The International Association of Machinists and Aerospace 
Workers, District Lodge 4, Local Lodge 559 ("Union" or 
"Machinists Union") filed this prohibited practice complaint   
on August 28, 2014, against the Town of Madison, alleging that 
the Town violated 26 MRSA §964(1)(E) of the Municipal Public 
Employee Labor Relations Law ("Act").  Specifically, the 
complaint alleges that the Town failed to bargain in good faith 
by refusing to grant customary annual wage increases while the 
first contract with the Machinists Union was being negotiated.
  
    An evidentiary hearing was held on January 15, 2015.  
Grand Lodge Representative David Lowell represented the 
Machinists Union and Matthew Tarasevich, Esq., represented the 
Town of Madison.  Both parties were able to examine and cross-
examine witnesses, to offer documentary evidence at the hearing, 
and to submit written argument.  Chair Katharine I. Rand 
presided at the hearing, with Employer Representative Christine 
Riendeau and Employee Representative Robert L. Piccone serving 
as the other two members of the Board.  The parties' post-


[end of page 1]


hearing briefs were both filed by March 13, 2015, and the Board 
deliberated this matter on April 8, 2015.


                           JURISDICTION
 
     The International Association of Machinists and Aerospace 
Workers, District Lodge 4, Local Lodge 559, is a bargaining 
agent within the meaning of 26 MRSA §962(2), and the Town of 
Madison is the public employer within the meaning of 26 MRSA 
§962(7).  The jurisdiction of the Board to hear this case and to 
render a decision and order lies in 26 MRSA §968(5). 
 
                              FACTS

1.  District Lodge 4 of the Machinists Union was recognized as 
    the bargaining agent of administrative employees of the Town 
    of Madison on March 5, 2014.  Mr. George Edwards, a business 
    agent for the Machinists, had been the lead negotiator for 
    the administrative employees? bargaining unit at all times 
    relevant to this complaint.
 
2.  Madison had given its employees a wage increase on July 1 
    every year for at least 13 years, with the exception of one 
    year.  While these increases were generally referred to as 
    "COLA" increases, they were not COLA's in the sense of being 
    tied to the consumer price index or other figures published 
    by the U.S. Bureau of Labor Statistics.  The "COLA's" 
    provided by the Town of Madison were the only across-the-
    board wage increases provided to its employees.  Longevity 
    pay increases had also been provided to employees upon 
    reaching specified milestones of service.

3.  Mr. Jack Ducharme, Vice Chair of Madison's Board of 


[end of page 2]


    Selectman, is currently serving as the Acting Town Manager.  
    Mr. Ducharme described the process for determining the annual 
    raise as:  Early in the spring of each year, the Town Manager 
    looks at what the economic conditions are in the area, what 
    other towns are offering for raises, what circumstances the 
    Town is in with respect to the budget, what the Town must do, 
    and other matters affecting the Town finances.  The Town 
    Manager then brings to the Board of Selectmen a proposal for 
    a wage increase for the town employees.  The Board of 
    Selectmen reviews that proposal to determine whether to 
    accept it or not, depending on their assessment of the 
    circumstances in Town and what the taxpayers can afford.
  
4.  Ms. Nancy Gove, a Town employee who provided clerical support 
    to the Town Manager for the past 10 years, was responsible 
    for preparing budgetary spreadsheets that he used in 
    preparing the budget every year.  The spreadsheet was 
    developed by taking the wages as of the end of the fiscal 
    year, adding the proposed cost-of-living adjustment, adding 
    any longevity increases due and any other pay increase.[fn]1  
    These final figures in the spreadsheet show the pay increases 
    for each individual, and can be identified by that person's 
    initials.
  
5.  For FY 2014-15, the Town followed the same practice for 
    determining wage increases.  As part of the budget, the Board 
    of Selectmen approved a 2% ?COLA? wage increase for all 
    employees.  The wage increase was provided to the 

[fn]1 She mentioned "merit or other pay increase," but it did not appear 
that she meant there was some formal or informal process for granting 
merit increases.  Given that there was nothing in the record even 
suggesting merit awards, perhaps she was referring to wage adjustments 
due to changed job duties.


[end of page 3]


     unrepresented employees, but not to the employees in the 
     administrative bargaining unit.
  
6.  There was no testimony or evidence showing the specific 
    amount of wage increases provided to employees historically, 
    although it was undisputed that the increases varied in 
    amount and an increase had been provided every year except 
    2010.  George Edwards did not have specific figures, but 
    painted a general picture by stating that the increases had 
    been "a 2 %, a 1.5, a 3 %" increase.
 
