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HomeMy WebLinkAbout5 Representation of Unrepresented Employees Agenda Item # ,ATTORNEY -CLIENT'PRIVILEGED AND,CONFWENTM MEMORANDUM DATE: October 1%2007 TO: Board of Directors,Truckee-Danner Public Utility District FROM: Steven C. Gross,General Counsel RE: Representation of Unrepresented Employees Question Presented Can the District Require Unrepresented Employees To Be Represented During Labor Negotiations? Short Answer No. The District cannot require the unrepresented employees to be represented by an organization for the purposes of conducting labor negotiations. Discussion The District is subject to the provisions of the Meyers-Milias-Brown Act("MMBA"), which is located at California Government Code Section 3500 and following. In particular, the MMBA defines "public agency" as " ... every governmental subdivision, every district, every public and quasi-public corporation, every public agency and public service corporation and every town, city, county, city and county and municipal corporation, whether incorporated or not and whether chartered or not." (Gov. Code Section 3501(c)). Gov. Code Section 3502 makes it clear that public employees, including the unrepresented employees of the District,have the right to decide for themselves whether they want to be represented by an employee organization and that the District cannot force them to be represented. Section 3502 states, (00025157.DOC 1) "Except as otherwise provided by the Legislature, public employees shall have the right to form,join, and participate in the activities of employee organizations of their own choosing for the purpose of representation on all matters of employer-employee relations. Public employees also shall have the right to refuse to join or participate in the activities of employee organizations and shall have the right to represent themselves individually in their employment relations with the public agency." It is important to note that the MMBA also provides for an"Agency Shop," which is an arrangement that requires an employee, as a condition of continued employment, either to join the recognized employee organization or to pay the organization a service fee in an amount not to exceed the standard initiation fee, periodic dues, and general assessments of the organization. (Gov. Code Section 3502.5.) An agency shop arrangement cannot apply to management employees (Gov. Code Section 3502.5(f)) and the District cannot require unrepresented employees to be represented through the agency shop provisions. Please note that once there is a recognized employee organization, i.e. IBEW 1245, then an agency shop arrangement can be put in place. For your information, I have attached two Memoranda that I prepared for the District in November 2001 and April 2003 regarding Agency Shop issues. (00025157.DOC 1} [[DA RNEY-CLIENT'PRIVILEGED AND CONFIDENTIAL MEMORANDUM : November 19,2001 Peter Hohme ster,General Manager TDPUD : Steve Grass anti Andy Dorris,District Counsel Agency Shop Requirement I. Background Information TDPUD currently does not have an "agency shop", which is an arrangement that requires all employees of a given employer either to join the recognized employee union, or pay the union a "service fee" not to exceed the applicable union dues. You have indicated that IBEW Local 1245 has informed you that as a result of statutory changes enacted by SB 739, TDPUD may be forced to establish an agency shop, and will now fall under the jurisdiction of the Public Employment Relations Board("PERB"). We have examined the statutes in question, and it does appear that an agency shop may be forcibly established and that PERB will now have responsibility for overseeing TDPUD's compliance with the Meyers-Milias Brown Act. Specific issues raised by the new law are discussed below. II. Questions Presented A. Under what circumstances may an agency shop be formed? B. Can an agency shop be formed even if the current MOU does not provide for this possibility? C. What limitations may be placed on the "fees" required to be paid by employees who opt not to join the union? D. What does PERB jurisdiction over the Meyers-Milias Brown Act entail? III. Conclusions A. If an agency shop is not negotiated, it may be formed by election. B. Apparently yes. C. Non-member employees cannot be required to pay for anything other than {00025189.DOC 1} collective bargaining costs. D. See below. IV. Discussion A. Formation of Agency Shop Existing law provided that an agency shop agreement could be negotiated between a public employer and the recognized employee organization. What SB 739 did, among other things, was to add a provision' that even if no agreement is negotiated, an agency shop agreement must be placed in effect if employees vote for it. The process begins when a petition requesting an agency shop arrangement signed by 30% of the employees in the applicable bargaining unit is filed. (Agency shop arrangements do not apply to management or supervisory employees.) As the union representative mentioned, no petition can be filed until after good faith negotiations over the creation of an agency shop arrangement have occurred. There does not appear to be a minimum time period for the negotiations, but if the negotiations are not concluded within 30 days, the petition may be filed anyway. A majority of the employees who vote at an election on the question must vote for it. It appears that if the election is unsuccessful, no more than one