STATE OF MAINE MAINE LABOR RELATIONS BOARD
Case No. 85-19
Issued: December 2, 1985
_____________________________________
)
MAINE STATE EMPLOYEES ASSOCIATION, )
)
Complainant, )
)
v. ) DECISION AND ORDER
)
STATE OF MAINE, )
)
Respondent. )
_____________________________________)
The State of Maine (State) and the Maine State Employees
Association (MSEA) are parties to five collective bargaining agree-
ments which are effective from September 3, 1984, to June 30, 1986.[fn1]
Each of those agreements contains a provision defining "non-standard
classifications" to include employees, normally below pay grade 21,
whose working conditions require them to work a variable or irregular
workweek in excess of 40 hours in circumstances where the work hours
cannot be scheduled or determined except by the employees themselves.[fn2]
Employees in non-standard classifications are referred to as "non-
standard employees," and they are compensated under the bargaining
agreements at a rate of 16 percent above the basic rates in their
salary grades. They are not entitled by the bargaining agreements to
overtime pay for working longer than a normal day or normal workweek.
On June 11, 1985, the Governor of Maine issued Executive Order
No. 15 FY 84/85, which, after reciting reasons in justification of the
order, requires all non-standard State employees who are not eligible
for exemption from the Federal Fair Labor Standards Act of 1938
_______________
1 The State negotiated separate collective bargaining agreements
with MSEA as bargaining agent for the following bargaining units: Law
Enforcement Services; Administrative Services; Professional and Tech-
nical Services; Operations, Maintenance and Support Services; and
Supervisory Services. Each of these agreements addresses non-standard
employee compensation in an identical manner in section C of article X.
2 Each of the collective bargaining agreements, in article X,
Compensation, section C, Non-Standard Work Week, provides in part as
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(FLSA), 29 U.S.C. chapter 8 (1982), to comply with specified proce-
dures "to ensure that the total number of hours they work does not
incur FLSA overtime liability beyond the State's budgeted, authorized
ability to pay."[fn3]
On June 12, 1985, MSEA duly filed with this Board a prohibited
practice complaint alleging that, by thus acting unilaterally, the
State has engaged in the prohibited practice of "refusing to bargain
collectively with the bargaining agent of its employees as required by
section 979-D" in violation of section 979-C of the State Employees
Labor Relations Act, 26 M.R.S.A. chapter 9-B (Supp. 1985-1986). More
specifically, MSEA alleges that by issuing Executive Order No. 15 the
State has violated its obligation under section 979-D(1)(E)(1) to
confer and negotiate in good faith with respect to wages, hours and
working conditions. The MSEA's complaint also alleges that the
State's issuance of the Executive order constitutes interference,
restraint or coercion of employees "in the exercise of their rights
guaranteed in Section 979-B of the State Employees Labor Relations
Act, in violation of Section 979-C(1)(A)" and further that by issuing
the Executive Order the State "has discouraged membership in employee
organizations by discrimination in regard to terms and conditions of
employment in violation of Section 979-C(1)(B)."
_______________
follows:
1. Classifications below pay grade 21 which meet the fol-
lowing criteria shall be designated as non-standard:
(a) Employees in the classes work a variable work week in
excess of forty (40) hours required by working conditions;
(b) Employees' work week is irregular such that work hours
cannot be scheduled or determined except by the employees.
. . . .
3. Employees in the classifications designated as non-
standard shall be compensated at a rate of sixteen percent
(16%) above the basic rates in their salary grades.
3 A copy of the Executive Order is attached to this decision.
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The State duly filed its response to the complaint, and on
July 19, 1985, Alternate Chairman Donald W. Webber conducted a pre-
hearing conference. The prehearing conference memorandum and order
issued by Alternate Chairman Webber on July 22, 1985, is incorporated
in and made a part of this decision and order.
On July 31, 1985, an evidentiary hearing on the issues framed by
the complaint and response and narrowed by the prehearing conference
memorandum and order was conducted before the Board, consisting of
Chairman Edward S. Godfrey, presiding, Thacher E. Turner, Employer
Representative, and Russell A. Webb, Alternate Employee Representative.
The parties were provided the opportunity at hearing to appear, submit
evidence, cross-examine witnesses and argue orally. The State sub-
mitted a post-hearing memorandum on August 16, 1985, and the MSEA sub-
mitted a brief on August 19, 1985.
JURISDICTION
The jurisdiction of this Board to hear and decide this case is
conferred by 26 M.R.S.A. Sec. 979-H (Supp. 1985-1986).
BACKGROUND OF THE EXECUTIVE ORDER;
THE GARCIA DECISION
On February 19, 1985, the United States Supreme Court issued its
decision in Garcia v. San Antonio Metropolitan Transit Authority, 105
S. Ct. 1005, reh'g denied, 105 S. Ct. 2041 (1985), overruling its pre-
vious decision in National League of Cities v. Usery, 426 U.S. 833
(1976), and subjecting state and local governments to the provisions
of the Fair Labor Standards Act. At all times pertinent to the prohi-
bited practice complaint the FLSA required that covered[fn4] non-exempt,[fn5]
_______________
4 Section 13(b)(20) of the FLSA provides an exemption from the over-
time pay requirement for public fire protection or law enforcement
agencies employing during the workweek fewer than five employees in
fire protection or law enforcement activities, as the case may be.
5 Section 13(a)(1) of the FLSA provides exemptions from the overtime
pay and minimum wage requirements for employees employed in bona fide
executive, administrative, professional or outside sales capacities,
as defined by the Secretary of Labor.
