State of California (Department of Personnel Administration) (PERB 0706S)

STATE 	OF 	CALIFORNIA
DECISION 	OF 	THE
PUBLIC 	EMPLOYMENT 	RELATIONS 	BOARD
CALIFORNIA 	STATE 	EMPLOYEES'
ASSOCIATION, 	SEIU, 	Local 	1000,
Charging 	Party,
v.
STATE OF CALIFORNIA, 	DEPARTMENT
OF 	PERSONNEL ADMINISTRATION,
Respondent.
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Case No. 	S-CE-371-S
PERB 	Decision No. 	706-S
December 16, 	1988
Appearances: 	George Karrer, 	Administrator, 	for the California
State Employees' 	Association.
Before Hesse, 	Chairperson; 	Porter, 	Craib and Shank, 	Members.
DECISION
SHANK, 	Member: 	This 	case is before the Public Employment
Relations 	Board 	(Board) 	on appeal 	by the California 	State
Employees' 	Association 	(CSEA) 	of the Board agent's dismissal 	of
an 	amended 	charge which 	alleges 	that 	the 	Governor 	failed 	to 	"meet
and 	confer 	in good 	faith" 	in violation of 	section 	3517 	of 	the
Ralph C. 	Dills Act 	(Act)1 before 	submitting his proposed budget
The 	Ralph C. 	Dills Act 	is 	codified at Government Code
section 	3512 	et 	seq. 	Section 	3517 	states:
The Governor, 	or his representative as may be
properly designated by law, 	shall meet 	and
confer in good faith regarding wages, 	hours,
and other terms 	and 	conditions 	of employment
with 	representatives 	of 	recognized 	employee
organizations, 	and 	shall 	consider 	fully 	such
presentations 	as 	are made by the 	employee
organization on behalf 	of 	its 	members 	prior
to 	arriving at 	a determination of policy or
course 	of action.
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for the 	fiscal year 	1988-89 pursuant to article 	IV, 	section 	12(a)
of 	the 	California Constitution.2 It 	is 	also 	alleged that 	a
violation of 	section 3523(a)3 of the Act, 	which mandates 	the
"Meet and 	confer 	in 	good 	faith" 	means 	that
the Governor or 	such representatives 	as 	the
Governor may designate, 	and representatives
of recognized employee organizations, 	shall
have 	the mutual 	obligation personally 	to 	meet
and 	confer promptly 	upon 	request 	by 	either
party 	and 	continue 	for 	a 	reasonable 	period of
time 	in order 	to exchange 	freely information,
opinions, 	and proposals, 	and to endeavor to
reach 	agreement 	on matters within the 	scope
of 	representation prior 	to 	the 	adoption by
the 	state 	of 	its 	final budget 	for the 	ensuing
year. 	The process 	should include adequate
time 	for the resolution of 	impasses.
2Article 	IV, 	section 	12(a) 	of the California Constitution
states:
Within the 	first 	10 	days 	of 	each calendar
year, 	the Governor 	shall 	submit to the
Legislature, 	with an explanatory message, 	a
budget 	for the 	ensuing 	fiscal 	year 	containing
itemized 	statements 	for 	recommended 	state
expenditures 	and 	estimated 	state 	revenues.
If 	recommended 	expenditures 	exceed 	estimated
revenues, 	the Governor 	shall recommend the
sources 	from which 	the 	additional 	revenues
should be 	provided.
3Government Code 	section 3523(a) 	states:
All 	initial meet 	and 	confer proposals 	of
recognized employee 	organizations 	shall 	be
presented to the 	employer 	at 	a public
meeting, 	and 	such proposals 	thereafter 	shall
be 	a public record.
All 	initial meet 	and 	confer proposals 	or
counterproposals 	of 	the 	employer 	shall 	be
presented 	to 	the 	recognized 	employee
organization at a public meeting, 	and 	such
proposals 	or 	counterproposals 	thereafter
shall 	be a public 	record.