election may be held per year. Also, the agency and the union are free to negotiate different procedures for holding votes on agency shop agreements. B. Formation of Agency Shop Notwithstanding MOU to the Contrary It appears that an agency shop may be voted into existence notwithstanding the fact that the MOU in place may not provide for the possibility of an agency shop. There is no explicit statement to this effect, but based on the statutes dealing with agency shops, this seems to be a reasonable inference. One of the new provisions created by SB 739 is that if "an agency fee arrangement [is created] outside of an agreement that is in effect", the union has to indemnify the employer against any claims arising from the employer's compliance with the agency fee obligation.2 This means that if non-member employees sue the employer over the mandatory 1 Government Code section 3502.5(b). All statutory references in this memorandum are to the Government Code. 2 Id. {00025189.DOC 11 paycheck deductions for union "fees", the union indemnifies the employer. This provision would not be necessary if an agency shop were established by MOU. Also, existing law contained procedures for voting to rescind agency shop agreements contained within MOUs. SB 739 added a provision to the effect that these procedures will also apply to agency shop agreements placed into effect as a result of a vote, rather than a negotiation.3 This also seems to imply that agency shop agreements may be essentially forced upon an employer notwithstanding the fact that the MOU then in effect does not provide for such an arrangement. C. Limitations on Fees Required to be Paid by Non-Member Employees There is well-established state and federal case law, including several US Supreme Court decisions, which holds that even if an agency shop is in effect, employees may not be required to join an employee organization.4 Moreover, employees cannot be required to pay fees to the union beyond an employee's proportionate share of the union's expenses in undertaking collective bargaining, contract administration, and grievance adjustment; non-member employees cannot be made to pay for a union's political or ideological activities, including organizing efforts. The way agency fees are paid is through direct deduction from employee paychecks by the employer, which remits all sums deducted to the union. However, unions are subject to strict rules prohibiting even the possibility that a non-member's money could be used for prohibited purposes. Usually, unions either reduce the deduction for non-members, or set up interest- bearing escrow accounts into which all deductions from non-members are paid. Once the union has determined which expenses non-members can be made to pay for, non-members are given a partial refund of their paycheck deductions. D. PERB Jurisdiction TDPUD is still subject to the Meyers-Milias-Brown Act ("MMB"),just as it was before SB 739. What SB 739 did was to place responsibility for overseeing MMB with the state Public 3 Section 3502.5(d). 4 A particularly good explanation from the Supreme Court is in Ellis v. Brotherhood..etc. (1986)466 US 435. (00025189.DOC 1) Employment Relations Board. PERB has had oversight over various statutes governing public employee relations, including those concerning state employees, state university employees, and public school employees, but until SB 739 did not have oversight over other public employees in California. The effect of PERB oversight is that unfair labor practice charges can now be filed with PERB, and PERB has responsibility for conducting elections dealing with certification and decertification of employee organizations as exclusive employee representatives. Since MMB has not changed significantly, the fact that PERB is now overseeing it should not represent much of a change for TDPUD. 100025189.DOC 1} ATTORNEY -CLIENT PRIVILEGED AND CONFIDENTIAL MEMORANDUM DATE: April 3,2002 TO. Peter Halznester,General Manager TDPUD FROM: Steve Gross and Andy Morris,District Counsel RE: Agency Shop Issues I. Background Information TDPUD was recently given notice that TDPUD employees will be participating in an election to determine whether TDPUD will become an "agency shop". Several employees have raised questions about the procedure involved and their rights with respect to the election. II. Questions Presented A. Is the election required to be binding? B. Can employees be grandfathered; i.e. keep their nonunion status even if the election results call for a union shop? C. Can employees pay some other entity, such as a charity, rather than the union? What grounds are there for not paying the union? D. Can employees who do not join the union pay less than union members? E. Can an employee be terminated for not paying the union fees? F. Can or should TDPUD deduct mandatory fees without an authorization from an affected employee? G. What enforcement mechanism is available to the union if it believes TDPUD is not enforcing the agency shop arrangement? III. Conclusions A. Yes. B. No. C. Only bona fide conscientious objectors can pay a charity instead; there are no grounds for not paying at all. 100025185.DOC 1} D. It depends on how the union uses the money it collects. E. Yes. Actually, employees are required to be terminated for not paying the fees. F. It appears the PUD can, and under the law it should, make deductions even without authorization. G. The union's remedy is to file an unfair labor practice charge with the Public