Huntington Beach City School District (PERB 0672E)

STATE 	OF CALIFORNIA
DECISION OF 	THE
PUBLIC 	EMPLOYMENT 	RELATIONS 	BOARD
HUNTINGTON 	BEACH 	ELEMENTARY
TEACHERS 	ASSOCIATION,
Charging 	Party,
v.
HUNTINGTON 	BEACH 	CITY 	SCHOOL
DISTRICT,
Respondent.
Case No. 	LA-CE-2528
PERB Decision No. 	672
June 7, 	1988
Appearance; 	Robert E. 	Lindquist, 	Attorney, 	California Teachers
Association, 	for Huntington 	District 	Teachers Association.
Before Hesse, 	Chairperson; 	Porter and Shank, 	Members.
DECISION
HESSE, 	Chairperson: 	Charging party, 	Huntington Beach
Elementary 	Teachers 	Association, 	appeals 	the 	Public 	Employment
Relations 	Board 	(Board) 	agent's partial dismissal, 	attached
hereto, 	of 	its 	charge alleging that 	respondent, 	Huntington
Beach 	City 	School 	District, 	by 	joining 	the 	Orange 	County 	Fringe
Benefits 	Joint 	Powers Authority 	(JPA), 	made 	certain unilateral
changes 	in health 	insurance benefits 	in 	violation of 	sections
3543.5(a), 	(b), and (c) of the Educational
Employment Relations Act (EERA).1
1EERA 	is 	codified 	at 	Government 	Code 	section 	3540 	et
seq. 	Unless 	otherwise 	indicated, 	all 	statutory references
herein 	are 	to the 	Government 	Code. 	Section 3543.5 provides, 	in
pertinent part, 	as follows:
It 	shall be unlawful 	for 	a public 	school
employer 	to:
1l
)
)
)
)
)
)
)
)
)
)
)
)

(a) 	Impose 	or 	threaten 	to 	impose 	reprisals
on employees, 	to discriminate or 	threaten to
discriminate 	against 	employees, 	or 	otherwise
to interfere with, 	restrain, 	or coerce
employees because 	of 	their 	exercise 	of
rights 	guaranteed by 	this 	chapter.
(b) 	Deny to employee 	organizations 	rights
guaranteed 	to 	them by 	this 	chapter.
(c) 	Refuse 	or 	fail 	to meet 	and negotiate 	in
good 	faith 	with 	an 	exclusive 	representative.
Specifically, 	charging party appeals 	the dismissal 	of
paragraphs 10, 	11, 	17, 	and 18 of its amended charge which, 	in
essence, 	alleges 	the 	following:
Paragraph 	10: 	As 	a 	consequence of 	joining 	the JPA,
respondent 	"affected 	a material 	and 	significant 	change 	in 	the
[total] 	amount 	of 	compensation 	received by 	the 	members 	of 	the
bargaining 	unit 	in 	the 	form of health 	and welfare benefits"
since:
a. 	The 	total 	amount 	of 	compensation provided became
subject 	to a 	"non-negotiable 	cost 	assessment 	unilaterally
established 	by 	the 	Unilateral 	Insurer."
b. 	The 	premium 	price 	and 	duration of 	insurance 	plans
became 	subject 	to adjustment by 	the 	JPA.
c. 	The penalties 	or 	disincentives 	for 	a change 	in 	insurer
"substantially 	increase[d] 	the cost 	to the union 	for, 	or
place[d] significant 	constraints 	on, 	bargaining any change 	in
health 	or 	welfare benefits 	which 	entails 	a 	change 	in 	insurer."
d. 	The basis 	for 	determining 	increases 	in premium prices
changed.
22

e. 	A 	foreseeable 	change 	in 	the 	amount 	of 	premium 	costs has
occurred.
Paragraph 	11: 	As 	a consequence 	of 	joining 	the JPA,
respondent 	"effected 	a material 	and 	significant 	change 	in 	the
amount 	of 	the 	contribution 	individual 	bargaining 	unit 	members
must 	make 	to 	ensure 	continued 	eligibility 	for health 	and
welfare benefits."
Paragraphs 	17 	and 	18: 	Respondent 	attempted 	to 	"derogate
and 	undermine 	[charging party's] 	authority 	[as] 	exclusive
bargaining 	representative 	by 	unilaterally 	implementing 	its
bargaining position 	on health 	and welfare benefits."
We have 	reviewed 	the 	partial 	dismissal 	and 	adopt 	that
portion of 	the 	regional 	attorney's 	analysis 	which dismisses 	the
allegations 	contained 	in paragraphs 	10, 	17, 	and 18 of the
amended charge. 	As 	to paragraph 11 of 	said charge, 	we disagree
with 	the 	regional 	attorney's 	conclusion.
For 	the 	purposes 	of 	determining 	the 	existence 	of 	a prima
facie 	case, 	the 	essential 	facts 	alleged by 	the 	charging party
are 	deemed 	true. 	(San Juan Unified 	School 	District 	(1977) 	PERB
Decision No. 	12.) 	On 	its 	face, 	paragraph 	11 of 	the charge
alleges 	that 	respondent 	changed 	the 	amount 	individual
bargaining 	unit 	members 	must 	contribute 	to 	ensure 	continued
eligibility 	for health and welfare 	coverage. 	We 	view 	this 	as
more 	than 	speculative 	or merely an 	"alternate 	theory" 	as
construed by 	the 	regional 	attorney. 	Rather, 	charging party has
depicted 	an actual 	change 	that has 	happened which 	is 	alleged 	to
w	
3

