Should unelected outsiders have the power to determine a city’s
economic fate? Or more importantly, is it legal for arbitrators to
set wages and benefits for local government?
Gilroy – Should unelected outsiders have the power to determine a city’s economic fate? Or more importantly, is it legal for arbitrators to set wages and benefits for local government?
A simmering fight between City Hall and local public safety workers hinges on that question, setting the stage for one of the most contentious political seasons in recent history. But a few councilmen facing re-election this fall have tried to deflate the issue before their names appear on the ballot.
The debate surrounding binding arbitration emerged in the spring, after the city and fire union reached impasse in contract negotiations. In the wake of the deadlock, Mayor Al Pinheiro and other city leaders warned that the city budget could explode if an arbitrator decides heavily in favor of firefighters. The warnings eventually evolved into a push to rescind arbitration at the ballot box.
Firefighters and other public safety workers, who are prohibited by state law from striking, painted the city’s concerns as an alarmist tactic aimed at uprooting their strongest bargaining chip in labor negotiations. Councilmen ultimately backed off the effort to rush an arbitration measure onto the November ballot in the face of union arguments about due process and threats of political retribution.
Now, councilmen Bob Dillon and Craig Gartman are claiming that even if voters rescind binding arbitration, originally voted into the city charter in 1988, a state law would simply kick the dispute-resolution procedure back into place.
So is binding arbitration truly unavoidable in Gilroy and everywhere else in California? Is the entire debate surrounding the issue pointless?
Local public safety unions say yes. Mayor Al Pinheiro and other critics backing the use of a ballot measure to repeal arbitration say no. And the state’s highest court has taken the side of Pinheiro and other local governments. Sort of.
In arguing their case, the incumbent councilmen and unions have pointed to SB 440, a state law authored in 2003 by former state senator and fervent union advocate John Burton (D-San Francisco).
The law states that public safety workers employed by all local governments in California – whether city, county, school district, or some other agency – shall have recourse to binding arbitration to settle deadlocked contract negotiations. Most interpret the law as applying to charter governments such as Gilroy when voters in that jurisdiction have not approved some form of the dispute-resolution procedure.
Uncharted legal territory
But SB 440 rests on virgin legal territory. It has never been tested in court and opponents predict the bill would face as speedy a demise as its predecessor at the hands of state supreme court judges.
In April 2003, the California Supreme Court struck down Burton’s original version of the bill, SB 402, after Riverside County challenged its constitutionality. The county, in a case brought by a local sheriff’s union hoping to invoke state-sanctioned binding arbitration, argued that the state does not have the right to pass laws forcing local governments to cede control over economic issues to an outside party. The high court agreed:
“We conclude … that Senate Bill 402 violates both constitutional provisions (in question). It deprives the county of its authority to provide for compensation of its employees and delegates to a private body the power to interfere with county financial affairs and to perform a municipal function.”
Within six months of the ruling, Burton’s SB 440 was signed and sealed by then-governor Gray Davis in order to fix – opponents say in order to circumvent – the bill overturned by the supreme court. The new legislation contained an “out clause” that supporters hope will satisfy the high court’s concerns about loss of local control.
The clause allows an elected body to reject arbitrator decisions through a unanimous vote.
“We looked at that ‘out’ provision as being a very high bar to pass,” said Megan Taylor, spokeswoman for the League of California Cities, a lead supporter of the successful challenge to Burton’s first bill. “I think it’s really tough to say no to your unions. These are elected officials that go out there and raise money for their campaigns. The idea that 100 percent of a council would stand up together and fight this is hard to imagine.”
The clash between City Hall and Fire Local #2805 has led stakeholders to the outer edge of California arbitration law. To date, no local government in the state has invoked the over-ride clause of SB 440, according to Joann Speers, general counsel for the League. On the opposite side of the issue, only unions in two non-charter cities – San Luis Obispo and Adelanto, in Southern California – have invoked the specter of the law as part of the normal bargaining process. Speers said San Luis Obispo officials settled contract issues before the case ever reached court, while “there have been a number of continuations” in Adelanto.
If Gilroy aspired to become the test ground for the constitutionality of SB 440, opponents of binding arbitration would have a long and likely expensive road ahead of them. First, city leaders would have to convince voters to rescind arbitration. Then, the seven-member council would have to overturn an arbitrator decision with a unanimous vote – a move that would undoubtedly trigger a court challenge by local unions.
The window for such a circuitous path appears to have closed for the moment. Council missed the chance to approve a ballot measure that could affect the outcome of arbitration hearings scheduled to start in January. If City Hall and Fire Local #2805 fail to reach a compromise before then, arbitrator John Kagel of Palo Alto will resolve the stalemate.
No dodging the question
But while the debate surrounding binding arbitration has cooled, council hopefuls will not be able to slip through election season without taking a stand on the issue, or by finessing their way around it. Five candidates will compete for three council openings this fall, and public safety workers plan to grill every one of them on binding arbitration during the endorsement process.
Voters had a glimpse of candidates’ positions earlier in the summer during the height of debate, when council incumbents Dillon, Gartman, and Charles Morales all endorsed a ballot measure that would subject arbitrator decisions to voter approval.
In recent weeks, Dillon and Gartman have sought to sideline the binding arbitration issue by invoking SB 440. They have focused, instead, on their dismay with the handling of negotiations and proposed that council members play a more direct role in labor talks. Morales said he still supports voter ratification of arbitrator decisions as a compromise between unions and home-rule advocates.
Council candidate Dion Bracco favors eliminating arbitration and council hopeful Peter Arellano says he would leave the dispute-resolution procedure in tact.
Jim Buessing, a representative for Local #2805, said union members at endorsement interviews Oct. 4 will demand straight answers from candidates on binding arbitration and the possibility of a ballot measure to rescind it. He expects candidates to arrive with a detailed understanding of the Burton bills and associated court decisions.
“I would expect any major city official, especially when they’re voting on something of this magnitude, to be very well educated on this,” Buessing said. “And if they aren’t, that would tell me they don’t take their job seriously. And how can we endorse an elected official that doesn’t take the time to educate themselves on issues that affect their employees?”
To read the state laws governing binding arbitration, go to www.leginfo.ca.gov and search for SB 402 and SB 440.
To read the court decision on SB 402, visit www.lexisnexis.com
/clients/CACourts/? and search for opinion number S107126.
