Filed 9/28/11 Assn. of Orange County Deputy Sheriffs v.

County of Orange CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH APPELLATE DISTRICT DIVISION THREE

ASSOCIATION OF ORANGE COUNTY DEPUTY SHERIFFS, G044502 Plaintiff and Respondent, (Super. Ct. No. 30-2010-00400085) v. OPINION COUNTY OF ORANGE et al., Defendants and Appellants; ORANGE COUNTY EMPLOYEES ASSOCIATION, Intervener and Respondent.

Appeal from an order of the Superior Court of Orange County, Kazuharu Makino, Judge. Affirmed. Petition for writ of supersedeas. Denied as moot. Nicholas S. Chrisos, County Counsel, and Wendy J. Phillips, Deputy County Counsel, for Defendants and Appellants.

Law Offices of Charles Goldwasser, Charles A. Goldwasser, David C. Goldwasser; The Krolikowski Law Firm and Adam J. Krolikowski for Plaintiff and Respondent. Silver, Hadden, Silver, Wexler & Levine, Richard A. Levine and Ken Yuwiler for Intervener and Respondent. * * INTRODUCTION In January 2010, the Orange County Sheriffs Department (the Department) employed a new classification of civilian employees to do office work in Orange County (the County) jails that had historically been exclusively performed by deputy sheriffs. The Association of Orange County Deputy Sheriffs (Association) sued the County, the Department, and the Countys sheriff Sandra Hutchens (collectively, defendants), alleging defendants transferred duties performed by members of the Associations bargaining unit to members of a different bargaining unit without having first complied with meet-and-confer obligations required by the Associations applicable memorandum of understanding with the County and the Meyers-Milias-Brown Act (MMBA) (Gov. Code, 3500 et seq.). (All further statutory references are to the Government Code unless otherwise specified.) The Associations complaint essentially alleged that defendants breached the memorandum of understanding and the MMBA by failing to meet and confer with the Association before implementing the use of CSAs in the Countys jails. The Association requested injunctive relief and the issuance of a writ of mandate requiring defendants to comply with their contractual and statutory meet-and-confer obligations. In October 2010, the trial court granted the Associations request for a preliminary injunction enjoining defendants from filling any deputy sheriff positions, which existed in the jail system on September 24, 2010, with employees classified as correctional services assistants (CSAs), other than were in effect on 2 *

September 24, 2010. The court also required the Association to file an undertaking in the amount of $10,000. Defendants appeal from the order issuing the preliminary injunction, arguing the Association failed to establish a likelihood of prevailing on the merits of its claims and further failed to show it would suffer interim harm in the absence of such an injunction. In the alternative, defendants also argue the amount of the undertaking ordered by the trial court was insufficient. We granted defendants requests to stay the preliminary injunction and trial court proceedings pending resolution of this appeal. We affirm. Well-established California Supreme Court precedent, including International Assn. of Fire Fighters, Local 188, AFL-CIO v. Public Employment Relations Bd. (2011) 51 Cal.4th 259, 277 (International Assn. of Fire Fighters), Claremont Police Officers Assn. v. City of Claremont (2006) 39 Cal.4th 623, 630 (Claremont), and Building Material & Construction Teamsters Union v. Farrell (1986) 41 Cal.3d 651, 655 (Building Material), is directly on point with the issues raised in this case. These opinions establish that a public employer must meet and confer with the bargaining unit regarding a decision to transfer duties away from that bargaining unit and the impacts of such a decision, when the purpose of the decision was to save labor expenses. Here, evidence showed defendants permanently transferred duties that historically were performed by members of the Association to employees belonging to a different bargaining unit to save labor costs, but did not meet and confer as to that decision or its impacts on the Association or its members. Some of the Association members position choices have been consequently eliminated. We hold the trial court did not err by concluding a preliminary injunction should be issued after weighing (1) the likelihood the Association would prove defendants were required to meet and confer as to the decision to use CSAs in the Countys jails and the impacts of such a decision but failed to do so, and (2) the relative harm the parties would suffer by the issuance or nonissuance of a preliminary injunction. 3

We further conclude defendants failed to demonstrate the court erred by imposing a $10,000 undertaking.

FACTUAL AND PROCEDURAL BACKGROUND The Association is an employee organization within the meaning of the MMBA, which represents employees of the Department who hold nonmanagement positions, including employees in positions classified as deputy sheriff I and deputy sheriff II. As a recognized employee organization, the Association has the right to represent its members in their employment relations with the County and the Department. In October 2007, the Countys board of supervisors ratified a memorandum of understanding agreed to by the Association and the County.

I. DEFENDANTS EXPLORE THE POSSIBILITY OF CREATING A CLASSIFICATION OF CIVILIAN EMPLOYEES TO PERFORM OFFICE WORK IN COUNTY JAILS TO SAVE MONEY; DEFENDANTS DO NOT MEET AND CONFER REGARDING THE DECISION TO CREATE SUCH A CLASSIFICATION AND THE IMPACTS OF SUCH A DECISION; THE COUNTY APPROVES CSA CLASSIFICATION. At an unspecified point in time, the Department formed a committee to evaluate the use of civilian employees for positions within the Countys correctional facilities. Historically, the Associations members held those positions. In February 2008, the Associations general manager, Mark Nichols, sent a letter to the Countys chief executive officer and to then-acting sheriff Jack Anderson, which stated in part: It has come to the attention of [the Association] that the Acting Sheriff is taking the position that the use of non-sworn employees to replace our members in the jail system is not subject to the meet and confer requirement of Government Code Section 3500, et seq. As has been previously explained to him, he is wrong about the requirements of the law.

In his letter, Nichols cited Building Material, supra, 41 Cal.3d 651, for the proposition that employers must bargain on action to transfer duties performed by members of a bargaining unit to a job title in another unit. Nichols further stated: However, the issue of whether negotiations take place is governed by the Memorandum of Understanding between the County and [the Association]. Article XXIII of the [memorandum of understanding] provides that, during the term of the agreement, the parties may negotiate with respect to any matter within the scope of representation only upon mutual agreement. . . . Therefore, absent the agreement of the Association, this is not a matter that can be addressed. The Association has not indicated a willingness to agree to negotiate at this time. In a letter dated February 22, 2008, Anderson stated he understood Nicholss concerns about the proposal to employ a new class of correctional employee in the Countys jail system and wished to assure Nichols his concerns would be addressed. Anderson stated: To reiterate what was said during our February 7, 2008 meeting with the entire [Associations] Board of Directors, the Sheriffs Department is facing tremendous budgetary difficulties that are projected to last for several years. . . . While acting as Sheriff, it is my responsibility to ensure the Sheriffs Department engages in a continuing, comprehensive self-evaluation of how we operate our jails to ensure best practices are being applied and efficiencies maximized. Realized fiscal savings by introducing a non-sworn correctional employee classification will allow for the sustained safe operation of the jails without having to cut other critical programs and public safety services. In his letter, Anderson further stated, I have considered the employment of non-sworn correctional personnel in our jails as a primary means of cutting expenses, with preliminary projections suggesting that about $24 to 34 million in annual savings will be realized in existing jail facilities alone. Such an initiative is also consistent with industry standards. Anderson concluded his letter by stating: The proposal to utilize a 5

non-sworn correctional personnel class is in its infancy stages and no specific plan or model has been decided upon. Much research and consideration still needs to be undertaken. [] I would like to reiterate my invitation for you and the [Associations] members to work with us collaboratively in this endeavor. By working together, we can develop a workable proposal that meets budgetary realities while upholding the tradition of professionalism and safety in our jails. On several occasions in 2008, Nichols and the Associations president, Wayne Quint, Jr., met with the Departments human resources manager, Buffy Reynoso. During these meetings, Reynoso informed Nichols and Quint of the Departments intentions to create a new civilian position called CSA. Reynoso described what the position would entail and the functions an employee in that position would serve. Nichols declared that in 2008 and 2009, he repeatedly requested the CSA issue be negotiated and advised the County and the Department he believed the CSA issue was the subject of mandatory bargaining pursuant to the requirements of the MMBA and the memorandum of understanding. The County responded to his requests by stating it would move forward without input from [the Association] concerning the CSA issue. In July 2009, the Countys board of supervisors approved a new classification series that would be dedicated to custody assignments within the Countys jails, which included CSA and correctional services trainee (we refer to correctional services trainees as CSAs) classifications. In September 2009, during normal contract negotiations between the Countys human resources director, Carl Crown, and the Association, the Association submitted a proposal that the County create a new Association classification of CSA. Crown declared, [b]ecause the creation of the new classification was not a mandatory subject of bargaining and because the new classification was not represented by [the Association], I refused to discuss this item with [the Association]. Nichols declared Crown refused to negotiate the CSA during main 6

table negotiations despite the requirements of the [memorandum of understanding] and MMBA to do so. On October 6, 2009, the Countys board of supervisors gave its final approval of the CSA classification series. Two days later, the Association withdrew its proposal as to a CSA classification. Crown declared that at no time before or during the negotiation process did [the Associations] leadership identify any possible impacts of the CSA classification or request to bargain those impacts with the County. The Association and the Countys representatives reached an agreement on a new memorandum of understanding in January 2010.1

II. CSAS BEGIN WORKING IN THE COUNTYS JAILS AND ASSUME DUTIES FORMERLY PERFORMED BY DEPUTY SHERIFFS. In January 2010, CSAs began working at the Theo Lacy Facility. CSAs were also employed at the Countys central jail. They were assigned to guard station positions in the housing modules and barracks, and worked directly with deputy sheriffs in managing the operation of the housing units. Sergeants supervise the CSAs and deputies, and the deputies serve as the lead workers who provide direction to the CSAs. CSAs are not assigned duties that involve direct inmate contact. The Association objected to the creation of the CSA classification, the hiring of CSAs, and the assignment of CSAs to another bargaining unit without meeting and conferring as required with [the Association] regarding the impact of CSAs on [the Associations] bargaining unit. Nichols informed the sheriff and other officials Although our record does not contain a copy of the January 2010 memorandum of understanding, Nichols declared that such memorandum of understanding contains the same relevant provisions that were contained in the October 2010 memorandum of understanding. Defendants do not contend otherwise. We therefore hereafter refer to both memoranda of understanding collectively as the MOU. 7
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that the Association would sue the moment the CSAs were used to supplant a sworn Deputy Sheriff position. Part of the staffing plan for the fiscal year beginning in July 2010 was to integrate additional CSAs into the Theo Lacy Facility. The CSAs were expected to fill positions in the jails, which became vacant from attrition, whether the attrition was due to retirement, promotion, termination of employment, or transfer. To achieve that goal, the Department continued to hire and train CSAs since January 2010. On July 31, 2010, a deputy sheriff in the position of deputy sheriff II in the Theo Lacy Facility received an e-mail notifying him of the unavailability of certain assignments for the facility in upcoming shift rotations. He was instructed by the Sergeant not to sign up for positions in module Q or N of the facility because those positions were to be filled by CSAs.

III. THE ASSOCIATION SUES DEFENDANTS FOR VIOLATION OF THE MOU AND THE MMBA AND SEEKS A TEMPORARY RESTRAINING ORDER AND A PRELIMINARY INJUNCTION. In August 2010, the Association filed a verified complaint against defendants, asserting claims for violation of the MOU and of the MMBA. The Association sought injunctive relief preventing defendants from changing the status quo prior to [defendants] complying with the meet and confer, bargaining and impasse procedures required by the MMBA and MOU. The complaint further prayed for the issuance of a peremptory writ of mandamus commanding defendants to follow the requirements of the MOU and MMBA, concerning meet and confer, bargaining and impasse procedures on the issue of the CSAs impact on employment conditions and employer-employee relations. A day after the complaint was filed, the Association applied ex parte for a temporary restraining order and an order to show cause regarding the issuance of a 8

preliminary injunction to enjoin defendants from replacing the Associations members with CSAs and thus maintain the status quo. In support of the Associations application, Nichols declared, inter alia, that the Association has suffered immediate damage due to the supplanting of [the Associations] positions in the Orange County Jails, the permanent loss of bargaining unit positions, and will continue to suffer loss of bargaining unit positions of Orange County Jail staffing according to [defendants] own statements. The trial court denied the Associations application for a temporary restraining order, but issued an order to show cause, which stated in part: [I]t appears to the satisfaction of the court that this is a proper case for granting an order to show cause for a preliminary injunction. In opposition to the Associations request for issuance of a preliminary injunction, defendants produced evidence showing that CSA duties are not the same as deputy sheriff duties because CSAs perform only some guard station office duties previously performed by deputy sheriffs. In the past, office duties, including maintaining logs, answering phone calls, organizing and distributing inmate movement passes, operating control panels, and other guard station clerical duties, were performed by deputy sheriffs working in the guard stations. Such duties were assigned to CSAs for the purpose of free[ing] up the deputies so they have more time to interact with the inmates and provide better security. The evidence also showed that before January 2010, each module and barracks was staffed with one deputy belonging to the deputy sheriff II classification, and two deputies belonging to the deputy sheriff I classification. Modules and barracks have subsequently been staffed with one CSA, one deputy sheriff II, and one deputy sheriff I; the other deputy sheriff I position would have been left vacant and the deputy formerly occupying the position would be reassigned . . . to relief positions. Defendants evidence further showed that deputy sheriffs have the same shift options as they had before the CSAs were utilized in January of 2010. The only 9

change is some of their non-direct inmate contact and administrative duties in the housing units have been shifted to the CSAs. This means that some non-direct inmate contact position choices are no longer available to deputies. However, as a result of new I.C.E contract and the projected re-opening of currently closed jail facilities, deputies now have additional position options they did not have when CSAs were initially utilized in January of 2010. Some deputy sheriffs position choices have been added and some eliminated. No deputy sheriff has lost his or her job as a result of the employment of CSAs and CSAs have not negatively impacted the level of security at the Theo Lacy Facility and the Countys central jail. Captain Davis Nighswonger, who oversees operations at the Theo Lacy Facility, declared: If the Sheriff is enjoined from staffing Theo Lacy with CSAs a severe hardship will result. Our staffing needs would be difficult to meet. Nighswonger further stated, the loss of CSA personnel will likely necessitate a large increase in overtime costs in order to meet the staffing needs . . . . Deputies would need to be utilized to fill the void left by the CSAs. Some Deputies would have their promotions and transfers to patrol deferred because of critical jail staffing needs. He further declared that CSAs are trained and hired specifically to work in the jails and could not be utilized elsewhere. As of August 25, 2010, there were 49 CSAs employed by the County and, according to the sheriff, issuance of a preliminary injunction enjoining use of CSAs would result in their layoffs because there would be no work for them to do.

IV. THE TRIAL COURT ISSUES A PRELIMINARY INJUNCTION; DEFENDANTS MOVE TO DISSOLVE THE INJUNCTION BECAUSE THE TRIAL COURT FAILED TO ORDER AN UNDERTAKING; THE TRIAL COURT ISSUES A NEW PRELIMINARY INJUNCTION PRESERVING THE STATUS QUO AND ORDERS A $10,000 UNDERTAKING. In late September 2010, the trial court issued a preliminary injunction, stating, in part, that during the pendency of the action, defendants were enjoined from 10

[f]illing any Deputy Sheriff positions which existed in the Orange County jail system on July 30, 2010, with CSA employees other than had been in effect on July 30, 2010. Defendants moved to dissolve the preliminary injunction on the ground the trial court failed to order an undertaking as required by Code of Civil Procedure section 529. Defendants requested that the trial court order an undertaking in the amount of $650,000. In support of defendants motion, Nighswonger declared that as of October 14, 2010, 24 people were being trained in the CSA academy and were expected to graduate on November 2, 2010. Nighswonger stated that as part of their continued training, the CSAs receive six weeks of on-the-job training in jails with deputy sheriffs. At the end of this six-week period, the staffing plan called for the CSAs to occupy positions in the jails on their own. The differential in hourly rate of pay between a deputy sheriff I and a CSA is $12.49. Nighswonger declared it will cost an additional $23,980 per pay period if the sheriff cannot use the CSAs in their intended capacity. If the preliminary injunction remained in effect in mid-December when the CSAs would be ready to assume solo positions in the jails, Nighswonger stated the Department will have to find other positions for them or potentially lay them off. Also, the positions that CSAs are intended to fill come mid-December will have to be filled by Deputies instead. The cost impact on the budget as approved by the Board of Supervisors will be significant. In mid-October 2010, the trial court issued a new preliminary injunction which stated: IT IS HEREBY ORDERED that during the pendency of the above-entitled action or until further court order, the County of Orange, Orange County Sheriffs Department, and Orange County Sheriff Sandra Hutchens, Defendants/ Respondents in the above-entitled matter, their employees and agents are hereby enjoined and restrained from filling any Deputy Sheriff positions which existed in the jail system on September 24, 2010, with employees classified as CSAs other than were in effect on September 24, 2010. [] The above injunction shall issue and become effective upon [the Association]s filing an undertaking in the amount of $10,000 as required by law. [] 11

The Preliminary Injunction previously signed and issued by the Court on September 28, 2010, is superseded and supplanted by this Order.2

V. DEFENDANTS APPEAL; THE PRELIMINARY INJUNCTION AND THE TRIAL COURT PROCEEDINGS ARE STAYED. Defendants filed a notice of appeal. In December, defendants filed a petition for writ of supersedeas in this court and requested an immediate stay of the preliminary injunction. This court issued an order staying the preliminary injunction pending further order of this court. In February 2011, defendants requested an immediate stay of all further trial court proceedings in the action, including trial which was scheduled in March. This court granted defendants request for a stay of all trial court proceedings including trial.

DISCUSSION I. GENERAL LEGAL PRINCIPLES GOVERNING PRELIMINARY INJUNCTIONS AND APPLICABLE STANDARD OF REVIEW The appellate standard for reviewing preliminary injunctions is well established. In deciding whether to issue a preliminary injunction, a trial court weighs two interrelated factors: the likelihood the moving party ultimately will prevail on the merits, and the relative interim harm to the parties from the issuance or nonissuance of the injunction. [Citation.] (Hunt v. Superior Court (1999) 21 Cal.4th 984, 999.) The California Supreme Court has explained: The trial courts determination must be guided At some later point in time, the union which represents the CSAs, the Orange County Employees Association, intervened and filed a cross-complaint in this action. The appellate record, however, contains neither the cross-complaint nor details of the Orange County Employees Associations involvement in this case. 12
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by a mix of the potential-merit and interim-harm factors; the greater the plaintiffs showing on one, the less must be shown on the other to support an injunction. [Citation.] Of course, [t]he scope of available preliminary relief is necessarily limited by the scope of the relief likely to be obtained at trial on the merits. [Citation.] A trial court may not grant a preliminary injunction, regardless of the balance of interim harm, unless there is some possibility that the plaintiff would ultimately prevail on the merits of the claim. [Citation.] Unless potential merit is conceded, an appellate court must therefore address that issue when reviewing an order granting a preliminary injunction. (Butt v. State of California (1992) 4 Cal.4th 668, 678.) The ultimate goal of any test to be used in deciding whether a preliminary injunction should issue is to minimize the harm which an erroneous interim decision may cause. [Citation.] [Citation.] (White v. Davis (2003) 30 Cal.4th 528, 554.) Generally, the ruling on an application for a preliminary injunction rests in the sound discretion of the trial court. The exercise of that discretion will not be disturbed on appeal absent a showing that it has been abused. [Citations.] [Citation.] A trial court may not grant a preliminary injunction, regardless of the balance of interim harm, unless there is some possibility that the plaintiff would ultimately prevail on the merits of the claim. [Citation.] [Citation.] (Hunt v. Superior Court, supra, 21 Cal.4th at p. 999.)3

The appellate briefs contain some debate as to whether the preliminary injunction here is properly characterized as prohibitory or mandatory in nature. [T]he general rule is that an injunction is prohibitory if it requires a person to refrain from a particular act and mandatory if it compels performance of an affirmative act that changes the position of the parties. (Davenport v. Blue Cross of California (1997) 52 Cal.App.4th 435, 446.) We review the latter form more closely for abuse of discretion. (Ibid.) The preliminary injunction at issue here is clearly prohibitory in that it prohibits defendants from hiring any more CSAs into deputy sheriff positions. We therefore review the order issuing a preliminary injunction for abuse of discretion. 13

Whether the trial court granted or denied a preliminary injunction, the appellate court does not resolve conflicts in the evidence, reweigh the evidence, or assess the credibility of witnesses. [Citation.] [T]he trial court is the judge of the credibility of the affidavits filed in support of the application for preliminary injunction and it is that courts province to resolve conflicts. [Citation.] Thus, even when presented by declaration, if the evidence on the application is in conflict, we must interpret the facts in the light most favorable to the prevailing party and indulge in all reasonable inferences in support of the trial courts order. [Citation.] (Whyte v. Schlage Lock Co. (2002) 101 Cal.App.4th 1443, 1450.)

II. THE TRIAL COURT DID NOT ERR BY ISSUING THE PRELIMINARY INJUNCTION. The Association argued to the trial court that it was entitled to a preliminary injunction because it would likely succeed on the merits of its claims. It also argued it would suffer interim and irreparable harm pending trial on those claims because defendants were continuing to expand the use of CSAs in the Countys jails and, consequently, were permanently transferring away from the Associations members duties that were historically performed by them. As we will discuss, the trial court did not abuse its discretion by concluding a preliminary injunction should be issued pending trial in this matter, after balancing the likelihood the Association would prevail on its claims and the relative harm the Association and defendants would suffer as a result of the issuance or nonissuance of the preliminary injunction. A. Likelihood of Prevailing on the Merits The gravamen of the Associations complaint against defendants is that they breached the MOU and the MMBA by failing to meet and confer with the

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Association before implementing the use of CSAs in the Countys jails. The prayer in the complaint states the Association sought injunctive relief that prevents defendants from changing the status quo prior to [their] complying with the meet and confer, bargaining and impasse procedures required by the MOU and the MMBA. The Association also sought issuance of a peremptory writ of mandate commanding defendants to comply with those procedures. We cannot evaluate on this record the extent to which defendants breached the MOU because those documents are not included in our record. It appears, however, that the Associations contention defendants breached the MOU is congruent with its contention they violated the MMBA. As discussed in detail post, the California Supreme Court has consistently interpreted the MMBA to require a local public employer to engage in the meet-and-confer process under similar circumstances. 1. The MMBA and the obligation to meet and confer The MMBA applies to local government employees in California. [Citation.] The MMBA has two stated purposes: (1) to promote full communication between public employers and employees, and (2) to improve personnel management and employer-employee relations. ( 3500.) To effect these goals the act gives local government employees the right to organize collectively and to be represented by employee organizations ( 3502), and obligates employers to bargain with employee representatives about matters that fall within the scope of representation ( 3504.5, 3505). (Claremont, supra, 39 Cal.4th at p. 630, fn. omitted.) Under the MMBA, a public employer and a recognized employee organization have a mutual obligation personally to meet and confer promptly upon request by either party . . . and to endeavor to reach agreement on matters within the scope of representation prior to the adoption by the public agency of its final budget for the ensuing year. (International Assn. of Fire Fighters, supra, 51 Cal.4th at p. 271.) 15

