Teamsters Local 48 v. City of Augusta, Board of Education, No. 78-04 Decision and Order dated June 7, 1978; Decision of Superior Court remanding to Board for clarification dated Nov. 10, 1978; Board's Supplemental Decision and Order dated Dec. 30, 1978. STATE OF MAINE MAINE LABOR RELATIONS BOARD Case 78-04 [Issued: June 7, 1978] _____________________________ ) TEAMSTERS LOCAL UNION NO. 48 ) STATE, COUNTY AND MUNICIPAL ) WORKERS UNION ) ) Complainant ) ) vs. ) DECISION AND ORDER ) CITY OF AUGUSTA, BOARD OF ) EDUCATION ) ) Respondent ) _____________________________) This case comes to the Maine Labor Relations Board (hereinafter referred to as "Board") by way of a Prohibited Practice Complaint dated July 27, 1977, and filed by Richard R. Peluso, Trustee, Teamsters Local Union No. 48 on July 28, 1977. An Answer to the Complaint, dated August 6, 1977, was filed by Charles E. Moreshead, Esquire, attorney for the City of Augusta, on August 18, 1977. On September 1, 1977, an Amended Prohibited Practice Complaint dated September 1, 1977, was filed by Richard R. Peluso. The City of Augusta's Answer to the Amended complaint, dated September 27, 1977 was filed by Charles E. Moreshead on September 29, 1977. On September 26, 1977, Stephen P. Sunenblick, Esquire, attorney for Council No. 74 of the American Federation of State, County and Municipal Employees and for the Maine Teachers Association filed Motions for Permission to Submit Amicus Curiae Brief. A pre-hearing conference was held in this case on September 30, 1977 at 9:30 a.m. in Augusta, Maine, with Alternate Chairman Donald W. Webber presiding. As a result of this pre-hearing conference, Mr. Webber issued on October 11, 1977 a Pre-Hearing Conference Menorandum and Order, the contents of which are incorporated herein by reference. On November 22, 1977, a hearing on the matter commenced at 10:00 a.m. in Portland, Maine, Chairman Walter E. Corey presiding, with Michael Schoonjans, Employee Represen- tative, and Robert D. Curley, Employer Representative. At the hearing, William F. Hufnagel, Esquire, submitted a Motion to file an amicus curiae brief on behalf of Baker Bus Service. During the hearing, the Board granted Mr. Hufnagel's Motion to file an amicus curiae brief and the pending Motions for permission to file an amicus curiae brief filed on behalf of Council No. 74 of the American Federation of State, County and Municipal Employees, and the Maine Teachers Association. The hearing on the matter was reconvened on January 4, 1978, at 9:30 a.m. in Portland, Maine, and on January 23, 1978 at 1:00 p.m. in Portland, Maine. All legal briefs were submitted by April 10, 1978, and the Board proceeded to deliberate on the case on April 11, 1978 and on May 2, 1978. JURISDICTION No party has challenged the jurisdiction of the Maine Labor Relations Board in this matter, and we conclude that this Board has jurisdiction to hear and render a [-1-] ______________________________________________________________________________________ decision in this case as provided in 26 M.R.S.A. 968(5). FINDINGS OF FACT Upon review of the testimony given at the hearings as well as the pleadings and the Pre-Hearing Conference Memorandum and Order, we find that: 1. Teamsters Local Union No. 48, State, County and Municipal Workers, is the recognized bargaining agent for the unit composed of the Bus Drivers employed by the Board of Education of the City of Augusta. 2. The Board of Education of the City of Augusta (hereinafter referred to as the "Board of Education") is a public employer as defined by 26 M.R.S.A. 962(7). 3. On May 8, 1973, the Augusta Bus Drivers Association was certified as the bargaining agent for the bus drivers employed by the Board of Education. The Augusta Bus Drivers Association and the Board of Education subsequently negotiated a series of collective bargaining agreements, the last one of which was effective for the period January 1, 1976 to December 31, 1976. 4. In an election held on February 28, 1977, the Auqusta Bus Drivers Asso- ciation was decertified as the bargaining agent for the bus drivers employed by the Board of Education. 5. On March 24, 1977, the Truck Drivers, Warehousemen and Helpers Union, Local No. 340, International Brotherhood of Teamsters was certified as the bar- gaining agent for the bus drivers employed by the Board of Education. 6. Teamsters Local Union No. 48, State, County and Municipal Workers (here- inafter referred to as the "Union") subsequently succeeded in law and in fact to the bargaining rights of Truck Drivers, Warehousemen and Helpers Union Local No. 340, International Brotherhood of Teamsters. 