State of California (State Personnel Board) (PERB 1491S)

STATE OF CALIFORNIA
DECISION OF THE
PUBLIC EMPLOYMENT RELATIONS BOARD
INTERNATIONAL UNION OF OPERATING
ENGINEERS,
Charging Party,
V.
STATE OF CALIFORNIA (STATE PERSONNEL
BOARD),
Respondent.
Case No. SA-CE-1295-S
PERB Decision No. 	1491-S
July 	18, 	2002
Appearances: Van Bourg, Weinberg, Roger & Rosenfeld by Matthew J. Gauger, Attorney, for
International Union of Operating Engineers; State of California (Department of Personnel
Administration) by Linda Diane Buzzini, Labor Relations Counsel, and Kronick, Moskovitz,
Tiedemann & Girard by Philip A. Wright, Attorney, Elise S. Rose, Attorney, and Dorothy
Bacskai Egel, Senior Staff Counsel, for State of California (State Personnel Board).
Before Baker, Whitehead and Neima, Members.
DECISION
WHITEHEAD, Member: 	This case is before the Public Employment Relations Board
(PERB or Board) on appeal by the International Union of Operating Engineers (IUOE) 1 of the
administrative law judge's (ALJ) notice of dismissal on SPB's motion to dismiss. The charge,
as amended,2 alleged that SPB violated the Ralph C. Dills Act (Dills Act)3 by refusing to
1The State of California (Department of Personnel Administration) (DP A) has also filed
an information brief with points and authorities in support of IUOE's appeal. From the record,
it is unclear whether DP A is a party or an intervenor in this case. DP A claims that it is a party,
representing the State of California (State), and filed a notice of appearance on May 9, 2001.
State of California (State Personnel Board) (SPB) disputes DP A's alleged status as a party
because DPA has refused to represent SPB in this matter and expressly supports IUOE's
position.
2By letter dated July 27, 2001, IUOE withdrew its unilateral change allegation.

approve settlement agreements for employees who participated in the contractual Board of
Adjustment disciplinary review procedure. IUOE alleged that this conduct constituted a
violation of Section 3519(a), (b) and (c).4 The Board agent issued a complaint that stated that
SPB is a "state employer" under Section 3513(j) and that SPB refused to approve proposed
settlement agreements for employees who participated in the contractual Board of Adjustment
disciplinary review procedure, in violation of Section 3519(a) and (b ). 	On August 28, 2001,
SPB filed a motion to dismiss. On September 24, 2001, the ALJ issued a notice of dismissal.
The basis for dismissal was that SPB is not a "state employer" under Section 3513(j) because,
in the present matter, it is acting in its adjudicatory capacity.
After reviewing the entire record in this matter, including the unfair practice charge, the
complaint, the ALJ's notice of dismissal, IUOE's appeal, DP A's information brief, SPB's
response to IUOE's appeal, and other correspondence contained within the record, the Board
3The Dills Act is codified at Government Code section 3512 et seq. Unless otherwise
indicated, all statutory references herein are to the Government Code.
4Section 3 519 provides, in pertinent part:
It shall be unlawful for the state to do any of the following:
(a) Impose or threaten to impose reprisals on employees, to
discriminate or threaten to discriminate against employees, or
otherwise to interfere with, restrain, or coerce employees because
of their exercise ofrights guaranteed by this chapter. For
purposes of this subdivision, "employee" includes an applicant
for employment or reemployment.
(b) Deny to employee organizations rights guaranteed to them by
this chapter.
( c) Refuse or fail to meet and confer in good faith with a
recognized employee organization.
2

finds that this matter should be remanded to the ALJ for hearing on the merits. In addition, the
Board, on its own motion, hereby orders joinder of DP A under PERB Regulation 32164( d). 5
BACKGROUND6
IUOE is the exclusive representative for State bargaining units 12 and 13. DP A is the
organization designated under Government Code section 19815.4(g) to represent the State
under section 3 517 of the Dills Act. SPB is an agency of the State of California and the
respondent in this matter. According to DP A, SPB received delegation from DP A to provide
its own legal representation in this matter.7 The unfair practice charge underlying this matter
was filed on May 3, 2001, 8 by IUOE, unit 12 and 13 division, against the SPB. The charge
alleges that the SPB has violated the Dills Act:
... by refusing to approve and by stating it wouid refuse to
approve adverse action settlements achieved through a Larson
Alternative Dispute Resolution process solely because the worker
used his or her collective bargaining agreement rather than
private counsel or other representative.
On July 30, the Office of the General Counsel issued a complaint against SPB. 	The
complaint alleges that SPB is "the state employer within the meaning of Government Code
section 3 513(j)" and that:
5PERB regulations are codified at California Code of Regulations, title 8, section 31001
et seq.
6This section contains the ALJ's findings of fact but identifies significant events and
clarifies all the parties' positions in this matter.
7DP A provided this information in the cover letter to its notice of appearance dated
May 9, 2001. That letter also stated that any settlement between the parties would require
DP A approval.
8All dates occurred in 2001 unless stated otherwise.
3

