State of California (Department of Transportation) (PERB 1213S)

STATE 	OF 	CALIFORNIA
DECISION 	OF 	THE
PUBLIC 	EMPLOYMENT 	RELATIONS 	BOARD
PROFESSIONAL 	ENGINEERS 	IN
CALIFORNIA GOVERNMENT,
Charging 	Party,
v.
STATE 	OF 	CALIFORNIA 	(DEPARTMENT
OF TRANSPORTATION),
Respondent.
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) 	Case No. 	SA-CE-775-S
PERB Decision No. 	1213-S
June 26, 	1997
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Appearances: 	Steven B. 	Bassoff, 	Attorney, 	for Professional
Engineers 	in California Government; 	State of California
(Department of 	Personnel Administration) 	by Robert J. 	Allen,
Labor Relations 	Counsel, 	for State of California 	(Department of
Transportation).
Before Caffrey, 	Chairman; 	Johnson and Dyer, 	Members.
DECISION
JOHNSON, 	Member: 	This 	case comes before the Public
Employment 	Relations 	Board 	(PERB or Board) 	on appeal 	by the 	State
of 	California 	(Department 	of 	Transportation) 	(State 	or Caltrans)
to a PERB administrative 	law judge's 	(ALJ) 	proposed decision.
The ALJ 	concluded 	that 	the 	dispute 	should not be 	dismissed and
deferred to arbitration, 	and that 	Caltrans breached 	its
obligation 	to negotiate with 	the 	Professional 	Engineers 	in
California Government 	(PECG) 	about a 	change 	in the 	Caltrans
policy governing home 	storage 	of 	state-owned vehicles, 	in

violation of section 3519(a), 	(b) 	and 	(c) 	of the Ralph C. 	Dills
Act 	(Dills A c t ) 1
The 	Board has 	reviewed 	the 	entire 	record 	including 	the
unfair practice 	charge, 	the complaint, 	the proposed decision and
the filings 	of 	the parties. 	The Board reverses 	the ALJ's
proposed decision and orders 	that 	the 	charge be 	dismissed and
deferred to 	the parties' 	contractual 	grievance procedure.
BACKGROUND
Contract 	Provisions
PECG 	is 	the 	exclusive 	representative 	of an appropriate 	unit
of 	employees 	(Unit 	9) 	within the meaning of Dills Act 	section
3513(b). 	Caltrans 	is an employer within the meaning of Dills Act
section 3513 (j). 	The most recent memorandum of understanding
(MOU) 	covered the period from September 1, 	1992 	through June 30,
1The Dills Act 	is 	codified at 	Government 	Code 	section 	3512
et 	seq. 	Unless 	otherwise 	indicated, 	all 	statutory references
herein are to the Government Code. 	Section 3519 	states, 	in
pertinent part:
It 	shall be unlawful 	for the 	state 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. 	For purposes 	of
this subdivision, 	"employee" 	includes an
applicant 	for 	employment 	or 	reemployment.
(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.
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1995. 	Section 19.1 	of 	the 	expired MOU contained an entire
agreement 	clause 	which provided:
a. 	This MOU sets 	forth the 	full 	and entire
understanding 	of 	the parties 	regarding 	the matters
contained herein, 	and any other prior 	or existing
understanding or MOU by the parties, 	whether
formal 	or informal, 	regarding any such matters are
hereby superseded. 	Except 	as 	provided 	in 	this
MOU, 	it 	is 	agreed and understood that 	each party
to 	this MOU voluntarily waives 	its 	right 	to
negotiate with 	respect 	to any matter 	raised 	in
negotiations or covered in this MOU, 	for the
duration of 	the MOU.
With respect 	to other matters within 	the 	scope 	of
negotiations, 	negotiations may be 	required during
the 	term of 	this MOU as provided 	in Subsection b.
below.
b. 	The parties 	agree 	that 	the provisions
of 	this 	Subsection shall 	apply only 	to matters
which are not 	covered in this MOU.
The parties 	recognize 	that 	during 	the 	term of 	this
MOU, 	it may be necessary for the State 	to make
changes 	in areas within the 	scope of negotiations.
Where 	the 	State 	finds 	it necessary to make 	such
changes, 	the State shall notify PECG of 	the
proposed 	change 	30 	days prior to 	its proposed
implementation.
The parties 	shall 	undertake 	negotiations 	regarding
the 	impact 	of 	such changes 	on the 	employees 	in
Unit 	9. 	when all 	three of 	the following exist:
(1) 	Where 	such changes would have an impact 	on
working 	conditions 	of 	a 	significant 	number of
employees 	in Unit 	9;
(2) 	Where the 	subject matter of 	the 	change 	is
within 	the 	scope 	of 	representation pursuant 	to 	the
Dills Act;
(3) 	Where PECG requests 	to negotiate with the
State.
. 	. 	. 	If the parties are in disagreement as to
whether
- - -
a proposed change 	is 	subject 	to 	this
Subsection, 	such disagreement may be 	submitted to
the arbitration procedure 	for resolution. 	The
33

