COUNTY OF SANTA CLARA v. SERVICE EMPLOYEES LOCAL 715 SEIU AFL CIO (1979)

This is an appeal from a judgment of the Superior Court to vacate a labor arbitration award which ordered the County of Santa Clara to promote three persons to the position of Road Maintenance Worker (hereafter “RMW”) IV, and bypass several other employees who scored higher on the merit system examination for these positions.

The following material facts found by the arbitrator are not disputed:

In 1971, the county undertook a study of positions involved in the maintenance of county roads and expressways.   These positions had not been studied since 1964.   Assistant Director of Personnel, Charles Lafferty, testified that the 1971 study encompassed all of the road maintenance worker positions, including the RMW III positions then occupied by the grievants.   According to the Summary Classification Report covering the study, job audits were conducted of “nearly half” the positions covering each identifiable work area and representative samples of those positions where there were a substantial number of positions in one work assignment.

Prior to the 1971 study, the differences between RMW III and IV classifications were based on the kind of equipment that was operated.   And it was not possible to progress in classification from III and IV without passing an equipment operator test.   The intent of the study, according to Lafferty, was to establish a dual concept of the RMW IV classification based upon the equipment operator functions and the leadman functions.   In other words, at least part of the objective of the study was to give recognition to the lead functions being performed by certain employees in the RMW III classification and to develop an examination so that employees could progress to RMW IV on the basis of their lead capabilities.

As a consequence of the 1971 study, nine RMW III positions were classified upward to RMW IV.   The positions occupied by the grievants were not among those reclassified to RMW IV.   The record does not show the basis for the reclassifications, nor whether any of the reclassifications were made only on the basis of the leadman functions being performed.   However, in order to qualify for the reclassification to RMW IV, the employees were required to pass the RMW IV equipment operator examination.

Following the 1971 study, which study was implemented by the board of supervisors in January 1972, the county developed an RMW IV leadman examination.   That examination was administered by the county in early 1974.   However, because of the great concern expressed by the employees as to the results of the examination, Director of Personnel, Gary C. Foss, announced in a March 26, 1974 memorandum to all affected employees that the entire selection process that had been developed would be cancelled.   The key concern of the employees and the union with respect to the selection process that had been used related to the use of two interview boards.   These two boards had produced final scores that were simply not compatible.   In his memorandum, Foss stated that a new selection process would be developed;  that Leadman III/IV candidates would be involved in the development of that process;  and that “we will look toward the use of only one interview board” for the next examination.

After the 1974 examination was thrown out, a series of meetings were held between the union and the county to discuss problems in the yard.   The union was concerned because it believed that several employees had been performing RMW IV duties for up to 15 years while in RMW III classifications.   The union sought to have such employees appointed to IV positions.   In late 1974, however, an impasse was reached between the parties on this subject.   Thereafter, the county proceeded on the basis of criteria it had developed as to when both an RMW IV leadman and an RMW IV equipment operator would be required on a job and when an RMW IV could serve in a dual lead-equipment operator role.   On the basis of such criteria, the county relieved the grievants herein of their lead functions and assigned the lead duties to RMW IV equipment operators.   This action created a great deal of furor among the employees, but for all practical purposes the crews continued to recognize the grievants as leadmen and the grievants continued to perform the lead functions.

At this point, according to the union, in order to resolve the difficulties that had arisen, the county asked for the names of five RMW III's whom the union believed had been performing RMW IV duties.   The union supplied five names;  the county offered provisional RMW IV appointments to four of the workers, one of whom turned the appointment down, and the provisional appoints of the grievants were thus made effective April 21, 1975.

According to the county, the three provisional appointments were made because the criteria that had been developed by the county for RMW IV assignments dictated a need for additional leadmen for safety reasons.   However, the record does not show that there was any change in the duties performed by the grievants upon their provisional appointments to RMW IV.   Rather, it is fair to conclude from the record that the job duties of the grievants have remained essentially unchanged since 1961 for Citrigno;  since 1960 for Median;  and since 1964 for Souza.   Also, at various times during this period, each of the grievants was assured by his foreman that he would “soon” be made an RMW IV.

