STATE OF MAINE MAINE LABOR RELATIONS BOARD Case No. 94-45 Issued: February 15, 1995 ___________________________________ ) BANGOR FIREFIGHTERS ASSOCIATION, ) LOCAL 772, IAFF, AFL-CIO-CLC, ) ) Complainant, ) ) v. ) DECISION AND ORDER ) ROBERT W. FARRAR and ) CITY OF BANGOR, ) ) Respondents. ) ___________________________________) On June 10, 1994, the Bangor Firefighters Association, Local 772, IAFF, AFL-CIO-CLC ("Association") filed a prohibited practice complaint with the Maine Labor Relations Board ("Board") alleging that Robert W. Farrar and the City of Bangor (collec- tively, "the City") violated section 964(1)(A), (B) and (E) of the Municipal Public Employees Labor Relations Law ("MPELRL"), 26 M.R.S.A. 964(1)(A), (B) and (E) (1988), by refusing to flesh out a bargaining proposal on employee retirement, engaging in unlawful regressive bargaining, surface bargaining and pattern bargaining, refusing to remove its retirement proposal from the bargaining table prior to fact finding, and insisting on a contract provision known to be illegal on its face. In its response, the City denied the allegations and moved for dismissal for failure to state a claim. The Association then filed a motion for default against the City on the ground that the City's response had not been properly served. A prehearing conference was convened in this matter on August 3, 1994, by Alternate Chair Kathy M. Hooke. In the Prehearing Conference Memorandum and Order, issued on August 12, 1994, and incorporated in and made a part of this Decision and -1- Order, both the Association's motion for default and the City's motion to dismiss were denied. An evidentiary hearing was held on September 7 and November 16, 1994. Alternate Chair Hooke chaired the hearing, accompanied on the first day by Alternate Employer Representative Eben B. Marsh and Employee Representative George W. Lambertson. Due to an extended illness, Mr. Lambertson was unable to continue sitting on the case and was replaced by Alternate Employee Representative Gwendolyn Gatcomb on the second day. Mr. Robert F. Bourgault represented the Association, and Thomas C. Johnston, Esquire, represented the City. The parties were given full opportunity to examine and cross-examine witnesses, introduce documentary evidence, and make oral argument. Both parties requested copies of the transcript, which were mailed on November 23, 1994. The parties filed posthearing briefs on December 13, 1994. The Board deliberated this matter on January 4, 1995. JURISDICTION The Association is the bargaining agent, within the meaning of 26 M.R.S.A. 962(2) (1988), for a unit of firefighters, lieutenants, captains, dispatchers and the mechanic employed in the Bangor Fire Department. The City is the public employer, within the meaning of 26 M.R.S.A. 962(7) (Supp. 1994), of the employees in the unit. The jurisdiction of the Board to hear this case and to render a decision and order lies in 26 M.R.S.A. 968(5)(A)-(C) (1988). FINDINGS OF FACT Upon review of the entire record, the Board finds: 1. The most recent collective bargaining agreement between the Association and the City was in effect from July 1, 1990, through June 30, 1993. Article 33 of that agreement states that the City will continue to provide retirement benefits pursuant to -2- various provisions of the Maine State Retirement System ("MSRS") that outline retirement benefits for employees of participating local districts ("PLDs").1 The City of Bangor is currently a PLD; employees in its eight bargaining units,2 most of its employees who are not organized for the purposes of collective bargaining, and members of a support staff bargaining unit employed by the Bangor School Department are all covered by MSRS through the City's status as a PLD. 2. The parties met on May 18, 1993, for negotiations; they reached agreement in principle on ground rules governing negotiations, and on May 23, 1993, executed those ground rules. Paragraph 8 of the ground rules states: 8. Economic and Non-Economic Considerations A. At or before the first bargaining session following agreement on the Ground Rules, the Union, as the moving party shall submit its complete package of economic and non-economic proposals for collective bargaining to the City. The City will have the opportunity to review and clarify the Union's proposal. B. At the next scheduled meeting between the parties, the City shall submit its complete package of economic and non-economic proposals for collective bargaining to the Union. The Union will have the opportunity to review and clarify the City's proposal. C. The parties agree that once initial opening bargaining proposals have been exchanged, that no additional economic or non-economic items shall be submitted by either party unless mutually agreed otherwise. It is further understood that the City's __________________________ 1It also contains, in paragraph 6, a reopener clause to be used in the event that the City wishes to consider withdrawing from MSRS during the term of the agreement. 2In addition to the firefighters' unit, represented by the Association, there are three police units, three units repre- sented by AFSCME Council 93 (public works, aircraft mechanics and Bass Park employees), and a nurses' unit represented by the Federation of Nurses and Health Professionals. -3- economic proposals may be presented as a package rather than on an item by item basis. At some point early in the negotiations, the parties made an informal agreement to pursue non-economic issues first. 3. At the May 18th meeting, the Association presented its negotiation proposals in writing to the City. They included increases in wages, paid vacation time, number of paid holidays, sick leave, and health insurance benefits. The Association also proposed two improvements in Article 33, Retirement (one to extend firefighter benefits to the dispatchers and mechanic, and the other for the City to adopt military credits for all veterans). 