City of Mason City v. Public Employment Relations Bd.

• Citation: 316 N.W.2d 851
• Decision Date: 17 March 1982
• Docket Number: No. 65812,I,No. 828,828,65812
• Court: United States State Supreme Court of Iowa
• Parties: 113 L.R.R.M. (BNA) 3354 CITY OF MASON CITY, Appellant, v. PUBLIC EMPLOYMENT RELATIONS BOARD, Appellee, and Teamsters, Chauffeurs, Warehousemen and Helpers, Local Unionntervenor-Appellee.

Page 851

316 N.W.2d 851

113 L.R.R.M. (BNA) 3354

CITY OF MASON CITY, Appellant, v. PUBLIC EMPLOYMENT RELATIONS BOARD, Appellee, and Teamsters, Chauffeurs, Warehousemen and Helpers, Local Union No. 828, Intervenor-Appellee.

No. 65812.

Supreme Court of Iowa.

March 17, 1982.

Gerald M. Stambaugh and C. W. McManigal, Mason City, for appellant.

Thomas J. Miller, Atty. Gen., Nancy D. Powers, Asst. Atty. Gen., and Susan K. Schreurs, Des Moines, for appellee.

Robert E. Conley of Conley & Conley, Des Moines, for intervenor-appellee.

William F. Sueppel of Meardon, Sueppel, Downer & Hayes, Iowa City, for amicus curiae League of Iowa Municipalities.

Considered en banc.

McGIVERIN, Justice.

Petitioner City of Mason City appeals from a district court judicial review decision holding that the following employee organization proposal was a mandatory subject of bargaining as "insurance" under section 20.9, The Code:

The employer shall pay the entire premium for Health and Welfare insurance including dependent coverage for any employee that retires. When the employee becomes eligible for medicare, the employer shall provide a supplemental policy to medicare, and the employer shall pay the entire premium.

Petitioner contends that the proposal pertains to "retirement systems" and, therefore, the proposal must be excluded from the scope of negotiations due to the last sentence of section 20.9. We find this contention meritorious and reverse the ruling of the district court.

The issue in question arose in the course of contract negotiations between petitioner, a "public employer" pursuant to section 20.3(1), and intervenor, Teamsters, Chauffeurs, Warehousemen and Helpers, Local Union No. 828, an "employee organization" under section 20.3(4). The union represented the police officers of Mason City, "public employee[s]" under section 20.3(3). ¹ A dispute arose during the course of negotiations and on January 17, 1979, the fact-finder petitioned the Iowa Public Employment Relations Board (PERB) for a resolution of the dispute over whether the proposal was a mandatory subject of bargaining under section 20.9, The Code. 660 I.A.C. 6.3(2).

Section 20.9 provides, in pertinent part:

The public employer and the employee organization shall meet ... to negotiate in good faith with respect to wages, hours, vacations, insurance, holidays, leaves of absence, shift differentials, overtime compensation, supplemental pay, seniority, transfer procedures, job classifications, health and safety matters, evaluation procedures, procedures for staff reduction, in-service training and all other matters mutually agreed upon....

All retirement systems shall be excluded from the scope of negotiations.

The PERB rendered a 2-1 decision holding that the proposal was a mandatory subject of bargaining within the meaning of section 20.9. ² Petitioner sought judicial review of the PERB decision pursuant to section 17A.19, The Code. The district court affirmed the PERB decision, holding that the union proposal did not pertain to "retirement systems" but was a mandatory subject of bargaining within the category of "insurance" under section 20.9. Petitioners appealed.

When we review a district court judgment rendered pursuant to section 17A.19, The Code, the sole question is whether the court correctly applied the law. Marshalltown Education Association v. PERB, 299 N.W.2d 469, 470 (Iowa 1980). "In order to make that determination, we apply the standards of section 17A.19(8), The Code, to the Board's action to determine whether this court's conclusions are the same as those of the district court." Id.; Jackson County Public Hospital v. PERB, 280 N.W.2d 426, 429-30 (Iowa 1979). Under this standard we find that the PERB's decision must be reversed because it was contrary to the statutory provisions of section 20.9. § 17A.19(8)(a), The Code. We disagree with the interpretation of section 20.9 made by the district court and the PERB.

We ordinarily start with a two-step analysis in considering whether a proposal is within the scope of mandatory bargaining under section 20.9. The proposal must come within the meaning of one of the subjects listed as mandatory in section 20.9. Secondly, there must be no legal prohibition against bargaining on the particular topic. Charles City Education Association v. PERB, 291 N.W.2d 663, 666 (Iowa 1980). Because we believe the second step is determinative here, we turn our consideration directly to it.

