Byrd v. AFSCME

• Citation: 781 N.E.2d 713
• Decision Date: 14 January 2003
• Docket Number: No. 49A02-0202-CV-165.,49A02-0202-CV-165.
• Parties: Angelique BYRD, Brent Cuniffe, Janice Dallas, Della Davis, Donald Day, James Dexter, Terri Emsing, Patricia Everly, Sue Hochstetler, Norma Murphy, Thomas Perkins, Mildred Weidenhaupt, and Mark Zollman, Appellants-Defendants, v. AMERICAN FEDERATION OF STATE, COUNTY, AND MUNICIPAL EMPLOYEES, COUNCIL 62 (AFSCME), Appellee-Plaintiff.
• Court: Court of Appeals of Indiana

781 N.E.2d 713

Angelique BYRD, Brent Cuniffe, Janice Dallas, Della Davis, Donald Day, James Dexter, Terri Emsing, Patricia Everly, Sue Hochstetler, Norma Murphy, Thomas Perkins, Mildred Weidenhaupt, and Mark Zollman, Appellants-Defendants, v. AMERICAN FEDERATION OF STATE, COUNTY, AND MUNICIPAL EMPLOYEES, COUNCIL 62 (AFSCME), Appellee-Plaintiff.

No. 49A02-0202-CV-165.

Court of Appeals of Indiana.

January 14, 2003.

William F. Diehl, Gagnon & Diehl, Indianapolis, IN, Milton L. Chappell, National Right to Work Legal Defense Foundation, Inc., Springfield, VA, Attorneys for Appellants.

Mary Jane Lapointe, Richard J. Darko, Lowe Gray Steele & Darko, LLP, Indianapolis, IN, Attorneys for Appellee.

OPINION

SULLIVAN, Judge.

Appellants, Angelique Byrd, Brent Cuniffe, Janice Dallas, Della Davis, Donald Day, James Dexter, Terri Emsing, Patricia Everly, Sue Hochstetler, Norma Murphy, Thomas Perkins, Mildred Weidenhaupt, and Mark Zollman (collectively "the Employees") challenge the trial court's grant of summary judgment in favor of the American Federation of State, County, and Municipal Employees, Council 62 ("the Union"), allowing the Union to collect fair share fees from the Employees, who are not members of the Union. In support of their argument that the trial court improperly granted summary judgment, the Employees raise five issues for our appellate review, which we restate as the following four:

I. Whether Executive Order 90-6 prevents the collection of fair share fees from non-union member employees;

II. Whether the fair share provision in the settlement agreement between the State and the Union improperly defines what is chargeable to non-union member employees;

III. Whether the Union failed to comply with the requirements set forth by the United States Supreme Court when it failed to perform an allocation audit; and

IV. Whether the Union met its burden of proof with regard to its entitlement to the fair share fees in question.

We affirm in part, reverse in part, and remand.

On May 22, 1990, then-Governor Evan Bayh promulgated Executive Order 90-6, which laid the groundwork for executive branch state employees to join labor unions. Nass v. State ex rel. Unity Team, 718 N.E.2d 757, 760 (Ind.Ct.App.1999),trans. denied. The Bayh order created a procedure for the recognition of an employee organization as the exclusive negotiating organization for members of an appropriate employee unit. Id. The Bayh order provided that the negotiating organization was entitled to meet and negotiate with the State Personnel Director on matters of wages, hours, and working conditions in an effort to reach a settlement subject to the Governor's approval. Id. The Bayh order also required the negotiating organization to represent all employees of the bargaining unit regardless of whether the employee was a member of the organization. Id. The language in the order that is the focus of our attention reads, "Employees shall have the right, freely and without fear of penalty or reprisal, to form, join and assist any lawful employee organization, or to refrain from any such activity." Appellant's Appendix at 7 (emphasis supplied).

On August 8, 1997, Governor Frank O'Bannon issued Executive Order 97-29, which approved and implemented a settlement agreement between the State and the Union. This order reads in pertinent part:

"NOW, THEREFORE, I, FRANK O'BANNON, by virtue of the authority vested in me as the Governor of the State of Indiana, do hereby order that:

1. The Settlement with AFSCME/ Indiana is hereby approved and incorporated by reference herein.

2. The Settlement shall be implemented effective August 8, 1997 and shall be administered in accordance with the laws of this State.

3. The Settlement does not supersede any existing of [sic] future statute, promulgated rule or executive order, except those executive orders which implemented prior settlements between the State and AFSCME/ Indiana. State officers and employees subject to the executive authority of the Governor shall administer and construe the Settlement as superseding any conflicting policies and work practices." Appellant's Appendix at 8.

