Lee Academy Education Assoc. and Lee Academy Board of Trustees, No. 87-UD-05
(April 14, 1987), reversed by MLRB No. 87-A-07. Board decision aff'd CV-87-338 and
556 A.2d 218 (Me. 1989).
STATE OF MAINE MAINE LABOR RELATIONS BOARD
Case No. 87-UD-05
Issued: April 14, 1987
_________________________
)
LEE ACADEMY EDUCATION )
ASSOCIATION/MTA/NEA )
)
and ) JURIDICTIONAL DECISION
)
LEE ACADEMY BOARD OF )
TRUSTEES )
_________________________)
This unit determination proceeding was initiated on December 1,
1986, when Lee Academy Education Association/MTA/NEA (hereinafter
referred to as "Union") filed a petition for appropriate unit deter-
mination, pursuant to 26 M.R.S.A. 966 (Pamph. 1986). The Union's
petition seeks the creation of a bargaining unit composed of all
Teachers (including half-time Teachers), the Athletic Director,
Department Heads, the Business Secretary, the Assistant Treasurer, the
Assistant Head Master, Dormitory Parents, and the Library Aide
employed by the Lee Academy Board of Trustees ("Employer"). The
Employer opposed the Union's petition on the grounds that the Lee
Academy Board of Trustees is not a public employer, within the defini-
tion of 26 M.R.S.A 962(7) (Pamph. 1986); therefore, the Maine Labor
Relations Board ("Board") lacks jurisdiction to fashion any bargaining
unit composed of the Employer's employees. At the outset of the evi-
dentiary proceeding in this matter, the parties agreed that con-
sideration of this action should be bifurcated. The hearing examiner
would first receive evidence on, weigh, and decide the jurisdictional
issue. If it was determined that the Board has jurisdiction to make
an appropriate unit determination herein, the evidentiary proceeding
would be reconvened in order to receive evidence pertinent to the
usual unit determination issues.
The evidentiary proceeding on the jurisdictional issue in this
case was conducted by the undersigned hearing examiner for the Board
in the Commissioner of Administration's Conference Room, State Office
Building, Augusta, Maine, on February 17, 1987. The Union was repre-
sented by Elmer S. Pinkham, Jr., Affiliate Service Director, MTA/NEA
[-1-]
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District #8, and the Employer was represented by Linda D. McGill,
Esquire.
Prior to presenting testimonial evidence, the following exhibits
were offered and admitted into the record:
Union Exhibit No. 1 Certification list of Lee Academy
Employees, Maine Department of Education
and Cultural Services, 1/22/87 [Admitted
without objection]
Union Exhibit No. 2 Letter from former Lee Academy Headmaster
John A. Robinson to Dept. of Education &
Cultural Services, April 16, 1986.
Contains 1986-1987 Block Grant informa-
tion, data has been updated for 1987-1988
and is, therefore, different from that in
the exhibit. [Admitted without objec-
tion, with caveat about 1987-1988 data]
Union Exhibit No. 4 Lee Academy Board of Trustees By-Laws
(1983 Revised Edition) [Admitted without
objection]
Union Exhibit No. 5 Faculty/Staff Contract, currently in use
at Lee Academy [Admitted without objec-
tion]
Union Exhibit No. 7 Letter from Internal Revenue Service
District Director to Lee Academy, 1/31/78
[Admitted without objection]
Union Exhibit No. 9 Internal Revenue Service Tax Examiner to
Lee Academy, 2/11/83 (Admitted without
objection]
Union Exhibit No. 13 Maine State Retirement System Payroll
Reporting Manual for Public School
Teacher Employers, 9/17/86 (Employer
objected on the grounds that expert
testimony would be required to interpret
any relevant sections of the Maine State
Retirement Law. Objection overruled. To
the extent that some Lee Academy employ-
ees participate in the State Retirement
System and to the extent, if any, that
such participation is relevant hereto,
then the Payroll Manual is relevant as
the Retirement System's interpretation of
its own rules and procedures.)
