State of California (Department of Forestry and Fire Protection) (PERB 0999S)

STATE 	OF 	CALIFORNIA
DECISION OF 	THE
PUBLIC 	EMPLOYMENT 	RELATIONS 	BOARD
INTERNATIONAL UNION OF OPERATING
ENGINEERS, 	CRAFT-MAINTENANCE
DIVISION, 	UNIT 12,
Charging 	Party,
v.
STATE OF CALIFORNIA 	(DEPARTMENT
OF FORESTRY AND FIRE PROTECTION),
Respondent.
)
)
)
)
) 	Case No. 	SF-CE-100-S
PERB Decision No. 	999-S
June 22, 	1993
)
)
)
)
)
)
)
Appearances: 	Van Bourg, 	Weinberg, 	Roger & Rosenfeld by Stewart
Weinberg, 	Attorney, 	for International Union of Operating
Engineers, 	Craft-Maintenance Division, 	Unit 12; 	Joan Branin,
Labor Relations 	Counsel, 	for the State of 	California 	(Department
of 	Forestry and Fire Protection).
Before Blair, 	Chair; 	Hesse and Caffrey, 	Members.
DECISION
CAFFREY, 	Member: 	This 	case 	is before the Public Employment
Relations 	Board 	(PERB or Board) 	on exceptions 	filed by the 	State
of 	California 	(Department 	of 	Forestry and Fire 	Protection) 	(CDF)
to a PERB administrative 	law judge's 	(ALJ) 	proposed decision.
The ALJ found that CDF violated section 3519(a), 	(b) 	and 	(c) 	of
the Ralph C. 	Dills Act 	(Dills Act)1 when it 	refused to negotiate
1The Dills Act 	is 	codified at 	Government 	Code 	section 	3512
et 	seq. 	Unless 	otherwise 	indicated, 	all 	statutory references 	are
to the Government Code. 	Section 3519 	states, 	in pertinent part:
It 	shall be unlawful 	for the 	state 	to do any
of 	the 	following:
(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

with the 	International Union of Operating Engineers, 	Craft-
Maintenance Division, 	Unit 12 	(IUOE) 	over the issue of
designating 	the area of 	layoff 	in which the 	employees 	of 	CDF are
considered 	for 	layoff.
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.
SUMMARY
The 	Board has 	reviewed 	the 	entire 	record 	in 	this 	case,
including the proposed decision, 	transcript, 	exhibits, 	CDF's
exceptions, 	IUOE's response thereto, 	and the collective
bargaining agreement between the parties. 	The 	Board 	finds 	that
the 	state 	employer's prerogative 	to 	reduce 	its 	operations
includes 	the 	authority 	to 	identify 	the 	specific positions 	in
specific 	locations 	to be eliminated, 	and is not a negotiable
subject under the Dills Act. 	However, 	the layoff of 	employees
occupying 	the positions management 	has 	decided 	to 	eliminate
affects 	the 	fundamental 	employment 	relationship. 	Under the
express 	terms of the Dills Act, 	a supersession statute, 	subjects
affecting the 	fundamental 	employment 	relationship, 	such as 	the
designation of 	the area 	in which employees 	will 	be 	laid off, 	are
negotiable subjects. 	Therefore, 	the Board concludes 	that a
violation of 	the Dills Act has 	occurred in this 	case, 	in
accordance 	with 	the 	following discussion.
22

FACTUAL 	BACKGROUND
IUOE 	is 	an employee 	organization and 	the 	recognized
exclusive 	representative of 	State Bargaining Unit 	12, 	within the
meaning of Dills Act 	section 3513. 	CDF is a state employer
within the meaning 	of Dills Act 	section 3513.
CDF 	is made up of four geographical 	regions, 	which are
further broken down 	into 	ranger units. 	Some 	ranger units 	contain
only one 	county, 	others 	contain more than one 	county. 	Ranger
stations, 	or fire stations, 	are located within ranger units.
On November 12, 	1991, 	Walt Norris, 	director of IUOE's public
employees 	section, 	received a 	letter from Ronald McGee 	(McGee),
CDF 	labor relations 	officer, 	announcing 	that 	seven positions 	had
been targeted 	for elimination, 	resulting 	in a probable 	layoff
effective January 7, 	1992.2 Prior to that 	time 	there had been no
layoffs at 	CDF.
On November 14, 	1991, 	pursuant to Department of Personnel
Administration 	(DPA) 	regulations, 	CDF submitted to DPA a 	"request
for approval 	of 	area of 	layoff 	and demotion charts." 	The
requested 	"area of 	layoff" 	was 	"county." 	McGee 	testified that
one 	factor which prompted CDF 	to 	request 	DPA to designate
specific 	counties 	as 	the area of 	layoff was 	the desire 	to avoid
payment 	of 	employee 	transfer and 	relocation expenses 	which 	could
2These positions 	and their locations are as 	follows: 	two
Electrician II positions 	(one 	each 	in Sonoma and Humboldt
Counties); 	two Carpenter II positions 	(one each in Sonoma and
Shasta Counties); 	one Carpenter Supervisor position 	(Shasta
County); 	one half-time Warehouse Worker position 	(Shasta County);
and one Skilled Laborer position 	(Fresno County).
w	3

result 	from employees 	bumping 	to a different 	location 	if 	a
broader area of 	layoff was 	established.3 In addition, 	CDF
asserted 	that 	layoffs 	based on a broader area 	of 	layoff might 	not
result 	in vacant positions 	in the 	locations 	desired by CDF. 	CDF
also noted, 	among other things, 	that 	the 	targeted positions had
been 	filled based 	on an 	open 	statewide 	examination with a 	county
location preference, 	that 	employees 	in the 	counties designated
for 	layoff 	had been 	hired pursuant 	to 	their 	indicated 	county
location preference, 	and that 	department 	employees 	typically did
not 	transfer between counties 	and units. 	CDF's 	request 	to
designate 	specific 	counties 	as 	the 	area 	of 	layoff was 	approved by
DPA.
IUOE 	filed a charge 	on November 15, 	1991 alleging that 	CDF
was 	attempting 	to 	layoff 	employees 	without 	first meeting and
conferring. 	On November 22, 	1991, 	IUOE formally requested to
meet 	and 	confer with CDF about 	the 	layoffs. 	A meet 	and 	confer
session was 	scheduled for December 19, 	1991.
In early December, 	employees 	in the designated area of
layoff were notified by CDF of 	the 	impending layoff. 	The 	notice
informed 	the 	employees 	that 	the 	designated area 	of 	layoff 	was 	by
county and 	that 	county seniority 	lists 	of 	affected 	employees 	had
been 	compiled.
3 Generally, the narrower the designated area of 	layoff, 	the
fewer 	the 	options 	available 	to 	the 	employees 	of 	that 	area who are
being 	considered for layoff, 	and the 	less 	likelihood of bumping
and 	the 	possible 	resulting 	employer-paid 	transfer and 	relocation.
44

