Grandville Mun. Executive Ass'n v. City of Grandville

Decision Date14 October 1996
Docket NumberDocket No. 103589
Parties, 153 L.R.R.M. (BNA) 2792 GRANDVILLE MUNICIPAL EXECUTIVE ASSOCIATION, Plaintiff-Appellee, v. CITY OF GRANDVILLE, Defendant-Appellant.
CourtMichigan Supreme Court
OPINION

PER CURIAM.

The issue in this case is whether the Court of Appeals erred in reversing a policy determination by the Michigan Employment Relations Commission that "executive" employees in the public sector may not belong to collective bargaining units. We hold that the panel did err. For reasons that we will explain later in this opinion, we vacate the judgment of the Court of Appeals and remand this matter to the MERC for further proceedings.

I

In 1990, the Grandville Administrative Employees Association petitioned the Michigan Employment Relations Commission to represent twelve supervisory employees of the City of Grandville. 1 The city challenged the inclusion of seven of these workers on the ground that they were "executive" employees. The MERC agreed with the city regarding five of the positions---clerk, treasurer, assessor, police chief, and fire chief. City of Grandville v. Grandville Administrative Employees Ass'n, 1991 MERC Lab. Op. 489. The decision was not appealed. 2

Subsequently, the five excluded employees filed a new petition with the MERC to form an executive bargaining unit. The city challenged the petition on the ground that executive employees are precluded from forming a collective bargaining unit by § 13 of the public employment relations act (PERA), which incorporates § 9e of the labor mediation act (LMA). M.C.L.A. §§ 423.213, 423.9e; M.S.A. §§ 17.455(13), 17.454(10.4).

Alternatively, the city argued that the proposed bargaining unit should be disallowed either (1) for reasons of public policy, or (2) because the five challenged positions should be considered "confidential," i.e., these executives should be excluded from bargaining on the basis of their role in the budgeting process and in recommending, formulating, and effectuating city policy at the highest level.

The MERC disagreed with the city's statutory interpretation, but agreed with its "public policy" argument. The commission did not discuss the "confidential employee" issue. City of Grandville v. Grandville Municipal Executive Ass'n, 1993 MERC Lab. Op. 206.

The petitioning employees appealed to the Court of Appeals, which reversed in a published opinion. 3 The panel said that the MERC's decision was based on substantial and material errors of law. The Court remanded the matter to the MERC "for a finding of an appropriate bargaining unit." 4 The Court denied rehearing.

The City of Grandville has applied to this Court for leave to appeal. 5

II

The LMA was adopted by the Legislature in 1939 to govern employment relations in Michigan. 1939 P.A. 176, M.C.L.A. § 423.1 et seq.; M.S.A. § 17.454(1) et seq. The LMA was modeled after the National Labor Relations Act (NLRA), which was adopted by Congress in 1935 (the Wagner Act). 49 Stat. 449, as amended, 29 U.S.C.A. § 151 et seq. 6

Subsequently, the Legislature adopted the PERA to regulate labor relations between Michigan's public employers and employees. 1947 P.A. 336, as amended by 1965 P.A. 379, M.C.L.A. § 423.201 et seq.; M.S.A. § 17.455(1) et seq. 7 The PERA incorporates by reference certain provisions of the LMA. The MERC is the agency that administers both acts.

One of the points of disagreement in the instant case concerns the extent to which the PERA applies to the same categories of employees as does the LMA. Subsection 2(e) of the LMA, which was added by the Legislature in 1949 (see footnote 6), expressly excludes persons who hold "supervisory" and "executive" positions from the definition of "employee":

"Employee" includes any employee ... but shall not include ... any individual employed as an executive or supervisor.... [M.C.L.A. § 423.2(e); M.S.A. § 17.454(2)(e).]

