STATE OF MAINE MAINE LABOR RELATIONS BOARD Case No. 79-32 _____________________________________ ) S.A.D. #22 NON-TEACHERS ASSOCIATION, ) ) Complainant, ) ) v. ) DECISION AND ORDER ) S.A.D. #22 BOARD OF DIRECTORS, ) ) Respondent. ) _____________________________________) The S.A.D. #22 Non-Teachers Association (hereafter "Association") filed this prohibited practice complaint on October 25, 1978. The S.A.D. #22 Board of Directors (hereafter "Directors") filed a response. A pre-hearing conference was held on December 19, 1978, by Alternate Chairman Donald W. Webber, who issued a Pre-Hearing Conference memorandum and Order on December 26, 1978, the contents of which are incorporated herein by reference. The matter was heard by the Maine Labor Relations Board (hereafter "Board") on February 16, 1979, Alternate Chairman Webber presiding, with Paul D. Emery, Employer Representative, and Paul Haney, Alternate Employee Representative. The Association was represented by Stephen P. Sunenblick, Esq., and the Directors by Hugh G. E. MacMahon, Esq. The parties filed post- hearing briefs. JURISDICTION Jurisdiction of the Board to hear and render a decision in this case lies in 26 M.R.S.A. 968(5). FINDINGS OF FACT 1. Complainant Association is the recognized bargaining agent for a bargaining unit composed of bus drivers, cafeteria workers, clerks, custodians, secretaries, nurses, and teacher aides in S.A.D. #22, Hampden. 26 M.R.S.A. 962(2). Respondent Board of Directors is a public employer of the employees in this unit. 26 M.R.S.A. 962(7). 2. The parties have had collective bargaining agreements in effect since 1971. The agreement for the three years ending June 30, 1978, contains an article on contingency funding: XIX. IMPLEMENTATION The implementation of this agreement and the benefits contained therein is dependent upon the amount of the state-local allocation funds and the appropriation of the necessary main- tenance of effort and/or leeway funds by the voters of S.A.D. #22. In the event that voters do not appropriate the funds required or the amount of the state-local allocation is insuf- ficient to implement this agreement, the Board agrees to reopen negotiations with the Asso- ciation before it, the Board, determines what changes will be made. -1- ______________________________________________________________________________ All previous agreements included some kind of implementation clause. 3. In initial proposals, the Association proposed that the entire implementation article be deleted; the Directors proposed that it be retained as it was. There were a number of negotiation sessions. The parties maintained their positions regarding the clause. Three Association negotiation team members testified that the Association's claim that the implementation article was a permissive subject was discussed a number of times during negotiations. Superintendent Skehan testified that this claim was not raised until after mediation and prior to the initiation of fact finding. 4. The Association requested mediation on May 24, 1978, and listed the implementation article as an item in dispute. In ex parte conferences with the mediator at the July 13 and 14 mediations, the Association took the position that the article was a "permissive" subject of bargaining, that they would consider it as part of a total settlement if the language were changed to eliminate the possibility of unilateral changes, and if there were major inducements to the Association in other areas. There is no evidence that the mediator told the Directors that the Association claimed that the article was a permissive subject. 5. Within a few days after the mediation, Keith Harvie, the Association's main spokesman in mediation, informed Assistant Superintendent Brooks that the Association was requesting fact-finding and was not including the article in its sub- mission of issues. In a letter dated July 19, 1978, Harvie then informed the Directors, through Skehan: "As you have been advised by the bargaining team of the Nonteaching Association, your proposal for retention of Article XIX, Implementation, is a permissive subject of bargaining. The Association no longer wants to burden the negotiations process with non- mandatory items which will be the cause of additional time and expense in the Fact Finding process. Therefore, on behalf of the Association, I am asking that the Board formally withdraw its proposal on Article XIX prior to Fact Finding. The Association will not include that Article in its list of issues attached to the Fact Finding request." Harvie then requested fact-finding in a document dated July 21, 1978, omitting the article. The Directors also requested fact- finding in a document dated July 31, 1978, which included the article. 6. The Association then demanded, in a letter dated August 16, 1978, that the Directors remove the article from their request. The Association threatened to file a prohibited practice com- plaint if the Directors did not do so. Skehan replied in a letter dated August 21, 1978, that "the Board [of Directors] has no intention of withdrawing its request for Article XIX [implementation] to be included in the fact-finding process." 7. A fact-finding panel heard the issues on August 29, 1978. The panel's report indicated that the Association argued that the implementation article was a permissive subject and should have been withdrawn on demand. The Board asked that the article be retained. The Panel concluded that the article was properly -2- ______________________________________________________________________________ before them and that a party had no right to block a panel from hearing a permissive subject. On the merits the panel recommended either removing tne article or reworking it so that the impact of lack of funding would be less devastating to the agreement. 