collective bargaining agreement

My law partner, Gabe Jiran, talks today about whether it’s all that easy to change the terms of a collective bargaining agreement.  Is it just as easy as a vote? Or does it require something more? The answer has implications for all employers.  

With all of the talk about the financial difficulties faced by the government, I, and others in here, sometimes get the question of whether the State of Connecticut or other states might try to change the laws on collective bargaining or try to pass legislation to alter the terms of its existing collective bargaining agreements.

Other states have started down this road, but it is not that easy.

Recently, the Connecticut Attorney General was asked to opine on whether the General Assembly could statutorily change the contracts covering State employees to address the fiscal crisis.  A link to the opinion is here.

The short answer is that the State could do so, such as by passing a statute that wage increases be delayed or eliminated in State contracts.

However, the United States Constitution imposes a pretty heavy burden on the State to justify any such changes.

The relevant factors are:

  1. the severity of the fiscal crisis;
  2. the nature and duration of the contractual changes;
  3. the extent that the State has attempted to implement other alternatives in the past;
  4. the extent to which the State has studied and made findings about the feasibility of other alternatives;
  5. whether these alternatives would be a less dramatic option;
  6. the extent to which the fiscal crisis existed or was foreseeable when the State entered into the existing contract; and
  7. the State’s representations during negotiations for the existing contract.

Based on cases utilizing some or all of these factors, the State would face an uphill battle if it wanted to change an existing contract.

For example, a federal appeals court struck down the State of New York’s plan to delay wage increases for employees because New York had alternatives such as raising taxes or shifting money around in its budget.  In another New York case, the same court found that a $1 billion deficit was not a dire enough fiscal crisis to justify a delayed wage increase.

However, one case found that the City of Buffalo was able to impose a wage freeze when it was undeniable that Buffalo was in a fiscal emergency and that the wage freeze was a last resort after looking at other options.

In discussing the matters with others here, we expect that Connecticut and other states will continue to look for creative options to address their financial situations with employees.

However, it is doubtful that these options will involve changes to existing contracts without negotiation with the unions involved.  In addition, any State attempts to change contracts in the private sector would be almost certain to fail.

Last month, I talked about how the Connecticut Supreme Court would start having all seven justices decide cases, instead of just five. The move will reduce the number of cases being reconsidered and lead to more consistent results. A case this morning shows why that move is the right one.

First, the background: Earlier this year, the Connecticut Supreme Court, in a 3-2 decision held that the collective bargaining agreement between the named defendant, the town of Greenwich, and the Silver Shield Association, the union representing the town’s police officers, did not cover the promotion to the position of police captain, which is a position outside the bargaining unit.

At the time, I said that the case, Honulik v. Town of Greenwich, would have "some significance for those who practice labor law in the state because it will help define what areas should be the subject of mandatory bargaining and what areas shouldn’t. "

This morning, the Court upheld the decision, now by a 4-3 vote.  The decision, as it acknowledges in footnote one (which you can download here), makes several substantive changes to the underlying analysis of the prior decision and now supersedes it. 

The dispositive issue, according to the Court is whether the collective bargaining agreement between the town and the union governs the promotion to the position of police captain, which is a position outside the bargaining unit, and requires that the candidate with the highest assessment score on a promotional examination be awarded the promotion.  The Conn. Supreme Court again held that it does not.

The case turns on a pretty specific factual review of the text of the collective bargaining agreement and whether a "past practices clause" (as I talked about in the prior post) would apply. 

Justice Katz again writes the dissenting opinion and claims that the majority has made error after error in its logic:

In my view, the majority’s reasoning is flawed because, on the one hand, the majority fails to give full effect to the provision in the agreement addressing promotions to the position of captain by ignoring the fact that the terms therein have a meaning that is informed by past practice while, on the other hand, the majority gives an unduly expansive effect to that promotion provision by concluding that it invalidates the past practices clause in the agreement as it applies to this subject despite the fact that past practice is not inconsistent with, and indeed can be reconciled with, the promotion provision. The majority then compounds its error by interpreting the management rights provision in a manner that is not supported by law or logic.

For employers, the thoughts I had earlier this year seem to apply even more so with this new decision: 

For employers (and even some labor/employment law attorneys), it’s hard to get excited about this case. It’s lengthy and fact-specific and doesn’t lend itself to some overarching analysis. But this case does reinforce the notion that employers should get sound legal advice when negotiating the terms of an agreement with a union. Nothing beats good quality drafting of collective bargaining agreements to avoid any future disputes later on.

