COMPULSORY BINDING ARBITRATION FOR LAW ENFORCEMENT AND FIREFIGHTERS DECLARED UNCONSTITUTIONAL
April 29, 2009
On April 24, 2009, the First District Court of Appeal, in the case of County of Sonoma v. Superior Court [Sonoma County Law Enforcement Association (SCLEA)], unanimously ruled that a 2003 law violates a county’s authority under the California Constitution to decide compensation of its own employees. After negotiations between the County and the union representing Sonoma County law enforcement officers broke down, the union called for arbitration under Code of Civil Procedure section 1299 et seq.
The County refused and SCLEA filed a petition to compel arbitration. The County filed a cross-complaint seeking declaratory relief. The superior court ruled that section 1299 et seq. was constitutional and ordered the County to submit to arbitration. The County then filed a petition for writ of mandate with the Court of Appeal and the superior court granted a temporary stay of its decision until the Court of Appeal ruled on the County’s writ petition.
History of the Legislation
In 2000, the Legislature adopted Senate Bill 402 (codified as CCP §1299 et. seq.) which provided for compulsory binding arbitration of labor disputes between firefighters and/or law enforcement officers and their respective employing agencies. If they reached an impasse, the employee organization (but not the employer) could refer the matter to an arbitration panel. Issues involving salaries, wages, benefits, and other forms of compensation, all fell within the scope of arbitration.
Each party was required to submit to the three person panel (one selected by the employee organization, one by the employer and the third an impartial person) its “last best offer of settlement as to each of the issues within the scope of arbitration.” The panel would then hold a hearing, reach a decision and, after a five day period (which allowed for the parties to meet in private and attempt, once more, to reach a mutual agreement), if no agreement was reached, the decision became final and would be made public.
In 2003, the California Supreme Court ruled, in the case of County of Riverside v. Superior Court, 30 Cal. 4th 278, that SB 402 was unconstitutional since it violated two sections of the California Constitution. Section 1 (b), of the Constitution, states that a county’s “governing body shall … provide for the … compensation … of its employees,” and section 11 (a) states that “the Legislature may not delegate to a private person or body power to make, control, appropriate, supervise, or interfere with county … money, … or perform municipal functions.”
The Court held that SB 402 violated those sections “by compelling [the county] to submit to binding arbitration of compensation issues.” Additionally, SB 402 gave power to a private body – the arbitration panel – “the power to interfere with county money (by potentially requiring the county to pay higher salaries than it chooses) and to perform municipal functions (determining compensation for county employees).”
As a result of the Riverside decision, the Legislature adopted Senate Bill 440, which amended CCP section 1299.7, providing that, after the arbitration panel makes its decision, “the employer may by unanimous vote of all the members of the governing body reject the decision of the arbitration panel, ….” (Emphasis added.) The Legislature declared that its intent was to make the process consistent with the decision in the Riverside case.
Court of Appeal Decision
The Court of Appeal, in the Sonoma County case, granted the County’s writ petition commanding the superior court to vacate its order and to enter a new order denying SCLEA’s petition to compel arbitration. The Court of Appeal agreed with the County that the amended version of CCP §1299.7 “continues to intrude upon its constitutional authority to establish compensation and terms of employment for county employees.”
The Court stated that “the setting of employee compensation is a legislative act that is part of the governing body’s budgetary process. Thus, the statute purports to authorize the adoption of a legislative act – and the imposition of binding contractual obligations upon a county and its taxpayers – even if a majority or supermajority of the democratically elected representatives of the people rejects the arbitration panel’s decision. Because “three members must ‘concur’ in order to act,” the votes of one or two members of a governing body simply cannot be construed as an act of the governing body itself.” (Emphasis in original.)
The Court also noted that section 1299.7’s procedure is contrary to the normal process used to set compensation of county employees. “Ordinarily under the MMBA, an MOU between a public agency and a public employee organization becomes binding only if it is affirmatively approvedby the governing body of the local agency.” Under section 1299.7, the decision “ … becomes binding if it receives an unfavorable determination from the majority of the governing body, so long as at least one member of the body either votes to accept the decision or does not vote.” (Emphasis in original.)
HOW THIS AFFECTS YOUR AGENCY
This case returns labor negotiations to the “norm.” Once again, a majority of an entity’s governing body must affirmatively approve a negotiated agreement, as opposed to one member of the body being able to cause the acceptance of an arbitration panel’s decision. Since the language in SB 440 requires a unanimous vote, the Court points out that “ … the county’s taxpayers will be bound by the decision of an unelected arbitration panel, if a single member of the local governing body either votes to accept the arbitrators’ decision or simply does not vote.
It is unknown, at this time, if SCLEA plans on petitioning the California Supreme Court for review but, until then, this is “the law of the land.” As always, we urge that you seek advice and guidance from your agency’s legal counsel before proceeding on matters such as this. However, if you wish to discuss this case in greater detail, please feel free to contact me at (714) 446 – 1400 or via e-mail at mjm@jones-mayer.com