	requirement,
that 	is, 	state employees 	could not 	do the work; 	but 	it 	could
not 	satisfy the 	second half, 	that 	is, 	the work would not be
done 	more 	economically 	than having 	state 	employees 	do 	it. 	The
state 	would 	of 	necessity 	then be 	exposing 	its 	employees 	to
hazardous 	waste, 	and exposing 	itself 	to liability, 	after having
concluded 	that 	a 	private 	employer 	is 	better 	equipped 	and more
willing 	to 	take 	on 	those 	risks.
Instructive 	in 	the 	contracting out 	dilemma 	is 	the 	language
of 	the 	Supreme 	Court 	in First 	National Maintenance:
The 	concept 	of 	mandatory bargaining 	is
premised 	on 	the belief 	that 	collective
discussions 	backed by 	the 	parties 	economic
weapons 	will 	result 	in decisions 	that 	are
better 	for 	both 	management 	and 	labor 	and 	for
society as a whole 	. 	. 	. 	This will be true,
however, 	only if 	the 	subject proposed 	for
discussion 	is 	amenable 	to 	resolution 	through
the bargaining process. 	Management 	must be
free 	from 	the 	constraints 	of 	the bargaining
process 	to 	the 	extent 	essential 	for 	the
running of a profitable business 	. 	. 	.
bargaining 	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
collective bargaining process, 	outweighs 	the
burden placed on 	the 	conduct 	of 	the
business. 	[107 LRRM 2709, 	2710.]
Thus, 	the 	issue 	the Board 	should 	focus 	on 	is not whether
contracting out 	effects 	the 	availability of employment, 	as 	it
obviously does. 	Rather, 	the 	focus 	should be on whether 	the
employer 	has 	a 	need 	for 	unencumbered 	decision-making 	and
whether 	the 	subject 	proposed 	for 	discussion 	is 	amenable 	to
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resolution 	through 	the bargaining process. 	If 	the decision 	to
be 	made by 	this 	employer 	on 	contracting 	out 	is based 	upon
considerations other 	than labor 	costs, 	it 	is difficult 	to see
how 	the 	decision 	would be 	amenable 	to 	collective 	bargaining.
The 	unions would, 	of 	necessity, 	be 	involved 	in decision making
beyond 	their 	own 	interests 	of 	employee 	wages 	and hours. 	But
such 	is 	not 	the 	function of an exclusive 	representative, 	it 	is
the 	function 	of 	management 	to be 	concerned 	with 	the 	running 	of
the business. 	The state, 	like private employers, 	is not run
collectively by labor 	and management, 	but 	is 	run by managers.
The 	state 	recognizes 	its 	obligation 	to bargain over 	the
effects 	of 	subcontracting, 	no matter 	what 	motivation 	is behind
the 	decision to subcontract. 	Furthermore, 	it 	is 	obvious under
First 	National 	Maintenance 	and 	Fibreboard 	that 	the 	state 	would
be 	obligated 	to negotiate 	any decision 	to 	subcontract 	that
turned 	on 	labor 	costs. 	But 	a blanket proposal 	that prohibits
subcontracting, 	and 	severely limits 	the 	number of 	reasons 	why
an employer may subcontract, 	such as 	the one we have here, 	is
outside 	the 	scope 	of 	negotiation because 	it 	of 	necessity
impinges 	upon management's 	right 	to manage, 	and does 	not
present 	a 	concomitant 	ability of 	the 	union 	to 	influence 	a
decision 	that 	is 	not based upon 	labor 	costs.
B. 	Layoffs
PECG proposed 	the 	following 	language 	concerning 	layoffs:
Layoffs 	shall be 	implemented 	only 	if 	the
state 	can demonstrate, 	based 	on 	the
preponderance evidence 	(sic), 	that layoffs
9

