California Code, Public Utilities Code - PUC § 120508

(a) This article also applies to the employee relations of employees of a nonprofit entity that operates public mass transit services and that is solely owned by the board. For employee relations regarding these employees, “board,” as used in this article, means the board and the board of directors of the nonprofit entity as the joint employer of the employees.

(b) The board may, at any time in its sole discretion, abolish any nonprofit entity or merge any nonprofit entity with another nonprofit entity or with the board.

(c) Upon abolishing or merging a nonprofit entity pursuant to subdivision (b), the board shall become the sole employer of the employees of the nonprofit entity and shall assume sole responsibility to observe all existing labor contracts established and maintained pursuant to this article.

(d) Except as may be agreed upon through the collective bargaining process, nothing in this section shall prohibit or limit the right of the board to contract with common carriers of persons operating under a franchise, license, or other agreement. Any provision in an existing collective bargaining agreement made applicable to the board in its capacity as a joint employer with a nonprofit entity pursuant to subdivision (a) or sole successor employer pursuant to subdivision (b) that is intended to prohibit or limit the right of a nonprofit entity to contract out covered bargaining unit services to another common carrier of persons shall not be binding upon the board with respect to any contract for services entered into, renewed, or extended by the board prior to January 1, 2004, and thereafter shall apply only to contracts for bargaining unit services covered by an existing collective bargaining agreement assumed by or binding upon the board as a joint employer unless otherwise agreed upon through the collective bargaining process. The amendments to this subdivision made by Chapter 557 of the Statutes of 2005 are intended solely to clarify existing law and shall not be interpreted either to enlarge or contract the board's right to contract out for public transportation services.