Wayne County v. Michigan Afscme Council 25 ( 2017 )

STATE OF MICHIGAN
COURT OF APPEALS
WAYNE COUNTY, UNPUBLISHED
January 24, 2017
Respondent-Appellee,
v No. 327727
MERC
MICHIGAN AFSCME COUNCIL 25, AFL-CIO, LC No. 10-000060
Charging Party-Appellant.
WAYNE COUNTY,
Respondent-Appellant,
v No. 327782
MERC
MICHIGAN AFSCME COUNCIL 25, AFL-CIO LC No. 10-000060
Charging Party-Appellee.
Before: GADOLA, P.J., and FORT HOOD and RIORDAN, JJ
PER CURIAM.
In Docket No. 327727, Charging Party Michigan AFSCME Council 25, AFL-CIO
(AFSCME) appeals by petition to review the decision and order of the MERC that reversed in
part and affirmed in part the decision and recommended order of the Administrative Law Judge
(ALJ). Respondent Wayne County cross-appeals by petition to review the same order in Docket
327782. We affirm in both Docket No. 327727 and Docket No. 327782.
In Calhoun Intermediate Sch Dist v Calhoun Intermediate Ed Ass’n, 314 Mich. App. 41,
46; 885 NW2d 310 (2016), this Court recently set forth the applicable standard for reviewing
decisions from the MERC:
“We review MERC decisions pursuant to Const 1963, art 6, § 28, and
MCL 423.216(e).” Van Buren Co Ed Ass’n v Decatur Pub Sch, 309 Mich. App.
630, 639; 872 NW2d 710 (2015) (quotation marks and citation omitted).
MERC’s factual findings are “conclusive if they are supported by competent,
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material, and substantial evidence on the record considered as a whole.” Police
Officers Ass’n of Mich v Fraternal Order of Police, Montcalm Co Lodge No 149,
235 Mich. App. 580, 586; 599 NW2d 504 (1999) (quotation marks and citation
omitted). “MERC’s legal determinations may not be disturbed unless they violate
a constitutional or statutory provision or they are based on a substantial and
material error of law.” Van Buren Co Ed Ass’n, 309 Mich. App. at 639. We
review de novo MERC’s legal rulings. St Clair Co Ed Ass’n v St Clair Co
Intermediate Sch Dist, 245 Mich. App. 498, 513; 630 NW2d 909 (2001).
The Michigan Supreme Court has also urged Michigan courts to “acknowledge[ ] the
expertise and judgment possessed by the MERC in the labor relations arena[,]” and to
particularly defer to the MERC’s factual findings. St Clair Intermediate School Dist v
Intermediate Ed Ass’n/Mich Ed Ass’n, 458 Mich. 540, 553; 581 NW2d 707 (1998). The MERC
has been entrusted with the interpretation and enforcement of the Public Employment Relations
Act (PERA), MCL 423.201 et seq., an area of the law which has been described as very
specialized and “politically sensitive[.]” Van Buren Co Ed Ass’n, 309 Mich. App. at 638, quoting
Kent Co Deputy Sheriffs’ Ass’n v Kent Co Sheriff, 238 Mich. App. 310, 313; 605 NW2d 363
(1999), aff’d 463 Mich. 353 (2000).
To the extent that the instant appeals require this Court to review the MERC’s
interpretation of the contractual language of the applicable collective-bargaining agreement
(CBA), this Court will review this legal question de novo. Arbuckle v Gen Motors LLC, 499
Mich. 521, 531; 885 NW2d 232 (2016); AFSCME Council 25 v Faust Pub Library, 311 Mich
App 449, 462; 875 NW2d 254 (2015). This Court will review a CBA in accordance with the
ordinary principles of contract law, provided those principles are not inconsistent with federal
labor policy. Arbuckle, 499 Mich. at 532.
On appeal in Docket No. 327727, charging party contends that the MERC erred in
dismissing the unfair labor practice charge against respondent with regard to the lieutenants and
sergeants and supervisory bargaining units. We disagree.
