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Legal Report, First Quarter of 2012

MEA Attorney Ann Smith and General Manager Mike Zucchet have yielded their space in this quarter’s publication so that we could re-print portions of MEA’s unfair practice charge with the State’s Public Employee Relations Board (PERB) related to the proposed “Comprehensive Pension Reform” Initiative against the City of San Diego. MEA is asserting that the initiative is not merely a “citizen’s” ballot initiative, but rather an initiative proposed and sponsored by Mayor Jerry Sanders, which effectively makes it a City-sponsored initiative that requires negotiations with the City’s recognized bargaining units, including MEA, before being placed on the ballot. Since the City refused MEA’s repeated demands to negotiate the terms of the ballot initiative, this complaint alleges that the City committed an unfair labor practice that demands that the initiative be stopped. Due to space restrictions, portions of the PERB charge have been cut, but you can read the entire complaint on MEA’s website at www.sdmea.org under “Latest News.”

This Charge addresses an MMBA issue of critical importance to MEA and its members with far-reaching consequences for all public employees and their recognized employee organizations throughout the state. With clear precedent in place related to the obligation of public employers to meet and confer over matters within the scope of representation prior to placing an initiative on the ballot seeking voter approval to amend or revise a City Charter, the City has refused to meet and confer with MEA over a so-called “Comprehensive Pension Reform” (“CPR”) ballot initiative headed to the June 2012 ballot because City claims that it is a “citizen’s initiative” not “City’s initiative.”

However, as the evidence shows, this so-called “citizen’s initiative” is merely a sham device which City’s “Strong Mayor” has used for the express purpose of avoiding City’s MMBA obligations to meet and confer. As City’s CEO and Chief Labor Negotiator, this Mayor has used his City-paid time, resources, power, prestige, visibility and “good offices” to inspire, write, negotiate, endorse, and sponsor the proposed “citizen’s initiative” which he has described as his “legacy as Mayor.” In fact, the primary motivation for City’s Mayor to use this subterfuge of a “citizen’s initiative” to dodge City’s meet and confer obligations was this same Mayor’s prior experience in 2007 with ballot initiatives styled as Propositions B and C which related to pensions and managed competition. ULP proceedings before PERB arose out of the Mayor’s meet and confer with MEA over these ballot initiatives and led to a finding that the City had violated the law. Having publicly lamented the delays and frustrations associated with this prior process, City’s Mayor essentially vowed “never again.”

If the Mayor’s course of conduct with regard to this CPR ballot initiative passes muster under this State’s MMBA, the death knell will toll on the MMBA as an effective means to assure that this State’s public employees have a voice at the bargaining table, through their recognized employee organizations, in addressing pensions and other mandatory subjects of bargaining before they appear on a ballot for voter approval. The City of San Diego must not be permitted to provide every other public employer in California with a blueprint for defeating the important legislative objectives defined decades ago in the MMBA.


Applicable Legal Principles

The MMBA imposes a duty on public employers to provide notice to a recognized employee organization and an opportunity to meet and confer over changes in wages and the terms and conditions of employment. This obligation exists whether the change would be a change in the Memorandum of Agreement, the City Charter, an ordinance or any other mechanism. Before an amendment to or revision of a City Charter affecting matters within the scope of representation may lawfully be placed on the ballot, a public employer is required to meet and confer with the affected recognized employee organizations.

The City of San Diego is governed by a “Strong Mayor” form of governance. City’s “Strong Mayor” is Jerry Sanders who serves as City’s Chief Executive Officer and Chief Labor Negotiator. Article XV of the City Charter establishes the Mayor’s authority as the City’s Chief Executive Officer and Chief Negotiator under both the Meyers-Milias-Brown Act (“MMBA”) and the City’s Employee-Employer Relations Policy 300-6, to determine, in the best interest of the City, the appropriate salary and other economic proposals to make at the start of and during the course of labor negotiations with the City’s six employee organizations when conducted in good faith as the law requires. The Mayor initiates the MMBA mandated meet and confer process with the City’s recognized employee organizations. The Mayor hires outside labor counsel to conduct the required meet and confer with the recognized employee organizations.

While PERB has held that an employer has the right to “express its views on employment related matters over which it has legitimate concerns in order to facilitate full and knowledgeable debate,” (Rio Hondo) employer speech that goes beyond mere expression of opinion or communications of existing facts, but instead advocates or solicits a course of action, is not subject to free speech protections. Thus, the City as the employer is prohibited from engaging in negotiations over matters within the scope of representation with persons or groups other than the exclusive representative as occurred here.