Employer Exhibit No. 1 Chapter 246 of the Private and Special
Laws of 1845 (Admitted without objec-
tion]
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Employer Exhibit No. 2 Current contract between Lee Academy and
Maine School Administrative District No.
30 [Admitted without objection]
Employer Exhibit No. 3 Letter from Superintendent of Schools,
Maine School Administrative District No.
30, to Deputy Commissioner, Maine
Department of Education and Cultural
Services, 12/29/86 [Admitted without
objection]
Employer Exhibit No. 4 Letter from Ellen Egan George to
Superintendent of Schools, Maine School
Administrative District No. 30, 1/8/87
[Admitted without objection]
Employer Exhibit No. 5 July, 1986 - June, 1987 Operating Budget,
Approved by Lee Academy Board of Trustees
on 10/18/86 [Admitted without objection]
The following exhibits were offered for admission into evidence
but were not admitted for the reasons stated in parentheses following
a description of each item.
Union Exhibit No. 3 Contract between Lee Academy and MSAD #30
(Withdrawn with the understanding that
the Employer is to submit the current
contract between Lee Academy and MSAD
#30; see Employer Exhibit No. 2.)
Union Exhibit No. 6 Seven-page package concerning the with-
drawal of Lee Academy from participation
in Social Security retirement and the
Academy's efforts to become involved in
the Maine State Retirement System
(Employer's objection that the exhibit
contains confidential communications
between Lee Academy and its attorney was
sustained.)
Union Exhibit No. 8 Memorandum from Assistant Attorney
General to Maine state Retirement System
dated February 6, 1981 (Employer's objec-
tion that there was no proper authen-
tication for the exhibit was sustained.)
Union Exhibit Nos. 10, Excerpts from the Maine State Retirement
11 and 12 System Public School Teacher payroll
Manual (Employer's objection that these
exhibits should be excluded as irrelevant
was sustained; see Union Exhibit No. 13
and caveat noted during discussion of its
admissibility.)
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Employer Exhibit No. 6 Lee Academy Faculty Handbook (Union
objected to the relevancy of the exhibit
to the jurisdictional question presented
and the Employer withdrew the proposed
exhibit.)
The sole witness presented by the Union was Ms. Therese Sawyer who
testified on voir dire on the issue of whether the Employer had waived
its attorney-client privilege in connection with Union Exhibit No. 6
and who appeared as a rebuttal witness. The Employer presented
Mr. Paul J. Keaney, Headmaster of Lee Academy, and Mr. Howard Mallett,
President of the Lee Academy Board of Trustees, as its witnesses. The
parties were afforded full opportunity to examine and cross-examine
witnesses and to introduce evidence. Both parties filed written argu-
ments which have been considered by the hearing examiner.
FINDINGS OF FACT
On the basis of the record as a whole, the hearing examiner finds:
1. The Petitioner, Lee Academy Education Association/MTA/NEA, is
a lawful organization which has as its primary purpose the represen-
tation of employees in their employment relations with employers,
within the meaning of 26 M.R.S.A. 962(2) (1974).
2. Through adoption of Chapter 246 of the private and special
Laws of 1845, the Legislature incorporated Lee Academy as a "body
politic" named Lee Normal Academy. The term "body politic" was a
generic term describing private corporations as illustrated by its use
in the enactments creating the Kennebec and Boston Steam Packet Co.
and the Bangor Steam Navigation Co. (Chapters 259 and 290, respec-
tively, of the Private and Special Laws of 1845).
3. Under Chapter 246, Lee Academy was to be governed by a Board
of Trustees which was authorized to sue and be sued; to have a cor-
porate seal; to enact by-laws for the management of the concern; to
take, hold, grant, convey, or lease real and personal property; and to
"choose all officers necessary for the management of their affairs,
for the promotion of education, and the preparation of teachers of
primary schools."
4. Since its incorporation, the Board of Trustees has been self-
perpetuating with current members filling vacancies on the Board as
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they occur.