are 	necessary because 	of 	lack 	of 	work 	or
funds. 	Any dispute 	regarding 	justification
for 	layoffs 	shall be 	submitted 	directly 	to
arbitration 	in 	conformance 	with 	the
grievance procedure. 	The 	arbitrator's
determination 	shall 	be 	final 	and binding 	on
all 	parties. 	Layoffs 	and bumping rights
shall 	be based 	exclusively 	on 	seniority,
rather 	than 	subjective 	management
evaluations 	or 	other 	factors. 	Demoted
employees 	shall have 	their 	salaries 	"red
circled." 	Whenever possible, 	employees
facing 	layoff 	or 	demotion 	shall be 	offered
positions 	equivalent 	in 	responsibility 	and
salary 	in 	the 	same geographical 	area.
Employees 	who are 	laid 	off 	shall 	receive
severance 	pay equal 	to 	one 	month's 	pay per
year 	(or 	fraction 	thereof) 	of 	service.
DPA refused 	to negotiate 	about 	the 	decision 	to 	lay off
employees, 	but 	indicated a willingness 	to discuss 	the 	impact 	of
layoffs 	on members 	of 	the bargaining unit. 	DPA counter-proposed
to PECG's 	language, 	essentially providing 	for 	notice 	of 	layoff
and 	certain 	recall 	rights. 	The parties 	exchanged 	several 	other
proposals 	concerning 	layoffs, 	and 	finally agreed 	to 	the
inclusion of 	the 	following 	language:
Layoffs, 	if required, 	shall be conducted 	in
accordance 	with 	existing 	laws 	and
regulations.
Based 	upon 	the 	testimony of 	the 	witnesses 	and 	the briefs
submitted by 	the parties, 	the ALJ 	ruled 	that 	DPA had 	refused 	to
negotiate 	the decision 	to 	lay off 	employees, 	but had 	negotiated
the 	impact of 	any decision to 	lay off. 	Furthermore, 	the ALJ
was 	guided 	again by 	the 	private 	sector 	and held 	that 	the
decision 	to 	lay off 	was 	a mandatory 	subject 	of bargaining. 	The
language 	used 	in 	section 	3516 	in 	the 	Dills 	Act 	and 	in 	the
10

National Labor 	Relations 	Act 	(NLRA) 	section 8(d) 	in defining
scope 	of 	representation 	is 	similar. 	As 	the 	decision 	to 	lay off
employees 	is 	negotiable 	in 	the private 	sector, 	he 	ruled 	there
is 	a presumption that 	it 	is 	also negotiable 	in the public
sector.
Under 	a long series 	of 	cases, 	PERB has 	ruled that 	an
employer 	does 	not have 	a duty 	to negotiate 	a decision 	to 	lay
off 	employees 	under 	the 	Educational 	Employment 	Relations 	Act
(EERA). 	(See e.g., 	Healdsburg, 	supra, 	p. 	15 at 	footnote 5.)
This 	is based both 	upon 	the 	statutory 	language 	found 	at
Education 	Code 	section 453084 and 	the 	application 	of 	the
three-part 	test 	formulated by 	PERB 	in Anaheim 	Union High 	School
District 	(1981) 	PERB Decision No. 	177. 	Language similar 	to
Education 	Code 	section 45308 	is 	found 	at 	Government 	Code
section 	19997.5 DPA argues 	that, 	as 	the 	two sections 	are
4
4Education Code 	section 45308 	reads, 	in relevant part:
Classified 	employees 	shall be 	subject 	to
layoff 	for 	lack 	of work 	or 	lack 	of 	funds.
Whenever 	a 	classified 	employee 	is 	laid 	off,
the 	order 	of 	layoff 	within 	the 	class 	shall
be 	determined by 	length of 	service. 	The
employee 	who has 	been 	employed 	the 	shortest
time 	in the class, 	plus higher classes,
shall be 	laid off 	first. 	Reemployment 	shall
be in the reverse order of layoff. 	. 	. 	.
5Government 	Code 	section 	19997 	reads:
Whenever 	it 	is 	necessary because 	of 	lack 	of
work 	or 	funds or whenever 	it 	is 	advisable 	in
the 	interests 	of 	economy 	to reduce 	the 	staff
of any 	state 	agency, 	the 	appointing power
may 	lay off 	employees 	pursuant 	to 	this
11

