LOS ANGELES, CITY OF v. S.C. (ENGINEERS & ARCHITECTS ASSOCIATION)

Real Party in Interest, Engineers & Architects Association, Reply to Supplemental Brief

Cal.December 14, 2012

~ SUPREME COURT COPY’ 4 No. S192828 IN THE SUPREME COURT OF THE STATE OF CALIFORNIA CITY OF LOS ANGELESand Does1 through 50, inclusive Petitioner, V. THE SUPERIOR COURT OF LOS ANGELES COUNTY Respondents, SUPREME COURT ENGINEERS AND ARCHITECTS ASSOCIATION, F L E D> Real Party in Interest. DEC 14 2012 Court of Appeal of the State of California Frank A. McGuire Clerk Second Appellate District, Division 3 Case No. B228732 Deputy Appeal from Superior Court of Los Angeles Honorable Gregory Alarcon Civil Case No. BS126192 PETITIONER’S ANSWER TO RESPONDENT?’S SUPPLEMENTAL BRIEF Gary M. Messing, No. 075363 Adam N.Stern, No. 134009 Gregg McLean Adam, No. 203436 MYERS LAW GROUP Jonathan Yank, No. 215495 9327 Fairway View Place, Suite 304 Gonzalo C. Martinez, No. 231724 Rancho Cucamonga, CA 91730 _ CARROLL, BURDICK Telephone: (213) 223-7676 & McDONOUGH LLP | Email: laboradam@aol.com 44 Montgomery Street, Suite 400 San Francisco, CA 94104 Telephone: 415.989.5900 Fax: 415.989.0932 Email: gadam@cbmlaw.com Attorneysfor Petitioner and Real Party in Interest Engineers and Architects Association No. 8192828 IN THE SUPREME COURT OF THE STATE OF CALIFORNIA CITY OF LOS ANGELESand Does1 through 50, inclusive Petitioner, Vv. THE SUPERIOR COURT OF LOS ANGELES COUNTY Respondents, ENGINEERS AND ARCHITECTS ASSOCIATION, Real Party in Interest. Court of Appeal of the State of California Second Appellate District, Division 3 Case No. B228732 Appealfrom Superior Court of Los Angeles Honorable Gregory Alarcon Civil Case No. BS126192 PETITIONER’S ANSWER TO RESPONDENT’S SUPPLEMENTAL BRIEF Gary M. Messing, No. 075363 Adam N.Stern, No. 134009 Gregg McLean Adam, No. 203436 MYERS LAW GROUP Jonathan Yank, No. 215495 9327 Fairway View Place, Suite 304 Gonzalo C. Martinez, No. 231724 Rancho Cucamonga, CA 91730 CARROLL, BURDICK Telephone: (213) 223-7676 & McDONOUGH LLP Email: laboradam@aol.com 44 Montgomery Street, Suite 400 San Francisco, CA 94104 Telephone: 415.989.5900 Fax: 415.989.0932 Email: gadam@cbmlaw.com Attorneysfor Petitioner and Real Party in Interest Engineers and Architects Association TABLE OF CONTENTS Page I INTRODUCTION.....cccccsssccccsceeccsesscnnaaescccssececcceetcaeaseseeeeeseasesseuaasseeanesanens 1 II FURLOUGHS ARE NOT A MANAGEMENTRIGHT UNDER THE MOUSOR THIS COURT’S PRECEDENTS......cccsssscccssceceeeccceeeeeceeeeeecserere 2 [I THE City’s MANAGEMENT RIGHTS ARGUMENT RENDERS THE MOU UNENFORCEABLE.......ccccccccescecsceccccecenaeesecseuessseeeeeeeseeseeeeanescasens 4 A. The City Fails to Heed Vallejo and Richmond AndIts Argument Would Swallow the Rest of the MOU .......cee 6 B. Article 1.9 Does Not Trump Article 3.1.ceceesseseeeeees 9 C. Article 1.9 Cannot Be Constitutionally Read to Absolve the City of Its Obligations Under the Contracts Clause........... 11 D. Grievances Are Not Limited to Departmental Disputes.......... 13 IV THE CITY’S OTHER ARGUMENTS Do NoT HELP IT OR ANSWER THIS COURT’S QUESTION....ccccccccseeeseseeeeetsareeesessneeeeeseesseeeeeneeeaseeeeneaes 16 A. UTLA Does Not Preclude Arbitration Here Because There Is No State Statute or Local Law Expressly Prohibiting Collective Bargaining or Arbitration Regarding Furloughs..... 16 B. The City Has No Statutory Right To A Judicial Forum, and It Directly Negotiated and Ratified the Grievance Arbitration Clause Mandated by the EROoeeceeeeeee 19 V+ EVEN IF FURLOUGHS WERE A MANAGEMENTRIGHT, EAA “MEMBERSHAVE A RIGHT TO GRIEVANCE ARBITRATION REGARDING THE “PRACTICAL EFFECTS”’........ccccccccsccsscesssssveceereeceuees 20 VI CONCLUSION. .......ccsceccccsccccsececcsssccccesseususcctoussceceuscessoveceuseceenseceeeeseaes 21 CBM-SF\SF571950.4 TABLE OF AUTHORITIES Page(s) State Cases Associationfor Los Angeles Deputy Sheriffs v. County ofLos Angeles (2007) 154 Cal.App.4th 1536occccesecsecseessesesssesseesessesessenseesnetiens 9 City ofFresno v. People ex rel. Fresno Firefighters (1999) 71 Cal.App.4th 82 ooo. eeeescseccsesseceseeseesateneeeseeverssesseseneesseeaees 8 EAA v. Community Development Dept. ofCity ofLos Angeles (1994) 30 CalApp.4th 644 oo. cccccccseecssetsecssecseceeeseereeecsssseersesseesseenees 9 Glendale City Employees’ Assn., Inc. v. City ofGlendale (1975) 15 Cal.3d 328 ocececcesseececeseeeecnecseceeeseeseessseaseaeensssessens 6, 10, 11 Inre David S. (2005) 133 CalApp.4th 1160... eeesscssecsseeseecseeseceseessersevsererseesers 10 International Assoc. ofFire Fighters v. City of Vallejo (1974) 12 Cal.3d 608 oo. ccccecscescessssetseeseetecsecseseeceeeneeensentsnees 4, 6,7, 10 International Assoc. ofFire Fighters v. Public Employment Relations Board (“Richmond”) (2011) 51 Cal.4th 259 ooccceseeeeseeereceeseeeseeeeseseneaeeees 3, 4, 6, 7, 10 International BrotherhoodofElectrical Workers v. City of Gridley (1983) 34 Cal.3d 191]ceecccsscecseeesseeeteesseeeseseceeeseeesessessaeeaeeesseaceas 5 International Brotherhoodv. City ofRedding (Nov.2, 2012) 210 CalApp.4th 1114oeeeceeseeesseeneeeeneseeseeees 12 L.A. Police Protective League v. City ofLos Angeles (“LAPPL’’) (1988) 206 CalApp.3d S11cereeriereneeeneecteeresneeres 