Dart v. Amalgamated Transit Union

• Decision Date: 19 December 2008
• Docket Number: No. 06-0034.,06-0034.
• Citation: 273 S.W.3d 659
• Parties: DALLAS AREA RAPID TRANSIT, Petitioner, v. AMALGAMATED TRANSIT UNION LOCAL NO. 1338, Respondent.
• Court: Texas Supreme Court

273 S.W.3d 659

DALLAS AREA RAPID TRANSIT, Petitioner, v. AMALGAMATED TRANSIT UNION LOCAL NO. 1338, Respondent.

No. 06-0034.

Supreme Court of Texas.

Argued November 14, 2007.

Decided December 19, 2008.

Jeffrey C. Londa, Steven E. Hart, Dennis C. Gardner, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Houston, Hyattye O. Simmons, Dallas Area Rapid Transit Legal Department, Harold R. McKeever, Dallas, for Petitioner.

Hal K. Gillespie, Joseph Halcut Gillespie, Gillespie, Rozen, Watsky, Motley & Jones, P.C., Dallas, for Respondent.

Justice HECHT delivered the opinion of the Court.

Section 13(c) of the federal Urban Mass Transit Act of 1964 (the "UMTA", now the Federal Transit Act) conditions a public transportation authority's receipt of federal financial assistance on "arrangements the Secretary of Labor concludes are fair and equitable" to protect "the interests of employees affected by the assistance".¹ Such arrangements "shall include provisions that may be necessary for ... the preservation of rights, privileges, and benefits ... [and] the protection of individual employees against a worsening of their positions related to employment".²

In this case, a public transportation authority and its employees' union, operating under a 13(c) arrangement, resolved a general grievance over wages and benefits. The authority did not adhere to the resolution, and the union sued for breach of contract. The lower courts concluded that the authority is not immune from suit.³ The issue before us is whether section 13(c) preempts an authority's immunity from suit under state law. We hold that immunity is not preempted and that the union's recourse is to the procedures approved in the 13(c) arrangement. Accordingly, we reverse the judgment of the court of appeals and dismiss the case.

I

Petitioner Dallas Area Rapid Transit is a regional public transportation authority⁴ that performs only governmental functions⁵ and is immune from suit under Texas law.⁶ Created in 1983 and funded with a one-cent sales tax,⁷ DART assumed the operations of the Dallas Transit System, which the City of Dallas had acquired in 1963 from the privately owned Dallas Transit Company.⁸ Company employees, and later System employees, were represented by Amalgamated Transit Union Local No. 1338, which now represents DART employees. ATU 1338 engaged in collective bargaining with the Company,⁹ but Texas law prohibits a state political subdivision from collective bargaining with public employees.¹⁰ This prohibition has been held to apply to the System,¹¹ DART,¹² and their employees, and ATU 1338 does not challenge its application here.¹³ But public employees may "present grievances concerning their wages, hours of employment, or conditions of work either individually or through a representative that does not claim the right to strike,"¹⁴ and ATU 1338 has presented grievances for DART employees.

DART receives federal financial assistance conditioned on a 13(c) Arrangement that was negotiated with ATU 1338 and approved by the Secretary of Labor on September 30, 1991. Attachment B to the 1991 Arrangement sets out "general grievance procedures ... for the purpose of giving an employee, individually or through such employee's representative, the opportunity to present grievances and appeals regarding establishment of, or failure to establish, specified wages, hours or conditions of work". For our purposes, those procedures may be summarized as follows:

• General grievances must be presented in writing to the human resources department head, who must meet with the employee or representative, provide a full hearing and review, and issue a written decision.

• The employee or representative may appeal to the executive director or invoke a fact-finding process.

• The fact-finding process is conducted by a three-member panel. One member is selected by each side, and the third is selected from a list of neutrals. After gathering facts, conducting hearings, and considering the opposing positions, the panel must issue a written report, making recommendations on unresolved issues.

• If the panel is unanimous, "the recommendations shall be deemed agreed upon as a final resolution of the issues submitted, except as otherwise modified by the parties' mutual agreement." But either partisan member of the panel may dissent. The panel must publish its findings and recommendations, and any dissents, in the local media.

• "[T]he fact-finding report and recommendations shall be advisory only" and shall not be binding on either party.¹⁵

The provisions of Attachment B, with minor changes, were included as section 8.10 of DART's Hourly Employment Manual.

