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Gerawan Farming, Inc. v. Agricultural Labor Relations Board

California Court of Appeals, Fifth District

May 14, 2015

GERAWAN FARMING, INC., Petitioner,
v.
AGRICULTURAL LABOR RELATIONS BOARD, Respondent UNITED FARM WORKERS OF AMERICA, Real Party in Interest. GERAWAN FARMING, INC., Plaintiff and Appellant,
v.
AGRICULTURAL LABOR RELATIONS BOARD, Defendant and Respondent; UNITED FARM WORKERS OF AMERICA, Real Party in Interest and Respondent.

[REVIEW GRANTED BY CAL. SUPREME COURT]

ORIGINAL PROCEEDING; petition for writ of review. APPEAL from a judgment of the Superior Court of Fresno County (39 ALRB No. 17) No. 13CECG01408 Donald S. Black, Judge.

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COUNSEL

Irell & Manella, David A. Schwarz; Georgeson, Belardinelli and Noyes, C. Russell Georgeson; Barsamian & Moody and Ronald H. Barsamian for Petitioner and for Plaintiff and Appellant.

Luke A. Wake; Benbrook Law Group, Bradley A. Benbrook, Stephen M. Duvernay; Walter & Wilhelm Law Group, Paul J. Bauer; McCormick, Barstow, Sheppard, Wayte & Carruth, Anthony Raimondo for NFIB Small Business Legal Center as Amicus Curiae on behalf of Petitioner and Plaintiff and Appellant.

Carl G. Borden for California Farm Bureau Federation as Amicus Curiae on behalf of Petitioner and Plaintiff and Appellant.

Robert P. Roy for Ventura County Agricultural Association as Amicus Curiae on behalf of Petitioner and Plaintiff and Appellant.

John C. Eastman and Anthony T. Caso for Center for Constitutional Jurisprudence as Amicus Curiae on behalf of Petitioner and Plaintiff and Appellant.

Jason E. Resnick for Western Growers Association as Amicus Curiae on behalf of Petitioner and Plaintiff and Appellant.

Kamala D. Harris, Attorney General, Douglas J. Woods, Assistant Attorney General, Mark R. Beckington and Benjamin M. Glickman, Deputy Attorneys General, for Defendant and Respondent.

Mario Martinez, Edgar Aguilasocho; Altshuler Berzon, Scott A. Kronland and Jonathan Weissglass for Real Party in Interest and Respondent.

OPINION

KANE, J.

Agricultural employer Gerawan Farming, Inc. (Gerawan) and United Farm Workers of America (UFW) have never reached mutually acceptable terms to enter a collective bargaining agreement (CBA) regarding Gerawan’s agricultural employees. UFW was certified as the employees’ bargaining representative in 1992, but after engaging in initial discussions with Gerawan, disappeared from the scene for nearly two decades. In late 2012, UFW returned and the parties renewed negotiations. A few months later, at UFW’s request, the Agricultural Labor Relations Board (the Board) ordered the parties to a statutory “Mandatory Mediation and Conciliation”

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(MMC) process pursuant to Labor Code section 1164 et seq.[1] Under the MMC process, if a 30 day mediation period does not succeed in producing a CBA by voluntary agreement, the mediator decides what the terms of the CBA should be and reports that determination to the Board. Once the mediator’s report becomes the final order of the Board, the report establishes the terms of an imposed CBA to which the parties are bound. (See §§ 1164, 1164.3.) Here, following the Board’s final order adopting the mediator’s report, Gerawan petitioned this court for review under section 1164.5, challenging the validity of the order and the MMC process on both statutory and constitutional grounds.[2] Among Gerawan’s claims is the contention that UFW’s lengthy absence resulted in an abandonment of its status as the employee’s bargaining representative.

We agree with Gerawan’s statutory argument that it should have been given an opportunity to prove abandonment to the Board once UFW requested the MMC process. More fundamentally, we agree with Gerawan’s constitutional arguments that the MMC statute violates equal protection principles and constitutes an improper delegation of legislative authority. Accordingly, the Board’s order, Gerawan Farming, Inc. (2013) 39 ALRB No. 17, is set aside.

