AFSCME Council 93 v. Governor McKernan and State of Maine, MLRB No. 91-18 (Employee Representative Lambertson dissenting in part, May 31, 1991), Decision and Order on Motion for Stay, No. 91-18, June 5, 1991, Motion for Stay of Final Agency Action Denied, No. CV-91-208 (Me. Super. Ct., Ken. Cty., July 25, 1991), MLRB decision affirmed, No. CV-91-208 (Nov. 27, 1991 ), Board decision vacated sub nom Bureau of Employee Relations v. AFSCME Council 93, 614 A.2d 74 (Me. 1992) Kennebec, ss. SUPERIOR COURT CV-91-208 State of Maine and Governor McKernan Plaintiffs vs. ORDER American Fed. of State County And Municipal Employees Council 93, and Maine Labor Relations Board Defendants This cause came on for hearing, and was argued by counsel, upon the motion of the [State for a stay of final agency action.] IT IS ORDERED that: [the Court has considered the memoranda filed, the arguments of counsel at hearing and the cases cited. In particular, the Court has reviewed Sanford 411 A.2d 1010 at 1012-1015 and Footnote #6 in Maine State Emp Ass'n v State Dev. Office 499 A.2d 165 at 168. The Court is convinced that the proper criteria for granting a stay is as set forth in the State Employees Labor Relations Act, 26 MRSA Sec. 979. To obtain a stay, it must be clearly shown that " . . . substantial and irreparable injury will be sustained . . . ." There is no showing of any irreparable injury here. The entry will therefore be: Motion for stay denied.] Dated: [7/25/91] /s/[Bruce W. Chandler]______________ Justice, Superior Court __________________________ STATE OF MAINE SUPERIOR COURT KENNEBEC, SS CIVIL ACTION DOCKET NO. CV-91-208 STATE OF MAINE ) ) and ) ) GOVERNOR MCKERNAN, ) ) Petitioners, ) v. ) DECISION AND ORDER ) AMERICAN FEDERATION OF STATE, ) COUNTY, AND MUNICIPAL EMPLOYEES, ) COUNCIL 93 ) ) and ) ) MAINE LABOR RELATIONS BOARD, ) ) Respondents. ) This matter is before the court for review of final agency action pursuant to M.R. Civ. P. 80C. Briefs were submitted by the parties and oral arguments were presented on October 31, 1991. This court affirms the decision of the Maine Labor Relations Board. The State appeals from a determination by the MLRB that the State violated 26 M.R.S.A. 979-C(1) (E) by refusing to bargain with AFSCME over unilateral modifications to the pay dates as required by Section 979-D(1)(E)(1). The State asserts that the Board exceeded its authority and committed an error of law by finding that AFSCME had not waived its statutory right to bargain over these changes. The pivotal issue before the court is whether AFSCME, in the -1- "zipper" clause of the bargaining agreement, clearly and unmistakably waived its statutory right to bargain over payroll changes, or as AFSCME contends, the right to bargain was retained in the Article 28 Maintenance of Benefits Clause. The court's standard of review is limited to whether the governmental agency abused its discretion, committed an error of law, or made findings not supported by substantial evidence on the record. Lewiston Raceway Inc. v. State Harness Racing Commission, 593 A.2d 663 (Me. 1991). I. The instant case involves a clash of two clauses: a general waiver clause[fn]2, or "zipper" clause, and an alleged _________________________ 1. Maintence of Benefits With respect to negotiable benefits, terms and conditions affecting members of this unit, which are not covered by the Agreement, but which are presently provided pursuant to law, written regulations, personnel rules, written directives, or special orders, the State agrees to make no changes without appropriate prior consultation and negotiation with the union. 2. Embodiment of Agreement The parties acknowledge that during the negotiations which preceded this Agreement, each had the unlimited right and opportunity to make demands and proposals with respect to any subject or matter not removed by law from the area of collective bargaining and that the understandings and agreements arrived at by the parties after the exercise of that right and opportunity are set forth in this Agreement. Therefore, the State and Council #93, AFSCME, AFL-CIO, for the life of this Agreement, each voluntary and unqualifiedly waive the right, and each agrees that the other shall not be obligated to bargain collectively with respect to any -2- exception to the waiver clause contained in Article 28 - the maintenance of benefits clause. A zipper clause "purports to close out bargaining during the contract term and to make the written contract the exclusive statement of the parties' rights and obligations." R. Gorman, Basic Text on Labor Law, 455 (1976). A waiver clause "furthers the basic federal labor policy of promoting industrial peace as well as contract stability." American League of Professional Baseball Clubs and National League of Professional Baseball Clubs, N.L.R.B. General Counsel Memorandum, text reprinted in full at 99 LRRM 1724, 1725-26 (1978). However, when relying on a claim of waiver of a statutory duty to bargain, an employer has the burden of proving a clear relinquishment; silence in the collective bargaining agreement does not constitute a waiver. N.L.R.B. v. Challenge-Cook Bros. of Ohio, Inc., 843 F.2d 230, 233 (6th Cir.1988). It has frequently been held that a waiver of a statutory right must be clear and unmistakable. State v. Maine State Employees Association, 499 A.2d 1228, 1232 (Me. 1985). Although parties may contractually waive the statutory