CDF and IUOE met 	on December 19, 	1991 	to negotiate 	the
impact 	of 	the 	decision to 	reduce 	operations 	through layoff.
Seniority was 	discussed and 	CDF 	described 	the process 	which
resulted 	in designating 	specific 	counties 	as 	the 	area 	of 	layoff.
When 	IUOE 	requested 	to bargain 	over 	the 	designation of 	the 	area
of 	layoff, 	CDF 	took the position that 	it was not a proper subject
for meeting 	and 	conferring.
Although ultimately no 	layoffs 	occurred, 	IUOE 	amended 	its
charge 	on February 4, 	1992, 	challenging CDF's unilateral 	adoption
of 	the policy designating 	specific 	counties 	as 	the area of
layoff. 	The 	PERB General 	Counsel 	issued a 	complaint 	on
February 24, 	1992, 	alleging that CDF had unilaterally changed its
policy 	concerning 	layoff.
The 	ALJ 	found 	that 	CDF 	established 	a 	new policy when 	it
designated 	"county" 	as 	the area of 	layoff. 	Concluding 	that 	the
designation of 	the area of 	layoff 	is a negotiable 	subject, 	the
ALJ 	found 	that 	CDF violated 	the Dills 	Act 	when 	it 	failed 	to
negotiate with 	IUOE 	over that 	subject.
On appeal, 	CDF argues 	that 	the 	obligation to bargain over
area of 	layoff 	was 	not 	the 	subject 	of 	the 	complaint 	in this 	case
and 	therefore was 	not 	appropriately before 	the ALJ. 	CDF asserts
that 	the 	designation of 	area 	of 	layoff 	is 	a 	fundamental
management 	decision 	inseparable 	from the 	decision 	to 	reduce
operations 	through layoff. 	CDF also argues 	that 	the 	collective
bargaining agreement 	(CBA) 	between the parties 	covers 	the matter
5
5

at 	issue 	in this 	case, 	and provides 	for deferral 	to arbitration
thus 	depriving 	PERB 	of 	jurisdiction.
In response, 	IUOE supports 	the ALJ's 	findings 	and argues
that 	the parties' 	CBA was not 	in effect at 	the 	time 	in question.
IUOE 	further asserts 	that 	reference 	to 	the 	CBA is 	improper since
it was not made part of 	the record in this 	case, 	nor was
testimony offered regarding 	the 	relevant 	sections 	of 	the 	CBA.
DISCUSSION
This 	case 	involves management's 	prerogative 	to 	determine
which 	component 	of 	a 	state agency will 	be 	subject 	to 	reduction,
and 	to achieve 	that 	reduction by layoff 	of 	employees. 	The 	issue
raised 	is whether under the Dills Act 	that 	prerogative 	extends 	to
certain aspects 	of 	the 	layoff 	process 	affecting 	the 	employment
relationships 	of 	the employees 	facing layoff, 	without 	requiring
negotiations 	with an 	exclusive 	representative.
The 	complaint 	in 	this 	case 	alleged 	that 	CDF violated 	its
duty to bargain under Dills Act 	section 	3519(c) 	by making a
unilateral 	change 	in its policy concerning 	layoff. 	The ALJ makes
references 	to CDF's unilateral 	adoption of policy, 	but 	frames 	the
issue 	as 	a 	question 	of whether CDF breached 	its 	obligation 	to
bargain 	in good 	faith when 	it 	refused 	to negotiate 	over 	the 	area
of 	layoff. 	The ALJ 	finds 	a violation under a refusal 	to bargain
theory. 	The Board will 	analyze 	CDF's 	conduct under both the
unilateral 	change and refusal 	to bargain theories.4
4CDF 	contends 	that 	the 	issue 	of whether 	it breached its
obligation to bargain was 	never before 	the ALJ. 	CDF argues 	the
complaint 	instead 	alleged 	that 	CDF 	altered 	an 	established past
6

Unilateral 	Change
An 	employer 	commits 	a unilateral 	change and violates 	Dills
Act 	section 3519(c) 	if the 	following criteria are met: 	(1) 	the
employer breached or altered the parties' 	written agreement 	or
established past practice; 	(2) 	such action was 	taken without
giving 	the 	exclusive 	representative 	notice 	or an 	opportunity 	to
practice by designating 	counties 	as 	the 	area of 	layoff without
meeting 	and 	conferring with 	IUOE.
The 	Board, 	adopting standards 	used by the National 	Labor
Relations 	Board, 	has 	held 	that where an unalleged violation 	is
intimately related to 	the 	subject matter of 	the 	complaint, 	the
conduct 	in question is part of 	the same course of 	conduct, 	the
unalleged violation has 	been 	fully litigated, 	and 	the parties
have had 	the 	opportunity to 	examine 	and be 	cross-examined, 	the
Board will 	entertain 	the violation. 	(Santa 	Clara Unified School
District 	(1979) 	PERB Decision No. 	104; 	Yolo County Superintendent
of Schools 	(1990) 	PERB Decision No. 	838.)
Here, 	the complaint alleges, 	in part:
4. 	In or about October 1991, 	Respondent 	changed
this 	policy by 	selecting 	employees 	for 	layoff by
seniority 	in the 	classification on 	the basis 	of
the 	county 	in which 	the 	employee worked. 	A county
is 	not 	recognized by Respondent 	as 	a geographic,
organizational, 	or functional subdivision.
5. 	Respondent 	engaged in the 	conduct 	described 	in
paragraph 	4 	without 	prior notice 	to 	Charging 	Party
and without 	having 	afforded 	Charging 	Party 	an
opportunity 	to meet 	and 	confer over the 	decision
to 	implement 	the 	change 	in policy and/or the
effects 	of 	the 	change 	in policy.
6. 	By the acts 	and 	conduct described in
paragraphs 	4 and 5, 	Respondent has 	failed and
refused 	to meet 	and 	confer 	in good 	faith 	in
violation of Government Code section 3519(c).
The 	complaint broadly alleges 	that 	CDF 	took action 	in
establishing 	counties 	as 	the 	geographical 	area 	of 	layoff 	without
negotiating with IUOE. 	The 	complaint 	is 	sufficiently clear to
put 	the parties 	on notice 	of 	the 	issue 	to be addressed.
77