4. On June 8, 1993, the City presented its proposals in writing to the Association. They included cuts in wages, paid vacation time, paid holidays, sick leave and health insurance benefits. One of the City's initial proposals was as follows: Article 33 - Delete: Current Paragraph 6. Replace with the following: 6. The City shall continue to provide retirement benefits through the Maine State Retirement System as specifically detailed in paragraphs 1 and 5 above until such time as an "alternate defined contribution plan" so-called shall be made available. At the time that such alternate plan is in place and available, all employees covered by this Agreement, who are partici- pating in the Maine State Retirement System shall be provided the option of either continuing to participate in the Maine State Retirement System or electing to participate in the alternate plan, subject to statutory requirements governing Maine State Retirement. Any employee hired after the inception date of the alternate plan shall be required to participate in the alternate plan. For all other bargaining unit contracts under negotiation in 1993, the City initially proposed the same retirement language. 5. Early in the negotiations, the City explained that the -4- intent behind its proposal was to withdraw from MSRS and begin participating in a defined contribution plan offered by the ICMA Retirement Corporation ("ICMA"); it also explained the reason for its desire to withdraw -- the very large, unfunded liability that had already accrued and the potential for further liability to accrue if the City remained in the system. (Currently, the City's payment toward the unfunded liability already accrued is 21.35 percent of firefighter payroll.) The City further explained that under current law, it cannot withdraw from MSRS unless it withdraws its entire plan. On two occasions, the City caused legislation to be introduced in the Maine Legislature that would have granted PLDs the option of partial withdrawal -- that is, the option to withdraw on a bargaining unit-by-unit basis. The legislation did not pass. 6. From July through December of 1993, the parties met for negotiations on approximately ten occasions, and reached tentative agreement on numerous non-economic issues. On several of those occasions, the Association requested that the City provide more detail with regard to its retirement proposal. More specifically, the Association requested information on what level of retirement contribution the City was offering to make, and whether the City would guarantee that contribution for some extended period of time; what contribution employees would be required to make; the length of the vesting period being proposed by the City; and the nature of any disability and survivor benefits to be provided. On one occasion Mr. Farrar was told by the Association that if he gave them more information, they would be interested in the proposal. At various times the City did state that it would be offering a disability plan comparable to the MSRS plan, but provided no specifics. No other clarifying detail was provided by the City in response to the Association's repeated requests. The Association did not make any proposals of its own as to these matters. The City held a meeting for employees in September of 1993, during which an ICMA represen- -5- tative explained basics of the ICMA plan such as the types of investments employees may choose, the tax consequences of the plan, examples of potential retirement accumulations. 7. At various sessions during negotiations, in addition to requesting that the City flesh out its proposal, the Association suggested the possibility of carriers other than ICMA, and also suggested the newly established consolidated MSRS plan as an alternative to the City's ICMA proposal. (The purpose of the consolidated plan is to reduce administrative costs to PLDs. The consolidated plan would also benefit employees, since it has greater portability than the current MSRS plan, expands military service credits, provides an improved disability plan, and adds an employee-elective defined contribution option.) The City made it clear that it did not want to consider this proposal because it planned to be out of the MSRS. On one occasion Mr. Farrar told a union bargaining representative that he had been told by the city council not to bring back a contract proposal that had Maine State Retirement in it. The Association also suggested that it would consider the ICMA proposal for new employees if benefits for employees currently in the MSRS were increased from 1/2 pay to 2/3 pay. The City did not pursue this overture because, according to Mr. Farrar, the City did not feel the proposal adequately addressed the Association's concerns. At various negotiation sessions, the Association also made known its reservations about the City's proposal other than its lack of specificity -- namely, the significant investment risk associated with switching from the MSRS defined benefit plan to a defined contribution plan and the lack of a guarantee beyond the life of the new contract regarding the City's contribution rate to the ICMA plan -- particularly in light of the one-year contract term being demanded by the City. The parties did discuss the issue of an employer-rate guarantee (not the rate itself) on several occasions, but were unable to find a means for making a guarantee. -6- 8. On or about November 9, 1993, the parties requested the services of a mediator; on January 12, 1994, the mediator met jointly with the parties, and then met with the Association separately regarding its "bottom line" position on outstanding issues. On January 19, 1994, the mediator met separately with the City to discuss its bottom line on outstanding issues. On March 18, 1994, the mediator met with the parties separately and then met with them in a joint session, informing them privately and jointly that he did not believe further mediation would be fruitful. Retirement was a major focus of discussion in mediation, but in neither joint mediation session did the City provide the Association with details of its retirement proposal. 