Savanna School District (PERB 0671E)

STATE 	OF CALIFORNIA
DECISION OF 	THE
PUBLIC 	EMPLOYMENT 	RELATIONS 	BOARD
SAVANNA 	DISTRICT 	TEACHERS
ASSOCIATION,
Charging 	Party,
v.
SAVANNA 	SCHOOL 	DISTRICT,
Respondent.
Case No. 	LA-CE-2527
PERB Decision No. 	671
June 7, 1988
Appearance; 	Robert E. 	Lindquist, 	Attorney, 	California Teachers
Association, 	for 	Savanna 	School 	Teachers 	Association.
Before Hesse, 	Chairperson; 	Porter and Shank, 	Members.
DECISION
HESSE, 	Chairperson: 	Charging party, 	Savanna District
Teachers 	Association, 	appeals 	the 	Public 	Employment 	Relations
Board 	(Board) 	agent's partial dismissal, 	attached hereto, 	of
its 	charge alleging that 	respondent, 	Savanna 	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:
)
)
)
)
)
)
)
)
l_____________ )

(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) 736-3127
October 	16, 	1987
Robert 	Lindquist, 	Attorney
California 	Teachers 	Association
Post 	Office 	Box 	92888
Los Angeles, 	CA 	90009
Re: 	LA-CE-2527, 	Savanna 	D i s t r i c t Teachers 	Association 	v.
Savanna 	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
Savanna 	D i s t r i c t 	Teachers 	Association 	(Association) 	a l l e g e d
that 	the 	Savanna 	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 	J o i n t 	Powers Authority 	(JPA 	or
Authority). 	This 	action 	was 	a l l e g e d 	to be 	a v i o l a t i o n of
Educational 	Employment 	Relations Act 	(SERA) 	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
c a s e . 	You 	were 	advised 	that 	if 	there 	were 	any 	factual
inaccuracies 	or 	additional 	f a c t s 	which 	would 	correct 	the
d e f i c i e n c i e s 	explained 	in 	that 	l e t t e r , 	you 	should 	amend 	the
charge 	accordingly. 	You 	were 	a l s o 	invited 	to 	submit 	any 	l e g a l
argument. 	You 	were 	further 	advised 	that 	unless 	you 	amended 	the
charge 	to 	s t a t e 	a 	prima 	f a c i e 	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, 	a l l e g i n g 	v i o l a t i o n s 	of 	EERA 	s e c t i o n s 	3543.5 	( a ) , 	( b ) ,
( c ) , and (d).
For 	the 	reasons 	which 	follow, 	the 	following 	a l l e g a t i o n s 	of 	the
amended 	charge w i l l be 	dismissed: 	Paragraphs 	10, 	11, 	17, 	and
18. 	The 	a l l e g a t i o n s 	in 	paragraphs 	15 	and 	16 	have 	been
withdrawn. 	Under 	separate 	cover 	today 	a 	complaint 	has 	issued
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

