Westminster School District (PERB 0677E)

STATE 	OF 	CALIFORNIA
DECISION OF 	THE
PUBLIC 	EMPLOYMENT 	RELATIONS 	BOARD
WESTMINSTER 	TEACHERS
ASSOCIATION, 	CTA/NEA,
Charging 	Party,
v.
WESTMINSTER 	SCHOOL 	DISTRICT,
Respondent.
Case No. 	LA-CE-2532
PERB Decision No. 	677
June 9, 	1988
Appearance; 	Robert E. 	Lindquist, 	Attorney, 	California Teachers
Association, 	for Westminster Teachers Association, 	CTA/NEA.
Before Hesse, 	Chairperson; 	Porter and Shank, 	Members.
DECISION
SHANK, 	Member: 	Charging party, 	Westminster Teachers
Association, 	CTA/NEA, 	appeals 	the 	Public 	Employment 	Relations
Board 	(Board) 	agent's partial dismissal, 	attached hereto, 	of
its 	charge 	alleging 	that 	respondent, 	Westminster 	School
District, 	by 	joining 	the 	Orange 	County 	Fringe 	Benefits 	Joint
Powers Authority 	(JPA), 	made 	certain unilateral 	changes 	in
health 	insurance benefits 	in violation of 	sections 	3543.5(a),
(b), 	and 	(c) 	of the Educational Employment Relations Act
(EERA).1
1EERA 	is 	codified 	at 	Government 	Code 	section 	3540 	et
seq. 	Unless 	otherwise 	indicated, 	all 	statutory references
herein are 	to the Government 	Code. 	Section 	3543.5 provides, 	in
pertinent part, 	as follows:
It 	shall be 	unlawful 	for 	a public 	school
employer 	to:
(a) 	Impose 	or 	threaten to 	impose 	reprisals
on employees, 	to discriminate 	or 	threaten to
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Specifically, 	charging party appeals 	the 	dismissal 	of
paragraphs 10, 	11, 	17, 	and 18 of its amended charge which, 	in
essence, 	allege the 	following:
Paragraph 	10: 	As 	a 	consequence of 	joining 	the JPA,
respondent 	"effected 	a material 	and 	significant 	change 	in 	the
[total] 	amount 	of 	compensation 	received by 	the members 	of 	the
bargaining 	unit 	in 	the 	form 	of health 	and welfare benefits"
since:
a. 	The 	total 	amount 	of 	compensation provided became
subject 	to a 	"non-negotiable 	cost 	assessment 	unilaterally
established 	by 	the 	Unilateral 	Insurer."
b. 	The 	premium 	price 	and 	duration 	of 	insurance 	plans
became 	subject 	to adjustment by the 	JPA.
c. 	The penalties 	or 	disincentives 	for 	a 	change 	in 	insurer
"substantially 	increase[d] 	the 	cost 	to the union 	for, 	or
place[d] significant 	constraints 	on, 	bargaining any change 	in
health 	or 	welfare benefits 	which 	entails 	a 	change 	in 	insurer."
d. 	The basis 	for 	determining 	increases 	in premium prices
changed.
discriminate 	against employees, 	or otherwise
to interfere with, 	restrain, 	or coerce
employees because 	of 	their 	exercise 	of
rights 	guaranteed by 	this 	chapter.
(b) 	Deny to employee organizations 	rights
guaranteed 	to 	them by 	this 	chapter.
(c) 	Refuse 	or 	fail 	to meet 	and negotiate 	in
good 	faith 	with 	an 	exclusive 	representative.
2
2

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: 	Respondents 	attempted 	to 	"derogate
and 	undermine 	[charging parties'] authority 	[as] 	exclusive
bargaining 	representative[s] 	by 	unilaterally 	implementing 	its
bargaining position 	on health 	and 	welfare benefits."
We 	have 	reviewed 	the 	partial 	dismissal 	and 	adopt 	that
portion of 	the 	regional 	attorney's 	analysis 	which dismisses 	the
allegations 	contained 	in paragraphs 	10, 	17, 	and 18 of the
amended charge. 	As 	to paragraph 11 of 	said charge, 	we disagree
with 	the 	regional 	attorney's 	conclusion.
For 	the 	purposes 	of 	determining 	the 	existence 	of 	a 	prima
facie 	case, 	the 	essential 	facts 	alleged by the 	charging party
are 	deemed 	true. 	(San Juan Unified 	School 	District 	(1977) 	PERB
Decision No. 	12.) 	On 	its 	face, 	paragraph 	11 of 	the charge
alleges 	that 	respondent 	changed 	the 	amount 	individual
bargaining 	unit 	members 	must 	contribute 	to 	ensure 	continued
eligibility 	for health 	and welfare 	coverage. 	We 	view 	this 	as
more 	than 	speculative 	or 	merely an 	"alternate 	theory" 	as
construed by 	the 	regional 	attorney. 	Rather, 	charging party has
depicted 	an 	actual 	change 	that has 	happened 	which 	is 	alleged 	to
33