The provisional appointments of the grievants to RMW IV continued for the six months allowed by Merit System Rule A25–189.   Following the expiration of that period, on October 21, 1975, the grievants began receiving pay at the RMW IV rate for work out of classification in accordance with section 7.5 of the agreement.   The grievants have continued to receive such pay up to the present time.

Meanwhile, another RMW IV leadman examination was developed and administered by the county to some 48 employee-candidates.   Again the employees protested the results of the examination.   The union thereupon challenged the examination because (1) contrary to the union's understanding on the basis of Foss' March 26, 1974 memorandum and subsequent discussions with the county, the union's concerns with respect to the earlier examination were not taken into consideration in the development of the March 1975 examination;  (2) no credit was given for past experience in ranking employees on the eligibility list.   The union's concern here, and the heart of the dispute in this matter, is that while the three grievants passed the examination, none of the grievants is among the top three on the RMW IV eligibility list.   Therefore, if permanent RMW IV appointments are made on the basis of this eligibility list, the jobs that the grievants have been performing for years will be awarded to other, less senior and less experienced workers;  (3) three oral interview boards, rather than one such board, were used;  and (4) the examination consisted of questions developed from a departmental safety manual to which manual the employees have never had access.

The dispute proceeded through the appropriate steps of the grievance procedure and on June 16, 1976, a hearing was held before Arbitrator Emily Maloney.   At that time, the union contended that the grievants were entitled to selective appointment to the RMW IV positions because they performed the duties of RMW IV classifications for years and that in each case the foreman recognized that the grievants had been performing the work at IV level for the periods claimed;  that the foreman made representations to the grievants over the years that they would be given IV status;  that recognition had been given in the case of other RMW III's performing IV work;  and that these grievants were being discriminated against because of the county's failure to accord them equal treatment by way of RMW IV status.

The union asserted that there was ample authority within the Merit System Rules for correcting the inequities that existed with respect to the workers.   Rule A25–103 ¹ sets forth the principle that workers are to be accorded like treatment, and Rule A25–184 ² provides the mechanism for doing so by selectively appointing the grievants to the RMW IV positions.   Additionally, the union argued that selective appointments had been made in the past under similar circumstances.

The county took the position that the real question presented was whether or not the grievants were performing duties outside of the scope of their present position classification so as to warrant the reclassification of their positions to RMW IV.   Therefore, the county maintained the dispute was not arbitrable because position classification matters are specifically excluded from consideration under the grievance procedure by section 18.1(b) of the agreement.³

In her opinion, the arbitrator specifically directed her attention to the question of arbitrability, and determined that the grievance was not fairly characterized as a position classification matter.   She found that even if the matter could be said to fall within the scope of position classification, it was arbitrary because it involved a claim of discriminatory application of the County Merit System Rules.

The arbitrator found there was no dispute between the parties that the grievants were performing RMW IV duties and that the county had recognized this fact by its provisional appointment of the grievants to the RMW IV positions on April 21, 1975;  by compensation of the grievants at the RMW IV rate for work out of class following the expiration of the provisional appointment period;  and the county in its post-hearing brief acknowledged that the grievance raised questions as to pay for work out of class going back several years.

Therefore, the arbitrator determined that the question was not one of position classification but rather whether the county should be required to give continued and formal recognition to the fact that the grievants were performing RMW IV work.

The arbitrator examined the language of section 18.1 of the agreement and the merit system rules relevant to the dispute.   She found that section 18.1 of the agreement provided that grievances of alleged violation, misapplication or misinterpretation of merit systems rules are arbitrable except for certain matters, including position classification, that are specifically excluded.   The arbitrator stated:  “The procedures for the carrying out of position classifications are set forth in Merit System Rules, Section A25–96, et seq.   However, there is also a provision in Merit System Rule A25–34 which states that ‘the rules shall apply in their entirety to all employees  ․ ․ ․’  Stated another way, that phrase means that the Merit System Rules shall not be applied in an arbitrary, capricious or discriminatory manner.   It follows, therefore, that a claim of discriminatory treatment of the grievants with respect to their position classification—an alleged violation of Merit System Rule A25–34—would indeed be arbitrable.”