8. The Association was willing to accept the recommendations of the panel; however, the Directors demanded changes in nine areas, including a demand for the implementation article. After a package proposal by the Directors including the full implementation article, the Association made a package counterproposal including a "reworded" implementation article. The parties eventually agreed to the following language: "XXI. - IMPLEMENTATION The implementation of this agreement and the benefits contained therein is dependent upon [the amount of the state-local allocaiton funds and] the appropriation of the necessary [maintenance of effort and/or leeway] funds by the voters of SAD #22. In the event that voters do not appropriate the funds required [or the amount of the state-local allocation is insufficient] to implement this agreement, the Board agrees to reopen negotiations with the Asso- ciation before it, the Board, determines what changes will be made. NOTE: The inclusion of this Article in the Working Agreement is dependent upon the final decision of the Maine Labor Relations Board concerning the Prohibited Practice Complaint relative to this Article. If the decision is in favor of the Asso- ciation, this Article will be deleted from this Working Agreement. If the decision is in favor of the Board, this Article will remain part of this Agreement." 9. The Association's share of the fact finders fees totaled $635.50. Approximately ten percent of the time spent in fact finding was devoted to the article. In addition, the Maine Teachers Association incurred approximately $50.00 of expenses in presenting its position to the fact finders. 10. S.A.D. #22 is a quasi-municipal corporation operated by the Board of Directors. The only source of funding for the Directors is payments from the towns making up the District. The towns are assessed an annual fee representing the town's share of the approved, one-year District budget. Budget approval or disapproval takes place at a meeting at which the annual budget is voted on by eligible voters who attend the meeting. Only residents of the District are eligible to vote at the meeting. The budget is voted on in a number of different Articles, eight of which concern monetary expenditures. An article calling for funding in a recommended amount could be reduced at the meeting and then approved by vote in the reduced amount. The Directors would then be forced to live within the limits of the reduced budget. 11. The current three-year agreement for the 1978-79 through 1980- 81 school years was executed in November 1978. Thus the actual budget level for the final two years was not yet established although the Directors would do everything they could to get their recommended budget approved. The Directors have not had a recommended budget reduced through the May 1978 meeting in fifteen years although one year the recommended budget passed by only nine votes. -3- ______________________________________________________________________________ 12. The current agreement has a "reopener" provision for each of the two final years of the three-year agreement, the 1979-80 and 1980-81 school years. The reopener provides, among other possibilities, that: "either party may, by written request to the other party, reopen negotiations on Wages, Blue Cross/Blue Shield Insurance, and on [two or three other articles]." 13. Approximately 65 percent of the total budget constitutes salaries and benefits for employees. Thus, Superintendent Skehan indicated that significant budget reductions would require reductions in force as the practical solution to its financial limits and the requirement to live within the terms of its contract. Salaries and benefits of employees represented by the Association constitute 10 to 20 percent of the District's total budget. Only 8 percent of the District's budget is not committed by contract (assuming constant personnel and program levels). DECISION The Association urges that the implementation article is not a mandatory subject of bargaining since it does not concern the relationship between the employer and the employees but rather relates to third party conduct, in effect making ultimate approval of an otherwise agreed-upon collective bargaining agreement subject to approval by voters and not by the public employer--the Directors. They urge that insisting on submitting this permissive issue to fact-finding over their objection is a per se violation of the duty to bargain in good faith. The Association seeks reimbursement for its costs in having to pursue this issue in fact-finding. The Directors urge that it is a proper subject for submission to fact- finding, that it is a mandatory subject, that the Association should be obli- gated to bargain this subject on policy grounds regardless of whether it is classified as mandatory or not, that in any event the Association waived its right to object by its conduct in a number of respects, that in any event it is not a prohibited practice to insist on a non-mandatory subject if the parties had treated it as a mandatory subject of bargaining, and finally that the Association's request for a monetary remedy is a penalty which is beyond the Board's authority to award. We conclude that the implementation clause has two facets--contingent implementation and subsequent managerial control over all bargaining subjects. The former is a permissive subject of bargaining and, therefore, by insisting on this article at impasse, the invocation of fact-finding, the Directors committed a per se violation of the duty to bargain in 26 M.R.S.A. 964(1) (E). The latter facet, control over all bargaining subjects, is so all- encompassing and totally destructive of the collective bargaining system that insistence on it also is a per se violation of 26 M.R.S.A. 964(1)(E). We also conclude that there was no waiver of the right to object and that an appropriate remedy would not include the payment of a portion of the Asso- ciation's fact-finding costs. Other arguments of the Directors are also rejected. 