CA SB1406

Establishes the Excluded Employee Arbitration Act to add binding arbitration as a fifth step in the grievance procedure for state excluded employees.

Permits employee organizations representing excluded employees to request arbitration if the grievance remains unresolved after the third or fourth level of review and the request is submitted within 21 days of the final decision.

Requires the state and employee organizations to maintain a standing panel of at least 20 arbitrators, with the California State Mediation and Conciliation Service providing additional arbitrators if fewer than three are available.

Mandates the arbitrator apply California law, issue a written decision within 45 days of the hearing conclusion, and base the decision on the written record and oral presentations.

Requires the nonprevailing party (other than the excluded employee) to bear all arbitration costs, including certified shorthand reporter fees, which cannot be passed to the excluded employee.