In determining whether or not the City has committed an unfair labor practice in violation of the MMBA, PERB will consider the actions of all officials and representatives acting on behalf of the City. The City of San Diego attempted to raise free speech rights as a defense in 2010 in San Diego Firefighters, Local 145, I.A.F.F. v City of San Diego (Office of the City Attorney) 2010 PERB Decision No. 2103-M. In that case, the City – through the City Attorney – advocated a course of action in circumvention of the exclusive representative, or otherwise used the communication to commit an unfair labor practice. In this case the City– through the actions of Mayor Jerry Sanders – has committed an unfair labor practice in violation of MMBA sections 3502, 3503, 3504 and 3505 and PERB Regulation 32604.


In 2008, City’s Former City Attorney Cautioned That the Conduct of Mayor Sanders In Support of a Pension-Related Ballot Initiative to Amend City’s Charter Would Require “Meet and Confer” Due to Agency Principles

In addition to the Mayor’s actions in thwarting the MMBA by negotiating the provisions of the CPR ballot initiative with a small group of private persons, City Attorney Jan I. Goldsmith became a visible supporter of the CPR ballot initiative when joining Mayor Sanders and the proponents in a press conference on the City concourse during normal business hours in April 2011 – under the CPR banner! During media coverage of the initiative, he then offered his legal opinion that the CPR initiative “does provide pension relief within legal parameters.” While the City Attorney asserts that he continues to have the rights of a private citizen, City Charter section 40 expressly provides that: “The (City) attorney and his or her deputies shall devote their full time to the duties of the office and shall not engage in private legal practice during the term for which they are employed by the City.” Thus, his opinion about the initiative’s “legality” when impacting pension benefits is readily understood as the legal opinion of the “City.” The City Attorney as City Attorney also issued an opinion concerning the base compensation component of CPR on January 10, 2011 . Notably, it is the City Attorney’s office which has responded on City’s behalf in rejecting MEA’s demands for meet and confer over the Mayor’s CPR ballot initiative.

However, in 2008, the prior City Attorney offered a different view when a bargaining impasse between City and MEA related to pension plan changes resulted in a hearing before the City Council pursuant to City’s Employer-Employee Relations Policy. When there were insufficient City Council votes to impose the Mayor’s “last, best and final” offer related to a new pension plan, Mayor Sanders reacted with anger and frustration – suggesting that he would lead an initiative to accomplish the changes he sought at the ballot box with voters’ approval.

Former City Attorney Michael Aguirre addressed the prospect of a Mayoral-sponsored “citizen initiative” in a Memorandum dated June 19, 2008, entitled “Pension Ballot Measure Questions.” Noting the Mayor’s rights and responsibilities under the Strong Mayor Charter provisions to represent the City regarding labor issues and negotiations, including employee pensions, he wrote:

While (the Mayor) does have the right to initiate or sponsor a voter petition drive , such sponsorship is legally considered as acting with apparent governmental authority, and will require the Mayor to meet-and-confer with the labor organizations over a voter initiative pension ballot measure that he sponsors. . . . The Mayor has ostensible or apparent authority to negotiate with the employee labor organizations over any ballot measure he sponsors or initiates, including a voter-initiative. The City, therefore, would have the same meet-and-confer obligations with its unions over a voter-initiative sponsored by the Mayor as with any City proposal implicating wages, hours, or other terms and conditions of employment.

With a change in City Attorney in December 2008 – and in view of the current City Attorney’s open support for the CPR initiative – a “new” legal analysis has apparently taken hold to provide “cover” for the Mayor’s activities and to lead the charge in rejecting MEA’s demands to the City for meet and confer as required under the MMBA.


City’s Course of Conduct, Through Its “Strong Mayor” Jerry Sanders, Violates MMBA

Although the CPR is being held out as a “citizen’s initiative,” the evidence is clear that the Mayor has spearheaded the entire CPR project from its inception. He engaged in private negotiations with a small group of representatives from the Chamber of Commerce, conservative Lincoln Club and “taxpayer” advocates, to determine what would be in the CPR relating to pensions, wages and other terms and conditions of employment. The fact of these negotiations was chronicled in the media. Mayor Sanders spoke openly of “concessions” he had to make during these negotiations (with persons and groups to the exclusion of MEA and other recognized employee organizations) in order to be unified behind a single proposition or ballot initiative to put before the voters for “comprehensive pension reform.”