13, 15 CBM-SF\SF571950.4 -ii- TABLE OF AUTHORITIES (continued) Page(s) Los Angeles County Civil Service Com. v. Superior Court (1978) 23 Cal.3d 55 occ ccccceeeeseesnecneeseessesscnsessessesssceeeseesseesseesanseeseeats 18 Professional Engineers v. Schwarzenegger (2010) 50 Cal.4th 989oocceescereereernetsesseesseseseesseseseeecsesses 4,8, 11 SEIU v. City ofLos Angeles (1994) 24 Cal.App.4th 136...cccsecesescsssessesensecssessesseecsesaseeeseeeaes 14 Sonoma County Organization ofPublic Employees v. County _ ofSonoma ("SCOPE") - a. (1979) 23 Cal.3d 296... eeccescsececesecsseessesesesescseesssesessseseessecseesecaes 12, 20 Taylor v. Crane (1979) 24 Cal.3d 442eeeeeeeeseessessenersessscnessscseeeseeneeenes 6, 10, 11, 20 United Teachers ofLos Angeles v.Los Angeles Unif. Schl. Dist.) ((UTLA”) © (2012) 54 Cal4th 504...ecsssecsessesscssessesssessesseeeeaes 8, 16, 18, 19 Votersfor Responsible Retirement v. Board ofSupervisors (1994) 8 Cal4th 765 oc. eccccsccseecceseceeessenesseceseseeseseeeessasseseressessasseseecneeas 5 State Statutes Education Code SECTION ATOLLS oo. eeeceecccsccssssecsecceeeceesessssseceeesssseeceeeeeseesnsesnaaeneecerees 17,19 Government Code section 3500 (Meyers-Milias-Brown ACct)......ccscsssssessessecsseesseesenees 18 SECTION 3540 oo. eieececsscccesscsceeseccessessssneeecccssenaeeceeseeceeseraneaeeeoeens 16, 17, 19 Other Authorities Educational Employment Relations Act (“SEERA”) .....:cccscsesseeeeeees 17, 19 CBM-SF\SFS71950.4 -iti- I INTRODUCTION The Supplemental Brief of the City of Los Angeles (“City”) fails topersuasively demonstrate that furloughs are not arbitrable under the parties’ memoranda of understanding (“MOUs”) and instead rehashes prior arguments, to which EAA hasalready responded. Indeed, the City rarely framesits arguments in terms of the scope ofarbitrability underthe parties’ contract and instead overreaches by trying to prevail on the substantive merits of the parties’ underlying dispute by insisting that furloughs are an indisputable managementright that overrides the MOUs’ wageand hour provisions—the issue squarely to be decided at arbitration.! Underlying the City’s argumentis its unexamined and unargued position that its MMBA,Charter, and ordinance powers “are distinct from its contractual rights and obligations under the MOUs.” (City Suppl. Br. at 26.) The City cites no authority for that proposition, and that argumentis unpersuasive because, as this Court has recognized in countless cases, local governmental powers are harmonized with state law on collective bargaining that makes MOUsbinding and enforceable. The City agreed to ' For example,the City conflates its Charter, Employee Relations Ordinance (“ERO”), and MOU arguments and doesnot directly answer the question posed by this Court. (See, e.g., City Suppl. Br. at 16 (“Under the Ordinance, City managementis relieved from [arbitration] .... The Ordinance, thus, does not mandate arbitration of this dispute”’].) CBM-SF\SF571950.4 bind itself to particular wage and hour termsfor a particular amountoftime and to arbitrate any MOU-based disputes, thus limiting the management prerogatives it held before. Those provisions—including Article 3.1—must be enforceable, notwithstanding contrary City action, for MOUsto have any meaning. (OB at 17-30; RB at 11-18.) Accepting the City’s overbroad arguments would have devastating consequences for MOU enforcement through grievancearbitration in this case and others. To beclear, as it has contended all along, EAA does not“seek[] to arbitrate the validity of [the] City Council’s determination that furloughs were necessary” (City Suppl. Br. at 12, 26), but rather only seeks arbitration to determine whetherthe City’s decision to impose furloughsviolated the MOUs’ wageand hourprovisions—i.e., to enforce its MOUsin arbitration. (OB at 3; RB at 7; EAA Suppl. Br. at 1.) And that arbitration is authorized by Article 3.1. I FURLOUGHS ARE NOT A MANAGEMENT RIGHT UNDER THE MOUS OR THIS COURT’S PRECEDENTS The City’s entire Supplemental Brief is premised on its unsupported assertion that furloughs are an “unfettered” managementright not subject to arbitration. The City relies on its reading of Article 1.9’s “relieve employees from duty,” “lack of funds,” and “take all necessary actions .. . in emergencies”text, but that language does not expressly CBM-SF\SF571950.4 authorize furloughs nor doesit prohibit furloughs arbitration. The City offers no argumentthat the parties’ mutually intended the MOUsto authorize furloughs underthe “lack of funds” or “emergenc[y]” language; nor doesit have any responseto the appellate court’s finding these phrases are ambiguous and require remand. There simply is no support for the City’s position. (See Part IIT, infra; EAA’s Suppl. Brief at 7-9 [under collective bargaining law furloughs are mandatory subjects of bargaining rather than managementrights because they directly impact wages and hours], 9-11 [Article 3.1 makes furloughs arbitrable], and 16-18 [MOUsdo not expressly allow furloughs under“lack of funds”or “cemergenc[y]” language and cannot reasonably be construed to authorize them either].) Rather than presenting rigorous argument, the City instead conflates layoffs (a