Gerawan Farming, Inc. v. Agricultural Labor Relations Bd.

Filed 7/15/20

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

GERAWAN FARMING, INC.,

F077033

Petitioner,

(44 ALRB No. 1,

v. 2012-CE-041-VIS,

2013-CE-007-VIS

AGRICULTURAL LABOR RELATIONS & 2013-CE-010-VIS)

BOARD,

Respondent; OPINION

UNITED FARM WORKERS OF

AMERICA,

Real Party in Interest.

ORIGINAL PROCEEDINGS; petition for writ of review.

Irell & Manella, David A. Schwarz; Barsamian & Moody, Ronald H. Barsamian

and Patrick S. Moody; Michael P. Mallery, for Petitioner.

Santiago Avila-Gomez, Todd M. Ratshin and Laura F. Heyck for Respondent.

Martinez Aguilasocho & Lynch and Mario Martinez for Real Party in Interest.

-ooOoo-

This writ proceeding addresses a decision by the Agricultural Labor Relations

Board (ALRB or Board) that agricultural employer Gerawan Farming, Inc. (Gerawan)

committed unfair labor practices by (1) engaging in bad faith “surface bargaining,” and

(2) insisting on the exclusion of workers employed by farm labor contractors (FLC

workers) from the core benefits of any collective bargaining agreement (CBA) reached

between Gerawan and the United Farm Workers of America (UFW or Union). The

Board’s findings were based on Gerawan’s bargaining conduct both before and after the

Board ordered the parties to “mandatory mediation and conciliation” (MMC) under the

MMC statutory scheme, Labor Code section 1164 et seq.1 To remedy these violations,

the Board awarded make-whole relief for the period January 18, 2013, to June 30, 2013.

Gerawan contends (1) the MMC statute does not authorize the Board to impose

unfair labor practice liability for its bargaining conduct within the MMC process, (2) the

Board lacks the power to impose make-whole relief when a party is engaged in MMC,

and (3) the Board’s unfair labor practice findings are erroneous, arbitrary, and

unsupported by substantial evidence. Gerawan also contends the Board erred when it

denied its prehearing motion to disqualify one of the Board members who participated in

this proceeding. Finding no merit to Gerawan’s arguments, we affirm the Board’s

decision.

FACTUAL AND PROCEDURAL BACKGROUND

Gerawan, a family owned farming business, is the largest tree fruit grower in

California. In addition to growing and harvesting tree fruit such as peaches, nectarines,

plums and apricots, Gerawan grows and harvests table and wine grapes. Gerawan’s

extensive farming operations are conducted on thousands of acres of farmland in two

1 The MMC statute is part of the Alatorre-Zenovich-Dunlap-Berman Agricultural

Labor Relations Act of 1975 (Lab. Code, §§ 1140‒1166.3) (the ALRA or the Act).

Undesignated statutory references are to the Labor Code.

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main locations: the west side ranches in the Kerman area, and the east side ranches in the

Reedley/Sanger area.

Gerawan classifies its direct-hire employees as either “cultural” or “crew” labor.

Cultural labor, which generally works year round, includes jobs such as water truck and

tractor drivers, mechanics, irrigators, and nursery workers, while crew labor performs

seasonal work such as harvesting and pruning. When Gerawan needs more workers, it

often obtains them through farm labor contractors, whose employees perform the same

work as crew labor. In 2013, Gerawan employed about 5,000 workers annually in both

seasonal crew and year-round cultural jobs, and hired between 800 and 1,500 agricultural

employees through farm labor contractors.

The UFW is a labor organization within the meaning of section 1140.4,

subdivision (f). In 1992, following a contested runoff election, the Board certified the

UFW as the exclusive bargaining representative of Gerawan’s agricultural employees. It

appears the parties held one in-person negotiating session in February 1995, but they

never entered into a CBA.

The Union Reappears and Negotiations Begin

No further bargaining occurred for the next 17 years until UFW National Vice

President Armando Elenes sent Gerawan a letter on October 12, 2012, asking to

recommence negotiations. Elenes asked Gerawan to provide 10 categories of information

for Gerawan’s agricultural employees, which included: (1) employee lists for all direct-

hire and FLC workers for the 2011 and 2012 seasons, indicating, among other things,

their hire dates, wage rates, and physical and mailing addresses; (2) names, addresses and

license numbers of any farm labor contractors Gerawan used; (3) a detailed summary of

any benefits, vacation pay, bonuses, holidays, piece rates and wages provided to

employees for 2010 through 2012; and (4) copies of any current employee manuals or

policies. Elenes proposed to start negotiations at the beginning of December. After

receiving no response, Elenes sent a second letter on October 30, 2012, which repeated

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the Union’s request to begin negotiations and for the information. Elenes threatened to

file an unfair labor practice (ULP) charge with the ALRB if he failed to receive a

response within five days.

Gerawan responded on November 2, 2012, by a letter signed by Gerawan’s

owners Ray, Mike and Dan Gerawan. They stated they were putting the requested

information together, but after not hearing anything from the Union for over 20 years,

they needed time to review the renewed demand to bargain and determine Gerawan’s

bargaining obligation, if any. They questioned how to explain to their employees, most

of whom did not participate in the election, that they would “now have a contract and

dues thrust upon them by a union they never voted for and who abandoned them 20 years

ago.” Nevertheless, Gerawan stated it would send information in the “next week or so”

and have an attorney contact Elenes to schedule negotiations. Gerawan produced some

of the requested information in December 2012.

Pre-MMC Negotiations

Gerawan and the UFW met for their first negotiation session on January 17, 2013.

Eight more sessions were held over the next two months.2 Throughout the negotiations,

the lead negotiators were attorney Ronald Barsamian for Gerawan and Elenes for the

UFW. The UFW provided its initial contract proposal at the first session, while Gerawan

presented its initial contract proposal at the second session on January 18, 2013. Before

March 29, 2013, Gerawan and the UFW each made four other contract proposals. The

UFW did not make any economic proposals during this time.

In March 2013, Gerawan announced hourly pay raises through a series of flyers,

which indicated the decisions to grant pay raises were from “Ray, Mike, and Dan

Gerawan,” and claimed Gerawan consistently paid higher wages than other companies in

the industry. The flyers did not credit the UFW for these pay raises; rather, they

2 Sessions were held on January 18, 2013; February 12, 13, 27, and 28, 2013; and

March 19, 21 and 28, 2013.

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expressed the raises were solely Gerawan’s decision and noted the Union was informed

of the “proposed plan, and we assume they will not cause any unnecessary delay.” The

UFW accepted the proposed wage increases. At that point, the Union had not made a

wage proposal, as it was waiting for some outstanding items it had requested.

Negotiations During MMC

On March 29, 2013, the UFW asked the ALRB to direct the parties into MMC,

which the Board did on April 16, 2013. (Gerawan Farming, Inc. (2013) 39 ALRB

No. 5.) On April 2, 2013, while the UFW’s request was pending before the Board,

Gerawan and the UFW engaged in a negotiation session. After being ordered into MMC,

the parties selected a mediator, Matthew Goldberg, who was appointed in May 2013.

Goldberg provided available dates for the mediation and the parties agreed to meet with

him on June 6 and 11, 2013, when off-the-record MMC sessions were held.

At the mediator’s request, Gerawan and the UFW continued to negotiate outside

the mediator’s presence while the MMC process was ongoing. The parties met on June

3, 2013, before the first MMC session. Gerawan presented a revised proposal to the

UFW, while the UFW prepared a matrix which compared the parties’ positions.

Thereafter, the parties held bargaining sessions on July 1, 24 and 29, 2013, outside the

mediator’s presence. The UFW made its first economic proposal on July 21, 2013. The

parties subsequently exchanged matrixes which set out the parties’ proposals and

supporting arguments on those terms they had not reached an agreement.

On-The-Record MMC Proceedings and Resulting CBA

The mediator conducted two days of on-the-record MMC proceedings on

August 8 and 19, 2013. As the parties were unable to voluntarily agree to all terms of a

CBA, Goldberg issued a report to the Board on September 28, 2013, which fixed the

CBA’s terms.3 (Gerawan Farming, Inc. (2013) 39 ALRB No. 16, p. 1.) Gerawan

3 Gerawan has asked us to take judicial notice of the mediator’s September 28, 2013

report in ALRB Case No. 2013-MMC-003, as well as the following documents filed in

other judicial proceedings: (1) the UFW’s opposition to ex parte application for stay of

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petitioned for review of Goldberg’s report, which the Board granted as to several terms.

The Board remanded the matter to Goldberg in accordance with section 1164.3,

subdivision (c). The parties met with Goldberg and reached agreement on the remanded

terms, which Goldberg incorporated into a second report dated November 6, 2013.

(Gerawan Farming, Inc. (2013) 39 ALRB No. 17, p. 2.) No party requested review of

the second report and the Board ordered it to take effect as a final order of the Board.

Gerawan petitioned for review of the Board’s order, contending, among other

things, that the MMC statutory scheme was unconstitutional. While this court agreed the

MMC statute was unconstitutional, the California Supreme Court held “the MMC statute

neither violates equal protection nor unconstitutionally delegates legislative power.”

(Gerawan Farming, Inc. v. Agricultural Labor Relations Bd. (2017) 3 Cal.5th 1118, 1130

(Gerawan Farming I.).) The court also held “that employers may not refuse to bargain

with unions—whether during the ordinary bargaining process or during MMC—on the

basis that the union has abandoned its representative status.” (Id. at p. 1131.) The court

remanded the matter to us with instructions to conduct further proceedings consistent

with its opinion. (Id. at p. 1160.)

administrative order pending review and the declarations of Giev Kashkooli and

Armando Elenes, filed on May 24, 2013, in Gerawan Farming, Inc. v. Agricultural Labor

Relations Board, Fresno County Superior Court case No. 13CECG01408; (2) complaint

for defamation, filed on February 15, 2013, in Gerawan Farming, Inc. v. United Farm

Workers of America, Fresno County Superior Court case No. 13CECG00495; and

(3) petition for writ of review of order of Agricultural Labor Relations Board, filed on

December 16, 2013, in Gerawan Farming, Inc. v. Agricultural Labor Relations Board,

Fifth District Court of Appeal case No. F068526.

We take judicial notice of the mediator’s report, as it was before the Board and

considered by it in rendering its decision on review in this case. With respect to the court

documents, we take judicial notice of these documents as “[r]ecords of … any court of

this state.” (Evid. Code, § 452, subd. (d)(1).) We do not, however, take judicial notice of

the truth of any factual assertions appearing in the documents. (Arce v. Kaiser

Foundation Health Plan, Inc. (2010) 181 Cal.App.4th 471, 483; see Espinoza v. Calva

(2008) 169 Cal.App.4th 1393, 1396 [“We can take judicial notice of the fact the

pleadings were filed, but not of the truth of the statements contained in them.”].)

6.

The Underlying ULP Charges and Administrative Hearing

During the course of negotiations, the UFW filed a number of ULP charges

against Gerawan. As pertinent here, the Board’s general counsel issued complaints that

encompassed three of those charges the UFW filed in 2012 and 2013. The charges were

later consolidated into a third amended complaint (complaint), which became the

operative pleading. The complaint alleged, as relevant here, that Gerawan violated

section 1153, subdivision (e) by (1) engaging in bad faith surface bargaining, and

(2) “proposing and insisting” on the exclusion of FLC workers from the terms of any

CBA reached between the UFW and Gerawan. The parties stipulated the complaint was

limited to bargaining conduct up to August 31, 2013.

An administrative law judge (ALJ) held a two-day hearing on the complaint in

November 2016, at which Elenes and Barsamian testified. The parties entered into a

written joint stipulation by which the parties stipulated to certain facts, as well as the

authenticity and admissibility of 62 joint exhibits, which the ALJ received into evidence.

The joint exhibits included Gerawan’s and the UFW’s correspondence, bargaining notes,

and contract proposals, as well as several matrices summarizing their positions on various

proposals. The ALJ issued a decision and recommended order on April 14, 2017,

sustaining both allegations and ordering, among other things, make-whole relief from

January 18, 2013, to June 6, 2013, the date of the first MMC session.

Gerawan, the UFW and the Board’s general counsel all filed exceptions to the

ALJ’s decision. On January 22, 2018, the Board issued its decision and order, in which it

affirmed the ALJ’s factual findings and legal conclusions. The Board found the

imposition of make-whole relief was appropriate, but extended the make-whole relief to

June 30, 2013, the day before the effective date of the MMC contract.

The Decertification Election and Subsequent Proceedings

Meanwhile, the Board conducted a decertification election at Gerawan on

November 5, 2013, after a majority of Gerawan workers petitioned the Board to hold an

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election to decide whether the UFW would remain their certified bargaining

representative. The Board impounded the ballots, subject to postelection proceedings to

determine whether to set aside the election based on the UFW’s objections. (Gerawan

Farming, Inc. (2013) 39 ALRB No. 20, pp. 1, 47‒48.) In April 2016, the Board nullified

the decertification election as a remedy for Gerawan’s purported unfair labor practices

related to the election. (Gerawan Farming, Inc. v. Agricultural Labor Relations Bd.

(2018) 23 Cal.App.5th 1129, 1141 (Gerawan Farming II); Gerawan Farming, Inc.

(2016) 42 ALRB No. 1.)

Gerawan petitioned for review of the Board’s decision, challenging the Board’s

unfair labor practice findings and the remedy of setting aside the election. (Gerawan

Farming II, supra, 23 Cal.App.5th at p. 1141.) In Gerawan Farming II, which was filed

on May 30, 2018, we concluded the Board erred in several of its unfair labor practice

findings as well as in the legal standard applied in reaching its remedial conclusions.

Accordingly, we partially set aside 42 ALRB No. 1 and remanded the matter to the Board

to reconsider its election decision under the appropriate standard. (Gerawan Farming II,

supra, 23 Cal.App.5th at p. 1141.)

On September 27, 2018, the Board certified the results of the decertification

election, in which a majority of valid ballots were cast for “No Union,” in Gerawan

Farming, Inc. (2018) 44 ALRB No. 10, pages 11-12. Under established Board precedent,

the UFW’s decertification dates back to November 5, 2013, the date of the election.

(Gerawan Farming, Inc. (2018) 44 ALRB No. 11, p. 13.) In light of the Union’s

decertification, we concluded the remaining issues raised in Gerawan’s petition for

review of the Board’s order approving the terms of the MMC contract, which included

additional constitutional challenges to the MMC statute and the retroactive wage

increases the Board’s order imposed, were moot and we dismissed that proceeding.

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DISCUSSION

I. Standard of Review

We set forth the standard of review in Gerawan Farming II: “When reviewing

questions of fact, we uphold the Board’s findings if supported by substantial evidence on

the record considered as a whole. [Citations.] Under this standard: ‘[W]e do not

reweigh the evidence. If there is a plausible basis for the Board’s factual decisions, we

are not concerned that contrary findings may seem to us equally reasonable, or even more

so.’ [Citation.] ‘Furthermore, those findings and conclusions that are within the Board’s

realm of expertise are entitled to special deference. [Citation.] And, because the

evaluation of witnesses’ credibility is a matter particularly for the trier of fact, the

Board’s findings based on the credibility of witnesses will not be disturbed unless the

testimony is “incredible or inherently improbable.” ’ ” (Gerawan Farming II, supra, 23

Cal.App.5th at p. 1162.)

This does not mean we take a “rubber stamp approach to our review of the

Board’s factual findings.” (Gerawan Farming II, supra, 23 Cal.App.5th at p. 1162.) We

measure the test of substantiality based on the “ ‘ “entire record, rather than by simply

isolating evidence which supports the board and ignoring other relevant facts of record

which rebut or explain that evidence.” ’ ” (Ibid.) “ ‘ “Substantial evidence” is not

established by just “any evidence” [citation] and is not shown by mere suspicions of

unlawful motivation [citation]. The burden of proving unlawful conduct is on the ALRB

[citation], and such conduct will not lightly be inferred [citation]. The standard of review

is met, however, if there is relevant evidence in the record which a reasonable mind

might accept in support of the findings.’ ” (Ibid.)

Where, as here, “the Board is called upon to draw inferences from the parties’

conduct during negotiations, the standard for court review of the Board’s determinations

is deferential.” (William Dal Porto & Sons, Inc. v. Agricultural Labor Relations Bd.

