In Paulsen v. Local No. 856 of International Brotherhood of Teamsters, (— Cal.Rptr.3d —-, Cal.App. 1 Dist., March 18, 2011), a court of appeal considered whether an action for breach of duty of fair representation was subject to the exclusive initial jurisdiction of the Public Employment Relations Board (“PERB”). The court of appeal held the action fell within PERB’s exclusive initial jurisdiction.
Former, retired, and current deputy probation officers (“Officers”) employed by Marin County (“County”) who are also members of Local No. 856 of the International Brotherhood of Teamsters (“Local 856”) filed a complaint alleging that Local 856, its agent Joe Martinelli, and the union’s leadership (collectively, “Union”) “entered into a secret deal with the County.” Officers alleged that the deal required Union “(a) not to negotiate overtime compensation for [Officers] and the proposed class although [Union] knew [Officers] were working more than 40 hours a week and were not exempt under the Fair Labor Standards Act . . . (FLSA); (b) to conceal [Officers’] right to overtime compensation from them; (c) to misrepresent to [Officers] and the proposed class that they were ‘professionals’ and therefore exempt from overtime compensation, although [Union] knew they were not exempt; and (d) to encourage the union’s officers to lie to its membership about the members’ rights to overtime compensation under the FLSA.” Officers’ state Union concealed overtime compensation from 1995 to 2009.
Officers brought a cause of action for breach of the duty of fair representation, common law breach of fiduciary duty, and fraudulent concealment. Union demurred to the complaint and the trial court sustained the demurrer to all three causes of action due to a lack of subject matter jurisdiction. The trial court consequently dismissed Officers’ action and entered a judgment in Union’s favor.
In a recent decision in the case of City of San Jose v. Operating Engineers Local Union No. 3, (2010) 49 Cal.4th 597, 601, the appellate court held: “In California, labor relations between most local public entities and their employees are governed by the Meyers-Milias-Brown Act (MMBA) . . . which recognizes the right of public employees to bargain collectively with their employers over wages and other terms of employment.” California’s PERB is the administrative agency that is “authorized to adjudicate unfair labor practices charges under the MMBA.” As a general rule, “local public agencies and their employees must exhaust their administrative remedies under the MMBA by applying to PERB for relief before they can ask a court to intervene in a labor dispute.”
The Legislature extended the jurisdiction of PERB in 2000 “to cover matters arising under the MMBA . . . through enactment of Government Code section 3509.” Section 3509, subdivision (b), provides in relevant part: “’A complaint alleging any violation of [the MMBA] . . . shall be processed as an unfair practice charge by [PERB]. The initial determination as to whether the charge of unfair practice is justified and, if so, the appropriate remedy necessary to effectuate the purposes of this chapter, shall be a matter within the exclusive jurisdiction of [PERB].’”
Officers assert their lawsuit is not subject to the “exclusive initial jurisdiction of PERB because they do not allege an unfair practice under the MMBA.” Furthermore, Officers argue that a breach of a union’s duty of fair representation is not an unfair labor practice under section 3509.
After analyzing several cases, the court of appeal found that PERB treats a “union’s violation of its duty of fair representation as an unfair practice under the MMBA” and that “PERB has exclusive initial jurisdiction over MMBA unfair practice charges.” The court of appeal found that even though MMBA does not expressly impose a duty of fair representation on a union, PERB has “nevertheless concluded that a violation of that duty is an unfair labor practice for purposes of the MMBA” which can also be inferred from certain regulations interpreting the MMBA. The court of appeal further concluded that “at least as to bargaining over the terms and conditions of employment, an employee organization acts as the employees’ exclusive representative and has a duty of fair representation under the MMBA.”
The court of appeal additionally found no merit to Officers’ argument that claims for unpaid wages are not considered unfair labor charges within the exclusive jurisdiction of PERB because they are not “seeking statutorily due wages from their employer,” but rather “compensation for [Union’s] actions in breaching their duty of fair representation.”
Finally, the court of appeal did not agree with Officers’ contention that seeking a remedy from PERB would be futile because they filed a class action lawsuit. The appellate court held that nothing in the MMBA suggests that a party can avoid the exclusive jurisdiction of PERB merely by filing a class action lawsuit.
In conclusion, the court of appeal held Officers’ action for breach of duty of fair representation was subject to the exclusive jurisdiction of PERB. It also found that Officers’ other causes of action were “in essence the same as the duty of fair representation claim” and thus also fell within PERB’s exclusive initial jurisdiction. The court of appeal affirmed the judgment of the trial court.
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