Oakland Unified School District (PERB 1045E)

STATE 	OF 	CALIFORNIA
DECISION OF 	THE
PUBLIC 	EMPLOYMENT 	RELATIONS 	BOARD
BUILDING AND 	CONSTRUCTION TRADES
COUNCIL 	OF ALAMEDA COUNTY,
Charging 	Party,
v.
OAKLAND UNIFIED SCHOOL DISTRICT,
Respondent.
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) 	Case No. 	SF-CE-1558
PERB Decision No. 	1045
May 3, 	1994
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Appearance: 	Weills 	& Siegel by Dan Siegel, 	Attorney, 	for Oakland
Unified 	School 	District.
Before Blair, 	Chair; 	Caffrey and Carlyle, 	Members.
DECISION
CAFFREY, 	Member: 	This 	case 	is before the Public Employment
Relations 	Board 	(PERB or Board) 	on appeal 	by the Oakland Unified
School District 	(District) 	of 	a proposed decision 	(attached
hereto) 	by a PERB administrative law judge 	(ALJ). 	In that
decision, 	the ALJ found that 	the District violated
section 3543.5(a), 	(b) 	and 	(c) 	of the Educational Employment
Relations Act 	(EERA)1 when it made unilateral 	changes to the
EERA 	is 	codified at Government 	Code 	section 3540 	et 	seq.
Unless 	otherwise 	indicated, 	all 	statutory references 	herein are
to the Government Code. 	Section 3543.5 	states, 	in pertinent
part:
It 	shall 	be unlawful 	for a public 	school
employer 	to do any of 	the 	following:
(a) 	Impose or threaten to 	impose 	reprisals
on employees, 	to discriminate or threaten to
discriminate against 	employees, 	or otherwise
to interfere with, 	restrain, 	or coerce
employees because 	of 	their exercise 	of 	rights
guaranteed by 	this 	chapter.

health benefit 	plan 	of 	employees 	represented by 	the 	Building 	and
Construction Trades 	Council 	of Alameda County 	(Council).
The 	Board has 	reviewed the 	entire 	record 	in this 	case,
including the proposed decision, 	transcript, 	exhibits and the
District's 	statement 	of 	exceptions.2 The Board 	finds 	the ALJ's
findings 	of 	fact 	and conclusions 	of 	law to be 	free 	of prejudicial
error and, 	therefore, 	adopts 	them as 	the decision of 	the Board
itself.3
DISTRICT'S 	EXCEPTIONS
On appeal, 	the District pursues 	an argument 	not presented
before 	the ALJ or addressed 	in 	the proposed decision. 	The
District 	asserts 	that a unilateral 	change 	is not unlawful 	unless
it 	has 	a 	generalized effect 	or 	continuing 	impact 	on 	terms 	and
conditions 	of 	employment. 	(Grant Joint Union High School
District 	(1982) 	PERB Decision No. 	196.) 	Citing PERB case law,
the District 	argues 	that unilateral 	changes 	in health care plan
administration are 	not unlawful 	unless 	they 	impact 	actual 	health
benefit 	levels. 	Since 	the burden 	in showing 	impact 	rests 	with
the 	charging party 	(Imperial 	Unified School 	District 	(1990) 	PERB
(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.
2The 	Council's 	response 	to 	the District's 	statement 	of
exceptions 	was 	not 	timely 	filed with 	the 	PERB headquarters 	office
and, 	therefore, 	was 	rejected by the 	PERB appeals assistant.
3The District's 	request 	for oral 	argument 	in this 	case was
denied by 	the 	Board.
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Decision No. 	825), 	the District argues that the Council has
failed to meet 	its burden, 	asserting 	that 	the 	record barely
addresses 	the 	impact 	of 	the health plan 	change 	on actual 	health
benefit 	levels. 	Therefore, 	the District argues 	that 	the Board
should reverse 	the ALJ's 	finding and dismiss 	the 	charge.
DISCUSSION
An 	employer's 	pre-impasse unilateral 	change 	in a matter
within the 	scope 	of 	representation 	is 	a per se violation of 	EERA.
(Pajaro Valley Unified School 	District 	(1978) 	PERB Decision
No. 	51; 	San Mateo County Community College District 	(1979) 	PERB
Decision No. 	94; 	NLRB v. 	Katz 	(1962) 	369 U.S. 	736 	[50 LRRM
2177].) 	In a series 	of decisions 	involving changes 	in health
plans 	and health plan administrators, 	the Board has 	held that
such a 	change 	is 	negotiable 	only if 	it has 	a material 	or
significant 	effect 	or 	impact 	on 	the actual 	benefits 	received by
employees. 	(Oakland Unified School District 	(1980) 	PERB Decision
No. 	126, 	affd. 	Oakland Unified School Dist, 	v. 	Public Employment
Relations Bd. 	(1981) 	120 Cal.App.3d 1007, 	1012 	[175 Cal.Rptr.