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

STATE Of CALIFORNIA 	GEORGE DEUKMEJIAN, Gover
PUBLIC EMPLOYMENT RELATIONS BOARD
LOS ANGELES REGIONAL OFFICE
3470 WILSHIRE •LVD., 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-2528, 	Huntington Beach 	Elementary Teachers
Association 	v. 	Huntington Beach 	City 	School 	D i s t r i c t
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
Huntington Beach 	Elementary 	Teachers 	Association 	(Association)
a l l e g e s 	that 	the 	Huntington Beach 	City 	School 	D i s t r i c t
( D i s t r i c t ) 	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 	v i o l a t i o n 	of Educational Employment 	Relations 	Act
(EERA) 	s e c t i o n s 	3543.5 	( a ) , 	(b), 	and 	( c ) .
I 	indicated 	to you 	in my 	attached 	l e t t e r 	dated August 26, 	1987
that 	the 	p a r t i e s 	of 	the 	above-referenced 	charge 	did 	not 	s t a t e 	a
prima 	f a c i e 	c a s e . 	You 	were 	advised 	that 	if 	there 	were 	any
factual 	inaccuracies 	or 	additional 	f a c t s 	which 	would 	correct
the 	d e f i c i e n c i e s 	explained 	in 	that 	l e t t e r , 	you 	should 	amend 	the
charge 	accordingly. 	You were 	a l s o 	invited 	to 	submit 	any 	l e g a l
argument. 	You 	were 	further 	advised 	that 	unless 	you 	amended 	the
charge 	to 	s t a t e 	a 	prima 	facie 	case, 	or 	withdrew 	it 	prior 	to
September 	1, 	1987, 	the 	noted portions 	of 	the 	charge 	would 	be
dismissed.
The 	time 	within 	which 	to 	f i l e 	an 	amended 	charge 	was 	extended 	to
September 	8, 	1987. 	On September 9, 	1987 	an amended charge 	was
received, 	alleging 	v i o l a t i o n s 	of EERA s e c t i o n s 	3543.5 	(a) , 	(b) ,
( c ) , 	and 	( d ) .
For 	the 	reasons 	which 	follow, 	the 	following 	a l l e g a t i o n s 	of 	the
amended 	charge w i l l be 	dismissed: 	Paragraphs 	10, 	11, 	17, 	and
18. 	The 	a l l e g a t i o n s 	in paragraphs 	15 	and 	16 	have 	been
withdrawn. 	Under 	separate 	cover 	today 	a 	complaint 	has 	issued
alleging 	that 	the 	D i s t r i c t ' s 	action 	of 	joining 	the 	JPA was 	an
unlawful 	u n i l a t e r a l 	change 	because 	it 	resulted 	in 	a 	change 	in
b e n e f i t s 	and 	resulted 	in 	a 	s i g n i f i c a n t l y 	l e s s 	r e l i a b l e 	insurer.
PARAGRAPHS 10 AND 11:
Paragraph 	10 (a) 	- Compensation 	in 	the 	form of health 	and
welfare 	b e n e f i t s :
The 	c o l l e c t i v e 	bargaining 	agreement 	provided 	for 	1986-87 	that
J

the 	District 	would 	provide 	fully 	paid 	employee 	health 	insurance
and 	75 percent 	of 	the cost of dependent coverage. 	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 	or 	that 	the 	amount 	of 	employee 	contribution 	for
dependent 	coverage 	increased 	when 	the 	District 	joined 	the 	JPA.,
as 	a 	result 	of 	the 	District 	joining 	the 	JPA.
October 	15, 	1987
LA-CE-2528
Page 	2
This 	allegation merely 	restates 	the 	allegation 	in paragraph 	11
(1) 	and 	(5) 	of 	the original charge. 	The allegation, 	as made 	in
the 	amended 	charge 	and 	the 	original 	charge, 	is 	that 	the 	JPA,
rather 	than 	the 	District 	sets 	the 	cost 	assessment 	for 	health
and 	welfare 	benefits 	and 	therefore, 	the 	District 	will 	no 	longer
negotiate 	with 	the 	Association 	about 	the 	amount 	of 	compensation
to 	be 	provided 	for 	members 	of 	the 	bargaining 	unit 	in 	the 	form
of 	health 	and 	welfare 	benefits.
The 	JPA does 	set 	the 	contribution 	rate 	for 	the District 	to
receive 	health 	insurance 	coverage 	through 	the 	JPA. 	It 	does 	not
necessarily 	follow, 	however, 	that 	the District must 	then pass
on 	any 	increase 	assessed 	by 	the 	JPA 	to employees, 	or 	a
fortiori, 	that 	it must 	do 	so 	without 	fulfilling 	its 	obligation
to bargain with 	the 	Association. 	Faced with 	an 	increased
contribution 	rate 	from 	the 	JPA 	for 	continued 	health 	insurance,
the 	District 	can 	assume 	the 	increased costs; 	it 	can 	bargain 	to
impasse 	with 	the 	Association 	about 	increasing 	the 	amount 	of
employee contribution 	toward 	health; 	or 	it can withdraw 	from
the 	JPA and 	seek 	other 	means 	of 	providing 	the 	bargained-for
health 	insurance 	to 	employees.1
If 	the 	result 	of 	bargaining 	is 	that 	no 	increased costs can 	be
passed 	on 	to 	employees 	and 	if 	the 	District 	doesn't 	wish 	to
assume 	those costs, 	again 	the District can 	leave 	the 	JPA. 	It
is 	simply 	not 	an 	automatic consequence 	of 	an 	increase 	in 	the
contribution 	rate 	by 	the 	JPA 	that 	the 	District 	will 	change 	the
amount 	of 	compensation 	provided 	to 	employees 	in 	the 	form of
1 The 	discussion 	in 	this 	paragraph 	assumes 	that 	the 	status
quo 	in 	health 	insurance 	in 	the 	District 	is 	that 	employees
receive 	health 	insurance 	without 	making 	any 	contribution 	for
those 	benefits. 	An 	argument could be made, 	of course, 	based 	on
the contract 	language, 	that 	the 	status 	quo 	is 	that 	the District
only contributes 	up 	to 	the 	ceiling 	amount 	in 	the 	agreement, 	and
after 	that 	the 	employees 	pay 	the 	costs 	of 	health 	insurance. 	If
that were 	the 	status quo, 	however, 	to change 	employee
contributions 	for 	health 	insurance 	would 	not 	be 	an 	unlawful
unilateral 	action 	because 	it would 	not 	alter 	the 	status 	quo.

