DOUGLAS COUNTY
HEALTH CENTER SECURITY UNION, APPELLEE,
V.
DOUGLAS COUNTY, NEBRASKA, APPELLANT.
284 Neb. 109
Filed July 13, 2012. No. S-11-778.
1.
Commission, of Industrial Relations: Appeal and Error. Any order or decision of
the Commission of Industrial Relations may be modified, reversed, or set aside
by an appellate court on one or more of the following grounds and no other: (1)
if the commission acts without or in excess of its powers, (2) if the order was
procured by fraud or is contrary to law, (3) if the facts found by the
commission do not support the order, and (4) if the order is not supported by a
preponderance of the competent evidence on the record considered as a whole.
2.
Commission of Industrial Relations: Labor and Labor
Relations. Under Nebraska's Industrial Relations Act, the Commission
of Industrial Relations has the authority to decide industrial disputes and to
determine whether any party to an agreement has committed a prohibited
practice.
3.
Labor and Labor Relations. It is a prohibited
practice for any employer, employee, employee organization, or collective
bargaining agent to refuse to negotiate in good faith with respect to mandatory
topics of bargaining.
4.
Commission of Industrial Relations. Neb. Rev. Stat. § 48-818
(Reissue 2010) sets out mandatory topics of bargaining: The Commission of
Industrial Relations may issue orders that establish or alter the scale of
wages, hours of labor, or conditions of employment, or any one or more of the
same.
5.
Labor and Labor Relations: Waiver. Under the clear and
unmistakable waiver standard utilized by the National Labor Relations Board,
equivocal, ambiguous language in a bargaining agreement is insufficient to
establish waiver of bargaining rights under a collective bargaining agreement.
6.
. Under the clear
and unmistakable waiver standard, the parties to a collective
bargaining agreement must
unequivocally and specifically express their mutual intention to permit
unilateral employer action with respect to a particular employment term.
7.
Labor and Labor Relations: Contracts. Under the contract
coverage rule, if the issue was covered by the collective bargaining agreement,
then the parties have no further obligation to bargain the issue.
8.
Labor and Labor Relations: Federal Acts. While decisions under
the National Labor Relations Act are helpful in interpreting Nebraska's
Industrial Relations Act, such decisions are not binding on the Nebraska
Supreme Court.
9.
Commission of Industrial Relations: Administrative Law. The Commission of Industrial
Relations is an administrative agency empowered to perform a legislative
function and, as such, has no power or authority other than that specifically
conferred on it by statute or by a construction thereof necessary to accomplish
the purposes of the act establishing the commission.
10.
Commission
of Industrial Relations: Breach of Contract. The
Commission of Industrial Relations does not have the authority to hear cases
involving an alleged breach of a contract.
11.
Contracts: Claims: Courts. The proper forum to pursue claims involving contract interpretation is
the district court.
HEAVICAN, C.J., WRIGHT, CONNOLLY, STEPHAN, MCCORMACK, and
MILLER-LERMAN, JJ.
HEAVICAN, C.J.
INTRODUCTION
The Douglas County Health Center Security Union (Union) filed
a petition before the Commission of Industrial Relations (CIR) alleging that
its employer, Douglas County, Nebraska (County), had engaged in certain
prohibited practices. The CIR found the County had engaged in a prohibited
practice when it failed to negotiate its intention to contract out bargaining
unit work to a private security company. The CIR ordered the parties to
recommence negotiation and awarded the Union attorney fees and costs. The County appeals. We reverse, and remand the decision of
the CIR, with directions to vacate its order and dismiss the Union's petition.
FACTUAL BACKGROUND
The Douglas County Health Center (DCHC) is an agency of
the County. The Union is the recognized bargaining unit for all full- and
part-time DCHC security guards and represents approximately eight guards. The
parties entered into a collective bargaining agreement (CBA) effective from
January 1, 2007, to December 31, 2009. The CBA contained the following
language, which is relevant to the issues presented by this case:
ARTICLE 16
MANAGEMENT
RIGHT OF CONTRACTING AND
SUB-CONTRACTING
Section 1.