7.  In 2010, prior to the Machinists becoming the bargaining 
    agent for two units of Town employees, the employees received 
    no wage increase.  Ms. Maddie Pierce, one of the employees in 
    the administrative unit, testified that the Town was 
    considering a budget that provided a wage increase, but also 
    included an increase in the employee contribution to the 
    costs of health insurance.  A group of unrepresented 
    employees met with the Town Manager and the Board of 
    Selectmen and requested that health insurance costs be 
    maintained at the current level in lieu of a wage increase.[fn]2  
    This request was granted, so the amount of wage increase for 
    that year was 0%.
   
8.  The Town of Madison Personnel Policy is a 23-page document 
    specifying various policies under the general categories of 
    employment practices; employee benefits; hiring, promoting, 
    exiting requirements; and employee development.  These 
    policies do not include any provision on annual wage or 
    "COLA" increases.

[fn]2 Ms. Pierce testified that prior to unionizing, the employees had the 
opportunity to sit down with the Select Board and the Town Manager and 
present their requests.


[end of page 4]


9.  Two of the policies contained in the Town's Personnel 
    Policies were amended by a vote of the Board of Selectmen on 
    January 12, 2015.  The health insurance policy was changed to 
    increase the employee?s contribution toward the costs of 
    family coverage from 15% to 25%.  The longevity payment was 
    changed from a percentage increase in the employee's base 
    wage to a lump sum payment of $1000.00 at the specific 
    service milestones.  The employees in the administrative 
    bargaining unit have continued to receive the level of 
    benefits described in the Personnel Policy that was in effect 
    in March of 2014, when the Union was recognized as the unit's 
    bargaining agent.

10. The Union and the Town held their first negotiating meeting 
    for their initial collective bargaining agreement on July 8, 
    2014.  Mr. Edwards testified that he made clear to the Town's 
    negotiating team both during the negotiation session and in a 
    side conversation in a different room that the Union's 
    position was the status quo must be maintained while the 
    parties were negotiating.  Mr. Rick Gilley, another business 
    agent for the Union since April of 2014, and Ms. Pierce, a 
    member of the Union's negotiating team, both testified     
    Mr. Edwards brought up the issue of maintaining the status 
    quo during negotiations while both teams were present. 
 
11. Mr. Ducharme attended the first negotiating session as a 
    member of the Town's bargaining team.  He did not recall 
    discussion about the status quo regarding pay increases at 
    the initial bargaining meeting, but did recall such a 
    discussion with respect to health insurance.

12. The parties stipulated that no demand to maintain the status 
    quo with respect to wages was made in writing.


[end of page 5]


13. At this first negotiating session, the parties established  
    ground rules for their negotiations.  In addition, the Union 
    presented its initial bargaining proposal.  The Town did not 
    present a bargaining proposal to the Union or a counter-
    proposal at this bargaining session.


14. On August 27, 2014, the Town's attorney sent an email to 
    George Edwards with a marked-up copy of the agreement that 
    had been ratified by the Highway department unit, stating

      Here is the Town's proposal for Admin.  The town's 
      position is that we'd like to have the same contract 
      with Admin as we have with HW, particularly with regard 
      to COLA increases, health insurance and longevity, and 
      with changes that are appropriate for the Admin unit.  
      Your proposals at the initial Admin negotiation session 
      also generally tracked the HW CBA language, so it seems 
      we are both in agreement on format. Now that we've 
      gotten HW done, we hope that we can quickly move on 
      Admin.

      Here's what I propose. Please share this proposal with 
      your members. If they are agreeable to tracking the 
      highway CBA, perhaps you and I can get this done by 
      phone and email.  If you think a meeting is required, 
      please let me know and we'll look at our schedules, 
      maybe for later next week or the following week.
       
      I'm also sure you're aware of what happened with regard 
      to the valuation of the mill in Madison last week. I'm 
      not sure what the fallout of that is going to be yet, 
      but I've spoken with Dana and he tells me that regard-
      less of that the town would still like to offer the 
      admin employees the same deal as public works employees.

15. The "HW CBA" mentioned in the email from the Town's attorney 
    refers to the Highway Department collective bargaining 
    agreement that was settled sometime in June 2014.  The
    Machinists Union was the bargaining agent for that unit, and 
    the negotiations for their initial agreement took two or 
    three years.  During that period, the Town did not give the 


[end of page 6]


    highway unit employees annual wage increases.  Mr. Edwards, a 
    negotiator for this bargaining unit for over a year prior to 
    settlement,[fn]3 testified that the Town went back and forth at 
    the table on whether the pay increase would be retroactive.  
    Mr. Edwards testified that Union Representative Lowell came 
    into the negotiations for the Highway unit toward the end and 
    had an extensive back-and-forth exchange with the Town 
    Attorney on the status quo obligation.  The Town made it 
    clear that its position was that the obligation to maintain 
    the status quo did not include providing the annual wage 
    increase.  Mr. Edwards had considered filing a complaint with 
    the Board on the Town's failure to pay the wage increases 
    during negotiations, but decided against it as the parties 
    neared settlement.
  