Our construction of section 20.9 to include the union proposal under the meaning of "all retirement systems," and therefore to exclude the proposal as a subject of bargaining, is controlled by legislative intent. Eggman v. Scurr, 311 N.W.2d 77, 78 (Iowa 1981); Loras College v. Iowa Civil Rights Commission, 285 N.W.2d 143, 147 (Iowa 1979). We "look to the object to be accomplished, the evils and mischiefs sought to be remedied, or the purpose to be subserved, and place on it a reasonable or liberal construction which will best effect its purpose rather than one which will defeat it." State v. Johnson, 216 N.W.2d 335, 337 (Iowa 1974).

We find that the legislative intent underlying the last sentence of section 20.9 was to exclude from negotiations under chapter 20 any proposal that directly augments or supplements the benefits a public employee would receive under a retirement system under other provisions of the Code. City policemen are already entitled to pension benefits under chapters 410 and 411, uniform statewide retirement systems. To find that the union proposal in the present case is not included within the scope of a "retirement system" would ignore and work to defeat a strong public policy underlying uniform retirement systems and pensions for public employees in this state.

Legislation regarding pensions for persons who work for the state government or its various subdivisions includes chapter 97 (old-age and survivors' insurance system), chapter 97A (public safety peace officers' retirement, accident and disability system), chapter 97B (Iowa public employees' retirement system), chapter 410 (disabled and retired firemen and policemen), chapter 411 (retirement systems for policemen and firemen), and chapter 605A (judicial retirement system).

There appear to be several public policies behind this Iowa pension scheme.

The purpose of this chapter is to promote economy and efficiency in the public service by providing an orderly means whereby employees who become superannuated may, without hardship or prejudice, be replaced by more capable employees, and to that end providing a retirement system which will provide for the payment of annuities to public employees, thereby enabling the employees to care for themselves in retirement, and which by its provisions will improve public employment within the state, reduce excessive personnel turnover and offer suitable attraction to high-grade men and women to enter public service in the state.

§ 97B.2, The Code. See also § 97A.2 (to provide retirement and other benefits to peace officers or their dependents).

Similarly, there appear to be several reasons for excluding retirement pensions and systems from the scope of collective bargaining and negotiation. First, the exclusion is intended to help "government employers hold down the spiraling cost of pension benefits." Village of Lynbrook v. New York State PERB, 48 N.Y.2d 398, 404, 399 N.E.2d 55, 57, 423 N.Y.S.2d 466, 468 (1979). Second, it is felt that significant matters of governmental policy, which pensions would seem to be from sheer cost alone, should remain outside the scope of negotiation so that citizen participation will not be precluded. See Paterson Police PBA v. Paterson, 87 N.J. 78, 92-93, 432 A.2d 847, 854-55 (1981) ("collective negotiations cannot be permitted to defeat the public's right to participate in the making of governmental policy, or to bypass the predominant duty of public employers to promote the public welfare"). Third, to allow individual police employee organizations to bargain over proposals such as the one in this case would mean that policemen in various cities would have wholly disparate benefits upon retirement based upon the skill and success of their bargaining representatives. See Laborers' International Union of North America, Local 1029 v. State Department of Health and Social Services, 310 A.2d 664, 667 (Del.Ch.1973). This would defeat the intent of the legislature to have an all-inclusive, uniform plan in dealing with retirement benefits for public employees, including policemen. This intent is evidenced by the mandatory membership provisions of the various systems, and the detailed provisions relating to "contributions, benefits, administration, eligibility credits, funding and supervision." Pennsylvania State Education Association v. Baldwin Whitehall School District, 30 Pa.Commw. 149, 162, 372 A.2d 960, 966 (1977) (Mencer, J., dissenting).

These policies underlying the section 20.9 exclusion were succinctly stated in Note, The Scope of Negotiations Under the Iowa Public Employment Relations Act, 63 Iowa L.Rev. 649, 687 (1978):

The alternative system pension exclusion ... appears to be a justifiable limit upon the scope of negotiations. Scope limiters have raised the concern that problems will arise because this type of monetary issue is not appropriate for collective negotiations. The delayed effect of the costs imposed by concessions to large pension demands has been seen, by scope limiters, as making such concessions politically attractive to public sector management, in contrast to the immediate costs imposed by concessions to demands in the area of wages and salaries. Because it is felt that public employers will have great difficulty in resisting pension demands, it has been suggested that the issue be excluded from bargaining. Although the view is not without opponents, the argument appears persuasive. Long-range policy choices concerning the necessity of pension...