American Federation of State, County and Municipal Employees, Local 1893 v. State Bd. of Higher Educ.

• Decision Date: 24 October 1977
• Citation: 570 P.2d 388,31 Or.App. 251
• Parties: , 96 L.R.R.M. (BNA) 3192 AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES, LOCAL 1893, Respondent, v. STATE BOARD OF HIGHER EDUCATION, Acting through the University of Oregon, State of Oregon, Petitioner.
• Court: Oregon Court of Appeals

Page 388

570 P.2d 388

31 Or.App. 251, 96 L.R.R.M. (BNA) 3192

AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES, LOCAL 1893, Respondent, v. STATE BOARD OF HIGHER EDUCATION, Acting through the University of Oregon, State of Oregon, Petitioner.

Court of Appeals of Oregon.

Oct. 24, 1977.

James A. Redden, Atty. Gen., W. Michael Gillette, Sol. Gen., and James C. Rhodes Asst. Atty. Gen., Salem, filed the brief for petitioner.

No appearance for respondent.

Before SCHWAB, C. J., and RICHARDSON and ROBERTS, JJ.

SCHWAB, Chief Judge.

Petitioner University of Oregon seeks review of an order of the Employment Relations Board (ERB) which held that the University had breached its statutory duty under ORS 243.672(1)(e), part of the Oregon Public Employes' Collective Bargaining Law, to bargain collectively in good faith. ¹

The University and Local 1893 of the American Federation of State, County and Municipal Employees were parties to a collective bargaining agreement which expired April 15, 1976. Local 1893 represents student employes who work in food preparation and service at the Erb Memorial Union at the University. In February 1976, negotiations for a new contract between Local 1893 and the University were initiated. At that time, both parties executed written collective bargaining ground rules for their bargaining sessions, clause 5 of which read:

"Proposals and Counterproposals At the first session following agreement on these ground rules, the Union will place all of its proposals on the table in proposed contract language. After discussions sufficient to clarify for employer representatives the intent and purpose of the Union proposals, the employer will at the next session, present its proposals in proposed contract language. Thereafter, the table will be closed to new issues except by mutual agreement of the parties."

The University has provided reduced meal prices for student employes in the food service since 1950. The price of a meal has always been calculated at the cost of the raw food sold approximately 40 percent of retail cost. In 1950, the reduced meal price for a student employe was $.25. In 1961, the cost of a meal had risen to $.50, reflecting an increase in food costs. In May 1976, a management study of the Erb Memorial Union recommended that the meal price should again be raised to $.75 to reflect current food costs. On May 17 or 18, the University posted notices on the employes' bulletin board informing them that the reduced meal price would be raised to $.75 effective June 1, 1976. The expiring labor contract contained no reference to meal prices.

Local 1893 and the University met several times between February and May 1976 in an attempt to reach agreement on a new contract. A formal mediation session between them was held at the end of May. The President of Local 1893 had requested that the mediator raise the issue of the meal price increase at this mediation session. However, the mediator told the Local President that it was his "strong desire to keep any new issues out of the mediation process," and that he wished "not to move into any new subjects prior to the first mediation session." The issue of the meal price increase was not raised at this mediation session nor at a second session held on June 3, 1976, when the Local indicated it would accept the University's contract offer. The contractual terms were finalized on June 7, 1976. On June 14, 1976, the parties signed a collective bargaining contract for 1976-78.

The meal price increase went into effect as scheduled on June 1, 1976. On June 10, the Local filed an unfair labor practice complaint against the University with the ERB alleging a violation of ORS 243.672(1)(e).

The ERB, in an order dated February 2, 1977, found that the price of meals paid by Local 1893 employes is a mandatory subject for collective bargaining and that the Local's failure to formally demand that the University bargain on the price change did not mean that the Local had acquiesced in the change. The ERB held that the University had a duty to bargain with the Local before unilaterally implementing a change in the student employe meal price and, by refusing to so bargain, violated ORS 243.672(1)(e). The ERB ordered the University to cease and desist from refusing to bargain with Local 1893 as to the meal price rise for its student food service employes. The University then filed this petition for judicial review.

