Anaheim City School District (PERB 0675E)

STATE 	OF CALIFORNIA
DECISION OF 	THE
PUBLIC 	EMPLOYMENT 	RELATIONS 	BOARD
ANAHEIM 	ELEMENTARY 	EDUCATION
ASSOCIATION, 	CTA/NEA,
Charging 	Party,
v.
ANAHEIM 	CITY 	SCHOOL 	DISTRICT,
Respondent.
Case No. 	LA-CE-2512
PERB Decision No. 	675
June 9, 	1933
Appearance; 	Robert E. 	Lindquist, 	Attorney, 	California Teachers
Association, 	for Anaheim Elementary Education Association,
CTA/NEA; 	Littler, 	Mendelson, 	Fastiff & 	Tichy by Diane L.
Kimberlin, 	for Anaheim City School 	District.
Before Hesse, 	Chairperson; 	Porter and Shank, 	Members.
DECISION
SHANK, 	Member: 	Charging party, 	Anaheim Elementary
Education Association, 	CTA/NEA, 	appeals 	the Public 	Employment
Relations 	Board 	(Board) 	agent's partial 	dismissal, 	attached
hereto, 	of 	its 	charge alleging that 	respondent, 	Anaheim City
School 	District, 	by 	joining 	the 	Orange 	County 	Fringe 	Benefits
Joint 	Powers Authority 	(JPA), 	made 	certain unilateral 	changes
in health 	insurance benefits 	in violation of 	sections 	3543.5(a),
(b), 	and 	(c) 	of the Educational Employment Relations Act
(EERA).1
1EERA 	is 	codified 	at 	Government 	Code 	section 	3540 	et
seq. 	Unless 	otherwise 	indicated, 	all 	statutory references
herein are 	to the Government Code. 	Section 3543.5 provides, 	in
pertinent part, 	as 	follows:
It 	shall be 	unlawful 	for 	a public 	school
employer 	to:
(a) 	Impose or 	threaten 	to 	impose 	reprisals
on employees, 	to discriminate or 	threaten to
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Specifically, 	charging party appeals 	the dismissal 	of
paragraphs 10, 	11, 	17, 	and 18 of its amended charge which, 	in
essence, 	allege the 	following:
Paragraph 	10: 	As 	a consequence 	of 	joining 	the JPA,
respondent 	"effected 	a material 	and 	significant 	change 	in 	the
[total] 	amount 	of 	compensation 	received by 	the 	members 	of 	the
bargaining 	unit 	in 	the 	form of health 	and 	welfare benefits"
since:
a. 	The 	total 	amount 	of 	compensation provided became
subject 	to a 	"non-negotiable 	cost 	assessment 	unilaterally
established 	by 	the 	Unilateral 	Insurer."
b. 	The 	premium 	price 	and 	duration 	of 	insurance 	plans
became 	subject 	to adjustment by 	the 	JPA.
c. 	The penalties 	or disincentives 	for 	a 	change 	in 	insurer
"substantially increase[d] 	the cost 	to the union 	for, 	or
place[d] significant 	constraints 	on, 	bargaining any change 	in
health 	or welfare benefits 	which 	entails 	a 	change 	in 	insurer."
d. 	The basis 	for 	determining 	increases 	in premium prices
changed.
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 negotiate 	in
good 	faith 	with 	an 	exclusive 	representative.
N	
2

e. 	A 	foreseeable 	change 	in 	the 	amount 	of 	premium costs 	has
occurred.
Paragraph 	11: 	As 	a consequence of 	joining 	the JPA,
respondents 	"effected 	a material 	and 	significant 	change 	in 	the
amount 	of 	the 	contribution 	individual 	bargaining 	unit 	members
must 	make 	to 	ensure 	continued 	eligibility 	for health 	and
welfare benefits."
Paragraphs 	17 	and 	18: 	Respondents 	attempted 	to 	"derogate
and 	undermine 	[charging parties'] authority 	[as] 	exclusive
bargaining 	representative[s] 	by 	unilaterally 	implementing 	its
bargaining position 	on health 	and 	welfare benefits."
We 	have 	reviewed 	the 	partial 	dismissal 	and 	adopt 	that
portion of 	the 	regional 	attorney's 	analysis 	which dismisses 	the
allegations 	contained 	in paragraphs 	10, 	17, 	and 18 of the
amended charge. 	As 	to paragraph 	11 	of 	said charge, 	we disagree
with 	the 	regional 	attorney's 	conclusion.
For 	the purposes 	of 	determining 	the 	existence 	of 	a prima
facie 	case, 	the 	essential 	facts 	alleged by the 	charging party
are 	deemed 	true. 	(San Juan Unified 	School 	District 	(1977) 	PERB
Decision No. 	12.) 	On 	its 	face, 	paragraph 11 of the charge
alleges 	that 	respondent 	changed 	the 	amount 	individual
bargaining 	unit 	members 	must 	contribute 	to 	ensure 	continued
eligibility 	for health and welfare 	coverage. 	We 	view 	this 	as
more 	than 	speculative 	or 	merely an 	"alternate 	theory" 	as
construed by 	the 	regional 	attorney. 	Rather, 	charging party has
depicted 	an actual 	change 	that has happened 	which 	is 	alleged 	to
W	3

have 	a material 	and 	significant 	impact 	on bargaining unit
employees. 	(Trinidad 	Union 	Elementary 	School 	District 	and
Peninsula Union 	School 	District 	(1987) 	PERB Decision No. 	629.)
We 	find 	a prima 	facie 	case has been 	alleged, 	requiring 	this
issue 	to be 	litigated. 	Therefore, 	we 	reverse 	the dismissal of
paragraph 	11 	of 	the 	amended 	charge 	and 	order 	that 	the 	partial
complaint 	already 	issued be 	amended 	to 	include 	this 	allegation.
ORDER
Based 	upon 	the 	foregoing, 	the 	Board hereby DISMISSES
paragraphs 	10, 	17, 	and 18 of 	the amended charge, 	and ORDERS
that 	the 	General 	Counsel 	incorporate 	paragraph 	11 	of 	the 	charge
into 	the 	complaint 	already 	issued.
Chairperson 	Hesse 	and Member 	Porter 	joined 	in 	this 	Decision.
44