have 	a 	material 	and 	significant 	impact 	on bargaining 	unit
employees. 	(Trinidad 	Union 	Elementary 	School 	District 	and
Peninsula 	Union 	School 	District 	(1987) 	PERB 	Decision No. 	629.)
We 	find 	a prima 	facie 	case has been 	alleged, 	requiring 	this
issue 	to be 	litigated. 	Therefore, 	we 	reverse 	the dismissal 	of
paragraph 	11 	of 	the 	amended 	charge 	and 	order 	that 	the partial
complaint 	already 	issued be 	amended 	to 	include 	this 	allegation.
ORDER
Based 	upon 	the 	foregoing, 	the 	Board hereby DISMISSES
paragraphs 	10, 	17, 	and 18 of the amended charge, 	and ORDERS
that 	the 	General 	Counsel 	incorporate 	paragraph 	11 	of 	the 	charge
into 	the 	complaint 	already 	issued.
Chairperson 	Hesse 	and Member 	Porter 	joined 	in 	this 	Decision.
4

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 	16, 	1987
Robert 	Lindquist, 	Attorney
California 	Teachers 	Association
Post 	Office Box 9 2888
Los Angeles, 	CA 	90009
Re: 	LA-CE-2532, 	Westminster 	Teachers Association v.
Westminster 	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
Westminster 	Teachers 	Association 	(Association) 	alleged 	that 	the
Westminster 	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 	benef 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 	additional 	f a c t s 	which would 	correct 	the
d e f i c i e n c i e s 	explained 	in 	that 	l e t t e r , 	you 	should 	amend 	the
charge 	accordingly. 	You were 	a l s o 	invited 	to 	submit 	any 	legal
argument. 	You were 	further 	advised 	that 	unless you 	amended 	the
charge 	to 	s t a t e 	a 	prima 	facie 	case, 	or 	withdrew 	it 	prior 	to
August 	17, 	1987, 	it 	would 	be dismissed.
The 	time 	within 	which 	to 	f i l e 	an 	amended 	charge 	was 	extended 	to
September 	8, 	1987. 	On September 	9, 	1987 	an 	amended charge was
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, 	and
17-26. 	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
alleging 	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

October 	16, 	1987
PARTIAL 	DISMISSAL OF 	UPC
LA-CE-2532
Page 	2
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.
This 	allegation merely 	restates 	the 	allegation 	in paragraph 	15
(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
1-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 	16, 	1987
PARTIAL 	DISMISSAL 	OF 	UPC
LA-CE-2532
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 	15(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
15(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 discussion of 	the Board's decision 	in Plumas, 	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 	16, 	1987
PARTIAL 	DISMISSAL 	OF 	UPC
LA-CE-2532
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 	15(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
15(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 	15(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 	15(6) 	of 	the

October 	16, 	1987
PARTIAL 	DISMISSAL 	OF UPC
LA-CE-2532
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, 	PERB Decision No. 	578 	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 	16, 	1987
PARTIAL 	DISMISSAL 	OF 	UPC
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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
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 	16, 	1987
PARTIAL 	DISMISSAL OF 	UPC
LA-CE-2532
Page 	7
Board 	stated 	that 	there 	had 	to 	be 	cogent
evidence 	that changes 	have 	occurred 	or 	will
occur.]
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
4 The 	scope 	analysis 	is, 	first 	that premium costs 	are
"wages," 	an 	enumerated 	subject; 	or even 	if 	they are 	not
directly 	wages,under 	the 	Anaheim 	analysis, 	they 	are 	closely
related 	to wages, 	and 	therefore 	within 	scope.
5These 	latter 	two 	arguments 	were 	not 	raised 	previously.

