Board Decision affirmed by Maine Law Court , 2013 ME 63 

	  
     Before the Court is the City of Augusta's petition under
M.R. Civ. P. 80C to review the Maine Labor Relations Board's
("the Board") December 15, 2011 Status Quo Determination. Under
the "strict status quo" doctrine, the Board determined that the
City must continue to provide three types of benefits available
to certain union members under a collective bargaining agreement
after that agreement expired. The two issues before the Court on
review are: (1) whether the Board had jurisdiction to decide the
presented static status quo issue; and (2) whether it correctly
applied the status quo doctrine to the benefits in question. 


                Factual and Statutory Background
                                
     Loca1 1650 ("the Union") is the chief bargaining agent for
members ofthe Augusta Fire Department. (R. Tab A.) The Union
entered into a collective bargaining agreement ("the CBA") with
the City of Augusta ("the City"), which expired on June 30,2010.
(R. Tab A.) 
     Prior to June 30,2010, the Union and the City entered into
negotiations for a new contract. (R. Tab A.) On June 10, 2010,
David Barrett, an independent contractor hired by the

[end of page 1]
 
City to negotiate as its representative, signed a document
captioned "Ground Rules for Negotiations" ("Ground Rules"). (R.
Tab G, C-1.) The Ground Rules contained a provision, 
known as the "Evergreen Clause," which stated that the current
CBA would remain in "full force and effect" if a new agreement
had not been reached before its expiration. (R. Tab G, C-1.) The 
CBA subsequently expired without a new agreement in place on June
30,2010, but the City chose not to honor certain benefits. Most
significantly, the City stated that it would not fulfill the 
provisions concerning retiree health benefits.[fn]1 (R. Tab H,
R-1.) The City claimed that Mr. Barrett was not authorized to
bind it with the Evergreen Clause, and that it was not otherwise 
obligated to continue providing the benefits under the status quo
doctrine. (R. Tab H, R-1.)
 
     In response, on August 3, 2010, the Union filed a "Practice
Complaint" ("the Complaint") with the Board, alleging that the
City had violated its obligation to negotiate in good faith by
refusing to honor the Evergreen Clause[fn]2 (R. Tab A.) The
Complaint did not challenge the City's status quo determination,
and the allegations contained therein are not the subject of the
City's current petition. (R. Tab A.)
 
     On May 11, 2011, the Board held a hearing on the Evergreen
Clause issue. (R. Tab I [hereinafter "Tr."].) At that hearing,
the Union expressed for the first time that it also wished to
expand the focus ofthe hearing to include a determination of
whether the City's status quo ruling was proper.[fn]3 (Tr. 7-8.)
Both parties acknowledged that grievances had been filed for
arbitration
 
  1 The provision in question requires the City to pay 100% of
a firefighter's hospital insurance benefits after retirement if
he or she has worked for a certain minimum number ofyears. (R.
Tab G,C-1O.)
  2 Prohibited practice complaints, which are filed with the
Board, are authorized under 26 M.R.S.A §  968(5)(B), and § 
964(1)(E).
  3 The Union's counsel expressed that, ifthe Evergreen Clause
was found to be unenforceable, the city would "still be under the
obligation to maintain the static status quo." (Tr. 7.) Counsel 
also indicated his intention to introduce evidence to show that
the City committed a "unilateral change to the static status
quo." (Tr. 8.) 

[end of page 2]

concerning the status quo determination, and that they were being
held in abeyance pending resolution of the Evergreen Clause
issue. (R. Tab M.) Counsel for the City objected to expanding the
scope of the hearing to include the status quo determination
because he claimed he was not on notice of the issue. (Tr. 8-9.)
The hearing chair then halted any further substantive or 
evidentiary discussion concerning the status quo issue. (Tr. 10.)
After the parties had finished presenting on the Evergreen Clause
issue, the discussion returned to how to proceed with the 
status quo question. (Tr. 74.) In response, the parties agreed to
brief the legal issue of whether the status quo dispute should be
addressed as part of the same proceeding, and, specifically,
whether the Board has the jurisdiction to do so under 26 M.R.S.A. 
§  964-A(2).[fn]4 (Tr.75-86.)
 
