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Final Non-Precedential Decision Adopted: August 24, 1995
By: K. William Curtis, DPA Chief Counsel
This matter was heard before Patricia Pavone, Hearing Officer, Department of Personnel Administration (DPA) on July 5, 1995, at Sacramento, California; July 17, 1995, July 18, 1995, and July 19, 1995 at Los Angeles, California; and July 24, 1995 at Sacramento, California.
Appellants were represented by Dennis Moss, Attorney, Professional Engineers in California Government (PECG), except two appellants who represented themselves. Respondent, Department of Transportation (CalTrans), was represented by Linda Nelson, Labor Relations Counsel, DPA.
Evidence having been received and duly considered, the ALJ makes the following findings of fact and Proposed Decision.
The above layoffs and demotions in lieu of layoff effective June 30, 1995, and appellant's appeals comply with the procedural requirements of Government Code section 19997. Patricia Pavone, Chief of the Benefits and Training Division, DPA, was appointed to serve as the Hearing Officer for this appeal by David J. Tirapelle, the Director of DPA.
The hearing was conducted on July 5, 1995, July 17, 1995, July 18, 1995, July 19, 1995, and July 24, 1995. The matter was considered submitted on July 27, 1995, when final closing briefs and all exhibits were received from the parties.
In December of 1994, CalTrans management was advised that the Governor's proposed budget for Fiscal Year 1995-96, to be published on January 10, 1995, would reflect an authorized staffing level that was 1,226 personnel staffing years (PYs) less than CalTrans budgeted staffing level for Fiscal Year 1994-95. This reduction was due to several factors, including: (1) an unanticipated, unallocated cut of $77 million because of the redirection of funding to pay the rail bond debt service; (2) a reduction in the level of reimbursable work done by CalTrans for the counties; (3) failure of the voters to pass several transportation funding initiatives; (4) failure of the Federal government to provide anticipated matching funds for planned transportation projects; and (5) a general realignment of workload in the department related to a major reorganization effort designed to streamline and improve operating efficiency. The proposed budget assumed that CalTrans would enter Fiscal Year 1995-96 at the new authorized staffing level.
CalTrans had anticipated and planned for some level of staffing reduction in Fiscal Year 1994-95 and believed that an excess 510 PYs could be eliminated through attrition. The unanticipated $77 million cut, however, created an additional surplus of 716 personnel that could not be absorbed within the six month period from January to July 1995. Based on this projection reduction in force, CalTrans began planning for a layoff.
CalTrans formally notified PECG about the Impeding downsizing and probable layoff on January 18, 1995. On the same date the Director of CalTrans, and members of his staff, met with DPA's Director and his staff, to discuss the general scope of the downsizing effort and the procedure to be followed in the event of a layoff.
On February 3, 1995, in a memorandum signed by CalTrans' Director, CalTrans officially requested that DPA approve its staffing plan and area of layoff. The staffing plan anticipated over 700 layoffs, including approximately 500 engineers. The area of layoff was proposed to be on a district by district basis, or geographical rather than statewide, with the exception of the Structures Division. In this letter, CalTrans presented the following rationale for the geographic area of layoff: (1) there would be "approximate equity" between areas as related to seniority compared to a statewide are of layoff, (2) layoffs by district would allow more precise reductions in relation to the workload with less disruption and lower cost than a statewide layoff, and (3) demotions could occur within each district, permitting "almost immediate" resumption of management and supervisorial activities. However, the memorandum indicated that he Structures Division should be treated as a statewide organization for the purpose of layoff.
In response to the February 3, 1995 memorandum, DPA staff requested additional information regarding recruitment and hiring practices of CalTrans. On February 7, 1995, CalTrans sent a memorandum to DPA's Classification and Compensation Division Section Chief with the information requested. In that memorandum, respondent describes CalTrans' recruitment and examining as historically statewide, including a national talent search for top university and college graduates. However, the memorandum states that hiring was done on "a geographic basis with candidates selecting their areas of preference in California." After a candidate was hired into a district/location, he or she "remained there in almost all cases." An exception to this practice is noted for hires into the Division of Structures. Due to the nature of structures work, candidates were told that they would be expected to move often as part of the job and would not work in one specific area.
