Hot Topics # 9




RONALD HOH provides a unique perspective to the new California interest arbitration law. In addition to his service as arbitrator in about forty interest arbitration hearings and decisions in five states in the past fifteen years, he was involved for nearly eleven years in administration of a state public sector interest arbitration law covering all categories of non-federal public employees as Director of Mediation Services for Iowa Public Employment Relations Board. In that function, he heard and decided over 120 bargaining-related unfair labor practice charges, and successfully served as contract mediator in over 500 bargaining impasses where interest arbitration was the final impasse procedure step. He also served two years as Regional Director of the Sacramento office of the California Public Employment Relations Board, administering California public sector bargaining laws affecting teachers, higher education and State employees, prior to going full-time into arbitration and mediation in 1987. He has been selected in over 850 grievance arbitration cases, is a member of the National Academy of Arbitrators, serves on several permanent arbitration panels both in California and in the Midwest, and is a member of the California State Mediation and Conciliation Service Arbitration Advisory Board.


Effectively January 1, 2001 the California Legislature enacted and Governor Davis signed into law a new system of collective bargaining impasse dispute resolution for California local governments and their firefighters and law enforcement personnel. That law prohibits strikes that "endanger public safety," and substitutes in place of that strike right a system authorizing interest arbitration, in disputes where the parties are unable to resolve collective bargaining impasses on a voluntary basis. Such a system fundamentally changes both past methods used in resolving these disputes, and the nature of the collective bargaining relationship between local government and its protective services employees. It equalizes bargaining power between the parties in the absence of the destructive strike right, but at the same time shifts the dynamics of the relationship between employers and employee organizations from a relative power relationship to one which focuses upon the equities involved in the areas in dispute between the parties.

The purpose of this Article is to discuss the role of interest arbitration in protective services collective bargaining dispute settlement in the absence of the strike right, to briefly review both the experience in interest arbitration laws and the role of neutral labor relations agencies administering those laws in other states, to examine the statutory provisions contained in the new California law, and to point out significant potential problems that may occur in administration and interpretation of SB 402, particularly in the absence of a neutral, experienced public sector labor relations agency designated to administer that law and resolve those problems. Finally, in order to fully meet the intent of the legislature to provide for an effective, timely method of impasse resolution via the right to interest arbitration in the absence of the strike right, this Article calls for a change in that law by the California legislature to provide for administration of the statute by a neutral labor relations agency such as the California Public Employment Relations Board (PERB), which currently regulates collective bargaining outside of the interest arbitration context in the California state, education and higher education sectors.

As state, county, municipal and education sector employees have increasingly achieved collective bargaining rights, the procedures to be uilized in resolving impasses in contract negotiations with their public employers have been viewed as a major closely related concern. Although most such jurisdictions had traditionally outlawed public employee strikes, strikes in many cases had nonetheless occurred. Mediation, fact finding and other non-conclusive and non-binding impasse resolution procedures in the absence of that strike right had often proven unsatisfactory, particularly to covered public employees such as police and firefighters, whose continued service is almost universally deemed essential to public health and safety.

As a result, many state legislatures across the country have passed laws providing for binding arbitration of contract disputes for such public employers and employees. The general theory behind such statutes is that the right to proceed to a binding interest arbitration award tends to equalize the bargaining power between public employers and bargaining representatives of their employees that would otherwise exist if those represented employees had the right to strike, and that such an equalization of bargaining power, particularly when these statutes are properly administered by a centralized neutral public sector labor relations agency, will tend to produce more mutually acceptable, voluntary contract agreements despite the existence of the right to an arbitrated outcome. Such a system is deemed by its supporters to be equitable to the often competing interests of all groups involved - public management, employees, and most nebulous of all, the "public interest."

