Dep't of Human Res. v. Int'l Union of Operating Eng'rs

• Decision Date: 17 December 2020
• Docket Number: F078825
• Citation: 273 Cal.Rptr.3d 127,58 Cal.App.5th 861
• Parties: DEPARTMENT OF HUMAN RESOURCES et al., Plaintiffs and Appellants, v. INTERNATIONAL UNION OF OPERATING ENGINEERS, Defendant and Respondent.
• Court: California Court of Appeals Court of Appeals

58 Cal.App.5th 861

273 Cal.Rptr.3d 127

DEPARTMENT OF HUMAN RESOURCES et al., Plaintiffs and Appellants,

v.INTERNATIONAL UNION OF OPERATING ENGINEERS, Defendant and Respondent.

F078825

Court of Appeal, Fifth District, California.

Filed December 17, 2020

Certified for Partial Publication.^*

Frolan R. Aguiling, Linda A. Mayhew, Sacramento, Sandra L. Lusich and Chris E. Thomas for Plaintiffs and Appellants.

The Myers Law Group, Adam N. Stern and D. Smith for Defendant and Respondent.

FRANSON, Acting P.J.

The State of California, through the California Department of Human Resources (the State), entered into a "Memorandum of Understanding" (MOU) with the International Union of Operating Engineers (the Union) regarding terms and conditions of employment for certain state employees classified as bargaining unit 12. The MOU, under article 16.7(G), provided that "materials of a negative nature" placed in an employee's personnel file shall, at the request of the employee, "be purged ... after one year." An exception to this provision stated that it did not apply to "formal adverse actions" as defined in the Government Code¹ or to "material of a negative nature for which actions have occurred during the intervening one year period." In the present dispute, an employee (B.H.) in bargaining unit 12 requested that negative material retained in his personnel file for more than one year be purged. A number of months later, the state agency where B.H. is employed, the California Department of Water Resources (DWR), took formal disciplinary action against B.H. referred to as a Notice of Adverse Action (NOAA). The discipline imposed in the NOAA consisted of a one-year salary reduction. The NOAA was based on, and attached copies of, counseling and corrective memoranda of a negative nature from several years past relating to B.H.'s job performance history at DWR. A settlement was later reached which reduced the discipline imposed under the NOAA.²

However, the settlement with B.H. did not end the controversy. The Union filed a grievance claiming that DWR violated article 16.7(G) of the MOU by using purged documents to support the adverse disciplinary action taken against B.H. The grievance was ultimately submitted to an arbitrator for resolution, and the arbitrator agreed with the Union's position holding, based on the language of article 16.7(G), that documents coming under the operation of the file-purge provision should not have been used to support the adverse action specified in the NOAA. As a remedy, the arbitrator directed the State to cease and desist from further violation of article 16.7(G) of the MOU. In response to the arbitrator's award, the State and DWR (together the State) filed a petition in the trial court under Code of Civil Procedure section 1285 to vacate or correct the award on several grounds (the petition), including that the arbitrator's interpretation of article 16.7(G) of the MOU constitutes a violation of public policy relating to civil service employment. The trial court found the State's arguments unpersuasive; the petition was denied, and the decision of the arbitrator was confirmed.

The State now appeals from the trial court's order denying its petition to vacate or correct the award. We agree with the State's contention that the arbitrator's interpretation of the MOU is contrary to public policy—specifically, the public policy embodied in the constitutional merit principle applicable to all civil service employment. Accordingly, we reverse the trial court's order on the petition and the ensuing judgment, and we remand the matter to the trial court with instructions to enter a new order vacating the award.³

FACTS AND PROCEDURAL HISTORY

Article 16.7 of the MOU

The MOU contains provisions relating to personnel and evaluation materials contained in employees' personnel files. Although the specific provision interpreted by the arbitrator in this case is article 16.7(G), which we have underscored below, the entirety of article 16.7 is helpful for purposes of context. Article 16.7 of the MOU states as follows:

"16.7 Personnel and Evaluation Materials

"There will only be one official personnel file and normally one supervisory working file regarding each employee and these files will be maintained as follows:

"A. An employee's official departmental personnel file shall be maintained at a location identified by each department head or designee.

