Appeal of Town of Rye, 94-199

• Decision Date: 24 October 1995
• Docket Number: No. 94-199,94-199
• Parties: , 154 L.R.R.M. (BNA) 2653 Appeal of TOWN OF RYE (New Hampshire Public Employee Labor Relations Board). Public Employee Labor Relation Board
• Court: New Hampshire Supreme Court

Page 948

666 A.2d 948

140 N.H. 323, 154 L.R.R.M. (BNA) 2653

Appeal of TOWN OF RYE (New Hampshire Public Employee Labor Relations Board).

Public Employee Labor Relation Board No. 94-199.

Supreme Court of New Hampshire.

Oct. 24, 1995.

Kidder & Burke, Laconia, and Michael Donovan, on the brief, Concord (Bradley F. Kidder, on the brief and orally), for petitioner, the Town of Rye.

McKittrick Law Offices, North Hampton (J. Joseph McKittrick, on the brief and orally), for respondent, Robert L. Howland.

HORTON, Justice.

The Town of Rye (town) appeals the decision of the New Hampshire Public Employee Labor Relations Board (PELRB) ordering it to pay the respondent, former Rye Police Officer Robert L. Howland, for the sick leave he accumulated prior to his retirement pursuant to a provision in an expired collective bargaining agreement (CBA) negotiated by the town and the Rye Fire and Police Association (association). For the reasons that follow, we affirm the PELRB's decision.

In December 1989, the association and the town signed a CBA, to be effective from January 1990 through December 1992. Two provisions are pertinent to this appeal. Article XXV contained an "evergreen clause," providing for the automatic renewal or continuance of the CBA after its expiration if negotiations for a successor CBA were still in progress. Article XIV stated that "[w]hen an employee leaves the department [he or she] shall be paid for any unused sick leave accumulated at the rate of 5% per year of full time employment with the town, not to exceed 100%."

Although the evergreen clause was not submitted to the town voters for ratification during any of the town meetings following the signing of the CBA, legislative action was taken with respect to the sick leave buyback provision. At the March 1990 town meeting, the town voted to establish a "Town Employees' Accumulated Leave Fund, for the purpose of funding Town Employees' accumulated leave accounts, and ... raise[d] and appropriate[d] the sum of five thousand dollars ($5,000) towards this purpose." The minutes of the town meeting explain the reasons for the appropriation:

Mr. Toby explained the need for a fund in case an employee retires and we have to pay accumulated vacation and sick leave. Frank Ciolek said he couldn't see why there wasn't a policy of "use it or lose it". Lester Stevens said there should be a maximum. To this, Mr. Tobey said these are benefits which have been approved over a number of years. He said it's very difficult to take away a benefit which has already been given. Dr. O'Brien reminded that the town has a legal obligation to pay these, in the event an employee leaves. He said he felt the logical way to pay these was through accumulation in a capital reserve fund.

The town warrant had been posted prior to the meeting and was mailed to each registered voter. In addition, the Rye Civic League, Inc.'s newsletter, which was distributed to all households prior to the meeting, explained that the Town Employees' Accumulated Leave Fund and accompanying $5,000 appropriation were on the warrant because "[s]ome employees of the Town are nearing retirement age with many years of service to the Town and are entitled to be paid for their unused leave (sick leave/annual leave) according to their contract which could become a hardship in the budgetary process." The record contains an undated calculation by the town that if all members of the police and fire departments retired at once and claimed the accumulated sick leave due under the CBA, the town's total liability as of December 1989 would be $100,586.43.

At the 1991 town meeting, in response to "a recent N.H. Supreme Court decision requiring acceptance by the legislative body of multi-year contracts," the town voted "to ratify the financial terms" of the CBA. Estimated wage and benefit increases for 1991 and 1992 were approved and funds were appropriated for health insurance benefits paid in 1990 and the 1991 wage increase, but there is no indication that the Town Employees' Accumulated Leave Fund was discussed. The former town selectman who negotiated the CBA testified before the PELRB that the accumulated sick leave buyback provision was intentionally not resubmitted at the 1991 town meeting because it had been approved at the 1990 town meeting.

From 1991 through 1993, the town appropriated sums from its capital reserve account and placed them into the Town Employees' Accumulated Leave Fund, bringing its total to approximately $50,000 at the time of the PELRB hearing. Two town employees retired during 1992 and were paid their respective leave accruals pursuant to the CBA, although these payments were not made from the Town Employees' Accumulated Leave Fund.

At the March 1993 town meeting, the town voters passed a resolution asking the selectmen to "make an in-depth review of the subject of accumulated sick leave," noting, in particular, that payment of large sums, in excess of $30,000 in one case, "has raised questions." At a special town meeting in September 1993, the town approved a new CBA containing a limited sick leave buyback provision and rejected an alternative provision that would continue funding the expired CBA's accumulated sick leave provision.

The respondent retired in June 1993, after twenty-two years of service, and claimed $42,731.40 for 229 days of accumulated sick leave. The town denied his claim, stating that the CBA provision "which extended a payout for accumulated sick leave was a cost item. However, it was not submitted [to a] Town Meeting for approval.... The Town has not appropriated funds to pay the amount you claim under the sick leave provision of the Agreement." The respondent submitted a grievance to the town selectmen, who affirmed the decision to deny his claim and denied arbitration.

In July 1993, the respondent and the association filed an unfair labor practice (ULP) complaint with the PELRB against the town, alleging a violation of RSA 273-A:5 (1987) for failing to pay accumulated sick leave benefits under the CBA. The PELRB found "not only that the Town committed a ULP by violating RSA 273-A:5 I (h) but also that Howland is owed money under the accumulated sick leave provisions of Article XIV, Section 1 of the CBA."

On appeal, the town argues that: (1) the PELRB failed to recognize or rule that the accumulated sick leave buyback provision was a cost item; (2) as a cost item, the provision was unenforceable because it was never approved by the town voters; (3) if the provision is unenforceable, the town did not create a binding past practice by making payments under the provision to two other employees who retired; and (4) the PELRB erred by relying upon the evergreen clause because that clause was a cost item that had not been approved by the town voters. We defer to the PELRB's findings of fact, and absent an erroneous ruling of law, we will not set aside the PELRB's decision unless the town demonstrates by a clear preponderance of the evidence that the order is unjust or unreasonable. RSA 541:13 (1974); see also Appeal of State of N.H., 138 N.H. 716, 719-20, 647 A.2d 1302, 1305 (1994).

The PELRB made no express finding of fact as to whether the accumulated sick leave buyback provision was a cost item. A cost item is "any benefit acquired through collective bargaining whose implementation...