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non-firefighting, non-law-enforcement employees be compensated at
regular wage rates[fn6] of not less than the current minimum wage and at
overtime rates of not less than one and one-half times their regular
wage rates for all hours worked over forty (40) in a workweek. See 29
U.S.C. Secs. 206 and 207 (1982). The FLSA has slightly less stringent
overtime pay provisions for public fire protection and law enforcement
employees.[fn7]
At all times pertinent to the prohibited practice complaint
herein the FLSA's overtime pay requirements could not be waived, and
an employer could not compensate employees for overtime with any
amount of compensatory time off unless such compensatory time was
taken before the end of the pay period in which the overtime was
performed.[fn8] An employer found to have violated the FLSA's overtime
provisions may be required to pay the affected employees, in court
cases initiated by the employees under the FLSA, the unpaid overtime
compensation, an equal amount in the form of liquidated damages, and
attorneys' fees and other costs. See 29 U.S.C. S 216(b) (1982). The
court may also award other appropriate relief including reinstatement,
promotion and payment of lost wages. An employer determined to have
willfully violated the FLSA's overtime provisions may be fined $10,000
and may, on second conviction, be imprisoned for up to six months.
_______________
6 Section 7(e) of the FLSA provides that an employee's regular wage
rate includes all remuneration including, but not limited to, incen-
tive, attendance or production bonuses, commissions, on-call or shift
differentials and the costs of any facilities furnished to the
employee.
7 Section 7(k) of the FLSA provides that fire protection and law
enforcement employees may work 53 and 43 weekly hours respectively, or
alternatively up to 212 and 171 hours, respectively, in work periods
of twenty-eight (28) consecutive days, without being eligible for
FLSA-mandated overtime pay.
8 0n November 6, 1985, President Reagan signed Public Law 99-150,
which attenuates the effects of the Garcia decision by, among other
things, amending the FLSA to reflect a public employer compliance date
of April 15, 1986, allowing employers in specified circumstances to
award premium compensatory time in lieu of premium overtime pay and
allowing premium compensatory time to be accumulated by public
employees.
-4-
See 29 U.S.C. Sec. 216(a) (1982). At the time of the hearing of the
charge the Department of Labor had indicated that in its investiga-
tions concerning the FLSA overtime wage practices of public employers
it would use April 15, 1985, as the starting date of required
compliance. See United States Department of Labor, Office of
Information, News, USDL 85-249 (June 14, 1985).
As stated above, the collective bargaining agreements between
MSEA and the State provide that employees in the classifications
designated as non-standard are compensated at a rate of sixteen per-
cent (16%) above the basic rates in their salary grades. As a con-
sequence of the Garcia decision, a non-exempt non-standard employee
(other than a law enforcement employee or a fire fighting employee)
who works more than 40 hours in one week must be regarded under the
FLSA as working overtime after 40 hours and must be paid an overtime
hourly rate equal to one and one-half times his or her FLSA hourly
rate. The FLSA hourly rate for such an employee covered by the
State-MSEA bargaining agreements is computed by taking 116 percent of
the basic rate in the employee's salary grade and dividing by 40. The
FLSA hourly rate for a non-standard law enforcement employee is com-
puted by a similar method except that the FLSA uses a workweek of 43
hours or 171 hours per 28-day work period as the norm for non-overtime
work time. In the case of a non-standard fire fighting employee, the
FLSA norm is 53 hours per work week or 212 hours per 28-day work
period.
The net result of the bargaining agreements in conjunction with
the FLSA is that if a non-exempt non-standard employee works beyond
the number of hours defined by the FLSA as the normal workweek or work
period for his classification, he becomes entitled by operation of the
FLSA to time-and-one-half overtime pay computed on the basis of 116
percent of his basic salary grade rate.
Tracking FLSA classifications, Executive order No. 15 divides
non-exempt non-standard employees into three groups: (1) those who do
not qualify under the FLSA as either law enforcement or fire fighting
personnel, (2) those who qualify under the FLSA as law enforcement
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personnel, and (3) those who qualify under the FLSA as fire fighting
personnel. The order provides that employees in each group shall con-
tinue to schedule their own hours based on operational needs as deter-
mined by their supervisors. It then states that employees in each
group are not authorized to schedule or work more than the maximum
number of hours that the FLSA permits employees of that group to work
without the employer's incurring liability for overtime. Exceptions
are provided when a commissioner or his designee gives advance approv-
al or where a bona fide emergency occurs at the end of a relevant
work period. In short, the order tailors its limitations on hours
worked to the overtime pay requirements of the FLSA in such a manner
as to avoid, as far as practicable, incurring FLSA overtime liability.
The order expressly provides that all non-exempt non-standard
employees who are receiving the non-standard premium 'in lieu of over-
time" shall continue to be paid their base salary plus the non-
standard (16 percent) premium "until otherwise ordered or arranged by
agreement with representative bargaining agents."
POSITIONS OF THE PARTIES
The MSEA contends that the State of Maine has refused to bargain
by making unlawful unilateral changes in the hours and working con-
ditions of non-standard employees in violation of 26 M.R.S.A.
Sec. 979-C(1)(E) (Supp. 1985-1986). Specifically, it contends that by
issuing the Executive Order the State has unilaterally altered
existing non-standard employee work schedules by restricting the
number of hours non-exempt non-standard employees may work, by limiting
the circumstances under which such employees may exceed specified
maximum hours, and by requiring such employees to review their work
schedules with their supervisors for the purpose of keeping their
total hours--barring bona fide emergencies--below the level of accrual
of Fair Labor Standards Act overtime liability.
The State advances the following contentions in response to the
MSEA's complaint and in defense of its issuance of the Executive
Order:
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1. Issuance of the Executive Order constitutes an exercise
of the right of the State to respond to impending finan-
cial emergency, specifically reserved to the State in the
Management Rights article of the parties' collective
bargaining agreements.
2. The Executive order does not change a "basic work schedule
or practice" so as to trigger the bargaining obligation
set forth in the contract's Hours and Work Schedules
articles.