Although interest arbitration is an entirely new form of public sector dispute resolution in virtually all SB 402 covered California jurisdictions (with the exception of the limited number of such jurisdictions which had previously adopted it in some form by local ordinance), it has long been the chosen statutory dispute resolution strike right alternative in the large majority of non-Southern states, particularly as it relates to disputes involving police and firefighter personnel. By 1990, thirty-five states and the District of Columbia had provided some form of interest arbitration as the means of resolving disputes over new contract terms for some or all of their public employees. Such systems existed by that time in each of the most populated midwest and east coast states, as well as in Washington, Oregon, Hawaii, Alaska and Nevada among western states. Many of these states have functioned under those interest arbitration laws for over twenty five years. Those state laws, virtually without exception, place responsibility for both jurisdiction over interest arbitration provisions and the determination of the existence of unfair labor practices in collective bargaining and impasse resolution in centralized, neutral state public employment relations boards or commissions, whose decisions in these areas are subject to review by court systems within those states.

A central determinant of the effectiveness of interest arbitration as a strike substitute is its ability to produce voluntary contract agreement between the parties despite the existence of the right to arbitrate. Research has shown that where the rate of all disputes subject to interest arbitration is compared to those disputes that are actually taken to arbitration, less than 10% actually proceed to arbitration, and a high percentage of those already limited cases are ultimately settled without the need for a written, binding award. Some of those jurisdictions providing that arbitration right to police and firefighters report settlement rates as high as 97% of those contracts eligible for arbitration. In New York, likely the most comparable state to California in this area, the percentage of fire and police arbitrations compared to disputes eligible to utilize interest arbitration remained constant between 3.5% and 3.8% of such disputes between 1983 and 1994.

Studies of the impact of interest arbitration show that such a procedure also significantly reduces or eliminates strikes, although enforcement of strike penalties is generally viewed as more important under such impasse resolution systems. Other related studies suggest that resort to arbitration does not pay off in terms of unusually high wages or economic awards, that settlement rates tend to increase over time under interest arbitration statutes, and that contract settlement rates are higher under final offer arbitration systems (such as that set forth in SB 402) than under systems utilizing conventional arbitration.

In marked contrast to laws governing public employee collective bargaining and dispute resolution in other highly populated states, California public employers and employees have historically been governed by a confusing patchwork of laws in these areas, which have often frustrated employees and restricted their right to engage in meaningful collective bargaining. City, county and special purpose districts have been regulated since 1970 by the Meyers-Milias-Brown Act, Government Code Section 3500, et. seq. (hereinafter MMB Act). That statute, while providing meet and confer rights to a wide range of employees including supervisors and setting forth a broad scope of bargaining, limited impasse resolution procedures to voluntary mediation, contained few representation determination procedures or designations of prohibited conduct, and required enforcement through the California court system. It also allowed local jurisdictions to enact rules and regulations concerning representation procedures and prohibited conduct in the employer-employee relations area. The state employee bargaining law (Government Code Section 3512, et. seq.) established in 1976 set forth a similar limited meet and confer system for state employees, but provided for administration of that statute by PERB. Employees of school districts and higher education institutions became covered in 1975 by separate bargaining laws administered by PERB (Government Code Sections 3540 et. seq. and 3571 et. seq., respectively), which somewhat limited bargaining scope, set forth more detailed representation and unfair labor practice protections (including among such prohibitions an employer's "...refusal to participate in statutory impasse procedures"), and limited impasse procedures to mediation and non-binding factfinding in the absence of settlement at earlier stages.

Criticism of these overlapping and confusing statutes, the lack of uniformity both in their administration and in impasse procedures, and the uncertain nature of the legality of public employee strikes in California where an "imminent threat to public health and safety" might exist, have lead since that time to repeated calls both for bargaining law consistency and either the statutory right to strike or an effective employee bargaining power alternative. Strangely, while providing that bargaining power alternative to law enforcement officers and firefighters through passage of SB 402, the 2000 California legislature further fractured the California statutory public employee collective bargaining system in two ways. First, while its passage of SB 739 brought city, county and special purpose districts covered by the MMB Act under the jurisdiction of PERB for representation and unfair labor practice purposes effective July 1, 2001, that law both inexplicably excludes law enforcement officers from its coverage and requires PERB, in city/county jurisdictions which had adopted employer-employee relations ordinances under the MMB Act, to both make unit determinations and process representation elections " accordance with rules adopted by the public agency," rather than under the PERB statute, regulations or decisions. Even more important for purposes of this Article, that statute limits PERB's unfair labor practice jurisdiction to "complaints alleging any violation of this chapter" (the MMB Act), or pertinent public agency rules and regulations adopted under the MMB Act.

