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F I S C A L I M P A C T R E P O R T

SPONSOR Lopez

DATE TYPED 2/23/2005 HB

SHORT TITLE

Public Employee Collective Bargaining

SB 1058

ANALYST Moser

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

NFI

NFI

SOURCES OF INFORMATION

LFC Files

Responses Received From

State Personnel Office (SPO)

SUMMARY

Synopsis of Bill

Senate Bill 1058 amends the Public Employee Bargaining Act to allow public employers and

employee representatives to negotiate collective bargaining agreements with provisions that may

be in conflict with state law provided that the parties understand that the agreement will not be-

come effective unless the applicable law is amended by the legislature.

The bill additionally provides that if a conflict arises between a rule promulgated by the person-

nel board and the terms of a collective bargaining agreement the terms of the collective bargain-

ing agreement shall prevail.

The bill also amends the Personnel Act creating an option for employees in the filing of appeals

over disciplinary actions. The bill would allow employees covered by a bargaining agreement the

opportunity to either appeal directly to the board as currently allowed or to file a grievance

through the applicable bargaining agreement.

Significant Issues

•

Section 1, Section 10-7E-17(B) SCOPE OF BARGAINING: adds additional language to

existing language to specifically allow the public employer and union representation to

Senate Bill 1058 -- Page 2

enter into an agreement that is in violation of law with the understanding with both par-

ties that the agreement will only become effective if the applicable law is amended in the

future by the legislature. The proposed amendment to 10-7E-17(B) seems contradictory.

In the first sentence, it permits the State and an exclusive bargaining agent to enter into

an agreement which is in conflict with another statute, so long as they "understand" it will

become effective only if the Legislature amends the law the agreement conflicts with.

The second sentence seems to say that the parties cannot enter into an agreement which

conflicts with existing legislation, no matter what their understanding. It is also unclear as

to what "understanding" means. Does it mean that the agreement has to recite that its va-

lidity and effectiveness is conditioned on Legislative action. If one of the parties does not

agree to negotiate language that would be in conflict with state law, could they be

deemed to not be negotiating in good faith. Or, if language is negotiated based upon the

chance that a statute can be changed, are the parties obligated to lobby for such change.

And if they do not do so, is that considered to be bad faith negotiations.

•

The purpose of the Personnel Act [10-9-1 NMSA 1978] is to establish for New Mexico a

system of personnel administration based solely on qualification and ability, which will

provide greater economy and efficiency in the management of state affairs. The state per-

sonnel board is charged in part with:

o

promulgating regulations to effectuate the Personnel Act [10-9-1 NMSA 1978];

o

hearing appeals and making recommendations to the employers;

o

making investigations, studies and audits necessary to the proper administration

of the Personnel Act [10-9-1 NMSA 1978]; and

o

representing the public interest in the improvement of personnel administration in

the system.

The Board is clearly charged with the promulgation of rules. This proposed change to law

creates an opportunity for the parties to effectively negotiate their own personnel rules.

Currently the state has two bargaining representatives identified and is not restricted from

recognizing others. The State Personnel Office feels that this bill would set the stage to

allow the collective bargaining agreement to over-rule the Personnel Act, the State Per-

sonnel Board rules, and the role of the State Personnel Board. The State administers one

uniform merit based compensation system, rather than multiple systems that target spe-

cific employee groups. This bill is in direct conflict with the purpose of the Personnel

Act as stated in 10-9-2 NMSA 1978 (Purpose of act; enactment under constitution).

•

A 1965 Opinion of the State Attorney General (Number 65-78A) specifically stated

that – “The Personnel Act provides for a merit system, but not a seniority system”.

•

Passage of this bill would allow the Collective Bargaining Agreement to supercede

the philosophy and intent of the personnel system and provide disparate treatment of

groups of employees. This would allow the union to impose collective bargaining

supported initiatives on those employees who choose not to be members of a union.

•

This bill would cause widespread confusion due to contradictions in the law and the op-

tion of allowing a union represented employee the ability to choose one of multiple re-

courses, while non-represented employees will only use the existing State Personnel

Board recourse. This would result in differing outcomes and confusion in interpreting

previous decisions and foster future administration/compliance problems.