STATE Of CALIFORNIA 	GEORGE DEUKMEJIAN, Governor
PUBLIC EMPLOYMENT RELATIONS BOARD
LOS ANGELES REGIONAL OFFICE
3470 WILSHIRE BLVD., SUITE 1001
LOS ANGELES, CALIFORNIA 90010
(213) 736-3127
October 	21, 	1987
Robert 	Lindquist, 	Attorney
California 	Teachers 	Association
Post 	Office 	Box 	9 2888
Los Angeles, 	CA 	90009
Re: 	LA-CE-2512, 	Anaheim 	Elementary Education 	Association 	v.
Anaheim 	Elementary 	School 	D i s t r i c t
PARTIAL DISMISSAL OF UNFAIR PRACTICE CHARGE
Dear 	Mr. 	Lindquist:
In 	the 	above-referenced 	charge 	as 	o r i g i n a l l y 	f i l e d , 	the 	Anaheim
Elementary 	Education 	Association 	(Association) 	a l l e g e s 	that 	the
Anaheim 	Elementary 	School 	D i s t r i c t 	( D i s t r i c t ) 	made 	a 	u n i l a t e r a l
change 	in 	health 	insurance 	b e n e f i t s 	by 	joining 	the 	Orange
County 	Fringe 	Benefits 	Joint 	Powers 	Authority 	(JPA 	or
Authority). 	This 	action 	was 	a l l e g e d 	to 	be 	a 	v i o l a t i o n 	of
Educational 	Employment 	Relations Act 	(EERA) 	s e c t i o n s 	3543.5
( a ) , 	( b ) , and ( c ) .
I 	indicated 	to 	you 	in my 	attached 	l e t t e r 	dated August 	6, 	1987
that 	the 	above-referenced 	charge 	did 	not 	s t a t e 	a 	prima 	f a c i e
c a s e . 	You 	were 	advised 	that 	if 	there 	were 	any 	factual
inaccuracies 	or 	additional 	f a c t s 	which 	would 	correct 	the
d e f i c i e n c i e s 	explained 	in 	that 	l e t t e r , 	you 	should 	amend 	the
charge 	accordingly. 	You 	were 	a l s o 	invited 	to 	submit 	any 	l e g a l
argument. 	You 	were 	further 	advised 	that 	unless 	you 	amended 	the
charge 	to 	s t a t e 	a 	prima 	f a c i e 	case, 	or 	withdrew 	it 	prior 	to
August 	17, 	1987, 	it 	would 	be 	dismissed.
The 	time 	within 	which 	to 	f i l e 	an 	amended 	charge 	was 	extended 	to
September 	8, 	1987. 	On 	September 	9, 	1987 	an 	amended charge was
r e c e i v e d , 	a l l e g i n g 	v i o l a t i o n s 	of 	EERA 	s e c t i o n s 	3543.5 	( a ) , 	(b),
( c ) , and (d).
For 	the 	reasons 	which 	follow, 	the 	following 	a l l e g a t i o n s 	of 	the
amended 	charge 	w i l l 	be 	dismissed: 	Paragraphs 	10, 	11, 	17, 	and
18. 	The 	a l l e g a t i o n s 	in 	paragraphs 	15 	and 	16 	have 	been
withdrawn. 	Under 	separate 	cover 	today 	a 	complaint 	has 	issued
a l l e g i n g 	that 	the 	D i s t r i c t ' s 	action 	of 	joining 	the 	JPA 	was 	an
unlawful 	u n i l a t e r a l 	change 	because 	it 	resulted 	in 	a 	change 	in
b e n e f i t s 	and 	resulted 	in 	a 	s i g n i f i c a n t l y 	l e s s 	r e l i a b l e 	insurer.
PARAGRAPHS 10 AND 11;
Paragraph 	10 (a) 	- Compensation 	in 	the 	form of health 	and
welfare 	b e n e f i t s :
The 	c o l l e c t i v e bargaining 	agreement which 	expired on June 	30,

October 	21, 	1987
Partial 	Dismissal of 	UPC
LA-CE-2512
Page 	2
1986 	provided 	that 	the 	District 	would 	"pay 	the 	annual 	premium
costs 	identified 	by 	each carrier 	for 	each 	full-time 	unit 	member
and 	their 	dependents" 	as 	indicated 	in 	the 	agreement. 	Blue
Cross was 	one of 	the 	listed carriers. 	It 	is not alleged 	that
during 	the 	1986-87 year 	the 	employees were 	required 	to make 	a
contribution toward 	the cost of 	their 	health 	insurance, 	as 	a
result 	of 	the District 	joining 	the 	JPA.
This 	allegation merely 	restates 	the 	allegation 	in paragraph 	8
(1) 	and 	(5) 	of the original charge. 	The allegation, 	as made in
the 	amended charge 	and 	the original charge, 	is 	that 	the JPA,
rather 	than 	the District 	sets 	the 	cost 	assessment 	for 	health
and welfare benefits 	and 	therefore, 	the District will no 	longer
negotiate 	with 	the 	Association 	about 	the 	amount 	of 	compensation
to be provided 	for members 	of 	the 	bargaining 	unit 	in 	the 	form
of health 	and welfare benefits.
The JPA does 	set the contribution rate 	for 	the District 	to
receive 	health 	insurance coverage 	through 	the JPA. 	It does 	not
necessarily follow, 	however, 	that the District must then pass
on 	any 	increase 	assessed 	by 	the 	JPA 	to 	employees, 	or a
fortiori, 	that 	it must do so without 	fulfilling 	its obligation
to 	bargain with 	the 	Association. 	Faced with 	an 	increased
contribution 	rate 	from 	the 	JPA 	for 	continued 	health 	insurance,
the District can assume the 	increased costs; 	it can bargain to
impasse 	with 	the Association 	about 	increasing 	the 	amount 	of
employee contribution 	toward health; 	or 	it can withdraw from
the 	JPA and 	seek 	other means 	of 	providing 	the 	bargained-for
health 	insurance 	to 	employees.1
If 	the 	result 	of 	bargaining 	is 	that 	no 	increased costs can be
passed 	on 	to employees 	and 	if 	the 	District doesn't wish 	to
assume 	those costs, 	again the District can leave the JPA. 	It
is 	simply not an automatic consequence of an 	increase 	in 	the
contribution 	rate 	by 	the 	JPA that 	the District will 	change 	the
amount of 	compensation provided 	to employees 	in the 	form of
health 	and 	welfare 	benefits. 	As 	the Board 	stated 	in Trinidad
Union 	Elementary 	School District/Peninsula 	Union 	School
District 	(1987) 	PERB Decision No. 	629, 	there must be some
cogent 	evidence 	that 	changes 	have 	happened 	or 	will 	happen,
1The 	discussion 	in 	this paragraph 	assumes 	that 	the 	status
quo 	in health 	insurance 	in the 	District 	is 	that employees
receive 	health 	insurance 	without making 	any contribution 	for
those benefits.

October 	21, 	1987
Partial 	Dismissal 	of 	UPC
LA-CE-2512
Page 	3
which 	have 	significantly 	changed 	or 	will 	significantly 	change
employee 	benefits. 	The 	fact 	that 	the 	JPA sets 	the contribution
rates 	for 	insurance 	is not 	such 	evidence.
For 	these 	reasons 	and 	for 	the 	reasons 	stated 	in my August 	6,
letter 	relating 	to paragraph 	8(1) 	and 	(5) 	of 	the 	original
charge, 	the allegation 	in paragraph 	10(a) 	of 	the 	amended 	charge
is dismissed.
PARAGRAPH 	10(b) 	- 	Premium Price 	and 	Plan Duration2
This 	allegation 	is 	also 	similar 	to 	those 	contained 	in paragraph
8(1) 	and 	(5) 	of the original charge. 	It adds the element of
the 	duration 	of 	the 	health 	insurance 	plan, 	but 	other 	than 	that
addition, 	it merely 	applies 	the 	same 	logic 	and 	requires 	the
same 	level 	of 	speculation 	about 	how 	the 	District 	will 	respond
to 	a change 	in the contribution 	rate 	by the 	JPA, 	as noted 	above
under Paragraph 10(a).
Nor 	does 	the 	fact 	that 	JPA can change 	the premium cost 	at 	any
time, 	or 	even adjust 	it 	retroactively, 	change the 	fact that the
District 	is not 	required 	to 	remain 	in the JPA, 	nor 	is 	it
required 	to 	unilaterally 	change 	employee 	contribution 	for
health 	insurance 	even 	if 	the 	JPA does change 	the 	District's
contribution 	rate 	to 	the 	JPA.
You 	argue 	in your 	October 	7, 	1987 	letter 	that joining 	the 	JPA
has 	resulted 	in actual changes 	in 	insurance plan duration, 	and
that 	other 	changes 	are 	reasonably 	foreseeable 	as 	a 	result 	of
that 	action. 	Insofar 	as 	the 	alleged 	actual 	and 	reasonably
foreseeable changes 	relate 	to the cost 	of 	insurance, 	or 	other
costs 	to 	the 	employer 	(whether 	during 	or 	after membership 	in
the JPA), 	they do not 	form an adequate basis 	for 	a prima 	facie
unilateral change case 	for 	the 	reasons 	stated at p. 	4 of 	this
letter, 	supra. 	Insofar 	as 	the 	allegations 	in paragraph 	10(b)
2 Y O U 	allege 	that 	the 	premium 	amount 	the 	employer 	pays 	for
health 	insurance 	is 	a matter 	within 	scope.
The 	discussion 	of 	the Board's 	decision 	in 	Plumas Unified
School District 	(1986) 	PERB Decision No. 	578, 	at page 	5 of 	this
letter, 	infra, 	however, 	demonstrates 	that a change 	in premium
amount 	(i.e. 	, 	employer costs for 	health 	insurance) 	without
more, 	is 	not an unlawful unilateral change.

