Detroit Police Officers Ass'n v. City of Detroit, Docket Nos. 103592
| Decision Date | 16 July 1996 |
| Docket Number | Docket Nos. 103592,No. 7,103610,7 |
| Parties | , 153 L.R.R.M. (BNA) 2315 DETROIT POLICE OFFICERS ASSOCIATION, et al., Charging Parties-Appellees, v. CITY OF DETROIT, Respondent Employer-Appellee, and City of Detroit Policemen And Firemen Retirement System Board of Trustees, Intervenor-Appellant. DETROIT POLICE OFFICERS ASSOCIATION, et al., Charging Parties-Appellees, v. CITY OF DETROIT, Respondent Employer-Appellant, and City of Detroit Policemen and Firemen Retirement System Board of Trustees, Intervenor. Calendar |
| Court | Michigan Supreme Court |
The issue presented by this case is whether the parties' past practice is so widely acknowledged and mutually accepted that it amends the contradictory and unambiguous contract language in the collective bargaining agreement. Applying the majority's analysis and holding in the recently decided Port Huron Ed. Ass'n v. Port Huron School Dist., 452 Mich. 309, 550 N.W.2d 228 (1996), 1 we hold that the association has shown that the parties had a meeting of the minds with respect to the new terms or conditions and that the past practice was so prevalent and widely accepted that there was an agreement to modify the contract. Thus, the board of trustees committed an unfair labor practice when it unilaterally changed a mandatory subject of bargaining.
The charter of the City of Detroit created a pension system that provides retirement and death benefits for its firefighters and police officers. The charter also contains provisions regarding the award of benefits as a result of duty- or nonduty-related incapacity. It provides that the board of trustees, which manages the retirement system, decides whether an applicant's disability is duty related:
If a member shall become totally incapacitated for duty by reason of injury, illness or disease resulting from performance of duty and if the Board of Trustees shall find such injury, illness or disease to have resulted from the performance of duty, ... such member shall be retired.... [Detroit Charter, tit. IX, ch. VII, art. VI, part B, § 1 (emphasis added).]
Additionally, the charter provides that the medical director shall certify to the board of trustees that the person is totally incapacitated. If a dispute arises over the medical director's finding, then the board of trustees is to "refer the matter in dispute to a Medical Board of Review consisting of three physicians or surgeons, of whom one shall be named by the Board of Trustees, one by the affected member, beneficiary, or other person claiming benefits, and the third by the two so named...." Detroit Charter, tit. IX, ch. VI, art. III, § 12(c). The medical findings of this medical board of review are binding on the board of trustees.
However, at some point, perhaps as early as 1941, the actual practice arose of having the medical director determine duty relatedness, as well as physical incapacity, with any dispute going to the medical board of review. Further, under the past practice, the medical board's decision was binding on the board of trustees, even with regard to duty relatedness.
In an attempt to recapture the duty-relatedness decision making, the board of trustees passed a resolution on December 6, 1990, stating in pertinent part:
[F]indings made by Medical Boards of Review shall be strictly limited to "medical findings"....
The board of trustees further stated that it was the one responsible for deciding whether the "underlying event or events that gave rise to the disability occurred while in the performance of duty...." The police and firefighter unions responded to this resolution by filing an unfair labor practice charge with the MERC. 2
The MERC found that an unfair labor practice had been committed and reversed the hearing referee's decision and recommended order of dismissal. The hearing referee had found that the resolution was consistent with the wording of the charter, and that there was no apparent reason for adoption of the resolution other than to emphasize the board of trustees' already clearly delineated authority to determine whether an injury or illness is duty related. He further found that any alleged past practice that resulted in the delegation of the decision making on the issue of duty relatedness from the board of trustees to the medical board of review would be an improper amendment of the charter.
In reversing, the MERC emphasized its understanding that over the years the parties had actually acquiesced in the medical director's determination with regard to duty relatedness, with binding review by the medical board of review. The MERC stated:
Contrary to the holding of the [hearing referee], we find in favor of the Charging Party. Past practice, the opinions of Corporate Counsel, the opinion of legal counsel for the Board of Trustees, and a Circuit Court decision all establish that the Medical Board of Review is the final arbiter of whether an injury/illness is duty related.
Pensions and the significant provisions of a pension plan are mandatory subjects of bargaining. Detroit Police Officers Ass'n v. Detroit, 391 Mich. 44 1974). We find in the case before us that the board which determines eligibility for a duty-related pension is a significant provision in the Detroit pension plan and is a mandatory subject of bargaining. The unilateral change of that mandatory subject effectuated by the December 6, 1990, resolution is an unfair labor practice. [1993 MERC Lab. Op. 424, 432.]
The MERC ordered the board of trustees to rescind the December resolution, and it directed the city and the board of trustees to stop this unilateral changing of the authority of the board of trustees regarding disability pensions.
The parties appealed, and the board of trustees sought a stay of the MERC order. The Court of Appeals granted the stay and affirmed the MERC in every respect. 212 Mich.App. 383, 538 N.W.2d 37 (1995). This Court granted the applications for leave to appeal of the city and the board of trustees.
In Port Huron, which we recently decided, the association and the school district had negotiated and signed a collective bargaining agreement in 1978. That contract contained a clause mandating the proration of benefits for teachers that worked less than a full year. This clause was included in future contracts in each succeeding year, including 1987-88, the year in dispute. Between 1978 and 1987, the eleven teachers who worked less than a full year received full insurance benefits, i.e., the benefits were not prorated as called for in the contract. However, in 1988 the district notified teachers hired during the middle of that school year that their insurance benefits would be prorated and thus they would not be provided benefits for the month of August.
The association filed an unfair labor practice charge, alleging that the district had a duty to bargain before unilaterally changing the insurance benefits, a mandatory subject of bargaining. On appeal to this Court, the majority held that
the unambiguous contract language controls unless the past practice is so widely acknowledged and mutually accepted that it amends the contract. The party seeking to supplant the contract language must show the parties had a meeting of the minds with respect to the new terms or conditions so that there was an agreement to modify the contract.
The majority approvingly cited a case that stated that the parties' agreement to modify the contract can be deduced from their course of conduct if it is unequivocal and the terms of modification are definite, certain, and intentional. See Port Huron, 550 N.W.2d at 232. Further, the majority indicated that the party seeking to supplant the contract language must prove that the other party intentionally chose to reject the negotiated contract and knowingly acted in accordance with the past practice.
A majority of this Court found that the association did not present proof that the district knowingly paid teachers hired midyear insurance benefits for the entire summer in disregard of contract language to the contrary with the intent that the payment would supplant the contract. The Court reasoned that the MERC did not find that the previous payments of insurance benefits were anything more than a mistake. Thus, the association did not meet its burden of proof in this respect.
There are a number of facts in the record that indicate that the parties' acceptance of and adherence to the past practice at issue modified the parties' contract language to the contrary.
Before the MERC, the association argued that since 1941, when the charter was adopted, the medical director made the initial determination whether the disability was duty related. If a dispute arose on that issue, it was reviewed by a medical board of review. That was the procedure that was in effect under the charter before the public employment relations act was enacted. M.C.L. § 423.201 et seq.; M.S.A. § 17.455(1) et seq. To establish that this past practice existed, the association introduced into evidence minutes of the board of trustees from 1984 to 1990, in which over one hundred decisions of the medical board of review regarding the issue of duty relatedness were accepted as final and binding by the board of trustees.
As further proof that the past practice existed, the association also introduced evidence...
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