Another memorandum was sent from CalTrans' Director to DPA's Director on March 16, 1993. This memorandum provided additional information and justification to support the request for geographic area of layoff. One of the key elements raised in this letter was CalTrans assertion that the "[difference in seniority of those laid off in a geographic layoff is minimal." In support of this statement, CalTrans presented an analysis that was done of its employee data base which illustrated the impact of the proposed layoff on Transportation Engineers as follows:
Based on this analysis, DPA approved CalTrans request for a geographic area of layoff on March 17, 1995, with the condition that employees in the Structures Division, a statewide organization, would have to be included within the districts in which they resided for the purpose of seniority computation and layoff. The State Personnel Board was consulted regarding this action and it made no objection to the proposed layoff plan.
From January 10, 1995, when the Governor's budget was published, until the layoff notices were sent out to employees on May 30, 1995 the workload situation was in a constant state of flux. In order to accomplish both the downsizing required by the reduction in the 1995-96 budget and the organizational restructuring that had been planned for 1994-95, CalTrans made numerous organizational changes and workload modifications. Some program changes were implemented and then rescinded within a matter of weeks (e.g., seismic retrofit design teams). Even the Personnel Function underwent a major reorganization during this period. This ever-changing scenario had a dramatic impact on the deployment of staff, the scope of the downsizing effort, and the quality of communication that was available to employees regarding their futures in the organization. This constant churning of staff created an environment that can only be described as chaotic.
On May 30, 1995, approximately 300 CalTrans Transportation Engineers received layoff or demotion in lieu of layoff notices. According to CalTrans testimony, on June 30, 1995, 114 Transportation Engineers were laid off and approximately 30 others were demoted in lieu of layoff.
The appeal challenges the validity of the layoff, alleges that the layoff was not in good faith and was otherwise improper, and that Article 13(g) of the Unit 9, Memorandum of Understanding (MOU), was violated with regard to the layoff procedures. Specifically, the appellants represented by PECG raise the following issues: (1) Did CalTrans, DPA and other departments comply with the layoff procedure? (2) Was the layoff carried out in good faith, or was it improper? (3) Did the designation of separate geographic areas throughout the State for layoff purposes violate statutory or regulator requirements that limit geographic layoffs? (4) Did the actual lack of funds exist upon which management justified the layoffs? (5) Did CalTrans refusal to perform available reimbursable engineering work on State highways for local agencies constitute bad faith? (6) Has CalTrans diverted available funds that could have been used to eliminate or decrease layoffs to private contactors for work historically performed by CalTrans employees? (7) Have departments in State service filled vacancies to the maximum extent possible with CalTrans employees who faced layoff? (8) Does it violate DPA procedure to refuse to allow employees to demote into Transportation Engineering Technician positions? (9) Did CalTrans' failure to meet and confer with PECG on "Golden Handshake," the area of layoff, and demotional ladders establish that the layoffs were not carried out in good faith?
One appellant raises the issue of the appropriateness of the deep class concept used for the Transportation Engineer because it allowed registered engineers to be included with nonregistered engineers, without distinction, in the layoff. One appellant raises the issue of the appropriateness of non-citizen employees being retained by CalTrans when citizens with less seniority were laid off.
PECG also had several appellants testify regarding individual issues related to seniority calculations.
Several of the appellant's issues revolve around the assertion that there wad no real lack of funding, or that existing funds were inappropriately redirected or declined. Specifically, the appellants claim that: (1) redirection of highway funds to pay the debt on the rail bonds was improper; (2) funds that could have been used to avoid the layoff were diverted to private contractors for work historically performed by CalTrans employees; and (3) CalTrans refused to perform available engineering work on State highways that was reimbursed by local agencies.