right to mid-term negotiations, albeit in clear and unequivocal terms, the Law Court has held that statutory rights can be expressly _________________________ subject or matter referred to or not referred to, covered or not covered in this Agreement, even though such subjects or matters may not have been within the knowledge or contemplation of either or both of the parties at the time they negotiated and signed this Agreement. -3- preserved, a general waiver clause notwithstanding. State of Maine v. Maine State Employees Association, 499 A.2d 1228 (1985) (The statutory duty to negotiate over the impact of such decisions could have been preserved in the contract). The union's intent, clearly evinced in Article 28, was to preserve negotiable benefits, terms and conditions of employment that were provided by law at the time the agreement was signed. Bi-weekly pay periods were, and are, provided pursuant to law. 5 M.R.S.A. 10. By the plain language of Article 28, the State agreed to make no changes with respect to these subjects without prior consultation and negotiation. It is with clear and unmistakable language that the parties agreed to preserve, not waive, the duty to negotiate with regard to extension of pay periods. In determining whether Article 28 is an express exception to the zipper clause it is the intent and understanding of the parties that governs. The intent of the parties must be ascertained from an examination of the whole instrument. The court sees no way to interpret the two clauses other than that the parties plainly agreed to exempt proposed changes to benefits, terms and conditions provided pursuant to law from the general waiver clause. The union expressly extracted this agreement from the State. There is no indication that AFSCME agreed to submit to arbitration on this issue. Rather, the State unequivocally agreed to negotiate any contemplated alterations to matters provided pursuant to law. -4- The State would have the court find that its failure to negotiate is merely a contractual violation and should result in the contractual remedy of an arbitration grievance proceeding. The State relies on State of Maine, supra, for this proposition. That case, however, is distinguishable from the present situation. First, the unilateral action on the part of the State in that case involved agency reorganization specifically permitted under the contract. In the present case, the unilateral action is not authorized by the contract and, moreover, directly contravenes 5 M.R.S.A. 10. "[T]here can be little doubt that where an employer unilaterally effects a change which has a continuing impact on a basic term or condition of employment, more is involved than just a simple default in a contractual obligation." R. Gorman, supra, at 421. See also Kinard Trucking Co. 152 N.L.R.B. 1157 (1965); California Blowpipe & Steel Co., 218 N.L.R.B. No. 117 (1975). Second, the Law Court pointed out that the right to bargain had been reserved by the union for certain other actions, but no such reservation had been requested for the impact of organizational changes. The Law Court found that the right to negotiate the impact of the organizational changes had been waived by the language of the waiver clause (neither party will attempt to compel mid-term negotiations on "matters that could have been raised during the negotiations"). The right to negotiate the impact of the relevant changes could clearly "have been raised during the negotiations" since the right to reorganize was specifically retained by the employer and the changes were -5- consequently anticipated. Failure to specifically reserve this right indicated a desire to waive bargaining over the impact of these changes. Because no express exception had been reserved, it was deemed waived. AFSCME, on the other hand, expressly reserved the right to negotiate over matters provided pursuant to law. This is presumably what the Law Court would recommend in order to preserve the statutory right of negotiation. Third, as noted, the State's unilateral action here blatantly disregards 5 M.R.S.A. 10. The extension of pay dates was implemented without first seeking legislative change. The State attempts to justify the refusal to negotiate by asserting that pay dates are "prescribed or controlled by law.[fn]3" However, the purpose of the prescribed-and-controlled exception to the requirement to bargain "is merely to prevent a term of a collective bargaining agreement from being in violation of existing law." _________________________ 3 979-D. Obligation to bargain 1. Negotiations. On or after January 1, 1975, it shall be the obligation of the public employer and the bargaining agent to bargain collectively. "Collective bargaining" means, for the purpose of this chapter, their mutual obligation: . . . E. To confer and negotiate in good faith: (1) To confer and negotiate in good faith with respect to wages, hours, working conditions and contract grievance arbitration, except that by such obligation neither party shall be compelled to agree to a proposal or be required to make a concession. All matters relating to the relationship between the employer and employees shall be the subject of collective bargaining, except those matters which are prescribed or controlled by public law . . . . -6- State v. M.L.R.B., 413 A.2d 510, 515 (1980). If anything, the prescribed-and-controlled provision undermines the position of the State: "The parties to collective bargaining are prohibited from negotiating an agreement, even though it concerns 'wages, hours, or working conditions,' where that agreement would be in violation of or inconsistent with any statutory directive." Id. at 515. Thus, collective bargaining that would extend the business hours of state liquor stores beyond the statutorily prescribed limit would be prohibited. State v. M.L.R.B. 413 A.2d at 515. Extension of pay dates would likewise be inconsistent with a statutory directive, and therefore rather than exempting the state from negotiating, would preclude negotiation on this subject altogether. "[T]here is no reason why the mandatory provision for collective bargaining) should be limited, in any way, excect in cases where some other applicable statutory provision explicitly and definitively prohibits the public employer from making an agreement as to a particular term or condition of employment." Id. at 516 (emphasis added) . Thus the prescribed-and controlled provision is not intended to provide a means of escaping the mandate to bargain. AFSCME preserved its statutory privilege to bargain with respect to items provided pursuant to law against unilateral action by securing a contract concession from the State to negotiate certain matters. It is clear that the State agreed to refrain from seeking a change in 5 M.R.S.A. 10 unless it bargained to do so and/or pursued a legislative amendment. -7- II. In State v. MSEA, the Law Court rejected a "sword-shield analysis" of zipper clauses because a contractual analysis led unequivocally to a finding of waiver. Application of a "sword- shield" analysis would have effectively negated an otherwise valid contractual provision. Id at 1232. However, in the present circumstance the application of this doctrine will not have this effect because Article 28, a valid contractual provision, specifically prohibits unnegotiated, unilateral action of this type. "The zipper clause has been held not to cede clearly and unequivocally to the employer the power to make unilateral changes in the status quo, and thus possibly modify . . . practices to the detriment of the employees, without notice and bargaining with the union." R. Gorman, supra, at 472. The parties agreed to waive the right to bargain as to matters contained or not contained in the contract with the exception of matters provided pursuant to law. The State is now attempting to utilize the zipper clause to avoid its obligation under Article 28 to bargain over a mid-term adjustment of benefits, terms and conditions provided pursuant to law. Article 17, however, does not authorize the State to institute unilateral changes both detrimental to the union and in contravention of the legislative mandate that state employees shall be paid bi-weekly. In N.L.R.B, v. Southern Materials Co., 447 F.2d 15 (1971), referred to as persuasive in State v. MSEA, the Court determined -8- that the right to mid-term negotiations had been waived regardless whether the Christmas bonuses were included within a maintenance of benefits provision vel non. The Court went on to point out, however, that if the maintenance of standards clause did include Christmas bonuses, the company would not have the right to discontinue them unilaterally. It would only have the right to decline the union's request to reconsider them during the life of the contract, and conversely the union could decline a similar request by the company. Id. at 18. The right to mid-term negotiations had been waived, not the right to continue to receive the bonus. There is a clear distinction between a situation where a party to a contract wishes to preserve the status quo and one where a party wishes to change it. In those cases involving a unilateral change, the employer relies on the existence of a zipper clause in the collective bargaining agreement not simply to establish that the contract precludes bargaining over new subjects during the term of the contract, but also, and more importantly, to establish that the contract gives the employer unfettered power to change any term or condition not contained in the contract. The Board has clearly stated that a zipper clause will not ordinarily be construed to grant the employer such unfettered power. American League of Professional Baseball Clubs and National League of Professional Baseball Clubs, N.L.R.B. General Counsel Memorandum, text reprinted in full at 99 LRRM 1724, 1725- 26 (1978). Article 17 waives the obligation to bargain collectively with respect to any subject or matter referred to or not referred to, covered or not covered, in the Agreement. Article 28 represents a commitment by the State to make no changes in benefits, terms -9- and conditions not covered by the Agreement but provided pursuant to law without consulting and negotiating with the union. The State cannot now use the general waiver of Article 17 to avoid its specific agreement in Article 28. Therefore, in conclusion, the court finds that the State was obligated to negotiate in accordance with the clear terms of the contract. Thus, MLRB did not err as a matter of law in failing to find that AFSCME had waived its statutory right to bargain over paydates. Therefore, it is hereby ORDERED and the entry shall be: The decision of the Maine Labor Relations Board is AFFIRMED. Dated: November 27, 1991 /s/__________________________ BRUCE W. CHANDLER Justice, Superior Court -10-