"B. Information in an employee's official departmental personnel file shall be confidential and available for inspection only to the employee's department head or designee in connection with the proper administration of the department's affairs and the supervision of the employee; except, however, that information in an employee's official departmental personnel file may be released pursuant to court order or subpoena. An affected employee will be notified of the existence of such a court order or subpoena.

"C. Evaluation material or material relating to an employee's conduct, attitude, or service shall not be included in his/her official personnel file without being signed and dated by the author of such material. Before the material is placed in the employee's file, the department head or designee, where possible, shall provide the affected employee an opportunity to review the material, and sign and date it. A copy of evaluation material relating to an employee's conduct shall be given to the employee.

"D. An employee and/or his/her authorized representative may review his/her official personnel file and/or supervisory working file during regular office hours. Where the official personnel file is in a location remote from the employee's work location, reasonable arrangements will be made to accommodate the employee.

"E. The employee with or without the assistance of their authorized representative, shall have a right to insert in his/her file reasonable supplementary material and a written response to any items in the file. Such response shall remain attached to the material it supplements for as long as the material remains in the file.

"F. Any performance evaluation conducted of an employee who is a participant in IUOE/State collective bargaining negotiations shall recognize the employee's frequent absence from his/her State job and the impact of such absences on the employee's performance. This is not intended to abrogate the right of the State to take disciplinary action against any employee who happens to be involved in such collective bargaining.

"G. Materials relating to an employee's performance included in the employee's official departmental personnel file shall be retained for a period of time specified by each department, except that at the request of the employee, materials of a negative nature shall be purged from any and all files after one year.

This provision, however, does not apply to formal adverse actions as defined in applicable Government Code sections or to material of a negative nature for which actions have occurred during the intervening one year period. Except that, by mutual agreement between a department head or designee and an employee, adverse action material may be removed."

B.H. Exercises File-Purge Rights

B.H. reviewed his personnel file at DWR and requested that materials of a negative nature be purged from his files. According to the arbitrator's findings, B.H. did this in 2014 and again in August 2015.

DWR's Notice of Adverse Action

In a written NOAA dated March 17, 2016, DWR informed B.H. that adverse action in the form of employee discipline would be imposed—specifically, a salary reduction of 10 percent for a period of one year. The NOAA stated that the causes of the disciplinary action included, among other things, inefficiency, inexcusable neglect of duty, insubordination, dishonesty, discourteous treatment of the public or other employees, and willful disobedience. A lengthy statement of facts supporting the disciplinary action included acts or omissions of B.H. occurring between 2013 and the end of 2015. For purposes of supporting the adverse action and demonstrating that B.H. received progressive discipline, numerous counseling and corrective memoranda and other documents containing negative material were referenced and copies were attached to the NOAA. The issuance dates of the negative memoranda and documents ranged from 2007 to 2015.

B.H. Appeals Adverse Action, Then Settles

On March 28, 2016, B.H. appealed the disciplinary action to the State Personnel Board (SPB or the Board), which is the constitutional agency charged with enforcing the civil service statutes and reviewing disciplinary actions on appeal. (See Cal. Const., art. VII, § 3, subd. (a).) Thereafter, DWR and B.H. reached an agreement to settle the disciplinary action. In June 2016, the Board approved the parties' settlement agreement. In the settlement agreement, B.H. agreed to accept the disciplinary action, but with a lesser penalty of a 10 percent salary reduction for six months, and he also waived his right to challenge his disciplinary action in any other proceeding.

The Union Files a Grievance as Bargaining Representative

On April 1, 2016, the Union filed a grievance alleging that DWR violated article 16.7(G) of the MOU by relying on prior corrective and counseling memoranda to support the NOAA issued to B.H. since the memoranda on file more than one year should have been purged. The parties were unable to resolve the dispute, and the Union demanded arbitration as provided under the MOU.

Arbitration Hearing

On May 23, 2017, the arbitration commenced between the Union and the State, the two contracting parties to the MOU, being conducted at the DWR facility in Mettler, California, before Arbitrator R. Douglas Collins. At the outset of the hearing, the parties stipulated the arbitrator would decide the following limited issues: "Did the employer violate Section 16.7 of the 2015–2020 bargaining unit MOU by using purged documents to support adverse action...