On November 19, 2010 a media alert was put out by the Office of the Mayor entitled “Mayor Jerry Sanders Fact Sheet.” It states that “The mayor also announced he will place an initiative on the ballot that would eliminate defined benefit pensions for new hires, instead offering them a 401(K)-style, defined contribution plan similar to those in the private sector.” The alert went on to state that “Sanders and Councilmember Kevin Faulconer will craft the ballot initiative language and lead the signature-gathering effort to place the initiative on the ballot.” The text of what was written in the media alert also appeared on the City of San Diego web site in the news center for the Office of the Mayor.

All communications and publicity relating to the CPR refer to Jerry Sanders as “Mayor Jerry Sanders.” On January 12, 2011, during his legally-required “State of the City” address, he stood on a stage behind a podium bearing the City’s seal and promised that he and the City Attorney “will soon bring to voters an initiative to enact a 401k-style plan.” He assured listeners that he and the City Attorney “would be acting in the public interest” but added the caveat that they would be doing this “as private citizens.” The press advisory about this address, written and distributed by the Mayor’s City-paid staff, touted that the “Mayor lays out vigorous agenda for 2011” for the City, including “his ballot initiative to replace pensions with a 401k-type plan for most new city hires.” The initiative had not been finalized at this time.

Notice was put out by the Office of the Mayor and the Office of the City Attorney that they would be discussing “pension reform” on January 14, 2011, at City Hall. E-mails related to media strategy and pension reform were circulated amongst City paid-staff on City equipment during City work time.

The Mayor’s City-paid press staff used the pension reform ballot initiative to increase the Mayor’s national media profile. On January 11, 2011, Communications Director for the Office of the Mayor, Darren Pudgil, wrote to Fox News, “as the attached article from Bond Buyer demonstrates, the City of San Diego is a national leader in pension reform. We’re eliminating pensions as we know them and putting in place a 401-k plan like the private sector. My boss San Diego Mayor Jerry Sanders is available any time to come on the Factor to talk about what he’s doing here in San Diego….Just let me know.”

The Mayor’s City-paid press staff also handled media questions regarding the ballot initiative, including questions about a quote by TJ Zane, a CPR proponent, about a conversation “that perhaps started the ball rolling, that as I understand it, the Mayor had made to Bill Lynch [Lincoln Club Vice Chair] to ask for the Lincoln Club’s help in getting to a singular initiative. It may have been a direct request on the mayor’s part to Lincoln Club leadership to facilitate as intermediaries.” The Mayor’s City-paid press staff also addressed a second TJ Zane quote relating to the fact that the “city’s unions were not involved” in any discussions relating to CPR.

Events related to the ballot initiative were regularly discussed at “staff pre-briefs” with the Mayor in the Mayor’s office at City Hall. The meetings were attended by more than a dozen key City staff members. Staff discussion topics include “Pension Reform Press Conference” and “Pension Reform Financial Analysis.” These meetings involving City-paid staff took place during City-paid work hours in the building at the center of City government.

On September 7, 2011, CityBeat published an article quoting from an e-mail sent by Darren Pudgil, the Mayor’s Communications Director and a full-time, paid City employee, explaining why the Mayor was bringing the ballot measure forward “as a private citizen – not as mayor.” “If Mayor Sanders had authored the initiative, he’d have been legally obligated to meet with the city’s labor unions – which is exactly what happened in July 2008. While he wouldn’t have had to accept the unions’ counter-proposals, he’d at least have to entertain them. The mayor took this route because the public deserves the right to decide a measure of this magnitude and importance.”

On November 9, 2011, Pudgil tweeted “Look for mayor on the morning shows today making pitch for his pension reform initiative, now headed for June ballot. Many people to thank.” In each instance, Pudgil was describing what his boss Mayor Sanders was doing to promote the CPR ballot initiative – and Pudgil himself was doing so as a paid City employee.

On December 7, 2011, CityBeat reported that “pension-reform proponents chose to go the citizen-initiative route in order to avoid negotiating with the unions that represent city employees.” Mayor Sanders was then quoted as saying “You do that so that you get the ballot initiative on that you actually want…Otherwise we’d have gone through meet-and-confer [negotiations], and you don’t know what’s gonna go on at that point through the meet-and-confer process.”