Employment Relations Board. IV. Discussion A. Binding Election Pursuant to Government Code section 3502.5(b) , an agency shop arrangement must be placed into effect if a majority of the employees who vote at an election vote in favor of it. So yes, the law requires that the election be binding; there is no provision for the election to be a nonbinding straw poll. B. Grandfathering Employees Again, there does not appear to be any provision for gandfathering existing employees. Once the employees vote in an agency shop in an election, all eligible employees (everyone who is not in management) are required to pay the applicable fees, although they are not required to become union members. Grandfathering would somewhat defeat the purpose of the law, so it is not surprising that grandfathering is not permitted. C. Grounds for Not Paying; Alternative Payees There are no hardship waivers or any other means of avoiding paying fees. Employees who are members of bona fide religions, bodies, or sects which have "historically held conscientious objections to joining or financially supporting public employee organizations" can pay a non-religous, non-labor, tax-exempt charitable fund instead. However, these employees are required to pay exactly the same amount they would have been required to pay to the union, and monthly proof of payment must be made to the employer as a condition of not having to pay the union. (00025185.DOC 1) D. Fee Differentials The Meyers-Milias-Brown Act (including section 3502.5) does not directly address the amount of the fees which must be paid by employees who decide not to join the union. However, pursuant to the National Labor Relations Act and several US Supreme Court decisions2, employees cannot be required to pay fees to the union beyond an employee's proportionate share of the union's expenses in undertaking collective bargaining, contract administration, and grievance adjustment. Non-member employees cannot be made to pay for a union's political or ideological activities, including organizing efforts. Some unions claim that they use all funds collected for collective bargaining, contract administration, and grievances, so non-members will not pay any less than members. Other unions (usually larger unions, but not always) do engage in political activities and organizing efforts, and non-members would not have to pay the portion of the fees which goes to fund these activities and efforts. The way agency fees are paid is through direct deduction from employee paychecks by the employer, which remits all sums deducted to the union. However, unions are subject to strict rules prohibiting even the possibility that a non-member's money could be used for prohibited purposes. Usually, unions either reduce the deduction for non-members, or set up interest- bearing escrow accounts into which all deductions from non-members are paid. Once the union has determined which expenses non-members can be made to pay for, non-members are given a partial refund of their paycheck deductions. E. Termination of Employees for Nonpayment The definition of"agency shop" in section 3502.5(a) is "an arrangement that requires an employee, as a condition of continued employment, either to join the [union], or to pay the [union] a service fee in an amount not to exceed the standard initiation fee, periodic dues, and general assessments of the [union]." Based on this, if an agency shop arrangement were in effect,TDPUD would have no choice but to terminate an employee for nonpayment. 'All statutory references are to the Government Code. 2 One good recent case is Communications Workers of America v. Beck(1988)487 US 735. 100025185.DOC 11 F. Paycheck Deductions Without Employee Authorization Although generally deductions cannot be made from an employee's paycheck without authorization, in this case the law appears to require that agency shop fees be deducted whether or not an employee has authorized it. Section 3508.5(b) provides that a public employer "shall deduct the payment of dues or service fees" where an agency shop arrangement is in place. Subsection (a) of this section provides that it has no effect on an employee's ability to authorize deductions, but subsection (b) appears to create a requirement that deductions be made without regard to whether they have been authorized. This is an odd provision, and we can understand why some employees might not be happy with it. However, section 3502.5(b) requires the union to indemnify TDPUD and hold it harmless from any claims or liability arising from any action by TDPUD to comply with an agency shop obligation. We recommend that TDPUD try to get authorization from employees to make the agency shop fee deductions. If such authorization cannot be obtained, TDPUD should get a formal indemnification agreement from the union, including that TDPUD will be entitled to choose its own counsel. Once the union has agreed to indemnify TDPUD as required by statute, TDPUD should go ahead and make the deductions. G. Remedies and Enforcement Section 3509 establishes the remedies for employer violations of agency shop arrangements. The Public Employment Relations Board ("PERB") has jurisdiction over complaints, which are to be treated as unfair labor practices complaints. This section appears to make an unfair practices complaint the exclusive route for addressing complaints, precluding suits in state court. Of course, PERB does have the authority to bring court actions to enforce PERB decisions. (00025185.DOC 1)