105]; 	Palo Verde Unified School District 	(1983) 	PERB Decision
No. 	321; 	Trinidad Union Elementary School District and Peninsula
Union School District 	(1987) 	PERB Decision No. 	629; 	Savana School
District 	(1988) 	PERB Decision No. 	671.) 	Therefore, 	in this case
the 	Council 	must 	show an 	impact 	on 	the 	actual 	health benefits
received by 	employees 	resulting 	from the 	change 	from the 	Oakland
Public Schools 	(OPS) 	plan to Health Net 	in order to meet 	the
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burden of 	showing 	that 	the 	change 	constitutes 	a violation of
EERA.
On appeal, 	the District argues 	that 	this burden has not been
met, 	asserting 	that 	"the 	record as 	a whole 	fails 	to establish any
impact 	on employees 	resulting 	from the District's 	unilateral
action." 	The District 	further argues 	that 	the 	record shows 	that
the 	change 	in 	its 	health 	care plan administration had 	little 	or
no 	impact 	on employees. 	The District points 	to District 	Exhibit
No. 	9 	as 	evidence 	that 	"the 	level 	and quality of health care
benefits 	provided 	through Health Net 	did not 	differ materially or
significantly 	from 	that 	provided under OPS 	administration."
On 	the 	contrary, 	the benefit 	comparison included 	in District
Exhibit No. 	9 	shows 	that while 	the 	type of health benefits
received by 	employees may not 	have 	changed when 	the 	District
replaced the OPS plan with Health Net, 	the 	costs 	of 	those
benefits 	to employees did change. 	For example, 	emergency care
visits 	required no 	employee 	copayment under the OPS plan; 	under
Health Net 	a 	$35 	copayment 	is 	required. 	Prescription drugs 	which
cost 	$1 under OPS 	cost 	$5-$7 under Health Net. 	And a series 	of
health plan benefits which had carried a 	10 percent 	- 	20 percent
copayment 	requirement under OPS, 	require no 	copayment under
Health Net. 	Among 	these benefits 	are 	in-patient maternity
services, 	x-ray services, 	laboratory and diagnostic services,
anesthesia 	services, 	blood and blood plasma 	services 	and durable
medical 	equipment 	services. 	The level 	of a health plan provided
to 	employees 	is 	determined not 	only by 	the 	health and medical
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services 	available under the plan, 	but 	also by the 	employee 	cost
of 	those 	services. 	A health plan provided by an employer at 	no
cost 	to 	employees 	is 	a materially different benefit 	than 	the
identical 	plan 	requiring 	employee 	cost 	contributions.
The 	evidence 	clearly demonstrates 	that 	the 	change 	from the
OPS 	plan 	to 	Health Net materially and 	significantly affected 	the
cost 	of 	the actual 	health benefits 	received by employees 	of 	the
District. 	Accordingly, 	the burden of demonstrating the 	impact 	of
the District's unilateral 	change of 	health plans has been met,
and the District's 	exceptions are without merit. 	Therefore, 	when
the District 	unilaterally 	changed the 	health benefit 	plan of
employees 	represented by the 	Council, 	it violated EERA
section 3543.5(a), 	(b) and (c).
ORDER
Based on the 	findings 	of 	fact and conclusions 	of 	law, 	and
the entire 	record in this 	case, 	the Board finds 	that 	the Oakland
Unified School 	District 	(District) 	violated 	the 	Educational
Employment Relations Act 	(EERA or Act), 	Government Code
section 3543.5(a), 	(b) 	and 	(c). 	Pursuant to EERA
section 3541.5(c), 	it is hereby ORDERED that the District, 	its
governing board and 	its 	representatives 	shall:
A. 	CEASE AND DESIST 	FROM:
1. 	Failing to meet and confer 	in good 	faith by
unilaterally 	changing 	the 	health benefits 	of 	employees 	in 	the
building 	and grounds 	unit.
B. 	TAKE THE 	FOLLOWING AFFIRMATIVE ACTIONS 	DESIGNED TO
EFFECTUATE THE 	POLICIES 	OF THE ACT:
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1. 	Restore 	to 	employees 	of 	the building and grounds
unit 	all 	the 	health benefits 	they would have 	enjoyed had 	the
District 	not 	unilaterally 	terminated 	the 	Oakland 	Public 	Schools
plan.
2. 	Make 	employees whole 	for any losses 	they may have
suffered due 	to the District's unilateral 	action, 	along with
interest 	at 	the 	rate 	of 	seven percent per annum.
3. 	Within thirty-five 	(35) 	days 	following the date
this Decision is no longer subject 	to reconsideration, 	post at
all 	work 	locations 	where 	notices 	to 	classified employees 	are
customarily placed, 	copies 	of 	the Notice 	attached hereto as 	an
Appendix. 	The 	notice must 	be 	signed by an authorized agent 	of
the District 	indicating 	that 	the District 	will 	comply with 	the
terms 	of 	this 	Order. 	Such posting 	shall 	be maintained 	for a
period of 	thirty 	(30) 	consecutive workdays. 	Reasonable 	steps
shall be 	taken to 	insure 	that 	this notice 	is not 	reduced in size,
defaced, 	altered or 	covered by any material.
4. 	Make written notification of 	the actions 	taken to
comply with 	this 	Order to 	the 	San 	Francisco Regional 	Director 	of
the 	Public 	Employment 	Relations 	Board 	in accordance with her
instructions. 	All 	reports 	to the Regional Director shall be
served 	concurrently 	on 	the 	Building 	and 	Construction 	Trades
Council 	of Alameda County.
Chair Blair and Member Carlyle 	joined 	in 	this 	Decision.
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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. 	SF-CE-1558,
Building 	and 	Construction Trades 	Council 	of 	Alameda 	County v.
Oakland Unified School District, 	in which all parties 	had the
right 	to participate, 	it has been found that 	the Oakland Unified
School District 	(District) 	violated the Educational 	Employment
Relations Act 	(Act), 	Government Code section 3543.5(a), 	(b) 	and
(c) .
As a result 	of 	this 	conduct, 	we have been ordered to post
this Notice and we will:
A. 	CEASE AND DESIST FROM:
1. 	Failing to meet 	and confer in good faith by
unilaterally 	changing 	the health benefits 	of 	employees 	in 	the
building 	and grounds 	unit.
B. 	TAKE THE 	FOLLOWING AFFIRMATIVE ACTIONS 	DESIGNED TO
EFFECTUATE THE 	POLICIES 	OF THE ACT:
1. 	Restore to employees 	of 	the building and grounds
unit 	all 	the 	health benefits 	they would have 	enjoyed had 	the
District 	not 	unilaterally 	terminated 	the 	Oakland 	Public 	Schools
plan.
2. 	Make 	employees whole 	for any losses 	they may have
suffered due 	to 	the District's unilateral 	action, 	along with
interest 	at 	the 	rate 	of 	seven percent per annum.
Dated: 	OAKLAND 	UNIFIED 	SCHOOL
DISTRICT
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.
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STATE 	OF 	CALIFORNIA
PUBLIC 	EMPLOYMENT 	RELATIONS 	BOARD
BUILDING AND 	CONSTRUCTION TRADES
COUNCIL 	OF ALAMEDA COUNTY,
Charging 	Party,
v.
OAKLAND UNIFIED 	SCHOOL DISTRICT,
Respondent.
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) 	Unfair 	Practice
Case No. 	SF-CE-1558
PROPOSED DECISION
(7/20/93)
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Appearances: 	Van Bourg, 	Weinberg, 	Roger and Rosenfeld by Stewart
Weinberg, 	Attorney, 	for Building and Construction Trades 	Council
of Alameda County; 	Office of 	the General 	Counsel by Cecilia
Castellanos, 	Attorney, 	for Oakland Unified School District.
Before JAMES W. 	TAMM, 	Administrative Law Judge.
PROCEDURAL 	HISTORY
This complaint, 	filed on April 27, 	1992, 	alleges that the
Oakland Unified School 	District 	(District) 	made unilateral
changes 	to 	the 	health benefit 	plan 	of 	employees 	represented by
the 	Building and Construction Trades 	Council 	of Alameda 	County
(Charging Party or Union) 	in violation of 	section 3543.5(a), 	(b)
and 	(c) 	of 	the 	Educational 	Employment 	Relations Act 	(EERA or
Act.)1 A settlement was held, 	however, 	the matter remained
1EERA is 	codified at 	Government 	Code 	section 	3540 	et 	seq.
The pertinent 	portion of 	section 3543.5 	reads:
It 	shall 	be unlawful 	for a public 	school
employer to:
(a) 	Impose or threaten to 	impose 	reprisals
on employees, 	to discriminate or threaten to
discriminate against 	employees, 	or otherwise
to interfere with, 	restrain, 	or coerce
employees 	because 	of 	their exercise 	of 	rights
guaranteed by 	this 	chapter.
This proposed decision has been appealed to the
Board itself and may not be cited as precedent
unless the decision and its rationale have been
adopted by the Board.
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unresolved. 	A hearing was held June 	8 	and 9, 	1993. 	At 	the
conclusion of 	the hearing 	the parties made 	oral 	arguments 	and the
case 	was 	submitted 	for decision.
(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.
FINDINGS 	OF 	FACT
The 	Charging 	Party 	is 	the 	exclusive 	representative 	of
employees 	in 	the building and grounds 	bargaining unit.
Up until May 1, 	1992, 	the District provided District
employees 	with a District 	sponsored health plan 	referred 	to 	as
the OPS plan. 	This plan had become very expensive 	to 	the
District. 	Over the years 	the District 	sought without 	success 	to
negotiate 	the 	elimination 	of 	the plan with 	the 	District's 	various
unions.
At 	some 	time prior to 19 88, 	the District and its unions did
agree 	to 	establish a 	Labor/Management 	Joint 	Advisory 	Committee 	on
Cost Containment 	(Committee). 	The 	function of the Committee was
to 	study and make 	recommendations 	regarding health 	care 	cost
containment possibilities. 	Over the years 	since 	its
establishment, 	the 	Committee did make 	specific 	recommendations
which were 	negotiated 	into various 	collective bargaining
agreements. 	For example, 	the 	collective bargaining agreement
between the District, and the 	Charging 	Party specifically lists
cost 	containment measures 	such as 	pre-admission 	certification 	for
hospital 	care, 	increased major medical 	deductibles, 	limitations
N2

on 	chiropractic and acupuncture 	treatments, 	and a generic 	drug
policy among many 	others.