In Macomb Co v AFSCME Council 25, 494 Mich. 65, 70; 833 NW2d 225 (2013), quoting
Port Huron Ed Ass’n, MEA/NEA v Port Huron Area Sch Dist, 452 Mich. 309, 321; 550 NW2d
228 (1996), the Michigan Supreme Court stated that where a CBA between the parties covers the
matters in dispute, and the CBA contains grievance procedures, “‘the details and enforceability
of the [contract] provision [at issue] are left to arbitration.’” In Macomb Co, 499 Mich. at 80, the
Michigan Supreme Court set forth a very clear process to be followed when a party alleges an
unfair labor practice arising from the failure to bargain collectively over a mandatory subject of
bargaining.
The MERC ordinarily “does not involve itself with contract interpretation
when the agreement provides a grievance process that culminates in arbitration.”
However, when a charging party claims that a respondent has failed to bargain
over a mandatory subject of bargaining, the MERC must “determine whether the
agreement ‘covers’ the dispute.” As a result, “it is often necessary for the MERC
. . . to review the terms of an agreement to ascertain whether a party has breached
its statutory duty to bargain.” If the agreement covers “the term or condition in
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dispute,” then “the details and enforceability of the provision are left to
arbitration.” The MERC itself has recognized this limitation on its scope of
authority, which we reaffirm today: when the parties have agreed to a separate
grievance or arbitration process, the MERC’s review of a collective bargaining
agreement in the context of a refusal-to-bargain claim is limited to determining
whether the agreement covers the subject of the claim. [Id. at 80-81, quoting Port
Huron Ed Ass’n, 452 Mich. at 321 (footnotes omitted; emphasis added).]
In other words, the Michigan Supreme Court emphasized that the grievance process that
is set forth in the parties’ CBA will be the process that will guide the parties’ disputes over
matters of contract interpretation. Id. The parties, where they include language in the CBA that
recites their resolution of a particular subject, have therefore satisfied their duty to bargain. Id. at
79. The MERC in this case also noted in its decision and order that this was the governing law.
In Macomb Co, the charging party unions claimed that it was an unfair labor practice for
the respondent employer to alter the actuarial tables that it used for determining retirement
benefits. Id. at 74. At issue in the case was whether the respondents were obligated to bargain
with the charging parties before changing the actuarial tables employed. Id. at 82. Macomb Co
has similar facts to the instant case, where the respondent in that case contended that its
retirement ordinance gave it the discretion to alter the actuarial tables, and that it satisfied the
duty to bargain with the charging parties where the collective bargaining agreements
incorporated the terms of the applicable ordinance. Id. at 82-83. The Michigan Supreme Court
recognized that the applicable county ordinance did give the respondent discretion to adopt and
maintain actuarial calculations, and that eight of the nine collective bargaining units at issue in
that case expressly incorporated the terms of the retirement ordinance on the subject of
calculating retirement benefits, and the remaining agreement did so implicitly. Id. at 83-87.
Under such circumstances, the Michigan Supreme Court stated, in pertinent part, as follows:
Because the collective bargaining agreements cover the calculation of
retirement benefits, we conclude that the grievance procedure is the appropriate
avenue for the charging parties’ claims arising out of the parties’ rights under
their respective collective bargaining agreements. [Id. at 87.]
The instant appeals present similar facts to Macomb Co, as the CBA language here
expressly references the retirement ordinance, and therefore the maintenance and disbursement
of funds earmarked for the thirteenth check. Accordingly, under the authority of Macomb Co,
the MERC correctly concluded that this matter was best resolved according to the grievance
procedures in the CBA, and dismissed charging party’s charge of an unfair labor practice on that
basis. While a distinguishing fact here is that respondent amended the ordinance at issue,
something that Macomb County did not do in the Macomb Co case, this fact in and of itself does
not render the clear legal principles set forth in Macomb Co inapplicable to the instant appeal.