FACTS AND PROCEDURAL HISTORY

Gerawan Farming

Gerawan is a family owned farming business that has been in operation since 1938. Gerawan grows, harvests and packs stone fruit and table grapes on about 12, 000 acres of farmland located in Fresno and Madera Counties, employing several thousand direct-hire workers and farm labor contractor employees.[3]

As was the case in the proceedings below, Gerawan’s petition for review presents a description of its operations and business model, presumably because of its concern that such practices would be impeded by the CBA established under the MMC process. We summarize that description here, not

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to agree or disagree, but simply to accurately portray Gerawan’s stated perspective. According to Gerawan, since the 1980’s it has placed a major emphasis on quality control and on keeping well-trained, productive employees. To ensure the quality of its produce, it has developed unique interactive methods to maintain quality control at each step of the harvesting and packing process, including an ability to respond to problems in any individual worker’s performance in real time. Allegedly, throughout the process, individual workers are notified of any problems, are given additional training or instruction and, if necessary, receive corrective action. Additionally, Gerawan asserts that to retain good workers it has consistently paid its direct-hire employees substantially more than the average industry wage, with many being compensated on a sliding-scale system (within a targeted per hour range) based on quality and productivity. In Gerawan’s view, these operational features have been and still are central to its ongoing success, but would be hampered or prevented by the imposed CBA.[4]

UFW’s Certification in 1992

On July 8, 1992, following a runoff election in 1990, UFW was certified as the exclusive bargaining representative for Gerawan’s agricultural employees. On July 21, 1992, UFW sent a letter to Gerawan requesting negotiations. On August 13, 1992, Gerawan accepted UFW’s request to begin bargaining and invited UFW to submit any proposals it wished to make. UFW did not send a proposal to Gerawan until November 22, 1994. In February 1995, the parties held one introductory negotiating session.[5] After that, UFW did not contact Gerawan again until late 2012.

UFW’s Reappearance in 2012 and the Renewal of Bargaining

On October 12, 2012, UFW sent a letter reasserting its status as the certified bargaining representative for Gerawan’s agricultural employees and demanded that Gerawan engage in negotiations. Gerawan responded by letter dated November 2, 2012, expressing its willingness to bargain in good faith, but also raising a number of questions and concerns based on UFW’s lengthy absence from the scene. An explanation of UFW’s absence was requested, but

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UFW refused. Nonetheless, the parties proceeded with negotiations. Between January 17, 2013 and March 29, 2013, the parties held 10 or more bargaining sessions.

MMC Process Ordered by the Board

On March 29, 2013, UFW filed a declaration with the Board requesting that the Board issue an order referring the parties to the MMC process pursuant to section 1164 et seq. Gerawan filed an answer objecting to UFW’s request on the grounds that the requirements of sections 1164 and 1164.11 were not satisfied and UFW had abandoned its status as the employees’ bargaining representative. On April 16, 2013, the Board rejected Gerawan’s arguments and ordered the parties to begin the MMC process.

Gerawan filed a petition for a writ of mandate in the superior court, asking the court to set aside the Board’s order sending the parties to the MMC process. The superior court denied the petition.[6]

A mediator was impaneled in May 2013 and conducted several mediation sessions with the parties. After the voluntary mediation phase of the MMC process was exhausted without any agreement being reached on the terms of a CBA, the mediator conducted on the record hearings in which he received testimony and evidence and made rulings on objections.[7] Thereafter, the mediator alone crafted the subject CBA. On September 28, 2013, the mediator submitted his report (i.e., his determination of the CBA’s terms) to the Board.

The Board Adopts the Mediator’s Report

Gerawan filed a petition with the Board objecting to the mediator’s report, both generally and as to its particular terms. The Board granted review and remanded the matter back to the mediator as to six issues. After further meetings were held with the parties, the mediator issued a second report to the Board dated November 6, 2013. On November 19, 2013, the Board adopted the mediator’s second report and it became the final order of the Board as set forth in Gerawan Farming, Inc., supra, 39 ALRB No. 17, the legal effect of which was to establish the mediator’s proposed CBA (as reported) as the final order of the Board. (See § 1164.3.)