October 	15, 	1987
LA-CE-2528
Page 	3
health 	and 	welfare 	benefits. 	As 	the 	Board 	stated 	in 	Trinidad
Union 	Elementary 	School 	District/Peninsula 	Union 	School
District 	(1987) 	PERB Decision No. 	629, 	there must be 	some
cogent 	evidence 	that 	changes 	have 	happened 	or 	will 	happen,
which 	have 	significantly 	changed 	or 	will 	significantly 	change
employee 	benefits. 	The 	fact 	that 	the JPA 	sets 	the 	contribution
rates 	for 	insurance 	is 	not 	such 	evidence.
For 	these 	reasons 	and 	for 	the 	reasons 	stated 	in my August 	26,
letter 	relating 	to paragraph 	11(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
11(1) 	and 	(5) 	of 	the 	original charge. 	It 	adds 	the element of
the 	duration 	of 	the 	health 	insurance plan, 	but 	other 	than 	that
addition, 	it merely 	applies 	the 	same 	logic 	and 	requires 	the
same 	level 	of 	speculation 	about 	how 	the 	District 	will 	respond
to 	a change 	in the 	contribution 	rate 	by the 	JPA, 	as 	noted 	above
under 	Paragraph 10(a).
Nor 	does 	the 	fact 	that 	JPA can 	change 	the 	premium cost 	at 	any
time, 	or 	even 	adjust 	it 	retroactively, 	change the 	fact 	that 	the
District 	is 	not 	required 	to 	remain 	in the 	JPA, 	nor 	is 	it
required 	to 	unilaterally 	change 	employee 	contribution 	for
health 	insurance 	even 	if 	the 	JPA does change 	the 	District's
contribution 	rate 	to 	the 	JPA.
You 	argue 	in your 	October 	7, 	1987 	letter 	that joining 	the 	JPA
has 	resulted 	in 	actual changes 	in 	insurance plan duration, 	and
that 	other 	changes 	are 	reasonably 	foreseeable 	as 	a 	result 	of
that 	action. 	Insofar 	as 	the 	alleged 	actual 	and 	reasonably
foreseeable changes 	relate 	to 	the 	cost 	of 	insurance, 	or 	other
costs 	to 	the 	employer 	(whether 	during 	or 	after 	membership 	in
the 	JPA), 	they do 	not 	form an 	adequate 	basis 	for 	a prima 	facie
unilateral 	change 	case 	for 	the 	reasons 	stated 	at p. 	4 	of 	this
letter, 	supra. 	Insofar 	as 	the 	allegations 	in paragraph 	10(b)
2You 	allege 	that 	the 	premium 	amount 	the 	employer 	pays 	for
health 	insurance 	is 	a matter 	within 	scope.
The discussion of the Board's decision 	in Plumas, 	at
page 	5 of 	this 	letter, 	infra, 	however, 	demonstrates 	that a
change 	in premium amount 	(i.e. 	, 	employer 	costs 	for 	health
insurance) 	without more, 	is 	not 	an unlawful 	unilateral 	change.

October 	15, 	1987
LA-CE-2528
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 	tha	- 	t
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 	26 	letter,
in 	response 	to paragraph 	11(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
11(4) 	of 	the 	original charge.
It 	alleges 	that 	as 	a 	result 	of 	joining 	the 	JPA various
disincentives 	or 	penalties 	exist 	to 	bargaining 	a change 	in 	the
insurer. 	You 	urge 	that 	these potential cost 	items are 	such 	as
to 	"increase 	the cost 	to 	the Union 	for, 	or 	place 	significant
constraints on, 	bargaining 	any change 	in health or 	welfare
benefits which 	entails 	a 	change 	in 	insurer." 	(Amended 	Charge
page 	8, 	lines 	4-6.) 	Even 	if one 	assumes 	the 	existence of 	each
of 	the 	alleged disincentives 	or 	penalties, 	this 	allegation does
not 	state 	a prima 	facie case. 	During 	the 	course of 	our
discussions 	about 	these 	allegations, 	I pointed 	out 	that 	any
penalties 	for 	or 	financial 	disincentives 	to 	withdrawing 	from
the 	JPA prior 	to 	three 	years 	do 	not 	necessarily 	imply 	that
faced with 	such penalties, 	the 	District will 	bargain 	in bad
faith, 	or 	that 	the 	District will 	bargain 	in 	bad 	faith 	rather
than 	accept 	such 	penalties. 	Joining 	the 	JPA 	is 	not 	an 	adequate
predictor, 	much 	less 	a predeterminor, 	of 	the 	District's 	future
bargaining 	behavior.
PARAGRAPH 	10(d) 	- Basis 	for 	Determining 	Increases 	in 	Premium
Price
For 	the 	reasons 	stated 	above 	relating 	to 	the 	other
subparagraphs 	of 	Paragraph 	10 	of 	the 	amended 	charge, 	and 	for
the 	reasons 	in 	reference 	to 	Paragraphs 	10 	and 	11 	stated 	below,
this 	allegation 	is 	dismissed.