5. The Board of Trustees consists of 30 members, each being
elected to a 6-year term by the other members of the Board, and meets
at least three times per year.
6. The Board of Trustees has full authority to manage the affairs
of the Academy including the power to take the following actions:
purchasing and selling realty, incurring debt, hiring and firing all
employees including the Headmaster and the faculty, managing endowment
funds, approving the budget, determining personnel policies and staff
salaries, determining curriculum options, establishing grade require-
ments, and maintaining the physical plant.
7. Between meetings of the Board of Trustees, the Board of
Directors, consisting of 8 members of the Board of Trustees, has the
power to act on behalf of the Academy, subject to ratification by the
Board of Trustees.
8. The Board of Directors meets with the Headmaster at least once
per month and therefore is more directly involved in the day-to-day
operation of the Academy. The Board of Directors functions as an exe-
cutive committee of the Board of Trustees and serves as the latter
Board's Finance Committee, managing the Academy's endowment fund.
9. The Academy's assets primarily consist of an endowment fund
valued at $1,141,000.00 and land and buildings worth between 2.5
and 3.5 million dollars.
10. The Academy's physical plant includes the main academy
building, a science/auditorium/planetarium building, a special educa-
tion classroom building, a home economics classroom building, 2 gym-
nasiums which are attached to each other, 2 residences, a dining hall,
a dormitory, and a garage, situated on a parcel of land 60 to 75 acres
in size.
11. The Academy is a member of the Association of Independent
Schools and is accredited by the New England Association of Colleges
and Secondary Schools.
12. Maine School Administrative District No. 30 ("M.S.A.D.
No. 30") was created by the Legislature, through its adoption of
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Chapter 90 of the Private and Special Laws of 1963.
13. Under the education laws in effect in 1963, no school adminis-
trative district could be created unless it encompassed a geographic
area having at least 300 resident high school pupils.
14. The Legislature recognized that "it is geographically
impossible to meet the minimum requirement of 300 resident high school
pupils in this area" and enacted Chapter 90 of the Private and Special
Laws of 1963 which stated, in part, as follows:
School Administrative District for Lee, Prentiss Plt.,
etc. authorized. The municipalities of Lee, Prentiss Plt.,
Springfield, Webster Plt., and Winn are exempted from the
limitations provided in the Revised Statutes of 1954,
chapter 41, section 111-E, as amended, and the Maine School
District Commission is authorized to proceed pursuant to
sections 111-F to 111-U-1 of said chapter 41, to take the
necessary action to allow the municipalities of Lee,
Prentiss Plt., Springfield, Webster Plt., and Winn to form
a School Administrative District and contract with Lee
Academy for the education of high school pupils.
15. During 1963 and pursuant to the authority granted in Chapter
90, cited above, the M.S.A.D. No. 30 Board of Directors, the Trustees
of Lee Academy, and the Maine Department of Education negotiated a
contract under which Lee Academy would provide secondary education for
the high school pupils from M.S.A.D. No. 30.
16. Through adoption of Chapter 46 of the Private and Special Laws
of 1965, the Legislature approved a "reconstitution" of M.S.A.D. No.
30. Although it does not mention the school district's contract with
Lee Academy, Chapter 46 states, in part, that "[A]ll of the proceed-
ings of the board of school directors of said district as said board,
was from time to time constituted and as shown by the records of said
district . . . are validated, confirmed and made effective."
17. Since its creation in 1963, M.S.A.D. No. 30 has always con-
tracted with Lee Academy for the latter to provide secondary education
to students from the geographic region encompassed by the former.