16. The collective bargaining agreement ratified by the Town and 
    the Union acting as the bargaining agent for the Highway 
    Department was a 3-year contract with an effective date of 
    July 1, 2014.  For the first year of the agreement, that is, 
    for FY 2014-2015, the parties agreed to a 2% wage increase.  
    For health insurance, the Town continued to pay 100% of the 
    employee's coverage, but the employee contribution to family 
    coverage increased from 15% to 25% for the first year of the 
    agreement.  In addition, the longevity benefit was changed 
    from a percentage increase to the base wage to a lump sum 
    payment.
  
17. The collective bargaining agreement for the Highway unit 
    included retroactive payment of wage increases going back two 
    years: 2.5% for 2012-13 and 2% for 2013-14.  

[fn]3 The Union had a succession of different bargaining representatives 
covering this unit during the negotiation process.


[end of page 7]


18. The Town Attorney's email of August 27, 2014, referred to the 
    mill devaluation that occurred on August 11, 2014.  The $150 
    million devaluation of the Madison Paper Industries mill 
    expected to result in a $2.5 million drop in revenues.  The 
    Town had passed its budget prior to the mill?s devaluation, 
    so the Board has had to cut capital purchases and other 
    expenses as much as they can and draw from the Town's surplus 
    in order to maintain the level of services that the voters 
    approved in the budget.  More recently, there was an 
    announcement on January 13, 2015, that the mill would be 
    laying off 150 employees for at least a two-week period.
  
19. Attached to the Town Attorney's email of August 27, 2014, was 
    a copy of the final contract for the highway department 
    employees that the attorney had marked up to indicate the 
    Town's proposed collective bargaining agreement for the 
    administrative unit.  In addition to the changes to the 
    health insurance and longevity benefit, the Town's proposal 
    included the payment of the 2% wage increase retroactive to 
    July 1, 2014.

  
                              DISCUSSION

     The statutory duty to bargain requires the employer and the 
bargaining agent to negotiate in good faith with respect to the 
mandatory subjects of bargaining, that is, wages, hours, working 
conditions and contract grievance arbitration.  26 MRSA §965(1).  
A public employer's unilateral change in a mandatory subject of 
bargaining "is a circumvention of the duty to negotiate which 
frustrates the objectives of [the Act] much as does a flat 
refusal."  See, e.g., Local 2303, IAFF, AFL-CIO-CLC v. City of 
Gardiner, No. 05-03, at 4 (March 22, 2005), quoting NLRB v. 
Katz, 369 U.S. 736, 743 (1962).  Consequently, once a bargaining 

      
[end of page 8]

      
agent is certified or recognized as the representative of the 
employees in a bargaining unit, the employer is required to 
maintain the status quo with respect to the mandatory subjects 
of bargaining until an agreement is reached or the parties reach 
bona fide impasse.  This principle applies whether a change to 
the status quo would be adverse or beneficial to the employee.  
See, e.g., AFSCME v. Bangor Water District, No. 81-46, at 3 
(July 2, 1981), citing NLRB v. Katz, 369 U.S. 736, 745-746 
(1962).  Because a unilateral change is a circumvention of the 
duty to bargain, it is a per se violation of the duty to 
bargain, without regard to motivation.  See, e.g., Teamsters v. 
Bucksport School Dep?t, No. 81-18, at 5 (Dec. 22, 1980).
        
     In this case, the parties are bargaining for their initial 
collective bargaining agreement.  The question presented is 
whether the Employer violated the Act by granting a 2% wage 
increase to Town employees on July 1, 2014, while not providing 
the increase to employees in the administrative employee 
bargaining unit.  The Employer argues that its obligation to 
maintain the status quo meant it could not unilaterally increase 
the wages of the bargaining unit employees; the Union argues 
that the obligation to maintain the status quo means the 
employer must continue to grant wage increases that had been 
regularly and customarily given for years.  
       
     This Board has always held that the status quo that must be 
maintained while negotiating an initial collective bargaining 
agreement includes the continuation of wage increases if such 
increases are the result of a well-established practice.  In the 
present case, the parties were attempting to negotiate their 
first contract.  The legal analysis for determining the wage 
issue before us is that which applies when the parties are 

      
[end of page 9]


negotiating the first collective bargaining agreement, not a 
successor agreement.
      
