HB 327-EVIDENCE RULES: UNION/EMPLOYEE PRIVILEGE  4:32:01 PM CHAIR OLSON announced that the next order of business would be HOUSE BILL NO. 327, "An Act making privileged certain communications between employees and employee union representatives; and amending Rule 402 and Rule 501, Alaska Rules of Evidence." 4:32:11 PM REPRESENTATIVE BOB LYNN, Alaska State Legislature, asked members to imagine they are employees whose employer alleges wrongdoing on the job. The employees obviously need help and cannot fight the battle alone so they go to their union representative and share the accusations and information. He pointed out that when parties speak to their attorneys the employees share privileged information in an honest manner. The employees assume their discussion will be held in confidence. The union representative's process is to take the information to the next level and the process is then repeated. The next step is litigation and the union representative is subpoenaed and required under oath to reveal everything their employees stated, including damaging information. He asked whether this is fair and reasonable. He stated that he would not want it to happen to him. He hoped members would not think this is the way to resolve problems for the employer and their employees. He pointed out that these issues do not occur in the private sector since employers and employee advocates can speak frankly about grievances without fear of their discussions being subject to subpoenas. He offered his belief that the same limited privilege of confidentiality should be attained for the public employee sector as well. REPRESENTATIVE LYNN said, "I think that's only fair. That's really what this bill is all about. It's to ensure that a union advocate can fulfill their duty of fair representation in disciplinary procedures and making things fair and equitable for everybody that's concerned." He asked members to try to put themselves in the scenario he just described and members will understand what the bill is all about. 4:35:31 PM MIKE SICA, Staff, Representative Bob Lynn, Alaska State Legislature, stated that Section 1 amend Alaska Statute 09.25, the code of civil procedures, by adding a new subsection AS 09.25.405, which provides that confidential communications between employee and employee representative of an organization are privileged conversations, when conducted in an advocacy setting in a disciplinary matter and provides for the definition of "organization." 4:36:12 PM MR. SICA stated that Section 2 amends AS 23.40, by adding a new subsection 23.40.065, which provides that (a) an individual cannot be compelled to disclose information in any proceeding, acquired from an employee represented by the individual, if such information was obtained in confidence and was in connection with an individual providing advocacy services in regards to disciplinary proceeding of the employee. MR. SICA related that subsection (b) provides exceptions to the privilege, such as being ordered by the court to disclose, if there is information concerning the commission of a crime, or if the employee consents to disclosure. Subsection (c) provides that if there is a conflict between this statute and federal or state law, then this statute is preempted and does not apply; and subsection (d) provides for the definition of "organization" to include any labor or employee organization existing in the state, and a definition of "proceeding," which includes any legislative, judicial, administrative, or any other proceeding requiring testimony under oath, and any arbitration, hearing or meeting under the grievance procedures of a collective bargaining agreement. 4:37:18 PM MR. SICA related that Section 3 declares an indirect court rule change [Alaska Rules of Evidence 402 and 501]. He explained Section 4 provides that Sections 1 and 2 can only take effect if Section 3 is approved by two-thirds vote of both houses. He summarized that this bill places in statute what most people already thought existed. 4:37:32 PM REPRESENTATIVE HOLMES referred to Section 2, which she said she assumes is patterned or is similar to a whole host of other professions such as accountants, therapists, social workers, and attorneys with this type of privilege. 4:38:03 PM MR. SICA pointed out that the bill drafter is online and could more specifically answer; however, this language is patterned after an Illinois law. He agreed that other privileges include communications between a husband and wife and clergy, and is limited so it wouldn't be as broad as attorney-client communications, but is relevant to the conversations in the grievance process. 4:38:29 PM REPRESENTATIVE SADDLER referred to page 1 line 7, to confidential communications. He asked for clarification on the definition of confidential communication. MR. SICA answered that in his limited understanding he thought it would refer to anything that falls under the privilege, which would include a communication between the union representative and the employee as it pertains to an anticipated or ongoing disciplinary proceeding. 4:39:13 PM REPRESENTATIVE SADDLER asked what the limits would be in terms of an anticipated disciplinary meeting. He questioned whether that might be too broad since any conversation might relate to a disciplinary proceeding. REPRESENTATIVE LYNN offered his belief that it would be limited to grievance under discussion. MR. SICA pointed out that the Senate held hearings on the companion bill and testimony revealed this was a required process early on in any type of pre-court phase of disciplinary hearings. He said he did not know for certain. 