Filed 8/29/14 City of Long Beach v. Public Employees Relations Board CA2/1
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
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              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     SECOND APPELLATE DISTRICT

                                                  DIVISION ONE

CITY OF LONG BEACH,                                                  No. B245981
                              Petitioner,
                                                                     (PERB No. LA-CE-537-M)
         v.

PUBLIC EMPLOYMENT RELATIONS
BOARD,
                               Respondent;

INTERNATIONAL ASSOCIATION OF
MACHINISTS & AEROSPACE
WORKERS LOCAL LODGE 1930,
DISTRICT 947,
                    Real Party in Interest.



         ORIGINAL PROCEEDING; petition for writ of mandate. Petition denied.

         Atkinson, Andelson, Loya, Ruud & Romo, Nate J. Kowalski, and Lisa M. Carrillo
for Petitioner City of Long Beach.
         Public Employment Relations Board, M. Suzanne Murphy, Wendi L. Ross, and
Ellen C. Wu for Respondent Public Employment Relations Board.
         Weinberg, Roger & Rosenfeld, David A. Rosenfeld, Kerianne R. Steele, Sean D.
Graham for Real Party in Interest International Association of Machinists & Aerospace
Workers Local Lodge 1930, District 947.
                            _______________________________________
       The City of Long Beach (City) petitions for writ of extraordinary relief from a
decision of the Public Employee Relations Board (PERB). The PERB determined
that the City violated its obligations under the Meyers-Milias-Brown Act (Gov. Code,
§ 3500 et seq.) (MMBA) by failing to meet and confer in good faith with the
International Association of Machinists and Aerospace Workers (IAM) before
implementing a mandatory furlough program for City employees.1 We conclude
that the City has failed to show that the PERB’s decision was clearly erroneous or
unsupported by substantial evidence, and we therefore affirm.
                                     BACKGROUND
1.     The City, the IAM, and the Furlough Program
       At all relevant times, the City and the IAM were parties to a memorandum of
understanding (MOU) that governed the terms and conditions of employment of
City employees represented by the IAM. The MOU provides that “[t]he City reserves,
retains, and is vested with all rights to manage the City,” and those rights “include but are
not limited to” the right “[t]o determine and/or change the size and composition of the
City work force and assign work to employees.” The MOU also provides as follows:
“It is understood and agreed that there exists within the City, in written form, Personnel
Policies and Procedures and Department Rules and Regulations. Except as specifically
modified by this MOU, these rules, regulations, and Policies and Procedures, and any
subsequent amendments thereto, shall be in full force and effect during the term of this
MOU. . . . Employee wages and fringe benefits will not be reduced unless agreed to by
the Union.”
       In addition, section 92 of the City’s Civil Service Rules and Regulations (CSRRs)
provides as follows: “For reasons of economy or due to a lack of work or funds, an
appointing authority may reorganize or eliminate any department, bureau, or division, or




1
       All subsequent statutory references are to the Government Code unless otherwise
indicated.


                                              2
may abolish any position under its direct jurisdiction, and/or reduce the number of, or the
hours worked by City employees.”
       The City’s fiscal year begins on October 1 and ends on September 30. The City’s
financial management personnel monitor the budget throughout the year to make sure
that the fiscal year will end in balance. The present dispute arises from steps the City
took to balance the budget for the 2009 fiscal year, which began in October 2008.
       On July 1, 2008, the city manager issued a budget message to the mayor and
city council. The message projected a $16.9 million dollar “structural budget deficit” in
the City’s budget for the 2009 fiscal year and proposed measures to balance the budget.
The total proposed budget for fiscal 2009 was $3.1 billion, of which $404 million
“supports the General Fund, which provides resources for the majority of core municipal
services such as public safety, public works, recreation, library services, legislative and
administrative support.” On September 9, 2008, the city council adopted a balanced
budget for fiscal year 2009, incorporating measures to address the projected $16.9 million
shortfall. Those measures did not include employee furloughs.
       On October 23, 2008, Lori Ann Farrell, the City’s director of financial
management, sent a memo to the mayor and the city council, alerting them to budgetary
consequences of the severe economic downturn that was then underway, proposing
various steps to make sure that fiscal 2009 would end in balance. The memo noted, for
example, that the decline in the price of oil to $60 per barrel from the $85 per barrel that
was projected for purposes of the 2009 budget could itself generate “a potential shortfall
of $5 million in General Fund revenue if it doesn’t rebound above [$85 per barrel] during
the year.” The memo proposed that “[a]ll unbudgeted one-time monies will be deposited
into the Budget Stabilization Fund,” generating an estimated $6.35 million in “one-time
resources” for the 2009 fiscal year, and also that “[a]ll non-essential budgeted one-time
expenses will be placed on hold until further notice,” which would “potentially conserve
up to an additional $8 million in General Fund resources.” (Boldface omitted.)
In addition to two other proposed measures, the memo described the following
possibility: “A mandatory five-day employee furlough will be explored. It is estimated