That provision makes clear that PERB thus has no unfair labor practice jurisdiction over the SB 402 interest arbitration provisions, which are not part of the MMB Act. This absence of PERB unfair labor practice jurisdiction in any form in law enforcement employer/employee organization disputes, and over impasse and interest arbitration procedures and requirements in disputes involving firefighters, is in marked contrast to the jurisdictions of state labor relations boards or commissions in every other state (except Wyoming) with impasse resolution systems requiring interest arbitration in the absence of voluntary contract agreement.

In enacting SB 402, the California Legislature determined that the proper place for such a law among the myriad of laws existing in California was as an amendment to Section 1281.1, et. seq., of the California Code of Civil Procedure. Those provisions, in general, provide that written agreements to submit disputes to arbitration, rather than to court proceedings, are enforceable in California. SB 402 provides that a request to arbitrate made pursuant to this statute is to be considered as having been made pursuant to a written agreement to submit a controversy to arbitration under Code of Civil Procedure provisions. The law itself thus appears in Section 1299 of the California Code of Civil Procedure, and not in any existing California law related to public employee collective bargaining.

The legislative intent portion of Section 1299 sets forth that the purpose of this statute is to "provide impasse remedies necessary to afford public employers the opportunity to safely alleviate the effects of labor strife that could otherwise lead to strikes by firefighters and law enforcement officers." That provision further contains the legislative intent that the law " construed to apply broadly to all public employers including, but not limited to, charter cities, counties, and cities and counties in this state." While provisions of the law are intended to govern resolution of impasses over economic issues, the legislative intent provision makes clear that the California legislature had no intention of altering the much broader "wages, hours and terms of conditions of employment" scope of bargaining between employers and employer organizations representing firefighters and law enforcement officers provided under the existing MMB law.

The Section 1299.3 "Definitions" section of the statute broadly defines both employees and employers covered by the statute. For example, both the definition of "firefighter" and of "law enforcement officer" contained in Section 1299.3(d) and (e), respectively, of the statute provide that those terms include all firefighters and law enforcement officers "...without respect to the rank, job title or job assignment of that person." That broad coverage scope is clearly intended to be consistent with provisions of the MMB Act, which sets forth organizational and bargaining rights not only for rank and file employees, but also for certain supervisory employees.

That Section additionally includes within the broad brush of the term "law enforcement officer" such job categories of district attorney investigators and inspectors, jailers, non-State correctional and custodial officers, non-State park rangers, housing authority officers, community college and school district police, county welfare fraud and child support investigators employed by district attorneys, non-State parole officers, and police/law enforcement officers employed by airports, harbor/port authorities, and the Bay Area Rapid Transit District. Likewise, the statutory definition of "firefighter" includes, inter alia, the category of emergency medical services personnel - at least some of whom are not within the jurisdiction of fire protection divisions of California government agencies. It is apparent given these broad coverage definitions that SB 402 covers certain employees of a myriad of government agencies in addition to what is commonly viewed as police and fire departments.

The "employer" definition contained in Section 1299.3(c) is similarly broad. It includes not only any local agency employing the defined firefighter or law enforcement officer, but also any entity "acting as a agent of any local agency, either directly or indirectly." That provision does, however, exclude employees serving in those capacities who are employed by the State of California.

