Wilson County Board of Education v. Wilson County Education Association and Steve Johnson ( 2010 )

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
February 6, 2007 Session
WILSON COUNTY BOARD OF EDUCATION v. WILSON COUNTY
EDUCATION ASSOCIATION AND STEVE JOHNSON
Appeal from the Chancery Court for Wilson County
No. 03344 C. K. Smith, Chancellor
No. M2005-02719-COA-R3-CV - Filed June 30, 2010
An assistant principal was transferred to a teaching position and grieved the transfer pursuant
to a locally negotiated agreement between the local board of education and the organization
representing teachers. After pursuing remedies through the school board, the teacher asked
the trial court to compel the board to arbitrate resolution of the dispute. The trial court
granted summary judgment to the school board, concluding that Tenn. Code Ann. § 49-2-303applied since “assistant principals” are statutorily the same as “principals” and, under the
holding in Marion County Board of Education v. Marion County Education Association, 86
S.W.3d 202 (Tenn. Ct. App. 2001), the director of schools has the authority to transfer
principals unrestrained by locally negotiated agreements. Mr. Johnson and the association
appealed, claiming that Tenn. Code Ann. § 49-2-303 does not apply to assistant principals
and that the director of schools must comply with their agreement in making transfer
decisions. We agree that the arbitration provision is not enforceable, but for a different
reason. We hold that there was no meeting of the minds as to the procedure to be used as the
final step in the grievance procedure. Consequently, there was no enforceable agreement to
arbitrate.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
Affirmed
P ATRICIA J. C OTTRELL, J., delivered the opinion of the court, in which W ILLIAM C. K OCH, J R.,
P.J., M.S., joined. W ILLIAM B. C AIN, J., did not participate.
Richard L. Colbert, Amy W. Malone, Nashville, Tennessee, for the appellants, Wilson
County Education Association and Steve Johnson.
Michael R. Jennings, Lebanon, Tennessee, for the appellee, Wilson County Board of
Education.
OPINION
Mr. Johnson was transferred by the director of schools from his position as Assistant
Principal at Lebanon High School to a position as an art teacher at Gladeville Elementary
School. At all times relevant herein, the Wilson County Board of Education (“Board”) and
the Wilson County Education Association (“Association”) were parties to a locally negotiated
agreement (“Agreement”) under the Education Professional Negotiations Act, Tenn. Code
Ann. § 49-5-601 et seq. (“EPNA”). Mr. Johnson filed a grievance under the Agreement
disputing his transfer.
The grievance filed by Mr. Johnson was made pursuant to Article 2 of the Agreement,
which provides, inter alia, that if a grievance is not resolved by the fourth step, it is
submitted to arbitration. The grievance made its way through the process described in
Article 2 of the Agreement and was denied at every level. Before Mr. Johnson’s grievance
was heard by an arbitrator, the Board filed this action in Wilson County Chancery Court
against Mr. Johnson and the WCEA seeking a declaratory judgment and a stay of arbitration.
The Board sought a declaratory judgment that it was not required to submit to binding
arbitration of Mr. Johnson’s claim. According to the Board, the Agreement “does not
contemplate a surrender of management authority over . . . transfers within the system” and,
if it did, any such provision in the Agreement was beyond the authority of the Board to
surrender.
Mr. Johnson and the Association filed a motion for summary judgment. Upon
concluding that the issues presented were purely matters of law, the trial court requested the
Board to likewise file a motion for summary judgment.
On November 1, 2005, the trial court entered its order concluding that Tenn. Code
Ann. § 49-2-303, which governs the employment of principals, included “assistant
principals” and that the director of schools has the statutory authority to appoint or reappoint
assistant principals unrestrained by locally negotiated agreements. Mr. Johnson and the
Association appealed, claiming that Tenn. Code Ann. § 49-2-303 does not apply to assistant
principals and that the director of schools must comply with the Agreement in making
transfer decisions.
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I. M R. J OHNSON’S G RIEVANCE
The Agreement at issue herein specifically addressed transfers, and Article 6(A) of
the Agreement governs Involuntary Transfers.1 Mr. Johnson makes no allegation that the
director failed to comply with the procedural aspects of transfers found in Article 6(A).