The decision to redirect highway funds to pay the debt on the rail bonds over a two-year period (Fiscal Years 1994-95 and 1995-96) was made by the Governor and the Legislature. The debt was outstanding because the voters had failed to approve passage of a bond initiative which would have provided the necessary funding. The Governor and the Legislature were acting in accordance with their Constitutional authority when the decision was made to redirect these funds.
The issue of the appropriateness of redirection or elimination of funds in the budget has been challenged before. In the appeal of the CAL/OSHA layoffs in 1988, PECG raised this issue before Philip Callis, Administrative Law Judge of the State Personnel Board, acting as a DPA Hearing Officer. In his decision, Judge Callis ruled:
"Article III, Section 3.5, of the Constitution specifically prohibits an administrative agency, whether constitutional or legislative, from passing on the validity of such an exercise of legislative authority."
Judge Callis went on to conclude that DPA has no authority to rule on the merits of the Governor's actions with regard to the budget. Furthermore, based on testimony presented by both appellants' counsel and respondents' counsel, this issue is currently being litigated. The courts will determine the ultimate appropriateness and constitutionality of the Governor's actions. Therefore, for the purpose of these appeals, the Department presumes that he Governor acted lawfully in redirecting highway funds to pay the rail bond debt service.
The redirection of funds left CalTrans with an unallocated cut of $77 million that had an adverse impact on its ability to deliver services as planned. The Chief of the Budget Division at CalTrans, testified that no one at CalTrans even knew about the redirection of funds until midway through the 1994-95 fiscal year.
Appellants also allege that additional funds could have been made available to offset the negative impact of the unallocated budget cut, if CalTrans had ceased to contract out seismic retrofit work, and if CalTrans had continued to perform reimbursable highway design and maintenance work, under contract to local transportation agencies, at the level this work was available.
The privatization (contracting out) of engineering design work has long been a subject of controversy and litigation between PECG and CalTrans. Much of the testimony and exhibits presented during the layoff hearings dealt with CalTrans' contracting policies and practices related to engineering design work, especially in the area of seismic retrofit of bridges and other highway structures. However, this review must be limited to the impact of such contracting policies on the decision of layoff engineers and the scope of the layoff.
Streets and Highways Code, section 180.8(a), states:
"The Director of CalTrans may contract out the design services for projects undertaken pursuant to this article in order to enhance or assist seismic retrofit project delivery. Without the ability to contract out the design and engineering portion of the seismic retrofit projects, the Legislature finds that the department will not be able to adequately, competently, or satisfactorily perform and deliver seismic retrofit projects. The director may contract for the services of engineers, architects, surveyors, planners, environmental specialists and materials testing specialists, in addition to those already employed by the department, in order to provide professional and technical project development services to the department whenever, in the judgement of the director those services are necessary in order to timely deliver seismic retrofit projects."
Furthermore, the Legislature specifically expressed its endorsement of contracting out design services in Streets and Highways Code, section 180.75:
"The Legislature hereby finds and declares that there is a compelling public interest in authorizing the department to contract out the design services for seismic retrofit projects. The Legislature further finds and declares that contracting out design services associated with seismic retrofit projects is a new state function to assist in project delivery and does not duplicate the existing functions of the department."
As stated previously, the appellants may wish to challenge the constitutionality of this statutory provision, but this administrative hearing is not the appropriate place to pursue such a challenge. For the purposes of these appeals, the Department presumes that CalTrans acted legally in contracting out, or planning to contract out, seismic retrofit design work.
The Deputy Director of CalTrans testified that CalTrans had used all of the seismic retrofit design expertise available in CalTrans and still had surplus or specialized work needed contract expertise. CalTrans Chief of the Structures Division, testified that CalTrans used its experienced design staff to do some of the most complex seismic retrofit work (e.g., San Francisco Bay Bridge Project) and it trained other engineers to do some of the less complex seismic retrofit projects. However, midway through the training effort, CalTrans' management decided that more of the design work had to be contracted out than originally planned in order to meet the statutory deadline of January 1, 1997. It was determined that the newly trained CalTrans engineers could most efficiently and effectively be used in the are of seismic retrofit inspections because Streets and Highways Code, section 180.8(b), holds CalTrans "ultimately responsible for all inspections." Thus, with a combination of state engineers and contract engineers doing the design work, while state engineers did all of the inspection work, the program could proceed within the prescribed time frame.