Additionally, while charging party argues that Macomb Co is not applicable, given that a
contract repudiation argument was not made in that case, the Michigan Supreme Court has
rendered a clear pronouncement concerning the procedure to be followed when the CBA covers
the issue of interpretation to be decided, and it is governing precedent in these appeals.
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While the MERC correctly concluded that the grievance process is the appropriate forum
for the resolution of the dispute regarding the lieutenants and sergeants and supervisory
bargaining units, we will briefly address the merits of charging party’s contention that
respondent repudiated the terms of the CBA by amending the retirement ordinance. The
governing provision of PERA, MCL 423.210(1)(e) provides, in pertinent part, as follows:
A public employer or an officer or agent of a public employer shall not do any of
the following:
(e) Refuse to bargain collectively with the representatives of its public employees,
subject to [MCL 423.211]. [Footnote omitted.]
The duty to bargain collectively regarding mandatory subjects of collective bargaining
will remain during the life of the collective bargaining agreement. Macomb Co, 494 Mich. at 79.
Once a matter has been determined to be a mandatory subject of bargaining, neither one of the
parties is permitted to take unilateral action regarding the matter unless an impasse in
negotiations has arisen. Michigan State AFL-CIO v MERC, 212 Mich. App. 472, 486; 538 NW2d
433 (1995); Detroit Police Officers Ass’n v Detroit, 391 Mich. 44, 54-55; 214 NW2d 803 (1974).
If a party does unilaterally modify the terms of a CBA during the term of the CBA, this will
amount to an unfair labor practice. St Clair Intermediate Sch Dist, 458 Mich. at 564-566
(recognizing that such action will amount to an unfair labor practice under the National Labor
Relations Act (NLRA), an analogous statute to Michigan’s PERA); Wayne Co Gov’t Bar Ass’n v
Co of Wayne, 169 Mich. App. 480, 486; 426 NW2d 750 (1988).
Repudiation of a contract will be held to exist under the following
circumstances:
Repudiation exists only when both of the following occur: (1) the contract
breach is substantial and has a significant impact on the bargaining unit; and (2)
no bona fide dispute over interpretation of the contract is involved. [In re City of
Detroit (Police Dep’t), 26 Mich Pub Emp Rep 21 (2012) (Case No. C10 F-132)
(Citations omitted; emphasis added).]
Repudiation that warrants the involvement of MERC will only arise where “there has been a
substantial abandonment of the collective bargaining agreement or the bargaining relationship.”
Id. (citations omitted). “The MERC does not exercise jurisdiction of breach of contract claims
unless the asserted breach of contract constitutes a complete renunciation of the collective
bargaining relationship.” Bay City Sch Dist v Bay City Ed Ass’n Inc, 425 Mich. 426, 437 n 12;
390 NW2d 159 (1986).
On appeal, the thrust of charging party’s arguments concerning the alleged repudiation of
the CBA are essentially two-fold. First, charging party contends that the MERC erred as a
matter of law where it concluded, in a cursory fashion, that the parties had a bona fide dispute
concerning the terms of the CBA. In a related assertion, charging party states that respondent did
not point to a specific provision in the CBA that gave it authority to modify the CBA.
As an initial matter, a review of the MERC’s decision and order belies these arguments.
For example, the MERC recited in detail each party’s position in the lower tribunal on the issue
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of repudiation. Therefore, the MERC, after carefully considering both parties’ arguments, did
correctly observe that respondent did advance a legal argument supporting its decision to amend
the retirement ordinance, and the text of the MERC’s decision and order does not support
charging party’s assertion that the MERC relied on “conclusory assertion[s].”
Charging party also maintains that the relevant language of the CBA clearly prevented
respondent from altering the terms of the CBA during the term of the agreement, and that any
reference to the retirement ordinance referred only to the ordinance as enacted as of the date of
the execution of the CBA. The relevant CBA language provides, in pertinent part, as follows:1
The detailed provisions of the Wayne County Retirement System shall control
except where changed or amended below.
* * *
Employees of the Hybrid Retirement Plan shall be eligible for post-retirement
cost-of-living adjustments in the form of distributions from the reserve for
Inflation Equity.
