Saddleback Community College District (PERB 0678E)

STATE 	OF 	CALIFORNIA
DECISION OF 	THE
PUBLIC 	EMPLOYMENT 	RELATIONS 	BOARD
SADDLEBACK 	COMMUNITY 	COLLEGE
DISTRICT 	FACULTY ASSOCIATION,
Charging 	Party,
v.
SADDLEBACK 	COMMUNITY 	COLLEGE
DISTRICT,
Respondent.
Case No. 	LA-CE-2511
PERB Decision No. 	678
June 10, 1988
Appearances: 	Robert E. 	Lindquist, 	Attorney, 	California Teachers
Association, 	for 	Saddleback 	Community 	College 	District 	Faculty
Association; 	Parker 	& 	Covert by Spencer 	E. 	Covert 	for 	Saddleback
Community 	College 	District.
Before Hesse, 	Chairperson; 	Porter and Shank, 	Members.
DECISION
HESSE, 	Chairperson: 	Charging party, 	Saddleback Community
College 	District 	Faculty Association, 	appeals 	the 	Public
Employment 	Relations 	Board 	(Board) 	agent's 	partial 	dismissal,
attached hereto, 	of 	its 	charge 	alleging 	that 	respondent,
Saddleback 	Community College 	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________ )

Specifically, 	charging party appeals 	the 	dismissal 	of
paragraphs 10, 	11, 	17, 	and 18 of 	its amended charge which,
inter alia, 	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.
(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.
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 	and which 	is
33

alleged 	to have had 	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 	complaint 	already 	issued be 	amended 	to 	include
this 	allegation.
The 	issues 	raised by 	the 	respondent 	on 	appeal 	are 	disputed
and 	are 	thus 	appropriate 	for 	an 	evidentiary hearing.
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.
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) 736-3127
October 	15, 	1987
Robert Lindquist, Attorney
California 	Teachers 	Association
Post Office Box 9 2888
Los Angeles, 	CA 	90009
Re: 	LA-CE-2511, 	Saddleback 	Community College District Faculty
Association v. 	Saddleback 	Community College 	District
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
Saddleback 	Community 	College 	D i s t r i c t 	Faculty Association
(Association) 	alleges 	that 	the 	Saddleback 	Community 	College
D i s t r i c t 	(District) 	made 	a unilateral 	change 	in 	health
insurance 	benefits 	by 	joining 	the 	Orange 	County 	Fringe Benefits
Joint Powers Authority 	(JPA or Authority). 	This 	action was
alleged 	to 	be 	a 	violation 	of Educational Employment 	Relations
Act 	(EERA) 	sections 	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 	state 	a prima 	facie
case. 	You 	were 	advised 	that 	if 	there 	were 	any 	factual
inaccuracies 	or 	additional 	facts 	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 	state 	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 violations of 	EERA 	sections 	3543.5 	( a ) , 	(b),
(c) , and (d).
For 	the 	reasons 	which 	follow, 	the 	following 	allegations 	of 	the
amended charge w i l l be dismissed: 	Paragraphs 10, 	11, 	17, 	and
18. 	The 	allegations 	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 	unilateral 	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 	reliable 	insurer.
PARAGRAPHS 	10 AND 11;
Paragraph 	10 (a) 	- Compensation 	in 	the 	form of health 	and
welfare 	benefits:
The 	c o l l e c t i v e 	bargaining 	agreement 	provided 	for 	1986-87 	that

October 	15, 	1987
Partial 	Dismissal of 	UPC
LA-CE-2511
Page 	2
the 	District 	would 	provide 	employees 	with 	fully paid 	health
insurance 	for 	themselves 	and 	their dependents. 	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 	€
(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 	obligatio	- 	n
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 	insurance; 	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
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,
1The 	discussion 	in this paragraph assumes, 	based on the
language 	of 	the Agreement, 	that 	the 	status quo 	in health
insurance 	in 	the 	District 	is 	that 	employees 	receive 	health
insurance 	without making 	any contribution 	for 	those 	benefits.