In April 2001, ATU 1338 filed a general group grievance on behalf of DART employees seeking wage increases and better benefits. The grievance did not result in a fact-finding panel report under the Attachment B procedures; instead, DART and ATU 1338 signed a "General Grievance Resolution" in June 2002. The Resolution provided, among other things, that hourly employees would receive three annual 4% pay increases effective October 2001, October 2002, and October 2003. The Resolution stated that it "constitute[d] a final resolution to the issues raised in the General Grievance", barred ATU 1338 from filing another general grievance "concerning terms and conditions of employment, specified wages, hours, and conditions of work" for three years, and stated that "DART agrees that for the three year period it will not make any unilateral changes to DART's Hourly Employment Manual except for those issues remaining open herein." But the Resolution also contained important reservations under the heading, "Management Rights":

1. DART, at its sole discretion, possesses the right in accordance with applicable laws, to manage all operations, including the direction of the working force and the right to plan, direct and control the operation of all equipment and other property of DART, except as modified by Section 8.10 of the DART Hourly Employment Manual and Section 617.005 of the Texas Government Code and DART's 13(c) Capital Arrangement certified by the Department of Labor on September 30, 1991 pursuant to USC § 5333(b), if applicable.... [N]othing herein changes DART's position that it has a unilateral right to establish employment conditions, set wages, hours of employment or conditions of work. In the event that DART makes any unilateral change except for issues remaining open herein during the term of this Resolution, such change relieves Local 1338 of its commitment not to file a General Grievance from October 1, 2001 to September 30, 2004.

2. Matters of inherent managerial policy are reserved exclusively to DART under law. These include but shall not be limited to such areas of discretion or policy as the functions and programs of DART, standards of service, its overall budget, utilization of technology, the organizational structure and selection and direction of personnel.

3. The listing of specific rights in this article is not intended to be, nor should be considered, restrictive or a waiver of any rights of management not listed and not specifically surrendered herein whether or not such rights have been exercised by DART in the past.

4. DART intends to abide by the provisions herein, and to resolve the general grievance as herein stated. By resolving this general grievance, DART does not intend to waive its legal obligations, including those set forth in its 13(c) Arrangement and its position that it may not legally enter into a legally binding and bilateral agreement with a labor organization regarding wages, hours, or conditions of employment of public employees. This general grievance is therefore resolved subject to all the foregoing limitations.

DART gave its employees the pay raises in 2001 and 2002, but not in 2003, and it unilaterally reduced other benefits, asserting that declining sales tax revenues required cost-saving measures. ATU 1338 sued for breach of contract based on DART's failure to comply with the 2002 Resolution. ATU 1338 sought money damages and injunctive relief. DART filed a plea to the jurisdiction claiming governmental immunity, which the trial court denied. On DART's interlocutory appeal, the court of appeals affirmed, holding that section 13(c) of the UMTA, as interpreted by the United States Supreme Court in Jackson Transit Authority v. Local Div. 1285, Amalgamated Transit Union,¹⁶ preempted DART's immunity from ATU 1338's suit:

Assuming state law provides that DART, as a governmental entity, is immune from suit, this immunity would obstruct accomplishing and executing Congress's full purposes and objectives under the UMTA. The UMTA, as interpreted in Jackson Transit Authority, is clear: state law is to control labor relations between local governments and unionized transit workers, as long as the workers' collective-bargaining rights are preserved before a local government receives federal aid. Congress designed section 13(c) of the UMTA "as a means to accommodate state law to collective bargaining." Jackson Transit Auth., 457 U.S. at 27, 102 S.Ct. 2202, 72 L.Ed.2d 639. Although section 13(c) may be narrowly drafted to minimize its effects on state labor law, Congress's clear intent was to preserve collective-bargaining rights. Where state immunity law would preclude enforcement of the rights preserved under section 13(c), Congress's objectives could not be accomplished. Therefore, state immunity law "is preempted and has no effect."¹⁷

We granted DART's petition for review.¹⁸

II

We begin with ATU 1338's argument that we lack jurisdiction over this interlocutory appeal. DART contends that we have jurisdiction because the court of appeals' decision conflicts with section 13(c) and Jackson Transit Authority. We first consider the extent of our jurisdiction and then how to apply it in this case.

A

Without an intermediate appellate court in Texas, this Court's workload soon became...