The Union recognizes that the right of contracting and
sub-contracting is vested in the County. The right to contract or subcontract
shall not be used for the purpose or intention of undermining the Union, nor to
discriminate against any employees.
Section 2.
If the contracting out or subcontracting of bargaining
unit work has the effect of eliminating bargaining unit jobs, the County agrees
to notify the Union as early as possible in advance of the same in order to
provide the Union with an opportunity to discuss with the County the necessity
and effect on bargaining unit employees.
As noted above,
this CBA expired on December 31, 2009. But the record contains uncontested
evidence that the parties have continued to operate as if it were still in
effect. We will likewise treat the CBA as being in effect.
On approximately March 1, 2011, the DCHC received notice
from the budget committee of the county board that it, along with most other of
the County's agencies, would be required to reduce by 4 percent its 2011-12
budget. This reduction amounted to about $1.6 million.
The record shows that after receiving this directive,
James Tourville, the DCHC administrator, considered
different options by which to reduce the DCHC budget. In connection with this
process, Tourville contacted a private security firm
to determine whether any cost savings would be had by outsourcing that work.
According to evidence in the record, a cost savings of between $140,000 and
$160,000 could be achieved by privatizing the security work.
At this time, Tourville
contacted a deputy county administrator whose job responsibilities included
negotiation with labor unions on behalf of the County. The administrator apparently
indicated that there
were no CBA-related issues with outsourcing the security work. In early April
2011, Tourville approached the county board and was
told to "proceed with contracting out the service," which apparently
included notifying the Union and beginning the competitive bid process.
On April 25, 2011, Tourville
and the deputy county administrator met with Union representatives to inform
them that the security work would be outsourced. The County acknowledges that
it did not negotiate with the Union, but, rather, informed the Union of the
decision. The Union was asked to offer any cost savings it might have to avoid
the outsourcing. At some point subsequent to this meeting, the Union offered to
reduce the uniform allowance paid to its workers, amounting to a cost savings
of between $8,000 and $10,000. At the meeting, the Union was also informed that
the Union's members would be allowed to apply for jobs with the new vendor.
On May 24, 2011, the Union filed a petition with the CIR
alleging, restated, that the County committed several instances of prohibited
practices, including (1) discouraging union membership and denying the rights
afforded to the Union, in violation of Neb. Rev. Stat. § 48-824(2)(a), (c) and
(f) (Reissue 2010); (2) failing to negotiate with the Union in advance of
outsourcing the security work, in violation of § 48-824(2)(b), (c), and (e);
and (3) informing Union representatives that the Union was too expensive, that
outsourcing the work would be cheaper, and that the Union's members could
probably be hired by the private vendor, in violation of § 48-824(2)(a), (b),
and (c).
It appears that following the filing of this petition,
the County submitted a request for proposals, placing out for bid DCHC's
security work. In response, on June 10, 2011, the CIR entered a status quo
order, ordering the County to not alter the employment status, wages, or terms
and conditions of the Union's employees.
A hearing was held before the CIR on August 8, 2011. On
August 18, the CIR issued an order finding that the County had engaged in a
prohibited practice when it failed to negotiate with the Union prior to
outsourcing the security work. In particular, the CIR found that the County had
undermined the Union when it outsourced all security jobs, thus leaving no
members left in the bargaining unit. The CIR ordered the parties to recommence
negotiations over outsourcing work within 30 days. The CIR further ordered the
County to pay attorney fees and costs, which amounted to $6,029.02.
ASSIGNMENTS OF ERROR
On appeal, the County assigns, restated and consolidated,
that the CIR erred in (1) finding that the County committed a prohibited
practice by failing to negotiate with the Union over the County's decision to
outsource bargaining unit work, (2) finding that the County's motivation was to
undermine the Union or discriminate against its members, (3) not properly
interpreting article 16 of the CBA, and (4) awarding attorney fees.