arbitrator's decision shall be binding. 	. 	. 	.
[Emphasis, added.]
The MOU contains a grievance2 procedure which culminates 	in
binding 	arbitration.3
Home 	Storage 	Permits
Many Unit 	9 	employees use 	State vehicles 	and possess 	a
permit known as a home 	storage permit 	(HSP). 	An employee who has
a HSP 	is 	allowed to store a State-owned vehicle at 	his 	or her
home 	overnight 	on a daily basis.4 Thus, 	the employee may go
directly 	to a 	field assignment 	each day, 	rather than to another
location 	to pick up a State vehicle 	for use before 	reporting 	to a
field assignment. 	In general, 	the purpose in granting HSPs 	is 	to
save 	the 	State money 	in miles 	driven and 	time 	spent 	by 	employees
while 	commuting 	to and 	from the work 	site.
Prior to the dispute 	that gives 	rise 	to this unfair practice
charge, 	Caltrans used guidelines 	issued on October 16, 	1992 	to
determine which 	employees 	should obtain or keep an HSP. 	During
the spring of 	1994, 	it became apparent to Caltrans 	that 	the 	1992
2Article 	12.2(a) 	defines a grievance as a 	"dispute of 	one or
more employees, 	or a dispute between the State and PECG,
involving the interpretation, 	application, 	or enforcement of 	the
express 	terms 	of 	this Agreement."
3Grievances may be 	filed no 	later 	than 21 	calendar days
after 	the 	grievant 	can reasonably be 	expected to have known of
the event occasioning the grievance. 	Also, 	grievants have 	the
right 	to 	appeal 	unsatisfactory 	responses 	and 	seek arbitration.
4HSPs 	were 	reviewed by Caltrans 	at 	least 	once 	a year 	to
verify that 	the 	criteria under which the permit was 	originally
issued had not 	changed.
44

