IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT (Sacramento)
October 28, 2011
PROFESSIONAL ENGINEERS IN CALIFORNIA GOVERNMENT, PLAINTIFF AND APPELLANT,
DEPARTMENT OF PERSONNEL ADMINISTRATION, DEFENDANT AND RESPONDENT.
(Super. Ct. No. 34-2010-00080765-CU-PT-GDS)
The opinion of the court was delivered by: Butz , J.
Prof. Engineers in Cal. Gov't. v. Dept. Personnel Admin.
NOT TO BE PUBLISHED
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
Plaintiff Professional Engineers in California Government (PECG) appeals from an order denying its petition to compel defendant State of California's Department of Personnel Administration (the State) to arbitrate an issue of salary parity for 2009. (Code Civ. Proc., § 1294, subd. (a) [such an order is appealable].)
We agree with the trial court that this issue of salary parity is not within the memorandum of understanding (the MOU or the Bargaining Unit 9 MOU) between PECG and the State, and therefore is not subject to the MOU's arbitration provision. (Code Civ. Proc., § 1281.2.)
Because the issue on appeal involves only an issue of contractual and legal interpretation requiring our independent review--i.e., whether the salary parity provision for 2009 is part of the MOU and therefore arbitrable--we proceed straight to our discussion, detailing the pertinent facts as we go. (Robertson v. Health Net of California, Inc. (2005) 132 Cal.App.4th 1419, 1425 [applying independent review in a similar context].)
I. The Issue
In 2003, the State and PECG, on behalf of state employee Bargaining Unit 9, agreed to the MOU, which covered terms of employment from 2003 through 2008.*fn1
As pertinent, the MOU includes provisions on salary parity and arbitration.
The MOU's salary parity provision states as relevant:
"All employees in classifications in Unit 9 shall receive salaries no less than salaries received by their counterparts in California's larger local agencies and the University of California. The determination of those salaries shall be based on [Department of Personnel Administration's (DPA's)] survey of Professional Engineer Benchmarks, utilizing the California public agencies and the University of California included in the department's survey dated December 2002, updated annually, and the local agency classifications and salary range matches contained therein. The salary survey for those classifications and agencies shall be updated no less than once per year. . . . [¶] . . . [¶]
"Effective July 1, 2005, the salary increase for all Unit 9 employees shall be no less than 25 [percent] of the [salary] lag calculated from the December 2004 survey or later.
"Effective July 1, 2006, the salary increase for all Unit 9 employees shall be no less than 50 [percent] of the lag calculated from the survey dated December 2005 or later.
"Effective July 1, 2007, the salary increase for all Unit 9 employees shall be no less than 75 [percent] of the lag calculated from the survey dated December 2006 or later.
"Effective July 1, 2008, and thereafter, the salaries for all Unit 9 employees shall be such that any lag calculated from the December 2007 or later DPA survey shall be entirely eliminated."
The MOU's arbitration provision states that only "grievances" are arbitrable. A "grievance" is a dispute "involving the interpretation, application, or enforcement of the express terms" of the MOU.
Because the MOU requires the expenditure of public funds, it is subject to legislative approval. (See Gov. Code, §§ 3517, 3517.5, 3517.6; see Stats. 2003, ch. 616, § 2, approving Assem. Bill No. 977 (2003-2004 Reg. Sess.) (hereafter Assembly Bill No. 977).) In 2003, the Legislature, in Assembly Bill No. 977, approved the Bargaining Unit 9 MOU, in pertinent part, as follows:
"SEC[TION] 2. . . . [¶] . . . [¶]
"(b)(1) The Legislature hereby approves the provisions of the [MOU] that requires [sic] the expenditure of funds, except for that portion of that [MOU] that authorizes the increase of salary or compensation for parity reasons, as based in part upon the results of the salary survey of professional engineering benchmarks performed by the [DPA], as described in that [MOU].
"(2) It is the intent of the Legislature that the Legislature's approval of the provisions of the [MOU] that are not approved by this act, as described in this subdivision, be considered at such time as the salary survey described in that subdivision has been completed and submitted to the Legislature for its consideration." (Stats. 2003, ch. 616, § 2, subd. (b)(1) & (2).)
The first salary increase under the MOU was approved by the Legislature in the 2005-2006 state budget, based on a 2005 DPA salary survey. Via a parallel process, annual salary increases based on corresponding annual salary surveys were legislatively approved in the state budgets for 2006-2007, 2007-2008, and 2008-2009. Although the Legislature has the 2009 salary survey before it, it has not approved a 2009 salary increase.
As noted, the basic issue is whether the salary parity provision for 2009 is part of the MOU; if it is, the issue of salary parity for 2009 is arbitrable; if not, that is not the case.
The parties argue this basic issue as follows.
PECG reads the Legislature's 2003 approval of the MOU's salary parity provision in Assembly Bill No. 977 as a one-time event, which simply began with the 2005 salary survey.
The State counters that the Legislature required approval of the salary parity provision each time an annual salary survey was completed. Because the Legislature has not approved the 2009 salary parity provision based on the 2009 survey, that particular parity provision is not part of the MOU and therefore not arbitrable under the MOU.