bargain over the change; 	(3) 	the change 	is not merely an isolated
breach of 	the 	contract, 	but amounts 	to a 	change of policy 	(i.e.,
has 	a 	generalized 	effect 	or 	continuing 	impact 	upon bargaining
unit members' 	terms and conditions of employment); 	and 	(4) 	the
change 	in policy 	concerns 	a matter within 	the 	scope 	of
representation. 	(Grant 	Joint Union High School 	District 	(1982)
PERB Decision No. 	196; 	Glendora Unified School District 	(1991)
PERB Decision No. 	876.)
To determine whether a unilateral 	change has 	occurred we
must 	analyze 	the 	status 	of 	the written agreement between the
parties 	to determine whether 	it 	includes provisions 	concerning
area of 	layoff, 	and if so, 	whether the terms of 	that agreement
arguably were breached by 	CDF.5
The parties' 	CBA contains provisions 	concerning area of
layoff. 	However, 	the CBA had expired prior to the alleged
unlawful 	conduct 	in this 	case, 	and negotiations 	over a successor
agreement were underway. 	Traditionally, 	an employer must
maintain 	certain 	terms 	contained 	in an 	expired 	contract 	until
such time 	as bargaining 	over a 	successor agreement 	has been
5IUOE argues 	that 	the parties' 	CBA was never made part 	of
the record and, 	therefore, 	is not appropriately before the Board.
PERB Regulation 32120 	requires 	employers 	to 	file 	a copy of 	their
collective bargaining agreements with PERB. 	(Cal. 	Code of Regs.,
tit. 	8, 	sec. 	17.) 	As a copy of the agreement is on file with
PERB, 	the Board hereby takes 	official 	notice of 	the 	terms 	of 	the
collective bargaining agreement 	in 	effect 	between 	the parties
from January 30, 	1989 	through June 30, 	1991. 	(Fountain Valley
Elementary School District 	(1987) 	PERB Decision No. 	625.) 	IUOE's
exception 	is 	therefore rejected.
88

completed 	either by 	reaching 	agreement 	or 	impasse. 	(Pajaro
Valley Unified School 	District 	(1978) 	PERB Decision No. 	51;
San Mateo 	County 	Community College 	District 	(1979) 	PERB Decision
No. 	94; 	NLRB v. 	Katz 	(1962) 	369 U.S. 	736 	[50 LRRM 2 1 7 7 ] ; 	DPA v.
Superior 	Court 	of 	Sacramento 	County 	(1992) 	5 	Cal.App.4th 	155
[6 	Cal.Rptr.2d 714].) 	Therefore, 	the 	layoff provisions 	of 	the
parties' 	expired CBA were 	operative 	at 	the 	time 	CDF made 	the
decision 	to 	reduce 	operations 	through 	layoff.
The 	express 	terms 	of 	the parties' 	CBA contain provisions
governing 	layoff 	and 	designation 	of 	the 	area 	of 	layoff.
Section 	18.1(b) 	of 	the CBA states:
Order of 	Layoff. 	Employees 	shall 	be 	laid 	off
in 	order 	of 	seniority pursuant 	to 	Government
Code 	Sections 	19997.2 	through 	19997.7 	and
applicable 	State 	Personnel 	Board 	and
Department 	of 	Personnel 	Administration 	rules.
The 	relevant 	Government 	Code 	section 	is 	19997.2, 	"Layoff 	and
reemployment 	lists 	by 	subdivision; 	conflict 	of 	section with
memorandum of 	understanding." 	It 	states:
(a) 	With the approval 	of 	the department 	[DPA],
only 	the 	employees 	of 	a 	designated 	geographical,
organizational 	or 	functional 	subdivision 	of 	a
state 	agency need be 	considered 	for 	layoff, 	and
reemployment 	lists 	shall 	be 	established 	for 	such
subdivision. 	Such 	lists 	take priority 	over 	the
departmental 	and 	other 	reemployment 	or 	employment
lists.
(b) 	If 	the provisions 	of 	this 	section are 	in
conflict 	with 	the 	provisions 	of 	a memorandum
of 	understanding 	reached pursuant 	to 	Section
3517.5, 	the memorandum of understanding 	shall
be 	controlling 	without 	further 	legislative
action, 	except 	that 	if 	such provisions 	of 	a
memorandum 	of 	understanding 	require 	the
expenditure of 	funds, 	the provisions 	shall
99