October 	15, 	1987
LA-CE-2528
Page 	5
PARAGRAPH 	10(e) 	- 	Total 	Premium Amount
This 	allegation 	is 	merely 	a 	restatement 	of 	the 	first 	allegation
in paragraph 	10(b). 	For 	the 	same 	reasons stated 	hereinabove
under paragraph 10(b), 	it 	is dismissed.
PARAGRAPH 	11
This 	paragraph 	alleges 	that 	a 	change 	in premium 	amounts
constitutes 	a 	unilateral 	change 	on 	the 	theory 	that 	it 	changes
the 	amount 	employees 	must 	contribute 	for 	continued 	eligibility
in 	the 	health 	insurance 	plan. 	The 	alternate 	theory 	for 	how 	the
change 	would 	affect 	employees 	does 	not 	affect 	the 	analysis.
For 	the 	reasons 	stated 	hereinabove, 	the 	allegation 	in paragraph
11 	is dismissed.
In 	sum the 	allegations 	in paragraphs 	10 	and 	11 do 	not 	state 	a
prima 	facie 	case 	because 	they 	assume 	that 	the District 	must 	act
in 	an 	unlawful manner 	in 	response 	to 	an 	increase 	(or 	decrease)
in contribution 	rate 	by 	the JPA. 	This 	is 	simply 	not 	so. 	In
the 	event 	the District were 	to act 	in such 	a manner, 	a charge
could 	then be 	filed, 	alleging 	an 	unlawful 	unilateral 	action 	by
the 	District, 	or 	failure 	to 	bargain 	in good 	faith 	at 	the
negotiating 	table.
The Board's decision 	in Plumas, 	PERB Decision No. 	578 	supports
the 	dismissal of 	the 	allegations 	in paragraphs 	10 	and 	11. 	In
that 	case, 	the 	Plumas 	district 	unilaterally moved 	from 	a 	health
insurance 	plan 	administered 	by 	Equitable Benefit 	Plan 	(EBP) 	to
a 	self-funded plan 	(up to 	a 	stop-loss amount) 	administered 	by
EBP. 	The Board's 	decision 	states 	that 	the 	Plumas district
saved 	$100,000 	in 	health 	insurance 	costs 	by the 	shift 	to 	the
self-funded plan. 	Yet 	the 	Board 	found 	no 	unlawful 	unilateral
change 	in 	negotiable 	terms 	of employment, 	based on 	that 	fact
(and on others 	articulated 	in the decision). 	Thus, 	the Board
has 	not 	found 	a mere 	insurance cost 	saving, 	without more, 	to 	be
an 	unlawful 	unilateral change. 	The 	allegations 	in paragraph 	10
rest 	squarely 	on 	the 	proposition 	that 	such 	a cost 	saving 	(i.e.,
change 	in the employer's premium costs), 	even 	if 	it has 	no
impact on 	the 	amount 	of 	employee 	contribution, 	is 	an 	unlawful
unilateral change.
During 	the course 	of 	our 	discussions 	about 	the 	amended 	charge,
you 	cited 	various 	cases 	to 	support 	the 	issuance 	of 	a 	complaint
based 	on 	the 	allegations 	in paragraph 	10 	and 	11. 	Then on
October 	7, 	you 	submitted 	a 	memorandum detailing 	your 	arguments

October 	15, 	1987
LA-CE-2528
Page 	6
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
LA-CE-2528
Page 	7
Examining 	each of 	the 	allegations 	in
paragraphs 	10 	and 	11 	under 	these 	standards
establishes 	that 	the 	changes 	enumerated
there 	are 	both 	legally 	cognizable 	and 	within
the 	scope 	of 	representation.4
The 	Board's 	decision 	in 	Trinidad
"reaffirmed" 	that 	insurance 	premium costs
are 	negotiable, 	"at 	least 	by 	implication."
(October 	7, 	1987 letter, p. 	15.) 	In
addition, 	joining 	the 	JPA constituted 	an
illegal 	parity 	agreement 	under 	the 	Court 	of
Appeals 	analysis 	in 	Banning 	Teachers
Association 	v. 	Public 	Employment 	Relations
Board 	(1986) 	186 Cal.App.3d 	569, 	(Hg 	granted
- 	Case No 	LA 	32300). 	Finally, 	even under
the 	totality of 	the 	circumstances 	rather
than 	the per 	se 	test, 	joining 	the 	JPA 	is 	a
violation of 	EERA section 	3543.5 	(c).5
None of 	these 	arguments, 	or 	the cited cases, 	are persuasive.
First, 	whether 	on 	the 	basis 	that 	the 	claim 	is 	not 	legally
cognizable, 	or 	because 	the 	subject 	itself 	is 	not within 	the
scope 	of 	representation, 	the 	Board 	in 	Plumas Unified 	School
District 	(1986) 	PERB Decision No. 	578, 	found no unlawful
unilateral 	change 	in 	a 	case 	where 	the 	employer 	saved 	$100,000
in premium costs 	by 	self-funding 	insurance. 	That 	case 	is
dispositive 	of 	the 	issue 	that 	a mere 	savings 	in premium costs,
without more, 	is 	not an unlawful 	unilateral change. 	To 	issue 	a
complaint 	on 	the 	allegations 	in paragraphs 	10 	and 	11 would 	be
contrary 	to 	that 	decision.
Second, 	even 	using 	the 	"reasonably 	foreseeable" 	standard 	for
determining 	whether 	joining 	the 	JPA 	is 	an 	unlawful 	unilateral
change, 	facts 	have 	not 	been 	alleged 	that 	show 	a 	reasonably
foreseeable 	change 	in negotiable 	subjects 	by a mere 	change 	in
the 	cost 	to 	the 	District 	for 	providing 	the 	insurance. 	[This 	of
course 	assumes 	that 	a mere 	change 	in costs 	is 	not 	negotiable,
4The 	scope 	analysis 	is, 	first 	that 	premium costs 	are
"wages," 	an enumerated 	subject; 	or 	even 	if 	they are 	not
directly 	wages,under 	the 	Anaheim 	analysis, 	they 	are 	closely
related 	to wages, 	and 	therefore 	within 	scope.
55These	These 	latter 	two 	arguments 	were 	not 	raised 	previously.

October 	15, 	1987
LA-CE-2528
Page 	8
following 	Plumas. 	It 	is 	not disputed 	that 	there 	were premium
cost savings.] 	Additionally, 	as 	stated 	hereinabove, 	the
District's 	future 	bargaining 	behavior 	is 	not 	predetermined 	by
its 	joining 	of 	the 	JPA.
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

October 15, 	1987
LA-CE-2528
Page 	9
other 	changes 	in 	benefits 	that 	the Association may 	seek 	at 	the
negotiating 	table. 	The 	tendency 	toward 	homogenization,
assuming 	for 	the 	sake 	of 	argument 	that 	it will occur, 	is not 	in
and 	of 	itself 	indicative 	of 	bad 	faith 	bargaining. 	Again 	it 	is
speculation 	that 	such 	bad 	faith 	bargaining 	will 	occur. 	If
during 	the 	future 	course 	of 	negotiations 	about health
insurance, 	the District fails to negotiate 	in good 	faith, 	that
is 	the 	time 	to 	file 	a charge 	about 	that 	behavior.
For 	all the 	foregoing 	reasons, 	the allegations 	in paragraphs 	10
and 	11 	of 	the 	amended 	charge 	are 	dismissed.6
PARAGRAPHS 	17 	and 	18 	- Undermining
These 	allegations 	were 	not made 	in the 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
Supply Corp. 	v. 	NLRB 	(1944) 	321 U.S. 	678 	[14
LRRM 	581].)
6Paragraph 	9(b) 	of 	the 	amended 	charge 	could 	be 	read 	to
make 	the 	same or 	similar 	allegations 	as 	those 	in paragraphs 	10
and 	11. 	I, 	however, 	read paragraphs 	1-9 	to be preliminary to
the 	allegations 	of 	the manner 	in 	which 	the 	alleged 	unilateral
change 	altered 	negotiable 	terms 	and 	conditions 	of 	employment,
and 	have 	not 	therefore 	formally 	dismissed 	any of 	those
allegations. 	Insofar as any allegations 	in paragraphs 	(l)-(9),
including but not 	limited 	to paragraph 	9(b), 	are 	intended 	to 	or
actually 	restate 	in 	substance 	the 	allegations 	in paragraphs 	10
and 	11, 	they are 	also dismissed.

