Boling v. Pub. Emp't Relations Bd.

• Decision Date: 02 August 2018
• Docket Number: S242034
• Citation: 422 P.3d 552,5 Cal.5th 898,236 Cal.Rptr.3d 109
• Court: California Supreme Court
• Parties: Catherine A. BOLING et al., Petitioners, v. PUBLIC EMPLOYMENT RELATIONS BOARD, Respondent; City of San Diego et al., Real Parties in Interest. City of San Diego, Petitioner, v. Public Employment Relations Board, Respondent; San Diego Municipal Employees Association et al., Real Parties in Interest.

5 Cal.5th 898

422 P.3d 552

236 Cal.Rptr.3d 109

Catherine A. BOLING et al., Petitioners,

v.PUBLIC EMPLOYMENT RELATIONS BOARD, Respondent;

City of San Diego et al., Real Parties in Interest.

City of San Diego, Petitioner,

v.Public Employment Relations Board, Respondent;

San Diego Municipal Employees Association et al., Real Parties in Interest.

S242034

Supreme Court of California.

Filed August 2, 2018

Lounsberry Ferguson Altona & Peak, Kenneth H. Lounsbery, Escondido, James P. Lough, Alena Shamos, Escondido, and Yana L. Ridge for Petitioners and Real Parties in Interest Catherine A. Boling, T.J. Zane and Stephen B. Williams in Nos. D069626 and D069630.

Jan I. Goldsmith and Mara W. Elliott, City Attorneys, Daniel F. Bamberg and George F. Schaefer, Assistant City Attorneys, Michael Travis Phelps, Chief Deputy City Attorney, and Walter C. Chung, Deputy City Attorney, for Petitioner and Real Party in Interest City of San Diego in Nos. D069630 and D069626.

Jones Day, Beth Heifetz, Gregory G. Katsas, G. Ryan Snyder, Karen P. Hewitt and Brian L. Hazen, San Diego, for San Diego Taxpayers Educational Foundation as Amicus Curiae on behalf of Petitioner and Real Party in Interest City of San Diego in Nos. D069630 and D069626.

Renne Sloan Holtzman Sakai, Arthur A. Hartinger, Jonathan V. Holtzman, San Francisco, and Alexander Volberding for League of California Cities, California State Association of Counties and International Municipal Lawyers Association as Amici Curiae on behalf of Petitioner and Real Party in Interest City of San Diego in Nos. D069630 and D069626.

Meriem L. Hubbard and Harold E. Johnson, Sacramento, for Pacific Legal Foundation, Howard Jarvis Taxpayers Association and National Tax Limitation Committee as Amici Curiae on behalf of Petitioner and Real Party in Interest City of San Diego in Nos. D069630 and D069626.

J. Felix de La Torre, Wendi L. Ross, Sacramento, Mary Weiss and Joseph W. Eckhart for Respondent.

Weinberg, Roger & Rosenfeld, Kerianne R. Steel and Anthony J. Tucci for Service Employees International Union, California State Council as Amicus Curiae on behalf of Respondent.

Smith, Steiner, Vanderpool & Wax and Ann M. Smith, San Diego, for Real Party in Interest San Diego Municipal Employees Association in No. D069630.

Smith, Steiner, Vanderpool & Wax and Fern M. Steiner, San Diego, for Real Party in Interest San Diego City Firefighters Local 145, IAFF, AFL-CIO in No. D069626.

Rothner, Segall & Greenstone, Ellen Greenstone, Pasadena, and Connie Hsiao for Real Party in Interest AFCSME, AFL-CIO, Local 127 in No. D069626.

Law Offices of James J. Cunningham and James J. Cunningham for Real Party in Interest Deputy City Attorneys Association of San Diego in No. D069626.

Leonard Carder, Andrew J. Ziaja and Arthur Liou, Oakland, for International Federation of Professional and Technical Employees Local 21, Operating Engineers Local Union No. 3 and Marin Association of Public Employees as Amici Curiae on behalf of Real Parties in Interest and Respondent.

Reich, Adell & Cvitan, Marianne Reinhold, Santa Ana, Laurence S. Zakson and William Y. Sheh, Los Angeles, for Orange County Attorneys Association as Amicus Curiae on behalf of Real Parties in Interest and Respondent.

Woodley & McGillivary, Thomas A. Woodley and William W. Li for The International Association of Fire Fighters as Amicus Curiae on behalf of Real Parties in Interest.

Law Office of Michael A. Conger and Michael A. Conger, Rancho Santa Fe, for San Diego Police Officers Association as Amicus Curiae on behalf of Real Parties in Interest.

CORRIGAN, J.