STANDARD OF REVIEW
[1] Any order or
decision of the CIR may be modified, reversed, or set aside by an appellate
court on one or more of the following grounds and no other: (1) if the CIR acts
without or in excess of its powers, (2) if the order was procured by fraud or
is contrary to law, (3) if the facts found by the CIR do not support the order,
and (4) if the order is not supported by a preponderance of the competent
evidence on the record considered as a whole.1
ANALYSIS
On
appeal, the County's primary argument is that the CIR was incorrect in ordering
it to bargain over the issue of outsourcing the security jobs at the DCHC,
because, according to the County, "the CIR failed to recognize that the
parties had already negotiated the topic and that the result of that
negotiation is clearly set forth in Article 16 of the CBA."2
The resolution of this case requires this court to examine issues of contract
coverage and waiver in collective bargaining agreements.
Contract Coverage and Waiver.
[2-4]
The general principles are familiar ones. Under
Nebraska's Industrial Relations Act, the CIR has the authority to decide
industrial disputes3 and to determine whether any party to an
agreement has committed a prohibited practice.4 Under § 48-824(1),
it is a prohibited practice for any employer, employee, employee organization,
or collective bargaining agent to refuse to negotiate in good faith with
respect to mandatory topics of bargaining. Neb. Rev. Stat. § 48-818 (Reissue
2010) sets out mandatory topics of bargaining: The CIR may issue orders that
"establish or alter the scale of wages, hours of labor, or conditions of
employment, or any one or more of the same." And in this case, the parties
agree that the topic at hand--the outsourcing of bargaining unit jobs--is a
mandatory topic of bargaining.
It
is here that the parties' views diverge. The Union contends that the County had
an obligation to bargain over the outsourcing of bargaining unit jobs because
it did not clearly and unmistakably waive its right to bargaining in the CBA.
The County, however, argues that it already bargained with the Union on this
topic at the time the parties entered into the CBA, that the results of this
bargaining are encompassed in article 16 of the parties' CBA, and that no
further bargaining is required at this time.
[5,6] The "clear and unmistakable" waiver standard
is utilized by the National Labor Relations Board. Under that standard,
"[e]quivocal, ambiguous language in a bargaining
agreement" is insufficient to establish waiver of bargaining rights under
a CBA.5 Rather, the parties must
"'unequivocally and specifically express their mutual intention to permit
unilateral employer action with respect to a particular employment term.'
"6 For example, where a contractual provision allowed for
benefits to be provided for "`ninety (90) days following
termination,'" the language was not "a clear and unmistakable waiver
with respect to the continuation of benefits beyond" that time period,
because it did not specifically address that
Scottsbluff Police Off. Assn.
v. City of Scottsbluff, 282 Neb. 676, 805
N.W.2d 320 (2011).
2 Brief for appellant at 12.
3 Neb. Rev. Stat. § 48-819.01 (Reissue
2010).
4 48-824.
5 Local Joint Executive
Bd. of Las Vegas v. N.LR.B., 540 F.3d 1072, 1079 (9th Cir. 2008).
6 Id. at 1079-80.
time period7 The Union contends that article 16 is
not a clear and unmistakable waiver of its right to bargain over the
elimination of all bargaining unit jobs.
[7]
But several circuit
courts of appeals have instead determined that the threshold question is
whether the issue was "covered by" the CBA. Only if it was not
"covered by" the CBA, do these courts consider whether the CBA
contained a clear and unmistakable waiver. Those circuits have adopted the
"contract coverage" rule, which treats the issue of whether there had
been a failure to bargain as a simple matter of contract interpretation--if the
issue was "covered by" the CBA, then the parties have no further
obligation to bargain the issue. The difference between these theories has been
explained by the District of Columbia Circuit:
[T]he "covered
by" and "waiver" inquiries . . . are analytically distinct. A
waiver occurs when a union knowingly and voluntarily relinquishes its
right to bargain about a matter; but where the matter is covered by the
collective bargaining agreement, the union has exercised its bargaining
right and the question of waiver is irrelevant. . . .
