Opinion
No. 15–P–1.
08-26-2016
CITY OF NEW BEDFORD v. COMMONWEALTH EMPLOYMENT RELATIONS BOARD.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
In August, 2009, faced with steep cuts in local aid from the Commonwealth and a ten percent reduction in wages and salaries in its budget for the fiscal year, the city of New Bedford (city) decided to close city offices at noon on Fridays and reduce the hours of many city employees by a half day each week (and reduce their wages accordingly) starting August 30, 2009. The American Federation of State, County and Municipal Employees, Council 93, Local 851 (union) filed a complaint with the Commonwealth Employment Relations Board (board) alleging that the city had engaged in practices prohibited by G.L.c. 150E, § 10. Both a hearing officer and the board ruled in the union's favor, finding that the city violated § 10 by imposing the reduction in hours without bargaining to resolution or impasse with the union or participating in mediation in good faith.
On appeal, the city and the board agree that the decision to close city offices at noon on Fridays was a “level of services” decision that was not a mandatory subject of bargaining. The city advances five arguments for overturning the board's decision. First, it argues that it was not required to bargain over the means of implementing the level of services decision because it was a nondelegable managerial decision, and the decision to close certain city services one-half day per week and the decision to furlough employees are inseparable. Second, it argues that it was not required to bargain over any means involving layoffs because the decision not to reduce the number of employees was itself a level of services decision. Third, it argues that it fulfilled its obligation to bargain. Fourth, it argues that the mediation and fact-finding procedures in G.L.c. 150E, § 9, did not apply because § 9 does not apply to a nondelegable managerial decision and because the parties were not engaged in negotiating the terms of a collective bargaining agreement (CBA). Fifth, it argues that it was excused both from bargaining about the furlough decision and from the mediation and fact-finding procedures in G.L.c. 150E, § 9, due to economic exigency. We affirm the decision of the board.
Under G.L.c. 150E, § 11(i ), an appeal from a decision of the board is governed by G.L.c. 30A, § 14, and is treated as an appeal from an agency action. Thus, the necessary parties to the appeal are the city and the board itself. The union had the right to intervene in this appeal under G.L.c. 30A, § 14(2), which it did not exercise.
Background. We recite the relevant facts as found by the CERB, reserving additional facts for where they become relevant below.
The city and the union had a CBA in force between July 1, 2006, and June 30, 2009. In December, 2008, the union notified the city that it wanted to enter into successor contract negotiations, and the city acknowledged receipt of that request on January 8, 2009. The first bargaining session did not occur until June, 2009.
During this period, the Commonwealth dramatically reduced local aid to the city. In January, 2009, local aid was reduced by about $2.8 million for the remainder of fiscal year 2009. On January 29, the mayor sent a letter to city employees informing them of this local aid shortfall and predicting another shortfall for fiscal year 2010, which would begin on July 1, 2009. He stated that maintaining full employment would “require a combination of [a] 10% reduction in base salary for the year, as well as seven (7) payless holidays to be determined.” In late July, 2009, the city received from the Commonwealth the official local aid figures for fiscal year 2010. They showed that general government aid would be cut by an additional $5.3 million to $22.8 million.
The first three bargaining sessions occurred June 24, July 20, and July 27. Both sides made proposals that the other side rejected. Of note, at the July 20 session the city proposed a one-year contract that would freeze wages, longevity payments, and sick leave incentive payments. The union rejected this proposal. At the July 27 session, the city proposed that union members accept a ten percent reduction in pay for one year and indicated that if the union did not accept this proposal, layoffs would be necessary. The city provided the union with a list of fifty-two positions, the holders of which would be laid off. The union rejected the offer of reduction in pay and accepted the possibility of layoffs.