With regard to other contracts for structural design work, all of the contracts presented into evidence were already in place at the time of the budget cut. These contracts do not reflect an effort on the part of the respondent to use contracting out as a means to expand or exacerbate the layoff. The fact that CalTrans did not identify these contacts for termination when it terminated other contracts to mitigate against the layoff does not demonstrate bad faith. Depending on the stage of development and estimated completion of the contract deliverables, it may have been infeasible or even illegal for CalTrans to terminate the contracts prior to June 30, 1995.
In the matter of CalTrans' refusal to retain reimbursable work under contract to local agencies, the appellants have presented no evidence to show that CalTrans is required to do such work. By all testimony and documentation admitted into evidence, the work was permissible. The testimonials introduced into evidence from local governments praising CalTrans' ability to do this work, or indicating dismay with the decision to reduce this work in the future, are not compelling evidence that CalTrans did something wrong. Management's decision to diminish reliance on reimbursable work was clearly within its discretion, is consistent with its planned reorganization, and is not indicative of bad faith on its part.
All appellants challenge the decision to implement the layoff on a district by district or geographic basis. They allege that this decision was illegal and improper because: (1) CalTrans and DPA failed to bargain the area of layoff in accordance with Section 13 of the Unit 9, Memorandum of Understanding; (2) that DPA's statutory authority only allows it to designate a single geographic area of layoff, not multiple geographic areas; and (3) that DPA violated its own rules and requirements in permitting CalTrans to proceed with a geographic area of layoff.
The Public Employees' Relations Board (PERB), in Decision Number 999-S (June 22, 1993), determined that the designation of the area(s) in which employees will be laid off is negotiable. However, the PERB further ruled that the inclusion of provisions related to the area of layoff within an Memorandum of Understanding indicates that the parties negotiated over the area of layoff during bargaining. The terms and conditions of the Memorandum of Understanding need not be subject to further negotiations.
Section 13(b) of the Agreement between the State of California and PECG covering Bargaining Unit 9, Professional Engineers (September 1, 1992 through June 30, 1995), states:
"Employees shall be laid off in order of seniority pursuant to Government Code Sections 19997.2 through 19997.7 and applicable State Personnel Board and Department of Personnel Administration rules."
By virtue of this language, PECG accepted the terms and conditions of the statutes identified and the administrative regulations adopted pursuant to that statutory authority. Therefore, CalTrans and DPA had no obligation to negotiate the terms of the area of layoff.
It is interesting to note that the issue of the State's obligation to negotiate the area of layoff was also raised by PECG in its representation of appellants from the Cal/OSHA layoff before Administrative Law Judge Philip Callis. In his decision, Judge Callis similarly ruled that:
"Here, the employee organization and the state negotiated an agreement which provided that 'layoffs, if required, shall be conducted in accordance with existing laws and regulations. (Section 13 of the Unit 9 Contract.)' In entering into this agreement, the employee organization, for good or ill, agreed that the existing procedures set for in those statutes and regulations would be the governing method for layoff . . ."
Since the employee organization is bound "for good or ill" to the existing procedures set forth in statute and rule, it is to those statutory and regulatory provisions that we must turn for direction on the proper determination of the area of layoff.
Government Code section 19997.2 (a) states that with DPA's approval "only the employees of a designated geographical, organizational or functional subdivision of a state agency need be considered for layoff . . ." This gives DPA the authority and responsibility to approve an area of layoff than is less than statewide or departmentwide in scope. A department needs no approval from DPA to proceed with a statewide layoff.