9. In negotiations with the nurses' bargaining unit, when the City's bargaining representative Robert Farrar was confronted with the lack of specifics in the proposal he stated that employees would get the new plan whether they liked it or not, because of the Mountain Valley decision. In negotiations for one police unit, Mr. Farrar commented to the effect that employees could take the proposal now or take it later and mentioned a decision, though not by name. On at least one occasion during negotiations with the Association, Mr. Farrar mentioned that he felt the MSAD 43 [Mountain Valley] decision would apply to the parties' dispute over retirement -- that the City could implement its retirement proposal without the agreement of the Associa- tion.3 __________________________ 3Although Mr. Farrar testified that he mentioned Mountain Valley in a private meeting with the mediator, and did not recall mentioning it to the Association directly, we credit the testi- mony of two witnesses who testified otherwise. We do so after observing the demeanor of all witnesses and in light of 1) the uncontroverted testimony of representatives of two other bargaining units regarding similar remarks by Mr. Farrar; and 2) the City's opening statement at hearing in which a justification was provided for Mr. Farrar's remarks to the Association. -7- 10. On or about April 21, 1994, the parties met to deter- mine what issues would be submitted to fact finding. On May 4, 1994, the Board received a joint request for fact-finding services. Article 33, Retirement, was on the list of issues in controversy that accompanied the joint request. 11. By letter dated May 17, 1994, the Association demanded that the City remove its retirement proposal from the bargaining table prior to fact finding. The letter further stated: It is the Union's position that the foregoing proposal constitutes a demand for a waiver of statutory rights granted under Chapter 9-A Title 26, the Municipal Public Employees Labor Relations Law, and is therefore a permissive subject of bargaining. The Union recog- nizes that the subject of pensions per se, is a manda- tory subject. However, the City's proposal as pre- sented and insisted upon, falls outside that mandatory scope. 12. By letter dated May 31, 1994, the City notified the Association that discussions were underway regarding the May 17th demand, and that a formal response would be forthcoming. In a second letter dated June 20, 1994, the City informed the Association that it believed that the Union had an obligation to continue in negotiations on the issue of changing the retirement program. The City also expressed a willingness to review an opinion of the Attorney General that the Association had referred to in a phone conversation.4 13. A fact-finding hearing was held before the Board of Arbitration and Conciliation on August 11-12, 1994. Both the Association's and the City's retirement proposals were presented to and addressed by the fact-finding panel in its report issued on September 22, 1994. The City did not provide any detail to the fact-finding panel in connection with its retirement __________________________ 4Presumably in connection with the Association's contention that the City could not lawfully distinguish between current and future employees in its retirement proposal. -8- proposal. 14. In a subsequent negotiation session on November 7, 1994, in connection with its retirement proposal, the City for the first time proposed contribution rates (10 percent for the City and 6.5 percent for employees) and a vesting period (one year). It also indicated an intention to offer optional disability and life insurance plans at the employee's expense, and to offer two plan sponsors rather than the one originally offered (ICMA). The City also expressed a willingness in writing to discuss compromises on such issues as wages and the work schedule (hours worked). Some agreements were reached, contin- gent on settlement of the whole contract. 15. On the date that the evidentiary hearing in this matter was concluded, November 16, 1994, five of the City's eight bargaining units had concluded contract negotiations. In addition to the firefighters' contract, one police unit contract and the nurses' unit contract were still under negotiation. The superintendent of schools has informed the City that when the City is ready to withdraw from MSRS, he will be "ready to go" as well -- that according to the City, the superintendent "will be able to effectuate what is needed to allow the City to withdraw." DISCUSSION At the heart of the dispute before us is the desire of the City of Bangor to withdraw from the Maine State Retirement System and the desire of the Association that the withdrawal not occur. The City is concerned about the potential for increases in its unfunded liability as a participating local district in MSRS; the Association is concerned about the investment risk associated with a defined contribution plan, as well as the fact that there is (and can be) no long-term guarantee regarding the rate of contribution by the City into any such alternate plan since the -9- MPELRL limits collective bargaining agreements to terms of three years. Substantially complicating the parties' dispute is the fact that withdrawal from MSRS cannot occur on a unit-by-unit basis, and nine bargaining units (eight City units and one school unit) currently are covered by the MSRS through the City's status as a participating local district. The Association alleges that the City violated section 964(1)(A), (B) and (E) of the MPELRL during negotiations for a successor contract by refusing to flesh out a bargaining proposal on employee retirement, engaging in unlawful regressive bargain- ing, surface bargaining and pattern bargaining, refusing to remove its retirement proposal from the bargaining table prior to fact finding, and insisting on and intending to implement a contract provision known to be illegal on its face. The City denies the allegations. Before we address the actions of the City that the Associa- tion alleges constitute violations, we note preliminarily that section 964(1)(B) of the MPELRL prohibits "[e]ncouraging or discouraging membership in any employee organization by discrimination in regard to hire or tenure of employment or any term or condition of employment" (emphasis added). There is absolutely no evidence in the record to suggest that any discrimination based on union membership occurred. Accordingly, we will dismiss this allegation without further discussion. The Board has on numerous occasions outlined the factors relevant to a determination of whether bargaining in