Boling v. Pub. Emp't Relations Bd.

Decision Date02 August 2018
Docket NumberS242034
CourtUnited States State Supreme Court (California)
PartiesCATHERINE 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.

Ct.App. 4/1 D069626

PERB Dec. No. 2464-M

Ct.App. 4/1 D069630 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.


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. 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 to voters an initiative to enact a 401(k)-style plan. [¶] We are acting in the public interest, but as private citizens. And we welcome to our effort anyone who shares our goals." On the same day, the mayor's office issued another press release publicizing his vow "to push forward his ballot initiative" for pension reform. The mayor and his staff continued their publicity efforts in the following weeks. The campaign committee hired an attorney and retained the consulting firm that was serving as the city's actuary for its existing pension plan. The firm used its access to the pension system database to provide a fiscal analysis of the impacts of 401(k) plans for new employees.

The pension reform plan announced by DeMaio the previous November differed in some respects from the Sanders proposal. DeMaio's plan did not exempt police and firefighters, and it included a cap on pensionable pay. Two local organizations, the Lincoln Club and the San Diego County Taxpayers Association (Taxpayers Association), supported DeMaio's plan because they considered it stronger than the mayor's. After the state of the city address, members of the business and development community told Sanders that competing measures would confuse the voters, and there would be insufficient funding for two citizens' initiatives. Shortly after a March 2011 press conference at which Sanders presented his latest proposal, some of these individuals told him they were backing DeMaio's plan because it had enough funding to appear on the ballot. They said Sanders could either join them or proceed on his own. A series of meetings between supporters of the competing proposals followed. Sanders, his chief of staff, and Goldstone, the city's chief operating officer, participated in the negotiations. Ultimately, the two sides reached an accord that melded elements of both plans. Newly hired police officers would continue to have a defined benefit pension plan, but newly hired firefighters would receive a 401(k)-style plan like other new employees. A freeze on pensionable pay would be subject to the meet-and-confer process and could be overridden by a two-thirds majority of the city council, but there would be no payroll cap. Sanders called the negotiations "difficult" and testified that he did not like every part of the new proposal, but supported it because it was "important for the City in the long run." Taxpayers Association hired a law firm to draft the initiative measure, using the DeMaio proposal as a starting point. Goldstone and the mayor's chief of staff reviewed drafts and provided comments. City Attorney Goldsmith also reviewed and weighed in on the proposal. After relatively few revisions, the resulting measure was titled the "Citizens' Pension Reform Initiative" (the Initiative).

In April 2011, a notice of intent to circulate the Initiative petition was filed. The proponents were petitioners Catherine A. Boling, T.J. Zane, and Stephen Williams. Zane and Williams were leaders of the Lincoln Club. Boling was treasurer of the San Diegans for Pension Reform. The next day, Sanders, DeMaio, Goldsmith, Faulconer, Boling, and Zane held a press conference to...

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