The arbitrator went on to find that position classification matters are excluded from the grievance procedure but claims of discriminatory application of merit system rules governing position classification are arbitrable under the grievance procedure.

Based on her findings, the arbitrator determined that the grievants were entitled to selective appointment to RMW IV positions.   She specifically found that although other workers on the eligibility list had years of road maintenance worker experience, there was no evidence presented to show that such workers had for years performed RMW IV work or that they had been continuously recognized as RMW IV's, as had the grievants.

On November 23, 1976, the county filed a petition to vacate the arbitration award alleging that the arbitrator exceeded her powers in the remedy she fashioned for the grievants.

The court found that 1) the arbitrator exceeded her authority in that the issue involved pertained to “position classification” and merit system examinations, and thus was not arbitrable;  2) the arbitrator also exceeded her authority in the relief granted, and 3) the arbitrator refused to consider evidence material to the controversy.

Appellant's principal contention on appeal is that the issues involved in the arbitration did not pertain to position classification or merit system examinations and the subject matter was therefore arbitrable.

 As appellant argues, courts of California have long established the principle that every reasonable intendment must be indulged in to give effect to arbitration proceedings.  (Davey Tree Surgery Company v. International Brotherhood etc. (1976) 65 Cal.App.3d 440, 450, 135 Cal.Rptr. 300;  Sevey v. American Federation of State, County and Municipal Employees (1975) 48 Cal.App.3d 64, 71, 121 Cal.Rptr. 341;  United Brotherhood of Carpenters, et al. Local 642 v. DeMello (1972) 22 Cal.App.3d 838, 840, 100 Cal.Rptr. 564;  Turner v. Cox (1961) 196 Cal.App.2d 596, 603, 16 Cal.Rptr. 644.)

 Neither the merits of a controversy nor the sufficiency of the evidence to support an arbitrator's award are matters for judicial review.   (Morris v. Zuckerman (1968) 69 Cal.2d 686, 691, 72 Cal.Rptr. 880, 446 P.2d 1000;  Felner v. Merit Plan Insurance Company (1970) 6 Cal.App.3d 540, 544–547, 86 Cal.Rptr. 178;  Jordan v. Pacific Auto. Ins. Co. (1965) 232 Cal.App.2d 127, 135, 42 Cal.Rptr. 556.)   Under the rule of broad construction, an arbitrator is authorized to determine all questions which she needs to determine in order to resolve the controversy submitted to her and the arbitrator herself decides which questions need to be determined.  (Morris v. Zuckerman, supra, at p. 690, 72 Cal.Rptr. 880, 446 P.2d 1000;  Grunwald-Marks, Inc. v. Los Angeles Joint Board (1959) 52 Cal.2d 568, 589–590, 343 P.2d 23.)

 On the other hand, an arbitrator derives her power solely from the arbitration agreement and cannot exceed her derived powers.  (Delta Lines, Inc. v. International Brotherhood of Teamsters (1977) 66 Cal.App.3d 960, 966, 136 Cal.Rptr. 345.)   Although there is a strong policy in favor of enforcing agreements to arbitrate, there is no policy compelling parties to accept arbitration of controversies which they have not agreed to arbitrate and which no statute has made arbitrable.  (Freeman v. State Farm Mut. Auto. Ins. Co. (1975) 14 Cal.3d 473, 481, 121 Cal.Rptr. 477, 535 P.2d 341.)

 Thus, powers of an arbitrator are limited and circumscribed by agreement or stipulation of submission.  (Pac. Fire etc. Bureau v. Bookbinders' Union (1952) 115 Cal.App.2d 111, 114, 251 P.2d 694.   Accordingly, a court may vacate an award if it determines that the arbitrator exceeded her powers and the award cannot be corrected without affecting merits of the decision upon the controversy submitted.  (Code of Civ. Proc., § 1286.2(d);  Morris v. Zuckerman, supra, 69 Cal.2d at p. 691, 72 Cal.Rptr. 880, 446 P.2d 1000.)