October 	21, 	1987
Partial 	Dismissal 	of 	UPC
LA-CE-2512
Page 	4
are 	intended 	to 	state 	that 	the 	employees 	in 	the 	bargaining 	unit
enjoyed 	the 	benefits 	of 	a 	"legally 	enforceable" 	contract 	of
insurance 	prior 	to 	joining 	the 	JPA, 	and 	do 	not 	enjoy 	such
benefits 	after 	the 	District 	joined 	the 	JPA, 	they do 	not 	state 	a
prima 	facie 	case 	under 	the 	Board's 	rationale 	in Plumas 	and
Trinidad, 	supra. 	In 	those 	cases 	the Board 	held 	that
self-funding 	of 	employee 	insurance 	(whether 	directly 	or 	through
a JPA) 	is 	not, 	without more, 	an unlawful unilateral change.
Inherent 	in 	any 	self-funding 	of 	health 	insurance 	is 	the
elimination 	of 	the 	contractual 	obligation 	of 	the 	prior
insurance 	carrier, 	at 	least up to the 	stop loss amount. 	And
those 	were 	the 	facts 	before 	the 	Board 	in 	both 	Trinidad 	and
Plumas, 	based 	upon which 	there 	was 	found 	to 	be no unlawful
unilateral 	change.
For 	these 	reasons, 	and 	the 	ones 	stated 	in my August 	6 	letter,
in response 	to paragraph 	8(1) 	and 	(5) 	of the original charge,
the 	allegation 	in paragraph 	10(b) 	is dismissed.
PARAGRAPH 	10(c) 	- 	Penalty 	for 	Change 	in 	Insurer
This 	allegation 	is 	similar 	to 	the 	one 	contained 	in paragraph
8(4) 	of 	the original charge. 	It 	alleges 	that as a 	result of
joining 	the 	JPA 	various 	disincentives 	or 	penalties 	exist 	to
bargaining 	a change 	in 	the 	insurer. 	You urge 	that 	these
potential 	cost 	items 	are 	such 	as 	to 	"increase 	the cost 	to 	the
Union 	for, 	or 	place 	significant constraints on, 	bargaining 	any
change 	in 	health or 	welfare 	benefits 	which 	entails 	a change 	in
insurer." 	(Amended 	Charge 	page 	8, 	lines 	7-9.) 	Even 	if 	one
assumes 	the 	existence 	of 	each 	of 	the 	alleged 	disincentives 	or
penalties, 	this 	allegation does 	not 	state 	a prima 	facie case.
During 	the 	course 	of 	our 	discussions 	about 	these 	allegations, 	I
pointed 	out 	that 	any 	penalties 	for 	or 	financial 	disincentives
to 	withdrawing 	from 	the 	JPA prior 	to 	three years do 	not
necessarily 	imply 	that 	faced 	with 	such penalties, 	the 	District
will 	bargain 	in 	bad 	faith, 	or 	that 	the 	District will 	bargain 	in
bad 	faith 	rather 	than 	accept 	such 	penalties. 	Joining 	the 	JPA
is 	not 	an 	adequate 	predictor, 	much 	less 	a 	predeterminer, 	of 	the
District's 	future 	bargaining 	behavior.
PARAGRAPH 	10(d) 	- Basis 	for 	Determining 	Increases 	in Premium
Price
This 	allegation 	is 	essentially 	the 	same 	as 	that made 	in
paragraph 	8(6) 	of 	the 	original charge, 	with 	the 	addition of
specifying 	the 	factors 	listed 	in 	the 	JPA Bylaws 	for 	determining
contribution 	rates. 	For 	the 	reasons 	stated 	in my
August 	6, 	1987 	letter 	relating 	to paragraph 	8(6) 	of 	the

October 21, 	1987
Partial Dismissal 	of UPC
LA-CE-2512
Page 	5
original 	charge, 	and 	for 	the 	reasons 	stated above 	relating 	to
the 	other 	subparagraphs of paragraph 	10 	of 	the 	amended charge,
this allegations 	is dismissed.
PARAGRAPH 	10(e) 	- Total Premium Amount
This 	allegation 	is 	merely 	a 	restatement of 	the 	first 	allegation
in paragraph 10(b). 	For 	the same 	reasons 	stated herein above
under paragraph 10(b), 	it is dismissed.
PARAGRAPH 	11
This paragraph 	alleges 	that 	a change 	in premium amounts
constitutes 	a 	unilateral change on 	the 	theory 	that 	it changes
the 	amount 	employees 	must 	contribute 	for 	continued 	eligibility
in 	the health 	insurance plan. 	The 	alternate 	theory for 	how the
change 	would 	affect 	employees 	does 	not 	affect 	the 	analysis.
For 	the 	reasons 	stated herein above, the 	allegation 	in paragraph
11 	is dismissed.
In 	sum the 	allegations 	in paragraphs 	10 	and 11 do not 	state 	a
prima 	facie 	case 	because 	they 	assume 	that 	the District must 	act
in an unlawful manner 	in 	response 	to 	an 	increase 	(or decrease)
in contribution rate by the JPA. 	This 	is simply not so. 	In
the event the District were 	to act 	in such a manner, 	a charge
could 	then 	be 	filed, 	alleging 	an 	unlawful 	unilateral 	action 	by
the District, 	or 	failure 	to 	bargain 	in good 	faith at 	the
negotiating 	table.
The Board's decision in Plumas, 	supra, 	supports the dismissal
of 	the allegations 	in paragraphs 10 	and 11. 	In that case, 	the
Plumas 	district 	unilaterally moved 	from a 	health 	insurance 	plan
administered 	by Equitable Benefit 	Plan 	(EBP) 	to a self-funded
plan 	(up 	to a stop-loss amount) 	administered 	by EBP. 	The
Board's decision 	states 	that 	the 	Plumas district 	saved
$100,000 	in health 	insurance costs 	by the 	shift 	to 	the
self-funded plan. 	Yet 	the Board 	found 	no 	unlawful 	unilateral
change 	in 	negotiable 	terms of employment, 	based on that 	fact
(and on others articulated in the decision). 	Thus, 	the Board
has not found a mere 	insurance cost 	saving, 	without more, 	to be
an 	unlawful 	unilateral change. 	The 	allegations 	in paragraph 	10
rest 	squarely on 	the proposition 	that 	such 	a cost 	saving 	(i.e.,
change 	in the employer's premium costs), 	even if 	it has no
impact on 	the 	amount of employee contribution, 	is an unlawful
unilateral change.
During 	the 	course 	of 	our 	discussions 	about 	the 	amended 	charge,
you cited 	various cases to 	support 	the 	issuance 	of 	a complaint
based on 	the 	allegations 	in paragraph 10 	and 	11. 	Then on