The fourth bargaining session occurred on August 17, 2009. Six days prior, on August 11, the city council had approved a budget for fiscal year 2010 that cut the wages and salaries account by ten percent, as expected. At the August 17 session, the city informed the union of this cut and proposed that the hours of most union members be reduced by a half day each week between August 31, 2009, and June 30, 2010 (the furlough). For many affected employees, this reduction in hours would occur on Friday afternoons, when most city offices would close at noon. The city proposed different furlough schedules for the department of public facilities, the health department, the zoo, the library department, police dispatchers, and paramedics. The union rejected the proposal and suggested layoffs instead. The city responded that it was going to implement the furlough, starting September 1, 2009, under the management rights clause of the expired CBA, but that it was willing to discuss the details of the implementation with the union. The union announced that the parties were at an impasse and that it would file for mediation. The city reiterated that it would implement the furlough. The union stated that the city was acting unlawfully and that it would file a prohibited practice charge.
This August 17 proposal, a paper copy of which appears in the record, is dated August 14, 2009. The board included this proposal in its findings, and found that “there is no indication that the [u]nion received it before the August 17 bargaining session.”
This fact appears in a document that the board credited. It is also consistent with the content of the executive order, quoted infra. The record establishes that employees of the department of public facilities, the health department, the zoo, the library, as well as police dispatchers and paramedics, are members of the union.
The board accepted the city's argument that the decision in Boston Hous. Authy. v. National Conference of Firemen & Oilers, Local 3, 458 Mass. 155, 935 N.E.2d 1260 (2010), was not retroactive, and so the CBA remained in effect in August, 2009. However, the board rejected the city's argument that the union's agreement to this clause waived its right to bargain over the furlough. The city does not appeal that aspect of the board's decision.
The next day, August 18, the union filed a petition for mediation and fact finding with the Department of Labor Relations pursuant to G.L.c. 150E, § 9. On August 19, the mayor sent the union president a letter stating:
“This is to officially inform you that due to lack of funds in the City budget for Fiscal 2010, I am closing municipal offices and reducing the hours that AFSCME members will be employed each week. Each AFSCME member will be relieved from duty half of one regularly scheduled work day each week to accomplish the needed savings until further notice. We are willing to work with your local to address the impact regarding the implementation. You may contact the Solicitor's Office directly.”
On August 20, the mayor issued Executive Order No.2009–5, titled “Closing of Municipal Offices,” which states in relevant part:
“WHEREAS, as Mayor of New Bedford I have the authority to alter the work days of City employees, notwithstanding obligations pursuant to M.G.L.c. 150E, to accomplish budgetary savings.
...
Effective August 30, 2009, due to the lack of funds and to meet the budgetary challenge, for causes beyond the City's control, I am implementing a policy to relieve employees from duty for lack of funds. This reduction in hours is to be accomplished by the closing of all municipal offices at noon on each Friday for the rest of that day, beginning on August 30, 2009. The reduction in hours worked is to be considered a furlough and will be first reflected in payroll checks issued on September 10, 2009 and will continue until further notice.
Work reductions for certain operations of the Department of Public Facilities, the Zoo, Health Department, Library and Emergency Medical Services are to be implemented in accordance with their prior discussions with the Personnel Department. Police Dispatchers shall have their work schedule reduced by four hours per week as approved by the Chief. Paramedics shall have their work schedule reduced by one-half tour per week as approved by the Director.”
Although the board did not so find, the record suggests that paramedics and police dispatchers were ultimately exempted from the furlough.
The half-day furlough reduced each employee's hours by exactly ten percent each week.
The board did not find this fact explicitly, but referred in its decision to a “half-day” furlough. The meaning of this phrase is explained by evidence in the record. The furlough was not four hours per week for every employee, but was equal to ten percent of each employee's weekly hours. The city's August 17 proposal stated that “an employee regularly scheduled to work forty (40) hours per week shall be reduced four (4) hours per week, employees regularly scheduled thirty-five (35) hours per week shall be reduced by three and one half (3 1/2) hours per week, etc.”
The union filed a prohibited practice charge relating to the furlough on August 25, 2009. The parties also engaged in related litigation in the Superior Court and before a single justice of this court that is irrelevant to the present appeal.
