Pending Interest Arbitration Case

In 2000, the Legislature passed a statute, known as SB 402, which required local governments to engage in "interest arbitration" after bargaining with local public safety unions to impasse over wages, hours and other terms and conditions of employment. ("Interest arbitration," as opposed to "grievance arbitration," is a process where an arbitrator actually determines the substance of a contract between an employer and an employee organization.) Local governments felt that this statute unconstitutionally impaired their power to set employee salaries. Eventually, after a good bit of litigation, the California Supreme Court declared SB 402 unconstitutional under two provisions of the California Constitution: Article XI, Section 1 (which gives county boards of supervisors power to set county employee salaries) and Article XI, Section 7 (which forbids the delegation of "municipal functions"). County of Riverside v. Superior Court, 30 Cal. 4th 278 (2003). (I represented the County in the case.)

In response to County of Riverside, the Legislature passed a new statute ("SB 440"). SB 440 retains interest arbitration, but it provides that the arbitrator's decision can be overturned by a unanimous vote of the local governing body. Does this modification change the result in County of Roverside? The issue is now before the Court of Appeal, First Appellate District, Division Five, in a writ petition brought by Sonoma County, and the case will be argued next week.