Ocean View School District (PERB 0673E)

STATE 	OF CALIFORNIA
DECISION OF 	THE
PUBLIC 	EMPLOYMENT 	RELATIONS 	BOARD
OCEAN VIEW TEACHERS ASSOCIATION,
Charging 	Party,
v.
OCEAN VIEW 	SCHOOL DISTRICT,
Respondent.
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) 	Case 	No. 	LA-CE-2529
PERB 	Decision 	No. 	673
June 	7, 	1988
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Appearance; 	Robert E. 	Lindquist, 	Attorney, 	California Teachers
Association, 	for 	Ocean View Teachers 	Association.
Before Hesse, 	Chairperson; 	Porter and Shank, 	Members.
DECISION
HESSE, 	Chairperson: 	Charging party, 	Ocean View Teachers
Association, 	appeals 	the 	Public 	Employment 	Relations 	Board
(Board) 	agent's partial dismissal, 	attached hereto, 	of its
charge 	alleging 	that 	respondent, 	Ocean View 	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
)
______ )

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.
Specifically, 	charging party appeals 	the dismissal 	of
paragraphs 	10, 	11, 	17, 	and 18 of its amended charge which, 	in
essence, 	alleges 	the 	following:
Paragraph 	10: 	As 	a 	consequence of 	joining 	the JPA,
respondent 	"affected 	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.
22

e. 	A 	foreseeable 	change 	in 	the 	amount 	of 	premium 	costs 	has
occurred.
Paragraph 	11: 	As 	a consequence 	of 	joining 	the JPA,
respondent 	"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: 	Respondent 	attempted 	to 	"derogate
and undermine 	[charging party's] 	authority 	[as] 	exclusive
bargaining 	representative 	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.
Members 	Porter 	and 	Shank 	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) 734-3127
October 	13, 	1987
Robert 	Lindquist, 	Attorney
California 	Teachers 	Association
Post 	Office 	Box 9 2888
Los Angeles, 	CA 	90009
Re: 	LA-CE-2529, 	Ocean 	View 	Teachers 	Association 	v.
Ocean 	View 	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 	Ocean
View 	Teachers 	Association 	(Association) 	a l l e g e s 	that 	the 	Ocean
View 	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 	alleged 	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 	7, 	1987
that 	the 	above-referenced 	charge 	did 	not 	s t a t e 	a 	prima 	f a c i e
case. 	You were 	advised 	that 	if 	there 	were 	any 	factual
inaccuracies 	or 	a d d i t i o n a l 	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 	state 	a 	prima 	f a c i e 	c a s e , 	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
received, 	alleging 	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
benefits 	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 	provided 	for 	1986-87 	that

the 	District 	would 	contribute 	up 	to 	a 	maximum 	amount 	toward
employee 	health 	insurance. 	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.
October 	13, 	1987
Partial 	Dismissal 	of 	UPC
LA-CE-2529
Page 	2
This 	allegation merely 	restates 	the 	allegation 	in paragraph 	7
(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
1lThe	The 	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. 	An argument could be made, 	of course, 	based 	on
the contract 	language, 	that 	the 	status quo 	is 	that 	the District
only contributes 	up to 	the 	ceiling 	amount 	in 	the 	agreement, 	and
after 	that 	the 	employees pay 	the 	costs 	of 	health 	insurance. 	If
that were 	the 	status quo, 	however, 	to change employee
contributions 	for 	health 	insurance 	would 	not 	be 	an 	unlawful
unilateral 	action 	because 	it 	would 	not 	alter 	the 	status quo.

October 13, 	1987
Partial 	Dismissal of 	UPC
LA-CE-2529
Page 	3
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,
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 	7,
letter 	relating 	to paragraph 7(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
7(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)
2You 	allege 	that 	the premium amount 	the 	employer 	pays 	for
health 	insurance 	is a matter 	within 	scope.
The
School Distric
___
discussion of 	the Board's 	decision 	in 	Plumas Unified
t 	(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 	13, 	1987
Partial 	Dismissal 	of UPC
LA-CE-2529
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 	7 	letter,
in 	response 	to paragraph 	7(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
7(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 	4-6.) 	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 	7(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 	7, 	1987 	letter 	relating 	to paragraph 	7(6) 	of 	the

October 	13, 	1987
Partial 	Dismissal 	of 	UPC
LA-CE-2529
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 	13, 	1987
Partial Dismissal 	of 	UPC
LA-CE-2529
Page 	6
October 	7, 	you 	submitted 	a memorandum detailing 	your 	arguments
and 	citing 	legal 	authorities 	for 	your 	position.3 The 	gist 	of
those 	arguments, 	insofar 	as 	they 	relate 	to 	the question of 	the
cost of premiums, 	is as follows:
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.]
3Various 	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 13, 	1987
Partial 	Dismissal of 	UPC
LA-CE-2529
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.
4The 	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.
55These	These 	latter 	two 	arguments 	were 	not 	raised 	previously.
—