October 16, 	1987
PARTIAL 	DISMISSAL 	OF 	UPC
LA-CE-2532
Page 8
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.
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

October 16, 	1987
PARTIAL DISMISSAL OF UPC
LA-CE-2532
Page 	9
a 	tendency of 	this District 	to negotiate 	for 	the 	benefits 	that
are 	available 	through the 	JPA and 	to 	be 	unwilling 	to 	agree 	to
other 	changes 	in benefits 	that 	the Association may 	seek 	at 	the
negotiating 	table. 	The 	tendency toward homogenization,
assuming 	for 	the 	sake of argument that 	it will occur, 	is not 	in
and of 	itself 	indicative 	of 	bad 	faith bargaining. 	Again 	it 	is
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 ordinal 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
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 	16, 	1987
PARTIAL 	DISMISSAL OF 	UPC
LA-CE-2532
Page 	10
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].)
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.
PARAGRAPHS 	19-26; 	Surface 	Bargaining
The 	District 	has 	stated 	that 	the 	surface 	bargaining 	allegations
in 	the 	amended 	charge 	are 	beyond 	the 	statute 	of 	limitations
contained 	in Government Code 	section 	3541.5(a). 	All of 	the
bargaining conduct alleged occurred 	before December 	4, 	1986, 	'
and 	the 	amended 	charge 	was 	not 	filed 	until 	September 	9, 	1987.7
7 The 	Association 	has 	stated 	that 	the 	words 	"subsequent 	to
December 	4, 	1986" 	in paragraphs 	23-26 were written 	in error.
In 	their 	place 	the 	Association 	intended 	the 	words 	"prior 	to
December 	4, 	1986." 	The District 	has 	been 	informed 	of 	the
error. 	This 	analysis, 	therefore, 	proceeds 	upon 	the 	assumption
that 	the 	bargaining 	conduct 	is 	alleged 	to 	have 	occurred 	prior
to December 	4, 	1986.

October 	16, 	1987
PARTIAL 	DISMISSAL OF 	UPC
LA-CE-2532
Page 	11
An 	exception 	to 	the 	section 	3541.5(a) 	limitations period may 	be
made 	where 	an amended charge 	is 	found 	to 	"relate 	back" 	to 	the
original charge. 	Gonzales Union High 	School 	District 	(1984)
PERB Decision No. 	410.
In 	the 	Gonzales case 	an amendment was 	allowed 	because 	it merely
added 	another 	theory 	based 	on 	the 	same 	events 	already 	at 	issue
in the case. 	In Monrovia Unified School District 	(1984) 	PERB
Decision No. 	460, 	the Board also discussed the 	relation-back
doctrine 	but did 	not 	allow an 	amendment. 	The 	original charge
alleged 	a 	unilateral change 	of 	the 	employer's policy on
discipline. 	The 	amendment 	alleged 	that 	the 	employer 	refused
the 	employee 	representation 	at 	the 	parent conference 	which 	led
to 	the 	disciplinary action against 	the 	employee. 	The Board
stated 	that 	the 	issue 	had 	not 	been 	raised 	by 	the 	initial
charge, 	notwithstanding that 	some mention of 	it was 	buried 	in
the 	attachments 	to 	the charge.
This case 	is 	similar 	to Monrovia. 	The original charge 	alleged 	a
pure 	unilateral 	change 	in employee 	health 	insurance 	benefits 	by
joining 	the JPA. 	Even broadly 	read, 	it did 	not 	raise 	the
allegations 	in paragraphs 	19-26.
Nor 	does 	the 	fact 	that 	the 	District 	is 	allegedly not prejudiced
by 	the 	addition 	of 	the 	surface 	bargaining 	allegations 	change
this 	result. 	Were 	there prejudice 	to 	the District 	by 	the
allowing 	the 	additional allegations, 	this would 	be 	another
reason 	not 	to 	issue 	a complaint. 	The 	lack 	of prejudice does
not, 	in and of 	itself, 	however, 	mandate the 	issuance of 	a
complaint.
For 	these 	reasons, 	the 	allegations 	in paragraphs 	19-26 of 	the
first 	amended 	charge 	that 	the 	District 	engaged 	in 	surface
bargaining 	in bad 	faith prior 	to December 	4, 	1986, 	are 	hereby
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

October 	16, 	1987
PARTIAL DISMISSAL 	OF 	UPC
LA-CE-2532
Page 	12
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)).
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. 	Th6
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).