article 	and department 	rule. 	All 	layoff
provisions 	and 	procedures 	established 	or
agreed 	to under 	this 	article 	shall 	be
subject 	to 	State 	Personnel 	Board 	review
pursuant 	to 	Section 	19816.5.
analogous, 	the 	Board 	should 	adopt 	the 	same 	reasoning under 	the
Dills Act 	that 	it has 	for EERA, 	that 	is, 	the decision to lay-
off 	is 	not negotiable but 	the 	effects 	are.
The ALJ 	rejected 	this 	argument because 	the 	supersession
provisions 	under 	EERA and 	the 	Dills 	Act 	differ. 	Under 	EERA,
where 	there 	is 	a 	statute on point, 	the 	statute will 	always hold
sway over 	any negotiated 	agreement. 	Under 	the 	Dills 	Act,
however, 	the 	Legislature has 	identified 	specific 	Government
Code 	sections 	that 	can be 	superseded by a 	memorandum 	of
understanding 	(MOU). 	(Gov. 	Code sec. 	3517.6.) 	Section 19997
is 	not 	one 	so mentioned. 	Nonetheless, 	the ALJ ruled 	that
Government 	Code section 	19997, 	even 	though 	it 	is 	not 	contained
in 	the 	supersession provision, 	can be 	superseded by an MOU.
Then, 	he 	ruled, 	DPA violated 	its 	duty 	to bargain 	in good 	faith
when 	it 	refused 	to discuss 	layoffs. 	DPA argues 	that 	the ALJ's
decision 	contradicts 	the 	plain meaning 	of 	the 	supersession
provisions. 	It 	further notes 	that EERA's 	rule, 	that 	the
decision to 	lay off 	is 	non-negotiable, 	is 	founded not only 	in
Education Code 	section 45308, 	but 	also 	in the 	Board's
application of 	the 	scope-of-bargaining 	test 	set 	forth 	in
Anaheim. 	In 	Newman-Crows 	Landing 	Unified 	School 	District
(1982) 	PERB Decision No. 	223, 	the Board held that 	the decision
12

to 	lay off 	employees, 	although 	it 	unquestionably 	impacted 	upon
wages, 	hours, 	and terms and conditions of employment, 	was
non-negotiable because 	it 	was 	a matter 	of 	"fundamental
management 	concern 	that 	requires 	that 	such 	decisions be 	left 	to
the 	employer's 	prerogative."
The 	reasoning 	that 	was 	adopted by 	the 	Board 	in Newman—Crows
Landing 	is 	applicable here. 	Although a union has 	a vested
interest 	in 	knowing who 	should be 	laid 	off 	and how 	a 	layoff
would be 	implemented, 	it 	should not have 	to be 	consulted 	as 	to
why a 	layoff 	is 	occurring. 	As 	with our 	interpretation of
Education 	Code 	section 45308, 	which 	led 	this 	Board 	to 	its
conclusion 	in Newman-Crows 	Landing, 	we 	similarly conclude 	that
the 	legislative 	intent of 	Government 	Code 	section 	19997 	is
clear 	from 	its 	language. 	It provides 	even greater 	managerial
discretion 	than the 	Education Code. 	Thus, 	there can be no
doubt 	that, 	as 	under 	the EERA, 	the Legislature 	intended that,
under 	the 	Dills 	Act, 	decisions 	to 	lay off 	remain exclusively
with 	the 	employer.
Furthermore, 	the ALJ's 	attempt 	to distinguish EERA 	from 	the
Dills 	Act based 	on 	supersession alone 	is 	not 	convincing.
Principles 	of 	statutory 	construction 	do 	not 	allow 	that 	which
has 	been 	omitted 	from 	the 	statute 	to be 	included by 	intuition.
In 	the 	absence 	of 	a 	supersession provision 	appended 	to 	section
19997, 	the result reached, 	and 	the rationale 	in support
thereof, 	is 	improper. 	(See UC Regents v. 	PERB 	(1985) 	168
Cal.App.3d 937, 	944-45.)
13