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Governor 	to 	provide 	the 	recognized 	employee 	organization 	(CSEA)
with 	all 	initial 	meet 	and 	confer proposals 	regarding 	salary
increases 	at a public meeting. 	Such 	failures 	to act 	allegedly
constitute violations of section 3519(a), 	(b), 	and 	(c) 	of the
Act.4
Having reviewed the 	entire record, 	we 	affirm the 	dismissal
of the 	charge 	for 	the reasons 	set 	forth below.
On January 28, 	1988, 	CSEA filed the 	charge alleging that the
State 	of California, 	Department of 	Personnel Administration
violated sections 3517, 	3523, and 3519(a), 	(b), 	and (c) of the
Act by the 	Governor's 	submission of 	the 	1988-89 	fiscal 	year
budget to the Legislature. 	The gravamen of CSEA's 	charge 	is 	that
the Governor was 	obligated, 	pursuant to the Act, 	to meet and
confer with CSEA and to 	consider 	CSEA's 	positions 	prior 	to 	the
submission of the budget proposal 	to the 	Legislature. 	In 	support
of 	the 	claim 	that 	the 	Governor 	unlawfully 	arrived 	at 	a
4Government Code section 3519(a), 	(b), and (c) 	state;
It 	shall be unlawful 	for the 	state to:
(a) 	Impose or threaten to 	impose reprisals
on employees, 	to discriminate or threaten to
discriminate against employees, 	or otherwise
to interfere with, 	restrain, 	or coerce
employees 	because 	of 	their 	exercise 	of rights
guaranteed by 	this 	chapter.
(b) 	Deny to employee 	organizations 	rights
guaranteed to 	them by this 	chapter.
(c) 	Refuse or 	fail 	to meet and confer 	in
good 	faith with 	a 	recognized 	employee
organization.
W	
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determination of 	policy or 	course 	of 	action, 	CSEA attached 	a 	copy
of 	section 	9800 	of 	the 	1988-89 proposed budget, 	an augmentation
for 	employee 	compensation. 	Section 	9800 	stated 	in part, 	" . . .
the 	budget proposes 	a 	general 	compensation 	increase 	up to 	four
percent 	(4%) 	commencing January 	1, 	1989, 	with that increase
supplemented by 	an 	additional 	75.2 	million 	for 	benefit 	and 	other
compensation adjustments 	as may be 	agreed upon."
The Board agent, 	by letter dated March 3, 	1988, 	replied to
CSEA's 	initial 	charge 	of 	the 	state's 	failure 	to meet 	and 	confer
in this 	fashion:
At the time of the budget's 	submission, 	CSEA
had not 	presented 	any proposals 	or 	any 	other
type 	of 	information 	for 	the 	State 	to
consider.
On March 	18, 	1988, 	CSEA filed a first amended charge, 	which
stated 	in part:
In the 	past when the 	Governor's 	proposal 	has
included reference 	to 	a 	specific 	percentage
increase and/or effective date, 	the 	state has
consistently 	bargained 	economic 	issues 	using
the 	Governor's 	proposal 	as 	a 	ceiling and has
consistently refused to 	agree 	to 	an 	effective
date 	other 	than 	that proposed 	by 	the
Governor. . . .
Further, 	CSEA was 	given no prior notice 	of
the 	fact 	that 	the 	Governor's 	proposal would
contain a 	specific 	percentage 	increase 	for
employee 	compensation or 	a 	specific 	effective
date. 	Therefore, 	CSEA could not have
requested 	to meet 	and 	confer 	prior 	to 	the
public 	announcement 	of 	the 	Governor's
proposal. 	Subsequent to the public
announcement of 	the Governor's 	proposals 	a
request 	to meet 	and 	confer with the 	Governor
would have 	been 	futile 	because 	the 	policy 	or
course 	of 	action had been publicly determined
and because 	the 	deadline 	for 	the 	proposal 	is
constitutionally 	set.