not 	become 	effective 	unless 	approved by 	the
Legislature 	in the annual 	Budget Act.
DPA Regulation 	section 	599.845 	outlines 	the 	procedure
through which employees 	of 	a 	specific 	subdivision are 	designated
to be 	considered for layoff. 	It 	states, 	in pertinent part:
Procedure. 	In making layoffs, 	the appointing
power 	shall 	first 	communicate with the
Director of 	the Department 	of 	Personnel
Administration 	regarding 	the 	designation 	of
the subdivision, 	if any, 	to be considered and
submit 	a list 	of 	employees 	in the unit 	of
layoff who are 	in the 	class 	or 	classes 	of
layoff.
The 	inclusion of 	these provisions 	in the CBA indicates 	that
the parties 	have negotiated over the 	subject 	of 	layoff 	and area
of 	layoff, 	and have agreed 	to be governed by the layoff
procedures 	included 	in the 	Government 	Code 	and 	implemented
through DPA regulations, 	rather 	than 	supersede 	them with an
alternative process. 	These provisions provide DPA with the
authority 	to designate a 	specific 	subdivision of 	CDF as 	the 	area
of 	layoff 	after reviewing 	the proposal 	of 	the appointing power.
Therefore, 	that area, 	once it has been designated by DPA, 	becomes
the area 	of 	layoff under the negotiated terms 	of 	the 	CBA. 	These
contract 	provisions 	do not 	require 	any 	further negotiations
between the appointing power 	(CDF) 	and an exclusive
representative 	(IUOE) 	before 	implementing 	the procedure whereby
DPA designates 	the area of 	layoff.
The 	evidence 	indicates 	that 	CDF 	followed the procedures
described above. 	Thus, 	there 	is no demonstration that 	the
employer breached the parties' 	written agreement 	concerning 	the
10

area 	of 	layoff 	and 	no violation 	is 	found under 	a 	theory 	of
unilateral 	change.6
Had 	these 	circumstances 	occurred 	during 	the 	negotiated 	term
of 	the 	CBA, 	this 	analysis 	would 	conclude 	at 	this 	point 	with a
finding 	that 	no 	violation 	had 	occurred 	since 	CDF 	had 	acted 	in
accordance with 	the 	express 	terms 	of 	the 	agreement. 	However, 	the
CBA also 	contained an 	"Entire Agreement" 	or waiver 	clause, 	which
by 	its 	own 	terms 	was 	effective 	only 	for 	the 	negotiated 	term 	of
the parties' 	CBA.
Section 24.1(a) 	of 	the parties' 	CBA states, 	in pertinent
part:
Entire Agreement. 	This 	Agreement 	sets 	forth 	the
full 	and 	entire 	understanding 	of 	the 	parties
regarding 	the matters 	contained 	herein, 	and 	any
other 	prior 	or 	existing 	understanding 	or 	agreement
by 	the parties, 	whether 	formal 	or 	informal,
regarding 	any 	such matters 	are 	hereby 	superseded.
Except 	as 	provided 	in 	this 	Agreement, 	it 	is 	agreed
and 	understood 	that 	each party 	to 	this 	Agreement
voluntarily waives 	its 	right 	to 	negotiate 	with
respect 	to 	any matter 	raised 	in 	negotiations 	or
covered 	in 	this 	Agreement, 	for 	the 	duration 	of 	the
Agreement. 	(Emphasis 	added.)
The 	Board has 	held, 	absent 	some 	form of waiver, 	that 	the
duty 	to 	bargain 	continues 	during 	the 	term of 	the 	collective
6 The 	agreement 	also 	contains 	grievance 	provisions 	which
result 	in 	final 	and binding 	arbitration. 	The 	Board 	recently
concluded 	in State 	of 	California 	(Department 	of 	Youth Authority)
(1992) 	PERB Decision No. 	962-S, 	that 	arbitration clauses 	continue
in 	effect 	after 	expiration 	of 	a 	CBA only 	in 	situations 	which:
(1) 	involve 	facts 	and occurrences 	that 	arose before 	expiration;
(2) 	involve 	post-expiration 	conduct 	that 	infringes 	on 	rights
accrued 	or vested under 	the 	agreement; 	or 	(3) 	under normal
principles 	of 	contract 	interpretation, 	survive 	expiration 	of 	the
agreement. 	The 	circumstances 	in 	this 	case 	do not 	meet 	this 	test
and 	therefore 	deferral 	to 	binding 	arbitration 	is 	not 	an 	available
avenue 	of 	resolution.
11

bargaining agreement. 	(Placentia Unified School 	District 	(1986)
PERB Decision No. 	595; 	South San Francisco Unified School
District 	(1983) 	PERB Decision No. 	343; 	NLRB v. 	Jacobs
Manufacturing Co. 	(2d Cir. 	1952) 	196 	F.2d 680 	[30 	LRRM 2098].)
However, 	the parties may agree 	to contractual 	language
specifically waiving 	or 	limiting 	the 	right 	to bargain about
particular matters. 	A waiver 	clause 	typically provides 	that
there 	is 	no 	further duty 	to bargain 	specified negotiable 	subjects
during 	the 	term of 	the agreement. 	The purpose 	of 	such a 	clause
is 	to 	lend 	stability 	to 	the bargaining 	relationship by 	limiting
the 	possibility of 	continuous 	negotiations.
The 	"Entire Agreement" 	clause 	in the parties' 	CBA prohibits
either party 	from negotiating 	any matter 	addressed 	during
negotiations 	or covered in the agreement. 	Therefore, 	IUOE waived
its 	right 	to 	further negotiations 	over 	layoff provisions 	during
the negotiated term of 	the 	contract. 	However, 	as 	the negotiated
term of 	the 	CBA had expired, 	the waiver provisions 	were not 	in
effect 	during 	the period 	in question. 	It 	is 	clear that parties
are 	free 	to 	seek negotiations 	on subjects within the 	scope 	of
representation which are 	covered by an agreement 	which does 	not
include a waiver clause.7 Consequently, 	we now consider whether
CDF breached 	its 	obligation 	to bargain 	in good 	faith when 	it
7The process 	of 	negotiating over 	terms 	within 	the 	expired
contract 	does 	not 	result 	in suspension of 	those 	terms 	during
negotiations. 	Rather, 	the terms of 	the expired agreement 	remain
in effect 	throughout 	negotiations 	and may 	continue 	to be
implemented 	in accordance with 	those 	terms.
12