In 	the 	1991 	negotiations 	between 	the District 	and 	the union
representing 	the District's 	teachers, 	the Oakland Education
Association 	(OEA), 	the parties began exploring the possibilities
of 	replacing 	the 	OPS 	plan with a Health Net plan. 	At 	that 	time,
the 	Committee put 	further 	cost 	containment 	issues 	on hold until
after 	the 	conclusion of 	the OEA/District 	negotiations. 	When 	the
District 	and 	OEA eventually 	reached 	agreement 	to 	replace 	the 	OPS
plan with Health Net, 	the District 	decided 	to 	replace 	the OPS
plan with Health Net 	districtwide 	in all 	bargaining units. 	The
decision was 	made 	after much discussion among 	the
superintendent's 	cabinet, 	however, 	prior to negotiations with any
unions 	other 	than OEA.
On March 3, 	1992, 	the District 	sent a letter notifying the
Charging 	Party 	that 	the District 	desired 	to 	terminate 	the 	OPS
plan May 1, 	1992. 	The letter also said that 	if 	the Charging
Party wished to bargain 	"the 	ramifications" 	of 	the 	termination of
the OPS plan, 	they should set up a meeting.
Although 	the March 3 	letter did not make 	it 	clear that 	the
District 	had already decided to 	terminate 	the OPS plan, 	the
testimony of District witnesses at 	the hearing, 	however, 	supports
a 	finding 	that 	the District's 	decision 	to 	terminate 	the 	OPS 	plan
was 	firm and irreversible by March 3, 	1992. 	This 	finding 	is
consistent with the District's March 3, 	1992, 	offer to negotiate
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over 	"the 	ramifications" 	of 	the 	decision and not 	the 	decision
itself.
Between March 3, 	1992, 	when the District 	invited the
Charging 	Party 	to negotiate 	over 	the 	ramifications 	of 	the 	switch
in health plans, 	up to May 1, 	1992, 	the District negotiator,
Julian Cane 	(Cane), 	met with Charging Party's negotiator, 	Jim
Brown 	(Brown), 	to discuss 	the 	issue 	informally on more 	than one
occasion. 	At 	one of 	those meetings, 	probably in April,2 Cane
presented Brown with a proposal 	for 	consideration. 	The proposal
was 	one 	that 	had been originally addressed 	to a 	different 	union.
While 	the negotiators discussed the 	issue, 	these 	informal
sessions 	could not 	be 	considered negotiating 	sessions 	for at 	that
time 	the 	Charging 	Party had not 	even agreed 	to 	reopen 	the
collective 	bargaining 	agreement.3
On April 	13, 	1992, 	Brown wrote to Cane asking for some
information and 	indicating 	that 	upon 	receipt 	of 	that 	information,
the 	Charging 	Party might 	choose 	to mutually 	re-open 	the
collective 	bargaining 	agreement.
2Both negotiators 	were 	very vague 	about 	when meetings
occurred and which 	conversations 	occurred at 	specific meetings.
3There 	is 	a 	heated dispute 	among 	the parties 	about 	the
status 	of 	their 	collective bargaining agreement. 	Brown claims
that 	the 	collective 	bargaining 	agreement 	distributed by 	the
District 	is not 	the agreement 	that 	he 	signed. 	It 	is unnecessary,
however, 	to 	resolve 	that 	dispute 	in order to resolve 	this unfair
practice 	charge. 	Under either 	interpretation of 	the 	contract,
the 	collective bargaining 	agreement 	could be 	re-opened prior 	to
its 	expiration only by the mutual 	consent 	of 	the parties.
•4

On April 	27, 	1992, 	after it was 	clear to Charging Party that
the 	District 	had already decided 	to 	replace 	the 	OPS 	plan with
Health Net, 	the 	Charging 	Party 	filed this 	unfair practice 	charge.
On May 1, 	1992, 	the District 	implemented its unilateral
decision 	to 	terminate 	the 	OPS 	plan and 	instituted 	the 	Health Net
plan in its place.
On May 5, 	1992, 	the 	Charging Party agreed to meet with the
District 	regarding 	termination of 	the OPS 	plan. 	Charging 	Party
made it 	clear, 	however, 	that 	it was doing so only under protest,
pending 	resolution of 	this 	unfair practice 	charge.
The parties met again on May 13 	and May 28, 	1992, 	but 	the
Union maintained 	its 	position 	that 	it 	was 	not 	negotiating 	and
would pursue 	the 	unfair practice 	charge.
Cane 	testified 	that 	the District's 	decision was 	made 	for
financial 	reasons. 	The OPS plan was 	so expensive 	that 	it was
diverting 	badly needed 	funds 	from other 	educational 	programs.