7. Negotiations between the Union and the Board of Education for a collective bargaining agreement commenced in May, 1977, with the first bargaining session being held on May 19, 1977. 8. The Union's proposed collective bargaining agreement, submitted to the Board of Education prior to the May 19, 1977 bargaining session, contained a clause prohibiting subcontracting of any unit work unless specifically authorized in the contract. 9. At the May 19, 1977 bargaining session, the negotiator for the Board of Education stated that the Board of Education wanted to reserve the right to subcontract the school bus operation, and the Board of Education would only negotiate over a collective bargaining agreement to cover the remainder of the then current school year. 10. Bargaining sessions between the Union and the Board of Education were also conducted on June 1, 8, and 15, 1977. At the June 1, 1977 bargaining session, the Union negotiator objected to the Board of Education's position that it would only negotiate for a collective bargaining agreement to cover the re- mainder of the current school year. The Board of Educaton negotiator stated that the Board of Education took this position because it was examining the possibility of subcontracting the school bus operation. 11. The topic of subcontracting the school bus operation was raised but mutually tabled during the June 8, 1977 bargaining session. The June 15, 1977 bar- gaining session was adjourned earlier than the designated time for adjourn- ment upon request of the Union negotiator, who stated that he wished to dis- cuss the ramifications of the subcontracting issue with the Union's Inter- national Trustee. -2- ______________________________________________________________________________________ 12. On June 23, 1978 the Union requested the services of a mediator to assist with the negotiations between the Union and the Board of Education. 13. On July 8, 1977, the negotiator for the Board of Education in a letter to the Executive Director of the Maine Labor Relations Board stated that attempts at mediation would be "fruitless" because nego- tiations had been discontinued for a few weeks pending decision by the Board of Education on whether to subcontract the school bus operation, and because the parties had not yet negotiated "many aspects of the contract." 14. Mediation sessions were conducted on July 27 and August 17 and 18, 1977. 15. At the August 17, 1977 mediation session, the Board of Education objected to the presence on the Union negotiating team of a part- time bus driver on the ground that the part-time bus driver was not a member of the bargaining unit. The Board of Education refused to meet with the Union until the part-time bus driver left the session. After the part-time bus driver left the session, the meeting commenced. 16. The Union proposed at the August 18, 1977 mediation session to negotiate the issues of severance pay and retroactive benefits. The Board of Edu- cation's negotiating team responded that it was not authorized to nego- tiate either of these items, and rejected the Union proposal. 17. The Board of Education initially considered the possibility of subcon- tracting the school bus operation during the summer of 1976, when bids for operating the school bus system were solicited and considered by the Board of Education. None of these bids received was accepted by the Board of Education. 18. On June 3, 1977, the City of Augusta's Superintendent of Schools again commenced soliciting bids for operation of the school bus system. 19. On August 18, 1977, the Board of Education scheduled a meeting to con- sider a bid for operating the school bus system. The Board of Educa- tion's chairman and four members were present at the time the meeting was scheduled to comence, but there was no quorum. A fifth member of the Board of Education arrived shortly thereafter, the meeting was called to order, and the Board of Education unanimously voted to accept the bid. 20. The member of the Board of Education whose arrival at the August 18, 1977 meeting created a quorum conceded in an interview published in the August 25, 1977 edition of the Kennebec Journal that "increased problems with the bus drivers . . . was a consideration" in his decision to vote to subcon- tract the school bus operation. 