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The Prior Decertification Election

Two weeks beforehand, on November 5, 2013, with the Board’s authorization, Gerawan’s employees held an election to decide whether to decertify UFW as their bargaining representative. The ballots were impounded by the Board and have not yet been counted, pending the Board’s resolution of claims of misconduct relating to the election. Shortly after the employees’ votes were cast, Gerawan requested that the Board stay the MMC proceedings until the outcome of the election was known. The Board denied the stay request on November 14, 2013, without explanation.[8] Thus, it is undisputed that when the Board adopted the mediator’s report on November 19, 2013, and thereby approved the CBA as determined by the mediator, it did so despite the intervening decertification election, which may have ousted UFW.

Gerawan’s Petition for Review

On December 16, 2013, Gerawan filed a petition for review (or more specifically, a petition for a writ of review) to this court, seeking our review under section 1164.5 of the Board’s final order in Gerawan Farming, Inc., supra, 39 ALRB No. 17. In its petition, Gerawan contends that the Board’s order was invalid on various statutory and constitutional grounds. The statutory grounds focus on Gerawan’s claims that the criteria for ordering the parties to the MMC process were not satisfied, including because UFW allegedly abandoned its status as the employee’s bargaining representative. In its constitutional arguments, Gerawan asserts the MMC process violates guarantees of equal protection and due process, and also constitutes an improper delegation of legislative powers. Furthermore, Gerawan maintains that the right to freedom of contract prevents the State from imposing a CBA by administrative fiat.

Upon our consideration of the petition, the parties’ briefing, and the Board’s certified record, we issued a writ of review and formally notified the parties of our review of Gerawan Farming, Inc., supra, 39 ALRB No. 17, pursuant to section 1164.5.

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DISCUSSION

In addressing the contentions raised in Gerawan’s petition for review (case No. F068526), our approach will be to discuss the statutory issues first and the constitutional questions second. Lastly, we will briefly address the separate appeal filed by Gerawan (case No. F068676), which has been consolidated herewith.

THE STATUTORY ISSUES

Inasmuch as we will conclude that the MMC statute unconstitutionally deprives Gerawan of equal protection and unconstitutionally delegates legislative authority, we could confine our opinion to a discussion of those issues alone. However, the parties have extensively briefed other issues relating to statutory interpretation and application of the MMC statute. We are not the highest court of review and hence do not presume to have the last word on this subject. We deem it appropriate to address the following statutory issues should they become relevant following a higher court ruling or a future attempt by the Legislature to enact another version of the MMC statute. Additionally, we reach the statutory issues as an alternative basis for our ruling; that is, even if the MMC statute were constitutionally sound, we would still conclude under the statutory arguments that the Board abused its discretion. For the sake of efficiency, we place our discussion of the statutory issues first because doing so will provide a thorough overview of the MMC statute (i.e., how it works and its purpose), which will give helpful background to our consideration of the constitutional issues.

I. Overview of the Statutory Framework

The Labor Code provisions creating the MMC process (§§ 1164–1164.13; the MMC statute) were added in 2002 as a new chapter (ch. 6.5) to the part of the code dealing with agricultural labor relations (div. 2, pt. 3.5). known as the Alatorre-Zenovich-Dunlap-Berman Agricultural Labor Relations Act of 1975 (§ 1140 et seq.; the ALRA). (See Stats. 2002, ch. 1145, § 2, p. 7401.) Therefore, to understand how the MMC statute fits within its larger statutory framework, we begin with a brief description of the ALRA.