October 15, 	1987
Partial 	Dismissal of 	UPC
IA-CE-2511
Page 	3
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 	6(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
6(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 	implement 	an 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 Unified
School District 	(1986) 	PERB Decision No. 	578, 	at page 5 of this
letter, 	infra, 	however, 	demonstrates that 	a change 	in premium
amount 	(i.e. 	, 	employer costs for health insurance) 	without
more, 	is not an unlawful unilateral change.

October 	15, 	1987
Partial 	Dismissal 	of UPC
LA-CE-2511
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 	6(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
6(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 	3-5.) 	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 	6(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 	6(6) 	of 	the

October 	15, 	1987
Partial 	Dismissal 	of 	UPC
LA-CE-2511
Page 	5
original 	charge, 	and 	for 	the 	reasons 	stated 	above 	relating 	to
the 	other 	subparagraphs 	of 	paragraph 	10 	of 	the 	amended 	charge,
this 	allegations 	is 	dismissed.
PARAGRAPH 	10(e) 	- 	Total 	Premium Amount
This 	allegation 	is 	merely 	a 	restatement of 	the 	first allegation
in paragraph 	10(b). 	For 	the 	same 	reasons 	stated herein above
under paragraph 10(b), 	it is dismissed.
PARAGRAPH 	11
This paragraph 	alleges 	that 	a 	change 	in premium 	amounts
constitutes 	a 	unilateral 	change 	on 	the 	theory that 	it 	changes
the 	amount 	employees 	must 	contribute 	for 	continued 	eligibility
in 	the 	health 	insurance plan. 	The 	alternate 	theory 	for 	how the
change 	would 	affect 	employees 	does 	not 	affect 	the 	analysis.
For 	the 	reasons 	stated herein above, the 	allegation 	in paragraph
11 	is dismissed.
In 	sum the 	allegations 	in paragraphs 	10 and 	11 do 	not 	state 	a
prima 	facie 	case 	because 	they 	assume 	that 	the District must 	act
in 	an 	unlawful manner 	in 	response 	to an 	increase 	(or 	decrease)
in contribution 	rate by 	the JPA. 	This 	is 	simply not 	so. 	In
the 	event 	the 	District were 	to 	act 	in such a manner, 	a charge
could 	then 	be 	filed, 	alleging 	an 	unlawful 	unilateral 	action 	by
the 	District, 	or 	failure 	to 	bargain 	in good 	faith at the
negotiating 	table.
The Board's decision 	in Plumas, 	supra, 	supports 	the dismissal
of 	the allegations 	in paragraphs 	10 and 11. 	In that case, 	the
Plumas 	district 	unilaterally 	moved 	from a 	health 	insurance 	plan
administered 	by Equitable 	Benefit 	Plan 	(EBP) 	to 	a 	self-funded
plan 	(up 	to a 	stop-loss amount) 	administered 	by EBP. 	The
Board's 	decision 	states 	that 	the 	Plumas district 	saved 	$100,000
in 	health 	insurance 	costs 	by 	the 	shift 	to 	the 	self-funded
plan. 	Yet 	the 	Board 	found 	no 	unlawful 	unilateral change 	in
negotiable 	terms 	of 	employment	- 	, 	based 	on that 	fact 	(and on
others articulated 	in the decision). 	Thus, 	the Board has not
found 	a mere 	insurance cost 	saving, 	without more, 	to be an
unlawful 	unilateral change. 	The 	allegations 	in paragraph 	10
rest 	squarely 	on 	the proposition 	that 	such 	a cost 	saving 	(i.e.,
change 	in 	the employer's premium costs), 	even if 	it has no
impact 	on 	the 	amount 	of 	employee contribution, 	is 	an unlawful
unilateral 	change.
During 	the 	course 	of 	our 	discussions 	about 	the 	amended charge,
you 	cited 	various 	cases 	to 	support 	the 	issuance 	of 	a 	complaint
based 	on the 	allegations 	in paragraph 10 and 	11. 	Then on