3. There was notice of the proposed change to the MSEA, but
there was no demand to bargain.
4. The State's proposals were presented and discussed in
detail.
5. The parties were at impasse when the MSEA rejected the
State's proposals on the basis of the State's refusal
to make concessions regarding the contractually estab-
lished 16 percent non-standard compensation premium. The
Executive Order is consistent with the State's last
bargaining proposal prior to impasse.
FINDINGS OF FACT
Upon consideration of the complete record, including the plead-
ings, the admissions, agreements and stipulations of the parties, and
the documentary and testimonial evidence adduced at hearing, we make
the following findings of fact:
The MSEA and the State are parties to several collective
bargaining agreements[fn9] which are effective September 3, 1984, through
June 30, 1986. The agreements, negotiated at a time when the FLSA's
overtime pay provisions were not applicable, contain provisions which
in effect define "non-standard" employees and give them a 16 percent
salary differential for all work in lieu of regular overtime pay under
the overtime articles of the agreements.[fn10] The matter of the 16 per-
cent non-standard compensation premium was an issue in the two imme-
diately preceding contract negotiations.
_______________
9 See n. 1 above.
10 See n. 2 above.
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The State employs individuals in several classifications who are
eligible under the bargaining agreements for the non-standard compen-
sation premium. We are unable to determine from the record the number
of such employees. These classifications include an unspecified
number of employees occupying the classifications of Marine Patrol
Officer, Liquor Enforcement Officer, Forest Watchman, Forest Rangers
I, II and III, Regional Forest Ranger, Fire Marshal's Office
Investigator, Probation and Parole Officer and Game Warden. The State
estimates its unfunded FLSA liability for non-standard employee over-
time, computed for a period of time unspecified in the record, as
being roughly of the order of five or six million dollars. According
to the State, this amount was arrived at by the use of work-hour
figures developed in the parties' 1982 fact-finding and 1983 fact-
finding and arbitration.
Steven L. Leech, the MSEA's Chief Negotiator, brought the United
States Supreme Court's decision in the Garcia case to the attention of
Kenneth A. Walo, Director of the Governor's Office of Employee
Relations (GOER), at the end of February, 1985. Leech pointed out to
Walo that the effect of Garcia was that public sector employees were
required to be paid overtime and indicated that the MSEA was looking
into the matter. Walo directed GOER Chief Counsel Susan Farnsworth to
investigate the ramifications of the case. During the second week in
March, while attending a workshop specifically devoted to the Garcia
case, conducted at a San Diego meeting of the National Public Employer
Labor Relations Association, Walo concluded that the Garcia case had
created a "serious situation" respecting non-standard employee over-
time compensation. The State began to consult about FLSA compliance
with Al Butler, of the Department of Labor's Portland Wage and Hour
Division office, during the first part of April, 1985.
Walo invited Leech to his office around April 27, 1985, and
apprised Leech of his perceptions of the seriousness of the impact of
Garcia, especially with regard to the State's past practice of pro-
viding compensatory time in lieu of premium overtime pay. Walo
invited Leech's participation in discussions to address the issue.
Walo informed Leech of the State's position that because of its
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interpretation that the FLSA requires overtime pay in addition to any
contractual compensatory time, the State intended to refrain from con-
senting to "mutually agreed" compensatory time.
The parties met at the MSEA office on May 2, 1985, in response to
MSEA's written request to bargain over the State's announced plan to
refrain from consenting to "mutually agreed" compensatory time, ten-
dered by Leech to Walo on May 1, 1985. In attendance at the May 2,
1985 meeting were Walo and Farnsworth and three or four members of the
MSEA staff, including MSEA Staff Attorney Eric R. Nelson. The par-
ticipants discussed the Garcia case and the impact of the applicabil-
ity of the FLSA on various provisions of the parties' collective
bargaining agreements. During the course of the meeting Walo tendered
to the MSEA a two-page briefing outline that he had previously distrib-
uted to agencies, which specified, among other things, the State's
plan to refrain from agreeing to the performance of overtime in
situations where governing contracts allow for use of compensatory
time by "mutual agreement." Walo informed the MSEA that he had
required all affected agencies to submit statements of the anticipated
monetary impact of the applicability of the FLSA and, upon the MSEA's
request, agreed to provide copies of such information to the MSEA.
The State informed the MSEA at the May 2 meeting of its concern that
the FLSA's provisions appeared to augur the potential liability with
regard to non-standard employees of time and one-half the FLSA regular
hourly wage in addition to the contractual liability for the 16 per-
cent non-standard compensation premium. The MSEA shared the State's
perception of overtime liability in this regard. Discussions revolved
around the remunerative components to be used in the determination of
the FLSA regular wage rate for use in calculating FLSA overtime pay
for non-standard employees.
The parties next met on may 20, 1985. Present were Nelson, MSEA
Chief Counsel Roberta L. deAraujo, Walo and Farnsworth. The parties
discussed the special provisions of the FLSA for law enforcement and
fire protection employees and the different cycles being used at that
time for the State's law enforcement employees, including State
Troopers, Game Wardens and Forest Rangers. The parties also discussed
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the State's prospective attempt to restructure the flex-time arrange-
ment of a certain employee whose schedule allowed alternate workweeks
of thirty-six and forty-four hours, respectively. The MSEA stated
that the State had agreed not to effect any changes and Walo agreed to
look into the situation. The employee was ultimately allowed to con-
tinue his previously established schedule. The State again raised the
issue of liability for non-standard employee overtime and the parties
discussed the notion of voluntary restrictions of work hours. The
MSEA's two-fold response to the State's suggestion of voluntary
restrictions was that it needed the information from agencies which
the State had formerly agreed to provide and that the MSEA needed to
discuss the issue of voluntary restrictions with the employees
involved.