18. The complete text of the current contract between the Academy
and M.S.A.D. No. 30 is as follows:
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SECONDARY TUITION
CONTRACT BETWEEN LEE ACADEMY AND MSAD #30
Lee Academy and MSAD #30, by and through their respec-
tive Board of Directors, hereby contract for the education
of secondary students in MSAD #30. Lee Academy does cove-
nant and agree to provide high school instruction in accor-
dance with Title 20, Chapter 207 of the Revised Statutes of
1982 and all succeeding amendments and revisions thereto,
for all pupils, legal residents of MSAD #30 for the five
school years beginning on August 24, 1983. This contract is
meant to be a continuing contract, reviewed annually at the
combined meeting of the Directors of MSAD #30 and Lee
Academy with needed changes being made by mutual consent.
In consideration of the above service MSAD #30 agrees to
pay Lee Academy the legal tuition rate charged other com-
munities as provided in Chapter 207, as amended or hereafter
amended.
Students from the district may be permitted to attend
another secondary school other than Lee Academy, under the
following conditions:
A. Can show evidence that the alternative secondary
school offers a program of interest not offered at Lee
Academy.
B. Can show extraordinary circumstances for such a
request.
Approval of either A/B requests shall be made only upon
a majority vote of the respective boards of directors of Lee
Academy and MSAD #30.
The MSAD #30 Board of Directors reserve the right to
establish criteria for withholding secondary tuition privi-
leges for individuals as need arises.
(emphasis in original)
19. M.S.A.D. No. 30 is managed by a Board of Directors which con-
sists of 15 members and which functions pursuant to the authority
granted by 20-A M.R.S.A. 1251-1258.
20. Under the By-Laws of the Lee Academy Board of Trustees, the
Chairman of the M.S.A.D. No. 30 Board of Directors is, by virtue of
his office and co-terminus therewith, a Trustee and a Director of Lee
Academy with full voting rights in each capacity. One other member of
the M.S.A.D. No. 30 Board of Directors is, by virtue of his office and
co-terminous therewith, a Trustee of Lee Academy with full voting
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rights.
21. Article III, 6 of the By-Laws of the Lee Academy Board of
Trustees states:
Where possible and when number restrictions permit, any
sending unit that has five or more students enrolled at Lee
Academy will have representation on the Board of Trustees
of at least one person.
22. The M.S.A.D. No. 30 Board of Directors and the Lee Academy
Board of Directors meet in joint session two times per year. One of
the joint meetings is held to review the contractual relationship
between the parties, as is contemplated by the terms of their con-
tract. Meeting in joint session, the two Boards of Directors also
coordinate their school calendars one with the other and address
mutual concerns.
23. Lee Academy meets the statutory requirements to receive public
funds for tuition purposes found in 20-A M.R.S.A. 2951-2955.
24. The Academy's operating budget for the 1986-1987 school year
is $941,645.00. The following table illustrates the dollar amounts
and the percentages of the operating budget derived from public
sources.
Percentage of
Source Dollar Amount Operating Budget
Tuition
M.S.A.D. No. 30 282,493.50 30%
Other Towns 395,490.90 42%
State Subsidy for
Faculty Salaries 30,600.00 3.25%
Special Education
Salary Subsidy 30,230.00 3.21%
Accounts Receivable
(All from public 48,546.00 5.16%
sending units)
Dept. of Agriculture 12,500.00 1.33%
__________ ______
TOTALS 799,860.40 84.95%
25. M.S.A.D. No. 30 uses the Academy's auditorium and gymnasiums
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without paying for such use.
26. M.S.A.D. No. 30 has never provided the Academy with funds for
the purpose of helping to defray the Academy's capital expenditures in
such areas as the construction, maintenance, and repair of buildings.
27. The Academy contracts with M.S.A.D. No. 30 for the latter to
provide transportation for the Academy's students to and from school,
for athletic team travel, and for field trips. The Academy compen-
sates M.S.A.D. No. 30 annually for such transportation services.
28. Since December of 1942, Lee Academy has been exempt from
payment of Federal Income Tax as a non-profit corporation organized
for educational purposes, within the meaning of 501(c)(3) of the
Internal Revenue Code of 1954.
29. Some employees at Lee Academy participate in the retirement
program administered by the Maine State Retirement System.