The appellant's have argued that this authority limits DPA to approving only one geographical or organizational subdivision, not multiple subdivisions, because the language in the statute is singular not plural. While this is an interesting grammatical argument, the appellants did not present any California Attorneys, Administrative Law Judges and Hearing Officers law that would support their legal theory that singular language bars plural implementation in this or any other instance.
The only administrative regulation that further defines the scope of this authority is DPA rule 599.845 which states, in relevant part:
"In making layoffs, the appointing power shall first communicate with the Director of the Department of Personnel Administration regarding the designation of the subdivision, if any, to be considered and submit a list of employees in the unit of layoff who are in the class or classes of layoff."
There are no other administrative rules governing the area of layoff. In fact, DPA rule 599.845 is the only rule that deals with the general procedures to be followed in implementing a layoff. The remaining nine rules in the article on layoff and demotion deal with specific procedures related to seniority credit. With such a broad statutory charter and virtually no administrative restrictions, it could be argued that the area of layoff can be determined on a California Attorneys, Administrative Law Judges and Hearing Officers by California Attorneys, Administrative Law Judges and Hearing Officers basis without any legal constraint. No one made this argument. Instead, testimony and written documentation showed that the parameter for all discussions was the guidelines governing determination of the area of layoff as outlined in The California State Staffing Reduction Policy and Procedure Manual, October 1994, (herein "Staffing Reduction Manual").
The Staffing Reduction Manual, is described in its opening paragraph on page 1 as a "guide" for State departments to use in conducting staffing reductions. However, lacking any other regulatory direction, and because the guide is explicit in its detail, it is a critical reference in determining if DPA made a proper decision in allowing CalTrans to proceed with a geographic area of layoff.
The Staffing Reduction Manual States on page 10:
"The majority of layoffs are conducted on a statewide basis within an appointing power; however, there are times when subdivisional layoffs within an appointing power are more appropriate. The most common subdivisional layoff is by geographic location, though on rare occasions other subdivisional layoffs, such as organizational or functional may be appropriate. Specific criteria must be applied to determine if a statewide or subdivisional layoff is appropriate. In arriving at a final decision, an appointing power must weigh the disruptiveness and cost of a statewide layoff against the employees' opportunity to exercise their seniority rights in a layoff or lesser scope." (Emphasis added.)
The Staffing Reduction Manual directs departments to analyze the hiring, promotion and transfer patterns of the agency as well as the past practice in prior layoffs. The Staffing Reduction Manual also notes that restricting a layoff to a geographic subdivision can result in an employee in that subdivision being laid off while a less senior employee in another area is not laid off.
In light of the statutory requirement that DPA approve a subdivisional layoff, early in the layoff process, the burden of proof was on CalTrans to demonstrate that it had a compelling reason to proceed with something other than a statewide layoff. The appellants argue that CalTrans' proof was lacking and biased towards management's desire to target certain districts over others for layoff.
Originally, CalTrans requested a geographic area of layoff for all twelve of its field districts. While the appellant's argument that a geographic layoff must be limited to only one district is unreasonably narrow, it is extremely difficult to accept respondent's argument that a geographic layoff involving every district has a scope less than statewide.
In February 1995, CalTrans represented to DPA that its hiring practices were geographically based because candidates for employment were able to select the area in the State that they wished to work and because there was very little movement from district to district in the form of transfers and promotions. However, in CalTrans' request for geographic layoffs, it specifically asked for exclusion of District 13 (Headquarters and Structures) in recognition of the statewide nature of selection of Structures personnel. When DPA required that the Structures personnel be included in the geographic area in which they lived, the distinction in hiring and transfer patterns was lost. At hearing, both the appellants and the respondent submitted documentation and testimony that undermined the representation of the districts being separate and distinct geographical entities. CalTrans personnel acknowledged repeatedly that both assignments and staff moved around from district to district to accommodate fluctuations in workload. This was especially true for work needed to support structures design and construction. While these may not have been permanent reassignments involving relocations, they nevertheless show that the organization was managed with a statewide mission in mind and there was a clear expectation that staff would do work for any district that needed support.