“The cardinal rule in the interpretation of contracts is to ascertain the intention of the
parties.” Radu v Herndon & Herndon Investigations, Inc, 302 Mich. App. 363, 374; 838 NW2d
720 (2013), quoting Shay v Aldrich, 487 Mich. 648, 660; 790 NW2d 629 (2010).
“Absent an ambiguity or internal inconsistency, contractual interpretation begins
and ends with the actual words of a written agreement.” Universal Underwriters
Ins Co v Kneeland, 464 Mich. 491, 496; 628 NW2d 491 (2001). . . . [W]e
examine “the language of the contract according to its plain and ordinary
meaning.” Miller-Davis Co v Ahrens Const, Inc, 495 Mich. 161, 172; 848 NW2d
95 (2014). “If the contractual language is unambiguous, courts must interpret and
enforce the contract as written . . . .” In re Egbert R Smith Trust, 480 Mich. 19,
24; 745 NW2d 754 (2008). [Innovation Ventures v Liquid Mf’g, 499 Mich. 491,
507; 885 NW2d 861 (2016).]
The MERC’s conclusion that respondent had not repudiated the terms of the CBA was
not legally erroneous, given that the applicable language of the CBA was reasonably subject to
different interpretations. In other words, the MERC did not commit an error of law in
concluding that where a bona fide dispute existed concerning the applicable CBA language,
respondent’s action in amending the retirement ordinance did not amount to a repudiation of the
contract, and therefore an unfair labor practice. While the CBA expressly stated that the terms of
the retirement ordinance would control on matters of retirement, except where modified
elsewhere in the CBA, there is nothing in the CBA language that expressly stated that only the
terms of the ordinance in effect at the time of the execution of the CBA would govern. The CBA
1
The parties do not dispute that the CBAs at issue in this appeal all contained the recited
language relating to the thirteenth check.
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also expressly referenced the retirement ordinance, the language of which has, since 1986, made
the payment of the thirteenth check discretionary.2 Accordingly, from both the plain language of
the retirement ordinance, as well as the CBA, it is clear that any payment of the thirteenth check
was considered discretionary on behalf of respondent.
Charging party also contends that a past practice existed between the parties where
retirees have been paid the thirteenth check since the 1980s, and that respondent has never placed
a cap on how much could be placed in the Inflation Equity Fund (IEF), or the disbursement
amount. Charging party makes an analogous argument that the parties had a past practice of
permitting labor representatives to weigh in and approve of any amendments to the retirement
ordinance. According to charging party, these past practices became terms of the collective
bargaining agreement. In Macomb Co, 494 Mich. at 81, our Supreme Court cautioned that
“[u]nambiguous language in a collective bargaining agreement dictates the parties’ rights and
obligations even in the face of a conflicting past practice, ‘unless the past practice is so wisely
acknowledged and mutually accepted that it creates an amendment to the contract.’” Id., citing
Port Huron Ed Ass’n, 452 Mich. at 329 (footnote omitted.) Specifically, the Michigan Supreme
Court stated, in pertinent part, as follows:
The party that seeks to overcome ambiguous contract language “must show the
parties had a meeting of the minds with respect to the new terms or conditions so
that there was an agreement to modify the contract.”
We clarify the Port Huron analysis to explain that this is an exceedingly
high burden to meet. Any lesser standard would defeat the finality in collective
bargaining agreements and would blur the line between statutory unfair labor
practice claims and arbitrable disagreements over the interpretation of collective
bargain agreements. As a result, the party that seeks to overcome an
unambiguous collective bargaining agreement must present evidence establishing
the parties’ affirmative intent to revise the collective bargaining agreement and
establish new terms or conditions of employment. Moreover, because “arbitration
has come to be the favored procedure for resolving grievances in federal and
Michigan labor relations,” doubt about whether a subject matter is covered should
be resolved in favor of having the parties arbitrate the dispute. The arbitrator, not
the MERC, is ordinarily best equipped to decide whether a past practice has
matured into a new term or condition of employment. [Macomb Co, 494 Mich. at
82 (emphasis supplied; footnote omitted).]
