Androscoggin Superior Court Decision AP-09-001 (Oct. 6, 2009) affirming MSEA v. City of Lewiston School Department, No. 09-05 (Jan. 15, 2009)
STATE OF MAINE
ANDROSCOGGIN, ss
ANDROSCOGGIN, ss
SUPERIOR COURT
CIVIL ACTION
DOCKET NO. AP-09-001
CITY OF LEWISTON SCHOOL DEPARTMENT,
Plaintiff/Petitioner
v.
MAINE STATE EMPLOYEES ASSOCIATION,
SEIU, Local 1989, and THE MAINE LABOR
RELATIONS BOARD,
Defendants/Respondents
DECISION AND JUDGMENT
(M.R.Civ.P. 80C)
I. BEFORE THE COURT
Before the court is a petition filed by the City of Lewiston School Department
(the Department) asking for review of a decision of the Maine Labor Relations Board
(MLRB) pursuant to M.R.Civ.P. 80C.
II. BACKGROUND AND PROCEDURAL HISTORY
This appeal involves the collective bargaining principle that a public employer
fails to bargain in good faith if the employer unilaterally changes the terms and
conditions of employment, after a collective bargaining agreement has expired. In this
case, the Department contests the MLRB's determination that the Department violated
this principle when it changed the terms of its bargaining agreement with the Maine
State Employees Association, SEIU, Local 1989 (MSEA) after the agreement between the
parties had expired. The MSEA is the labor organization recognized and certified as the
bargaining agent for one unit of employees of the Department.
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The Department and the MSEA were parties to the collective bargaining
agreement effective July 1, 2005 through June 30, 2008 (Agreement). The Agreement set
forth the percentages of the employees' health insurance to be paid by the employer
and by the employee. The Agreement specifically provided:
For the 2007-2008 school year, the Committee's contribution will be
increased by a percentage equal to the annual MEA Anthem BC/BS
Choice Plus plan premium rate increase, with a maximum cap not to
exceed 13% more than the contribution for the 2006-2007 school year. Any
increase above the committee's capped contribution will be paid by the
employee.
Pursuant to the Agreement, the Department and its employees shared
responsibility for premium payments. On July 1, 2006, there was a 5% increase in the
Anthem Blue Cross Blue Shield Plus Plan (Anthem) premium. During the 2006-2007
school year, the Department and the employees each paid 5% more than they had in the
prior year, which covered the 5% overall premium increase. On July 1, 2007, there was
an 8.66% increase in the Anthem premium. Accordingly, during the 2006-2007 school
year, the Department and the employees each paid 8.66% more than they had the prior
year. [fn]1
The Department and the MSEA began negotiating over a successor agreement in
mid-June, 2008, and the Agreement expired before a new agreement was reached. On
May 2, 2008, the Lewiston School Department Benefits Specialist, Jackie Little, sent an e-
mail message to Union member Jacqueline Smith setting forth the respective
contributions to health insurance premiums for employees as of July 1, 2008, if the new
agreement was not settled by that date. On July 1, 2008, the Anthem premium
increased by 4%. After June 30, 2008, the Department continued to contribute the same
[Footnote] 1. Each year of the Agreement the Department and the employees paid the same percentage of the
premiums based on the employee's level of coverage. For example, under a single payer plan an
employee paid 14.6% of the costs while the Department paid 85.4%. The dollar amount increased
under this formula for both the Department and the Employees based on the increase in premiums.
[end of page 2]
dollar amount to health insurance premiums that it contributed during the 2007-2008
school year. In other words, upon the expiration of the Agreement, the Department
kept its own contribution to the premium at the same dollar level and increased the
amount deducted from the paychecks of each unit employee to cover the full increase in
the health insurance premiums imposed by Anthem.
On September 5, 2008, the MSEA filed a prohibited practice complaint with the
MLRB, the agency that is authorized by statute (26 M.R.S. § 968) to adjudicate disputes
in the field of labor relations. The complaint alleged that the Department unilaterally
changed the status quo established by the Agreement in violation of 26 M.R.S. §
964(1)(A) and 964(1)(E).[fn]2 Specifically the MSEA alleged that the Department failed to
bargain in good faith when it unilaterally changed the percentage of the health
insurance paid by the employer during bargaining. According to the MSEA, the
Department's action interfered with, restrained or coerced employees in the exercise of
their rights.
In its decision and order the MLRB agreed with the MSEA and found that the
Department violated the Municipal Public Employees Labor Relations Law (MPELRL)
by: failing to bargain in good faith when it unilaterally changed a term of employment
after the expiration of the Agreement. The School Department's decision to keep its
own contribution to the health care premium at the same dollar level and increase the
[Footnote] 2 The relevant subsections provide the following:
1. PUBLIC EMPLOYER PROHIBITIONS. Public employers, their representatives
and their agents are prohibited from:
A. Interfering with, restraining or coercing employees isn the exercise of the rights
guaranteed in section 963; . . .
* * *
E. Refusing to bargain collectively with the bargaining agent of its employees as
required by section 965; . . .