 

Here’s a warning: If you don’t get involved with labor unions or collective bargaining agreements, you might as well skip over this next post because things don’t get much more technical (or mundane, depending on your perspective) than the following case discussion. 

In a divided 3-2 decision, the Connecticut Supreme Court held that the collective bargaining agreement between the named defendant, the town of Greenwich, and the Silver Shield Association, the union representing the town’s police officers, did not cover the promotion to the position of police captain, which is a position outside the bargaining unit. (Note: the decision will be officially released on February 24, 2009.)  Justice Katz writes the dissenting opinion.

The case, Honulik v. Town of Greenwich, will have some significance for those who practice labor law in the state because it will help define what areas should be the subject of mandatory bargaining and what areas shouldn’t.  In this case, the court was asked to examine, among other items, the scope of the "past practices" clause in the collective bargaining agreement. That clause stated:

All benefits and obligations which are not described in this [a]greement or in either the manual or plan and which are now enjoyed by or required of the employees are specifically included in this [a]greement by reference just as though each such benefit or obligation was specifically set forth.

Ultimately, the court concludes that other provisions of the agreement belie the notion that
the past practices clause governs the nonmandatory bargaining subject of promotion to police captain.  The court notes that:

We also observe that our conclusion leaves intact the current status of labor law in our state. To conclude that past practices clauses protect nonmandatory subjects of bargaining, in the absence of express language to the contrary, would set forth a rule of law that might have the perverse effect of encouraging municipalities and other employers to behave erratically with respect to permissive subjects of bargaining so as not to create a past practice precedent. That we will not do.

For employers (and even some labor/employment law attorneys), it’s hard to get excited about this case. It’s lengthy and fact-specific and doesn’t lend itself to some overarching analysis.  But this case does reinforce the notion that employers should get sound legal advice when negotiating the terms of an agreement with a union.  Nothing beats good quality drafting of collective bargaining agreements to avoid any future disputes later on.

As an aside, I can’t help but chuckle at the following footnote (footnote 17, if you’re curious), buried in Justice Katz’s dissent :

In light of the urgency to resolve this expedited public interest appeal as expeditiously as possible, I do not address the remaining arguments of the parties.

In case you are curious, the court held oral arguments on the case on April 15, 2008, nearly 10 months ago.

Last Friday, I reported on a late-breaking agreement to discuss labor matters between the UAW and Foxwoods. Since that time, media reports have been wide with editorials discussing the matter as well.

The Day has been leading the way with a few reports/editorials:

So what’s going on now? Don’t expect to hear anything from the parties for at least 30 days, if not longer. Richard Hankins, a Kilpatrick Stockton attorney representing the Mashantucket Pequot Gaming Enterprise states:

The parties are contemplating a framework that could constitute a win for everyone involved. It is important, however, that the discussions continue without external pressures at this point. When it is constructive to report on specifics, the parties will do so.

In thinking about this matter over the weekend, I’ve been convinced more than ever that the UAW’s willingness to apply tribal law is a very big deal — a view shared by my fellow bloggers at Workplace Prof Blog

But don’t expect to hear a lot of that from Foxwoods. Despite the concession, Foxwoods still has to deal with UAW and there’s no good reason to embarass the UAW by claiming a victory in the application of tribal law. (And to Foxwoods’ credit, Foxwoods has not been particularly hostile to the UAW through this process instead focusing on issues like tribal sovereignty to make their case.)

So if an agreement is ultimately reached, expect to hear lots about how the agreement is a win-win for Foxwoods AND the UAW.  It may be that terms of a labor agreement are a win-win but make no mistake: applying tribal law to the union would just be a win for Foxwoods. 

Suppose you, as an employer, have union-backed employees. The union files a grievance on behalf of three employees alleging that they did not receive "premium" pay on three holidays.  Because the dipsute cannot be resolved, the matter is sent to arbitration. 

For some employers, defining the issue to be sent to arbitration may not seem that important; after all, the arbitrator will just hear evidence relating to the supposed issue and issue a decision consistent with that issue.

The Court Decision

But a case released by the Connecticut Supreme Court today (to be officially released August 5, 2008) demonstrates the importance of crafting language that specifies what the exact issue is and what remedies the arbitrator will have available to it.