October 	21, 	1987
Partial 	Dismissal 	of 	UPC
LA-CE-2512
Page 	6
October 	7, 	you 	submitted 	a memorandum detailing 	your 	arguments
and 	citing 	legal 	authorities 	for your 	position. 	The gist of
those 	arguments, 	insofar 	as 	they 	relate 	to 	the question of 	the
cost of premiums, 	is as follows:
3
Under 	Grant 	Joint 	Union High 	School 	District
(1982) 	PERB Decision No. 	196, 	two essential
elements of a prima 	facie case of 	an
unlawful 	unilateral change are 	first, 	that
the change be 	"legally cognizable," 	and
second, 	that 	the change be made 	in a matter
within scope. 	In the health and welfare
benefits 	area, 	there are two types of
"legally cognizable" 	changes: 	"non-de
minimis" changes in benefit coverage, or
changes 	involving 	a 	"third party" 	to 	the
negotiations which effect 	terms 	and
conditions of employment. 	[In 	either 	kind
of change, 	to state a prima facie case, 	the
charging 	party has 	to 	state 	facts 	to 	show
that 	the 	alleged 	unilateral 	change 	would
either 	actually 	affect 	or 	have 	a 	"reasonably
foreseeable effect" 	on negotiable 	subjects.
The basis 	for 	this 	is 	found 	in Mt. 	Diablo
Education Association 	(DeFrates) 	(1984) 	PERB
Decision No. 	422 and 	is 	reaffirmed by
Trinidad 	Union 	Elementary 	School
District/Peninsula 	Union 	School 	District
(1987) 	PERB Decision No. 	629, 	where the
Board 	stated 	that 	there 	had 	to 	be 	cogent
evidence 	that 	changes 	have 	occurred or will
occur.]
3 Various 	ALJ decisions 	were 	cited 	in 	that 	memorandum.
Such decisions are, 	of course, 	not precedential. 	PERB
Regulation 	32215. 	Additionally, 	none of 	the cited cases stand
for 	the proposition that 	a change 	in 	the employer's costs of
providing health 	insurance, 	without more, 	is an unlawful
unilateral change. 	Even 	if 	any of 	the cited ALJ decisions
could 	be 	so 	read, 	they 	have 	been overruled 	by the Board's
decision 	in Plumas.
Numerous 	NLRA decisions 	were 	also 	cited 	for 	the proposition
that 	the 	cost 	to 	the 	employer 	of providing 	health 	insurance 	is
negotiable, 	and 	that 	therefore 	to change 	those costs without
negotiations 	is an unlawful unilateral change. 	None of the
cited cases 	stand 	for 	that proposition, 	and 	even 	if 	they did,
PERB 	has declined 	to 	follow such precedent, 	as demonstrated 	by
Plumas.

October 	21, 	1987
Partial 	Dismissal 	of 	UPC
LA-CE-2512
Page 	7
Examining 	each 	of 	the 	allegations 	in
paragraphs 	10 	and 	11 	under 	these 	standards
establishes 	that 	the 	changes 	enumerated
there 	are 	both 	legally 	cognizable 	and 	within
the 	scope 	of 	representation.4
The Board's 	decision 	in Trinidad
"reaffirmed" 	that 	insurance 	premium costs
are 	negotiable, 	"at 	least 	by 	implication."
(October 7, 	1987 letter, 	p. 	15.) 	In
addition, 	joining 	the 	JPA constituted 	an
illegal parity 	agreement 	under 	the 	Court 	of
Appeals 	analysis 	in Banning 	Teachers
Association 	v. 	Public 	Employment 	Relations
Board 	(1986) 	186 Cal.App.3d 	569, 	(Hg granted
- Case No LA 32300) . 	Finally, 	even under
the 	totality 	of 	the 	circumstances 	rather
than 	the per 	se 	test, 	joining 	the JPA is a
violation of EERA section 	3543.5 	(c).5
None 	of 	these arguments, 	or 	the cited cases, 	are persuasive.
First, 	whether 	on 	the 	basis 	that 	the 	claim 	is not 	legally
cognizable, 	or 	because 	the 	subject 	itself 	is 	not within 	the
scope 	of 	representation, 	the Board 	in Plumas Unified 	School
District 	(1986) 	PERB Decision No. 	578, 	found no unlawful
unilateral 	change 	in 	a case 	where 	the 	employer 	saved 	$100,000
in premium costs 	by 	self-funding 	insurance. 	That case 	is
dispositive 	of 	the 	issue 	that 	a mere 	savings 	in premium costs,
without more, 	is not an unlawful unilateral change. 	To 	issue a
complaint 	on 	the 	allegations 	in paragraphs 	10 	and 	11 	would 	be
contrary 	to 	that 	decision.
Second, 	even 	using 	the 	"reasonably 	foreseeable" 	standard 	for
determining 	whether 	joining 	the 	JPA 	is 	an 	unlawful 	unilateral
change, 	facts 	have 	not 	been 	alleged 	that 	show a 	reasonably
foreseeable change 	in 	negotiable 	subjects 	by a mere change 	in
the 	cost 	to 	the 	District 	for 	providing 	the 	insurance. 	[This 	of
course 	assumes 	that 	a mere 	change 	in costs 	is 	not negotiable,
following 	Plumas. 	It 	is 	not disputed 	that 	there were premium
cost 	savings.] 	Additionally, 	as 	stated herein above, the
District's 	future 	bargaining 	behavior 	is 	not predetermined 	by
its 	joining 	of 	the 	JPA.
4 The 	scope 	analysis 	is, 	first 	that premium costs 	are
"wages," 	an enumerated 	subject; 	or 	even 	if 	they are 	not
directly wages, 	under 	the 	Anaheim analysis, 	they 	are 	closely
related 	to wages, 	and 	therefore 	within 	scope.
5These	These 	latter 	two 	arguments 	were 	not 	raised 	previously.	5

October 	21, 	1987
Partial 	Dismissal 	of 	UPC
LA-CE-2512
Page 	8
Third, 	the Board's decision 	in Trinidad 	follows 	the earlier
Plumas 	rationale that premium cost changes, 	standing alone, 	are
not unlawful 	unilateral changes. 	This 	is confirmed 	by the
following 	statement 	in 	Trinidad;
In 	sum, 	the evidence 	in the 	record supports
the conclusion 	that 	the 	Districts 	have
improved 	the 	ability 	to 	supply benefits 	at 	a
reduced cost to themselves. 	It 	is not
enough 	to 	theorize 	whether 	the JPA
arrangement 	could 	potentially 	cause 	problems
for 	its members, 	or whether 	the JPA resulted
in 	a 	less well-established 	or 	less 	reliable
carrier.
Nor 	is 	that 	statement, 	"dicta." 	It 	is an 	integral part of 	the
Board's 	discussion of 	the 	reasons 	it disagreed with 	the ALJ's
determination, that 	there 	had 	been an unlawful relinquishment of
control 	over 	insurance costs 	to 	the 	JPA.
Fourth, 	entering 	into a joint powers agreement 	is not the 	same
as 	an 	illegal parity 	agreement. 	The JPA 	itself 	acknowledges
the 	bargaining 	obligations 	of 	the 	districts 	by permitting 	them
to 	leave 	the JPA prior 	to 	the 	usual three-year 	term, 	if 	that 	is
required 	as 	a 	result of 	collective 	bargaining. 	There 	is 	no
provision 	in the JPA which, 	like 	the one 	found to be 	illegal 	by
the Court 	of Appeals 	in Banning, 	requires the districts 	to
negotiate 	the 	same 	insurance 	benefits 	for 	their 	employees 	as
other 	districts 	in the JPA.
Fifth, 	whether one adjudges 	the allegations 	in paragraphs 	10
and 	11 on 	the 	per 	se or 	the 	totality of 	the conduct test, 	they
do not 	state 	a prima 	facie case. 	There was 	no 	showing 	that
this 	is 	an unlawful unilateral change, 	nor were 	facts alleged
to 	support 	a 	finding 	that 	the conduct 	is one 	indication of 	bad
faith 	bargaining.
You 	also 	argue 	that 	an 	inevitable 	effect 	of 	joining 	a JPA 	for
health 	insurance 	is 	what you call 	homogenization of 	the 	benefit
programs. 	By 	this 	term you 	apparently mean 	that there 	will 	be
a 	tendency of 	this 	District 	to 	negotiate 	for 	the 	benefits 	that
are 	available 	through 	the 	JPA and 	to 	be 	unwilling 	to 	agree 	to
other 	changes 	in 	benefits 	that 	the Association may 	seek 	at 	the
negotiating 	table. 	The 	tendency 	toward 	homogenization,
assuming 	for 	the sake of argument that 	it will occur, 	is not 	in
and 	of 	itself 	indicative 	of 	bad 	faith 	bargaining. 	Again 	it 	is

