City of Palo Alto v. Pub. Emp't Relations Bd.

Decision Date23 November 2016
Docket NumberH041407
Citation211 Cal.Rptr.3d 287,5 Cal.App.5th 1271
CourtCalifornia Court of Appeals Court of Appeals
Parties CITY OF PALO ALTO, Petitioner, v. PUBLIC EMPLOYMENT RELATIONS BOARD, Respondent; International Association of Firefighters, Local 1319, AFL-CIO, Real Party in Interest.

Renne Sloan Holtzman Sakai, Jonathan Holtzman, Charles D. Sakai, Randy Riddle, San Francisco, Erich W. Shiners, Sacramento, for Petitioner City of Palo Alto.

J. Felix De La Torre, General Counsel, Wendi L. Ross, Deputy General Counsel, Miles E. Locker, Senior Regional Attorney, for Respondent Public Employment Relations Board.

Mastagni Holstedt, David E. Mastagni, Isaac S. Stevens, Jeffrey R.A. Edwards, Erich A. Knorr, Sacramento, John A. Melis, for Real Party in Interest International Association of Firefighters, Local 1319, AFL-CIO.

Meyers, Nave, Riback, Silver & Wilson, Arthur A. Hartinger, Linda M. Ross, Jasleen Ahuja, Oakland, for Amicus Curiae League of California Cities, Supporting The City of Palo Alto.

Premo, J.

Since 1978, article V of the City of Palo Alto's (hereafter, City) charter provided that impasses in negotiations regarding wages, hours, and other terms and conditions of employment for the City's police and firefighters would be submitted to binding interest arbitration. In 2011, the Palo Alto City Council (City Council) voted to place on the ballot for the upcoming election a measure that repealed this binding interest arbitration provision. Real party in interest the International Association of Firefighters, Local 1319, AFL-CIO (IAFF) filed an unfair practice charge with the Public Employment Relations Board (PERB), alleging the City placed the measure before voters without consulting in good faith with the IAFF, as required by the Meyers-Milias Brown Act (MMBA) (Gov. Code, § 3500 et seq. ).1 A PERB administrative law judge (ALJ) found in the City's favor. This decision was later reversed by PERB. By that time, the measure repealing the binding interest arbitration provision had already been passed by the voters. As part of its remedy, PERB ordered the City to rescind its resolution from 2011 referring the measure to the voters.

Pursuant to section 3509.5, the City requested this court issue a writ of extraordinary relief aning PERB's decision and directing PERB to dismiss the unfair practice charge. We granted a writ of review. As we explain below, we find PERB's conclusion that IAFF sufficiently requested to meet and consult with the City is supported by substantial evidence and determine the constitutional issues raised by the City are meritless. Nonetheless, PERB's order directing the City Council to rescind its resolution violated the doctrine of separation of powers by ordering a legislative body to take legislative action. We therefore annul PERB's decision and remand the matter back to PERB with directions to strike this remedy.

1. The City's Consideration of an Amendment to the City Charter

In 1978, the city charter was amended to add article V, titled "Compulsory Arbitration for Fire and Police Department Employee Disputes." Section 4 of article V provided: "All disputes or controversies pertaining to wages, hours, or terms and conditions of employment which remain unresolved after good faith negotiations between the city and either the fire or police department employee organization shall be submitted to a three-member board of arbitrators upon the declaration of an impasse by the city or by the recognized employee organization involved in the dispute. [¶] ... [¶] At the conclusion of the arbitration hearings, the arbitration board ... shall decide each issue by majority vote by selecting whichever last offer of settlement on that issue it finds most nearly conforms with those factors traditionally taken into consideration in the determination of wages, hours, and other terms and conditions of public and private employment...."

On April 12, 2010, the city manager prepared a report to the City Council. The report indicated the City was facing a budget deficit of $8.3 million in 2011. The report also provided suggestions on how to balance the City's budget.

In May 2010, the Santa Clara County civil grand jury issued a report that analyzed the employment costs of cities within the county. In part, the report noted that in times of economic boom, cities had opted to attract qualified candidates with increased wages and pension benefits, which were largely guaranteed by union collective bargaining agreements. The report noted that binding interest arbitration had compounded the problem in the City of San Jose. Suggestions were provided on how cities could address the issues caused by increasing costs and included a discussion about binding arbitration. The report noted: "Binding arbitration is not open to the public and results in an adversarial process between the city and employee groups. Binding arbitration limits the ability of city leaders to craft solutions that work for the city's budget. The process has resulted in wage and benefit decisions that have been greater than the growth in basic revenue sources." The report recommended the City of San Jose prepare a ballot measure repealing the section of its city charter dealing with binding arbitration. No specific recommendations were made to the City to take similar action.