October 	16, 	1987
PARTIAL DISMISSAL OF 	UPC
LA-CE-2532
Page 	13
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: 	David C. 	Larsen, 	Attorney
By~-------

STATE OF CALIFORNIA 	GEORGE DEUKMEJIAN. Governor
PUBLIC EMPLOYMENT RELATIONS BOARD
LOS ANGELES REGIONAL OFFICE
3470 WILSHIRE BLVD.. SUITE 1001
LOS ANGELES. CALIFORNIA 90010
(213) 736-3127
August 	7, 	1987
Robert 	Lindquist, 	Attorney
California 	Teachers 	Association
Post 	Office 	Box 92888
Los Angeles, 	CA 	90009
Re: 	LA-CE-2532, 	Westminster 	Teachers Association, 	CTA/NEA
v. 	Westminster 	School 	D i s t r i c t
Dear Mr. 	Lindquist:
In 	the 	above-referenced 	charge 	the 	Westminster 	Teachers
Association 	(Association) 	a l l e g e s 	that 	the 	Westminster 	School
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 v i o l a t i o n of 	Educational 	Employment 	Relations
Act 	(EERA) 	sections 3543.5 	( a ) , 	(b) , 	and 	( c ) . 1
My 	investigation of 	the 	charge 	revealed 	the 	following
information.
The JPA was formed on January 1, 	1987, 	by 	the D i s t r i c t and
eight 	other 	public 	educational 	agencies. 	The 	D i s t r i c t ' s
membership was e f f e c t i v e on 	that date. 	The 	D i s t r i c t Board 	of
Education 	acted 	to 	join 	the JPA on December 	4, 	1986.
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 	benefits." 	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, 	Article 	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
1I	l t1t 	appears 	from the 	allegations of 	the 	charge 	that 	the
D i s t r i c t ' s 	action 	occurred 	while 	the 	parties were 	at 	impasse 	in
their 	negotiations 	for 	a 	successor 	agreement. 	In 	such 	event,
if 	a 	violation were 	stated 	by 	these 	f a c t s , 	it would 	be 	a
v i o l a t i o n of 	3543.5 (e) 	not 	(c) .

August 	7, 	1987
LA-CE-2532
Page 2
least 	the 	following 	factors: 	"cost price 	index 	(inflation 	factor);
experience 	factor; 	cost of 	reinsurance; 	desired 	level of
self-insured 	retention; 	desired 	level 	of 	reserves; 	and 	plan
design." 	(By-Laws, 	Article V. 	Section 	B.1.) 	Premiums 	are 	to be
paid 	to monthly or 	tenthly 	by 	the 	member 	districts.
There 	was 	no change 	in 	the 	coverage 	for 	employees of 	the District,
or 	in the 	administration of 	the plan 	by 	the 	action of 	joining 	the
JPA.
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. 	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 	self-insurance 	aspect 	of 	the 	JPA funding 	of 	the 	health 	insurance
benefits 	is 	limited 	by 	an aggregate 	stop-loss provision of 	120% 	of
the District's 	anticipated 	claims. 	There 	is 	also an 	individual
stop-loss provision of 	$50,000 per employee. 	(This 	is not 	recited
in the JPA Agreement or 	bylaws, 	but 	it 	is undisputed by 	the
Association 	that 	these are 	the 	stop-loss 	amounts.) 	This 	stop-loss
aspect 	of 	the 	JPA 	self-funding 	arrangement 	provides 	that 	the
District 	is 	fully 	insured by Blue 	Shield, 	in 	the 	aggregate 	for
amounts beyond 	120% 	of 	its 	anticipated claims 	in a year. 	The JPA's
reserves 	(from member district contributions) 	are established 	so 	as
to cover 	the exposure 	up to 	120% 	of 	the 	initial anticipated claims.
The 	Agreement 	which 	establishes 	the 	JPA provides 	that 	its 	members
are 	jointly 	and 	severally 	liable 	"upon 	any 	liability which 	is
otherwise 	imposed 	on 	any one 	of 	the members 	or 	upon 	the Authority
for 	injury 	caused 	by 	a negligent 	or 	wrongful 	act 	or 	omission
occurring 	in 	the performance 	of 	the Agreement." 	The 	Agreement
requires 	the 	district 	to 	remain 	in 	the 	JPA 	for 	3 years 	unless
earlier 	termination 	is 	"required 	as a condition of 	collective
bargaining." 	If 	a member 	district 	terminates 	before 	three years,
however, 	there will 	be 	no refund or 	repayment of 	its contributions
to the 	JPA.
The 	JPA 	is 	governed 	by 	a Board 	of Directors, 	with most 	decisions
requiring 	only a majority vote. 	Each member 	district has 	one 	vote
on the Board 	of Directors, 	regardless 	of 	the 	number 	of 	employees 	of
the 	district.
The 	1983-86 	collective 	bargaining 	agreement 	provided 	in Article 	XII