The union had filed a prohibited practice charge as to other actions by the city two weeks earlier. A claim arising from that charge was included in the complaint of prohibited practice underlying this case as count II and was decided by the board. Neither party has appealed the board's disposition of that count, and we do not address it.
Discussion. Pursuant to G.L.c. 150E, § 11(i ), an appeal from a decision of the board is governed by G.L.c. 30A, § 14. Thus, this court will only set aside a board decision if it is “(a ) [i]n violation of constitutional provisions; or (b ) [i]n excess of the statutory authority or jurisdiction of the agency; or (c ) [b]ased upon an error of law; or (d) [m]ade upon unlawful procedure; or (e ) [u]nsupported by substantial evidence; or (f ) [u]nwarranted by facts found by the court on the record as submitted ...; or (g ) [a]rbitrary or capricious, an abuse of discretion, or otherwise not in accordance with law.” G.L.c. 30A, § 14(7). “We ... must accord deference to the commission's specialized knowledge and expertise, and to its interpretation of the applicable statutory provisions.” Worcester v. Labor Relations Commn., 438 Mass. 177, 180, 779 N.E.2d 630 (2002). See also G.L.c. 30A, § 14(7) (“The court shall give due weight to the experience, technical competence, and specialized knowledge of the agency, as well as to the discretionary authority conferred upon it”).
With this deference in mind, we cite decisions of the board (and its predecessor, the Labor Relations Commission) throughout our own decisions. We defer to them where appropriate, and otherwise cite them for their persuasive value.
1. Duty to bargain. Employers are required to bargain about “wages, hours, standards of productivity and performance, and any other terms and conditions of employment.” G.L.c. 150E, § 6. However, “[t]here are some subjects which, as a matter of policy, ... cannot be ... made the subject of collective bargaining.” School Comm. of Newton v. Labor Relations Commn., 388 Mass. 557, 563, 447 N.E.2d 1201 (1983) (Newton ). Among the subjects that fall within a public employer's managerial prerogative are decisions about the level of services to offer. Ibid. (“[T]he decision to reduce the level of janitorial services is an exclusive school committee prerogative”). Local 2071, Intl. Assn. of Firefighters v. Bellingham, 67 Mass.App.Ct. 502, 510, 854 N.E.2d 1005 (2006), S.C., 450 Mass. 1011, 877 N.E.2d 553 (2007) (“A union cannot ... determine the level of government services”).
Even though the decision to reduce services falls within a public employer's managerial prerogative, “[t]he means of achieving a reduction in force, by layoffs or otherwise, and the impact of that decision on the terms and conditions of employment are matters which, as a matter of policy, can be made the subject of collective bargaining.” Newton, supra. “Certainly, the question of termination of employment by layoff is one of the ‘terms and conditions of employment.’ “ Ibid., quoting from G.L.c. 150E, § 6. Layoffs involve “the very essence of the relationship, the employment itself, and not a peripheral matter.” Ibid.
The parties agree that the decision to close city offices at noon on Fridays was an exercise of the city's managerial prerogative to make level of services decisions, over which it did not have to bargain. The parties disagree, however, about whether the city was required to bargain over its decision to implement that reduction in services by cutting the hours of most employees by a half-day per week.
In its brief, the board only agreed that the decision to close city offices for a half day each week was a level of services decision. However, at oral argument, the board agreed that closing the offices at noon on Fridays, in particular, was a level of services decision.
The city advances two arguments in support of its position. First, it argues that there was only one means of implementing this level of services decision, and so bargaining was not required. Second, it argues that even if there were an alternative means that involved layoffs, both the decision to close offices at noon on Friday and the decision to maintain its then-current number of staff were level of services decisions, and so it was not required to bargain about either. We conclude that both the city's arguments are unpersuasive. There were multiple means of implementing the reduction in services, some of which did not involve layoffs, and the city has not established that maintaining the same number of employees was the only way to maintain the level of services desired.