1A. The contingent implementation facet. The first facet of the implementation article is that the collective bargaining agreement is made contingent upon a future event, that being a vote by residents of -4- ______________________________________________________________________________ the District on whether to fund the budget proposed by the Directors.[fn]1 It is well settled that a party commits a per se violation of the Act by insisting to impasse on a non-mandatory subject of bargaining. See NLRB v. Wooster Division of Borg-Warner Corp., 356 U.S. 342 (1958); Board of Directors of M.S.A.D. No. 24 v. Van Buren Custodian Association, MLRB Case No. 79-16 (1979). Moreover, insistence upon incorporation of a permissive bargaining subject in the agreement need not be the sole cause for impasse in order to establish a violation of the duty to bargain. See Caribou School Department v. Caribou Teachers Association, MLRB Case No. 76-15 (1977); cf. Teamsters Local 48 v. Town of Falmouth, MLRB Case Nos. 79-10 & 79-18 (1979) at page 6. In addition, we conclude that these parties were at impasse when they submitted issues to fact-finding. Since the Directors included the implementation article over the objection of the Association and refused on demand to remove it from the fact-finding proceeding, the question is thus squarely raised as to whether or not the implementation article is a mandatory subject of bargaining. If it is mandatory, then the Directors have acted properly. If it is permissive, they have violated 26 M.R.S.A. 964(1)(E) through 965(1)(C). See Borg-Warner, supra. The test for whether this is a mandatory subject of bargaining is whether it falls within the limitation of "wages, hours, working conditions and contract grievance arbitration."[fn]2 26 M.R.S.A. 9650)(C). Since this section of the Maine Public Employees Labor Relations Act (hereafter "Act") is nearly identical to the National Labor Relations Act, 29 U.S.C. 151 et seq., we usually look to established federal precedents for guidance on this issue. See Caribou School Department v. Caribou Teachers Association, No. Ar-79-4 (Me., June 19, 1979). The leading case in this area is Allied Chemical Workers Local 1 v. Pittsburgh Plate Glass Co., 404 U.S. 157 (1971), which establishes the general criterion that the subject must "settle an aspect of the relationship between the employer and employee." Id. at 179. We view it as a premise of the very concept of collective bargaining that working conditions be settled by agreements. The contingency implementation facet of this clause, however, cannot be said to "settle" anything. Rather, the entire, bargained agreement is nulli- fied by the eventuality of the contingency. Thus, the premise of collective bargaining is absent in this facet of the implementation article. We there- fore conclude, in keeping with our duty, power and "special expertise," Id. at 182, that we must classify this facet of the article as a permissive subject of bargaining. Secondly, we note that the idea of demanding that the Association accede to having the voters of the District have an input in the ratification of the entire contract is strongly parallel to the provision classified as permissive in Borg-Warner, supra, where the demand was for a "ballot" clause calling for a pre-strike vote of all unit employees as to the employer's last offer. In Borg-Warner the _______________ 1 The article as proposed also included an additional contingency, the action of the Legislature in allocating funds, which was removed from the final form of the article. While the decision and rationale apply equally well to this second contingency, it is not mentioned hereafter since it is duplicative only. 2 The educational policy exception of 26 M.R.S.A. 965(1)(C) is not germane or raised as an issue. -5- ______________________________________________________________________________ Supreme Court found that the clause dealt with relations between employees and their unions, not between employees and their employer. The Court also stated: "It substantially modified the collective bargaining system provided for in the statute by weakening the independence of the 'representative' chosen by the employees." 356 U.S. at 350. The contingency implementation clause here has the same effect of weakening the collective bargaining system both by allowing the public employer, established by definition in 26 M.R.S.A. 962(7), to avoid its duty to bargain by shunting a ratification decision to the voters and, furthermore, thereby denying the employees the power to bargain for their working conditions with their employer. Finally, the conclusion we reach today follows necessarily from the decision in Maine Teachers Association v. Sanford School Committee, MLRB Case Nos. 77-18, 19, 20, 29 (1977) where the Board classified as non-mandatory "the subject of ratification by a body other than the public employer, of an agreement reached by the representative of the public employer." Id. at 5. Power to make agreements resides with the public employer as does the accompanying duty to bargain and execute agreements reached. See M.R.S.A. 965(1)(C) & (D). The contingency implementation clause thus runs contrary to the statutory duty to bargain.