good faith, pursuant to section 965(1)(C) of the MPELRL, has occurred. "Among such indicators of good faith bargaining are whether the parties have: met and negotiated at reasonable times, observed the negotiating ground rules, offered counterproposals, made compromises, accepted the other party's positions, explained and provided justification for their own positions, reduced tentative -10- agreements to writing, and participated in the dispute resolution procedures." Auburn Firefighters Association v. Valente, No. 87- 19, slip op. at 10, 10 NPER ME-18017 (Me.L.R.B. Sept. 11, 1987), citing Waterville Teachers Association v. Waterville Board of Education, No. 82-11, slip op. at 4, 4 NPER 20-13011 (Me.L.R.B. Feb. 4, 1982); and Sanford Highway Unit v. Town of Sanford, No. 79-50, slip op. at 10-11, 1 NPER 20-10012 (Apr. 5, 1979), aff'd, 411 A.2d 1010 (Me. 1980). Surface bargaining The thrust of the Association's complaint is that the City never had an intent to reach agreement with the Association on the issue of retirement, but rather intended at the outset to accomplish its goal of withdrawing from MSRS, whether or not agreement was reached. To achieve its goal, argues the Association, the City bargained regressively on other subjects of bargaining, refused to flesh out its retirement proposal when asked to do so on numerous occasions, engaged in pattern bargaining and improperly raised the spectre of unilateral implementation under the Mountain Valley decision. It is not unlawful to take a tough bargaining stance on a single issue, if adequate justification for that stance is provided to the other party. Teamsters Local Union No. 340 v. Portland Housing Authority, No. 90-13 (Me.L.R.B. Dec. 3, 1990). See also Southern Aroostook Community School Committee v. Southern Aroostook Teachers Association, No. 75-05, slip op. at 3 (P.E.L.R.B. Nov. 21, 1974) (interim decision). Nor do we know of anything to prevent an employer from attempting to obtain the same provision from multiple bargaining units,5 particularly __________________________ 5Or a union that represents multiple units from attempting to obtain the same provision for each unit. It must simply use lawful means to do so. Utility Workers Union of America, 203 NLRB 230 (1973), enf'd, 490 F.2d 1383 (6th Cir. 1974). -11- where, as here, agreement with multiple units is the only way that the provision can be implemented. That is not to say, however, that it is lawful to bargain with a take-it-or-leave-it attitude. Teamsters Local Union No. 48 v. City of Augusta, No. 78-04, slip op. at 4 (Me.L.R.B. June 7, 1978). See also American Meat Packing Corp., 301 NLRB 835, 835 (1991), citing General Electric Co., 150 NLRB 192 (1964), enf'd, 418 F.2d 736 (2d Cir. 1969). Looking at the totality of the city's conduct, we find that the City did just that, and therefore violated its duty to bargain in good faith. We base our finding on three acts/omissions by the City. First and foremost is the City's unwillingness, until well after fact finding had been completed, to flesh out its retire- ment proposal in critical respects -- in spite of repeated requests that it do so. The City provided various excuses for its failure. We are not persuaded by the City's argument that it was simply waiting to flesh out its proposal until the parties reached economic subjects in their bargaining and an economic "package" could be proposed. The parties' ground rules specifi- cally required that each party submit "its complete package of economic and non-economic proposals" to the other party at the outset of negotiations. The City did so on wages, health insur- ance and other economic issues -- in fact, on every economic issue except retirement. We are equally unpersuaded by Mr. Farrar's statement that he didn't provide the information because he didn't believe the Association was seriously interested in the City's proposal. Even if that were a legitimate reason for refusing to flesh out a proposal and Mr. Farrar was correct about the Association's position, refusing to flesh out the proposal was hardly the way to change the Association's attitude if the City truly sought to find a basis for agreement. Further, the September 1993 presentation by ICMA, touted by the City as providing detail on its proposal, did not (and could not) satisfy -12- the Association's requests for specificity, since under the ICMA plan matters such as contribution rates and vesting schedule are subject to negotiation between the employer and its employees (they are set by statute under MSRS). Finally, it does not help the City's case that the Association itself did not make offers regarding employer and employee contribution rates and a vesting schedule. It is the City that is proposing this change in the retirement provision in the parties' contract, and it is the City that has the burden of making its proposal specific enough for the Association to analyze and respond to it in a meaningful way. In sum, we find that the City's demand, over a period of more than a year, that the Association buy into the concept of ICMA without so much as a single hard number on the table for discussion frustrated any prospect for reaching agreement. Alton Community Unit School District 11, 5 PERI 1054, 11 NPER IL- 20070 (Ill.E.L.R.B. Hearing Officer, Mar. 1, 1989); Blairsville- Saltsburg School District, 17 PPER 17143, 8 NPER PA-17143 (P.L.R.B. Hearing Examiner, June 13, 1986). Our finding of surface bargaining is also based on the City's statement(s) to the Association and to others that it could implement its retirement proposal without consent under the Mountain Valley decision.6 A discussion regarding the potential for unilateral implementation might, in some circumstances, be appropriate after parties have participated in good faith in all of the MPELRL's dispute resolution procedures and have been unable to reach agreement. However, the City's focus on that possibility was clearly premature and, we find, indicative of the state of mind with which the City conducted negotiations. __________________________ 6Mountain Valley Education Association v. MSAD #43 Board of Directors, No. 93-15 (Me.L.R.B. Aug. 19, 1993), aff'd, No. CV-93- 437 (Me. Super. Ct., Ken. Cty., Apr. 8, 1994), appeal