     In the 1979 case Teamsters Local Union No. 48 v. University 
of Maine, the Board concluded that the University had violated 
the Act because terminating the established merit increase plan 
during bargaining for an initial contract was an impermissible 
"change" in the status quo and consequently a per se violation.  
No. 79-08 at 5 (June 29, 1979).  The merit plan provided a 3 «% 
increase up each step of the pay scale if the annual performance 
review was successful.  The merit plan (available to all 
employees except those at the top step) had been in effect for 
each fiscal year for the previous 5 years, with the exception of 
one year when the Legislature did not provide funding.  The 
Trustees' compensation plan for FY 1978 also included a "Cost of 
Living" allowance of 4%.  The Trustees? compensation plan was 
designed to provide these two wage increases for all University 
employees, including the two units filing the prohibited 
practice complaint, except that faculty and professional staff 
were to receive a combined 6% increase.  This plan was approved 
in late May and was offered to the respective bargaining agents 
on the condition that it would be the total compensation 
improvements for the coming fiscal year.[fn]4  When the two 
bargaining units rejected the offer in June, the University 
implemented the compensation plan effective on July 1, 1978, for 
all employees except those in the two bargaining units. 
       
     In concluding that the termination of the merit plan was an 
unlawful unilateral change, the Board distinguished the circum-
stances of bargaining for a first contract from the situation in 
      
[fn]4 The Faculty bargaining unit accepted the proposal.


[end of page 10]

      
Easton, a Board case decided just three months earlier.  Easton 
Teachers Association v. Easton School Committee, No. 79-14 
(March 13, 1979).  In Easton, the Board ruled that following the 
expiration of a contract, the status quo should not include the 
continuation of a "built-in wage escalator" while the parties 
are negotiating a successor agreement.  The Board in the 
University case explained why Easton does not apply when the 
parties are negotiating their initial contract:

          Sound policy reasons support the different view 
     in the pre-contract period.  First, unlike expiring
     contract provisions, the employees have not had the 	
     opportunity to bargain over or agree on wages and    
     working conditions prior to certification.  Conditions 
     had been set purely by management policy. Thus there 
     also could be no understanding or agreement on a 
     termination date at which point wage levels might 
     be frozen in the future.

          In addition, it often takes months for a newly-
     certified bargaining agent to even formulate its 
     initial bargaining proposals, and potentially years 
     to negotiate an initial contract.  In contrast, bar-
     gaining on successor contracts takes place during 
     the term of an existing contract and usually involves 
     fewer issues, or simply proposed changes in the 
     existing contract.  It would be harsh and unfair to    
     employees, and a windfall to employers, if clear,  
     automatic wage escalator provisions were terminated       
     at the time of bargaining agent certification.

Teamsters v. University of Maine, No. 79-08, at 6.

     The Board stated it had "no difficulty" concluding that the 
University's merit increase plan was a wage and a working 
condition.  The evidence demonstrated that it was a defined plan[fn]5

[fn]5 See Board finding #6, noting there are seven wage steps in each wage band 
and each step is a 3 ½% increase.  Employees move up a step if their annual 
performance review is successful.  Teamsters v. University, No. 79-08, at 2.


[end of page 11]


that had been in effect continuously since 1973.  Id.  In 
contrast, the Board noted that, had the point been argued, it 
would not have found the annual across-the-board wage increases, 
"loosely referred to as 'cost of living' ("COL") increases," 
to constitute a working condition because they were varied, and 
did not constitute a consistent or automatic increase plan.  
Teamsters v. University, No. 79-08, at 6.  We note now, and will 
discuss in more detail below, that there was no indication or 
finding in that case about how the amount of these across-the- 
board increases were determined.
 
     Two years after the Teamsters v. University case, this 
Board reiterated that when a newly organized bargaining unit is 
involved, "the Union must establish that the salary increases 
sought are a continuation of the pre-certification status quo" 
to prevail on a charge that the failure to provide pay increases 
was an unlawful unilateral change.  Council 74, AFSCME v. SAD 
#1, No. 81-12, at 4 (March 11, 1981).  In SAD #1, the evidence 
demonstrated that the pre-certification status quo included an 
established wage plan under which employees regularly received a 
step increase on July 1 or upon return to work at the beginning 
of each school year. SAD #1, No. 81-12, at 2-3, 6.  The Employer 
refused to continue to apply the established step increase wage 
plan for members of the newly formed bargaining unit while 
adhering to that plan for all unorganized employees.  Id. at 6.  
The Board held this to be a unilateral change to the status quo 
that violated §964(1)(E), indicating that it had "no problem in 
holding that the step increase plan was a wage and working con-
dition because of its continuation over the past few years" and


