PUBLIC SAFETY EMPLOYEES ASSOCIATION, AFSCME LOCAL 803, AFL-CIO, Appellants and Cross-Appellees,
v.
CITY OF FAIRBANKS, Appellee and Cross-Appellant, and ALASKA LABOR RELATIONS AGENCY, Appellee.
Appeal
from the Superior Court No. 4FA-15-02868 CI of the State of
Alaska, Fourth Judicial District, Fairbanks, Michael P.
McConahy, Judge.
Molly
C. Brown and Margaret Simonian, Dillon & Findley, P.C.,
Anchorage, for Appellants and Cross-Appellees.
Paul
J. Ewers, City Attorney, Fairbanks, for Appellee and
Cross-Appellant.
Notice
of nonparticipation filed by Kimberly D. Rodgers, Assistant
Attorney General, Anchorage, and Jahna Lindemuth, Attorney
General, Juneau, for Appellee.
Before: Stowers, Chief Justice, Winfree, Maassen, Bolger, and
Carney, Justices.
OPINION
WINFREE, JUSTICE.
I.
INTRODUCTION
This
appeal requires us to decide whether a city council's
reconsideration and ultimate rejection of a labor agreement
constituted an unfair labor practice under Alaska's
Public Employer Relations Act (the Act). An Alaska Labor
Relations Agency (ALRA) panel concluded a violation occurred,
and on appeal the superior court affirmed that ruling. But
because the record does not support a finding of bad faith on
the city's part, and because the failure to ratify the
agreement alone cannot be a violation of the Act, we reverse
the superior court's decision affirming the ALRA
panel's ruling.
II.
FACTS AND PROCEEDINGS
A.
Facts
This
case arises from disputed collective bargaining negotiations
between City of Fairbanks and Public Safety Employees
Association, AFSCME Local 803 (PSEA). PSEA is the labor
representative for the City's police and dispatch
employees.
The
City is governed by a home-rule charter vesting
"executive and administrative power" in the
mayor[1] and "all [other] powers" in the
city council.[2] In 2013 the City and PSEA began
negotiating a collective bargaining agreement for fiscal
years 2014 through 2017. Then-Mayor John Eberhart was the
lead negotiator for the City's bargaining team,
[3] and
PSEA was represented by its internally selected bargaining
team.
Mayor
Eberhart and his bargaining team acted in concert with the
city council during negotiations.[4] It is undisputed that
negotiations could not move forward until the city council
tentatively approved the City's bargaining position.
During months of negotiations the City's bargaining team
would reach tentative agreement on financial terms with PSEA
and then would present those terms to the city council for
tentative approval in executive session.
The
negotiating teams reached a tentative agreement; on August
11, 2014, in accordance with a City ordinance, [5] the mayor
presented the agreement to the city council in open public
session for ratification as Ordinance 5953. The city council
advanced the ordinance to its next regular
meeting;[6] in the interim the PSEA membership voted
to approve the agreement.
The
city council heard public testimony about the agreement on
August 25. Five people commented, focusing on the City's
ability to fund the agreement, how the agreement would affect
spending on other labor agreements, the need to attract new
employees with higher wages, and the feasibility of reduced
work hours. Council members then questioned City employees
about the contract, focusing almost entirely on the proposed
agreement's cost. The discussion ended with council
members debating whether the agreement would save money or
cost money in the long run and, if the latter, whether other
benefits outweighed the cost. The city council ultimately
voted 4 to 3 to adopt the ordinance, with Mayor Eberhart
casting the tie-breaking vote. Before concluding the August
25 session, Mayor Eberhart introduced Ordinance 5955, which
appropriated funds for the labor agreement. Ordinance 5955
was advanced by a 4 to 2 vote, and the meeting was adjourned
at 12:05 a.m. on August 26.
On
August 27 then-Council Member Jim Matherly filed a written
notice of reconsideration of Ordinance 5953, apparently
believing that, because the August 25 meeting had adjourned
after midnight, a motion for reconsideration would remain
timely through August 27. But the City Clerk rejected his
motion as untimely because it was not filed within 24 hours
of the vote.[7]
Council
Member Matherly took up the issue again at the city
council's next meeting, on September 8, moving to suspend
the rules of procedure to allow reconsideration of Ordinance
5953.[8] Council Member Hilling requested
clarification on suspension of the rules, and the Mayor, City
Attorney, and City Clerk provided clarification based on the
Fairbanks General Code and Robert's Rules of Order. The
motion to suspend the rules then passed by a 5 to 1 vote.
Once
the city council rules were suspended, Council Member Hilling
moved to reconsider Ordinance 5953. Council Member Matherly
explained that after the August 25 vote he had reexamined the
contract and that he was concerned it was overly costly to
the City. He further explained that he thought his earlier
motion to reconsider had been timely. Before voting on
reconsideration, city council members asked several
procedural questions of the Mayor, City Attorney, and City
Clerk, including how many times an ordinance could be
reconsidered and whether public comment was allowed prior to
the vote. The three responded that an ordinance could be
reconsidered only once regardless of the subsequent
vote's outcome and that if the motion to reconsider
carried, Ordinance 5953 would be reopened as if the original
vote had never taken place. The City Clerk advised that
allowing public comment was the city council's
prerogative, and the city council then called for additional
public comment before voting.