 In the case at bench, the lower court found that the instant dispute concerns position classification.   Taking judicial notice of Santa Clara County's ordinance code, section 25–44 defines “class or class of positions” as a group of positions having duties and responsibilities sufficiently similar that the same title, examples of duties and requirements may be applied.   Section 25–97 states:  “Classification shall be based on the principle that positions shall be in the same class when their duties and responsibilities are enough alike to justify the same descriptive title, definition of duties and responsibilities and employment standards.”   Given these definitions, it appears to this court that the term “position classification” which appears in the subject agreement must be construed as meaning the abstract process of defining which duties and responsibilities are contained in any given position.   At the time of the arbitration hearing, the county contended that the dispute concerned whether or not the grievants were performing duties outside of the scope of their present position classification so as to warrant the reclassification of their positions to RMW IV.   However, the argument was untenable since the county had made provisional appointments of the grievants to the RMW IV positions on April 21, 1975, more than a year prior to the arbitration hearing;  the county had compensated the grievants at the RMW IV rate for work out of class following the expiration of the provisional appointment period;  and the county in its post-hearing brief acknowledged that the grievance raised questions as to pay for work-out-of-class going back several years.   Given these facts, the arbitrator concluded, and we agree, that there is no dispute with respect to the fact that the grievants are performing RMW IV duties.   This is not a case where the duties and responsibilities of the grievants differ from those established for the RMW IV classification.   Therefore, the question is not one of position classification, but rather, whether the county should be required to give continued and formal recognition to the fact that the grievants are performing RMW IV work.

The lower court also concluded that the grievance herein involved merit system examinations.   While it is true that a basis of the instant controversy rests in the fact that other applicants for the RMW IV position placed higher on the eligibility list, the dispute does not appear to concern the merit system examination itself.   Rather, Merit System Rule A25–103(d) ⁴ provides that an incumbent of a position which is reallocated upward (as happened in the present case) may be appointed to the new class by being eligible for and passing the appropriate examination without regard to his place on the eligible list.   The union argued that since this procedure had been employed in the past, it was discriminatory to refuse to do so in the present situation.   Thus, the grievance concerns discriminatory application of the merit system rules and not merit system examinations per se.

Having concluded that the present controversy falls neither within the “position classification” nor “merit system examinations” exclusions under the grievance procedure established by the parties, we must hold that the subject grievance was arbitrable.   Thus, there is little more that this court can do.   In O'Malley v. Wilshire Oil Co. (1963) 59 Cal.2d 482, 30 Cal.Rptr. 452, 381 P.2d 188, the California Supreme Court adopted the reasoning of United Steelworkers of America v. American Mfg. Co. (1960) 363 U.S. 564, 80 S.Ct. 1343, 4 L.Ed.2d 1403:  “The function of the court is very limited when the parties have agreed to submit all questions of contract interpretation to the arbitrator.   It is confined to ascertaining whether the party seeking arbitration is making a claim which on its face is governed by the contract.   Whether the moving party is right or wrong is a question of contract interpretation for the arbitrator.   In these circumstances the moving party should not be deprived of the arbitrator's judgment, when it was his judgment and all that it connotes that was bargained for.”   The court concluded:  “The courts, therefore, have no business weighing the merits of the grievance, considering whether there is equity in a particular claim, or determining whether there is particular language in the written instrument which will support the claim.   The agreement is to submit all grievances to arbitration, not merely those which the court will deem meritorious.”  (363 U.S. at pp. 567–568, 80 S.Ct. at pp. 1346;  see also, 59 Cal.2d at p. 488, 30 Cal.Rptr. 452, 381 P.2d 188.)

The court below made a finding that under the Merit System an employee had no right to be selectively appointed to a county position, and on this basis apparently concluded that the arbitrator exceeded her authority in making such an award.   This finding is clearly based on the court's interpretation of the Merit System Rules, which differs from the arbitrator's interpretation of those rules.   However, this is not an issue for the court to decide.

