Appeal of New Hampshire Retirement System

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THE SUPREME COURT OF NEW HAMPSHIRE
___________________________
Public Employee Labor Relations Board
No. 2014-312
APPEAL OF NEW HAMPSHIRE RETIREMENT SYSTEM
(New Hampshire Public Employee Labor Relations Board)
Argued: March 31, 2015
Opinion Issued: May 22, 2015
Sulloway & Hollis, PLLC, of Concord (Edward M. Kaplan and Katherine
DeForest on the brief, and Mr. Kaplan orally), for the petitioner.
Milner & Krupski, PLLC, of Concord (Glenn R. Milner on the brief and
orally), for the respondent.
LYNN, J. The petitioner, the New Hampshire Retirement System (NHRS),
appeals the decision of the New Hampshire Public Employee Labor Relations
Board (PELRB) denying the NHRS’s petition to modify the composition of the
respondent, Local 1984, a bargaining unit represented by the State Employees’
Association (SEA), to exclude from the unit certain supervisory positions. See
N.H. Admin. Rules, Pub 302.05(a). We reverse and remand.
I
The following facts were found by the PELRB or are otherwise not in
dispute. The NHRS is a public employer within the meaning of RSA 273-A:1,
IX (Supp. 2014). On September 13, 1978, the PELRB certified the SEA as the
exclusive representative of a bargaining unit composed of certain of the NHRS’s
“[c]lassified state employees.” Between 2004 and 2010, and without objection
from the NHRS, the PELRB issued three orders modifying the bargaining unit
at the SEA’s request. In 2004, the unit description was modified to read as
follows: “Employees of the NH Retirement System, with the exception of those
employees excluded from the [applicable statutory] definition of public
employee . . . .” In 2009 and 2010, while the general unit description remained
unchanged from 2004, it was specifically modified to exclude certain
enumerated positions, none of which are relevant to this appeal. Subsequent
to these modifications, on December 7, 2011, the NHRS and the SEA entered
into a collective bargaining agreement with effective dates from July 1, 2011,
through June 30, 2013.
George Lagos became the executive director of the NHRS in February
2012. Upon assuming his new position, Lagos reviewed NHRS’s procedures,
methodology, written policies, and some job descriptions, and met with the
Trustees and management team, all with the goal of developing a new business
plan. Based upon his review, Lagos concluded that the NHRS lacked an
effective management structure because the management team itself lacked
responsibility, accountability, and authority. Specifically, he was concerned
that managerial employees did not have a proper sense of the scope of their
authority and responsibilities. Lagos instituted changes to improve the
management structure of the NHRS, including the training of managerial
employees, and developed a three-year business plan that involved, among
other things, instituting performance evaluations.
Rosamond Cain was hired as the NHRS’s Human Resources Manager in
August 2012. Under the direction of Lagos, she helped to address concerns
that certain NHRS employees did not perform their assigned responsibilities
and needed assistance in managing their teams. As a member of the new
management team, Cain participated in the creation of a three-part training
program for management that focused upon evaluations, employee
expectations, and job performance. She also amended job descriptions and
conducted training sessions on performance appraisals and supervisor
accountability.
The following NHRS positions, all members of the bargaining unit as
currently constituted, were affected by the new management team’s training
efforts and are the subject of this appeal1: Retiree Services Team Lead,
1 In addition to denying the petition for modification with respect to the positions identified in the
text, the PELRB also refused to exclude the positions of Process Improvement Manager and
Project Manager from the bargaining unit. The NHRS does not challenge the PELRB’s decision
with respect to these positions. The PELRB also granted the petition for modification insofar as it
requested that the newly created position of Regulatory Compliance Officer/Staff Attorney be
excluded from the bargaining unit, and the SEA has not filed a cross-appeal challenging that
decision.
2
Employer Auditing Team Lead, Employer Reporting Team Lead, Member
Accounts Team Lead (collectively “Team Leads”), Public Information Officer,
and Controller. The Employer Auditing, Employer Reporting, and Member
Accounts Team Lead positions were established on various dates in 2008; the
record does not indicate when the Retiree Services Team Lead position was
established. The Public Information Officer position was established in 1988,
and the Controller position was established in October 2011. The job
descriptions for all of these positions contain the following language:
Carries out supervisory responsibilities in accordance with the
organization’s policies and applicable laws. Responsibilities
include interviewing, hiring and training employees; planning,
assigning and directing work; appraising performance; rewarding
and disciplining employees; addressing complaints and resolving
problems.