guidelines 	needed modification.5 PECG 	representatives 	became
aware of Caltrans' 	intention during that 	same time period, 	and
they were 	concerned 	that 	the 	revisions 	could result 	in 	the
cancellation or denial 	of unit members' 	HSPs.6 Accordingly,
PECG's 	Executive Assistant 	Bruce Blanning 	(Blanning) 	submitted a
letter of 	inquiry to Caltrans 	in June 	1994, 	to which Caltrans
Chief 	of 	Labor Relations Dave Brubaker 	(Brubaker) 	responded by
acknowledging 	that new guidelines 	were being developed, 	but
stating 	that 	in the 	interim the 	existing 	(1992) 	guidelines would
continue 	to be used.
Brubaker gave Blanning official 	notice 	of 	the proposed
change in HSP policy on November 23, 	1994, 	included a draft 	copy
of 	revised guidelines, 	and offered to begin meeting and
negotiating this 	topic. 	A deadline of January 3, 	1995 	was
established 	for PECG to submit 	a 	request 	to negotiate and
Blanning sent written questions 	to Brubaker on December 23, 	1994.
Among other questions, 	Blanning made reference to Article 	19.1 of
the MOU and questioned Caltrans' 	authority to change 	the HSP
policy without 	negotiating. 	After sending 	PECG a newly-revised
copy of 	the 	draft 	guidelines 	in early January, 	Brubaker responded
5A May 	1994 	internal 	audit 	identified problems 	with 	the HSP
process, 	including various types of noncompliance.
6In fact, 	PECG complained, 	in the spring of 1994, 	that 	"home
storage permits 	were being yanked." 	According 	to undisputed
testimony, 	it 	is evident 	that 	the number of HSPs was 	sharply
reduced 	from May 1994 	to 	the 	time 	of 	the hearing 	in this 	case
(March 1996) . 	At the time of the May 1994 audit, 	approximately
1,984 HSPs were 	issued. 	By February of 	1995, 	the number of HSPs
had been reduced to 1,365, 	and by the date of 	the hearing, 	the
number of 	HSPs was 	further reduced to 	1,003.
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to Blanning's December 23 	letter on January 11, 	1994 	and
continued 	to 	express 	willingness 	to meet 	and discuss 	any 	specific
concerns. 	The parties met 	on January 20, 	1994 	and discussed the
proposed changes 	for some 	time, 	but 	the meeting was not
considered by 	either party as 	a 	negotiating 	session.
In a March 13, 	1995 	letter to PECG, 	Brubaker stated that
the parties were at an 	"apparent 	impasse" 	over the HSP issue.
On March 27, 	Blanning wrote back saying that he disagreed and
made 	new allegations 	that 	unit members 	were being 	required 	to
comply with 	the 	changed policy. 	Blanning 	then 	requested 	that
Caltrans 	rescind 	those 	requirements 	until 	bargaining 	could be
completed.
On April 	10, 	1995, 	Brubaker responded by stating that
"administration of 	the 	revised policy 	is 	now vested with 	the
District vehicle pool managers," 	but 	that 	requests 	for exemptions
from the policy would be 	considered on a 	case-by-case basis. 	He
concluded by stating that, 	"we 	intend to 	implement 	the new 	[HSP]
policy effective April 14, 	1995."
PECG responded by letter on May 9, 	1995, 	asking whether the
"apparent 	change 	in policy 	is 	authorized by Article 	19.1.b 	of 	the
current MOU."7 PECG 	requested an 	early 	response 	and 	reminded
Caltrans 	that 	"it 	is 	an unfair practice under the Dills Act 	to
7Also 	in this 	letter 	(to which Caltrans 	never responded),
PECG 	complained 	that 	"some 	employees 	who 	had been parking 	state
vehicles 	at 	their 	residences 	are now required to park 	them at
other 	locations 	and provide 	their 	own 	transportation 	to 	and 	from
that 	location" 	and 	that 	"our members 	are being required to
undergo 	significant 	expense 	and 	inconvenience 	in 	complying with
what appears 	to be Caltrans' 	new policy."
66

make 	a unilateral 	change 	in 	conditions 	of 	employment 	during
negotiations [8] on a new MOU."
On July 21, 	1995, 	Caltrans 	issued a document 	entitled
"Procedural 	Standards 	for Home Storage 	Permits." 	According 	to
the 	cover memorandum, 	the 	standards 	"take 	effect 	immediately."
On October 10, 	1995, 	PECG filed an unfair practice charge,
alleging 	that:
a. 	On or about September 25, 	1995, 	PECG received
a 	copy of a July 21, 	1995 memorandum entitled
"Standards 	for Home Storage 	Permits" 	in the
mail. 	This 	new document 	had not been
previously provided 	to 	PECG and was 	being
implemented without 	a 	discussion 	or
negotiations.
b. 	The 	new standards 	were 	significantly 	changing 	the
working 	conditions 	for employees 	in Bargaining
Unit 	9 	by eliminating up to 99% 	of 	the existing
home 	storage permits. 	Employees were being
required 	to undergo 	significant 	expense 	and
inconvenience as 	a 	consequence 	of 	this 	new policy.
c. 	Caltrans 	did not 	negotiate 	the new policy 	in good
faith and did not 	negotiate 	the 	impact 	of 	this 	new
policy.
d. 	The declaration of 	intent 	to 	implement 	a
unilateral 	change 	in the working conditions,
contained in the April 	10, 	1995 	letter from the
Department 	of Transportation, 	constituted an
unfair practice 	charge because 	it 	occurred during
contract 	bargaining 	and 	it 	occurred without 	good
faith negotiations. 	(Emphasis added.)
PECG alleged that by these actions, 	Caltrans violated
section 3519(a), 	(b) 	and 	(c) 	of the Dills Act. 	PERB issued a
complaint on November 30, 	1995. 	After a hearing, 	the ALJ issued
a proposed decision in which he made 	two conclusions. 	First, 	he
8The 	file 	indicates 	that 	successor negotiations 	for a new
MOU were underway at 	the 	time 	of 	the May 9 	letter.
77

