STATE OF MAINE MAINE LABOR RELATIONS BOARD
Case No. 81-06
Issued: April 28, 1981
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)
MAINE STATE EMPLOYEES ASSOCIATION, )
)
Complainant, )
v. ) DECISION AND ORDER
)
STATE OF MAINE, )
)
Respondent. )
____________________________________)
This is a prohibited practices case, filed pursuant to 26 M.R.S.A.
979-H(2) on July 24, 1980 by the Maine State Employees Association (MSEA).
MSEA alleges in its complaint that the State of Maine (State) violated 26
M.R.S.A. 979-C(1)(A) and (E) by granting parity to managerial and confi-
dential employees with respect to wage increases and certain benefits nego-
tiated for bargaining unit employees, together with more favorable treatment
with regard to other benefits. The State filed a response on August 14, 1980,
denying that its actions constituted violations of the State Employees Labor
Relations Act, 26 M.R.S.A. 979, et seq. (Act).
A pre-hearing conference on the case.was held on September 8, 1980,
Alternate Chairman Donald W. Webber presiding. Alternate Chairman Webber
issued on September 8th a Pre-Hearing Conference Memorandum and Order, the
contents of which are incorporated herein by reference.
Hearing of the case was had on October 8, 1980, Chairman Edward H. Keith
presiding, with Employer Representative Don R. Ziegenbein and Alternate
Employee Representative Harold S. Noddin. MSEA was represented by John J.
Finn, Esq., and the State by Attorney Linda D. McGill. Full opportunity was
given to examine and cross-examine witnesses, present evidence, and make
argument. Both parties filed post-hearing briefs, which have been considered
by the Board.
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JURISDICTION
MSEA is a bargaining agent within the meaning of Section 979-H(2) for
five state employee bargaining units. The State is the public employer as
defined in Section 979-A(5). The jurisdiction of the Maine Labor Relations
Board to hear this case and render a decision and order lies in Section 979-H.
FINDINGS OF FACT
Upon review of the entire record, the Board finds:
1) In March 1979, after approximately 18 months of negotiations, MSEA
and the State tentatively agreed to the first collective bargaining agreements
for the five State employee bargaining units represented by MSEA. As required
by 26 M.R.S.A. 979-D(E)(3), the State then submitted legislation to
authorize the cost items contained in the tentative agreements. Included in
this legislation were provisions stating that confidential employees excluded
from collective bargaining by Section 979-A(6)(C) would be given "similar and
equitable" treatment to employees covered by the agreements, and that
managerial employees excluded from bargaining by Section 979-A(6) would be
given "similar and equitable" treatment consistent with the salary provisions
agreed to for the Supervisory Services bargaining unit. The Legislature
passed this legislation in May, 1979.
2) In October, 1979, the parties began negotiations for agreements to
succeed the first agreements, which were due to expire on June 30, 1980.
After a number of bargaining sessions, including 17 sessions held on or after
January 24, 1980 and mediation sessions on March 4, 7, and 21, 1980, the
parties reached tentative agreements on the successor contracts. In a May 7,
1980 letter to the State, MSEA stated its opposition to including the
managerial and confidential employees in the bill seeking legislative
ratification of the new agreements. The letter states that including these
employees in the legislation would be "totally contrary to the principle
behind such employees' exclusion from bargaining units and is unseemly."
3) The State submitted legislation for approval of the cost features of
the tentative agreements in May, 1980. At the same time, the State submitted
a second bill to fund and implement benefits for the managerial and confi-
dential employees
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excluded from bargaining units. This bill provides for the managerial and
confidential employees the same salary increase, the same increase in the
mileage rate paid for the use of personal vehicles, and the same contribution
for dependent health insurance as were negotiated for the employees in the
Supervisory Services bargaining unit. In addition, the bill provides State-
funded life insurance and income protection plans for the excluded employees.
Neither of these plans were included in the agreements negotiated for the
bargaining unit employees, although MSEA had attempted to negotiate a life
insurance plan. The Legislature passed both bills on May 29, 1980. The cost
of the increased wages and benefits for the bargaining unit employees totalled
about $3.9 million, while the cost of the package for the excluded employees,
who totalled about 300 in number, was approximately $241,500.
4) Some of the employees represented by MSEA were highly concerned about
the legislation granting the excluded employees the increased wages and bene-
fits. Some employees thought that MSEA was involved in some sort of deal with
the State, not understanding that the increased wages and benefits for the
confidential and managerial employees resulted from separate legislation to
which MSEA was not a party.
5) At some point prior to the submission of the legislation in May,
1980, the Governor's staff, the Director of the Governor's Office of Employee
Relations, and other State officials began considering wages and benefit
increases for the excluded employees. After considerable discussion about
market conditions, political considerations, and various alternatives, it was
decided to track the salary increase and some of the benefits negotiated for
the Supervisory Services unit, and to give the managerial and confidential
employees the life insurance and income protection plans.