CalTrans presented no documentation to support its claim that the cost and disruption of a statewide layoff would be burdensome. In fact, the appellant's successfully challenged this assumption by eliciting testimony from CalTrans Personnel staff that there were minimal relocations in the prior statewide, CalTrans' layoff because "transfers occurred on paper only." Furthermore, CalTrans admitted that currently workload and staff are being moved from district to district on a short term basis to handle shifting workload without relocating staff.
CalTrans' final and strongest argument in support of a geographic area of layoff was that the "difference in seniority of those laid off in a geographic layoff is minimal." While this may have been marginally true when the original analysis was presented to DPA on March 16, 1995, the analysis was a "snapshot in time" based on the layoff of 510 Transportation Engineers. The final layoff involved a little more than 22 percent of the original target group. If everything had stayed static, if the work of the engineers in District 8 had truly been different from the work done in District 6 or District 12, then the geographic plan might have worked. But, as people and workload began to move around the State to accommodate the changing structure and direction of the organization, the dynamics of the reduction in force began to change. By June 30, 1995, there was significant disparity between the least senior person retained and the most senior person laid off.
While the evidence does not support the appellants' claim that the decision to pursue a geographic area of layoff was done in bad faith, it does support their contention that CalTrans had an ill conceived position regarding the relative merit and harm of a district by district approach. It might have been faster and less disruptive to management, but the Staffing Reduction Manual states that these management issues must be weighed against the employees' seniority rights. The evidence indicates that the measurements used to weigh these items against each other were seriously flawed.
Appellants argue that the classification of Transportation Engineering Technician should have been included in the demotional pattern for Transportation Engineers. They base this claim on the fact that Transportation Engineers are capable of performing the duties of Transportation Engineering Technicians.
Government Code section 19997.8, gives DPA the sole discretion to make determinations regarding the inclusion of a specific classification in the demotional pattern. Since this statue was also included, by reference, in Section 13 of the Unit 9, Memorandum of Understanding, there is no obligation for DPA to negotiate further on this matter.
The statute states that in lieu of being laid off an employee may elect demotion to: "9a) any class with substantially the same or a lower maximum salary in which he or she had served under permanent or probationary status;" or "(b) a class in the same line of work as the class of layoff, but of lesser responsibility, if such a class is designated by the [D]epartment [of Personnel Administration.]"
There are no DPA rules regarding designation of classes in a demotional pattern, so again the Staffing Reduction Manual is the only source of policy direction. On pages 23-25 of the manual it describes the factors to be considered in demoting an employee in lieu of layoff including criteria for establishing both the primary and secondary demotional patterns.
A primary demotional pattern is one which includes classes at lower salary levels in the same series as the class of layoff, and classes at lower salary levels in the same series as the class of layoff, and classes in which specific employees formerly served in probationary or permanent appointments. No appellant has alleged that demotion to the Engineering Technician class was not permitted if he or she had prior status in that class, so there is no issue relative to the primary demotional pattern.
At issue is the designation of classes in the secondary demotional pattern. According to the manual, a secondary demotional pattern may include (emphasis added) any classes in which "the similarity in duties and minimum qualifications to the layoff class indicates that the employees in the layoff class will be able to perform the duties of the secondary demotional class." While the duties of Engineering Technician may be similar to the duties of the Transportation Engineer, the class concept is different enough for the two classes to be placed in entirely different bargaining units. Furthermore, the minimum qualifications are different in terms of the licensure and registration requirements.
There is clearly nothing in the statutes, rules or guidelines that requires CalTrans or DPA to select any specific class in the secondary demotional pattern. The fact that an employee may be able to do a job successfully does not mean that he or she has a right to it. Such an argument logically implies that attorneys have a right to demote to paralegal positions and doctors have a right to demote to nursing positions. There is clearly no policy or past practice that sustains this argument.