August 7, 	1987
LA-CE-2532
Page 	3
that 	the District 	would pay 	up 	to 	the 	specified annual dollar
amounts 	for 	fringe 	benefit premiums 	for each unit member. 	The
carrier 	for 	health 	insurance 	at 	that 	time was Blue Cross.
During the period June 19, 	1986 through November 	4, 	1986 the
District 	and 	the Association met 	and 	negotiated over 	a 	successor 	to
the 	1983-86 agreement. 	The 	subject of health 	insurance was
discussed, 	with 	the Association proposing 	that 	the District 	join 	the
"Orange Trust," 	a 	joint 	labor-management trust for 	funding 	health
insurance. 	The parties declared 	impasse 	in their 	negotiations on
November 	14, 	1986, 	without reaching any agreement on health
insurance.
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; 	. . . .

August 7, 	1987
LA-CE-2532
Page 4
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.
Unilateral changes 	are considered 	"per 	se" 	violations 	if
certain criteria 	are met. 	Those criteria are: 	(1) 	the
employer 	implemented 	a 	change 	in policy 	concerning 	a matter
within the 	scope of 	representation, 	and 	(2) 	the change was
implemented 	prior 	to 	the 	employer 	notifying 	the 	exclusive
representative 	and giving 	it 	an opportunity 	to 	request
negotiations. 	Walnut 	Valley 	Unified 	School 	District 	(1981)
PERB Decision No. 	160; 	Grant 	Joint Unified 	High 	School 	District
(1982) 	PERB Decision No. 	196.
The nub of 	the 	issue presented here 	is whether 	the change 	to
self-funding 	of 	health 	insurance 	through the 	JPA 	is a matter
within 	the 	scope 	of 	representation.
At 	the 	time 	the charge was 	filed, 	the 	latest 	PERB decision
dealing 	with 	self-funding 	of 	health 	insurance 	as 	a potential
unlawful 	unilateral 	change 	was 	Plumas Unified 	School District
(1986) 	PERB Decision No. 	578, 	in which the Board 	found the
district's 	decision 	to 	self-fund medical 	insurance 	not 	to 	be 	an
unlawful unilateral change. 	In Plumas, 	there was a 120%
stop-loss provision 	in 	the 	self-funding 	arrangement.
Since 	the charge was 	filed, 	the Board 	has decided Trinidad
Union 	Elementary 	School 	District 	and 	Peninsula 	Union 	School
District 	(1987) 	PERB Decision No. 	629. 	In that case, 	the Board
stated 	unequivocally 	that 	a 	"change 	to 	a 	self-funded plan 	does
not, 	without more, 	result 	in 	a per 	se 	violation of EERA." 	The
Board 	also 	found 	that 	joining 	a 	JPA 	to 	self 	fund 	benefits 	is
essentially 	the 	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.

August 	7, 	1987
LA-CE-2532
Page 	5
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.
Relinguishment 	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 	[2]
No 	facts 	have 	been 	alleged 	here 	that provide 	any 	cogent
evidence 	that changes 	in control have 	happened or will happen,
which changes 	would cause 	a 	significant change 	in employee
benefits. 	It 	is merely speculation that, 	in the future, 	some
changes 	in 	those 	benefits might 	occur 	by 	an 	action of 	the JPA.
Risk 	and 	Reliability
Mo 	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.3
2In 	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."
1 1	3 Here, 	as 	in Plumas, 	if 	the 	stop-loss aspect of the
District's 	health 	insurance coverage 	were 	cancelled, 	then 	a
charge 	could 	be 	filed, 	in which 	some 	cogent 	evidence 	of 	a 	loss
in 	reliability 	and 	increased 	risk 	could 	be 	presented.

August 7, 	1987
LA-CE-2532
Page 	6
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
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-2532
Page 	7
insurers, 	thereby 	"reducing 	the 	amount 	of 	money 	available 	for
negotiations with Charging 	Party." 	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
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.

August 	7, 	1987
LA-CE-2532
Page 	8
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. 	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 might 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.
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 	unde	- 	r 	penalty 	of perjury 	by 	the 	charging party. 	The
amended 	charge 	must 	be 	served 	on 	the 	respondent 	and 	the

August 	7, 	1987
LA-CE-2532
Page 	9
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