[end of page 12]



because written documentation of the plan was provided.  Id.fn]6 
 
      AFSCME v. Town of Brunswick is the most recent case of this 
Board or any Maine court on the contours of the status quo that 
must be maintained when a union becomes certified as the 
representative of the bargaining unit.  No. 85-08 (April 19, 
1985).  The facts of that case are quite similar to the matter 
before us:

          For several successive years it had been the 
     practice for the Respondent to provide what it called a 
     cost-of-living increase to its unrepresented employees.  
     The amount and form of the increase was not placed in 
     evidence, but the benefit was granted each year effec-  
     tive July 1. The record shows that the town granted a 6 
     percent increase to its remaining unrepresented employees 
     effective July 1, 1984 but refused a demand of the union  
     to extend that benefit to employees who had become   
     members of the newly organized bargaining unit.  

Brunswick, No. 85-08, at 5; see also finding #12 at 3 ("On 
July 1 in each of several years, including 1981, 1982 and 1983, 
the Town had granted raises to unorganized employees.  
The percentages of those past increases were not specified.")  
The town also refused to move one employee to the next step of 
the salary grid which would have occurred had her position not 
been in the bargaining unit.  Id. at 5-6.
 
     In Brunswick, the Board expressly rejected the Respondent's 
argument that the obligation to maintain the status quo meant 

[fn]6 In SAD #1, the Board also addressed the school's failure to provide 
an across-the-board wage increase to the newly organized employees, 
concluding that granting the 8% increase to all unorganized employees 
while withholding it from the organized employees in the new 
bargaining unit solely because they had unionized was "patently 
impermissible" and therefore a violation of §964(1)(A).  Id. at 7.  
Thus, that portion of the Board?s decision did not require a showing 
that the increase was a continuation of an established practice.


[end of page 13]


that wages must be "frozen" pending negotiations for a new 
agreement.  Brunswick, No. 85-08, at 6.  The Board explained 
that while Easton would have required that result if the parties 
were negotiating a successor agreement, Easton did not dictate 
the nature of the status quo that must be maintained pending 
negotiations for an initial agreement. 

     . . . [I]n other decisions we have emphasized that 
     where the bargaining unit has been newly organized, 
     the 'dynamic status quo" must be maintained; that is, 
     benefits customarily given or already provided for 
     under arrangements in effect at the time of certifi-
     cation of the bargaining agent must be continued.  
     Council #74, AFSCME, AFL-CIO v. SAD No. 1, MLRB No. 
     81-12 (1981); Town of Falmouth, supra.[fn]7  Under that 
     principle the employer is obligated to continue its 
     normal and customary practices regarding mandatory 
     subjects of bargaining.  Wage and step increases are 
     obviously mandatory subjects of bargaining.  

Brunswick, No. 85-08, at 6.  In applying this to the facts 
of the case, the Board went on to hold:

     The record shows that a salary increase had been 
     granted customarily and regularly to non-organized 
     employees on July 1 for several successive fiscal 
     years immediately preceding fiscal year 1984-85 and 
     a 6 percent increase was accorded non-organized 
     employees effective July 1, 1984.  Therefore, the same 
     benefit had to be continued for those employees who 
     became members of the newly formed unit.  For similar 
     reasons employee Lessard should have received the 
     scheduled step increase on her anniversary date that 
     she would have been entitled to under the arrangements 
     in effect before the Union was certified.  Failure to 
     continue these benefits constitutes a per se violation 
     of the Act for which we must order appropriate 
     remedies.


[fn]7 Falmouth did not address the status quo. Falmouth held that the 120-
day notice requirement in §965(1), last  ¶, (subsequently amended) 
applied to both initial and successor bargaining.  No. 79-10 at 5.


[end of page 14]


Brunswick, No. 85-08, at 6.  

     Beyond the limited issue of wage increases, the principles 
for determining the status quo of other benefits and working 
conditions is instructive, as well.  One case of particular 
relevance is AFSCME v. Bangor Water District, No. 81-46 (July 2, 
1981), a case in which the employer made unilateral changes to 
the holiday schedule after the bargaining agent was elected.  
The Board concluded that making the day after Christmas a 
holiday was a unilateral change in past practice because the day 
had never before been a holiday.  Id. at 4.  The Board also 
found that the District did not change the established holiday 
schedule by announcing that the day after Thanksgiving would be 
a regular work day, even though it had been granted as a holiday 
in 6 of the previous 9 years.  The established practice was that 
a few days before Thanksgiving, the District would decide 
whether to make the day a holiday based on the workload and 
weather conditions.  Id. at 2.  The Board concluded that the 
District's decision to not grant the holiday was consistent with 
its practice, as the workload was heavy and the weather condi-
tions were favorable.  Id. at 4.  Thus, Bangor Water District 
recognized that an established practice required to be main-
tained during negotiations for an initial agreement may be a 
decision-making process, and not a particular outcome.
       