At some undetermined point the parties reached accord on the
"mutually agreed" compensatory time issue. Also, at some undetermined
point the parties discussed the FLSA'S professional, administrative
and executive exemptions. The State provided to the MSEA at the May 20,
1985 meeting the State Department of Personnel's preliminary find-
ings concerning classifications which it considered to be exempt from
the requirements of the FLSA. The MSEA met with various law enforce-
ment employees on May 21 to discuss the issue of voluntary restric-
tions and the impact of the FLSA on their work. The general consensus
of these law enforcement employees was that their jobs could not be
accomplished in the restricted time spans.
The parties met again on May 28, 1985. Present at this meeting
were Walo, Leech, deAraujo, Nelson and Farnsworth. The participants
discussed the response the MSEA had received from law enforcement
employees and talked about the interaction under the FLSA of voluntary
hour restrictions and preexisting call-out and stand-by procedures.
The MSEA informed the State that it had received response from
employees that both the shift-work alternative and the hour restric-
tions would prevent them from getting the job done. The State had
received response from its managers that neither shift-work nor eight-
to-five schedules would work. The MSEA also informed the State of its
concern that those employees determined to be exempt from the FLSA
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might be required to work longer hours as a result of the voluntary
restrictions, in order to make up the hours that would no longer be
worked by non-exempt non-standard employees. The MSEA again requested
any reports which the State was receiving from agencies regarding the
impact of the FLSA.
The parties were represented by substantially the same par-
ticipants at their next meeting, including Nelson, Leech, deAraujo and
Walo, on May 30. The parties continued to discuss voluntary restric-
tions. Walo said he would soon be meeting with agency personnel and
that he wanted to get some sense as to the MSEA's position on the pro-
posed voluntary restrictions. The MSEA again responded by requesting
any agency impact information Walo had received and by stating its
need to meet with law enforcement personnel before making any sort of
decision. DeAraujo asked the State to provide a list of non-standard
classes, and asked for information concerning the average hours worked
by non-standard employees, information on tours of duty for non-
standard employees and information on the State's personal services
budgets for various years. Walo expressed his concern that the MSEA
seemed to be "backing-off" on what he perceived to be their willing-
ness to agree to voluntary restrictions. Walo stated that he had not
been receiving the agency impact information as expected and that he
would probably have to send out a second memo requesting the infor-
mation. Walo mentioned his intent to use a twenty-eight day cycle for
employees. The parties scheduled a meeting for the fifth of June,
involving both agency management personnel and law enforcement employ-
ees. Finally, Walo expressed urgency regarding the need to reach
agreement on the voluntary restrictions and indicated that he wanted
some sort of determination from the MSEA by the meeting on June 5.
Nelson, Leech, Gary A. Mather, Assistant Director of GOER, and
Walo met on the third of June, to discuss the logistics of the forth-
coming June 5 meeting. Discussion was also had concerning voluntary
restrictions, one State objective being revealed to be to obtain a
limit on law enforcement employees' hours of 43 hours per week or 171
hours per 28-day cycle. The parties also discussed allowing employees
the flexibility of determining their schedules and the setting up of
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priorities concerning the work of employees. Voluntary compliance was
understood by everyone at this point to be a temporary arrangement.
The concept of supervisory approval of overtime was introduced and
call-out and stand-by were also talked about. By this time it was
clear to all that the amount of overtime liability, based on the
number of law enforcement work hours, was significant.
The June 5, 1985 meeting followed separate morning meetings by
the MSEA and law enforcement personnel on the one hand and GOER staff
and agency personnel on the other. When the parties met after
luncheon, voluntary restrictions of non-standard employees' work hours
was announced to be the intent of the meeting. The topic soon moved
to the duration of any agreement reached, Leech being desirous that
any agreement extend to contract expiration. Walo responded that the
State was unprepared to enter into such a permanent arrangement
because of the State's perceived lack of sufficient information to
discuss intelligently a permanent solution and its desire to gauge the
effects of and results obtained by the proposed voluntary restric-
tions. July 1, 1985, was offered by Walo as a target date for
arriving at a permanent solution. The parties discussed the MSEA's
concern regarding the shifting of the work-hour burden to exempt
employees and discussed the treatment to be accorded vacation and sick
leave with regard to the computation of hours worked. Walo refused to
incorporate an agreement that vacation and sick leave be considered as
hours worked in any temporary agreement on voluntary restrictions.
The MSEA expressed concern that failing to consider such leave as
hours worked might provide the opportunity for abuse of employees.
Walo spoke on an agency-by-agency basis about responses to and
anticipated methods of effectuating voluntary restrictions. The issue
of the possibility of negotiations over continuation of the non-
standard compensation premium during bargaining for a permanent solu-
tion to the work-hour matter was raised. Walo stated the State's
opposition to paying, simultaneously, both the non-standard compen-
sation premium and FLSA overtime compensation. Conversation then
turned to the nature of the non-standard compensation premium, the
State insisting it to be in the nature of overtime pay, Leech
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insisting much more to be involved, such as remuneration for self-
scheduling, flexibility and "the riding in the hours that the employee
was called upon to work." The MSEA conditioned its further par-
ticipation in discussions concerning voluntary restrictions both upon
assurance, by Walo, that he would refrain from raising the issue of
the non-standard compensation premium until the expiration of the
contract and upon consent by Walo that any agreement reached on work-
hour restrictions would last until the expiration of the contract.
Walo agreed that the non-standard compensation premium would continue
to be paid during the term of the voluntary restrictions. Walo
refused to assure Leech that the non-standard compensation premium
would not become an issue in future negotiations and informed the MSEA
that absent agreement on voluntary restrictions the State would be
required to take some unspecified action by executive order to reduce
its FLSA liability. It was apparent that the State intended, without
much delay, to impose work hour limitations to curtail its FLSA over-
time liability. The meeting adjourned without agreement being reached.
