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RPVCCA_CC_SR_2012_01_31_E_Agency_Shop_Agreement_With_Employees_AssociationCITY OF MEMORANDUM RANCHO PALOS VERDES TO: FROM: DATE: SUBJECT: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL ERIC MAUSSER,HUMAN RESOURCE"~~ JANUARY 31,2012 AGENCY SHOP AGREEMENT BETWEEN THE CITY OF RANCHO PALOS VERDES AND THE RANCHO PALOS VERDES EMPLOYEES ASSOCIATION REVIEWED:CAROLYN LEHR,CITY MANAGER ~ RECOMMENDATION Adopt Resolution No.2012-_,approving an agency shop agreement and authorizing the City's labor relations representative to implement the agreement. DISCUSSION California public sector labor law,as applicable to cities,expressly provides for the establishment of an agency shop in a bargaining unit represented by a union recognized as the exclusive representative.The exclusive representative has an obligation to represent all employees in the unit.An agency shop requires unit employees to either join the union or to pay a service fee for representation.An agency shop may be implemented pursuant to agreement between the public agency and union or without agreement by petitioning the California Division of Conciliation of the Department of Industrial Relations for an election. The City Council recognized the Rancho Palos Verdes Employees Association ("Association")on October 18,2011,as the majority representative in a unit of non- management,full-time employees.The Association requested implementation of an agency shop agreement in November 2011.Subsequently,the Association submitted proof that well over half of the employees in the bargaining unit support establishment of an agency shop.The City Attorney's Office prepared a draft agreement which has been accepted by the Association with one minor change.The change adds the words "upon request"in Paragraph 9 of the agreement.This is the only change to the draft agreement distributed to the City Council on December 20,2011. ''The Association will keep an adequate itemized record of its financial transactions and shall make available annually.upon request,to the City and to the employees who are members of the Association,within 60 days after the end of its fiscal year,a detailed written financial report E-1 Approval and Implementation of Agency Shop Agreement January 17,2012 Page 2 of 2 thereof in the form of a balance sheet and the opening statement,certified as to accuracy by its president and treasurer or corresponding principal officer or a certified public accountant,as provided in Government Code §3502.5(f)." In this case,over 90%of the employees in the unit signed the petition requesting an agency shop.Once it is clear that employees want an agency shop,the advantage of implementation by agreement is that the parties can provide for the administrative procedures to be used,reducing the potential for disagreements.It also avoids the need for employees to take time away from work for election activities. Employees have the right to implement an agency shop.An employer's interest is generaljy limited to procedural issues.The proposed agency shop agreement sets reasonable procedures,as typically adopted by California cities,for implementation of the agency shop.Having met the requirements under law,Staff recommends the City Council approve the agreement and authorize implementation. Attachments Resolution No.2012-_, Agency Shop Agreement City Attorney Memo Re:Hudson Procedure E-2 RESOLUTION NO.2012- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES, APPROVING AN AGENCY SHOP AGREEMENT BETWEEN THE CITY OF RANCHO PALOS VERDES EMPLOYEES ASSOCIATION AND THE CITY OF RANCHO PALOS VERDES AND PROVIDING FOR ITS IMPLEMENTATION. WHEREAS,the City of Rancho Palos Verdes recognized and certified the Rancho Palos Verdes Employees Association (Association)on October 18,2011 as the recognized employee organization for the designated non-management employees of the City for purposes of employer- employee relations under the Myers-Milias-Brown Act (MMBA),government Code Section 3500- 3511 and regulations of the Public Employment Relations Board (PERB).8 Cal.Code Reg. Section 31001-3297;and WHEREAS,the MMBA expressly provides for adoption of an agency shop agreement in a bargaining unit with a recognized exclusive representative;and WHEREAS,the Association has requested implementation of an agency shop agreement and provided proof that well over half the eligible employees in the unit desire an agency shop;and WHEREAS,representatives of the City and the Association have mutually agreed to tentative terms,pending City Council approval,for the agency shop agreement; NOW,THEREFORE,THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES DOES HEREBY FIND,DETERMINE AND RESOLVE AS FoLLOWS: Section 1:The Agency Shop Agreement between the City of Rancho Palos Verdes and the Rancho Palos Verdes Employees Association,a copy of which is attached to and incorporated by reference into this resolution,is hereby approved. Section 2:The Human Resources Manager,as the City's principal management representative,shall implement and administer the terms of the Agency Shop Agreement on behalf of the City. Section 3:This resolution shall take effect immediately. PASSED,APPROVED,and ADOPTED this 