Thus, 	DPA did not violate 	its 	duty 	to bargain over 	the
provision 	concerning 	the 	decision 	to 	lay off.
C. 	Work 	Preservation/Transfer 	Proposal
PECG 	initially proposed 	the 	following
article:
Work 	duties 	and 	functions 	currently
performed by employees 	in 	Unit 	9 	shall 	not
be 	assigned 	to other 	employees. 	Engineering
and 	closely related activities, 	functions,
and 	programs 	shall 	be 	supervised 	and 	managed
by qualified engineers 	or 	other 	classes 	in
the promotional 	chain of 	Unit 	9 	employees
(architects, 	engineering geologists, 	etc.).
Staffing 	ratios 	shall 	not be 	utilized 	to
restrict promotions.
DPA argues 	that 	the 	transfer 	of 	work proposal, 	like 	the
proposal 	to 	contract 	out, 	should be 	governed by 	the 	law 	found
in Otis 	Elevator and First National Maintenance. 	That 	is, 	a
decision 	to 	transfer 	work 	out 	of 	a bargaining 	unit based 	on 	a
desire 	to 	reduce 	labor 	costs 	would be 	clearly 	negotiable
because 	it 	is 	amenable 	to the bargaining process. 	The union
can make 	proposals 	that 	would 	aid 	management 	either 	in going
forward with 	its 	plan or 	rescinding 	its 	plan because
suggestions 	or 	concessions 	made by 	the 	union make 	the 	transfer
of 	work 	unnecessary. 	But 	the 	decision 	to 	transfer 	work 	for
reasons 	other 	than 	reduction of 	labor 	costs 	is 	not 	amenable 	to
the bargaining process because 	the 	union 	can make 	no
concessions 	that 	would 	alter 	such 	a decision. 	The 	union 	could
not 	concede what 	it 	does 	not 	control, 	and 	it does 	not 	control
all 	the 	factors 	that 	would go 	into 	a decision 	to 	transfer 	work.
14

DPA's 	argument 	does 	not 	confront 	the 	"work preservation"
aspect of this proposal, 	however. 	It 	is well 	settled that work
preservation 	is 	a valid 	subject 	of bargaining, 	as 	noted by a
long 	line of PERB and NLRB cases. 	Thus, 	where 	a 	transfer of
work 	occurs 	in a 	situation 	that 	is 	not 	an emergency, 	the union
does have 	a 	vested 	right 	in maintaining what 	it 	already has.
To 	excuse 	the 	transfer 	of work 	merely because 	of 	a 	"policy
change" 	by management would 	defeat 	the 	purpose 	of 	collective
bargaining, 	and 	could 	easily 	shelter 	an 	employer 	who 	artfully
chooses 	his 	words 	and 	ends 	up gutting 	an 	entire bargaining unit
of 	its 	work 	on 	the basis 	of 	a policy 	change.
Thus, 	to the extent 	the proposal 	is 	for 	the purpose of
preserving unit work, 	it 	is negotiable.
D. 	Assignment 	of 	Work 	During a 	Job Action 	(Job Action
Interference)"
The 	proposal 	made by PECG 	concerning 	job 	action
interference 	reads 	as 	follows:
Bargaining 	unit 	employees 	shall 	not be
ordered 	or 	asked 	to perform 	the 	duties 	of
other 	employees 	who are 	engaging 	in a
strike, 	work stoppage, 	or other 	job
action.
DPA's 	first 	response 	was 	that 	this 	proposal 	would 	not be
negotiated because 	it was 	in 	the 	area of 	"management
prerogative." 	It 	later 	refused 	to negotiate 	the 	above because
DPA 	felt 	it was 	outside 	the 	scope 	of 	representation. 	The ALJ
observed 	that 	the 	question 	of 	reassignment 	to 	non-bargaining
15

