California Government Code section 3505
Under the Meyers-Milias-Brown Act (MMBA) (Gov. Code, 3500 et seq.), a public employer and a recognized employee organization have a mutual obligation to meet in person and confer promptly upon either party's request in an endeavor to reach agreement on matters within the scope of representation before the public agency's adoption of its final budget for the coming year (Gov. Code, 3505).
In Claremont Police Officers Assn. v. City of Claremont (2006) 39 Cal.4th 623, the California Supreme Court clarified a three-part test (the Claremont test) to determine whether an employer's action is subject to the meet-and-confer requirements of Government Code section 3505:
"First, we ask whether the management action has 'a significant and adverse effect on the wages, hours, or working conditions of the bargaining-unit employees.' If not, there is no duty to meet and confer. Second, we ask whether the significant and adverse effect arises from the implementation of a fundamental managerial or policy decision. If not, then ... the meet-and-confer requirement applies. Third, if both factors are present--if an action taken to implement a fundamental managerial or policy decision has a significant and adverse effect on the wages, hours, or working conditions of the employees--we apply a balancing test. The action 'is within the scope of representation only if the employer's need for unencumbered decisionmaking in managing its operations is outweighed by the benefit to employer-employee relations of bargaining about the action in question.' In balancing the interests to determine whether parties must meet and confer over a certain matter , a court may also consider whether the 'transactional cost of the bargaining process outweighs its value.' "