The Settlement which was incorporated into the O'Bannon order contained the following provision:

"Section E. All employees hired after October 1, 1997 must begin paying to the Union, on January 1, 1998, their fair share of the costs of providing Union representation, in an amount not exceeding eighty-five (85%) of the dues required to be paid by employees who are members of the Union. The amounts required of nonmembers shall not include fees, charges, and assessments involving political contributions. Employees required to pay fair share may make such payments by paycheck withholding.

The Union shall establish and operate a procedure to protect the rights of nonmembers who are required to make fair share payments to such organization, which procedure shall include:

(1) An annual notice to such nonmembers of the fair share amount they are required to pay, including an audited Union financial statement and a disclosure by the Union of the manner in which it has arrived at the fair share amount;

(2) An expeditious procedure allowing nonmembers to challenge the Union's calculation before an impartial decision-maker; and

(3) An escrow fund into which all amounts in dispute shall be placed pending the decision of the impartial decision maker.

All monies collected by the Union pursuant to this provision must be held in escrow until it is determined by a court of general jurisdiction that this fair share provision is lawful. If a court determines that this fair share provision is not lawful, the Union shall return the monies held in escrow plus interest to the affected employees. Moreover, the Union agrees to hold harmless and indemnify the State for any and all expenses, including but not limited to legal fees it incurs in defending any action challenging the legality of this provision or operation of this provision and to pay in full any judgments against the State." Appellant's Appendix at 1.

Thereafter, the Auditor of State refused to honor the voluntary paycheck deductions for fair share fees, and several state employee unions, including AFSCME, joining the Governor as a necessary party under Indiana Trial Rule 19, petitioned the trial court to mandate that the Auditor do so.¹ The unions also sought damages and a request for a declaratory judgment that the fair share provision of the Settlement was lawful and enforceable. The trial court entered summary judgment in favor of the unions, ordering the Auditor to process the voluntary paycheck deductions and declaring that the fair share fee was legal and enforceable. The Auditor appealed, and in Nass, another panel of this court held that the Governor did have the authority to enter into settlement agreements with the unions. 718 N.E.2d at 763-64. The Nass court also held that the unions and the Auditor did not have sufficient adverse legal interests regarding the fair share provision. Id. at 766. Therefore, the Nass court reversed the trial court on the issue of the legality and enforceability of the fair share provision contained in the Settlement. Id.

Upon remand, AFSCME, on December 11, 2000, sued several non-union state employees, among them the Employees in this case, who refused to pay the fair share fee. The Employees responded and counterclaimed. On April 30, 2001, the Union moved for summary judgment and the Employees filed a response on August 28, 2001, which argued against summary judgment for the Union and in favor of summary judgment for them. On February 1, 2002, the trial court granted summary judgment in favor of the Union. It is from this judgment that the Employees now appeal.

Summary Judgment

Summary judgment is appropriate only if the designated evidentiary material demonstrates that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Ind. Trial Rule 56(C); Title Search Co., Inc. v. 1st Source Bank, 765 N.E.2d 167, 171 (Ind.Ct.App.2002),trans. denied. Genuine issues of material fact exist where facts are in dispute concerning an issue which would dispose of litigation. Gen. Housewares Corp. v. Nat'l Sur. Corp., 741 N.E.2d 408, 412 (Ind.Ct.App. 2000). Upon appeal, we apply the same standard as the trial court and resolve disputed facts or inferences in favor of the non-moving party. Title Search, 765 N.E.2d at 171. This court and the trial court are bound to consider only those matters which were designated to the trial court. Markley Enters., Inc. v. Grover, 716 N.E.2d 559, 564 (Ind.Ct.App.1999). The moving party bears the burden of establishing, prima facie, that no genuine issues of material fact exist and that he or she is entitled to judgment as a matter of law. Title Search, 765 N.E.2d at 171. Once the moving party has met this burden, the burden falls upon the non-moving party to set forth specific facts demonstrating a genuine issue for trial. Id. The non-moving party may not rest upon his or her pleadings, but must set forth specific facts, using supporting materials contemplated under the rule, which show the existence of a genuine issue for trial. Brown v. Banta, 682 N.E.2d 582, 584 (Ind. Ct.App.1997),trans. denied. In addition, the party appealing a grant of summary judgment bears the burden of persuading us that the trial court erred. Title Search, 765 N.E.2d at 171.

I The Executive Orders

The Employees argue that the portion of the Bayh order which states that employees shall have the right, freely and without fear of penalty or reprisal, to refrain from joining and assisting any lawful employee organization prohibits the collection of fair share fees in general. Therefore, their argument continues, the fair share provision contained in the Settlement approved and incorporated into the O'Bannon order is invalid.² The Employees do not dispute that a later executive...