(1984) 163 Cal.App.3d 541, 548 (Dal Porto).) As the Ninth Circuit Court of Appeals

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explained in Penasquitos Village, Inc. v. NLRB (9th Cir. 1977) 565 F.2d 1074:4

“Deference is accorded the [National Labor Relation] Board’s factual conclusions for a

different reason—Board members are presumed to have broad experience and expertise

in labor-management relations. [Citation.] Further, it is the Board to which Congress has

delegated administration of the Act. The Board, therefore, is viewed as particularly

capable of drawing inferences from the facts of a labor dispute. Accordingly, it has been

said that a Court of Appeals must abide by the Board’s derivative inferences, if drawn

from not discredited testimony, unless those inferences are ‘irrational,’ [citation]

‘tenuous’ or ‘unwarranted.’ ” (Id. at p. 1079.)

We review questions of law, such as whether an error of law was made or the

decision was procedurally sound, de novo. (Gerawan Farming II, supra, 23 Cal.App.5th

at p. 1163.) “Board decisions that rest on ‘erroneous legal foundations’ will be set aside.”

(Ibid.)

As for statutory construction, generally the Board’s interpretation of the Act is

given deference because the Board is the administrative agency entrusted with

enforcement of the statute; therefore, courts will follow the Board’s interpretation unless

it is clearly erroneous. (Arnaudo Brothers, L.P. v. Agricultural Labor Relations Bd.

(2018) 22 Cal.App.5th 1213, 1226 (Arnaudo Brothers).) Nevertheless, it is the court’s

fundamental responsibility in construing a statute to ascertain the Legislature’s intent so

as to effectuate the law’s purpose. Thus, the Board cannot alter or amend the Act, or

enlarge or impair its scope. (Ibid.; J.R. Norton Co. v. Agricultural Labor Relations Board

(1979) 26 Cal.3d 1, 29.)

As for our review of the Board’s remedies, “because the Board has broad

discretion to fashion remedies to effectuate the purposes of the ALRA, courts take a

4 The ALRA directs that we rely on applicable precedents of the National Labor

Relations Act. (§ 1148; Highland Ranch v. Agricultural Labor Relations Bd. (1981)

29 Cal.3d 848, 855‒856.)

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cautious approach and will interfere only where the remedy is patently unreasonable

under the statute [citation], or where the remedy seeks to achieve ends other than those

which can fairly be said to effectuate the policies of the ALRA.” (Gerawan Farming II,

supra, 23 Cal.App.5th at pp. 1163‒1164.) The Board’s discretion must be exercised

reasonably, not punitively. (Id. at p. 1164.)

II. MMC and the Duty to Bargain in Good Faith

We begin with Gerawan’s challenge to the Board’s ability to make an unfair labor

practice finding. Gerawan contends that because it was compelled into MMC, it may not

be found liable for bad faith bargaining based on positions it took during the MMC

process. An evaluation of this claim requires us first to review the ALRA and MMC

statute, and then discuss the interplay between the two as it applies here.

A. The ALRA

The Legislature enacted the ALRA in 1975 “to provide for collective-bargaining

rights for agricultural employees” (§ 1140.2) by putting into place a system of laws

generally patterned after the National Labor Relations Act (29 U.S.C. § 151; the NLRA).

(J.R. Norton Co. v. Agricultural Labor Relations Bd., supra, 26 Cal.3d at p. 8, see § 1148

[implementing the ALRA, the Board follows applicable NLRA precedents].) “The

ALRA established an elaborate framework governing the right of agricultural workers to

organize themselves into unions to engage in collective bargaining with their employers.”

(Gerawan Farming I, supra, 3 Cal.5th at p. 1129.) The ALRA also created the Board

and “granted it ‘specific powers and responsibilities of administration, particularly in

conducting and certifying elections and in investigating and preventing unfair labor

practices.’ ” (Gerawan Farming I, at p. 1130.) “[T]he ALRA identifies a number of

unfair labor practices and other unlawful acts (§§ 1153, 1154, 1154.5, 1155.4, 1155.5),

and empowers the Board to investigate, prevent, and remedy such practices (§ 1160).”

(Id. at p. 1131.)

11.

When a labor organization becomes the employees’ bargaining representative as a

result of an election, a duty to bargain is created, which requires the employer and labor

representative to “bargain collectively in good faith” in order to reach an agreement “with

respect to wages, hours, and other terms and conditions of employment,” although “such

obligation does not compel either party to agree to a proposal or require the making of a

concession.” (§ 1155.2, subd. (a).)5 The duty to bargain “has no time limit”—the duty

continues until the union is replaced or decertified through a subsequent election.

(Gerawan Farming I, supra, 3 Cal.5th at pp 1153‒1154.) It is an unfair labor practice for

an employer “[t]o refuse to bargain collectively in good faith” with a certified labor

organization. (§ 1153, subd. (e); see Dal Porto, supra, 163 Cal.App.3d at p. 548.)

B. The MMC Statute

In 2002, the Legislature determined “additional legislation was necessary to fulfill

the goals of the ALRA because it had proven ineffective at facilitating the negotiation

and completion of [CBAs].” (Gerawan Farming I, supra, 3 Cal.5th at p. 1130.) The

Legislature concluded a mediation procedure would “ ‘more fully attain the purposes of

the [ALRA], ameliorate the working conditions and economic standing of agricultural

employees, create stability in the agricultural labor force, and promote California’s

economic well-being by ensuring stability in its most vital industry.’ ” (Id. at pp. 1132‒

1133.)

“The Legislature therefore enacted the ALRA’s ‘mandatory mediation and

conciliation’ (MMC) provisions to ‘ensure a more effective collective bargaining process

5 Section 1155.2, subdivision (a) provides: “For purposes of this part, to bargain

collectively in good faith is the performance of the mutual obligation of the agricultural

employer and the representative of the agricultural employees to meet at reasonable times

and confer in good faith with respect to wages, hours, and other terms and conditions of

employment, or the negotiation of an agreement, or any questions arising thereunder, and

the execution of a written contract incorporating any agreement reached if requested by

either party, but such obligation does not compel either party to agree to a proposal or

require the making of a concession.”

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between agricultural employers and agricultural employees.’ ” (Gerawan Farming I,

supra, 3 Cal.5th at p. 1130.) “The MMC statute sets forth a process, known as

compulsory interest arbitration, ‘in which the terms and conditions of employment are

established by a final and binding decision of an arbitrator.’ [Citation.] Unlike

‘grievance arbitration,’ which focuses on ‘construing the terms of an existing agreement

and applying them to a particular set of facts,’ interest arbitration ‘focuses on what the

terms of a new agreement should be.’ [Citation.] The MMC process results in ‘quasi-

legislative action’ by which ‘[t]he terms of the “agreement” determined by the arbitrator

[are] imposed upon [the employer] by force of law.’ ” (Id. at p. 1133.)

“Either an agricultural employer or a union representative may invoke the MMC

process by filing with the Board ‘a declaration that the parties have failed to reach a

collective bargaining agreement and a request that the board issue an order directing the

parties to mandatory mediation and conciliation of their issues.’ (§ 1164, subd. (a).)”

(Gerawan Farming I, supra, 3 Cal.5th at p. 1133.) If the declaration satisfies the

statutory requirements, “the board shall immediately issue an order directing the parties

to [MMC] of their issues.” (§ 1164, subd. (b); Cal. Code Regs., tit. 8, § 20402.6)7

“Mediation” proceeds for 30 days; when that period expires, “if the parties do not

resolve the issues to their mutual satisfaction, the mediator shall certify that the mediation

process has been exhausted.” (§ 1164, subd. (c).) The mediation period may be extended

an additional 30 days “[u]pon mutual agreement of the parties.” (§ 1164, subd. (c); Cal.

Code Regs., § 20407, subd. (a).) The 30-day period commences “on the date of the first

scheduled mediation session.” (Cal. Code Regs., § 20407, subd. (a).)

6 Further references to regulations are to title 8 of the California Code of

Regulations.

7 To invoke MMC, “[t]he parties must have never had a contract, they must have

‘failed to reach agreement for at least one year’ after the initial request to bargain, and the

employer must have committed an unfair labor practice.” (Gerawan Farming I, supra,

3 Cal.5th at p. 1142, citing § 1164.11.)

13.

“The Board’s implementing regulations specify how the mediation is to be

conducted.” (Gerawan Farming, Inc. v. Agricultural Labor Relations Bd. (2019)

40 Cal.App.5th 241, 247 (Gerawan Farming III).) “[T]he parties are required to serve on

each other, and on the mediator upon his or her selection, a document which identifies the

disputed and undisputed issues, as well as the standards by which they propose to resolve

the disputed issues, and provides agreed-upon contract language for the issues not in

dispute. (Cal. Code Regs., § 20407, subd. (a)(1).)” (Id. at p. 248.) The parties may

engage in discovery and “[t]he mediator may enforce discovery duties by drawing

adverse inferences, or imposing terms, conditions, or sanctions upon a party.” (Ibid.)

The mediator presides at the mediation, ruling on the admission and exclusion of

evidence, and retains “discretion to go off the record at any time to clarify or resolve

issues informally,” although off-the-record communications “shall not be the basis for

any findings and conclusions in the mediator’s report.” (Cal. Code Regs., § 20407,

subd. (a)(2).)

Within 21 days after the mediation period expires, the mediator files “a report with

the board that resolves all of the issues between the parties and establishes the final terms

of a [CBA], including all issues subject to mediation and all issues resolved by the parties

prior to the certification of the exhaustion of the mediation process. With respect to any

issues in dispute between the parties, the report shall include the basis for the mediator’s

determination. The mediator’s determination shall be supported by the record.” (§ 1164,

subd. (d); Cal. Code Regs., § 20407, subd. (c).)

Either party may petition the Board for review of, or to set aside, the mediator’s

report on grounds set forth in section 1164.3, subdivisions (a) and (e). If a prima facie

case for review is not shown or no petition is filed, the report becomes the Board’s final

order. (§ 1164.3, subd. (b).) If the Board finds grounds to grant review, it issues a

decision on the petition and, if it finds a provision of the mediator’s report to be unlawful,

it requires the mediator to modify the CBA’s terms, meet with the parties for further

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mediation, and submit a second report. (Id., subd. (c).) As before, the parties may

petition the Board for review of the second report. (Id., subd. (d).) If no petition is filed

or the petition fails to state a prima facie case of a violation of subdivision (a), the second

report takes effect as the Board’s order. (Ibid.) If the petition is subject to review under

subdivision (a), the Board determines the issues and issues a final order. (Ibid.)

In Gerawan Farming I, our Supreme Court, in holding that an employer may not

refuse to bargain with a union on the basis that it abandoned its representative status,

rejected the contention that “the MMC process falls ‘outside the ordinary bargaining

context’ ” as “the text and structure of the statute indicate that the MMC process is a

continuation of the ordinary bargaining process.” (Gerawan Farming I, supra, 3 Cal.5th

at p. 1156.) The court noted that “[i]n many cases, the parties may reach a voluntary

agreement on all or most of the disputed terms before the mediator writes a final report or

before the ALRB issues its final order.” (Ibid.) The court explained that MMC “is not

wholly distinct from ‘normal’ bargaining because it imposes contract terms on the

parties” since “[t]he availability of interest arbitration, as an ultimate recourse, is itself a

bargaining tool that the Legislature believed would facilitate resolution of disputes and

consummation of first agreements.” (Id. at p. 1157.) The court further explained that

while the state of the law before the enactment of the MMC statute imposed on

employers a continuing duty to bargain, but did not compel them to agree to a proposal or

require them to make a concession, “[w]hen the Legislature later enacted the MMC

statute, it expanded the ‘duty to bargain’ to include the MMC process.” (Gerawan

Farming I, at p. 1157.)

C. MMC and Unfair Labor Practice Liability

Here, the parties held nine negotiation sessions from January 17 to March 28,

2013. The Union asked the Board to order MMC on March 29, which it did on April 16.

The mediator was appointed in May and the parties met with him in off-the-record

sessions on June 6 and 11. At some point, the mediator asked the parties to negotiate

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outside his presence while the MMC process was ongoing. The parties met four times

outside the mediator’s presence—on June 3 and July 1, 24, and 29—to see if they could

reach a voluntary agreement on disputed terms. Thereafter, on-the-record MMC sessions

were held on August 8 and 19, and the mediator issued his report on September 28.

In his decision, the ALJ noted the complaint charged Gerawan with engaging in

“overall bad faith surface bargaining during the 2013 voluntary negotiations,” with the

term “voluntary” referring to negotiations “that occurred outside those mandated by the

MMC process.” The ALJ further noted that with the exception of “a few overlapping

exhibits, little, if any, evidence was adduced concerning the bargaining that occurred

under the auspices of the mediator.” In addressing this charge, the ALJ concluded the

parties’ progress toward an agreement could be measured best by comparing their

positions reflected in their initial January proposals against their arguments prepared in

late July and early August for submission to the mediator, as well as a late August matrix

that set forth their positions.

In its exceptions to the ALJ’s decision, Gerawan contended that because MMC

“supplants mutual, good faith bargaining,” good faith bargaining is not required once the

parties are ordered into MMC. In addressing this contention, the Board stated it

previously found, and the California Supreme Court confirmed in Gerawan Farming I,

that MMC is not a substitute for bargaining but rather an extension of the bargaining

process. The Board rejected Gerawan’s suggestion the statutory good faith bargaining

obligation does not apply where referral to MMC is possible or after MMC is requested:

“The possibility a party may request referral to MMC, or the fact that a party has done so,

does not privilege the other party to disregard its bargaining obligation or to otherwise

engage in a campaign of bad faith tactics to frustrate bargaining and the prospect of

reaching agreement.”

The Board also rejected Gerawan’s argument that the ALJ erred in relying on

evidence from the MMC proceedings to support his bad faith finding. Since Gerawan

16.

failed to identify any testimony or exhibits it claimed the ALJ improperly relied on, the

Board found Gerawan failed to satisfy the requirement of California Code of Regulations

section 20282, subdivision (a)(1)8 to cite to the record. In addition, the Board noted the

ALJ recognized the ULP allegations pertained to voluntary negotiations, which were

“those negotiations that took place outside of the context of MMC and without the

presence of a mediator,” and little evidence was adduced concerning bargaining that

occurred under the mediator. The Board further noted the parties’ joint stipulation of

facts and exhibits established the admissibility of the contract proposals the ALJ

referenced.

While it is not entirely accurate that the parties’ negotiating sessions took place

outside the context of MMC, as it was the mediator who asked the parties to continue

negotiating, the sessions were held outside the mediator’s presence to see if the parties

could voluntarily reach agreement on disputed terms.9 The question is whether Gerawan

had a duty to bargain in good faith during these sessions such that unfair labor practice

liability may be imposed if Gerawan refused to bargain in good faith.

As we have stated, once a union is certified, it remains the employees’ exclusive

collective-bargaining representative until it is decertified or a rival union is certified, and

the employer has a duty to bargain with that union until either of those events occur.

8 California Code of Regulations section 20282, subdivision (a)(1), provides: “The

exceptions shall state the ground for each exception, identify by page number that part of

the administrative law judge’s decision to which exception is taken, and cite to those

portions of the record which support the exception.”

9 Gerawan claims California Code of Regulations section 20407, subdivision (a)(1)

also required it to meet with the Union outside the mediator’s presence. That regulation

provides that within seven days of receipt of the Board’s order directing the parties to

MMC, the parties are required to serve on each other, and the mediator upon his or her

selection, a document which identifies the disputed and undisputed issues, and provides

agreed upon contract language for the issues not in dispute. (Cal. Code Regs., § 20407,

subd. (a)(1).) While the regulation requires the parties to exchange documents that set

forth their positions and agreed upon contract language for undisputed issues, it does not

require them to negotiate further.

17.

(Nish Noroian Farms (1982) 8 ALRB No. 25, p. 14.) Thus, as Gerawan recognizes, its

“bargaining obligations continued until the date the UFW was decertified” on

November 5, 2013.10 Those obligations included a duty to bargain in good faith.

(§§ 1153, subd. (e), 1155.2; Kaplan’s Fruit & Produce Co., Inc. (1977) 3 ALRB No. 28,

pp. 2‒3, 7.) “When the Legislature enacted the MMC statute, it expanded the scope of

the ‘duty to bargain’ to include the MMC process.” (Gerawan Farming I, supra,

3 Cal.5th at p. 1157.)11

Thus, the good faith bargaining duty extends, at a minimum, to negotiation

sessions held outside the mediator’s presence during the MMC process. Gerawan asserts

the MMC statute replaced consensual bargaining with a one-time exception to the

ALRA’s prohibition on compelled concessions and forced agreements. We disagree.