October 13, 	1987
Partial 	Dismissal 	of 	UPC
LA-CE-2529
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

October 	13, 	1987
Partial 	Dismissal 	of 	UPC
LA-CE-2529
Page 	9
and 	of 	itself 	indicative 	of 	bad 	faith 	bargaining. 	Again 	it 	is
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 13, 	1987
Partial Dismissal of 	UPC
LA-CE-2529
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 13, 	1987
Partial Dismissal 	of 	UPC
LA-CE-2529
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
By 'Sandra Owens 	Dennison
Regional 	Attorney
Attachment
cc: 	James Romo, Attorney

state Of 	CALIFORNIA 	George 	DEUKMEJIAN, Governor
PUBLIC EMPLOYMENT RELATIONS BOARD
LOS ANGELES REGIONAL OFFICE
3470 WILSHIRE BLVD., SUITE 1001
LOS 	ANGELES, 	CA 	90010
(213) 736-3127
August 	7, 	1987
Robert 	Lindquist, 	Attorney
California 	Teachers 	Association
Post 	Office 	Box 	92888
Los Angeles, 	CA 	90009
Re: 	LA-CE-2511, 	Saddleback 	Co—unity 	College 	D i s t r i c t Faculty
Association 	v. 	Saddleback 	Co—unity 	College 	D i s t r i c t
Dear Mr. 	Lindquist:
In 	the 	above-referenced 	charge 	the 	Saddleback 	Community 	College
D i s t r i c t 	Faculty Association 	(Association) 	a l l e g e s 	that 	the
Saddleback 	Community 	College 	D i s t r i c t 	(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) r (b), and ( c ) .
My 	investigation of 	the 	charge 	revealed 	the 	following
information.
The JPA was 	formed on January 	l, 	1987, 	by eight public
educational 	agencies. 	The 	D i s t r i c t Board 	of 	Trustees 	acted 	to
join 	the 	JPA on January 	26, 	1987.
The Agreement establishing 	the JPA provides 	that 	it 	was 	formed
pursuant 	to 	Government 	Code 	sections 6500 	et 	s e q . , 	to 	"jointly
provide 	for 	a 	self-insurance 	program 	for 	employee 	health 	and
welfare 	b e n e f i t s . " 	The 	JPA 	is 	a 	separate 	legal e n t i t y , 	and 	in
accord with 	Article 	4 	of 	the 	JPA Agreement, 	it 	has 	only 	those
powers which 	are common 	to 	the 	member 	d i s t r i c t s 	and which 	are
"in 	furtherance of 	the 	functions 	and 	objectives" 	of 	the
Agreement. 	(JPA Agreement, 	A r t i c l e 	4. 	Section 	( a ) . ) 	The
Bylaws of 	the JPA give 	it 	the 	authority 	to 	set 	the 	annual
premiums 	for 	the 	insurance 	for 	the member 	d i s t r i c t s . 	(Bylaws,
Article V.) 	The contribution 	for 	premiums 	is 	determined 	by 	at
l e a s t 	the 	following 	factors: 	"cost price 	index 	(inflation
factor); 	experience 	factor; 	cost 	of 	reinsurance; 	desired 	l e v e l
of 	self-insured 	retention; 	desired 	l e v e l 	of 	reserves; 	and 	plan
design." 	(By-Laws, 	A r t i c l e V. 	Section 	B.1.) 	Premiums 	are 	to
be paid 	to monthly or 	tenthly 	by 	the member 	d i s t r i c t s .
The Association a l l e g e s 	no 	change 	in 	the 	coverage 	for 	employees
of 	the 	D i s t r i c t , 	or 	in 	the 	administration 	of 	the 	plan 	by 	the
action of 	joining 	the JPA.

August 7, 	1987
LA-CE-2511
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 	Cross, 	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 	XVI 	that 	the
District would 	"provide 	all 	employees 	(75% 	of 	contract 	or 	greater)
and 	their 	eligible 	dependents 	with 	a 	fully 	paid 	health 	insurance
plan." 	(Article 	XVI 	section 	1.) 	The 	carrier 	for 	health 	insurance
at 	that 	time 	was Blue 	Cross.

August 7, 	1987
LA-CE-2511
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 	Cross, 	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 	7, 	1987
LA-CE-2511
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 charge 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 	same 	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 7, 	1987
LA-CE-2511
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 enployee
benefits. 	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 Cross.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
1I	l n	rn 	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."
2Here, 	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 	7, 	1987
LA-CE-2511
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.
Control 	Over 	Reserves
The 	Association 	claims 	that 	the 	JPA 	now 	has 	control 	over
reserves, 	interests, 	premium overpayments, 	or 	rebates 	from

August 7, 	1987
LA-CE-2511
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.
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 	7, 	1987
LA-CE-2511
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 	employee 	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 sight 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 	7, 	1987
LA-CE-2511
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