The obligation to bargain in good faith requires that the parties must genuinely seek to reach agreement. (Ibid.) The MMBA does not require that the parties actually reach an agreement. (International Assn. of Fire Fighters, supra, at p. 271.) [A] public employer has the ultimate power to reject employee proposals on any particular issue. (Ibid.; see Claremont, supra, 39 Cal.4th at p. 630 [Even if the parties meet and confer, they are not required to reach an agreement because the employer has the ultimate power to refuse to agree on any particular issue].) Section 3504 defines the term scope of representation to include all matters relating to employment conditions and employer-employee relations, including, but not limited to, wages, hours, and other terms and conditions of employment, except, however, that the scope of representation shall not include consideration of the merits, necessity, or organization of any service or activity provided by law or executive order. The California Supreme Court has stated: The definition of scope of representation and its exceptions are arguably vague and overlapping. [Citations.] [W]ages, hours and working conditions, which, broadly read could encompass practically any conceivable bargaining proposal; and merits, necessity or organization of any service which, expansively interpreted, could swallow the whole provision for collective negotiation and relegate determination of all labor issues to the citys discretion. [Citation.] (Claremont, supra, 39 Cal.4th at p. 631.) 2. Building Material, supra, 41 Cal.3d 651, and its progeny hold that a local public employer must meet and confer regarding a decision to transfer duties out of a bargaining unit to save labor costs. In Building Material, supra, 41 Cal.3d at page 659, the California Supreme Court held that [f]or an action by an employer to fall within the scope of representation, and thus be subject to the mandatory bargaining requirements of the MMBA, it must have a significant effect on the wages, hours, and other terms and conditions of

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employment of the bargaining-unit employees. [Citations.] It is clear that the permanent transfer of work away from a bargaining unit often has a significant effect on the wages, hours, and working conditions of bargaining-unit employees. The Supreme Court observed that federal courts interpreting the National Labor Relations Act (29 U.S.C. 151 et seq.) have held the duty to bargain is triggered when an employer has transferred bargaining-unit work to an independent contractor or to established or newly hired employees outside the bargaining unit. (Building Material, supra, 41 Cal.3d at pp. 658-659.) The Supreme Court further observed that California cases have also recognized that the transfer of bargaining-unit work to nonbargaining-unit employees is a proper subject for negotiation. [Citations.] (Id. at p. 661.) The court cited Dublin Professional Fire Fighters, Local 1885 v. Valley Community Services Dist. (1975) 45 Cal.App.3d 116, 119, in which a public employer unilaterally adopted a new policy requiring the use of temporary employees for overtime work, effectively depriving the regular employees of their customary priority in seeking such work. (Building Material, supra, at p. 661.) The Supreme Court noted that the appellate court in Dublin Professional Fire Fighters, Local 1885 v. Valley Community Services Dist., supra, 45 Cal.App.3d at page 119, held that section 3505 required the employer to meet and confer with employee representatives before the new policy could be implemented because the workload and compensation of the regular employees were affected. (Building Material, supra, at p. 661.) The Supreme Court in Building Material, supra, 41 Cal.3d at page 659, stated that although the obligation to bargain is required only if the work transfer adversely affects the bargaining unit in question, it is evident a bargaining unit is adversely affected when a work transfer results in layoffs or the failure to rehire bargaining-unit workers who would otherwise have been rehired. The court explained adverse effects have also been found when bargaining-unit employees have lost the opportunity to perform overtime or other types of highly paid work [citations] or even 17

when the laid-off employees have been rehired at similar jobs but the bargaining unit itself was reduced in size. (Id. at pp. 659-660.) The court further noted, [t]he cases have established that the bargaining unit can be adversely affected without any immediate adverse effect on any particular employee within that unit. (Id. at p. 662.) Even if an action has a significant adverse effect on wages, hours, or working conditions of the bargaining-unit employees, the Supreme Court in Building Material, supra, 41 Cal.3d at page 660, stated that an employer may not be required to meet and confer for an action that falls within the merits, necessity, or organization language of section 3504. The court explained, [i]f an action is taken pursuant to a fundamental managerial or policy decision, it is within the scope of representation only if the employers need for unencumbered decisionmaking in managing its operations is outweighed by the benefit to employer-employee relations of bargaining about the action in question. [Citations.] (Building Material, supra, at p. 660.) In Building Material, supra, 41 Cal.3d at pages 662-663, the defendants argued that even if their actions had an adverse effect on the bargaining unit, the decision to transfer work outside that unit fell within the fundamental managerial or policy exception of the MMBA. The Supreme Court agreed that [f]ederal and California decisions both recognize the right of employers to make unconstrained decisions when fundamental management or policy choices are involved. (Building Material, supra, at p. 663.) But when such a decision significantly affects employees wages, hours, or working conditions, the court stated, a balancing test applies: the employers need for unfettered authority in making decisions that strongly affect a firms profitability is weighed against the benefits to employer-employee relations of bargaining about such decisions. (Ibid.) As directly applicable to the instant case, the Supreme Court held: Decisions to close a plant or to reduce the size of an entire workforce, however, are of a different order from a plan to transfer work duties between various employees. The 18