[fn]3 The Directors are not handcuffed without such a contract-relief contingency. It is within their power, if necessary, to reduce personnel, cut programs, or seek appropriate contract modifications through the reopening of negotiations. This is a not uncommon situation for all employers, public and private, who encounter income which falls short of expectations. 1B. Managerial control of bargaining subjects facet. If the voters do not "appropriate the funds required," that is, if the contingency transpires, then the second facet of the implementation article is enlivened. This facet has the Board of Directors agreeing to "reopen negotiations with the Association before it, the Board [of Directors], determines what changes will be made." Although the word "negotiations" is used, the latter part of the phrase clearly indicates final decision by the Board of Directors alone. In essence the negotiations are nothing more than consultation rights and not full collective bargaining rights.[fn]4 In addition, the power of the Board of Directors to make "changes" is totally unrestricted. Thus it is in fact an all-inclusive management rights provision which sweeps over all subjects of mandatory bargaining. A much less sweeping management rights provision was considered in NLRB v. American National Insurance Co., 343 U.S. 395 (1952). In American National, the National Labor Relations Board ("NLRB") had concluded that it in effect was a refusal to bargain over mandatory subjects and thus a per se violation of the duty to bargain to propose a clause which reserved sole control over certain mandatory subjects, including promotions, discipline, and work scheduling. The Supreme Court reversed, however, stating: _______________ 3 The fact finders reported that the clause had a "devastating" impact on harmonious labor relations. 4 As the fact finders phrased it: " 'renegotiations' would be a sham." -6- ______________________________________________________________________________ "Any fears the [NLRB] may entertain that use of management functions clauses will lead to evasion of an employer's duty to bargain collectively . . . do not justify con- demning all bargaining for management functions clauses covering any 'condition of employment' as per se vio- lations of the Act." Id. at 409. This implementation article, however, does not simply cover one or a few subjects of mandatory bargaining. What is involved here is ultimate manage- ment control of all subjects. Moreover, the contingency which would trigger such power--a decision by tax-paying voters to cut back school taxes--is an all-too-likely possibility in the current economic climate.[fn]5 Moreover, the issue of whether or not funds appropriated by the voters are actually sufficient is left open to interpretation. Thus, while we agree that a management rights clause covering only a few mandatory subjects of bargaining would not be a per se violation but rather only possible evidence of bad faith, we conclude that a bargaining agent cannot be forced to bargain over a provision which constitutes a waiver of bargaining rights on all subjects. Thus, we deem this second facet of the implementation article to be so totally destructive of the principles of collective bargaining as to be a per se violation of the duty to bargain of 26 M.R.S.A. 965. 2. Waiver The Directors argue that, even if a permissive subject, the Association waived its right to object to this article by once agreeing to it in the previous collective bargaining agreement, by first proposing negotiations over the subject, by its pre-fact-finding bargaining conduct of not demanding its removal from the table until the initiation of fact-finding, by listing it as an issue in dispute in mediation, by discussing it after fact-finding, and by eventually signing the contract. The Directors misconstrue the long-settled concept of a permissive subject. "By once bargaining and agreeing on a permissive subject, the parties, naturally, do not make the subject a mandatory topic of future bargaining." Pittsburg Plate Glass, supra, 404 U.S. at 188. Moreover: "No waiver of the right to claim later that a subject is a permissive one results from bargaining without reservation about the subject. Either the employer or the union may bargain about the topic as if it were a mandatory subject without losing its right, at any time before agreement is reached, to take an adamant position that the matter shall not be included in a contract between the parties. To sus- tain a claim of waiver based upon a course of bargaining 'would penalize a party to negotiations for endeavoring to reach agreement by consenting to bargaining upon issues as to which the Act does not require him to bargain.' [Kit Mfg. Co., 150 NLRB 662, 671, 58 LRRM 1140 (1965), enforced, 365 F.2d 829 (9th Cir. 1966)]" The Developing Labor Law, Section of Labor Relations Law, American Bar Association, C. Morris (BNA 1971) at page 425. Essentially, a permissive subject never changes into a mandatory subject no matter how lengthy the bargaining. The court in NLRB v. Davidson, 318 F.2d 550, _______________ 5 The fact finders stated that "the current cost-cutting political climate plus the language of the article itself creates a situation potentially destructive of good faith labor relations." -7- ______________________________________________________________________________ 558 (4th Cir. 1963) stated: "A determination that a subject which is non-mandatory at the outset may become mandatory merely because a party had exercised this freedom [to bargain or not to bargain] by not rejecting the proposal at once, or sufficiently