According 	to Cane, 	the decision to go 	to Health Net was 	also
based upon a 	recommendation by 	the 	Committee 	to do 	so. 	Cane,
however, 	was not a member of 	the Committee, 	and did not 	regularly
attend Committee meetings. 	Cane's 	testimony on 	this 	point was
directly contradicted by Jim Tate 	(Tate), 	the Charging 	Party's
representative to the Committee, 	and by Jack Phar 	(Phar), 	the
. . .
District's 	representative 	on the 	Committee. 	Both Tate and 	Phar
testified 	that 	the 	Committee 	never made 	any 	recommendation 	to
switch from OPS 	to Health Net. 	Since 	Cane was not a member of
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the Committee and Tate and Phar were, 	I 	credit 	their testimony-
over Cane's 	on this 	issue.
However, 	even if a vote had been taken on this 	issue by the
Committee, 	and even 	if 	it 	had made a recommendation to switch
from OPS 	to Health Net, 	that 	recommendation would not 	have been
binding upon Charging 	Party. 	There was 	no evidence 	that 	the
Committee 	was 	ever given authority by 	the 	Charging 	Party 	to
negotiate 	changes 	to health benefits. 	Moreover, 	both Cane and
Phar agreed 	that 	Tate 	consistently maintained 	the 	position 	that
any 	changes 	to 	the health plan was 	negotiable.
While all 	witnesses 	agreed 	that 	the 	OPS 	plan was very
expensive 	to 	the District 	and 	that 	the District 	was 	losing money
on the plan, 	there was no evidence 	that 	the District was 	forced
to 	terminate 	the 	OPS plan 	in 	the building and grounds unit 	on May
1 due 	to a 	fiscal 	emergency. 	According to District witnesses,
there were 	other choices 	available 	to 	the District, 	such as
raising health care premiums 	or, continuing the OPS plan in the
building and grounds unit 	above. 	However, 	these 	other
possibilities 	were not 	seriously 	considered by 	the District. 	In
fact, 	the District never even calculated the 	cost 	of 	continuing
the plan 	for 	just 	the building and grounds unit.
In summary, 	the District 	sought 	to 	replace an expensive
self-insured health plan with a 	less 	expensive 	one. 	After
reaching agreement with the 	teacher's 	unit, 	the District made 	the
decision 	to 	terminate 	the 	OPS 	plan and replace 	it with Health
Net. 	The District was 	able 	to 	reach agreement 	on the 	change with
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all 	bargaining units 	except 	the 	Charging 	Party. 	When 	the
District 	was 	unable 	to 	reach agreement 	with 	the 	Charging 	Party,
it 	went 	ahead anyway and 	implemented 	its 	earlier decision.
ISSUE
Did the District violate EERA section 3543.5(b) 	and 	(c) 	by
unilaterally 	changing 	the 	health benefit 	plan?
DISCUSSION
It 	is well 	settled that absent 	special 	circumstances, 	a
district's 	unilateral 	action on a matter within 	the 	scope 	of
representation 	is 	a per se violation of 	EERA. 	(Pajaro Valley
Unified School District 	(1978) 	PERB Decision No. 	51; 	San Mateo
County Community College District 	(1979) 	PERB Decision No. 	94.)
Health benefits 	are 	clearly 	enumerated within the 	scope 	of
representation.
In this 	case, 	it 	is 	clear that 	the parties had not 	completed
the negotiations process. 	It 	is not 	certain that 	the parties
ever even started the process. 	Even under 	the District's
interpretation 	of 	the parties 	collective 	bargaining agreement,
the 	agreement 	could 	only be 	re-opened 	for negotiations 	by mutual
consent. 	Thus, 	the Charging 	Party was 	entitled to decline 	to
negotiate 	any 	changes 	in 	the 	contract 	and 	the District 	would be
bound to 	continue 	the 	status 	quo regarding health benefits. 	The
status 	quo was 	having 	the OPS plan available 	to employees 	in 	the
unit.
However, 	setting aside any contractual 	rights 	enabling the
Charging 	Party to refuse 	to negotiate, 	it 	is 	clear that 	the
77

District 	did not 	engage 	in good 	faith negotiations. 	The 	decision
to 	terminate 	the 	OPS 	plan was 	made unilaterally by 	the District
prior 	to 	any negotiations 	with 	the 	Charging 	Party. 	The 	decision
was made prior to the District's March 3, 	1992, 	invitation to
negotiate 	the 	ramifications 	of 	the decision.
The District argues 	two defenses. 	The 	first 	is 	that 	the
Charging 	Party waived 	rights 	to,negotiate 	by not 	responding 	to
the 	District's March 	3 	invitation to negotiate until April 	13 	and
by not 	agreeing 	to negotiate until May 	5. 	According 	to 	the
District, 	the 	Charging Party's 	refusal 	to negotiate 	on May 13 	and
28 	is 	further evidence of 	the 	Charging 	Party's 	bad 	faith.