30. Teachers at Lee Academy have received Teacher Recognition
Grant payments, pursuant to the provisions of 20-A M.R.S.A. 13503-A
and 13509(1) and (2) (Supp. 1986).
31. Some teachers and one administrator at Lee Academy have par-
ticipated in the development of a school improvement plan in conjunc-
tion with members of the M.S.A.D. No. 30 educational staff.
JURISDICTIONAL DISCUSSION
The question presented in this phase of the bifurcated unit
determination proceeding is whether Lee Academy is subject to the pro-
visions of the Municipal Public Employees Labor Relations Law ("Act"),
26 M.R.S.A. ch. 9-A (1974 & Pamph. 1986), and, hence, comes within the
jurisdiction of the Maine Labor Relations Board. The purpose of the
Act is to "promote the improvement of the relationship between public
employers and their employees by providing a uniform basis for recog-
nizing the right of public employees to join labor organizations of
their own choosing and to be represented by such organizations in
collective bargaining for terms and conditions of employment."
26 M.R.S.A. 961 (1974). To facilitate employee efforts in self-
organization for purposes of collective bargaining, the Board is
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empowered, upon receipt of a petition therefore together with the
required showing of interest, to fashion appropriate bargaining
units. 26 M.R.S.A. 966(1) (Pamph. 1986). Each such unit consists
of a public employer's employee classifications that share a clear and
identifiable community of interest. 26 M.R.S.A. 966(1) and (2)
(Pamph. 1986).
A threshold requirement[fn]1 in every unit determination is that the
employer, whose employee classifications are being considered for
inclusion into a proposed bargaining unit, must be a public employer,
within the definition of 26 M.R.S.A. 962(7) (Pamph. 1986). The mere
fact that an employer is a private corporation is not dispositive of
the question of whether that entity is a public employer within the
meaning of the Act. The Law Court has addressed this issue as
follows:
Plaintiff's contention that a private corporation can-
not be a "public employer" is also without merit. Section
962(7) provides that a "public employer," for purposes of
the Municipal Public Employees Labor Relations Act ("the
Act") (26 M.R.S.A. ch. 9-A), includes "any officer, board,
commission, council, committee or other persons or body
acting on behalf of any municipality or town . . . or of
any school . . . district." (Emphasis added) The Act
defines "person" as an individual, corporation, partnership,
_______________
1 Although there are no burdens of proof in unit proceedings, Rule
1.09(D), the question of whether the Board has jurisdiction to act in
a unit determination is, like the substantial change requirement in a
unit clarification, State of Maine v. Maine State Employees Associa-
tion, MLRB: No. 82-A-02, Interim Order, slip op. at 15-16 (June 2,
1983), a threshold issue concerning which the petitioner bears the
burden of both alleging and establishing the requisite element. The
petitioner in the instant proceeding offered its documentary evidence,
secured rulings on the admissibility of said exhibits and, reserving
the right to offer rebuttal evidence, rested its case. Reserving its
right to argue that the Petitioner had failed to carry its burden of
proof on the issue of jurisdiction, the Employer then offered its evi-
dence. The Employer did not press its objection in its brief; there-
fore, consistent with the Board's precedent, the objection is deemed
to have been withdrawn. Coulombe v. City of South Portland, MLRB No.
86-11, majority opinion, slip op. at 9 (Dec. 29, 1986); Teamsters
Local Union No. 48 v. University of Maine, MLRB No. 79-37, slip op. at
4, n.2 (Oct. 17, 1979). In any event, by the time that it rested, the
Petitioner had placed sufficient evidence in the record to warrant a
conclusion that the Academy is a public employer within the meaning of
the Act.
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company or association," 26 M.R.S.A. 1. It is thus evi-
dent that a "public employer" can be a private corporation,
such as plaintiff, it if acts on behalf of a municipality.
