Bay City Educ. Ass'n v. Bay City Public Schools

• Decision Date: 05 May 1988
• Docket Number: No. 79370,79370
• Parties: BAY CITY EDUCATION ASSOCIATION, Bay City Public Schools Secretarial/Clerical Association, and Non-Academic School Employees Association, Plaintiffs-Appellees, v. BAY CITY PUBLIC SCHOOLS, Defendant-Appellant. 430 Mich. 370, 422 N.W.2d 504, 46 Ed. Law Rep. 734
• Court: Michigan Supreme Court

Page 504

422 N.W.2d 504

BAY CITY EDUCATION ASSOCIATION, Bay City Public Schools

Secretarial/Clerical Association, and Non-Academic

School Employees Association, Plaintiffs-Appellees, v. BAY CITY PUBLIC SCHOOLS, Defendant-Appellant.

No. 79370.

430 Mich. 370, 422 N.W.2d 504, 46 Ed. Law Rep. 734

Supreme Court of Michigan.

Argued Oct. 8, 1987.

Decided May 5, 1988.

Foster, Swift, Collins & Coey, P.C., by Stephen O. Schultz, Lansing, for plaintiffs-appellees.

Allsopp, Fitzgerald & Kolka, P.C., by William W. Allsopp, Bay City, for defendant-appellant.

CAVANAGH, Justice.

Plaintiff employee associations brought unfair labor charges against Bay City Public Schools after the school board decided to terminate its operation of a special education center and to transfer the responsibility for the programs conducted there to the Bay-Arenac Intermediate School District (ISD). This Court is asked to determine whether the local district was subject to a mandatory duty to bargain in good faith with its unionized employees regarding this decision.

The Court of Appeals characterized the local district's arrangement with its ISD as a subcontract and a mandatory bargaining subject. We disagree and hold that this educational programming decision was within the management rights of the local school board and was not subject to any prior bargaining obligation. We emphasize, however, that although the local district was not required to bargain regarding the decision itself, it was subject to the duty to bargain in good faith regarding the effect of the decision on unit employees.

I

The special education center operated by Bay City Public Schools serviced Bay City students as well as students from other constituent districts of the Bay-Arenac Intermediate School District. The school district began reviewing its operation of the programs due to budget concerns connected with the possible defeat of an upcoming millage request and the possibility that the district would be "out of formula." ¹

State financing through the ISD for special education students was considerably more advantageous. The superintendent of the ISD estimated that the ISD would receive approximately $1,775 more state aid per student than would the local district. Accordingly, the superintendents of the constituent districts recommended to their respective boards that resolutions requesting the ISD to operate the center programs be adopted. When it became apparent that these districts would no longer send their students to the center programs operated by defendant, the Board of Education of the Bay City Public Schools unanimously adopted a motion to "transfer" its special education center programs to the ISD and to ask the ISD to assume the responsibility as to Bay City students. The ISD board adopted a resolution to assume the operation of the programs shortly thereafter.

The plaintiff unions requested to bargain over the decision, arguing that defendant's "transfer" of its special education programs to the ISD constituted an implied subcontract giving rise to a mandatory duty to bargain. The school district answered that it had no duty to bargain, since it was not subcontracting but terminating its responsibility to provide the programs by transferring them to the ISD. The district was, however, willing to bargain regarding the effect of its decision on the bargaining unit employees.

In April 1982, the plaintiff unions filed a complaint with the Michigan Employment Relations Commission, alleging that the school district refused to bargain over a decision to subcontract bargaining unit work. ² A hearing was held May 20, 1982 and, on July 18, 1984, the hearing referee entered his findings and recommended that the charges be dismissed. On April 18, 1985, the commission concurred with the referee and dismissed the charges in their entirety. The commission concluded that in spite of the board's use of the word "transfer," the board had, in effect, terminated a program it formerly operated. The commission noted that the decision was due to a lack of funds, and it characterized the move as the "type of decision that has always been recognized to be within the core of managerial control."

The MERC denied plaintiffs' motion for reconsideration, and plaintiffs filed a claim of appeal in the Court of Appeals. In direct contrast to the decision of the MERC, the Court of Appeals determined that defendant had subcontracted with the ISD. After concluding that subcontracting is a mandatory subject of bargaining, the Court reversed the MERC's decision. Bay City Ed. Ass'n v. Bay City Public Schools, 154 Mich.App. 68, 397 N.W.2d 219 (1986). We granted defendant's application for leave to appeal ³ in order to consider whether the local board breached its duty to bargain in good faith concerning its decision to terminate the special education center programs.

