Palo Alto chided for ‘bad faith’ negotiations with utility workers

The city of Palo Alto failed to negotiate in “good faith” during its extended contract talks with a recently formed labor group of managers in the Utilities Department, a judge for the state Public Employment Relations Board stated in a ruling released this week.

The decision was prompted by a complaint that the union, the Utilities Management and Professional Association of Palo Alto (UMPAPA) made in August 2016, following 20 meetings between city officials and union representatives over a new contract. The union filed its complaint after the city’s negotiators, at the behest of the City Council, insisted that the contract include an “at-will” provision that would have allowed the city to fire new employees in eight management positions, with or without cause.

While the city had maintained that this is a standard provision that had been discussed in prior contract talks, the union argued that it would be “illegal if applied to the bargaining unit employees.” In her ruling, Administrative Law Judge Alicia Clement concluded that by proposing the “predictably unacceptable” at-will clause in the late stage of negotiations, the city effectively took steps to prevent the union from “achieving any kind of job security for bargaining unit members.”

“At best, the City’s efforts were focused on maintaining pre-organizational terms and conditions of employment for bargaining unit members,” the ruling states. “At worst, the City was attempting to ensure that it was all but impossible for UMPAPA to succeed in improving working conditions for its members, because it never intended to relinquish any control over issues like discipline, work rules, work assignments, attendance standards, and work schedules.”

The ruling requires the city to provide to the union the information it sought — namely, documents on which city negotiators based their assertion that the city could experience a recession during the period covered by the contract and information about the city’s bond rating. It also requires the city to “meet and confer in good faith with representatives of UMPAPA regarding wages, hours and other terms and conditions of employment.” The city also has to post a notice declaring that the city had violated the Brown Act at all work locations where notices to UMPAPA employees are generally posted.

While the consequences are relatively mild, amounting to little more than public shaming and an admonition to do better, the text of the ruling paints a damning picture of the city’s negotiating practices. Clement points to numerous instances in which the city canceled or delayed meetings, conduct that she concluded constitute a pattern that suggests severe neglect.

“What emerges is a picture in which the City assigned little or no priority to negotiations with UMPAPA, and apparently feared no serious consequence for its failure to meet and confer in a timely fashion,” the ruling states. “At best, the City’s conduct and attitude toward negotiations with UMPAPA demonstrate that the City placed a low level of importance on these negotiations – prioritizing other tasks over preparation for negotiations and bumping negotiations when conflicts arose.”

The fact that the two parties have been negotiating since 2011 with no agreement is “outrageous,” Clement concluded.

“That the City continued to approach negotiations with UMPAPA with no sense of urgency after several years of painfully slow progress gives rise to a strong inference of bad faith,” she wrote in a proposed ruling on Friday.

The ruling represents the second legal victory for the nascent labor group over the city, which in 2009 challenged the UMPAPA’s formation. The group’s members include assistant directors, senior engineers and various senior and mid-level managers — employees who were traditionally included in the non-unionized “management and professionals group.” In 2011, a judge affirmed the rights of the utilities employees to break apart from the broader group and form their own labor unit.

Since then, however, the city and the new union have been mired in extensive and largely fruitless contract negotiations. Prior to the union’s 2016 complaint to PERB, the two sides held 20 negotiation sessions but could not reach an agreement on a new contract. Among the biggest topics of dispute was the question of adjusting the salaries of UMPAPA members to the market level. Each side had submitted its own “benchmark” study showing salary levels elsewhere. While the city focused on other cities that have public utilities, the union included other agencies, including joint powers associations, special districts and irrigation districts where positions were similar to those in the Utility Department.

“Essentially, UMPAPA chose agencies based on the similarity of the duties performed by their employees, while the City utilized other cities as comparators, simply assigning position matches to those most closely resembling UMPAPA positions,” Clement wrote in the ruling, which offers a rare glimpse into normally secretive negotiations process.

The two sides also disagreed over a January 2016 proposal from the city to effectively tie the salaries of utility workers to those of the unrepresented management group. The clause proposed by the city required “all UMPAPA classifications that are Management and Professional qualifications (to) receive an equivalent general salary increase as the Management and Professional classification.” Deborah Lloyd, the union’s negotiator, characterized this as “removing those positions from the unit for negotiations,” according to the ruling.

The ruling also refers to two requests for information that the union had made to the city but to which it had received no response. In February 2016, the union requested any reports on which the City “based its belief that a recession was imminent.” The following month, it requested the city’s bond rating. The city, according to Clement, “failed to provide any response to these requests or a reason why it could not provide the information.”

Negotiations appeared to have hit rock bottom in May 2016, shortly after the city had proposed “bifurcating” the economic and non-economic issues on the contract. This would allow the union members to get salary adjustments while negotiations proceed on other elements of the contract. On May 11, 2016, during the 20th bargaining session, the union proposed striking from the contract all the “at-will” language. The city’s negotiators indicated to the union that they will recommend bifurcation to the council, which was scheduled to discuss the contract on May 24.

The day after the council’s discussion, the city’s negotiator, attorney Allyson Hauck, informed Lloyd that the council was “disturbed” by the removal of the at-will language. The following day, Hauck informed Lloyd that the city can no longer agree to the bifurcation, citing UMPAPA’s proposed changes, including the removal of the at-will language. Lloyd then responded that the union believed that the city acted in bad faith and that the union “will not participate in any further negotiations until it had resolved the alleged unfair practices regarding bad faith bargaining.”

It wasn’t immediately clear whether the city plans to appeal the ruling. Chief Assistant City Attorney Terence Howzell said the council will be consulted on the matter when it returns from its summer break. The deadline for the city to file exceptions to the PERB decision is Aug. 21.

But whatever the city’s response, UMPAPA members hope the victory will be more than symbolic and that it will actually prod the city into completing the negotiations and reaching a deal with the union. Jim Bujtor, a founding member and current chair of UMPAPA, called the ruling “a step in the right direction” in getting the city to reach fair terms with the union.

“The city needs to take some actions to remedy the situation,” Bujtor told the Weekly. “We have a difficult labor situation, when it comes to attracting and retaining qualified employees in the utility. They’re not addressing the issue. Our goal is to reach some fair terms.”