A. The ALRA

In 1975, the California Legislature enacted the ALRA “to provide for collective-bargaining rights for agricultural employees” (§ 1140.2) by putting into place a system of laws generally patterned after the National Labor Relations Act (29 U.S.C. § 151 et seq.; the NLRA). (J.R. Norton Co. v. Agricultural Labor Relations Bd. (1979) 26 Cal.3d 1, 8

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[160 Cal.Rptr. 710, 603 P.2d 1306] (J.R. Norton Co.); see § 1148 [in implementing the ALRA, the Board follows applicable precedents of the NLRA].) The ALRA declares it is the policy of the State of California “to encourage and protect the right of agricultural employees to full freedom of association, self-organization, and designation of representatives of their own choosing … for the purpose of collective bargaining or other mutual aid or protection.” (§ 1140.2.)[9] As noted by our Supreme Court, “[a] central feature in the promotion of this policy is the [ALRA’s] procedure for agricultural employees to elect representatives ‘for the purpose of collective bargaining with respect to rates of pay, wages, hours of employment, or other conditions of employment.’ (Id., § 1156 et seq.)” (J.R. Norton Co., supra, at p. 8.) Under that election procedure, if a proper petition has been filed, the Board directs that an election be held by a secret ballot vote of employees to determine an issue of employee representation, such as whether a particular labor organization shall be the employees’ bargaining representative.[10] (§§ 1156, 1156.3.) Except in certain runoff elections, every ballot “shall provide the employee with the opportunity to vote against representation by a labor organization by providing an appropriate space designated ‘No Labor Organizations.’” (§ 1156.3, subd. (c).) After the election, the Board “shall certify” the result unless it determines based on a sustained election challenge “that there are sufficient grounds to refuse to do so.” (§1156.3, subd. (e)(2) [stating grounds for such refusal].)

If a labor organization (i.e., a union)[11] is certified as the winner of such an election and thus becomes the employees’ bargaining representative, certain legal consequences follow. First, a statutory bar exists to holding another representation election for at least the initial one-year certification period. (§§ 1155.2, subd. (b), 1156.5, 1156.6.) Second, a duty to bargain is created, which is owed by the employer to the union and vice versa. (§§ 1152, 1153, subd. (e), 1154, subd. (c).) However, unlike the election bar, the duty to bargain does not expire with the initial one-year period. That is because a union’s status as the employees’ certified bargaining representative continues beyond the one-year period for purposes of extending the parties’ duty to bargain. (Montebello Rose Co. v. Agricultural Labor Relations Bd. (1981) 119 Cal.App.3d 1, 24–26, 29 [173 Cal.Rptr. 856] (Montebello Rose) [affirming ALRB’s conclusion that a certified union continues to enjoy that status after the initial certification year expires, based in part on NLRB precedent that there is a presumption of continuing majority status]; F&P Growers Assn. v. Agricultural Labor Relations Bd. (1985) 168 Cal.App.3d 667, 672 [214 Cal.Rptr. 355]

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(F&P Growers) [noting “‘rebuttable presumption’” under ALRA that a union continues to have majority support after initial one-year period].)[12] Consequently, it has been held that once a union is certified as the bargaining representative of an employer’s agricultural employees, the employer’s duty to bargain with that union continues until the union is replaced or decertified through a subsequent election pursuant to section 1156.3 or 1156.7. (Montebello Rose, supra, at pp. 23–24, 29 [approving statutory interpretation adopted by the Board in Kaplan’s Fruit & Produce Co., Inc. (1977) 3 ALRB No. 28 (Kaplan’s)]; Adamek & Dessert, Inc. v. Agricultural Labor Relations Bd. (1986) 178 Cal.App.3d 970, 983 [224 Cal.Rptr. 366] (Adamek & Dessert, Inc.); Bruce Church, Inc. (1991) 17 ALRB No. 1, p. 9 [stating principle adhered to by the Board that “a Union remains the certified representative until decertified”]; Pictsweet Mushroom Farms (2003) 29 ALRB No. 3, pp. 5-6 [same].)[13]

In summary, the ALRA recognizes, protects and promotes agricultural employees’ right to collective bargaining (§ 1140.2), and in the furtherance of that right the ALRA requires the agricultural employer and the employees’ certified representative to bargain collectively in good faith (§§ 1153, subd. (e), 1154, subd. (c)). The ALRA defines the parties’ mutual obligation to bargain collectively in good faith as follows: “[T]o bargain collectively in good faith is the performance of the mutual obligation of the agricultural employer and the representative of the agricultural employees to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment, or the negotiation of an agreement, or any questions arising thereunder, and the execution of a written ...


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