The phrase "acting on behalf of" used by Maine to
define the sweep of the term "public employer" is appar-
ently sui generis in public labor relations law. By
including within the definition of "public employer" a
corporation, as well as natural persons, who "act on
behalf of" a municipality, section 962(7) invokes the
general principles of agency, which are defined in the
identical terms of "acting on behalf of." See Desfosses
v. Notis, Me., 333 A.2d 83, 86 (1975), quoting Restatement
(Second) of Agency, 1(1) (1958). However, as the Board
with the affirmance of the Superior Court properly recog-
nized, the Act's purposes do not require that every agent
of a municipality be treated as a "public employer" subject
to the Act. By the established law of agency, some agents
are independent contractors, while there are other agents
who, if natural persons, are in contrast designated as
servants." The distinction between an agent-servant and
an agent-independent contractor is whether the agent's
performance with respect to his physical conduct is sub-
ject to another's control or right to control. In deter-
mining whether Baker Bus was a "public employer" under the
Act, the tribunals below, in effect, applied that tradi-
tional test.
Baker Bus Service, Inc. v. Keith, 416 A.2d 727, 730 (Me. 1980) (foot-
note omitted). There is no question that Lee Academy is a private,
non-profit corporation organized for educational purposes; therefore,
our inquiry will focus on whether, in its operation, the Academy is
"acting on behalf of" a school district.
The Board has had four opportunities to apply the above standard
in determining whether a "private" contractor was independent from the
public employer or was merely its alter ego in performing the services
in question. The following factors have been considered important in
evaluating whether the "private" contractor was subject to the public
employer's control or right to control, within the meaning of the
Baker Bus test: (1) the existence of a contract for the services at
issue; (2) the extent of the private contractor's capital investment
in the facilities and equipment required to perform the contracted
services; (3) the percentage of the "private" corporation's overall
operating budget received from the public employer; and (4) the right
to control or actual control exercised by the public employer over the
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"private" entity's performance of the contracted services. In the
Baker Bus case itself, the Law Court affirmed the Board's conclusion
that the private corporation was a public employer within the meaning
of the Act stating as follows:
Plaintiff [Baker Bus Service, Inc.] thus was not
required to furnish any of the necessary equipment, sup-
plies, or materials when it agreed to operate the school
bus system for Augusta. Nor was plaintiff required to
make more than a minimal capital investment. The City's
retained powers over routes and the hiring of personnel
establishes that plaintiff could exercise little indepen-
dent judgment in carrying out the contract. On the record
before us, the Board and the Superior Court were not incor-
rect in concluding that plaintiff, in performing its con-
tract to operate the Augusta school busses, was acting on
behalf of the City and under its control to an extent that
rendered it a "public employer" for purposes of the Act.
Baker Bus Service, Inc., 416 A.2d, at 731 (addition by hearing exam-
iner and footnote omitted).
The next case in which the Board applied the Baker Bus test was
Erskine Academy Teachers Ass'n v. Erskine Academy Board of Trustees,
MLRB No. 79-06, slip op. (Mar. 27, 1979) (Employee Representative
Schoonjans dissenting). In that case, an employee organization
charged that the Erskine Academy Board of Trustees had violated the
Act by failing and refusing to negotiate in good faith for a successor
collective bargaining agreement. The Academy argued that it was not
a public employer; therefore, its conduct did not violate the Act.
Despite the fact that the Academy derived over 95% of its income from
public tuition payments, Erskine Academy, supra, at 2, the Board
concluded that it was not a public employer within the meaning off the
Act. After outlining the Baker Bus standard, the majority of the
Board applied the test as follows:
In applying Baker Bus to the instant case, we are com-
pelled to conclude that Erskine Academy is not an agent of
a town or school district and is therefore not a public
employer under the Act. The Erskine Academy Board of
Trustees is under contract with no public body; it is
totally independent of local town and school officials;
it was founded as a private school and still operates
under trustees who need be faithful only to State law,
State regulations, and the founding trust deed; it is
responsible for its employees and operations; and, signi-
ficantly, it owns a huge capital investment.