a. Only one means. When there is only one means of implementing a decision within the employer's managerial prerogative, bargaining over means is not required. In the case establishing this rule, Local 346, Intl. Bhd. of Police Officers v. Labor Relations Commn., 391 Mass. 429, 437 n. 16, 462 N.E.2d 96 (1984) (Local 346 ), the Ayer police chief ordered certain police officers suspected of criminal activity to take polygraph tests or face discipline, including possible discharge. The union filed a prohibited practices charge, alleging that the department had violated G.L.c. 150E, § 6, by refusing to bargain over this directive. The Supreme Judicial Court determined that integrity and credibility were so important to the police department's effective performance of its duties that requiring polygraph tests for officers accused of criminal conduct was a “managerial prerogative.” 391 Mass. at 442, 462 N.E.2d 96. In a footnote, the court addressed whether the employer nevertheless had to bargain about the means or impact of its decision: “We have said that even if a decision is one committed to a public employer's prerogative, G.L.c. 150E, § 6, may impose a duty to bargain over the means and impact of the decision. In the instant case, however, the union has not briefed or argued that there is a distinction between the ‘decision’ to require officers suspected of criminal activity to submit to polygraph testing or to face discharge, and the ‘means' or impact of that decision. We perceive none. In any event, the issue is waived .” Id. at 442 n. 16, 462 N.E.2d 96 (citations omitted).
The city argues that this case is directly controlled by Local 346, as the only possible means of implementing the decision to close at noon on Fridays was to reduce employees' hours by a half day per week. In its decision, the board rejected this argument. It ruled that the city was required to bargain over whether this reduction in the level of services would be accomplished “by voluntary or involuntary reduction in hours, attrition, or otherwise .” We agree.
Means of implementing a level of services reduction may differ based on “the timing of the reduction, the number of employees to be affected, and, the criteria used to select [affected] employees....” Commonwealth & Massachusetts Nurses Assn., 18 M.L.C. 1220, 1225 (1991). See also Newton, supra at 566–567, 447 N.E.2d 1201 (“Because we hold that the school committee's decision to achieve a reduction in force by layoffs is a mandatory subject of bargaining, it follows that the timing of any decision to lay off employees, the number of employees to lay off, and which employees to lay off are also mandatory subjects of bargaining”). The other possible means cited by the board—voluntary reduction in hours and attrition—differ along these dimensions, and so the board's consideration of them is supported by precedent.
The city argues that the board erred in that voluntary reduction of hours and attrition are not, in fact, means of implementing the city's decision to close at noon on Fridays. In particular, it argues that once city offices were closed on Friday afternoons, no employees could work during that time, and therefore it had no option except to reduce employees' hours by a half day per week. We think the board's finding that other means were available is supported by substantial evidence.
According to the facts found by the board, not all the members of the bargaining unit had their hours reduced on Friday afternoons. The mayor's executive order carved out exceptions for employees of the department of public facilities, the zoo, the health department, the library, and emergency medical services. Employees in these departments had their hours reduced, but the reductions occurred at different times during the week for different employees. Thus, the reduction of services in these departments could have been accomplished, at least in part, by voluntary furloughs and attrition. The same is true of employees who worked less than forty hours per week at city offices that were closed at noon on Fridays. Although the board made no specific findings about how many hours each week city offices were open prior to the events at issue here, the fact that some employees worked forty hours per week implies that some offices were open for at least forty hours. Accordingly, the reduction in services by these employees could have been accomplished, at least in part, by voluntary furloughs or attrition.
Paramedics and police dispatchers were ultimately exempted from the furlough. See note 5, supra.
The record indicates that the bargaining unit contained employees who worked twenty, thirty, thirty-five, thirty-seven and one-half, and forty hours per week, respectively. In addition, emergency medical technicians worked forty-two hours per week. We consider this evidence insofar as it supports the board's finding that there were other means of implementing the noon closure on Fridays. See G.L.c. 30A, § 14(7)(e ) (court reviews agency decision for “substantial evidence”).