While charging party contends that it need only make a showing of a “tacit agreement”
that the parties’ past practice would form a term of the underlying agreement, given its assertion
that the collective bargaining agreement is silent on the issue of the thirteenth check, see id. at 82
n 49, this argument is not persuasive.
2
We have closely reviewed the applicable language of the retirement ordinance, and its
amendments, in reaching this conclusion.
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Even accepting charging party’s factual assertions regarding the existence of a past
practice (1) concerning payment of the thirteenth check and (2) the involvement of the labor
unions in negotiating this benefit, the doctrine does not provide a mechanism for charging party
to amend the express terms of the CBA under the circumstances of this case. Specifically,
contrary to what charging party argues, the CBA language is not silent on the issue of the
thirteenth check. Instead, the CBA language specifically states that the language of the
retirement ordinance will control, and the retirement ordinance language is clear that the
payment and disbursement of the thirteenth check is very much discretionary. Additionally,
there is nothing in the language of the CBA regarding the applicability of the retirement
ordinance that provides that charging party, or any labor representatives, must approve any
amendments to the ordinance. Moreover, charging party is hard-pressed to argue that any past
practice overcomes the unambiguous terms of the CBA, given that respondent strenuously
argues that the payment of the thirteenth check was always discretionary. Put another way,
under the facts of this case, charging party cannot establish a “meeting of the minds with respect
to the new [alleged] terms or conditions” to the extent that it can be said that there was an
agreement to modify the express terms of the CBA. Macomb Co, 494 Mich. at 89, quoting Port
Huron Ed Ass’n, 452 Mich. at 332 n 16.3
In Docket No. 327782, respondent contends that the MERC erred in concluding that the
subject of the thirteenth check was a mandatory subject of bargaining. Respondent also contends
that during the fact-finding process following the expiration of the non-supervisory agreement,
respondent did not bear a duty to bargain on the subject of the thirteenth check or to notify
charging party concerning the proposed amendments to the retirement ordinance during the fact-
finding period.4 We disagree.
Subsection 15(1) of PERA imposes the following obligations on a public employer with
regard to collective bargaining:
3
The remaining elements required to support a claim of contract repudiation are that the breach
of the CBA be substantial and that it have a substantial effect on the bargaining unit at issue.
Given our conclusion with regard to the first element, it is not necessary to address these
remaining elements.
4
In its brief on appeal in Docket No. 327782, respondent asserts that it did not have a duty to
bargain with charging party before amending the terms of the retirement ordinance. It should be
noted that this presents a distinct question from whether respondent breached its duty to bargain
in good faith during the fact-finding period after the non-supervisory agreement expired when it
failed to notify charging party of the revisions it was making to the retirement ordinance. We
have concluded that the MERC correctly determined that the parties’ dispute regarding contract
interpretation is best left to be addressed according to the CBA grievance procedures where the
CBA expressly covered the issue of the thirteenth check. As the Michigan Supreme Court has
stated, once the parties have bargained collectively about a subject, and the CBA language
covers the matter in dispute, the duty to bargain has been satisfied. Macomb Co, 494 Mich. at 79.
Accordingly, the issue raised by respondent does not require additional analysis.
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A public employer shall bargain collectively with the representatives of its
employees as described in [MCL 423.211] and may make and enter into
collective bargaining agreements with those representatives. Except as otherwise
provided in this section, for the purposes of this section, to bargain collectively is
to perform the mutual obligation of the employer and the representative of the
employees to meet at reasonable times and confer in good faith with respect to
wages, hours, and other terms and conditions of employment, or to negotiate an
agreement, or any question arising under the agreement, and to execute a written
contract, ordinance, or resolution incorporating any agreement reached if
requested by either party, but this obligation does not compel either party to agree
to a proposal or make a concession. [MCL 423.215(1) (emphasis added).]