As stated above, “[t]he ALRA established an elaborate framework governing”

agricultural workers’ right to organize into unions and collectively bargain with their

employers. (Gerawan Farming I, supra, 3 Cal.5th at p. 1129.) That “elaborate

framework” includes granting the Board the power to investigate and prevent unfair labor

10 We asked the parties to address in supplemental briefing the effect, if any, of the

Union’s decertification on the issues or arguments raised in this proceeding. The parties

agree the decertification rendered the contract imposed pursuant to the MMC process null

and void, but does not render the unfair labor practice charges in this proceeding null and

void because the charges relate to bargaining conduct between January and August 2013,

before the November 2013 decertification election. Gerawan, however, asserts the

decertification, and our decision in Gerawan II, supra, 23 Cal.App.5th 1129, have some

bearing on the outcome of this proceeding. We will discuss Gerawan’s supplemental

arguments where appropriate.

11 We acknowledge that in making this statement, the court was not deciding

whether a party compelled into MMC remains subject to a good faith duty to bargain.

Nevertheless, as we have recognized, MMC proceedings formalize the usual give and

take of contractual negotiations with a mediator, throughout that process the parties

remain free to resolve the disputed issues, and “on-the-record MMC proceedings are part

and parcel of the negotiating process.” (Gerawan Farming III, supra, 40 Cal.App.5th at

pp. 270‒271.) Since negotiation does not end when MMC is invoked, an employer has a

continuing duty to bargain during MMC.

18.

practices. (Id. at p. 1130.) The Legislature added the MMC statute to this “elaborate

framework” for one purpose—to facilitate the negotiation and completion of CBAs, as

the Act had proven ineffective at facilitating the negotiation and completion of CBAs.

(Id. at p. 1130.) Throughout the MMC process, “the parties are free to resolve the

disputed issues.” (Gerawan Farming III, supra, 40 Cal.App.5th at p. 271.) It is only if

the parties fail to reach voluntary agreement on those terms that a contract will be

imposed on them by force of law. Thus, “the MMC process is a continuation of the

ordinary bargaining process,” not a replacement for consensual bargaining. (Gerawan

Farming I, at p. 1156.)

Gerawan contends that because the MMC statute does not incorporate or reference

the statutory duty to bargain, the Legislature did not intend to extend the duty to bargain

to MMC. According to Gerawan, it is “implausible” to suggest the Board may impose

liability for bad faith bargaining within MMC when the Legislature made clear its view

that existing bargaining obligations and the Board’s ability to enforce good faith

bargaining had failed to achieve contracts. (See Gerawan Farming I, supra, 3 Cal.5th at

p. 1141 [“the Legislature reasonably could have concluded that a mediation process

followed by binding arbitration in the event of a bargaining impasse would ‘correct’ the

ALRA’s failure and facilitate the adoption of first contracts”].)

That the Legislature enacted the MMC process because the Board had been unable

to enforce good faith bargaining, however, does not mean the Legislature intended to

eliminate the Board’s enforcement authority with respect to the parties’ negotiations

outside the mediator’s presence. Although the MMC statute does not address the

statutory duty to bargain, the MMC statute is part of the ALRA, which makes the refusal

to bargain in good faith an unfair labor practice and empowers the Board to prevent such

19.

conduct. (§§ 1153, 1155.2, subd. (a), 1160.)12 Contrary to Gerawan’s assertion, there is

no conflict between the MMC statute or its implementing regulations13 and the statutory

duty to bargain that requires us to construe MMC as not including a good faith bargaining

duty with respect to the parties’ negotiations outside the mediator’s presence. (See

Agricultural Labor Relations Bd. v. Superior Court (1976) 16 Cal.3d 392, 420 [citing the

axiom of statutory construction that a particular or specific provision takes precedence

over a conflicting general provision]; Code Civ. Proc., § 1859].)

Gerawan questions how the statutory definition of good faith bargaining in

section 1155.2, subdivision (a), which expressly does not compel a party to agree to a

proposal, can possibly apply in MMC, which imposes an agreement by force of law. But

in MMC, when negotiating outside the mediator’s presence, the parties are not compelled

to agree to a proposal or required to make a concession. Rather, if the parties cannot

reach agreement, they present their positions on disputed terms to the mediator with

supporting evidence. If done in good faith, the parties have satisfied their good faith

bargaining duty. Contrary to Gerawan’s assertion, imposing unfair practice liability does

not punish an employer for exercising a choice between making concessions to avoid the

mediator from imposing a term or standing on its objections to the union’s proposed

terms. Whatever choice the employer makes, unfair practice liability may not be

imposed if the employer’s position is taken in good faith.

Gerawan asserts the MMC statute does not grant the Board jurisdiction to

adjudicate the parties’ bad faith conduct during MMC. But it did not need to do so, as the

12 Section 1160 provides: “The board is empowered, as provided in this chapter, to

prevent any person from engaging in any unfair labor practice, as set forth in Chapter 4

(commencing with Section 1153) of this part.”

13 Gerawan contends imposing a good faith bargaining duty rewrites the MMC

regulations because the regulations are silent about imposing such a duty. The

regulations, however, simply set out the procedure for conducting MMC proceedings and

for the Board’s review of the mediator’s report. They do not address bargaining conduct

within MMC or in negotiating sessions held outside the mediator’s presence.

20.

Board has jurisdiction to adjudicate unfair labor practice charges under another section of

the ALRA, namely, section 1160, which empowers the Board “to prevent any person

from engaging in any unfair labor practice” as set forth in the ALRA. For this reason,

Gerawan’s claim that the Board lacks implied statutory authority to police bargaining

within MMC fails, as it has been granted express authority to do so.14

Adjudicating an unfair labor practice charge arising from the parties’ negotiations

outside the mediator’s presence does not undermine the finality of the Board’s order

enforcing the mediator’s report, as Gerawan suggests. This is because, unlike the case

Gerawan cites, Rios v. Allstate Ins. Co. (1977) 68 Cal.App.3d 811, 818, in which the

plaintiff who sued his insurer for bad faith based on the insurer’s conduct during an

arbitration proceeding had the ability to challenge that conduct by moving to vacate the

arbitration award, the Board did not have the ability to challenge Gerawan’s purported

bad faith bargaining in the MMC proceedings, as those proceedings concerned only

setting the terms of a CBA.

Gerawan asserts the UFW’s election to pursue MMC rather than avail itself of

remedies for bad faith bargaining outside MMC raises due process concerns, since

allowing the UFW to pursue both MMC and unfair labor practice remedies would result

in double recovery for the same alleged harm. We disagree. This is not a situation where

there is a possibility for multiple damage awards for the same conduct, as in State Farm

Mut. Auto. Ins. Co. v. Campbell (2003) 538 U.S. 408, 423, or where Gerawan would be

required to pay a single debt more than once, as in Western Union Telegraph Co. v.

14 In making this argument, Gerawan relies on the interpretative principle that where

“ ‘ “Congress includes particular language in one section of a statute but omits it in

another section of the same Act, it is generally presumed that Congress acts intentionally

and purposely in the disparate inclusion or exclusion.” ’ ” (INS v. Cardoza-Fonseca

(1987) 480 U.S. 421, 432.) This principle does not apply here, however, as the present

issue is not the interpretation of particular language within the Act, but rather whether the

Board’s authority granted it in section 1160 extends to bargaining conduct during the

course of MMC proceedings.

21.

Pennsylvania (1961) 368 U.S. 71, 77. MMC is not a process by which one party recovers

damages from the other; rather, MMC is “intended to be factfinding proceedings that

create a record from which the mediator determines those terms the parties are unable to

resolve by the end of the MMC process.” (Gerawan Farming III, supra, 40 Cal.App.5th

at pp. 270‒271.) Although the end result of MMC is a contract which is imposed on the

employer by force of law (Gerawan Farming I, supra, 3 Cal.5th at p. 1133), it does not

punish an employer for conduct during negotiating sessions held outside the mediator’s

presence. Instead, that is addressed through the Board’s authority under section 1160 to

prevent employers from engaging in unfair labor practices.

Gerawan next contends the ALJ and Board improperly relied on exhibits that

reflected proposals the parties exchanged during MMC and were submitted to the

mediator. Gerawan argues off-the-record communications are inadmissible under the

mediation privilege of Evidence Code section 1119, while on-the-record proceedings are

subject to the litigation privilege of Civil Code section 47.

With respect to the mediation privilege, Gerawan asserts the regulations expressly

state off-the-record communications are inadmissible. California Code of Regulations

section 20407, subdivision (a)(2), states that the mediator presides at the mediation, all

evidence upon which the mediator relies in writing his or her report must be preserved in

an official record, and the mediator “retain[s] the discretion to go off the record at any

time to clarify or resolve issues informally.” The regulation further provides: “All

communications taking place off the record shall be subject to the limitations on

admissibility and disclosure provided by Evidence Code section 1119, subdivisions (a)

and (c), and shall not be the basis for any findings and conclusions in the mediator’s

report.” (Cal. Code Regs., § 20407, subd. (a)(2).)15 The proposals the ALJ and Board

15 Evidence Code section 1119, which states the fundamental rule regarding

confidentiality of mediation communications, provides: “(a) No evidence of anything

said or any admission made for the purpose of, in the course of, or pursuant to, a

mediation or a mediation consultation is admissible or subject to discovery, and

22.

relied on, however, were prepared for the mediator in conducting the on-the-record

sessions, not for the off-the-record discussions.16 As such, they were not subject to the

mediation privilege.

As for Gerawan’s contention the litigation privilege of Civil Code section 47,

subdivision (b) bars admission of the proposals, the privilege immunizes participants

from tort liability arising from communications made during judicial proceedings.

(Silberg v. Anderson (1990) 50 Cal.3d 205, 214.) While Gerawan asserts on-the-record

MMC proceedings are equivalent to a court proceeding, it does not explain how unfair

labor practice proceedings are equivalent to tort proceedings or why the privilege should

apply here. Moreover, the privilege does not bar the evidentiary use of Gerawan’s

proposals. (Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc. (2000)

78 Cal.App.4th 847, 914‒915 [“ ‘when allegations of misconduct properly put an

individual’s intent at issue in a civil action, statements made during the course of a

judicial proceeding may be used for evidentiary purposes in determining whether the

disclosure of the evidence shall not be compelled, in any arbitration, [or] administrative

adjudication, … in which, pursuant to law, testimony can be compelled to be given. [¶]

… [¶] (c) All communications, negotiations, or settlement discussions by and between

participants in the course of a mediation or a mediation consultation shall remain

confidential.” The regulation excludes Evidence Code section 1119, subdivision (b),

which provides: “No writing … that is prepared for the purpose of, in the course of, or

pursuant to, a mediation or a mediation consultation, is admissible or subject to

discovery, and disclosure of the writing shall not be compelled, in any arbitration,

administrative adjudication, civil action, or other noncriminal proceeding in which,

pursuant to law, testimony can be compelled to be given.”

16 The ALJ compared the parties’ January proposals to (1) the Union’s July 26, 2013

“Proposal with [S]upporting Arguments” (Joint Exhibit 57); (2) Gerawan’s August 2,

2013 “Current Proposals of the Parties[,] Company’s Supporting Arguments” (Joint

Exhibit 59); and (3) the August 30, 2013 “Updated Matrix (Gerawan Farming and UFW-

Stipulated).” The MMC regulations require the parties to “provide the mediator with a

detailed rationale for each of its contract proposals on issues that are in dispute” and

“provide on the record supporting evidence to justify those proposals.” (Cal. Code Regs.,

§ 20407, subd. (a)(1).)

23.

individual acted with the requisite intent’ ”; therefore, statements made during a judicial

proceeding may be used to prove the existence of bad faith in an action against an

insurer].) Since the ALJ and Board used Gerawan’s proposals to determine Gerawan’s

intent to reach an agreement to establish whether it engaged in bad faith bargaining, the

litigation privilege does not apply.

Finally, Gerawan claims the Board’s adjudication of unfair labor practice charges

based on conduct within MMC violated the United States Constitution in two ways:

(1) the retroactive imposition of bargaining liability violates the First Amendment; and

(2) imposing liability for conduct within a quasi-legislative process violates due process.

Gerawan asserts the Board’s post hoc review of the bargaining process violated

the First Amendment’s prohibition against “inquisitorial investigations of protected

expressive activity.” Gerawan claims the Board forced it to choose between “refraining

from core political speech” or “engaging in that speech and risking costly Board

proceedings, monetary penalties and enforcement orders.” In support, Gerawan cites

cases addressing: (1) a federal court’s ability to enjoin Congress’s issuance of a

subpoena directed to a bank claiming a First Amendment privilege for the records sought

on the ground they were equivalent to confidential membership lists (Eastland v. United

State Servicemen’s Fund (1975) 421 U.S. 491); (2) the conflict between individual rights

of free speech and association and the government’s interest in conducting legislative

investigations (Gibson v. Florida Legislative Investigation Committee (1963) 372 U.S.

539, 543); (3) whether liquor license holders have a First Amendment right to protest the

granting or transfer of a similar license for the sole purpose of preventing or limiting

competition (Matossian v. Fahmie (1980) 101 Cal.App.3d 128, 132); and (4) whether an

attorney fees award for frivolous conduct based on the prosecution of a colorable claim

for an improper purpose violates the First Amendment’s petition clause (Gordon v.

Marrone (N.Y. 1992) 590 N.Y.S.2d 649, 650-651). None of these situations are at issue

here. While Gerawan claims it is being punished for exercising its First Amendment

24.

right to speak during the MMC proceedings, Gerawan’s conduct during MMC

proceedings before the mediator was not at issue here.

With respect to Gerawan’s due process claim, Gerawan does not cite any authority

to support its argument that a due process violation exists because the Board both

reviewed Gerawan’s objections to the mediator’s initial report (with the second report

becoming the Board’s final order after no party objected) and adjudicated whether

Gerawan engaged in good faith bargaining. The sole case Gerawan cites, BE&K Constr.

Co. v. NLRB (2002) 536 U.S. 516 (BE&K Constr.), addressed the issue of whether the

National Labor Relations Board (NLRB) may impose unfair labor practice liability for an

employer’s retaliatory lawsuit that was unsuccessful but not objectively baseless. (Id. at

p. 526.) While the court recognized the question raised concerns regarding the First

Amendment right to petition, ultimately it did not decide that issue. (BE&K Constr., at

pp. 529‒533, 535‒536.) Instead, the court held the NLRB incorrectly interpreted the

National Labor Relations Act to allow for punishment of unsuccessful suits as

“retaliatory” even though they may have been reasonably based. (BE&K Constr., at

pp. 536‒537.) As the court did not even decide the constitutional issue, the case has no

bearing here.

In sum, there is no conflict between the MMC statute and ALRA with respect to

imposing unfair practice liability for acts arising from the parties’ negotiation sessions

held outside the mediator’s presence.

III. Unfair Labor Practice Findings

Gerawan challenges both unfair labor practice findings—that it engaged in bad

faith surface bargaining and insisted on the exclusion of workers employed by farm labor

contractors. Gerawan contends the Board’s findings are erroneous, arbitrary and not

supported by the record considered as a whole.

25.

A. Hearing Evidence

The Union presented its first proposal at the first negotiation session on

January 17, 2013, which contained 28 articles, but did not include an economic proposal.

The Union finally submitted an economic proposal in July 2013. According to Union

negotiator Elenes, the Union did not present an economic proposal earlier because it was

waiting for Gerawan to provide information the Union had been requesting for some

time. Elenes recalled the Union was missing information on health care, which he

thought was something like participation rates or how many people were actually in the

plans, as well as some other items he could not remember. The Union received the

information sometime in July, when it was able to finalize the economic proposal. The

Union had requested information such as Gerawan’s vacation policy, bonuses and

holidays; some information was provided in December 2012 and June 2013, but not all of

it, and the Union did not receive the additional information until sometime in July 2013.

According to Gerawan’s negotiator Barsamian, Gerawan produced the information

the Union requested in its October 2012 letters over the following two months and

everything was produced by the end of 2012. After the MMC process began, the Union

subpoenaed documents and information from Gerawan, some of which it produced at the

June 11, 2013 mediation session. Gerawan provided other information in a June 22, 2013

email. Barsamian testified that Gerawan provided some of the subpoenaed information

to the Union in the MMC process. Gerawan rejected the Union’s economic proposal.

Gerawan presented its opening proposal on January 18, 2013. It contained

17 articles and called for a one-year agreement with an automatic renewal clause.

Gerawan refused to alter its position on the agreement’s term. Near the end of

negotiations, Gerawan justified its position based on its firm belief “that given the

situation giving rise to this mediation, a one-year agreement is the most logical beginning

for any relationship between these parties.” The remaining articles addressed only non-

26.

economic matters. Elenes, recalling his initial reaction to Gerawan’s proposals, said he

was “taken aback,” as he “had never seen a proposal like this.”