October 	15, 	1987
LA-CE-2528
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 mist 	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
LA-CE-2528
Page 	11
Service
All 	documents 	authorized 	to 	be 	filed 	herein 	must 	also 	be
"served" 	upon 	all parties 	to 	the proceeding, 	and 	a 	"proof 	of
service" 	must 	accompany 	each 	copy 	of 	a 	document 	served 	upon 	a
party 	or 	filed 	with 	the 	Board 	itself. 	(See 	section 	32140 	for
the 	required 	contents 	and 	a 	sample 	form.) 	The document 	will 	be
considered 	properly 	"served" 	when 	personally 	delivered 	or
deposited 	in 	the 	first-class 	mail 	postage 	paid 	and 	properly
addressed.
Extension 	of 	Time
A 	request 	for 	an extension 	of 	time 	in 	which 	to 	file 	a 	document
with 	the 	Board 	itself 	must 	be 	in 	writing 	and 	filed 	with 	the
Board 	at 	the 	previously 	noted 	address. 	A 	request 	for 	an
extension 	must 	be 	filed 	at 	least 	three 	calendar 	days 	before 	the
expiration 	of 	the 	time 	required 	for 	filing 	the 	document. 	The
request must 	indicate good cause 	for 	and, 	if 	known, 	the
position 	of 	each 	other 	party 	regarding 	the 	extension, 	and 	shall
be 	accompanied 	by proof 	of 	service 	of 	the 	request 	upon 	each
party 	(section 32132).
Final 	Date
If 	no 	appeal 	is 	filed within the 	specified 	time 	limits, 	the
dismissal 	will 	become 	final 	when 	the 	time 	limits 	have 	expired.
Sincerely,
JOHN 	SPITTLER
Acting 	General 	Counsel
By Sandra 	Owens 	Dennison
Regional 	Attorney
Attachment
cc: 	James Romo, 	Attorney

STATE OF CALIFORNIA 	GEORGE DEUKMEJIAN Governor
PUBLIC EMPLOYMENT 	RELATIONS BOARD
LOS ANGELES REGIONAL OFFICE
3470 WILSHIRE BLVD. SUITE 1001
LOS ANGELES, CALIFORNIA 	90010
(213) 734-3127
August 	26, 	1987
Robert 	Lindquist, 	Attorney
California 	Teachers 	Association
Post 	Office 	Box 	92888
Los Angeles, 	CA 	90009
Re: 	LA-CE-2528, 	Huntington Beach Elementary Teachers
Association 	v. 	Huntington Beach 	City 	School 	D i s t r i c t
Dear Mr. 	Lindquist:
In 	the 	above-referenced 	charge 	the 	Huntington Beach Elementary
Teachers 	Association 	(Association), 	alleges 	that 	the 	Huntington
Beach 	City School D i s t r i c t 	(District) 	made 	a 	unilateral change
in 	health 	insurance 	benefits 	by 	joining 	the 	Orange 	County
Fringe Benefits 	Joint 	Powers 	Authority 	(JPA or 	Authority).
This 	action 	is 	alleged 	to 	be 	a v i o l a t i o n of 	Educational
Employment 	Relations Act 	(EERA) 	sections 3543.5 	( a ) , 	(b) ,
and ( c ) .
My 	investigation of 	the 	charge 	revealed 	the 	following
information.
The 	JPA was 	formed on January 1, 	1987, 	by 	the 	D i s t r i c t and
eight other 	public 	educational 	agencies. 	The 	D i s t r i c t ' s
membership was e f f e c t i v e 	on 	that 	date. 	The 	D i s t r i c t Board 	of
Education 	acted 	to 	join 	the JPA on 	January 6, 	1987.
The 	Agreement 	establishing 	the 	JPA 	provides 	that 	it 	was 	formed
pursuant 	to 	Government 	Code 	sections 	6500 	et 	s e q . , 	to 	"jointly
provide 	for 	a 	seIf-insurance 	program for 	employee 	health 	and
welfare b e n e f i t s . " 	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, 	A r t i c l e 	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 	level 	of 	reserves; 	and 	plan
design." 	(By-Laws, 	Article 	V. 	Section 	B.1.) 	Premiums 	are 	to
be 	paid 	to monthly or 	tenthly 	by 	the member 	d i s t r i c t s .
Insurance 	companies 	assign 	insureds 	to 	experience 	rating 	pools
which 	are 	used 	as 	a 	p a r t i a l 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.
August 	26, 	1987
LA-CE-2528
Paqe 	2
The 	self-insurance 	aspect 	of 	the 	JPA 	funding 	of 	the 	health
insurance 	benefits 	is 	limited 	by 	an 	aggregate 	stop-loss
provision of 	120% 	of the District's anticipated claims. 	There
is 	also 	an 	individual 	stop-loss provision 	of 	$50,000 per
employee. 	(This 	is 	not 	recited 	in the 	JPA Agreement or 	bylaws,	
. .
but 	it 	is 	undisputed 	by the Association 	that 	these 	are 	the
stop-loss 	amounts.) 	This 	stop-loss 	aspect 	of 	the 	JPA
self-funding 	arrangement provides 	that 	the 	District 	is 	fully
insured 	by Blue 	Shield, 	in 	the 	aggregate 	for 	amounts 	beyond
120% 	of 	its 	anticipated claims 	in a year. 	The JPA's 	reserves
(from member 	district contributions) 	are 	established 	so as 	to
cover 	the 	exposure 	up to 	120% 	of 	the 	initial 	anticipated claims.
The 	Agreement which 	establishes 	the 	JPA provides 	that 	its
members 	are 	jointly 	and 	severally 	liable 	"upon 	any 	liability
which 	is 	otherwise 	imposed 	on 	any 	one 	of 	the 	members 	or 	upon
the 	Authority 	for 	injury caused 	by 	a 	negligent 	or 	wrongful 	act
or 	omission 	occurring 	in the performance 	of 	the Agreement."
The Agreement 	requires 	the district 	to 	remain 	in 	the JPA for 	3
years 	unless 	earlier 	termination 	is 	"required 	as 	a condition 	of
collective 	bargaining." 	If 	a member 	district 	terminates before
three years, 	however, 	there will 	be 	no 	refund or 	repayment of
its contributions 	to 	the JPA.
The 	JPA 	is governed 	by a Board 	of 	Directors, 	with most
decisions 	requiring 	only 	a majority 	vote. 	Each 	member 	district
has one 	vote 	on 	the Board of Directors, 	regardless of 	the
number 	of 	employees 	of 	the district.
The 	collective 	bargaining 	agreement 	in 	effect 	at 	the 	time 	the
District 	acted 	to 	join 	the 	JPA provided 	in 	Article 	XV:
15.1 	The 	District 	agrees 	to 	continue 	to
provide 	current 	coverage 	for 	the
following 	teacher 	insurance 	programs 	and
assume 	the 	inflationary 	costs 	for 	the
1985-86 	school 	year:
15.1.1 	Medical 	and 	75% 	of 	dependent
coverage.

