Board of Trustees of University of Maine System v. Associated Colt Staff of University of Maine System

• Decision Date: 26 May 1995
• Docket Number: No. 7272,Docket No. KEN,7272
• Citation: 659 A.2d 842
• Parties: 149 L.R.R.M. (BNA) 2568, 101 Ed. Law Rep. 279 BOARD OF TRUSTEES OF the UNIVERSITY OF MAINE SYSTEM v. ASSOCIATED COLT STAFF OF the UNIVERSITY OF MAINE SYSTEM and Maine Labor Relations Board. DecisionLaw94 445.
• Court: Maine Supreme Court

Page 842

659 A.2d 842

149 L.R.R.M. (BNA) 2568, 101 Ed. Law Rep. 279

BOARD OF TRUSTEES OF the UNIVERSITY OF MAINE SYSTEM v. ASSOCIATED COLT STAFF OF the UNIVERSITY OF MAINE SYSTEM and Maine Labor Relations Board.

Decision No. 7272.

Law Docket No. KEN 94 445.

Supreme Judicial Court of Maine.

Argued Nov. 2, 1994.

Decided May 26, 1995.

Catherine O'Connor (orally), Bernstein, Shur, Sawyer & Nelson, Kennebunk, for plaintiff.

Bruce Smith, Harry Pringle, Drummond, Woodsum, & MacMahon, Portland, for amicus curiae.

Judith A. Dorsey (orally), Maine Labor Relations Bd., Augusta, Shawn C. Keenan (orally), Maine Teachers Ass'n, Augusta, for defendants.

Timothy Belcher, Maine State Employees Ass'n, SEIU Local 1989, Augusta, for amicus curiae.

Before WATHEN, C.J., and ROBERTS, GLASSMAN, CLIFFORD, RUDMAN, DANA and LIPEZ, JJ.

CLIFFORD, Justice.

The Associated COLT Staff of the University of Maine System (ACSUM) ¹ and the Maine Labor Relations Board (Board) appeal from a judgment of the Superior Court (Kennebec County, Alexander, J.) vacating the Board's decision that the University of Maine System (University) breached its duty to bargain in good faith by discontinuing the annual step increase in wages included as a wage provision in the collective bargaining agreement that had expired. The requirement to bargain and negotiate in good faith includes the obligation to maintain the status quo following the expiration of a contract. ² Applying a "dynamic" status quo rule that it had adopted after the contract had been entered into, the Board imposed on the University a duty to continue paying to its employees the annual step increases in wages included in the expired agreement. The Board concluded that the failure of the University to do so constituted a unilateral change in the status quo prohibited under the law. Beyond the particular unfairness of the application of the dynamic status quo rule retroactively to the facts of this case, such application requires the University to pay wage increases not collectively bargained for and not approved by the University, and thus violates the letter and spirit of the Public Employee Labor Relations Law. Accordingly, we affirm the Superior Court.

The University and ACSUM had a collective bargaining agreement of three years' duration, commencing in 1989, and expiring on June 30, 1992. The agreement contained separate wage scales with an across-the-board increase for each year of the contract. The wage schedule for each year was divided into wage bands for different levels of employment, and each band included six to eight steps based on seniority. The agreement provided that on each of the anniversary dates of the agreement, employees would advance from one lettered step to the next and receive the specified increase in wages. When the agreement expired, the University adhered to the last wage schedule, and discontinued the annual step increases, except as they applied to promotions.

In December 1992, ACSUM filed a prohibited practice complaint with the Board, alleging that the University violated the University of Maine System Labor Relations Act, 26 M.R.S.A. §§ 1021-1035 (1988 & Supp. 1994). ³ After a hearing, the Board ruled that the discontinuance of the payment of salary step increases after the expiration of the collective bargaining agreement constituted a unilateral change in the conditions of employment in violation of the University's duty to bargain pursuant to 26 M.R.S.A. § 1027(1)(A) and (E). The Board ordered the University to continue to advance each employee one step higher on the existing wage scale annually, until the parties agree otherwise or bargain in good faith to impasse. ⁴ In addition, the Board ordered the University to reimburse employees for the wages and interest lost as a result of the delay in granting the first increase following the expiration of the contract.

The University filed a petition for review of final agency action with the Superior Court pursuant to 26 M.R.S.A. § 1029(7) and M.R. Civ.P. 80C. The Superior Court concluded that the Board's decision was "an improper imposition into the substance of collective bargaining processes" and vacated the Board's decision. This appeal by the Board and ACSUM followed.

We review the Board's decision directly, State v. Maine State Employees Ass'n, 538 A.2d 755, 757 (Me.1988), for error of law, abuse of discretion, or clear error. See City of Bangor v. American Fed'n of State, County & Mun. Employees, 449 A.2d 1129, 1134, 1136-37 (Me.1982); 26 M.R.S.A. § 1029(7).