Walo informed Leech during the period between the meeting on
June 5 and the issuance of the order that he was dismayed that
agreement on voluntary work-hour limitations had not been reached,
that the State had to do something to limit its FLSA liability and
that it appeared that the State would issue an executive order to that
end. On June 11, 1985, the Governor of Maine issued Executive order
No. 15 FY 84/85, described above. The MSEA did not receive written
notice of the terms of the order before the morning of the date of its
issuance. At 10 a.m. on June 11, 1985, the effective date of the
Order, Walo took an unsigned copy of the Executive Order to Leech's
office and informed Leech that a signed version would issue that
afternoon. Leech responded that Walo could pick up his prohibited
practice complaint on the way out at deAraujo's office. Walo did
receive a copy of MSEA's complaint the next day. The MSEA did not
request to bargain any impact flowing from the State's decision to
limit the hours of non-standard employees prior to the filing of the
prohibited practice complaint.
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Since the Executive order was issued, one employee has been admon-
ished for working over the number of daily work hours which he set
for himself. Non-standard employees in the Fish and Wildlife
Department are required to secure supervisory permission to work
beyond eight hours in any work day, although these employees are in
fact working the same schedule now that they were prior to the
Executive Order. Non-standard Marine Patrol Officers employed in the
Department of Marine Resources have been asked to perform most of
their primary work between the hours of 6 a.m. and 6 p.m. in conform-
ity with their practice in the previous year. They are not
precluded, however, from scheduling their work-hours between 6 p.m.
and 6 a.m.
Before and after the issuance of the Executive Order, supervisors
have directed non-standard employees to perform specific tasks at spec-
ified times and places. However, now, as before the issuance of the
Executive Order, the non-standard employees themselves normally deter-
mine when they will perform their work. At least one non-standard
employee has asked for and has received permission to work beyond the
work-hour maximums established by the Executive Order. No non-
standard employee has been refused permission to work beyond the spe-
cified maximums. The scheduled days off and on-call duty hours of
non-standard employees have not changed as a result of the Executive
Order. No non-standard employee has failed to receive the non-
standard overtime compensation premium of 16 percent. Non-standard
fire protection and law enforcement personnel, who work the maximum
number of hours set forth in the Executive Order, 53 and 43 respec-
tively, continue to satisfy the eligibility requirement of the non-
standard compensation provision of the contracts. Other non-standard
employees are limited to 40-hour weeks except as otherwise authorized
under the Order, but they continue to be compensated as non-standard
employees. There was testimony from an MSEA official to the general
effect that some unspecified employees work unspecified fewer hours as
a result of the Executive order.
We find no evidence that the Executive Order was issued as a
result of anti-union animus on the part of the State and no evidence
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of discrimination against any employee or group of employees in the
application of the provisions of the order. We find that both parties
acted in good faith in the discussions in May and June that preceded
issuance of the order.
DISCUSSION
Non-standard employees, who, by definition in the bargaining
agreement, schedule their own hours and have no basic work week and
hence no contract right to "overtime," have become entitled by virtue
of a change in federal law to FLSA overtime compensation if and when
their actual work hours over certain basic work periods exceed spec-
ified maxima. Although such employees by definition do not and can-
not work "overtime" within the meaning of the collective bargaining
agreements, they are treated under the FLSA as eligible for overtime
wages like standard employees whenever their work hours exceed FLSA
specified maxima. On those occasions, their entitlement to FLSA over-
time comes not from the bargaining agreements but from federal law
operating by virtue of the supremacy clause of the United States
Constitution.
Executive Order No. 15 has as its stated purpose placing controls
on the amount of FLSA overtime liability that the State will incur as
the result of the Garcia decision. One effect of the Executive Order
is to limit the opportunity that non-exempt non-standard employees
might otherwise have of earning FLSA-overtime pay. Without the
Executive Order, that opportunity would arise whenever performance by
such employees of their assigned responsibilities called for them to
work longer during a work period than the maximum number of hours for
that period allowed by the FLSA without the State's incurring over-
time liability. Under Executive Order No. 15, such employees may no
longer schedule or determine their work without considering FLSA over-
time provisions. Except in certain bona fide emergencies, they must
now obtain supervisory approval before working longer than the FLSA
basic work periods.
If the State had a duty in mid-term to negotiate placing controls
on the non-standard employees' opportunity to earn FLSA overtime, the
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State was guilty of the prohibited act of "refusing to bargain" when
it issued the Executive Order unilaterally. 26 M.R.S.A. Sec. 979-C(1)(E)
(Supp. 1985-1986). Unless otherwise provided by the bargaining
agreements, a unilateral change by the State in a mandatory subject of
bargaining would be equivalent to a refusal to bargain. State v.
Maine Labor Relations Board, 413 A.2d 510 (Me. 1980). Similar con-
siderations would apply if the State, though not required to bargain
the Executive Order itself, had a duty in mid-term to bargain its
impact on request and did not do so.
The first issue before the Board is whether the State had a duty
in mid-term to bargain the imposition of controls placed by the
Executive Order on the opportunity of non-exempt non-standard
employees to obtain FLSA-mandated overtime pay by scheduling and
working longer hours than the FLSA permits without causing the
employer to incur liability for overtime payments. The resolution of
that issue is controlled by the decision and reasoning of the Maine
Supreme Judicial Court in State of Maine v. Maine State Employees
Association, No. 3953 (Me. Oct. 29, 1985) (hereinafter referred to as
"Decision No. 3953"). That case, like this one, arose from a prohi-
bited practice complaint based on the State's refusal to bargain or
bargain impact in midterm.[fn11] It involved the interpretation and appli-
cation of certain articles of an earlier (1980-1981) set of collective
bargaining agreements between the State and the MSEA. The State had
reorganized three of its agencies without bargaining either the
changes themselves or their impact despite timely demand by the union.
