California State University (California State Employees Association) * * * VACATED by California State Employees' Association v. Public Employment Relations Board (1996) 51 Cal.App.4th 923 (PERB 1093H)

VACATED by California State Employees' Assn. v. Public
Employment Relations Bd. (1996) 51 Cal.App.4th 923
STATE 	OF 	CALIFORNIA
DECISION OF 	THE
PUBLIC 	EMPLOYMENT 	RELATIONS 	BOARD
CALIFORNIA 	STATE 	EMPLOYEES
ASSOCIATION, 	CSU DIVISION,
SEIU LOCAL 1000, 	AFL-CIO,
Charging 	Party,
v.
CALIFORNIA STATE 	UNIVERSITY,
Respondent.
Case No. 	LA-CE-328-H
PERB Decision No. 	1093-H
April 5, 	1995
Appearances: 	Claire Iandoli, 	Attorney, 	for California State
Employees' 	Association, 	CSU Division, 	SEIU Local 1000, 	AFL-CIO;
William G. 	Knight, 	Attorney, 	for California State University.
Before Caffrey, 	Carlyle and Garcia, 	Members.
DECISION
GARCIA, 	Member: 	This 	case is before 	the Public Employment
Relations 	Board 	(PERB 	or Board) 	on appeal 	by the 	California State
University 	(CSU) 	to 	a proposed decision by an administrative 	law
judge 	(ALJ) 	in which 	the ALJ 	found 	that 	CSU had violated section
3571(a) 	and 	(c) 	of the Higher Education Employer-Employee
Relations Act 	(HEERA or 	Act).1 After 	reviewing 	the 	entire
1HEERA is 	codified at Government 	Code 	section 3560 	et 	seq.
Unless 	otherwise 	indicated, 	all 	statutory references 	are 	to 	the
Government Code. 	Section 3571(a) 	and 	(c) 	provide that 	it is
unlawful 	for 	the 	higher 	education employer 	to:
(a) 	Impose or threaten to 	impose 	reprisals
on employees, 	to discriminate or threaten to
discriminate against 	employees, 	or otherwise
to interfere with, 	restrain, 	or coerce
employees because 	of 	their exercise 	of 	rights
guaranteed by this chapter. 	. 	. 	.
(c) 	Refuse or fail 	to engage 	in meeting and
conferring with an 	exclusive 	representative.
}
)
)
)
)
)
)
)
}
_____;____________ !

record, 	including the parties' 	exceptions and responses, 	the
Board 	reverses 	the ALJ's 	proposed decision.
JURISDICTION
PERB has 	jurisdiction over this 	case 	for 	the 	following
reasons: 	CSU is an employer under HEERA. 	The California State
Employees' 	Association, 	CSU Division, 	SEIU Local 1000, 	AFL-CIO
(CSEA) 	at 	all 	times 	relevant has been the 	exclusive
representative of bargaining units 2, 	5, 	7 and 9, 	under HEERA.2
The matter 	is 	not 	subject 	to any grievance agreement 	between CSU
and CSEA. 	Charges were 	timely 	filed.
PROCEDURAL 	BACKGROUND
CSEA filed an unfair practice 	charge 	on July 	6, 	1992. 	On
January 11, 	1993, 	after an investigation, 	the PERB General
Counsel 	issued a 	complaint 	against 	CSU. 	The 	complaint 	alleged
that before June 1, 	1992, 	merit salary adjustments 	(MSAs) 	were
paid based on merit 	and effective performance. 	It 	was 	alleged
that 	on or about June 	1, 	1992, 	CSU changed this policy by
suspending payment 	of MSAs. 	This 	action was 	taken without
affording 	CSEA an 	opportunity 	to meet 	and 	confer 	over both 	the
decision and the effects 	of 	the change 	in policy, 	in violation of
HEERA section 3571(a) 	and 	(c).
CSU filed its answer on January 29, 	1993, 	admitting that 	it
suspended MSA payments on June 	1, 	1992, 	but 	denying a violation
of 	HEERA.
2Unit 2 	consists of health care 	support; 	Unit 5 	is
operations 	support; 	Unit 	7 	is 	clerical/administrative support;
and Unit 	9 	is 	technical 	support.
22

A PERB-conducted 	settlement 	conference 	failed 	to 	resolve 	the
dispute.
A formal hearing was held on June 	16, 	1993, 	in Los Angeles,
California. 	With the 	filing of post-hearing briefs 	on July 30,
1993, 	the matter was 	submitted for a proposed decision.
FACTUAL 	BACKGROUND
The 	record shows 	that 	the parties 	have 	negotiated several
agreements 	of 	various 	duration which 	included a provision 	for
MSAs 	based 	on performance. 	The 	collective bargaining 	agreement
(CBA or contract) 	covering the period of 	1985 	to 	1988 	contained a
provision 	that 	read: 	"Merit 	salary adjustments 	shall 	be 	subject
to 	funds 	being 	appropriated by 	the 	Legislature 	and made 	available
to 	the 	CSU specifically 	for merit 	salary adjustments."3
CSU suspended MSAs 	during 	the year 	1988-89, 	thereby
increasing CSEA's 	effort 	to 	safeguard MSAs 	in 	the 	successor
agreement. 	In negotiations 	for the 	1989-92 	contract, 	the parties
3The 	1989-92 	contract 	contains 	the 	following 	language:
Any 	term of 	this Agreement 	which 	is 	deemed by
the 	Employer 	to 	carry an economic 	cost 	shall
not 	be 	implemented until 	the 	Employer
determines 	that 	the 	amount 	required
therefor[] 	has been appropriated and makes
such amount 	available 	for 	expenditure 	for
such purpose. 	If 	the Employer determines
that 	less 	than the amount 	needed to 	implement
this 	Agreement 	or any provision herein has
been 	appropriated 	to 	implement 	this Agreement
or any provision herein, 	the term(s) 	of this
Agreement 	deemed by 	the 	CSU 	to 	carry 	economic
cost 	shall 	automatically be 	subject 	to 	the
meet 	and 	confer process.
33

agreed that MSAs 	would be paid 	for 	the 	term of 	the 	agreement.
Section 20.19 	of 	the agreement provided:
Merit 	Salary Adjustments 	shall 	be paid
effective July 1, 	1989, 	and for the duration
of 	this agreement, 	subject 	to provisions
20.18 	and 	25.2.4
As 	agreed, 	the parties began negotiations 	on a 	successor
contract 	during the 	spring of 	1992. 	CSEA's proposal was
presented to CSU on March 1, 	1992, 	and CSU's proposal 	reached
CSEA on April 	14, 	1992.. 	Before bargaining began, 	the parties
agreed on ground 	rules, 	including a 	commitment 	not 	to 	resolve
economic 	items 	(including wages) 	until 	non-economic matters were
resolved. 	Robert 	Plankers 	(Plankers) 	represented CSEA in the
negotiations 	in the 	spring of 	1992 	and Kent 	Porter 	(Porter)
represented CSU. 	Between April 	6 and May 30, 	1992, 	the parties
met 15 times.
On April 	27, 	Porter announced that 	it was 	CSU's 	intent 	to
delete MSAs 	and not 	pay 	them 	if 	they were 	not 	expressly 	funded by
the 	Legislature. 	Plankers pointed out 	that 	there had never been
specific 	funding, 	but 	Porter's position was 	that 	if 	there was no
specific 	funding, 	there would be no MSAs. 	Other than the
April 	27 	discussion, 	there were no other discussions 	of MSAs
prior to the 	contract's 	expiration date of May 31, 	1992.
4Section 20.18 	provides 	that 	"[m]ovement 	between 	steps 	on
the 	salary 	range 	shall 	be 	based on merit 	and effective
performance." 	Section 25.2 	pertains 	to 	reopeners 	for the
1991-92 	fiscal year. 	By its 	terms, 	the agreement was 	to expire
on May 31, 	1992.
4