In or about March 2001, Respondent refused to approve
proposed settlement agreements for employees who
participated in the contractual Board of Adjustment
disciplinary review procedure.
By this conduct, the complaint alleges, SPB violated Government Code section 3519(a) and
(b).
SPB filed a motion on August 28, asking that the charge and complaint be dismissed.
The motion sets out a number of grounds for dismissal, including assertions that SPB is not a
"state employer" or "employer" under Section 3 513(j) and that PERB lacks jurisdiction to
determine the California constitutional question upon which this case ultimately rests. 9
These events grow out of contractual agreements reached in 1999 between DPA and
IUOE, which represents employees in the State bargaining units 12 and 13. Under the terms of
the agreements covering units 12 and 13, a Board of Adjustment composed of two
management and two IUOE representatives is created as part of the grievance procedure. iO A
majority of the Board of Adjustment can resolve a grievance. In the event of a deadlock,
IUOE can move the dispute to arbitration. In the event of major disciplinary action, 11 an
employee is given the choice of invoking the jurisdiction of SPB or filing a grievance under
the contract. The choice of forum rests solely with the employee and once made is irrevocable.
9IUOE did not file a response to the motion to dismiss. (See PERB Regulation
32190(b).)
10See article 14.8 of the agreement covering unit 12 and article 5.9 of the agreement
covering unit 13.
11 Article 15.B.2.b of the agreement for unit 12 defines "major discipline" as "dismissal,
pem1anent demotion, suspension of more than 3 working days, a temporary demotion or
deduction in pay of 5 percent (or one step) or greater for more than three months (or equivalent
reduction in salary)." Article 6.B.2.b of the agreement for unit 13 defines "major discipline" as
"dismissal or suspension of more than 3 working days."
4

These contractual procedures were enacted into law with legislative approval of the negotiated
agreements.
According to SPB, under the contracts as implemented, the State and IUOE have taken
the results of disciplinary arbitrations and settlements to SPB for ratification. 12 SPB, however,
has refused and has stated that it will continue to refuse to review and ratify such settlements
or arbitration awards on the ground that the procedure violates Article VII, section 3( a) of the
California Constitution. 13 SPB 's refusal to act is the cause of action contested in the unfair
practice at issue here. IUOE asserts that by its refusal to review settlements of disciplinary
action and its statements that it would refuse to approve such settlements, the SPB has
interfered with both employee and union rights.
The complaint in this matter proceeded as follows. 	On May 9, DPA filed a notice of
appearance with PERB. On August 29, ALJ Jim Tamm (Tamm) held an informal conference
with the parties. DP A participated in the August 29 informal conference. 	SPB filed its motion
to dismiss on August 28. On August 31, ALJ Tamm issued a notice of second informal
conference to be held on September 24. Also, on August 31, ALJ Ron Blubaugh (Blubaugh)
12See SPB points and authorities in support of motion to dismiss at pp. 3-4. However,
in IUOE's appeal documents, IUOE asserts that it has never requested SPB to approve a Board
of Adjustment decision or presented a settlement for SPB to review; instead, this case arose out
of SPB' s statement on an unrelated settlement agreement that it would reject settlements
tainted by the Board of Adjustment process. Since IUOE was not allowed to present its
position in the motion to dismiss, this allegation was not weighed by the ALJ in his decision to
dismiss the complaint.
13Section 3(a) of the California Constitution provides that:
The [State Personnel] board shall enforce the civil service statutes
and, by majority vote of all its members, shall prescribe
probationary periods and classifications, adopt other rules
authorized by statute, and review disciplinary actions.
5