26 M.R.S. § 964(1)(A), (1)(E) (2008).
[end of page 3]
amount deducted from the employees' paychecks constituted a change in the status
quo. Thus, the Department acted to make a unilateral change in a mandatory subject of
bargaining that constituted a refusal to bargain in violation of § 964(1)(E) and
(1)(A). Accordingly, the MLRB determined that the Department was obligated to
increase its contributions to health insurance premiums after the Agreement had
expired.
The Department asserts that the terms of the Agreement expressly limit increases
to the Department's contributions to health insurance premiums to the 2006-2007 and
2007-2008 school years. It is the Department's contention in this appeal that the MLRB
acted beyond its statutory authority and in violation of the contractual rights of the
Department in improperly construing the Agreement between the parties. The
Department argues that it is the MLRB that acted improperly when it unilaterally
obligated the Department to increase its contributions to health insurance premiums
contrary to the terms of the expired Agreement.
III. DISCUSSION
A. Standard of Review.
The court may only reverse or modify an administrative agency's decision if it is
based upon "bias or error of law," is "unsupported by substantial evidence on the
whole record," is "arbitrary or capricious," or involves an "abuse of discretion" by the
agency. 5 M.R.S. § 11007(4)(C)(4)-(6) (2008). The court cannot "substitute its judgment
for that of the agency on questions of fact." 5 M.R.S. at § 11007(3). The focus on appeal
is not whether the court would have reached the same conclusion as the agency, but
whether the record contains competent and substantial evidence that supports the
result reached by the agency. CWCO, Inc. v. Superintendent of Ins., 1997 ME 226, 703
[end of page 4]
A.2d 1258, 1261. This court cannot "attempt to second guess the agency on matters
falling within its realm of expertise," and judicial review is limited to the question of
"whether the agency's conclusions are unreasonable, unjust or unlawful in light of the
record." Imagineering v. Superintendent of Ins., 593 A.2d 1050, 1053 (Me. 1991). Where
the question is one of statutory interpretation the court reviews for errors of law. Botting
v. Dep't of Behavioral & Developmental Servs., 2003 ME 152, 9, 838 A.2d 1168, 1171. The
MLRB is granted considerable deference in construing public employment collective
bargaining statutes because of its expertise in the area of labor relations. Mountain Valley Educ.
Ass'n v. Maine Sch. Admin. Dist. No. 43, 655 A.2d 348, 354 (Me. 1995).
B. Error of Law.
The Department asserts it is unlawful for the MLRB, without any statutory
authority, to impose an obligation for school districts to pay increased health insurance
contributions that were never negotiated and never budgeted. The court must
determine whether the MLRB erred in how it defined the status quo that must be
maintained for health insurance premium costs when the Agreement expired and the
parties were negotiating a successor agreement.
The MPELRL, 26 M.R.S.A. §§ 961-974, extends to all public employees the rights
to organize and to bargain collectively. Minot Sch. Comm. v. Minot Educ. Ass'n, 1998 ME 211,
5, 717 A.2d 372, 375. Collective bargaining includes the parties' mutual
obligations "to confer and negotiate in good faith with respect to wages, hours, working
conditions and contract grievance arbitration," 26 M.R.S.A. § 965(1)(C), and "to
participate in good faith in the mediation, fact-finding and arbitration procedures
required by this section," 26 M.R.S.A. § 965(1)(E) 2008. The MPELRL empowers the
MLRB to prevent "the prohibited acts enumerated in section 964," 26 M.R.S.A. §
968(5)(A), one of which is "refusing to bargaining collectively," 26 M.R.S.A. § 964(1)(E).
[end of page 5]
The Law Court has recognized the "well-established rule of labor law that an
employer may not unilaterally alter the terms and conditions of employment after the
expiration of a collective bargaining agreement." Lane v. Board of Directors of Maine
School Administrative Dist., 447 A.2d 806, 810 (Me. 1982). This rule is based on the
principle that unilateral alterations of the collective bargaining agreement are in
contravention of the statutory duty to bargain in good faith. Id. Accordingly, when an
employer initiates a unilateral change in violation of his statutory responsibilities, he
commits an unfair labor practice. Id. The requirement to bargain and negotiate in good
faith includes the obligation to maintain the status quo following the expiration of a
contract. Board of Trustees v. Associated Colt Staff, 659 A.2d 842, 843 (Me. 1995). [fn]3
In the Colt decision, the Law Court addressed the definition of status quo at the
expiration of a collective bargaining agreement. Colt, at 842. The University of Maine
System (the University) and its bargaining agent, ACSUM, had a collective bargaining
agreement that provided for across-the-board wage increases for employees for each
year of the contract. Colt, at 844. When the agreement expired, the University adhered
to the last wage schedule, and discontinued the annual step increases for employees,
except as they applied to promotions. Id. The MRLB concluded that the failure of the
University to adhere to the wage increase after the agreement expired constituted a
unilateral change in the status quo prohibited under the law. Id. at 843-44. The Court
found that "[t]o say that the status quo must be maintained during negotiations is one
thing; to say that the status quo includes a change and means automatic increases in
[Footnote] 3 In cases involving allegations of unilateral changes after the expiration of an agreement, the
MLRB looks to the terms of the expired agreement as evidence of the status quo that must be
maintained. See, e.g., MSEA v. School Committee of City of Lewiston, No. 90-12 (Aug. 21,
1990) at 16. The established practices regarding the mandatory subjects of bargaining are also
considered to determine the status quo between the parties. See, e.g., Council #74, AFSCME v.