In the wake of MEA’s repeated demands and City’s repeated refusals to meet and confer over the CPR ballot initiative, Mayor Sanders just delivered his legally-required 2012 “State of the City” address on January 11, 2012. On this occasion, he did not directly discuss CPR. When MEA’s General Manager Michael Zucchet asked Mayor Sanders during a pre-speech briefing on January 10, 2012, if he intended to include remarks about pension reform, Mayor Sanders chuckled and said he would not be doing so because he would be “on a stage behind a podium with the City’s seal on it.” Yet this is precisely where he stood – at a podium bearing the City seal – on January 11, 2011, when he delivered his legally-required “State of the City” address as Mayor a year ago announcing his intent to “bring to voters an initiative to enact a 401k-style plan.” And this is where he stood again in April 2011, on the City concourse outside City Hall during City work time – at a City podium displaying the City seal with City Attorney Jan Goldsmith at his side and the CPR banner displayed – advocating for CPR in the company of its “citizen” proponents – TJ Zane and April Boling, as well as other private citizens with whom he had “negotiated” over CPR’s terms.


City Has Justified Its Refusal to Bargain By the Fiction of a “Citizens’ Initiative” and By Misplaced Attention on the City Council Not the Strong Mayor

In rejecting each of MEA’s several demands for meet and confer over the CPR Ballot Initiative, the current City Attorney merely emphasizes the fact that the City Council is not proposing this ballot initiative and did not act “as a body” to authorize the Mayor to use the resources and power of his office to sponsor it. As a result, the City Attorney argues that the City’s admitted MMBA obligations to meet and confer have never been triggered with regard to it and that the City Council will play a strictly ministerial role in placing Mayor Sanders’ legacy pension reform initiative on the ballot if it otherwise satisfies the procedural requirements set forth in the Elections Code.

A proper legal analysis cannot begin and end with the fact that the City Council is not proposing this ballot initiative. This fact has never been in dispute. But the City Council is not empowered to act as the City’s Chief Labor Negotiator under the Charter’s Strong Mayor Form of Governance – the Mayor is; the City Council does not initiate the MMBA-mandated meet and confer process with this City’s recognized employee organizations – the Mayor does; the City Council does not direct the activities of this City’s Human Resources or Labor Relations Office – the Mayor does; the City Council does not employ outside labor counsel to conduct the required meet and confer processes in accordance with law – the Mayor does. The City Council’s ability to fulfill its proper role on behalf of all residents across eight Council districts when influencing the Mayor’s bargaining positions and/or in resolving any impasse at the bargaining table between the Mayor and this City’s unions depends upon the Mayor’s good faith fulfillment of his Charter-mandated role as Chief Negotiator. Where he fails to do so – as occurred here – he undermines the proper balance of power and shared governance established by the City Charter.

Moreover, all of Mayor Sanders’ actions and activities related to this “pension reform” ballot initiative had to be undertaken for the benefit of the City because, if not, he would have been acting in violation of the City’s Code of Conduct and Conflict of Interest policies and regulations applicable to all elected officials and City employees. These policies unequivocally prohibit the Mayor from engaging in any activity which results in using the prestige or influence of his City of San Diego office or the City’s time, facilities, equipment or supplies for his private advantage. Accordingly, it cannot be credibly argued that Mayor Sanders has acted as a private citizen with regard to his “legacy” initiative.

Finally, the course of conduct shown herein demonstrates that Mayor Sanders, acting in his capacity as Mayor and not as a private citizen, has clearly made a determination of policy for this City related to mandatory subjects of bargaining – and then promoted this determination using the power of his office as Mayor as well as its resources. He has initiated, formulated, funded, written, and negotiated the terms of CPR which are matters within the scope of MEA’s representation of 3,800 City employees. He has done so while refusing to meet and confer with MEA and instead negotiating in private with a handful of like-minded supporters. And leaving no room for any doubt in the matter, Mayor Sanders has announced that this initiative will be “his legacy as mayor” – not the landmark agreements negotiated with MEA under the MMBA to substantially lower pension benefits for new hires in 2009 and to reform retiree health benefits in 2011.

Mayor Sanders’ indisputable activities cannot be dismissed as the simple exercise of free speech by an elected official. The ruse of a “citizen’s initiative” cannot lawfully defeat the legitimate rights of MEA and 3,800 City employees – not to mention the far-reaching anti-MMBA consequences for hundreds of thousands of Californians who work in the public sector. An unfair labor practice has occurred here and must be redressed to assure the continued vitality and uniform application of the important provisions of the MMBA at issue.