Instead, Mr. Johnson based his grievance on other sections of the Agreement. He
argues that his transfer violated several subsections of Article VIII of the Agreement
governing Personnel Policies and Practices. Article 8(A)(3), governing Employee
Evaluation, requires evaluation of tenured employees under State Board of Education
guidelines which Mr. Johnson claims was not done. Since he was not evaluated, Mr. Johnson
argues that the Board did not comply with other provisions regarding evaluation, such as
opportunity to respond. Article 8(A)(5) requires “definite positive assistance” to be provided
upon recognition of “professional difficulties,” which Mr. Johnson claims he did not receive.
Mr. Johnson claims Article (8)(B)(3) giving him access to his personnel file was violated
since he was informed his file had been lost when a previous principal left. Article 8(B)(4)
governing use of files provides as follows:
The Director of Schools shall not base any adverse action against an employee
upon materials which are not contained in such employee’s personnel or
evaluation file. Moreover, the Director of Schools shall not base any adverse
action against an employee upon materials which are contained in such
employee’s personnel or evaluation file unless the materials had been placed
in the file at the time of the incident giving rise to such materials and the
1
Specifically, the transfer provision states:
1. An involuntary transfer or reassignment may be made for administrative and/or disciplinary
reasons pursuant to TCA § 49-5-510.
2. Employees who have been involuntarily transferred or reassigned for administrative
reasons shall be given preference over those employees seeking voluntary transfers
when a vacancy is to be filled during the summer months, with the approval of the
receiving principal.
3. a. When transfer requests have been granted, teacher notification will
occur prior to notification of the Board.
b. Notice of a transfer or reassignment shall be given to an employee
prior to notification of the Board.
c. An involuntary transfer or reassignment shall be made only after
a meeting between the employee and the Director of Schools or his
designee, if said meeting is requested by the employee.
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employee had been notified at such time that such materials were placed in the
file.
According to Mr. Johnson, if a file had existed it “would have impacted the Director’s
decision” about his placement. Under Article 8(C)(1) of the Agreement, the director of
schools is to provide employees an “expected correction of deficiencies in writing, and shall
indicate a reasonable period of correction.” Mr. Johnson argues he received no such notice.
Mr. Johnson finally argues that the director of schools violated the Agreement since
he was transferred “without just cause.” Article 8(C)(3)(c) provides as follows:
a. No tenured employee shall be discharged, non-renewed, suspended,
disciplined, reprimanded, adversely evaluated, reduced in rank or
compensation, or deprived of any professional advantage without just cause.
In effect, Mr. Johnson argues that the problems with his personnel file and apparent
inaction in the face of what must have been perceived as “professional difficulties” as an
assistant principal removed any standing the director of schools may have had to reduce his
rank and pay by transferring him. Consequently, he argues, he was transferred without “just
cause.” We note that while Mr. Johnson was a tenured teacher, he did not enjoy tenure in his
administrative assignment. Tenn. Code Ann. § 49-5-501(11)(A).
In his grievance, for relief Mr. Johnson asked that either he “be made whole by paying
the amount due him as an administrator or place him in an administrative position of the
same rate of pay.” 2
2
Although it is not perfectly clear in the record, it appears that the transfer had the effect of reducing
Mr. Johnson’s pay. The grievance itself raises issues. For example, Mr. Johnson’s allegations are based in
large part upon his assertion that his transfer was due to performance - related issues and that procedures
set out in the Agreement applicable to performance - related actions were not followed. Part of this assertion
rests upon the provision in the Agreement that Mr. Johnson interprets as limiting involuntary transfers to
those made with “just cause.” Because state statute gives school system administrators broad authority to
make transfers for “the efficient operation of the system,” Tenn. Code Ann. § 49-5-510, there is a significant
question regarding the appropriate interpretation of any provision in a locally negotiated agreement that
purports to limit the grounds upon which a transfer can be made. Additionally, as the provision quoted in
footnote 1 makes clear, the Agreement itself allows involuntary transfers for reasons set out in Tenn. Code
Ann. § 49-5-510.
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II. I NTERVENING E VENTS
At the time this appeal was orally argued, counsel for the parties and this court were
aware that the Tennessee Supreme Court had granted permission to appeal in a case which
involved issues similar to those presented herein and might, therefore, be relevant to the
resolution of this case. The Court subsequently filed its opinion in that case, Lawrence
County Educ. Ass’n v. Lawrence County Bd. of Educ., 244 S.W.3d 302 (Tenn. 2007) and
thereafter denied a petition for rehearing that had been filed by the Education Association
and the teacher/coach.