                                              3
that a one-week furlough on non-public safety and non-critical employees would save
approximately $700,000 - $900,000 in the General Fund in [fiscal year 2009]. While
this action is certainly a meet-and-confer issue with the employee bargaining units, and
would represent an approximately 2 percent salary reduction for participating employees,
we hope for the full cooperation of all unions in finding a unified solution to our current
challenges.”
       In a letter to the mayor and the city council dated December 1, 2008, Patrick H.
West, the city manager, noted that although the fiscal 2009 “General Fund budget was
structurally balanced upon adoption, which required solutions to overcome a projected
$16.9 million structural deficit, the unforeseen economic freefall at the beginning of
the fiscal year” was causing general fund revenue projections for fiscal 2009 to fall
$19.2 million below the budgeted estimates, “about half of the loss caused by the steep
drop in the price of oil.” The letter stated that “[t]his economic turmoil has required
serious and immediate fiscal strategies to ensure that the [fiscal year 2009] budget for the
General Fund, along with several other funds, ends the year balanced. These included
2 percent – 6 percent spending reductions for City Manager-led departments, a 40-hour
furlough of City employees or an equivalent savings, a hard hiring freeze, and the
elimination of planned one-time expenditures.”
       Just eight days later, on December 9, 2008, a memo from Farrell to West
reported that current estimates for general fund revenue for fiscal 2009 were “down
approximately $15.7 million from the adopted budget.” Farrell described the proposals
from her October 23 memo, including “exploring the possibility of an employee
furlough,” and she recommended some additional measures “[t]o proactively address
additional declines in projected General Fund revenue” that might develop if the
economy continued to deteriorate.
       On January 6, 2009, Farrell prepared a report to the mayor and the city council on
the fiscal 2008 budget and the outlook for fiscal 2009. The report stated that for fiscal
2008, “[a]s of fiscal year-end, actual expenditures for all departments and all funds are
$2.6 billion. Revenues for all departments and all funds are $2.7 billion. . . . For the


                                              4
General Fund, actual expenditures for all departments were $388.8 million, or
$3.4 million less than the Adjusted Budget of $392.2 million . . . . Actual General
Fund revenues for all departments totaled $400.1 million.” The report recommended
depositing $3 million of the general fund surplus from fiscal 2008 into the City’s budget
stabilization fund “to help address a projected $15.7 million revenue shortfall in the
General Fund in [fiscal 2009].” The report also repeated a previous recommendation to
deposit $6 million that the City received in a settlement into the budget stabilization fund.
The city council followed both recommendations, depositing the $9 million into the
budget stabilization fund.
       The City met and conferred with the IAM on January 29 and February 19 and 26,
2009, to discuss cost-saving measures for fiscal 2009. The parties discussed furloughs as
one possible measure. At the January 29 meeting, the City told the IAM that a five-day
furlough for “everyone minus police, fire” should generate “[$]1.5 million” in savings
and would amount to a 1.92 percent reduction in employee income. At the February 19
meeting, the parties discussed various alternatives to furloughs, such as having
employees pay a larger share of their contributions to PERS to generate savings for the
City equivalent to a five-day furlough. At the February 26 meeting, the IAM reported
that if the City could not promise that there would be no layoffs if a furlough were
implemented, then the IAM’s members would “rather have the layoffs instead of the
furlough.” The City stated that a five-day furlough would be “equivalent to 26 full-time
positions.” Again, the parties discussed various alternative cost-saving measures.
       In a memo dated March 4, 2009, Farrell told West that revenue shortfalls for the
general fund for fiscal 2009 were now estimated to be approximately $20 million. Farrell
further stated that because of “the current outlook and the structural budget deficits we
expect for fiscal years 2010, 2011 and 2012, the time to begin taking bold, permanent
steps to address our General Fund budget shortfalls has come. As such, consuming
limited one-time resources to address what is apparently a structural deficit is no longer a
recommended solution.” Regarding furloughs, the memo stated the following: “With the
significant financial challenges the City is facing, we are planning on implementing a


