PERB holds that employer may not use impasse to abrogate contractual rights

The Public Employment Relations Board (“PERB”) recently ruled in Tulare County (2015) PERB Decision No. 2414-M that where an employer had contractually agreed that it would “unfreeze” employees’ flex promotions and step increases upon expiration of a Memorandum of Understanding (“MOU”), the employer did not have the right to impose contrary terms.

The County had asked the Union for help in saving millions of dollars over the life of the MOU, and the Union agreed in exchange for the County promising that the promotions and step increases would unfreeze when the MOU expired.  To that end, the parties agreed upon addenda to their MOU that provided that flex promotions and step increases would be unfrozen upon the MOU’s expiration date, August 1, 2011.  However, when the time came, the County refused to implement the promotions and step increases. 

The County argued that it had bargained to impasse, so it had the right to impose its last, best and final offer, in which it was reinstituting the freeze.  However, PERB noted that the “impasse rule” is subject to any outstanding contractual obligations the employer may have incurred.  PERB held that “parties may expressly agree to limit an employer’s right to impose terms at impasse, or they may impliedly achieve the same result by agreeing to terms that do not mature until after the agreement has expired.  Accordingly, where, as here, a contractual right survives expiration of the agreement, the employer is not free to impose terms that abrogate or impair that right.”  In other words, if the employer agrees to something that survives the contract, it will be held to that agreement. 

This case upholds a Union’s right to enforce contractual terms that survive expiration of an MOU, despite an employer’s attempt to use impasse to renege upon them.

By Anne Yen | March 5, 2015

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