Supply Corp.
October 	21, 	1987
Partial 	Dismissal 	of 	UPC
LA-CE-2512
Page 	9
speculation 	that 	such 	bad 	faith 	bargaining 	will 	occur. 	If
during 	the 	future 	course 	of 	negotiations 	about 	health
insurance, 	the 	District 	fails 	to negotiate 	in good 	faith, 	that
is 	the 	time 	to 	file 	a charge 	about 	that 	behavior.
For 	all 	the 	foregoing 	reasons, 	the 	allegations 	in paragraphs 	10
and 	11 	of 	the 	amended 	charge 	are 	dismissed.6
PARAGRAPHS 	17 	and 	18 	- 	Undermining
These 	allegations 	were 	not 	made 	in 	the original charge.
Assuming 	for 	the 	sake 	of 	this 	analysis 	that 	the 	allegations
would 	be 	considered 	timely 	by 	the 	application 	of 	the 	relation
back 	doctrine, 	they do 	not 	state 	a prima 	facie case 	of 	unlawful
undermining 	for 	the 	following 	reasons.
In 	some 	instances, 	direct communication by the 	employer 	with
the 	employees 	unlawfully 	undermines 	the 	exclusive
representative 	and 	the 	collective 	bargaining 	relationship. 	In
Muroc 	Unified 	School 	District 	(12/15/78) 	PERB Decision No. 	80,
the 	Board 	addressed 	the 	issue 	of 	communications 	or 	memoranda
directed 	at 	employees 	as 	follows:
The 	EERA 	imposes 	on 	the 	public 	school
employer 	an 	obligation 	to 	meet 	and 	negotiate
with 	the 	exclusive representative, and
embodies 	the 	principle 	enunciated 	in 	federal
decisions 	that 	the 	employer 	is 	subject 	to
the 	concomitant 	obligation 	to meet 	and
negotiate with no 	others, 	including 	the
employees themselves. 	(See 	Medo 	Photo
Supply Corp. 	v. 	NLRB 	(1944) 	321 U.S. 	678 	[14
LRRM 	581].)
6Paragraph 	9(b) 	of 	the 	amended 	charge 	could 	be 	read 	to
make 	the 	same 	or 	similar 	allegations 	as 	those 	in paragraphs 	10
and 	11. 	I, 	however, 	read paragraphs 	1-9 	to be preliminary to
the 	allegations 	of 	the manner 	in which 	the 	alleged 	unilateral
change 	altered 	negotiable 	terms 	and 	conditions 	of 	employment,
and 	have 	not 	therefore 	formally 	dismissed 	any 	of 	those
allegations. 	Insofar 	as any allegations 	in paragraphs 	(l)-(9),
including 	but 	not 	limited 	to paragraph 	9(b), 	are 	intended 	to 	or
actually 	restate 	in 	substance 	the 	allegations 	in paragraphs 	10
and 	11, 	they 	are 	also dismissed.

October 21, 	1987
Partial Dismissal of 	UPC
LA-CE-2512
Page 	10
Consequently, 	. 	. 	. actions of a public
school employer 	which 	are 	in derogation
of 	the 	authority 	of 	the 	exclusive
representative 	are 	evidence 	of 	a 	refusal
to negotiate 	in good 	faith. 	(NLRB v.
Goodyear Aerospace Corp. 	(6th Cir. 	1974)
Evidence 	of 	bad 	faith 	includes 	undermining 	the 	ability 	of 	the
exclusive 	representative 	to 	act on behalf 	of 	the 	unit. 	Muroc
Unified School District 	(12/15/78) 	PERB Decision No. 	80;
Modesto City Schools 	(3/8/83) 	PERB Decision No. 	291. 	The
charge, 	as presently written, 	fails to allege actions of the
public 	school 	employer 	which 	are 	in 	derogation of 	the 	authority
of 	the 	exclusive 	representative.
The 	only 	facts 	alleged 	here 	are 	that 	the 	employer 	acted 	to
adopt 	the 	resolution to 	join 	the 	JPA, 	and 	that 	the documents
embodying 	the 	action are public documents 	"available to, 	and 	in
common 	knowledge 	among, 	members of 	the 	bargaining 	unit." 	These
facts 	are 	alleged 	to 	show that 	the 	District 	undermined 	the
authority 	of 	the 	Association. 	No 	cases 	have 	been cited 	to
support 	the proposition that based 	on facts 	such as 	these, 	a
prima 	facie case 	of 	undermining 	is 	stated. 	The 	allegations 	in
paragraphs 	17 	and 	18 are 	therefore dismissed.
Right 	to Appeal
Pursuant 	to Public 	Employment Relations Board 	regulations, 	you
may 	obtain 	a 	review of this dismissal of 	the charge 	by 	filing
an 	appeal 	to 	the Board 	itself 	within 	twenty 	(20) 	calendar 	days
after 	service 	of 	this dismissal 	(California Administrative
Code, 	title 	8, 	section 32635(a)). 	To be timely filed, 	the
original 	and 	five copies of 	such 	appeal must be actually
received 	by 	the Board 	itself 	before 	the close 	of 	business
(5:00 p . m . ) , or sent by telegraph, certified or Express United
States mail postmarked no 	later 	than 	the 	last date 	set 	for
filing. 	Code 	of Civil Procedure 	section 	1013 shall apply.
(See 	section 	32135.) 	The Board's address 	is:
Public Employment 	Relations Board
1031 	18th 	Street
Sacramento, 	CA 95814
If 	you 	file a 	timely appeal 	of 	the 	refusal 	to 	issue 	a
complaint, 	any other party may 	file 	with 	the Board 	an 	original
and 	five 	copies 	of 	a 	statement 	in opposition within 	twenty
calendar 	days 	following 	the 	date 	of 	service 	of 	the 	appeal
(section 32635(b)).

October 	21, 	1987
Partial 	Dismissal 	of 	UPC
LA-CE-2512
Page 	11
Service
All 	documents 	authorized 	to 	be 	filed 	herein must 	also 	be
"served" 	upon 	all parties 	to 	the proceeding, 	and a 	"proof 	of
service" 	must 	accompany 	each 	copy 	of 	a 	document 	served 	upon 	a
party or 	filed 	with 	the Board 	itself. 	(See 	section 	32140 	for
the 	required 	contents 	and 	a 	sample 	form.) 	The document will 	be
considered 	properly 	"served" 	when 	personally 	delivered 	or
deposited 	in 	the 	first-class 	mail 	postage 	paid 	and properly
addressed.
Extension 	of 	Time
A 	request 	for 	an extension 	of 	time 	in which 	to 	file 	a document
with 	the 	Board 	itself must 	be 	in writing 	and 	filed with 	the
Board 	at 	the 	previously noted 	address. 	A 	request 	for 	an
extension 	must 	be 	filed 	at 	least 	three 	calendar 	days 	before 	the
expiration 	of 	the 	time 	required 	for 	filing 	the document. 	The
request must 	indicate good cause 	for 	and, 	if 	known, 	the
position 	of 	each other 	party 	regarding 	the 	extension, 	and 	shall
be 	accompanied 	by proof 	of 	service 	of 	the 	request 	upon each
party 	(section 32132) .
Final 	Date
If no appeal 	is 	filed within 	the 	specified 	time 	limits, 	the
dismissal 	will 	become 	final 	when 	the 	time 	limits 	have 	expired.
Sincerely,
JOHN 	SPITTLER
Acting 	General 	Counsel
Sandra 	Owens 	Dennison
Regional 	Attorney
Attachment
cc: 	Diane 	Kimberlin, 	Attorney
1. 	C
-

