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 In 1934, the People of the State of California voted to amend the California Constitution to eliminate a spoils system by establishing a merit-based civil service system of hiring and terminating employees responsible for conducting the public's business. More than 40 years later, the legislature passed the Dills Act, establishing a collective bargaining process for state employees that allowed employee representatives to negotiate terms and conditions of employment within the parameters of the existing merit system.
 In 2005, the California Supreme Court issued a pair of significant decisions addressing the interplay between the constitutional civil service requirements and state employee collective bargaining. These two cases involved constitutional challenges to collectively bargained and legislatively ratified changes to the hiring and disciplinary processes in the state civil service.
Supreme Court Preserves Merit-Based Hiring:
Article VII of the California Constitution, Section 1(b) addresses the role of "merit" in the selection process: "In the civil service permanent appointment and promotion shall be made under a general system based on merit ascertained by competitive examination."
In State Personnel Board v. California State Employees Association (2005) 36 Cal.4th 758, the Court examined whether the constitution permitted the state and an employee union to negotiate, and the legislature to ratify, a selection system under which appointment and promotion would ultimately be determined by seniority. The provisions of the negotiated collective bargaining agreement required interested candidates to bid on job openings within specified classifications and required state hiring managers to use seniority as the sole deciding factor in appointments or promotions to those vacancies.
The Court noted that, under the Civil Service Act, individuals seeking appointment or promotion in the state civil service must first take an examination to determine their eligibility for appointment or promotion to positions within a civil service classification. The names of candidates who pass the examination are placed, in rank order based on scores, on an eligible list. To make a "list appointment," a hiring manager selects from among the successful candidates in the first three ranks and conducts hiring interviews to compare the candidates' qualifications to perform the specific duties of the vacant position. Hiring managers typically review personnel files, check references and consider a number of job-related factors to help them determine whether the candidate possesses the necessary knowledge, skills, abilities, and experience to perform successfully in the position. The manager has discretion to select the candidate who would be the "best fit" for the job.
The Court concluded that the negotiated provisions which, in effect, forced the manager to hire the eligible candidate with the most seniority, impermissibly removed the discretion of the manager to select the candidate best suited applicant for the vacant position and undermined the constitutional mandate that appointments and promotions be based on merit. The Court opined that while seniority may be an appropriate factor in evaluating merit to the extent it measures a candidate's relevant, job-related experience, statewide seniority does not necessarily reflect fitness for a particular position. The Court invalidated the seniority based, post and bid, selection process.
Supreme Court Preserves SPB's Role of Reviewing Discipline:
Article VII, Section 3(a) provides: "The board shall... review disciplinary actions."
When a state employer disciplines a civil service employee for poor performance or misconduct, the employee is entitled to appeal the disciplinary action to the independent SPB. The SPB has discretion to sustain, revoke or modify the discipline imposed the state employer. Decisions of the SPB are subject to judicial review, but can be overturned by the courts only on a showing that the decision is not supported by substantial evidence or that it is wrong on the law.
In State Personnel Board v. Department of Personnel Administration (2005) 37 Cal.4th 512, the Court examined whether the constitution allowed the state negotiator and several unions to negotiate agreements whereby Boards of Adjustment and private arbitrators would review disciplinary actions imposed by the state employer. Under the agreement, employees could challenge discipline either by filing an appeal with the SPB or by bypassing SPB review in favor of the negotiated grievance and arbitration procedures.
The Court held that the negotiated procedures violated the constitutional mandate that the SPB "shall... review disciplinary actions." Citing its previously issued decision in the selection by seniority case, the Court noted that SPB's constitutional authority to hear and decide whether discipline is taken for "legal cause," is a necessary counterpart to its power to appoint and promote public employees based solely on merit. Moreover, the Court held, because employee discipline is an integral part of the civil service system, the SPB's constitutional authority to review discipline is exclusive and cannot be bypassed in favor of private arbitration. Finally, the Court rejected the argument that employees may "waive" SPB review in favor of adjudication by another entity. Because the merit-based civil service system exists to protect not only individual employees but also the public, the public has a strong interest in ensuring that partisanship plays no role in selection, advancement, or discipline within the state civil service. Allowing other entities not bound by SPB's merit-based standards to review, modify or reverse disciplinary actions could compromise that public interest, especially given that the decisions were not subject to review by the courts for errors of law or fact.
Together, the recent California Supreme Court decisions provide significant guidance on the parameters of collective bargaining within California's constitutionally merit-based civil service system. While recognizing that the State may negotiate with unions over the terms and conditions of employment of state civil service employees, the Court held that neither the Department of Personnel Administration, as the Governor's collective bargaining representative, nor the Legislature may agree to collective bargaining terms that conflict with the constitutional merit principle or compromise the SPB's constitutional role in protecting the merit principle.
Dorothy Bacskai Egel is a Senior Staff Counsel for the California State Personnel Board. She received her J.D. in 1986 from the University of California, Boalt Hall School of Law, and a Masters of Public Policy in 1985 from the University of California, Berkeley. She was lead counsel for the State Personnel Board in State Personnel Board v. Department of Personnel Administration and co-counsel in State Personnel Board v. California State Employees Association.
Elise S. Rose has been Chief Counsel for the California State Personnel Board since 1991. She previously served as a Board Legal Advisor for a member of the Public Employment Relations Board and as a Supervising Counsel for the California Correctional Peace Officer's Association. She oversaw the litigation in both of the cases discussed herein.
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