October 	15, 	1987
Partial 	Dismissal 	of 	UPC
LA-CE-2511
Page 	6
October 	7, 	you 	submitted 	a 	memorandum detailing 	your 	arguments
and 	citing 	legal 	authorities 	for 	your 	position.3 The 	gist 	of
those 	arguments, 	insofar 	as 	they 	relate 	to 	the question of 	the
cost of premiums, 	is as follows:
Under 	Grant 	Joint 	Union 	High 	School 	District
(1982) 	PERB Decision No. 	196, 	two essential
elements 	of 	a prima 	facie case of 	an
unlawful 	unilateral change 	are 	first, 	that
the 	change be 	"legally cognizable," 	and
second, 	that 	the change be made 	in a matter
within 	scope. 	In 	the 	health and welfare
benefits 	area, 	there 	are 	two types of
"legally cognizable" 	changes: 	"non-de
minimis" changes 	in benefit coverage, 	or
changes 	involving 	a 	"third party" 	to 	the
negotiations 	which 	effect 	terms 	and
conditions of employment. 	[In either 	kind
of change, 	to state a prima facie case, 	the
charging 	party 	has 	to 	state 	facts 	to 	show
that 	the 	alleged 	unilateral 	change 	would
either 	actually 	affect 	or 	have 	a 	"reasonably
foreseeable 	effect" 	on negotiable 	subjects.
The 	basis 	for 	this 	is 	found 	in Mt. 	Diablo
Education Association 	(DeFrates) 	(1984) 	PERB
Decision No. 	422 	and 	is 	reaffirmed by
Trinidad 	Union 	Elementary 	School
District/Peninsula 	Union 	School 	District
(1987) 	PERB Decision No. 	629, 	where the
Board 	stated 	that 	there 	had 	to 	be 	cogent
evidence 	that changes 	have 	occurred 	or 	will
occur.]
3Various 	ALJ 	decisions 	were 	cited 	in 	that memorandum.
Such decisions are, 	of course, 	not precedential. 	PERB
Regulation 	32215. 	Additionally, 	none 	of 	the 	cited cases 	stand
for 	the proposition that 	a change 	in the 	employer's costs 	of
providing 	health 	insurance, 	without more, 	is an unlawful
unilateral change. 	Even 	if 	any 	of 	the cited ALJ decisions
could 	be 	so 	read, 	they 	have 	been 	overruled 	by the Board's
decision 	in Plumas.
Numerous 	NLRA 	decisions 	were 	also 	cited 	for 	the proposition
that 	the 	cost 	to 	the 	employer 	of 	providing 	health 	insurance 	is
negotiable, 	and 	that 	therefore 	to change 	those costs without
negotiations 	is an unlawful 	unilateral change. 	None of 	the
cited 	cases 	stand 	for 	that proposition, 	and 	even 	if 	they did,
PERB has 	declined 	to 	follow 	such precedent, 	as demonstrated 	by
Plumas.
•'

October 	15, 	1987
Partial 	Dismissal 	of 	UPC
LA-CE-2511
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 cost
- s 	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.
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	5These 	latter 	two 	arguments 	were 	not 	raised previously.