In our review of the effect of the Lawrence County decision on this appeal, we
determined that the parties should be asked to submit additional briefs regarding two issues
that had not been addressed in the original briefing. Accordingly, we requested additional
briefing on: (1) whether the parties agreed to arbitration to resolve grievance disputes and/or
what kind of alternative dispute resolution procedure did they agree to follow, and (2)
whether an assistant principal is, or whether administrative duties performed by an assistant
principal are, included in the protections provided by the EPNA.
III. A GREEMENT TO A RBITRATE
In this court’s order regarding supplemental briefing, we asked the parties to address
the issue of whether the parties had actually agreed to resolve grievance disputes through
binding arbitration. Specifically, the order stated:
The . . . issue involves whether the parties agreed to a dispute resolution
process and, if so, what is that procedure. Under the Tenn. Code Ann. §§ 49-5-
602(1) and 49-5-601 et seq. the parties were authorized to include procedures
for final and binding arbitration of disputes arising under the agreement, but
such arbitration is not governed by Tennessee’s statutes on arbitration.
Parties may agree to resolve their disputes in any legal way they choose,
and they are not limited to formal methods of dispute resolution recognized
and defined by statute or rule. Instead, private parties may agree on “any
mutually satisfactory procedure that is not illegal or contrary to public policy.”
Team Design v. Gottlieb, 104 S.W.3d 512, 517 (Tenn. Ct. App. 2002). When
parties agree on how to resolve disputes, courts will generally require them to
follow their agreed upon procedures. Id. at 518.
...
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Determination of what the parties agreed to with regard to how to resolve disputes
under the Agreement is important in deciding how and whether some of the holdings of
Lawrence County Educ. Ass’n. apply herein. The arbitration agreed to in the master contract
at issue in Lawrence County was not binding arbitration. Instead, the arbitrator’s decision
was merely a recommendation to the board of education, thereby retaining to the board the
final decision, and the board in that case approved or accepted the arbitrator’s advisory
findings or recommendations. The school board’s approval of the remedies recommended
by the arbitrator was an important factor in the Supreme Court’s holding in Lawrence
County.3
Additionally, the appeal in this case is from an order declaring that the Board was not
required to submit to arbitration of Mr. Johnson’s grievance regarding his transfer.
Obviously, whether the parties effectively agreed to arbitration and how the parties agreed
to define that arbitration are relevant in our review of the trial court’s order. If there was no
enforceable agreement to arbitrate, then the Board could not be compelled to submit to
arbitration, and the trial court’s judgment must be affirmed.4
When parties litigate the effect of a purported agreement to settle disputes by
arbitration, the trial court must adjudicate whether the parties have a valid arbitration
agreement at all, as well as whether a concededly binding arbitration clause applies to a
certain type of controversy. Thompson v. Terminix Intern. Co., L.P., M2005-02708-COA-
R3-CV, 2006 WL 2380598, at *4 (Tenn. Ct. App. Aug. 16, 2006) (quoting Green Tree Fin.
Corp. v. Bazzle, 539 U.S. 444, 452 (2003)). The court must determine the validity of the
agreement before submitting the dispute to arbitration. Taylor v. Butler, 142 S.W.3d 277,
283 (Tenn.2004).
3
In affirming the trial court’s upholding of the arbitrator’s decision the Supreme Court stated that
the trial court’s ruling was due to unique circumstances, i.e., that the board of education had approved the
arbitrator’s recommendation. Thus, “the BOE, as the supreme authority within the local school system, gave
vitality to his claim by adopting the arbitrator’s interpretation.” 244 S.W.3d at 318. Clearly, a board
reserving the final decision to itself, as it did in the contract in the Lawrence County case , is substantively
different from a board delegating a final decision to an arbitrator who is not part of the local government
entity charged with operation of our public schools. See Cannon County Bd. of Educ. v. Wade, M2006-
02001-COA-R3-CV, 2008 WL 3069466, at *11-12 (perm. app. denied Feb. 17, 2009) (discussing the
Lawrence County holdings).