...
Actively participates in NHRS’ Management Team, including
development and implementation of strategic planning initiatives,
collaborative problem-solving and various project initiatives.
Prior to the new management team’s efforts, these positions, as indicated by
the job description, were responsible for managing other bargaining unit
employees, but were not actually performing these responsibilities.
Cain testified that, under the new management regime, the Team Leads,
Public Information Officer, and Controller now all have similar supervisory
responsibilities, including assigning work, imposing discipline, and conducting
performance evaluations of other employees who are members of the
bargaining unit. The performance evaluations are reviewed by the human
resources department and by Lagos, after which each employee’s evaluation is
placed in his or her personnel file. The evaluations may affect the employee’s
opportunities for promotion, lead to placement on an improvement plan, or
result in discharge. The NHRS did not submit any completed performance
evaluations to the PELRB hearing officer. Cain also testified that these
positions now issue disciplinary letters and written warnings which, like the
performance evaluations, are placed in the employee’s personnel file. The
NHRS submitted to the hearing officer three written warnings, as well as two
letters summarizing conversations with employees regarding attire and
behavioral concerns.
On April 8, 2013, the NHRS filed the subject modification petition with
the PELRB. See N.H. Admin. Rules, Pub 302.05(a). In it, the NHRS sought to
exclude from the bargaining unit the Team Lead, Public Information Officer,
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and Controller positions on the grounds that circumstances had changed and
that the positions were now supervisory within the meaning of RSA 273-A:8, II
(Supp. 2014). The SEA objected to the petition to modify, arguing that the
circumstances regarding those positions had not changed to a degree
warranting modification of the bargaining unit and that the positions were not
otherwise improperly included within the unit.
Following an evidentiary hearing, a PELRB hearing officer denied the
petition to modify the bargaining unit. With regard to the Team Leads and
Public Information Officer — positions which had been created prior to the
March 2010 modification of the bargaining unit2 — the hearing officer found
that the “hiring of new management and the implementation of new managerial
strategic plan are not material changes in circumstances warranting
modification of an existing bargaining unit.” Regarding the Controller position,
which was created after the March 2010 modification, the hearing officer
acknowledged that the creation of a new position could warrant a modification
of an existing bargaining unit, but denied exclusion of this position from the
unit on the ground that there was insufficient evidence “to establish that the
Controller ‘exercises supervisory authority involving the significant exercise of
discretion.’”
The PELRB reviewed and approved the hearing officer’s decision, see N.H.
Admin. Rules, Pub 205.01, and subsequently denied NHRS’s motion for
rehearing, see N.H. Admin. Rules, Pub 205.01(d), 205.02(a); RSA 541:3 (2007).
This appeal followed.
On appeal, the NHRS argues, among other things, that the PELRB erred
by failing to exclude certain supervisory employees from the unit, as the
change in status of those positions from “supervisory-in-name-only to
supervisory-in-fact is a change sufficient to require modification of the
bargaining unit” pursuant to New Hampshire Administrative Rules, Pub
302.05(a). It specifically argues that modification of the bargaining unit under
the changed circumstances is mandated by RSA 273-A:8, II, which prohibits
supervisors and the employees they supervise from belonging to the same
bargaining unit. We agree that the change in the contested positions to
“supervisors-in-fact” constituted a material change in circumstances
warranting modification of the unit.
2In her decision, the hearing officer stated that these positions “appear[ed]” to have been created
prior to the March 2010 bargaining unit modification. Since neither party contends that the
hearing officer’s statement is inaccurate, we assume that the Team Lead and Public Information
Officer positions were in fact included in the bargaining unit prior to the modification of the unit
approved by the PELRB in March 2010.
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II
RSA chapter 541 governs our review of PELRB decisions. See RSA 273-
A:14 (2010); RSA 541:2 (2007). “Under RSA 541:13 (2007), we will not set
aside the PELRB’s order except for errors of law, unless we are satisfied, by a
clear preponderance of the evidence, that it is unjust or unreasonable.” Appeal
of Hillsborough County Nursing Home, 166 N.H. 731, 733 (2014). The PELRB’s
findings of fact are presumed prima facie lawful and reasonable. RSA 541:13.
“In reviewing the PELRB’s findings, our task is not to determine whether we
would have found differently or to reweigh the evidence, but, rather, to
determine whether the findings are supported by competent evidence in the
record.” Appeal of Hillsborough, 166 N.H. at 733. “We review the PELRB’s
rulings on issues of law de novo.” Id.