21. At the end of the 1977 school year, several bus drivers employed by the Board of Education applied for unemployment compensation. The Employment Security Commission on July 5, 1977 denied the compensation after being advised by the Board of Education's Superintendent of Schools that the bus drivers had a reasonable assurance of reemployment the next academic year. Some of the bus drivers appealed the denial, and the Employment Security Commission on August 11, 1977 awarded unemployment compensation on the grounds that, in light of the Board of Education's solicitation of bids for operating the school bus system, the bus drivers did not have a reasonable assurance of reemployment. ISSUES 1. Did the Board of Education violate 26 M.R.S.A. 964(1)(E) by refusing to negotiate in good faith with the bargaining agent over the issue of sub- contracting the school bus operation? -3- ______________________________________________________________________________________ 2. Was the Board of Education's decision to subcontract motivated in part by a desire to avoid dealing with the bargaining agent, in violation of 26 M.R.S.A. 964(1)(A) and (B)? 3. Did the Board of Education violate 26 M.R.S.A. 964(1)(E) by refusing to bargain over the impact or effects of its decision to subcontract? 4. Did the Board of Education violate 26 M.R.S.A. 964(1)(E) by refusing to participate in a mediation session because a part-time bus driver was present as a member of the Union's negotiating team? 5. Did the Board of Education violate 26 M.R.S.A. 964(1)(A) when, after soliciting bids for operation of the school bus system, its representative informed the Employment Security Commission that the bus drivers had a reasonable assurance of reemployment the next academic year? I Did the Board of Education violate 26 M.R.S.A. 964(1)(E) by refusing to negotiate in good faith with the bargaining agent over the issue of subcontracting the school bus operation? Title 26 M.R.S.A. 964(1)(E) provides that "public employers, their representa- tives and their agents are prohibited from refusing to bargain collectively with the bargaining agent of its employees as required by Section 965." Section 965(1)(C) provides an obligation on the public employer to bargain collectively and collective bargaining means, inter alia, "to confer and negotiate in good faith with respect to wages, hours, working conditions and contract grievance arbitration . . . ." The parties have conceded on brief that there is an obligation to bargain with respect to the issue of subcontracting and the issue before this Board is whether or not the Board of Education satisfied its obligation to negotiate. Both parties presented initial proposals with respect to the issue of subcontracting. The bargaining posi- tion of the Union was that subcontracting should be prohibited. The position of the Board of Education was that subcontracting should be permitted and the Board of Edu- cation would reserve the right to subcontract. Negotiations require an exchange of bargaining positions as well as a willing- ness to discuss the proposals and a give and take in the process. A take it or leave it attitude or intransigence in the discussion can be either bad faith negotiating or evidence of bad faith. In the present case, both sides took a strong position on the issue of sub- contracting. Neither party evidenced any flexibility in its position and before further discussion took place, the subject of subcontracting was tabled by mutual consent pursuant to the ground rules. Since the Union made a tactical decision not to pursue the issue of subcontracting at the bargaining table by agreeing to table the issue, they cannot now claim the Board of Education refused to negotiate in good faith. Intransigence on the issue of subcontracting characterized both parties' positions and discussion and agreement on other issues indicates good faith negotiat- ing. We find neither a per se violation nor sufficient conduct to warrant a find- ing of a violation of the duty to negotiate in good faith on the part of the Board of Education. Therefore Paragraphs (a), (b) and (c) of the Amended Complaint are DISMISSED. -4- ______________________________________________________________________________________ II Was the Board of Education's decision to subcontract motivated in part by a desire to avoid dealing with the bargaining agent in violation of 26 M.R.S.A. 964(1)(A) and (B)? Complainant has charged that the Board of Education's decision to subcontract was improperly motivated by a desire to avoid dealing with Complainant, which re- sulted in interference with the bus drivers' exercise of their rights and in dis- crimination against the bus drivers in a term or condition of their employment, in violation of 26 M.R.S A. 964(1)(A) and (B). The Board of Education contends that its decision to subcontract was not motivated by anti-union sentiment, but was motivated solely by