6) In April, 1980, the State filed pursuant to Section 979-E(3) several
petitions for unit clarification, seeking to remove approximately 200
employees from bargaining units represented by MSEA on the ground that the
employees were managerial or confidential personnel as defined in 26 M.R.S.A.
979-A(6). Hearings on these petitions by a Board hearing examiner currently
are in progress.
DECISION
This case presents the question whether the granting of negotiated wages
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and benefits to managerial and confidential employees violates the subsections
of Section 979-C(1) of the State Employees Labor Relations Act. We hold that
it does not and dismiss MSEA's complaint.
MSEA urges that the granting of the negotiated salary and other benefits
to the excluded employees interferes with the bargaining unit employees'
Section 979-B rights and constitutes a refusal to bargain because: 1) it in
effect forces the bargaining unit employees to bargain for the excluded
employees, increasing the impact of cost items being negotiated and impairing
MSEA's ability to negotiate for the organized employees, 2) it deprives the
bargaining unit employees of the right to bargain about the issue of equality
of treatment between their unit and another group of employees, and 3) it
creates a conflict of interest for the management negotiators who, knowing
they will receive whatever is negotiated for the represented employees, tend
to grant bargaining concessions which favor their own interests. The State
argues that it has no formal policy of granting negotiated benefits to
excluded employees, and that, in any event, its determination of salary and
benefit levels for the excluded employees cannot violate the rights of the
organized employees.
The State has extended negotiated salary increases and some negotiated
benefits to the managerial and confidential employees both times that MSEA
and the State have negotiated agreements. The legislation submitted by the
State in the spring of 1979 for authorization of the cost items in the first
agreements provided that the confidential employees would receive the salary
and all benefits negotiated for the organized employees, and that the
managerial employees would get the salary negotiated for the Supervisory
Services bargaining unit and the negotiated mileage reimbursement rate.
Similarly, legislation submitted in May, 1980, granted the excluded employees
the salary increases, the increase in the mileage reimbursement rate, and the
health insurance benefit included in the second round of contracts. Thus,
while the State does not have a written policy of extending negotiated
benefits to excluded employees, its practice has been to grant some of the
negotiated items to the managerial and confidential employees at the same time
these items are implemented for the unit employees.
However, we do not agree with MSEA's arguments that this extension of
benefits interfered with the organized employees' rights or constituted a
refusal to bargain. An employer may properly take into consideration the
wages and
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benefits negotiated for unit employees when deciding wage and benefit levels
for unrepresented employees, and a "policy of uniformity" between unit and
non-bargaining unit employees is lawful. Texas Foundries, Inc. v. NLRB, 211
F.2d 791, 793 (5th Cir. 1954).
In the interest of preserving the excluded employees' morale and
efficiency, an employer must be concerned that these employees not feel that
their interests are being ignored while the bargaining unit employees receive
wage and benefit increases. As a practical matter, an employer knows that
anytime it gives an increase to unit employees additional costs are likely to
be involved, since its managerial and confidential employees probably will
expect similar treatment. The passing on of the negotiated items to the
excluded employees results, we think, not in placing an unfair burden on the
union, but in "enhancement of the union's prestige among [the] unorganized
employees." Texas Foundries, Inc., 101 NLRB 1642, 1668 (1952), rev'd on other
grounds, 211 F.2d 791 (5th Cir. 1954).
In light of these controlling principles, MSEA's arguments that the State
violated the Act by granting the negotiated items to the excluded employees
must fail. A "policy of uniformity" does not impermissably breach the "wall
of separation" established by the Act between unit and excluded employees.
While the excluded employees received the wage increases and some of the
benefits negotiated for the unit employees, the State did not negotiate with
the excluded employees, did not make them subject to the grievance procedure,
did not include them under any negotiated job security provisions, or other-
wise extend to them any of the rights and privileges accorded to unit
employees. We therefore cannot say that the State is, contrary to the intent
of the Act, treating the excluded employees as bargaining unit members.
Since an employer may properly consider negotiated wages and benefits
when setting the wages and benefits of excluded employees, we reject MSEA's
contention that the State is required to make a completely independent
determination of the excluded employees' wages and benefit levels. MSEA has
cited no legal authority which supports its contention; certainly Section
979-A(6), by separating state personnel into bargaining unit employees and
excluded employees, does not mandate that the State make an entirely inde-
pendent determination of the excluded employees' wages and benefits.
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In any event, even if the State was required to make an independent
determination, the record shows that various State officials did engage in
considerable discussion about the wage and benefit increases to be granted to
the excluded employees. The State thus did not "automatically" grant the
negotiated items to the excluded employees, but did make an independent
determination of the proper wage and benefit increases, deciding to grant
negotiated wage increases and some of the negotiated benefits, as well as some
additional benefits. The fact that "political" considerations were involved
does not make the determination improper.
