The Meyers-Milias-Brown Act (MMBA) (Gov. Code, §§ 3500–3511) governs labor disputes between California public employers and unions, and establishes impasse procedures. Under the MMBA’s default scheme, a factfinding panel’s settlement recommendation is “advisory only,” and the employer may, after a public hearing, implement its last, best, and final offer. As an alternative, the statute allows charter cities and counties to adopt their own impasse procedures – so long as those procedures include binding arbitration (Gov. Code, § 3505.5, subd. (e)).

The City and County of San Francisco, a charter city and county, took that alternative. Under Charter section A8.409-4, eligible labor disputes that reach impasse go to “interest arbitration,” where arbitrators must select between each side’s last offer on each disputed issue, and their decision is “final and binding.”

The real party in interest, the Municipal Attorneys Association of San Francisco (MAA), represents roughly 500 City attorneys. Under Charter section 10.104, those attorneys are “exempt” employees who serve “at the pleasure of the appointing authority”- meaning they are at-will and may be terminated without cause. During recent negotiations – prompted by what the MAA said was a history of “mass political firings” at the San Francisco District Attorney’s Office – the union advanced two proposals that would change that status. Proposal 1 required “just cause” and progressive discipline for any discipline, including terminations, with disputes subject to binding arbitration. Proposal 14 required layoffs in inverse order of seniority. Together the court called these the “just cause proposals.”

The City refused to submit the proposals to binding interest arbitration. It agreed to bargain, mediate, and proceed through MMBA factfinding, but maintained throughout that the proposals conflicted with the Charter and were not eligible for the Charter’s binding interest arbitration. The MAA disagreed and filed an unfair practice charge with the Public Employment Relations Board (PERB).

After an expedited hearing, an Administrative Law Judge issued a proposed decision concluding that section 10.104 conflicted with the MMBA, that the MMBA superseded section 10.104 under the home rule doctrine as a narrowly tailored matter of statewide concern, that the just cause proposals were eligible for binding interest arbitration, and that the City’s refusal to arbitrate constituted bad faith bargaining.

PERB, in Municipal Attorneys Association of San Francisco, Teamsters Local 856 v. City and County of San Francisco (2025) PERB Dec. No. 2958-M, affirmed the ALJ’s conclusions but on different reasoning. Rather than finding a conflict, PERB harmonized section 10.104 with the MMBA, reasoning that the section permits the City to establish just cause protections by regulation, policy, MOU, or through the Charter’s interest arbitration mechanism. PERB held the City violated both its Charter and the MMBA by refusing to arbitrate, found bad faith bargaining, enjoined the City from refusing to arbitrate, and ordered the City to make the MAA whole for extra bargaining costs plus interest. The City petitioned for a writ of extraordinary relief under Government Code section 3542, and the Court of Appeal issued a writ of review.

The Court of Appeal reversed in the published case of City and County of San Francisco v. Public Employment Relations Board -Case No. A173302 (June 2026). It held that the MAA’s just cause proposals are not eligible for binding interest arbitration under the Charter, vacated PERB’s finding that the City committed an MMBA violation, and set aside the associated remedies.

The court began with the standard of review, drawing a sharp line. Courts defer to PERB’s construction of labor laws within its jurisdiction, such as the MMBA, and will follow that construction unless clearly erroneous. But the Charter is not a labor law – it is “the supreme law of the City” – and PERB receives no deference when construing it. Instead, the City’s interpretation of its own charter receives “great weight,” particularly as to the broad powers of its Civil Service Commission.

Construing the Charter de novo, the court found independent textual bases for excluding the proposals from arbitration.

The Commission carve-out (section A8.409-3), while restating the City’s duty to bargain in good faith, also provides that “matters within the jurisdiction of the Commission which establish, implement and regulate the civil service merit system shall not be subject to bargaining under this part.” Tracing the word “part” through related provisions (sections A8.409, A8.409-1, A8.409-6, and 16.116, which collects these sections as “Appendix A”), the court held that “part” necessarily includes the binding interest arbitration provisions of section A8.409-4. It then held the at-will status of exempt attorneys falls squarely within the carved-out matters: exempt employees are part of the City’s civil service merit system (sections 10.100, 10.101, and Commission rule 114), and altering their at-will status implicates the merit system’s “definitions, administration and organization,” the “standards . . . for employment . . . and appointment,” and the “designation of positions as exempt.” The Commission’s own rule treating exempt employees as serving at pleasure was entitled to deference.

The compliance carve-out (section A8.409-4(g)). Separately, the impasse procedures “shall not apply” to any rule or policy “necessary to ensure compliance with . . . local laws, ordinances or regulations,” and disputes over such determinations “may be challenged in a court of competent jurisdiction” rather than arbitrated. In rejecting the proposals, the court reasoned, the City acted to ensure compliance with section 10.104 and Commission rule 114—so the proposals were exempt from arbitration on that ground as well.

The court reinforced these readings with the measures’ legislative history. San Francisco voters have repeatedly affirmed the at-will status of City attorneys and, in 1976, rejected a measure that would have allowed removal only for cause; yet the ballot materials for the interest arbitration provisions never suggested that unelected arbitrators could override section 10.104 and strip exempt employees of at-will status. Because at-will status is “such a vital condition of employment,” the court inferred the voters never intended that result. It also deferred to the City’s longstanding and consistent position that the at-will status of exempt employees is not arbitrable.

Finally, because the just cause proposals were in fact ineligible for arbitration, PERB’s sole basis for finding bad faith – the City’s statements that the proposals were ineligible – collapsed. The court therefore vacated the bad faith finding and its remedies.

Court Rules 500 S.F. Municipal Attorneys Remain At-Will Employees