31st day of January 2012. Attest: City Clerk STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES )ss CITY OF RANCHO PALOS VERDES ) Mayor I,Carla Morreale,City Clerk of the City of Rancho Palos Verdes,hereby certify that the above Resolution No.2012-_was duly and regularly passed and adopted by the said City Council at a regular meeting thereof held on January 31,2012. City Clerk E-3 Agency Shop Agreement City of Rancho Palos Verdes and Ranchos Palos Verdes Employees Association 1.The City of Rancho Palos Verdes (City)and the Rancho Palos Verdes Employees Association (RPVEA or Association)enter into this Agreement to implement an agency shop agreement,pursuant to California Government Code §3502.5 and other applicable law.The City is a "public agency"and the Association is recognized as the exclusive or majority representative in the appropriate unit established by the City.Employees in the unit have demonstrated their support for an agency shop by presenting a written petition for an agency shop signed by a majority of the employees in unit. 2."Agency Shop,"as used in this Agreement,means "an arrangement that requires an employee,'as a condition of employment,either to join the recognized employee organization or to pay the organization a service fee in an amount not to exceed the standard initiation fee, periodic dues and general assessments of the organization."The "service fee"may also be referenced as an "agency fee"or "agency shop fee"under applicable law and in this Agreement. 3.This Agreement will be placed in effect for the first full month following execution by the Association and approval by the Rancho Palos Verdes City Council.Unless otherwise agreed,all dues,service fees or charitable contributions (if eligible)for the month will be deducted from the second paycheck of each month. 4.The parties recognize that employees in the unit have the right to join or not to join the Association.Pursuant to an agency shop agreement,as provided under State law and this Agreement,employees must either voluntarily join the Association or must pay a service fee. The amount of the service fee will be a uniform amount established by the Association and limited as provided by law.The amount of the service fee and any changes in the fee will be certified in writing to the City by the President of the Association. 5.Any employee who is a member of a bona fide religion,body or sect that has historically held conscientious objections to joining or financially supporting public employee organizations shall not be required to join or financially support any public employee organization as a condition of employment. a.The employee will be required,in lieu or periodic dues,initiation fees,or agency fees,to pay sums equal to the dues,initiation fees or agency fees to a nonreligious and nonlabor charitable fund exempt from taxations under Section 501(c)(3)of the Internal Revenue Code.The employee may choose the organization from a list of at least three qualifying organizations designated by written agreement between the City and Association or,if not so designated,then any qualifying charity chosen by the employee. If the employee refuses to choose a qualified charity,the City and Association will mutually designate the charity. b.In the event of a dispute between the employee and Association regarding religious exemption status,the Association will provide for an adjudication process,at Association expense,before a neutral hearing officer who is not associated with the R6876-J076\J409283vl.doc E-4 Association or its representatives.In the event of such a dispute,the charitable deduction will commence but will be held in escrow pending resolution of the dispute. 6.Covered employees will execute written authorization for either Association dues deductions,the agency fee,or,if eligible,the charitable contribution.In the absence of a written authorization,the employee will be deemed an agency fee payer and City will deduct the agency fee from the employee's paycheck. 7.Dues and service fees withheld by the City will be transmitted to the Treasurer of the Association as the person authorized to receive such funds,at the address specified in writing. The Association agrees to promptly refund to the City any amounts paid in error.Charitable contributions,if applicable,will be transmitted to the applicable charity. 8.The employee's earnings must be regularly sufficient after other legal and required deductions are made to cover the amount of the dues or fees authorized.When an employee is in non-pay status for the entire second pay period of the month,no withholding will be made to cover that month from future earnings,nor will the employee be permitted to deposit the amount with the City that would have been withheld.When an employee is in non-pay status for part of the second payroll period of the month and the salary is insufficient to cover the full withholding after other deductions,no deduction will be made.All other legal and required deductions (including group medical and insurance plans)and liI;nits on withholding will have priority over Association dues and service fees.Payment of dues or service fees during non-pay status or where earnings are insufficient are to be addressed directly between the member and Association. 