managementright) with furloughs (not a management right), ignoring the key distinction between the twothat this Court has previously recognized. This Court has affirmed that layoffs are a managementright because they involve “the employer’s retained freedom to manageits affairs unrelated to employment,” and thus are beyond employers’ obligation to bargain. (See /nternational Assoc. ofFire Fighters v. Public Employment Relations Board (“Richmond”) (2011) 51 Cal.4th 259, 273 [italics added; internal citations and quotations omitted]; CBM-SF\SF57 1950.4 International Assoc.ofFire Fighters v. City of Vallejo (1974) 12 Cal.3d 608, 621 (“Vallejo”’).) This Court has further recognized that, for the same reason, furloughs are not a managementright because they directly impact wages and hours—i.e., mandatory subjects of collective bargaining directly | implicating an employer’s bargaining duty. (See Professional Engineersv. Schwarzenegger (2010) 50 Cal.4th 989, 1040-1041 [“the issue whether an employee's wages may be reduced by the implementation of a mandatory furlough . . . lies at the heart of the matter of ‘wages, hours, and other terms and conditions of employment’ thatare the subject of an MOU”].) The City does not explain why the furloughsit imposed here warrant different treatment. And even though the City cites Professional Engineers, Vallejo, and Richmond, it makes no attempt to explain what in those cases makes furloughs a managementright, let alone distinguish the reasoning establishing that they are not. It THE CITY’S MANAGEMENT RIGHTS ARGUMENT RENDERS THE MOU UNENFORCEABLE The City insists throughoutits brief that the MOUsare “subordinate to established law” such as the MMBA,the City Charter and ERO,such that Article 1.9’s arbitration clause is subject to external constraints. (E.g., City Suppl. Br. at 17, 5-9.) But this case does not CBMC-SF\SF571950.4 implicate any external limits on MOUs’ grievance provision. And our courts have consistently sought to harmonize local governmental powers with collective bargaining agreements reached under the MMBA. (See OB at 23-30; RB at 12-14.) Accordingto the City, certain ERO provisions “place[] . . certain subjects, including the City Council’s rights, powers and authority in all matters, beyond the scopeof an arbitration agreement.” (City Suppl. Br. at 8-9.) But the ERO was enacted pursuant to MMBAsection 3507, and this Court has harmonized local procedures enacted underthis section with the MMBA,butit has not hesitated to hold they are unenforceable whenthey conflict with MMBApolicies. (International Brotherhood of Electrical Workers v. City ofGridley (1983) 34 Cal.3d 191, 202 [“The powerreserved to local agencies to adopt rules and regulations was intended to permit supplementary local regulations which are ‘consistent with, and effectuate the declared purposesof, the statute as a whole’”’]; Votersfor Responsible Retirement v. Board ofSupervisors (1994) 8 Cal.4th 765, 781 [“It is indisputable that the procedures set forth in the MMBAare CBM-SF\SF57 1950.4 a matter of statewide concern, and are preemptive of contradictory local labor-management procedures”’|y In any event, this case does not implicate any external limits on the MOUs’arbitration clause because furloughsarbitration is fully consistent with the Charter and ERO. Specifically, there is no dispute that Article 3.1 is itself consistent with and authorized by the Charter and ERO, as is Article 1.9. (See OBat 8-9, 12 fn.7, 28-29; RB at 15.) The arbitrability question posed by this Court thus turns on how these two provisions interact. However, on the current record, that interaction is not unambiguous, such that, following this Court’s determination ofthe principal unlawful delegation question, remand is necessary. (EAA Suppl. Br. Parts II.) Alternatively, to the extent the Court approaches that interaction as a matter of law, Article 3.1 mandatesarbitration. | A. TheCity Fails to Heed Vallejo and Richmond AndIts Argument Would Swallow the Rest of the MOU Distilled to its essence, the City argues Article 1.9 gives it “unfettered” and “exclusive responsibility” to managethe city andits * For example, the City argues that ERO 4.875, which makes the ERO applicable to “all departments, offices and bureaus of the City[,]” means that “the arbitration process was not intended to apply to . . . the City Council.” (City Suppl. Br. at 8). But that would effectively make the MOUsunenforceable in arbitration if the City attempts to legislate its way out of an MOU,as it has done here—contrary to Glendale City Employees’ Assn., Inc. v. City ofGlendale (1975) 15 Cal.3d 328 and Taylor v. Crane (1979) 24 Cal.3d 442. CBM-SF\SF571950.4 workforce, such that it can “take all actions deemed necessary in an emergency,” leaving employees only theright to grieve the “practical consequences.” (See City Suppl. Br. at 1, 9-11.) But that argument completely ignores Article 3.1’s broad arbitration clause making “any dispute which concernsthe interpretation or application of this written MOU”subject to arbitration. (AA 1:103, italics added; EAA Suppl. Br.at 9-11.) The City nowhere explains why Article 3.1 should not be given its plain meaning or why Article 1.9 would necessarily trump the parties’ arbitration clause.’ Nothingin the parties’ MOUs compels or even suggests that result. The City fails to account for this Court’s precedents outlining the function of managementrights clauses and their limitations. The purpose of management rights clauses is to preserve management prerogatives and not to trump MOUprovisions,particularly those establishing wages and hours. (EAA Suppl.Br.at 3-8, citing Vallejo and Richmond.) Forthat reason, Article 1.9 simply cannot, as the City urges, be read to give the City carte blancheto violate the MOUs wageand hour provisions because that would “swallow the whole [agreement] and relegate determination ofall labor issues to the city’s discretion.” (Vallejo, supra, 3 Indeed, the only express carve outfrom the grievance processrelates to parking disputes. (See, e.g., AA 1:142 [Article 7.9 Parking: “appeals of CBM-SF\SF571950.4 12 Cal.3d at p. 615; EAA Suppl. Br. at 11-19.) (See also City ofFresnov. People ex rel. Fresno Firefighters (1999) 71 Cal.App.4th 82, 105 (“Clearly, employers would always prefer unencumbered decisionmaking in managementofoperations, but such an exception [managementrights] cannot swallow the [collective bargaining] rule by allowing the employer to designate with impunity what is an operational management decision’’) (Ardaiz, J., dissent).) EAA doesnotdispute the City has general management powers and that Article 1.9, as a managementrights clause, preserves them, butthat does not meanthat the City can unilaterally impose furloughsorthat its imposition of furloughs is outside the scope ofarbitration. Indeed this Court has held that furloughs are not an inherent managementright, and this managementrights clause does not expressly make furloughs a management right.’ (Professional Engineers, supra, 50 Cal.4th at 1040- 1041; United Teachers ofLos Angeles v. Los Angeles Unif. Schl. Dist. (2012) 54 Cal.4th 504, 519 (““UTLA”) [only “express provision” making an employment decision a managementright can exclude a grievance from arbitration]; see Part II, supra.) In short, because furloughs are not a employee parking issues... . shall not be grievable”].) CBM-SF\SF571950.4 managementright andare in fact at the heart of the bargaining obligation (wages and hours), they fall squarely within the scope ofthearbitration clause.° B. Article 1.9 Does Not TrumpArticle 3.1 The City adopts but does not defend the court of appeals’ flawed interpretation of Article 1.9 as a limitation on Article 3.1. (See City Suppl. Br. at 10-11.) That reading is unsupported and confuses Article 1.9 “effects” arbitration for Article 3.1 MOU-based arbitration. (See EAA Suppl Br. at 19-21.) Nothing in the parties’ MOUs makes Article 1.9 a limitation on Article 3.1 arbitration, and such a reading would be contrary to the labor policies in managementrights cases recognizing that managementrights do not trump MOUrights. Indeed, the appellate court, like the City, incorrectly presumed furloughs were an Article 1.9 “ By contrast, Los Angeles County apparently has negotiated a management rights clause that expressly allowed it to impose furloughs. (See Association for Los Angeles Deputy Sheriffs v. County ofLos Angeles (2007) 154 Cal.App.4th 1536, 1540-1541.) > EAA v, Community Development Dept. ofCity ofLos Angeles (1994) 30 Cal.App.4th 644 did not “h[o]ld that because the layoff was dueto lack of funds ... it was a managementdecision . . . not subject to arbitration.” (City Suppl. Br. at 12.) There EAA agreed that layoffs were a management right and the only question was whether there was substantial evidence that the layoffs were due to lack of work and/or lack of funds. (/d. at pp. 648, 650.) By contrast, here EAA disputes thatfurloughs are a management right because they directly impact employees’ wages and hours,i.c.,it disputes the parties intended Article 1.9’s lack of work/funds language authorizes furloughs. CBM-SF\SF571950.4 managementright, even though extrinsic evidence was necessary to decide if that reading accorded with the parties’ intent. (See Slip Op. at 15-18; EAA Suppl. Br. at 2-4.)° The sameis true for the City’s argumentthat Article 1.9 allows it “to use all of its pre-existing authority .. . unless specifically restricted by the terms of the MOU.” (City Suppl. Br. at 11, italics added.) That reading too is based on the court of appeals’ unsupported analysis and suffers from ‘the same flawsbecauseit fails to account for Glendale’s and Taylor’s holdings that MOUsare enforceable onceratified, and Vallejo and Richmond whichheld that managementrights do not ttump MOU rights.’ More fundamentally,it fails to recognize this Court’s holding that ° Indeed, the court of appeals’ inability to resolve that matterledit to its unlawful delegation holding, where it is evident that it believed furloughs were a unilateral and unreviewable managementright. (See Slip Op.at 18- 26.) ’ The City, however, apparently rejects the court of appeals’ reading of Article 1.9 as requiring that the restrictions on managementrights be in the managementrights clause itself. (See Slip Op. at 14 fn.12; EAA Suppl. Br. at 12-13, esp. fn.9.) Indeed, it espouses EAA’s reading ofArticle 1.9 that, “except as specifically set forth [in this MOU,] no provisions in this MOU shall be deemedto limit or curtail the City[‘s managementrights].” As EAA previously argued, this language is at minimum redundant (EAA Suppl. Br. at 13 fn.9), but that redundant reading is more reasonable than the alternative argument the City makes here-that a provision in an MOUis not a limitation on managementrights unless each and every section specifically says it is. What controls is the parties’ intent. (See Jn re David S. (2005) 133 Cal.App.4th 1160, 1167-1168 [accepting “redundant” interpretation as “not unreasonable” because “such an interpretation upholds the legislative intent”’].) CBM-SF\SF571950.4 -10- furloughs are not within management’s pre-existing authority. (Professional Engineers, supra, 50 Cal.4th at 1040-1041.) Thus,the specificity the City demandsin light of these principles is unnecessary because an MOUprovisionis, by its very nature, a limitation on managementrights. (EAA Suppl. Br. at 4-9.) Thatis, the existence of various MOU provisions on wages and hours are themselves sufficient to restrict the City’s managementprerogatives (to the extent they existed in regard to these mandatory subjects of bargaining) because, by negotiating andratifying the MOU,the City agreedto limit its authority as to those subjects over which it would otherwise have plenary discretion. Requiring further specificity in each and every MOU section stating that a particular section is an exception to managementrights would be superfluous and burdensome. Indeed, such language is unnecessary because the City of Los Angelesratified the MOUsandthey are thus enforceable under Glendale and Taylor. C. Article 1.9 Cannot Be Constitutionally Read to Absolve the City of Its Obligations Under the Contracts Clause This Court has previously rejected a government employer’s assertions that a fiscal emergency alone allowed imposition of furloughs on public employees. (Professional Engineers, supra, 50 Cal.4th 989.) More generally, it has rejected arguments that fiscal constraints are sufficient to allow a governmental entity to breachits contractual obligations to public CBM-SF\SF571950.4 -11- employees. (Sonoma County Organization ofPublic Employees v. County ofSonoma (1979) 23 Cal.3d 296 (“SCOPE”).) It should do so again here. The City insists that Article 1.9 meansit can “unilaterally take all action necessary to meet an emergencysituation” (City Suppl. Br.at 11), including ignoring the MOUs, breachingits contractual obligations, and then escaping its contractual duty to arbitrate resulting disputes. That argument has no support in law. (See OB at 47-55; RB at 20-23.) This Court has specifically recognized that public entities cannot unilaterally ignore their contractual obligations unless exceptions to the contracts clause apply. (SCOPE, supra, 23 Cal.3d at 307-308 [contract impairment must be constitutionally “reasonable” and “necessary”].) None apply inthis case. Further, the City presents no argument whythe “lack of funds” language authorizes furloughs (not a management right), as opposed to layoffs (a recognized managementright.) It does not. (See EAA Suppl. Br. at 16-18.) Moreover, the Third District recently held that a city employer’s lack of fundsorinability to pay for MOU obligationsis not relevant to determine whetherthat obligation exists or is enforceable. (See International Brotherhood v. City ofRedding (Nov. 2, 2012) 210 Cal.App.4th 1114, 148 Cal-Rptr. 857, 862 [examining MOUinlight of contracts clause obligations].) CBM-SF\SF571950.4 -12- D. Grievances Are Not Limited to Departmental Disputes The City insists the grievance process solely “is aimed at resolving disputes that can be addressed by” department heads. (City Suppl. Br. at 14-15.) That is incorrect. First, Article 3.1 broadly defines a grievance to include MOU- based grievances.® (AA 1:103.) Although the City maintains that “(njothing .. . suggests that the City Council... . may be challenged via a ‘prievance’” (City Suppl. Br. at 15), EAA does not seek to challenge the City Council, but rather it merely seeks arbitration to determine whether the City Council’s imposition of furloughs violated its MOUs—.e., it seeks to enforce its MOUsinarbitration. That squarely falls within the “interpretation or application” language of Article 3.1. Second, while it is true that the grievance process culminating in arbitration originates in city departments,that is mandated by the City’s own ERO. (See EAA’s MJN Ex.2 [ERO 4.865(a)(L) [“Provision shall be madefor discussion of the grievancefirst with the employee’s immediate supervisor on an informal basis”), italics added].) That department-specific ® That broad definition is, of course, subject to the limitation that the matter soughtto be arbitrated actually arise from or seek to enforce MOUrights, and our courts have been able to discern the difference between grievances that do and do not. (See,e.g., L.A. Police Protective League v. City ofLos Angeles (1988) 206 Cal.App.3d 511), 513 (“LAPPL”) [denying arbitration because grievancefiled purportedly under the MOUdid notactually concern interpretation or application MOU or departmentalrules].) CBM-SF\SF571950.4 -13- approach accords with labor public policy becauseit attempts to resolve employee disputes at the lowest level possible. (OB at 22-23; RB at 17- 18.) More fundamentally, however, the MOUsexpressly allow grievances to be filed at a level higher than step one, allowing the parties to proceed directly to arbitration without going through the departments. (See AA 1:104 [Article 3.1, Section II.C [in multi-employee grievances “the Association may request that the first level of review be at a level higher than Step 1 and shall provide justification for such request”].) The MOUs thus makeclear that the parties recognized that certain grievances, particularly those involving multiple employees, are not limited to department-specific matters.’ Third, SEIU v. City ofLos Angeles (1994) 24 Cal.App.4th 136 does not support the City’s argument that “combined grievances are limited to employees in a single department”such that “[t]he procedureis inapplicable to City wide disputes.” (City Suppl. Br. at 15.) SE/U merely decided an employee in one department wasnotentitled to arbitration of an “interdepartmental grievance[]”he filed against anothercity department he did not work for. (24 Cal.App.4th at p. 145; id. at p. 139 [“the MOU does not compelarbitration of employees’ disputes with departments other than ” The record doesnot indicate whether EAA soughtsucharbitration and was denied, because only the grievance denials drafted by managementare CBM-SF\SF571950.4 -14- those employing them”].) But the City identifies no grievance that was filed by an EAA memberin a department other one in which he or she works.'° Finally, the City also inexplicably cites the same City Attorney Opinion (“Opinion”) that undermined its unlawful delegation argument to argue the Opinion discerned “a legislative intent by the City Council [in the ERO] to limit the type of disputes subject to the grievance procedure to issues resolvable by individual departments.” (City Supp. Br. at 9 [relying on Opinion 85-28,filed July 26, 1988 [City’s 4RJN, Ex. 1].) That is a gross mischaracterization because the Opinion makes no mention of legislative intent, makes nolegislative history analysis, and its conclusion on this issue is unsupported with any legal authority. (See City’s 4RJN, Ex. 1 at p. 15.) More importantly, it does not answer whetherthe parties here intended Article 3.1 to be so limited. Indeed, the Opinion does not deal with MOU-basedgrievancesatall and ignores labor arbitration policies favoring resolution of employmentdisputes at the lowest levels.'! In any in the record. '0 APPL does not support the City either because the employeethere did not even try to enforce any MOU-basedright through the grievance arbitration process. (206 Cal.App.3d at p. 513) '! The Opinion analyzesthe allocation ofpower between the City Council and city departments. (See id. at 2-3.) It did not substantively deal with grievances seeking to enforce MOUrights. CBM-SF\SF57 1950.4 -15- event, the Opinion is entitled to no weightas it is essentially the City’s own unsubstantiated opinion. IV THE CITY’S OTHER ARGUMENTSDO NoT HELP IT OR ANSWERTHIS COURT’S QUESTION The Court specifically asked the parties to brief arbitrability under the parties’ MOUs. The City makes several non-MOU based argumentsit asserts are relevant to this question. None have merit. A. UTLA Does Not Preclude Arbitration Here Because There Is No State Statute or Local Law Expressly Prohibiting Collective Bargaining or Arbitration Regarding Furloughs Relying on United Teachers ofLos Angeles v. Los Angeles Unif. Schl. Dist. (2012) 54 Cal.4th 504 (“UTLA”), the City argues enforcing the arbitration clause here would “replace, set aside or annul” its management rights and charter based powers. In fact, UTLA actually reinforces EAA’s arbitration arguments. (/d. at p. 519 [only “express provision” making an employmentdecision a managementright can exclude a grievance from arbitration]; see also id. at pp. 518-520 [reaffirming Steelworkers Trilogy, requiring doubts be resolvedin favorof arbitration, and lack of merits not an arbitration defense].) UTLA dealt with a union’s request for arbitration that directly conflicted with two specific statutes that apply only to collective bargaining in school districts: (1) Government Code section 3540 of the Educational CBM-SF\SF571950.4 -16- Employment Relations Act (“EERA”) and (2) Education Code section 47611.5, subd. (e), which applies to charter school approvals. (/d. at pp. 511-513.) This Court explained that Government Code section 3540 is a “non-supersession clause,” meaning thatit prohibits collective bargaining over matters that directly infringe on the Education Code. (/d. at 513-516 (“the scope of [collective bargaining] does not include matters that would annul, set aside, or replace portions of the Education Code”].) The rationale for that rule is that “labor relations in [public schools] significantly intersect with educational goals . . . [and] the Legislature has limited the scope of[collective bargaining] by withdrawing.. . certain matters in the Education Code. The Legislature has decided that those matters should be exclusively managementprerogatives.” (/d. at p. 520.) Similarly, Education Code section 47611.5, subd. (e) expressly providesthat “[t]he approval or denial of a charter [school] petition... shall not be controlled by collective bargaining agreements nor subject to review ... by the Public Employment Relations Board.” Taking these two statutes together, this Court held that the grievance arbitration the union sought regarding whether the charter school approval procedures set forth in the parties’ MOUwere followed was “statutorily preempted.” (/d.at CBM-SFASF571950.4 -17- 520, 524-526.)'