economic considerations. Our findings lead us to conclude that a desire to avoid dealing with Complainant was one motivation underlying the Board of Education's decision to subcontract, and that the decision therefore resulted in violations of 26 M.R.S.A. 964(1)(A) and (B). Several facts convince us that the aforesaid improper motive was a factor in the Board of Education's decision to subcontract. First, the timing and sequence of the decision to subcontract strongly suggests that a desire to avoid dealing with the bargaining agent was a consideration in the decision. The Board of Education initially solicited bids for operation of the school bus system during the summer of 1976, but did not accept any of the bids. The Truck Drivers, Warehousemen and Helpers Union, Local No. 340, the predecessor to Teamsters Local Union No. 48. was certified as the bargaining agent for the bus drivers on March 24, 1977, and nego- tiations between the Union and the Board of Education commenced in May, 1977. The Board of Education again solicited bids during the summer of 1977, and a bid was accepted on August 18, 1977. Second, we believe that remarks by the Board member whose presence created a quorum at the August 18, 1977 meeting, quoted in the August 25, 1977 edition of the Kennebec Journal, show that a desire to avoid dealing with the Union motivated a key Board member's vote on the subcontracting question. After Board Member Theberge arrived at the August 8, 1977 meeting, a quorum of the Board of Education was present, and a unanimous vote to subcontract the school bus operation was taken. Member Theberge subsequently conceded in an interview with a reporter for the Kennebec Journal that "increased problems with the bus drivers . . . was a considera- tion" in his decision to vote to subcontract. While the concession on its face does not necessarily establish anti-union sentiment on the part of the Board member, we believe after careful consideration of all surrounding facts that the Board member meant that certification of the Union and the on-going negotiation and mediation sessions were factors influencing his decision. Because the presence of this Board member at the meeting was essential if the Board of Education was to have the quorum necessary to vote on whether to subcontract, we attach much significance to our belief that the Board Member's decision to vote for subcontracting was motivated in part by anti-union sentiment. -5- ______________________________________________________________________________________ In finding an improper motivation for the Board of Education's decision subcontract, we believe that economic considerations also motivated the Board of Education in its decision. However, in Freeport Police Benefit Assn. v. Town of Freeport, M.L.R.B Case No. 74-18 (1974) we adopted a standard under which a public employer's act is unlawful if one of the motivating factors was to discourage activity protected by the Municipal Public Employees Labor Relations Act. Conse- quently, the fact that economic considerations were a factor in the Board of Educa- tion's decision does not absolve the Board of Education, in light of our finding that a desire to avoid dealing with the bargaining agent was also a motivating factor. We also conclude that the Board of Education's desire to avoid dealing with the Union constitutes a violation of 26 M.R.S.A. 964(1)(A) and (B). Subcontracting an operation in order to circumvent the duty to bargain with the bargaining agent clearly interferes with the exercise of public employees' rights to join and participate in the activities of organizations of their own choosing for the purposes of represen- tation and collective bargaining, in violation of 26 M.R.S.A. 964(1)(A). The de- cision to subcontract, based in part on an improper motive, also violated 26 M.R.S.A. 964(1)(B) because it discouraged membership in an employee organization by discrim- ination in regard to terms and conditions of employment. In light of these violations, we will order an appropriate remedy. III Did the Board of Education violate 26 M.R.S.A. 964(1)(E) by refusing to bargain over the impact or effects of its decision to subcontract? Complainant charged that the Board of Education violated 26 M.R.S.A. 964(1)(E) by refusing to bargain over the issues of severance pay and retroactive benefits after deciding to subcontract the school bus operation. The Board of Education has argued that it satisfied its obligation to bargain over the Union's proposals when it met and caucused to consider the proposals, which were rejected by the Board of Education after the