4:40:11 PM REPRESENTATIVE SADDLER asked for clarification on disciplinary proceedings and the threshold. REPRESENTATIVE THOMPSON stated that he is not an attorney. He related his understanding that HB 327 relates to public employees and that public unions are being discriminated against. He suggested if it is a private employer with union employees that the shop steward communications would be privileged, but these communications are not privileged for public employees. MR. SICA related his understanding that in a private situation privileges are extended by the National Labor Relations Act. 4:41:11 PM REPRESENTATIVE MILLER related a scenario in which Mr. Sica was in the union and Representative Miller, as his boss fired him. He asked if the action would be an anticipated disciplinary hearing and if the firing would be covered by the wording. MR. SICA offered his belief that the communication would be an ongoing procedure since as the employee he will go to union representative to file a grievance and his union representative will be involved in the process. 4:41:54 PM DOUG MERTZ, Attorney, Mertz Law, stated he became involved with this issue when one of his clients was unfairly terminated by the state. He explained that the law requires a very specific process must be used, such that a person cannot immediately sue, but must exhaust administrative remedies. In order to do so, the employee must engage in a process with the state Division of Personnel. He detailed that a representative from that division and a representative of the aggrieved person attempt to work out an agreement, which is a process that can go on for a substantial amount of time and can potentially result in arbitration. The state requires the employee be represented by a union advocate - a non-lawyer advocate - and prohibits the employee from being represented by an attorney. In fact, if the employee was allowed to hire private counsel the usual attorney- client would apply and there wouldn't be any question that all the communications were private. However, the state requires a non-attorney represent employees during this process. He relayed the process, noting that once the administrative processes are exhausted the suit is brought forth using a private attorney. In his client's case at that point the state alleged no privilege exists and issued a subpoena for all the information from the union's file. Thus everything related to the member, any discussions between the union representative and the member, including tactics, case evaluations, and potential acceptable or unacceptable settlements, and any strategies were subpoenaed. 4:44:40 PM MR. MERTZ reinforced that if an attorney had been involved there would not be any question that it would be blatantly wrong and improper to even demand these things. He stated that he formerly held the position as an assistant attorney general and at the time no one would have even thought of issuing a subpoena for the records, and if they had, the action would likely have been considered unethical. However, in the past two years the Department of Law has decided to attempt to gain an advantage during litigation, including employing this tactic. He characterized this action as so extreme and outrageous that when a similar situation - a parallel case - came before the California Supreme Court, the court said it would be ridiculous for the California legislature to set up a system whereby the only thing a lay advocate could say is, "Don't talk to me." He predicted that is what will happen as soon as people realize that communications between the advocate and the member can be obtained by the state. He further predicted that people will not talk to their advocate and their advocates will not talk to them and the entire process will fall apart. He surmised the state could potentially call the advocate as a witness against the advocate's own client. He brought up one case in another state that pertained to collective bargaining between a school district and the teacher's union. The teacher's union tried to subpoena all of the internal communications of the school district relating its collective bargaining position - what the school district intended to ask for and not ask for - and in that case the Illinois Supreme Court said Illinois could not do so. 4:46:55 PM MR. MERTZ pointed out numerous cases in which employees have reported to some authority serious wrongdoing. In those instances the employers attempted to subpoena, essentially retaliate, by requesting information on their employees. He again predicted that if this were allowable the entire system would fall apart. Essentially the system set up to make resolution of grievances more efficient would fall apart and the employees would simply mark time until they could sue since the employees would then have proper confidential relationships. He reported that the Alaska Supreme Court is currently considering his client's case. He questioned why the legislature should consider this issue since the court may soon decide the case. He offered two reasons for the legislature to take action now. First, the Alaska Supreme Court takes a long time to decide cases. Second, when the Alaska Supreme Court considers the matter it will not focus on whether it is good idea to prohibit this practice, but rather will consider whether the action is unconstitutional - a denial of due process - to allow the employer to make this type of demand from the union. He pointed out that this is a much higher bar to satisfy. It is entirely possible the Alaska Supreme Court could rule that the state's actions are unfair, but it does not violate due process; however, the legislature has the privilege of being able to decide whether the state's actions constitute good or bad policy, and whether the state should simply set a standard and set aside the constitutional issues. Therefore it would be appropriate, for those reasons, for the legislature to look at this case now. This bill would affect lots of people since it is not limited to public employees, but could also apply to private employees who are union members. He surmised since it has now become an official policy of this administration to employ these types of tactics, the actions will probably spread to private employers. He urged members to look very strongly at this now. He hoped the committee will conclude the importance of having an even playing field and confidentiality is essential to that process. He concluded that confidentiality between employees and their union representatives should be preserved through a bill like this. 4:49:40 PM REPRESENTATIVE HOLMES remarked that she thinks what she is hearing is completely unconscionable - that people are not able to use an advocate since everything is discoverable at the next level. She asked whether the state can subpoena the union's records, but the union cannot subpoena the records from the state. MR. MERTZ answered no; the union cannot subpoena the records from the state. 