On June 	1, 	1992, 	Plankers 	spoke with Porter about the
contract. 	According to Plankers, 	Porter stated, 	"We're willing
to extend as 	long as progress 	is being made." 	He also stated,
"Nothing will 	be 	suspended 	for the 	time being." 	As 	a 	result 	of
this 	conversation, 	Planker's 	impression was 	that 	the whole
contract, 	without exception, 	had been extended.
The parties 	then met on June 9. 	CSU's position, 	as 	stated
by Porter, 	was 	that 	the contract was 	extended, 	except 	for MSAs.
Porter 	said he 	had been advised of 	this 	position 	only 	that
morning. 	MSAs were suspended as of June 1, 	1992, 	even for those
who had merited a 	step 	increase.5 No 	other 	items 	of 	cost,
including health benefits, 	were 	suspended.6 According 	to
Plankers, 	the June 9 	notice was 	the 	first notice 	that 	CSU was
suspending 	the MSAs.
Prior to 	the 	suspension of MSAs, 	neither party had requested
PERB 	to declare 	impasse. 	In late June 	CSEA requested impasse,
which was 	opposed by CSU. 	CSEA withdrew the 	request 	on
August 	10. 	CSU requested impasse on November 20, 	1992; 	it was
withdrawn later. 	The parties 	continued negotiations 	and 	in April
1993 	reached a 	successor agreement.
50n June 1.2, 	1992, 	Samuel Strafaci, 	director of employee
relations, 	wrote 	to the 	State 	Controller's 	Office 	concerning 	the
suspension of MSAs 	for CSEA employees. 	Strafaci 	noted 	that 	CSU's
commitment 	to pay MSAs 	expired with 	the 	contract 	expiration date.
Strafaci 	cited 	the 	contract provision on 	cost 	items 	as 	well 	as
section 3572 	of 	the Government Code 	(discussed below).
6At 	the 	time 	the MSAs were 	suspended, 	the parties had not
discussed any economic 	items, 	including payment 	of 	health 	care
costs, dental, 	or vision.
55

ALJ'S 	PROPOSED 	DECISION
The ALJ 	found 	that 	CSU's 	suspension of MSAs 	was 	inconsistent
with 	the past practice 	of paying MSAs 	every year. 	The 	single
suspension 	that 	occurred 	in 	1988 	was 	an 	"aberration" 	and did not
represent 	a pattern of 	conduct 	to establish a past practice 	of
unilateral 	suspension of MSAs. 	Thus, 	CSU violated HEERA section
3571(a) 	and 	(c) 	by unilaterally suspending MSAs prior to
completion of 	the 	statutory 	impasse procedures. 	The ALJ 	found
that 	since 	the 	statute 	expressly 	requires 	legislative 	funding 	for
payment 	of MSAs, 	he did not have the authority to order payment
of 	the MSAs, 	but 	instead he ordered as 	a 	remedy 	that 	CSU cease
and desist 	from 	"taking unilateral 	action and 	failing 	to meet 	and
confer 	in good 	faith with 	[CSEA] 	about 	suspension of merit 	salary
adjustments." 	Furthermore, 	he ordered CSU to, 	upon request, 	meet
and 	confer with CSEA on 	the 	suspension 	of MSAs.
As 	a 	secondary 	issue, 	the ALJ examined CSEA's 	allegations 	of
bad 	faith bargaining by 	CSU and 	found 	insufficient 	evidence 	of 	a
violation.
CSEA'S EXCEPTIONS7
CSEA agreed with 	the 	ALJ 	that 	CSU had 	committed 	an unlawful
unilateral 	suspension of MSAs, 	but 	argues 	on appeal 	that 	the ALJ
erred by 	failing 	to 	remedy the unilateral 	change. 	CSEA is
entitled 	to a 	return to 	the 	status 	quo ante 	of 	awarding MSAs
based 	on merit 	and 	effective 	performance.
7Both sides 	filed exceptions 	in this 	case. 	Although CSEA
"won" 	according 	to 	the result 	in the proposed decision, 	they
filed exceptions 	to 	the 	remedy, 	since 	the ALJ did not 	order
monetary 	relief. 	CSU 	in 	turn 	filed exceptions 	that 	respond 	to
CSEA's 	exceptions, 	and requested oral 	argument. 	Oral argument
was held before 	the Board on November 8, 	1994.
66

CSEA further argues 	that 	the 	ALJ 	erred by 	relying 	on HEERA
section 3572 	as 	dispositive 	of 	the 	status 	quo ante 	remedy.8 The
appropriate 	remedy under 	existing 	PERB precedent 	is 	for 	CSU to
maintain 	the 	status 	quo during negotiations 	by paying MSAs.
CSU'S 	EXCEPTIONS
In general, 	CSU's 	exceptions 	seek a determination by PERB
that 	the meet 	and 	confer process 	required under 	its 	CBA with CSEA
and under HEERA section 	3572 	is 	an after-the-fact 	bargaining 	of 	a
similar nature 	to 	"effects 	of 	layoff" 	bargaining. 	CSU fully
supports 	the ALJ's 	determination 	in 	the 	proposed decision 	that 	no
award of monetary relief 	is 	appropriate 	in this 	case.
CSU's 	first 	exception 	challenged 	the ALJ's 	statement 	that
"salary savings were 	. 	. 	. 	the source of funds for MSAs," 	since
there 	is 	no specified source of 	funding 	for MSAs. 	CSU argues
that 	this 	issue 	is 	important because 	it helps 	support 	the
statutory 	scheme 	of 	HEERA that 	"there 	can be no binding
commitment 	of matters 	which 	require 	funding without 	a 	supporting
appropriation."
8The ALJ 	relied 	on 	the 	second paragraph 	of 	HEERA section
3572(a) 	to conclude:
The plain meaning 	of 	the 	first part 	of 	that
section 	is 	that 	legislative budgetary action
necessary 	for provisions 	of memorandums 	of
understanding 	is 	a 	condition precedent 	to
legal 	efficacy 	of 	an agreement 	which 	requires
such action.
CSEA argues 	that 	the 	section is 	inapplicable because 	there was 	no
"written memoranda 	reached pursuant 	to 	the provisions 	of 	this
chapter which 	require[d] 	budgetary or 	curative action by 	the
Legislature 	or other 	funding agencies."
77

CSU next 	takes 	exception 	to 	statements 	in 	the proposed
decision 	that 	accuse 	CSU of 	failing 	to provide 	CSEA an
opportunity 	to meet 	and 	confer on 	the MSA 	issue before 	the
effective 	date 	of 	June 	1. 	CSU suggested alternate 	language 	to
clarify 	its 	position 	that 	there was 	no obligation 	to provide 	an
opportunity to meet 	and confer under the 	facts 	in this 	case.
Thirdly, 	CSU excepts 	to 	the ALJ's description of 	the 	1988
nonpayment 	of MSAs 	as 	an 	"aberration" 	from the 	consistent 	pattern
of 	paying MSAs 	every year. 	This 	description misstates 	the past
practice, 	the meaning of 	the contract, 	and the effect 	of 	the
expiration of 	the 	contract.
CSU's 	fourth exception 	is 	to 	the 	statement 	that 	it violated
its 	obligation under HEERA by unilaterally 	suspending MSAs 	prior
to 	completion of 	the 	statutory 	impasse procedures. 	CSU argues
that 	it 	had 	the 	right 	to withhold MSAs under the 	contract 	terms
[citing to Article 25] 	at 	the 	time 	in question. 	The allegation
of 	bad 	faith bargaining 	is 	outside 	the 	scope of 	this unfair labor
practice 	charge, 	since CSEA filed the unfair on July 6, 	1992,
long before 	it brought 	the MSA issue 	to 	the 	table.
ISSUE
Did CSU violate 	HEERA when 	it 	suspended MSAs 	on June 	1,
1992?
DISCUSSION
We 	agree with 	CSU that 	it 	did not violate 	HEERA by
suspending MSAs 	on June 	1, 	1992, 	for the 	reasons explained below.
88