Accordingly, the pivotal issue to be determined is whether the MERC erred as a matter of law in
concluding that the thirteenth check amounted to a “term[ ] [or] condition of employment,” to the
extent that respondent bore a duty to negotiate with charging party in good faith during the fact-
finding period.
In St Clair Intermediate Sch Dist, 458 Mich. at 551, the Michigan Supreme Court set forth
the legal principles for determining whether a particular subject constitutes a mandatory subject
of bargaining:
Mandatory subjects of collective bargaining are comprised of issues that
“settle an aspect of the relationship between the employer and employees,” Allied
Chem & Alkali Workers of America v Pittsburgh Plate Glass, 404 U.S. 157, 178;
92 S. Ct. 383; 30 L. Ed. 2d 341 (1971), and include, but are not limited to, terms and
conditions of employment concerning hourly, overtime, and holiday pay, work
shifts, pension and profit sharing, grievance procedures, sick leave, seniority, and
compulsory retirement age. Detroit Police Officers Ass’n v Detroit, 391 Mich. 44;
214 NW2d 803 (1974).
The statutory duty to bargain will be satisfied when the parties meet in good faith and
bargain over the disputed subjects. Detroit Police Officers Ass’n, 391 Mich. at 55. Generally, if
the parties are not able to reach an agreement after bargaining in good faith, they are said to be at
an “impasse[,]” and an employer is permitted to take unilateral action on an issue so long as such
action is congruent with its final offer to the union. Id. at 56. In the public sector, such as is at
issue in this case, the procedures may vary.
The concept of unilateral action after impasse is also recognized in the public
sector. The public sector has, however, begun to institute procedures such as fact-
finding and arbitration that require the parties to actually negotiate beyond
impasse. [Id. at 56.]
In Detroit Police Officers Ass’n, id. at 63, the Michigan Supreme Court referred to well-settled
federal precedent, Inland Steel Co v NLRB, 77 N.L.R.B. 1; 21 LRRM 1310, enforced 170 F2d 247
(CA 7, 1948), which “firmly established that pension and retirement provisions are mandatory
subjects of bargaining under the NLRA.” More recently, in Macomb Co, 494 Mich. at 78, the
Michigan Supreme Court, when considering the Macomb County Retirement Commission’s
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ability to adopt actuarial calculations, recognized that “the calculation of retirement benefits is a
mandatory subject of collective bargaining.” (Footnote omitted.) See also Senior Accountants,
Analysts & Appraisers Ass’n v Detroit, 218 Mich. 263, 273; 553 NW2d 679 (1996) (recognizing
that Detroit Police Officers Ass’n does “unquestionably state that . . . retirement provisions are
mandatory subjects of bargaining[.]”). This Court has recognized that the “test generally applied
to determine whether a matter is a mandatory subject of bargaining is whether it has an impact
upon wages, hours, or conditions of employment, or settles an aspect of the employer-employee
relationship.” City of Detroit v Michigan Council 25, AFSCME, 118 Mich. App. 211, 215; 324
NW2d 578 (1992) (emphasis supplied).
Respondent raises a series of creative and novel arguments on appeal that challenge the
MERC’s ultimate conclusion that the issue of the thirteenth check was a mandatory subject of
bargaining. According to respondent, the thirteenth check was a permissive subject of
bargaining, and therefore it did not bear a duty to bargain with charging party over this matter.
Specifically, respondent argues that there is a distinction between “retiree” benefits that a retiree
obtains following employment, and “retirement” benefits, which are closely related to, accrue
during, and arise from an employee’s employment. In support of the assertion that a matter must
accrue to an employee out of the employment relationship, respondent points to Inland Steel Co,
where the National Labor Relations Board considered section 9(a) of the NLRA, concluding that
the term “wages” in that subsection ought to be construed in a manner that included
“emoluments of value, like pension and insurance benefits, which may accrue to employees out
of their employment relationship.” Respondent also points to the MERC’s multiple conclusions
in its decision and order that the thirteenth check is a discretionary payment, asserting that such a
factual finding is inconsistent with its ultimate legal determination that it is a mandatory subject
of bargaining. Respondent also points out, consistent with Butler v Wayne Co, 289 Mich. App.