“The refusal of courts to review the merits of an arbitration award is the proper approach to arbitration under collective bargaining agreements.   The federal policy of settling labor disputes by arbitration ⁵ would be undermined if courts had the final say on the merits of the awards.   As we stated in United Steelworkers of America v. Warrior and Gulf Nav. Co., [363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409] [citation omitted], decided this day, the arbitrators under these collective agreements are indispensable agencies in a continuing collective bargaining process.   They sit to settle disputes at the plant level—disputes that require for their solution knowledge of the customs and practices of a particular factory or of a particular industry as reflected in particular agreements.

“When an arbitrator is commissioned to interpret and apply the collective bargaining agreement, he is to bring his informed judgment to bear in order to reach a fair solution of a problem.   This is especially true when it comes to formulating remedies.   There the need is for flexibility in meeting a wide variety of situations.   The draftsmen may never have thought of what specific remedy should be awarded to meet a particular contingency.  ․ ․ ․ ”   (U. S. Steelworkers v. Enterprise Corp. (1959) 363 U.S. 593, 596–597, 80 S.Ct. 1358, 1360–1361, 4 L.Ed.2d 1424.)

Moreover, in the recent case of Taylor v. Crane (1979) 24 Cal.3d 442, 155 Cal.Rptr. 695, 595 P.2d 129, our Supreme Court held that unless a charter expressly prohibits a city from agreeing to arbitrate a specific issue, the city retains the power to do so.   In Taylor, the Berkeley City Charter granted the city manager the power and duty to appoint, discipline or remove all  ․ ․ ․  subordinate officers and employees of the city, subject to the civil service provisions of the charter.   However, there was no provision in the charter barring the creation of an alternative form of appeal such as arbitration.   Here, section A25–103(d) reserves to the Director of Personnel discretion to allow the appointment of an incumbent employee who has passed the appropriate examination “without regard to his place on the eligible list.”   However, as was the case in the Berkeley City Ordinance, there is nothing in the Santa Clara County ordinances barring the possibility of another person, such as an arbitrator, making an appointment.

 In the case at bench, the arbitrator found that the grievants had been victims of inequitable treatment by the county's refusal to recognize and compensate them for the level IV work they had been performing for years, and that no serious argument could be that the Merit System Rules are to be used as a shield for the inequitable and discriminatory treatment of county workers.   There appears to be no limitation in the grievance procedure or in the County Merit System Rules for righting the wrongs done to these grievants by requiring the county to halt its discriminatory practices and demand the appointment of the grievants.   Since in an action to vacate an arbitration award under a collective bargaining agreement the function of the court is very limited, it was proper for the arbitrator to fashion the appropriate remedy.

Finally, the lower court found that the arbitrator excluded material evidence in violation of Code of Civ. Proc., § 1286.2(e).   The court found that the county offered to present evidence that other employees scored higher in the Merit System examination than did the grievants herein and had extensive experience.

At one point in the arbitration hearing, the arbitrator declined to hear evidence concerning the experience of other employees who scored higher on examination.   Thereafter, the county requested to augment the record so as to show that other applicants had experience as Road Workers and that some had been paid in the past for work-out-of-class as Road Worker IV's.   Thereafter, the county unsuccessfully urged the arbitrator to reconsider her award in light of further evidence concerning the experience of other employees.

We note that in the arbitration award, the arbitrator clearly acknowledges that other employees may have had extensive experience, and may have received higher scores on the Merit System examination than did the grievants.   However, she appears to have determined that these facts were not relevant to the particular inequities suffered by the grievants.   She states:  “The question, then, is not so much whether authority can be found in the Merit System Rules to grant to the employees formal recognition of their actual status as RMW IV's.   But, rather, the important question is whether the discretionary power of the County under the Merit System Rules can be construed to permit the continuation of the inequitable treatment that the record establishes has been accorded to these grievants.   Certainly no serious argument could be made that the Merit System Rules are to be used as a shield for the inequitable and discriminatory treatment of County workers.   Here it will be noted that while other workers on the eligibility list do have years of road maintenance worker experience, there has been no evidence presented to show that such workers have for years performed RMW IV work or that they have been continuously recognized as RMW IV's, as have these grievants for the past 16 months.   Therefore, the recognition of the grievants as RMW IV's will in no way result in discrimination against other workers on the RMW IV eligibility list.”  (Emphasis added.)