This 	argument 	is unpersuasive 	since 	the District 	had not
demonstrated 	that 	the 	Charging 	Party had 	any 	obligation 	to
negotiate 	changes 	in 	the 	health benefits 	absent 	a mutual
agreement 	to re-open the contract. 	Also, 	it 	is 	clear that 	the
District 	did not 	give proper notice 	or an 	opportunity 	to
negotiate 	until 	after 	the 	District 	had unilaterally made 	the
decision to 	terminate 	the plan. 	This 	argument 	is also
unpersuasive because 	at 	no 	time 	did 	the District 	ever 	offer 	to
negotiate 	the decision to 	terminate 	the OPS plan. 	It 	only
offered to negotiate 	the 	effects 	of 	its unilateral 	decision.
Finally, 	Charging Party's 	refusal 	to negotiate 	on May 	13 	and 28
is 	not 	evidence 	of 	bad faith by 	the 	Charging 	Party 	since 	the 	OPS
plan 	had 	already been unilaterally 	terminated by 	the 	District 	on
May 	1. 	The 	Charging 	Party 	should not 	be 	forced 	into 	the 	position
8

of 	trying 	to bargain back 	to 	the 	status 	quo after a policy has
been 	unilaterally 	changed.
The District's 	second defense 	is 	that 	its 	unilateral 	action
should be 	excused due 	to a business 	necessity. 	In order 	to prove
a business necessity, 	the District must 	show:
. 	. 	. 	an actual financial emergency which
leaves 	no 	real 	alternative 	to 	the action
taken and allows 	no 	time 	for meaningful
negotiations before 	taking action.
(Emphasis 	added.)
(Calexico Unified School 	District 	(1983) 	PERB
Decision No. 	357 	(adopting administrative 	law
judge's 	proposed 	decision.)
The 	Board 	interpreted 	its 	Calexico 	decision 	in 	Compton
- -
Community College District 	(1989) 	PERB Decision No. 	720.
In Calexico, 	the district unilaterally
imposed a 	freeze 	on teachers' 	step and 	column
increases, 	which were being negotiated as
part of 	the parties' 	reopener negotiations,
in order 	to present 	a balanced budget 	to 	the
superintendent 	by September. 	The 	freeze was
effective 	the 	start 	of 	school 	in September.
Testimony 	indicated 	that 	the 	district 	could
have 	technically balanced 	its 	budget 	without
implementing 	the 	freeze but 	declined 	to do 	so
because 	such action would have 	reduced 	the
district's 	reserves and, 	thus, 	would not have
been 	financially responsible. 	The district
further argued 	that 	it 	remained willing 	to
continue 	to negotiate 	even after 	the 	decision
was 	unilaterally made. 	The 	Board rejected
all 	of 	the 	district's 	arguments 	and held
that, 	even though the district presented
convincing 	evidence 	of 	the 	difficult
financial 	circumstances 	it 	faced, 	the
district 	failed 	to 	show that 	it 	had no
alternative 	to 	instituting 	the 	unilateral
freeze prior to 	the 	completion of bargaining.
Furthermore, 	the Board found that 	the
district's 	financial 	problems were not 	the
result 	of 	a sudden, 	unexpected change 	in
circumstances, 	but 	rather resulted 	from
budgetary problems 	which arose 	much 	earlier
in the year.
99

In Compton, 	supra, 	the District had been in a dire 	financial
situation. 	It not 	only lacked a reserve 	fund, 	but 	had been
forced to 	obtain advance 	apportionments 	in excess 	of 	$1 million
during 	the previous 	two years. 	The 	current years proposed
expenditures 	exceeded projected 	total 	revenues 	by 	$1.3 	million,
not 	counting 	the 	$1 million 	in advance 	apportionment 	it 	received.
Dissenting 	Board Member 	Stephen 	Porter argued 	that 	the 	district's
worsening 	financial 	crisis 	coupled with 	the 	district's
unsuccessful 	attempts 	to 	expedite 	impasse 	procedure 	were
sufficient 	to 	establish a business 	necessity defense.
The Board majority, 	however, 	specifically rejected that
reasoning 	and 	found 	the 	district 	had not 	satisfied 	its 	burden of
proving 	that 	the 	financial 	crisis 	had offered no 	real 	alternative
to 	the 	unilateral 	action and had prevented any 	opportunity 	for
meaningful 	negotiations. 	Since 	"it may have been possible" 	for
the 	district 	to 	formulate 	a budget without 	the unilateral 	cuts,
the 	district 	had 	failed 	to prove 	that 	unilateral 	action was 	its
only alternative.
The 	Board's 	holding 	in 	San 	Francisco 	Community 	College
District 	(1979) 	PERB Decision No. 	105, 	is similar. 	There, 	the
district 	unilaterally withheld 	salary 	increments 	and postponed
sabbaticals 	in 	reaction to 	the 	"pending 	financial 	crisis"
resulting from the passage, 	in 1978, 	of Proportion 13. 	The Board
held 	that 	the 	district 	should have 	taken 	the matter 	to 	the
negotiating 	table.
An employer 	is 	under no 	obligation at 	any
time 	to 	reach agreement 	with 	the 	exclusive
10

representative. 	The 	duty 	imposed by the
statute 	is 	simply 	- 	but unconditionally 	- 	the
duty 	to meet 	and negotiate 	in good 	faith 	on
matters within 	the 	scope 	of 	representation.
