Lee Academy Board of Trustees v. Lee Academy Educ. Assoc., reversing 87-UD-05,
aff'd CV-87-338 and 556 A.2d 218 (Me. 1989). STATE OF MAINE MAINE LABOR RELATIONS BOARD Case No. 87-A-07 Issued: August 17, 1997 ____________________________________ ) LEE ACADEMY BOARD OF TRUSTEES, ) ) Appellant, ) ) v. ) DECISION AND ORDER ) LEE ACADEMY EDUCATION ASSOCIATION/ ) MTA/NEA, ) ) Appellee. ) ____________________________________) Pursuant to 26 M.R.S.A. 968(4) (Pamph. 1986) and in accordance with Maine Labor Relations Board (Board) Unit Determination Rule 1.10, this appeal was commenced on April 29, 1987, when Linda D. McGill, attorney for the Lee Academy Board of Trustees (Academy), filed a notice of appeal of a Hearing Examiner's Jurisdictional Decision (Decision) issued on April 14, 1987. In that Decision the Hearing Examiner determined the Academy to be a "public employer" within the meaning of 26 M.R.S.A. 962(7) (Pamph. 1986). In the proceeding before the Hearing Examiner the Lee Academy Education Association/MTA/NEA (Association) contended that the Academy is the public employer of the employees whose classifications comprise a sought-after Academy unit contended to be appropriate for the pur- poses of collective bargaining by the Association. The Association's sought-after unit is described as including all Teachers (including half-time teachers), the Athletic Director, Department Heads, the Business Secretary, the Assistant Treasurer, the Assistant Head Master, Dormitory parents, and the Library Aide. The Academy opposed the Association's petition before the Hearing Examiner on the basis of its contention that the Academy is not a public employer. With the consent of the parties, the Hearing Examiner bifurcated the proceeding and received evidence solely on the jurisdictional issue of public employer status. [-1-] ______________________________________________________________________ The Academy contends in this appeal that the Hearing Examiner omitted certain relevant facts and failed to consider those facts in reaching his decision.[fn]1 The Academy contends that the Hearing Examiner erred in finding certain facts, including but not limited to the finding that Maine School Administrative District Number 30 (MSAD 30) exercises control over Lee Academy's activities through Lee Academy's Board of Directors, and erred in concluding as a matter of law that the Academy is a public employer. The Academy also takes issue with the Hearing Examiner's finding that the Academy's motion for dismissal, for petitioner's alleged failure to carry its jurisdic- tional burden of proof, was appropriately deemed withdrawn. The Academy renewed this request by way of a motion in the nature of a motion for directed verdict made during the appeal proceeding. The Association's contentions on appeal are that it amply demon- strated the Academy's public employer status and MSAD 30 control before the Hearing Examiner and that a conclusion of control by MSAD 30 is compelled by the fact that all of the Academy's Directors and about half of the Academy's Trustees are from towns within MSAD 30. Hearing of this appeal was convened on June 10, 1987, in Augusta, Maine, before the Maine Labor Relations Board consisting of Edward S. Godfrey, presiding, Thacher E. Turner, Employer Representative, and Vendean V. Vafiades, Alternate Employee Representative. As in the proceeding below, the Association and the Academy are represented in this appeal, respectively, by MTA/NEA District Affiliate Service Director Elmer S. "Buddy" Pinkham and Attorney Linda D. McGill. The Association presented no witnesses. The Academy elicited the testi- mony of only Herbert C. Haynes, the current Chairman of both the Board of Directors of Lee Academy and the Academy's Investment Committee. _______________ 1 The overwhelming majority of these purportedly omitted facts were put into evidence by way of the Association's stipulations to all but one of the Academy's proposed additional findings. The proposed finding which was rejected by the Association was established by way of testimony. -2- ______________________________________________________________________ JURISDICTION The jurisdiction of the Board to hear and decide this appeal is conferred by 26 M.R.S.A. 968(4) (Pamph. 1986). Neither party has contested the Board's jurisdiction to determine whether Lee Academy is a public employer within the meaning of the Municipal Public Employees Labor Relations Law (MPELRL). FINDINGS OF FACT The Academy takes exception to a number of the factual findings made by the Hearing Examiner. The first of these is the Academy's objection that the Hearing Examiner erroneously found in numbered paragraph eight that the Lee Academy Board of Directors serves as the Board's Financing Committee and manages the Academy's Endowment Fund. The Academy offered no sworn testimony to support this exception. It is therefore denied. The second of the Academy's exceptions pertains to finding of fact paragraph eleven. The Association and the Academy stipulated during the appeal hearing that this paragraph be modified to state that "the Academy is a member of both the National and Maine Associations of Independent Schools and is accredited by the New England Association of Schools and Colleges." By permitting this modification we resolve the