* Given this preemption,it denied arbitration where the arbitrator’s remedy would necessarily conflict with these statutory proscriptions. (/d. at pp. 526, 528.) The City here cites no similar statutes or local laws containing an express prohibition on furloughs or wage and hourarbitration. There are none. The MMBAdoesnot have a “non-supersession clause.” The language in Government Codesection 3500(a) the City cites—*[n]othing contained herein shall be deemed to supersede. . . the charters, ordinances, and rules of local public agencies’”—is not a “non-supersession”clause allowing local laws to trump the MMBA and MOUs. Onthe contrary,this Court has interpreted it as merely “reserving to local agencies the right to pass ordinances and promulgate regulations consistent with the purposes of the MMBA.” (Los Angeles County Civil Service Com. v. Superior Court (1978) 23 Cal.3d 55, 62-63 [“To extend a broaderinsulation from MMBA's requirements would allow local rules to undercut the minimumrights that the MMBAguarantees”’]; Gov. C. § 3500, subd.(a).) The City asserts that Article 1.9, the Charter, and the ERO preemptthearbitration EAA seeks here, but unlike UTLA,it points to no ? The Court noted that its conclusions did not meanall of the union’s grievances were inarbitrable, and it remandedto thetrial court to assess what specific MOU provisions wereat issue and whether they ran afoul of the Education Code. (/d. at pp. 527-528.) CBM-SF\SF571950.4 -18- specific language in any ofthose authorities that expressly does so. That glaring omissionis fatal to the City’s argument, becauseit is clear that whena legislative body wants to carve out certain matters from collective bargaining—as the Legislature did in Government Codesection 3540 and Education Code section 47611.5, subd. (e)—it knowshowto do so. Asto the issue of arbitration remedy, unlike UTLA the arbitrator here can fashion a remedy within the constraints of the law. (See RB at 7- 11). That was impossible in UTLA because EERA and the Government Code expressly prohibited any use of MOUsto impinge on charter school approval. There is no analogouslimitation here. B. The City Has No Statutory Right To A Judicial Forum, and It Directly Negotiated and Ratified the Grievance Arbitration Clause Mandated by the ERO The City argues at great length that it did not “waive[] its [statutory] right to a judicial forum for resolution of challengesto its exercise of its reserved management rights.” (City Suppl. Br. at 20.) That argumentis meritless. The City never identifies the source ofits purported statutory right to a judicial forum.'? There is none. Instead, the City draws on cases where courts have refused to compelindividual discrimination plaintiffs from being pushing into '5 ERO 4.880(b), whichgives the City “the right to maintain anylegal action” does not grant the City a right to a judicial forum, but at most authorizes it to bring and/or defend against a lawsuit. CBM-SF\SF571950.4 -19- arbitration based on dubious readings of employment agreements. (See City Suppl. Br. at 21-24.) Application of those cases here would turn them on their head because,unlike an individualplaintiff, the City of Los Angeles is a sophisticated entity that directly negotiated andratified an arbitration clause and grievance process that accords with its own ERO. That does not meanit “waived”a judicial forum, but rather that it agreed employees could bring MOU-based disputes through a grievance process that would quickly and efficiently resolve them.'* It was entitled to do so under Taylor. Vv EVEN IF FURLOUGHS WERE A MANAGEMENTRIGHT, EAA MEMBERS HAVE A RIGHT TO GRIEVANCE ARBITRATION REGARDING THE “PRACTICAL EFFECTS” There is no needto revisit this Court’s holding in Professional Engineers that furloughs are not a managementright, but if it determines that furloughs somehow were a managementright under the circumstances of this case, EAA submits the arbitration it seeks is still proper because '! The City further argues that an arbitrator is unconstrained bya presumption supposedly favoring the City’s exercise of emergency powers. (See City Suppl. Br. at 24 [arguing presumption applies “unless and until Association provesthat the City abusedits discretion”].) First, the City’s authority to declare an emergencyis not at issue here. Second, there is no such presumption whena local government’s action substantially impairs its employment contract with public employees. (See SCOPE, supra, 23 Cal.3d at 308-309 [legislative deference unnecessary because“the government’s self-interest is at stake”].) CBM-SF\SF571950.4 -20- membersare allowedto file