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To hold otherwise would require a twisting of the
theory of Baker Bus. We are loathe to do so since we
believe the agency theory is a most plausible interpreta-
tion which is also well-suited to a definite application.
* * * * *
This is not to say that all privately-owned high
schools are the same. For example, we could reach a
different conclusion if a school had a contract with a
town, or if there were other significant differences.
Erskine Academy, supra, at 5.
The third case involving the Baker Bus test is Portland Public
Library and Portland Teachers Ass'n, MLRB No. 81-A-02, slip op.
(June 18, 1981), aff'd Portland Public Library v. Portland Teachers
Ass'n, No. CV-81-884 (Me. Super. Ct., Cum. Cty., Aug. 22, 1983).
The Board based its holding that the Library was a public employer on
the following factors: (1) the legislation establishing the Library
was like a contract in that it outlined the terms of the relationship
between the Library and the City of Portland, essentially providing
that the City was responsible for furnishing the buildings and funds
required to operate the Library and the Library would provide free
services to City residents, MLRB No. 81-A-02, at 8; (2) the Library
was "almost totally dependent" on the City for its annual operating
revenues, receiving approximately 80% of such funds from the City,
MLRB No. 81-A-02, at 3-4; and (3) despite the fact that the Library is
governed by a self-perpetuating Board of Trustees, two of the twenty
Trustees, the Mayor of the City and its Superintendent of Schools,
were public officials and, during the course of the relationship
between the parties, the Board of Trustees had abdicated to the City
Council the authority to decide most of the important questions con-
cerning the operation of the Library, including control over the hours
of operation, the number of employees, and the employee pay scale.
MLRB No. 81-A-02, at 7. In reaching its conclusion, the Board mini-
mized the influence of the fact that the Library owned assets valued
in excess of 9 million dollars and had an endowment fund worth
$1,068,000., MLRB No. 81-A-02, at 4, by stating that "[t]he Library's
capital investment clearly is dwarfed by the large City investments in
buildings and in the operating funds provided by the City." MLRB
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No. 81-A-02, at 7.
The final case applying the Baker Bus test is International
Brotherhood of Electrical Workers and Fox Islands Electric Coopera-
tive, Inc., MLRB No. 87-A-01, slip op. (Feb. 27, 1987). In that case,
none of the factors relevant to public employer control or right to
control over the "private" corporation was present. The Board based
its conclusion that the Cooperative was not a public employer on the
following: (1) the Cooperative did not provide service under any
contract with any public employer; (2) the Cooperative owned all of
the facilities and equipment required in its operations and there was
no evidence that the municipalities involved ever made significant
financial contributions to the Cooperative or provided it with land or
equipment; (3) the municipalities in question merely purchased
electricity from the Cooperative, like the Cooperative's other mem-
bers, and no evidence was presented concerning the percentage of the
Cooperative's total operating budget derived from the municipalities;
and (4) the member municipalities could neither appoint nor remove
members of the Cooperative's Board of Trustees and, participating at
the Cooperative's annual meetings on the same one meter-one vote basis
as the other members, the towns could only exercise about 10 votes out
of the 1206 votes eligible to be cast. Fox Islands, supra, at 3.
The municipalities in question had never controlled the Cooperative's
operations and the above factors established that the towns had the
right to control the utility's conduct.
In the instant case, Lee Academy provides secondary education to
essentially all high school students from SAD. No. 30 pursuant to the
terms of the contract between the Academy and the S.A.D. While the
mere existence of such an agreement may not be dispositive of the
public employer status issue, the terms of the pertinent contract
suggest that the School District has the right to control the
Academy's performance thereunder. The contract provides that the par-
ties are to review their relationship annually at a joint meeting of
their Boards of Directors. In addition to that provided for in their
agreement, the two Boards of Directors usually hold a second joint
meeting every year. At such joint meetings, the parties discuss mat-
ters of mutual concern. Encompassed within the annual review process
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is the potential for non-renewal of the parties' agreement.