Nine
people commented on the motion to reconsider. Most comments
were focused on the cost to the City; people commented that
they thought the agreement was too expensive, that the City
could not afford the agreement, and that the agreement's
costs were greater than the City had been promised during
negotiations. City council members then questioned City staff
about the City's ability to pay under the agreement's
terms. City employees reported that the cost of the agreement
was likely higher than calculated during negotiations, that
approving the agreement would result in pressure for higher
wages in other collective bargaining agreements, and that
costs would drastically increase if either party opted out of
the agreement. The city council debated the motion, with all
six council members focusing comments on the cost to the
City. The city council then voted 4 to 2 to reconsider
Ordinance 5953.
After
the motion to reconsider carried, but before Ordinance 5953
was revoted on, Council Member Hilling moved to postpone the
revote to the city council's September 22 meeting. The
motion was amended to further postpone the revote to November
3, which Council Member Hilling praised as giving new city
council members time to "get up to speed" on the
contract dispute before voting.[9] The motion to postpone
consideration of Ordinance 5953 carried 5 to 1. The city
council then approved an amended version of the previously
advanced funding Ordinance 5955, increasing the police
department's funding by $5, 939 but explicitly rejecting
all increases contemplated in the tentative labor agreement.
On
November 3 the newly constituted city council voted
unanimously not to adopt Ordinance 5953; the proposed
collective bargaining agreement with PSEA thus was not
approved by the city council.
B.
Proceedings
A week
after the city council's final vote, PSEA filed a charge
with the ALRA; PSEA asserted the City had refused to bargain
in good faith.[10] PSEA requested that the ALRA find the
city council's suspension of the rules and subsequent
reconsideration of Ordinance 5953 was an unfair labor
practice and order the City to let the tentative agreement
stand as the final collective bargaining agreement between
the City and PSEA. In April an ALRA hearing officer found
probable cause to support the charge.
In
November an ALRA three-member board panel decided 2 to 1 that
the City had committed an unfair labor practice and ordered
the city council to execute the collective bargaining
agreement.[11] The ALRA panel concluded that: the City
was accountable for all actions of the city council; the city
council had unreasonably delayed, or "strung out, "
negotiations;[12] under the totality of the circumstances
the city council's actions constituted bad faith; an
enforceable contract was entered into between the City and
PSEA after the first vote on August 25, 2014; the City had no
valid excuse to rescind the contract; and the remedy for the
violation was enforcement of the tentative
agreement.[13] The ALRA panel ordered the City to
"execute the collective bargaining agreement it reached
with [PSEA], and that it ratified on August 25,
2014."[14]
The
City appealed the ALRA panel's decision to the superior
court. The superior court held that the city council could
not be a public employer under the Act[15]but that the
ALRA's material factual findings were supported by
substantial evidence and the ALRA otherwise had authority to
order execution of the tentative agreement.
PSEA
appeals the superior court's ruling that the city council
is not a public employer under the Act. The City
cross-appeals the court's affirmance of the ALRA
panel's finding of an unfair labor practice and its order
that the City execute the collective bargaining agreement.
III.
STANDARD OF REVIEW
When a
superior court acts as an intermediate appellate court in an
administrative matter, "we independently review the
merits of the agency's decision."[16]We review an
agency's factual findings to determine "whether they
are supported by substantial evidence, " which is
"such relevant evidence as a reasonable mind might
accept as adequate to support" the agency's
conclusion.[17] " 'We view the evidence in
favor of the findings, ' and we will not choose between
competing inferences or evaluate the strength of the
evidence."[18] "We will look only to determine if
substantial evidence exists in the record, taking into
account evidence in the record detracting from the supporting
evidence's weight."[19] "The substantial evidence
test is highly deferential, but we still review the entire
record to ensure that the evidence detracting from
the agency's decision is not dramatically
disproportionate to the evidence supporting it such that we
cannot 'conscientiously' find the evidence to be
'substantial.' "[20]
We
review an agency's legal conclusions using our
independent judgment only if "the agency's
specialized knowledge and experience would not be
particularly probative."[21] In all other cases we apply
the "reasonable basis standard, " deferring to an
agency's legal interpretation "so long as it is
reasonable."[22]
The
parties strenuously dispute the proper application of these
principles to the issues in this case. The City urges us to
use our independent judgment in determining whether the city
council is a public employer and whether the ALRA had
authority to order execution of the collective bargaining
agreement. The City also argues that whether an unfair labor
practice occurred is a legal question within the ALRA's
expertise, subject to rational basis review. PSEA counters
that we should review the first two questions under the
rational basis standard, and that whether an unfair labor
practice occurred is a factual question subject to the
substantial evidence standard.