grievances regarding the “practical consequences” of any managementrights decision. Specifically, Article 1.9 allows grievances aboutthe practical effect furloughs have on “wages, hours, and other terms and conditions of employment.” (See AA 1:93.) The court of appeal acknowledged that some of the grievances before it squarely fit within the “practical consequences” category, but faulted the union for not distinguishing those grievances from others, even though the City never made that argument and the grievance denials in the record were drafted by the City and not the employees. (See Slip. Op.at 16-17 fn.13; AA 2:2400-7:1648.) If this Court finds furloughs are authorized by Article 1.9, it should direct the trial court to compel arbitration of those grievances directed at the “practical consequences” of the City’s imposition of furloughs because that issue squarely falls within Article 1.9. VI CONCLUSION If this Court decides to reach the issue ofarbitrability it should remandto thetrial court to resolve the ambiguity as to whether the MOUs authorize furloughs under the circumstancesofthis case or, alternatively, find that the MOUsdo not make furloughs inarbitrable. To the extent the Court finds furloughs are authorized by Article 1.9, it should remand to the trial court to allow grievance arbitration regarding the “practical CBM-SF\SF571950.4 -21- consequences” on EAA members. Resolution ofthe issue of arbitrability, however, is not necessary to reverse the court of appeal’s unlawful delegation holding on which this Court granted review and, accordingly, this Court should reverse the decision of the court of appeals to allow the arbitrations to proceed. Dated: December14, 2012 Respectfully submitted, CARROLL, BURDICK & McDONOUGH LLP By (| Gaty M.Messing \ Gregg McLean Adam Jonathan D. Yank Gonzalo C. Martinez Attorneys for Petitioner and Real Party in Interest Engineers and Architects Association CBM-SF\SF57 1950.4 -22- WORD COUNT CERTIFICATION Pursuant to Rule 8.520(c) of the California Rules of Court, I certify that the attached brief contains 5212 words, as determined by the computer program used to prepare the brief. Dated: December 14, 2012 A J {/ Jonathan Yank CBM-SF\SF571950.4 PROOF OF SERVICE BY MAIL I declare that I am employedin the County of San Francisco, California. Iam over the age of eighteen years and not a party to the within cause; my business addressis 44 Montgomery Street, Suite 400, San Francisco, CA 94104. On December 14, 2012,I served the enclosed: PETITIONER’S ANSWER TO RESPONDENT’S SUPPLEMENTAL BRIEF on the parties in said cause (listed below) by enclosing a true copy thereof in a sealed envelope and, following ordinary business practices, said envelope wasplaced for mailing and collection(in the offices of Carroll, Burdick & McDonough LLP) in the appropriate place for mail collected for deposit with the United States Postal Service. I am readily familiar with the Firm's practice for collection and processing of correspondence/documents for mailing with the United States Postal Service and thatsaid correspondence/documents are deposited with the United States Postal Service in the ordinary course of business on the same day. Janis Levart Barquist, Esq. Counselfor Petitioner City ofLos Angeles Jennifer Maria Handzlik, Esq. Carmen A. Trutanich Office of the Los Angeles City Attorney 200 North Main Street, Room 800 Los Angeles, CA 90012 Frederick Bennett Counselfor Respondent Superior Court of Superior Court of Los Angeles Los Angeles 111 North Hill Street, Room 546 Los Angeles, CA 90012 Hon. Gregory Alarcon Trial Judge Superior Court of Los Angeles 111 North Hill Street, Dept. 36 Los Angeles, CA 90012 Superior Court of Los Angeles 111 North Hill Street Los Angeles, CA 90012 California Court of Appeal Second District, Division 3 Ronald Reagan State Building 300 So. Spring Street, 2°° Floor Los Angeles, CA 90013 Anthony Segall, Esq. Attorneysfor Amicus Curiae AFSCME, Ellen Greenstone, Esq. District Council 36,et al. Jonathan Cohen, Esq. Anthony P. Resnick Rothner, Segall & Greenstone 510 South Marengo Avenue Pasadena, CA 91101-3115 CBM-SF\SF571950.2 Arthur Krantz, Esq. Leonard Carder, LLP 1330 Broadway, Suite 1450 Oakland, CA 94612 Rex S. Heinke, Esq. Jessica Michael Weisel, Esq. Amit Arun Kurlekar, Esq. Akin Gump Strauss Hauer & Feld 633 W.Fifth Street, Suite 5000 Los Angeles, CA 90071-2081 David W. Tyra, Esq. Kronick Moskovitz Tiedemann & Girard 400 Capitol Mall, 27" Floor Sacramento, CA 95814 Marcia Haber Kamine Kamine Phelps PC 523 W.6- Street, Suite 546 Los Angeles, Ca 90014 Stephen H. Silver, Esq. Silver, Hadden, Silver, Wexler & Levine 1428 SecondStreet Santa Monica, CA 90401 Counselfor Amicu Curiae IFPTE,etal. Counselfor Amicus Curiae Los Angeles Chamber ofCommerce Counselfor Amici Curiae League of California Cities and California State Association ofCounties Counselfor Amicus Curiae Engineering Contractors’ Association Counselfor Amici Curiae Los Angeles Police Protective League, et al. I declare under penalty of perjury that the foregoing is true and correct, and that this declarationwas executed on December 14, 2012, at San Francisco, California. CBM-SF\SF571950.2 Ris Sonica JoafiGonsalves