Appeal of Sanborn Regional School Bd., 89-529

• Decision Date: 14 August 1990
• Docket Number: No. 89-529,89-529
• Citation: 579 A.2d 282,133 N.H. 513
• Parties: , 136 L.R.R.M. (BNA) 2588, 62 Ed. Law Rep. 660 Appeal of the SANBORN REGIONAL SCHOOL BOARD (New Hampshire Public Employee Labor Relations Board).
• Court: New Hampshire Supreme Court

Page 282

579 A.2d 282

133 N.H. 513, 136 L.R.R.M. (BNA) 2588, 62 Ed. Law Rep. 660

Appeal of the SANBORN REGIONAL SCHOOL BOARD (New Hampshire Public Employee Labor Relations Board).

No. 89-529.

Supreme Court of New Hampshire.

Aug. 14, 1990.

Bradley Kidder Law Firm, Laconia (Bradley F. Kidder, on the brief and orally), for petitioner, Sanborn Regional School Bd.

James F. Allmendinger, Concord, Staff Atty., NEA-New Hampshire, by brief and orally, for respondent, Sanborn Regional Educational Ass'n.

Michael C. Reynolds, Concord, General Counsel, by brief for the State Employees' Ass'n of New Hampshire, Inc., as amicus curiae.

Cook & Molan P.A., Concord (Glenn R. Milner on the brief), by brief for Professional Firefighters of New Hampshire, as amicus curiae.

H. Bernard Waugh, Jr., Concord, by brief for New Hampshire Mun. Ass'n, as amicus curiae.

Krasner Professional Association, Farmington (Emmanuel Krasner on the brief), by brief for New Hampshire Federation of Teachers, as amicus curiae.

Hatfield, Moran & Barry P.A., Hillsborough (Jane A. Cummings and Douglas S. Hatfield, Jr., on the brief), by brief for New Hampshire School Administrators Ass'n and New Hampshire School Boards Ass'n, as amici curiae.

Kathleen Wrobel, et al. by brief for a group of Newton taxpayers, as amici curiae, pro se.

PER CURIAM.

This appeal arises from a decision of the New Hampshire Public Employee Labor Relations Board (PELRB) in response to the Sanborn Regional School Board's (school board) allegations that the Sanborn Regional Educational Association (association) committed an unfair labor practice in declining to renegotiate the second and third years of a collective bargaining agreement. The controversy arose over the results of the annual Sanborn school district meeting held on March 9, 1989, where the voters failed to approve and fund an increase in the teachers' salaries as required by the second-year terms of the collective bargaining agreement. The PELRB found that the association had not committed an unfair labor practice and dismissed the school board's complaint. For the reasons following, we reverse and remand.

The school board and the association entered into a collective bargaining agreement which covered the period July 1, 1988, through June 30, 1991. In February 1988, the school board members and union representatives initialed the collective bargaining agreement. At the annual school district meeting held in March 1988, the voters approved the appropriation for the funding of the salaries for the first year of the collective bargaining agreement. The formal signing of the agreement did not take place until May 18, approximately eleven weeks after the school district meeting. This agreement contained, inter alia, provisions with regard to teachers' salaries, extra-curricular activities, and support staff compensation. The record reveals that certain concessions were made by the association in the first year of the agreement which were intended to be offset by the terms of the second and third years. It appears that the association, at the conclusion of the negotiations, was satisfied with the agreement as a whole and would not necessarily have considered the terms of each individual year acceptable, when isolated from the remaining portions of the agreement.

On March 9, 1989, the school district conducted its annual meeting for that year. Contained within the 1989 school district warrant was article 3, which provided as follows:

"To see if the District will vote to raise and appropriate the sum of Four Hundred Twenty-Five Thousand Eight Hundred Seventy Dollars ($425,870.00) for the fiscal year 1989-90, such sums of money representing the additional costs attributable to the increase in teachers' salaries and benefits over those paid in the 1988-89 fiscal year."

In addition, the warrant also contained two other separate articles requesting approval of certain salary increases for school administrators over those paid in 1988-89 and also to fund the second year of a negotiated settlement with the Sanborn Regional Support Staff (support staff). All three articles dealt with appropriations for the 1989-90 school year and were silent with regard to the requirements of either the collective bargaining agreement or the aforementioned negotiated settlement in subsequent years.