unit 	work 	during 	a 	strike by 	employees 	outside 	the bargaining
unit 	is 	a question of 	first 	impression 	for 	PERB. 	The ALJ,
however, 	cited 	the 	Board's 	decision 	in Alum Rock 	Union
Elementary School District 	(1983) 	PERB Decision No. 	322, 	as
holding 	that 	the 	transfer 	of 	existing 	functions 	and 	duties 	of
one 	classification 	to another 	is within 	the 	scope 	of
representation. 	Changes of 	that kind, 	PERB had ruled, 	did not
involve 	an 	"overriding managerial 	prerogative." 	The ALJ 	wrote
that 	the 	question 	in 	the 	instant 	case 	was 	not 	so much whether
the 	state be permitted 	to assign 	any other 	employees 	to do 	the
work 	of 	striking 	employees, 	but 	rather whether 	the 	employer had
an 	obligation 	to bargain with 	an employee 	organization 	that 	is
not 	striking 	concerning work 	normally 	done by 	employees 	who 	are
-
striking. 	DPA argued 	that 	it 	needed 	flexibility 	in an
emergency 	situation 	to be 	able 	to assign 	its 	employees 	wherever
they 	were 	needed.
The 	ALJ 	rejected 	the 	"emergency 	situation" 	argument 	on 	the
grounds 	that 	it 	was 	speculative. 	He 	relied 	also on PERB
precedent 	holding 	that 	the 	mere 	presence 	of 	an 	emergency will
not 	abrogate 	an 	employer's 	obligation 	to 	negotiate 	with 	an
employee 	organization. 	(See 	San Mateo County Community College
District 	(1979) 	PERB Decision No. 	94; 	San Francisco Community
College 	District 	(1979) 	PERB Decision No. 	105; 	and Davis
Unified School 	District, 	et all 	(1980) 	PERB Decision No. 	116.)
Rather, 	the presence 	of 	an emergency situation 	is merely a
reason 	to be 	raised 	during 	negotiations 	as 	to why 	such 	a 	clause
should 	not 	be 	included.
16

We 	concur 	with 	the ALJ when he 	notes 	that, 	in essence, 	the
state's 	desire 	to maintain day-to-day operations 	in 	the 	face 	of
a 	strike by employees 	is 	a 	legitimate 	concern, 	but 	one 	that
must be 	negotiated. 	There 	is 	nothing 	to prevent 	the 	state 	from
stating 	in 	the 	negotiations 	that 	it 	will 	reassign Unit 	9
members 	to 	the bargaining unit work 	of 	another 	unit, 	and
holding 	fast 	to 	that position. 	But by refusing 	to negotiate
about 	any 	aspect 	of 	this 	subject, 	DPA 	foreclosed 	negotiations
that might have 	led 	to a 	satisfactory 	resolution. 	Thus, 	the
state 	breached 	its 	bargaining 	obligation 	when 	it 	refused 	to
negotiate 	the 	work 	assignment 	of 	employees 	during 	a 	job 	action.
The 	arguments 	raised by DPA on exception, 	that 	is, 	the
state 	must 	feel 	free 	to move 	quickly 	in 	an 	emergency and 	the
state has 	a 	need 	to maintain 	its 	operations 	(subjects 	on which
an 	employee 	organization 	could 	not 	make 	substantive bargaining
proposals) 	miss 	the point. 	The arguments 	raised by 	DPA are
negotiating positions, 	not defenses 	to why 	it did not
negotiate.
Certainly 	the 	concerns 	of 	the 	state 	are 	legitimate 	and
valid. 	But 	the 	validity and 	legitimacy of 	its 	position do 	not
mean 	that 	the 	union has 	less 	of 	an 	interest 	in not 	doing work
normally performed by employees 	who 	are 	on 	strike. 	For 	a
variety of reasons, 	not 	the 	least of which 	is union 	solidarity
as 	well 	as 	preservation of bargaining unit 	work, 	the 	union has
a 	legitimate 	interest 	in 	not 	doing work 	normally performed by
striking employees. 	Thus, 	its position as proposed 	is 	a
17

reasonable 	response 	to 	those 	concerns.
On 	this 	matter, 	DPA miscontrues 	First 	National
Maintenance. 	The 	proposal by PECG was 	applicable 	only where
there was 	a 	job action; 	thus, 	its 	scope was 	narrow. 	While 	the
state has 	an 	interest 	in 	seeing 	that 	state 	services 	are
continuously provided by 	state 	employees, 	the 	reasons 	advanced
by 	DPA 	for 	refusing 	to bargain 	PECG's 	proposals 	are 	merely 	the
positions 	it 	could have 	taken during bargaining. 	The 	state
should have counter-proposed that 	it 	retained 	the 	right 	to
assign 	work.
The proposal 	is negotiable.
E. 	Discipline
PECG 	proposed 	the 	following 	language 	concerning
disciplinary 	procedures:
Existing procedures 	and practices 	shall
remain 	in 	force, 	except 	that all
disciplinary 	actions 	and 	probationary
rejections 	shall be 	submitted 	to
arbitration, 	rather 	than a SPB hearing
officer. 	The 	arbitrator 	shall be 	selected
in a manner 	similar 	to 	that proposed 	in 	the
grievance procedure. 	The 	decision of 	the
arbitrator 	shall be 	final, 	except 	that 	if
the 	arbitrator 	upholds 	or 	reduces 	the
disciplinary 	action 	or 	probationary
rejection, 	his 	decision 	shall be 	reviewed by
the 	State 	Personnel 	Board.
DPA 	refused 	to negotiate 	the 	above 	section 	on 	the 	grounds
that 	disciplinary procedures 	are 	within 	the 	exclusive
jurisdiction of 	the 	State 	Personnel 	Board. 	The 	state
specifically offered 	to negotiate 	the 	cause 	of 	discipline, 	but
refused 	to negotiate 	any other 	feature 	of 	discipline, 	including
18