former directly affect the amount of work that can be accomplished or the nature and extent of the services that can be provided, and are therefore fundamental management decisions. The decision to transfer bargaining-unit work to nonunit employees in this case had no effect on the services provided by the hospital, but directly affected the wages, hours, and working conditions of the hospital employees. Thus, the work transfer was a suitable subject for collective bargaining. (Building Material, supra, 41 Cal.3d at pp. 663-664, italics added.) The defendants in Building Material argued that the decision to eliminate two bargaining-unit positions and transfer the duties of those positions to three newly created positions outside the bargaining unit should be exempt from meet-and-confer obligations because it involved the economical and efficient operation of local government. (Building Material, supra, 41 Cal.3d at p. 664.)4 The Supreme Court rejected the defendants argument. (Id. at p. 664.) Distinguishing cases involving employers decisions related to the betterment of police-community relations and the avoidance of unnecessary deadly force which directly affect the quality and nature of public services, the Supreme Court stated: By contrast, defendants decision to reorganize certain work duties was hardly fundamental. It had little, if any, effect on public services. Rather, it primarily impacted the wages, hours, and working conditions of the employees in question and thus was a proper subject for mandatory collective bargaining. Indeed, defendants claim to the contrary is in conflict with the statutory framework of the MMBA: any issue involving wages, for example, would affect the cost of government services, but such matters are specifically included in the scope of representation as defined in section 3504. (Ibid.)

One of the two eliminated positions was vacant. (Building Material, supra, 41 Cal.3d at p. 655.) The person who held the other position was transferred to a full-time position he did not want. (Id. at p. 656.) 19

In Claremont, supra, 39 Cal.4th at page 628, the Supreme Court held: [T]here is a distinction between an employers fundamental material or policy decision and the implementation of that decision. To determine whether an employers action implementing a fundamental decision is subject to the meet-and-confer requirement ( 3505), we employ the test found in our decision in Building Material. The Claremont court summarized Building Material, stating, in that case, the city was required to meet and confer [citation] with the Union because the citys transfer of duties to a nonbargaining unit had a significant and adverse effect on the bargaining units wages, hours, and working conditions, and its action was not exempted as a fundamental policy decision because it concerned the effective operation of local government. (Claremont, supra, at p. 636.) The Claremont court also acknowledged, [c]ourts have interpreted wages, hours, and other terms and conditions of employment, which phrase is not statutorily defined, to include the transfer of bargaining unit work to nonunit employees. (Id. at p. 631.) Most recently, the Supreme Court in International Assn. of Fire Fighters, supra, 51 Cal.4th at page 277, relied on Building Material and Claremont to hold: Under the MMBA, a local public entity that is faced with a decline in revenues or other financial adversity may unilaterally decide to lay off some of its employees to reduce its labor costs. In this situation, a public employer must, however, give its employees an opportunity to bargain over the implementation of the decision, including the number of employees to be laid off, and the timing of the layoffs, as well as the effects of the layoffs on the workload and safety of the remaining employees. 3. The Association produced evidence that showed a likelihood defendants violated the MMBA by failing to meet and confer as to the implementation of the CSA classification. It is undisputed some duties historically performed by deputy sheriffs in the Countys jails were transferred to individuals employed as CSAs, beginning in January 20

2010. Instead of each jail module and barracks containing one deputy sheriff II position and two deputy sheriff I positions, modules and barracks were assigned one deputy sheriff I, one deputy sheriff II, and one CSA. Defendants evidence showed that the displaced deputy sheriff I position would thereafter remain vacant and any deputy sheriff holding such a position would be reassigned. Although defendants produced evidence showing deputy sheriffs had the same shift options they had before CSAs were hired beginning in January 2010 and no deputy sheriff had lost his or her job as a result of the utilization of CSAs, defendants admitted certain position choices are no longer available to deputies as they have been eliminated. True, the record does not contain evidence the Association has already suffered a diminution in the size of its bargaining unit. Nevertheless, the record does show defendants plan to utilize lower paid CSAs in the place of some deputy sheriffs to reduce labor costs and to replace retiring and promoted deputies with CSAs and not new deputies. Under these circumstances, a diminution in the size of the Associations bargaining unit is likely. Defendants do not contend they engaged in meet-and-confer procedures as to the decision to use CSAs in the jails or the impacts of that decision. They contend they were not required to do so. In light of the foregoing uniform and apposite Supreme Court authority and the evidence in the record, the trial court did not abuse its discretion by concluding the Association demonstrated a likelihood of prevailing on its claims. B. Interim Harm As discussed ante, [t]o obtain a preliminary injunction, a plaintiff ordinarily is required to present evidence of the irreparable injury or interim harm that it will suffer if an injunction is not issued pending an adjudication of the merits. (White v. Davis, supra, 30 Cal.4th at p. 554.) Here, the Association produced evidence that its 21