While we appreciate that some of the unit employees feel it unfair that
negotiated wages and benefits were granted to the managerial and confidential
employees, we cannot say that the granting of the benefits reasonably tended
to interfere with the unit employees' rights in violation of Section 979-
C(1)(A), or amounted to a refusal to bargain in violation of Section 979-
C(1)(E). An employer is entitled to attempt to satisfy its excluded
employees' interests, and the State's efforts to do so here were proper.
Neither can we say that the extension of negotiated items creates an
unlawful conflict of interest for the management negotiators. MSEA is free to
reject any proposal which might favor the excluded employees' interests over
those of the unit employees. There is no evidence that the wage provision for
members of the Supervisory Services bargaining unit, which unlike the agree-
ments for the other bargaining units provides for the larger of a flat dollar
or a percentage increase, originated with the management negotiators or is
contrary to the interests of the members of the Supervisory Services unit or
the members of any other unit. Management negotiators often are aware that
they will benefit from the agreements they make during negotiations, since an
increase in the unit employees' wages and benefits frequently means an
increase for the managerial employees. This type of knowledge does not create
a conflict of interest which could reasonably be said to interfere with the
unit employees' right to bargain. The fact that some "extra" benefits - a
life insurance plan and an income protection plan - were granted to the
excluded employees does not constitute unlawful interference with the unit
employees' Section 979-B rights. It is the State's prerogative to establish
the wages and benefits for the confidential and managerial employees. This
prerogative was properly exercised when State
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officials decided to grant some of the negotiated items as well as the
additional benefits. The grant of the additional benefits cannot reasonably
be construed as a "message" to unit employees that the State was displeased
with their bargaining activities.
None of our conclusions are changed by the fact that in May, 1980, when
the State secured passage of legislation extending the negotiated items and
granting some additional benefits to excluded employees, the State was seeking
pursuant to Section 979-E(3) to remove approximately 200 employees from the
bargaining units. While the desires of the employees whose positions are in
dispute may not be wholly irrelevant in the unit clarification proceeding,
they are at best one minor factor among a number of factors to be considered.
Chief among these factors are whether the circumstances surrounding the
formation of the units have changed sufficiently to warrant modification of
the units, and whether in fact the contested employees fall within any of the
subsections of Section 979-A(6). Even if the wage increase and benefits
received by the excluded employees did increase some of the unit employees'
willingness to be removed from the units, a proposition we consider unlikely
since the employees would lose important contract rights if removed from the
units, this fact would have no material effect on the determination whether
the employees should be removed from the units.
Finally, the "parity" cases relied on by MSEA are not controlling. Those
cases hold that a policy of granting one bargaining unit the same item nego-
tiated for a second unit represented by a different bargaining agent is
unlawful because it imposes an improper burden on the second union. See,
e.g., Local 1219, IAFF v. Connecticut Labor Relations Board, 171 Conn. 342,
370 A.2d 952 (1976); Lewiston Firefighters Association v. City of Lewiston,
354 A.2d 154 (Me. 1976). Absent from these cases is a fundamental element
present in this case: the State has the sole discretion in determining the
excluded group of employees' wages and benefits and, in making this determin-
ation, may properly look to the negotiated wages and benefits. The employers
in the parity cases were not free to determine unilaterally the wages and
benefits of one of the groups of employees, but were required to bargain with
both groups. The State's prerogative to set the excluded employees' wages and
benefits, which distinguishes this case from the parity cases, overrides
MSEA's assertion that the State is forcing it to bargain for the managerial
and confidential employees.
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In sum, we conclude that the State in granting the managerial and confi-
dential employees the negotiated wages and benefits, and in granting these
employees some additional benefits, did not interfere with the bargaining unit
employees' rights in violation of Section 979-C(1)(A) or refuse to bargain in
violation of Section 979-C(1)(E). Our decision should not be construed as an
endorsement of the State's position that its actions with regard to the
managerial and confidential employees can never constitute a violation of the
Act. The law is well settled to the contrary; for example, even the discharge
of an excluded employee can violate the organized employees' rights in certain
circumstances. See, e.g., NLRB v. Eagle Material Handling Co., 558 F.2d 160,
164-165 (3rd Cir. 1977). We hold here only that the payment of negotiated
wages and other benefits to the excluded employees, under the facts of this
case, did not violate the Act.
ORDER
On the basis of the foregoing findings of fact and discussion, and by
virtue of and pursuant to the powers granted to the Maine Labor Relations
Board by 26 M.R.S.A. 979-H, it is ORDERED:
Maine State Employees Association's complaint
filed on July 24, 1980 in Case No. 81-06 is
dismissed.
Dated at Augusta, Maine this 28th day of April, 1981.
MAINE LABOR RELATIONS BOARD
/s/____________________________________
Edward H. Keith, Chairman
/s/____________________________________
Don R. Ziegenbein, Employer
Representative
/s/____________________________________
Harold S. Noddin, Employee
Representative
The parties are advised of their right pursuant to 26 M.R.S.A. 979-H
(7) to seek a review by the Superior Court of this decision and order by
filing a complaint in accordance with Rule 80-B of the Rules of Civil
Procedure within 15 days after receipt of the decision and order.
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