     The parties accordingly submitted briefs on the status quo
question. (R. Tab K; Tab L.) The City argued that §  964-A(2)
required the Union to pursue any grievances via arbitration. (R.
Tab L.) The Union argued that §  964-A(2) conferred jurisdiction
on the Board to resolve whether the following three benefits, all
denied by the City after the CBA's expiration, were enforceable
under the status quo doctrine: (1) the CBA provision guaranteeing
certain retiree health benefits; (2) the provision compensating
employees for unused sick time; and (3) the provision that
compensated employees for unused balances remaining in their
annual uniform allowance. (R. Tab K.)
 
     The Board issued a nine-page interim order on August 9,
2011, and determined that §  964-A(2) allowed and even required it
to resolve the dispute over whether the benefits in question
continued to be enforceable under the status quo doctrine. (R.
Tab M.) The Board highlighted the language of §  964-A(2), which
provides: '''[d]isputes over which provisions in an expired
contract are enforceable by virtue of the static status quo
doctrine first must be resolved 

  4 For full text of the relevant part of26 M.R.S.A §  964-A(2),
see Discussion, page 5, infra. 

[end of page 3]


by the board,' subject to appeal pursuant to applicable law." (R.
Tab M 6.) The Board construed that it has the authority and
obligation to determine what the status quo is that must be 
maintained, and the arbitrator's role is to determine whether
there has indeed been a change. (R. Tab M 6.) Thus, the Board
directed the parties to submit final briefs on the merits of both
the Evergreen Clause issue and the status quo issue, and that no
further evidence would be necessary. (R. Tab M 8.) 

     The City then moved for reconsideration, arguing that asking
the parties to brief whether the three benefits at issue are
enforceable under the static status quo doctrine is outside the
scope of the Complaint. (R. Tab N.) Additionally, the City
requested additional time to submit briefs. (R. Tab N.) The Board
denied the City's motion, reasoning that it would treat the two
submitted issues separately. (R. Tab O.) The parties subsequently
submitted their briefs on the merits. (R. Tab P; Tab Q.)
 
     On December 15, 2011, the Board issued two separate
decisions. The first concluded that the Evergreen Clause was not
binding because it was never ratified by the City. (R. Tab R.) In
its second decision--the decision on appeal here--the Board ruled
that "the provisions of the collective bargaining agreement that
expired on June 30, 2010, covering the payout of accrued sick
time, the payout of clothing allowance balance, and payment of
retiree health insurance premiums are enforceable by virtue of
the static status quo doctrine pursuant to 26 M.R.S.A. § 
964-A(2)." (R. Tab S.) 

                      Standard of Review 
                                
     Under Rule 80C, the Court will review the agency decision
for an abuse of discretion, error of law, or findings unsupported
by substantial evidence from the record. See Thacker v. 

[end of page 4]

Konover Dev. Corp., 2003 ME 30,  14, 818 A.2d 1013, 1019. The
Court must defer to the agency's interpretation of its own
internal rules and regulations unless they "plainly compel a
contrary result." Rangeley Crossroads Coal. v. Land Use Reg. 
Comm 'n, 2008 ME 115,  10, 955 A.2d 223, 227, Similarly, the
Court gives great deference to an agency's interpretation of a
statute it is charged with administering. See id. 

                          Discussion 
                                
I.     Jurisdiction of the Maine Labor Relations Board 

     The City argues that the Board did not have the jurisdiction
to decide whether the benefits in question--health insurance for
retiring firefighters, certain sick leave payout, and uniform
allowance benefits--were enforceable under the status quo
doctrine, The Court treats this argument as two distinct issues:
(1) whether the Board has jurisdiction pursuant to 26 
M.R.S.A. §  964-A(2) to decide this type of dispute; and (2)
whether the Board unfairly prejudiced or denied due process to
the City by combining the two proceedings in the manner
heretofore described. 

     a. The Board's Jurisdiction to Decide the Static Status Quo
Issue 

     A determination for this issue hinges on an evaluation of
how the Board interpreted §  964-A(2), a determination presently
scrutinized by the Court. The statute provides:
                    
     [i]f a contract between a public employer and a
     bargaining agent signed after October 1, 2005 expires
     prior to the parties' agreement on a new contract, the
     grievance arbitration provisions of the expired
     contract remain in effect until the parties execute a
     new contract. In any arbitration that is conducted
     pursuant to this subsection, an arbitrator shall apply
     only those provisions enforceable by virtue of the
     static status quo doctrine and may not add to, restrict
     or modify the applicable static status quo following
     the expiration of the contract unless the parties have
     otherwise agreed in the collective bargaining
     agreement.  All such grievances that are appealed to
     arbitration are subject exclusively to the grievance
     and arbitration process contained in the expired
     agreement, and the board does not


[end of page 5]

     have jurisdiction over such grievances. The
     arbitrator's determination is subject to appeal,
     pursuant to the Uniform Arbitration Act. Disputes over
     which provisions in an expired contract are
     enforceable by virtue of the static status quo doctrine 
     first must be resolved by the board, subject to appeal
     pursuant to applicable law. The grievance arbitration
     is stayed pending resolution of this issue by the
     board. 