This case arises from unfair practice claims filed by unions after San Diego's mayor sponsored a citizens' initiative to eliminate pensions for new municipal employees and rebuffed union demands to meet and confer over the measure. The Court of Appeal annulled a finding by respondent, the Public Employment Relations Board (PERB), that the failure to meet and confer constituted an unfair labor practice. We granted review to settle two questions: (1) When a final decision by PERB under the Meyers-Milias-Brown Act (the MMBA; Gov. Code, § 3500 et seq. )¹ is appealed, what standards of review apply to PERB's legal interpretations and findings of fact?; (2) When a public agency itself does not propose a policy change affecting the terms and conditions of employment, but its designated bargaining agent lends official support to a citizens' initiative to create such a change, is the agency obligated to meet and confer with employee representatives?

These questions are resolved by settled law and the relevant statutory language. First, we have long held that PERB's legal findings are entitled to deferential review. They will not be set aside unless clearly erroneous, though the courts as always retain ultimate authority over questions of statutory interpretation. The MMBA specifies that PERB's factual findings are "conclusive" "if supported by substantial evidence." (§ 3509.5, subd. (b).) Second, the duty to meet and confer is a central feature of the MMBA. Governing bodies "or other representatives as may be properly designated" are required to engage with unions on matters within the scope of representation "prior to arriving at a determination of policy or course of action." (§ 3505.) This broad formulation encompasses more than formal actions taken by the governing body itself. Under the circumstances here, the MMBA applies to the mayor's official pursuit of pension reform as a matter of policy.² The Court of Appeal erred, first by reviewing PERB's interpretation of the governing statutes de novo, and second by taking an unduly constricted view of the duty to meet and confer.

I. BACKGROUND

In November 2010, two San Diego city officials proposed public employee pension reforms. First, Councilmember Carl DeMaio recommended that defined benefit pensions be replaced with 401(k)-style plans for all newly hired city employees. Then, Mayor Jerry Sanders declared that he would develop a citizens' initiative to eliminate traditional pensions for new hires, except in the police and fire departments, and replace them with a 401(k)-style plan. San Diego's charter establishes a "strong mayor" form of government, under which Sanders acted as the city's chief executive officer. His responsibilities included recommending measures and ordinances to the city council, conducting collective bargaining with city employee unions, and complying with the MMBA's meet-and-confer requirements.

As relevant here, proposals to amend a city's charter can be submitted to voters in two ways. First, a charter amendment can be proposed by the city's governing body on its own motion. ( Elec. Code, § 9255, former subd. (a)(2).) Second, an amendment can be proposed in an initiative petition signed by 15 percent of the city's registered voters or, for amendments to a combined city and county charter, by 10 percent of registered city and county voters. ( Elec. Code, § 9255, former subd. (a)(3)-(4).)

In 2006 and 2008, Sanders had pursued two ballot measures affecting employee pensions. These measures were intended to be presented to voters as the city's proposals. (See Elec. Code, § 9255, former subd. (a)(2).) In the course of developing them, Sanders met and conferred with union representatives, as required by People ex rel. Seal Beach Police Officers Assn. v. City of Seal Beach (1984) 36 Cal.3d 591, 601, 205 Cal.Rptr. 794, 685 P.2d 1145. The 2006 proposal was approved by the voters. In 2008, the proposal never went to the voters because Sanders and the unions reached an agreement. In 2010, however, Sanders chose to pursue further pension reform through a citizens' initiative instead of a measure proposed by the city. He reached this decision after consulting with staff and concluding that the city council was unlikely to put his proposal on the ballot. He was also concerned that compromises might result from the meet-and-confer process. In a local magazine interview, he explained that "when you go out and signature gather ... it costs a tremendous amount of money, it takes a tremendous amount of time and effort .... But you do that so that you get the ballot initiative on that you actually want. [A]nd that's what we did. Otherwise, we'd have gone through the meet and confer and you don't know what's going to go on at that point."

Sanders held a press conference at city hall to announce his plans. The event was attended by City Attorney Jan Goldsmith, City Councilmember Kevin Faulconer, and City Chief Operating Officer Jay Goldstone. A statement informed the public that "San Diego voters will soon be seeing signature-gatherers for a ballot measure that would end guaranteed pensions for new [c]ity employees." A photograph showed Sanders making the announcement in front of the city seal. The mayor's office issued a news release that explained the decision and bore his title and the city seal.³ Faulconer disseminated the press release by e-mail, stating that he and Sanders "would craft a groundbreaking [pension] reform ballot measure and lead the signature-gathering effort to place the measure before voters." Sanders sent a similar e-mail declaring that he would work with Faulconer to "craft language and gather signatures" for a ballot initiative to reform public pensions.

Subsequently, Sanders developed and publicized his pension reform proposal. In January 2011, allies of the mayor formed a campaign committee to raise money for the proposed initiative. The mayor's chief of staff monitored the committee's activities, keeping track of its fundraising and expenditures.

In his January 2011 state of the city address, Sanders vowed to "complete our financial reforms and eliminate our structural budget deficit." He said he was "proposing a bold step" of "creating a 401(k)-style plan for future employees ... [to] contain pension costs and restore sanity to a situation confronting every big city." He declared that he, along with Faulconer and the city attorney, "will soon bring...