found 	that 	the 	dispute 	should not 	be 	dismissed and 	deferred 	to
arbitration because 	he 	found 	that 	the 	disputed 	conduct 	occurred
on July 21, 	1995, 	after the contract expired. 	Second, 	he
concluded 	that 	Caltrans violated 	the Dills Act 	because 	it
breached 	its 	obligation 	to negotiate with PECG about 	a 	change
in 	the Caltrans 	HSP policy. 	Since we disagree with the ALJ's
first 	conclusion, 	and find that 	this 	charge must be dismissed
and deferred to the parties' 	grievance procedure, 	we lack
jurisdiction 	to 	discuss 	the ALJ's 	second 	conclusion.
CALTRANS' 	EXCEPTIONS
Most 	of Caltrans' 	exceptions 	challenge the ALJ's 	refusal 	to
defer this dispute 	to arbitration. 	Caltrans asserts 	that 	its
March 13, 	1995 and April 	10, 	1995 	letters 	clearly indicate 	its
firm intent 	to 	implement 	the 	changes 	on April 	14, 	and not 	on July
21, 	1995, 	as the ALJ found. 	Thus, 	according to Caltrans, 	since
PECG's unfair practice charge alleges violations 	of 	the MOU,
deferral 	is appropriate.
PECG'S 	RESPONSE
PECG argues 	that 	it had no basis 	for filing a grievance 	'
before June 30, 	1995, 	and therefore 	its 	remedy derives 	from the
Dills Act 	rather than the parties' 	MOU.9
9Since we agree 	that 	this 	case 	should have been deferred, 	we
will 	not 	discuss 	other exceptions 	or responses 	in this Decision.
8

DISCUSSION
Lake 	Elsinore Unified School 	District 	(1987) 	PERB Decision
No. 	646 	and 	its Dills Act progeny10 have established a
longstanding 	jurisdictional 	rule which 	requires 	that 	a 	charge
must be dismissed and deferred to arbitration if: 	(1) 	the
grievance machinery of 	the 	agreement 	covers 	the matter at 	issue
and culminates 	in binding arbitration, 	and 	(2) 	the conduct
complained of 	in the unfair practice 	charge 	is prohibited by the
provisions 	of 	the agreement 	between 	the parties.
When assessing 	the 	deferrability of 	a 	charge 	that 	alleges 	a
unilateral 	change, 	the important date is when the employer takes
an official 	action, 	not a 	subsequent 	date when the action becomes
effective. 	(DPA, 	warning letter at p. 	5.) 	For example, 	in DPA,
certain allegations11 of violations 	occurred during 	the 	term of
the agreement. 	The Board held that 	those allegations were
subject 	to 	the 	contractual 	grievance 	and arbitration procedure
and 	ordered 	that 	the 	charge 	be 	dismissed and deferred 	to 	that
procedure.
Likewise, 	in the case at bar, 	Caltrans wrote to PECG on
April 	10, 	1995, 	expressly stating that 	"we 	intend to implement
the new 	[HSP] 	policy effective April 	14, 	1995." 	This date was
10See, 	e.g., 	State of 	California 	(Department of Personnel
Administration) 	(1996) 	PERB Decision No. 	1145-S 	(DPA).
11In DPA, 	the 	State announced that 	it 	intended to 	transfer
State police 	employees 	to another bargaining unit 	effective
July 1, 	1995, 	which would be 	the day after the 	contract 	expired.
On June 	13, 	1995, 	the State allegedly refused a demand to bargain
the transfer, 	a date on which the agreement was 	still 	in effect.
99

