American Federation of State, County and Mun. Employees v. Department of Mental Health
| Decision Date | 12 January 1996 |
| Docket Number | Docket Nos. 158997,159007,P,159006,163908-163911,AFL-CI |
| Citation | 215 Mich.App. 1,545 N.W.2d 363 |
| Parties | AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES, Petitioner-Appellee, v. DEPARTMENT OF MENTAL HEALTH, Respondent-Appellant, and Quality Living Systems and Paragon, Respondents-Appellees. AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES, Petitioner-Appellee, v. DEPARTMENT OF MENTAL HEALTH, Respondent-Appellant, and Central State Community Services and Saginaw County Community Mental Health, Respondents-Appellees. AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES, Petitioner-Appellee, v. DEPARTMENT OF MENTAL HEALTH, Respondent-Appellant, and Community Normalization Home, Inc., and Jackson Hillsdale Department of Mental Health, Respondents-Appellees. AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES, Petitioner-Appellee, v. DEPARTMENT OF MENTAL HEALTH, Respondent-Appellant, and Innovative Housing Development, Respondent-Appellee. AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES, Petitioner-Appellee, v. DEPARTMENT OF MENTAL HEALTH, Respondent-Appellant, and Independent Opportunities, Inc., Respondent-Appellee. AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES, Petitioner-Appellee, v. DEPARTMENT OF MENTAL HEALTH, Respondent-Appellant, and A.R.C. Corporation, Respondent-Appellee. AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES, Respondent-Appellee, v. DEPARTMENT OF MENTAL HEALTH, Respondent-Appellant, and Harrington House, Inc., Respondent-Appellee. AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES,etitioner-Appellee, v. DEPARTMENT OF MENTAL HEALTH, Respondent-Appellant, and Alternative Services, Inc., Respondent-Appellee. AMERICAN FEDERATION OF STATE, COUNTY, AND MUNICIPAL EMPLOYEES,etitioner-Appellee, v. DEPARTMENT OF MENTAL HEALTH, Respondent-Appellant, and New House, Inc., Respondent-Appellee. INTERNATIONAL UNION, UNITED AUTOMOBILE AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, Petitioner-Appellee, v. DEPARTMENT OF MENTAL HEALTH, Respondent-Appellant, and River's Ed |
| Court | Court of Appeal of Michigan — District of US |
Webb, Hildebrandt & Paton, P.C. by Alison L. Paton, L. Rodger Webb, and Ann Hildebrandt, Detroit, for American Federation of State, County and Municipal Employees.
Greenspon, Scheff & Washington, P.C. by Donald B. Greenspon and George B. Washington, Detroit, for International Union, United Automobile, Aerospace and Agricultural Implement Workers of America.
Frank J. Kelley, Attorney General, Thomas L. Casey, Solicitor General, and Clive D. Gemmill, Suzanne L. Wilhelm, Barbara A. Schmidt, Cheryl B. Lord, and Peter L. Trezise, Lansing, for Department of Mental Health.
Before SMOLENSKI, P.J., and HOOD and CALLAHAN, * JJ.
In these consolidated cases, respondent Department of Mental Health (DMH) appeals as of right decisions of the Michigan Employment Relations Commission (MERC). We vacate those decisions on the ground that the MERC's jurisdiction is preempted by the National Labor Relations Act (NLRA), 29 U.S.C. 151 et seq.
Quality Living Systems; Central State Community Services; Community Normalization Home, Inc.; Innovative Housing Development; Independent Opportunities, Inc.; A.R.C. Corporation; Harrington House, Inc.; Alternative Services, Inc.; New House, Inc.; and River's Edge Residential Services, Inc., (hereinafter referred to as providers) are nonprofit corporations that provide group home 1 services for developmentally disabled and mentally ill or impaired persons. The providers have funding ties with the DMH either through direct contracts with the DMH or an agency of the DMH, or through contracts with various community mental health entities that in turn contract with the DMH.
Petitioners American Federation of State, County and Municipal Employees (AFSCME) and International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) petitioned the MERC for certification as collective bargaining agents for certain group home employees. Petitioners alleged that the DMH and the providers were joint employers of these employees, which, if so found by the MERC, would mean that the DMH would be required to bargain in good faith with petitioners. 2 The MERC determined that the DMH and the providers were joint employers, further found that a question of representation existed, and directed that elections be held to elect collective bargaining representatives. See generally the public employment relations act (PERA), M.C.L. § 423.201 et seq.; M.S.A. § 17.455(1) et seq.