STATE Of 	California 	GEORGE DEUKMEJIAN, Governor
PUBLIC EMPLOYMENT RELATIONS BOARD
LOS ANGELES REGIONAL OFFICE
3470 WILSHIRE BLVD., SUITE 1001
LOS ANGELES, CALIFORNIA 90010
(213) 736-3127
August 6, 	1987
Robert Lindquist, 	Attorney
California 	Teachers 	Association
Post Office Box 92888
Los Angeles, CA 	90009
Re: 	LA-CE-2512, Anaheim Education Association, CTA/NEA
v. Anaheim City School District
Dear Mr. Lindquist:
In the above-referenced charge the Anaheim Education Association
(Association) 	alleges 	that 	the Anaheim City School District
(District) 	made 	a unilateral change in health 	insurance benefits by
joining 	the Orange County Fringe Benefits Joint Powers Authority
(JPA or Authority) . 	This action is alleged to be a violation of
Educational Employment Relations Act 	(EERA) 	sections 3543.5 	(a),
(b) , and 	(c).
My 	investigation of the charge revealed the following 	information.
The JPA was formed on January 1, 	1987, 	by the District and eight
other 	public educational agencies. 	The District's membership was
effective on that i3ate. 	The District Board of Education acted to
join the JPA on November 18, 1986.
The Agreement establishing 	the JPA provides that 	it was 	formed
pursuant 	to Government Code 	sections 6500 et seq., 	to 	"jointly
provide 	for 	a self-insurance program for employee health and welfare
benefits." 	The JPA is a separate 	legal entity, 	and in accord with
Article 4 of the JPA Agreement, 	it has only those powers which are
common to the member districts and which are "in furtherance of the
functions and objectives" of 	the Agreement. 	(JPA Agreement, Article
4. 	Section 	(a).) 	The Bylaws 	of the JPA give 	it 	the authority. to set
the annual premiums for 	the 	insurance for the member districts.
(Bylaws, Article V.) 	The contribution for premiums 	is determined by
at least the 	following 	factors: 	"cost price 	index 	(inflation
factor); 	experience 	factor; 	cost of 	reinsurance; 	desired 	level of
self-insured retention; 	desired 	level of 	reserves; 	and plan
design." 	(By-Laws, Article V. Section 	B.1.) 	Premiums are to be
paid to monthly or tenthly by the member districts.
There was no change in the coverage for employees of the District,
or 	in the administration of 	the plan by 	the action of joining 	the
JPA. 	In fact, 	after 	the District joined 	the JPA 	in January, 	it
negotiated a change 	in insurance carrier 	to Blue Shield with the
Association.

August 	6, 	1987
LA-CE-2512
Page 	2
Insurance 	companies 	assign 	insureds 	to 	experience 	rating 	pools 	which
are 	used 	as 	a partial 	basis 	for 	determining 	their 	insurance 	rates
for 	the 	upcoming 	insurance year. 	Larger 	employers may have an
experience 	rating pool 	of 	their 	own, 	and 	smaller 	districts 	may 	be
placed 	in 	a pool 	with 	other 	smaller 	employers. 	This district 	claims
that 	it 	is 	100% credible, 	that 	is, 	it 	is assigned to 	its own
experience 	rating 	pool. 	The Association claims 	that 	the District's
experience 	rating pool 	is now that of 	the JPA, 	not the District. 	No
facts have 	been provided 	to 	support 	that 	allegation. 	The District
denies 	that 	its 	experience 	rating 	pool 	was changed 	when 	it 	joined
the 	JPA.
The 	self-insurance 	aspect 	of 	the 	JPA funding 	of 	the 	health 	insurance
benefits 	is 	limited by an aggregate 	stop-loss provision of 	120% 	of
the District's 	anticipated claims. 	There 	is also an 	individual
stop-loss provision of 	$50,000 per 	employee. 	(This 	is not 	recited
in the JPA Agreement 	or 	bylaws, 	but 	it 	is undisputed by the
Association 	that 	these 	are 	the 	stop-loss amounts.) 	This 	stop-loss
aspect 	of 	the 	JPA 	self-funding 	arrangement provides 	that 	the
District 	is 	fully 	insured 	by Blue 	Shield, 	in the 	aggregate 	for
amounts beyond 	120% 	of 	its 	anticipated claims 	in a year. 	The 	JPA's
reserves 	(from member 	district contributions) 	are 	established 	so 	as
to cover 	the exposure 	up to 	120% 	of 	the 	initial anticipated claims.
The 	Agreement 	which 	establishes 	the 	JPA provides 	that 	its members
are 	jointly 	and 	severally 	liable 	"upon 	any 	liability which 	is
otherwise 	imposed 	on 	any 	one 	of 	the Members 	or 	upon 	the 	Authority
for 	injury 	caused 	by 	a 	negligent or 	wrongful 	act 	or 	omission
occurring 	in 	the 	performance 	of 	the Agreement." 	The Agreement
requires 	the district 	to 	remain 	in 	the 	JPA for 	3 years 	unless
earlier 	termination 	is 	"required 	as 	a condition of collective
bargaining." 	If 	a member 	district 	terminates before 	three years,
however, 	there will 	be 	no 	refund or 	repayment of 	its contributions
to 	the 	JPA.
The 	JPA 	is 	governed 	by 	a Board of 	Directors, 	with most decisions
requiring 	only 	a majority vote. 	Each member 	district 	has 	one 	vote
on 	the Board of 	Directors, 	regardless 	of 	the 	number 	of 	employees 	of
the 	district.
The 	collective 	bargaining 	agreement 	in 	effect 	at 	the 	time 	the
District 	acted 	to 	join 	the 	JPA provided 	in Article 	X 	that 	the
District 	would 	pay 	up 	to 	the 	specified 	monthly dollar 	amounts 	for
each carrier 	for 	each 	full-time 	unit 	member 	and 	their 	dependents.
The 	carrier 	for 	health 	insurance 	at 	that 	time 	was 	Blue 	Cross.

August 	6, 	1987
LA-CE-2512
Page 	3
The 	charge 	alleges 	that 	the 	District's 	decision 	to 	join 	the 	JPA
reduced 	or 	eliminated 	benefits 	in 	the 	following 	ways:
(1) 	The 	determination 	of 	premium 	and
benefits 	levels 	now 	has 	been 	placed 	within
the 	exclusive 	control 	of 	the 	JPA and, 	as 	a
consequence, 	Charging 	Party 	is 	denied 	the
opportunity 	to 	bargain 	the 	cost 	of 	insurance
coverage 	for 	its 	members;
(2) 	The 	JPA 	is 	a 	"self-funded" 	program, 	and
thus, 	is 	a 	less 	reliable 	insurer 	and 	less
able 	to 	perform 	than 	the 	previous 	carrier,
Blue 	Shield, 	and 	as 	a consequence, 	Charging
Party 	receives 	a materially 	lower 	quality 	of
medical 	benefits;
(3) 	The JPA, 	rather 	than 	respondent,
maintains 	all 	control 	over 	reserves,
interests, 	premium overpayments, 	or 	rebates
from 	insurers, 	thus 	reducing 	the 	amount 	of
money 	available 	for 	negotiation 	with
Charging 	Party;
(4) 	JPA 	Rules prohibit withdrawal 	from
membership 	prior 	to 	a 	three-year 	period 	of
time 	with 	full pro-rata 	refund 	rights, 	thus
reducing 	the 	amount 	of 	money 	available 	for
negotiating 	with Charging 	Party, 	if 	such
negotiations occur 	with 	in 	(sic) 	the
three-year 	membership 	period;
(5) 	Control 	over 	retention, 	administrative
costs, 	marketing costs, 	have 	been
transferred 	from 	Respondent 	to 	the 	JPA, 	thus
eliminating 	Charging 	Party's 	opportunity 	to
bargain 	with 	Respondent 	over 	such 	fees 	and
their 	relationships 	to 	claims
payments; 	. . . .
For 	the 	following 	reasons 	the 	charge 	does 	not 	state 	a 	prima
facie 	violation 	of 	the 	EERA.
In 	determining 	whether 	a 	party 	has 	violated 	section 	3543.5(c)
of 	EERA, 	the 	PERB 	utilizes 	either 	the 	"per 	se" 	or 	"totality 	of
the 	conduct" 	test, 	depending 	on 	the 	specific 	conduct 	involved
and 	the 	effect 	of 	such 	conduct 	on 	the 	negotiating 	process.
Stockton 	Unified 	School 	District 	(1980) 	PERB 	Decision No. 	143.