At the 1989 school district meeting, the voters approved the funding of the second year of the negotiated settlement with the support staff only, and declined to approve the salary increases for the teachers or the school administrators as required by the terms of the collective bargaining agreement. Instead, the voters approved the appropriation of $212,935 for increases in teachers' salaries, approximately one-half the amount negotiated in the collective bargaining agreement. In addition, the voters cut the school administrators' salary increases by one-half and incidentally cut $196,067 from the school district's operating budget. These cuts totaled approximately $425,000.

On March 27, 1989, the school board sent notification to the association that, because the school district voters had failed to approve the negotiated salary increases, "[t]he Sanborn Regional School Board wishe[d] to exercise its rights under RSA 273-A:3, II, to reopen negotiations on the salaries for the 1989-90 school year." The association responded by letter, dated March 31, 1989, notifying the school board that the association had voted not to reopen negotiations and that in its opinion the town was bound to finance the second and third-year terms of the collective bargaining agreement. Based upon the association's unwillingness to renegotiate the terms of the collective bargaining agreement, the school board, on April 10, 1989, filed an unfair labor practice charge against the association. The question which is presented to us is easily stated, but more difficult to resolve: Under what circumstances is a school district bound by a collective bargaining agreement negotiated in good faith between a teacher's union and a district school board, when the agreement is a multi-year contract providing for specific teacher salary increases during the life of the contract?

On June 15, 1989, a hearing was held before the PELRB with regard to the school board's allegations that the association had committed an unfair labor practice in refusing to renegotiate the terms of the collective bargaining agreement. By order dated October 24, 1989, the PELRB dismissed the school board's complaint, finding that: (1) a multi-year contract was negotiated by both parties, (2) the voters funded, without question or modification, the first year of the collective bargaining agreement, (3) when funding the first year of the agreement, the voters were made aware of the implications of the 3-year salary schedule, (4) the policy behind the enactment of RSA chapter 273-A was to foster harmonious and cooperative relations between public employers and their employees, and (5) based upon its findings, the school board and the public employer have the responsibility to fund the negotiated salary increases and that the association had not committed an unfair labor practice.

On appeal, the school board claims that RSA chapter 273-A does not contemplate multi-year agreements because it requires "cost items" to be submitted to the legislative body (school district voters) for approval, modification, or rejection each year. In addition, the school board contends that, apart from any claim that the voters of the district lacked authority to bind the district to the second and third year terms of the collective bargaining agreement, there was insufficient evidence in the record to support the PELRB's finding that the voters had sufficient knowledge of the terms of the collective bargaining agreement to bind the district by the first-year appropriation.

Collective bargaining agreements are construed in the same manner as other contracts, subject to the law controlling at the time of their execution. Mastro Plastics Corp. v. Labor Board, 350 U.S. 270, 279, 76 S.Ct. 349, 356, 100 L.Ed. 309 (1955). In order for a contract to be formed there must be a meeting of the minds as to the terms thereof. Turcotte v. Griffin, 120 N.H. 292, 294-95, 415 A.2d 668, 669 (1980). For such a meeting of the minds to take place, each party must have the same understanding as to the terms of the agreement. Id. In addition, before a contract can be formed each party must manifest an intention to be bound, 17 Am.Jur.2d Contracts § 1, at 333 (1964), supported by adequate consideration, Lang v. Johnson, 24 N.H. 302, 307 (1851). Every contract so formed "contains an implied covenant of good faith and fair dealing." Albee v. Wolfeboro Railroad Co., 126 N.H. 176, 179, 489 A.2d 148, 151 (1985).

Section 2.1 of the collective bargaining agreement provides that negotiations between the association and the school board are to be conducted in accordance with the procedural requirements of RSA chapter 273-A. Under the provisions of RSA 273-A:3, II(b), the school board is required to submit only "cost items" to the school district voters for their approval. Should the voters reject any part of the submission, or otherwise take action that in any way modifies the terms of the cost item before them, either party may reopen the negotiations. RSA 273-A:3, II(b). "Cost items" are defined as "any benefit[s] acquired through collective bargaining whose implementation requires an appropriation by the legislative body of the public employer with whom negotiations are being conducted." RSA 273-A:1, IV.

The provision of RSA chapter 273-A that requires "cost items" to be submitted to the legislative body does not expressly state that such a submittal must be done annually. RSA 273-A:3, II(b) merely provides that "[o]nly cost items shall be submitted to the legislative body of the public employer for approval." A plain reading of this...