                                             5
five-day (40 hours) employee furlough during the current fiscal year, which is estimated
to generate approximately $4 million in savings to the General Fund. The furlough
will likely take place the last Friday of the month from May to September in the current
year. . . . We have met with all employee associations to discuss furloughs and will
continue to welcome further discussion with the Unions of alternatives that would
achieve the same savings in the current fiscal year. We will continue to keep the City
Council informed prior to implementation of these cost-saving measures.”
       On March 5, 2009, the MOU implementation committee met. The possibility of
furloughs was discussed at that meeting.
       On April 9, 2009, the City and the IAM again met and conferred concerning
cost-saving measures. Again, the parties discussed the possibility of furloughs.
       According to the testimony of the City’s manager of personnel operations, Ken
Walker, sometime in mid-April “the City decided to recommend to the city council to
have five days of furloughs.” On April 22, 2009, the IAM’s chief spokesman emailed the
City’s director of human resources, stating the following: “I understand that City Council
will be voting to go forward with the furloughs at their council meeting on May 5th. This
kind of makes our May 7th meeting nothing more than an update to what we already
know. I’m receiving a lot of pressure to do something, yet I’m not quite sure what to do.
I have instructed our attorney to file unfair labor practice charges with PERB for failure
to negotiate the furloughs.” He also added, “Let me know if you . . . still want to meet
with me on the 7th at 11:00 a.m., or if you think maybe meeting sooner might be better.”
       The director of human resources responded on April 23, 2009, claiming that at the
April 9 meeting she had informed the IAM negotiating team that (1) “the City Manager
was going to have to move forward [with the furloughs] if there were no alternatives to
negotiate” and (2) “a resolution would be going to the City Council shortly and that
the needed savings could not wait.” She added that “[w]e will remain available to
discuss alternatives with all Unions” and that “negotiated alternatives can follow
implementation.” She also said, “Let me know if you and the negotiating team would
like to meet before May 5. I am available.”


                                              6
       At the May 5, 2009, meeting of the city council, West recommended adoption
of a resolution “authorizing implementation of an employee work furlough in order to
generate an amount equivalent to 1.92 percent in pay (40 hours for regular, full-time
employees) for all permanent City employees in Fiscal Year (FY) 2009.” The city
council approved the recommended resolution. The resolution provided that “[e]mployee
work furloughs equivalent to 1.92 percent of annual salary (i.e., 40 hours of unpaid time
off for a regular full time employee) be implemented . . . . [¶] Work furloughs may not
be required in the event alternative equivalent employee generated savings are negotiated
with a labor organization.”
       On May 7, 2009, the City and the IAM met as scheduled. The City’s notes of the
meeting state that the “IAM indicated that there is no agreement they are interested in
regarding furlough.” The notes also reflect that Farrell was planning to make a “financial
presentation” of some kind at the end of the meeting. According to the notes, the IAM
representatives were concerned that their attendance at the presentation would be
interpreted as “opening the contract,” and they did not “want any misunderstanding that
they are opening discussions.” They accordingly ended the meeting and left before
Farrell had the opportunity to give her presentation.
       On July 21, 2009, the City adopted a resolution declaring a fiscal emergency.
2.     Procedural History
       On May 26, 2009, the IAM filed with the PERB an unfair practice charge against
the City. On October 12, 2010, the Office of the General Counsel of the PERB issued
a complaint against the City for imposing the furloughs in violation of the statutory
obligation to meet and confer in good faith. The City answered, admitting certain facts
but denying the charges and asserting various affirmative defenses.
       A PERB administrative law judge (ALJ) conducted a formal hearing on the
charges on July 18-20 and August 26 and 29, 2011. On June 1, 2012, the ALJ issued
his proposed decision. The ALJ concluded that the City violated the MMBA by
implementing the furlough policy without first bargaining to impasse and presenting
a last, best, and final offer. The ALJ also rejected the City’s arguments that the