"Where
the contract fully defines the parties' rights as to what would otherwise be a
mandatory subject of bargaining, it is incorrect to say the union has 'waived'
its statutory right to bargain; rather, the contract will control and the
'clear and unmistakable' intent standard is irrelevant."8
In applying this
standard, courts first inquire as to whether the subject at issue was
"covered by" the CBA. If it was, it becomes a contract interpretation
question. But if the subject was not "covered by" the contract,
whether the subject was waived is examined.
In fact, the CIR has adopted this "covered by"
language,9 though it has not applied it
consistently:10 In F.O.P., Lodge
No. 21 v. City of Ralston, NE11 the CIR cited to Dept of
Navy, Marine Corps Logistics Base v. FLRAI2 for its explanation
of the distinction between contract coverage and waiver. The CIR went on to
explain why it mattered: If the change in health insurance was "`contained
in' the CBA, the dispute was a breach of contract claim outside of the scope of
the CIR' s authority.13
[8]
While decisions under
the National Labor Relations Act are helpful in interpreting Nebraska's
Industrial Relations Act, such decisions are not binding on this court.I4
And in this case, we are persuaded, not by the National Labor Relations Board's
view of waiver under the
7 Id
at 1081. See N.L.R.B. v. General Tire and Rubber Co., 795 F.2d 585 (6th Cir. 1986).
8 Dept of Navy, Marine Corps Logistics Base v. FLRA, 962 F.2d 48, 57 (D.C. Cir. 1992).
9 See F.O.P., Lodge No. 21 v. City of
Ralston, NE, 12 C.I.R. 59
(1994). See, also, Washington County Police Officers Association/F.O.P.
Lodge 36 v. County of Washington, State of Nebraska, No. 1247,
2011 WL 2286982 (C.I.R. May 31, 2011).
10) Cf. General
Drivers & Helpers Union, Local No. 554 v. County of Douglas, Nebraska, No.
1224, 2009
WL 5220888 (C.I.R. Nov. 24, 2009) (status quo order).
11
F.O.P., Lodge No. 21, supra note 9.
12 Dept
of Navy, Marine Corps Logistics Base, supra note
8.
13
F.O.P., Lodge No. 21, supra note 9 at 63.
14 See Scottsbluff Police Of
Assn., supra note 1.
National Labor
Relations Act, but by the circuit courts that have adopted the contract coverage
rule. In particular, we find persuasive the reasoning of the District of
Columbia Circuit:
When parties
bargain about a subject and memorialize the results of their negotiation in a
collective bargaining agreement, they create a set of enforceable rules--a new
code of conduct for themselves--on that subject. Because of the fundamental
policy of freedom of contract, the parties are generally free to agree to
whatever specific rules they like, and in most circumstances it is beyond the
competence of . . . the National Labor Relations Board or the courts to
interfere with the parties' choice. [Citation omitted.] On the other hand, when
a union waives its right to bargain about a particular matter, it
surrenders the opportunity to create a set of contractual rules that bind the
employer, and instead cedes full discretion to the employer on that matter. For
that reason, the courts require "clear and unmistakable" evidence of.waiver and have tended to construe waivers narrowly.15
We find the distinction
between contract coverage and waiver to be both logically and analytically
correct, and as such, we adopt it.
Was
Subcontracting "Covered By" CBA?
We therefore consider the threshold question of whether
the subcontracting of bargaining unit jobs at DCHC was "covered by"
the CBA. In conducting this inquiry, we examine whether the CBA "fully
defines the parties' rights" as to this topic.
Whether a topic is "covered by" a CBA was at
issue in Dept. of Navy, Marine Corps Logistics Base,16
which involved two separate petitions filed by a union against its employer,
the Marine Corps. The first petition dealt with the reassignment of personnel,
also referred to as employee "details"; the second petition dealt
with a change in performance evaluation factors. As relevant to the first
petition, the CBA contained provisions defining when employee
"details" would be implemented, how long the detail could last, and
the effect of the detail on an employee's salary and liability for union dues.
After certain employees were detailed, the union filed a petition with the
Federal Labor Relations Authority (FLRA), arguing that bargaining was required.
