Wayne County v. Michigan Afscme Council 25 ( 2014 )

STATE OF MICHIGAN
COURT OF APPEALS
COUNTY OF WAYNE, UNPUBLISHED
October 9, 2014
Plaintiff-Appellant,
v No. 312708
Michigan Employment Relations
Commission (MERC)
MICHIGAN AFSCME COUNCIL 25 AND ITS LC No. 09-000211
AFFILIATED LOCALS 25, 101, 409, 1659, 1862,
2057, 2926, AND 3317,
Charging Parties-Appellees.
Before: RONAYNE KRAUSE, P.J., and WILDER and STEPHENS, JJ.
PER CURIAM.
Respondent, Wayne County, appeals as of right the Michigan Employment Relations
Commission (MERC) order adopting the administrative law judge’s (ALJ) recommended order,
ruling in favor of the charging parties, Michigan AFSCME Council 25 and its affiliated Locals
25, 101, 409, 1659, 1862, 2057, 2926, and 3317 (hereinafter “charging parties”), and finding that
respondent breached its duty to bargain. We reverse and remand for further proceedings
consistent with this opinion.
Respondent challenges the decision by the MERC that past practice supersedes the
language of the relevant collective bargaining agreements (CBAs) in determining that retirees
receiving disability pensions are to continue to receive health care benefits.
I. STANDARD OF REVIEW
The applicable standard of review was discussed by our Supreme Court in Macomb Co v
AFSCME Council 25, 494 Mich 65, 77; 833 NW2d 225 (2013) (citations omitted):
In a case on appeal from the MERC, the MERC’s factual findings are
conclusive if supported by “competent, material, and substantial evidence on the
whole record.” Legal questions, which include questions of statutory
interpretation and questions of contract interpretation, are reviewed de novo. As a
result, an administrative agency’s legal rulings “are set aside if they are in
-1-
violation of the constitution or a statute, or affected by a substantial and material
error of law.”
II. ANALYSIS
In accordance with MCL 423.210(1)(e) of the Public Employment Relations Act
(PERA), it is unlawful for a “public employer or an officer or agent of a public employer” to
“[r]efuse to bargain collectively with the representatives of its public employees. . . .” “By
statute, the employer and the representative of the employees are required to bargain for wages,
hours, and other terms and conditions of employment, MCL 423.215, which constitute
mandatory subjects of collective bargaining.” St Clair Intermediate Sch Dist v Intermediate Ed
Ass’n/Michigan Ed, 458 Mich 540, 550-551; 581 NW2d 707 (1998). “The ‘mandatory subjects
of bargaining’ include health insurance benefits.” Ranta v Eaton Rapids Pub Sch Bd of Ed, 271
Mich App 261, 270; 721 NW2d 806 (2006) (citation omitted). “The statutory duty to bargain
may be fulfilled by ‘negotiating for a provision in the collective bargaining agreement that fixes
the parties’ rights and forecloses further mandatory bargaining. . . .’ ” Port Huron Ed Ass’n
MEA/NEA v Port Huron Area Sch Dist, 452 Mich 309, 318; 550 NW2d 228 (1996) (citation
omitted). “Once agreement is reached, the terms of the written bargaining agreement are
preserved and neither management nor labor may unilaterally modify the agreement without the
consent of the other party.” St Clair Intermediate Sch Dist, 458 Mich at 566-567 (internal
citations omitted). It is also, however, accepted that “[a] subject need not be explicitly
mentioned in an agreement in order for the subject to be ‘covered by’ the agreement.” Port
Huron Ed Ass’n, 452 Mich at 322 n 16.
The case of Macomb County v AFSCME Council 25, supra, guides our resolution of the
issues presented. The factual issues in AFSCME Council 25 are not significantly distinguishable
from those here. In AFSCME Council 25, the respondents changed the way they calculated
retirement benefits without first bargaining for the change under the presumption that the
county’s retirement ordinance granted them discretion to do so and the charging parties argued
that past practice had established an enforceable calculation of retirement benefits such that they
could not be changed absent additional bargaining. 494 Mich at 82-83. Similarly, here
respondent contends that its “reservation of rights” and zipper clauses gave it the authority to
change the health insurance for disabled retirees and the charging parties argue that past practice
of awarding benefits along with disability retirement prohibited a change without additional
bargaining.
According to our Supreme Court, there are two analytical inquiries to be made when
considering whether an employer is required to bargain before it alters a mandatory subject of
bargaining. Port Huron Ed Ass’n, 452 Mich at 318. The first of these inquiries asks whether
“the issue the union seeks to negotiate [is]. . . covered by or contained in the collective
bargaining agreement.” Id. (citations and internal quotation marks omitted). If the answer is
negative, then the second inquiry asks whether “the union . . . somehow relinquish[ed] its right to
bargain.” Id. The importance of distinguishing between these two concepts has long been
recognized. Id. at 319. Specifically:
-2-
When parties bargain about a subject and memorialize the results of their
negotiation in a collective bargaining agreement, they create a set of enforceable
rules—a new code of conduct for themselves—on that subject. Because of the
fundamental policy of freedom of contract, the parties are generally free to agree
to whatever specific rules they like, and in most circumstances it is beyond the
competence of the Authority, the National Labor Relations Board or the courts to
interfere with the parties’ choice. . . . On the other hand, when a union waives its
right to bargain about a particular matter, it surrenders the opportunity to create a
set of contractual rules that bind the employer, and instead cedes full discretion to
the employer on that matter. For that reason, the courts require “clear and
unmistakable” evidence of waiver and have tended to construe waivers narrowly.