                                             7
implementation of the furlough policy was authorized by the MOU and “by the City’s
legal authority to respond to an emergency.”
       The City filed exceptions to the ALJ’s proposed decision and a brief in support
thereof, and also a supplemental brief in support of its statement of exceptions. The IAM
filed a response.
       On December 4, 2012, the PERB issued its decision. The PERB affirmed the
ALJ’s determination that the City “violated the MMBA by unilaterally implementing the
furloughs.”
       The City timely petitioned this court for a writ of extraordinary relief from the
PERB’s decision. We issued an order to show cause.
                                STANDARD OF REVIEW
       Judicial review of the PERB’s factual findings and interpretations of controlling
statutes is deferential. By statute, “[t]he findings of the board with respect to questions
of fact, including ultimate facts, if supported by substantial evidence on the record
considered as a whole, shall be conclusive.” (§ 3509.5, subd. (b).) As for statutory
interpretation, “[a]ppellate courts . . . generally defer to PERB’s interpretations of
controlling statutory provisions” (California State Employees’ Assn. v. Public
Employment Relations Bd. (1996) 51 Cal.App.4th 923, 933), and “[u]nder established
principles PERB’s construction is to be regarded with deference by a court performing
the judicial function of statutory construction, and will generally be followed unless it is
clearly erroneous.” (San Mateo City School Dist. v. Public Employment Relations Bd.
(1983) 33 Cal.3d 850, 856.) “PERB is ‘one of those agencies presumably equipped or
informed by experience to deal with a specialized field of knowledge, whose findings
within that field carry the authority of an expertness which courts do not possess and
therefore must respect.’ [Citation.] ‘[T]he relationship of a reviewing court to an agency
such as PERB, whose primary responsibility is to determine the scope of the statutory
duty to bargain and resolve charges of unfair refusal to bargain, is generally one of
deference’ [citation], and PERB’s interpretation will generally be followed unless it is



                                              8
clearly erroneous.” (Banning Teachers Assn. v. Public Employment Relations Bd. (1988)
44 Cal.3d 799, 804.)
                                      DISCUSSION
       The City argues on various grounds that the PERB’s decision must be overturned.
We conclude that the City’s arguments lack merit, and we therefore deny the petition.
       Before turning to detailed consideration of the City’s arguments, we wish to
acknowledge a general theme of the City’s briefing, namely, that the economic crisis of
2008 to 2009 was profound and had severe consequences for the City’s budget, leaving
the City no choice but to take urgent measures—such as imposing furloughs—in order to
offset revenue shortfalls. The severity of the economic crisis and its impact on the City’s
budget do not appear to be in dispute, and we need not address them. Rather, the issue
before us is whether the City has shown, under the highly deferential standard of
review, that the PERB clearly erred, or relied on unsupported factual findings, when it
determined that the manner in which the City implemented the furlough program violated
the IAM’s procedural rights. We conclude that the City has failed to make that showing.
I.     The City Had a Duty to Meet and Confer
       Under the MMBA, “[t]he governing body of a public agency . . . shall meet
and confer in good faith regarding wages, hours, and other terms and conditions of
employment” with certain “recognized employee organizations.” (Gov. Code, § 3505;
see San Joaquin County Employees Assn. v. City of Stockton (1984) 161 Cal.App.3d
813, 818.) Nonetheless, the City argues on multiple grounds that it had no duty under
the MMBA to meet and confer with the IAM concerning the furlough program. We
conclude that none of the City’s arguments has merit.
       A.     Section 92 of the CSRRs
       The City raises several arguments based on section 92 of the CSRRs, which
authorizes the City, “[f]or reasons of economy or due to a lack of work or funds,” to
“reduce the number of, or the hours worked by City employees.” The City argues that
(1) the CSRRs “[a]re incorporated into the [p]arties’ MOU and [t]rump the [m]eet and
[c]onfer [r]equirements of the MMBA”; (2) the CSRRs would apply to the same effect