refused to negotiate 	over 	the designation of 	the area 	of 	layoff.
Refusal 	to Bargain
A per 	se violation 	of 	the 	duty 	to meet 	and negotiate 	in good
faith 	results 	from an employer's 	refusal 	to participate 	in
negotiations 	on a 	subject 	within 	the 	scope 	of 	representation.
(Healdsburg Union High School District 	(1980) 	PERB Decision
No. 	132.) 	IUOE sought to negotiate over the designation of 	the
area of 	layoff at 	the December 	19 meeting. 	To determine whether
CDF 	failed 	to bargain 	in good 	faith when 	it 	refused 	IUOE's 	demand
to negotiate, 	we must determine whether the designation of 	the
area of 	layoff 	is 	a negotiable 	subject within the 	scope 	of
representation under 	the Dills Act.
Relying 	on 	decisions 	under 	the 	Educational 	Employment
Relations Act8 and the 	test 	set 	forth 	in State 	of 	California
(Department of Transportation) 	(1983) 	PERB Decision No. 	361-S,
the 	Board has 	concluded 	that 	a decision 	to 	reduce 	operations 	and
lay off 	employees 	covered by the Dills Act 	is not 	negotiable
because 	it 	is 	a matter of 	"fundamental management 	concern 	that
requires 	that 	such decisions be 	left 	to 	the 	employer's
prerogative." 	(State 	of 	California 	(Department 	of 	Personnel
Administration) 	(1987) 	PERB Decision No. 	648-S.) 	Although no
Dills Act 	case directly addresses 	the negotiability of 	effects 	of
the decision to layoff, 	it 	is well 	established under analogous
PERB precedent 	that 	effects 	of 	layoff 	decisions 	are 	negotiable
8Anaheim Union High School 	District 	(1981) 	PERB Decision
No. 	177; 	Newman-Crows Landing Unified School District 	(1982) 	PERB
Decision No. 	223.
13

topics. 	(See e.g., 	Newman-Crows Landing Unified School District.
supra. 	PERB Decision No. 	223; 	Kern Community College District
(1983) 	PERB Decision No. 	372; 	Oakland Unified School District
(1985) 	PERB Decision No. 	540.)
Dills Act 	section 3516 	states:
The 	scope 	of 	representation 	shall 	be 	limited
to wages, 	hours, 	and other terms and
conditions of employment, 	except, 	however,
that 	the 	scope 	of 	representation shall 	not
include 	consideration of 	the merits,
necessity, 	or organization of any service 	or
activity provided by 	law or 	executive 	order.
The 	Board has 	established a 	test 	to 	determine whether
subjects 	not 	specifically 	enumerated 	in Dills Act 	section 	3516
are negotiable. 	A subject will 	be 	found 	to be negotiable 	if 	it
involves 	the 	employment 	relationship and 	is 	of 	such concern to
both management 	and employees 	that 	conflict 	is 	likely to 	occur,
and 	if 	the mediatory 	influence 	of 	collective 	negotiations 	is 	an
appropriate means 	of 	resolving 	the 	conflict. 	Such subjects will
be 	negotiable 	unless 	imposing 	such an 	obligation would unduly
abridge 	the 	State 	employer's 	freedom to exercise 	those managerial
prerogatives 	(including matters 	of 	fundamental 	policy) 	essential
to the achievement 	of 	the State's mission. 	(State 	of 	California
(Department of Transportation). 	supra. 	PERB Decision No. 	3 61-S.)
Layoff 	involves 	the possible 	termination of 	the 	employment
relationship, 	a 	subject which can cause great 	concern 	to both
employees 	and management. 	Collective negotiations 	can provide a
forum in which 	conflicts 	arising 	from the possible 	termination of
employment 	can be resolved. 	Thus, 	the 	first 	elements 	of 	the test
14

to determine whether a subject 	falls within 	the 	scope 	of
representation are met.
The 	question of 	whether mandating negotiations 	over 	the
subject 	of 	area 	of 	layoff 	would unduly abridge management's
prerogatives 	is 	not 	as 	easily resolved. 	It 	involves management's
fundamental 	authority 	to determine which 	components 	of 	a 	state
agency will 	be 	subject 	to 	reduction through layoff, 	as 	well 	as
the 	fundamental 	rights 	of 	employees 	and 	their exclusive
representatives 	to negotiate 	over 	issues 	involving 	the 	employment
relationship.
CDF argues 	that 	the decision to 	layoff 	employees 	in a
particular geographical, 	organizational 	or 	functional 	subdivision
is 	inseparable 	from the basic 	decision 	to 	reduce 	operations
through layoff. 	Since 	the motivation 	for layoff 	is 	generally to
achieve 	fiscal 	economies, 	the efficacy of 	layoff 	in attaining
that 	goal 	can only be 	evaluated after a 	specific 	area 	of 	layoff
has 	been designated. 	CDF 	contends 	that 	an employer 	cannot
finalize 	a decision 	to pursue 	the 	fundamental management
prerogative 	of 	layoff 	without 	the 	area 	of 	layoff 	having been
designated.
The 	Board agrees 	that 	the 	state 	employer's 	fundamental
management 	prerogative 	to 	reduce 	operations 	includes 	the
authority 	to 	identify 	the 	specific 	component 	of 	a 	state 	agency 	to
be 	the 	subject 	of 	reduction. 	This prerogative 	includes 	the 	right
to designate 	specific positions 	in specific 	locations 	to be
reduced through layoff. 	In this case, 	however, 	management's
15

prerogative 	to pursue 	layoff 	to 	reduce 	specific positions 	is 	not
in question. 	This 	case 	involves 	the 	separable and distinct
question of 	whether 	certain aspects 	of 	the process used to 	lay-
off 	employees, 	once management has 	decided the positions 	they
occupy must be 	reduced, 	are negotiable under the Dills Act.
The designation of 	the area of 	layoff, 	an aspect 	of 	the
layoff process, 	determines 	the degree 	of 	options 	to actual 	layoff
available 	to 	individual 	employees. 	A broad area of 	layoff
(statewide) 	generally provides greater options, 	such as bumping
less 	senior employees 	or demoting in lieu of 	layoff, 	than a
narrow area 	of 	layoff 	(county) 	in which employees may have no
option to actual 	layoff. 	The area of 	layoff 	also 	typically
determines 	the 	reemployment 	rights 	of 	employees 	subject 	to
demotion and layoff. 	Generally, 	the narrower the area of 	layoff,
the broader 	the 	reemployment 	rights 	offered to employees.
Therefore, 	the designation of 	the area of 	layoff 	directly affects
the 	likelihood 	of 	demotion or 	termination of 	the 	employment
relationship, 	as well 	as 	the 	likelihood of 	reemployment 	following
demotion 	or 	layoff.
In matters 	involving 	the 	fundamental 	employment
relationship, 	the unique 	status 	of 	the Dills Act as a
supersession 	statute mandates 	that 	great 	deference be 	given 	to
the 	rights 	of 	employees 	and their exclusive 	representatives.
Dills Act 	section 3517.6 	states, 	in pertinent part:
In any case where 	the provisions 	of
[Government Code] 	Section 19997.2 	. 	. 	. are
in conflict with the provisions 	of 	a
memorandum of understanding, 	the 	terms 	of 	the
16