Pursuant to the University of Maine System Labor Relations Act, the University is required to bargain and negotiate in good faith. See 26 M.R.S.A. §§ 1026(1)(C), 1027(1)(A), (E). That requirement includes the obligation to maintain the status quo following the expiration of a contract. See Lane v. Board of Directors of M.S.A.D. No. 8, 447 A.2d 806, 809-10 (Me.1982) (employer may not unilaterally alter terms and conditions of employment after expiration of collective bargaining agreement).

The definition of status quo at the expiration of the collective bargaining agreement is at the crux of this case. Until 1991, the Board had construed status quo to mean that wages existent at the expiration of a collective bargaining agreement were frozen. In doing so, the Board rejected the notion that increases in wages scheduled in the expired contract should be extended beyond the expiration of that contract. M.S.A.D. No. 43 Teachers' Ass'n v. M.S.A.D. No. 43 Bd. of Directors, 432 A.2d 395, 397-98 (Me.1981). In M.S.A.D. No. 43, we agreed that the application of a static status quo rule to collective bargaining was appropriate.

"To say that the status quo must be maintained during negotiations is one thing; to say that the status quo includes a change and means automatic increases in salary is another. The matter of increments can be negotiated and, if it is agreed that such increments can and should be paid, provision can be made for payment retroactively."

Id. at 397 n. 3 (quoting Board of Coop. Educ. Servs. v. New York State Pub. Employment Relations Bd., 41 N.Y.2d 753, 395 N.Y.S.2d 439, 442, 363 N.E.2d 1174, 1177 (1977)).

In 1991, the Board reversed its previous position and adopted what is known as the dynamic status quo rule, thereby requiring public employers to pay their employees any annual step increases in wages included in an agreement that expired. Auburn Sch. Adm'rs Ass'n v. Auburn Sch. Comm., No. 91-19 (Me. L.R.B. Oct. 8, 1991), consolidated appeals dismissed per stipulation, No. CV-91-459 & -464 (Me. Sup.Ct., And. Cty., Apr. 24, 1992).

To apply the dynamic status quo rule to the circumstances of this case, and require the University to pay increases in wages in an expired collective bargaining agreement that was negotiated at a time when the Board was applying a different status quo rule is particularly unfair. The parties negotiated this contract with the understanding that during any interim period following the expiration of the contract, wages would be frozen and maintained at the level existing on the date of expiration. See M.S.A.D. No. 43, 432 A.2d at 397-98. The Board's subsequent departure from many years of precedent disregards the parties' reliance on the prior rule, and places on the University the burden of funding wage increases not budgeted for. See generally Ryan Heating Co. v. NLRB, 942 F.2d 1287, 1289 (8th Cir.1991) (discussing factors that affect determination whether to apply NLRB decision retroactively); Fox Painting Co. v. NLRB, 919 F.2d 53, 56 (6th Cir.1990) (discussing factors).

Beyond the unfairness of the dynamic status quo rule's application in this case, however, is its contravention of the statutory language and the legislative history of Maine's public employment labor relations law. The very section imposing the duty to negotiate in good faith, and thus to maintain the status quo when a contract expires, provides "except that by such obligation [to negotiate] neither party shall be compelled to agree to a proposal or be required to make a concession." 26 M.R.S.A. § 1026(1)(C). The payment of wages can have an "enormous impact" on the University's budget, see City of Biddeford v. Biddeford Teachers Ass'n, 304 A.2d 387, 413 (Me.1973), and constitutes a substantial concession by the University in direct contravention of the prohibition contained in section 1026(1)(C). Caribou Sch. Dep't v. Caribou Teachers Ass'n, 402 A.2d 1279, 1285-86 (Me.1979) (Board has no authority to impose duty on public employer to pay wage increases not agreed to); see also Appeal of Milton Sch. Dist., 137 N.H. 240, 625 A.2d 1056, 1058-59 (1993) (Board has no authority to require district to pay "cost items" not approved by town).

Other provisions in the statute make clear that the Legislature was careful to protect the public fisc from wage increases that were neither bargained for nor approved by the public employer. Although the law provides for binding arbitration as the preferred method of settling disputes when negotiation fails, the Legislature specifically excluded salaries, pensions, and insurance from binding arbitration. ⁵ Arbitrators may only recommend, and not bind the parties, as to salaries and pensions in Maine. 26 M.R.S.A. § 1026(4)(B); see Caribou Sch. Dep't, 402 A.2d at 1286 n. 8 & 1287. Contrary to this proposition, however, the Board effectively has constrained the University to accept an increase in salaries.

The static status quo rule is consistent with the Legislature's clearly expressed intent to protect municipal and state agency budgets from increases in wages imposed without agreement by the governing body. ⁶ The recently adopted dynamic status quo rule, on the other hand, obligates the University to pay substantial increases in wages not approved by its trustees, and dramatically alters the status and bargaining positions of the parties. It changes, rather than maintains, the status quo. ...