664, 672; 798 NW2d 37 (2010), that because retirees are not members of the bargaining unit,
changes to their benefits will not amount to an unfair labor practice.
While the record, specifically the relevant terms of the retirement ordinance, does
confirm that the disbursement of the thirteenth check was discretionary on the part of the
respondent, the MERC’s legal conclusion that it amounted to a mandatory subject of bargaining
amounted to a reasoned and principled application of the law. Most recently, the Michigan
Supreme Court confirmed that retirement provisions are mandatory subjects of bargaining.
Macomb Co, 494 Mich. at 78. The thirteenth check, aimed at supplanting retirement benefits and
to assist retirees with dealing with the cost of inflation, is undoubtedly related to the retirement
provisions that are set forth in the collective bargaining agreements. As noted, while respondent
raises interesting arguments contesting the MERC’s legal determination, these arguments are
simply a distraction from the core legal principle that determines whether a topic is a subject of
mandatory bargaining. That is, as relevant to this appeal, whether the issue is one that “settle[s]
an aspect of the relationship between the employer and employees.” Allied Chemical, 404 U.S. at
178; City of Detroit, 118 Mich. App. at 215. Where the record confirms that respondent
established the thirteenth check to assist retirees with dealing with inflation and increased costs
of living, it was reasonable, and in accordance with governing law, for the MERC to conclude
that it amounted to a mandatory subject of bargaining. Where the MERC’s legal conclusion
amounted to a principled and reasonable application of the law, its decision ought not to be
disturbed on appeal. Calhoun Intermediate School Dist, 314 Mich. App. at 46.
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Respondent also contends that the MERC erred in concluding that it breached its duty to
bargain in good faith when it failed to notify charging party that it was amending the retirement
ordinance during the time period following the expiration of the non-supervisory CBA when the
parties were engaged in fact-finding. As relevant to this appeal, respondent’s CBA with the non-
supervisory unit expired in 2008. During the period that respondent was undertaking
amendments to the retirement ordinance, it had entered into the fact-finding process5 with the
non-supervisory unit after negotiations subsequent to the expiration of the agreement had stalled.
At issue is whether the MERC correctly concluded that respondent engaged in an unfair labor
practice when it amended the retirement ordinance during the fact-finding process that ensues
following an impasse.
The MERC has held that “even in the event of a good faith impasse, a party may not
unilaterally impose changes in mandatory subjects of bargaining after fact[-]finding has been
requested.” In re Wayne Co, 24 Mich Pub Emp Rep 25 (2011) (Case No. C10 A-024), aff’d
Wayne Co v AFSCME Council 25, unpublished opinion of the Court of Appeals, issued February
13, 2014 (Docket No. 303672). The MERC has also recognized that the duty to bargain in good
faith endures following the issuance of the fact-finder’s report, and that the parties ought to
continue to bargain for a reasonable time following the issuance of the report, which the MERC
has stated is 60 days in most cases. In re Oakland Community College, 15 Mich Pub Emp Rep
33006 (2001) (Case No. C99 F-111).
In this case, the MERC noted that the fact-finder’s report was issued on September 17,
2010, and that respondent amended the retirement ordinance within two weeks of that report
being issued. Citing In re Orion Twp, 18 Mich Pub Emp Rep 72 (2005) (Case No. C03 E-121),
the MERC stated that where respondent acted to change a mandatory subject of bargaining
during the period after the fact-finder’s report was issued, respondent engaged in an unfair labor
practice. The MERC also concluded that where the parties had entered into the “post-fact
finding mandatory negotiations period,” respondent was obligated to give notice and an
opportunity to bargain to charging party before taking action that would alter a mandatory
subject of bargaining. The MERC took care to note that while nothing in the express terms of
the expired CBA precluded respondent from amending the retirement ordinance, respondent
nonetheless had a duty to give charging party notice of the impending revisions, and the
opportunity to bargain over the substance of the revisions. According to respondent, the
MERC’s conclusion that it did not notify charging party of the proposed amendment to the
retirement ordinance is not supported by the record, where the record confirms that charging
party was aware of respondent’s intentions, starting in the summer of 2010.