caucus. We conclude that because the Board of Education's negotiat- ing team was not authorized to reach agreement concerning severance pay or retroactive benefits, the Board of Education did unlawfully refuse to bargain over the impact or effects of its decision to subcontract. The chief negotiator for the Union testified at the November 22, 1977 hearing that after the Union proposed to negotiate severance pay and retroactive benefits at the August 18, 1977 mediation session, the Board of Education's negotiating team caucused, then responded that it had not been authorized by the Board of Education to negotiate such items and rejected the Union's proposal. We find this testimony credible. We have held on several previous occasions that a public employer is obligated to negotiate on the impact or effects of its decisions concerning the terms and conditions of employment of the public employees affected, Cape Elizabeth Teachers -6- ______________________________________________________________________________________ Assn. v. Cape Elizabeth School Board, M.L.R.B. Case No. 75-24 (1975); Westbrook Teachers Assn. v. School Committee of the City of Westbrook, M.L.R.B. Case No. 74-17 (1974). Examples of these negotiable matters include order of layoff, severance pay, workload for remaining employees, retroactive benefits, etc. If a public employer's negotiating team is not authorized by the public employer to negotiate the impact of the public employer's decisions, then a refusal to bargain has occurred. Accordingly, we conclude that the Board of Education refused to bar- gain over the impact of its decision to subcontract the school bus operation in violation of 26 M.R.S.A. 964(1)(E). IV Did the Board of Education violate 26 M.R.S.A. 964(1)(E) by refusing to par- ticipate in a mediation session because a part-time bus driver was present as a member of the Union's negotiating team? The ground rules negotiated by the parties with respect to the composition of the bargaining team stated that "Negotiation sessions shall be closed," and "Neither team shall have more than six (6) representatives at any negotiating session. Legal counsel is excluded from this section." At the August 17, 1977 mediation session, the Board of Education objected to the presence on the Union negotiatinq team of a part-time bus driver on the ground that the part-time driver was not a member of the bargaining unit. The Board of Education refused to meet with the Union until the part-time bus driver left the session. The ground rules require "closed" sessions. However, the presence of a non- unit member on the negotiating team does not violate the requirement of "closed" sessions, and there was no evidence in the record that the inclusion of the non- unit memher on the bargaining team would have violated the requirement of no more than six members on a team. Absent an express requirement in the ground rules, one does not have to be a member of the bargaining unit or a "public employee" as defined in 26 M.R.S.A. 962(6) in order to serve as a member of a negotiating team. More- over, we have repeatedly held that absent express agreement in the ground rules, neither party may attempt to dictate the composition of the other party's negotiat- ing team. MSAD #44 Administrators Assn. v. MSAD #44 Board of Directors, MLRB Case No. 77-27 (1977); MSAD #54 Education Assn. v. MSAD #54 Board of Directors, MLRB Case No. 75-10 (1975); MSAD #43 Board of Directors v. MSAD #43 Teachers Assn., MLRB Case No. 74-24 (1974). We therefore conclude that the Board of Education's conduct in interfering with the composition of the Union's bargaining team violated 26 M.R.S.A. 964(1)(E). -7- ______________________________________________________________________________________ V Did the Board of Education violate 26 M.R.S.A. 964(1)(A) when, after soliciting bids for the operation of the school bus system, its representative informed the Employment Security Commission that the bus drivers had a reasonable assurance of reemployment the next academic year? In mid-June, 1977, the Board of Education's Superintendent of Schools advised the Employment Security Commission that several bus drivers in the Augusta School Department had "a reasonable assurance of reemployment" during the next academic year. As a result of this assertion, the employees were initially denied unemploy- ment benefits. Upon appeal, the initial decision was reversed on the ground that in light of the Board of Education's solicitation of bids for operation of the school bus system, the bus drivers did not have a reasonable assurance of reemployment, and the bus drivers