October 	15, 	1987
Partial Dismissal 	of 	UPC
LA-CE-2511
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 	15, 	1987
Partial Dismissal 	of 	UPC
LA-CE-2511
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
SupplSuppl	y Corp	y Corp	. 	v.. NLRB 	(1944) 	321 U.S. 	678 	[14
LRRM 	581].)
t>Paragraph 	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 	15, 	1987
Partial Dismissal 	of 	UPC
LA-CE-2511
Page 	10
Consequently, 	. 	. 	. 	actions of a public
school 	employer 	which 	are 	in 	derogation
of 	the 	authority of 	the 	exclusive
representative 	are 	evidence of 	a 	refusal
to 	negotiate 	in good 	faith. 	(NLRB v.
Goodyear Aerospace Corp. 	(6th Cir. 	1974)
Evidence 	of 	bad 	faith 	includes 	undermining 	the 	ability of 	the
exclusive 	representative 	to 	act 	on 	behalf 	of 	the 	unit. 	Muroc
Unified School District 	(12/15/78) 	PERB Decision No. 	80*
Modesto City Schools 	(3/8/83) 	PERB Decision No. 	291. 	The
charge, 	as presently written, 	fails to allege actions of 	the
public 	school 	employer 	which 	are 	in derogation 	of 	the 	authority
of 	the 	exclusive 	representative.
The 	only 	facts 	alleged 	here 	are 	that 	the 	employer 	acted 	to
adopt 	the 	resolution 	to 	join 	the 	JPA, 	and 	that 	the documents
embodying 	the 	action 	are 	public 	documents 	"available 	to, 	and 	in
common 	knowledge 	among, 	members of 	the 	bargaining 	unit." 	These
facts 	are 	alleged 	to 	show 	that 	the 	District 	undermined 	the
authority 	of 	the Association. 	No cases 	have 	been cited 	to
support 	the proposition 	that 	based 	on 	facts 	such as 	these, 	a
prima facie case of 	undermining 	is 	stated. 	The allegations 	in
paragraphs 	17 	and 	18 	are 	therefore dismissed.
Right 	to 	Appeal
Pursuant 	to Public 	Employment 	Relations Board 	regulations, 	you
may 	obtain a 	review of 	this dismissal 	of 	the charge 	by 	filing
an appeal 	to 	the Board 	itself within twenty 	(20) 	calendar 	days
after 	service 	of 	this 	dismissal 	(California Administrative
Code, 	title 	8, 	section 32635(a)). 	To be timely filed, 	the
original 	and 	five copies 	of 	such appeal must 	be 	actually
received 	by 	the 	Board 	itself 	before 	the 	close 	of 	business
(5:00 p.m.), 	or sent by telegraph, certified or Express United
States 	mail postmarked 	no 	later 	than 	the 	last date 	set 	for
filing. 	Code 	of 	Civil Procedure 	section 	1013 	shall 	apply.
(See 	section 	32135.) 	The Board's address 	is:
Public 	Employment 	Relations 	Board
1031 	18th Street
Sacramento, 	CA 95814
If you 	file 	a timely appeal 	of 	the 	refusal to 	issue a
complaint, 	any 	other 	party 	may 	file 	with 	the 	Board 	an 	original
and 	five 	copies 	of 	a 	statement 	in opposition within 	twenty
calendar 	days 	following 	the date 	of 	service 	of 	the 	appeal
(section 32635(b)).

October 	15, 	1987
Partial 	Dismissal 	of 	UPC
LA-CE-2511
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
Attachment
cc: 	Spencer E. 	Covert, 	Esq.
V
Sandra Owens 	Dennison
Regional 	Attorney