                                             9
even if they were not incorporated into the MOU; and (3) because of the City’s status as a
charter city and the existence of section 92 of the CSRRs, the City is “[e]xempt” from the
MMBA’s meet-and-confer requirements. (Bold and underlining omitted.)
       All of those arguments lack merit. “It has long been settled that, insofar as a
charter city legislates with regard to municipal affairs, its charter prevails over general
state law. [Citations.] However, as to matters of statewide concern, charter cities remain
subject to state law. [Citation.]” (Sonoma County Organization of Public Employees v.
County of Sonoma (1979) 23 Cal.3d 296, 315-316.) The Supreme Court has held that
the meet-and-confer requirements of the MMBA “must be met” by charter cities,
because “[f]air labor practices, uniform throughout the state,” are a matter of statewide
concern. (See People ex rel. Seal Beach Police Officers Assn. v. City of Seal Beach
(1984) 36 Cal.3d 591, 594, 600 (Seal Beach); see also Building Material & Construction
Teamsters’ Union v. Farrell (1986) 41 Cal.3d 651, 657). In Seal Beach, the Court
concluded that there was no conflict between a charter city’s “unchallenged constitutional
power . . . to propose charter amendments” and the procedural meet-and-confer
requirements of the MMBA, because the city “may still propose a charter amendment
if the meet-and-confer process does not persuade it otherwise.” (Seal Beach, supra,
36 Cal.3d at pp. 597, 601.) The same analysis applies here: The meet-and-confer
requirements of the MMBA do not conflict with the City’s powers under section 92 of
the CSRRs, because the City can still exercise those powers if the meet-and-confer
process does not persuade it otherwise. Because there is no conflict, there is no question
of the local provision “trumping” the MMBA, or vice versa, and it does not matter
whether the CSRRs are incorporated into the MOU or apply of their own force (or neither
or both).2




2
       Insofar as the City’s arguments based on section 92 of the CSRRs are meant to
be based on the City’s powers to address fiscal emergencies, we address them separately
in our discussion of emergencies. Section 92 of the CSRRs says nothing about
emergencies.

                                              10
       The City’s only response to this analysis is that section 92 of the CSRRs is
“substantive,” not “procedural,” and therefore is not “subject to any superseding
bargaining requirements under the MMBA.” The argument is purportedly based on
the Supreme Court’s statement that “‘there is a clear distinction between the substance
of a public employee labor issue and the procedure by which it is resolved. Thus there is
no question that “salaries of local employees of a charter city constitute municipal affairs
and are not subject to general laws.” [Citation.] Nevertheless, the process by which the
salaries are fixed is obviously a matter of statewide concern and none could, at this late
stage, argue that a charter city need not meet and confer concerning its salary structure.’
[Citation.]” (County of Riverside v. Superior Court (2003) 30 Cal.4th 278, 289.)
       The City’s argument that the MMBA meet-and-confer requirements do not apply
because section 92 of the CSRRs is substantive fails for two independent reasons. First,
because there is no conflict between the meet-and-confer requirements and section 92 of
the CSRRs, it does not matter whether section 92 is substantive or procedural or anything
else. Second, regardless of whether section 92 is substantive, the dispositive point is
that the MMBA meet-and-confer requirements are procedural and a matter of statewide
concern. They do not intrude upon the City’s plenary authority to determine the wage
levels for City employees; they merely affect the process by which those wage levels will
be set. (See Seal Beach, supra, 36 Cal.3d at p. 597 [the MMBA “established a procedure
for resolving disputes regarding wages, hours and other conditions of employment, [but]
it did not attempt to establish standards for the wages, hours and other terms and
conditions themselves”].)3