Academy's second exception. The Academy's third exception, acquiesced in by the Association, requests numbered fact paragraph fifteen be modified to state both that the Maine Department of Educational and Cultural Services (DECS) was not a party to the negotiation of the contract between MSAD 30 and the Academy, and that the DECS merely reviewed and approved that contract. Finally, the Academy objects that numbered fact paragraph sixteen should contain the additional finding that the DECS has opined that under current general law MSAD 30 may contract with any public or private secondary school approved for tuition purposes. The record does not contain a substantive objection to this exception; therefore, it and the unopposed exceptions two and three above are hereby granted and the record modified, accordingly. During their discussions of proposed additional findings, the parties stipulated to the following modifications of the Hearing -3- ______________________________________________________________________ Examiner's findings of fact contained in numbered paragraph six: 6. Subject only to applicable requirements of law the board of trustees has full authority either directly or by appro- priate delegation to manage the affairs of the Academy in- cluding the power to take the following actions: purchasing and selling realty, incurring debt, hiring and firing all employees including the head master and the faculty, manag- ing endowment funds, approving the budget, determining per- sonnel policies and staff salaries, determining curriculum options, establishing grade requirements, determining extra- curricular activities, class schedules and class size, and maintaining the physical plant. The parties did not otherwise contest the Hearing Examiner's findings of fact contained in numbered paragraphs one through thirty-one of the Jurisdictional Decision. The findings of fact made by the Hearing Examiner which have not been objected to by the parties and finding of fact paragraphs six, eight, fifteen and sixteen, as modified, are incorporated in and made a part of this decision and order. The following stipulated additional findings of fact were arrived at through the salutary efforts of the parties prior to going on the record in the appeal: 32. The number of students enrolled at Lee Academy for the school year 1986-87 is approximately two hundred and twenty- five (225). 33. Lee Academy has grades nine through twelve. 34. The chair of MSAD 30 was made a trustee of the Academy according to the Academy's revised By-Laws of 1976. 35. The chair of MSAD 30 was made an ex officio voting member of the board of directors of the Academy according to the Academy's revised By-Laws of 1983. 37. No MSAD 30 chair has, so far, been an officer of the board of trustees or the board of directors during his coterminous term. 38. The second MSAD 30 trustee has, so far, never been an officer of the board of trustees or the board of directors of Lee Academy. 39. The addition of the MSAD 30 chair and the second representative of the MSAD to the Academy's boards was initiated by the trustees of the Academy for the purpose of improving relations with the MSAD. -4- ______________________________________________________________________ 40. The Academy's 1986-87 students fall into three general groups: The first group is comprised of students from MSAD 30 and constitutes approximately forty-two (42) percent of the student body. The second group of students comprising fifty-six (56) percent is from surrounding towns other than those from areas comprised within MSAD 30. The third group of students, about two (2) percent, are inter- national students. 40A. Except for the international students at least eighty (80) percent of the tuition of students at Lee Academy is funded with public funds. 41. The Academy recruits students from the surrounding towns through the use of teams of students, faculty and administration. 42. Lee Academy competes with four public schools for students from the surrounding towns of East Grand, Woodland, Calais and Eastport. 43. Tuition at the Academy for all but the international students is set by state law, while room and board charges are set by the trustees.[fn][2] 43A. Approximately forty-five (45) to fifty (50) students resided in the Lee Academy dormitories during the 1986-87 school year. Based upon the testimony adduced at the appeal proceeding we make the following three additional findings of fact: 44. The Board of Directors is presently composed of indi- viduals who reside in the MSAD 30 towns of Winn, Lee and Springfield. The Chairman of MSAD 30 is not the Chairman of the Academy's Board of Directors. 45. Members of the Board of Directors are chosen from the Academy's Trustees based on their activity on the Board of Trustees and the distance they must travel to Board meetings. 