docketed, No. KEN-94-452 (Me. May 9, 1994). -13- The third factor in making our determination of surface bargaining is the lack of evidence of any substantial concession on the City's part on other major non-retirement issues until after fact finding had been completed. This finding is based on the testimony received at the hearing as well as the report of the fact finders which was submitted as a joint exhibit. While the City's desire to withdraw from MSRS is legitimate, the Association's concerns about withdrawal are equally legitimate. In these circumstances, and where compromise on the basic premise of the proposal (withdrawal from MSRS) is difficult without abandoning the proposal itself, movement must occur elsewhere in order to effectuate the principle of give and take which is at the heart of the collective bargaining process.7 The Board has been reluctant to find surface bargaining where both parties have refused to compromise. Teamsters Local Union No. 48 v. City of Augusta, slip op. at 4. That is not the case here. The Association asked for specifics regarding the City's retirement proposal, presumably in order to be able to analyze and respond to it. The Association also offered other changes in the parties' current retirement provision as alter- natives to withdrawal from MSRS. Finally, the Association stated that it would be willing to consider withdrawal if retirement benefits were increased for current employees who chose to con- tinue in MSRS after withdrawal occurred. The City's failure to pursue these overtures is further indication of its intransigent state of mind. We find that the City engaged in surface bargaining, thereby __________________________ 7We reject the Association's claim that the City engaged in actual regressive bargaining. Review of the initial proposals of both parties and the fact-finding report leads us to conclude that the City's proposed take-backs were, as it stated, simply made in response to the Association's request for several changes in the contract in the other direction. There is nothing unlawful about such a tactic. -14- violating its duty to bargain in good faith and section 964(1)(E) of the MPELRL. Surface bargaining inherently undermines the status of the bargaining agent and therefore interferes with, restrains and coerces employees in the exercise of their bargaining rights. Accordingly, we also find that the City violated section 964(1)(A) of the MPELRL. We will order the City to cease and desist from refusing to bargain in good faith and from interfering with, restraining and coercing members of the firefighters' unit by engaging in surface bargaining, and to take the affirmative action of posting the attached Notice. Refusal to remove permissive subject from table The second major allegation in the Association's complaint is that the City refused, when requested, to remove its retire- ment proposal from the bargaining table prior to fact finding. The proposal as presented is a permissive subject, the Associa- tion asserts, because "such a vague and imprecise proposal is indistinguishable from a demand for a bargaining waiver on a mandatory subject of bargaining." We disagree with the Association that the City's proposal constituted a demand for a bargaining waiver by virtue of its vagueness. While the City bargained in bad faith by, among other things, refusing to provide specificity to its proposal in a timely fashion, it never took the position that employer and employee contribution rates, a vesting schedule and other such details would be left to the discretion of the City and never be negotiated. Rather, the City was demanding that the Association agree to the concept of the proposal, with details to be negoti- ated later. In any case, it is not clear to us that a demand for a bargaining waiver is necessarily a permissive subject of bargaining, regardless of the number of mandatory subjects on which a waiver is demanded or the nature of the waiver. See Toledo Blade Co., 295 NLRB 626 (1989) (provision waiving right to participate in bargaining with individual employees over early -15- retirement is mandatory subject); NLRB v. Tomco Communications, 567 F.2d 871 (9th Cir. 1978) (zipper clause is mandatory subject). But see also Deerfield Community School District, 2 NPER 51-11023 (W.E.R.C. Dec. 19, 1979), aff'd, Dec. No. 17503 (Dane Cty. Cir. Ct. Jan. 13, 1981) (zipper clause is permissive subject); Palm Beach Jr. College v. United Faculty of Palm Beach Jr. College, 475 So.2d 1221 (Fla. 1985) (waiver of statutory right to bargain impact of management prerogative is permissive subject); Grundy Center Community School District, 8 NPER IA- 17018 (Ia.P.E.R.B. Apr. 18, 1986) (merit pay proposal which failed to reference either specific amount to be paid or formula for calculating pay is permissive). Since we need not reach the issue of whether the demand for a bargaining waiver is a permissive subject of bargaining, we will not resolve it. We disagree with our dissenting colleague that the provision ceded substantive decision-making power to third parties. Were this the case, we agree that the provision would be permissive and therefore required to be withdrawn by the City upon receipt of a timely request by the Association. The dissent's position, however, confuses provisions in a binding agreement that address possible changing external circumstances with prerequisites for reaching a binding agreement in the first place. The test for whether a proposal is a mandatory subject of bargaining is whether it falls within the "wages, hours, working conditions and contract grievance arbitration" language of section 965(1)(C) of the MPELRL. SAD #22 Non-Teachers Associ- ation v. SAD #22 Board of Directors, No. 79-32, slip op. at 5, 1 NPER 20-10024 (Me.L.R.B. July 30, 1979). The Association and the dissent agree that retirement is normally a mandatory subject of bargaining because retirement benefits are a form of wages. Our dissenting colleague argues, however, that because the outcome of negotiations with other bargaining units will govern whether or not the firefighters' unit will continue to be covered -16- by MSRS, the contingency created by the City's proposal is the same as those found to be permissive in SAD #22 and an earlier case, Maine Teachers Association v. Sanford School Committee, No. 77-18, -19, -20 & -29 (Me.L.R.B. June 13, 1977). This conclusion obscures crucial differences between those two cases and the issues here. The provision at issue in SAD #22 made implementation of the agreement and its benefits expressly dependent upon appropriation of necessary funds by the voters of SAD #22. Essential to the Board's discussion of the SAD #22 provision was its perception that the provision undermined the very existence of a binding agreement between the parties. Thus, in reviewing whether the contingent implementation facet of this provision was mandatory or permissive, the Board first cited the principle articulated in Allied Chemical & Alkali Workers Local 1 v. Pittsburgh Plate Glass Co., 404 U.S. 157 (1971) that a mandatory subject must "settle an aspect of the relationship between the employer and employee," SAD #22, slip op. at 5, quoting 404 U.S. at 178. The Board found that the contingency implementation facet of the clause could not be said to settle anything. "Rather, the entire, bargained agreement is nullified by the eventuality of the contingency. Thus, the premise of collective bargaining is absent in this facet of the implementation article." Id. at 5. The Board then analogized to a provision found to be permis- sive in NLRB v. Wooster Division of Borg-Warner Corp., 356 U.S. 342 (1958), finding that, like the membership ballot clause at issue in Borg-Warner: The contingency implementation clause here has the same effect of weakening the collective bargaining system both by allowing the public employer, established by defini- tion in 26 M.R.S.A. sect. 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. -17- SAD #22, slip op. at 6. Finally, the Board relied on its prior decision in Sanford where it had found to be permissive "the subject of ratification by a body other than the public employer, of an agreement reached by the representative of the public employer." SAD #22, slip op. at 6, quoting Sanford, slip op. at 5. As the Board pointed out: "Power to make agreements resides with the public employer as does the accompanying duty to bargain and execute agreements reached." Id. Thus, the contract provisions in the cases relied on by the dissent interfered with the power to make binding decisions, a fundamental premise of the collective bargaining process. For this reason, they were considered to be permissive and not the subject of required bargaining. The proposal in this case differs significantly from those involved in SAD #22 and Sanford. First, the express language of the provision does not create a condition precedent or mention third parties. It simply states that the City will continue to provide retirement benefits under the MSRS until an alternate defined contribution plan is available. Thus, the language of the provision provides for a predetermined change upon occurrence of a condition subsequent to a binding agreement. It does not by its terms set up third-party approval as a prerequisite for the agreement to come into being. As an initial matter, therefore, the express language of the provision does not cede the power to make binding decisions to third parties. Second, the provision at issue in this case, unlike those considered by the Board in SAD #22 and Sanford, does not impliedly cede decision-making power to third parties. It is up to the Association to agree or not to agree to make the ICMA alternative a part of its agreement. If it agrees, it is the Association's further responsibility to shape the alternative's -18- substantive specifics, including levels of employer and employee contributions, vesting periods, and disability and survivor benefits. Nothing about the provision gives any part of this decision-making process to third parties. Retention of substantive decision-making distinguishes this case from the parity pay cases relied on by the dissent. Finally, again unlike the cases relied on by the dissent, the agreement between the Association and the City, if one is reached, will in no sense be subject to ratification by third parties. Whatever the results of the independent negotiations of the other bargaining units in the Bangor PLD, the collective bargaining agreement reached between the Association and the City will stand. It will not be reduced to a nullity and will continue to be binding on both parties. It is true that, depending on the actions of third parties -- other unions in the Bangor PLD or the Legislature or the MSRS itself -- different provisions of the contract may apply. Thus, under the provision sought by the City, if "an alternate defined contribution plan" becomes available, one defined result will occur. If it doesn't, another defined result will occur, namely continuance of pension rights as defined by the MSRS. But in either case, the result will have emerged from, and been defined by, an independent collective bargaining process carried through to completion by appropriate bargaining agents for employer and employee, independent of third parties. To settle an issue by negotiating alternative outcomes is still to settle an issue. This is a far cry from the situations in SAD #22 and Sanford where the Board found that a third party had been given the power to nullify the very existence of a binding contract, the premise of the collective bargaining process. Thus, neither the express language of the provision at issue, the facts of the cases relied on by the dissent, nor their underlying rationale supports the conclusion that this provision -19- shunted decision-making responsibility away from the bargaining parties to third parties in a manner sufficient to turn a clearly mandatory subject into a permissive one.8 Insistence on an illegal contract provision Finally, we disagree with the Association's allegation that the City further engaged in bad faith bargaining by insisting on a contract provision known to be illegal on its face. At issue in connection with this allegation is the Association's apparent belief that if the City withdraws from MSRS, it cannot make a distinction between current and future employees. While it is true that under current MSRS law the City cannot withdraw from MSRS as a PLD on a unit-by-unit basis, it appears to us that it must make a distinction between current employees and those employed after withdrawal occurs. Under 5 M.R.S.A. 18254 (1989), current employees themselves decide whether to remain in the system or withdraw their accumulated contributions, while persons employed after withdrawal may not participate. We will dismiss this allegation. 