Section 1299.3(g) limits the "scope of arbitration" to "economic issues, including salaries, wages and overtime pay, health and pension benefits, vacation and other leave, reimbursements, incentives, differentials, and all other forms of renumeration." That provision specifically excludes from the scope of arbitration issues protected by "what is commonly referred to as the management rights clause contained in Section 3504 of the Government Code." It further provides that an employer covered by the statute may by adoption of an ordinance establish a broader definition of the "scope of arbitration."

Section 1299.4 contains provisions concerning implementation of a request for arbitration. It provides that such a request may be made by the employee organization, by written notification to the employer "...if an impasse has been declared after the parties have exhausted their mutual efforts to reach agreement over matters within the scope of arbitration, and the parties are unable to agree to the appointment of a mediator, or if a mediator agreed to by the parties is unable to effect settlement of a dispute between the parties after his or her appointment." There no further amplification concerning the circumstances or timelines of an arbitration request. That statutory provision neither requires mediation as a condition precedent to a request for arbitration, nor sets forth the point either at which the parties "have exhausted their mutual efforts to reach agreement," or at which any agreed-upon mediator " unable to effectuate settlement" of the dispute. That provision likewise sets forth no standard under which an "impasse" may be "declared."

Section 1299.4(b) provides that within three days of receipt of that written notification of implementation of these arbitration provisions, each party shall designate a person to serve as its member of the arbitration panel, and that within five days thereafter absent mutual agreement, those two panel members shall designate an impartial chairperson of the panel. The statute provides that such a chairperson must be one "with experience in labor management dispute resolution." There is no requirement that the panel chairperson have previous interest arbitration experience.

In the event the parties cannot agree upon the chairperson, Section 1299.4(c) provides that the two panel members are to jointly request a list of seven impartial arbitrators from the American Arbitration Association. Alternatively, that joint request may by mutual agreement be made to the California State Mediation and Conciliation Service. If such a list obtained from either of these sources is utilized, the parties are to alternately strike names from the list until one name remains, and that person shall become the panel chairperson.

Section 1299.5 provides that the panel shall meet with the parties within ten days after its establishment or any additional period to which the parties mutually agree, make inquiries and investigations, hold hearings, and take other action, including further mediation, that the panel deems appropriate. The panel is also empower under Subsection(b) of that provision to subpoena witnesses, administer oaths, take testimony from any person, and issue subpoenas for production of documents related to any issue before the panel.

Section 1299.6 provides that the parties are to submit to the panel, five days prior to the commencement of the panel's hearing, a "last best offer of settlement as to each of the issues within the scope of arbitration...made in bargaining as a proposal or counterproposal and not previously agreed to by the parties prior to any arbitration request" made under the statute. Thereafter, within thirty days of conclusion of the hearing or any agreed upon extension, the panel is to select on each disputed issue without modification "...the last best offer that most nearly complies with the statutory criteria." Alternatively, the parties may mutually agree to submit their final offers on a package rather than an issue-by-issue basis, and the arbitration panel must select one of those package final offers without modification within the same thirty day time period.

Subsection(c) of that section sets forth the criteria on which the arbitration panel is to base its findings, opinions and decisions. In addition to the usual criteria found in other state interest arbitration statutes concerning interest and welfare of the public, ability to pay, and an employer's financial condition, comparisons to employees performing similar work, and the consumer price index, that provision gives the panel an unusual amount of flexibility in making its decision. The listed statutory factors are not the only ones on which the panel may base its decision. That provision sets forth that the panel may consider "...those factors traditionally taken into consideration in the determination of those matters in the scope of arbitration," and changes in the listed statutory factors "...traditionally taken into consideration in determination of matters within the scope of arbitration."

Section 1299.7 provides that the decision of the arbitration panel shall be neither publicly disclosed nor immediately binding on the parties for a period of five days after service upon them. During that five day period, the parties may by mutual agreement amend or modify the decision of the panel. In the event that five day period or a mutually agreed extension passes, the panel's decision as may be amended or modified by the parties shall be both publicly disclosed and binding upon the parties. In order to place the provisions of that award within an existing memorandum of understanding between the parties, the panel must specifically so provide in its award.