. . .
STATE Of 	California 	GEORGE 	DEUKMEJIAN,
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-2511, 	Saddleback Community College 	D i s t r i c t Faculty
Association v. Saddleback Community College D i s t r i c t
Dear Mr. 	Lindquist:
In 	the 	above-referenced 	charge 	the 	Saddleback Community College
D i s t r i c t 	Faculty Association 	(Association) 	alleges 	that 	the
Saddleback Community College 	D i s t r i c t 	(District) 	made 	a
unilateral 	change 	in 	health 	insurance benefits 	by 	joining 	the
Orange 	County Fringe Benefits 	Joint Powers Authority 	(JPA or
Authority). 	This 	action 	is 	alleged 	to be 	a violation of
Educational Employment 	Relations Act 	(EERA) 	sections 3543.5
(a), (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 	Trustees 	acted 	to
join 	the JPA on January 	26, 	1987.
The 	Agreement establishing 	the JPA provides 	that 	it 	was 	formed
pursuant 	to 	Government 	Code 	sections €500 	et 	s e q . , 	to 	"jointly
provide 	for 	a 	seIf-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
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 . I . ) 	Premiums 	are 	to
be paid 	to monthly or 	tenthly 	by 	the member 	d i s t r i c t s .
The 	Association a l l e g e s 	no 	change 	in 	the 	coverage 	for 	employees
of 	the 	D i s t r i c t , 	or 	in 	the 	administration of 	the 	plan 	by 	the
action of 	joining 	the 	JPA.

August 7, 	1987
LA-CE-2511
Page 	2
Insurance 	companies 	assign 	insureds 	to 	experience 	rating 	pools 	which
are used 	as 	a partial 	basis 	for 	determining 	their 	insurance 	rates
for 	the 	upcoming 	insurance 	year. 	Larger 	employers may have 	an
experience 	rating pool 	of 	their 	own, 	and 	smaller 	districts may 	be
placed 	in 	a pool with other 	smaller 	employers. 	This district claims
that 	it 	is 100% credible, 	that 	is, 	it 	is assigned to its own
experience 	rating 	pool. 	The 	Association claims 	that 	the 	District's
experience 	rating pool 	is 	now that of 	the JPA, 	not 	the District. 	No
facts 	have 	been provided 	to 	support that 	allegation. 	The District
denies 	that 	its 	experience 	rating 	pool was changed when 	it 	joined
the 	JPA.
The 	self-insurance 	aspect 	of 	the 	JPA funding 	of 	the 	health 	insurance
benefits 	is 	limited by 	an 	aggregate 	stop-loss provision of 	120% 	of
the District's 	anticipated claims. 	There 	is 	also an 	individual
stop-loss provision of 	$50,000 per 	employee. 	(This 	is not 	recited
in the JPA Agreement or 	bylaws, 	but 	it 	is undisputed by the
Association that these 	are 	the 	stop-loss amounts.) 	This stop-loss
aspect 	of 	the 	JPA 	self-funding 	arrangement 	provides 	that 	the
District 	is fully 	insured by Blue 	Cross, 	in the aggregate 	for
amounts 	beyond 	120% 	of 	its anticipated claims 	in a year. 	The JPA's
reserves 	(from member 	district contributions) 	are established 	so 	as
to cover 	the exposure 	up to 	120% 	of 	the 	initial anticipated claims.
The 	Agreement which 	establishes 	the 	JPA provides 	that 	its members
are 	jointly 	and 	severally 	liable 	"upon 	any 	liability which 	is
otherwise 	imposed 	on any 	one 	of 	the members 	or 	upon 	the Authority
for 	injury caused 	by a 	negligent 	or 	wrongful 	act or 	omission
occurring 	in 	the performance 	of 	the Agreement." 	The Agreement
requires 	the district 	to 	remain 	in the JPA for 	3 years unless
earlier 	termination 	is 	"required 	as 	a condition of collective
bargaining." 	If 	a member 	district 	terminates 	before three years,
however, 	there will be no 	refund or 	repayment of 	its contributions
to 	the 	JPA.
The 	JPA 	is governed 	by 	a Board 	of Directors, 	with most decisions
requiring 	only 	a majority 	vote. 	Each member 	district 	has 	one 	vote
on the Board of Directors, 	regardless of 	the 	number 	of employees 	of
the 	district.
The 	collective 	bargaining 	agreement 	in 	effect at the 	time 	the
District 	acted 	to 	join 	the 	JPA provided 	in Article 	XVI 	that 	the
District 	would 	"provide 	all 	employees 	(75% 	of 	contract 	or 	greater)
and 	their 	eligible 	dependents 	with 	a 	fully paid health 	insurance
plan." 	(Article 	XVI 	section 	1.) 	The carrier 	for 	health 	insurance
at 	that 	time was Blue Cross.