Section 13(g) of the Unit 9, Memorandum of Understanding, states:
"Departments filling vacancies shall offer positions to employees facing layoff, demotions in lieu of layoff or mandatory geographic transfers who meet the minimum qualifications for the vacancy being filled, provided that the vacancy is equivalent in salary and responsibility and in the same geographic area and bargaining unit."
Appellants presented a strong case that this section of the MOU was violated during the CalTrans layoffs, because: (1) key personnel at DPA were unaware of Section 13 (g) until after the reduction in force had begun; (2) DPA took inadequate steps to ensure that departments understood the significance of this section; (3) DPA had no viable way to effectively monitor and control appointments made in conflict with this agreement; and (4) some appointments were made in conflict with the provisions of this section.
DPA never developed any policy or procedures related to implementation of this provision until after the CalTrans reduction in force was in progress. There are no references to this provision in the Staffing Reduction Manual or any other written policy statement within DPA. The only documentation that was produced during the hearing was a one paragraph message sent on the State's interagency electronic mail system (PROFS). This message was not sent out until April 3, 1995, more than two months after CalTrans had discussed preliminary layoff procedures with DPA.
Even after the Classification and Compensation Division attempted to enforce the provisions of Section 13 (g), using the routine SROA procedures, no one seemed to have a clear understanding of what they were supposed to do. In fact, the designation of the implementation of Section 13 (g) as "Super SRAO" seemed to further confuse efforts at enforcement. The bottom line is that while some vacant Unit 9 positions were offered to CalTrans employees in other departments, other vacant positions were not offered to CalTrans engineers, and hires were made from other agencies or from outside State service.
CalTrans and DPA asserted that: (1) the union was responsible for enforcement of Section 13 (g); (2) the term "shall offer positions" only means that job openings had to be posted at CalTrans; (3) departments had good reasons for not hiring CalTrans engineers; and (4) some CalTrans engineers turned down jobs that were offered to them. These defenses are simply not consistent with the facts or the past practice in other areas of labor relations contract management.
While the union clearly has significant responsibility for contract enforcement, DPA has always taken a leadership position with regard to overall administration of the provisions of the MOU. Policies and procedures are routinely developed by DPA to support consistent application of contract language. In some cases, contract implementation involves months of staff work, system design and coordination with the departments. To argue here that DPA was blameless in not developing a contingency plan for implementation of Section 13 (g) should a reduction in force occur is specious.
The term "shall offer positions" is clear on its face. It does not say "shall advertise positions" or "shall consider surplus employees." To the extent that there was no mechanism in place to provide hiring departments with a list of surplus CalTrans engineers and specific instructions to limit selection to those surplus employees, departments did the best that they could to make the positions available to CalTrans engineers and offer jobs to those that they judged to be were qualified. In addition, it appears that CalTrans made every effort to track down available jobs and monitor the efficacy of the efforts to place its surplus engineers. Unfortunately, these efforts were not sufficient.
The respondents argue that many of the positions that the appellants allege were filled improperly may not have been true "vacancies." It appears, from the data obtained from the State Controller's Office, that many of the transactions involved promotions in place, mandatory reinstatements and internal transfers. However, it was only in response to the evidence presented at the hearing that DPA closely examined appointments that were made into Unit 9 classes during the period of January through June 1995. This level of scrutiny should have been part of an ongoing procedure during the reduction in force. The SROA process was inadequate to ensure enforcement of Section 13 (g) because it was not designed to require the level of compliance needed, and it was not in place soon enough to be fully effective.
A subsidiary issue raised by the appellants is the failure of CalTrans to negotiate the decision to not give a "Golden Handshake" retirement incentive to the most senior staff in order to mitigate against the need for a layoff. This decision was made by CalTrans prior to February 1, 1995, based on the cost of providing this incentive.
The discussion of the decision to pursue or not pursue a Golden Handshake is not within the scope of the Government Code sections incorporated in the Unit 9, Memorandum of Understanding. Therefore, the decision to including or exclude this type of a retirement incentive, as part of an overall reduction in force strategy, probably should have been included in the scope of the negotiations between CalTrans and PECG related to the impact of the layoff. However, Professional Engineers in California Government submitted no evidence at the hearing or in its brief that demonstrated any material benefit in force. Therefore, this issue is deemed waived and will not be discussed further in this decision.