(Emphasis added). 
     
     While the City concedes that the Board could resolve the
dispute over whether the three benefits in question are
enforceable under the status quo doctrine, it asserts that
certain arbitration language--primarily, "grievance arbitration
is stayed pending resolution of this issue by the board"--
requires that a grievance arbitration be filed prior to a board
determination. (City Br. 6.) 

     The Court does not interpret the statute as containing an
arbitration mandate. Yes, §  964-A(2) provides generally that when
a CBA expires, the arbitration procedure contained therein
remains in effect. The statute goes on to clarify that "only
those provisions enforceable by virtue of the static status quo
doctrine" are subject to arbitration. 26 M.R.S.A. §  964-A(2). The
statute, thus, purposefully delegates authority to the Board to
determine which provisions meet that description when it provides
that the Board must first resolve "any dispute[] over which
provisions in an expired contract are enforceable by virtue of
the static status quo doctrine." Id. 

     The Board clearly delineated the respective roles of both
itself and the arbitrator in its August 9, 2011 interim order
when it wrote: "the Board determines what the status quo is that
must be maintained, and the arbitrator will determine whether, in
fact, there has been a change." (R. Tab M. 6.) The City, however,
has pointed to nothing, either in §  964-A(2) or elsewhere,
purporting to dictate a process with which a litigant must
conform in order to have the Board resolve "disputes over which
provisions in an expired 

[end of page 6]

contract are enforceable by virtue of the static status quo." 26
M.R.S.A. §  964-A(2). Nothing in the statute, therefore, justifies
an interpretation different than the one the Board articulated in
its interim order. 

     b. The Board's Purported Due Process Violation 

     The City maintains that it was entitled to notice of the
status quo issue in the Complaint, as well as an opportunity to
present evidence on that issue at a hearing. (City Br. 7.) The
City alleges that the Board conducted an improper and unfair
proceeding, the result of which deprived the City of its due
process rights generally. (City Br. 7.)
 
     "The essential requirement of due process in the
administrative context is that a party be given notice and an
opportunity to be heard. Maddocks v. Unemp't Ins. Comm'n, 2001 ME
60,  7, 768 A.2d 1023, 1025. Section 964-A(2) contains no
provision requiring a litigant to file any sort of complaint to
provide notice and initiate the process of resolving a status quo
dispute. In fact, when the Union introduced the status quo
resolution issue at the May 11,2011 hearing, the Board terminated
discussion in order to allow for a full briefing on the topic of
whether it could decide the issue. Afterward, at the August
9,2011 interim order, the Board determined that §  964-A(2)
allowed and even required it to resolve this dispute. In that
order, the Board clarified that it would treat the status quo
issue distinct from the Evergreen Clause issue, and it ordered a
briefing on the merits. The Court determines that the August
9,2011 order provided sufficient notice to the parties that the
status quo issue was thereafter on the table.
 
     The Court now addresses the issue of whether the parties
were entitled to an evidentiary hearing to develop a factual
record with respect to the status quo issue, as the Union argues.
With regard to the hearing component, the Board was required to
provide

[end of page 7]
 
the Union with a "reasonable opportunity for a fair hearing, the
conduct of which is governed by ... [the] Administrative
Procedures Act." Maddocks, 2001 ME 60,  7, 768 A.2d 1023.
Generally, under the APA, "every party shall have the right to
present evidence and arguments on all issues, and at any hearing
to call and examine witnesses and to make oral cross-examination
of any person present and testifying." 5 M.R.S.A §  9056(2).
 
     Here, the CBA contained the three provisions in question,
and was presented as evidence since the inception of the matter,
starting with their articulation in the Complaint. (R. Tab A.) As
the Union argued in its brief, "the terms of the expired
agreement are evidence of the status quo that must be
maintained." (Union Br. 8.) In other words, it is difficult to
see what other evidence the Board would have required in order to
make a factual determination. The Board determined, in its
interim order, that it had all the necessary and relevant
evidence, and thus simply directed the parties to prepare
briefs.[fn]5 Additionally, as to the City's due process claim,
while due process guarantees the right to be heard, it does not
necessarily guarantee the right to a hearing such as the one the
City proposes. The City had its opportunity to be heard, and in
fact, had more than one opportunity since it submitted its motion
to reconsider the interim order, as well as its brief in support
of its 80C petition. 

