American Federation of State, County, and Municipal Employees, Council No. 95 v. Olson

• Decision Date: 22 August 1983
• Docket Number: No. 10379,10379
• Citation: 338 N.W.2d 97
• Parties: 114 L.R.R.M. (BNA) 3275 AMERICAN FEDERATION OF STATE, COUNTY, AND MUNICIPAL EMPLOYEES, COUNCIL NO. 95, Plaintiff and Appellant, v. Allen I. OLSON, Governor of the State of North Dakota; Robert O. Wefald, Attorney General of the State of North Dakota; Duane R. Liffrig, Commissioner of the North Dakota State Highway Department; Darrell Ohlhauser, Acting Director of the Office of Management and Budget of the State of North Dakota; and John Lesmeister, Treasurer of the State of North Dakota, Defendants and Appellees. Civ.
• Court: North Dakota Supreme Court

Page 97

338 N.W.2d 97

114 L.R.R.M. (BNA) 3275

AMERICAN FEDERATION OF STATE, COUNTY, AND MUNICIPAL EMPLOYEES, COUNCIL NO. 95, Plaintiff and Appellant, v. Allen I. OLSON, Governor of the State of North Dakota Robert O. Wefald, Attorney General of the State of North Dakota; Duane R. Liffrig, Commissioner of the North Dakota State Highway Department; Darrell Ohlhauser, Acting Director of the Office of Management and Budget of the State of North Dakota; and John Lesmeister, Treasurer of the State of North Dakota, Defendants and Appellees.

Civ. No. 10379.

Supreme Court of North Dakota.

Aug. 22, 1983.

Schneider, Schneider & Schneider, Fargo, for plaintiff and appellant; argued by John T. Schneider, Fargo.

Kathryn L. Dietz and Marilyn Foss, Asst. Attys. Gen., Bismarck, for defendants and appellees; argued by Marilyn Foss, Bismarck. Appearance by Kathryn L. Dietz, Bismarck.

Robert A. Feder, Fargo, for N.D. Public Employees Ass'n. Filed amicus curiae brief.

ERICKSTAD, Chief Justice.

This is an appeal by the American Federation of State, County, and Municipal Employees, Council No. 95 (the Union) from a summary judgment of the District Court of Burleigh County, dated November 29, 1982, dismissing the Union's first four causes of action in its lawsuit against the defendant state officials. The district court entered a Rule 54(b), N.D.R.Civ.P., determination that there was no just reason for delay in entering judgment thereby permitting the Union to file this appeal prior to a final determination of the entire lawsuit. We affirm.

The Union filed this lawsuit during July, 1981, seeking a declaratory judgment and injunctive relief for the defendants' "wrongfully and unconstitutionally denying legislatively appropriated and contractually mandated wage increases" to employees of the State Highway Department represented by the Union. Briefly summarized, the Union's first four causes of action assert:

(1) That the authority given to the Office of Management and Budget under Section 54-44.1-12, N.D.C.C., to withhold appropriated salary increases constitutes an unlawful delegation of legislative authority, and the acts of the Governor and the Director of the Office of Management and Budget under that provision which resulted in employees of the State Highway Department represented by the Union not receiving the full eight percent (8%) salary increase contracted for July 1, 1982, are void;

(2) That the Governor's action in declaring insufficient funds to pay legislatively appropriated salary increases for July 1, 1982, was spurious and constituted an unlawful veto under Article V, Section 10 of the North Dakota Constitution;

(3) That employees of the State Highway Department represented by the Union were denied equal protection under the federal and state constitutions because employees represented by the Grain Miller's Union and state officials received an eight percent (8%) salary increase on July 1, 1982; and

(4) That the collective bargaining agreement entered into between the Union and the State Highway Department is a valid contract under which employees of the Union were entitled to an eight percent (8%) salary increase on July 1, 1982.

The district court entered a summary judgment dismissing the foregoing causes of action from which the Union has now appealed raising the following issues:

(1) Whether or not the district court erred in concluding that the collective bargaining agreement entered into between the State Highway Department and the Union was void; and

(2) Whether or not the district court erred in granting a summary judgment dismissing, as a matter of law, the Union's first four causes of action.

Larry Laschkewitsch, the executive director of the Union, and Walter Hjelle, State Highway Commissioner, entered an agreement entitled Memorandum of Working Rules and Regulations which was to be effective as of July 1, 1981. The agreement provided for recognition of the Union as the exclusive bargaining agent for all employees of the State Highway Maintenance Division:

"The Employer recognizes the Union as the exclusive bargaining agent for all employees of the Highway Department Maintenance Division except clerical, administrative, supervisory and temporary employees. The Employer further agrees to recognize the Union as the representative of other employees of the Highway Department who choose to be represented by the Union provided that the Union presents signed dues deduction forms for more than 50 percent of the employees in such unit that the Union desires to be included under this Agreement.... The Employer will not aid, promote or finance any labor group which purports to engage in collective bargaining or make any agreement with any individual, group or organization for the purpose of undermining the Union or which is in conflict with this Agreement for this bargaining unit."