August 7, 	1987
LA-CE-2511
Page 	3
The 	charge 	alleges 	that 	the 	District's 	decision 	to 	join 	the 	JPA
reduced 	or 	eliminated 	benefits 	in 	the 	following 	ways:
(1) 	The determination 	of 	premium and
benefits 	levels 	now 	has 	been placed 	within
the 	exclusive control 	of 	the JPA and, 	as a
consequence, 	Charging 	Party 	is denied the
opportunity 	to 	bargain 	the 	cost 	of 	insurance
coverage 	for 	its members;
(2) 	The JPA is a 	"self-funded" program, 	and
thus, 	is a 	less reliable 	insurer and 	less
able 	to 	perform 	than 	the 	previous 	carrier,
Blue Cross, 	and as a consequence. 	Charging
Party 	receives 	a materially 	lower 	quality of
medical 	benefits;
(3) 	The JPA, 	rather than respondent,
maintains 	all control 	over 	reserves,
interests, 	premium overpayments, 	or rebates
from 	insurers, 	thus 	reducing 	the amount of
money 	available 	for 	negotiation with
Charging 	Party;
(4) 	JPA Rules prohibit 	withdrawal 	from
membership prior 	to 	a 	three-year 	period 	of
time with full pro-rata 	refund 	rights, 	thus
reducing 	the 	amount 	of 	money 	available 	for
negotiating with Charging 	Party, 	if 	such
negotiations occur with 	in 	(sic) 	the
three-year 	membership 	period;
(5) 	Control over 	retention, 	administrative
costs, marketing costs, 	have been
transferred 	from Respondent 	to 	the 	JPA, 	thus
eliminating 	Charging 	Party's 	opportunity 	to
bargain with 	Respondent 	over 	such 	fees 	and
their 	relationships 	to 	claims
payments; 	. . . .
For 	the 	following 	reasons 	the 	charge 	does 	not 	state 	a prima
facie 	violation of 	the 	EERA.
In 	determining 	whether 	a party 	has 	violated 	section 	3543.5(c)
of EERA, 	the 	PERB utilizes either 	the 	"per 	se" 	or 	"totality of
the conduct" 	test, 	depending 	on the 	specific conduct 	involved
and 	the 	effect 	of 	such 	conduct 	on 	the 	negotiating 	process.
Stockton Unified 	School 	District 	(1980) 	PERB Decision No. 	143.

August 	7, 	1987
LA-CE-2511
Page 	4
Unilateral 	changes 	are 	considered 	"per 	se" 	violations 	if
certain criteria are met. 	Those criteria are: 	(1) 	the
employer 	implemented 	a 	change 	in policy 	concerning 	a matter
within the 	scope of 	representation, 	and 	(2) 	the 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.
The 	facts 	alleged 	in 	this 	charge 	appear 	to 	require 	dismissal
for 	the 	same 	reasons which 	the Board 	stated 	in Trinidad. 	Each
of 	the Association's alleged 	areas of 	change 	in 	insurance
benefits will 	be 	analyzed 	in 	light of 	the Board's holding 	in
Trinidad.

August 7, 	1987
LA-CE-2511
Page 5
Relinquishment 	of control
In Trinidad, the Board stated:
In sum, 	the evidence 	in the record supports
the conclusion that the Districts have
improved the ability to supply benefits at a
reduced cost to themselves. 	It is not
enough to theorize whether the JPA
arrangement could potentially cause problems
for 	its members, 	or whether the JPA resulted
in a less well-established or less reliable
carrier.5 [1]
No facts have been alleged here that provide any cogent
evidence that changes 	in control have happened or will happen,
which changes would cause a significant change 	in 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
1In 	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,	2eere, 	as in Plumas, 	if the stop-loss aspect of the
District's health insurance coverage were cancelled, 	then a
charge could be filed, 	in which some cogent evidence of a loss
in 	reliability and 	increased 	risk could be presented.