Second, Lee Academy, like the Portland Public Library, derives an
overwhelming majority of its operating revenues from public employer
funds. Such funds are in the form of tuition payments from local
"sending units" and subsidies from the State paid because the Academy
educates publicly-funded students. See, i.e., 20-A M.R.S.A.
13502(1)(B) (Supp. 1986). While a high degree of financial support by
a public employer does not, in and of itself, translate to public
employer control over the recipient, such a level of support is "a
pertinent element" in establishing such control. Portland Public
Library, MLRB No. 81-A-02, at 8. Clearly, the Academy would be unable
to continue its operation at present levels without the public
employer funds which it currently receives.
Third and most significant is the fact that the S.A.D. and other
"sending units" exercise control over the Academy's activities through
their representation on the Academy's governing bodies. The chairman
and one other member of the S.A.D. Board of Directors are, by virtue
of the Academy Trustees' By-Laws, members of the Academy Board of
Trustees and the Chairman is a member of the Academy Board of
Directors. The Academy Trustees' By-Laws also provide that, where
possible, each "sending unit" having 5 or more students enrolled at
the Academy should have at least one representative on the Academy
Board of Trustees. The Academy Board of Trustees has de jure
authority to operate the enterprise, to hire and fire employees, to
set their wage rates, and to establish personnel policies; however,
unlike the situations in Fox Islands and Erskine Academy, the public
employers involved are represented with full voting rights of the
Academy boards. Although no evidence was presented that such public
employer representatives exercise majority control on either of the
Academy's governing bodies, the Academy's heavy reliance on the
tuition payments and related subsidies tends to amplify the public
employers' voices on the Academy boards.
The Academy's contract with the S.A.D., the degree of financial
support which the Academy receives from public employers, and the
public employers' representation on the Academy's governing bodies
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together persuade the hearing examiner that the Academy is subject to
the public employers' "right to control," under the Baker Bus test and
is, therefore, a public employer, within the meaning of the Act.
In reaching this decision, the hearing examiner is aware that, like
Erskine Academy, the Academy owns substantial assets, including all of
the facilities and equipment required to satisfy its obligation under
the contract with S.A.D. No. 30. While such a heavy capital invest-
ment is significant, the other relevant factors, taken together,
qualitatively outweigh the capital investment factor in this case.
The following facts had no effect in the decision-making process
in this case: (1) the Academy's tax-exempt status for Federal Income
Tax purposes, (2) some Academy employees participate in the retirement
plan administered by the Maine State Retirement System, and (3) some
Academy personnel participated in the development of a "school improve-
ment plan" together with some S.A.D. No. 30 employees. The first two
of these facts reflect decisions by other agencies, the Internal
Revenue Service and the Maine State Retirement System, with regard to
the statutes which each administers. Neither of these agencies is
competent to decide, nor did they in fact determine, that Lee Academy
is a public employer within the meaning of the Act. Their treatment
of the Academy and/or of its employees is, therefore, irrelevant here.
Fox Islands, supra, 87-A-01, at 2-3. The third fact was not given any
weight because no statute, regulation, or other authority was cited
limiting or requiring participation in the development of such plans
to public school employees. In any event, the treatment of particular
academic institutions by the Department of Education and Cultural
Services for certain purposes pursuant to the statutes which it admin-
isters does not require similar treatment for other purposes under
different statutes.
CONCLUSION
On the basis of the foregoing findings of fact and discussion and
by virture of and pursuant to the provisions of 26 M.R.S.A. 966
(Pamph. 1986), the hearing examiner concludes that Lee Academy is a
public employer, within the definition of 26 M.R.S.A. 962(7) (Pamph.
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1986). The Executive Director or his designee, therefore, has juris-
diction to make an appropriate unit determination, pursuant to 26
M.R.S.A. 966.
Dated at Augusta, Maine, this 14th day of April, 1987.
/s/____________________________
Marc P. Ayotte
Hearing Examiner
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