Thus, 	the 	confusion bred by the passage 	of
Proposition 	13 	did not 	excuse 	the District's
obligation 	to meet 	and negotiate with 	the
Federation, 	nor did it 	justify the District's
unilateral 	actions. 	(San Francisco Community
College District, 	supra.)
See also NLRB v. 	Auto Fast 	Freight 	(9th Cir. 	1986) 	#793 	F.2d
112 6 	[122 	LRRM 3058], 	where the court upheld the National 	Labor
Relations 	Board's 	(NLRB) 	rejection of an employer's business
necessity defense. 	The employer in that 	case, 	like 	in the case
at hand, 	had been aware 	of 	its 	severe 	economic problems 	for
months 	prior 	to 	taking unilateral 	action. 	The NLRB 	concluded
that 	the 	financial 	problems 	did not 	suddenly arise 	to 	create 	an
urgency 	that 	would 	justify 	the unilateral 	action.
The 	evidence 	in 	this 	case 	regarding business 	necessity 	is
quite 	clear. 	Although the District 	was 	clearly having 	financial
difficulties, 	several 	options, 	short of unilaterally terminating
the OPS plan, 	were available 	to the District. 	The choices
available 	to 	the District may not 	have 	been 	easy 	choices 	for 	the
District, 	but they were, 	in fact, 	choices.
The District 	has 	also 	failed to prove 	that 	its 	financial
condition allowed no 	additional 	time 	for 	further negotiations 	or
for completion of 	the 	impasse procedures 	of 	the Act. 	There 	is not
a 	single piece 	of 	evidence 	that 	the May 	1 	OPS plan termination
date was 	a magical 	deadline 	for anything.
11

CONCLUSION
The 	District 	took unilateral 	action 	in 	terminating 	the 	OPS
plan and 	replacing 	it 	with 	the 	Health Net 	plan 	in 	the buildings
and grounds unit. 	The Charging 	Party was 	not under an obligation
to 	re-negotiate health benefits 	absent 	a mutual 	agreement 	to 	re-
open the 	contract. 	Even 	if 	the 	Charging 	Party had been obligated
to re-negotiate 	the health benefits, 	the District's unilateral
decision 	to 	replace 	the 	OPS 	plan with Health Net 	was 	made 	prior
to 	notifying 	the 	Charging 	Party and 	affording 	an 	opportunity 	to
negotiate 	over 	the District's 	decision. 	The District 	has 	also
failed 	to prove 	that 	it 	had no 	other alternative 	available 	to 	it
and 	that 	circumstances 	allowed no 	time 	for meaningful
negotiations 	prior 	to 	taking action.
In taking 	its unilateral 	action, 	the District violated
section 3543.5(c) 	and derivatively 	(b). 	The facts of 	this 	case
also 	support 	the 	allegation 	in 	the 	complaint 	of 	an 	independent
violation of section 3543.5(a).
REMEDY
Section 	3541.5(c) 	gives 	PERB broad 	statutory authority 	to
fashion appropriate 	remedies 	for unfair practices. 	In 	cases
involving unilateral 	action, 	PERB generally orders 	employers 	to
restore 	the 	status 	quo as 	it 	existed prior 	to the violation.
(Santa Clara Unified School District 	(19 79) 	PERB Decision No.
104.) 	Thus, 	the District 	should restore 	to employees 	of 	the
building 	and grounds 	unit 	all 	the 	health benefits 	they would have
enjoyed, 	had 	the District 	not 	unilaterally 	terminated 	the 	OPS
12

plan. 	The District 	should also make 	the 	employees 	whole 	for any
losses 	they may have 	suffered due 	to 	the 	District's 	unilateral
action, 	along with 	interest 	at 	a 	rate 	of 	seven percent per annum.
(San Francisco Unified School 	District 	(1990) 	222 	Cal.App.3d 	146
at pp. 	151-152 	[272 Cal.Rptr. 	38].)
It 	is 	also appropriate 	that 	the District be 	required 	to post
a notice 	incorporating the 	terms 	of 	the 	order. 	The Notice 	should
be 	subscribed by an authorized agent 	of 	the District, 	indicating
that 	it will 	comply with the 	terms 	thereof. 	The Notice 	shall 	not
be 	reduced 	in size 	and reasonable 	effort will 	be 	taken to 	insure.
that 	it 	is 	not 	altered, 	covered by any material 	or defaced and
will 	be 	replaced 	if 	necessary. 	Postin	
. . .	
g 	such a notice will 	inform
employees 	that 	the District 	has 	acted 	in an unlawful 	manner and
is 	being 	required to 	cease 	and desist 	from this 	activity and will
comply with the 	order. 	It 	effectuates 	the purposes 	of 	EERA that
employees 	be 	informed of 	the 	resolution 	of 	the 	controversy and
will 	announce 	the District's 	readiness 	to 	comply with 	the 	ordered
remedy. 	(Davis Unified School District, 	et al. 	(19 80) 	PERB
Decision No. 	116; 	see Placerville Union School District 	(1978)
PERB Decision No. 	69.)