The State conceded that the reorganization had entailed changes in
wages, hours and working conditions.
In the first part of its decision, the Court upheld the Board's
ruling that the changes themselves came within the State's management
rights under the 1980-1981 Management Rights article of the relevant
bargaining agreements. That article provided as follows:
_______________
11 The prohibited practices complaints in the two cases allege
violations of different subsections of sections 979-C and 979-D of the
State Employees Labor Relations Act. The differences in the subsec-
tions relied on are immaterial for the purposes of this case.
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Management Rights
The MSEA agrees that the State has and will continue
to retain the sole and exclusive right to manage its oper-
ations and retains all management rights, whether exercised
or not, unless specifically abridged, modified or delegated
by the provisions of this Agreement. Such rights include
but are not limited to: the right to determine the mission,
location and size of all agencies and facilities; the right
to direct its work force, to administer the merit system; to
establish specifications for each class of positions and to
classify or reclassify and to allocate or reallocate new or
existing positions in accordance with the law; to discipline
and discharge employees; to determine the size and com-
position of the work force; to eliminate positions; to make
temporary layoffs at its discretion; to contract out for
goods and services; to determine the operating budget of the
agency; to install new, changed or improved methods of
operations; to relieve employees because of lack of work or
for other legitimate reasons; to maintain the efficiency of
the government operations entrusted to them; and to take
whatever actions may be necessary to carry out the mission
of the agency in situations of emergency.
The Court then turned to the Conclusion of Negotiations article
(the so-called "zipper" or "wrap-up" clause) of the agreements, which
provided as follows:
Conclusion of Negotiations
A. The State and MSEA agree that this Agreement is the
entire Agreement, terminates all prior Agreements or
understandings and concludes all collective negotiations
during its term. Neither party will during the term of this
Agreement seek to unilaterally modify its terms through
legislation or other means which may be available to them.
B. Each party agrees that it shall not attempt to
compel negotiations during the term of this Agreement on
matters that could have been raised during the negotiations
that preceded this Agreement, matters that were raised during
the negotiations that preceded this Agreement or matters
that are specifically addressed in this Agreement.
The Court ruled that since "the matter" had been "specifically
addressed in the Agreement" (i.e., in the Management Rights article),
the zipper clause operated to waive any statutory right the MSEA might
otherwise have to bargain the reorganization itself in mid-term.
Both the Management Rights article and the Conclusion of
Negotiations article in the 1984-1986 bargaining agreements now before
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us are identical to the parallel articles in the 1980-1981 agreements
that were before the Court in Decision No. 3953. At least two
material distinctions should be noted between the facts in the present
case and those in Decision No. 3953. Those distinctions lie in the
difference between the unilateral actions taken by the State in the
two cases and in the presence in the instant case of an express provi-
sion of the contract which specifically retains the right to bargain,
upon request, over the impact of the particular management activity at
issue. The express provision referred to is the Hours and Work
Schedules article, section 1 of which provides as follows:
Hours and Work Schedules
1. The basic department, agency or other operational unit
work schedules and practices, including work schedules
or practices peculiar to particular classes, in effect
on the effective date of this Agreement, shall not be
changed without the employer informing MSEA in advance
and negotiating the impact of such changes, if request-
ed, on the affected employees. Negotiations shall occur
no longer than a thirty (30) day period prior to the
implementation of the change. If the parties have not
reached agreement within the thirty (30) day period, the
obligation to bargain shall continue.
The identical provision was contained in the 1980-1981 agreements that
were before the Court in Decision No. 3953, but it was not contended
there that the provision had been brought into play by the unilateral
changes in organization the State made in that case. In the instant
case, the MSEA contends, among other things, that Executive Order No.
15 changed "work schedules and practices" and hence required at least
impact bargaining on request of the Union.
The Court held in Decision No. 3953 that the State's reorganiza-
tion orders in that case were authorized by the Management Rights
article in the 1980-1981 agreements. A crucial issue in the present
case is thus whether the State's action in issuing the Executive Order
was authorized by the identical Management Rights article in the
current (1984-1986) agreements. If it was so authorized, the Court's
ruling in Decision No. 3953 compels the conclusion that mandatory mid-
term bargaining of the Executive Order has been waived by the
Conclusion of Negotiations article of the current bargaining
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agreements.
We find that the State was authorized by the Management Rights
article to issue the Executive order. Further, although the MSEA may
have specifically reserved the right, upon request, to bargain over
the impact of the Executive Order on work schedules and practices, we
find that the MSEA has failed to establish by the evidence in this case
that such a request to bargain impact was actually made.
From the evidence before us, we find that the State's concern
about prospective large deficits was genuine, not pretextual, and that
the concern had a rational basis. We find no evidence of any purpose
behind the Executive Order to injure the union or diminish its stature
or to discriminate against employees because of their union membership.
Though phrased in terms of limiting hours of work of the non-exempt
non-standard employees, the Executive Order expressed a core manage-
ment decision: namely, to hold down expenditures for State services
in order to avoid the substantial budget overruns the State expected
would otherwise result from the Garcia decision. The decision to issue
the Order, made at the highest executive level, was deemed immediately
necessary for the proper management of the State's operations. In
direct effect, the Executive Order restricted the mission of any State
agencies employing non-standard employees to whatever those agencies
could accomplish within the work-time restrictions thereby placed on
the work force. After issuance of the Executive Order, whatever the
priorities may formerly have been of such a State agency, the agency
must now review its mission and priorities to accommodate them within
the limits imposed by the order on the amount of work-time available.