August 7, 	1987
LA-CE-2511
Page 6
make 	its contributions. 	This 	argument 	fails 	to take 	into
account 	the 	fact 	that 	the 	JPA Bylaws provide 	that 	a member
district 	that 	fails 	to make 	the 	required 	contributions 	to 	the
Authority 	may 	be 	involuntarily 	terminated 	from the 	JPA, 	thereby
eliminating 	or 	cutting 	short 	the 	time 	within 	which 	the 	other
JPA members 	would 	arguably 	be 	incurring 	liability 	for 	the
contributions 	of 	the 	defaulting 	member. 	To 	speculate 	that 	such
exposure might 	continue 	for 	a 	long 	enough period 	of 	time 	to
make 	the JPA 	funding 	a 	less 	reliable method 	than 	the 	current
method, 	is 	just that, 	speculation. 	Under Trinidad, 	more than
just 	speculation 	is 	required 	to establish a change 	to a 	less
reliable 	insurer.
Moreover, 	the 	Board 	in 	Trinidad 	implicitly overruled 	the ALJ's
determination 	that 	the 	joint 	and 	several 	liability of 	the
member 	districts 	for 	each 	other 	was 	a 	factor 	creating 	increased
risk 	and 	lack 	of 	reliability. 	In 	his decision the ALJ 	stated:
The 	terms 	of 	the NCSMIG agreement 	and
bylaws, 	in particular, 	imposed joint and
several 	liability 	on the members, 	in accord
with 	the 	statute 	governing 	joint power
relationships. 	Small employers 	in the
NCSMIG, 	including 	Trinidad, 	are now exposed
to 	potential 	financial disaster 	by 	sharing
in 	liability 	up to 	the 	stop-loss amount.
This 	differs dramatically from Plumas, 	in
which 	the 	employer's exposure 	was 	no greater
after 	the 	switch 	to 	self-funding.
(Trinidad 	Proposed Decision 	(11/7/86) 	at
p. 	38.)
The Board, 	in 	deciding 	that 	the 	JPA in Trinidad did not 	result
in 	less 	reliability or 	greater 	risk to employees, 	stated,
"There 	was 	no 	evidence 	produced 	by 	the 	Charging 	Parties 	that
the 	JPA was 	not 	reliable 	. . . . 	The 	risk 	here 	was 	limited 	by
the 	stop-loss plan as 	it was 	in Plumas." 	By these 	statements,
the 	Board 	implicitly 	rejected 	the 	ALJ's 	finding 	regarding 	the
exposure 	from joint and 	several 	liability. 	In this case, 	as 	in
Trinidad, 	Government Code 	section 	6508.1 permits 	the 	joint 	and
several liability of the member districts. 	Here, 	as 	in
Trinidad, 	the 	implication 	that 	such 	joint 	and 	several 	liability
creates 	additional 	risk and 	lack 	of 	reliability 	is 	rejected.
Control 	Over 	Reserves
The 	Association claims 	that 	the 	JPA now has 	control 	over
reserves, 	interests, 	premium overpayments, 	or rebates from