August 6, 	1987
LA-CE-2512
Page 4
Unilateral changes 	are considered 	"per 	se" 	violations 	if
certain criteria are met. 	Those criteria are: 	(1) 	the
employer 	implemented 	a change 	in policy 	concerning 	a 	matter
within the 	scope of 	representation, 	and 	(2) 	the change 	was
implemented 	prior 	to 	the 	employer 	notifying 	the 	exclusive
representative 	and 	giving 	it 	an 	opportunity 	to 	request
negotiations. 	Walnut 	Valley Unified 	School 	District 	(1981)
PERB Decision No. 	160; 	Grant Joint Unified High School District
(1982) 	PERB Decision No. 	196.
The 	nub 	of 	the 	issue 	presented 	here 	is 	whether 	the 	change 	to
self-funding 	of 	health 	insurance 	through 	the 	JPA 	is 	a matter
within 	the 	scope 	of 	representation.
At 	the 	time 	the 	charge was 	filed, 	the 	latest 	PERB decision
dealing 	with 	self-funding 	of 	health 	insurance 	as 	a potential
unlawful 	unilateral change 	was 	Plumas 	Unified 	School 	District
(1986) 	PERB Decision No. 	578, 	in which the Board found the
district's 	decision 	to 	self-fund Medical 	insurance 	not 	to 	be 	an
unlawful unilateral change. 	In Plumas, 	there was a 120%
stop-loss provision 	in 	the 	self-funding 	arrangement.
Since 	the charge was 	filed, 	the Board 	has decided Trinidad
Union 	Elementary 	School 	District 	and 	Peninsula 	Union 	School
District 	(1987) 	PERB Decision No. 	629. 	In that case, 	the Board
stated 	unequivocally 	that 	a 	"change 	to 	a 	self-funded plan does
not, 	without more, 	result 	in a per 	se violation of EERA." 	The
Board 	also 	found that 	joining 	a JPA to 	self 	fund 	benefits 	is
essentially 	the 	sane 	as 	individually 	self-funding 	those
benefits, 	and 	therefore 	not negotiable 	under 	the 	Plumas
rationale. 	The Board 	articulated 	its 	reasons 	for 	finding 	the
JPA self-funding 	to 	be 	the 	same 	as 	individual 	self-funding, 	as
follows: 	first, 	the 	districts did not 	relinquish control over
insurance 	to 	the JPA; 	second, 	the 	JPA did not 	result 	in 	less
reliability or greater 	risk; 	third, 	the 	lack 	of 	State
regulation 	of 	the JPA 	is not of 	consequence 	to 	the 	reliability
of 	the JPA; 	and 	fourth, 	the alleged 	lack 	of 	experience 	of 	the
JPA Board 	of 	Directors 	did 	not 	have 	any 	impact 	on 	the 	capacity
of 	the 	JPA to provide 	insurance 	coverage.
Further, 	in Trinidad, 	the Board 	reaffirmed 	that 	there must 	be
some 	"impact on 	services or benefits" 	in order 	to 	find 	a 	(c)
violation 	in a change 	in insurance carrier. 	Trinidad, 	supra,
at p. 	12.
The 	facts 	alleged 	in 	this 	charge 	appear 	to 	require 	dismissal
for 	the 	same 	reasons which 	the Board 	stated 	in Trinidad. 	Each
of 	the Association's 	alleged 	areas of 	change 	in 	insurance
benefits will 	be 	analyzed 	in 	light 	of 	the Board's holding 	in
Trinidad.

August 6, 	1987
LA-CE-2512
Page 	5
Relinquishment 	of 	control
In Trinidad, 	the Board 	stated:
In 	sum, 	the 	evidence 	in 	the 	record 	supports
the 	conclusion 	that 	the 	Districts 	have
improved 	the 	ability 	to 	supply 	benefits 	at 	a
reduced cost to 	themselves. 	It 	is not
enough 	to 	theorize 	whether 	the JPA
arrangement 	could 	potentially 	cause 	problems
for 	its members, 	or whether 	the 	JPA 	resulted
in 	a 	less well-established or 	less 	reliable
carrier.5 [1]
No 	facts 	have 	been 	alleged 	here 	that 	provide 	any cogent
evidence 	that 	changes 	in control 	have 	happened 	or 	will 	happen,
which 	changes 	would 	cause 	a 	significant 	change 	in 	employee
benefits. 	To 	the contrary, 	it 	is not disputed 	that 	since
joining 	the 	JPA, 	the 	District 	has 	negotiated with the
Association 	about 	a change 	in health 	insurance carrier 	to Blue
Shield, 	and 	that 	the 	agreed-upon change 	has 	been 	implemented 	by
the District. 	It 	is merely speculation that, 	in the future,
some 	changes 	in 	those 	benefits might 	occur 	by 	an action 	of 	the
JPA.
Risk 	and 	Reliability
No 	facts 	are 	alleged 	here 	that 	indicate 	that 	the JPA 	is 	less
reliable 	or 	puts employees 	at greater 	risk 	than they were 	under
the prior 	arrangement 	for 	funding 	health 	insurance. 	As 	in
Plumas 	and 	Trinidad, 	there 	is a 	stop-loss provision which
limits the exposure of 	the District, 	in this case, 	to 120% 	of
the 	anticipated claims 	for 	the 	insurance year. 	Beyond 	that
amount 	the 	District 	is 	fully 	insured 	by Blue 	Shield.2
The 	argument 	is made 	that 	the 	joint 	and 	several 	liability of
the Districts 	in 	the 	JPA for 	each others 	acts 	exposes 	this
district 	to 	liability 	for 	another 	district 	that might 	fail 	to
1In 	the 	footnote 	of 	this quote 	the Board 	states, 	"There
must 	be 	some 	cogent 	evidence 	that 	changes 	have 	happened 	or 	will
happen, 	which 	have 	significantly changed 	or 	will 	significantly
change 	employee 	benefits."
2 Here, 	as 	in Plumas, 	if the stop-loss aspect of the
District's 	health 	insurance coverage 	were cancelled, 	then 	a
charge could be 	filed, 	in which some cogent evidence 	of 	a 	loss
in 	reliability 	and 	increased 	risk 	could 	be 	presented.

August 6, 	1987
LA-CE-2512
Page 	6
make 	its contributions. 	This 	argument 	fails 	to 	take 	into
account 	the 	fact 	that 	the 	JPA Bylaws 	provide 	that 	a member
district 	that 	fails 	to 	make 	the 	required 	contributions 	to 	the
Authority may 	be 	involuntarily 	terminated 	from 	the 	JPA, 	thereby
eliminating 	or 	cutting 	short 	the 	time 	within 	which 	the 	other
JPA members 	would 	arguably 	be 	incurring 	liability 	for 	the
contributions of 	the 	defaulting member. 	To 	speculate 	that 	such
exposure might continue 	for 	a 	long 	enough period of 	time 	to
make 	the 	JPA 	funding 	a 	less 	reliable 	method 	than 	the 	current
method, 	is 	just that, 	speculation. 	Under Trinidad, 	more 	than
just 	speculation 	is 	required 	to establish a change 	to 	a 	less
reliable 	insurer.
Moreover, 	the Board 	in Trinidad 	implicitly 	overruled 	the 	ALJ's
determination 	that 	the 	joint 	and 	several 	liability of 	the
member 	districts 	for 	each 	other 	was 	a 	factor 	creating 	increased
risk 	and 	lack of 	reliability. 	In his decision 	the ALJ 	stated:
The 	terms 	of 	the NCSMIG agreement 	and
bylaws, 	in particular, 	imposed joint and
several 	liability on the members, 	in accord
with 	the 	statute 	governing 	joint power
relationships. 	Small employers 	in the
NCSMIG, 	including Trinidad, 	are 	now exposed
to potential 	financial disaster 	by 	sharing
in 	liability 	up 	to 	the 	stop-loss amount.
This differs dramatically 	from Plumas, 	in
which 	the 	employer's exposure 	was 	no greater
after 	the 	switch 	to 	self-funding.
(Trinidad 	Proposed Decision 	(11/7/86) 	at
p. 	38.)
The 	Board, 	in deciding 	that 	the JPA 	in 	Trinidad did 	not 	result
in less 	reliability or 	greater 	risk 	to employees, 	stated,
"There 	was 	no 	evidence 	produced 	by 	the 	Charging 	Parties 	that
the 	JPA was 	not 	reliable 	. . . . 	The 	risk 	here was 	limited 	by
the 	stop-loss plan as 	it was 	in Plumas." 	By 	these 	statements,
the 	Board 	implicitly 	rejected 	the 	ALJ's 	finding 	regarding 	the
exposure 	from joint 	and 	several 	liability. 	In 	this case, 	as 	in
Trinidad, 	Government Code section 	6508.1 permits the joint and •
several liability of 	the member districts. 	Here, 	as 	in
Trinidad, 	the 	implication 	that 	such 	joint 	and 	several 	liability
creates 	additional 	risk 	and 	lack of 	reliability 	is 	rejected.
The 	Association claims 	that 	the JPA now has 	control 	over
reserves, 	interests, 	premium overpayments, 	or 	rebates from
Control 	Over 	Reserves