The main 	issue 	in this 	case 	is 	raised by CSU's 	third
exception; 	CSU argued that 	describing 	the 	1988 	withholding of MSA
payments as an 	"aberration" 	misstates 	the past practice, 	the
meaning of 	the 	contract, 	and the effect 	of 	the 	expiration of 	the
contract. 	As 	explained in the 	following paragraphs, 	we 	concur
with CSU's 	analysis 	that 	the 	1988 	nonpayment 	of MSAs 	was
consistent with 	the past practice, 	not an aberration from it.
HEERA 	Guidelines
CSU's 	statutory bargaining 	responsibility 	and 	authority 	is
found in HEERA sections 3562(d), 	3570 and 3572.
HEERA section 3562 provides, 	in pertinent part:
As used in this 	chapter:
(d) 	"Meet and confer" means 	the performance
of 	the mutual 	obligation of 	the 	higher
education 	employer and 	the 	exclusive
representative 	of 	its 	employees 	to meet 	at
reasonable 	times 	and 	to 	confer 	in good 	faith
with respect 	to matters within the 	scope 	of
representation and 	to 	endeavor 	to 	reach
agreement 	on matters within the 	scope of
representation. 	The process 	should 	include
adequate 	time 	for the 	resolution of 	impasses.
If 	agreement 	is 	reached between
representatives 	of 	the 	higher 	education
employer and the 	exclusive 	representative,
they 	shall 	jointly prepare 	a written
memorandum of 	such understanding which 	shall
be 	presented 	to 	the 	higher 	education 	employer
for concurrence. 	However, 	these obligations
do not 	compel 	either party to agree 	to any
proposal 	or require 	the making of 	a
concession.
HEERA section 3570 	provides 	that:
Higher education employers, 	or such
representatives 	as 	they may designate, 	shall
engage 	in meeting and 	conferring with 	the
employee 	organization 	selected as 	exclusive
99·

representative 	of 	an appropriate unit 	on all
matters within the 	scope 	of 	representation.
HEERA section 	3572 	provides 	that:
This 	section shall 	apply only to 	the
California 	State 	University.
(a) 	The duty to meet and confer in good
faith requires 	the parties 	to begin
negotiations prior 	to 	the adoption of 	the
final 	budget 	for 	the 	ensuing year
sufficiently in advance 	of 	the 	adoption date
so 	that 	there 	is 	adequate 	time 	for agreement
to be 	reached, 	or for the 	resolution of an
impasse. 	The California State University
shall 	maintain 	close 	liaison with 	the
Department 	of 	Finance 	and 	the 	Legislature
relative 	to 	the meeting and 	conferring 	on
provisions 	of 	the written memoranda which
have 	fiscal 	ramifications. 	The Governor
shall 	appoint 	one 	representative 	to attend
the meeting and conferring, 	including 	the
impasse procedure, 	to advise the parties 	on
the views 	of 	the Governor on matters which
would 	require 	an appropriation 	or 	legislative
action, 	and the Speaker of 	the Assembly and
the 	Senate 	Rules 	Committee may each appoint
one 	representative 	to attend the meeting and
conferring 	to advise 	the parties 	on the views
of 	the 	Legislature 	on matters which would
require 	an 	appropriation 	or 	legislative
action.
No written memoranda 	reached pursuant 	to 	the
provisions 	of 	this 	chapter which require
budgetary 	or 	curative 	action by 	the
Legislature 	or 	other 	funding agencies 	shall
be 	effective unless 	and until 	such an action
has been taken. 	Following execution of
written memoranda of understanding, 	an
appropriate 	request 	for 	financing 	or
budgetary 	funding 	for 	all 	state-funded
employees 	or 	for 	necessary 	legislation will
be 	forwarded promptly 	to 	the 	Legislature 	and
the Governor or other funding agencies. 	When
memoranda 	require 	legislative 	action pursuant
to this 	section, 	if 	the Legislature or the
Governor 	fail 	to 	fully 	fund 	the memoranda 	or
to take the requisite curative action, 	the
entire memoranda 	shall 	be 	referred back 	to
the 	parties 	for 	further meeting and
10

conferring; 	provided, 	however, 	that the
parties may agree 	that provisions 	of 	the
memoranda which are 	nonbudgetary and 	do 	not
require 	funding 	shall 	take 	effect 	whether 	or
not 	the 	funding 	requests 	submitted to 	the
Legislature 	are 	approved.
It 	is 	well 	established under 	federal 	law and PERB precedent
that 	an employer's 	unilateral 	change 	in terms 	and conditions 	of
employment within the scope of 	representation 	is, 	absent a valid
defense, 	a per se 	refusal 	to negotiate and a violation of HEERA
section 3571 (c). 	(Regents of the University of California 	(1985)
PERB Decision No. 	520-H; 	Pajaro Valley Unified School 	District
(1978) 	PERB Decision No. 	51 	(Pajaro).)
Whether a unilateral 	change has 	occurred 	is measured by
comparing 	the 	action 	taken 	to 	the 	status 	quo established by a
contract 	or the past practice. 	The decision in NLRB v. 	Cone
Mills Corp. 	(1967) 	323 	F.2d 595 	[64 LRRM 2536] 	(Cone Mills)
explains 	the 	evolution of 	the 	status 	quo doctrine under 	federal
labor 	law, 	which has 	generally been adopted by PERB.9
In Cone Mills 	the Court 	of Appeals 	explains 	that 	unilateral
action by 	the 	employer after a 	contract 	expires 	is 	not 	an unfair
labor practice per 	se 	under National 	Labor Relations Act 	(NLRA)
section 8(a)(5); 	such action may be sufficient, 	standing alone,
to support a 	finding of 	refusal 	to bargain, 	but 	it does not
compel 	such a 	finding 	in disregard of 	the 	record as 	a whole. 	The
court 	then described the 	origins 	of 	the 	status 	quo doctrine 	in
9See, 	e.g., 	Pajaro discussed infra 	in the text 	of 	this
Decision; 	see also, 	San Mateo County Community College District
(1979) 	PERB Decision No. 	94, 	where the Board discussed and
adopted the 	federal 	status 	quo doctrine.
11