PROPOSED 	ORDER
Upon the 	foregoing 	findings 	of 	fact 	and 	conclusions 	of 	law,
and the entire 	record in the 	case, 	and pursuant 	to the
Educational Employment Relations Act 	(Act), 	Government Code
section 	3541 (c),.it 	is 	hereby ordered 	that 	the 	Oakland Unified
School District 	(District) 	and 	its 	representatives 	shall:
13

A. 	CEASE AND DESIST FROM:
1. 	Failing to meet 	and 	confer 	in good 	faith by
unilaterally 	changing 	the 	health benefits 	of 	employees 	in 	the
building and grounds 	unit.
B. 	TAKE 	THE 	FOLLOWING AFFIRMATIVE ACTIONS 	DESIGNED TO
EFFECTUATE THE 	POLICIES 	OF THE ACT:
1. 	Restore to employees 	of 	the building and grounds
unit 	all 	the 	health benefits 	they would have 	enjoyed had 	the
District 	not 	unilaterally 	terminated 	the 	OPS 	plan.
2. 	Make 	employees 	whole 	for any losses 	they may have
suffered due 	to 	the District's 	unilateral 	action, 	along with
interest 	at 	the 	rate 	of 	seven percent per annum.
3. 	Within ten 	(10) 	workdays 	of 	service of a 	final
decision 	in this matter, 	post 	at all 	school 	sites 	and all 	other
work 	locations 	where 	notices 	to 	employees 	are 	customarily placed,
copies 	of 	the Notice 	attached hereto as 	an Appendix. 	The Notice
must 	be 	signed by an authorized agent 	of 	the District 	indicating
that 	the District will 	comply with the 	terms 	of 	this 	Order. 	Such
posting 	shall 	be maintained 	for a period 	of 	thirty 	(30)
consecutive workdays. 	Reasonable 	steps 	shall be 	taken to 	insure
that 	the Notice 	is not reduced in size, 	altered, 	defaced or
covered by any 	other material.
2. 	Within five 	(5) 	workdays 	of 	service of a 	final
decision 	in this matter, 	notify the San Francisco Regional
Director of 	the Public Employment Relations Board, 	in writing, 	of
the 	steps 	the 	employer has 	taken to 	comply with 	the 	terms 	of 	this
Order. 	Continue 	to report 	in writing to 	the Regional Director
14

periodically 	thereafter as 	directed. 	All 	reports 	to 	the 	Regional
Director 	shall 	be 	served 	concurrently 	on 	the 	Charging 	Party.
Pursuant to California Code of Regulations, 	title 	8, 	section
32305, 	this 	Proposed Decision and Order 	shall 	become 	final 	unless
a party 	files 	a 	request 	for an 	extension 	of 	time 	to 	file
exceptions 	or a 	statement 	of 	exceptions 	with 	the Board 	itself.
This 	Proposed Decision was 	issued without 	the 	production 	of
a written transcript 	of 	the 	formal 	hearing. 	If a transcript 	of
the hearing 	is 	needed for 	filing exceptions, 	a request 	for an
extension of 	time 	to 	file 	exceptions must be 	filed with 	the Board
itself 	(Cal. 	Code of Regs., 	tit. 	8, 	sec. 	32132). 	The request for
an 	extension 	of 	time must 	be 	accompanied by a 	completed
transcript 	order form 	(attached hereto). 	(The 	same 	shall 	apply
to 	any 	response 	to 	exceptions.)
In accordance with PERB regulations, 	the statement 	of
exceptions must be 	filed with 	the Board 	itself 	within 20 	days 	of
service 	of 	this 	Decision or upon service 	of 	the 	transcript 	at 	the
headquarters 	office 	in Sacramento. 	The 	statement 	of 	exceptions
should 	identify by page 	citation 	or 	exhibit 	number 	the 	portions
of 	the record, 	if any, 	relied upon for such exceptions. 	(Cal.
Code of Regs., 	tit. 	8, 	sec. 	32300.) 	A document is considered
"filed" 	when actually 	received before 	the 	close 	of 	business
(5:00 p.m.) 	on the 	last day set 	for filing 	". 	. 	. o r when sent by
telegraph or 	certified or Express United States mail, 	postmarked
not 	later than the 	last 	day set 	for 	filing 	. . . " 	(Cal. 	Code 	of
Regs., 	tit. 	8, 	sec. 32135; Cal. Code of Civ. P r o c , 	sec. 	1013
15

shall 	apply.) 	Any 	statement 	of 	exceptions 	and supporting brief
must 	be 	served 	concurrently with 	its 	filing 	upon 	each party 	to
this proceeding. 	Proof 	of 	service 	shall 	accompany each 	copy
served on a party or filed with the Board itself. 	(Cal. 	Code 	of
Regs., 	tit. 	8, 	secs. 	32300, 	32305 and 32140.)
James W. 	Tamm
Administrative 	Law 	Judge
. . .
. ..
1
,
6