Ass'n of Or. Corr. Emps. v. State, A143552

• Decision Date: 09 November 2011
• Docket Number: A143552
• Parties: ASSOCIATION OF OREGON CORRECTIONS EMPLOYEES, Respondent, v. STATE OF OREGON and DEPARTMENT OF CORRECTIONS, Petitioners.
• Court: Oregon Court of Appeals

ASSOCIATION OF OREGON CORRECTIONS EMPLOYEES, Respondent, v. STATE OF OREGON and DEPARTMENT OF CORRECTIONS, Petitioners.

A143552

COURT OF APPEALS OF THE STATE OF OREGON

FILED: November 9, 2011

Employment Relations Board

UP3303

Argued and submitted on February 17, 2011.

Leigh A. Salmon, Assistant Attorney General, argued the cause for appellant. With her on the brief were John R. Kroger, Attorney General, and Jerome Lidz, Solicitor General. With her on the reply brief were John R. Kroger, Attorney General, and David B. Thompson, Interim Solicitor General.

Becky Gallagher argued the cause for respondent. With her on the brief was Garrettson, Gallagher, Fenrich & Makler, P.C.

Before Schuman, Presiding Judge, and Wollheim, Judge, and Nakamoto, Judge.

WOLLHEIM, J.

Reversed and remanded.

WOLLHEIM, J.

This is the second time that this case has come before this court on judicial review. The issue is the same: Where employees bid for work shifts on a schedule posted by the Department of Corrections (DOC), did the collective bargaining agreement (CBA) between the DOC and the Association of Oregon Corrections Employees authorize the DOC to unilaterally change the posted work schedule system? Previously, we held that the Employment Relations Board erred in ordering the DOC to bargain over the changes because the board required the DOC to show that the CBA demonstrated a "clear and unmistakable" waiver of the right to bargain schedule changes. Instead of the test that the board used, we held that the general rules of contract interpretation apply to the construction of the CBA and remanded to the board to apply that test. Association of Oregon Corrections Employees v. DOC. 209 Or App 761, 769-70, 149 P3d 319 (2006). On remand, the board concluded that the CBA was ambiguous and that, based on extrinsic evidence, the parties did not intend to allow the DOC to make such unilateral changes. The DOC petitioned for judicial review. We review the board's conclusion that the CBA is ambiguous for errors of law, Arlington Ed. Assn. v. Arlington Sch. Dist. No. 3, 196 Or App 586, 595, 103 P3d 1138 (2004), and conclude that the board erred because the CBA unambiguously allowed the DOC to make such unilateral changes. Accordingly, we reverse and remand.

We take the relevant undisputed facts from the board's order and the record. The parties' CBA covered the period from July 1, 2001 to June 30, 2003. The CBA provided that it remained in effect during the negotiation process for a new CBA.

The Management Rights clause, Article 3, authorized, among other things, the DOC to "schedule work." Article 28 defined the work week and described how the DOC would post work schedules. Article 28 also gave employees the right to bid on work schedules. The bidding process included an incumbency provision that allowed employees who placed two consecutive bids on the same shift to keep that shift unless a senior employee outbids the incumbent. As stated, the issue in this case is whether the CBA authorized the DOC to unilaterally change the posted work schedule system.

In January 2003, the parties began negotiations on a successor CBA to the 2001-03 bargaining agreement. In May 2003, the association became aware that the DOC intended to post a new work schedule, beginning with the July-August 2003 shift bid schedule. The DOC's new work schedule would unilaterally change various assignments, the start times, and days off for a number of security employees. In effect, the DOC's proposed change eliminated the incumbency provision of the CBA. At a bargaining meeting on the successor CBA, the association's counsel informed the DOC that the proposed schedule changes affected mandatory subjects of bargaining, and, therefore, the DOC must first bargain before it implemented the new work schedule. The DOC did not concede that its proposed change was a mandatory subject of bargaining, but it did agree to meet with the association and discuss the issue outside the formal contract negotiation process. Two days later, the DOC informed all security employees that in the future they must bid on work schedules, including employees who held incumbencies. The DOC explained that it was implementing the new process and, for that reason, it was necessary for all employees to bid for new work schedules. Theassociation and the DOC did later meet to discuss the schedule, but the parties did not reach an agreement. The DOC unilaterally implemented the new schedule. In response, the association president posted a memo to staff stating:

"This is to inform all staff that the [association] does not agree with or support the wholesale changes to the Bid Schedule. There are over 130 changes to this schedule which equate to 60% of the schedule. Some of these changes should have been negotiated at the Bargaining table but were not. The [association] will pursue the avenues it has available to us."