New Hampshire Administrative Rules, Pub 302.05(a) provides, in relevant
part:
Where the circumstances surrounding the formation of an existing
bargaining unit are alleged to have changed, or where a prior unit
recognized under the provisions of RSA 273-A:1 is alleged to be
incorrect to the degree of warranting modification in the
composition of the bargaining unit, the public employer, or the
exclusive representative . . . may file a petition for modification of
bargaining unit.
The NHRS argues that there has been a change in circumstances surrounding
the formation of the unit; namely, that the Team Lead, Public Information
Officer, and Controller positions, which were previously only “supervisors-in-
name,” are now supervisors-in-fact. The NHRS further argues that the change
is material and thus warrants modification, as it would “result in a statutory
violation with respect to the composition of the bargaining unit.” Cf. Appeal of
City of Laconia, 147 N.H. 495, 497 (2002) (whether a change is material is part
of the modification analysis); RSA 273-A:8, II. In response, the SEA first
argues that the issue of whether there has been a material change in the
contested positions is a mixed question of law and fact and, because the NHRS
failed to provide a transcript of the evidentiary hearing before the PELRB, we
should decline review. The SEA also contends that the NHRS’s argument fails
because it confuses the PELRB “findings” with mere recitations of testimony.
Finally, the SEA argues that there was no material change in circumstance.
As a preliminary matter, we first address the SEA’s assertion that the
NHRS cannot prevail on appeal because it did not provide a transcript of the
evidentiary hearing, which is needed to address what it contends is a mixed
question of law and fact. The SEA essentially asserts that, absent a transcript,
the NHRS has no factual basis upon which to rely for its modification argument
because the recitations contained in the “Findings of Fact” section of the
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hearing officer’s order, upon which the NHRS relies, do not actually constitute
factual findings. Instead, the SEA claims that these statements are merely
inconclusive recitations of witness testimony that the hearing officer was free to
accept or reject, even if uncontroverted. See Appeal of Armaganian, 147 N.H.
158, 163 (2001) (stating that the New Hampshire Personnel Appeals Board was
not required to believe even uncontroverted witness testimony). We disagree.
The SEA accurately states the general principle of law, but it misses the
mark in applying the principle to the record before us. Although the hearing
officer did phrase some of her factual recitations in terms of what certain
witnesses said or what certain documents showed, rather than in terms of
what she found to be true, there is no indication that her ultimate decision
regarding modification of the bargaining unit hinged on credibility
determinations or that there was any question as to the accuracy of the facts
about which evidence was presented. Rather, the dispute between the parties
turns upon the legal implications of those facts with respect to the issue of
whether a modification of the bargaining unit was warranted. Thus, the most
sensible construction of the hearing officer’s order is not that she rejected some
or all of the evidence presented, but that she found that evidence legally
“insufficient” to support the relief that the NHRS requested. See Fischer v.
Superintendent, Strafford County House of Corrections, 163 N.H. 515, 519
(2012) (interpretation of court order is subject to de novo review). Because a
transcript is not required for us to review this purely legal issue, we are free to
consider the NHRS’s arguments. Tiberghein v. B.R. Jones Roofing Co., 151
N.H. 391, 394 (2004).
We agree with the NHRS that a change that would result in a bargaining
unit violating RSA 273-A:8, II constitutes a material change in circumstances
warranting modification. Thus, we must examine the language of that statute.
Although the PELRB’s determination will not be overturned unless it is
erroneous as a matter of law, or unjust or unreasonable, we are the final
arbiter of the intent of the legislature as expressed in the words of the statute
considered as a whole. Appeal of Town of Moultonborough, 164 N.H. 257, 264
(2012). RSA 273-A:8, II states, in pertinent part, that “[p]ersons exercising
supervisory authority involving the significant exercise of discretion may not
belong to the same bargaining unit as the employees they supervise.” To
determine whether the Team Lead, Public Information Officer, and Controller
positions exercise supervisory authority involving the significant exercise of
discretion, we consider several factors: their authority to evaluate other
employees; the nature of their supervisory role; and their disciplinary
authority. Id. at 266.
We first consider the Team Lead, Public Information Officer, and
Controller positions’ authority to evaluate other employees within the
bargaining unit. Under the job descriptions, these positions are responsible for
“appraising performance,” and, under the new management team, now actually
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do evaluate other employees in the bargaining unit. These evaluations are
placed in the employee’s personnel file, and can affect the employee’s
opportunities for promotion, can lead to placement on an improvement plan, or
can lead to termination.
