A labor lawyer and former Palo Alto school board member, Alan Davis, said Thursday that the school district could have pushed back against the classified employees' and teachers' unions when a missed contract deadline, discovered in August, led to the district having to pay $4.4 million in unbudgeted raises this academic year.
Davis — who served on the Board of Education from 1979 to 1989 and owns Davis & Reno, a San Francisco law firm that represents employees, labor organizations and union members in labor-management disputes — said in an interview with the Weekly that the two union contracts do not explicitly require a written notification to reopen negotiations under certain financial conditions. A verbal statement — which district negotiator Scott Bowers said he gave in negotiations and other officials said they had also expressed — would have sufficed.
The district, Davis said, may have even "prevailed" had this issue gone to arbitration.
A one-sentence provision in the district's three-year union contracts is at the center of this issue.
It states: "In the event that the actual property tax received for 2016-17 (as determined by the County Assessor report of February 2017) is more or less than 1.5 percent of the amount of the property tax used in the Board Adopted Budget for 2016- 2017, each party has the option to reopen negotiations on the 3 percent increase to the Teachers' Salary Schedule for 2017-18 by March 15, 2017."
Throughout the last school year, board members and senior district administrators operated under the assumption, codified in the district budget, that there would be no raises for teachers this year. That decision stemmed from a multi-million-dollar shortfall in the district's budget, discovered in summer 2016.
The unions' obligation in this situation, both legal and moral, has been questioned in recent weeks. But Davis said the unions' primary responsibility is to their members, and they did not have a legal responsibility to remind the district about the March 15 deadline.
"Their primary duty is one of good faith to their members, and that's what they have to exercise," Davis said.
A 1967 U.S. Supreme Court case, Vaca v. Sipes — in which a union's members sued union officials for violating the collective bargaining agreement and refusing to take a grievance to arbitration — established three criteria for unions' "duty of fair representation," Davis noted. Unions cannot act arbitrarily, discriminatorily or in bad faith toward its members.
"That extends to all of their relationships with their employees — when they're handling grievances, to not be arbitrary, discriminatory or act in bad faith," he said. "When they're in negotiations, the same standards apply."
In a statement the Palo Alto Educators Association posted online after a Palo Alto Weekly story broke the news of the missed deadline, the union's executive board made a similar argument.
To suggest the union should have reminded the district of its responsibility to formally reopen negotiations "is essentially to suggest that we should have acted outside the scope of our contract and without the expressed will of our own membership."
"We have a legal and ethical responsibility to represent our members and their interests, in accordance with state law and our own bylaws. That is what we have done consistently," the teachers union said.
The unions may have had a moral obligation, however, to reopen the contract if the district's financial state warranted it, Davis said. He recalled widespread renegotiations of contractual raises, including in Palo Alto Unified, during the 2008 global financial downturn.
"Where there's really a crisis, almost all unions will agree to renegotiate even with contracts that have provisions that provide for increases," he said.
"There can be a moral obligation in times of stress for the teachers to agree to reopen a contract even though the contract is not required," he added.
The district's ongoing budget shortfall — the result of misestimated property tax projections on the part of the district — might not have been enough to justify this, Davis said. A comparison of last year's and this year's certified, year-end unrestricted fund balance with actual revenue and expenditures is necessary to determine that, he said.
A grievance process would have allowed a full discussion about the district's financial situation, which union leadership would have then explained to their members in advance of a vote on whether the contract should be reopened, he said.
"They have the duty to preserve (compensation) that unless there's a bonafide reason to either freeze or decrease those wages," Davis said.
He also said that any attorney who represented the district in negotiations should be questioned about his or her responsibility to advise the district to reopen negotiations. Firm Lozano Smith was advising the district at the time but was not present at negotiations, according to the district. (Palo Alto Unified no longer uses this firm.)
Emails provided to the Weekly under a Public Records Act request show that both Bowers and Chief Budget Officer Cathy Mak were well aware of the contract deadline months ago and that Bowers had discussed it in union negotiations.
On June 6, Palo Alto High School math teacher Herb Bocksnick emailed Mak, asking: "Did the district properly notify PAEA (Palo Alto Educators Association) by the deadline that they needed to reopen negotiations on the 3% raise for 2017/18?"
Two hours later, Mak forwarded Bocksnick's email to Bowers, asking for a copy of a "letter/email to PAEA and CSEA (California School Employees Association)" regarding the teacher's question.
Bowers quickly wrote back, "We spoke about it in negotiations."
The emails also indicate the district met with the unions for a bargaining session just after the deadline, on March 20.
Bowers said in a previous interview that he "had no idea there were any issues" with the contract when he retired in June, and assumed that any compensation changes would be negotiated "as we normally did" in August, after the district receives updated property tax projections from the county.