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CSEA 	could not 	have 	requested 	to 	meet 	and
confer 	on 	the 	budget proposal 	in 	connection
with 	the 	negotiation 	on 	the 	successor
collective 	bargaining 	agreement 	because 	those
negotiations were 	not 	scheduled by the 	State,
pursuant to Section 3 523, 	until January 21,
1988 	and thereafter.
The 	Board 	agent replied 	to 	the 	first 	amended 	charge 	on
March 22, 	1988, 	by stating that Constitution article 	IV, 	section
12, 	provides 	adequate notice 	of the Governor's responsibility and
the timetable within which to 	submit the budget. 	Therefore, 	CSEA
had the 	opportunity to request 	to meet and confer, 	and had 	failed
to do 	so before 	submission of the budget. 	Furthermore, 	CSEA
presented no persuasive 	argument 	to 	support 	its 	assumption 	that
the 	proposed budget 	constitutes 	the 	state's 	initial 	meet 	and
confer proposal. 	Nor does 	section 	3517 	or 	3523 	of 	the Act 	give
the 	state 	employer the 	sole right 	to 	establish dates 	upon which
to present meet and confer proposals. 	The 	charge was 	then
dismissed.
CSEA'S 	POSITION
CSEA contends 	that 	section 	3517 	of 	the Act 	imposes 	an
affirmative 	obligation on the 	Governor 	or his 	representative 	to
meet 	and 	confer prior to arriving at 	a policy or 	course 	of
action. 	Further, 	the limitation of a general 	compensation
increase of up to 	four percent commencing January 	1, 	1989, 	and a
supplemental 	$75.2 	million for benefits 	is 	a unilateral
implementation 	of 	a 	term 	and 	condition of 	employment without
meeting and 	conferring 	in violation of 	the Act.
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ISSUE
The 	issue 	is whether 	the 	Governor's 	compliance with the
constitutional mandate of article 	IV, 	section 	12 	in submitting a
fiscal 	year budget 	constitutes 	a unilateral 	implementation 	of 	a
negotiable 	item under the Act.
DISCUSSION
The 	Board agent's 	dismissal 	is 	based upon the 	fact 	that 	CSEA
made 	no 	demand upon 	the 	Governor 	to negotiate 	prior 	to 	the
submission of his proposed budget. 	We do not agree with the
Board agent's 	reasoning. 	We 	dismiss 	the 	charge 	on the 	ground
that 	the 	Governor's 	proposed budget 	is 	not 	a matter 	for
negotiation, 	but is 	instead the performance of a 	constitutionally
imposed duty. 	The Governor acts 	as 	an essential 	participant 	in
the 	legislative process, 	whereby the 	state remains 	solvent 	and
operating. 	The 	Governor has 	the 	constitutional 	responsibility to
assess 	the 	financial 	needs 	of 	state 	government and estimate
potential 	income 	and expenditures 	and provide 	a 	fiscal 	plan 	to
the 	Legislature which will 	culminate 	in the adoption of 	a 	fiscal
budget, 	effective the first day of the next fiscal year. 	In
doing 	so, 	he acts 	in a legislative 	capacity as part of the
legislative process which 	is 	separate 	and apart 	from his
responsibilities 	as 	the 	chief 	executive 	and employer 	of 	state
employees.