The association filed an unfair labor practices complaint, alleging, among other things, that the DOC violated ORS 243.672(1)(e) in unilaterally altering schedule changes involving start-stop times and days off. The association also alleged the changes concerned a mandatory subject of bargaining under ORS 243.650(7)(a) and, thus, would be a per se unfair labor practice. The board decided that the DOC committed an unfair labor practice because the CBA did not expressly authorize the DOC's unilateral action and did not provide a clear and unmistakable waiver by the association of the right to bargain. The board rejected the DOC's contention that the association waived its right to bargain by failing to make a timely demand. The DOC petitioned for judicial review, and we reversed and remanded, directing the board to correctly interpret the CBA and determine whether the CBA authorized the DOC to unilaterally change the posted work schedule system. Association of Oregon Corrections Employees, 209 Or App at 770. On remand, the board reconsidered the CBA, and again the board concluded that the CBA did not authorize the DOC to make that unilateral schedule change. The DOC petitions for judicial review a second time.

We first consider whether the board correctly construed the CBA. A CBAis a contract that is subject to the general rules of contract interpretation. Marion Cty. Law Enforcement Assn. v. Marion Cty., 130 Or App 569, 575, 883 P2d 222 (1994), rev den, 320 Or 567 (1995). A contract must be enforced according to its terms. Arlington Ed. Assn., 196 Or App at 595. The court can consider extrinsic evidence to determine if a contract is ambiguous. Ambercombie v. Hayden Corp., 320 Or 279, 292, 883 P2d 845 (1994); Connall v. Felton, 225 Or App 266, 272, 201 P3d 219, rev den, 346 Or 257 (2009). The parties' prior course of conduct can be considered to establish that a contract term is ambiguous. Batzer Construction, Inc. v. Boyer, 204 Or App 309, 320, 129 P3d 773, rev den, 341 Or 366 (2006). If a contract is ambiguous--which occurs when the contract or a contract term can be reasonably given more than one plausible interpretation--"'the trier of fact will ascertain the intent of the parties and construe the contract consistent with' that intent." Arlington Ed. Assn., 196 Or App at 595 (quoting OSEA v. Rainier School Dist. No. 13, 311 Or 188, 194, 808 P2d 83 (1991)). If extrinsic evidence is insufficient to resolve the ambiguity, we resort to appropriate maxims of contractual construction. Yogman v. Parrott, 325 Or 358, 364, 937 P2d 1019 (1997).

Whether the terms in a contract are ambiguous is a question of law. Arlington Ed. Assn., 196 Or App at 595. We begin with the relevant terms of the CBA. Two articles of the CBA bear on whether the DOC had authority to make unilateral schedule changes. Article 3, the management rights clause, provides:

"The Association agrees that the Employer retains all inherent rights of management and hereby recognizes the sole and exclusive right of the State of Oregon, as the Employer, to operate and manage its affairs in accordance with its responsibilities to maintain efficient governmental operations. The Employer retains all rights to direct the work of itsemployees, including, but not limited to, the right to hire, promote, assign, transfer, demote, suspend, or discharge employees for proper cause; to schedule work; determine the processes for accomplishing work; to relieve employees from duties because of lack of work or for other legitimate reasons; to take action as necessary to carry out the missions of the State; or determine the methods, means, and personnel by which operations are to be carried on, except as modified or circumscribed by the terms of this Agreement. The retention of these rights does not preclude any employee from filing a grievance, pursuant to Article 44, Grievance and Arbitration Procedure, or seeking a review of the exercise of these rights, when it is alleged such exercise violates provisions of this agreement."

(Emphasis added.) Thus, Article 3 authorizes the DOC to "direct the work of its employees, including, but not limited to, the right to * * * schedule work * * * except as modified or circumscribed by the terms of this Agreement." The parties disagree as to the breadth of the term "schedule work." The DOC urges that Article 3 includes the right to change the shift schedule for employee bidding. The...