3
       In connection with the contention that section 92 of the CSRRs is substantive,
the City relies on State Building & Construction Trades Council of California v. City of
Vista (2012) 54 Cal.4th 547 (City of Vista), but the City’s reliance is misplaced. In
City of Vista, the Supreme Court held that charter cities are not bound by California’s
“prevailing wage law,” which “requires that certain minimum wage levels be paid to
contract workers constructing public works.” (Id. at p. 552.) The Court distinguished the
prevailing wage law from the meet-and-confer requirements of the MMBA, because the
prevailing wage law “imposes substantive obligations on charter cities, not merely
generally applicable procedural standards.” (Id. at p. 565.)

                                             11
       B.     Waiver
       As noted earlier, the MOU provides that “[t]he City reserves, retains, and is vested
with all rights to manage the City,” and those rights “include but are not limited to” the
right “[t]o determine and/or change the size and composition of the City work force and
assign work to employees.” The City argues that this “management rights” clause of the
MOU “constitutes a ‘waiver’ of any objection that the IAM may have regarding the
unilateral implementation of the temporary employee furlough.” We conclude that the
PERB’s rejection of this argument was not clearly erroneous.
       “PERB has adopted the standard for waiver used by the National Labor
Relations Board (NLRB), which requires that a waiver of statutory rights be ‘clear
and unmistakable.’ A waiver will not be lightly inferred. [Citations.]” (San Jacinto
Unified School District (1994) PERB Dec. No. 1078.) “A generally-worded management
rights clause will not be construed as a waiver of statutory bargaining rights.” (Ibid.)
Thus, under PERB precedent, the general reservation to the City of “all rights to manage
the City” will not be construed as a waiver of the IAM’s meet-and-confer rights under the
MMBA. And the specific reservation of the right “[t]o determine and/or change the size
and composition of the City work force and assign work to employees” does not clearly
and unmistakably reserve to the City the right to impose furloughs without first meeting
and conferring. On the contrary, that provision on its face does not appear to relate to
furloughs and is consistent with the MMBA’s meet-and-confer requirements. We
therefore conclude that the PERB did not clearly err when it rejected the City’s waiver
argument based on the management rights provisions of the MOU.
       C.     Emergency
       The City argues that it faced “a fiscal emergency that justified the unilateral
imposition of a temporary employee furlough.” We conclude that the PERB’s rejection
of this argument was supported by substantial evidence and was not clearly erroneous.
       The PERB has long recognized that “a compelling operational necessity can
justify an employer acting unilaterally before completing its bargaining obligation.
[Citation.] However, the employer must demonstrate ‘an actual financial emergency


                                             12
which leaves no real alternative to the action taken and allows no time for meaningful
negotiations before taking action.’ [Citation.]” (County of Santa Clara (2010) PERB
Dec. No. 2120M.) When the City unilaterally imposed the furloughs, it had untapped
reserves (in its budget stabilization fund) that exceeded the savings to be generated by
the furloughs, and the City did not officially declare a fiscal emergency until more than
two months later. Those facts alone are sufficient to support the PERB’s determination
that the City failed to demonstrate that there was no real alternative to the action taken
and no time for meaningful negotiations before taking action.
       D.     Professional Engineers
       The City argues that under Professional Engineers in California Government v.
Schwarzenegger (2010) 50 Cal.4th 989 (Professional Engineers), the city council did not
have to meet and confer with the IAM before adopting the resolution authorizing the
furlough program. The argument lacks merit.
       In Professional Engineers, the Supreme Court concluded that neither “the
constitutional authority granted to [the Governor] by the California Constitution [nor] the
existing statutory provisions pertaining to the terms and conditions of state employment
granted [the Governor] or the [Department of Personnel Administration] the authority
unilaterally to impose a mandatory unpaid furlough on state employees.” (Professional
Engineers, supra, 50 Cal.4th at p. 1041.) The Court likewise rejected the contention
that certain state employee memoranda of understanding “authorized the Governor
unilaterally to reduce the hours and wages of covered employees in response to a
burgeoning budget deficit.” (Ibid.) The Court further held, however, that when the
Legislature later enacted (and the Governor signed) legislation revising the 2008 budget,
it “validat[ed] the [furlough] plan that the Governor lacked authority to impose
unilaterally.” (Id. at pp. 1043-1044.) The Court’s analysis was based on California
statutes under which a provision in a state employee memorandum of understanding that
“requires the expenditure of funds” does not “become effective” unless the necessary
expenditure of funds is “approved by the Legislature in the annual Budget Act.”
(§ 3517.6, subd. (b); see Professional Engineers, supra, 50 Cal.4th at pp. 1042-1044.)