Section 1299.4 further provides that employees covered by these provisions are not permitted to engage in strikes... "that endanger public safety;" that employers may not "interfere with, intimidate, restrain, coerce, or discriminate against an employee organization or employee because of an exercise of rights" under this law; and that employers are prohibited from refusing "to meet and confer or condition agreement upon a memorandum of understanding based upon an employee organization's exercise of rights" under this law.

Section 1299.9(a) provides that the SB 402 provisions do not apply to otherwise covered employers who, prior to January 1, 2001, had incorporated their own procedures for submission of "disputes relating to wages, hours and other terms and condition of employment" to experienced neutral persons or panels for final and binding determination. Those approximately twenty-two existing California jurisdictions with such binding arbitration ordinances or statutes are to remain outside of the scope of this law, unless the pertinent charter amendment relating to interest arbitration in those jurisdictions is subsequently repealed, or is amended in a form no longer requiring such binding arbitration of these disputes.

Finally, Section 1299.9(b) provides that, absent agreement to the contrary, the cost of the arbitration proceedings and the expense of the arbitration panel, except those of the employer panel representative, are to be borne by the employee organization, and not split between the parties as normally occurs in such proceedings.

The League of California Cities has already announced that it intends to challenge the constitutionality of SB 402, likely at the point in time at which the first request for invocation of the statutory interest arbitration procedure is made by an involved employee organization. Interest arbitration laws have been subject to constitutional attack in at least sixteen states, on the basis of contentions in one or more of the following areas: 1) illegal delegation of legislation authority; 2) statutory home rule provisions; or 3) inadequate statutory criteria. With the exception of Colorado and Utah (illegal delegation) and South Dakota (home rule), each of these statutes has withstood constitutional scrutiny, normally on the basis that statutory standards were adequate and/or that the arbitrator or arbitration panel was acting as a "public official(s)" while performing this function. While SB 402 certainly contains extensive and reasonably precise standards for decisions by the arbitration panel, and the effect of the powers and duties of California charter cities for purposes of "home rule" claims is unknown to this commentator (and well beyond the scope of this article), it is interesting to note that the Michigan interest arbitration statute was amended to meet the concerns of that State's Supreme Court, to assure that the chairperson of the arbitration panel be appointed by an accountable public entity - the Michigan Employment Relations Commission. In California, such "appointment" absent agreement to the contrary will be made via arbitrator selection procedures of the American Arbitration Association - a private, non-profit organization - rather than by an "accountable government entity" - either PERB or the California State Mediation and Conciliation Service - the latter the alternative source of arbitrator lists under the statute.

Of substantially greater concern to this commentator are significant and potentially vital issues of the parties' relative rights left totally unanswered by SB 402. The most critical of these matters concerns the heart of the interest arbitration process itself - when an invocation of the statutory interest arbitration procedure is appropriate. Section 1299.4 limits such a request to circumstances where "...the parties have exhausted their mutual efforts to reach agreement over matters within the scope of arbitration, and the parties are unable to agree to the appointment of a mediator, or if a mediator is unable to effectuate settlement of a dispute between the parties after his or her appointment." This language presents a variety of issues critical to the timing of that invocation of the arbitration step. For example, it contains no indication of the point at which the parties have "exhausted their mutual efforts to reach agreement" on matters within the scope of arbitration, the point at which or by what standard any agreed-upon mediator is "...unable to effectuate settlement of a dispute after his or her appointment," at what point any "inability to agree" to the appointment of a mediator take place, or indeed what if anything happens when no attempt has been made to agree to the appointment of a mediator. In addition, although that Section requires an "impasse" to be "declared," it is unclear whether such a "declaration" may be made unilaterally by only one of the parties even if all of the described conditions set forth in that Section have been met, because the term "impasse" is neither defined anywhere in the statute nor specifically tied to the exhaustion of "mutual efforts to reach agreement" set forth in that Section. Since Section 1299.4 appears to makes both "exhaustion of mutual efforts to reach agreement" and either inability to agree on a mediator or mediator inability to effect settlement prerequisite conditions to invocation by an employee organization of the statutory interest arbitration provisions, answers to one or all such questions when raised appear necessary prior to proceeding to the interest arbitration provisions contained in later sections of SB 402.