The DMH argues that the providers are private employers and therefore the MERC did not have subject-matter jurisdiction to decide these cases because of preemption under the NLRA. A claim of federal preemption is a challenge to subject-matter jurisdiction that may be raised at any time. Ass'n. of Businesses Advocating Tariff Equity v. Public Service Comm, 192 Mich.App. 19, 24, 480 N.W.2d 585 (1991). 3
In Michigan Council 25, AFSCME v. Louisiana Homes, Inc. (On Remand), 203 Mich.App. 213, 511 N.W.2d 696 (1994), lv. den. 445 Mich. 938, 521 N.W.2d 607 (1994), cert. den. sub. nom., Michigan Dep't. of Mental Health v. Louisiana Homes, Inc., 513 U.S. 1077, 115 S.Ct. 724, 130 L.Ed.2d 629 (1995) (Louisiana Homes II ), 4 this Court recently decided this very issue adversely to the DMH in a case involving facts similar to the facts of the instant cases. 5 However, after oral argument took place in these cases the National Labor Relations Board (NLRB) issued a decision that expressly overruled the reasoning of the precedent relied on by the Louisiana Homes II Court in deciding the preemption issue. See Management Training Corp. v. Teamsters, Chauffeurs, Warehousemen & Helpers of America, Local 222, 317 NLRB 1355, 1995 WL 451936 (1995). Thus, we believe reexamination of this issue is appropriate in light of the intervening change in federal law.
We begin with a summary of the generally applicable law as stated in Louisiana Homes II:
Subject to limited exceptions, when an activity is "arguably" subject to the provisions of the NLRA, states must defer to the exclusive competence of the National Labor Relations Board. [Int'l Longshoremen's Ass'n v. Davis, 476 U.S. 380, 381, 394, 106 S.Ct. 1904, 90 L.Ed.2d 389 (1986) ]; San Diego Building Trades Council v. Garmon, 359 U.S. 236, 245, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959). When a party asserts that state proceedings are preempted because the conduct at issue is within the purview of the NLRA, the claim represents a challenge to the subject-matter jurisdiction of the state court or tribunal; it is "a claim that the state court has no power to adjudicate the subject matter of the case." Davis at 393 . Thus, when a claim of NLRA preemption is raised, Davis directs that "it must be considered and resolved by the state court." Id. [Louisiana Homes II, supra at 216-217, 511 N.W.2d 696.]
However, under § 152(2) of the NLRA, 29 U.S.C. 152(2), an "employer" subject to the provisions of the NLRA does not include a "State or political subdivision thereof." Moreover, under § 164(c) of the NLRA, 29 U.S.C. 164(c), the NLRB has discretion to refuse to exercise its jurisdiction over certain types of cases:
(1) The Board, in its discretion, may, by rule of decision or by published rules ... decline to assert jurisdiction over any labor dispute involving any class or category of employers, where, in the opinion of the Board, the effect of such labor dispute on commerce is not sufficiently substantial to warrant the exercise of it jurisdiction....
(2) Nothing in this Act ... shall be deemed to prevent or bar any agency or the courts of any State or Territory (including the Commonwealth of Puerto Rico, Guam, and the Virgin Islands), from assuming and asserting jurisdiction over labor disputes over which the Board declines, pursuant to paragraph (1) of this subsection, to assert jurisdiction.
In Nat'l, Transportation Service, Inc. v. Truck Drivers & Helpers of America, Local Union 728, 240 NLRB 565, 1979 WL 8831 (1979), the NLRB enunciated a test for determining whether the board would exercise jurisdiction over employers with close ties to an exempt entity:
[I]n this and future cases involving a determination whether the Board should assert jurisdiction [over an employer with close ties to an exempt entity], we shall determine whether the employer itself meets the definition of "employer" in [29 U.S.C. 152(2) ], and, if so, determine whether the employer has sufficient control over the employment conditions of its employees to enable it to bargain with a labor organization as their representative.
... Once it is determined that the employer can engage in meaningful collective bargaining with representatives of its employees, jurisdiction will be established. [Id.]
The NLRB explained that the control test provided a "more objective, precise, and definitive standard for determining discretionary jurisdictional issues" under § 164(c). Id. at 566.
In CK Homes, Inc. v. AFSCME, unpublished decision of the NLRB Seventh Region Director, decided February 14, 1986 (Case No. 7-RM-1275), the regional director held that the NLRB would not assert jurisdiction over an employer that was a nonprofit Michigan corporation provider of group homes for mentally disabled persons and that had contracted with the DMH to provide services to these persons. Id. at 2, 7. Applying Nat'l. Transportation, the director found as follows:
Thus, the Employer may be considered to be tantamount to an administrative arm of the government and not within the definition of [29 U.S.C. 152(2) ]. In addition, the control possessed and exercised over the Employer's operations by the State of Michigan makes...
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