4
The Court of Appeals may affirm a judgment on different grounds from those relied on by the trial
court when the trial court reached the correct result. Continental Cas. Co. v. Smith, 720 S.W.2d 48, 50
(Tenn. 1986); Shutt v. Blount, 194 Tenn. 1, 8, 249 S.W.2d 904, 907 (1952); In re Estate of Jones, 183 S.W.3d
372, 378 n.4 (Tenn. Ct. App. 2005); Shoemake v. Omniquip Int’l, Inc., 152 S.W.3d 567, 577 (Tenn. Ct. App.
2003).
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“Arbitration is a consensual proceeding in which the parties select decision-makers
of their own choice and then voluntarily submit their disagreement to those decision-makers
for resolution in lieu of adjudicating the dispute in court.” Merrimack Mut. Fire Ins. Co. v.
Batts, 59 S.W.3d 142, 149 (Tenn.Ct.App.2001) (emphasis added). “[T]he scope of an
arbitrator’s authority is determined by the terms of the agreement between the parties which
includes the agreement of the parties to arbitrate the dispute.” D & E Const. Co., Inc. v.
Robert J. Denley Co., Inc., 38 S.W.3d 513, 518 (Tenn.2001) (internal quotation marks
omitted). “When the parties agree to arbitrate, they are bound by the terms of that arbitration
provision.” Id. But, “[b]ecause ‘[a]rbitration is a matter of contract[,] . . . a party cannot be
required to submit to arbitration any dispute which he has not agreed so to submit.’”
Rosenberg v. BlueCross BlueShield of Tennessee, Inc., 219 S.W.3d 892, 903 (Tenn .Ct.App.
2006) (quoting AT & T Techs., Inc. v. Communications Workers of Am., 475 U.S. 643, 648,
106 S.Ct. 1415, 89 L.Ed.2d 648 (1986)).
“Where the parties have agreed to be bound by the outcome of their agreed-upon
procedure, the courts will require them to accept the result by declining to try their dispute
de novo and by limiting the scope of judicial review of the outcome.” Team Design v.
Gottlieb, 104 S.W.3d at 517 (emphasis added). Parties indicate their intent to be bound by
the result from their agreed-upon dispute resolution by the language used in the agreement.
Id. at 517 n. 7.
Accordingly, a dispute over the enforceability of a provision addressing dispute
resolution “addresses itself primarily to the application of contract law.” Id. Likewise,
“[c]ourts should generally apply ‘ordinary state-law principles’ in deciding whether the
parties agreed to submit certain issues to arbitration.” Frizzell Const. Co., Inc. v. Gatlinburg,
LLC, 9 S.W.3d 79, 85 (Tenn.1999) (citation omitted); see also Taylor v. Butler, 142 S.W.3d
at 284; T.R. Mills Contractors, Inc. v. WRH Enters., LLC, 93 S.W.3d 861, 866-70
(Tenn.Ct.App.2002).
Whether the parties have agreed to be bound by the result of a dispute resolution
process in an agreement is simply a question of contract interpretation. The question of
interpretation of a contract is a question of law. Guiliano v. Cleo, Inc, 995 S.W.2d 88, 95
(Tenn. 1999). Our review of conclusions on questions of law is de novo, with no
presumption of correctness. Tenn. R. App. P. 13(d).
“The central tenet of contract construction is that the intent of the contracting parties
at the time of executing the agreement should govern.” Planters Gin Co. v. Fed. Compress
& Warehouse Co., Inc., 78 S.W.3d 885, 890 (Tenn. 2002). The purpose of interpreting a
written contract is to ascertain and give effect to the contracting parties’ intentions, and
where the parties have reduced their agreement to writing, their intentions are reflected in the
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contract itself. Id.; Frizzell Constr. Co. v. Gatlinburg, L.L.C., 9 S.W.3d at 85. “The intent
of the parties is presumed to be that specifically expressed in the body of the contract . . . .”
Planters Gin Co., 78 S.W.3d at 890. Therefore, the court’s role in resolving disputes
regarding the interpretation of a contract is to ascertain the intention of the parties based upon
the usual, natural, and ordinary meaning of the language used. Guiliano, 995 S.W.2d at 95;
Bob Pearsall Motors, Inc. v. Regal Chrysler-Plymouth Inc., 521 S.W.2d 578, 580 (Tenn.
1975). Where the language of the contract is clear and unambiguous, its literal meaning
controls the outcome of contract disputes Planters Gin Co., 78 S.W.3d at 890.
