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PERB Holds That Labor Association Must Make Financial Records Available to Member Upon Request at Any Time

Posted On: March 31, 2014

In California School Employees Association & Its Chapter 47 (“CSEA”) (2014) PERB Decision No. 2355, the California Public Employment Relations Board (“the Board”) recently ruled that a labor association governed by the Educational Employment Relations Act (“EERA”) must produce financial records for inspection within a reasonable time following a request by a member. As explained below, we believe the reasoning of the CSEA decision applies equally to other California public sector labor-relations statutes.

In the CSEA case, an association member made a vague request for “financial records (Treasurer’s Report)” and filed an unfair labor practice charge when the association allegedly failed to respond to the request. In defending the charge, the association claimed that it only had to provide such information within 60 days of the end of the fiscal year. The association relied on language in EERA, specifically Government Code section 3546.5, stating that “[e]very recognized or certified employee organization shall keep an adequate itemized record of its financial transactions and shall make available annually, to the board and to the employees who are members of the organization, within 60 days after the end of its fiscal year, a detailed written financial report thereof … signed and certified as to accuracy by its president and treasurer, or corresponding principal officers.”

The Board disagreed with the association’s reading of the statute, concluding that the 60-day period referenced in the statute refers to the time period during which the association must prepare such records—it is not a limitation on when a member may seek to review them. The Board did note, however, that the obligation to prepare financial records within 60 days of the end of the fiscal year does not imply that the association is required to automatically distribute them in the absence of an inspection request. Finally, the Board determined that the vague request for “financial records (Treasurer’s Report)” was sufficient to put the association on notice that he was requesting financial reports within the meaning of the statute.

While this case arose under EERA, the same rationale should apply under the  Meyers-Milias Brown Act, the Ralph C. Dills Act, the Higher Education Employer-Employee Relations Act, and other California public sector labor-relations statutes containing similar financial reporting requirements. 

Comment:  This is a welcome clarification of labor association reporting requirements. While the association lost the dispute, the outcome does not impose any new reporting requirements—it merely requires that reports an association must already prepare be made available at any time upon request, rather than during a limited 60-day period. And, frankly, the Board’s reading of the statute makes more sense than the position argued by the association.

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