In Office of Labor Relations v. New England Health Care Employees Union, District 1199 (download here), the parties submitted the above factual scenario to an arbitrator with the following issues listed:

Did the [s]tate violate [a]rticle [twenty-one] of the [agreement] in the [s]tate’s application of holiday designation and payment of holiday pay to the [g]rievants? If so, what shall be the appropriate remedy, consistent with the [agreement]?

The arbtirator rendered an award in favor of the union finding that the state did indeed violate the portion of the collective bargaining agreement.  In doing so, the arbtrator issued an decision that ordered that the employer had to change its holiday policy to give premium pay to all employees under the collective bargaining agreement on a going forward basis. 

The state appealed, first to the trial court, and then ultimately to the Connecticut Supreme Court, on the grounds that the arbtirator exceeded his authority when issuing the "remedy" because the arbitrator’s decision applied to all employees, not the three employees on whose behalf the issue was grieved.

The Connecticut Supreme Court agreed with the state, finding that the question presented should be interpreted like any contract:

As we have stated previously herein, it is well settled that we read contracts of this nature in a way that will give effect to every provision and apply a common sense construction of the words used. Thus, the language of the submission and its internal structure indicate that the question of relief was intended to address the harm to the three individual grievants named in the first question.

In essence, the Supreme Court stated that it was common sense that the remedy could only address the three employees at issue; otherwise, the parties would have structured the request differently.

The Takeaway

So what’s the takeaway from this case from an employer perspective (and indeed from a union perspective)? Take time to craft the issues for arbitration in as specific a fashion as possible.  While the Connecticut Supreme Court upheld the langauge that was used in this situation, the question presented to the arbitrator could have been more specific and the issue could have been avoided entirely.

It’s always interesting when the state agency responsible for enforcing discrimination claims is sued for discrimination itself. It’s even more interesting when the agency takes a position that is opposite of the view of the EEOC.  But a case decided on July 7th by the Second Circuit Court of Appeals sets up that scenario. 

The case is Richardson v. CHRO (download here) and it resolves (at least in the Second Circuit) an important question for employers who have collective bargaining agreements with unions.  Namely, does Title VII (the federal anti-discrimination law on gender and race, among other protected categories) prohibit clauses that allocourtesy flickr -- fork in the road w an employee to choose their remedy for discrimination complaints in a collective bargaining agreement or does such a clause constitute "discrimination". 

The Second Circuit, creating a split among the Courts of Appeals, agreed with the CHRO (and rejected the EEOC’s interpretation).  In doing so, the Court said that such a clause is not prohibited by Title VII and is not discrimination.  

The Court’s main holding is here:  

While there are limits on what a union may agree to in collective bargaining, Plaintiff’s union has not transgressed them by contracting to limit an employee’s legal recourse under certain circumstances. The collective bargaining agreement about which Plaintiff complains simply stipulates that an aggrieved employee may either arbitrate her grievance or file a charge with the CHRO describing that grievance.

Nor did the union discriminate against Plaintiff by adhering to the election-of-remedies provision after Plaintiff chose to file a charge with the CHRO. The union’s choice to adhere to its collective bargaining agreement in this case was indubitably non-discriminatory: the collective bargaining agreement does not constitute a waiver of any statutory rights under Gardner-Denver, and the defendants’ withdrawal from arbitration did not constitute retaliation because the forum-selection clause was a reasonable defensive measure to avoid duplicative proceedings in the two fora Richardson’s employer maintained for addressing discrimination complaints.

Here was the clause that the court approved of:

[D]isputes over claimed unlawful discrimination shall be subject to the grievance procedure but shall not be arbitrable if a complaint is filed with the Commission on Human Rights and Opportunities arising from the same common nucleus of operative fact.

In other words, the employee can aribtrate a discrimination complaint or file a charge with the state agency responsible for investigating discrimination complaints, but not both.  In so ruling, the Second Circuit upheld the lower court’s granting of summary judgment to the CHRO and the union. 

As the Workplace Horizons blog is quick to note, (and as the decision acknowledges), this now creates a split in the circuits, meaning that at some point, the issue will be ripe for U.S. Supreme Court involvement.

In the short run, for employers this type of clause may be an important bargaining chip in negotiations with unions. Until now, some unions might balk at such a provision because they might believe it was unenforceable. This decision now gives both employers and unions some room to manuever in this area.  For employers looking to reduce costs, inserting such provisions may also help to avoid discrimination lawsuits by having employees use the grievance procedure instead.

Interesting footnote: The case was argued in February 2007 and decided in July 2008. Thus, for those that think the justice system always moves quickly, think again.