August 	26, 	1987
LA-CE-2528
Page 	3
As 	a 	result of 	reopener 	negotiations, 	concluded 	on or 	about
December 	2, 	1986, 	the 	parties 	agreed 	to continue 	the 	1985-86
program for 	the 	1986-87 	school 	year. 	There 	were 	no 	discussions
of 	the 	JPA during 	those 	negotiations. 	The 	carrier 	for 	health
insurance 	at 	that time was, 	and 	remains, 	Blue Shield.
On or about January 	28, 	1987, 	the District sent out 	a
memorandum 	to 	employees 	regarding 	health 	insurance. 	The 	charge
alleges that 	in 	the memorandum, 	the 	District 	informed 	the
employees 	of 	the 	following 	changes 	in 	benefits 	as 	a 	result 	of
joining 	the 	JPA:
(1) 	A modification of 	the 	claims payors
from Sonora 	Service 	Center 	to 	Lodi 	Service
Center;
(2) 	Assignment 	of 	a new and 	different
policy 	number;
(3) 	A delay 	in processing 	of 	any 	new
Medical claims 	until the 	issuance 	of 	new
Blue 	Shield 	cards 	are 	issued;
* •
(4) 	modification of plan provisions
regarding 	extension of 	benefits 	for 	disabled
employees as dependents; 	and
(5) 	A change 	in the pre-existing claim
form 	to 	a 	new and 	different 	claim 	form.
The 	only change 	in 	the 	claims 	form apparent 	from the
January 	28, 	1987 memorandum 	is a change 	in the color 	of 	the
form.
With 	respect 	to 	the 	"extension of 	benefits 	for 	disabled
employees as dependents 	(subparagraph 	(4) 	above)," an
attachment 	to 	the 	January 	28 	memorandum 	requires 	employees 	(or
their 	dependents) 	who 	became 	totally 	disabled 	while 	covered
under 	the 	prior 	medical plan 	to 	notify 	the 	District 	in 	order
for 	benefits 	to be extended beyond January 	31, 	1987, 	under
Insurance 	Code 	section 	10128.2. 	The 	document 	states 	that 	if
disabled 	employees 	and 	their 	dependents 	fail 	to 	comply 	with 	the
notification 	requirement, 	they 	will 	lose 	their 	entitlement 	to
some 	unspecified 	benefits.
The 	charge 	alleges 	in paragraph 	11 	that 	the 	District's decision
to 	join 	the 	JPA 	reduced 	or 	eliminated 	benefits 	in 	the 	following
ways:

August 	26, 	1987
LA-CE-2528
Page 	4
(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 	Shield, 	and 	as 	a 	consequence, 	Charging
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;
(6) 	Respondent 	has 	transferred 	its 	claims
experience 	pool 	from 	the 	District 	as 	its 	own
claims 	pool 	to 	the 	JPA 	pooled 	claims
experience, 	thus 	affecting 	the 	benefits 	base
available 	for 	the 	premium 	rates 	agreed 	upon
between 	Charging 	Party 	and 	Respondent.
PARAGRAPH 	11, 	SUBSECTIONS 	(1) 	THROUGH 	( 5 ) ;
For 	the 	following 	reasons 	paragraph 	11, 	subsections 	(1) 	through
( 5 ) , 	of 	the 	charge 	does 	not 	state 	a 	prima 	facie 	violation 	of
the 	EERA.

August 	26, 	1987
LA-CE-2528
Page 	5
In determining 	whether 	a 	party 	has 	violated 	section 	3543.5(c)
of EERA, 	the 	PERB 	utilizes either 	the 	"per 	se" 	or 	"totality 	of
the 	conduct" 	test, 	depending 	on 	the 	specific 	conduct 	involved
and 	the 	effect 	of 	such conduct 	on 	the 	negotiating 	process.
Stockton Unified 	School District 	(1980) 	PERB 	Decision No. 	143.
Unilateral changes 	are considered 	"per 	se" 	violations 	if
certain criteria are met. 	Those criteria 	are: 	(1) 	the
employer 	implemented 	a 	change 	in 	policy 	concerning 	a 	matter
within the 	scope of 	representation, 	and 	(2) 	the change 	was
implemented 	prior 	to 	the 	employer 	notifying 	the 	exclusive
representative 	and 	giving 	it 	an 	opportunity 	to 	request
negotiations. 	Walnut Valley 	Unified 	School 	District 	(1981)
PERB Decision Mo. 	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 Mo. 	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 Mo. 	629. 	In 	that case, 	the Board
stated unequivocally 	that 	a 	"change 	to 	a 	self-funded plan does
not, 	without more, 	result 	in a per 	se violation of EERA." 	The
Board 	also 	found 	that 	joining 	a 	JPA 	to 	self 	fund 	benefits 	is
essentially 	the 	same 	as 	individually 	self-funding 	those
benefits, 	and 	therefore not 	negotiable 	under 	the 	Plumas
rationale. 	The 	Board 	articulated 	its 	reasons 	for 	finding 	the
JPA self-funding 	to 	be 	the 	same 	as 	individual 	self-funding, 	as
follows: 	first, 	the districts 	did not 	relinquish control over
insurance 	to 	the 	JPA 	second, 	the JPA did 	not 	result 	in 	less
reliability or 	greater 	risk; 	third, 	the 	lack of State
regulation of 	the 	JPA 	is 	not 	of 	consequence 	to 	the 	reliability
of 	the 	JPA; 	and 	fourth, 	the 	alleged 	lack 	of 	experience 	of 	the
JPA Board 	of 	Directors did 	not 	have 	any 	impact on 	the 	capacity
of 	the 	JPA 	to provide 	insurance 	coverage.
Further, 	in 	Trinidad, 	the 	Board 	reaffirmed 	that 	there 	must 	be
some 	"impact 	on 	services 	or 	benefits" 	in order 	to find 	a
(c) 	violation 	in 	a change 	in 	insurance 	carrier. 	Trinidad,
supra, 	at p. 	12.