The cover page of Gerawan’s proposal contained a statement that it was being

“made without, in any way, wa[i]ving any argument or position that Gerawan has taken

or may take regarding whether the UFW is entitled to represent the agricultural

employees of Gerawan due to the UFW’s abandonment of its representation of the

agricultural employees and failure to meet its obligations to bargain in good faith with

Gerawan.” Barsamian explained the statement was made “just to protect their rights.”

We review the evidence as to each proposal at issue below.

1. Union Recognition

The Union’s first article, entitled “Recognition,” contained what Elenes called

“very standard language,” which stated that Gerawan recognized the Union as the

exclusive representative of its agricultural employees and described the unit. In addition,

the Union sought Gerawan’s commitment, among other things, that it would not make

individual agreements with unit employees and would encourage employees to “give

u[t]most consideration to supporting and participating in collective bargaining and

contract administration functions.”

Gerawan’s initial proposal named the parties to the agreement and contained a unit

description, but did not contain a direct statement that it recognized the Union as the

agricultural employees’ exclusive representative. None of Gerawan’s subsequent

proposals contained language recognizing the Union as the exclusive bargaining

representative. Gerawan eventually agreed to include language barring individual

agreements, although it sought to carve out an exception for “cultural employees who

have traditionally had their wages set based on past practice of individual evaluation of

their performance, skills and experience.” The parties tentatively agreed on two aspects

of the first article, namely, parties’ names and a prohibition against assignability.

27.

2. Agency Shop/Checkoff

The Union’s initial proposal entitled “Union Security,” would establish an agency

shop, which would require unit employees to either become members of the Union or pay

an agency fee to the Union. Gerawan would be required to terminate or suspend

employees who did not meet the membership/agency fee obligation on written notice

from the Union. The proposal described the terms for establishing and operating a dues

checkoff system, whereby Gerawan would deduct the employees’ dues or agency fees

from their paychecks and submit the amount collected to the Union to fund the Union’s

activities.

Gerawan’s comparable proposal, entitled “Right to Work,” provided for an open

shop: “Neither membership in good standing in the Union, nor the payment of Union

dues to non-member fees shall be a condition of employment with the Company.”

Neither party moved from their positions throughout the negotiations.

Gerawan’s counsel stated in his opening statement that Gerawan “had very good

reasons” for “proposing an open shop, what we call right to work.” He explained that

“after two decades of not being here, it literally should be up to the employees to decide

whether they wished to pay money for the jobs they already had.”

When Elenes saw the “Right to Work” heading during negotiations, he told

Barsamian California is not a right to work state and he did not know “where you’re

coming from on this.” Barsamian responded to the effect that Gerawan “believed in

freedom of choice, employee free choice,” meaning “the employees had the right to

decide whether they want to pay dues or not pay dues, be a member of the UFW or not.”

According to Elenes, Gerawan was “adamant on that.” Elenes said Gerawan did not want

to be involved with deducting Union dues and fees, and the Union would need to deal

with it. According to Elenes, this issue was a repeated point of contention throughout the

negotiations.

28.

Barsamian testified throughout the negotiations, Gerawan “wanted an open shop

and not having it as a condition of employment.” This was due in part to the cost relating

to deducting dues and fees, but “a large part of it was the company’s deeply-held belief

that an employee should have a free choice and not have their jobs depend on whether or

not they joined a union.” Barsamian, an experienced negotiator, did not know of any

open shop UFW contract in California. Barsamian did not calculate the cost of deducting

dues and fees, although the parties discussed deductions. When Elenes talked about how

difficult it would be for the Union to collect dues, Barsamian brought up the fact that at

another grower, “union reps used to have to go up and down the hillside” to collect union

dues, as an example of a company that did not collect union dues.

Gerawan justified its position in its August 2013 argument in support of its right to

work proposal by explaining that its employees “were (and still are) already being paid

the highest wages in the industry before the Union made any effort to represent them, and

thus the questionable concept of ‘fair share’ or ‘free rider’ simply does not apply here.

The employees should not be forced to pay to keep their jobs, nor is there any

justification to try to put those costs on the Company in the form of higher rates to cover

the dues/fees…. The employees deserve to become acquainted with the Union and be

provided with some semblance of service in the form of representation before being

asked to pay money to it.” Gerawan further stated that requiring it to “do the Union’s

bidding by furnishing dues check-off authorization forms” did not “foster any labor peace

given the situation,” and it was “just as logical, if not preferable, to have the Union not

collect any dues or fees for the one-year period given its failure to fairly represent the

employees for so long.”

Elenes provided the following rationale for the Union’s security proposal: “Well,

obviously … we have an obligation to represent all employees …. And again, all our

contracts have some type of union security language that indicates that the employees are

either going to pay agency fees or going to pay dues, membership dues. And obviously

29.

we need that to be able to collect dues, be able to collect agency fees so that we can fund

the work that we’re going to have to do to administer the contract and continue

improving the conditions of other farm workers.”

3. Seniority

The Union proposed to establish a seniority system that would apply as a factor in

layoffs, recalls, promotions, transfers, and overtime. Seniority was defined as “the length

of continuous service of an employee beginning with their date of hire,” and the proposal

identified when an employee began to acquire seniority, provided a means for breaking

seniority ties, and identified the recordkeeping and information sharing required to

administer the seniority system.

Gerawan’s initial proposal did not contain a reference to seniority. Instead, it

provided, with respect to hiring, work assignments and layoffs, that the Union recognized

“the Company and the employees have worked together under a policy whereby the

Company has the sole and exclusive authority to decide which employees shall be hired

or laid off.” It also provided that Gerawan would have “sole and exclusive authority” to

decide work assignments, transfers and promotions.

Elenes argued to Gerawan that a seniority system was needed because employees

were complaining that they were either not being recalled or not being recalled in order,

which was a huge issue of contention for the employees. To try to reach agreement, the

Union proposed changing “seniority” to “length of service,” as Gerawan did not like the

word “seniority” and Barsamian started using the “length of service” term. The parties,

however, started arguing about the definition of “length of service,” as the Union wanted

length of service to be used in recalling or laying off employees, while Gerawan wanted

to retain the right to recall and lay off employees based on the company’s judgment.

Barsamian testified that because the Union had not dealt with Gerawan for a long

time and negotiations were taking place when employees were not working, “quite a bit

of discussion” involved trying to explain to Elenes how things worked at the company.

30.

Barsamian explained the Union’s seniority proposal was “a rather strict seniority type of

provision” that would have prevented movement between crews for purposes other than

seniority, which would interfere with Gerawan’s practice of allowing employees to move

from crew to crew due to things such as carpooling or family relationships.

While the Union changed the term “seniority” to “length of service” in its later

proposals, the rest of the provision remained the same. Gerawan continued to reject any

limitation on its exclusive control over layoffs, recalls, work assignments, promotions

and transfers, including any application of seniority as a controlling factor in any

employment decision, regardless of what it is called. Gerawan’s later proposal set forth

its current method of considering an employee’s length of service, which was to include

all of the employee’s past service, regardless of whether it was continuous, although it

included length of service as one factor to be considered when recalling or laying off

employees, or filling job vacancies.

4. Grievance-Arbitration

The Union proposed a grievance and arbitration procedure as the “exclusive

means” for resolving all disputes concerning the interpretation or application of the

agreement. The procedure involved a three-step process preceding arbitration to allow

for a negotiated resolution, but if that failed, an arbitration would be conducted using

arbitrators from the American Arbitration Association.

Gerawan’s initial proposal for resolving employee concerns provided: “The

Union recognizes that the Company and the employees have resolved employee concerns

through the Company’s internal procedures and agrees that any grievances employees

may have are best handled as per past practice. In the event an issue remains unresolved,

the Company and the Union may confer on what approach or venue might be utilized to

resolve the issue. A designated Union representative may be present during a meeting

between an employee and a Company representative when requested by the employer, as

provided by law.”

31.

By the end of August 2013, the parties had made considerable progress toward

establishing a standard grievance-arbitration system. The August matrix reflected

tentative agreements on eight separate provisions of the procedure and other areas of near

agreement. For example, the parties had a tentative agreement on the use of arbitration if

efforts through the initial three steps failed to produce a resolution. The only issues that

remained for resolution were whether a union steward would be compensated for time

involved in processing grievances and which arbitration service would be used.

5. No Strike-No Lockout

The Union proposed to “agree that there will be no strikes, boycotts or slowdowns

by the Union against the Company during the life of this Agreement.” The proposal

would prohibit the use of unit employees as strike breakers and required Gerawan to

agree there would be no lockouts during the agreement’s term. According to Elenes, this

was a very standard language in most UFW contracts.

Gerawan proposed that “[t]he Company, Union and the employees shall be free to

take whatever lawful economic action they deem necessary during the term of this

Agreement.” According to Barsamian, Gerawan had a long history of allowing

employees to engage in work stoppages and it did not want to restrict that right.

The parties remained committed to their original positions throughout their

negotiations.

6. Just Cause

The Union proposed limiting Gerawan’s right to discipline and discharge

employees based on “just cause” standard, while Gerawan wanted to retain its at-will

employment policy. Barsamian testified that throughout the seven months of

negotiations, the parties discussed how the disciplining and discharge of employees

should be done and Gerawan never rejected just cause. Instead, Gerawan “kept asking

for a definition of just cause” to include in the contract. Barsamian explained Gerawan

had a problem using the term—just cause was a new concept to Gerawan because it was

32.

an at-will company, so it “wanted a definition of what just cause meant.” Barsamian

admitted “just cause” was not a new term to him, but he had “struggled with it for

decades in arbitrations, in administrative proceedings, employment litigation in court.

It’s one of those terms that comes up and everybody thinks they know what it is and

everything else—it’s like three blind men describing an elephant.” The Union made no

attempt to satisfy Gerawan’s demand for a precise definition of just cause.

7. Management Rights

The Union’s initial proposal included a management rights provision which

provided: “The Company will retain all its rights of management except as expressly and

explicitly modified by this Agreement.”

Gerawan’s initial proposal addressing “Management Rights,” provided, in part:

“All of the rights, powers, prerogatives, and authorities that the Company has historically

exercised are retained except those specifically abridged or modified by this Agreement;

including, but not limited to: the right to hire, promote, discharge or discipline, and to

maintain discipline and efficiency of employees. The Company maintains the specific

right to review the performance and production capabilities of each employee as part of

its disciplinary procedure.” The proposal further provided that Gerawan would have the

exclusive responsibility to determine the products grown, harvested or sold, and the

schedule and manner of production, and it retained the right to make all business

operation decisions. It was also Gerawan’s responsibility to “direct and supervise all

employees, to assign and transfer and layoff employees,” and determine when overtime

would be worked.

By the end of August, the Union had slightly altered its proposal on this subject to

provide that the parties agreed it was Gerawan’s duty and right “to manage and direct its

operations and employees”; therefore, Gerawan reserved “all rights, powers, and

authority in connection therewith, except as specifically limited by” the agreement’s

express provisions. Gerawan, however, did not alter its proposal at all.

33.

8. Farm Labor Contractors

The Union proposal regarding farm labor contractors reflected the objectives of

limiting the use of farm labor contractors and when it was necessary to utilize them,

protecting direct hires and FLC workers. The proposal required Gerawan to use its direct

hire employees for all bargaining unit work and prohibited the use of FLC workers “if

doing so would cause the layoff or loss of hours worked by direct hire employees.” In

addition, FLC workers would be part of the bargaining unit and farm labor contractors

hired to perform work covered by the agreement would “be required to provide equal

wages, terms and conditions of employment” to FLC workers as those required under the

agreement. Finally, Gerawan would be required to terminate its contractual relationship

with any farm labor contractor “documented to be in repeated violation of any federal or

state law or regulation concerning employee terms and conditions of employment,

employee health, or employee safety,” with “documented to be in violation” defined as

“reasonable evidence” presented to company management of repeated violations of state

or federal laws or regulations.

Gerawan’s initial proposal on farm labor contractors excluded FLC workers from

the contract: “The Union agrees and understands that the Company retains the use of

services provided by farm labor contractors. The Union agrees that no provision of this

Agreement shall apply to farm labor contractors or to the employees provided by farm

labor contractors.”

Elenes recalled telling Gerawan the proposal to exclude FLC workers from the

agreement was illegal; Gerawan responded they were not Gerawan’s employees. Elenes

conceded the Union had previously agreed to exclude FLC workers from other contracts,

but he explained there was no enforcement of that issue in the past and the Union had

been fixing that issue when renegotiating those contracts. According to Elenes, the

Union was always pushing to treat FLC workers the same as direct hires, but it was a

constant battle.

34.

Barsamian denied that Elenes told him Gerawan’s proposal was illegal.17

Barsamian testified he explained to Elenes that Gerawan proposed excluding FLC

workers from the contract because they were not used regularly. To address this, the

Union proposed amending its proposal to read: “The Company will make best efforts to

utilize its own direct hire employees for all bargaining unit work but in no case will FLC

employees be utilized, if doing so, would cause the layoff or loss of hours worked by

direct hire employees.” Gerawan rejected the modification at that time. Barsamian

testified it was his position that everything under the contract, other than the economics,

would apply to FLC workers.

In its June 3, 2013 proposal, Gerawan eliminated the sentence of its initial

proposal that stated the agreement did not apply to farm labor contractors. Gerawan

added sections providing that farm labor contractors would set their employees’ “wage

rates paid and benefits provided,” and utilize discipline and discharge procedures, in

compliance with federal and state law, and any union grievances arising from

employment of FLC workers would be served on the farm labor contractor and

Gerawan’s human resources office. In addition, Gerawan proposed to “continue its past

practice of making its best efforts to form and employ its direct-hire crews before

utilizing farm labor contractor crews,” but that was not a guarantee that all direct-hire

crews would be employed before, or laid off after, all FLC workers.

By July 21, 2013, the Union had dropped its proposal requiring Gerawan to

terminate farm labor contractors who repeatedly violated labor laws. In arguments to the

mediator, Gerawan asserted there was nothing illegal about its proposal, pointing to other

17 Even if Elenes did not raise the legality of Gerawan’s proposal during

negotiations, the Union’s position the proposal “would illegally exclude” FLC workers

“from contract coverage regarding wages, benefits, discharge and discipline” was made

clear in its July 26, 2013 arguments to the mediator. Barsamian testified he heard the

assertion of illegality from another Union person during the formal MMC proceedings.

35.

UFW contracts that either wholly or partially excluded FLC workers, and its proposal

rationally distinguished between direct-hire and FLC workers.

9. Union Obligations

Gerawan proposed to include an article entitled “Union Obligations,” which had

three sections. The first was a wide-ranging “hold harmless and indemnification”

provision by which the Union agreed “to indemnify and hold the Company harmless

from any and all claims, losses, damages, costs or expenses whatsoever including

reasonable attorneys’ fees that it may incur directly or indirectly as a result of the

Company performing under this Agreement, or due to the acts or omissions, breach of

any provisions of this Agreement or violation of any federal, state, local statute,

regulation or ordinance by the Union or its officers, director, employees, agent or

volunteers under its control. The Union agrees to protect, defend, indemnify and hold the

Company and its employees free and harmless from and against any and all losses,

claims, liens, demands and causes of action of every kind and character including the

amount of judgment, penalties, interests, court costs and legal fees incurred by the

Company in defense of the same, arising in favor of any party including governmental

agencies.”

The second section required the Union to purchase and maintain insurance from a

provider approved by Gerawan in an amount that would protect it from claims which may

arise from the performance of its duties under the agreement, the Union’s presence on

Gerawan’s property, and any actions or activities that concerned or affected Gerawan.

The Union would be required to obtain the following insurance: (1) to cover workers

compensation and disability claims, as well as claims under similar employee benefit

acts, in amounts required by law; (2) $50 million in comprehensive general liability

coverage; (3) $100 million in directors’ and officers’ errors and omissions coverage; and

(4) $100 million to cover the Union’s indemnification requirements in the first section. !

36.

The last section required the Union to cooperate with workers compensation fraud

investigations initiated by Gerawan or its insurers, and to waive any claims of unlawful

surveillance as a part of this commitment.

The Union had no comparable proposal. According to Barsamian, this proposal

was included because Gerawan’s general counsel made it clear they had always required

this kind of provision for any vendors, companies or associates that came onto the

property, as Gerawan was very concerned about liability and being a target of liability

lawsuits. Gerawan wanted the same provision to apply to the Union because the Union

would have personnel on the property.