memorandum of 	understanding 	shall 	be
controlling unless 	the 	State 	Personnel 	Board
finds 	those 	terms 	to be 	inconsistent with
merit 	employment 	principles 	as 	provided 	for
by Article VII 	of 	the 	California
Constitution.
Thus, 	the Dills Act provides 	the 	state employer and an
exclusive 	representative 	with 	the 	authority 	to 	supersede
specified 	statutory provisions 	relating 	to 	the 	employment
relationship by agreeing 	to memorandum of 	understanding 	(MOU)
provisions 	which differ 	from the 	specified 	statutory provisions.9
(DPA v. 	Superior Court of Sacramento County, 	supra. 	5 	Cal.App.4th
155.)
By designating 	specific 	sections 	of 	the Government 	Code 	as
supersedable, 	the 	Legislature has provided clear direction of 	its
intent 	to ensure 	that 	the 	subjects 	of 	those 	sections 	are
appropriate 	subjects 	of 	collective bargaining within 	the 	scope 	of
representation.
Government 	Code 	section 19997 	et 	seq. 	deals with the 	subject
of 	layoff. 	Section 	19997 provides 	the 	state employer with the
authority to 	lay off 	employees 	"because 	of 	lack of work or 	funds,
or whenever it 	is advisable 	in the 	interests 	of 	economy." 	This
section is not 	supersedable under the Dills Act, 	underscoring
management's 	fundamental 	prerogative 	to 	reduce 	staff 	through
layoff.
9Where 	the parties 	do not 	agree 	to alter the 	terms 	of 	an
applicable 	statutory provision, 	the 	specific Government 	Code
provision 	is 	not 	superseded and 	remains 	in effect.
17

The various provisions 	of 	section 19997 et 	seq. 	deal with
aspects of the layoff process, 	such as area of layoff, 	employee
seniority, 	seniority credit 	for veterans, 	demotion in lieu of
layoff, 	and reemployment 	lists. 	Some of 	these 	sections 	involving
certain specific aspects 	of 	the layoff process, 	are 	subject 	to
supersession under the express 	terms 	of 	the Dills Act.
Government 	Code 	section 19997.2, 	dealing with the 	subject 	of
designating the area of 	layoff and reemployment, 	is a
supersedable 	statute under the 	terms 	of 	the Dills Act. 	The
Legislature 	has 	clearly directed 	that 	the 	subject 	of 	Government
Code 	section 	19997.2 	is 	an appropriate 	subject 	of 	collective
bargaining within the scope 	of 	representation. 	Therefore, 	under
the express 	terms 	of 	the Dills Act, 	the 	state employer cannot
refuse 	the valid demand 	of 	an 	exclusive 	representative 	to
negotiate 	over 	the 	subject 	specified 	in Government 	Code 	section
19997.2.
CONCLUSION
In this 	case, 	CDF acted within its prerogatives 	in
identifying 	seven 	specific positions 	which were 	to be 	reduced,
and by pursuing layoff 	to achieve 	the 	reduction. 	However, 	the
subject 	of 	designating the 	area 	in which 	employees 	occupying
those positions will 	be 	laid off 	is within the 	scope 	of
representation under the 	express 	terms 	of 	the Dills Act. 	The
waiver clause 	of 	the parties' 	CBA had expired and 	IUOE made a
valid demand 	of 	CDF 	to bargain 	over 	the 	subject 	of 	designating
the area of 	layoff. 	Therefore, 	CDF could not 	refuse 	to negotiate
18

the matter upon IUOE's 	timely 	request.10 The Board 	finds 	that
CDF 	failed 	to bargain 	in good 	faith 	in violation of 	Dills Act
section 3519 (c) 	when it 	refused to negotiate over the 	subject 	of
designation of 	the area of 	layoff. 	By the same 	conduct, 	CDF
denied 	IUOE 	the 	right 	to 	represent 	its members 	in violation of
section 3519(b). 	This 	conduct also denied bargaining unit
members 	the 	right 	to be 	represented by 	IUOE 	in 	their 	employment
relations with CDF 	in violation of 	section 3519(a).
REMEDY
The Board 	is 	authorized to 	remedy violations 	of 	the Dills
Act. 	Section 3514.5(c) 	grants 	the Board the power to:
. 	. 	. 	issue a decision and order directing an
offending party 	to 	cease 	and desist 	from 	the
unfair practice 	and 	to 	take 	such affirmative
action, 	including but not 	limited to 	the
reinstatement 	of 	employees 	with or without
back pay, 	as will 	effectuate the policies 	of
this 	chapter.
It 	has 	been 	found that 	CDF 	failed to negotiate 	about 	the
area of 	layoff. 	By this 	conduct, 	CDF breached its 	obligation to
negotiate 	in good faith in violation of 	section 3519(c). 	By the
same 	conduct, 	CDF denied 	IUOE 	the right 	to represent 	its members
in violation of 	section 3519(b). 	This 	conduct also denied
bargaining unit 	employees 	the 	right 	to be 	represented by 	IUOE 	in
their employment 	relations 	with CDF 	in violation of
section 3519(a).
10While 	CDF had an obligation 	to negotiate 	with IUOE, 	during
those negotiations 	it was 	free 	to continue with its 	layoff
process 	as 	proposed under 	the 	still-in-effeet 	terms 	of 	the 	CBA.
(NLRB v. 	Katz, 	supra. 	369 U.S. 	736.)
19