well before 	the June 	30 	expiration date of 	the MOU, 	a 	fact which
is 	reflected in PECG's unfair practice 	charge, 	which alleges 	that
Caltrans 	declared 	its 	"intent 	to 	implement 	a unilateral 	change 	in
the working 	conditions 	contained in the April 	10. 	1995 	letter"
which 	constituted 	"an unfair practice 	charge because 	it 	occurred
during 	contract 	bargaining 	and 	it 	occurred without 	good 	faith
negotiations." 	(Emphasis added.)
The 	Lake 	Elsinore standard has been met 	in this 	case.
First, 	the grievance machinery in the parties' 	MOU provides 	for
resolution 	of 	this 	dispute 	and 	culminates 	in binding arbitration.
Second, 	the conduct 	complained of 	in the charge, 	that 	the State
changed working 	conditions 	by unilaterally 	changing 	the 	HSP
policy, 	is 	arguably prohibited by the 	entire agreement 	clause 	in
the MOU 	(Article 19.1). 	Therefore, 	PERB is without jurisdiction
in 	this matter and 	the 	charge must 	be 	dismissed and deferred 	to
the 	contractual 	grievance 	and arbitration procedure.
ORDER
The 	Board hereby 	reverses 	the 	administrative 	law 	judge's
proposed decision, 	DISMISSES 	the unfair practice 	charge and
defers 	it 	to the parties' 	contractual 	grievance procedure.
Member Dyer joined 	in this Decision.
Chairman Caffrey's 	concurrence begins 	on page 	11.
10

CAFFREY, 	Chairman, 	concurring: 	The Ralph C. 	Dills Act
(Dills Act) 	section 3514.5(a) 	states, 	in part, 	that the Public
Employment Relations Board 	(Board) 	shall not:
. 	. 	. 	issue a complaint against conduct also
prohibited by 	the provisions 	of 	the 	agreement
between 	the parties 	until 	the 	grievance
machinery of the agreement, 	if 	it exists and
covers 	the matter at 	issue, 	has been
exhausted, 	either by settlement 	or binding
arbitration.
This 	section establishes 	a 	jurisdictional 	rule under which the
Board must 	dismiss 	an unfair practice 	charge and defer 	it 	to
arbitration if: 	(1) 	the 	complained of 	conduct 	is arguably
prohibited by the provisions 	of 	the parties' 	collective
bargaining agreement 	(CBA); 	and 	(2) 	the contractual grievance
machinery covers 	the matter at 	issue and 	culminates 	in binding
arbitration. 	(Lake Elsinore School District 	(1987) 	PERB Decision
No. 	646; 	State of California 	(Department of Personnel
Administration) 	(1996) 	PERB Decision No. 	1145-S.)
The 	State 	of 	California 	(Department 	of 	Transportation)
(State or Caltrans) 	and the 	Professional 	Engineers 	in California
Government 	(PECG) 	are parties 	to a CBA which covered the period
of September 1, 	1992 	to June 30, 	1995. 	The CBA contains a
grievance procedure which 	culminates 	in binding arbitration. 	The
"Entire Agreement" 	clause of 	the CBA at Article 	19.1.b states, 	in
pertinent part:
b. 	The parties 	agree 	that 	the provisions 	of 	this
Subsection 	shall 	apply only 	to matters 	which
are not 	covered 	in this MOU.
The parties 	recognize 	that 	during 	the 	term of
this MOU, 	it may be necessary for the State
11