     Although there is not a large number of Board cases 
addressing wages increases and the employer's obligation to 
maintain the status quo when there is a newly organized 
bargaining unit, a consistent principle runs through the Board's 
prior decisions.  To the extent an employer has an established 
practice, plan, or process, it is the status quo that must be 


[end of page 15]


maintained.
 
     Having established that Maine law requires the continuation 
of an established wage increase practice, plan, or process 
during bargaining for an initial contract, the question 
presented is whether the evidence supports a finding such a 
practice, plan, or process had been established sufficiently to 
justify considering it part of the status quo that must be 
maintained.
 
     We conclude that the evidence supports a finding that the 
Town of Madison had an established process for annually 
determining an annual across-the-board wage increase to be 
recommended to the Select Board for approval.  This process had 
been in place for at least 13 years, with an increase provided 
every year except in 2010.  The Vice Chair of the Select Board, 
currently serving as the Acting Town Manager, testified that the 
process occurs annually with the Town Manager reviewing the 
economic conditions in the area, the pay raises provided in 
other towns, budgetary circumstances, and other factors 
affecting town finances.  The Town Manager would then make a 
wage proposal for the board of selectmen to approve or reject.  
Although there was no documentary evidence presented that 
detailed this process, the testimonial evidence describing this 
process for determining the wage increase to propose to the 
Selectmen was not disputed.
 
     The process for determining the wage increases is the 
status quo that the Employer is obligated to maintain while 
negotiating an initial bargaining agreement.  That is the pre-
certification status quo.  The employees in the newly organized 
bargaining unit are entitled to have that same process applied 


[end of page 16]


while they are negotiating their first bargaining agreement.  
Here, the evidence demonstrated that the Town followed the same 
process as it had for the past 13 years, resulting in the Town's 
decision that a 2% raise was warranted.  The Town gave the 2% 
increase to the unorganized employees but not to the employees 
in the new bargaining unit.  The only difference between the 
practice over the past 13 years (including 2010 until the 
employees spoke up) and what occurred in 2014 is that the newly 
organized unit did not get the increase in 2014.

     This conclusion is similar to our holding in Brunswick, 
where we held that there was an established practice of 
providing pay increases to its unrepresented employees every 
July 1st over several successive years.  Brunswick, No. 85-08, 
at 5.  Similarly, our conclusion is consistent with Bangor Water 
District, where the Board held that the process for determining 
each year whether to make the Friday after Thanksgiving a 
holiday was properly maintained by the employer.  Here, the Town 
carried out the established process for determining a wage 
increase but failed to maintain the status quo when it refused 
to provide the 2% increase to employees in the newly organized 
unit.  This conduct violated §965(1)(E).

     The Board's decision in Teamsters v. University that the 
COLA portion of the Trustees wage plan was not a condition of 
employment is distinguishable because of the absence of evidence 
demonstrating a consistent wage increase plan.  The evidence 
only showed a greatly varied sequence of COLA increases over a 
few years without any indication there was an established 
process used to determine the amount of the increase.  Teamsters 
v. University, No. 79-08, at 6 (a "varied series of increases


[end of page 17]


[...does not ...] constitute a working condition because it is 
not a consistent or automatic increase plan.").[fn]8  In the present 
case, the record demonstrates that the established process for 
determining wage increases was implemented consistently every 
year for over a decade.  That process was implemented again in 
the spring of 2014 and happened to result in a 2% wage increase 
for 2014-15. 
 
     To state the obvious, it is much easier to identify a 
regular and customary, or consistent or automatic wage increase 
plan when there is some written documentation describing it, 
such as a personnel policy or a chart with written wage bands 
and defined steps.  (See SAD #1 and Teamsters v. University)  
The absence of documentation does not mean, however, that a 
practice does not exist.  Here, there was no dispute that the 
practice existed, that it had been implemented regularly and 
consistently for over a decade.  Consequently, it is immaterial 
that the Town's Personnel Policies do not provide for annual 
wage increases.  
 