Section 1299.6(a), which addresses submission of final offers, also contains several unanswered questions vital to the parties' respective rights under the statute. The most critical of these concerns the requirement that "last best" final offers on each "issue" are limited to those "...made in bargaining as a proposal or counterproposal and not previously agreed to by the parties prior to any arbitration request" made under Section 1299.4. Even without consideration of what constitutes an "issue" under this language, this statutory provision raises questions concerning whether a particular final offer: 1) was both "last" and "best"; and 2) was made "in bargaining as a proposal or counterproposal." Moreover, it is unclear whether the phrase "prior to the arbitration request" modifys both the phrase "made in bargaining as a proposal or counterproposal" and the phrase "not previously agreed to by the parties," or whether it modify only the latter phrase. If it modifies both phrases, that interpretation significantly formalizes the arbitration process by limiting final offers to those made "prior to the arbitration request," and eliminates from such final offers potential compromise positions of the parties made at a time closer to the arbitration hearing, when movement toward a middle ground is substantially more likely to occur. This interpretation will likely result in arbitration final offers significantly different than the parties' real "bottom lines" in negotiations, and will make the subject of the proper timing of the arbitration request - the existence of an "impasse" - even more critical to the parties' respective rights. The stakes are even higher in this area where the parties have agreed to final offer "package" arbitration under subsection (b) of that Section, given the even higher risk to each party involved in such final offer package arbitration.

The language of that Section also raises such important issues as: 1) whether final offers have been timely submitted to the panel and whether they are required to be submitted at any time to the other party; 2) whether a party can change a final offer once made; 3) whether such "proposals or counterproposals" are limited to those previously made in writing or include those that were made verbally through the mediator; 4) whether the term "in negotiations" includes proposals made in other than across the bargaining table side bar discussions between the parties during negotiations; 5) whether final offers made as proposals in negotiations after the arbitration notification are either viable or valid before the panel; and 6) whether final offers made outside of these requirements may even be considered by the arbitration panel. Each of these subjects once again can be critical to the parties' respective rights under SB 402.

Finally of significant potential dispute is the area of scope of arbitration. Although the Section 1299.3(g) scope definition of "economic issues" appears to be relatively clear upon first blush, that initial clarity clouds considerably when the realities of the bargaining process are considered. For example, it is unclear whether the term "economic issues" includes the subject of contract duration. If not, it appears that matters subject to interest arbitration are limited by default to one year contracts absent joint agreement - a result arguably inapposite to long term, stable labor relations between the involved parties. If duration is included as an "economic issue," the statute provides no indication of what happens when the parties' final offers cover differing time periods, and whether those final offer differences effectively preclude the panel from making "without modification" decisions on each of the "disputed issues" addressed in those final offers.

Similarly, certain otherwise bargainable subjects can be viewed as "economic" in some circumstances and non-economic in others. Such subjects as firefighter apparatus or law enforcement patrol manning, "trading time" (shift exchanges), and employee assistance programs fall into this category.

Finally in this area, while the statute in Section 1299.6 requires submission of "the last best offer of settlement as to each of the issues within the scope of arbitration," it contains no definition of the term "issue." This definitional absence raises such questions as whether a final offer containing both "across the board" and "merit" wage increases is one "issue," or two, and thus whether such a proposal requires "final offers" in each of these wage areas. Likewise, does the term "health benefits" include only health and major medical insurance as an "issue," or does that "issue" also include life insurance, disability insurance, workers' compensation insurance, etc. Determination of the scope of the term "issue" will obviously affect the scope and propriety of any final offers placed before the arbitration panel.