In its August 30, 2013 proposal, Gerawan lowered the insurance coverage limits to

$1 million, except the general liability insurance coverage would be $1 million per person

or $2 million per incident. In its argument regarding this proposal, Gerawan explained it

took “into account the government-imposed nature of any agreement resulting from this

mediation, which was invoked upon the application made by the Union.” Gerawan was

concerned about being held responsible for the Union’s conduct given that after a 20-year

absence, the Union had “attack[ed] the Company without having attempted to gain any

experience about its operations or the employees within the bargaining unit.” Gerawan

cited examples of employees complaining about Union organizers visiting them at their

homes and engaging in threatening and intimidating conduct. In addition, Gerawan was

concerned the Union was in a “distressing economic situation” that would affect its

ability to address any liability that may be imposed on the Union. Gerawan asserted it

had a right to be informed as to proper workers’ compensation coverage, since Union

representatives would be coming onto Gerawan’s property.

The Union’s notes of the March 21, 2013 bargaining session reflect that Elenes

told Barsamian the indemnification/insurance proposal was “junk.”

37.

B. The ALJ’s Findings

The ALJ found Gerawan engaged in surface bargaining based on the totality of the

circumstances. First, the ALJ found that “[c]ritical delays marked the bargaining process

that followed the UFW’s reemergence in October 2012.” The ALJ noted there was a

three-week delay in answering the Union’s request to bargain and when Gerawan finally

replied, it did not mention the requested information and lectured about the Union’s

potential to invoke the MMC process. The ALJ found that while Gerawan provided

some of the Union’s requested information in December 2012, it “delayed furnishing

critical economic information” until late June or early July 2013, thereby preventing the

Union from formulating a “complete economic proposal through most of the voluntary

bargaining period.” The ALJ rejected Gerawan’s claim that the Union’s failure to submit

an economic proposal prior to the July 21, 2013 bargaining session inhibited the parties’

progress toward an agreement.

Despite Gerawan’s assertion in its November 2012 letter that it would work with

the Union in good faith to reach an agreement, the ALJ found Gerawan’s bargaining

conduct established no such thing. First, Gerawan ignored the Act’s “rudimentary

bargaining obligations when granting the interim wage increases during the 2013

season.” The ALJ determined Gerawan’s conduct with respect to the March 2013 wage

increases was “compelling evidence of its extreme bad faith approach to its bargaining

efforts in 2013.”

As for the parties’ conduct at the bargaining table, the ALJ found Gerawan

advanced proposals it obviously knew the Union would never accept, including the right

to work, economic action and union obligation/insurance proposals, which was a

significant indicium of bad faith bargaining. Gerawan insisted on the first two proposals

“into the final stages of the MMC process and, save for the lowered insurance demands it

negotiated with itself because the Union refused to even consider this proposal from the

outset, all three remained unchanged throughout the bargaining process.” Moreover,

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these proposals were “clearly grounded on [Gerawan’s] own personal and very self-

serving philosophy of freedom of choice,” and sought to impose special qualifications on

the Union to satisfactorily qualify as a proper representative of Gerawan’s employees, in

violation of the ALRA and NLRA. Gerawan’s “rigid adherence” to these proposals was

further evidence of its bad faith surface bargaining.

The ALJ also noted Gerawan’s union obligation proposal, as well as its proposal

to exclude FLC workers from coverage under the agreement, were not mandatory

subjects of bargaining. While the ALJ recognized Gerawan agreed to include FLC

workers under the grievance/arbitration provision, he found that amounted to a “hollow

concession” since it would be up to the farm labor contractor to determine the other terms

and conditions of employment. Since those contractors have no duty to bargain with the

Union, the effect of Gerawan’s proposal was to exclude FLC workers from the terms of

any agreement reached. In addition, it was difficult to perceive how the Union could

compel a farm labor contractor to arbitrate violations of the terms of employment. The

ALJ concluded that by insisting on resolution of these nonmandatory subjects of

bargaining, Gerawan was using these proposals as a “device to prevent an agreement.”

The ALJ rejected as meritless Gerawan’s assertion that it insists on all vendors

providing proof of insurance in order to enter its property. The ALJ explained the Union

is the employees’ representative, not a vendor, and all of its “ ‘rights’ flow from the legal

protection accorded to those agricultural workers who freely selected that labor

organization by a majority vote in a lawful election.” Since the workers could not be

required to buy liability insurance from an approved provider in order to enter Gerawan’s

property, it followed their representative need not do so. Accordingly, the ALJ found

Gerawan violated its duty to bargain in good faith by its insistence on an indemnification/

insurance proposal and the exclusion of FLC workers from the core benefits of a

collective bargaining agreement.

39.

In sum, the ALJ found the record supported the conclusion Gerawan engaged in

bargaining with no intention of ever reaching an agreement with the Union and by

persistently refusing to bargain concerning the employment status concerning the

employment terms of FLC workers.

C. The Board’s Order

The Board affirmed the ALJ’s factual findings and legal conclusions. With

respect to the right to work proposal, the Board concluded Gerawan opposed the Union’s

proposal, and maintained its rigid adherence to its own proposal, “based solely on its

philosophical opinions as to its employees’ free choice rights and its fervent opposition to

the UFW’s status as its employees’ exclusive bargaining representative.” The Board

noted Gerawan never truly considered the Union’s proposal and made no effort to assess

the costs of implementing a check-off system.

With respect to Gerawan’s economic action proposal, the Board found the Union

“reasonably perceived Gerawan’s highly unorthodox proposal as an attempt to undermine

its status as the employees’ bargaining representative.” The Board concluded this

proposal was “inimical to labor peace and the underlying policies and purposes of the

ALRA” and NLRA, and undermined any argument the proposal was advanced in good

faith with a genuine intent to reach agreement.

The Board agreed with the ALJ that Gerawan’s union obligations proposal was not

a mandatory subject of bargaining, and therefore insisting on the proposal to impasse was

a violation of the duty to bargain in good faith and properly considered in a totality of the

circumstances analysis. The Board found Gerawan’s stated rationale for the proposal

was further evidence of its bad faith in insisting on it, as Gerawan’s fear that the Union

might cause damage to its property was “entirely speculative” and Gerawan was

attributing “nefarious intentions” to the Union. The Board explained the record

supported the ALJ’s finding that Gerawan exhibited several of the hallmark indicia of

bad faith, including its delay in providing information, making unreasonable bargaining

40.

demands, making unilateral changes in mandatory subjects of bargaining, and engaging

in efforts to bypass the Union.

The Board considered Gerawan’s other bargaining proposals and positions. The

Board found unconvincing Gerawan’s rationale for resisting the Union’s just cause

proposal, as Barsamian surely must have been familiar with the term and instead of

attempting to provide its own definition of the term, Gerawan feigned ignorance. The

Board further found Gerawan’s position on the just cause proposal provided further

evidence that it was not open to agreement or true give-and-take required by the good

faith bargaining duty.

The Board found unconvincing Gerawan’s argument that the ALJ failed to

consider concessions it made. The Board recognized Gerawan offered concessions on

seniority by being willing to consider “length of service” in the context of layoffs and

recalls, as well as filling positions due to vacancy or promotional opportunity. These

“limited concessions,” however, did not defeat the surface bargaining allegations in the

context of totality of the circumstances. With respect to the grievance-arbitration

provision, the Board explained that while Gerawan may have made more movement on

the issue than the Union, Gerawan’s starting point, namely, that Gerawan determined all

employee grievances itself, allowed for the most movement. The Board concluded on the

record before it these concessions were not sufficient to detract from Gerawan’s positions

on the other provisions, “which we find demonstrate a strategy by Gerawan to frustrate

the possibility of reaching agreement.”

The Board also considered Gerawan’s conduct away from the bargaining table.

The Board upheld the ALJ’s findings that Gerawan’s unreasonable delay in furnishing

economic information the Union requested and its conduct surrounding the March 2013

wage increases were further evidence of Gerawan’s lack of good faith.

With respect to the FLC workers, the Board affirmed the ALJ’s conclusion that

Gerawan’s insistence on removing them from the scope of any collective bargaining

41.

agreement and its persistent refusal to bargain over their wages, hours, and terms and

conditions of employment, violated section 1153, subdivision (e).

D. Surface Bargaining

The duty to bargain means more than merely demonstrating a willingness to meet

and talk; rather, it requires a party “to enter discussions with an ‘open and fair mind, and

a sincere purpose to find a basis of agreement.’ ” (NLRB v. Big Three Industries, Inc.

(5th Cir. 1974) 497 F.2d 43, 46; J.P. Stevens & Co., Inc. (1978) 239 NLRB 738, 749,

762‒763.) A party, however, may engage in “ ‘hard bargaining to achieve a contract that

it considers desirable[,]’ ” and thus “is entitled to stand firm on a position if he

reasonably believes that it is fair and proper or that he has sufficient bargaining strength

to force the other party to agree.” (Atlanta Hilton & Tower (1984) 271 NLRB 1600,

1603; NLRB v. Advanced Business Forms Corp. (2nd Cir. 1973) 474 F.2d 457, 467.)

There is a difference between surface bargaining and hard bargaining. “The

former, which violates the Act’s requirement that parties negotiate in good faith, is

defined as ‘ “going through the motions of negotiating,” without any real intent to reach

an agreement.’ [Citation.] ‘Hard bargaining,’ on the other hand, is found where a party

genuinely and sincerely insists on provisions that the other party deems unacceptable,

even though it may produce a stalemate. [Citations.] … ‘[G]ood faith bargaining does

not require that [a company] make proposals that are acceptable to [the union]…. A lack

of good faith … may be found only from “conduct clearly showing an intent not to enter

into a contract of any nature.” ’ ” (Dal Porto, supra, 163 Cal.App.3d at p. 549.)

The Board and NLRB consider the totality of the circumstances to determine

whether a party’s conduct, as a whole, both at and away from the bargaining table,

demonstrates a violation of the duty to bargain in good faith. (Regency Service Carts,

Inc. (2005) 345 NLRB 671; McFarland Rose Production, Inc. (1980) 6 ALRB No. 18,

p. 4.) Thus, the Board looks to the entire course of bargaining rather than examining

individual negotiating sessions or proposals in isolation. (Altorfer Machinery Co. (2000)

42.

332 NLRB 130, 160 [“negotiations must be viewed in their totality, so that isolated

events, proposals and counterproposals are not accorded undue weight, which is not truly

reflective of the entirety of the process” (Altorfer Machinery)]; McFarland Rose

Production, Inc., at p. 23 [“Surface bargaining is a violation which occurs over an

extended period of time and it cannot be analyzed by examining individual bargaining

sessions or positions in isolation from the totality of the parties’ conduct.”].)

In evaluating the totality of the circumstances, the NLRB “has enumerated specific

areas to which it looks: delaying tactics, unreasonable bargaining demands, unilateral

employment changes, efforts to bypass employees’ bargaining representative, failure to

designate an agent with sufficient bargaining authority, withdrawal of agreed-upon

proposals, and arbitrary scheduling of meetings, as well as conduct occurring away from

the bargaining table.” (Altorfer Machinery, supra, 332 NLRB at p. 148, citing Atlanta

Hilton & Tower, supra, 271 NLRB at p. 1603.) The totality of the circumstances

“includes a consideration of the union’s conduct.” (Carl Joseph Maggio, Inc. v.

Agricultural Labor Relations Bd. (1984) 154 Cal.App.3d 40, 71.)

“The problem in resolving a charge of bad faith bargaining is to ‘ascertain the

state of mind of the party charged, insofar as it bears upon that party’s negotiations.’

[Citation.] State of mind is a question not of law but of fact, and is most often established

by circumstantial evidence. [Citations.] Absent evidence of specific conduct which

constitutes a per se violation of a duty to bargain in good faith, ‘the determination of

intent must be founded upon the party’s overall conduct and the totality of the

circumstances ….’ [Citation.] As was said in Labor Board v. Truitt Mfg. Co. (1956) 351

U.S. 149, 155: ‘A determination of good faith or of want of good faith normally can rest

only on an inference based upon more or less persuasive manifestations of another’s state

of mind. The previous relations of the parties, antecedent events explaining behavior at

the bargaining table, and the course of negotiations constitute the raw facts for reaching

43.

such a determination.’ (Frankfurter, J. conc./dis. opn.)” (Dal Porto, supra, 163

Cal.App.3d at p. 549.)

“Although individual actions standing alone may be insufficient to demonstrate

bad-faith bargaining, these actions must be considered a part of the totality of

circumstances in determining whether a [party] has engaged in surface bargaining.”

(Altorfer Machinery, supra, 332 NLRB at p. 130, fn. 2.) While a negotiating party is not

required to accept a particular proposal or make a particular concession, “a party’s

consistent refusal to make an informed assessment of the other party’s proposal, coupled

with a consistent rejection of the other party’s efforts to make its proposal more

acceptable to the party, may give rise to an inference that the party is not interested in

reaching agreement but is merely ‘going through the motions of negotiating.’ ” (Dal

Porto, supra, 163 Cal.App.3d at p. 551.) Although the Board is prohibited from drawing

an inference of bad faith bargaining from an employer’s mere act of rejecting a union

proposal, an employer who refuses to evaluate that proposal has rejected its duty to

participate in the bargaining process. (Id. at p. 552.)

In challenging the Board’s order, Gerawan contends the Board failed to consider

the Union’s nearly 17-year absence in its totality of the circumstances analysis, which

sheds light on the basis for Gerawan’s contract proposals. Gerawan asserts that even if

an employer’s proposal is evidence of bad faith in the context of an on-going union

relationship, the same proposal made after a union’s long disappearance, where the

union’s demands upset longstanding business practices, and raised serious questions and

concerns among the workers, is not.

As we recognized in Gerawan II, the Union’s sudden reappearance, claiming to be

the workers’ rightful bargaining representative, seeking a contract, and ultimately

pursuing MMC, was a “major change of circumstances” and constituted a “dramatic shift

from the long-term status quo” that “profoundly affected” Gerawan and its workers.

(Gerawan II, supra, 23 Cal.App.5th at p. 1207.) But as the Board noted in its decision,

44.

by indicating its willingness to enter into negotiations with the Union and respond to its

information requests, and proceeding to do both, Gerawan conceded the Union’s status as

its employees’ certified bargaining representative, and therefore waived any argument the

Union no longer retained its certified status. (See Technicolor Government Services, Inc.

v. NLRB (8th Cir. 1984) 739 F.2d 323, 327 [when “employer honors a certification and

recognizes a union by entering into negotiations with it, the employer has waived the

objection that the certification is invalid”]; Brown & Connolly, Inc. (1978) 237 NLRB

271, 275 [employer demonstrates its acceptance of a union’s representational status by

commencing negotiations]; § 1153, subd. (f).)

Thus, while the Union’s absence may be considered when weighing the

reasonableness of Gerawan’s proposals, Gerawan cannot defend its bargaining positions

and proposals based on its belief it was able to represent its employees’ interests better

than the Union. (See Summer Peck Ranch, Inc. (1984) 10 ALRB No. 24, pp. 9‒10

[“resisting union proposals ‘in the interest’ of the employees and in order to preserve a

‘family-like’ relationship between employer and employee displays a basic lack of

acceptance” of the union’s role and is “incompatible with good faith bargaining”];

Montebello Rose Co., Inc. (1979) 5 ALRB No. 64, p. 24 [employer’s desire to protect

their employees from the union’s arbitrary action demonstrates a failure to accept a basic

principle of the ALRA—that the certified collective bargaining representative is the

employees’ exclusive representative, which is a role the employer may not assume]; As-

H-Ne Farms, Inc. (1980) 6 ALRB No. 9, p. 5 [employer may not justify refusal to

provide employee addresses to the union on the ground it was protecting employees’

privacy rights]; J.R. Norton Company (1982) 8 ALRB No. 89, p. 25 [in light of

employer’s overall bargaining conduct, its objection to union security clause based on

fear of potential for abuse in giving union sole discretion for determining a worker’s good

standing, indicated bad faith, because it demonstrated a failure to accept the union as the

employees’ exclusive representative].)

45.

Gerawan also asserts the Board’s order improperly rests on the substance of

Gerawan’s proposals. It is true that the Board “ ‘may not, either directly or indirectly,

compel concessions or otherwise sit in judgment upon the substantive terms of collective

bargaining agreements.’ ” (H.K. Porter Co. v. NLRB (1970) 397 U.S. 99, 106.)