     The Town's argument that it should not be required to pay 
the annual wage increase to this unit because it is "discretion-
ary" confuses the process for determining wage increases with 
the outcome of that process.  It is not the 2% increase that is 
"scheduled" or "customarily or regularly" granted by the Town.  
Had the Town decided that a 0% increase was warranted, there 

[fn]8 It is instructive to note that during the 1970's and early 1980's, 
COLA clauses in collective bargaining agreements were relatively 
common, especially in major employers in manufacturing industries.  
Such COLA's typically used a formula to tie wage increases to changes 
in the Consumer Price Index (CPI) on a predetermined schedule.  See, 
"Cost-of-living Clauses: Trends and Current Characteristics", by 
Janice M. Devine, Compensation and Working Conditions, December 1996 
(U.S. Dept. of Labor, Bureau of Labor Statistics).


[end of page 18]


would have been no violation as long as the unorganized 
employees been treated the same as the employees in the newly 
organized bargaining unit. It is the annual process of deter-
mining whether a wage increase will be paid (and, if so, how 
much) that the Town is required to continue.  And this process 
in fact did continue, resulting in approval for a 2% pay 
increase for FY 2014-2015.  When the Town, pursuant to this 
process, exercised its discretion to pay a 2% increase, the Town 
was required to pay that increase to the employees in the newly 
organized bargaining unit. 

     The Employer also contends this case is governed by the Law 
Court's holding in Board of Trustees of the University of Maine 
System v. COLT, 659 A.2d 842 (Me. 1995).  As explained above, 
however, the Board has long distinguished between the negotia-
tion of an initial agreement, where the established practice 
determines the status quo, and negotiation of a successor agree-
ment, where the expired collective bargaining agreement serves 
as evidence of the status quo that must be maintained.  See, 
e.g., MSEA v. Lewiston School Dept., No. 09-05, at 7, aff'd,
AP-09-001, (Oct. 6, 2009, Androsc. Sup. Ct, Delahanty, J.).  By its 
terms, COLT applies to successor negotiations only.  659 A.2d at 
844. ("The definition of status quo at the expiration of the 
collective bargaining agreement is at the crux of this case.")

     The Law Court recently revisited the teaching of COLT in 
City of Augusta v. Maine Labor Relations Board et al., 2013 ME 
63, a case, like COLT, involving the status quo following the 
expiration of the agreement.  There is nothing in City of 
Augusta that suggests that the analysis in COLT applies to a 
newly organized bargaining unit--every reference by the Court to 
the status quo specifically limits it to the status quo 


[end of page 19]


following the expiration of the agreement.  The analysis is 
different in post-expiration situations because the expired 
collective bargaining agreement serves as evidence of the status 
quo that must be maintained.  See, e.g., MSEA v. Lewiston School 
Dept., No. 09-05, at 7, aff'd, AP-09-001, (Oct. 6, 2009, 
Androsc. Sup. Ct, Delahanty, J.).  COLT does not apply to the 
status quo that exists when the parties are negotiating their 
first agreement, where there is no expired contract.  The 
established practice determines the status quo; in this case 
that practice included the Town's express approval of the 
increase for FY 2014-15.

     The Town contends that requiring it to pay employees in a 
newly-formed bargaining unit pay increases "that were never 
bargained for" would "shift the power dynamic to the Union" 
(Town Br. at 6, 7).  There is no question that a wage increase 
is, as the Town states, "a bargaining chip at the negotiating 
table that can be traded for something else of value, be it 
health care contribution percentages, an additional paid 
holiday, or a change in vacation accruals"  But the same could 
be said for longevity pay, or any number of things the Town 
concedes must continue during negotiations for an initial 
agreement.  These arguments are not relevant to the determina-
tion of what constitutes the status quo; they merely describe 
the consequences of having one's rightful bargaining chip taken 
away, as the Union contends the Town did here. 
 
     The Employer also argues that it was not obligated to pay 
the wage increase to the newly organized unit because the 
Union's bargaining team never specifically demanded the Employer 
pay the annual wage increase and/or because the parties had a 
"mutual understanding" that the status quo did not include the 


[end of page 20]


wage increases, based on what transpired during the highway 
department negotiation.  The legal obligation to maintain the 
status quo exists without regard to a specific demand to 
bargain, unless the union has clearly and unmistakably waived 
its right to bargain.  State v. Maine State Employees Assoc., 
499 A.2d 1228, 1232 (Me. 1985) (waiver of a statutory right must 
be clear and unmistakable).  There was no evidence of waiver in 
this case and so the Union's alleged failure to request the 
status quo be maintained is not relevant to the outcome.  
We similarly reject the notion that the administrative unit
could or should be charged with the conduct or negotiating 
positions taken by another unit.  