It 	is 	appropriate 	to 	order CDF 	to 	cease and desist 	from such
conduct and, 	upon request, 	negotiate with IUOE about 	the
designation of 	the area of 	layoff.
CDF 	is 	also 	ordered 	to post 	a 	notice 	incorporating 	the 	terms
of 	this 	order. 	The notice must be 	signed by an authorized agent
of 	CDF 	indicating 	that 	it will 	comply with the 	terms 	thereof.
The notice shall 	not be 	reduced in size, 	defaced, 	altered or
covered by any 	other material. 	Posting 	this 	notice will 	provide
employees 	with notice 	that 	CDF has 	acted 	in an unlawful 	manner
and is being 	required to 	cease and desist 	from this 	activity. 	It
effectuates 	the purposes 	of 	the Dills Act 	that 	employees 	be
informed 	of 	the 	resolution of 	the 	controversy and will 	announce
the 	employer's 	readiness 	to 	comply with the 	ordered remedy. 	(See
Placerville Union School District 	(1978) 	PERB Decision No. 	69;
Pandol 	& Sons v. 	Agricultura	- 	l 	Labor Relations Board 	(1979) 	98
Cal.App.3d 580, 	587 	[159 Cal.Rptr. 	584]; 	NLRB v. 	Express
Publishing Co. 	(1941) 	312 U.S. 	426 	[8 LRRM 415].)
ORDER
Upon the 	foregoing 	findings 	of 	fact and conclusions 	of 	law,
and the 	entire 	record in this 	case, 	and pursuant 	to 	the Ralph C.
Dills Act 	(Dills Act), 	Government Code section 3514.5, 	it is
hereby ordered 	that 	the 	State 	of 	California 	(Department 	of
Forestry and Fire 	Protection) 	(CDF) 	and its 	representatives
shall:
A. 	CEASE AND DESIST 	FROM:
1. 	Refusing to negotiate with the 	International 	Union
20

of Operating Engineers, 	Craft-Maintenance Division, 	Unit 	12
(IUOE), 	about the designation of the area of layoff.
2. 	Denying IUOE 	the 	right 	to 	represent 	its members 	in
their 	employment 	relations 	with CDF.
3. 	Denying Unit 	12 	bargaining unit 	employees 	the 	right
to be 	represented by 	IUOE 	in 	their employment 	relations 	with CDF.
B. 	TAKE 	THE 	FOLLOWING AFFIRMATIVE ACTIONS 	DESIGNED TO
EFFECTUATE THE 	POLICIES 	OF THE DILLS ACT:
1. 	Upon request, 	meet and negotiate with 	IUOE about
designation of 	the area 	of 	layoff.
2. 	Within thirty-five 	(35) 	days 	following the date
this Decision is no longer subject 	to reconsideration, 	post at
all 	work 	locations where 	notices 	to 	classified employees 	are
customarily posted, 	copies 	of 	the notice attached hereto as 	an
appendix. 	The 	notice must 	be 	signed by an authorized agent 	of
CDF, 	indicating that 	CDF will 	comply with the 	terms 	of 	this
Order. 	Such posting 	shall 	be maintained 	for a period of 	thirty
(30) 	consecutive workdays. 	Reasonable steps 	shall be taken to
ensure that 	the notice is not 	reduced in size, 	altered, 	defaced
or 	covered with any 	other material.
3. 	Make written notification of 	the actions 	taken 	to
comply with 	this 	Order to 	the 	Sacramento Regional 	Director 	of 	the
Public 	Employment 	Relations 	Board 	in accord with 	the 	director's
instructions.
Chair Blair 	joined 	in 	this 	Decision.
Member Hesse's 	concurrence begins 	on page 	22.
21

Hesse, Member, Concurring:
I 	concur 	in 	the 	result 	and 	the majority's 	reasoning 	to 	the
extent 	that 	it 	rests 	on the holding 	that 	the 	State 	of 	California,
Department 	of 	Forestry and Fire 	Protection 	(CDF) 	violated the
Ralph C. 	Dills Act 	(Dills Act 	or Dills)1 when it 	flatly refused
to bargain a mandatory subject 	of 	bargaining--the 	areas 	of
layoff.
CDF 	contends 	that 	the 	complaint 	filed with 	the 	Public
Employment Relations 	Board 	(PERB or Board) 	did not 	include 	the
allegation that 	it 	was 	obligated 	to negotiate 	in good 	faith 	over
the areas 	of 	layoff and, 	therefore, 	that 	the allegation was never
before the PERB administrative law judge 	(ALJ). 	CDF argues, 	in
support 	of 	this 	contention, 	that 	the 	issue before 	the Board was
whether 	it had made a unilateral 	change 	in past practice 	or
established 	a 	new policy without meeting 	and 	conferring 	about 	the
change with 	the 	International 	Union 	of 	Operating 	Engineers,
Craft-Maintenance Division, 	Unit 12 	(IUOE).
The Board majority entertains 	this 	argument 	and, 	in so
doing, 	joins 	CDF 	in misunderstanding 	the nature 	of 	a unilateral
change violation. 	By asserting 	that 	CDF made an unlawful
unilateral 	change, 	IUOE has 	charged that 	CDF circumvented the
bilateral 	collective 	bargaining 	process 	and unilaterally 	changed
a 	subject 	within the 	scope 	of bargaining. 	Preliminary to any
finding 	that 	a unilateral 	change has 	occurred 	is 	the
determination 	that 	the matter 	changed 	is 	indeed a 	subject 	that
1The Dills Act 	is 	codified at Government 	Code 	section 	3512
et 	seq. 	Unless 	otherwise 	indicated, 	all 	statutory references 	are
to the Government Code.
22