9.The Association will keep an adequate itemized record of its financial transactions and shall make available annually,upon request,to the City and to the employees who are members of the Association,within 60 days after the end of its fiscal year,a detailed written financial report thereof in the form of a balance sheet and the opening statement,certified as to accuracy by its president and treasurer or corresponding principal officer or a certified public accountant, as provided in Government Code §3502.5(1). 10.The Association will establish and thereafter provide the City with a copy of its current "Hudson Procedure"for the determination and protest of its agency fees.The Hudson Procedure will,at a minimum,comply with the minimum requirements of Public Employment Relations Board regulations 32992 -32994.The Association will provide a copy of the Hudson Procedure to every service fee payer within one month of this Agreement going into effect,annually thereafter and as a condition of any change in the agency fee.The Association will provide a copy of its Hudson Procedure to each employee newly covered as an agency fee payer after the implementation of this Agreement,upon learning the identity of such fee payer. 11.Except as expressly provided in this Agreement,the procedures for voluntary dues deductions,as agreed between the City and Association,will remain in effect. 12.Following implementation,this Agreement (including the agency shop)may be rescinded by a majority of all votes cast by employees in the unit.In the event the agency shop is rescinded pursuant to a majority vote of employees,the Association agrees not to request, -2- R6876-I076\1409283vl.doc E-5 petition for,negotiate for or otherwise seek an agency shop for one calendar year from the date of the final agency fee payroll deduction following the rescission vote.Rescission will be subject to the following conditions: a.A request for such a vote must be supported by a petition,filed with the City's designated labor relations representative,containing the signatures of at least 30 percent of the employees in the unit; b.The vote is by secret ballot;and c.The vote may be taken only once per year measured from the latter of the date this Agreement becomes effective or the date of the last rescission election. 13.The Association agrees to defend,indemnify and hold harmless the City and its officers, employees-and agents against any and all claims,demands,proceedings,suits and liability arising,directly or indirectly,out of any action taken or not taken by or on behalf of the City in any way related to this Agreement or the City's compliance with the agency fee obligations.The City reserves the right to select and direct legal counsel,at Association expense,in the event of any challenge to the City's compliance with the agency fee obligation. 12.Representatives of the City and Association have reached agreement on the above terms in response to the Association's request for an agency fee agreement and written proof of majority support for such an agreement.The terms outlined above represent a joint recommendation to the City Council for its determination and approval.This Agreement will not be effective unless and until approved by the City Council. Association President Treasurer City Principal Management Representative Date:_______,2012 -3- Date:_______,2012 R6876-I076\1409283vl.doc E-6 CITY OF RANCHO PALOS VERDES OFFICE OF THE CITY ATTORNEY 30940 Hawthorne Boulevard,Rancho Palos Verdes,California 90275 Telephone 310.377.0360 Facsimile 310.377.9868 MEMORANDUM TO: CC: FROM: DATE: SUBJECT: Mayor and City Council Carol Lynch,City Attorney Carolyn Lehr,City Manager Eric Mausser,Human Resources Manager Roy A.Clarke January 24,2012 "Hudson Procedure"in Agency Shop Agreement The City Council requested an explanation of the "Hudson Procedure"referenced in paragraph 10 of the proposed Agency Shop Agreement.Please recall that in an agency shop, bargaining unit members are required to either join the union or pay a service fee for representation.The "Hudson Procedure"is the process that allows non-members to prevent their money from being used for purposes that are not germane to the union's collective bargaining and representation duties.Typically,these include expenses for political activities that are not directly related to negotiations,ratification and contract enforcement.They include other expenses that do not benefit non-members,such as member-only insurance benefits,general public relations activities,charitable contributions and international relief efforts. The name is taken from Teachers v.Hudson,475 U.S.292 (1986),the U.S.Supreme Court's case setting forth the minimum procedural requirements that public sector unions must follow to assure that nonmembers can prevent the use of their money for impermissible purposes.Under Hudson and regulations adopted by California's Public Employment Relations Board,the union provides agency fee payers with a notice that explains how the agency fee was calculated and the procedure to appeal all or part of the agency fee. If there are any additional questions,please let Carol Lynch or me know. E-7