Senate Bill 1058 -- Page 3

•

The first provision in this bill would overrule the holding of the Supreme Court in AFSCME

Local 2238 v. Stratton, 108 NM 163 (1989) and AFSCME Local 2839 v. Udall, 111NM 432

(1991) that State Personnel Board rules trump provisions in Collective Bargaining Agree-

ments. The second provision would have the same effect. Additionally, it would overrule the

current provision making the State Personnel Board the final authority over disciplinary ac-

tions and where the grievance procedure is elected; substitute the judgment of an arbitrator.

The remedies available under the current State Personnel Board rules and those available in

arbitration are similar, except that contrary to State Personnel Board rule, arbitrators often

will not deduct unemployment comp from back pay. See 1.7.12.22(B)

•

As stated in the Personnel Act [10-9-10(B) Board Duties], The Board Shall: (B) hear

appeals and make recommendations to employers;

Annotation:

Board acts in quasi-judicial capacity in hearing appeals. – In hearing

administrative appeals by employees from agency action, as distinguished

from its function in adopting rules and creating policy, the state personnel

board acts in a quasi-judicial capacity rather than a policy making func-

tion.. Montoya v. Department of Finance and Administration, 98 N.M.

408, 649 P.2d 476 (Ct. App. 1982).

•

It is clear that the State Personnel Board is responsible for hearing administrative appeals

by employees from agency action. This duty is already being performed by the board and

by not passing this bill, represented and non-represented employees will have their ap-

peals heard by a board that has quasi-judicial capacity and decisions will be uniformly

made under one single personnel system.

Annotation:

Collective Bargaining – In New Mexico, there is an implied authority to

bargain collectively in the public sector as an incident to the express grant

of authority under the Personnel Act. Local 2238 of AFSCME v. Stratton,

108 N.M. 163, 769 P.2d 76 (1989).

•

Collective bargaining contracts with governmental employees cannot in any way

conflict with, contradict, expand or enlarge the rules of labor-management rela-

tions adopted by the state personnel board or any other governmental entity acting

in this regard. The same applies to any merit system in place or toe be adopted in

the future. Local 2238 of AFSCME v. Stratton, 108 N.M. 163, 769 P.2d 76

(1989).

•

It is also clear that any Collective Bargaining Agreement with the State of New Mexico

cannot conflict, contradict, expand or enlarge the rules of labor management relations

adopted by …(state government). Passage of this bill would be in direct conflict with the

Personnel Act, the State Personnel Board rules, and the role of the State Personnel Board.

•

10-7E-17 (D) SCOPE OF BARGAINING: adds additional language to specify that this is

related to only a “Public” employer, solely for the purpose of uniformity.

Senate Bill 1058 -- Page 4

•

Allowing disciplinary actions (suspension, demotions and dismissals) to be taken through

a grievance procedure will open the process to third party arbitration. Arbitrators will po-

tentially be able to bind the state of New Mexico in resolving cases.

FISCAL IMPLICATIONS

The potential exists for significant fiscal implication to the state. With respect to discipline alone

the potential for increased cost due to arbitration is substantial. In the area of negotiating contract

provisions outside of the state personnel system poses the potential for substantial increases.

ADMINISTRATIVE IMPLICATIONS

The potential of creating different systems for the personnel issue of managing employees cre-

ates significant problems with respect to contract administration and personnel management. The

potential for a bifurcated system becomes difficult in the management of the system.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL.

•

Employees will have the same opportunity that they currently do in appealing disciplinary

issues through the State Personnel Board.

•

The State and the Union will not be placed in a situation where they mutually agree to an is-

sue that is currently in violation of state law, with the “understanding” that it will be alright if

the Legislature amends the law in the future.

•

There will not be “undue” pressure on the Legislature to pass law based on an agreement be-

tween the State and the Union.

•

The Personnel Act of 1964 will prevail as the guiding law/framework in administering a

sound, equitable, merit-based human resource system in the classified service of state gov-

ernment.

•

The Unions will suffer no harm if this bill is not passed and will continue to have a signifi-

cant role in bargaining on behalf of the units represented.

GM/yr