United States: Appellate Court Upholds City Of San Diego's Pension Reform Measure Against Unfair Labor Practices Charge

In City of San Diego v. Public Employee Relations Board (April 11, 2017), the Fourth District Court of Appeal considered an unfair labor practices challenge brought by unions against the city of San Diego under the state's Meyers-Milias-Brown Act ("MMBA"). The unions alleged that the city's mayor's involvement with a 2012 pension reform initiative converted a citizen-sponsored initiative ("CPRI") to a city-sponsored measure, thereby requiring the city to engage in meet-and-confer under MMBA before placing the measure on the ballot, which the city failed to do. The initiative mandated that new city employees, except police officers, be provided with a 401(k)-style defined contribution plan, rather than the city's traditional defined benefit retirement plan.

The mayor was involved in initiating, sponsoring, promoting, and implementing the CPRI. The union's challenge was originally filed in the state Public Employee Relations Board ("PERB"), with jurisdiction over public employee labor disputes. The PERB issued an administrative decision siding with the unions, finding that the initiative qualified as a city-sponsored measure, and that the city had violated its meet-and-confer obligations. On appeal, the Fourth District Court of Appeal disagreed with nearly every factual and legal determination made by the PERB, and reversed the agency's determination. The court concluded:

[A] city has no obligation under the MMBA to meet and confer before placing a duly qualified citizen sponsored initiative on the ballot, and only owes such obligations before placing a governing-body-sponsored ballot proposal on the ballot. We further conclude PERB's fundamental premise—that under agency principles [Mayor] Sanders's support for the CPRI converted it from a citizen-sponsored initiative on which no meet-and-confer obligations were imposed into a City Council-sponsored ballot proposal to which section 3504.5's meet-and-confer obligations became applicable—is legally erroneous. Opinion at 65.

The court found that the City Council was not bound by the mayor's actions despite his apparent authority to speak on behalf of the city in labor matters, and despite the fact that the mayor announced his plans for a citizens' initiative at a press conference at City Hall; sent out emails as mayor to voters; gave media interviews; formed a support committee to raise campaign contributions; attended strategy sessions with proponents for another similar pension reform ballot measure; and publicly campaigned for the measure. He often identified himself not as a private citizen but as mayor, and used the services of city staff to promote the measure. Nevertheless, the court determined that these actions were within his rights as a private citizen and an elected official, and could not be attributed to the City Council as official acts of that governing body.

Although several people occupying elected and nonelected positions in City's government did provide support for the CPRI, we conclude PERB erred when it applied agency principles to transform the CPRI into a governing-body-sponsored ballot proposal. Because we conclude that, notwithstanding the support given to the CPRI by Sanders and others, there is no evidence the CPRI was ever approved by City's governing body (the City Council), we hold PERB erred when it concluded City was required to satisfy the concomitant "meet-and-confer" obligations imposed by Seal Beach for governing-body-sponsored charter amendment ballot proposals." Opinion at 6.

Comment

The decision plows no new ground in California pension law—it has always been the case that a state or local legislative body is free to offer prospective new employees any retirement benefits it wants, or none at all. The decision is also unremarkable in its interpretation of the California labor laws.

What is remarkable, and portentous, is the court's parsing of the degree to which courts should defer to the determinations of state and local administrative agencies, like our retirement boards. For disputed factual questions, the court applied the most deferential standard of review (Opinion at 22), but in this case found the material facts largely undisputed. For questions of law, however, the court referred to this as a "complicated question" that requires a court to "distinguish between two classes of interpretive actions by the administrative body—those that are 'quasi-legislative' in nature and those that represent interpretation of the applicable law." Opinion at 23-24. For the former, the court sustained the level of deference afforded under the prevailing Yamaha standard, stating that its scope of review is narrow and limited to the question of whether the administrative rule lay within the lawmaking authority delegated to the agency by the Legislature. When engaged in rule-making, an agency is acting as a legislative body creating rules with the dignity of statutes, and courts regularly defer to the discretionary actions of the legislative branch. Not so, however, when the agency is "construing a controlling statute" that governs the agency's activities. Opinion at 24-25. For an agency's interpretation of the laws it is charged with enforcing, the court departed from the Yamaha standard, and held that the standard of judicial review is independent judgment. Opinion at 24. With legal interpretations, the judicial branch is afforded ultimate authority. Because an interpretation of law is only an agency's legal opinion, however "expert" the agency may be in the field, the court held that it commands a commensurably lesser degree of judicial deference.

Where dispositive facts are undisputed and purely legal issues remain requiring interpretation of a statute an administrative agency is responsible for enforcing, courts exercise independent judgment, and an agency's interpretation is one of several interpretive tools that may be helpful. In the end, however, the court must independently judge the text of the statute, citing Azusa Land Partners v. Department of Indus. Relations (2010) 191 Cal.App.4th 1, 14 (internal marks omitted). Opinion at 27.

In affording scant deference to the determinations of the state administrative agency charged with primary responsibility for interpreting the state's labor laws, the Fourth District Court of Appeal erodes a key aspect of the long-respected Yamaha doctrine. The ruling is sharply at odds with that of the First District Court of Appeal in City of Pleasanton v. Board of Administration (2012) 211 Cal.App.4th 522, 539:

Where our review requires that we interpret the PERL [Public Employees Retirement Law] or a PERS regulation, the court accords great weight to PERS interpretation....This is in recognition of the fact that as the agency charged with administering PERL, PERS has expertise and technical knowledge as well as an intimate knowledge of the problems dealt with in the statute and the various administrative consequences arising from particular interpretations. (internal marks and citations omitted).

Click here to view the decision.

This article is presented for informational purposes only and is not intended to constitute legal advice.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions