AMALGAMATED TRANSIT UNION, LOCAL 1564, AFL-CIO v SOUTHEASTERN MICHIGAN TRANSPORTATION AUTHORITY
Docket No. 85589
Supreme Court of Michigan
Decided July 15, 1991
437 Mich. 441
Argued October 2, 1990 (Calendar No. 5).
In an opinion by Justice BOYLE, joined by Chief Justice CAVANAGH and Justice LEVIN, the Supreme Court held:
SEMTA engaged in an unfair labor practice by unilaterally altering the disciplinary policy it applied to probationary employees. The unfair labor practice charge was not precluded by the prior decisions of the circuit court and Court of Appeals concerning the arbitrability of the parties’ contractual dispute. The MERC‘S conclusion that the parties’ consistent practice with respect to the discipline of probationary employees gave rise to
- The public employment relations act imposes a duty to negotiate in good faith over mandatory subjects of bargaining during the life of the collective bargaining agreement. While the parties may agree by contract to grant the right to take unilateral action, neither party may take unilateral action on such a subject unless it has satisfied the statutory obligation or has been freed from it. Factual findings of the commission are conclusive if supported by competent, material, and substantial evidence on the whole record, and the agency‘s choice between two reasonably differing views of the evidence must be given due deference. Legal rulings of an administrative agency may be set aside if they are in violation of the constitution or a statute or are affected by a substantial and material error of law.
- Collateral estoppel applies to preclude relitigation of issues actually determined by final judgment and essential to a judgment in a prior action between the parties. In order for collateral estoppel to apply, the issue must be identical to that determined in the prior action. Contractual and statutory claims, even when based on the same controversy, generally involve different factual and legal issues. Whether a party has engaged in an unfair labor practice prohibited by the PERA requires inquiries beyond interpretation of a collective bargaining agreement. In this case, the decision regarding the question of arbitrability did not decide the merits of the underlying claim. Because the Court of Appeals did not reach the rationale employed by the circuit court, the circuit court judgment was not conclusive. Thus, collateral estoppel does not bar this action.
- A past practice which does not derive from the parties’ collective bargaining agreement may become a term or condition of employment, binding on the parties. The creation of a term or condition of employment by past practice is premised in part upon mutuality and is justified by the parties’ tacit agreement that the practice will continue. The nature of a practice, its duration, and the reasonable expectations of the parties may justify its attaining the status of a term or condition of employment. Whether the parties bargained with regard to the subject or dealt with it in their collective bargaining
agreement is relevant. When a practice is consistent with discretion conferred upon an employer by contract, but is not required by contract, a factual question is presented regarding the existence of the mutuality necessary for a binding past practice. While the existence of a contractual clause granting management discretion to engage in a particular practice may be evidence that the mutuality required for a binding past practice is lacking, it does not preclude the creation of a term or condition of employment. All pertinent evidence, including the specificity of the reservation, the practices of the parties, the policies of the employer, and the bargaining history must be examined to determine whether a term or condition of employment is established. In this case, the MERC‘S conclusion that the application of the disciplinary procedure to probationary employees had become a term or condition of employment was supported by competent, material, and substantial evidence on the whole record and clearly is a reasonable view of the evidence which should not be displaced. - The waiver of statutorily protected rights in a contractual provision should not be inferred; the undertaking must be stated explicitly, and must be clear and unmistakable. Whether a union clearly and unmistakably waives its right to bargain over a specific matter is typically reviewed as a factual finding. In this case, the management-rights clause is not sufficiently specific to demonstrate that the union clearly and unmistakably waived its right to bargain over changes in the disciplinary policies applied to probationary employees. Nor is there any evidence to indicate an actual intent by the union to relinquish its statutory right to negotiate concerning the disciplinary scheme applicable to probationary employees. The commission‘s findings were supported by competent, substantial, and material evidence.
Affirmed.
Justice BRICKLEY, joined by Justice GRIFFIN, dissenting, stated that an exercise of a practice that is clearly pursuant to, consistent with, and in fulfillment of a term or terms of a collective bargaining agreement does not become a term or condition of employment apart from the collective bargaining agreement that requires midterm bargaining. The parties vested in the employer the sole authority to establish how and under what conditions probationary employees could be discharged. No violation of the duty to bargain exists under these facts because the parties bargained over the terms, and the employer‘s conduct clearly was consistent with the bargain.
Justices RILEY and MALLETT took no part in the decision of this case.
Sachs, Nunn, Kates, Kadushin, O‘Hare, Helveston & Waldman, P.C. (by Theodore Sachs and I. Mark Steckloff), for the plaintiff.
Dickinson, Wright, Moon, Van Dusen & Freeman (by John Corbett O‘Meara, Thomas G. Kienbaum, and Theodore R. Opperwall) for the defendant.
BOYLE, J. This action arises under
I
In 1975, the parties drew up a letter of understanding specifying penalties for an operator‘s failure to appear for work at the scheduled time and place. This letter was substantially incorporated in the 1977 contract between the parties as article
The 1977 contract also contained the following provision regarding probationary employees:
All new OPERATORS coming within the scope of this Agreement shall be on probation for a period of ninety (90) calendar days from the date they complete their training requirements. Such probationary period shall constitute a trial period during which the AUTHORITY judges the ability, competency, fitness, and other qualifications of new OPERATORS to do the work for which they were employed. . . .
During such probationary period, the AUTHORITY may discharge the OPERATOR at any time and its right to do so shall not be questioned by the UNION; nor shall the UNION assert or present any grievance on behalf of any such new OPERATOR.
The above provisions of article 6, §§ 1-2, of the 1977 contract were also contained in the 1974-77 contract between the parties; however, the earlier contract provided that both the union and SEMTA were to judge the qualifications and fitness of probationary employees.2
The union filed the instant unfair labor practice charge on February 12, 1980. Upon a motion by SEMTA, the MERC stayed its proceedings pending the conclusion of the arbitration proceedings.
After considering the terms of the contract as well as the practices of the parties, the arbitrator initially found that article 37, § 1 of the 1977-80 collective bargaining agreement, specifying a seven-step disciplinary scheme for “misses,” did apply to probationary employees, and “that [article 6, § 2] does not prevent the Union from questioning disciplinary action, including discharge, by SEMTA of probationary employees for engaging in miss-outs, or the presentation of grievances by the Union on behalf of such operators in such circumstances.”
All new EMPLOYEES coming within the scope of this Agreement shall be on probation for a period of sixty (60) days from the date they complete their training requirements and report to an assigned station designated by the AUTHORITY, ready for work. Such probationary period shall constitute a trial period during which the AUTHORITY and the UNION are to judge the ability, competency, fitness, and other qualifications of new EMPLOYEES to do the work for which they were employed. During such probationary period, the AUTHORITY may discharge the EMPLOYEE at any time and its right to do so shall not be questioned by the UNION; nor shall the UNION assert or present any grievance on behalf of any such new EMPLOYEE because of any matter or occurrence whatsoever falling within such probationary period.
The Court of Appeals affirmed the decision of the circuit court on somewhat different grounds. Relying on the language of article 6, § 2 and article 10, § 1, the Court of Appeals concluded that the contract dispute was not arbitrable:
Article 6, § 2 of the collective-bargaining agreement between plaintiff and defendant states that the union will not assert or present any grievance on behalf of any probationary employee. Article 10, § 1 of the agreement defines a grievance as any matter involving the interpretation or application of the terms of the agreement and any dispute concerning the suspension or discharge of an employee. Under these articles, defendant is prohib-
The union did not appeal the Court of Appeals determination.
With arbitration thus concluded, the MERC proceedings relating to the union‘s unfair labor practice charges resumed. In a decision and recommended order, the hearing referee rejected SEMTA‘S argument that the circuit court‘s order granting SEMTA summary disposition was res judicata regarding the matters raised in the unfair labor practices charge. The hearing officer reasoned that since the instant charge alleged statutory issues and not merely a contract violation, it raised issues which were not and could not have been resolved in the arbitration proceedings. She concluded next that the application of the miss policy contained in article 37 of the parties’ collective bargaining agreement to probationary employees became a term or condition of employment which could not be altered unilaterally. The hearing officer viewed the crux of the dispute as being whether article 6, § 2 of the collective bargaining agreement waived the union‘s right to bargain over changes in the disciplinary policy applicable to probationary employees and concluded that the union did not waive such right.
The Michigan Employment Relations Commission affirmed the decision of the hearing officer. 1987 MERC Lab Op 721. The MERC agreed that SEMTA‘S consistent application of the seven-step miss procedure set forth in article 37, § 1 had rendered the procedure a term or condition of
The Court of Appeals affirmed the commission‘s decision, Amalgamated Transit Union v Southeastern Michigan Transportation Authority, unpublished opinion per curiam of the Court of Appeals, decided February 10, 1989 (Docket No. 103428). This Court granted leave to appeal in an order issued April 16, 1990. 434 Mich 900 (1990). Appellant has raised three issues for this Court‘s consideration: 1) whether the doctrine of collateral estoppel precludes the union from asserting the instant unfair labor practice charge, 2) whether the MERC erred when it concluded that the seven-step miss procedure had become a term or condition of employment for probationary employees, and 3) whether the MERC erred in finding that the union did not waive its statutory right to bargain over such term or condition of employment.
II
The PERA imposes a duty to negotiate in good faith over mandatory subjects of bargaining which persists during the life of the collective bargaining
Our review of the commission‘s decision is circumscribed by the statutory mandate that factual findings of the commission are conclusive if supported by competent, material, and substantial evidence on the record considered as a whole.
Legal rulings of administrative agencies are not given the deference accorded factual findings. Legal rulings of an administrative agency are set aside if they are in violation of the constitution or a statute, or affected by a substantial and material error of law.
III
Thus we turn to the first issue on appeal. SEMTA
Collateral estoppel applies to preclude relitigation of issues actually determined by final judgment and essential to the judgment in a prior action between the parties. Senior Accountants v Detroit, 399 Mich 449, 459; 249 NW2d 121 (1976). 1 Restatement Judgments, 2d, § 27, p 250. In order for collateral estoppel to apply, the issue must be identical to that determined in the prior action. NAACP v Detroit Police Officers Ass‘n, 821 F2d 328, 330 (CA 6, 1987).
SEMTA characterizes the dispositive issue determined in the prior action as the finding “that ‘misses’ for probationary operators related to their ‘qualifications’ as judged by SEMTA under Article 6, and that Article 37‘s seven-step procedure simply did not apply to probationary operators.” (Emphasis in the original.)
Assuming that the circuit court did in some sense resolve what SEMTA generally refers to as the “Article 37 versus Article 6” issue, it did so as a matter of contractual interpretation. The question of contract interpretation which was decided in arbitration is not identical to the statutory issue in this case.5 It is true that this action is based upon the same events that underlay the earlier arbitration proceedings, specifically SEMTA‘S application of a four-step disciplinary procedure to probationary employees beginning in July or August, 1979. But as this Court recognized in Bay City Schools v Bay City Ed Ass‘n, 425 Mich 426,
The determination whether SEMTA engaged in an unfair labor practice prohibited by the PERA requires inquiries beyond interpretation of articles 6 and 37 of the collective bargaining agreement. The hearing officer and the MERC were required to determine whether the application of the seven-step miss procedure to probationary employees had become a term or condition of employment by virtue of its consistent application to probationary employees.7 A determination that article 37 of the collective bargaining agreement did not apply to probationary employees would not settle the question whether the application of the seven-step miss procedure had become a term or condition of employment which, pursuant to the PERA, could not be unilaterally altered absent impasse or waiver. In connection with the unfair labor practice charge upon which this case is based, the hearing officer and the MERC both considered whether article 6 constituted a waiver of the union‘s statutory right to negotiate over changes in disciplinary policy. Because this question must be answered by application of the stringent standard
We disagree with SEMTA‘S contention that the applicability of article 37 to probationary employees was a necessary predicate for the circuit court or the Court of Appeals determinations. By deciding that the union could not bring a grievance on behalf of probationary employees, the courts did not, and were not required to, determine whether article 37 applied to such employees. A decision on the question of arbitrability does not decide the merits of the underlying claim. AT&T Technologies, Inc v Communications Workers of America, 475 US 643; 106 S Ct 1415; 89 L Ed 2d 648 (1986).
Finally, assuming that the circuit court actually decided that article 37 was applicable to probationary employees, we conclude that the circuit court‘s decision was not a final judgment for purposes of collateral estoppel. The Court of Appeals, affirming the circuit court‘s summary disposition, decided only that article 6, § 2 precluded the union from asserting any grievance on behalf of probationary employees. Because the rationale used by the circuit court was never reached by the Court of Appeals, the circuit court‘s judgment is not given conclusive effect:
A judgment affirmed on appeal has conclusive effect, but if the appellate court affirms on grounds that differ from those relied upon by the lower court, the conclusiveness of the judgment as res judicata and as collateral estoppel are governed by the appellate decision. Thus if the trial court rests its judgment on two grounds, each of which is independently adequate to support it, the judgment is conclusive as to both; but i[f] the appellate court affirms on one ground without passing on the other, the second ground is no longer conclu-
Having concluded that collateral estoppel does not bar the instant action, we turn to the merits of the appeal.
IV
The next question is whether SEMTA‘S application of the seven-step miss procedure to probationary employees became a term or condition of employment so that it could not be unilaterally altered absent impasse or waiver.9 A past practice which does not derive from the parties’ collective bargaining agreement may become a term or condition of employment which is binding on the parties.10 The creation of a term or condition of employment by past practice is premised in part upon mutuality; the binding nature of such a practice is justified by the parties’ tacit agreement
The inquiry whether a past practice has given rise to a term or condition of employment is not limited to the consideration of the consistency and duration of the practice itself. Whether the parties have bargained regarding the subject or dealt with it in their collective bargaining agreement are also relevant considerations. In finding that there was substantial evidence in support of a board finding that a Christmas bonus had become a term or condition of employment, the United States Circuit Court of Appeals for the First District in Isla Verde Hotel Corp v NLRB, 702 F2d 268, 271 (CA 1, 1983), considered not only the past practice of paying bonuses, but also the bargaining relationship of the parties which had included discussions about bonus payments. In Office & Professional Employees Int‘l Union v NLRB, 136 US App DC 12; 419 F2d 314, 321 (1969), the court considered “past practice” not only in terms of the consistent use of unit employees to perform audits, but also took note that the union had bargained on the matter in the past, and that discussions had resulted in no contractual provision on the subject. Id. at 19.13
that “[i]n the face of . . . established practice, the contract is only relevant to the extent that it may indicate the union‘s waiver of its right to bargain.” Road Sprinkler Fitters Local Union v NLRB, 219 US App DC 228, 233; 676 F2d 826, 831 (1982). Curiously, the court cited Office & Professional Employees Int‘l Union, supra, where the court considered not only the bargaining history but the absence of a contractual provision regarding audits or auditors before concluding that the consistent use of unit employees to perform audits had become a term or condition of employment, id. at 19. The two other cases cited in Road Sprinkler Fitters for the statement that the contract is only relevant to the issue of waiver, Rose Arbor Manor v Retail Clerks Union, 242 NLRB 795 (1979), and NLRB v Sweet Lumber Co, 515 F2d 785 (CA 10, 1975), cert den 423 US 986 (1975), do analyze management-rights clauses within the analytical framework of waiver. However, they do not limit the relevance of the contract to that question, nor is such a limitation required or suggested by the analyses.
Thus, in NLRB v Merrill & Ring, Inc, 731 F2d 605, 608 (CA 9, 1984), the court concluded that a “uniform past practice and policy” that employees summoned for jury service were not required to report for work in the morning before jury duty had become a term or condition of employment, notwithstanding the employer‘s claim that this practice was affirmatively permitted by a clause in the contract.
Similarly, in Trenton v Trenton Fire Fighters, 166 Mich App 285, 289-290, 295; 420 NW2d 188 (1988), the Court of Appeals upheld the MERC‘S conclusion that the fire department‘s “long-standing policy” regarding minimum manpower requirements established a term or condition of employment, notwithstanding the arbitrator‘s conclusion in prior proceedings that the contract management-rights clause reserving the employer‘s right to control “operations” permitted a change in manpower requirements.
The relevance of a contractual provision or other policy of employer discretion to the question whether a term or condition of employment has arisen from past practice was recognized in Battle Creek Fire Dep‘t v Organization of Supervisory Personnel, 1989 MERC Lab Op 726, where the union charged that the city committed an unfair labor practice when it unilaterally began assigning overtime work previously performed by battalion
Similarly in AFSCME v Detroit Transportation Dep‘t, 1989 MERC Lab Op 30, the MERC declined to find a past practice constituting a term or condition of employment where, pursuant to express written policy, the employer retained the option to deviate from the alleged “past practice.”15
The approaches of the federal courts, of the Michigan Court of Appeals, and of the commission reveal that the existence of a term or condition of employment is a factual matter. While the existence of a contractual clause granting management discretion to engage in a particular practice
In this case, the existence of a contractual clause reserving SEMTA‘s right to judge the “ability, competency, fitness, and other qualifications” of probationary employees and to discharge at any time provides some evidence against the conclusion that a term or condition of employment was created. However, the evidence is not so strong as it was in Detroit Transportation Dep‘t, for example, where the written policy specifically permitted the annual readjustment of the disciplinary “triggers.” The evidentiary weight of the management-rights clause is counterbalanced by the highly consistent manner in which the seven-step disciplinary procedure was applied to probationary employees.
A review of the exhibits admitted before the hearing officer reveals that at least ninety percent of probationary employees disciplined before August, 1979, were disciplined consistent with the seven-step procedure in article 37. Significantly, most of the violation records make express reference to article 37. At the hearing, two SEMTA operators testified that in their initial training, which immediately preceded the probationary period, they received literature summarizing the seven-step miss procedure. The union introduced as an exhibit a booklet which had been compiled for distribution to probationary employees. That
We find the MERC‘S conclusion that the application of the provisions of article 37 to probationary employees had become a term or condition of employment to be supported by competent, material, and substantial evidence on the record. The commission‘s view that the application of the seven-step procedure to probationary employees became a term or condition of employment is clearly a reasonable view of the evidence, and one which should not be displaced by this Court.
V
Thus we turn to the final issue raised by SEMTA and conclude that the commission‘s finding that the union did not waive its right to bargain over the disciplinary policy applied to probationary employees was not erroneous and was supported by competent, material, and substantial evidence on the whole record.
The waiver of statutorily protected rights in a contractual provision should not be inferred unless the undertaking is “explicitly stated“; such a waiver must be “clear and unmistakable.” Metropolitan Edison Co v NLRB, 460 US 693, 708; 103 S Ct 1467; 75 L Ed 2d 387 (1983). In applying this standard, the NLRB has looked for evidence of an actual intent to waive a bargaining right:
In order for contract language to effect a waiver of bargaining rights, it must be “clear and unmistakable.” In assessing that question, the Board considers the bargaining history of the contract language and the parties’ interpretation of the language. Where an employer relies on contract language as a purported waiver to establish its right to change terms and conditions of employ-
The “clear and unmistakable” standard is applied by the MERC, as well as our Court of Appeals. See Lansing Fire Fighters v Lansing, 133 Mich App 56; 349 NW2d 253 (1984); Kent Co Ed Ass‘n v Cedar Springs, 157 Mich App 59, 66; 403 NW2d 494 (1987); Westland Fire Fighters Ass‘n v Westland, 1987 MERC Lab Op 793, 801; Royal Oak Police Officers Ass‘n v Royal Oak, 1988 MERC Lab Op 605, 611. The MERC frequently looks for an “explicit” waiver as well. See Roseville Fire Fighters Ass‘n v Roseville, 1982 MERC Lab Op 1377, 1386 (clear and explicit waiver is required, absent past practice or other evidence of explicit intent to waive a bargaining right); Teamsters Union v Mt Clemens, 1986 MERC Lab Op 30, 33.
The MERC‘S conclusions regarding whether the union clearly and unmistakably waived its right to bargain over a specific matter is typically reviewed as a factual finding. See Kent Co Ed Ass‘n, supra at 66; Mid-Michigan Ed Ass‘n v St Charles, 150 Mich App 763, 771; 389 NW2d 482 (1986) (a management-rights clause was not a sufficiently clear and explicit waiver when viewed in the context of the parties’ past practice). See also Int‘l Union v NLRB, 802 F2d 969, 973 (CA 7, 1986). We cannot dispute the commission‘s finding that the management-rights clause did not represent a clear and unmistakable waiver of the duty to bargain before altering the disciplinary procedure applicable to probationary employees.
We consider first the language of article 6, § 1 providing that SEMTA “judges the ability, competency, fitness, and other qualifications of new operators to do the work for which they were employed.” This wording is not so unequivocal as to justify this Court‘s overturning the commission‘s conclusion that the union did not clearly and unmistakably waive the right to bargain over changes in disciplinary policy with respect to probationers. The MERC, as well as the NLRB, typically look for a waiver of the duty to bargain about a specific subject.
The degree of specificity which will indicate an intent to waive a statutory bargaining right is illustrated in NLRB v United Technologies Corp, 884 F2d 1569, 1574 (CA 2, 1989), where the court considered whether a contractual management-rights clause constituted a waiver of the union‘s right to bargain concerning a change in the company‘s progressive discipline policy. The contractual clause reserved management‘s right “to make and apply rules and regulations for production, discipline, efficiency, and safety.” On the basis of this language and additional contractual language specifically granting the employer the right “to discharge or otherwise discipline any employee for just cause,” the court found a waiver of union‘s right to negotiate over disciplinary policy.
By contrast, the NLRB in Dearborn Country Club & Hotel Employees, 298 NLRB —; 134 LRRM 1211 (1990), found that the language of a management-rights clause was not sufficiently specific to constitute a waiver of the union‘s right to bargain over changes in an established practice of offering overtime first to full-time employees. The board found the contractual clause reserving the employer‘s right “to arrange its work schedules, to designate
In Spring Lake Ed Ass‘n v Spring Lake Schools, 1988 MERC Lab Op 362, the commission found no waiver of the union‘s right to bargain over a change in the content of the form used to evaluate teachers, despite a contractual clause reserving management‘s right to hire teachers and to “‘determine their qualifications and the conditions for their continued employment ....‘” The MERC noted the absence of explicit reference to the evaluation instrument. The MERC also reviewed the parties’ bargaining history, which did not reveal an intent by the union to waive its right to bargain over the evaluation form. Id. at 366.
The contract in this case is lacking the specificity which would indicate that the union “consciously yielded” its right to negotiate concerning the discipline applied to probationary employees.16 Article 6, § 1 of the agreement contains no mention of the employer‘s right to discipline probationary employees. While the right to discipline, not referenced in the contract, is certainly closely related to the employer‘s judgment of ability, competency, fitness, and “other qualifications,” which right is contractually reserved, it is not the same matter. We conclude that the management-rights clause contained in article 6, § 1 of the contract
SEMTA also relies on the “sweepingly broad” language of article 6, § 2 which provided that SEMTA could discharge a probationary employee “at any time and its right to do so shall not be questioned by the union; nor shall the union assert or present any grievance on behalf of any such new operator.” We accept the commission‘s conclusion that this language did not clearly and explicitly waive the union‘s right to bargain over changes in the disciplinary policy applied to probationary employees. Article 6, § 2 refers to discharge, but not to discipline. Nor has SEMTA cited any evidence which would indicate an actual intent by the union to relinquish the statutory right to negotiate concerning the disciplinary scheme applicable to probationary employees.
SEMTA contends that article 6, § 2‘s broad language providing that the union will not “question” the discharge of probationary employees would be rendered meaningless if interpreted only as a waiver of the right to grieve since article 6, § 2 expressly provides that the union shall not “assert or present any grievance” on behalf of probationary operators.18 However, the record supports the
In 1980, the ambiguous language of article 6, § 2 was changed to provide that a probationary operator “may be discharged by the Authority without such discharge being subject to grievance.”19 Union representative Phillip Don Leo testified that Daniel Morrill, SEMTA Director of Operations, indicated that this change only clarified what was intended in the 1977-80 contract. That intent, Leo stated, was that the union was able to file grievances for probationary employees relating to actions short of discharge, but not including discharge. According to Leo, the 1980 negotiations involved no discussion about the union‘s right to go to the MERC or any other agency on behalf of probationary employees, focusing solely on grievance matters.
In view of this testimony, it appears unlikely that the language of the 1977 contract was intended to waive the union‘s statutory right to negotiate concerning the discipline imposed on probationary employees. We conclude that the commission‘s findings were supported by competent, substantial, and material evidence.
CONCLUSION
The MERC and the Court of Appeals correctly
The decision of the Court of Appeals is affirmed.
CAVANAGH, C.J., and LEVIN, J., concurred with BOYLE, J.
BRICKLEY, J. (dissenting). I agree with the majority that collateral estoppel (issue preclusion) does not foreclose this appeal. However, because I believe that the litigation below did not adequately resolve the question whether the employer‘s conduct created through practice a term of employment unamenable to unilateral change, I respectfully dissent.
Labor law has long prohibited an employer from unilaterally changing a term or condition of employment embracing a mandatory subject of bargaining. NLRB v Katz, 369 US 736; 82 S Ct 230; 8 L Ed 2d 230 (1962). A unilateral change by an employer violates the duty to bargain and thus contravenes “[o]ne of the primary purposes of the Act [designed to] promote the peaceful settlement of industrial disputes by subjecting labor-management controversies to the mediatory influence of
In the instant case, however, the employer did not violate the duty to bargain over a term or condition. The union and the employer did in fact bargain to vest an unconditional right of the employer to discharge probationary employees.1 The employer‘s exercise of discretion in establishing an orderly and fair disciplinary procedure for probationary employees short of discharge did not comprise a unilateral change of a material term or condition under the facts presented. Rather, it constituted an exercise of an agreed-upon provision of the collective bargaining agreement.
Unilateral change of term or condition cases generally appear in two factual configurations. In the first configuration, the contract/collective bargaining agreement is silent or ambiguous with respect to the alleged term or condition created by a past practice. However, the fact that the contract does not explicitly allow a term or condition is of no practical import, since “[the] statutory duty to bargain is independent of any obligation the employer may incur under [the] contract.” Road Sprinkler Fitters Local Union v NLRB, 219 US App DC 228, 233; 676 F2d 826 (1982). Thus, for example, an employer that consistently provides Christmas bonuses to employees, and then rescinds those bonuses without bargaining may commit an unfair labor practice. NLRB v Nello Pistoresi & Son, Inc, 500 F2d 399 (CA 9, 1974).
In the second configuration, the contract may explicitly allow or prohibit a particular practice. Even so, courts have found that a consistent policy or practice contrary to the contractual provision may yet ripen into a term or condition which if unilaterally changed initiates an unfair labor practice violation. Thus, in Mid-Michigan Ed Ass‘n v St Charles Community Schools, 150 Mich App 763, 767, 769; 389 NW2d 482 (1986), the Court of Appeals held that “the [employer‘s] past practice of providing health care benefits, although contrary to the contract provision, constituted a term of employment which could not be unilaterally changed.” The Court reasoned that “[b]ecause the district instituted the practice and permitted it to continue, knowing that it was contrary to the contract, the district cannot now rely on the contractual language to unilaterally change the practice.”
The Employment Relations Commission relied on St Charles in concluding that in the instant case “[w]hile the broad language of Article 6 gave [the employer] discretion to discharge probationary employees, it did not give [the employer] the explicit right to change a disciplinary policy which constituted an established term or condition of employment without giving [the union] notice and an opportunity to demand bargaining.” 1987 MERC Lab Op 721, 730. This statement, of course, begs the question. The obvious answer is that the language of article 6 did give the employer the discretion to discharge probationary employees,
The instant case is distinguishable both from cases in which the contract does not refer to the alleged term or condition created by past practice and cases in which a contractual provision conflicts with an established term or condition. Here, the parties bargained, and the resulting bargain provided the employer unfettered discretion to establish any policy to discharge probationary employees during the probationary period, or no policy at all. In exercise of that discretion, the employer chose to utilize the seven-step procedure of article 37 for failure to report for duty, and apparently did so in a fairly consistent manner. However, under the analysis of the MERC, as adopted by the majority, an employer confronts a Hobson‘s choice. Either an employer could establish no policy regarding discharge, and discharge probationers for the first infraction, or the employer could strive for perfect inconsistency in meting discipline to probationers. Only these courses would avoid the establishment of a uniform past practice and prevent an obligation to bargain over what had previously been bargained.
Under the analysis of the MERC and the majority, an employer that bargains for and obtains discretion to act independently relinquishes that discretion the moment it exercises discretion in a consistent fashion. If the employer exercises bargained-for discretion in an arbitrary and inconsistent manner, the creation of a term or condition through practice does not arise. In the instant case, the employer did not act contrary to the collective bargaining agreement, but in accordance with its terms. Under these circumstances, it can-
The majority states that “while the parties may by contract agree to grant the right to take unilateral action, it is well established that neither party may take unilateral action on such a subject unless it either has satisfied the statutory obligation or has been freed from it.” Ante, p 450, citing NLRB v C & C Plywood Corp, 385 US 421; 87 S Ct 559; 17 L Ed 2d 486 (1967). If that were a correct reading of the Plywood Court, it would be the end of the matter. I read the case differently, however, and, in fact, believe that it supports the opposite conclusion.