The Board, however, is not prohibited from examining the contents of the parties’

proposals, as it “must take some cognizance of the reasonableness of the position taken

by an employer in the course of bargaining negotiations” if it is not to be “blinded by

empty talk and by the mere surface motions of collective bargaining ….” (NLRB v. Reed

& Prince Mfg. Co. (1st Cir. 1953) 205 F.2d 131, 134‒135; see NLRB v. F. Strauss & Son,

Inc. (5th Cir. 1976) 536 F.2d 60, 64; NLRB v. Holmes Tuttle Broadway Ford, Inc. (9th

Cir. 1972) 465 F.2d 717, 719.) Inferences drawn from the proposals are not alone

sufficient to support a violation of the obligation to bargain in good faith; the Board also

“ ‘must show “substantial evidence that the company’s attitude was inconsistent with its

duty to seek an agreement.” ’ ” (Seattle-First Nat’l Bank v. NLRB (9th Cir. 1981)

638 F.2d 1221, 1226.)

With these principles in mind, we consider Gerawan’s arguments with respect to

the Board’s consideration of the parties’ bargaining positions to determine whether the

Board’s findings are supported by substantial evidence and deference should be given to

the inferences it drew.

1. Right to Work

The Union’s initial proposal included a union security provision establishing an

agency shop, which required employees to become Union members or pay an agency fee,

and provided for a check-off system for collecting dues and fees. As the Board asserts,

these are common provisions in collective bargaining agreements to facilitate the

collection of due and fees, and generally are intended to alleviate the concern posed by

“free riders.” (See NLRB v. General Motors Corp. (1963) 373 U.S. 734, 741, 744.)

46.

Gerawan countered with its “Right to Work” proposal, which provided for an open

shop in which Union membership was not required. While Gerawan asserts this was not

an “unorthodox” proposal, given Barsamian’s many years of labor law experience, it was

reasonable for the Board to infer that Gerawan would have been aware the term was

“commonly regarded as anathema to labor organizations.”18

Gerawan adhered to its proposal throughout the course of negotiations based on its

philosophical opinions about its employees’ free choice rights and its opposition to the

Union’s status as its employees’ collective bargaining representative. The Board

reasonably found Gerawan’s stated rationale and unwillingness to move on even the

name of its proposal evidenced its lack of intent to reach agreement on this issue.

“Where, as here, the employer adamantly opposes union security and checkoff on vague

or generalized ‘philosophical’ grounds or questionable assertions of policy, the inference

is warranted that the Employer entered negotiations with a fixed intention not to consider

or agree to any form of union security or checkoff,” in violation of its duty to bargain in

good faith. (Chester County Hospital (1995) 320 NLRB 604, 622; see Universal Fuel,

Inc. (2012) 358 NLRB 1504, 1521 [“opposition to union security and dues checkoff

based on philosophical grounds without business justification has been held to constitute

evidence of bad-faith bargaining”].)

While, as Gerawan asserts, there is nothing in the ALRA that compels the use of

union security agreements, leaving the parties free to accept or reject them (Pasillas v.

Agricultural Labor Relations Bd. (1984) 156 Cal.App.3d 312, 344), Barsamian admitted

he was not aware of any open shop UFW contract in California.19 Gerawan asserts it was

within its rights to resist a proposal that would allow the Union to be the “sole judge” of

18 As the Board noted, the mediator who presided over the MMC proceedings

recognized “[t]he very title to this Article suggested by [Gerawan] and its invidious

connotation is predictably unacceptable to the Union.”

19 The mediator found that union security clauses were the rule rather than the

exception in agricultural labor contracts.

47.

who it could hire or fire, and it had a legitimate business justification for its position,

namely, that it was concerned employees who were “forced to pay dues to a union they

knew nothing about might quit rather than do so.” But Gerawan never presented these

arguments during negotiations or raised them before the Board. Belated and shifting

“justifications” may demonstrate the pretextual nature of an employer’s bargaining

conduct. (Giannini Packing Corp. (1993) 19 ALRB No. 16, p. 17 [presenting shifting

and inconsistent explanations for decisions constitutes “strong circumstantial evidence of

the existence of an undisclosed and forbidden motive”]; Peter Scalamandre & Sons, Inc.

(2000) 330 NLRB 1191, 1197 [the NLRB “has long held that unlawful motivation may

be found where an employer provides false or shifting reasons for its actions”].)

Gerawan cites several cases as examples of the NLRB declining to infer bad faith

when an employer opposes a union security provision as a matter of principle. Those

cases, however, are distinguishable. In WCUE Radio, Inc. (1974) 209 NLRB 181, 188‒

189, the NLRB declined to infer bad faith where, in rejecting the union’s request for a

union or agency shop, the employer explained to the union it was opposed to union-

security agreements as a matter of principle and believed such a provision would hamper

its ability to recruit new talent, although it might be willing to grant a checkoff of union

dues. In contrast here, Gerawan never gave the Union a business justification for

opposing the agency shop proposal and opposed any form of checkoff. In the other cases

Gerawan cites, although the employers firmly opposed union or agency shop clauses,

they made concessions on other terms or the parties reached agreement on many terms.

(See Pacific Mushroom Farm (1981) 7 ALRB No. 28, ALJD at pp. 18‒19; Church Point

Wholesale Grocery Co. (1974) 215 NLRB 501‒502.)

Gerawan’s failure to offer a business justification for its opposition to the Union’s

proposal and to make any effort to assess the costs of implementing a checkoff system is

48.

indicative of bad faith bargaining.20 (See Dal Porto, supra, 163 Cal.App.3d at pp. 551‒

552.) Gerawan points to the mediator’s discussion of this issue in his report as

supporting its opposition to an agency shop. While the mediator recognized the Union’s

absence had raised a thorny issue, as “[a]ll other things being equal, the imposition of

membership fees to support an organization that most of the Employer’s employees have

had little if anything to do with would appear to be a bit of an overreach,” the mediator

determined all things were not equal. Instead, the mediator, in adopting the Union’s

proposal in its entirety, found Gerawan’s perspective on union dues and fees “is cast in

dark tones and ascribes to the Union some nefarious, self-serving purpose in collecting

them”; Gerawan presumed to speak on the employees’ behalf, “which in itself is a

conflict of interest, claiming that the Union’s bargaining efforts are ‘unwanted’ ”; and in

the face of directly contradictory statutory language in sections 1153, subdivision (c) and

1154, subdivision (b), Gerawan asserted the “imposition of agency fees was inconsistent

with the ALRA’s protections of freedom of association and self-organization.”

In sum, substantial evidence on the record considered as a whole supports the

Board’s finding that “Gerawan opposed the UFW’s request and maintained its own rigid

adherence to its ‘Right to Work’ proposal based solely on its philosophical opinions as to

its employees’ free choice rights and its fervent opposition to the UFW’s status as its

employees’ exclusive bargaining representative. It never truly considered the UFW’s

proposal, and admittedly took no effort to assess what the costs, if any, of implementing a

check-off system would be.” The Board’s inference that Gerawan’s conduct with respect

to this provision evidenced an effort to frustrate the parties’ ability to reach a voluntary

collective bargaining agreement was neither “irrational,” “tenuous,” nor “unwarranted.”

(Penasquitos Village, supra, 565 F.2d at p. 1079.)

20 Gerawan asserts its opposition to the agency shop provision was not based

primarily on how the fees would be deducted, but rather “whether compulsory agency

fees could be compelled by the state.” That was not the justification it gave the Union for

opposing the fees, however.

49.

2. Economic Action

The Board found Gerawan did not advance its economic action proposal, which

would have allowed its employees to take any “lawful economic action,” in good faith

because: (1) its rationale for the proposal was rooted in its “freedom of choice”

philosophy; (2) the Union reasonably perceived the proposal as an attempt to undermine

its status as the employees’ bargaining representative; and (3) the proposal was directly

contrary to the purpose of a collective bargaining agreement, namely, to ensure labor

peace and minimize or eliminate disruptions caused by labor disputes.

Gerawan asserts the Board failed to consider the effect of the Union’s “no-strike/

no-lockout clause on the employees’ right to choose their bargaining representative.”

Gerawan argues the Union’s no strike provision was self-serving and conflicted with the

employees’ freedom of choice because it would have prevented employees from

protesting against the Union or supporting a decertification effort. Gerawan maintains it

sought to protect its employees’ statutory right to strike through its economic action

provision. As discussed above, Gerawan’s attempt to cast itself as the employees’

representative is incompatible with good faith bargaining, and supports an inference that

its proffered justification for its provision was made in bad faith.

A union may waive the right to strike as the quid pro quo for the employer’s

acceptance of the grievance and arbitration procedure. (NLRB v. Magnavox Co. (1974)

415 U.S. 322, 325.) That is what the Union was attempting to do here. Gerawan appears

to argue the Union did not have the right to bargain away the statutory rights of its

workers because the current employees did not select it, citing selective language from

Mastro Plastics Corp. v. NLRB (1956) 350 U.S. 270, 280.21 As we have discussed,

21 In that case, the United States Supreme Court, in deciding whether the parties’

collective bargaining agreement waived the employees’ right to strike against the

employers’ unfair labor practices, observed that waivers of employees’ right to strike

generally contribute to the normal flow of commerce and the maintenance of regular

50.

however, the Union was the employees’ elected representative, despite its long absence

and regardless of whether the current employees voted for it; as the exclusive bargaining

representative, the Union had the right to propose a waiver of the employees’ right to

strike in exchange for a grievance and arbitration procedure.

Moreover, the Board reasonably found Gerawan’s economic action proposal was

contrary to the purpose of a collective bargaining agreement, thereby undercutting

Gerawan’s position that it advanced this proposal in good faith. (H.J. Heinz Co. v. NLRB

(1941) 311 U.S. 514, 524 [collective bargaining agreement is “regarded as the effective

instrument of stabilizing labor relations and preventing, through collective bargaining,

strikes and industrial strife”].) In enacting the ALRA, the Legislature “specifically

declared the collective bargaining process is the preferred method for attempting to bring

peace and stability to California’s agricultural fields.” (Ruline Nursery Co. v.

Agricultural Labor Relations Bd. (1985) 169 Cal.App.3d 247, 253, citing Agricultural

Labor Relations Bd. v. Superior Court, supra, 16 Cal.3d at p. 403.) Similarly, labor

peace is the overriding goal of the NLRA, which “is promoted when the parties to a labor

dispute avoid a test of strength involving a strike or a lockout by negotiating a collective

bargaining agreement, which will standardly include a no-strike clause, thus assuring

labor peace during the term of the agreement ….” (Duffy Tool & Stamping, L.L.C. v.

NLRB (7th Cir. 2000) 233 F.3d 995, 997.)

As the NLRB has explained, one of the NLRA’s primary objectives “is to utilize

collective-bargaining contracts as a means for minimizing, if not eliminating, disruptions

to the free flow of commerce caused by labor disputes. Obviously, strikes are one such

disruption[].” (Altorfer Machinery, supra, 332 NLRB at p. 165.) In Altorfer Machinery,

the NLRB criticized an employer’s strike proposal, finding it “contemplates the very type

of conduct which is inherently disruptive of the free flow of commerce” and “presents the

production schedules, “[p]rovided the selection of the bargaining representative remains

free.” (Mastro Plastics Corp. v. NLRB, supra, 350 U.S. at p. 280, italics omitted.)

51.

prospect of ongoing labor dispute and incident disruption.” (Ibid.) Similarly, here, as the

Board reasonably found, Gerawan’s proposal “was so far contrary to the fundamental

purposes of the ALRA as to undermine any argument that the proposal was advanced in

good faith with a genuine intent to reach agreement.”22

3. Union Obligations

Gerawan’s union obligations proposal would have required the Union to

indemnify Gerawan from any claims, losses or damages it may incur when performing

under the agreement, and to carry certain forms of insurance. As the Board found, and

Gerawan concedes, this was not a mandatory subject of bargaining because it did not

relate to the employees’ wages, hours, or terms and conditions of employment.

(§ 1155.2, subd. (a); Arlington Asphalt Co. (1962) 136 NLRB 742, 745, enfd. sub nom.

NLRB v. Davison (4th Cir. 1963) 318 F.2d 550, 557.) The NLRB and courts “have

consistently treated a contract requirement of a performance bond or financial indemnity

agreement proposed by either employer or union for the other, as a nonmandatory subject

of bargaining, and have held that employer or union insistence to impasse on such a

requirement was a violation of the obligation to bargain in good faith.” (Covington

Furniture Mfg. Corp. (1974) 212 NLRB 214, 217‒218, enfd. (6th Cir. 1975) 514 F.2d

995; see NLRB v. Wooster Div. of Borg-Warner (1958) 356 U.S. 342, 349 [employer’s

refusal to enter into an agreement on the ground it does not include a nonmandatory

bargaining subject, “is, in substance, a refusal to bargain about the subjects that are

within the scope of mandatory bargaining”].)

Gerawan asserts there is no evidence it refused to agree to any mandatory subject

of bargaining until the Union accepted the nonmandatory union obligations proposal.

Gerawan further asserts that because this proposal was outside the scope of the issues the

22 The mediator similarly noted, when considering Gerawan’s economic action

proposal, “[n]othing could be more antithetical to the preservation of peace and stability

in labor relations than to allow the parties to resort to economic warfare during the term

of their collective bargaining agreement.”

52.

mediator was permitted to include in his report, the proposal could not have stymied

negotiations and cannot serve as evidence of an intent to avoid an agreement, particularly

since the Union rejected the proposal and the mediator excluded it from the terms

imposed.

The evidence shows, however, that the parties discussed this proposal throughout

the negotiations and Gerawan insisted on its inclusion, even arguing to the mediator that

the proposal should be included in the parties’ contract. The mediator did not exclude the

proposal from the contract because he was not permitted to do so; instead, he rejected the

proposal on the merits. The mediator found there was no evidence to support Gerawan’s

assertions that the Union’s conduct or economic situation justified inclusion of the

proposed term. Noting that the parties had agreed not to interfere with each other’s

internal business, the mediator determined Gerawan’s suggestion that the Union obtain

various types of insurance directly contravened this language. The mediator further

determined the hold harmless provision was overbroad and incomprehensible and, as the

Union pointed out, the proposal was highly unusual and not found in any of its labor

agreements.

The Board found the ALJ properly considered Gerawan’s conduct with respect to

this proposal in his totality of the circumstances analysis. That conduct included seeking

to impose on the Union “the equivalent of a pay-to-play requirement,” contrary to the

ALRA, which does not require a certified labor organization to post security in favor of

an employer as a condition of exercising its rights under the ALRA, including the right of

access to the employer’s premises. (See Cal. Code Regs., § 20900.) The NLRB found

“convincing evidence” of an employer’s “inclination to engage in no more than nominal

bargaining” where the employer “treated the Union as an intruder, one which required

some watching after, rather than as a statutorily invited guest on the premises.” (J.P.

Stevens & Co., Inc., supra, 239 NLRB at p. 769.) The Board reasonably found

Gerawan’s proposal reflected a similar disposition.

53.

In addition, the ALJ found Gerawan sought to impose special qualifications on the

Union before it could qualify as the employees’ proper representative, which was a status

the Union had already attained by virtue of its prior certification. As the ALJ stated,

“[n]othing in any labor relations statute authorizes an employer to impose its own

qualification standards on the employee representative. Indeed, Section 1153(b) of the

ALRA and [29 United States Code section 158(a)(2)] of the NLR[A] prohibit employers

from doing just that in order to protect the right of employees to independent

representation.”

An employer’s “insistence on extreme or unreasonable proposals can be part of the

evidence in determining whether demands made by a particular party was designed to

frustrate agreement in the collective-bargaining process.” (McDaniel Ford, Inc. (1997)

322 NLRB 956, 965.) The Board reasonably found Gerawan’s insistence on this unusual

proposal, when considered in combination with Gerawan’s other conduct, supported a

finding of overall bad faith bargaining.

4. Just Cause

The Board found Gerawan’s position with respect to the Union’s just cause

proposal was “further evidence of a mindset not open to agreement or true give-and-take”

required by the duty to bargain in good faith. Gerawan contends it never rejected the

proposal, but rather was merely asking for clarification of the “just cause” standard

which, if left undefined, would give an arbitrator the power to define the term. (See

Conoco, Inc. v. Oil, Chemical & Atomic Workers Int’l Union (N.D. Okla. 1998)

26 F.Supp.2d 1310, 1317.)

The Board found Gerawan’s rationale for resisting the just cause proposal was

unconvincing, given that the term is not foreign to practitioners in the field of labor law

and labor relations, or to labor arbitrators who often are called upon to apply it. (See

Show Industries, Inc. (1993) 312 NLRB 447, 455 [just cause standard for disciplinary

action is a common feature of a typical collective-bargaining agreement]; Prentice-Hall,

54.