procedures. 	DPA rested 	its 	refusal 	upon 	the California
Constitution Article VII, 	section 3(a), 	which provides:
The board 	shall 	enforce 	the 	civil 	service
statutes 	and, 	by majority vote 	of 	all 	its
members, 	shall prescribe probationary
periods 	and 	classifications, 	adopt other
rules 	authorized by statute, 	and 	review
disciplinary 	actions.
SPB, 	in an amicus brief, 	argued as well 	that 	the same
Article 	VII 	brought 	disciplinary procedures 	within 	the
exclusive 	jurisdiction of 	the 	SPB.
DPA excepts 	to 	the ALJ's 	finding 	that 	a disciplinary
proposal 	that 	did 	not 	provide 	for 	full 	and 	complete 	SPB 	review
of 	all 	decisions 	of 	an arbitrator was 	within 	the 	scope 	of
bargaining. 	In effect, 	DPA does 	not except 	to 	the portion of
the ALJ's 	decision holding 	that 	a 	disciplinary procedure
calling 	for 	SPB 	review of 	an 	arbitrator's 	decision 	that 	is
adverse 	to an employee 	is 	negotiable, 	or 	that 	discipline 	is 	not
within the 	scope of bargaining. 	Rather, 	it objects 	to the
second half 	of 	the 	same proposal, 	which does 	not provide 	for
SPB 	review of 	an arbitrator's 	decision 	that 	is 	adverse 	to 	the
employer. 	In 	its 	argument, 	DPA references 	the 	consolidated
cases 	in State of 	California 	(1984) 	Decision No. 	HO-U-222-S.
In 	that 	decision, 	the hearing officer 	found 	that 	a 	similar
proposal, 	eliminating the role of 	the 	SPB 	in the 	instances
where 	an 	arbitrator 	dismissed 	the 	disciplinary action, 	was 	not
within 	the 	scope 	of 	representation:
19

Under 	the 	proposed 	system 	the 	Personnel
Board 	would be 	cut 	off 	from 	every 	disputed
case 	where 	an 	arbitrator 	decided 	against 	the
state. 	Because 	the procedure 	affords 	no
method by which 	such 	matters 	could 	get
before 	the 	Personnel 	Board 	the 	Board 	could
not 	exercise 	its 	authority 	to 	"review
disciplinary actions." 	(PERB 	Decision No.
HO-U-222, at p. 58.)
DPA 	asks 	that 	the 	proposal 	made by PECG be 	declared 	outside
the 	scope 	of 	representation because 	it 	does 	not provide 	for
full 	and 	complete 	review 	of 	an 	arbitrator's 	decision by 	the
SPB, 	but 	only provides 	for 	review under 	one 	circumstance. 	DPA
is 	willing 	to 	arbitrate 	disciplinary procedures 	insofar 	as 	they
do 	not 	contravene 	the 	review authority of 	the 	SPB.
Worth 	noting 	is 	that 	DPA does 	not 	ask 	PERB 	to overturn
completely 	the 	ALJ's 	rationale 	for holding 	that 	the 	discipline
provision proposed by PECG was 	negotiable. 	Rather, 	DPA asks
that 	the 	Board 	reconcile 	the ALJ's 	decision 	in 	this 	case with
the 	decision 	in HO-U-222-S.6 PECG's proposal 	in 	this 	case
and 	the 	proposal by 	the 	union 	in 	the 	earlier 	decision both
involve 	use 	of 	an arbitrator 	for 	disciplinary disputes. 	Both
proposals 	provided 	for 	SPB 	review 	of 	an 	arbitrator's 	decision
only 	in 	the 	case 	of 	a decision adverse 	to an employee. 	To
circumvent 	the 	constitutional provisions 	of Article VII, 	both
proposals 	provide 	that 	if 	the 	arbitrator held 	against 	the
state, 	the 	state 	could never 	formally 	file 	notice of 	the
6The 	decision 	in that 	case was 	not 	appealed 	to 	the 	Board
itself and 	is, 	therefore, 	binding only on the parties 	to that
decision.
20