were declared eligible for unemployment benefits. Complainant has claimed that the employer's statement to the Employment Security Commission was so unreasonable that the Board of Education's real motivation was to penalize the bus drivers for supporting the Union. We do not agree that the employer's position was unreasonable. At the time the employer was required to complete the employee information card. the Board of Education was considerinq subcontracting but an acceptable bid had not been received. The Board of Education had solicited bids for operation of the school bus system during the summer of 1976, but did not accept any of the bids received. The bus drivers were reemployed at the commencement of the 1976-77 school year. The experience of the 1976 summer had shown that solicitation of bids did not necessarily mean that subcontracting was certain to follow. Consequently, the statement to the Employment Security Commission does not appear to us to have been either unreasonable or malicious. Paragraph 5(b) of the Amended Complaint therefore is DISMISSED. ORDER On the basis of the foregoing findings of fact and by virtue of and pursuant to the powers granted to the Maine Labor Relations Board by the provisions of 968 of the Municipal Public Employees Labor Relations Act, it is hereby ORDERED: 1. That the Board of Education, its representatives and agents, cease and desist from engaging in any of the acts prohibited by 26 M.R.S.A. 964(1), and especially from refusing to bargain collectively with the bargaining agent of its employees as required by 26 M.R.S.A. 965; 2. That the Board of Education remunerate each employee adversely affected by the decision to subcontract that employee's weekly salary from the period commencing with the beginning of the fall 1977 school year through the date at which the employee commenced substantially equivalent employment, less any compensation earned through other employment by the employee during the aforesaid period; -8- ______________________________________________________________________________________ 3. That the Board of Education negotiate with the Union over the issues of severance pay and retroactive benefits for all members of the bargaining unit; and 4. That within thirty (30) days from the date of this Order the parties hereto shall notify, in writing, the Maine Labor Relations Board at its offices in Augusta, Maine, of the steps they have taken to comply with this Order. Dated at Augusta, Maine, this 7th day of June, 1978. MAINE LABOR RELATIONS BOARD /s/_________________________________________ Walter E. Corey, Chairman /s/_________________________________________ Robert D. Curley, Employer Representative /s/_________________________________________ Michael Schoonjans, Employee Representative -9- ____________________________________________________________________________________ STATE OF MAINE MAINE LABOR RELATIONS BOARD Case No. 78-04 [Issued: Dec. 30, 1978] ______________________________ ) TEAMSTERS LOCAL UNION NO. 48, ) STATE, COUNTY, MUNICIPAL AND ) UNIVERSITY EMPLOYEES, ) ) Complainant, ) v. ) SUPPLEMENTAL ) DECISION AND ORDER CITY OF AUGUSTA, BOARD OF ) ON REMAND EDUCATION, ) ) Respondent. ) ______________________________) This case comes to the Maine Labor Relations Board (Board") by way of a remand order dated November 10, 1978 by the Kennebec County Superior Court in Teamsters Local Union No. 48 v. City of Augusta, Board of Education and Maine Labor Relations Board, Docket No. CV 78-499. The Superior Court proceeding was instituted on or about August 30, 1978 when Teamsters Local Union No. 48 ("Local No. 48") filed a "Petition to Compel Compliance With Or To Review, A Decision Of The Maine Labor Relations Board." By its Petition, Local No. 48 sought an order from the Superior Court compelling the City of Augusta, Board of Education ("Board of Education") to comply with a Decision and Order issued by the Board on June 7, 1978 in M.L.R.B. Case No. 78-04. The Board in its June 7, 1978 Decision and Order ordered, inter alia, the followinq action: "2. That the Board of Education remunerate each employee adversely affected by the decision to subcontract that employee's weekly salary from the period commencing with the beginning of the fall 1977 school year through the date at which the employee commenced substantially equivalent employment, less any compensation earned through other employment by the employee during the aforesaid period." The Superior Court in its November 10, 1978 remand order instructed that the Board "define or clarify the term 'substantially equivalent employment' as it appears in