We find the Legislature's consideration of the salary parity provision in Assembly Bill No. 977 ambiguous.
PECG's interpretation of Assembly Bill No. 977--i.e., a one-time legislative approval of the parity provision--is supported by the way the Legislature refers to the salary survey in the singular in Assembly Bill No. 977 (Stats. 2003, ch. 616, § 2, subd. (b)(1) & (2)), and arguably by the way the salary parity provision specifies a preset 25 percent annual decrease in the salary lag that corresponds to the MOU's duration regarding salary adjustments.
On the other hand, the State's interpretation of Assembly Bill No. 977--i.e., the Legislature intended to consider for approval the salary parity provision each time an annual salary survey was submitted--is supported by (1) the salary provision's language (and Assem. Bill No. 977's general reference to that language), specifying particular annual surveys and noting those surveys are "updated annually"; (2) the Legislature's refusal in 2003 in Assembly Bill No. 977 to approve the salary parity provision without an updated salary survey; and (3) the rationale for legislative approval of the MOU--overseeing the expenditure of public funds.
In light of this legislative ambiguity in Assembly Bill No. 977, we may consider extrinsic aids to help us interpret it. (Schnyder v. State Bd. of Equalization (2002) 101 Cal.App.4th 538, 545.) We turn to legislative history, and the Legislature's treatment of the salary parity provision. (Ibid.)
The legislative history of Assembly Bill No. 977 is entwined with that of another bill, Senate Bill No. 348, which was described as substantively "identical" to Assembly Bill No. 977. Senate Bill No. 348, which ultimately did not pass, covered the MOU along with another bargaining unit's memorandum of understanding (Bargaining Unit 7). The legislative history for Assembly Bill No. 977 states: "According to the Assembly Appropriations Committee analysis of [Senate Bill No.] 348 . . . , an identical bill, the MOUs negotiated between DPA and [Bargaining Unit] 9 include parity adjustments that are affected by a future salary survey and MOUs. The Legislature cannot, therefore, assess the state's financial liability for these MOUs at this time. This bill [i.e., Assembly Bill No. 977] approves only those provisions of the [Bargaining Unit] 9 MOU requiring the expenditures of funds that can be determined at this time. The provisions of this MOU contingent upon future salary surveys and MOUs will require approval of the Legislature in separate measures, after the relevant information has been reviewed by the Legislature." (Sen. Rules Com., Off. of Sen. Floor Analyses, 3d reading analysis of Assem. Bill No. 977 (2003-2004 Reg. Sess.), Sept. 12, 2003, p. 2 [see also analysis of Assem. Com. on Public Employees Retirement and Social Security, Assem. Bill No. 977 (2003-2004 Reg. Sess.), Apr. 23, 2003, pp. 1-3]).
Thus, the legislative history supports the State's interpretation of Assembly Bill No. 977.
And indeed, the Legislature has considered approval of the MOU's salary parity provision in the manner described in the legislative history: approving (or, as is the case here, not approving) salary increases in annual state budgets only after considering the corresponding annual salary survey.
Two further points confirm that the State's interpretation of Assembly Bill No. 977 is the correct one.
First, PECG argues, rather weakly, that Senate Bill No. 348 is not identical to Assembly Bill No. 977, because the Senate bill covered two memoranda of understanding (for Bargaining Units 7 and 9), while the Assembly bill covered only one, the MOU (for Bargaining Unit 9). Indeed, in its opening brief on appeal, PECG quotes a legislative committee analysis of Senate Bill No. 348, which tracks the legislative history of Assembly Bill No. 977: "The provisions of these MOUs [i.e., Bargaining Units 7 and 9] contingent upon future salary surveys and MOUs will require approval of the Legislature in separate measures, after the relevant information has been reviewed by the Legislature."
And, second, PECG, also in its opening brief, refers to a DPA document, on the subject of the salary surveys, which states that the MOU requires DPA to annually survey public agencies, calculate "the salary lead or lag," and provide salary increases to Bargaining Unit 9 employees based at various percentages of the salary lag on July 1, 2005, 2006, 2007 and 2008. (Italics added.) The MOU's salary parity provision itself reiterates in this respect: "The calculation of the salary lead or lag for [Bargaining] Unit 9 employees shall be based on weighted average salaries of employees in the classifications in those surveyed agencies." (Italics added.) Thus, the MOU envisions the possibility of a salary "lead" rather than just a "lag"; this supports the State's view that Assembly Bill No. 977 contemplated an annual salary consideration by the Legislature based on the corresponding annual salary survey.
Because the Legislature has not approved the 2009 salary parity provision based on the 2009 salary survey, that particular parity provision is not part of the MOU and therefore not arbitrable under the MOU.
The order denying PECG's petition to compel arbitration is affirmed. The State is awarded its costs on appeal. (Cal. Rules of Court, rule 8.278 (a)(1), (2).)
We concur: NICHOLSON , Acting P. J. DUARTE , J.