Where, however, a contractual provision is ambiguous, i.e., susceptible to more than
one reasonable interpretation, the parties’ intent cannot be determined by a literal
interpretation of the language. Planters Gin Co., 78 S.W.3d at 890. In that situation, courts
must resort to other rules of construction, and only if ambiguity remains after application of
the pertinent rules does the legal meaning of the contract become a question of fact. Id.Ambiguity exists in a contract when it is “of uncertain meaning and may be fairly understood
in more ways than one.” Farmers-Peoples Bank v. Clemmer, 519 S.W.2d 801, 805 (Tenn.
1975).
In the case before us, our request that the parties address what specific agreement they
may have had with regard to resolving disputes over grievances was triggered by the
language in the Agreement itself. The grievance procedure is found in Article 2 of the
Agreement. Step 1 of the grievance process involves a meeting with the employee’s
immediate supervisor; Step 2 involves review by the director of schools and a hearing; Step
3 is a review by the Board, including a hearing; Step 4 provides that, “[i]f dissatisfied with
the disposition of the grievance at step 3 . . . the Association may submit the grievance to
either (1) panel binding arbitration or (2) regular binding arbitration.” The Agreement
further describes the two types of arbitration, and the primary distinction between them is
whether the grievance is heard by a single person or by a panel.5
Both types of “binding arbitration,” however, are subject to provisions stating the
panel or the arbitrator “may recommend reinstatement, financial reimbursement, damages
and/or other remedies.” (emphasis added). The inconsistency between “binding
arbitration” and a “recommendation”, instead of an award, by the arbitrator is obvious.
5
Under paragraph 1 of Article 2, titled “Panel Binding Arbitration,” the selection of the members of
the three-member panel is set out. Under paragraph 2, titled “Regular Binding Arbitration,” the parties agreed
to request the American Arbitration Association to submit a panel, from which the parties will select an
arbitrator, according to specified selection procedures. There is no provision that the arbitration will be
conducted pursuant to AAA rules.
-8-
They are more than inconsistent; they are mutually exclusive. They cannot both be given
effect as defining the result of the final step in the grievance process.6
The Agreement itself does not contain any further description of the process to be
used, nor does it address the final decision-making authority regarding grievance disputes.7
In other words, the parties did not address the specifics of the dispute resolution method they
agreed to. While parties may agree on “any mutually satisfactory procedure” for resolving
disputes between them,”8 Team Design v. Gottlieb, 104 S.W.3d at 517, before courts will
require parties to submit to that procedure, it must be shown that an enforceable agreement
exists. The question raised by the language of the Agreement in the case before us is whether
the parties actually reached an agreement as to a procedure for resolving their disputes.
In the absence of contractual provisions describing the parties’ intent with regard to
the procedure to be used, we look to statutory provisions for aid in interpreting the
Agreement’s Step 4 language. Under the EPNA, a local board of education and a recognized
professional employees’ organization may include in an agreement “covering terms and
conditions of professional service . . . procedures for final and binding arbitration of such
disputes as may arise involving the interpretation, application, or violation of the agreement.”
Tenn. Code Ann. § 49-5-612(c) (emphasis added). That provision does not further describe
the procedures to be followed in any such “final and binding arbitration.” Its plain language
indicates that, if the parties agree to arbitrate disputes arising under an agreement, they are
to devise the procedures to be used and include them in the Agreement. This necessarily
6
Although the agreement in Lawrence County was interpreted as providing for an arbitrator’s
recommendation to the school board, we do not know the exact language of that agreement and, for example,
whether it also purported to provide for “binding” arbitration resulting in arbitrator’s recommendation. In
that case, the parties agreed that the arbitrator’s decision was advisory only, not binding, and subject to
approval or disapproval of the board.
7
The Agreement does not specifically state to whom the arbitrator’s recommendations are to be
made, but the Lawrence County opinion makes clear that the Tennessee Supreme Court believes that the local
school board has final authority on transfers and that any recommendations, therefore, are directed to the
board.
8
We are aware, of course, that the Board of Education is not a private party. Limitations, even
prohibitions, exist with regard to a governmental entity’s ability to agree to alternative dispute resolution.