Inc. (1988) 290 NLRB 646, 669 [noting that just cause is a “well-recognized and well-

defined standard”]; see also Landry v. The Cooper/T. Smith Stevedoring Co., Inc. (1989)

880 F.2d 846, 848, fn. 1 [“As is the usual circumstance in collective bargaining

agreements, the contract did not define ‘just cause’ ”].) The Board also found by not

attempting to provide its own definition of just cause, and instead feigning ignorance of

its meaning and insisting the Union define it, Gerawan reflected “shadow boxing” or

“giving the Union a runaround” that has been found to constitute a refusal to bargain.

(See NLRB v. Herman Sausage Co. (5th Cir. 1960) 275 F.2d 229, 232 (Herman

Sausage).)

The evidence supports the Board’s findings. While Barsamian testified Gerawan

never rejected the just cause standard and merely asked for a definition of it, Gerawan

proposed an at-will standard throughout the negotiations, a position it never moved from.

Initially Gerawan proposed it had “the right to hire, promote, discharge or discipline”

pursuant to its historical practice of at-will employment. Eventually Gerawan made the

following counterproposal to the Union’s discipline and discharge proposal: “The

company retains the right to discipline or discharge employees pursuant to federal and

state law and the terms of this Agreement.” Gerawan asserts it provided “numerous

modifications” to this counterproposal, but the record shows the counterproposal

remained the same throughout the negotiations. Barsamian’s claim that he was uncertain

of the meaning of just cause is undermined by the inclusion of just cause or for cause

limitations in Gerawan’s management rights proposals at the beginning and end of

negotiations, which Gerawan claimed were included in error.23

23 Gerawan asserts it “proposed various formulations of the just cause standard.”

Gerawan points to Barsamian’s testimony, in which he confirmed he was aware there

were legal treatises that would provide some guidance on the meaning of just cause and

said that after he talked about the standard with Elenes, he quoted a couple of those

treatises in letters to the general counsel’s partner and asked if that was what he meant,

but never received a response. It is unclear, however, when this communication

55.

The Board reasonably found Gerawan’s position with respect to the Union’s just

cause proposal provided further evidence it was not making real efforts to enter into an

agreement. (A-1 King Size Sandwiches, Inc. (1982) 265 NLRB 850, 859 [employer’s

efforts “to retain exclusive and unbridled control over discipline and discharge and both

layoff and recall” factored into finding of bad faith bargaining], enfd. sub nom. NLRB v.

A-1 King Size Sandwiches, Inc. (11th Cir. 1984) 732 F.2d 872, 876 [describing union’s

just cause proposal as “a common non-controversial clause”].)

5. Gerawan’s Concessions

Gerawan contends the Board ignored concessions and modifications it made to its

seniority and grievance and arbitration proposals, and failed to consider the significance

of them.

With respect to the seniority proposal, the Board explained that while Gerawan

made some concessions by offering to consider length of service in the context of layoffs,

recalls, and filling job vacancies, its limited concessions did not defeat the surface

bargaining allegations based on the totality of the circumstances. The Board viewed

these concessions as creating the impression of serious bargaining while making no real

effort to conclude an agreement. (McFarland Rose Production, Inc., supra, 6 ALRB

No. 18, p. 28; Herman Sausage, supra, 275 F.2d at p. 232 [“to sit at a bargaining table …

or to make concessions here or there, could be the very means by which to conceal a

purposeful strategy to make bargaining futile or fail”].)

With respect to the grievance and arbitration provision, the Board was not

persuaded Gerawan’s concessions were as noteworthy as it portrayed them. Noting that

grievance-arbitration is a common feature in collective bargaining agreements and serves

as “[a] major factor in achieving industrial peace” (United Steelworkers of America v.

Warrior & Gulf Navigation Co. (1960) 363 U.S. 574, 578), the Board found that while

occurred; Barsamian testified it occurred when “the new set of negotiations [] started up”

in 2015.

56.

Gerawan may have made more movement on this issue than the Union, its starting point,

namely, that Gerawan would determine employee grievances itself, allowed for the most

movement.

While Gerawan ultimately adopted nearly all of the Union’s proposed language, it

was reasonable for the Board to conclude this was not notable since Gerawan’s initial

proposal was so far removed from a standard grievance provision. The Board also

reasonably could find that Gerawan’s concessions were not sufficient to detract from its

rigid positions on the right to work, economic action, and union obligations proposals, as

well as its resistance to the Union’s basic just cause proposal, which evidenced a strategy

to frustrate the possibility of reaching a voluntary collective bargaining agreement. (See

Altorfer Machinery, supra, 332 NLRB at p. 150, citing NLRB v. Big Three Industries,

Inc., supra, 497 F.2d at p. 46.)

6. Conduct Away from the Bargaining Table

The Board determined Gerawan’s delay in providing information to the Union and

its March 2013 interim wage increases, as well as the flyers informing employees of the

increases, provided further evidence of bad faith bargaining. Gerawan challenges only

the Board’s finding with respect to the interim wage increases, namely, that Gerawan did

not give the Union a meaningful opportunity to bargain over them, arguing it did not have

such an obligation.

An employer violates its duty to bargain when it implements unilateral changes in

the terms and conditions of employment. (NLRB v. Katz (1962) 369 U.S. 736, 743.)

“[W]hen, as here, the parties are engaged in negotiations, an employer’s obligation to

refrain from unilateral changes extends beyond the mere duty to give notice and an

opportunity to bargain; it encompasses a duty to refrain from implementation at all,

unless and until an overall impasse has been reached on bargaining for the agreement as a

whole.” (Bottom Line Enterprises (1991) 302 NLRB 373, 374, emphasis omitted.)

Unilateral changes in mandatory subjects of bargaining are among the conduct that is

57.

indicative of a lack of good faith. (Atlanta Hilton & Tower, supra, 271 NLRB at

p. 1603.)

Gerawan announced hourly pay raises through flyers that informed employees the

decisions to grant pay raises were from “Ray, Mike, and Dan Gerawan,” who “made the

decision to give cultural labor employees a raise just as they always have,” and “informed

the union of our proposed plan, and we assume they will not cause any unnecessary

delay.” The Board agreed “with the ALJ that Gerawan gave the UFW notice of a fait

accompli, not a meaningful opportunity to bargain, that presented the union the Hobson’s

choice to quickly accept Gerawan’s terms or face further disparagement by it.” (See

Champion International Corp. (2003) 339 NLRB 672, 678‒688; S & I Transportation,

Inc. (1993) 311 NLRB 1388, fn. 1; J.P. Stevens & Co., supra, 239 NLRB 738 [employer

presented the union with a “ ‘Hobson’s choice’—either accept or reject unilaterally

predetermined modifications in benefit programs”; “this tactic was a most effective

means of undermining the collective-bargaining process and denigrating the Union’s

status as collective-bargaining agent”].)

Gerawan contends this conclusion was erroneous because “[w]age changes that

merely reflect continuations of past company policy are not considered changes in

existing work conditions, and thus fall outside the Katz rule.” (Aaron Brothers Co. v.

NLRB (9th Cir. 1981) 661 F.2d 750, 753; see NLRB v. Southern Coach & Body Co. (5th

Cir. 1964) 336 F.2d 214, 217‒218 [promotions necessitated by a strike, which did not

involve discretionary pay raises, did not violate Katz rule; the NLRA does not prohibit

an employer from making necessary work force adjustments in the absence of evidence

of deviation from established company policy or refusal to bargain with respect to the

standards to be used for promotion].)

Gerawan claims the wage increases were made pursuant to its “established

practice of providing competitive wage increases and the business necessity underlying

its wage increases.” It cites no evidence, however, to show a past practice of providing

58.

automatic wage increases on a regular basis as part of an established company policy.

Elenes testified Gerawan told him, when discussing the wage proposal, that they were

raising wage rates because “some of their competitors were raising rates and they wanted

to stay above the competition.” This testimony, however, does not establish that

Gerawan had an established policy of raising wages to stay ahead of the competition.

The Board reasonably could find, based on the flyers, that the raises were made, not to

stay above the competition, but rather as part of “a strategy to undermine the union in the

eyes of the employees” by depicting the Union “as an obstacle to Gerawan’s ability to

bestow its good will on the employees,” and portray itself “as the benefactor of its

employees.”24

The mediator’s report, which Gerawan cites, also does not establish there was a set

policy of wage increases; instead, it shows the discretionary nature of the raises. When

discussing wages, the mediator noted the minimum wage was the driving force for wage

levels in California agriculture absent union representation, and Gerawan’s 10-year wage

history demonstrated that in certain instances, but not all, Gerawan paid more than the

minimum wage. The mediator noted the two March 2013 increases implemented within

a week of each other occurred in the context of renewed bargaining with the Union, and

“[t]he rationale for raising wages so dramatically at that time cannot simply be explained

as a desire to remain in ‘the forefront’ of agricultural labor compensation providers or by

a need to attract the best workers.” Thus, the mediator actually found the raises at issue

were not linked to any policy, and instead were discretionary.

24 In Gerawan II, we concluded there was substantial evidence to support an unfair

labor practice charge based on direct dealing relating to the flyers announcing the March

2013 pay raise, as “[r]easonably implicit in this message to its employees was that

Gerawan was granting the pay raises entirely on its own, apart from the union, and that it

was hoped that the union would not delay or get in the way of what Gerawan alone was

doing for them.” (Gerawan II, supra, 23 Cal.App.5th at p. 1211.)

59.

Based on the record as a whole, the Board reasonably could find Gerawan’s

conduct surrounding the March 2013 wage increases further evidenced Gerawan’s lack of

good faith in bargaining towards a collective bargaining agreement. (Montebello Rose

Co., Inc. (1979) 5 ALRB No. 64, p. 25 [“ ‘Conduct reflecting … an underlying purpose

to bypass or undermine the union … manifests the absences of a genuine desire to

compromise differences and to reach agreement in the manner the Act commands.’ ”];

Akron Novelty Mfg. Co. (1976) 224 NLRB 998, 1001.)25

7. Conclusion

In sum, the Board’s findings are supported by substantial evidence on the record

considered as a whole. While the Union’s sudden reappearance after a 17-year absence

created a “dramatic shift from the long-term status quo” that “profoundly affected both

Gerawan and its workers” (Gerawan II, supra, 23 Cal.App.5th at p. 1207), Gerawan had

25 The Board also addressed Gerawan’s contention that the ALJ erred in citing to the

Board’s findings in Gerawan Farming, supra, 42 ALRB No. 1, in which the Board found

Gerawan committed unfair labor practices related to the decertification election, because

an appeal of that decision was pending in this court. In rejecting the argument, the Board

noted that while the ALJ did not specifically rely on the Board’s findings of unlawful

support and assistance to the decertification effort, solicitation of grievances, and

employee direct dealing it made in its prior decision, it “would find nothing improper in

doing so,” as it was “not required to ignore this history.” Gerawan contends in its

supplemental brief that because we rejected many of those findings and conclusions in

Gerawan II, the factual basis and context the Board relied on in reaching its decision in

this case is undermined. The Board, however, specifically stated: “[W]hile the record of

Gerawan’s bargaining conduct in this case fully supports our findings that it simply

engaged in the surface motions of bargaining without any real intention of reaching

agreement with the union, we consider such unlawful conduct as found in our prior

decision as providing additional context to the parties’ labor relations.” The Board,

however, clearly stated its “findings and affirmance of the ALJ’s surface bargaining

findings are based on the record in this case,” and its “ultimate disposition of Gerawan’s

petition for review in the other case has no bearing on our disposition of this case.” As

the Board points out in its supplemental brief, neither the Board’s preceding discussions

on the surface bargaining question concerning the contract proposals at issue, nor

Gerawan’s delay in responding to the Union’s information request, rely on any findings

made on the Board’s earlier decision in 42 ALRB No. 1.

60.

a duty to bargain in good faith with the Union and could not “unilaterally declare” that it

would “refuse to engage with the union” because it believed the Union had abandoned its

employees (Gerawan I, supra, 3 Cal.5th at p. 1159). In its bargaining, Gerawan was

permitted to stand firm on its positions if it reasonably believed them to be fair, but it

could not merely go through the motions without any real intent to reach an agreement.

Here, the Board found Gerawan was going through the motions without any real

intent of reaching an agreement based on its proposals and positions taken on the right to

work, economic action, and union obligations proposals, as well as the Union’s just cause

provision, which centered only on its philosophical opinions of its employees’ right to

choose and failure to truly consider the Union’s proposals. As we have explained, there

is substantial evidence to support these findings. Our function is not to decide what

inference we would draw from the facts presented, but rather whether reasonable minds

could draw the one the Board did. (Stonewall Cotton Mills, Inc. v. NLRB (5th Cir. 1942)

129 F.2d 629, 631.) The Board’s findings are neither “irrational,” “tenuous,” nor

“unwarranted.” (Penasquitos Village, Inc. v. NLRB, supra, 565 F.2d at p. 1079.) These

findings are “supported by substantial evidence on the record considered as a whole, and

will not be disturbed.” (Dal Porto, supra, 163 Cal.App.3d at p. 553.)

E. Farm Labor Contractor Workers

The Board found that Gerawan violated section 1153, subdivision (e) by

(1) refusing to bargain over the wages, hours and terms and conditions of employment of

FLC workers, which is a per se violation of the duty to bargain, and (2) insisting on

removing the FLC workers from the scope of any collective bargaining agreement.

Farm labor contractors are not employers under the Act; instead, the employer

engaging the farm labor contractor is “deemed the employer for all purposes under [the

Act].” (§ 1140.4, subd. (c); Cardinal Distributing Co. v. Agricultural Labor Relations

Bd. (1984) 159 Cal.App.3d 758, 768.) FLC workers therefore are part of the bargaining

unit represented by the Union and Gerawan is deemed their employer for purposes of

61.

collective bargaining. (§§ 1140.4, subd. (c), 1156.2; Bud Antle, Inc. (2013) 39 ALRB

No. 12, p. 9; TMY Farms (1976) 2 ALRB No. 58, pp. 4‒5.) An employer’s refusal to

bargain over the wages, hours and other terms and conditions of employment of FLC

workers constitutes a per se violation of the duty to bargain. (Paul W. Bertuccio (1984)

10 ALRB No. 16, ALJ Dec. pp. 21, 27, enfd. in relevant part sub nom. Bertuccio v

Agricultural Labor Relations Bd. (1988) 202 Cal.App.3d 1369, 1377.)

A proposal to modify the scope of a bargaining unit or remove employees from it

is not a mandatory subject of bargaining. (Hess Oil & Chemical Corp. v. NLRB (1969)

415 F.2d 440, 445 [holding “an issue concerning the construction of an appropriate unit

so as to exclude certain members from that unit is not a subject for bargaining and an

insistence upon it constitutes a violation” of the NLRA].) Likewise, an employer’s

insistence that bargaining be restricted to less than all employees in the bargaining unit

constitutes a refusal to bargain. (Paul W. Bertuccio, supra, 10 ALRB No. 16, ALJ Dec.

p. 20, citing Beyerl Chevrolet, Inc. (1975) 221 NLRB 710 [employer’s “inclusion of

language which arbitrarily limits the scope of the unit in any of its bargaining proposals

shows a reluctance on its part to attempt to reach a collective-bargaining agreement” and

constitutes bad faith bargaining].)

Gerawan’s initial proposal was to exclude FLC workers from the terms of any

agreement. Gerawan adhered to this proposal as written until its June 3, 2013 proposal.26

While Gerawan agreed to include FLC workers under the grievance/arbitration provision,

it continued to propose leaving all of the other terms and conditions of employment of

26 Gerawan claims it dropped the proposal to wholly exclude FLC workers from the

agreement by March 21, 2013. In making this statement, however, Gerawan cites to the

Union’s March 21, 2013 proposal. On March 19, 2013, Gerawan proposed adding a

sentence to its original proposal excluding FLC workers, which stated it would “continue

its past practice of making its best efforts” to employ direct-hire crews before FLC crews,

but it would not guarantee direct-hire crew employees would be hired before or laid off

after all FLC workers. The Union’s March 21, 2013 response was to propose striking the

exclusion of FLC workers and modify the added sentence to state only that Gerawan

would use its best efforts to employ direct-hire crews before farm labor contractor crews.

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such workers for the farm labor contractors to determine. At the hearing, Gerawan’s

counsel conceded the FLC workers were part of the bargaining unit, explaining that

Gerawan’s position was that it could treat them differently than other bargaining unit

members.