Paraqraph No. 2 of the Maine Labor Relations Board's June 7, 1978 Order in M.L.R.B. Case No. 78-04." The Board met to deliberate on the instruc- tion contained in the remand order on November 27, 1978 in Augusta, Maine, Chairman Edward H. Keith presiding, with Paul D. Emery, Employer Representative and Michael Schoonjans, Employee Representative. The purpose of this Supplemental Decision and Order is to set forth the Board's definition of the term "substan- tially equivalent employment" as it appears in our June 7, 1978 Decision and Order, in compliance with the Superior Court's remand order. JURISDICTION Neither party has challenged the jurisdiction of the Maine Labor Relations Board in this matter, and we conclude that this Board has jurisdiction to render a [-1-] ___________________________________________________________________________________ decision in this case as provided in 26 M.R.S.A. 968(5) and in accordance with the Kennebec County Superior Court's remand order dated November 10, 1978 in Docket No. CV 78-499. FINDINGS OF FACT 1. On June 7, 1978 the Maine Labor Relations Board issued a Decision and Order in M.L.R.B. Case No. 78-04 which ordered, inter alia, that the City of Augusta, Board of Education ". . . remunerate each employee adversely affected by the decision to subcontract that employee's weekly salary from the period commencing with the beginning of the fall 1977 school year through the date at which the employee commenced substantially equivalent employment, less any compensation earned through other employment by the employee during the aforesaid period." 2. In a remand order dated November 10, 1978 in Teamsters Local Union No. 48 v. City of Augusta, Board of Education, et al., Docket No. CV 78-499, the Kennebec County Superior Court instructed the Maine Labor Relations Board to ". . . define or clarify the term `substantially equivalent employment' as it appears in Paragraph No. 2 of the Maine Labor Relations Board's June 7, 1978 Order in M.L.R.B. Case No. 78-04." DECISION We believe that an employee adversely affected by the Board of Education's decision to subcontract its school bus operation has obtained "substantially equivalent employment" within the meaning of our June 7, 1978 Order when the employee obtains employment which compensates the employee at a weekly rate of 95% (or more) of the employee's gross weekly salary at the close of the 1977 school year plus the Board of Education's weekly out-of-pocket costs for fringe benefits for the employee as of the end of the school year in June of 1977. By "fringe benefits" we mean benefits such as retirement, medical and personal liability plans which accrue directly to the employee or his family. We do not consider such matters as collision insurance plans covering the school buses as "fringe benefts" accruing directly to the employee. The employee's gross weekly salary and his employer's weekly out-of-pocket payments for fringe benefits should be totaled when determining whether the employee has obtained the 95% figure. For example, assuming that an employee received a gross weekly salary of $150.00 and that the Board of Education paid out $30.00 per week for fringe benefits for the employee at the end of the Spring 1977 school year, the employee would obtain "substantially equivalent employment" when he receives a gross weekly salary and employer out-of-pocket fringe benefit payments totalling $171.00 (95% of $180.00). The employee could obtain this figure by, for example, receiving $171.00 per week in gross salary with no employer out-of-pocket fringe benefit payments, or by receiving $100.00 per week in gross salary with the employer paying $71.00 per week in out-of-pocket costs for fringe benefits. We also will clarify several other points in our June 7, 1978 Order. First, -2- ___________________________________________________________________________________ while we have earlier indicated the method by which we would determine if an em- ployee has received "substantial equivalent employment" and have denominated our formula of 95% or more of the employee's gross weekly salary at the close of the 1977 school year, we believe it may be of benefit to define the terms "weekly salary" and "compensation" within the context of paragraph 2 of our June 7, 1978 Order. Specifically, by "weekly salary" and "compensation," we mean the employee's gross weekly salary, to include wages earned before taxes and deductions plus the employer's out-of-pocket costs for fringe benefits for that employee, as defined above. In determining what amounts a given employee may be entitled to receive under