In Plywood, a classified wage scale had been agreed upon in the contract, and management had reserved the right to give premium pay to some employees. It subsequently attempted to give such premium pay to a class of employees, and the union brought an unfair labor practice petition. In granting the petition, the NLRB ruled that “the union had not ceded power to the employer unilaterally to change the wage system as it had.” Id. at 425. The Supreme Court said, “In refusing to enforce the Board‘s order, the Court of Appeals did not decide that the premium pay provision of the labor agreement had been misinterpreted by the Board.” Id. (Emphasis added.) Because the United States Supreme Court accepted the factual finding of the meaning of the contract, it reversed the decision of the United States Court of Appeals and reinstated the decision of the NLRB. In doing so, the United States Supreme Court further stated,
But in this case the Board has not construed a labor agreement to determine the extent of the
contractual rights which were given the union by the employer. It has not imposed its own view of what the terms and conditions of the labor agreement should be. . . . The Board‘s interpretation went only so far as was necessary to determine that the union did not agree to give up these statutory safeguards. Thus, the Board, in necessarily construing a labor agreement to decide this unfair labor practice case, has not exceeded the jurisdiction laid out for it by Congress. [Id. at 428. Emphasis added.]
It seems to be implicit in this NLRB case before the Supreme Court that if the contract had specifically given the employer the discretion to give this premium pay in the manner in which it did, it would not have had to bargain before instituting the premium pay. The Supreme Court seemed to think that that was the controlling factor. Plywood clearly suggests that the MERC should have made a determination of whether or not the employer was changing its seven-step procedure to a four-step procedure pursuant to the contract. The hearing referee‘s conclusion, affirmed by the MERC, about the meaning of article 6 is as follows:
In my view, the contract language here simply removed Respondent‘s obligation to demonstrate, with respect to discharged probationary employees, that the discharges were fair and in accord with established policies. [1987 MERC Lab Op 737.]
The specific language of article 6 by any fair and objective reading does not permit such a watering down of its obvious intent.
The parties in this case vested in the employer the sole authority to establish how and under what conditions probationary employees could be discharged. No violation of the duty to bargain
The rule requiring compulsory bargaining over terms created by past practice is designed to foster collective bargaining and ought not be distorted to obliterate a term of a contract that results from the process of collective bargaining. Such a result places the cart before the horse, or, better stated, allows the end to serve the means. For these reasons, I respectfully dissent.
I would hold that an exercise of a practice that is clearly pursuant to, consistent with, and in fulfillment of a term or terms of a collective bargaining agreement does not become a term or condition of employment apart from the collective bargaining agreement that requires midterm bargaining.
I would reverse the decision of the Court of Appeals and remand the case to the MERC for the application of this standard to the case at hand.
GRIFFIN, J., concurred with BRICKLEY, J.
RILEY and MALLETT, JJ., took no part in the decision of this case.
Notes
For each failure to report for duty at the proper time and place, an OPERATOR will be charged with a miss. Discipline for misses will be as follows:
A. First miss—written warning.
B. Second miss—without sixty (60) days free of misses since the last miss—one (1) day violation.
C. Third miss—without sixty (60) days free of misses since the last miss—three (3) days violation.
D. Fourth miss—without sixty (60) days free of misses since the last miss—one (1) day suspension.
E. Fifth miss—without sixty (60) days free of misses since the last miss—three (3) days suspension.
F. Sixth miss—without sixty (60) days free of misses since the last miss—seven (7) days suspension.
G. Seventh miss—without sixty (60) days free of misses since the last miss—dismissal.
Article 6, §§ 1-2, of the contract provided:All new OPERATORS coming within the scope of this Agreement shall be on probation for a period of ninety (90) calendar days from the date they complete their training requirements. Such probationary period shall constitute a trial period during which the AUTHORITY judges the ability, competency, fitness, and other qualifications of new OPERATORS to do the work for which they were employed. . . .
During such probationary period, the AUTHORITY may discharge the OPERATOR at any time and its right to do so shall not be questioned by the UNION; nor shall the UNION assert or present any grievance on behalf of any such new OPERATOR.
“During such probationary period, the operator may be represented by the Union in matters regarding wages and hours. However, during such period, the operator may be discharged by the Authority without such discharge being subject to a grievance. The Authority agrees to provide the Union with a written statement setting forth the reasons for discharge.”