federal 	labor 	law to aid 	in 	identifying 	the 	extent 	of 	the
employer's 	statutory obligation:
It 	is 	axiomatic 	in contract 	law that parties
to an agreement 	are 	relieved 	of 	their mutual
obligations 	upon termination of 	the
agreement. 	[citations 	to Restatement] 	A
[CBA] 	is not, 	of course, 	an ordinary
contract. 	. 	. 	.[citations omitted.] 	Since
parties 	to a 	[CBA] 	normally contemplate a
subsisting contractual relationship 	. 	. 	.
with not 	infrequent 	renewals 	or
renegotiations, 	and since the employment
relationship 	generally 	continues 	beyond
expiration or 	termination of 	the agreement,
it has been said that 	some 	rights 	created by
[CBAs] 	survive the termination of the
agreement. 	It is necessary, 	however, 	to
carefully define what 	is meant by 	"survive."
We 	think 	it 	conceptually 	correct 	to 	say 	that
an employer 	is 	always 	free 	after 	termination
of 	the 	contract 	to unilaterally 	change
conditions 	previously 	established by 	the
contract. 	In this 	sense there 	is no
"survival." 	. 	. 	. 	the employer can institute
unilaterally 	the 	working 	conditions 	which he
desires 	once his 	contract with the Union has
expired 	[citation].
But 	the more 	important 	question 	is 	not
whether the 	employer 	is 	free 	to abolish a
contractually 	derived 	right 	after 	contract
termination. 	Clearly he may do so. 	The
question is how and when he may do so, 	i.e.,
-whether he must 	give 	reasonable 	opportunity
to bargain before he acts. 	The obligation,
to the extent 	there 	is one, 	to give notice
and opportunity to bargain derives not 	from
the 	contract but 	from the National 	Labor
Relations Act. 	That 	there may be 	such an
obligation is what 	is meant by 	"survival."
. 	. 	. 	the use of the term "survive" 	can be
misleading. 	Rights 	that 	survive 	contract
termination do not 	live 	forever and 	can be
destroyed after affording 	the 	opportunity 	to
bargain. 	[Id. 	at 562.]
As 	other federal 	cases 	illustrate, 	the employers' 	duty to
continue 	the 	status 	quo after expiration of 	a 	contract 	is 	derived
12

from the parties' 	statutory obligation to bargain under NLRA
section 8(a)(5). 	For example, 	in NLRB v. 	Katz 	(1962) 	369 U.S.
736 	[50 LRRM 2177] 	(Katz), 	the Court held that an employer cannot
make 	changes 	in 	terms 	and 	conditions 	where 	an 	existing agreement
has 	expired and negotiations 	on a new agreement 	have 	not 	yet 	been
completed.10 The 	rationale was 	the 	employer's 	statutory
obligation to bargain under NLRA section 	8(d). 	(Id. 	at 	742.)
Another 	important aspect 	of 	the 	status 	quo doctrine 	is 	found
in Marine 	& Shipbuilding Workers v. 	NLRB 	(1963) 	320 	F.2d. 	615
[53 LRRM 2878]; 	cert. 	den. 	(1964) 	375 U.S. 	984 	[55 LRRM 2134]
(Marine). 	That 	case held that although mandatory subjects
continue 	after expiration because 	the 	statute makes 	them
bargainable, 	rights which existed only because 	of 	the 	contract do
not 	survive 	and 	can be 	lawfully 	terminated by unilateral
action.11 Furthermore, 	it was 	inappropriate 	to continue to give
life to the 	clauses at 	issue 	in that 	case, 	since the expired
contract 	expressly provided 	that 	the 	language 	at 	issue 	should
- - 	- -
remain in effect 	only so long as 	the agreement was 	extant. 	(Id.
at 	617.) 	The 	case at bar contains a provision limiting the
duration 	of 	the MSA language 	to 	the 	duration of 	the 	contract
itself.
10See also, 	Hinson v. 	NLRB 	(1970) 	428 	F.2d 133 	[73 	LRRM 2667]
for a good discussion of 	the 	rules 	involved 	in applying 	the
status quo doctrine.
11In the Marine 	case, 	the provisions at 	issue 	(union security
measures) 	were wholly dependent upon existence of 	the 	contract.
Since 	there was 	no 	contract 	in existence when the 	company
discontinued the practices, 	the 	company's action was 	in
conformity with 	the 	law.
13

We 	agree 	with 	the ALJ 	that 	CSU did not 	breach 	or alter an
existing written agreement when 	it 	suspended the MSAs 	on June 	9,
since the contract had expired on May 31, 	1992. 	However, 	as 	the
ALJ noted, 	certain 	terms 	of 	an expired agreement 	survive
expiration 	and must 	be maintained by 	the 	employer until
bargaining on a 	successor agreement 	is 	completed, 	either by
reaching a successor agreement 	or attaining 	impasse. 	(See 	State
of 	California 	(Department 	of 	Forestry and Fire 	Protection) 	(1993)
PERB Decision No. 	999-S.) 	That view is 	consistent with the
explanation set 	forth in Cone Mills, 	supra. 	i.e., 	when a contract
expires 	the obligations 	of 	the parties normally terminate,
although 	the 	federal 	statute 	and 	interpretations 	thereunder
obligate 	the parties 	to continue 	the 	status 	quo.
HEERA sections 	3570 	and 3562(d) 	impose 	essentially the 	same
duty to bargain as does NLRA section 8(a)(5). 	However, 	section
3572 	goes 	further and limits 	the 	obligations 	that may accrue and
continue because 	of 	the 	statutory duty to meet 	and 	confer. 	In
this 	case, 	the parties' 	contract expressly limited the duration
of 	the MSA language 	and under HEERA section 	3572 	the 	employer has
no 	authority 	to 	continue 	financial 	obligations 	that 	require
funding by the Legislature. 	Therefore, 	although MSAs are within
the 	scope of bargaining because 	they relate 	to wages,12 the
12HEERA section 3562 (r) 	defines 	the scope of 	representation
as:
(r) 	For purposes 	of 	the California State
University only, 	"scope 	of 	representation"
means, 	and is limited to, 	wages, 	hours of
employment, 	and other terms and conditions 	of
employment.
14

- -
specific 	contractual 	time 	limitation 	and 	the 	statutory 	restraint
of 	HEERA 	section 	3572 	impose a more 	restricted duty to bargain
than would exist 	under 	federal 	law.
At 	the 	time CSU discontinued payment of MSAs, 	the
contractual 	commitment 	to MSAs 	had expired under 	the 	terms 	of 	the
contract. 	As 	the ALJ construed the 	obligation, 	MSAs would be
provided 	for 	the 	term of 	the 	agreement 	and after 	the 	contract
expired because 	they had 	not 	been 	expressly 	identified as
terminating with 	the 	contract. 	As 	the ALJ stated:
The contract did not 	. 	. 	. 	express agreement
that 	the provision 	on MSA's 	would not
continue 	forward after 	expiration of 	the
contract. 	It 	only expressed agreement 	that
MSA's 	would be provided 	for 	the 	term of 	the
agreement. 	All provisions 	of 	the 	contract
had the 	same 	term limit 	of 	the 	contract.
(Proposed decision, 	p. 	11; 	emphasis added.)
The 	statement 	amounts 	to a ruling 	that 	a 	contract must
affirmatively state 	which provisions 	do not 	survive 	expiration 	of
the 	contract, 	and all 	provisions 	not 	specifically terminated must
be 	given effect 	until 	impasse 	or a 	successor agreement 	is
reached. 	No legal precedent 	is 	cited that 	compels 	this 	result,
other 	than 	the proposition 	that 	"parties may 	limit 	post-contract
vitality 	of 	terms 	and conditions 	of 	employment."13
Should we 	follow that view, 	all 	terms 	of an agreement
survive 	its 	expiration, 	unless 	it 	is 	affirmatively stated that
they do not; 	therefore, 	the agreement becomes 	the past practice
13Citing State 	of 	California 	(Department 	of 	Forestry and 	Fire
Protection), 	supra. 	PERB Decision No. 999-S.
15