The FLRA agreed, applying what was essentially a waiver analysis, and concluded
that individual details on the local level were not addressed in the CBA.
As to the issue of performance evaluations, the CBA
established comprehensive procedures for the employer to follow when it
modified performance criteria, including advance notice, an opportunity for
employee participation, and a requirement that the standards be "`fair and
reasonable."17 After the standards were changed, the union
objected. The FLRA again agreed that bargaining was not waived, because the CBA
did not specifically address the 'full range of impact and implementation'
issues.I8
The District of Columbia
Circuit, applying its contract coverage standard, held that in both instances,
the topics at issue were "covered by" the CBA. The court conceded
that the
15 Dept.
of Navy, Marine Corps Logistics Base, supra note
8 at 57.
16 Dept.
of Navy, Marine Corps Logistics Base, supra note
8.
17 Id. at 61.
18 Id. at 53.
FLRA was correct
that the CBA did not "'specifically address ... the full range of impact
and implementation issues' that might conceivably arise," but noted that
this standard was "both unrealistic and impermissible."I9 We similarly conclude that the dispute over the
subcontracting of DCHC security work is "covered by" the parties' CBA
in this case.
In this case, article
16, § 1, of the CBA provides that the "Union recognizes that the right of
contracting and sub-contracting is vested in the County. The right to contract
or subcontract shall not be used for the purpose or intention of undermining
the Union, nor to discriminate against any employees." Section 2 further
notes that "[i]f the contracting out or
subcontracting of bargaining unit work has the effect of eliminating bargaining
unit jobs," the County will notify the Union and "provide the Union
with an opportunity to discuss with the County the necessity and effect on
bargaining unit employees."
We conclude that the
subcontracting of bargaining unit jobs is clearly "covered by"
article 16 of the CBA. That article specifically notes the steps that the
County needs to follow when "the contracting out or subcontracting of
bargaining unit work has the effect of eliminating bargaining unit jobs."
And the elimination of bargaining unit jobs is at issue in this dispute.
We recognize that article
16 does not specifically mention the elimination of the entire bargaining unit,
which would be the result of the County's action in this case. But we decline
to read article 16 so strictly as to conclude that it would not cover the
subcontracting dispute at issue in this case. To strictly read article 16 would
essentially apply the "unrealistic and impermissible"2°
waiver standard in the first instance, and would be antithetical to the
contract coverage principles we now adopt.
Result.
[9,10] The CIR is an
administrative agency empowered to perform a legislative function and, as such,
has no power or authority other than that specifically conferred on it by
statute or by a construction thereof necessary to accomplish the purposes of
the act establishing the CIR.21 Under Nebraska's Industrial
Relations Act, the CIR has the authority to decide industrial disputes22
and to determine whether any party to an agreement has committed a prohibited
practice.23 But the CIR does not have the authority to hear cases
involving the alleged breach of a contract.24
[11] We have concluded that the subcontracting issue presented by this case is "covered by" the parties' CBA. And determining whether the County's action was allowed by the CBA involves a question of the proper interpretation of that contract. This is something over which the
19 Id at 62.
20 id.
21 Central
City Ed Assn. v. Merrick Cty. Sch. Dist.,
280 Neb. 27, 783 N.W.2d 600 (2010).
22 § 48-819.01.
23 48-824.
24 See Transport
Workers of America v. Transit Auth. of City of Omaha, 205 Neb. 26, 286 N.W.2d 102 (1979).
CIR lacks authority.25
The proper forum to pursue such claims is the district
court.26 As such, we reverse, and remand the decision of the CIR,
with directions to the CIR to vacate its order and dismiss the Union's
petition.
CONCLUSION
We conclude that the issue of the subcontracting of bargaining unit jobs resulting in the elimination of bargaining unit jobs is "covered by" the CBA and presents an issue of contract interpretation over which the CIR lacks jurisdiction. We accordingly reverse, and remand to the CIR, with directions to vacate its order and dismiss the Union's petition.
REVERSED AND REMANDED WITH DIRECTIONS.
25 See id.
26 See id.