members will be harmed pending trial on the merits of its claims because of defendants intention to continue to expand the number of CSAs at the Countys jails. A class of applicants for the CSA position was being trained at the academy at the time the preliminary injunction was issued. Consequently, absent the issuance of a preliminary injunction, it was certain more CSAs would be hired by the Department to work in the jails where they would permanently take over the office duties that were once exclusively performed by deputy sheriffs. The Associations members suffered harm by the narrowing of position choices available to them as a result of the CSAs employment. The record strongly suggests fewer deputy sheriffs would be hired as a result of the utilization of CSAs. (Otherwise the use of CSAs would not constitute a significant cost savings touted by defendants.) Thus, the Association itself would also suffer harm by the ongoing diminution of its bargaining unit pending trial on the merits of its claims, absent the issuance of a preliminary injunction. On the other hand, defendants asserted they would suffer the greater harm by the issuance of a preliminary injunction because staffing needs would be difficult to meet and the loss of CSA personnel will likely necessitate a large increase in overtime costs in order to meet the staffing needs. But the preliminary injunction order, issued in October 2010, precluded defendants from placing any more CSAs into former deputy sheriff positions as of September 24, 2010. The preliminary injunction did not require defendants to oust any CSAs already employed and working in the jails as of that date. Defendants evidence showed that as of September 24, 2010, defendants planned to hire the 24 people who were then being trained in the CSA academy and expected to fill CSA positions at the Countys jail by mid-December. But defendants did not produce evidence showing the extent to which they would suffer harm before mid-December. As the record suggests trial in this case was near at the time of the trial

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courts ruling, the trial court did not err by determining that, on balance, the Association would have suffered the greater harm by nonissuance of the preliminary injunction. In the opening brief, defendants raise the factual issue of whether [the Association] waived any right to meet and confer by failing to assert its bargaining rights after receiving notice of the proposed change in terms of employment. But the evidence showed that Nichols repeatedly requested defendants meet and confer on the implementation of the CSA classification, and such requests were denied. In any event, a waiver of the statutory right to meet and confer must be clear and unmistakable to be effective. (Building Material, supra, 41 Cal.3d at p. 668.) The Association did not make a clear and unmistakable waiver of its right to meet and confer. Defendants also argue the comments the trial court made during the hearing on whether to issue a preliminary injunction undermine its order because the courts comments show the trial court was focused on the wrong issues. For example, defendants argue that at the hearing, the trial court appeared to be inappropriately focused on obtaining defendants commitment to engage in meet-and-confer procedures. The trial courts order issuing the preliminary injunction does not contain the courts reasons for doing so. As a panel of this court stated in Whyte v. Schlage Lock Co., supra, 101 Cal.App.4th at page 1451, [b]ecause we review the correctness of the order, and not the courts reasons, we will not consider the courts oral comments or use them to undermine the order ultimately entered.

III. THE TRIAL COURT DID NOT ERR BY ORDERING A $10,000 UNDERTAKING. Code of Civil Procedure section 529, subdivision (a) provides in relevant part: On granting an injunction, the court or judge must require an undertaking on the part of the applicant to the effect that the applicant will pay to the party enjoined any damages, not exceeding an amount to be specified, the party may sustain by reason of the 23

injunction, if the court finally decides that the applicant was not entitled to the injunction. The appellate court in ABBA Rubber Co. v. Seaquist (1991) 235 Cal.App.3d 1, 14, stated: That estimation is an exercise of the trial courts sound discretion, and will not be disturbed on appeal unless it clearly appears that the trial court abused its discretion by arriving at an estimate that is arbitrary or capricious, or is beyond the bounds of reasons. The court further stated: In reviewing the trial courts estimation, the first step is to identify the types of damages which the law allows a restrained party to recover in the event that the issuance of the injunction is determined to have been unjustified. The sole limit imposed by the statute is that the harm must have been proximately caused by the wrongfully issued injunction. [Citation]. Case law adds only the limitation that the damages be reasonably foreseeable. [Citations.] (Ibid.) Defendants contend the undertaking was grossly inadequate and thus constituted an abuse of discretion. Nighswongers declaration, which was filed in support of defendants motion to dissolve the preliminary injunction on the ground it did not include an undertaking, establishes that defendants would not begin to suffer losses as a result of the preliminary injunction until the completion of the training of the most recent class of CSAs in December 2010. However, at the time the trial court issued the preliminary injunction in October 2010, trial was near. Thus, defendants assertion that it would suffer $650,000 in damages as a result of the issuance of the preliminary injunction is speculative. The record does not suggest the trial court calculated the amount of the undertaking based on any improper criteria or misunderstanding of the law. We find no abuse of discretion.

DISPOSITION The order issuing the preliminary injunction is affirmed. This courts orders staying the enforcement of the preliminary injunction and further trial court

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proceedings are lifted upon the finality of this opinion. Defendants petition for writ of supersedeas is denied as moot. Plaintiff shall recover costs on appeal.

FYBEL, J. WE CONCUR:

OLEARY, ACTING P. J.

IKOLA, J.

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