46. The money to fund full-time Migrant tutors comes from the Department of Educational and Cultural services through S.A.D. 30 to the Academy. The following finding of fact proposed by the Academy was rejected by the Association: 36. The weight given to opinions, votes or actions by the MSAD chair and/or the second MSAD member is no differ- _______________ 2 See 20-A M.R.S.A. 5806 (1983). -5- ______________________________________________________________________ ent from that given to any other trustee or director by the other trustees and the other directors, respectively. We have, as is more specifically explained hereinafter, considered the issue raised by this finding and based upon the record as a whole make the following finding of fact, numbered: 36. The influence exercised by MSAD 30's ex officio members of Lee Academy Boards has not been greater than that of any other Lee Academy Board member. DISCUSSION Lee Academy is a "private school" within the meaning of chapter 117 of the Maine Education Law, title 20-A of the Maine Revised Statutes Annotated, and is operated subject to the provisions of that chapter. The Municipal Law defines the term "public employer" as "any officer, board, commission, council, committee or other persons or body acting on behalf of any municipality or town or any subdivision thereof, or of any school, water, sewer or other district, or of the Maine Turnpike Authority, or of any county or any subdivisions thereof." 26 M.R.S.A. 962(7) (Pamph. 1986). We agree with the Hearing Examiner's conclusion that the Academy is not, itself, a School District or public employer within the meaning of the Municipal Law, even though it performs most of the educational functions that would be performed by a public high school. We disagree, however, with the Hearing Examiner's conclusion that the Academy acts "on behalf of" public employers within the meaning of the Municipal Law. We are persuaded that the Academy is correct in its assertion that it is not a "public employer" within the meaning of 26 M.R.S.A. 962(7) (Pamph. 1986), as that term has been interpreted by the Supreme Judicial Court in Baker Bus Service, Inc. v. Keith, 416 A.2d 727 (Me. 1990). Upon consideration we find that the Academy is neither a public entity nor "subject to [any public entity's] control or right to control. Id., at 730. The Hearing Examiner found that the existence and terms of a contract for the exclusive provision of educational services to the -6- ______________________________________________________________________ overwhelming majority of MSAD 30's secondary students suggests the right of MSAD 30 to control the Academy's performance thereunder. The Hearing Examiner also found that the Academy receives an overwhelming majority of its operating revenues from public sources and would be unable "to continue its operations at present levels without the public employer funds which it currently receives." In light of these findings and in light ot his further finding that MSAD 30 and other "sending units" exercise control over the Academy through their representation on the Academy's governing bodies, the Hearing Examiner concluded that the high degree of financial support by public employers and the representation of public employers on the Academy's governing bodies establish "that the Academy is subject to the public employers' 'right to control,' under the Baker Bus test and [that it] is, therefore, a public employer, within the meaning of the [MPELRL]." More specifically, the Hearing Examiner states at page fifteen of his report that: Third and most significant is the fact that the S.A.D. and other "sending units" exercise control over the Academy's activities through their representation on the Academy's governing bodies. The Chairman and one other member of the S.A.D. Board of Directors are, by virtue of the Academy Trustees' By-Laws, members of the Academy Board of Trustees and the Chairman is a member of the Academy Board of Directors. The Academy Trustees' By-Laws also provide that, where possible, each "sending unit" having 5 or more students enrolled at the Academy should have at least one representative on the Academy Board of Trustees. The Academy Board of Trustees has de jure authority to operate the enterprise, to hire and fire employees, to set their wage rates, and to establish personnel policies; however, unlike the situations in Fox Islands and Erskine Academy, the public employers involved are represented with full voting rights of [sic] the Academy boards. Although no evidence was presented that such public employer represen- tatives exercise majority control on either of the Academy's governing bodies, the Academy's heavy reliance on the tuition payments and related subsidies tends to amplify the public employers' voices on the Academy boards. Although the above-quoted statements by the Hearing Examiner con- cerning the "amplification" of the degree of control exercised by MSAD 30's ex officio members of Lee's Academy's governing boards appear in the discussion rather than in the findings of fact section of the -7- ______________________________________________________________________ Jurisdictional Decision, they are more in the nature of findings of fact and we have reviewed them as such. Contrary to the Hearing Examiner's determination we find that the record below does not sup- port more than a "potential" for control based upon fiscal con- siderations, and that the Association has not met its jurisdictional burden of proving actual "control or right to control" under the stan- dard announced in Baker Bus Services, Inc. v. Keith, 416 A.2d 727 (Me. 1980). There was absolutely no evidence offered before the Hearing Examiner or the Board to establish, by way of voting history of the Academy's