disciplinary 	action with 	the 	SPB, 	never bringing any such
disciplinary 	action 	for 	the 	SPB 	to 	review.
The ALJ 	in 	this 	case 	approved of 	this 	system, 	but 	that
system was 	rejected by another ALJ 	in 	the 	earlier 	case. 	That
decision 	specifically noted 	that 	the 	action 	of 	the 	state 	in 	not
filing disciplinary notices 	with 	the 	SPB, 	when 	it 	received 	an
unfavorable 	determination 	from 	an 	arbitrator 	differs
significantly 	from 	an 	approach 	where 	disciplinary 	action 	is
contemplated 	or 	even 	taken by an appointing power, 	but 	then
rescinded prior 	to 	any 	formal 	action 	and 	thus 	the 	matter 	never
reaches 	the 	SPB. 	There 	is 	a world of 	difference between an
employer 	who either 	changes 	its 	mind 	or 	who 	agrees 	in
settlement 	to withdraw the 	disciplinary action, 	and 	the 	case
proposed by PECG 	wherein 	the 	employer 	wishes 	to 	impose
disciplinary action, 	indeed seeks 	to 	impose 	such action, 	but 	is
prohibited 	from 	imposing 	that 	action because 	of 	an 	award 	of 	an
arbitrator. 	In other words, 	in the 	former 	situation there 	is
no disciplinary action 	for 	the 	SPB 	to 	review, 	because 	the
employer 	wishes 	there be 	no disciplinary action. 	In 	the 	latter
situation, 	however, 	there 	is no disciplinary action because 	an
arbitrator 	has 	instructed 	there be 	no 	disciplinary 	action.
Therefore, 	to comply with 	the 	requisites 	of Article VII 	of 	the
Constitution, 	any provision 	that 	deals 	with 	discipline must
provide 	for 	equal 	access 	to 	the 	SPB 	for both 	employer 	and
employee.
21

Consequently, 	PECG's proposal, 	as 	it conflicts with the
Constitution, 	is non-negotiable.
CONCLUSION
The proposals 	dealing with contracting out, 	layoffs, 	and
discipline 	are 	non-negotiable. 	The proposals 	concerning work
preservation 	and 	work 	performed 	during 	a 	job 	action 	are
negotiable.
REMEDY
The 	appropriate 	remedy 	is 	a cease 	and desist 	order, 	and 	an
order 	requiring 	DPA 	to negotiate 	proposals 	concerning work
preservation 	and work performed 	during 	a 	job 	action. 	The
employer 	shall 	also be 	required 	to post 	a 	notice 	incorporating
the 	terms 	of 	the 	order. 	The 	notice 	should be 	subscribed by 	an
authorized 	agent 	of 	the 	State 	of California, 	indicating 	that 	it
will 	comply with 	the 	terms 	thereof. 	The 	notice 	shall 	not be
reduced 	in 	size, 	and 	shall be posted 	for 	a period of 	thirty
(30) 	consecutive workdays.
ORDER
Upon 	the 	foregoing 	findings 	of 	fact 	and 	conclusions 	of 	law,
and 	the 	entire 	record 	in the 	case, 	it 	is 	found 	that 	the 	State
of 	California 	(Dept, 	of 	Personnel Administration) 	has violated
sections 	3519(b) 	and 	(c) 	of the Ralph C. 	Dills Act. 	Pursuant
to section 3514.5(c) 	of 	the Government Code, 	it 	is hereby
ordered 	that 	the 	State 	of 	California 	and 	its 	representatives
shall:
22