These numerous areas of potential disagreement will be decided under the existing SB 402 system by the superior courts of the fifty-eight counties in California, with potential appeal thereafter to California appellate courts and the California Supreme Court. Such courts are already substantially overburdened in other case law areas, and lack the necessary expertise for important first impression determinations under SB 402 normally placed before administrative agencies rather than courts both in every other interest arbitration state but Wyoming and generally in other areas of California civil law. Such a system for resolution of these important questions will inherently result in substantial delay in the ultimate resolution of the underlying bargaining impasse through voluntary settlement or an interest arbitration award. Those delays and the employee frustrations produced by them, particularly given the high expectations of law enforcement and firefighter line personnel for a real voice in determination of their economic benefits for the first time under this law, will also likely result in low employee morale and the possibility of illegal work stoppages or slowdowns - all of which are contrary to the legislative intent of producing voluntary contract settlements by equalizing bargaining power and avoiding strikes that negatively impact public health and safety.

Such a system additionally greatly encourages forum shopping among the superior and appellate courts. Parties on both sides will likely seek courts which they view as favorable to their point of view on these matters. Differences in decisional findings of these courts will likewise result in both delays in ultimate resolution of these issues and confusion concerning that proper standards to be applied in these crucial areas of SB 402.

Finally, an interest arbitration system simply cannot afford the luxury of the significant delays and costs inherent in the jurisdiction of the courts which has existed under the MMB Act for the past thirty years. Collective negotiations under an interest arbitration system is a fluid, people centered process that can involve high degrees of emotion, particularly where a person's paycheck and livelihood are involved, and where an alternative now exists to what many employees termed "collective begging" under the old MMB Act system. Timely and consistent determinations in these matters are critical to the process, to the parties' respective rights under the statute, and to the public interest. A delayed decision can be worse than a bad decision where a legal issue significantly holds up negotiations.

The effectiveness of any public sector impasse resolution system which intends to equalize bargaining power between the parties in the absence of the right to strike is generally measured by how effectively the parties utilize that equal power in reaching voluntary contract agreement without necessitating a determination of that impasse by the arbitrator or arbitration panel. It is submitted here that, without one centralized neutral agency with public sector bargaining expertise such as PERB making determinations on the "rules of the game" in the high stakes world of interest arbitration, the frustrations involved in delays inherent in final determinations by California courts of the numerous issues raised by SB 402 make unlikely a true measure of that law's effectiveness, at least for the next three to five years until the California Supreme Court rules on some or all of these matters. These problems could be avoided, to a large extent, by investing jurisdiction over interpretation and administration of those statutory impasse provisions in PERB, and by court deference thereafter in most cases to PERB's expertise as the arbiter of such matters, similar to the experience in other interest arbitration states.

The passage of SB 402 by the 2000 California legislature fundamentally changes the nature of the bargaining relationship between covered public employers and their law enforcement and firefighter personnel, by providing interest arbitration as the final impasse resolution step absent earlier voluntary contract agreement. The right to interest arbitration has proven effective in virtually all other states utilizing that system in leading to very high percentages of voluntary contract settlements despite that right, particularly where disputes concerning the parties' relative rights under those interest arbitration statutes have been resolved in a timely manner by state labor relations boards or commissions placed in charge of administration and interpretation of those statutes due to their expertise in public employment labor relations and labor law. That advantage is conspicuously absent in California under SB 402, which leaves resolution of the important rights and duties of the parties to an already overburdened California state judiciary ill-equipped to timely and correctly determine those important rights and duties.

The right to interest arbitration, when such a statute is properly administered, can produce results equitable to management, labor and the public interest, but could also result in work stoppages and low employee morale if substantial delays occur in its administration and thus in negotiations and contract agreement between the parties because of legal wrangling. Such delays and the lack of necessary expertise inherent in initial resolution of these disputes by California courts under SB 402 could largely be eliminated by placing administration of those interest arbitration provisions within the centralized jurisdiction of the California PERB, in a manner similar to that long in existence in other interest arbitration states.

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