has 	been 	relegated by 	statute 	to 	the bargaining process. 	A
unilateral 	change 	is 	deemed a per se 	refusal 	to bargain because,
by definition, 	unilateral 	action is 	not bilateral bargaining.
All 	refusals 	to bargain, 	however, 	(including the per se
unilateral 	change variety) 	are premised on the 	finding 	that 	the
subject about which bargaining 	is 	sought 	(or the 	subject 	of 	the
unilateral 	change) 	is within the 	scope 	of bargaining as 	defined
by 	law.
Subjects 	that 	are within the 	scope 	of bargaining are
enumerated in Dills 	sections 	3516 	and 3517.6. 	(Department 	of
Personnel Administration v. 	Superior Court 	(1992) 	5 	Cal.App.4th
155 	[6 Cal.Rptr.2d 714]). 	Section 3516 enumerated "wages, 	hours,
and other 	terms 	and conditions 	of 	employment" 	as 	within the 	scope
of 	representation and Section 	3517.6 	expressly permits 	the 	state
employer and the 	state employee unions 	to negotiate 	terms 	of 	a
memorandum of 	understanding 	that 	supersede 	certain 	specified
statutory provisions. 	Among 	the 	statutory provisions 	subject 	to
supersession is Dills Act 	section 3517.6, 	which includes 	the
designation of 	the area of 	layoff. 	Thus, 	by the express 	terms 	of
the Dills Act, 	the designation of 	the area of layoff 	is a
mandatory 	subject 	of 	bargaining.2
2I 	find 	it 	unnecessary 	to apply 	the 	San Mateo 	City School
District v. 	Public Employment Relations Board 	(1983) 	33 	Cal.3d
850 	[191 	Cal.Rptr. 	800] 	test 	cited in State of 	California
(Department of Transportation) 	(1983) 	PERB Decision No. 	361-S and
follow the ALJ's 	analysis 	that 	the areas 	of 	layoff 	are 	subject 	to
the bargaining obligation because 	it 	is 	an effect 	of 	the 	decision
to 	layoff. 	In my opinion, 	the designation of 	the areas 	of 	layoff
is 	an 	expressly enumerated 	subject 	of bargaining because 	it 	is
listed in the 	supersession section of Dills Act, 	section 3517.6.
23

It 	is worth emphasizing that, 	while designating areas 	of
layoff 	as 	a 	subject 	about 	which 	the 	state 	employer must
negotiate, 	these provisions 	do not 	require the parties 	to reach
agreement 	nor are 	the parties 	legally obligated to yield; 	they
are 	required 	to bargain 	in good 	faith 	in a genuine 	effort 	to
reach agreement. 	In this 	case, 	it 	is undisputed that 	CDF flatly
refused 	to 	confer with 	IUOE 	over 	the designation of 	counties 	as
areas 	of 	layoff. 	This 	conduct 	removed the discussion of 	the
designation of 	the 	areas 	of 	layoff 	from the bargaining 	table 	and
is a per se 	refusal 	to bargain.
I 	do not 	join the Board's 	opinion with respect 	to 	its
interpretation 	of 	the 	expired 	collective 	bargaining 	agreement
between CDF and IUOE. 	By its terms, 	the parties' 	contract
expired on June 30, 	1991; 	the conduct 	complained of herein
occurred 	in November and December 	1991. 	The 	contract was 	not
made a part 	of 	the 	record and, 	in the 	course 	of 	the hearing
before 	the ALJ, 	CDF made no argument 	concerning 	the 	status 	or the
meaning 	of 	the 	contract. 	CDF 	raised 	it 	for the 	first 	time 	on
appeal 	to 	the 	Board 	itself 	and 	the 	record 	is 	devoid of 	evidence
concerning 	the 	existence 	of 	a 	contract 	and any 	interpretation of
the 	contract 	language.
Having 	concluded 	that 	the 	area 	of 	layoff 	is 	a mandatory
subject 	of bargaining under the Dills Act, 	I 	find that 	CDF's 	flat
refusal 	to negotiation was a violation of 	section 3519(a), 	(b)
and (c).
24

APPENDIX NOTICE 	TO EMPLOYEES
POSTED 	BY ORDER OF 	THE
PUBLIC 	EMPLOYMENT 	RELATIONS 	BOARD
An Agency of 	the 	State 	of 	California
After a hearing 	in Unfair Practice Case No. 	SF-CE-100-S,
International 	Union of Operating Engineers. 	Craft-Maintenance
Division. 	Unit 	12 v. 	State of 	California 	(Department of 	Forestry
and Fire 	Protection), 	in which all parties had the right 	to
participate, 	it has been found that 	the State of 	California
(Department 	of 	Forestry and Fire 	Protection) 	(CDF) 	violated the
Ralph C. 	Dills Act 	(Dills Act), 	Government Code section 3519(a),
(b) and (c).
As a result 	of 	this 	conduct, 	we have been ordered to post
this Notice 	and we will:
A. 	CEASE AND DESIST FROM:
1. 	Refusing to negotiate with the 	International 	Union
of Operating Engineers, 	Craft-Maintenance Division, 	Unit 	12
(IUOE), 	about the designation of the area of layoff.
2. 	Denying 	IOUE 	the 	right 	to represent 	its members 	in
their 	employment 	relations 	with CDF.
3. 	Denying Unit 	12 	bargaining unit 	employees 	the 	right
to be 	represented by 	IUOE 	in 	their employment 	relations 	with 	CDF.
B. 	TAKE 	THE 	FOLLOWING AFFIRMATIVE ACTION DESIGNED TO
EFFECTUATE THE 	POLICIES 	OF THE DILLS ACT:
Upon request, 	meet 	and negotiate with IUOE about 	the
designation of 	the area of 	layoff.
Dated: 	State 	of 	California 	(Department
of 	Forestry and 	Fire 	Protection)
By: Authorized 	Agent
THIS 	IS AN OFFICIAL NOTICE. 	IT MUST REMAIN POSTED 	FOR AT LEAST
THIRTY 	(30) 	CONSECUTIVE WORKDAYS 	FROM THE DATE 	OF 	POSTING AND
MUST NOT BE REDUCED 	IN SIZE, 	DEFACED, 	ALTERED, 	OR COVERED WITH
ANY 	OTHER 	MATERIAL.
e