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. 968(5) (1988 & Supp. 1994), it is hereby ORDERED: 1. That the City of Bangor and its agents and represen- tatives shall: __________________________ 8We agree with the dissent that the Association's failure to raise third-party decision making is not fatal because the Association did raise the general issue of permissiveness. The Association's failure to advance the third-party decision making argument, however, does shed light on how the parties to these negotiations understood the nature of the City's proposals. The parties' understanding of contract terms is a relevant consideration when interpreting those terms. -20- a. Cease and desist from refusing to bargain in good faith and from interfering with, restraining and coercing members of the firefighters' unit by surface bargaining on the mandatory subject of employee retirement. b. Take the following affirmative action that is necessary to effectuate the policies of the MPELRL: i. Sign, date and post, within 10 calendar days of the date of issuance of this decision and order, at all locations where notices to members of the firefighters' unit are customarily posted, copies of the attached "Notice." The Notice shall remain posted for a period of two weeks. ii. Notify the executive director, in writing, within 25 calendar days of the issuance of this decision and order, of the steps that have been taken to comply with this order. 2. That complainant's remaining allegations are dismissed. Issued at Augusta, Maine, this 15th day of February, 1995. MAINE LABOR RELATIONS BOARD The parties are hereby advised of their right, pursuant to 26 M.R.S.A. 968(5)(F) (Supp. /s/___________________________ 1994), to seek review of this Kathy M. Hooke decision and order by the Alternate Chair Superior Court. To initiate such a review, an appealing party must file a complaint with the Superior Court within /s/___________________________ fifteen (15) days of the date Eben B. Marsh of issuance of this decision Alternate Employer and order, and otherwise Representative comply with the requirements of Rule 80C of the Maine Rules of Civil Procedure. Alternate Employee Representative Gwendolyn Gatcomb filed a separate opinion, dissenting in part. -21- OPINION I agree with my colleagues that the City did not violate the MPELRL by either engaging in unlawful regressive bargaining or insisting on an illegal contract provision. I also agree that if the City's retirement proposal were a mandatory subject of bargaining, the City would have refused to bargain in good faith by engaging in surface bargaining. I even agree that it is not always easy to resolve the question of whether a particular waiver of bargaining rights is a permissive or mandatory subject. However, that question is easy to resolve in the case before us. The City's proposal is a permissive subject because it cedes decision-making on a mandatory subject to third parties. As the Board pointed out in SAD #22, slip op. at 5, citing Allied Chemical, 404 U.S. at 178, for a subject to be mandatory it must "settle an aspect of the relationship between the employer and employee." As with the provision at issue in SAD #22, the City's proposal cannot be said to "settle" anything. Were the availability of an alternative to MSRS solely within the discretion of the City, it could at least be argued that the issue of retirement would be settled by making the decision a management prerogative. That is not the case. Whether or not the firefighters' unit will continue to be covered by MSRS is dependent on the outcome of negotiations in other bargaining units, one of which is not even a bargaining unit of this employer! There is no difference in kind between this contin- gency clause and the contingency clauses that the Board was faced with in SAD #22 and Sanford. In both of those cases, the employer's proposal would have required ratification of contract provisions by a body or bodies other than the employers them- selves (town voters, warrant committee).9 __________________________ 9There were other aspects of the contract provision proposed in SAD #22 that the Board determined to be unlawful. They are not relevant here. -22- This Board is not alone in finding that a demand to cede decision-making on a mandatory subject to a third party or parties is a permissive subject of bargaining. NLRB v. Borg- Warner Corp., 356 U.S. 342 (1958) (demand for employee vote on union's strike decisions is a permissive subject); NLRB v. Cheese Barn, 558 F.2d 526 (9th Cir. 1977), and cases cited therein (employee ratification of collective bargaining agreement is a permissive subject fn10); Amer-Cal Industries, 274 NLRB 1046 (1985) (proposal conditioning signing of contract on employee decer- tification vote is permissive subject); Springfield Housing Authority v. Labor Relations Commission, 454 N.E.2d (Mass.App. 1983) (demand for approval of collective bargaining agreement by third party, Department of Community Affairs, is permissive subject). That is because such a contingency clause has the effect of "weakening the collective bargaining system both by allowing the public employer . . . to avoid its duty to bargain . . . and denying the employees the power to bargain for their working conditions with their employer." SAD #22, slip op at 6. The contract proposal before us is also somewhat analogous to a parity clause fn11 -- in each, a term and condition of employment for one unit is dependent on the outcome of negotiations in another. Although parity clauses are lawful in some jurisdic- tions, they are not lawful in many others, including Maine. Lewiston Firefighters Association v. City of Lewiston, 354 A.2d 154 (Me. 1976). That is because they "violate the coherence of the bargaining unit and thereby interfere with a right conferred upon employees collectively to secure the processes of labor- management bargaining." Id. at 162. Stated another way, parity __________________________ 10Since the parties to a collective bargaining agreement are the employer and the bargaining agent, employees themselves are third parties. 