In the 	case of Veterans 	of Foreign Wars v. 	State of
California 	(1974) 	36 Cal.App.3rd 688 	[111 Cal.Rptr. 	750], 	the
court 	considered 	the 	legality 	of 	a 	diversion 	of 	money 	from 	the
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Veteran's 	Farm 	and House 	Building 	Fund 	and 	found 	it 	to 	be
illegal. 	In determining the 	capacity in which the named
defendants, 	including the Governor, 	had acted in making the
diversion, 	the court stated at page 	697:
The Governor, 	moreover, 	acts in a legislative
capacity 	in 	submitting 	the 	annual 	budget 	bill
to 	the 	Legislature 	and 	in approving 	it 	after
its adoption. 	(Cal. 	Const., 	art. 	IV,
sections 10, 	12; 	see Jenkins v. 	Knight 46
Cal.2nd 220, 	223 	[293 P.2nd 6] 	Lukens v. 	Nye,
156 Cal. 	498, 	501-503 	[105 P. 	593].)
Here, 	the question is whether the Act places 	a duty on the
Governor 	to meet 	and 	confer 	and 	sunshine 	his 	economic 	proposals
for 	state 	employees 	prior 	to 	complying with article 	IV, 	section
12 	of 	the Constitution. 	We 	conclude that no 	such duty 	can be
imposed when 	the 	Governor 	is 	acting 	in a 	legislative 	capacity 	in
submitting 	a 	fiscal 	plan to 	the 	Legislature pursuant 	to
constitutionally 	mandated 	process 	designed 	to 	keep 	the 	state
solvent 	and 	operating.
ORDER
For the 	foregoing reason, 	we hereby DISMISS 	the 	charge 	in
Case No. 	S-CE-371-S.
Chairperson 	Hesse 	and Member 	Porter 	joined 	in 	this 	Decision.
Member 	Craib's 	concurrence begins 	on page 	8.
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Member Craib, 	concurring: 	I 	concur with the result reached
in the 	lead opinion, 	however, 	I 	find it necessary to briefly
clarify the 	Board's 	holding. 	The 	potential 	for 	confusion arises
from the rejection, 	without 	sufficient explanation, 	of the Board
agent's 	reliance 	on CSEA's 	failure 	to demand bargaining.
My 	colleagues 	have 	correctly perceived CSEA's 	charge 	as
alleging 	that 	the 	Governor 	has 	an affirmative 	duty 	to 	bargain
prior to 	submitting the proposed budget. 	In CSEA's 	view, 	such
action 	constitutes 	a unilateral 	change 	in policy which would be
unlawful 	regardless 	of whether there was 	an earlier demand 	to
bargain. 	As my colleagues point out, 	the 	submission of the
proposed budget 	is 	constitutionally mandated 	and 	cannot 	itself
constitute 	a violation of 	the 	Governor's 	statutory duty to
negotiate pursuant to the Ralph C. 	Dills Act.
While 	the 	same 	conclusion was 	implicit 	in the 	Board 	agent's
analysis, 	it was not given the emphasis 	it deserved. 	Instead,
the 	Board 	agent 	focused 	on 	an alternative reading of 	the 	charge,
i.e., 	one 	addressing the 	Governor's 	actual 	bargaining conduct
during 	the 	period preceding the 	submission of 	the 	proposed
budget. 	Had that in fact been the 	focus 	of CSEA's 	charge, 	the
Board agent's 	reliance 	on the 	failure 	of 	CSEA to demand
bargaining during that period would have 	been 	correct. 	While
CSEA 	could have 	attempted 	to negotiate with the 	Governor 	prior 	to
the 	submission of the proposed budget, 	perhaps with the hope 	of
affecting the 	content of 	the proposed budget, 	CSEA would have 	had
the 	obligation 	to 	demand 	bargaining 	during 	that 	period 	and 	could
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not 	later 	complain of 	a 	lack of negotiations 	in the 	absence 	of
such a demand.1
1It is 	important to note 	that, 	though the Governor's
bargaining 	conduct 	during 	the 	period 	preceding 	submission 	of 	the
proposed budget 	obviously would be 	subject 	to 	the 	good 	faith
requirements of the Dills Act, 	the 	submission of the budget
itself, 	since it is a constitutionally required act, 	could not
evidence 	bad 	faith nor be 	the 	subject 	of 	a 	remedy 	ordered by 	this
Board.
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