As for employees who worked forty hours per week, the city's proposal to the union explicitly contemplated that employees might be required to work more than thirty-six hours. The board could infer that this evidence undermined the city's representation that it would be impossible for even a single city employee to continue working during those hours. Again, the city could have achieved its level of services reduction, at least in part, by voluntary furloughs and attrition.
b. Maintaining number of staff is a level of services decision. The city argues that both its decision to close at noon on Fridays and its decision to maintain the same number of staff were level of services decisions, and so it was not required to bargain over any alternative means of implementing its decision to close at noon on Fridays that involved reducing the number of staff. The board rejected this argument by concluding that the furlough was not the only way to maintain the required service levels. This finding was supported by substantial evidence.
As discussed above, there were means of implementing, at least in part, the city's decision to close at noon on Fridays that did not involve layoffs, such as voluntary furloughs.
2. Bargaining obligation. The city argues that it satisfied its bargaining obligation by giving the union time to raise alternatives to the furlough and by offering to bargain over impact, and that the union waived its right to bargain by failing to respond. The board concluded that the union did not waive its right to bargain because the city presented the union with the furlough plan as a fait accompli and because it was improper for the city to try to limit bargaining to impact bargaining. The board's conclusions were supported by its findings.
The board also found that the parties had not bargained to impasse. The city does not squarely challenge this part of the board's decision, but does cite a National Labor Relations Board case for the proposition that a single, twenty-minute bargaining session can satisfy a party's obligation to bargain to impasse. See Dixon Distributing Co., 211 N.L.R.B. 241 (1974). To the extent the city is suggesting that it bargained to impasse, we reject this argument. The board found that there was no impasse, and this finding was supported by substantial evidence. See Newton, supra at 574, 447 N.E.2d 1201 (“There can be no impasse justifying unilateral action if the cause of the deadlock is the failure of one of the parties to bargain in good faith”).
A party waives its right to bargain by inaction only “where [it] had actual notice of the proposed change, a reasonable opportunity to negotiate over it, and unreasonably or inexplicably failed to bargain or to request bargaining.” Newton, supra at 570, 447 N.E.2d 1201. However, there is no reasonable opportunity to negotiate when the other party comes to the table with a fait accompli. See Anderson v. Selectmen of Wrentham, 406 Mass. 508, 512, 548 N.E.2d 1230 (1990) (“It would be antithetical to th[e] notion [of good faith bargaining] to permit a party to the bargaining process to come to the table with a fait accompli”). See also Town of Hudson, 25 M.L.C. 143, 148 (1999) ( “[A]n employer's duty to notify the union of a potential change before it is implemented is not satisfied by presenting the change as a fait accompli and then offering to bargain. A fait accompli exists only where, ‘under all the attendant circumstances, it can be said that the employer's conduct has progressed to a point that a demand to bargain would be fruitless' “ [citations omitted] ).
The board's findings support its conclusion that the furlough plan was presented to the union as a fait accompli. At the August 17 bargaining session, the city informed the union that it had the power to impose the furlough without bargaining, pursuant to the management rights clause in the expired CBA. After the union protested and stated that it would file for mediation, the city repeated that it would implement the furlough. Two days later, the mayor “officially inform[ed]” the union that he would impose the furlough, and the day after that he issued the executive order doing so. The second paragraph of that order states “as [m]ayor of New Bedford I have the authority to alter the work days of [c]ity employees, notwithstanding obligations pursuant to M.G.L.c. 150E.” In light of the city's position that it could implement the furlough without bargaining, the board was warranted in concluding that a demand to bargain would have been fruitless. See also Town of Hudson, supra (concluding that nine days between notification of a change and its effective date was “insufficient to afford the [u]nion a meaningful opportunity to bargain”).
The fact that the city offered to discuss “implementation” and “impact” with the union does not alter this conclusion. On August 17, after the city said it would impose the furlough under the management rights clause, it also said that it was willing to discuss the details of the implementation with the union. The letter that the mayor sent the union on August 19 also stated that “[w]e are willing to work with your local to address the impact regarding the implementation.”
The board has held that the defense of waiver by inaction cannot succeed when an employer improperly limits bargaining to impact bargaining. Boston Sch. Comm., 35 M.L.C. 277, 287 n. 23 (2009). This rule is reasonable and entitled to deference. As the city was required to bargain over means in addition to impact, the union's decision not to engage in impact bargaining did not constitute waiver by inaction.