Boards or otherwise, the subservience of the Board of Trustees or Directors of Lee Academy to the will of MSAD 30 or any other public employer. Throughout the Appeal the petitioner stead- fastly maintained that the MSAD 30 members of Lee Academy's Boards exercised no greater control in the Academy's affairs than any fellow Academy Board member. The only evidence pertinent to the relative influence of individual members of the Lee governing boards was the testimony of Academy Board of Directors' Chairman Haynes, which establishes that Lee's Board members exercise their own personal judgment and not the judgment of any public employer constituency in the conduct of the affairs of Lee's Boards. The record similarly fails to show significant participation in the direction of the Academy's operations by the MSAD 30 Superintendent or any other official of any public employer. Finally, the mere existence of a contract whose terms do not suggest the right of control is not probative of the existence of the "agent-servant" as opposed to the "agent-independent contractor" rela- tionship. We find no provisions in the instant parties' contract which tend to establish a right of control by MSAD 30 over the Academy's operations. Moreover, we do not construe that portion of the parties' contract which provides that the contract be "reviewed annually at a combined meeting of the Directors of MSAD #30 and Lee Academy with needed changes being made by mutual consent" as establishing a "joint committee," within the meaning of 20-A M.R.S.A. 2703(1)(B) (1983), possessing the power and duties set forth -8- ______________________________________________________________________ in 20-A M.R.S.A. 2704 (1964 & Supp. 1986). We are well aware that the "agent-servant" relationship in the enterprises of transportation and education must necessarily be established by widely divergent factual circumstances. However, the requirement of proof of actual control or right to control by the pro- ponent of public employer status remains unchanged. The Association has not met its burden of establishing that the Academy is either a public employer or "acting on behalf of" a public employer within the meaning of the Municipal Public Employees Labor Relations Law. We are deciding this case on the basis of the evidence before us relating to the control of Lee Academy's affairs by MSAD 30. We express no opin- ion about the status of private schools in general for purposes of the applicability of the MPELRL. ORDER On the basis of the foregoing discussion and by virtue of and pursuant to the powers granted to the Maine Labor Relations. Board by 26 M.R.S.A 968(4) (Pamph. 1986), it is hereby ordered that the appeal of the Lee Academy Board of Trustees filed April 29, 1987, be GRANTED and that the petition of the Lee Academy Education Associa- tion/MTA/NEA, filed December 1, 1986, be DISMISSED. Dated at Augusta, Maine, this 17th day of August, 1987. The parties are hereby MAINE LABOR RELATIONS BOARD advised of their right, pursuant to 26 M.R.S.A. 968(4) (Pamph. 1986), to seek review of this /s/____________________________ decision and order by Edward S. Godfrey the Superior Court. Chairman To initiate such a review an appealling party must both file a complaint with the /s/____________________________ Superior Court within Thacher E. Turner fifteen (15) days of the Employer Representative date of issuance hereof, and otherwise comply with the requirements of Rule 80B of the Maine Rules of Civil Procedure. -9- _____________________________________________________________________ _ Alternate Employee Representative Vendean V. Vafiades filed a separate dissenting opinion. OPINION I respectfully dissent from the majority in this case, because it is my opinion that Lee Academy clearly acts on behalf of MSAD 30 and other municipalities or towns which send public tuition secondary stu- dents to the Academy, within the meaning of 26 M.R.S.A. Section 962(7) (Pamph. 1986). My conclusion is reached by consideration of the stan- dards set forth in Baker Bus Service, Inc. v. Keith, 416 A.2d 727, 730 (Me. 1980), their particular application to school systems and the importance of fostering the sound public policy of promoting stable labor relations upon which the Maine Municipal Public Employees Labor Relations Law (Municipal Law) is based. I. Lee Academy clearly operates as the "alter ego" of MSAD 30, within the contemplation of the standards set out in Baker Bus, by providing educational services to the overwhelming majority of secon- dary school students within MSAD 30. To accept publicly funded tuition students, a private school must be approved for tuition pur- poses under state law. See 20-A M.R.S.A. 2951 (1983 & Supp. 1986). A private school receiving public tuition funds must meet various state requirements such as: providing instruction in specific sub- jects and instruction based on a basic curriculum, employing certified teachers, meeting certain standards for length of the school day, pro- viding for a minimum school year, etc. See 20-A M.R.S.A. 2901, 2902 (1983 & Supp. 1986). State law allows school administrative districts such as MSAD 30 to contract with a private school when the SAD itself does not offer a secondary school education. Any such contracts are required to include a provision