to make 	changes 	in areas within the 	scope 	of
negotiations. 	Where the State 	finds 	it
necessary to make 	such changes, 	the State
shall 	notify PECG of 	the proposed 	change 	30
days 	prior 	to 	its 	proposed 	implementation.
The 	parties 	shall 	undertake 	negotiations
regarding 	the 	impact 	of 	such 	changes 	on the
employees 	in Unit 	9, 	when all 	three of 	the
following 	exist:
(1) 	Where 	such changes would have an impact
on working 	conditions 	of 	a 	significant 	number
of 	employees 	in Unit 	9;
(2) 	Where 	the 	subject matter of 	the 	change
is within 	the 	scope 	of 	representation
pursuant 	to the Dills Act;
(3) 	Where PECG requests 	to negotiate with
the State.
. 	. 	. 	If the parties are in disagreement as
to whether a proposed change 	is 	subject 	to
this 	Subsection, 	such disagreement may be
submitted 	to 	the 	arbitration procedure 	for
resolution. 	The arbitrator's 	decision shall
be binding.
Note 	that under this 	article, 	Caltrans has 	the authority to
make 	changes 	in 	terms 	and 	conditions 	of 	employment 	provided 	that
it 	notifies 	PECG 30 	days 	prior 	to 	implementation and undertakes
impact 	negotiations when 	the 	enumerated 	conditions 	are met. 	A
change made 	in accordance with this provision 	is 	not a
"unilateral 	change," 	but 	rather a 	change made pursuant 	to a
bilaterally-negotiated article 	of 	the 	CBA. 	Any disagreement
between the parties 	as 	to whether a proposed change 	is 	subject 	to
this 	provision may be 	submitted 	to binding 	arbitration.
The parties 	engaged 	in an 	extended 	series 	of 	communications
and discussions 	concerning proposed 	changes 	to Caltrans' 	policy
12

governing home 	storage permits 	for 	state-owned vehicles. 	These
communications 	included:
A March 13, 	1995, 	letter from Caltrans 	to
PECG addressing 	the 	"apparent 	impasse 	at 	the
recent 	two home storage permit meetings."
A March 27, 	1995, 	response from PECG
asserting 	that 	the meet 	and 	confer process 	is
at 	a preliminary 	stage 	and the parties 	are
not at 	impasse. 	PECG specifically requests
that 	a meet 	and 	confer 	session be 	scheduled.
An April 	10, 	1995, 	letter from Caltrans to
PECG asserting 	that 	the 	"only 	concern 	that
deals 	with policy changes 	that 	impact 	your
membership" 	has been addressed.
Consequently, 	Caltrans 	states 	"we 	intend to
implement 	the new policy effective April 	14,
1995" 	and indicates 	that 	Caltrans 	sees no
reason to 	continue 	to meet 	on the 	issue.
A May 9, 	1995, 	response 	from PECG asking 	if
Caltrans 	was 	refusing to meet 	and 	confer and
had 	implemented 	the policy. 	The 	letter
specifically asks 	if 	Caltrans believes 	the
policy 	change 	is 	authorized by 	CBA
Article 19.1.b, 	and, 	if so, 	how PECG was
provided 	30-day notice 	of 	the proposed
change.
In my view, 	it 	is absolutely clear that 	in April 	and May
1995, 	Caltrans was proceeding with implementation of a change 	in
home 	storage permit policy; 	and 	it 	is 	equally clear that 	PECG was
or should have been aware 	of 	it. 	Whether Caltrans was permitted
to do 	so under Article 	19.1.b, 	a question directly referenced by
PECG, 	is 	a matter subject 	to binding arbitration under the very
terms of 	that article. 	Furthermore, 	PECG's expressed concern
that 	Caltrans 	had not 	provided the 	30-day notice 	of 	the proposed
change before 	implementation and 	refused 	to meet 	and 	confer,
contrary to the 	requirements 	of Article 19.1.b, 	also describes
13

conduct 	arguably prohibited by 	the 	CBA and 	subject 	to 	its
grievance and arbitration procedure. 	Accordingly, 	Dills Act
section 3514.5(a) 	requires 	that 	the unfair practice 	charge 	in
this 	case be 	dismissed and deferred 	to 	the 	contractual 	grievance
and 	arbitration procedure.
14