School Admin. District #1, No. 81-12, at 4 (March 11, 1981).
[end of page 6]
salary is another." Id. at 845 (quoting Board of Coop. Educ. Servs. v. New York State Pub.
Employment Relations Bd., 41 N.Y.2d 753, 363 N.E.2d 1174, 1177, 395 N.Y.S.2d 439 (N.Y.
1977)). The MLRB's "recently adopted dynamic status quo rule" improperly "obligated
the University to pay substantial increases in wages not approved by its trustees, and
dramatically altered the status and bargaining positions of the parties." Id. at 845. The
rule changed, rather than maintained, the status quo. Id.
In the instant case, the respondents contend that maintaining the status quo
required maintaining the percentage of the premium being paid by the employer and
the employees at the expiration of the Agreement. In other words, in order to maintain
the status quo, the Department and its employees were to continue to share the
premium payments at the same proportions they shared them over the life of the
Agreement. Conversely, the Department contends the status quo should be the dollar
amount paid by the employer for health insurance premiums at the expiration of the
Agreement. The Department claims the MLRB erred in apply a dynamic view of
status quo in this case.
According to the terms of the Agreement the Department does not expressly
agree to pay a percentage of the health care insurance premiums. At the same time, the
Agreement does not provide that the Department would contribute a specific dollar
amount toward the premium. In the Agreement, it is the employees' contribution that
is expressed as a fixed dollar amount, not the employer's. Unlike Colt, this case does
not involve the continuation of step increases in wages, which the Law Court
determined would change the status quo. Instead, the Department's act to burden the
employees with the entire increase in premiums when previously the costs had been
shared changed the status quo. The Department and the employees had the same level
of cost sharing for all three years the Agreement was in force. Both the Department's
[end of page 7]
share and each the employee's share increased at the same rate as Anthem's increase in
the overall health insurance premium. The contract included a 13% cap on the amount
of premium increase the employer would absorb, but the cap was never reached. The
terms of the contract demonstrate that both parties anticipated increases in premiums
and established a mechanism for sharing the burden of those increases, up to 13%.
When Anthem raised its premium rate by 4% in July 2008, both the Department
and the employees would have had to pay 4% more than they had the prior year for
health insurance under the terms of the Agreement. If the Department had continued
to abide by the language in the Agreement both the Department and the employees
would have had to shoulder a portion of the overall premium increase. Instead, the
Department passed the burden of the entire increase onto the employees, so that
employees saw an increase of 26-37%, depending on their level of coverage. Thus, the
Department's refusal to pay part of the rate increase would have resulted in a sudden
obligation for employees to pay drastically higher health insurance premiums. The
MLRB did not err in considering the terms of the Agreement and the substantial impact
of the change on the employees. The Board reasonably concluded that the
Department's action was a significant unilateral change in a mandatory subject of
bargaining.
C. Mootness.
The MSEA asserts that the parties have agreed to a new 2008-2011 collective
bargaining agreement, which provides for retroactive compensation to employees who
paid the disproportionate amount of health insurance premium during the period
between contracts. Thus, the MSEA contends that because the Department is in the
process of compensating employees for premium overpayments due to the disruption
of the status quo, the issue is now moot.
[end of page 8]
Courts dismiss as moot questions whose resolution will have limited or no
practical effect. Bureau of Employee Relations v. Maine Labor Relations Bd., 655 A.2d 326
(Me. 1995).[fn]4 Courts review for mootness by examining the record to determine whether
there remain sufficient practical effects flowing from the resolution of the litigation to
justify the application of limited judicial resources. Id.
The MSEA has not provided evidence of a new agreement and the Department
has not stipulated to this factual assertion. Regardless of this issue, the appeal should
be denied for the reasons stated above.
IV. DECISION AND JUDGMENT
The clerk will make the following entry as the Decision and Judgment of the
court:
The judgment of the Maine Labor Relations Board is affirmed.
SO ORDERED.
Dated: October 6, 2009
/s/__________________________________
Thomas E. Delahanty II
Justice, Maine Superior Court
[Footnote] 4 The Law Court has recognized three exceptions to the mootness doctrine:
First, the court will determine whether sufficient collateral consequences will
result from determination of the questions presented so as to justify relief. Second,
while technically moot in the immediate context, questions of great public interest
may nevertheless be addressed for the future guidance of the bar and of the public.
Third, issues which may be repeatedly presented to the trial court, yet escape
review at the appellate level because of their fleeting or determinate nature, may
appropriately be decided.
Id. (citing State v. Irish, 551 A.2d 860, 862 (Me. 1988).
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