     A final argument that runs through the Town's brief is the 
notion that the Town was able to provide a 2% wage increase only 
because it was able to shift some of the costs of health insur-
ance onto the employees through reductions in other benefits.  
The Town argues that the budgetary constraints are even more 
pronounced due to a major loss of revenue resulting from the 
devaluation of the paper mill announced on August 11, 2014.   
 
     The Town offered evidence that the collective bargaining 
agreement settled with the Highway Department bargaining unit in 
June, 2014, included both the 2% wage increase effective July 1, 
2014, and an increase from 15% to 25% in the employee contri-
bution to the cost of health insurance for family members.  
The Town also introduced evidence that the same increase in 
health insurance costs was imposed on other employees in January 
of 2015.  However, evidence of changes the Town made through 
collective bargaining or for unrepresented employees months 
after the pay increase at issue is not relevant to determining 
the status quo in effect on March 5, 2014, when the unit was 


[end of page 21]


organized and recognized.[fn]9 

     Had there been some evidence that the process of 
determining the proposed wage increase each year was one in 
which the decision was tied to, and dependent on, the share of 
the costs of the health insurance taken on by the employees, the 
result in this case might be different.  However, there was no 
evidence, documentary or testimonial, tending to establish such 
a connection with respect to 2014 or historically.[fn]10 
       
     In light of the findings of facts and conclusions of law 
described above, we conclude that Town of Madison committed a 
per se violation of § 964(1)(E) by failing to maintain the pre-
certification status quo with respect to the established process 
for providing annual wage increases.  We also conclude that, 
even without any anti-union animus on the part of the Town, this 
conduct constitutes a violation of §964(1)(A) because it had the 
effect of "interfering with, restraining or coercing employees 
in the exercise of the rights guaranteed by section 963".  The 
standard is well established that a violation of §964(1)(A) does 
not require a showing of improper motive, as the issue is 
whether the conduct can reasonably be viewed as tending to 
interfere with the free exercise of employee rights under the 
Act.  Jefferson Teachers Assoc. v. Jefferson School Committee, 
No. 96-24, at 25 (Aug. 25, 1997).  Here, withholding the pay 
      
[fn]9 We also note that this argument could just as easily been made with 
respect to some other change in benefit that may have freed up funds 
for the Town, such as elimination of one or more holidays or changes 
to longevity pay.

[fn]10 The circumstances of 2010, when the employees approached the Town 
Manager and Select Board to forestall an increase in health insurance 
contributions by taking a 0% increase does not establish a practice of 
such a connection.

      
[end of page 22]


increase from the administrative employees while giving it to 
the unorganized employees would reasonably tend to have a 
chilling effect on the employees' organizational activities.   
See, Teamsters v. Town of Oakland, No. 78-30, at 3 (Aug. 24, 
1978) (Town's discontinuance of long-standing practice of paying 
for employees' breakfasts after the employees worked through the 
night violated §964(1)(A) as it may reasonably have been viewed 
by the employees as a response to organizing a union.) 
      
     Having found a violation of the Act, we will order the Town 
to cease and desist from such conduct and will order a remedy 
that will result in "a restoration of the situation, as nearly 
as possible, to that which would have obtained" but for the 
prohibited practice.  Caribou School Department v. Caribou 
Teachers Association, 402 A.2d 1279, 1284 (Me. 1979).  
We accordingly will order the Town to restore the status quo 
as it existed prior to its unilateral change by paying the 
employees in the administrative bargaining unit the 2% wage 
increase retroactive to July 1, 2014.
 
     It is important to emphasize that ordering the restoration 
of the status quo does not mean that the Employer has to add 2% 
to the administrative employees wages permanently or expend 2% 
more than it had anticipated.  It simply means that the Town has 
to bargain for changes, not impose them unilaterally.  The law 
requires the employer to maintain the status quo with respect to 
the mandatory subjects of bargaining while negotiating a new 
agreement and ensuring compliance with that law is our statutory 
responsibility.  The status quo is based on the established past 
practice; the parties' eventual agreement will undoubtedly 
reflect the economic realities facing the Town.

      
[end of page 23] 



                               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 MRSA §968(5), we hereby ORDER the Town of Madison to 
cease and desist from unilaterally changing the status quo.  
We further ORDER the Town of Madison to restore the status quo 
by paying to the members of the administrative employees bar-
gaining unit the 2% wage increase, with retroactive payment to 
July 1, 2014, plus interest of 3.27%.[fn]11
      
Dated at Augusta, Maine, this 4th day of June 2015.
 

[fn]11 This is the pre-judgment interest rate used in Maine's state courts
for judgments issued in 2015. See www.courts.maine.gov/citizen help/ attorneys/writ-pre.html.

[end of page 24]