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 	16 f 	1987
PARTIAL 	DISMISSAL OF 	UPC
LA-CE-2527
Page 	2
This 	allegation merely 	restates 	the 	allegation 	in paragraph 	8
(1) 	and 	(5) 	of 	the original charge. 	The allegation, 	as made 	in
the 	amended charge 	and 	the 	original charge, 	is that 	the JPA,
rather 	than 	the 	District 	sets 	the 	cost 	assessment 	for 	health
and 	welfare 	benefits 	and 	therefore, 	the 	District 	will 	no 	longer
negotiate 	with 	the 	Association 	about 	the 	amount 	of 	compensation
to 	be 	provided 	for 	members 	of 	the 	bargaining 	unit 	in the 	form
of 	health 	and 	welfare 	benefits.
The 	JPA does 	set 	the 	contribution 	rate 	for 	the District 	to
receive 	health 	insurance coverage 	through 	the 	JPA. 	It does 	not
necessarily 	follow, 	however, 	that 	the 	District must 	then pass
en 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-2527
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 	change	- 	d 	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 	8(1) 	and 	(5) 	of 	the original
charge, 	the 	allegation 	in paragraph 	10(a) 	of 	the amended charge
is dismissed.
PARAGRAPH 	10(b) 	- 	Premium 	Price 	and 	Plan Duration2
This 	allegation 	is 	also 	similar 	to 	those 	contained 	in paragraph
8(1) 	and 	(5) 	of 	the original charge. 	It adds the element of
the 	duration of 	the 	health 	insurance plan, 	but other 	than 	that
addition, 	it merely 	applies 	the 	same 	logic 	and 	requires 	the
same 	level of 	speculation 	about 	how the 	District will 	respond
to 	a change 	in the 	contribution 	rate 	by the JPA, 	as noted 	above
under Paragraph 10(a).
Nor 	does 	the 	fact 	that 	JPA can 	change 	the premium cost 	at 	any
time, 	or 	even adjust 	it 	retroactively, 	change 	the 	fact 	that 	the
District 	is not 	required 	to 	remain 	in the JPA, 	nor 	is 	it
required 	to 	unilaterally 	change 	employee 	contribution 	for
health 	insurance 	even 	if 	the 	JPA does change 	the 	District's
contribution 	rate 	to 	the 	JPA.
You 	argue 	in your 	October 	7, 	1987 	letter 	that 	joining 	the 	JPA
has 	resulted 	in 	actual 	changes 	in 	insurance plan duration, 	and
that 	other 	changes 	are 	reasonably 	foreseeable 	as 	a 	result 	of
that 	action. 	Insofar 	as 	the 	alleged 	actual and 	reasonably
foreseeable changes 	relate 	to the 	cost of 	insurance, 	or 	other
costs 	to 	the 	employer 	(whether 	during 	or 	after 	membership 	in
the 	JPA), 	they do 	not 	form 	an adequate 	basis 	for 	a prima 	facie
unilateral 	change 	case 	for 	the 	reasons 	stated at p. 	4 	of 	this
letter, 	supra. 	Insofar 	as the 	allegations 	in paragraph 	10(b)
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-2527
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 	Pluma
Trinidad 	- s 	and
, 	supra. 	In 	those 	cases 	the 	Board 	held 	that
self-funding 	of 	enployee 	insurance 	(whether 	directly 	or 	through
a JPA) 	is 	not, 	without wore, 	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 8(1) 	and 	(5) 	of the original charge,
the 	allegation 	in paragraph 	10(b) 	is dismissed.
PARAGRAPH 	10(c) 	- 	Penalty 	for 	Change 	in 	Insurer
This 	allegation 	is 	similar 	to 	the 	one contained 	in paragraph
8(4) 	of 	the original charge. 	It alleges that as a 	result of
joining 	the 	JPA various disincentives or 	penalties 	exist 	to
bargaining 	a change 	in 	the 	insurer. 	You urge 	that 	these
potential 	cost 	items 	are 	such 	as 	to 	"increase 	the 	cost 	to 	the
Union 	for, 	or place 	significant constraints on, 	bargaining 	any
change 	in 	health or 	welfare 	benefits which entails 	a change 	in
insurer." 	(Amended 	Charge page 	8, 	lines 	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 predeterminor, 	of 	the
District's 	future 	bargaining 	behavior.
PARAGRAPH 	10(d) 	- Basis 	for 	Determining 	Increases 	in Premium
Price
This 	allegation 	is 	essentially 	the 	same 	as that made 	in
paragraph 	8(6) 	of 	the 	original charge, 	with the 	addition of
specifying 	the 	factors 	listed 	in 	the 	JPA Bylaws 	for 	determining
contribution 	rates. 	For 	the 	reasons 	stated 	in my
August 	7, 	1987 	letter 	relating 	to paragraph 	8(6) 	of 	the

October 	16, 	1987
PARTIAL 	DISMISSAL 	OF 	UPC
LA-CE-2527
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 hereinabove
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 	hereinabove, 	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 Unified School District 	(1986),
PERB Decision Ho. 	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
LA-CE-2527
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 natter
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 	16, 	1987
PARTIAL DISMISSAL OF 	UPC
LA-CE-2527
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 hereinabove, 	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.
5These	5These 	latter 	two 	arguments 	were 	not 	raised 	previously.