3. Applicability of G.L.c. 150E, § 9. The city argues that the mediation and fact-finding procedures in G.L.c. 150E, § 9, are inapplicable, since that section only applies to negotiations over the terms of a CBA. It argues that the decision to impose the furlough was separate from the ongoing negotiations over the CBA, and that the union only requested mediation over the decision to impose the furlough. The board rejected this argument. We agree with the board's conclusion.
This section provides, in relevant part: “Upon the filing of a petition pursuant to this section for a determination of an impasse following negotiations for a successor agreement, an employer shall not implement unilateral changes until the collective bargaining process, including mediation, fact finding or arbitration, if applicable, shall have been completed and the terms and conditions of employment shall continue in effect until the collective bargaining process, including mediation, fact finding or arbitration, if applicable, shall have been completed....”
We need not address the city's argument that the prohibition on unilateral changes in G.L.c. 150E, § 9, does not apply when the change is entirely within the employer's managerial prerogative. We have concluded, supra, that the furlough decision was not entirely within the employer's managerial prerogative.
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The board has interpreted § 9 to prohibit employers from implementing any unilateral changes after a petition for mediation is filed, whether or not such changes are contractual. See Cambridge Health Alliance, 37 M.L.C. 168, 169–170 (2011). This interpretation of § 9 is reasonable and entitled to deference.
4. Economic exigency. The city argues that it was excused from its bargaining obligation by economic exigency. The board concluded that the city failed to prove the elements of the economic exigency defense, as established by prior board decisions. We agree.
Under board precedent, economic exigency is an affirmative defense that excuses a public employer's decision to change working conditions without bargaining. To establish this defense, the city must prove three elements: (1) circumstances beyond the city's control required the imposition of a deadline for negotiations; (2) the union was notified of those circumstances and the deadline; and (3) the deadline imposed was reasonable and necessary. See Town of Brookline, 20 M.L.C. 1570, 1595 (1994); Cambridge Public Health Commn., 37 M.L.C. 47, 52 (2010). See also Secretary of Admin. & Fin. v. Commonwealth Employment Relations Bd., 74 Mass.App.Ct. 91, 98, 904 N.E.2d 468 (2009) (“If the Commonwealth had agreed to bargain and no resolution or impasse was in sight as the implementation deadline approached, under longstanding commission precedent, the Commonwealth could have imposed a reasonable negotiation deadline, implemented the withholding, and continued post-implementation bargaining without running afoul of its obligations under G.L.c. 150E”). Even assuming that the city proved the first element, it failed to carry its burden of proving that it set a deadline for negotiations, that it informed the union of that deadline, or that the deadline was reasonable and necessary.
The city did not set a deadline for negotiations before the August 17 bargaining session. On July 27, the city represented to the union that its members would either have to accept a ten percent wage cut or face layoffs, but did not indicate that the negotiations had to conclude by any particular date. The city received the local aid figures at the end of July, 2009, and passed a budget cutting the wages and salaries account for fiscal year 2010 by ten percent on August 11. Nothing in the record indicates that the city set a deadline for negotiations or communicated that deadline to the union after receiving the local aid figures or after the budget was passed.
As discussed above, the city's actions at the August 17 bargaining session are inconsistent with its claim that it set a deadline for negotiations. The city's position at that session was that it did not have to bargain over the decision to implement the furlough and could do so unilaterally under the management rights clause of the expired CBA. On these facts, there was substantial evidence to support the board's finding that the city never set a deadline for negotiations or informed the union of the existence of one. The city's announcement that the effective date of the furlough would be September 1 (later moved forward to August 30) did not constitute setting a deadline for negotiations. The city's stated position that it did not need to negotiate over the decision to impose the furlough is incompatible with its present argument that the effective date was a deadline for negotiations over whether the furlough should be implemented.
Conclusion. The decision and order of the board is affirmed.
So ordered.