The State was faced with a choice between (1) the risk of
incurring large deficits if it did nothing and the Legislature should
refuse additional appropriations to fund payments required under the
FLSA and (2) the risk of offending the public by delayed or reduced
government services if the choice were made to curtail services in
order to incur little, if any, financial exposure under the FLSA. The
choice, made at a high political level, between such serious risks
strikes us as a management decision within the intended scope of the
Management Rights article of the bargaining agreements giving the
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State the exclusive right to 'manage its operations." The fact that
the decision was expressed in the Executive Order in the form of
limiting work hours does not make it any less managerial in nature or
effect.
It is true that the issuance of the order does not fit exactly
into any of the categories specifically mentioned in the Management
Rights article as illustrative of "management rights." It may be
arguable whether, in issuing the Executive order, the State was
"determining the mission of . . . agencies and facilities" or
"directing its work force" or taking an action "necessary to carry out
the mission of the agency in situations of emergency." However, the
Management Rights article says, in effect, that the specified cate-
gories are not exhaustive in illustrating the meaning of the State's
"exclusive right to manage its operations.'
In the Supreme Judicial Court's Decision No. 3953, the State's
right to reorganize agencies was rather easily inferred from par-
ticular management rights specified in the Management Rights article.
See Decision No. 3953, p. 4, n. 3. In the present case, although we
think the Governor issued the Executive Order in exercise of the
State's right to manage its operations, it is not as clear as in
Decision No. 3953 that the Order can be supported by reference to any
particular specified management right or combination of specified
rights in the Management Rights article. We believe, however, that
the two cases cannot be sensibly distinguished on that basis: the
language of the article, "Such rights include but are not limited to,"
rules out any possibility that the particular management rights men-
tioned are intended to include all the ways in which the State may
effectively exercise its right to manage its operations.
Since we decide that the State was authorized by the terms of
the Management Rights article to issue Executive Order No. 15, we are
bound by the Court's ruling in Decision No. 3953 to decide that the
zipper clause of the agreements operated to waive any right of the
MSEA to bargain in mid-term the issuance of the Executive order
itself.
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The MSEA asserts, however, that it had at least a right to
bargain the impact of the Executive Order on work schedules and prac-
tices under the explicit language of the Hours and Work Schedules
article of the bargaining agreements. The MSEA argues, first, that
this provision operates as a specific "abridgement" or "modification"
pro tanto of the State's management right in this case; second, that
the provision operates to reserve specifically from the scope of the
zipper clause the right to bargain in mid-term the impact of a manage-
ment decision directly affecting work schedules of the non-standard
employees.
Whatever the merits of those arguments may be, we find from the
evidence of the discussions in the May and June meetings in 1985, that
the MSEA made no request, before bringing this prohibited practices
complaint, to bargain any impact that might result from the State's
limiting the hours of non-standard employees. We find that the MSEA
knew by June 5, 1985, at the latest that the State was determined to
limit its exposure to FLSA overtime liability and that it would do so
by fiat if voluntary restrictions could not be agreed on. The MSEA
also knew that the issue of the limitation of the State's liability
was considered by the State to be extremely urgent. Walo had informed
Leech that he needed an answer on the voluntary restrictions by the
June 5 meeting. Walo informed Leech at the June 5 meeting that,
absent an agreement on the voluntary restrictions, the State would be
required to act promptly to limit its FLSA overtime liability.
Eric Nelson, MSEA Staff Attorney, who was in attendance at the
principal meetings, testified that the MSEA knew at least on June 3
that the State's objective, "in terms of the notion of voluntary
compliance, was to limit the work performed to the schedule as set
forth in [the] Fair Labor Standards Act." Nelson testified also that
Walo indicated to the MSEA on June 3 that some sort of determination
regarding the notion of voluntary compliance was desired by the June 5
meeting. According to Nelson, Walo expressed the immediate need to
deal permanently with the issue of liability and stated that the State
would not pay both the non-standard differential and overtime pay.
Nelson testified also that Walo informed the MSEA on June 5 that the
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State would do what it had to do to limit its FLSA liability.
Finally, Nelson testified that at the conclusion of the June 5 meeting
he expected that the State was going to take some action to limit its
liability. Two unit employees who were present at the June 5 meeting
also testified that they heard Walo's statement that absent voluntary
compliance the State would have to take measures to limits its liabil-
ity. The MSEA's attorney admitted in his brief that on June 5 Walo
stated that the State would probably accomplish its desired result
through executive order. Walo informed Leech between the meeting on
the 5th and the issuance of the Executive Order that the State had to
do something and that it appeared that the State was going to issue an
executive order.
In the circumstances of this case, we find that the MSEA was on
reasonable and sufficient notice that the State intended in the near
future, as a matter of great urgency, to implement limitations on the
work hours of non-standard employees. Although the MSEA expressed
concern over the impact of the prospective restrictions on exempt
employees, it appears to have forgone any request to negotiate over
this or other impacts in an unavailing attempt to extract from the
State a promise not to bring up the non-standard compensation premium
as an issue in future negotiations.
In view of the extensive prior discussions between the parties,
the mere fact that the State did not make available to MSEA the exact
terms of the Executive Order until the morning of its promulgation did
not, by,itself, render unreasonably short the notice by the State of
its prospective action; the Executive Order embodied no changes that
should not have been expected as a result of those early discussions.
Since reduction in the hours of non-standard employees to the work-
hour levels set forth in the FLSA was the only method legally
available to the State to limit FLSA overtime liability, the MSEA
should reasonably have expected the nature of the State's ultimate
action to be exactly such a limitation.
We find that the MSEA had sufficient advance notice of the coming
change to afford it the opportunity to propose methods of dealing with
any resulting impact of the Executive order. Absent a demand to nego-
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tiate any impact of the State's decision to limit overtime availabil-
ity, we conclude that the State has not failed to negotiate the impact
of its decision to impose work-hour limitations.