While the specifically applicable statute permits the inclusion of “final and binding arbitration” in locally
negotiated agreements, that does not authorize the inclusion of any and every substantive term. See Cannon
County Bd. of Educ. v. Wade, 2008 WL 3069466, at *13 (holding that an arbitration provision in a locally
negotiated agreement could not be enforced or interpreted to give an arbitrator authority to decide to renew
a probationary teacher’s employment, which is a decision given by statute to local school officials).
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implies that there are no procedures that are to be generally applied without their being
spelled out in a particular agreement.
Another provision of the EPNA defines “arbitration” as “the process of determination
of disputed matters by submission to private unofficial persons selected for a purpose and in
a manner consistent with this part.”9 Tenn. Code Ann. § 49-5-602(1). That provision
continues, however, by stating “Arbitration under this part is not governed by the provisions
of title 29, chapter 5.” Id. Title 29, chapter 5 includes the statutory provisions governing
arbitration and, specifically, Tennessee’s version of the Uniform Arbitration Act, Tenn. Code
Ann. § 29-5-301 et. seq.10 Consequently, specific legislative language prevents recourse to
the Arbitration Act, or cases decided under that Act, to supply a definition of arbitration as
used in the Agreement herein, or to provide an understanding of the procedures that would
ordinarily apply.11
In the absence of a statutory guidelines or specific language in the Agreement, we
asked the parties to address the type of dispute resolution to be followed and whether there
was agreement to a specific procedure. In response, the parties have offered differing
interpretations of the language of the Agreement, even though they both insist that the Step
4 language is unambiguous.
The Association asserts that the parties expressly agreed to “binding arbitration,” and
that the use of the term “recommend” with regard to the arbitrator’s authority over remedies
was just inartful. A similar argument could be made, we believe, emphasizing the express
agreement that the arbitrator simply “recommend” a remedy, while characterizing the use of
the term “binding” as inartful. In other words, nothing in the language used in the
Agreement would suggest to us that one inconsistent term was mistakenly used or that the
other one embodied the parties’ intent.
9
This “part,” the Education Professional Negotiations Act, also includes the use of mediation and
fact-finding/advisory arbitration as part of the process of negotiation toward an agreement, Tenn. Code Ann.
§ 49-5-613(b), and describes the role and procedure for any such “arbitrator.” Tenn. Code Ann. § 49-5-
613(c). Therefore, we interpret the “selected for a purpose, and in a manner consistent with this part”
language as referring to the two different roles envisioned for persons called “arbitrators.”
10
In addition to establishing various rules regarding procedure used in arbitration, that Act contains
provisions governing court enforcement of arbitration agreements and court review of arbitration awards.
11
There is no basis for application of the Federal Arbitration Act, and neither party asserts such
application.
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The Association further argues that it is not reasonable to believe that a grieving party
“would commit to pay the expenses of an arbitrator for a purely advisory award that the
Board, having already rejected the grievance at Step 3, could simply disregard.” 12 The
conclusion we are to reach from that assertion is that it would be an unreasonable
interpretation of the Agreement to hold that the parties agreed to a procedure that would
result in a third-party recommendation to the school board on any grievance dispute, because
the board is already included in Step 3 of the grievance process.
We cannot agree. First, this is apparently the procedure agreed to in Lawrence
County. In that case, the “arbitrator” made a recommendation to the school board, after a
hearing and as the final step after school board denial of the grievance. Hence, other parties
in similar situations have made just such an agreement. Second, the Tennessee Supreme
Court has recognized a procedure for non-binding arbitration, defining it as “a process in
which a neutral person or a panel, called an arbitrator or an arbitration panel, considers the
facts and arguments presented by the parties and renders a decision which is non-binding.”
Tenn. R. S. Ct. 31, Sec. 2(k).13
Finally, such a procedure recognizes the school board’s role, authority, and statutory
responsibilities as to certain personnel matters. See Cannon County Bd. of Educ. v. Wade,
2008 WL 3069466, at *6, *13 (holding that the statutory authorization to agree to arbitrate
does not authorize a local school board to delegate to an arbitrator all disputes regarding the
administration of the local school system and that “a locally negotiated agreement’s terms
cannot be interpreted or applied in a way to achieve a result that is outside the statutory
authority” and that contracts cannot change statue or be enforced to effectuate a result that
is contrary to statute); see also Lawrence County Educ. Ass’n. v. Lawrence County Bd. of
Educ. 244 S.W.3d at 318-19 (holding that a locally negotiated agreement cannot be
interpreted to give statutory dutes of a local school official to an arbitrator).