August 26, 	1987
LA-CE-2528
Page 	6
The 	facts 	alleged 	in 	this charge 	appear 	to 	require dismissal of
paragraph 11, 	subsections 	(1) 	through 	(5), 	of the charge for
the 	same 	reasons 	which 	the 	Board 	stated 	in 	Trinidad. 	Each 	of
the 	Association's 	alleged 	areas 	of 	change 	in 	insurance 	benefits
in 	those 	subsections 	of paragraph 	11 will 	be 	analyzed 	in 	light
of 	the Board's 	holding 	in Trinidad.
Relinquishment 	of 	control
In Trinidad, 	the Board 	stated:
In 	sum, 	the evidence 	in the 	record 	supports
the 	conclusion 	that 	the 	Districts 	have
improved 	the 	ability 	to 	supply 	benefits 	at 	a
reduced cost to themselves. 	It 	is 	not
enough 	to 	theorize whether 	the 	JPA
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
Mo 	facts 	are 	alleged 	here 	that 	indicate 	that 	the 	JPA 	is 	less
reliable 	or 	puts 	employees 	at 	greater 	risk 	than 	they 	were 	under
the prior 	arrangement 	for 	funding 	health 	insurance. 	As 	in
Plumas 	and Trinidad, 	there 	is a 	stop-loss provision which
limits the exposure of the District, 	in this case, 	to 120% 	of
the 	anticipated 	claims 	for 	the 	insurance year. 	Beyond 	that
amount 	the 	District 	is 	fully 	insured 	by Blue 	Shield.2 The
argument 	is made 	that 	the 	joint 	and 	several 	liability 	of 	the
Districts 	in 	the 	JPA for 	each other's 	acts 	exposes 	this
IIln1n 	the 	footnote 	of 	this quote 	the Board 	states, 	"There
must 	be 	some 	cogent evidence 	that changes 	have 	happened or will
happen, 	which have 	significantly changed 	or 	will 	significantly
change 	employee 	benefits."
2Here, 	as 	in Plumas, 	if 	the 	stop-loss 	aspect of 	the
District's 	health 	insurance coverage were 	cancelled, 	then 	a
charge could 	be 	filed, 	in which some cogent 	evidence 	of 	a 	loss
in 	reliability 	and 	increased 	risk 	could 	be 	presented.
•

August 26, 	1987
LA-CE-2528
Page 	7
the 	ALJ's 	finding 	regarding 	the
exposure 	from joint 	and 	several 	liability. 	In 	this case, 	as 	in
Trinidad, 	Government 	Code 	section 	6508.1 permits 	the 	joint 	and
several 	liability of 	the member 	districts. 	Here, 	as 	in
Trinidad, 	the 	implication 	that 	such 	joint 	and 	several 	liability
creates additional risk and lack of reliability is rejected.
Control 	Over 	Reserves
The 	Association 	claims 	that 	the 	JPA 	now 	has 	control 	over
reserves, 	interests, 	premium overpayments, 	or 	rebates 	from
insurers, 	thereby 	"reducing 	the 	amount 	of 	money 	available 	for
district 	to 	liability 	for 	another 	district 	that 	might 	fail 	to
make 	its contributions. 	This 	argument 	fails 	to 	take 	into
account 	the 	fact 	that 	the 	JPA Bylaws 	provide 	that 	a member
district 	that 	fails 	to 	make 	the 	required 	contributions 	to 	the
Authority 	may 	be 	involuntarily 	terminated 	from 	the 	JPA, 	thereby
eliminating 	or 	cutting 	short 	the 	time 	within 	which 	the 	other
JPA members 	would 	arguably 	be 	incurring 	liability 	for 	the
contributions 	of 	the 	defaulting 	member. 	To 	speculate 	that 	such
exposure 	might 	continue 	for 	a 	long 	enough 	period 	of 	time 	to
make 	the 	JPA 	funding 	a 	less 	reliable method 	than 	the 	current
method, 	is 	just 	that, 	speculation. 	Under 	Trinidad, 	more 	than
just 	speculation 	is 	required 	to 	establish 	a change 	to 	a 	less
reliable 	insurer.
Moreover, 	the 	Board 	in 	Trinidad 	implicitly 	overruled 	the 	ALJ's
determination 	that 	the 	joint 	and 	several 	liability of 	the
member 	districts 	for 	each 	other 	was 	a 	factor 	creating 	increased
risk 	and 	lack of 	reliability. 	In 	his decision the ALJ 	stated:
The 	terms 	of 	the 	NCSMIG 	agreement 	and
bylaws, 	in particular, 	imposed 	joint and
several 	liability on 	the members, 	in 	accord
with the 	statute 	governing 	joint 	power
relationships. 	Small employers 	in the
NCSMIG, 	including 	Trinidad, 	are 	now exposed
to 	potential 	financial 	disaster 	by 	sharing
in 	liability 	up 	to 	the 	stop-loss 	amount.
This differs dramatically 	from Plumas, 	in
which 	the 	employer's 	exposure 	was 	no greater
after 	the 	switch 	to 	self-funding.
(Trinidad 	Proposed Decision 	(11/7/86) 	at
P. 	38.)
The Board, 	in deciding 	that 	the 	JPA 	in Trinidad did 	not 	result
in 	less 	reliability or 	greater 	risk 	to employees, 	stated,
"There 	was 	no evidence 	produced 	by 	the 	Charging 	Parties 	that
the 	JPA was 	not 	reliable 	. . . . 	The 	risk 	here 	was 	limited 	by
the 	stop-loss plan 	as 	it was 	in 	Plumas." 	By 	these 	statements,
the Board implicitly