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 the provisions of 26 M.R.S.A. Sec. 979-H (Supp.
1985-1986), it is ORDERED:
That the prohibited practices complaint, filed June 18,
1985, by the Maine State Employees Association be, and it
hereby is, DISMISSED.
Dated at Augusta, Maine this 2nd day of December, 1985.
MAINE LABOR RELATIONS BOARD
__________________________________
The parties are advised of Edward S. Godfrey
their right pursuant to 26 Chairman
M.S.R.A. Sec. 968(5)(F) (Supp.
1985-1986) to seek review of
this decision and order by
the Superior Court by filing __________________________________
a complaint in accordance Thacher E. Turner
with Rule 80B of the Rules Employer Representative
of Civil Procedure within 15
days of the date of the
decision.
__________________________________
Russell A. Webb
Alternate Employee Representative
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EXECUTIVE ORDER
OFFICE OF NO. 15FY 84/85
THE GOVERNOR DATE June 11, 1985
LIMITATION ON HOURS OF WORK FOR
NON-STANDARD EMPLOYEES OF STATE GOVERNMENT
WHEREAS, The United States Supreme Court recently reversed
an earlier decision and held that the Fair Labor Standards Act
("FLSA"), 29 U.S.C. 201, et seq., applies to employees of State
and local governments, Garcia v. San Antonio Metropolitan Transit
Authority, 105 S.Ct. 1005 (1985), reh'g denied, 105 S.Ct. 2041
(April 15, 1985); and
WHEREAS, due to the Garcia decision, the State is subject to
significant,indeterminable and unbudgeted liability for overtime
unless certain measures are taken immediately to set limits on
the total number of hours which may be worked by State government
employees who are designated as non-standard and paid the non-
standard premium in lieu of overtime and who are not exempt from
coverage under the FLSA; and
WHEREAS, these facts create an emergency situation with res-
pect to the funding of the operation of State government which,
if not addressed, could lead to massive layoffs, major cuts in
essential services or both;
NOW, THEREFORE, I JOSEPH E. BRENNAN, Governor of the State
of Maine, do hereby issue the following order, effective today:
1. All non-standard employees who are not eligible for exemp-
tion from the FLSA, as determined by the Department of
Personnel, shall immediately comply with the following
procedures to ensure that the total number of hours they
work does not incur FLSA overtime liability beyond the
State's budgeted, authorized ability to pay.
a. All non-standard employees who do not qualify as law
enforcement or fire fighting personnel under the FLSA,
as determined by the Department of Personnel:
1) will continue to schedule their own hours based on
operational needs as determined by the supervisor;
but
-1-
2) are not authorized to schedule or work more than
40 hours in any work week without express advance
approval of the Commissioner or his or her desig-
nee, except in the event of a bona fide emergency
occurring at the end of the workweek.
b. All non-standard employees who qualify as law enforce-
ment personnel under the FLSA, as determined by the
Department of Personnel:
1) will continue to schedule their own hours based on
operational needs as determined by the supervisor;
but
2) are not authorized to schedule or work any more
than 171 hours in any of the 28-day work periods
established by the employing State Department or
Agency; and
3) in order to monitor the accrual of total hours of
work within the 28-day work period, are not autho-
rized to schedule or work any more than 43 hours
in any workweek; except that
4) with respect to both the 43 and 171 hours limita-
tions, additional hours may be worked within the
relevant periods if, and only if, a) there is ex-
press advance authorization from the Commissioner
or his or her designee or b) there is a bona fide
emergency occurring at the end of the relevant
work period. If more than 43 hours are worked in
any week, the employee and the supervisor shall
review the work to be accomplished in the remain-
der of the 28-day period to ensure that 171 hours
will not be exceeded for the full work period.
c. All non-standard employees who qualify as fire fighting
personnel under the FLSA, as determined by the Depart-
ment of Personnel:
1) will continue to schedule their own hours based on
operational needs as determined by the supervisor;
but
2) are not authorized to schedule or work any more
than 212 hours in any of the 28-day work periods
established by the employing State Department or
Agency; and
-2-
3) in order to monitor the accrual of total hours of
work within the 28-day work period, are not autho-
rized to schedule or work any more than 53 hours
in any workweek; except that
4) with respect to both the 53 and 212 hours limita-
tions, additional hours may be worked within the
relevant periods if, and only if, a) there is ex-
press advance authorization from the Commissioner
or his or her designee or b) there is a bona fide
emergency occurring at the end of the relevant
work period. If more than 53 hours are worked in
any week, the employee and the supervisor shall
review the work to be accomplished in the remain-
der of the 28-day period to ensure that 212 hours
will not be exceeded for the full work period.
2. All employees, regardless of their inclusion or not in a
bargaining unit, who are designated non-standard and paid
the non-standard premium in lieu of overtime and who are not
eligible for exemption from the FLSA as determined by the
Department of Personnel shall continue to be paid their base
salary plus the non-standard premium until otherwise ordered
or changed by agreement with representative bargaining
agents.
3. Each Commissioner and Agency Head of State Government shall
immediately identify the individuals in the Department or
Agency who will be designated to approve hours of work pur-
suant to this Order.
4. Each Commissioner or Agency Head shall ensure that a defini-
tion of "bona fide emergency" is prepared immediately to
define that term according to the operational context of the
Department or Agency.
5. All employees affected by this order shall be informed
immediately of: 1) the terms of this Order, 2) the relevant
individuals designated to approve hours of work pursuant
to this Order, and 3) the employing Department's or agency's
definition of "bona fide emergency." An employee's failure
to comply with the provisions of this order shall be just
cause for counseling and progressive discipline as
appropriate.
/s/_______________________________
JOSEPH E. BRENNAN
Governor
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