                                             13
Thus, when the Legislature revised its budget and reduced the “appropriation for state
employee compensation to a level reflecting the reduced compensation to be paid to
employees under the Governor’s [previously unauthorized] furlough plan,” the
Legislature rendered ineffective any (state employee) MOU provisions to the contrary
and, in effect, “endorse[d] . . . the two-day-a-month furlough plan” previously imposed
by the Governor. (50 Cal.4th at pp. 1043-1044.)
       Professional Engineers does not support the City’s position in this case.
Compliance with the meet-and-confer requirements of the MMBA (or analogous
requirements concerning state employees) was not at issue in Professional Engineers.
The statutes on the basis of which Professional Engineers validated the state employee
furlough plan do not apply to charter city employees. The City cites no analogous
statutes that would authorize the City’s city council to impose furloughs without first
complying with the meet-and-confer requirements of the MMBA. For all of these
reasons, we reject the City’s contention that Professional Engineers shows that the PERB
erred or clearly erred.
II.    The City Violated Its Duty to Meet and Confer
       The City argues that if it did have a duty to meet and confer with the IAM
concerning the furloughs, it discharged that duty as a matter of law. We disagree.
Because the PERB’s determination that the City violated its meet-and-confer obligation
is supported by substantial evidence and is not clearly erroneous, we must affirm it.
       The parties appear to agree that (assuming the City had a meet-and-confer
obligation at all) the applicable standard is as follows: The parties were required to meet
and confer in good faith until they reached either an agreement or an impasse in the
negotiations; in the event of an impasse, the City could then impose its last, best, and
final offer. PERB has interpreted the term “impasse” as meaning that “‘the parties have
considered each other’s proposals and counterproposals, attempted to narrow the gap of
disagreement and have, nonetheless, reached a point in their negotiations where
continued discussion would be futile. [Another PERB decision] described impasse as the
‘point at which the parties have exhausted the prospects of concluding an agreement and


                                             14
further discussions would be fruitless.’” (County of Riverside (2014) PERB
Dec. No. 2360M.)
       The PERB argues that the record contains substantial evidence that (1) in
mid-April 2009 the City decided to recommend to the city council that it implement
the furlough plan, (2) the city council voted on May 5, 2009, to implement the furlough
plan, and (3) the parties had not reached impasse as of May 5. We agree.
       The City’s manager of personnel operations testified that in mid-April “the
City decided to recommend to the city council to have five days of furloughs.” It is
undisputed that the city council approved the furlough resolution on May 5. But as late
as April 23, the City’s director of human resources was still inviting the IAM’s
representatives to continue to negotiate over “alternatives” to the furloughs, and the city
council’s May 5 furlough resolution itself expressly contemplated the possibility that
“alternative equivalent employee generated savings” might be “negotiated with a labor
organization.” That is substantial evidence that the parties had not reached a point
at which further negotiations would be futile or fruitless.
       The City presents no meritorious argument to the contrary. The City argues that
an impasse sufficient to permit the City to act unilaterally can exist even if no party
formally declares impasse. Our analysis does not depend on the lack of a formal
declaration of impasse, so the argument is of no consequence.
       The City also argues that when the IAM failed to respond to the City’s April 23
offer to meet again before May 5, “the parties had effectively reached impasse.” We are
not persuaded. Although it might be reasonable to infer from the evidence that the parties
reached impasse by May 5, it is also reasonable to infer that they did not. The PERB’s
determination that they did not is supported by substantial evidence and is not clearly
erroneous. We must therefore defer to it.
       Finally, the City argues that even if the parties were not at impasse by May 5, the
IAM “waived its right to negotiate further over the furlough decision when it abandoned
the negotiations.” The argument appears to be based on both the IAM’s failure to
respond to the City’s April 23 offer to meet again before May 5 and the IAM’s