The agreement covered numerous items regarding the employment relationship between the State Highway Department and employees represented by the Union including the following relevant provisions regarding wages:

"Effective July 1, 1981, all nonprobationary permanent employees shall have their salaries adjusted a minimum of nine (9) percent increase.

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"Effective July 1, 1982, all nonprobationary permanent employees shall have their salaries adjusted a minimum of eight (8) percent increase."

It is undisputed that the salary increases provided for under the contract were equivalent to the maximum salary increases authorized for state employees through appropriations by the 1981 Legislative Assembly.

Employees represented by the Union received a nine percent salary increase on July 1, 1981.

On March 24, 1982, Governor Allen I. Olson wrote a letter to the acting director of the Office of Management and Budget relative to the State's fiscal problems, which provided in relevant part:

"If revenues continue to decline, no salary increases will be allowed for State employees on July 1, 1982. If, on the other hand, revenues and economic conditions generally stabilize, an average salary increase not exceeding four percent will be allowed."

On March 26, 1982, Governor Olson sent a communication to all state agencies and departments regarding fiscal and budgetary constraints which provided in relevant part:

"... if revenues continue to decline, no salary increases will be allowed for state employees on July 1, 1982. If revenues and economic conditions generally stabilize, an average increase not to exceed four percent may be allowed. This policy applies, regardless of the funding source for the appropriation." [Emphasis in original.]

During June, 1982, Duane Liffrig, the State Highway Commissioner at that time, received an attorney general's opinion which concluded that the agreement entered into between Commissioner Hjelle and the Union was not contractually binding. Thereafter, on June 16, 1982, Commissioner Liffrig informed the Union, through a letter written to its executive director, Larry Laschkewitsch, that the State Highway Department "withdraws from participation" in the agreement effective immediately. As a result, employees of the Highway Department represented by the Union did not receive the full eight percent salary increases on July 1, 1982, as provided for in the agreement, and the Union then filed this lawsuit.

The agreement entered into between the State Highway Department and the Union constitutes an exclusive collective bargaining agreement purporting to bind the Highway Department and all employees of the Highway Department Maintenance Division, with the exception of certain specified positions. It is undisputed that there is no express statutory authority for the State Highway Commissioner to enter into collective bargaining agreements. However, the Union asserts on appeal that the Commissioner has an implied authority to enter collective bargaining agreements as an incident to his express authority under Subsection 4 of Section 24-02-03, N.D.C.C.:

"24-02-03. Responsibilities of commissioner.--The commissioner shall:

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"4. Employ all engineers, assistants, clerks, agents, attorneys, and other employees, required for the proper transaction of the business of his office, or of the department, fix their titles, determine their duties, the amount of their bonds in the state bonding fund, if any are required, and their compensation, and shall discharge them in his discretion."

The defendant state officials assert that the Commissioner has no authority, express or implied, to enter collective bargaining agreements and that the agreement between the State Highway Department and the Union is void.

It is well-settled that public officials have only such authority as is expressly given them by the constitution and statutes together with those powers and duties which are necessarily implied from the express grant of authority. See, Kopplin v. Burleigh County, 77 N.D. 942, 47 N.W.2d 137 (1951). It is also generally recognized that, absent express statutory authority, public officials do not have authority to enter exclusive collective bargaining agreements with public employees. See, annotation 31 A.L.R.2d 1142 (1953); See also, Commonwealth of Virginia v. County Board of Arlington County, 217 Va. 558, 232 S.E.2d 30 (1977); State Board of Regents v. United Packing House, Etc., 175 N.W.2d 110 (Iowa 1970); Minneapolis Federation of Teachers Local 59 v. Obermeyer, 275 Minn. 347, 147 N.W.2d 358 (1966). However, some courts have recognized an implied power of a public body to enter collective bargaining agreements. See, Dayton Classroom Teachers Association v. Dayton Board of Education, 41 Ohio St.2d 127, 323 N.E.2d 714 (1975); International Brotherhood of Electrical Workers, Local Union No. 611 v. Town of Farmington, 75 N.M. 393, 405 P.2d 233 (1965). Having reviewed numerous case authorities on this subject together with the relevant statutory provisions of this State, we conclude that...