early, might unduly discourage free bargaining on non-mandatory matters. Parties might feel compelled to reject non- mandatory proposals out of hand to avoid risking waiver of the right to reject." Thus the Directors' arguments that there was a waiver by past agreement, by discussing the article in negotiations and by listing it as an issue in dispute in its mediation request, are without merit. Moreover, the argument that the Association waived its right to object to inclusion of the subject in fact-finding by first proposing negotiations on the subject is unpersuasive, "Catch 22" reasoning since the Association's proposal was that the article be deleted. We conclude that the onset of fact-finding is the most desirable point for a party to make its demands concerning permissive subjects clear, as the Association did here. Fact-finding is the usual starting point of impasse resolution. That the parties "are unable to effect a settlement" of their bargaining is in fact the criterion for invocation of this process. 26 M.R.S.A. 965(3)(A).[fn]6 Indeed, we find here that impasse occurred at the initiation of fact- finding. Thus, by forcing the issue to fact-finding, the Directors committed a violation of their duty to bargain. Since the Directors continued to demand the inclusion of the Article in the agreement after fact-finding, the Association did not waive its right to object by discussing the matter. It may have been the only way to achieve an agreement when it did. In any event, its right to object was clearly preserved by signing the final agreement that contained the caveat notation listed in Finding No. 8. See Caribou School Department v. Caribou Teachers Association, supra, at page 6 n.4. In light of our conclusions regarding waiver we see no urgency to resolve the conflict in testimony evident in Finding of Fact No. 3 regarding whether the Association claimed the article was permissive or non-mandatory during pre-mediation negotiations. 3. Other Arguments The Directors cite Economy Stores, Inc., 120 NLRB No. 1 (1958) for the "principle" that an employer does not refuse to bargain in good faith by insisting on a subject that the parties have treated as a proper subject. Not only is that not the case here, but also this principle was laid to rest long ago by the Supreme Court in Borg-Warner, supra, and NLRB v. Katz, 369 U.S. 736 (1962). See also Pittsburg Plate Glass, supra, 404 U.S. at 188. The Directors also argued that since the fact-finding panel found the parties' _______________ 6 It is clearly proper for a party to demand that permissible subjects be removed at any time prior to fact-finding. In fact, the issue does not usually come to a head prior to fact-finding, however, since the parties must continue to bargain mandatory subjects to impasse. Although not before us in this case, we would be inclined to find a waiver of the right to object if a party submitted or acquiesced in the submission of a permissive subject to fact-finding or (if it were bypassed) to interest arbitration. -8- ______________________________________________________________________________ dispute over the article was properly before it, the Directors did not commit a prohibited practice by insisting on submitting the article to the fact finders. However, the fact finders did not conclude that the subject was a mandatory subject, and would not bind the Maine Labor Relations Board by its conclusions even it it did. We conclude to the contrary of the argument. The Directors also cited Easton Teachers Association v. Easton School Committee, MLRB Case No. 79-14 (1979), for the proposition that regardless whether a provision is permissive or mandatory, neither party may claim that the provision automatically terminates with the contract. The assertion is incorrect, however. In Easton, the characterization of two specific provisions as either permissive or mandatory was not necessary to the result in that case since the termination of the two provisions constituted a bad faith violation in light of other conduct, not just by virtue of the fact of unilateral termination itself as with the ten mandatory subjects. Easton, supra, at page 6. REMEDY The Association seeks its consequential costs of participating in fact- finding with regard to the implementation article. The Directors argue that this claim would constitute a penalty which is beyond the power of the Board. While we disagree with the characterization of the request as a "penalty," and although we are holding in favor of the Association, we conclude that an order directing payment of consequential damages would not effectuate the policies of the Act. 26 M.R.S.A. 968(5)(C). This is so because this appears to be an otherwise isolated transgression, because the conclusion that it is a permissive subject is a novel and complex one, and because other remedies, including the agreement between the parties in the "Note" to Article XXI of the current contract, are adequate in this case. Thus we direct a simple cease and desist order. ORDER 1. Respondent S.A.D. #22 Board of Directors, its members, agents, successors and assigns shall cease and desist from submitting issues which are non-mandatory subjects of bargaining to fact-finding when objected to by an appropriate bargaining agent. Dated at Augusta, Maine, this 30th day of July, 1979. MAINE LABOR RELATIONS BOARD /s/____________________________________ Donald W. Webber Alternate Chairman /s/____________________________________ Paul D. Emery Employer Representative /s/____________________________________ Paul Haney Alternate Employee Representative -9- ______________________________________________________________________________