The City Council reviewed the report and discussed its findings. In particular, the City Council focused on the report's analysis of binding arbitration. On July 19, 2010, the City Council directed its staff to prepare a measure repealing binding arbitration in article V of the city charter, which was to be placed on the November 2010 ballot.

2. Initial Communications Regarding the City's Consideration of the Ballot Measure

On July 22, 2010, attorneys for the Palo Alto Police Managers Association (PMA) wrote a letter to the city manager. The PMA told the City that it was obligated to comply with the meet and confer requirements of the MMBA before taking any action on the proposed charter amendment to repeal article V, citing to People ex rel . Seal Beach Police Officers Assn . v . City of Seal Beach (1984) 36 Cal.3d 591, 205 Cal.Rptr. 794, 685 P.2d 1145 (Seal Beach ).

The following day, Tony Spitaleri, president of the IAFF, also wrote a letter to the city manager. Spitaleri joined in the PMA's assertion that the City was required to meet and confer with the IAFF and other recognized employee organizations under the MMBA. Spitaleri noted that in 2010, the City of Vallejo complied with the MMBA's meet and confer requirement before it placed a measure repealing binding arbitration on its ballot. At the conclusion of his letter, Spitaleri urged the city manager to "begin a dialogue with [the IAFF] and with other labor organizations which would be affected by any effort to remove or modify the Article V requirements."

On July 26, 2010, Russell Carlsen with the City's department of human resources responded to Spitaleri's letter. Carlsen advised Spitaleri that the City Council was going to consider the repeal of the binding arbitration provision in article V during its July 26, 2010 meeting and was intending on placing the measure on the ballot at its August 2, 2010 meeting. Carlsen then stated: "Interest arbitration provisions are a permissive, not mandatory, subject of bargaining (see DiQuisto v . County of Santa Clara (2010) 181 Cal.App.4th 236, 255–57 ; City of Fresno v . [People ex rel .] Fresno Firefighters , IAFF Local 753 (1999) 71 Cal.App.4th 82, 96–97 ). As such, meet and confer is not required. However, if you have questions or comments about the Council's proposal you may contact me or attend the Council meetings on July 26 and August."

That same day, Gary Baum, the city attorney, wrote to the City Council, addressing the meet and confer issue raised by the IAFF and the PMA. Baum opined that the City had no obligation to meet and confer with the labor organizations under the MMBA. Baum reasoned that the MMBA only required the City to meet and confer about matters within the scope of representation, such as employee wages, hours, and working conditions. Baum noted that the IAFF and the PMA relied on Seal Beach . Baum, however, concluded that Seal Beach was distinguishable.

On August 2, 2010, the City Council held a meeting and discussed the proposed ballot measure to repeal binding arbitration in article V. Councilmember Holman moved to adopt a resolution calling to place before the voters the measure repealing binding arbitration at a special election on November 2, 2010. The motion failed by a vote of five to four. The City Council then directed its staff to "return in the fall with a timeline for consideration of binding arbitration and ideas through study sessions, outreach to the community organizations, in order to get background information and benchmarking data."

3. The Policy and Services Committee's Consideration of the Proposed Ballot Measure to Repeal Article V

After the City Council's meeting in August 2010, the City's policy and services committee began considering a measure to repeal the binding arbitration provision in article V. In May 2011, the City staff prepared a report with information about the proposal to repeal binding interest arbitration.

On May 3, 2011, Sandra Blanch, the City's interim human resources director, wrote a letter to Spitaleri informing him that the policy and services committee would begin discussing a potential measure repealing binding arbitration on May 10, 2011. The letter informed Spitaleri that if he wished to "meet and discuss regarding this issue," he should contact Marcie Scott at the City's human resources department.

That same day, Spitaleri wrote an e-mail to Scott. Spitaleri asked if Blanch's letter was "a request to meet and confer over possible changes to Article V prior to the Policy and Services Standing Committee meeting on May 10." Spitaleri did not receive a response to the e-mail. He later left Blanch a voicemail...

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