We focused upon similar facts in Appeal of University System of New
Hampshire, 131 N.H. 368, 376 (1988). In reversing the PELRB’s decision that
captains were not supervisors, we relied in part upon the fact that captains,
like the contested positions here, had the authority to evaluate subordinate
employees within the same bargaining unit. University System, 131 N.H. at
376. Likewise, in Appeal of Town of Moultonborough, we found that sergeants
and captains were supervisors, and reversed the PELRB’s decision to the
contrary, because those positions also had the authority to evaluate
subordinate employees in the same bargaining unit. Moultonborough, 164
N.H. at 267. As is the case here, the evaluations conducted by the contested
positions in University System and Moultonborough affected subordinate
employees. In University System, 131 N.H. at 266, the evaluations were given
weight in merit pay increase decisions and led to a new employee being
discharged for not progressing in a satisfactory manner; in Moultonborough,
164 N.H. at 267, the evaluations were placed in the employee’s personnel file
and were considered in determining step raises. Thus, based upon the facts
before the PELRB, we conclude that the contested positions’ authority to
evaluate other bargaining unit members shows that these positions exercise
supervisory authority involving the significant exercise of discretion.
The SEA emphasizes that the NHRS did not submit any completed
performance evaluations to the PELRB. However, given that the new
management regime was of recent vintage at the time of the hearing, and that
bargaining unit members evaluating other bargaining unit members is
inherently problematic, the absence of completed evaluations is of little
significance. As we have stated, the fact that an employee “has such
[supervisory] authority, regardless of whether he presently exercises it, is
sufficient to vest him with supervisory authority under the statute.” Appeal of
Town of Stratham, 144 N.H. 429, 432 (1999). Further, “[i]t is not necessary for
us to sit by and ‘allow events to unfold to the extent that the disruption of the
[NHRS] and the destruction of working relationships is manifest before taking
action.’” University System, 131 N.H. at 376-77 (quotation omitted).
We next consider the nature of the supervisory role for the contested
positions. Based upon the job description language, each position is
responsible for: “interviewing, hiring and training employees”; “planning,
assigning and directing work”; “rewarding” employees; and “addressing
complaints and resolving problems.” Like the employees here, the employees
in the contested positions in Moultonborough assigned work, developed
department rules, and were involved in various aspects of the hiring process,
and the captains in University System likewise assigned work to subordinate
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officers. Moultonborough, 164 N.H. at 266; University System, 131 N.H. at
376. Consistent with these decisions, we conclude that the nature of the
supervisory role for the contested positions was substantial vis-a-vis other
bargaining unit members, and, thus, shows that these positions exercise
supervisory authority involving the significant exercise of discretion.
Finally, we consider the disciplinary authority of the Team Lead, Public
Information Officer, and Controller positions. The PELRB found that each
position has the authority to issue disciplinary letters and written warnings,
which are placed in the employee’s personnel file. This is again similar to
Moultonborough and University System, in which the contested positions were
authorized to issue warnings to other bargaining unit employees.
Moultonborough, 164 N.H. at 267; University System, 131 N.H. at 376.
Further, the Team Lead, Public Information Officer, and Controller positions
are all responsible for “addressing complaints and resolving problems” with
employees that, together with their ability to issue disciplinary letters, indicates
widespread disciplinary authority. The NHRS submitted three written
warnings, as well as two letters summarizing attire and behavioral concerns, to
the PELRB. Again, this evidence demonstrates that the contested positions’
authority involves the significant exercise of discretion over other bargaining
unit members.
In sum, in light of all the facts found by the PELRB, we conclude that the
Team Leads, Public Information Officer, and Controller are supervisors under
RSA 273-A:8, II. Thus, contrary to the hearing officer’s determination, we
conclude that “the hiring of new management and the implementation of [a]
new managerial strategic plan,” in which the contested positions became
supervisors-in-fact, constituted a material change in circumstances that
mandated the modification of the bargaining unit in order to prevent a violation
of the statute. Accordingly, we hold that the PELRB’s decision not to exclude
the Team Lead, Public Information Officer, and Controller positions from the
bargaining unit was erroneous as a matter of law. We reverse the order of the
PELRB and remand for further proceedings consistent with this opinion.
Reversed and remanded.
DALIANIS, C.J., and HICKS, CONBOY, and BASSETT, JJ., concurred.
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