and the 	status 	quo. 	That view is not 	consistent with California
contract 	law.14
It 	appears 	that 	the ALJ relied on a 	labor law concept 	that 	a
contract 	establishes 	a 	status 	quo and overlooked the parties'
clear 	intent 	to 	limit 	the MSA provision 	to a specific 	time
period. 	Furthermore, 	the 	concept grows 	out of 	the NLRA-imposed
duty to bargain under NLRA section 	8(a)(5) 	which does 	not 	contain
the 	constraints 	of HEERA section 3572.
Since 	CSU 	committed no violation of 	an existing 	agreement,
the 	remaining 	issue 	is 	to 	identify the past practice 	or 	status
quo, 	to measure whether CSU's action violated HEERA.
Past 	Practice
In Pajaro. 	PERB recognized the 	"dynamic status quo" 	concept
in 	federal 	labor law. 	That 	concept 	recognizes 	that 	change 	can be
a normal 	part 	of 	the pattern of 	conduct 	between an 	employer and a
union. 	As 	PERB noted in Pajaro:
While 	Katz prohibits 	disturbance 	of 	the
status quo during negotiations, 	the NLRB has
held that 	the 	"status 	quo" 	against which an
employer's 	conduct 	is 	evaluated must 	take
into account 	the 	regular and 	consistent 	past
patterns 	of 	changes 	in the 	conditions 	of
employment. 	The NLRB has 	held that 	changes
consistent 	with 	such a pattern are not
violations of the 	"status quo."
14See, 	e.g., 	Sayble v. 	Feinman 	(1978) 	76 Cal.App.3d 509
[142 	Cal.Rptr. 	895] 	citing California Code of Civil 	Procedure
section 	1858 	(Court 	has neither power to make 	for parties 	a
contractual 	arrangement which they themselves did not make nor to
insert 	in agreement 	language 	that 	appealing party wishes 	were
there).
16

Unfortunately, 	no objective 	test 	exists 	to 	fully define a
past practice 	and the discretion or 	right 	to withhold or make
additional 	payments 	under a policy 	is 	sometimes 	overlooked when
it 	should be part of 	the definition. 	In 1988, 	CSU did not pay
MSAs, 	an action that was permitted under the contract.
Characterizing 	this 	event 	as 	an 	"aberration" 	from a pattern
strips 	the parties 	of 	their power 	to 	set 	limitations 	on 	their
contractual 	rights 	and obligations 	and may 	impose burdens
inconsistent 	with HEERA section 	3572.
The ALJ concluded that 	the 	"single 	suspension 	[in 	1988] 	does
not 	represent 	a pattern of 	conduct 	to establish a past 	practice
of unilateral 	suspension of MSA's." 	Under that 	reasoning, 	the
ALJ 	imposed on CSU the burden of 	establishing a past 	practice 	to
suspend MSAs; 	whereby the more times 	it occurred, 	the more likely
it would be 	found to 	constitute a past practice, 	which avoids a
potential 	problem after the 	contract 	expires. 	That pattern of
behavior would be 	repugnant 	to 	the purpose 	of 	HEERA.
The parties' 	contract permitted non-payment 	of MSAs under
certain conditions, 	which led to nonpayment 	of MSAs 	in 1988. 	The
contractual 	history of 	the parties 	shows 	that 	CSU consistently
protected 	itself 	against 	a permanent 	commitment 	to MSA payments.
Although CSU only asserted that 	right once 	(in 1988), 	it had the
right 	to not pay MSAs whenever 	it 	had no 	contractual 	obligation
to do so.
While 	the 	evidence 	shows 	CSU policy was 	to pay MSAs 	whenever
resources permitted, 	the 	evidence also shows 	that 	CSU never
17

abandoned 	its 	contractual 	and management 	right, 	consistent with
its 	statutory duties, 	to not pay MSAs on a permanent basis. 	The
contract 	obligated CSU to pay MSAs 	for a 	limited period, 	which 	is
not 	the 	same as 	creating a 	"past practice" 	that 	established
payment 	of MSAs 	as 	a 	status 	quo 	that 	could not be unilaterally
discontinued after 	expiration 	of 	the 	prior 	contract 	and before
completing 	negotiations 	on a 	successor 	contract.
Other 	CSU Exceptions
CSU's 	second exception 	challenges 	a 	statement 	in 	the
proposed 	decision accusing 	CSU of 	failing 	to provide 	CSEA an
opportunity 	to meet 	and 	confer on 	the MSA issue before 	the
effective 	implementation date of June 	1. 	In its 	statement 	of
exceptions, 	CSU suggested alternate language 	to clarify its
position 	that 	there was 	no 	obligation 	to provide 	an 	opportunity
to meet and confer under the 	facts 	in this 	case. 	Since we 	find
no unilateral 	suspension 	of 	an obligation 	created by 	contract 	or
past practice, 	and since CSU gave adequate notice of 	its position
in 	compliance with HEERA section 3572 	and 	the parties 	continued
to discuss 	their concerns, 	we 	find 	that 	CSU did not violate HEERA
on 	the meet 	and confer 	issue.
It 	is not necessary to address 	the CSU exceptions 	that 	the
allegation of bad 	faith bargaining 	is 	outside 	the 	scope 	of 	this
unfair labor practice 	charge, 	or that 	it was an error on the part
of the ALJ to find that 	"salary savings were 	. 	. 	. 	the source of
funds 	for MSAs," 	since we 	find that 	CSU did not violate HEERA by
discontinuing MSA payments 	after 	the 	CBA expired.
18

ORDER
The 	Board hereby reverses 	the ALJ's 	proposed decision 	and
DISMISSES 	the 	complaint 	and unfair practice 	charge 	in 	Case
No. LA-CE-328-H.
Member Carlyle 	joined in 	this 	Decision.
Member Caffrey's 	dissent begins 	on page 	20.
19

CAFFREY, 	Member, 	dissenting: 	I dissent. 	The California
State University 	(CSU) 	violated section 3571(a) 	and 	(c) 	of 	the
Higher Education Employer-Employee Relations Act 	(HEERA) 	when 	it
unilaterally 	suspended merit 	salary adjustments 	(MSAs) 	for
employees 	represented by 	the 	California 	State 	Employees'
Association, 	CSU Division, 	SEIU Local 1000, 	AFL-CIO 	(CSEA) 	on
June 	1, 	1992, 	prior to the completion of bargaining with CSEA.
Accordingly, 	I would affirm the proposed decision of 	the 	Public
Employment 	Relations 	Board 	(PERB or Board) 	administrative 	law
judge 	(ALJ). 	However, 	I would modify the remedy proposed by the
ALJ to 	include a make whole provision, 	ordering backpay plus
interest 	to be paid 	to 	the 	employees 	affected by CSU's 	unlawful
MSA 	suspension.
I 	expressly 	reject 	the misguided analysis 	which 	leads 	the
majority 	to 	the 	contrary conclusion. 	The majority opinion
misapplies 	PERB and National 	Labor Relations 	Board 	(NLRB)
precedent, 	and misinterprets HEERA section 3572 	so severely, 	that
it 	threatens 	a 	fundamental 	rule of 	collective bargaining.
DISCUSSION
It 	is 	a 	fundamental 	rule 	of 	collective bargaining 	that 	an
employer must maintain 	certain 	terms 	and 	conditions 	of
employment, 	including wages and benefits, 	following expiration of
a 	Collective Bargaining Agreement 	(CBA) 	during 	the parties'
negotiations 	over a 	successor agreement. 	An employer's
unilateral 	change 	in these 	terms 	and 	conditions 	of 	employment 	is
a per 	se violation 	of 	the 	statutory duty 	to bargain 	in good
20