II

Michigan's public employment relations act ⁴ imposes a duty on public employers to bargain collectively and in good faith with respect to "wages, hours, and other terms and conditions of employment...." M.C.L. Sec. 423.215; M.S.A. Sec. 17.455(15). This duty is virtually identical to that imposed under Sec. 158(d) of the National Labor Relations Act, 29 USC 158(d), and this Court has looked to federal precedents for guidance in interpreting Sec. 15 of the PERA. Detroit Police Officers Ass'n v. Detroit, 391 Mich. 44, 53, 214 N.W.2d 803 (1974); Local 1277, Metropolitan Council No. 23, AFSCME v. Center Line, 414 Mich. 642, 652-653, 327 N.W.2d 822 (1982).

Central to the resolution of the issue presented here is a determination whether the local board's decision to discontinue its operation of the special education center programs affects "terms and conditions of employment." Issues encompassed by that statutory language are mandatory bargaining subjects. Local 1277, supra.

The scope of the bargaining obligation of public employers has been broadly construed by Michigan courts. ⁵ This broad construction has been based primarily on an analogy to federal cases in the private sector and evidences a recognition of the strike prohibition imposed on public employees under M.C.L. Sec. 423.202; M.S.A. Sec. 17.455(2).

In the educational setting, we have previously looked to whether the employer's action clearly constitutes educational policy, for which there is no bargaining obligation, or a condition of employment, to which the duty to bargain extends. ⁶ Central Michigan Univ. Faculty Ass'n v. Central Michigan Univ., 404 Mich. 268, 279-280, 273 N.W.2d 21 (1978). As we recognized in Local 1277, supra, 414 Mich. at 660-661, 327 N.W.2d 822, certain subjects are within the scope of management prerogative, and the public employer, who remains politically accountable for such decisions, must not be severely restricted in its ability to function effectively. ⁷ Ultimately, the appropriate characterization of an issue or a disputed decision turns on the particular facts of each case.

The elimination of bargaining unit work through subcontracting has been considered a term and condition of employment under the NLRA. Fibreboard Paper Products Corp. v. NLRB, 379 U.S. 203, 85 S.Ct. 398, 13 L.Ed.2d 233 (1964). The Supreme Court held in Fibreboard that the private employer's unilateral decision to subcontract for maintenance work previously performed by union members was a mandatory subject of bargaining. ⁸ 379 U.S. at 218, 85 S.Ct. at 407. The Court carefully limited its holding, however, and cautioned that its "decision need not and does not encompass other forms of 'contracting out' or 'subcontracting' which arise daily in our complex economy." 379 U.S. at 215, 85 S.Ct. at 405. Justice Stewart emphasized in his concurrence that "[t]he Court most assuredly does not decide that every managerial decision which necessarily terminates an individual's employment is subject to the duty to bargain. Nor does the Court decide that subcontracting decisions are as a general matter subject to that duty." 379 U.S. at 218, 85 S.Ct. at 407.

In reliance on the Fibreboard decision, the Court of Appeals concluded that the local board's decision at issue here constituted subcontracting and was, therefore, within the mandatory bargaining obligation. The Court also looked to its decision in Van Buren Public School Dist. v. Wayne Circuit Judge, 61 Mich.App. 6, 28-32, 232 N.W.2d 278 (1975), in which it determined that the school district's decision to subcontract for bus driving services, thereby eliminating bargaining unit work, was within the scope of the duty to bargain.

As the Fibreboard Court cautioned, however, the facts of each case must be carefully examined when determining the extent of the bargaining obligation. We are persuaded that, on the unique facts of this case, the board's decision regarding the extent of its curriculum was not a term or condition of employment subject to mandatory bargaining. Our decision is based on the PERA as well as on pertinent provisions of article 3 of the School Code, M.C.L. Sec. 380.1701 et seq.; M.S.A. Sec. 15.41701 et seq.

The State Board of Education has the duty to "[d]evelop, establish, and continually evaluate and modify" a state plan for the delivery of special education programs and services in cooperation with intermediate school districts. M.C.L. Sec. 380.1701(a); M.S.A. Sec. 15.41701(a). In turn, the board of each intermediate school district has the duty to "[d]evelop, establish, and continually evaluate and modify" its plan for special education in cooperation with its constituent districts. Each intermediate school district is required to submit its plan to the State Board of Education for approval. M.C.L. Sec. 380.1711(1)(a); M.S.A. Sec. 15.41711(1)(a). Local districts are required to provide special education programs and services "in accordance with the intermediate school district special education plan...." M.C.L. Sec. 380.1751(1); M.S.A. Sec. 15.41751(1).

The statute also provides...