City of Detroit v. Detroit Police Officers Ass'n, Docket No. 63929

CourtSupreme Court of Michigan
Citation294 N.W.2d 68,408 Mich. 410
Docket NumberNo. 16,Docket No. 63929,16
Parties, 105 L.R.R.M. (BNA) 3083 The CITY OF DETROIT, a Municipal Corporation, Plaintiff, Appellant, Cross- Appellee, v. DETROIT POLICE OFFICERS ASSOCIATION, an unincorporated labor organization, Defendant, Counterclaimant, Appellee, Cross-Appellant, and George E. Bowles, Aubrey McCutcheon and William L. Kircher, Defendant, Appellees, and Detroit Fire Fighters Association, Intervening Defendant, Appellee and Cross-Appellant. Calendar
Decision Date06 June 1980

[408 Mich. 432] George G. Matish, Acting Corp. Counsel by Bernard J. Fieger, William M. Saxton, Southfield, and Michael A. Hurvitz, Sp. Asst. Corp. Counsel, Detroit, for plaintiff, appellant, cross-appellee.

Gregory, Van Lopik, Korney & Moore, Nancy Jean Van Lopik, Detroit, for Detroit Police Officers Assn.

Marston, Sachs, Nunn, Kates, Kadushin & O'Hare by Theodore Sachs, Detroit, for Detroit Fire Fighters Assn.

WILLIAMS, Justice, for affirmance.

In 1969, the Michigan Legislature enacted 1969 P.A. 312, an act to provide for the compulsory interest arbitration of municipal police and fire department disputes. M.C.L. § 423.231 et seq.; M.S.A. § 17.455(31) et seq. The purpose and intent of the Act is described in § 1:

"It is the public policy of this state that in public police and fire departments, where the right of employees to strike is by law prohibited, it is requisite to the high morale of such employees and the efficient operation of such departments to afford an alternate, expeditious, effective and binding procedure for the resolution of disputes, and to that end the provisions of this act, [408 Mich. 433] providing for compulsory arbitration, shall be liberally construed." M.C.L. § 423.231; M.S.A. § 17.455(31).

This case involves two major issues: (1) whether 1969 P.A. 312, as amended, includes an unconstitutional delegation of "legislative and political responsibility to politically unaccountable arbitrators", to use the words of the plaintiff City of Detroit (City's Brief, p. 7); and (2) whether the arbitration panel's award was supported by "competent, material and substantial evidence on the whole record" as required by § 12 of Act 312, M.C.L. § 423.242; M.S.A. § 17.455(42), as well as Const.1963, art. 6, § 28.

The first issue has been inconclusively considered by four Justices of this equally-divided Court in Dearborn Fire Fighters v. Dearborn, 394 Mich. 229, 231 N.W.2d 226 (1975), where pre-amendment Act 312 was assessed. All four Justices found that there existed sufficient standards to guide the exercise of delegated authority. Beyond this consensus, however, one Justice would hold the pre-amendment Act constitutional on the facts with relation to public accountability where the impartial chairperson of the arbitration panel was appointed by the Michigan Employment Relations Commission ("MERC") chairperson, but indicated that the Act was of doubtful constitutionality in that instance where the panel chairperson was alternatively selected by the parties' delegates alone. Two Justices would hold the Act unconstitutional because both the method of panel member selection and tenure of the panel chairperson did not provide sufficient political responsibility and accountability. Another Justice would hold the Act constitutional in all respects.

Subsequent and responsive to the Dearborn opinion, the Legislature significantly amended Act 312 by providing for the composition of an arbitration[408 Mich. 434] panel including a representative of each party plus an impartial chairperson selected by MERC from a permanent panel established by MERC and known as the MERC Panel of Arbitrators. 1

Eligibility for this permanent panel is restricted to impartial, competent and reputable United States citizens, who must be residents of Michigan. Members of the panel must subscribe an oath or affirmation of office. The term of these panelists is [408 Mich. 435] indeterminate and they are subject to removal without cause by the MERC. Such persons are appointed to this panel by the MERC commissioners who are, in turn, direct appointees of the Governor with the advice and consent of the state senate

The first question before us, then, is whether a delegation, accompanied by otherwise sufficient standards, to such an arbitration panel as provided in Act 312, as amended, is constitutional.