August 7, 	1987
LA-CE-2511
Page 	7
insurers, 	thereby 	"reducing 	the 	amount 	of money 	available 	for
negotiations 	with 	Charging 	Party." 	The 	District claims 	that
these 	are matters 	within 	the 	control 	of 	the 	insurers, 	not 	the
District, 	and 	that 	the Association 	has 	never 	had 	the 	right
under 	the 	EERA to 	negotiate 	with 	the 	District over 	these moneys.
Even 	if 	one 	assumes 	that 	the 	District did 	shift control over
these matters 	to the JPA, 	however, 	there are no facts alleged
here 	to 	show how 	this 	alleged change 	in control 	impacts on
services or 	benefits. 	Without such facts, 	a prima 	facie case
cannot 	be 	stated.
Claims 	experience 	pool
The 	Association 	has 	not provided 	any 	evidence 	that 	would
demonstrate 	that 	the District has 	had a change 	in 	its
experience 	rating 	pool 	as 	a 	result 	of 	joining 	the 	JPA for
self-funding 	of 	health 	insurance.
Even 	if 	there 	had 	been 	a change 	in experience 	rating pool by
the 	joining 	of 	the 	JPA, 	that 	fact 	alone 	would not constitute a
unilateral 	action 	by 	the District. 	The 	setting 	of 	experience
rating pools 	is 	an action of 	insurers, 	not of 	the 	insured.
Under 	the Board's holding 	in Trinidad, 	arguably, 	if a district
action caused 	the 	insurer 	to 	evaluate 	its placement of 	the
District 	in one 	or 	another 	experience 	rating pool, 	and that had
an 	impact on the 	level or 	quality of employee benefits, 	there
could 	be a basis 	for 	finding 	a prima 	facie 	(c) 	violation. 	This
case does not present such a 	scenario, 	however. 	There are
simply 	no 	facts 	alleged 	to 	show how a change 	in experience
rating pool 	would 	have 	any 	impact 	on 	the 	level 	or quality 	of
employee 	benefits.
Prohibition 	against 	withdrawal prior 	to 	three years
The 	JPA agreement 	does 	provide 	that member 	districts 	can
withdraw 	from membership prior 	to 	the 	initial 	three-year 	period
if 	that 	is 	required as 	a condition of collective bargaining.
(JPA Agreement, 	section 8 ) . 	In the event of a voluntary
withdrawal prior 	to the three-year period, 	however, 	the Bylaws
provide 	that 	there 	will be 	no 	refund 	or 	repayment 	to 	the
withdrawing member 	(Bylaws Article VII, 	Section B.) 	From these
provisions 	the 	Association 	deduces 	that 	the 	amount 	of 	money
available 	for 	negotiating 	with 	Charging 	Party will 	be 	reduced

August 7, 	1987
LA-CE-2511
Page 8
if the negotiations occur within the three-year period. 	This
is alleged 	to be one of the ways 	in which the District has
changed the benefits of employees. 	Even assuming 	the
Association's deduction to be valid, 	there are no facts alleged
that show that 	the three-year 	membership without 	full pro-rata
refund would materially change employee benefits. 	Under 	the
Board's decision in Trinidad, 	facts must be stated to show such
a material change 	in benefits by the JPA provision regarding
three-year 	membership without 	refund.
Control over 	retention, 	administrative costs and marketing
costs.
The Association also alleges that employee benefits have been
reduced or eliminated by the transfer of control over
retention, 	administrative costs and marketing costs from the
District to the JPA. 	It is not clear from the facts alleged
that the District ever 	had control over 	retention,
administrative costs, 	or marketing costs in order to transfer
such control to the JPA. 	The District denies that it ever had
such control. 	Assuming, 	however, 	that the District did
transfer control over these 	items to the JPA, 	the issue at this
level of 	inquiry 	is whether that fact would arguably
demonstrate an impact on employee benefits. 	At most, 	this
transfer of control could result 	in higher or lower costs to
the District 	for employee benefits. 	A change 	in costs to the
employer, 	does not, however, 	necessarily imply a change in
employee benefits. 	As 	in so many of the other areas of this
charge, 	the Association theorizes about what night 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.

August 7, 	1987
LA-CE-2511
Page 9
The 	amended charge 	should 	be prepared on a standard PERB unfair
practice
contain al
signed unde
amended charg
-charge 	form clearly 	labeled First Amended Charge,
l the facts and allegations you wish to make, 	and be
r penalty of perjury by the charging party. 	The
e 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