August 	6, 	1987
LA-CE-2512
Page 7
insurers, 	thereby 	"reducing 	the 	amount 	of 	money 	available 	for
negotiations 	with 	Charging 	Party." 	The 	District claims 	that
these 	are matters within 	the control of 	the 	insurers, 	not 	the
District, 	and 	that 	the Association has 	never 	had 	the 	right
under 	the 	EERA to 	negotiate 	with 	the 	District 	over 	these moneys.
Even 	if 	one 	assumes 	that 	the 	District did 	shift control 	over
these matters to the JPA, 	however, 	there 	are 	no 	facts alleged
here 	to 	show how 	this 	alleged change 	in control 	impacts 	on
services 	or 	benefits. 	Without such facts, 	a prima 	facie case
cannot 	be 	stated.
Claims 	experience 	pool
The Association 	has 	not 	provided 	any 	evidence 	that 	would
demonstrate 	that 	the 	District 	has 	had 	a change 	in 	its
experience 	rating 	pool 	as 	a 	result 	of 	joining 	the 	JPA for
self-funding 	of 	health 	insurance. 	The 	District 	states 	that
both prior 	to 	and 	after 	joining 	the 	JPA 	the 	District 	has 	been
considered by 	its 	insurers 	to be 	100% credible, 	that is 	its
rates 	are 	set based on 	its own experience, 	not 	that of 	the
other 	districts 	in the JPA.
Even 	if 	there had 	been a change 	in experience 	rating pool by
the 	joining 	of 	the 	JPA, 	that 	fact alone would not constitute a
unilateral 	action 	by 	the 	District. 	The 	setting 	of 	experience
rating pools 	is 	an action of 	insurers, 	not of 	the 	insured.
Under 	the Board's holding 	in Trinidad, 	arguably, 	if a district
action caused 	the 	insurer 	to 	evaluate 	its placement of 	the
District 	in one or 	another 	experience 	rating 	pool, 	and 	that 	had
an 	impact on the 	level or quality of employee benefits, 	there
could be a basis 	for 	finding 	a prima 	facie 	(c) 	violation. 	This
case does not present 	such a 	scenario, 	however. 	There 	are
simply no 	facts 	alleged 	to 	show how a change 	in experience
rating pool 	would 	have 	any 	impact 	on 	the 	level or 	quality 	of
employee 	benefits.
Prohibition 	against 	withdrawal 	prior 	to 	three 	years
The 	JPA agreement 	does provide 	that member 	districts can
withdraw 	from membership prior 	to 	the 	initial 	three-year 	period
if 	that 	is 	required 	as 	a condition of collective bargaining.
(JPA Agreement, 	section 	8 ) . 	In the event of a voluntary
withdrawal prior 	to 	the 	three-year period, 	however, 	the Bylaws
provide 	that 	there 	will 	be 	no 	refund 	or 	repayment 	to 	the
withdrawing 	member 	(Bylaws 	Article VII, 	Section B.) 	From these
provisions 	the 	Association deduces 	that 	the 	amount 	of 	money
available 	for 	negotiating 	with 	Charging 	Party will 	be 	reduced

August 	6, 	1987
LA-CE-2512
Page 	8
if 	the 	negotiations 	occur within 	the 	three-year 	period. 	This
is alleged 	to be 	one 	of 	the ways 	in which 	the 	District has
changed 	the 	benefits 	of 	employees. 	Even 	assuming 	the
Association's deduction 	to be valid, 	there 	are 	no 	facts 	alleged
that 	show 	that 	the 	three-year 	membership 	without 	full pro-rata
refund 	would 	materially 	change 	employee 	benefits. 	Under 	the
Board's decision 	in Trinidad, 	facts must 	be 	stated 	to 	show 	such
a material 	change 	in 	benefits 	by 	the 	JPA provision 	regarding
three-year 	membership 	without 	refund.
Control 	over 	retention, 	administrative 	costs 	and marketing
costs.
The Association 	also 	alleges 	that enployee 	benefits have 	been
reduced 	or 	eliminated 	by 	the 	transfer 	of control over
retention, 	administrative costs and marketing 	costs 	from the
District 	to 	the JPA. 	It 	is 	not clear 	from the 	facts alleged
that 	the 	District 	ever 	had 	control 	over 	retention,
administrative costs, 	or marketing 	costs 	in order 	to transfer
such control to the 	JPA. 	The 	District denies 	that 	it ever 	had
such control. 	Assuming, 	however, 	that the District did
transfer control over 	these 	items 	to the JPA, 	the 	issue 	at 	this
level of 	inquiry 	is 	whether 	that 	fact would 	arguably
demonstrate 	an 	impact 	on employee 	benefits. 	At Most, 	this
transfer 	of 	control could 	result 	in higher 	or 	lower 	costs 	to
the District 	for 	employee benefits. 	A change 	in costs 	to 	the
employer, 	does not, 	however, 	necessarily imply a change 	in
employee 	benefits. 	As 	in so many of 	the other 	areas of 	this
charge, 	the Association theorizes 	about what might happen as 	a
result of 	this 	alleged change 	in control. 	What night happen,
without 	facts 	to demonstrate 	how 	it might happen and how the
events would 	affect 	employee 	benefits, 	is 	not 	enough 	to 	state 	a
prima 	facie 	case 	in 	this 	area.
In sum, 	as 	in Plumas 	and Trinidad, 	the 	facts 	alleged here 	show
merely 	a 	change 	by 	the 	District 	in 	the method of 	financing 	its
health 	insurance 	benefits 	for 	employees. 	Without 	further 	facts
to 	show how 	this 	change 	in 	the 	funding 	mechanism materially
changes 	the 	benefits 	for 	employees, 	no prima 	facie case 	is
stated.
For 	these 	reasons, 	the charge 	as presently written does 	not
state a prima 	facie 	case. 	If you 	feel that there are 	any
factual 	inaccuracies 	in 	this 	letter 	or 	any 	additional 	facts
which would 	correct 	the 	deficiencies 	explained 	above, 	please
amend the charge accordingly. 	In addition, 	if 	there 	is 	legal
argument which you wish 	to 	submit, 	I will also consider 	it.

August 	6, 	1987
LA-CE-2512
Page 9
The 	amended 	charge 	should 	be 	prepared 	on 	a 	standard 	PERB 	unfair
practice 	charge 	form 	clearly 	labeled 	First 	Amended 	Charge,
contain 	all 	the 	facts 	and allegations you 	wish 	to make, 	and 	be
signed 	under 	penalty of 	perjury 	by 	the 	charging 	party. 	The
amended 	charge 	must 	be 	served 	on 	the 	respondent 	and 	the
original proof 	of 	service must 	be 	filed with 	PERB. 	If 	I 	do 	not
receive 	an 	amended 	charge 	or withdrawal 	from you 	by close 	of
business on August 17, 	1987, 	I 	shall dismiss your charge. 	If
you 	have 	any questions 	on how to proceed, 	please 	call me 	at
(213) 736-3127.
Sincerely,
Sandra 	Owens 	Dennison
Regional 	Attorney
cc: 	Bill Harju
.