11A parity or "me-too" clause grants a benefit to one bargaining unit that is triggered by granting it to another. -23- provisions in effect force a bargaining agent to bargain not only for the employees it represents, but for the employees in another unit as well. Id. at 161. Although, given the current with- drawal requirements of the MSRS, I would not hold that the City's retirement proposal is unlawful, it can be no more than permis- sive. My colleagues avoid this result by holding first that as long as a bargaining proposal does not on its face require third-party approval to be implemented, it is not a permissive subject. That holding does major injustice to a basic principle of contract interpretation.12 A primary rule of construction is that pro- visions must be interpreted to give effect to the intent of the parties. F. Elkouri and E.A. Elkouri, How Arbitration Works, at 348 (4th Ed. 1985). That principle should be applied even more rigorously where, as here, there is no dispute as to the meaning of the provision. The City's proposed provision hinges implemen- tation of an alternative to MSRS on its future availability, precisely because its availability is not assured. The City cannot implement an alternative to MSRS without withdrawing from MSRS. It cannot withdraw from MSRS without withdrawing all nine bargaining units now covered. If that were not the case, this dispute would not be before us.13 __________________________ 12It is also inconsistent with the majority's finding that the proposal is not permissive based on vagueness. Nowhere on its face does the proposal say that details of the ICMA will be negotiated later. 13It is no accident that Mr. Farrar, in testifying on the status of other contract negotiations, stated that "in all [five] of those contracts we do have the new language allowing us to withdraw from Maine State and establishing the new alternate retirement plan." He also stated, in answering a question regarding whether other units that have agreed to the contract provision on retirement know when it will take effect: "No, they do not. Their contract is open ended pending resolution with other units." -24- The majority's second reason for finding that the provision is not permissive is that it does not even impliedly cede decision-making to third parties. The majority reaches this conclusion by drawing a distinction between a provision that, in one alternative, will nullify the parties' agreement, and a provision that, in one alternative, will change the agreement. Since, in both instances, it is third parties that will ultimately decide which alternative obtains, the majority has created a distinction without a difference. Moreover, the distinction in no way explains either Borg-Warner or Lewiston. Borg-Warner involves an employer demand that, during the term of the contract, the union's strike decisions in connection with nonarbitrable disputes be subject to an employee vote. Lewiston involves a parity, or "me-too" provision -- a union demand that, should another bargaining unit's benefits be improved, they will be improved for members of the union's bargaining unit also. The Association requested, in a timely fashion,14 that the City remove its retirement proposal from the bargaining table prior to fact finding, on the ground that it constituted a demand for a waiver of bargaining rights and therefore was a permissive subject of bargaining. The City's retirement proposal would require the Association to waive its right to make the final decision regarding the choice of retirement plans and put that decision in the hands of third parties. Therefore the proposal is a permissive subject of bargaining.15 Accordingly, I would __________________________ 14The City is wrong that the Association's demand was made too late. The Board has previously stated that the demand may be made anytime prior to fact finding, and has permitted the demand to be made as late as two working days prior to the fact-finding hearing itself. Oxford Hills Teachers Association v. MSAD No. 17 Board of Directors, No. 88-13, slip op. at 30 (Me.L.R.B. June 16, 1989. 15The Association's waiver argument was based on the vague- ness of the City's proposal, and not on an allegation that the proposal ceded decision-making to third parties. This omission -25- require the City to remove its retirement proposal from the table unless and until the Association agrees to discuss it further. I would also dismiss the Association's allegations regarding surface bargaining, since it is not a violation of the MPELRL to surface bargain over a permissive subject. A bargaining agent (or employer) faced with surface bargaining in connection with a permissive subject may simply demand that it be taken off the table. Issued at Augusta, Maine, this 15th day of February, 1995. MAINE LABOR RELATIONS BOARD /s/___________________________ Gwendolyn Gatcomb Alternate Employee Representative __________________________ is not fatal, since the Association did raise the issue of permissiveness based on waiver. -26- NOTICE TO EMPLOYEES POSTED PURSUANT TO AN ORDER OF THE MAINE LABOR RELATIONS BOARD AS A RESULT OF THE FILING OF A PROHIBITED PRACTICES CASE AGAINST THE CITY OF BANGOR, IT HAS BEEN DETERMINED THAT THE CITY HAS VIOLATED THE LAW. IN ACCORDANCE WITH OUR INTENTION TO COMPLY WITH THE BOARD'S ORDER, YOU ARE NOTIFIED OF THE FOLLOWING: We will cease and desist from refusing to bargain in good faith and from interfering with, restraining and coercing members of the City of Bangor Firefighters' Unit by surface bargaining on the mandatory subject of employee retirement. We will post this notice for two weeks. We will notify the Board of the date of posting and of compliance with its order. City of Bangor Dated: ____________________________ Robert W. Farrar Director of Administration Any questions concerning this notice or compliance with its provisions may be directed to: MAINE LABOR RELATIONS BOARD STATE HOUSE STATION 90 AUGUSTA, MAINE 04333 (207) 287-2015