By: Jason M. Ewert, Partner, Cole Huber LLP
When a local government decides to contract out the work of their public employees, the Meyers-Milias-Brown Act (MMBA) and controlling decisions by the Public Employment Relations Board (PERB) require the agency to notify its union and bargain over either the decision or its impacts. Despite the existing legal framework for addressing any perceived failure to meet and confer with recognized unions prior to contracting out bargaining unit work, on October 13, 2025, Governor Gavin Newsom signed AB 339 (Ortega) over the opposition of local government groups. AB 339 amends the MMBA by adding section 3504.1 to the California Government Code pertaining to contracting notices.
AB 339 only applies to public agencies with a recognized employee organization (a public employee union).
This new law explicitly requires local public agencies to provide recognized employee organizations with at least 45 days' written notice before issuing a request for proposal (RFP), request for a quote (RFQ), or renewing or extending any existing contract to perform services that are within the scope of work of most represented job classifications. Notably, contracts generally associated with public works (i.e. construction, alteration, demolition, installation, repair, maintenance and other highly specialized services related to the aforementioned categories of work) are exempt from the new notice requirements, as specified.
Additionally, contracts that pertain to architecture, engineering, environmental services, land surveying or that are directly related to public works or other infrastructure projects that are subject to uniform codes or standards also fall outside the scope of the new notice obligations. The exemption of these categories of work likely stems from the common understanding that delaying these services is not in the best interest of the public. However, all other contract work that is within the scope of existing represented job classifications now requires local agencies to provide significant advanced notice with detailed information regarding the proposed services and the reasons for the proposal. This essentially means the vast majority of contracts will be subject to the new notice requirement.
While some may argue that this amendment to the MMBA does not significantly modify the duties and obligations of public agencies because of the existing requirements to meet and confer prior to issuing a RFP, RFQ, or renewing or extending any existing contract, the legislative change will undoubtedly result in delays in obtaining certain essential services that are routinely provided through contractual agreements. For example, some professional services (i.e. consultants, auditors, attorneys, engineers and other individuals or organizations possessing a high degree of professional, unique, specialized, technical skill or expertise) are performed by employees of public agencies. Many agencies that employ these professionals also choose to contract for services (with the consent of the recognized union) that are of an extraordinary professional, technical and temporary nature.
The California Court of Appeal has confirmed that one purpose of competitively bidding jobs that public employees could do is that those jobs should go to public employees. However, the aforementioned professional services are generally exempt from the standard competitive bidding requirements when the service cannot be performed adequately, competently or satisfactorily by internal agency employees and it is impossible to recruit such personnel to perform such service for the period required by the agency. In these cases, agencies were previously allowed to quickly hire the right person, or people to get the job done according to established best practices in the most efficient manner possible. Now, agencies with time sensitive projects that require a high level of skill may be required to provide recognized unions with information concerning the duration, scope, estimated cost (including breakdown of major cost components), any available drafts regarding the solicitation of the contract, and an explanation of the reason for entering into the contract. This requirement also applies to any renewals or extensions of existing contracts.
Understandably, unions will likely scrutinize the agencies’ decisions in much greater detail than they would have prior to the new statutory mandate. In addition to the new 45-day notice requirement, the existing requirements under the MMBA to meet and confer remain unchanged. All this means that contracting for these services will take much more time and result in higher costs. According to the California State Senate Appropriations Committee, the magnitude of those costs is unknown.
So, what happens if there is an emergency that requires an immediate solution that is only available through contracting out the service? The MMBA currently contains an exemption from the notice requirements for modifications of matters within the scope of representation in cases of emergency. In those unique situations, the governing body or the boards and commissions must provide notice and opportunity to meet at the earliest practicable time. AB 339 also contains certain exceptions during “emergencies” or other “exigent circumstances” where the public agency is only required to provide as much advance notice as is practicable under the circumstances. However, the new statute does not define what constitutes an emergency or exigent circumstance.
As many who work in local government know, emergencies are rarely as easy to define as they were during the COVID-19 pandemic. The Legislature’s failure to define what constitutes an emergency or exigent circumstance will undoubtedly result in disagreements and litigation with labor partners during times when local agencies need to focus available resources on response and recovery.
With the state and local agencies grappling with a substantial and growing decline in support from the federal government for a variety of programs and services, AB 339 undermines local agencies’ efforts to continue to provide a safety net and quality of life services to their communities. In addition to imposing considerable costs on local agencies in the immediate future, this new law will lead to increased conflict and eventual litigation with labor partners, and significant delays in executing programs that are essential in maximizing federal, state, and local resources to ensure that services are provided in a timely manner to those who need them most.
This article was contributed by Jason M. Ewert from Cole Huber LLP, a CSDA Business Affiliate. CSDA members can contact Cole Huber through the CSDA Buyer’s Guide at csda.net.
This communication is provided for general information only and is not offered or intended as legal advice. Readers should seek the advice of an attorney when confronted with legal issues and attorneys should perform an independent evaluation of the issues raised in these communications.
Take a look back at previous parts of the 2026 New Laws Series in CSDA eNews for more in-depth overviews of new laws affecting special districts:
Missed Part 6? Read it now: Positioning Special Districts for Success Under New Permitting and Planning Laws
Missed Part 5? Read it now: Biggest Brown Act Revamp in Decades (SB 707)
Missed Part 4? Read it now: Clarifying Timing for Collection of Development Related Fees (SB 499)
Missed Part 3? Read it now: Certified Payroll Records Requests on Prevailing Wage Public Works Projects (AB 538)
Missed Part 2? Read it now: Additional CEQA Exemptions and Reforms
Missed Part 1? Read it now: CA Supreme Court Denies Elected Officials Right to Sue as “Employees” Under Whistleblower Statute
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