The
ultimate issue we decide in the City's appeal is whether
the City violated the Act by committing an unfair labor
practice.[23] That is a legal question, well within
the scope of the ALRA's "specialized knowledge and
experience."[24] We therefore apply the reasonable basis
standard to the ALRA panel's conclusion that the City
violated AS 23.40.110(a)(5).[25] The factual findings the ALRA
panel made in reaching that conclusion, including whether the
City bargained in bad faith and whether it strung out
negotiations, are reviewed for substantial
evidence.[26]
PSEA's
appeal does not require such deference. The city council is a
public employer under the Act only if the city council is a
"political subdivision of the state."[27]
"Political subdivision" is a "non-technical
statutory term" whose meaning can be determined without
specialized agency expertise.[28] We therefore interpret the
meaning of AS 23.40.250(7) using our independent judgment,
adopting "the rule of law that is most persuasive in
light of precedent, reason, and policy."[29]
IV.
DISCUSSION
A.
The City Council Is Not A Public Employer, But The ALRA's
Unfair Labor Practice Order Was Against The City, Not The
City Council.
After
the superior court held that the city council is not a public
employer - even while the court affirmed the ALRA panel's
decision - the parties began disputing the significance of
the superior court's holding. The City argues that
"[b]ecause the [c]ity [c]ouncil is not a[n] [Act] public
employer, there can be no unfair labor practice." PSEA
argues that "ALRA's decision stands even if this
Court finds that the [c]ity [c]ouncil is not a 'public
employer, ' " but it nonetheless contends that the
superior court must be reversed.
Our
analysis begins with the plain language of the Act. Section
110(a)(5) provides that a "public employer or an agent
of a public employer may not. .. refuse to bargain
collectively in good faith with an organization that is the
exclusive representative of employees in an appropriate
unit."[30] "Public employer" is defined
in § 250(7) as:
the state or a political subdivision of the state, including
without limitation, a municipality, district, school
district, regional educational attendance area, board of
regents, public and quasi-public corporation, housing
authority, or other authority established by law, and a
person designated by the public employer to act in its
interest in dealing with public employees.[31]
We
first determine whether the city council is "a political
subdivision of the state."[32]
The
answer to this question is no. The term "political
subdivision, " as used throughout Alaska Statutes, does
not contemplate legislative bodies as political subdivisions
of the state. Instead, legislative bodies are treated as
distinct subparts of a broader political subdivision, like a
municipality. For instance, § 255 of the Act notes:
"[The Act is] applicable to organized boroughs and
political subdivisions of the state, home rule or otherwise,
unless the legislative body of the political
subdivision, by ordinance or resolution, rejects having
the provisions . . . apply."[33] Similarly, AS 39.35.950
provides: "The request [to become an employer in the
Public Employees' Retirement System plan] shall be made
after adoption of a resolution by the legislative
body of the political subdivision . . .
."[34] Also similarly, AS 26.23.500 provides:
"A political subdivision may withdraw from participation
in the Alaska instrastate mutual aid system .... To withdraw,
the governing board of apolitical subdivision shall
adopt a resolution . . ., "[35] These are only a few
examples of the distinction present in our statutes; the
legislature has plainly not contemplated that legislative
bodies are political subdivisions. Therefore the city council
is not a public employer under the Act.
This
holding, however, does not resolve the real issue in this
case. The ALRA panel did not decide that the city council was
a public employer - such a conclusion cannot be found in its
finding of facts, conclusions of law, or analysis. On the
contrary, its decision plainly states that "[t]he
City of Fairbanks is a public employer under AS
23.40.250(7)"; "the City of Fairbanks
violated AS 23.40.110(a)(5)"; and "[t]he process
the City applied under the facts of this case
supports a conclusion that it bargained in bad
faith."[36]
What
the ALRA panel did conclude is that the City should be held
accountable for the city council's actions, and it did so
by finely parsing whether the actions of a legislative body
could be attributed to a political subdivision at large.
First, the ALRA panel noted that "[i]n the typical
scenario, employees of the executive branch of a state or
political subdivision comprise the 'public employer'
in a negotiating process."[37] Second, it determined
that "the facts here indicate the [city council], the
[C]ity's legislative branch, was actively involved in
negotiations with PSEA."[38] Third, it concluded that
"[t]his active involvement makes the [c]ouncil
members' actions accountable in determining whether there
was an unfair labor practice violation in this
case."[39] This reasoning was not a legal
conclusion that the city council itself had become the public
employer, but rather the ALRA panel's resolution of the
"threshold issue" of "whether the [city
council]'s actions in the collective bargaining process .
. . constitute actions by a public employer under [the
Act]."[40]
We
therefore conclude the city council is not a public employer
under the Act, but the ALRA panel's unfair labor practice
finding was directly against the City. There is no dispute
that the City is a public employer; as such we must decide
the City's cross-appeal.
B.
The Conclusion That The City Committed An Unfair Labor
...