The Board found Gerawan’s proposals “effectively removed determinations

concerning FLC workers’ terms and conditions of employment from the scope of any

contract.” Gerawan contends this is not a fair characterization of its position. But that is

precisely what Gerawan’s proposals did—FLC workers’ wages and benefits, as well as

the discipline and discharge procedures applicable to them, would be set by the farm

labor contractors rather than the contract. The Board reasonably could find that by

insisting the FLC workers remain outside the majority of the contract’s terms, Gerawan

in effect was refusing to bargain over the terms and conditions of employment, which is a

per se violation of the duty to bargain.27

Gerawan contends the Board’s reliance on Paul R. Bertuccio, supra, 10 ALRB

No. 16 is misplaced, as there the grower refused to consider any proposals regarding FLC

workers for three years and the Board expressly found the employer’s position prevented

the parties from reaching agreement. Even so, the principle remains that an employer

may not insist on excluding employees who are part of the bargaining unit or restrict

27 Gerawan contends the Board improperly considered positions it took after May 17,

2013, the date the original complaint was filed, which alleged conduct during bargaining

sessions from January to April 2013. Gerawan argues the Board exceeded the scope of

the charged conduct, as the Board may not find an unfair labor practice based on conduct

that was “not charged nor otherwise properly placed in issue” and where the employer

“was not placed on notice it was required to defend against those charges.” (George

Arakelian Farms, Inc. v. Agricultural Labor Relations Bd. (1986) 186 Cal.App.3d 94,

103.) Gerawan, however, was placed on notice that the charged conduct extended past

May 17, 2013, through allegations made in the third amended consolidated complaint

filed on September 9, 2016. There it was alleged that “[t]hroughout the negotiations with

the UFW over a CBA, Gerawan proposed and insisted that the terms of any collective

bargaining agreement would not apply to its FLC employees,” and cited as evidence

Gerawan’s June 3, 2013 proposal, and 11 bargaining sessions in which Gerawan never

offered a proposal to extend the contract to FLC employees.

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bargaining to less than all members of the unit. (Beyerl Chevrolet, Inc., supra, 221

NLRB at p. 720.) Gerawan asserts it never refused to bargain over the FLC workers, but

as we have discussed, the Board reasonably found that it effectively did.28

Finally, Gerawan contends the Board ignored the mediator’s findings regarding

farm labor contractor issues. In setting out the parties’ positions, the mediator noted the

Union sought to preserve the work of direct-hire employees by prohibiting the use of

farm labor contractors when it would cause a lay-off of direct hires, and to bind the

contractor to the wages, and terms and conditions of employment, applicable to direct

hires under the agreement. Gerawan asserts the Union therefore proposed preferential

treatment of one group of employees over another in violation of its duty of fair

representation. Gerawan further asserts even the mediator noted other collective

bargaining agreements “reveal that agricultural employers apply a wide range of

exceptions to the CBA’s provisions when applied to FLC workers.” From this, Gerawan

claims there is nothing that “prevents giving preferential treatment to hiring/recalling

direct-hires outside of a contract.”

The mediator, however, also noted that farm labor contractors’ exclusions are

commonly found in the subcontracting clause, and even contracts Gerawan cited

contained limitations on the use of subcontractors, namely, that they will not be used to

the detriment of direct hires, must have skills or equipment the bargaining unit employees

do not, or are needed for demands dictated by time and weather. The mediator then

found the wages, hours and other terms and conditions of employment of the collective

28 Gerawan claims its later proposals were closer to the Union’s proposal than its

original one, citing to a statement in the Union’s negotiator’s February 13, 2013 notes

that “FLC language is a lot closer.” It is apparent from the note, however, that this

statement was made by a Gerawan negotiation team member, “MM,” in response to a

review of the Union’s February 12, 2013 proposal, in which the Union proposed to

amend the first section of its original proposal to provide that Gerawan would “make best

efforts” to use direct-hire employees. Gerawan did not propose any changes to the farm

labor contractor proposal in its February 12, 2013 proposal.

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bargaining agreement should apply to FLC workers, as they are deemed employees of

Gerawan, and because they have the right to sign certification or decertification petitions

and vote in representation elections, they have an impact on whether they, as well as

direct-hire employees, are represented when engaged at an employer’s operations.

The mediator in fact found that it was reasonable for the Union to give preference

to direct hires over FLC workers with respect to hiring and layoffs, but when FLC

workers were used, their wages, hours and terms and conditions of employment must be

equivalent to those given direct-hire employees under the contract. Thus, the mediator’s

findings actually support the Board’s conclusion that Gerawan’s insistence on removing

the FLC workers from the scope of any collective bargaining agreement, and its

persistent refusal to bargain over their wages and terms and conditions of employment,

constituted a refusal to bargain in good faith in violation of section 1153, subdivision (e).

F. Separation of Powers

After the Board adopted the mediator’s report setting the terms of the MMC

contract, Gerawan petitioned this court for review of that order, raising constitutional

challenges to the MMC statute, which encompassed some of the terms that were part of

the Board’s bad faith finding in this case. During the pendency of that proceeding, the

hearing on the unfair labor practice charges at issue here was held, the ALJ issued his

decision, and the Board addressed the parties’ exceptions and issued its order affirming

the ALJ’s factual findings and legal conclusions, which Gerawan petitioned this court to

review. After briefing was completed in this case, we dismissed Gerawan’s petition from

the Board’s order adopting the MMC contract as moot in light of the Union’s

decertification.

In Gerawan’s opening and reply briefs, Gerawan pointed out the Board’s bad faith

bargaining finding was based on terms the mediator imposed as part of the MMC

contract, notwithstanding the fact this court had yet to decide whether these (and other)

terms of the contract were arbitrary, unconstitutional or imposed unlawfully in Gerawan’s

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petition from the Board’s order adopting the MMC contract. Gerawan argued this

usurped this court’s exclusive jurisdiction to decide whether the disputed contract terms

were lawful before the Board passed judgment on Gerawan’s bargaining positions on

those terms. Gerawan asserted the Board assumed the MMC contract was valid,

notwithstanding the fact the decertification election took place before the contract was

imposed.

The Board argued in its brief that the then pending judicial review of the Board’s

earlier decision had “no impact” on its ability to examine whether Gerawan engaged in

bad faith bargaining in the negotiations that preceded that order. The Board explained

that this case concerns Gerawan’s bargaining conduct leading up to August 2013, four

months before the Board’s order adopting the MMC contract, when Gerawan’s violation

of the Act was complete. The Board asserts the fact that later events produced a contract

does not retroactively convert Gerawan’s unlawful conduct into lawful conduct or

preclude the Board from remedying the effects of the violation.

In supplemental briefing on the effect of the Union’s decertification on the parties’

arguments, Gerawan contends the election’s nullification of the MMC contract not only

calls into question the validity of the contracting process imposed on Gerawan and its

workers, but also undermines the Board’s holding that Gerawan’s objections to terms the

mediator imposed, which are now void, were improper.

The Board responds in its supplemental brief that this case is not about MMC or

the contract eventually ordered into effect at the conclusion of MMC, but rather

Gerawan’s conduct both before MMC and outside the mediator’s presence after the

parties were ordered to MMC. The Board argues the disposition of the earlier MMC

litigation has no bearing on Gerawan’s bad faith conduct during its negotiations with the

Union outside the context of MMC, noting Gerawan concedes its good faith bargaining

obligation continued until the Union was decertified.

66.

We agree with the Board that the earlier case has no bearing on this one. In this

case, the Board was judging conduct leading up to the formal MMC proceedings that

concluded before any MMC contract was adopted. The primary issue before the Board

was whether Gerawan engaged in good faith bargaining by entering into negotiations

with an intent to reach an agreement. The examination of this issue does not call into

question the validity or legality of the terms the mediator ultimately adopted. Rather, it

requires an analysis of Gerawan’s state of mind, as shown by its conduct at and away

from the bargaining table.

IV. The Make-Whole Remedy

“The ALRA authorizes the Board to grant certain remedies, including make-whole

relief, when it determines that a party has engaged in unfair labor practices. (§ 1160.3.)

‘Make-whole relief is a compensatory remedy that reimburses employees for the losses

they incur as a result of delays in the collective bargaining process. [Citation.] The

remedy is designed to give agricultural employees the type of economic benefits they

would have received if the parties had reached a timely agreement.’ ” (Tri-Fanucchi

Farms v. Agricultural Labor Relations Bd. (2017) 3 Cal.5th 1161, 1167‒1168, citing

George Arakelian Farms, Inc. v. Agricultural Labor Relations Bd. (1989) 49 Cal.3d

1279, 1286, fn. 3.)29

The ALRB has broad discretion in applying this remedial make-whole power.

(Holtville Farms, Inc. v. Agricultural Labor Relations Bd. (1985) 168 Cal.App.3d 388,

390.) “ ‘Because the relation of remedy to policy is peculiarly a matter for administrative

competence, courts must not enter the allowable area of the [ALRB’s] discretion and

29 Section 1160.3 provides that the Board shall issue an order “requiring such person

to cease and desist from such unfair labor practice, to take affirmative action, including

reinstatement of employees with or without backpay, and making employees whole, when

the board deems such relief appropriate, for the loss of pay resulting from the employer’s

refusal to bargain, and to provide such other relief as will effectuate the policies of this

part.” (§ 1160.3, italics added.)

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must guard against the dangers of sliding unconsciously from the narrow confines of law

into the more spacious domains of policy.’ ” (Carian v. Agricultural Labor Relations Bd.

(1984) 36 Cal.3d 654, 674.) Accordingly, the ALRB’s remedial order should not be

disturbed “ ‘unless it can be shown that the order is a patent attempt to achieve ends other

than those which can be fairly said to effectuate the policies of the Act.’ ” (Ibid.)

The Board concluded the make-whole remedy was appropriate under the

circumstance presented in this case. In considering make-whole relief, the ALJ and the

Board applied the test stated in William Dal Porto & Sons, Inc. v. Agricultural Labor

Relations Bd. (1987) 191 Cal.App.3d 1195. Under that test, once the Board produces

evidence showing the employer unlawfully refused to bargain, a presumption is created

that the parties would have consummated a collective bargaining agreement providing for

higher employee pay had the employer bargained in good faith. (Id. at pp. 1208‒1209.)

The burden of persuasion then shifts to the employer to rebut the presumption and if the

employer cannot do so, “the Board is entitled to find an agreement providing for higher

pay would have been concluded.” (Ibid.) To rebut the presumption, the employer must

produce “evidence of some alternative, legitimate cause for the parties’ failure to agree”

that shows “the parties would not have agreed even if the employer had not refused to

bargain.” (United Farm Workers v. Agricultural Labor Relations Bd. (1993)

16 Cal.App.4th 1629, 1640.)

Applying this test, the Board explained that since it found Gerawan unlawfully

engaged in surface bargaining in violation of the Act, it presumed an agreement

providing for higher employer wages would have been reached in the absence of

Gerawan’s unlawful conduct. The Board affirmed the ALJ’s conclusion that Gerawan

failed to meet its burden to show a contract providing for higher wages would not have

been reached had Gerawan bargained in good faith.

The Board also found make-whole relief was appropriate under the F & P

Growers standard, in which the Board “consider[s] on a case-by-case basis the extent to

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which the public interest in the employer’s position weighs against the harm done to the

employees by its refusal to bargain. Unless litigation of the employer’s position furthers

the policies and purposes of the act, the employer, not the employees, should ultimately

bear the financial risk of its choice to litigate rather than bargain.” (F & P Growers Assn.

v. Agricultural Labor Relations Bd. (1985) 168 Cal.App.3d 667, 682.) The Board found

Gerawan’s conduct did not further the policies and purposes of the Act, as its decision to

engage in a “ ‘time-consuming bargaining charade,’ part of which ‘included an

unrelenting effort to discredit’ its employees’ representative” was inimical to the

purposes of the Act, and “was destructive of the core right of employees ‘to negotiate the

terms and conditions of their employment’ through their bargaining representative.”

The Board rejected Gerawan’s argument that a make-whole award was not

appropriate when MMC has been invoked. The Board noted there was nothing in the

MMC statute that precluded a make-whole award for an unfair labor practice violation.

Moreover, the mediator’s authority in the MMC process was limited to resolving the final

terms of a collective bargaining agreement regarding the mandatory subjects of

bargaining; the mediator did not have authority under the MMC process to order unfair

labor practice remedies. Finally, the parties continued to bargain without the mediator’s

assistance after MMC was invoked.

Gerawan does not challenge the Board’s application of the Dal Porto test and its

decision to impose the make-whole remedy based on Gerawan’s conduct. Instead,

Gerawan challenges the Board’s authority to award make-whole relief when a party is

engaged in MMC. Gerawan contends the Board does not have the statutory authority to

impose make-whole relief and make-whole remedies violate its due process rights.

As we explained in discussing a party’s good faith bargaining duty, section 1160

empowers the Board to adjudicate unfair labor practice charges that arise from

negotiations outside the mediator’s presence during the MMC process. This necessarily

includes the power, should the Board find that a party has engaged in an unfair labor

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practice, to, among other things, make employees whole “for the loss of pay resulting

from the employer’s refusal to bargain.” (§ 1160.3.)

Gerawan argues there can be no refusal to bargain once the parties enter MMC

because MMC will result in the imposition of a contract whether or not the employer

participates. While this may be true if we were examining an employer’s conduct during

MMC proceedings before the mediator, here we are addressing an employer’s conduct in

bargaining sessions held outside the mediator’s presence. Given that the parties have a

duty to bargain in good faith during those sessions, an employer in fact may be found to

have refused to bargain in those sessions despite the mediator’s ultimate ability to

establish the final terms of a collective bargaining agreement. Contrary to Gerawan’s

contention, the Board did not “vest itself with power beyond authority under its enabling

statute, or invent a new remedy out of whole cloth” when it found the make-whole

remedy was appropriate, as it was authorized to impose such a remedy under

section 1160.3.

Gerawan asserts “[t]he Board does not explain why it may second-guess the

mediator’s decision not to sanction Gerawan for what it deems unlawful conduct, let

alone why it may pile on top of retroactive wage increases already imposed by the

mediator.” As we have explained, the purpose of the MMC statute is to facilitate the

negotiation and completion of collective bargaining agreements, with the parties retaining

the right to reach voluntary agreement on disputed issues. (Gerawan Farming I, supra,

3 Cal.5th at p. 1130; Gerawan Farming III, supra, 40 Cal.App.5th at p. 271.) The

mediator’s authority in the MMC process is limited to resolving the final terms of a

collective bargaining agreement. The MMC statute “does not give a mediator the

authority to find unfair labor practices, or to remedy them.” (Arnaudo Brothers (2015)

41 ALRB No. 6, ALJ Dec. p. 13, enfd. sub nom. Arnaudo Brothers, supra,

22 Cal.App.5th 1213.) The authority to order unfair labor practice remedies remains

exclusively with the Board. (§§ 1160.3, 1160.9.)

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Gerawan complains that imposing unfair labor practice liability “on top of the

contract terms fixed by the mediator (or the sanctions he may impose) creates a serious

risk of contradictory and double punishment.” Gerawan asserts that if the Board has the

power to adjudicate unfair labor practice charges within MMC, the Board could punish as

an unfair labor practice a party’s failure to comply with its discovery obligations, even if

the mediator chose not to do so,30 or an employer who declines to participate in MMC

may be subject to both a contract based solely on the Union’s proposals and monetary

sanctions for failure to bargain.31 The distinction here, however, is that the Board did not

punish Gerawan’s conduct in the MMC process, but rather its conduct during

negotiations held outside the mediator’s presence. Our conclusions in this case are

limited to that situation.

Gerawan contends its due process rights were violated because the Board imposed

a new policy, not found in the MMC statute, that an employer is required to bargain in

good faith during MMC, and retroactively fined it for failing to comply with that policy.

Generally, an agency “is not precluded from announcing new principles in an

adjudicative proceeding and … the choice between rulemaking and adjudication lies in

the first instance within the [agency’s] discretion.” (NLRB v. Bell Aerospace Co. (1974)

416 U.S. 267, 294.) In a “narrow class of cases,” however, an agency may abuse its

30 The parties have the ability to conduct discovery in MMC and the mediator is

empowered to “draw adverse inferences or impose terms, conditions, or sanctions” for

the purpose of enforcing the duty to make discovery. (Cal. Code Regs., § 20406,

subd. (d).)

31 Gerawan contends this is especially egregious since the Board’s regulations

contemplate that a party may refuse to participate in the MMC process without threat of

sanctions. The regulations provide that “[t]he failure of any party to participate or

cooperate in the mediation and conciliation process shall not prevent the mediator from

filing a report with the Board that resolves all issues and establishes the final terms of a

collective bargaining agreement, based on the presentation of the other party.” (Cal.

Code Regs., § 20407, subd. (a)(1).) While the mediator may impose a contract if a party

refuses to participate or cooperate, the regulations are silent on whether that party may

also be subject to unfair practice liability.

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discretion by announcing new rules through adjudication rather than through rulemaking,

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