October 	16, 	1987
PARTIAL 	DISMISSAL 	OF 	UPC
LA-CE-2527
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 	16, 	1987
PARTIAL DISMISSAL OF 	UPC
LA-CE-2527
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
Suppl	Supply	y 	Corp	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 	16, 	1987
PARTIAL 	DISMISSAL 	OF 	UPC
LA-CE-2527
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 	undemanding 	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 	16, 	1987
PARTIAL 	DISMISSAL 	OF 	UPC
LA-CE-2527
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
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-2527, 	Savanna 	D i s t r i c t Teachers 	Association
v. 	Savanna 	School 	D i s t r i c t
Dear 	Mr. 	Lindquist:
In 	the 	above-referenced 	charge 	the 	Savanna 	D i s t r i c t Teachers
Association 	(Association) 	a l l e g e s 	that 	the 	Savanna 	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 ) .
My 	investigation of 	the 	charge 	revealed 	the 	following
information.
The 	JPA was 	formed on January 	1, 	1987, 	by 	eight public
educational 	agencies. 	The 	D i s t r i c t 	Board 	of 	Education 	acted 	to
join 	the 	JPA on February 	10, 	1987.
The 	Agreement 	establishing 	the 	JPA 	provides 	that 	it was 	formed
pursuant 	to 	Government 	Code 	sections €500 	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 	l e g a l 	e n t i t y , 	and 	in
accord 	with 	A r t i c l e 	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
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, 	Article 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 .
There 	was 	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-2527
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. 	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 claims 	that 	it never 	was assigned 	its own
experience 	rating pool 	by 	the 	insurer.
The 	self-insurance 	aspect 	of 	the 	JPA 	funding 	of 	the 	health 	insurance
benefits 	is 	limited 	by an aggregate 	stop-loss provision of 	120% 	of
the District's anticipated claims. 	There 	is also an 	individual
stop-loss 	provision of $50,000 per 	employee. 	(This 	is 	not 	recited
in the JPA Agreement or bylaws, 	but 	it 	is undisputed by the
Association 	that 	these 	are 	the 	stop-loss 	amounts.) 	This 	stop-loss
aspect 	of 	the 	JPA self-funding 	arrangement 	provides 	that 	the
District 	is fully 	insured by Blue Shield, 	in 	the aggregate 	for
amounts beyond 	120% 	of 	its anticipated claims 	in a year. 	The 	JPA's
reserves 	(from member 	district contributions) 	are 	established 	so 	as
to cover 	the exposure 	up to 	120% 	of 	the 	initial 	anticipated claims.
The 	Agreement 	which 	establishes 	the 	JPA provides 	that 	its 	members
are 	jointly 	and 	severally 	liable 	"upon 	any 	liability which 	is
otherwise 	imposed on any one 	of 	the members 	or 	upon the Authority
for 	injury caused 	by 	a 	negligent 	or 	wrongful act 	or 	omission
occurring 	in the performance 	of 	the 	Agreement." 	The Agreement
requires 	the district 	to 	remain 	in the JPA for 	3 years unless
earlier 	termination 	is 	"required 	as 	a condition of 	collective
bargaining." 	If 	a member district 	terminates 	before 	three years,
however, 	there will 	be 	no 	refund or 	repayment of 	its contributions
to the JPA.
The JPA 	is governed by a Board 	of Directors, 	with most decisions
requiring 	only 	a majority vote. 	Each member 	district has 	one 	vote
on the Board 	of Directors, 	regardless of 	the 	number 	of 	employees 	of
the district.
The collective 	bargaining 	agreement 	in effect 	at 	the 	time 	the
District 	acted 	to 	join 	the JPA provided 	in Article VIII 	that 	the
District 	would 	pay 	up 	to 	the 	specified 	annual 	dollar 	amounts 	for
Blue 	Cross 	for 	each unit member 	(working 	four 	hours or more) 	and
their 	dependents.
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

August 	7, 	1987
LA-CE-2527
Page 	3
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.
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.

August 7, 	1987
LA-CE-2527
Page 	4
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.
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

August 7, 	1987
LA-CE-2527
Page 	5
arrangement 	could 	potentially 	cause 	problems
for 	its members, 	or whether 	the JPA resulted
in 	a 	less well-established 	or 	less 	reliable
carrier. 5 [1]
No 	facts 	have 	been 	alleged 	here 	that 	provide 	any cogent
evidence 	that changes 	in control 	have 	happened 	or 	will happen,
which changes 	would cause 	a 	significant change 	in employee
benefits. 	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
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.
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-2527
Page 	6
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
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.

August 7, 	1987
LA-CE-2527
Page 	7
Claims experience 	pool
The 	Association 	has 	not provided 	any 	evidence 	that would
demonstrate 	that 	the 	District 	has 	had 	a change 	in 	its
experience 	rating pool 	as 	a 	result 	of 	joining 	the JPA for
self-funding 	of 	health 	insurance. 	The 	District 	states 	that
both prior 	to 	and 	after 	joining 	the 	JPA the 	District 	has 	never
had 	its own experience pool.
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 	here 	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.
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

August 7, 	1987
LA-CE-2527
Page 	8
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 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 	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