faith. 	(State 	of 	California 	(Department 	of 	Forestry and Fire
Protection) 	(1993) 	PERB Decision No. 	999-S; 	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 2177]; 	Department of Personnel
Administration v. 	Superior Court 	(1992)5 	Cal.App.4th 	155
[6 Cal.Rptr.2d 714].)
NLRB v. 	Cone Mills Corp. 	(1967) 	323 	F.2d 595
[64 LRRM 2536], 	a case cited by the majority, 	makes 	it 	clear that
CBAs 	are 	not 	ordinary contracts, 	and that 	employers may 	change
working 	conditions 	following 	the 	expiration 	of 	a CBA only after
affording 	the 	opportunity to bargain over those 	changes. 	In 	that
case, 	the 	court 	stated that 	this 	obligation 	"derives not 	from the
contract but 	from the National 	Labor Relations Act."
Another case, 	Marine 	& Shipbuilding Workers v. 	NLRB 	(1963)
320 	F.2d 615 	[53 	LRRM 2878], 	cited by the majority, 	holds 	that an
employer 	could unilaterally discontinue 	a 	union 	shop 	and 	checkoff
provision because 	it was 	dependent 	on the 	existence 	of 	the
contract. 	However, 	the court's broader holding was 	that 	the
employer 	could not 	unilaterally 	change 	fundamental 	conditions 	of
-
employment 	such as 	seniority 	rights 	or 	the 	grievance procedure
after 	expiration of 	the 	contract 	during negotiations 	over a
successor agreement.
There 	are 	numerous 	policy 	considerations 	which have 	led
PERB, 	the NLRB and 	the United States 	Supreme Court 	to 	confirm the
fundamental 	rule against unilateral 	changes, 	which the Board
21

discussed in San Mateo Community College District, 	supra. 	PERB
Decision No. 	94. 	First, 	a unilateral 	change destabilizes 	the
employer-employee 	relationship which 	can 	lead 	to 	job actions 	and
other workplace disruptions. 	Second, 	unilateral 	changes 	in
working 	conditions 	undercut 	the 	exclusive 	representative's
negotiating power and 	ability 	to 	function 	effectively 	on behalf
of bargaining unit members. 	Third, 	the rule against employer
unilateral 	changes 	promotes 	the 	level 	playing 	field between 	the
parties 	which 	is 	a basic prerequisite 	of 	the 	statutory design of
collective bargaining. 	The bilateral 	duty to negotiate 	in good
faith and 	the 	negotiating 	equality 	it 	relies upon are undermined
by 	the 	ability of 	one party 	to unilaterally 	change 	conditions 	of
employment 	prior 	to 	the 	completion of 	the bargaining process.
These 	policy 	considerations 	particularly apply to parties 	to 	an
expired CBA who are 	negotiating a 	successor CBA. 	This 	is
precisely 	the 	context 	in which 	the 	dispute posed by 	the 	instant
case arises.
An extensive body of precedent, 	including 	that 	cited above,
confirms 	the 	fundamental 	rule 	that 	CSU was 	obligated 	to 	continue
the MSA provision 	contained 	in 	the 	expired 	CBA during 	its
negotiations with CSEA over a successor agreement, 	unless 	it 	can
demonstrate 	an 	exception 	to 	this 	rule 	and/or an agreement 	by 	the
parties 	to proceed differently. 	CSU asserts 	that 	it was 	not 	so
obligated in this 	case, 	basing 	its arguments on the application
of 	HEERA section 3572, 	the 	specific provisions 	of 	the expired CBA
and 	its 	past practice with regard to 	the payment 	of MSAs.
22

HEERA Section 	3572
In its 	oral 	argument brief, 	CSU argues 	that upon expiration
of 	its 	CBA with CSEA on May 31, 	1992, 	it 	exercised its authority,
as 	expressly authorized 	in HEERA section 3572, 	to 	suspend payment
of MSAs 	"in times when 	the 	Legislature did not 	appropriate 	funds
for MSAs." 	CSU argues 	that 	all 	of 	the 	longstanding precedent
cited above, 	cases 	arising under the 	Educational 	Employment
Relations Act 	(EERA) 	and the National 	Labor Relations Act 	(NLRA)
including 	those 	affirmed by 	the United States 	Supreme 	Court,
should be 	deemed by 	the 	Board 	to be 	"irrelevant" 	and are
"inapplicable 	and should not be 	followed" 	in this 	case. 	CSU asks
the 	Board 	to 	sweep aside 	decades 	of 	precedent 	confirming a
fundamental 	rule of 	collective bargaining stated above, 	to 	find
that:
When unrestrained by 	a 	collective 	bargaining
agreement, 	the 	[Trustees 	of 	the California
State University] 	and their delegees have 	the
power 	to determine 	the 	compensation 	for all
CSU employees.
This 	startling pronouncement 	is 	unsupported by 	legal
authority. 	Many HEERA provisions 	relating 	to 	the 	obligation 	to
bargain 	in good 	faith are 	identical 	to 	EERA provisions.
Furthermore, 	the 	California Supreme Court has 	held that 	the
bargaining 	requirements 	of 	the NLRA and 	cases 	interpreting 	them
may be 	referred 	to 	for enlightenment 	on 	similar 	issues 	arising
under state 	labor statutes. 	(Fire 	Fighters Union v. 	City of
Vallejo 	(1974) 	12 Cal.3d 608, 	616-617 	[116 Cal.Rptr.507].) 	The
23

court 	has 	also used 	federal 	precedent 	for guidance 	in
interpretation 	of 	other 	state 	labor 	statutory provisions.
(El Rancho Unified School Dist, 	v. 	National 	Education Assn.
(1983) 	33 Cal.3d 946, 	953 	[192 Cal.Rptr. 	123].)
It 	is simply unimaginable, 	and unsubstantiated, 	that the
Legislature, 	in the very statute which provides 	CSU employees
with the 	right 	to 	form, 	join and participate 	in employee
organizations 	for 	the purposes 	of 	collective bargaining with CSU,
would 	include 	a provision which 	restricts 	that 	right 	to 	the
extent 	argued by CSU. 	HEERA section 3572 	describes 	the process
of 	securing 	funding 	for a memorandum of 	understanding 	(MOU) 	which
has 	just 	been negotiated by the parties. 	After the parties 	reach
an agreement 	which 	requires 	"budgetary 	or 	curative 	action by 	the
Legislature," 	they must 	obtain such action or the 	entire MOU is
referred back 	to 	the parties 	for 	further negotiations.
HEERA section 3572 	does not address 	the parties' 	obligations
during negotiations, 	does 	not address 	the 	efficacy of a provision
of a CBA which has been in effect 	for three years, 	and
categorically does 	not address 	or offer an exception to 	the
employer's 	obligation 	to maintain 	certain terms 	and 	conditions 	of
employment 	contained 	in an expired CBA while 	the parties 	are
negotiating 	over 	a 	successor agreement.
The parties 	in this 	case were negotiating 	for a 	successor
agreement 	following 	expiration of 	their prior CBA at 	the 	time 	of
CSU's 	unilateral 	suspension of MSAs. 	They had not 	reached
agreement 	on an MOU 	requiring budgetary 	or 	curative 	action by 	the
24