the provisions of our Order of June 7, 1978, we believe that the subcontract- ing decision on the part of the City of Augusta warrants a payment to the employee of that amount which he or she was receiving as salary (after deductions for taxes and Social Security) at the close of the 1977 school year plus the employer's out- of-pocket costs for the aforementioned benefits, specifically including retirement, medical, and personal liability insurance premiums or payments. When such payment is made , we contemplate that the City of Augusta will remain responsible for assum- ing the necessary withholding tax increments to satisfy the current requirements of the Internal Revenue Code and the State of Maine. The total entitlement due to any employee is to be mitigated by those amounts that he/she has earned since the termination of his/her employment with the City of Augusta Board of Education. In referring to our 95% test, mentioned earlier, if the employee has met such test, we deem it appropriate that no award is due hereunder; however, if an award is due hereunder because the given employee(s) has/have not reached the 95% level, then that employee is to be compensoted at the rate of his/her prior compensation, as defined earlier, at the 100% level of what he/she were receiving at the time of termination. While the 95% test establishes, within our guidelines, "substantial equivalent employment," we believe the entitlement, if warranted, should be made at l00% of the costs otherwise associated with the hiring of and the performance of services by the terminated employee. Moreover, certain benefits which may have been provided by the former employer, the City of Augusta, may have been deemed to be of a "vital" nature by the terminated employee, e.g., health or casualty insurance. If this were the case and the given employee sought to purchase equivalent coverage for him/herself or his/her family, he/she would have sustained an out-of-pocket cost which, in effect, would have reduced his/her take-home salary and disposable income. Such a loss caused by the decision of the employer to subcontract should not have to be borne by an employee who had no role in the decision-making process of the public employer to involve itself with subcontracting of school bus services. Lastly, implied in our June 7, 1978 Order is the requirement that each employee adversely affected by the Board of Education's decision to subcontract actively seek acceptable employment in good faith. In other words, analogizing to a well-known principle of contract law, it is incumbent upon each employee to seek to mitigate the economic impact upon his finances which occurred when the Board of Education decided to subcontract its school bus operation. We believe that this Supplemental Decision and Order fully satisfies the in- struction contained in the Superior Court's November 10, 1978 remand order. We will -3- ___________________________________________________________________________________ restate in this Supplemental Decision and Order our order in Paragraph No. 2 of the June 7, 1978 Order with our definition, as explained above, of the phrase "substantially equivalent employment." All other Paragraphs of our June 7, 1978 Order remain in effect as stated in that Order. ORDER On the basis of the foregoing findings of fact and by virtue of and pursuant to the powers granted to the Maine Labor Relations Board by the provisions of 26 M.R.S.A. 968, it is hereby ORDERED: That the Board of Education remunerate each employee adversely affected by the decision to subcontract that employee's weekly salary from the period commencing with the beginning of the Fall 1977 school year through the date at which the employee commenced substantially equivalent employment, less any com- pensation earned through other employment by the employee dur- ing the aforesaid period. An employee has obtained substantially equivalent employment when he obtains employment which compensates at a weekly rate of 95% of the employee's gross weekly salary at the end of the Spring 1977 school year plus the Board of Educa- tion's weekly out-of-pocket costs for fringe benefits for the employee at the end of the Spring 1977 school year. Dated at Augusta, Maine this 30th day of December, 1978. MAINE LABOR RELATIONS BOARD /s/_______________________________________ Edward H. Keith Chairman /s/_______________________________________ Paul D. Emery Employer Representative /s/_______________________________________ Michael Schoonjans Employee Representative -4- ___________________________________________________________________________________