issued a notice of formal hearing to be held January 10 and 11, 2002. After a conversation
with SPB's counsel shortly before the second informal conference was to occur, ALJ Tamm
cancelled the September 24 informal conference. Also, on September 24, ALJ Blubaugh
issued his notice of dismissal. IUOE did not file a response to SPB's motion to dismiss
allegedly because of its belief that the parties would set a briefing schedule should settlement
negotiations fail at the second settlement conference. Therefore, ALJ Blubaugh based his
findings of fact solely on SPB 's motion to dismiss and supporting documentation.
At this time, the parties, including DP A, are involved in litigation over this matter. 14
ALI'S NOTICE OF DISMISSAL
The ALJ only addressed the jurisdictional issue concerning whether or not SPB is an
"employer" under the Dills Act in order to dispose of this case and, therefore, did not reach the
constitutional issue. He determined that ordinarily DPA is the state employer15 under Dills Act
section 3517(j). 16 (State of California (Department of Personnel Administration) (1998) PERB
Decision No. 1305-S; State of California (Department of Personnel Administration) (1996)
PERB Decision No. 1145-S.) He also stated that in cases involving unilateral changes, or
interference or discrimination against employees for their protected acts, PERB has found
individual agencies to be the State employer. (State of California (Department of Youth
14California State Personnel Board v. California Department of Personnel
Administration, et al., Sacramento County Superior Court, No. 01CS00109.
15The ALJ also cited a letter from DPA labor relations counsel to PERB that he
believed demonstrated DP A's position that DPA does not consider SPB to be the State
employer and has not delegated authority to SPB to represent the State.
16Section 3513(j) provides:
6

Authority) (2000) PERB Decision No. 1374-S; State
of
California (Department
of
Corrections)
(2000) PERB Decision No. 1381-S; State
of
California (Department
of
Corrections) (2001)
PERB Decision No. 1435-S.) In situations where individual state agencies were deemed a
"State employer," those agencies were the appointing authority.
According to the ALJ, PERB has previously considered whether a state agency acting
in an adjudicatory capacity can be a "State employer," and in that circumstance, decided it
cannot. (California State Employees Association (Gonzalez-Coke, et al.) (2000) PERB
Decision No. 1411-S.) In that case, the Board determined that PERB itself could not commit
an unfair practice through its administrative decisions. Analogizing the present matter, the
ALJ found that SPB was acting in its adjudicatory capacity because the employees neither
work for SPB nor does IlJOE represent SPB employees. SPB's position is based upon its
interpretation
of
its constitutional mandate and therefore, the ALJ found that the proper forum
for challenging SPB' s actions is in court.
DISCUSSION
This case involves legal issues
of
great import to this Board, namely, whether
or
not
SPB is an employer under the Dills Act given the factual circumstances in this case; whether
any agency, acting in a quasi-adjudicatory capacity, is an employer under the Dills Act; and,
whether the Dills Act and memorandum
of
understanding (MOU) provisions may be
harmonized with that portion
of
Cal. Constit. Art. VII, section 3(a), which establishes SPB's
authority to review disciplinary actions. In light
of
the importance
of
these issues, the Board
concludes the following.
"State employer," or "employer," for the purposes of bargaining
or meeting and conferring in good faith, means the Governor or
his or her designated representatives.
7

First, the Board, on its own motion, orders that DPA be joined as a party to this case.
DPA and SPB dispute DP
A's
status as a party. It is unclear in the record whether
DPA
is a
party or not. Although DPA filed a timely notice
of
appearance during the Board agent's
investigation, DP A participated in the informal conference and, under Government Code
section 19815 .4(g), DP A would normally be the State representative in this matter, DP A has
declined to represent SPB because
of
a conflict
of
interest. Furthermore, the charge
by
IUOE
is clearly against SPB. However, DP A has declared that a settlement in this matter must be
approved
by
DPA. DPA is also clearly a party to the unit 12 and
13
MOUs, whose provisions
are at issue in this case.
Under PERB Regulation 32164(d), PERB, on its own motion, may order joinder
of
a
party if:
(1) In the absence
of
the employer, employee organization or
individual, as a party, complete relief cannot be accorded; or
(2) The employer, employee organization or individual has an
interest relating to the subject
of
the action and is so situated that
the disposition
of
the action in their absence may:
(A) As a practical matter impair or impede their ability to protect
that interest; or
(B) Leave any
of
the parties subject to a substantial risk
of
incurring double, multiple, or otherwise inconsistent obligations
by reason
of
said interest.
In this matter, at issue is the validity
of
provisions ofMOUs between DPA and IUOE.
If
the charge were upheld, then the decision would impact DPA in the same manner as IUOE.
A logical remedy would be for SPB to cease and desist from not approving Board
of
Adjustment settlements, the process agreed to in negotiations. As a party to the MOUs, DPA
should have the same right to seek enforcement of such a decision as IUOE. Therefore, DP A
8