4:50:52 PM REPRESENTATIVE SADDLER recalled Mr. Mertz cited an Illinois Supreme Court case in which a union tried to do a reverse discovery. He asked whether the union should have the right to do so. MR. MERTZ answered that goes right to the question of what the role of the union is in the collective bargaining process. He said if only one side has access to the confidential planning sessions prior to the collective bargaining sessions that it makes the whole collective bargaining process meaningless, which is why the National Labor Relations Board (NLRB) and others have said this effectively destroys the role of the union and should be prohibited. 4:52:07 PM REPRESENTATIVE SADDLER asked whether either side should have a hidden microphone privilege. MR. MERTZ answered yes. REPRESENTATIVE SADDLER asked if the hidden microphone privilege were allowed the parties would go straight to court. MR. MERTZ responded that it would make the initial process meaningless. Currently, the process is quite efficient for most minor or major grievances. He offered his belief that it is a valuable process to have and once the playing field is lopsided during the administrative process that it ruins the usefulness of the entire administrative process. 4:52:53 PM REPRESENTATIVE SADDLER asked if he is aware of any advice given employees with respect to the grievance process. MR. MERTZ responded up until this incident happened the assumption has been that - for most part - anything between a union advocate and his/her member has been deemed confidential. Thus when a union representative talks to the member he/she asks the member to tell the advocate everything about the case; however, that can no longer happen. 4:53:49 PM REPRESENTATIVE SADDLER asked for the definition of confidential communication between an employee and a union representative. MR. MERTZ answered that confidential communication is not defined in the bill. He predicted the court will go back to the parallel privileges in the rules for attorney-client privileges to decide when the privilege begins and when it doesn't apply. He elaborated that very specific precedents apply to an attorney and his/her clients. 4:54:28 PM REPRESENTATIVE SADDLER asked whether the union advocates should have the same protections as an attorney when meeting informally with their clients. MR. MERTZ answered yes. 4:54:36 PM REPRESENTATIVE SADDLER asked when the decision in his client's specific case is expected. MR. MERTZ answered that oral arguments were held two weeks ago. The Alaska Supreme Court typically issues their decision between six months and a year after oral arguments. 4:55:05 PM REPRESENTATIVE HOLMES related her understanding that since this precedent has been set that the current advice is not to talk to advocates. MR. MERTZ answered yes, that has to be the outcome. 4:55:25 PM PETE FORD, Southeast Regional Manager, Alaska Public Employees Association (APEA); President, Juneau Central Labor Council, stated that the Juneau Central Labor Council is the local affiliate of the AFLCIO. The APEA represents 8,000 employees and a few private sector employees in the state, school districts, university, cities, boroughs, and nonprofit organizations. He stated that he speaks today in favor of adoption of HB 327. He characterized this bill as a significant and meaningful source of solace during a time when employees are already facing difficult situations. 4:57:15 PM MR. FORD estimated that in approximately 60 percent of the time APEA's members frequently interrupt the discussions with their union representatives to ask whether their communications will be held as confidential communications. He speculated that in approximately 30 to 40 percent of the employees who seek guidance when they encounter difficulties with their employers ask whether their discussions are confidential. He has always been able to confidently answer yes. He emphasized that he needs to have honest and complete information during these discussions in order to fully understand the employee's situation and explore acceptable settlements. 4:58:17 PM MR. FORD stated during the day-to-day activities of union representation that HB 327 would offer employees assurance of their confidential rights, which is appropriate and proper. 4:58:35 PM REPRESENTATIVE SADDLER asked for the threshold for a disciplinary action or anticipated disciplinary action. MR. FORD answered that typically these employees would be facing dismissal situations, but other actions could include suspensions or reductions in pay or status, and in some instances employees would face reprimands of some type as a first level of discipline. He pointed out that sometimes he consults with employees who sense the atmosphere in the workplace has become uncomfortable and they also sense that they are being treated differently by their supervisor or manager. He emphasized the importance of confidentiality in those situations so the union can more fully understand the specific situation and help the employee rebuild his/her relationship with his/her supervisor. 5:00:02 PM REPRESENTATIVE SADDLER related his understanding that the privilege should kick in at the lowest level of disciplinary or potential disciplinary action. MR. FORD agreed. REPRESENTATIVE SADDLER asked whether there would be any point at which the privilege would not be necessary. MR. FORD said he was unsure. He then speculated that a theoretical conversation would not require a privilege. [HB 327 was held over.]