  5 Indeed, in its brief, the Union points out that the Board did
not allow either party to submit evidence on the status quo
dispute. (Union Br. 8.) The Court agrees with the Union's
conclusion that since the parties had presented the expired CBA
to the Board from the outset of the case that it was reasonable
for the Board to determine that no additional evidence on the
static status quo subject was necessary. (Union Br. 8-9.)
     
[end of page 8]
 
II. Application of the Static Status Quo Doctrine
 
     The duty to bargain in good faith includes "the obligation
to maintain the status quo following the expiration of a
contract." Bd. of Trustees of the Univ. of Me. v. COLT, 659 A.2d
842 (Me. 1995). It is important, however, to note that the duty
to bargain in good faith, and by extension, the obligation to
maintain the status quo, applies only to "mandatory" subjects of
bargaining, including "wages, hours, working conditions, and
contract grievance arbitration." 26 M.R.S.A. §  965(1)(C). See
also Mtn. Valley Edu. Ass'n v. Sch. Admin. Dist. No. 43, 655 A.2d
348, 351 (Me. 1995). 

     The Law Court has approved the "strict status quo" approach,
which renders the mandatory terms of a contract essentially
frozen after it expires. COLT, 659 A.2d at 845-46. In COLT, the
court held that wage increases, beyond those scheduled in a
three-year contract, were not enforceable after the contract
expired. See id. The court reasoned that the payment of increased
wages could have an enormous impact on the University's budget,
which would force the employer to make considerable concessions
not contemplated by the contract.[fn]6 See id. at 845. 

     Returning to the instant matter, three provisions of the CBA
are in question here. First, the CBA provides that an employee
who has accumulated 120 unused days of sick leave shall be
"remunerated on an annual basis for those days not used as sick
leave in excess of 120." (R. Tab A, CBA Art. 11(2).) Second, the
CBA earmarks $475.00 per 


     6 The Board, and Superior Court on appeal, applied the COLT
holding to a disagreement over whether an employer was required
to continue paying its proportionate share of health insurance
premiums after a CBA expired in Lewiston Sch. Dep't v. MSEA,
SEIU Local 1989, No. AP-09-001 (Me. Super. Ct. Oct. 6, 2009).
While this is a relevant application ofthe COLT holding, the
Union, in citing to this case, did not provide the Court with
access to it. That aside, in Lewiston Sch. Dep't, the Board and
Superior Court held that the employer was required to continue
payments, thereby rejecting the employer's argument that the
amounts of its contributions should be frozen at the time the
contract expired. See id. 

[end of page 9]

employee annually to pay uniform costs, and if any balance
remains on May 1,"employees will be paid such balance in a lump
sum amount by June 30 each year," (R. Tab A, CBA Art. 30.) Third,
"[w]hen a firefighter [or battalion chief] retires with a 
minimum of [twenty to] twenty-five [, depending on the date of
hire,] years of creditable service with the City of Augusta, Fire
Department, and in good standing, the City will pay 100% of
employee hospital insurance benefits until such time as eligible
for Medicare coverage." (R. Tab A, CBA Art. 12(3).)
 
     Addressing the sick leave payout provision first, the Board
concluded that it was a mandatory subject of bargaining as a
"form of compensation," and, thus, it was "materially and
significantly related to wages . . . ." (R. Tab S [hereinafter
"Board Decision"] 13.) The Board then concluded that "[t]he sick
time payout provision is enforceable under §  964-A(2) by virtue
of the static status quo because continuation of this provision
is necessary to maintain the existing level of wages, unlike the
step increase in COLT, which changed wages." (Board Decision 14.) 

     As for the uniform allowance payout provision, the Board
concluded that it too was a mandatory subject of bargaining since
it was also a "form of compensation." (Board Decision 15.) The
Board then concluded that the provision continued to be
enforceable because "[e]liminating this potential earning results
in a substantial change in the status quo, as there is a very
real potential loss ofincome." (Board Decision 15.) With regard
to both the sick leave and uniform provisions, the Board found
that the City was not forced to make a "substantial concession,"
like that which was found to be improper in COLT, because the
amounts imposed were established and existed under the expired
contract. (Board Decision 16.)
 