[Id., quoting Dep’t of Navy v Fed Labor Relations Auth, 962 F2d 48, 57 (CA DC,
1992).]
As an initial matter it must be determined whether the contractual language covers the
subject at issue. “[W]hen a charging party claims that a respondent has failed to bargain over a
mandatory subject of bargaining, the MERC must determine whether the agreement ‘covers’ the
dispute.” AFSCME Council 25, 494 Mich at 80 (citation and quotation marks omitted). The
holding in AFSCME Council 25 is that if the disputed issue is covered in the CBA, then the
grievance procedure, and not the MERC, becomes the appropriate avenue for addressing the
charging parties’ claims. Id. at 87.
The ALJ and majority of the MERC panel erroneously determined that the relevant
CBAs were silent with regard to health care benefits for disability retirees. Although the CBAs
do not specifically reference the right to health care benefits for “disability retirees,” this does
not render the contracts silent on this subject, as “[a] subject need not be explicitly mentioned in
an agreement in order for the subject to be ‘covered by’ the agreement.” Port Huron Ed Ass’n,
452 Mich at 322 n 16 (citation omitted). The relevant CBAs and the Health and Welfare Benefit
Plans reference employees needing to meet age and/or years of service criteria in order to qualify
for health care benefits upon retirement. The 2006 Health and Welfare Benefit Plan clearly
indicated: “All employees hired or rehired on or after December 1, 1990 shall not be eligible for
health care benefits . . . upon retirement unless they retire with thirty (30) or more years of credit
service.” (Emphasis added.) Because the contract language is unambiguous, Port Huron Ed
Ass’n, 452 Mich at 323, it should be given its plain meaning, Calhoun Co v Blue Cross Blue
Shield Mich, 297 Mich App 1, 13; 824 NW2d 202 (2012). Contrary to the MERC’s majority
holding, we find that the CBAs do contain contract language that addresses retiree eligibility and
health care. Because we find that the disputed issue is covered in the CBAs, we also find that
remand for arbitration is the appropriate remedy for addressing the charging parties’ past practice
claims.
“[A] term or condition of employment” may be established “through [a] past practice”
mutually accepted by the parties. St Clair Intermediate Sch Dist, 458 Mich at 571 (citation
omitted). AFSCME Council 25 explained the concept and effect of past practice:
[T]his Court’s caselaw allows a charging party to raise an unfair labor
practice complaint for changing a term or condition of employment even when a
collective bargaining agreement controls, but only when the new term or
-3-
condition amounts to an amendment of the collective bargaining agreement.
However, overcoming an unambiguous provision in the collective bargaining
agreement requires the charging parties to “show the parties had a meeting of the
minds with respect to the new terms or conditions so that there was an agreement
to modify the contract.” The past practice must be “so widely acknowledged and
mutually accepted that it creates an amendment to the contract.” [494 Mich at 89,
citing Port Huron Ed Ass’n, 452 Mich at 312, 329.]
Here, the parties stipulated to a 30 year history of past practice of providing disability
retirees health care benefits regardless of whether they met age or years of service criteria.
Respondent announced its intent to discontinue payments for health insurance to future disability
retires without any bargaining. As of the date of this appeal, its intent was not made manifest.
The parties agree that five retirees with disability pensions were awarded health care benefits
after 2008 despite both the clear language of the applicable retirement benefits clause and the
zipper clauses contained in Local 3317's contracts. The issue between the parties remains
whether the continuation of the practice of awarding health insurance to individuals with
disability retirement after the 2008 contract, and despite the zipper clause, constituted a past
practice that required additional bargaining to change. On remand, the charging parties will have
to employ the test from AFSCME Council 25 and demonstrate that there existed a “meeting of
the minds with respect to the new terms or conditions—[with respondent] intentionally choosing
to reject the negotiated contract and knowingly act in accordance with the past practice.” 494
Mich at 89 citing Port Huron Ed Ass’n, 452 Mich at 312.
III. CONCLUSION
“If the agreement covers the term or condition in dispute, then the details and
enforceability of the provision are left to arbitration.” AFSCME Council 25, 494 Mich at 80
(citation and quotation marks omitted). Here, the grievance and arbitration procedures provided
for in Article 10 of the CBAs were bypassed. The scope of the MERC’s authority in reviewing a
claim of refusal-to-bargain when the parties have a separate grievance or arbitration process is
limited to whether the agreement covers the subject of the claim. Id. at 81. When there is
evidence that a past practice has modified the collective bargaining agreement, it is left to the
arbitrator to make the final determination on the issue and not the MERC. On remand, the
arbitrator is to determine whether the test in AFSCME Council 25 has been met and if so, the
appropriate contractual remedy.
-4-
Reversed and remanded for proceedings consistent with this opinion. We do not retain
jurisdiction.1
/s/ Amy Ronayne Krause
/s/ Kurtis T. Wilder
/s/ Cynthia Diane Stephens
1
We note that in its statement of questions presented respondent poses the following inquiry: “Is
a disability retiree’s entitlement to health care benefits vest [sic], if at all, under the terms of the
CBA under which he or she has retired?” Yet, a review of the brief fails to reveal any reference
to this issue, any citation to law or discussion of pertinent facts or argument. “It is axiomatic that
where a party fails to brief the merits of an allegation of error, the issue is deemed abandoned by
this Court.” Prince v MacDonald, 237 Mich App 186, 197; 602 NW2d 834 (1999).
-5-