One appellant challenges the entire class concept uses for professional engineers in CalTrans and argues that registered engineers should not have been included with non-registered engineers in the layoff. This is a fundamental classification issue that was raised and argued during the development of the current class concept. There is no legal authority to modify a classification during a layoff in order to make distinctions between incumbents in the same classification, regardless of the specialized individual qualifications that those incumbents may have.
One appellant challenges the fact that CalTrans engineers who are not United States citizens were retained because of their seniority scores over less senior citizens. While this is an interesting public policy issue, there is no current statutory or regulatory requirement that citizenship be a factor in determining order of layoff.
Appellants were advised at the hearing, that seniority issues should have been addressed through the special seniority appeal process that was established for this layoff. They were not properly presented within the scope of this hearing.
The appellants have failed to prove that the layoff was unnecessary or that CalTrans acted improperly in identifying the types of work to be reduced, redirected or eliminated in downsizing the organization to meet fiscal demands. Therefore, the layoff, itself, is sustained.
Also, the appellants were unsuccessful in demonstrating that there was any compelling reason for DPA or CalTrans to include the class of Engineering Technician in the secondary demotional pattern for Transportation Engineer. Therefore, the demotional pattern, as established, is appropriate.
However, the appellant have presented sufficient evidence of procedural improprieties in two areas. First, there was inadequate justification for CalTrans to request a geographic area of layoff instead of conducting a statewide layoff, and DPA failed to follow its own guidelines in granting CalTrans' request. Second, the provisions of Section 13 (g) of the Unit 9, MOU, were not adequately implemented with regard to the placement of surplus engineers.
The remedy to correct the improper designation of area of layoff only impacts those appellants who would have had enough seniority to stay employed in the event that the layoff had been conducted on a statewide basis. Appellants suggest that 19 months is the cutoff based on their analysis of the layoff data. However, this assertion does not accurately reflect the seniority cutoff based on the appellant's status as of June 30, 1995, or the actual composition of the engineering workforce at that time. Based on an analysis of CalTrans' Statewide Distribution Chart and appellants' seniority scores, it appears that anyone with less than 26 months of seniority in Districts 7 and 8, as of June 30, 1995, would have lost their employment in a statewide layoff. Therefore, appellants with 26 months or more, as of June 30, 1995, shall have their layoffs or demotions rescinded. Back pay is also awarded to these appellants.
The remedy to correct the Section 13 (g) issues involves a more thorough analysis of the appointments that were made during the reduction in force than was available during the hearing. Therefore, this matter must be remanded to the Classification and Compensation Division of DPA for appropriate action. It is recommended that DPA include a representative from PECG and CalTrans in evaluating the validity of appointments made during the reduction in force period which began on March 1, 1995, the date that CalTrans engineers were granted "surplus" status by DPA, and continued through June 1995. Promotions in place, mandatory reinstatements, internal transfers and other position actions that did not result from a true vacancy are not included within the scope of this order.
Any appointment made to vacant Unit 9 positions by State agencies that should have been offered to a CalTrans engineer, and was not, may be unlawful as defined in Government Code section 19257.5. A final determination on voiding any appointments pursuant to this section is reserved to the State Personnel Board.
Additional issues raised by the individual appellants, have no statutory or regulator basis in fact. Therefore, these appeals are summarily denied, except that the individual appellants are not barred from the remedies available to the rest of the appellants who were represented by PECG.
The seniority appeals are referred to the Classification and Compensation Division for review.
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that the layoffs and demotions in lieu of layoff taken by respondent against the appellants, effective June 30, 1995, are hereby sustained as modified.
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1. District 13 included the Statewide Structures Division. DPA required CalTrans to include the Transportation Engineers within that Division be included in the geographic area in which they resided for the purposes of layoff.