[end of page 10]

     Before addressing the retirement benefits provision, the
Court especially defers to the Board's determination that the
above provisions represented "forms of compensation," in part,
because the City only devotes a single page to the sick leave and 
uniform allowance payout provisions. (City Br. 15-16.) The City
merely declares that those two provisions do not constitute
wages, but offers no authority to refute the Board's 
conclusion to the contrary. Also, the City asserts that allowing
the payouts to continue after the expiration of the CBA alters
the static status quo in violation of COLT. The City's effort in
this respect does not, however, compel a different result than
that reached by the Board here.
 
     As to the retirement benefits provision, the Board held that
it was a mandatory subject of bargaining "to the extent that it
is a future benefit for active employees." (Board Decision 19.)
Furthermore, that provision continued to be enforceable because
"[t]he terms of the expired agreement clearly state that the City
will pay 100 percent of the premium costs." (Board Decision 19.)
The Board distinguished COLT, where pay raises would have
increased the employer's obligation, because here "the City is
merely required to continue [to] pay the same proportion that it
had been paying, that is, 100 percent." (Board Decision 19.) For
this provision, moreover, the Board read the obligation to arise
even when the firefighter becomes eligible and retires after the
CBA expired.[fn]7 (Board Decision 20.) The Board reasoned:
"[t]here is no condition stated in the agreement that the
individual must retire prior to the expiration of the contract."
(Board Decision 20.)
 
  7 It is worth noting that the Board actually rejected the
Union's position on this issue. The Union asked only that the
City be required to pay retirement benefits to those employees
who became eligible before expiration ofthe CBA (including those
who might not actually retire until after expiration). (R. Tab P
7.)

[end of page 11]
 
     The City here does not argue that the retirement benefits
provision is not "mandatory," and concedes that it must continue
to pay benefits to employees who retired before the CBA expired.
(City Br. 10.) However, the City asserts that the provision is
only enforceable as to those employees "who in fact retired
during the term of the contract," not those who retire after the
CBA expires. (City Br. 10.) The City argues that enlarging its
obligation in order to encompass new retirees is "just like the
requirement to continue paying annual wage increases" struck down
by the Law Court in COLT. (City Br.10.) The City argues that this
would alter the status quo because it had only agreed in the CBA
"to provide retiree health insurance to employees who retired
during its term." (City Brief 10.) 

     The Court agrees with the Board's interpretation of the
holding of COLT. In COLT, employees enjoyed a"specified increase
in wages" once a year for the term of the contract. COLT, 659
A.2d at 844. The increases were based on separate wage scales for
each year of the agreement, not, for instance, a percentage
increase set on a yearly basis. See id. Thus, enforcing future
wage increases would essentially compel the employer to accept a
payment formula it had not previously approved. See id. at 846.
Here, in contrast, the CBA unequivocally provides for 100%
payment of the benefits in question, so enforcing the provision
post-expiration does not enlarge the City's obligation, or compel
it to accept a commitment it had not already considered and
approved. Accordingly, its assessment that the "specified
increase in wages" in COLT were comparable to the post-expiration
enforcement of the retirement benefits provision is misplaced.
The City argues that enforcement alters the status quo because
new, additional employees will claim the benefit post-expiration
and the City will sustain a 

[end of page 12]

greater financial burden. (City Br. 11.) COLT is, therefore,
distinguishable in this respect because the added financial
burden of wage increases in COLT was derived from a payment
formula that did not exist under the former contract,
whereas here the City was aware that additional employees would
later become eligible as their circumstances changed. 

     Additionally, the CBA in COLT was specifically tied to the
three years of the contract. Here, in contrast, the provision
takes effect "[w]hen a firefighter retires," and does not
otherwise provide a time limitation. Unlike the contract in COLT,
the CBA here did not specifically limit its coverage to employees
who retired during its term, and, therefore, the City's position
that the retirement benefits provision is only enforceable as to
those firefighters who retired before the CBA expired is of
little merit.
 
                          Conclusion 
                                
     The Court affirms and upholds the Board's determination in
this matter. The Court agrees that the Board had sufficient
jurisdiction to determine the static status quo issue, and it
likewise appropriately applied the static status quo doctrine to
the benefits in question. 

The entry will be: The Maine Labor Relations Board decision is
upheld.




[10/12/12]                                 /s/M. Murphy
DATE                                       SUPERIOR COURT JUSTICE
          

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