The second issue raises the question whether the arbitration panel's award as to the economic issue of cost of living allowance ("COLA") and wages and as to the non-economic issue of a residency hardship exemption was supported by competent, material and substantial evidence on the whole record. More specifically, as to the economic issue, we must answer the threshold question whether the City's last best offer of elimination of the already existing police officers' cost of living program plus wage increases over a three-year period of 4.8%, 4% and 4% more nearly complied with the applicable legislative standards than did the defendant Detroit Police Officers Association's ("DPOA") last best offer of continuation of the already existing cost of living program and the somewhat lower wage increases of 4.5%, 4% and 3.5% over a three-year period. As to the non-economic award of a residency hardship exemption, we must determine the threshold question whether that award was based on the applicable legislative standards.

Since the Dearborn decision, similar schemes have been enacted in many jurisdictions, 2 upheld [408 Mich. 436] as constitutional by the overwhelming weight of authority, 3 and

stamped by many with the imprimatur of success in averting critical-service strikes. 4 Guided by this ample judicial and scholarly[408 Mich. 437] authority, we are compelled to conclude that 1969 P.A. 312, as significantly amended by 1976 P.A. 84, is constitutional in all respects. 5 Furthermore, after careful review of the record and its relationship to the Act's § 9 factors, M.C.L. § 423.239; M.S.A. § 17.455(39), relative to both economic and non-economic issues, and mindful of the statutorily prescribed standard of judicial review codified in § 12, we hold that the arbitration panel's economic award must also be upheld, whereas the record does not sustain the panel's non-economic award as to the residency hardship exemption. Interest is denied. The lower court is affirmed except as to the residency hardship exemption

The City and the DPOA, the certified bargaining [408 Mich. 438] agent of the police officers of Detroit, reached an impasse in 1977 on several of the terms and conditions of employment in bargaining for a new contract. Thereafter, upon demand of the DPOA, the MERC appointed an arbitration panel pursuant to 1969 P.A. 312, as amended ("Act" or "Act 312"); the unsettled issues remaining between the parties were submitted to that panel for binding arbitration. After some 15 hearings before this panel, plus oral arguments by the parties, conducted over a period of eight months, the panel issued its award on December 20, 1978.

In essence, the panel majority 6 accepted the City's "last offer of settlement" 7 as to all disputed economic issues except its

COLA and wage proposals. 8 On these two items, the DPOA's last offers a preservation of the parties' previous COLA arrangement and a lower three-year wage increase than that proposed by the City were adopted by the panel. 9 As to the non-economic issues, most were settled, withdrawn or remanded to the parties. [408 Mich. 439] 10 One of the remanded issues involved the prior contractual provision that all City police officers be residents of the City of Detroit. The City had won this provision in the parties' previous [408 Mich. 440] contract through the award of another Act 312 arbitration panel (Platt panel) issued September 5, 1977. Although the present panel upheld the City's position that the residency provision be maintained, it ruled for the DPOA that some provision should be made for the exercise of reasonable discretion by either the mayor or a City official designated by the mayor to exempt persons with hardship circumstances. Accordingly, the panel remanded this narrow issue to the parties with the instruction that should they be unable to resolve the matter themselves within thirty days of the issuance of the award, the panel would do so

Shortly after the issuance of this arbitration panel's December 20, 1978 award, this matter began its complicated procedural course in our courts. On January 9, 1979, the City filed suit in the circuit court for Wayne County seeking judicial review of the arbitration panel's award. Initially, the City sought review of the award limited to those portions which dealt with COLA, wages and the residency hardship exemption. Thereafter, the City filed the first of

two amended complaints, the first one raising the issue of Act 312's constitutionality. Meanwhile, both the DPOA and the Detroit Fire Fighters Association ("DFFA"), which had been allowed to intervene by stipulation of the parties, filed counterclaims seeking enforcement of the panel's December 20, 1978 award and the payment of interest on the economic awards from the time of their issuance

The circuit court initially declined to either stay the proceeding as requested by the City or to order immediate City compliance with the arbitration award as requested by both the DPOA and the DFFA. On February 13, 1979, however, the circuit court issued an opinion pendente lite which ordered[408 Mich. 441] enforcement of the panel's award in its entirety pending that court's complete review of the panel's decision and order. The reasons given by the trial court in its interlocutory opinion ordering enforcement of the arbitration panel's award were threefold:

"(1) The public policy underlying and expressed in Act 312 encourages immediate enforcement under the circumstances present in this case;

"(2) The City is not...

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