1. 	CEASE AND DESIST FROM:
a. 	Failing 	and 	refusing 	to meet 	and 	confer 	in good 	faith
with 	the 	Professional 	Engineers 	in 	California Government 	with
regard 	to proposals 	on assignment 	of bargaining 	unit 	work 	to
employees 	outside 	the bargaining unit 	and, 	in 	the event 	of 	a
strike by other 	employees, 	assignment 	of 	non-bargaining 	unit
work 	to members 	of 	the bargaining unit.
b. 	By the 	same 	conduct, 	denying 	to 	the 	Professional
Engineers 	in 	California Government 	rights 	guaranteed by 	the
Ralph C. 	Dills Act, 	including 	the 	right 	to represent 	its
members.
2. 	TAKE 	THE 	FOLLOWING AFFIRMATIVE ACTIONS 	DESIGNED TO
EFFECTUATE THE 	POLICIES OF THE ACT:
a. 	Upon request, 	meet 	and 	confer 	in good 	faith with 	the
Professional 	Engineers 	in 	California Government 	in 	respect 	to
those 	subjects 	enumerated 	above 	to 	the 	extent 	they have been
determined herein 	to be 	within 	the 	scope 	of 	representation.
b. 	Within 	five 	(5) 	workdays 	after 	this 	Decision 	is 	no
longer 	subject 	to 	reconsideration, 	prepare 	and post 	copies 	of
the 	Notice 	to Employees 	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 	at
its 	headquarters 	offices 	and 	in conspicuous 	places 	at 	the
location where 	notices 	to employees 	in 	the 	affected 	units 	are
customarily posted. 	It 	must not be 	reduced 	in 	size and
reasonable 	steps 	should be 	taken 	to 	see 	that 	it 	is 	not 	defaced,
altered, 	or 	covered by any material.
23

c. 	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. 	All 	reports 	to 	the 	Regional 	Director
shall 	be 	concurrently 	served 	on 	the 	charging party herein.
It 	is 	further 	ORDERED all 	other 	allegations 	in 	the 	charge
and 	complaint 	are hereby DISMISSED.
24

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-125-S,
Professional 	Engineers 	in California Government 	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 	violated 	Government 	Code 	section
3519(b) and (c).
As 	a result 	of 	this 	conduct, 	we have been ordered 	to post
this 	Notice, 	and will abide by the 	following. 	We will:
1. 	CEASE AND DESIST FROM:
a. 	Failing 	and 	refusing 	to meet 	and 	confer 	in 	good 	faith
with 	the 	Professional 	Engineers 	in 	California Government with
regard 	to proposals 	on assignment 	of bargaining 	unit 	work 	to
employees 	outside 	the bargaining unit 	and, 	in 	the 	event of 	a
strike by other 	employees, 	assignment 	of 	non-bargaining 	unit
work 	to members 	of 	the bargaining unit.
b. 	By 	the 	same 	conduct, 	denying 	to 	the 	Professional
Engineers 	in 	California Government 	rights 	guaranteed by 	the
Ralph C. 	Dills Act, 	including 	the 	right 	to represent 	its
members.
2. 	TAKE 	THE 	FOLLOWING AFFIRMATIVE ACTIONS 	DESIGNED TO
EFFECTUATE THE 	POLICIES OF THE ACT:
a. 	Upon request, 	meet 	and confer 	in 	good 	faith with 	the
Professional 	Engineers 	in 	California Government 	in 	respect 	to
those 	subjects 	enumerated 	above 	to 	the 	extent 	they have been
determined herein 	to be 	within 	the 	scope 	of 	representation.
Dated: 	STATE 	OF 	CALIFORNIA 	(DEPARTMENT
OF 	PERSONNEL ADMINISTRATION)
By:
Authorized 	Agent
THIS 	IS AN OFFICIAL NOTICE. 	IT MUST REMAIN POSTED FOR AT
LEAST 	THIRTY 	(30) 	CONSECUTIVE WORKDAYS 	FROM THE DATE OF
POSTING AND MUST NOT BE REDUCED IN SIZE, 	DEFACED, 	ALTERED OR
COVERED 	BY ANY MATERIAL.