5
Fact-finding proceedings “are a creature of statute and are a part of the bargaining process.
Fact-finding is a mechanism designed to assist parties in fulfilling their mutual obligations to
bargain in good faith and . . . are intended to deter disruptions of public services as a result of
unsolved labor disputes.” In re Wayne Co, 28 Mich Pub Emp Rep 35 (2014) (Case No. C10 A-
024-A). MCL 423.25(1) provides specifically for the process of fact-finding.
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There is evidence in the lower tribunal file to suggest that charging party was aware of
the proposed amendments to the ordinance. In any event, the MERC’s conclusion that
respondent failed to notify charging party appeared to rest on its concern that by conducting
itself the way it did, respondent failed to act in good faith during the negotiation process. For
example, the MERC, in its decision, pointed to Macomb Co, 494 Mich. at 78-79, where the
Michigan Supreme Court instructed that “[g]ood faith requires a party to be ‘actively engaged in
the bargaining process with an open mind and a sincere desire to reach an agreement.’” (Citation
and footnote omitted.) Under the circumstances, where respondent was required to continue to
negotiate in good faith after the non-supervisory agreement expired, and during the fact-finding
process, the MERC’s conclusion that respondent engaged in an unfair labor practice where it
amended the retirement ordinance without notifying charging party was supported by competent,
material and substantial evidence in the record. Calhoun Intermediate Sch Dist, 314 Mich. App.
at 46.
Charging party also argues on appeal in Docket No. 327727 that the MERC erred in
concluding that it had a duty to request bargaining on the subject of the thirteenth check.
According to charging party, the authority that the MERC cited was not applicable to
circumstances such as in the present case, where charging party alleged that respondent
repudiated the CBA during fact-finding. This Court very recently set forth the legal principles
regarding a public employer’s duty to bargain, noting that it is conditioned on the employee
union requesting bargaining.
Pertinent to the case at bar, PERA imposes on public employers a duty to
bargain collectively with the representatives of its employees “in good faith with
respect to wages, hours, and other terms and conditions of employment. . . . ”
MCL 423.215(1). See also AFSCME Local 25 v Wayne Co, 297 Mich. App. 489,
494; 824 NW2d 271 (2012) (explaining that PERA imposes a duty to bargain
collectively upon the expiration of a CBA). Wages, hours, and other conditions
of employment, including health insurance benefits, are “mandatory subjects of
bargaining.” Ranta v Eaton Rapids Pub Sch Bd of Ed, 271 Mich. App. 261, 270;
721 NW2d 806 (2006). While a public employer has a duty to bargain, that duty
is not implicated absent a request by the employees to enter into negotiations. St
Clair Prosecutor v AFSCME, AFL–CIO, St Clair Co Gen Employees Chapter,
Local 1518, 425 Mich. 204, 242; 388 NW2d 231 (1986). Thus, an employer’s
duty to bargain is “expressly condition[ed]” on the employees’ request for
bargaining. Local 586, SEIU v Village of Union City, 135 Mich. App. 553, 557;
355 NW2d 275 (1984). [Van Buren Co Ed Ass’n, 309 Mich. App. at 641.]
Put simply, the MERC in this case clearly held that respondent violated its duty to
bargain with charging party by moving forward with the retirement ordinance amendments when
the parties were engaged in the fact-finding process. Where the MERC also concluded that any
error on the part of respondent was harmless to charging party, given that the parties entered into
a subsequent agreement that did not alter the impact of the 2010 amendments to the retirement
ordinance, and where the MERC’s recitation of the relevant law is consistent with recent
authority from this Court, we leave its reasoning and ultimate order undisturbed.
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Affirmed.
/s/ Michael F. Gadola
/s/ Karen M. Fort Hood
/s/ Michael J. Riordan
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