Court Holds New Law Requiring Binding Arbitration Of Economic Disputes Involving Local Agency Public Safety Employees Is Unconstitutional

In County of Riverside v. The Superior Court of Riverside County (2002) 97 Cal.App.4th 1103, the California Court of Appeal, Fourth Appellate District, held that a law (Code of Civil Procedure §§ 1299 et. seq. effective January 1, 2001) which allows a union representing local public safety employees to force a local agency to submit unresolved economic issues to binding arbitration when the parties reach an impasse in labor negotiations is unconstitutional.

When negotiations between the County of Riverside and the Riverside Sheriff’s Association reached an impasse over compensation for probation department employees, the Association requested that the matter be submitted for binding arbitration. The County refused to submit to arbitration, and the Association sought an order compelling arbitration from the Superior Court of Riverside County. When the Court granted the order, the County sought a writ of mandate from the Court of Appeal on the ground that the law was unconstitutional.

The Court of Appeal held that the law violates article XI, section 11, subdivision (a) of the California Constitution, which provides, “The Legislature may not delegate to a private person or body power to make, control, appropriate, supervise, or interfere with county or municipal corporation improvements, money, or property, or to levy taxes or assessments, or perform municipal functions.” The law violates this section because it delegates to a private body, an arbitration panel, the power to interfere with or control county money.

The Court rejected the Association’s argument that the matter fell into the “statewide concern” exception that has been carved out by the courts. The Court noted that prior case law provided that section 11, subdivision (a) was intended to prohibit “only legislation interfering with purely local matters” but not to forbid the delegation of power “to accomplish purposes of more than purely local concern.” The Court emphasized that “it is a matter of statewide concern that the process by which local agency employee salaries are set is conducted according to fair labor practices;” however, establishing the actual compensation of local agency employees is a matter of purely local concern. The Court rejected the argument that the possibility of strikes or work stoppages among public safety workers transformed the matter into one of statewide concern. The Court noted that strikes or work stoppages by public safety employees are illegal and that there is no evidence that stoppages or strikes have in the past, or could in the future, pose an actual danger to public safety or welfare.

The Court concluded that, even if the statewide concern exception applied under section 11, subdivision (a), the binding arbitration requirement violates article XI, section 1, subdivision (b) of the California Constitution as well. Section 1, subdivision (b), which does not have a statewide-concern exception, provides that the governing body of a county “shall provide for the number, compensation, tenure, and appointment of employees.” The Court interpreted section 1, subdivision (b) as giving counties complete authority in matters concerning employee compensation. It concluded that the binding arbitration law is unconstitutional because it empowers a union to place compensation decisions in the hands of a private arbitration panel by allowing the panel to choose between the last best offers of the parties.