‘a Grand Canyon Sort Of Disagreement': How Clinics And A Union Leader Sparred Over Prop 44

SACRAMENTO, California — From the moment union leader Dave Regan floated the idea of a ballot measure targeting the state’s health clinics, leaders in the clinic industry questioned his intentions.

While Regan said the initiative was meant to insure clinics spent public funds effectively and operated with transparency, clinic operators suspected it was a ploy to boost membership in his union, United Healthcare Workers, by organizing their staffs.

Regan admitted as much, said Francisco Silva, head of the California Primary Care Association, which represents about 200 independently operated community health clinics. Silva recounted a conversation he said the two men had last year before Regan had begun the process of putting a measure to voters. Regan, Silva said — in an account disputed by Regan — offered to abort his plans if the clinics would stand aside to allow his union to sign 25,000 clinic staffers up as new union members.

Faced with the prospect of a ballot measure that clinics worried would devastate their ranks, the offer landed as more of a threat, Silva said.

“It's no secret in this town that UHW has weaponized the ballot initiative process, and not to really fix policy, but to leverage for something else,” Silva said.

In an interview with POLITICO and documents he shared from recent negotiations over the ballot measure, Silva laid out the clinics’ case for how talks with Regan unfolded and ultimately imploded.

Regan denied Silva’s account of the negotiations. While he acknowledged his union has been in talks with the clinic association over the past few years about facilitating statewide union elections, Regan insisted those discussions were separate from the ballot measure.

He said he never offered a deal to forgo his plans for the ballot measure in exchange for clinics’ cooperation on organizing staff. Any notion that the two issues were linked is “all their own concoction,” Regan said.

A person close to negotiations, who requested anonymity to discuss the private talks candidly, reinforced Silva’s account, saying the push to increase UHW’s membership had been a main component of the discussions. The person also corroborated Silva’s claim that the union and clinics had been close to a deal to keep the measure off the ballot, but that it fell apart in the final days before a state deadline.

Both UHW and its parent organization, Service Employees International Union, have been circling the state’s clinics for years, going against them on minimum wage local ballot measuresacross southern California and legislation in Sacramento to increase their data reporting requirements.

The rivalry came to a head over what is now called Proposition 44, which Regan was angling to put to voters in November and, on its face, was a bid to regulate how clinics can spend their mostly publicly-funded budgets.

Dubbed the “Clinic Funding Accountability and Transparency Act,” the measure would require the state’s community health clinics to spend at least 90 percent of funds on their core mission of providing primary care to patients, regardless of a person’s ability to pay. (On average, about 70 percent of clinic patients are on Medi-Cal, the state’s insurance for low-income people, about 15 percent are on Medicare, the federal program for older adults, and the rest are uninsured.)

Regan and his team have argued the measure is needed to insure clinics are good stewards of sparse health care dollars, especially in light of looming federal cuts to health care. Dwindling public dollars, they said, should be spent on patient care, not high executive salaries, fundraising or union busting efforts. According to UHW, some clinics are spending less than half of their funding on patient care and, across the whole industry, a total of as much as $1.7 billion is going to other costs.

The impact of the measure, Silva claims, would be devastating as clinics would be forced either to cut spending on what it considers core services like human resources, insurance enrollment assistance , telemedicine, and janitorial work or operate at a significant loss. Half of the clinics could be forced to close, according to an estimate released by Silva’s association.

The potential for such a significant hit to patient care, along with the prospect of having to mount a costly campaign to sway voters, Silva said, led him and his members to negotiate with Regan in hopes he’d agree to pull the measure off the ballot.

The clinic fight was not playing out in isolation. A seasoned ballot initiative combatant, Regan filed multiple measures this year that spurred negotiations at the highest levels of California politics.

While Assembly Speaker Robert Rivas' office worked to forge a settlement between Regan and clinics, the Newsom administration was pushing Regan to withdraw an extraordinarily contentious proposal for a one-time tax on billionaires. Talks with the California Hospital Association yielded a settlement in which Regan dropped his measure to limit hospital executive pay and the hospitals dropped their limiting union political activity.

According to Silva, the clinics and UHW hammered out a tentative deal: CPCA would send its members a Regan-approved employment agreement to be used at clinics where staff wanted to unionize. Silva provided POLITICO with a draft copy of the agreement template, which included stipulations that clinic employers wouldn’t say or do anything to discourage workers from organizing and would provide union staff access to break rooms and other office space to meet with workers. (About 30 percent of clinic workers are already under some kind of collective bargaining agreement, Silva said.)

And in each of five years the agreement would be in effect, the clinics collectively would have to hold an election for at least 5,000 employees, potentially netting Regan the 25,000 new dues-paying members he allegedly told Silva he wanted at the outset.

In exchange, the union would pull the measure from the ballot and agreed not to “propose, sponsor, finance, qualify, circulate, file, or publicly support any statewide or local ballot measure,” hostile to the clinics through the end of 2030. The union would also agree not to “sponsor, seek to introduce, or publicly support” legislation running counter to clinics’ interests nor to lobby against them.

Silva said initially he was hopeful the deal would get done ahead of the state’s 5 p.m. deadline on June 25 to remove measures from the November ballot. By his estimate, “we had probably 95 percent of the terms done.”

But the day before the deadline, Silva claimed, Regan’s team “started changing the goalposts.”

The deal fell apart over two issues, Silva said.

The union, he said, issued an 11th-hour demand that clinics would be required to use the model employment agreement, instead of it being voluntary. As a trade association, Silva said, his group does not have the authority to make such a deal since its 198 members are run independently by boards that decide on how to handle employment issues.

Silva, meanwhile, insisted that the agreement be put in writing and signed by all parties. He said he feared a repeat of 2014, when a similar deal between UHW and the California Hospital Association went to arbitration after the union filed ballot measures that impacted hospitals.

Regan balked, Silva said, “And we thought it would be too risky to reach such an agreement without being in writing.”

Regan rebutted each point of Silva’s account. He said it was the clinics, not him, that made the last-minute bid to keep the measure off the ballot by offering the 5-year union enrollment campaign. And he claimed the employment agreement template Silva portrayed as being the centerpiece of a deal was nothing more than a proposal he rejected as soon as Silva floated it.

“It was a symbolic proposal without any practical effect,” Regan said. “And that is not a close disagreement, that is a Grand Canyon sort of disagreement.”

The claim, Regan said, that negotiations broke down with the two sides were on the cusp is an effort by Silva to distract voters from unpopular positions taken by the clinics — namely their opposition to the tax on billionaires Regan is putting to voters in November.

“They're opposed to taxing billionaires to restore the Trump cuts, they are opposed to maximizing resources for patient care, and they're opposed to restraining egregiously illegal conduct against workers who try to join the union,” Regan said. “All three of those things are completely indefensible.”

What is not disputed: The deadline to pull ballot measures passed. A few days later, the state announced the clinic measure’s official designation: Proposition 44.

The clinics have sued in federal court to remove it from the ballot, claiming that the federally funded clinics are only subject to federal regulations on their spending. And Silva is helping to rally some powerful forces in state politics including the California Medical Association, California Hospital Association, California Teachers Association and Planned Parenthood to raise millions of dollars to campaign against the measure.

Jeremy B. White contributed to this report.