August 	26, 	1987
LA-CE-2528
Page 	8
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.
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.) 	Prom these
provisions 	the 	Association deduces 	that 	the 	amount 	of 	money
available 	for. negotiating with Charging 	Party will be 	reduced
if 	the 	negotiations occur 	within 	the 	three-year 	period. 	This
is alleged 	to 	be one of 	the ways 	in which the District has
changed 	the 	benefits 	of 	employees. 	Even assuming 	the
Association's deduction to 	be 	valid, 	there 	are 	no facts alleged
that 	show 	that 	the 	three-year 	membership without 	full 	pro-rata
refund would 	materially change 	employee 	benefits. 	Under 	the
Board's decision 	in Trinidad, 	facts must 	be 	stated 	to 	show such
a material change 	in benefits 	by 	the 	JPA provision 	regarding
three-year 	membership 	without 	refund.
Control 	over 	retention, 	administrative 	costs 	and 	marketing
costs.
The 	Association 	also 	alleges 	that 	employee 	benefits 	have 	been
reduced 	or 	eliminated 	by 	the 	transfer 	of 	control 	over
retention, 	administrative 	costs 	and 	marketing 	costs 	from 	the
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

August 26, 	1987
LA-CE-2528
Page 	9
employer, 	does not, 	however, 	necessarily 	imply a change 	in
employee 	benefits. 	As 	in 	so many 	of 	the 	other 	areas 	of 	this
charge, 	the 	Association 	theorizes 	about 	what 	might 	happen 	as 	a
result 	of 	this 	alleged 	change 	in control. 	What 	might 	happen,
without 	facts 	to 	demonstrate 	how 	it 	might 	happen 	and 	how 	the
events would 	affect 	employee 	benefits, 	is 	not enough 	to 	state 	a
prima 	facie case 	in 	this 	area.
In 	sum, 	as 	in 	Plumas 	and 	Trinidad, 	the 	facts alleged 	in
paragraph 11, 	subsections 	(1) 	through 	(5), 	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 	by the 	allegations
in paragraph 11, 	subsections 	(1) 	through 	(5).
PARAGRAPH 10, 	SUBSECTIONS 	(1), 	(2), And 	(5)
In addition, 	paragraph 10 of the charge alleges, 	in part, 	that
employee 	benefits 	were 	changed 	by 	the 	District 	joining 	the 	JPA,
in 	the 	following 	respects: 	first, 	a change 	in the 	location of
the claims 	service center 	(subsection 	(1) 	of paragraph 	10);
second, 	the 	assignment of 	a 	new policy 	number 	(subsection 	2 	of
paragraph 	10), 	and third, 	by a change 	in claims form
(subsection 	(5) 	of paragraph 10). 	None of 	these changes
demonstrate 	any 	"impact 	on 	services 	or 	benefits," 	as 	the 	Board
required 	in Trinidad, 	in order 	to 	state 	a prima 	facie
unilateral change 	in 	health 	benefits.
First, 	with 	respect 	to 	the change 	in the 	location of 	the 	claims
service center, 	there 	are 	no 	facts 	alleged 	that demonstrate
some 	impact on services. 	It 	is not 	as 	if 	the location was
moved 	a 	significant 	distance 	from the 	district, 	so 	as 	to
arguably 	impact 	upon 	the 	time 	within 	which 	claims 	reach 	the
claims 	center. 	Claims 	are 	mailed 	by 	employees 	to 	the 	claims
service 	center. 	Both 	Lodi 	and 	Sonora 	are 	approximately 	the
same 	distance 	from 	the 	District. 	Nor 	have 	any 	other 	facts 	have
been 	provided 	that 	would 	show 	any 	other 	impact 	on 	services.
Second, 	with 	respect 	to the 	policy 	number 	change, 	no 	facts 	are
alleged 	to 	show any 	impact 	on 	services 	by 	the change, 	nor 	is
any 	apparent 	from 	the 	fact 	of 	such 	a 	change.
Third, 	with 	respect 	to 	the 	alleged 	change 	in claims 	forms, 	the
only change apparent 	from 	the 	January 	28, 	1987 memorandum
attached 	to the charge, 	is 	a change 	in 	the color 	of 	the 	form.
This 	is 	not 	a 	significant 	change. 	Nor 	are 	any 	other 	facts
alleged 	to 	show 	that 	this 	was 	some 	other 	change 	in 	claims
forms, 	that 	would 	have 	some 	impact 	on 	employee 	services 	under
the benefit program.

August 26, 	1987
LA-CE-2528
Page 	10
For 	these 	reasons, 	the allegations 	in paragraph 	10, 	subsections
(1), 	(2), and 	(5), and in paragraph 11, subsections (1) 	through
(5), 	of the charge, 	as presently written do not 	state a prima
facie 	case. 	If you 	feel 	that 	there 	are 	any 	factual
inaccuracies 	in 	this 	letter 	or 	any additional 	facts 	which would
correct 	the deficiencies explained above, 	please 	amend 	the
charge accordingly. 	In addition, 	if there 	is legal argument
which you wish to 	submit, 	I will also consider 	it. 	The amended
charge 	should 	be 	prepared 	on 	a 	standard 	PERB 	unfair practice
charge 	form clearly 	labeled First Amended Charge, 	contain 	all
the 	facts 	and 	allegations you wish to make, and 	be 	signed 	under
penalty of perjury 	by the 	charging party. 	The 	amended charg
-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 	the 	close 	of 	business
on September 	1, 	1987, 	I shall dismiss paragraph 10, 	subsections
(1), 	(2) 	and 	(5) 	and paragraph 11, subsections 	(1) 	through 	(5)
of 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