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County of Ventura v. Public Employment Relations Board

California Court of Appeals, Second District, Sixth Division

November 21, 2019

COUNTY OF VENTURA, Petitioner,
v.
PUBLIC EMPLOYMENT RELATIONS BOARD, Respondent SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL 721, Real Party in Interest.

          Public Employment Relations Board PERB Dec. No. 2600-M) (PERB Case No. LA-CE-655-M

          Leroy Smith, County Counsel, Matthew A. Smith, Assistant County Counsel, for Petitioner.

          J. Felix de la Torre, General Counsel, Wendi L. Ross, Deputy General Counsel, Daniel Trump and Joseph W. Eckhart, Senior Regional Attorneys, for Respondent.

          Weinberg, Roger & Rosenfeld, Monica T. Guizar and Christina L. Adams, for Real Party in Interest.

          TANGEMAN, J.

         Service Employment International Union, Local 721 (SEIU) sought to represent nonphysician employees of satellite medical clinics (Clinics) owned by private corporations but under contract with Ventura County Medical Center (VCMC) to provide medical services. The County of Ventura (the County) refused to process SEIU's petition to represent the employees (Clinic employees) on the ground that private corporations and not the County were the sole employers. SEIU filed an unfair practice charge with the Public Employment Relations Board (PERB), alleging the County's refusal to process its petition violated the Meyers-Milias-Brown Act (MMBA) (Gov. Code, [1] § 3500 et seq.), which governs employer-employee relations between public agencies and public employees. An administrative law judge (ALJ) found in favor of the County and dismissed the unfair practice charge. PERB reversed the ALJ's decision and found the County is a single employer or, in the alternative, a joint employer of Clinic employees.

         The County filed this petition for a writ of extraordinary relief from PERB's decision (§ 3509.5, subds. (a) & (b)). It argues PERB lacked jurisdiction because Clinic employees were private employees, and not County employees. We affirm.

         Facts

         The County, through the Health Care Agency, owns and operates VCMC. VCMC provides a network of ambulatory care clinics, which consist of either specialty care or primary care clinics. The primary care clinics consist of 17 privately-owned Clinics throughout Ventura County. The Clinics provide outpatient services to the underserved patient population and advertise these services as affiliated with VCMC.

         Each private corporation has a Professional Services and Operations Agreement (Operations Agreement) with VCMC to provide medical services. Each corporation is owned by a physician, who serves as the Clinic's medical director. The medical director's duties and responsibilities are established through the Operations Agreement.

         Each of the Operations Agreements between VCMC and the Clinics are “almost identical.” The Operations Agreements state that VCMC is the “licensed operator” of each Clinic. Each Clinic identifies itself as a “clinic of [VCMC].” The Operations Agreements state that Clinic patients are VCMC patients and patient records are VCMC property.

         The County provides and maintains the facilities, equipment, and furnishings for the Clinics to operate. The Operations Agreements state the Clinics “shall not do anything in or about” the facilities that would “obstruct or interfere with the rights of” VCMC. The County is permitted to use the facilities for “any purpose, ” including maintaining licenses and permits, coordinating and reviewing medical records or financial records, administering VCMC programs, and providing services.

         Financial Relationship

         The County pays each corporation a monthly administration fee and, in addition, bonuses for achieving certain goals (e.g., meeting certain patient satisfaction survey scores, complying with accreditation requirements, or maintaining an average volume of patient visits that meet Medicare productivity guidelines).

         Before each fiscal year, each Clinic negotiates an annual operating budget with the County. The operating budget includes all projected expenses that require the County's reimbursement, including employee payroll projections. The County must approve the operating budget. All expenses are reported to the County in a monthly financial report. The County determines from these monthly reports when supplemental funding for additional expenses is necessary.

         The County owns all revenues and accounts receivable that the Clinics generate. It establishes all fees for services provided and handles billing. After the County collects the revenues from the Clinics, it uses those revenues to cover the Clinics' expenses. If the revenues are insufficient to cover a Clinic's expenses, the County advances funds to cover the remaining expenses. One medical director testified that when requesting advance funds, he must “justify each” request. Each Operations Agreement sets a maximum annual amount of “additional operating capital” that is “necessary to meet [Clinic] operating expenses.” If a Clinic's average cash balance exceeds the average monthly operating costs, the County may recoup excess cash by withholding revenue or requiring the Clinic to return funds.

         The County pays some expenses directly, including expenses to maintain the facilities, furnishings, medical supplies, and equipment. It also pays for medical malpractice, ...


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