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sr-101282-11ff f° 007 1 2 1982 CA : RP1P1: KMr4 : rt Council Meeting 10-12-32 Santa tlonica, California S'T'AFF REPORT T0: Piayor and City Council FROb4: City Attorney SUBJECT: Relevance of Labor Dispute Between Group S+7 and Employees to Pending Franchise Issues IN"_'RC DLI CT I ON On August 3, 1932, the City the current labor dispute between arising from the election of Theatrical and Stage Employees City Council referred to the whether the matter was relevant before the City Council or the the City Manager. Council considered the issue of Group P7 Cable and its employees the International Alliance of CATSE) as bargaining agent. The City Attorney the question of to the franchise issues pending issues presently under study by BACKGROUP7D Cn June 1, 1937_, the City Attorney transmitted a staff report to the City Council regarding Theta's request for approval of the merger between its parent company, Teleprompter, and Group W, a subsidiary of Westinghouse Corp. The staff report raised several issues, including a possible breach of franchise by Theta. The City Council set the matter for a public hearing. 1 ~~- 00T 1 2 1982 Between the time of the staff report and the date for public hearing, city staff teas contacted by representatives of Theta and several meetings ieere held. At these meetings, Theta proposed that the issues of franchise breach and the approval of merger be deferred pending broad-ranging discussions including franchise extension. The City Council agreed to defer the legal issues and consider the issues raised by Theta. Consequently, consideration of the matters presented in the City Attorney's staff report were suspended, and the public hearing thereon postponed, while these nece issues were being explored. Consideration of these issues is being handled by the City PZanager's office. That process is described in a staff report transmitted to the City Council for its meeting of July 27, 1932. Because of the complexity and importance of the issues, the City Council approved staff recommendation for the formation of a Cable Communications Task Force that would study the issues, encourage public education and participation, and advise the City Council on policy. Several months before the issue of possible breach of franchise was considered by the City Council, a majority of Theta employees voted to `orm a bargaining unit to be affiliated with IATSE. Union representatives claim that Theta group 'v~l) has refused to recognize the union as its employees' representative. Since about February, 193?_, the employees have been on strike and have been urging a boycott of Group bV. Representatives of the 2 employees' group have urged the City Council to take cognizance of the labor dispute and support the union's position. mhe franchise agreement bet~oeen the City and Theta does not make any mention of labor. matters or the personnel policies of the franchisee. mhe potential breach by mheta raised in the earlier staff report relates to covenants and conditions contained in the franchise agreement and does not pertain to labor practices of of the franchisee. Labor difficulties and unfair labor practices can he relevant to the City Council in the process of awarding, renewing, or extending a franchise. Such issues, which may affect the qualifications of applicants as caell as the quality and continuity of service, may be considered. See, e.g., Golden State Transit Corp. v. City of Los Angeles, 82 Daily Appellate Report 2589 (9th Cir., Sept. 7, 1982). Thus, in renewing or renegotiating the franchise with Group w, the City Council may consider the instant labor matters to the extent they might impact upon the performance required by the franchisee under the franchise agreement. Likewise, the same considerations go to the issue of the pending request for approval of the Theta - Group W merger. As noted in the first staff report on this subject, character qualifications play an important part in FCC licensing decisions. Similarly, they would be relevant to a decision by the Council regarding the franchise transfer. 3 The labor issue, however, is irrelevant to the question of whether or not Theta has breached the existing franchise agreement. The determination of cahether or not a breach has occurred depends upon the application of specific terms of the franchise agreement. Although the City Council might validly consider Croup G^7's labor practices in the context of approval of transfer, such issues are presently suspended pending negotiations and study by the City Manager and the task force. The matters currently under consideration relate to types of service, quality of programming, community access, and related issues. The labor issue would interject legal and collateral matters that might. cloud the charge of the task force. RE COMM Et1DAT I02I For the foregoing reasons, it is respectfully recommendeds 1. The Cable Communications Task Force not inquire into or consider matters relating to current labor dispute betcaeen Croup 47 and its employees. 4 2. ^hat at such time that City Council considers the approval of the transfer request or the renecaal or extension of the franchise that the labor practices of the franchisee be considered to such extent as the City Council deems appropriate. Prepared by: Robert P2, t4yers, City Attorney ~:arl C4. tlanheim, Deputy City Attorney 5