                                             15
termination of the May 7 meeting before Farrell was able to make her “financial
presentation.” Again, applying a deferential standard of review, we must reject the City’s
argument.
       The context of the City’s April 23 offer supports a reasonable inference that the
offer lacks the significance that the City attributes to it. On April 22, the IAM’s chief
negotiator emailed the City’s director of human resources, telling her that he had heard
that the city council “will be voting to go forward with the furloughs at their council
meeting on May 5th.” He stated that he was instructing the IAM’s lawyer “to file unfair
labor practice charges with PERB for failure to negotiate the furloughs,” but he
nonetheless offered to meet again sometime before the next scheduled meet-and-confer
session on May 7. In her reply email on April 23, the director of human resources
confirmed that the City was moving ahead with the furloughs but would “remain
available to discuss alternatives with all Unions,” adding that “negotiated alternatives can
follow implementation.” In closing, she said, “Let me know if you and the negotiating
team would like to meet before May 5. I am available.” Thus, (1) the director of human
resources’ email confirmed the IAM negotiator’s understanding that the City had already
decided to move forward with the furloughs, merely adding that the City was open to
negotiating alternatives after the fact, and (2) the director of human resources responded
to the IAM negotiator’s offer of an expedited meeting by asking if he wanted an
expedited meeting. Consequently, a reasonable interpretation of the City’s April 23 offer
is that it was not an offer to engage in negotiations that were capable of averting the
City’s adoption of the furlough plan. Rather, it was an invitation to negotiate post hoc
alternatives to the furlough plan that the City had already decided to adopt. It was not
unreasonable for the PERB to conclude that the City’s decision to adopt that plan without
first negotiating to impasse or agreement was itself a violation of the MMBA, and an
invitation to negotiate post hoc alternatives does not cure the violation.
       The IAM’s termination of the May 7 meeting is likewise of no use to the City.
As discussed above, the City had already violated its meet-and-confer obligations by
adopting the furlough plan on May 5 without having negotiated to impasse or agreement.


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The PERB’s implied finding that the IAM’s conduct at the May 7 meeting could not cure
that violation is supported by substantial evidence and not clearly erroneous.4
       For all of the foregoing reasons, we conclude that the City has failed to show that
the PERB’s determination that the City violated its meet-and-confer obligation was
clearly erroneous or not supported by substantial evidence.
                                      DISPOSITION
       The petition is denied. The IAM shall recover its costs of this original proceeding.
       NOT TO BE PUBLISHED.




                                                 ROTHSCHILD, P. J.
We concur:



              CHANEY, J.



              JOHNSON, J.




4
        The City asserts that the IAM “created the deadlock in the negotiations which
existed as of that time, by its absolute refusal to explore ways in which cost savings could
be achieved other than by furloughs.” If the City is referring only to the May 7 meeting,
the argument lacks merit for the reasons already given—the record contains substantial
evidence that the City’s meet-and-confer violation occurred before May 7, and the PERB
did not clearly err by determining that the IAM was not obliged to try to talk the City out
of the furloughs that were then a fait accompli and that the IAM’s conduct at the May 7
meeting therefore could not cure the violation that had already occurred. If, however, the
City’s reference to the IAM’s “absolute refusal to explore ways in which cost savings
could be achieved other than by furloughs” is meant to apply to the entire course of
negotiations, then the record contains substantial evidence to the contrary, namely, the
City’s notes of the various meet-and-confer sessions, which show that the IAM
repeatedly put forward alternative cost-saving proposals.

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