Legislature and, 	therefore, 	HEERA section 3572 	is 	inapplicable to
the 	circumstances 	of 	this 	case.
Of particular 	concern 	is 	the potential 	implication of 	the
majority's view that under HEERA section 3572, 	CSU is without
authority 	to 	continue 	a 	contractual 	financial 	obligation 	for
which the 	Legislature has 	not provided specific 	funding. 	Under
this 	interpretation, 	CSU apparently 	can and must 	repudiate a
provision 	of 	an 	existing 	CBA based 	simply on its 	conclusion 	that
the 	Legislature 	has 	not 	provided 	specific 	funding 	for 	it.
Nothing 	is more 	likely to undermine 	the basic purpose 	of HEERA
than 	to provide 	the 	employer with 	the 	ability 	to unilaterally
repudiate 	a 	contractual 	financial 	obligation 	involving a
condition of 	employment 	as 	fundamental 	as 	employee wages. 	I
reject 	this 	unsubstantiated and potentially 	destructive 	view.1
Contract 	Provisions
CSU offers 	the alternative argument 	that 	its June 	1, 	1992,
suspension of MSAs 	is 	specifically authorized by provisions 	of
the parties' 	expired CBA. 	This argument 	is based on a theory of
waiver by contract. 	The Board will 	not 	readily 	infer 	that 	a
party has waived 	its 	rights, 	requiring 	that 	any such waiver be
Since 	HEERA section 3572 	is 	inapplicable 	to the
circumstances 	of 	this 	case, 	I 	find it unnecessary to address 	the
myriad of 	issues 	raised by that 	section, 	none 	of which is
addressed in the majority opinion. 	These 	include: 	the process
for determining 	that 	a provision of 	a 	CBA requires 	budgetary
action by the 	Legislature; 	the process 	for determining whether
such a CBA provision has been 	fully 	funded; 	the 	impact 	on an
existing 	condition of 	employment 	of 	the 	failure 	to 	fully 	fund 	it
in a period subsequent 	to 	its 	implementation; 	and the various
bargaining obligations and rights 	of 	the parties 	in any and all
of 	these situations.
25

expressed 	in 	clear and unmistakable 	terms, 	particularly where 	the
waiver of 	the 	statutory right 	to bargain 	is 	asserted. 	(Amador
Valley Joint 	Union High School 	District 	(1978) 	PERB Decision
No. 	74; 	San Francisco Community College District 	(1979) 	PERB
Decision No. 	105.)
CSU asserts 	that 	the 	language 	of 	CBA section 20.19 	gives 	it
the authority to suspend MSAs 	on June 	1, 	1992. 	CBA section 20.19
provides:
Merit 	salary adjustments 	shall 	be paid
effective July 1, 	19 89, 	and for the duration
of 	this Agreement, 	subject 	to provisions
20.18 	and 	25.2.2
CSU argues 	that 	the phrase 	"for the duration of 	this Agreement"
constitutes 	a waiver by CSEA of 	its 	right 	to negotiate 	over 	the
subject 	of MSAs 	following expiration of 	the 	CBA on May 31, 	1992,
and 	indicates 	agreement 	by 	CSEA that 	CSU 	can unilaterally 	suspend
MSAs at 	that 	time.
This 	argument 	is without merit. 	As 	concluded by the ALJ 	in
his proposed decision, 	this durational 	language does not address
CSU's 	statutory 	obligation under HEERA during 	the 	period 	after
expiration of 	the 	contract. 	The durational 	language of Article
20.19 	does 	not 	constitute 	in 	clear and unmistakable 	terms 	a
waiver by CSEA of. 	its 	right under HEERA to bargain 	in good 	faith
over terms and conditions 	of 	employment. 	Nor does 	it 	constitute
a 	clear and unmistakable 	agreement 	by 	CSEA to waive 	CSU's
2Section 20.18 	provides 	for movement 	between 	steps 	on the
salary schedule based on merit 	and performance, 	and 	section 25.2
concerns 	reopeners 	for 1991-92.
26

obligation to maintain wages, 	hours and other terms of 	employment
embodied 	in 	the 	expired 	CBA during bargaining 	over a 	successor
agreement.
To 	interpret 	agreement 	on mere 	durational 	language 	as 	a
waiver of 	the 	statutory 	right 	to bargain would 	severely undermine
the principles 	of 	collective bargaining 	by allowing widespread
unilateral 	changes 	after 	expiration of 	CBAs 	containing 	such
language, 	while 	the parties are bargaining over a 	successor
agreement. 	In this 	case, 	for example, 	the expired CBA contained
a general 	durational 	provision 	in Article 25.1. 	Clearly that
statement 	of 	CBA duration does 	not 	allow the 	employer 	to
unilaterally alter terms and conditions 	of 	employment, 	such as
wages, 	hours, 	and health benefits, 	described in the contract once
it has expired. 	Similarly, 	CSU's 	reliance on the durational
language 	of 	CBA Article 20.19 	to 	justify 	its 	suspension of MSAs
upon expiration of 	the CBA is unavailing.
CSU also 	justifies 	its unilateral 	suspension of MSAs by
reliance on CBA Article 25.4, 	which states:
Any 	term of 	this Agreement 	which 	is 	deemed by
the 	Employer to 	carry an economic 	cost 	shall
not 	be 	implemented until 	the 	Employer
determines 	that 	the 	amount 	required 	therefore
has 	been appropriated and makes 	such amount
available 	for 	expenditure 	for 	such purpose.
If 	the Employer determines 	that 	less 	than the
amount needed to 	implement 	this Agreement, 	or
any provision herein, 	has been appropriated
to 	implement 	this Agreement 	or any provision
herein, 	the term(s) 	of this Agreement deemed
by 	the 	CSU to 	carry 	economic 	cost 	shall
automatically be 	subject 	to 	the meet 	and
confer process.
27

This provision 	is 	designed to prevent 	implementation of 	any
CBA term having 	an 	economic 	cost 	if 	it 	is 	determined by CSU 	that
funds are unavailable for that purpose. 	In this 	case, 	CSU made
no 	such determination prior 	to 	the 	implementation 	of 	the MSA
provision of 	the 	contract. 	Instead, 	the 	record is 	clear that 	CSU
implemented 	CBA Article 	20.19 	providing 	for payment 	of MSAs 	for
the 	entire 	negotiated term of 	the 	CBA. 	Having 	implemented the
MSA provision, 	Article 25.4 	does not give CSU the discretion to
make 	a 	subsequent 	determination 	of 	funding unavailability which
could affect 	the 	status 	of 	that provision. 	CSU offers no
argument 	on this 	issue, 	nor does 	it address 	the 	issue of 	the
effectiveness of Article 25.4 on June 1, 	1992, 	following
expiration of 	the CBA. 	Furthermore, 	this Article does not 	lead
to 	the 	conclusion 	that 	CSU can unilaterally suspend a 	CBA
- -
provision, 	once 	implemented, 	without 	completing the meet and
confer process. 	More importantly, 	Article 25.4 	does not address
CSU's 	obligation under HEERA to maintain 	terms 	and 	conditions 	of
employment 	after 	the 	CBA's 	expiration while 	the parties 	are
negotiating over a successor agreement. 	Therefore, 	CSU's
assertion that 	its 	suspension of MSAs 	is permitted by Article
25.4 	of 	the parties' 	expired CBA is without merit.
In summary, 	CSU's arguments 	involving CBA Articles 	20.19 	and
25.4 	fail 	to 	demonstrate 	a 	clear and unmistakable waiver by CSEA
of 	its 	statutory right 	to bargain over the 	subject 	of wages. 	Nor
do 	these 	arguments 	provide 	CSU with an exception 	to 	its
28