specifying the duration of the contract from two to ten years and are required to be ratified by a majority vote of each of the governing bodies that are party to the contract and be approved by the Commissioner of Education. See -10- ______________________________________________________________________ 20-A M.R.S.A. 2703 (1983 & Supp. 1986). Such a contract may establish a joint committee if the receiving school is a private school. See 20-A M.R.S.A. 2703(1)(B) (1983). MSAD 30 and Lee Academy have such a contract and this contract requires all secondary MSAD 30 students to attend Lee Academy except upon satisfaction of either of the two limited conditions of: a lack of program of interest not offered at the Academy or extraordinary circumstances for the request. Any such exception must be approved by the majority vote of each governing body. (See Hearing Examiner's Finding of Fact paragraph eighteen). Such an exception has been made only two or three times since 1983, the date of the first contract. The contract requires that the directors of MSAD 30 and Lee Academy meet jointly once a year to review and make changes to the contract. In fact, the two boards meet at least twice annually to discuss school issues and at these meetings they are functioning as a joint committee for the purposes of 20-A M.R.S.A. 2704 (1983 & Supp. 1986). Thus, they have the authority to select and employ teachers, fix their salaries, determine the course of study, and make other educational policy decisions. In fact, some educational decision-making does take place in these meetings. The Lee Academy By-Laws require represen- tation by the MSAD 30 School Board Chairman on the Academy Board of Directors and require another MSAD 30 Board member to serve, along with the MSAD 30 Chairman, on the Academy Board of Trustees. Other public "sending units" are represented on the Board of Trustees when they have five or more students at Lee. This representation by board members and sending units demonstrates the meaningful input afforded public school representatives regarding the ultimate managerial decision-making made by and the educational program provided at Lee Academy. A total of seventy-two percent of the Academy's operating budget is derived from public tuition and up to eighty-five percent of its total budget comes from public funds. MSAD 30 transports its own stu- dents to the Academy and both the Academy's full-time Migrant Teacher Program, which is funded through MSAD 30, and the Academy's special education services are paid for with public dollars. A full ninety- eight percent of the Academy's student body is made up of students who -11- ______________________________________________________________________ come from MSAD 30 and surrounding towns. There is no doubt that the Academy is operating as the "alter ego" of MSAD 30 and surrounding towns, by accepting public tuition and providing public education to these students. Through State regula- tion, contractual relationship, and financial arrangements the educa- tional opportunities offered at Lee Academy are under the significant control of the "sending unit" municipalities, MSAD 30 and the State. Because Lee Academy operates and educates in no distinctly different manner than other public schools and operates on behalf of MSAD 30 and surrounding towns it is clearly within the definition of the term "public employer" contained in the Municipal Public Employees Labor Relations Law. II. To operate as an approved private school and be eligible for accepting public tuition, the Academy must meet substantive educa- tional requirements, employ certified teachers and comply with reporting responsibilities and necessary health and safety regulations established by State law. Certainly the State has enacted these per- vasive requirements because of the high degree of public trust that is vested in institutions established for the purpose of educating our children. It flies in the face of sound public policy that the legislature would pass such strict requirements for the education of students and allow the same institution to evade the jurisdiction of the Municipal Public Employees Labor Relations Law. The public has a significant interest in assuring that there are stable labor relations in its public schools. Teachers' strikes threaten the fundamental learning process. Employment of the collec- tive bargaining process brings order to labor relations and fosters a sound educational environment where the energy of the administra- tors and teachers are rightfully focused on their responsibility to students. The public-tuition-funded students attending Lee Academy deserve a peaceful educational environment in which to learn. Stable labor relations are a crucial component to achieving this goal. -12- ______________________________________________________________________ Lee Academy is the agent and alter ego of the towns from which it accepts tuition students and should not be allowed to evade the intent and protection afforded by the Maine Municipal Public Employees Labor Relations Law. Dated at Augusta, Maine, this 14th day of August, 1987. MAINE LABOR RELATIONS BOARD _________________________________ Vendean V. Vafiades Alternate Employee Representative -13- _____________________________________________________________________