On the other hand, the Board herein argues that the provision in the Agreement
regarding “binding arbitration” does not comply with the statute allowing the inclusion in
such collective bargaining agreements of “final and binding arbitration.” Tenn. Code Ann.
§ 49-5-612(a). The Board further argues that the failure to use the language recommended
in the statute shows that the parties “did not intend that this [Step 4] would be the final step
12
The Board points out that the Agreement allows the Association to request arbitration, not an
individual grievant.
13
Rule 31 authorizes a trial court, with the consent of the parties, to order non-binding arbitration.
Tenn. R. S. Ct. 31, Sec. 21. However, Rule 31 only applies to court-annexed dispute resolution which is
triggered after a lawsuit is filed, so it does not apply to this case.
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in the [grievance] process.” The Board also asserts that use of the term “recommend” is not
inartful, but instead expresses the parties’ agreement since they did not use the statutory
language and chose specifically to use the term “recommend” in describing the dispute
resolution neutral’s authority as to remedies. Again, we cannot agree.
Each party urges an interpretation that ignores an express term in the Agreement’s
provision on dispute resolution. We find no basis in law, in the Agreement, or in any facts
in the record to ignore either term. Instead, we conclude that the parties did not actually
agree on the procedures for final resolution of disputes arising under the Agreement’s
grievance process. Tenn. Code Ann. § 49-5-612(c) (emphasis added). In other words, the
parties did not have a meeting of the minds on that issue.
A contract must result from a meeting of the minds of the parties and must be
sufficiently definite to be enforced. In re Estate of Haskins, 224 S.W.3d 675, 678 (Tenn.
Ct. App. 2006) (citing Johnson v. Central National Ins. Co. of Omaha , 356 S.W.2d 277, 281
(Tenn. 1961)). A contract must result from a meeting of the minds of the parties in mutual
assent to the terms. Staubach Retail Services-Southeast, LLC v. H.G. Hill Realty Co., 160
S.W.3d 521, 524 (Tenn. 2005); Doe v. HCA Health Servs. of Tenn., Inc., 46 S.W.3d 191, 196
(Tenn. 2001). As explained by our Supreme Court:
A contract “‘must result from a meeting of the minds of the parties in mutual
assent to the terms, must be based upon a sufficient consideration, free from
fraud or undue influence, not against public policy and sufficiently definite to
be enforced.’” Higgins v. Oil, Chem., and Atomic Workers Int'l Union, Local
# 3-677, 811 S.W.2d 875, 879 (Tenn.1991) (quoting Johnson v. Central Nat'l
Ins. Co. of Omaha, 210 Tenn. 24, 34-35, 356 S.W.2d 277, 281 (Tenn.1962)
(citations omitted)). Indefiniteness regarding an essential element of a contract
“may prevent the creation of an enforceable contract.” Jamestowne On Signal,
Inc. v. First Fed. Sav. & Loan Ass'n, 807 S.W.2d 559, 565 (Tenn. Ct.
App.1990) (citing Hansen v. Snell, 11 Utah 2d 64, 354 P.2d 1070 (1960)). A
contract “ ‘must be of sufficient explicitness so that a court can perceive what
are the respective obligations of the parties.’” Higgins, 811 S.W.2d at 880
(quoting Soar v. National Football League Players' Ass'n, 550 F.2d 1287,
1290 (1st Cir.1977)); see also Restatement (Second) of Contracts § 33(2)
(1981) (“The terms of a contract are reasonably certain if they provide a basis
for determining the existence of a breach and for giving an appropriate
remedy.”)
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Doe v. HCA Health Services of Tennessee, Inc., 46 S.W.3d at196. Without any “meeting of
the minds of the parties in mutual assent to the terms . . . ,” there can be no enforceable
contract. Id.
Because the parties did not reach a meeting of the minds with regard to the procedures
that would result in a final resolution of disputes relating to grievances under the locally
negotiated agreement herein, we affirm the trial court’s judgment declaring that the Wilson
County Board of Education was not required to submit Mr. Johnson’s grievance to an
arbitrator.
C ONCLUSION
We affirm the judgment of the trial court. Costs of this appeal are to be divided
equally between the appellants, as a group, and the appellee.
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PATRICIA J. COTTRELL, JUDGE
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