Initially, we note that the scope of our review of an order of the ERB is limited. Springfield Ed. Assn. v. Sch. Dist., 24 Or.App. 751, 756-57, 547 P.2d 647 (1976). We must affirm ERB's interpretation of the laws it is authorized to administer unless it is "unlawful in substance or procedure." ² ORS 183.482(8)(a); Springfield Ed. Assn. v. Sch. Dist., supra at 757. In our review of ERB interpretations of the Oregon Public Employes' Collective Bargaining Law, we may give some weight to federal decisions interpreting similar sections of the National Labor Relations Act, 29 U.S.C. §§ 151 et seq. (1971). Klamath Co. v. Laborers Inter. Union, 21 Or.App. 281, 534 P.2d 1169 (1975).

Petitioner contends that the ERB should have dismissed Local 1893's complaint on the ground that reduced meal prices is not a mandatory subject for bargaining. The scope of the employer's duty to bargain collectively in good faith under ORS 243.672(1)(e) extends only to mandatory subjects for bargaining. These include matters of employment relations, namely direct and indirect monetary benefits, hours, vacations, sick leave, grievance procedures and other conditions of employment. ORS 243.650(7); Springfield Ed. Assn. v. Sch. Dist., supra at 756. This court will usually defer to the expertise-based policy formulations of an administrative agency, including the ERB, especially where the agency is interpreting a broadly worded general statute. Fairview Hospital v. Moore, 28 Or.App. 637, 640-41, 560 P.2d 671 (1977). Wasco County v. AFSCME, 30 Or.App. 863, 868, 569 P.2d 15 (1977); Brusco Towboat v. State Land Bd., 30 Or.App. 509, 521, 567 P.2d 1037 (1977); Bienz v. City of Dayton, 29 Or.App. 761, 776, 566 P.2d 904 (1977). We have, in the past, applied this rule to ERB determinations as to what constitutes a mandatory subject of negotiation. See Springfield Ed. Assn. v. Sch. Dist., supra at 756-57.

In finding that the reduced meal price for employes of Local 1893 is a mandatory subject for bargaining, the ERB stated:

" * * * There is a substantial body of private sector case law holding that the price of meals furnished to employes is not a mandatory subject for bargaining. However, this Board is not bound by such NLRB or federal circuit court decisions. In any event, each of these cases holding that meal price is not a mandatory subject is readily distinguishable on its facts, in that in each case the employer was not in the business of providing food, unlike Respondent herein. Hence, private sector precedent making an employe discount on the company product a mandatory subject of bargaining is more applicable to the facts presented herein. And on those facts it would be highly inequitable to permit Respondent to prevail on its contention that meal price is merely a permissive bargaining subject. The evidence shows that reduced price meals were furnished by Respondent for its own convenience, to prevent employes' unscheduled and unauthorized eating on the job. It is apparent that reduced price meals function as an incentive to students to seek this type of employment. Over 50% of the student food service employes take advantage of the reduced rate. Where employes are students working on a part-time basis preparing and serving food, the availability to them of low cost food must be viewed as integral to their employment and an indisputable part of their compensation.

The employer's practice of providing meals at $.50 has become an established working condition. Under these particular circumstances, the price of the meal has become a mandatory subject for bargaining. (Footnotes omitted.)"

Where employers offer their employes meals, housing or company-related services at reduced cost, the federal courts have looked to a number of factors in order to determine whether the benefit offered is a condition of work about which the employer must bargain. A reduced-cost company benefit may be characterized as a mandatory subject for bargaining if one or more of the following conditions is satisfied: (1) the cost of the benefit is substantially less than the market value of such benefits such that the employe can be said to be receiving partial compensation; (2) employe utilization of the benefit is required by the lack of practical alternatives; and (3) a high percentage of employes take advantage of the benefit. See N. L. R. B. v. Ladish Co., 538 F.2d 1267, 1271 (7th Cir. 1976); Seattle First National Bank v. N. L. R. B., 444 F.2d 30, 34, n. 5 (9th Cir. 1971); McCall Corporation v. N. L. R. B., 432 F.2d 187, 188 (9th Cir. 1970); Westinghouse Electric Corporation v. N. L. R. B., 387 F.2d 542, 547-49 (4th Cir. 1967); N. L. R. B. v. Central Illinois Public Service Company, 324 F.2d 916, 918-19 (7th Cir. 1963); National Labor Relations Board v. Hart Cotton Mills, 190 F.2d 964, 972 (4th Cir. 1951); R. Gorman, Labor Law 500-01 (1976).

In this case, the record indicates that the Local 189...