has as much interest in this action as IUOE. On the other hand,
ifDPA
were not joined, a
PERB ruling for SPB affecting only IUOE might result in inconsistent contractual obligations
between DPA and IUOE pertaining to the relevant provisions
of
the MOUs.
	DPA's
circumstances thereby fall within Section 32164(d)(2)(A) and (B). In order to eliminate any
confusion as to DP
A's
status as a party and to ensure a just resolution in this matter, the Board,
on its own motion, therefore orders DP A to be joined under this rule.
Second, the ALJ's dismissal
of
this matter without obtaining IUOE's position does not
yield a just result. There was clearly confusion in the conduct
of
PERB 's informal and formal
processes. In less than a one-month period, between August 29 and September 24, the parties
were involved in settlement discussions with ALJ Tamm, SPB filed a motion to dismiss, and
on the scheduled date
of
the second settlement conference, ALJ Blubaugh issued his notice
of
dismissal. There is a factual dispute as to whether a briefing schedule was to be negotiated
should settlement negotiations fail, perhaps facilitated by ALJ Tamm. The notice
of
dismissal
was issued at the time that settlement negotiations appeared to break down. Technically, IUOE
may not have met the requirements for filing its response to the motion to dismiss or for
requesting an extension
of
time to file its response. However, given the timing
of
the events
and the confusion regarding which ALJ was handling the case at that time, it appears that
justice would not be served without giving IUOE "an opportunity to be heard." In addition,
the significance
of
the issues involved in this case demands that the Board create a fully-
developed record
of
the facts and legal arguments before rendering its decision. It appears that
there are disputed issues of fact. 	For example, one factual issue raised by DPA in its
information brief concerns whether or not SPB was acting in its adjudicatory capacity when it
decided not to approve Board of Adjustment settlements. Such issues can only be developed
9

with an adequate record based upon full participation by all parties; no such record has been
created in this case.
Third, the ALJ' s ruling that PERB lacks jurisdiction over state agencies acting in their
adjudicatory capacities is overly broad. Taken to an extreme, as stated
by
IUOE and DP A,
SPB, acting in its quasi-adjudicatory capacity, could deny an employee union representation at
a disciplinary appeal hearing or could rule against an employee because
of
the employee's
protected activities and still be insulated from the dictates
of
the Dills Act. PERB would
be
abdicating its statutory responsibilities in allowing such an absurd result. After a hearing on
the merits, it could be determined that SPB, whether or not acting as a quasi-adjudicatory
agency, is an "employer" under Section 3513(j) and that its actions violated the Dills Act. 	It
could also be determined that SPB, in whatever capacity, is not an "employer," did not violate
the Dills Act, or acted outside the bounds
of
the Dills Act. Without a complete record, it is
impossible to know.
SPB also argues that PERB cannot rule on the constitutionality
of
its actions. While
this may be true, the Board has the authority to harmonize provisions
of
the laws under its
jurisdiction with other laws. This already has been done on several occasions. (See, e.g.,
Pacific Legal Foundation
v.
Brown (1981) 29 Cal. 3d 168, 175 [172 Cal.Rptr. 487]; San Ysidro
School District (1980) PERB Decision No. 134; Sonoma County Bd.
of
Education v.
Public
Employment Relations Bd. (1980) 102 Cal. App. 3d 689, 701 [163 Cal.Rptr. 464];
San Bernardino City Unified School District (1989) PERB Decision No. 723; Cajon Valley
Union School District (1989) PERB Decision No. 766.)
In light of the above, the Board hereby remands this case to the ALJ for a hearing on
the merits of the motion to dismiss. The issues at stake here, particularly, the interpretation of

"employer" under the Dills Act, are so critical that only a hearing would provide sufficient
information to yield a fair and well-reasoned result. The importance
of
the issues is evidenced
by the fact that DP A and SPB are involved in at least three lawsuits to detennine the
constitutionality
of
the
MOU
provisions.
17
In addition, in order to clarify DP
A's
status in this
matter, under PERB Regulation 32164(d),
by
its own motion, the Board orders joinder
of
DP A.
ORDER
The unfair practice charge in Case No. SA-CE-1295-S is hereby REMANDED to the
Administrative Law Judge for a hearing on the merits
of
SPB
's
motion to dismiss, consistent
with this Decision. Pursuant to PERB Regulation 32164(d), the Board also orders joinder
of
the State
of
California (Department
of
Personnel Administration) as a party to this case.
Members Baker and Neimajoined in this Decision.
17
Two
of
these lawsuits are awaiting a decision by the Third District Court
of Appeal
and in the third one, DP A and IUOE have apparently filed an appeal from a ruling by the
Sacramento County Superior Court.
11