obligation 	to maintain 	the MSA provision 	of 	the 	expired CBA
during 	negotiations 	over a 	successor agreement.
Past 	Practice
CSU argues 	alternatively 	that 	its 	unilateral 	suspension of
MSAs 	is permitted because 	it 	is 	consistent with 	its 	past
practice, 	specifically 	its 	suspension of MSAs under the 	terms 	of
the previous, 	1985-88, 	CBA. 	The language of that agreement
provided 	that 	MSAs 	"shall 	be 	subject 	to 	funds 	being 	appropriated
by 	the 	Legislature 	and made 	available 	to 	the 	CSU specifically 	for
merit 	salary adjustments." 	CSU suspended MSAs 	at 	the beginning
of 	the 	1988-89 	fiscal year, 	a year in which the Legislature and
Governor did not make 	funds 	available 	specifically 	for MSAs. 	An
arbitrator 	ruled 	that 	CSU's 	action was 	in accordance with and
authorized by 	the MSA provision 	of 	the 	1985-88 	contract 	described
above. 	With the 	exception of 	this 	contractually authorized MSA
suspension, 	the 	record includes no evidence of a practice of
suspending MSAs 	by 	CSU based 	on 	funding 	availability 	or 	any 	other
considerations.
The 	application of 	a provision of 	a prior CBA is
insufficient 	to 	constitute 	a past 	practice 	constraining parties
who 	have 	substantially altered 	that 	provision 	in a 	subsequent
agreement. 	The 	1989-92 	contract 	contains different 	language
regarding MSAs, 	specifically deleting 	the provision making MSAs
subject 	to 	specific 	funding by the 	Legislature. 	CSU's 	practice
with regard to 	this 	CBA provision was 	to pay MSAs 	regardless 	of
whether 	funds 	were 	specifically appropriated 	for 	that 	purpose 	by
29

the 	Legislature, 	including paying 	them for the 	first 	eleven
months 	of 	the 	1991-92 	fiscal 	year prior 	to 	their unilateral
suspension on June 1, 	1992.3
The majority's 	discussion of 	past 	practice 	contains
statements 	which demonstrate 	a profound misunderstanding 	of 	HEERA
and misapplication of precedent. 	The majority states 	that 	CSU
"had 	the 	right 	not 	to pay MSAs 	whenever 	it 	had no 	contractual
obligation to do 	so"; 	and CSU has 	the 	contractual 	and management
right 	"to not 	pay MSAs 	on a permanent basis."
Under HEERA, 	CSU has 	the obligation to negotiate 	in good
faith with CSEA over the 	subject 	of 	employee wages, 	including
MSAs, 	a matter expressly within the 	scope 	of 	representation
defined 	in HEERA section 3581.3. 	CSU is bound by the 	fundamental
rule 	of 	collective bargaining 	that 	an employer must maintain
certain 	terms 	and 	conditions 	of 	employment 	following 	expiration
of a CBA during the parties' 	negotiations 	over a successor
agreement. 	There 	is 	no statutory or management 	right 	to not 	pay
MSAs.
3It 	is 	interesting 	to note 	that 	contrary to CSU's
assertions, 	the evidence 	leads 	to the 	conclusion that budgetary
action by 	the 	Legislature was 	not 	required to 	fund 	the payment 	of
MSAs. 	During the term of 	the CBA, 	including eleven months 	of 	the
1991-92 	fiscal 	year, 	MSAs were paid even though not 	specifically
funded by the 	Legislature. 	CSU offers 	no evidence 	to 	support 	its
assertion 	that 	it 	needed 	specific 	legislative 	funding 	to pay MSAs
in the 	twelfth and final month of 	1991-92, 	or subsequently 	in
1992-93 	when 	the 	Legislature's 	practice 	of 	not 	specifically
funding MSAs 	continued.
30

Remedy
HEERA section 	3563.3 	gives 	the 	Board broad 	remedial 	power,
including 	the authority 	to 	issue 	cease 	and desist 	orders 	and 	to
require 	affirmative 	action effectuating 	the policies 	of 	the
HEERA. 	In a long line of 	cases, 	the Board has 	ordered a make
whole 	remedy 	for 	employees 	affected by a unilateral 	change.
(Regents 	of 	the University of 	California 	(1983) 	PERB Decision
No. 	356-H; 	Rio Hondo Community College District 	(1983) 	PERB
Decision No. 	292; 	Oakland Unified School District 	(1980) 	PERB
Decision No. 	126; 	Compton Unified School District 	(1989) 	PERB
Decision No. 	784.) 	Such remedies 	have been approved by the
courts. 	(San Diego Adult 	Educators v. 	Public Employment
Relations Bd. 	(1990) 	223 Cal.App.3d. 	1124, 	1137
[273 Cal.Rptr. 	53].)
A make 	whole 	remedy 	is 	clearly 	called 	for and appropriate 	in
this 	case. 	First, 	CSU unilaterally and unlawfully changed a
condition 	of 	employment 	involving 	the 	fundamental 	subject 	of
employee wages. 	Second, 	consistent with the discussion above,
the ALJ's 	reliance 	on HEERA section 	3572 	in declining 	to order a
make whole 	remedy is misplaced, 	as 	it describes 	circumstances
which do not present 	themselves 	in this 	case. 	Furthermore, 	as
noted above, 	during the 	term of 	the 	CBA, 	CSU paid MSAs 	in
accordance with CBA section 20.19, 	despite 	the 	fact 	that 	they had
not 	been 	specifically 	funded by 	the 	Legislature 	during 	that
period. 	Therefore, 	no 	finding that 	funds are unavailable 	to pay
MSAs 	can be made 	in this 	case.
31

CSU finds 	support 	for the ALJ's 	decision not 	to order a make
whole 	remedy 	in Regents 	of 	the University of 	California 	(Davis,
et al.) 	(1990) 	PERB Decision No. 	842-H 	(University of California)
but 	that 	case 	is 	clearly distinguishable. 	University of
California 	involves 	the 	failure 	to provide 	adequate 	advance
notice 	of a phase 	in of merit 	increases 	to 	employees 	represented
by a 	nonexclusive 	representative 	and not 	covered by a 	CBA. 	The
Board 	determined 	that 	since 	the 	employer's 	meet 	and discuss
obligation 	to a nonexclusive 	representative 	includes 	neither a
requirement 	to 	reach agreement 	or 	impasse, 	and the 	record did not
include 	sufficient 	evidence 	to 	support 	a 	finding 	that 	funds 	were
available 	to pay 	the 	increase, 	the 	entitlement 	to back pay was
speculative 	and not 	an appropriate 	remedy.
In this 	case, 	the employees affected by the unlawful
unilateral 	change 	are 	represented by an 	exclusive 	representative
and are 	covered by the 	terms 	of 	an expired CBA. 	The 	record here
also 	reveals 	that 	funds 	were available 	to pay MSAs 	under that
CBA, 	and MSAs were paid, 	regardless 	of whether funds 	had been
specifically appropriated 	for 	that 	purpose 	by 	the 	Legislature.
University of 	California does 	not 	lead to 	the 	conclusion 	that 	a
make whole 	remedy 	is 	inappropriate 	in this 	case.
Having 	found 	that 	the 	suspension of 	MSAs 	by CSU was
unlawful, 	I 	conclude that a make whole 	remedy is appropriate. 	I
would 	order backpay plus 	interest 	to be paid to 	employees
affected by 	CSU's 	unlawful 	action.
32