 Based on this statement, it is obvious that the material evidence was not excluded from the arbitration proceedings, but rather, the arbitrator determined that even if the additional evidence was submitted, it would not alter the fact that the grievants had performed RMW IV work and had been recognized as RMW IV's, whereas the other applicants had not.

 The determination of which issues are actually necessary to the ultimate decision is a question to be resolved by the arbitrator.  (Jones v. Kvistad (1971) 19 Cal.App.3d 836, 843, 97 Cal.Rptr. 100.)

 While parties to arbitration must be given every reasonable opportunity to present their evidence, arbitrators are not required to admit all relevant testimony whenever it may be offered or submitted to them;  orderly administration of justice requires that, within reason, evidence must be offered at the proper time and the parties must be diligent.  (Grunwald-Marx, Inc. v. Los Angeles Joint Board, Amalgamated Clothing Workers (1959) 52 Cal.2d 568, 587, 343 P.2d 23.)   Where a party seeking to vacate an arbitration award claims that the arbitrator cut short his testimony and refused to hear another witness, it is incumbent upon him to show that competent and material evidence was excluded.  (Moore v. Griffith (1942) 51 Cal.App.2d 386, 124 P.2d 900.)   Here, the county casually offered to produce evidence on the abilities of other RMW IV candidates;  it then requested to augment the record with comparative data on test results and experience;  but at no point did it seek to offer evidence that other candidates had been recognized as RMW IV's.   It was on this basis that the arbitrator must have made the determination that even if other workers had scored higher on Merit System examinations, they had not been treated disparately in terms of their job classifications as had been the grievants.   Based on this analysis, it is apparent that no material evidence was excluded from the hearing.

The judgment below is reversed.

FOOTNOTES

1.   Rule A25–103 provides in pertinent part:“(a) If an occupied position is reclassified, the incumbent shall be promoted, demoted or transferred to the new class in accordance with regular examination and certification procedures, except as indicated below.  ․ ․ ․“(d) When a position is reallocated upward, a continuing regular incumbent may be appointed to the new class with the director's approval by being eligible for and passing the appropriate examination without regard to his place on the eligible list.   This qualifying examination procedure may be used only when there is a clear showing that the duties of the position have gradually evolved without any purpose on the part of anyone to evade the merit principle provided that the incumbent has occupied the position for at least two (2) years and the reallocation is between classes within the same occupational group  ․ ․ ․”  (Emphasis added.)

2.   Rule A25–184 provides in pertinent part:“(a) Upon approval of a requisition from the appointing authority, the director shall certify the three (3) names highest on the appropriate eligible list  ․ ․ ․“(c) An appointing authority may specify particular abilities, knowledge or traits when requesting personnel stating in writing the reason for the special qualifications request.   Certification of the highest ranking eligible possessing such qualifications may be made after investigation and finding of clear evidence that efficient performance can best be performed by those with the specialized requirement.”

3.   Section 18.1 of the agreement provides in part:“a) Definition:  A grievance is defined as an alleged violation, misinterpretation, or misapplication of the provisions of this Memorandum of Agreement and/or Understanding, Merit System Rules, or other County ordinances, resolutions, Policy and/or Procedure Manuals, or alleged infringement of a worker's personal rights (i. e. discrimination, harassment) affecting the working conditions of the workers covered by this Agreement, except as excluded under Section 18.1(b).“b) Matters Excluded From Consideration Under the Grievance Procedure  ․ ․ ․“3. Position classification.  ․ ․ ․“5. Merit System Examinations.”

4.   See fn. 1

5.   Adopted by the California Supreme Court in O'Malley v. Wilshire Oil Co., supra.

MILLER, Associate Justice.

TAYLOR, P. J., and ROUSE, J., concur.