At the time the petition was filed in the instant case, the only express definition of "employee" in the PERA appeared in § 2, which forbade strikes:

No person holding a position by appointment or employment in the government of the state of Michigan, or in the government of any 1 or more of the political subdivisions thereof, or in the public school service, or in any public or special district, or in the service of any authority, commission, or board, or in any other branch of the public service, hereinafter called a "public employee," shall strike. [1947 P.A. 336, M.C.L.A. § 434.202; M.S.A. § 17.455(2).][ 8

This definition of "public employee" was moved to § 1 of the PERA by 1994 P.A. 112. 9

Section 13 of the PERA, which provides the MERC with authority to determine appropriate collective bargaining units of public employees, incorporates by reference § 9e of the LMA. Section 13 states, in pertinent part:

The commission shall decide in each case, to insure public employees the full benefit of their right to self-organization, to collective bargaining and otherwise to effectuate the policies of this act, the unit appropriate for the purposes of collective bargaining as provided in section 9e of Act No. 176 of the Public Acts of 1939, as amended, being section 423.9e of the Michigan Compiled Laws.... [M.C.L.A. § 423.213; M.S.A. § 17.455(13) (emphasis supplied).]

Section 9e, in turn, provides:

The unit shall be either the employees of 1 employer employed in 1 plant or business enterprise within this state, not holding executive or supervisory positions, or a craft unit, or a plant unit, or a subdivision of any of the foregoing units. If the group of employees involved in the dispute was recognized by the employer or identified by certification, contract, or past practice, as a unit for collective bargaining, the commission may adopt that unit. [M.C.L.A. § 423.9e; M.S.A. § 17.454(10.4) (emphasis supplied).]

III

In the instant case, the MERC disagreed with the city that the PERA, by its terms, forbids executive employees from belonging to collective bargaining units. Instead, the MERC relied on its previous decision in Detroit v. Governmental Accountants & Analysts Ass'n, 1969 MERC Lab. Op. 187, for the proposition that persons holding executive positions in the public sector should be precluded from collective bargaining as a matter of public policy.

The Court of Appeals agreed that the PERA does not, by its terms, preclude executive employees from joining together in collective bargaining units. Citing Muskegon Co. Professional Command Ass'n v. Muskegon Co., 186 Mich.App. 365, 464 N.W.2d 908 (1990), the panel further reasoned that the absence of an express bar in the PERA means that all public employees, including executive employees, are "entitled to the rights and privileges granted under the PERA, including the right to engage in lawful organizational activity." 213 Mich.App at 590, 540 N.W.2d 681. The Court specifically rejected the MERC's finding that executive employees could be excluded from collective bargaining as a matter of public policy:

[O]n at least two occasions this Court has found it inappropriate to create an executive exclusion that is based on public policy. [Dearborn School Dist. v. Labor Mediation Bd., 22 Mich.App. 222, 229-230, 177 N.W.2d 196 (1970), and Hillsdale Community Schools v. Labor Mediation Bd., 24 Mich.App. 36, 41-42, 179 N.W.2d 661 (1970).] ...

* * * * * *

In this case, the MERC's ruling was wholly contrary to the above case law. As we held in Dearborn School Dist. and Hillsdale Community Schools, the Legislature has decreed that the public policy of this state is to grant public employees in executive positions the right to engage in collective bargaining. The MERC's ruling that public policy forbids executives in public employment from engaging in collective bargaining was therefore based on a substantial and material error of law. [213 Mich.App at 590-591, 540 N.W.2d 681.][ 10

The Court of Appeals additionally observed:

Furthermore, the MERC's ruling was contrary to the line of cases culminating with Muskegon Co, holding that the executive exclusion of § 9e does not preclude public employees who hold an executive position from exercising the rights and privileges granted to all public employees under the PERA, including the right to engage in lawful organizing activities. Thus, the ruling was again based on a substantial and material error of law. [Id., at 591, 540 N.W.2d 681.]

IV

The decisions of the MERC are reviewed on appeal pursuant to Const. 1963, art. 6, § 28, and M.C.L.A. § 423.216(e); M.S.A. § 17.455(16)(e). The commission's findings of fact are conclusive if they are supported by competent, material, and substantial evidence on the record considered as a whole. Port Huron Ed. Ass'n v. Port Huron Area School Dist., 452 Mich. 309, 322, 550 N.W.2d 228 (1996). The MERC's legal determinations may not be disturbed unless they violate a constitutional or statutory provision or they are based on a substantial and material error of law. M.C.L.A. § 24.306(1)(a), (f); M.S.A. § 3.560(206)(1)(a), (f). Id., at 323, 550 N.W.2d 228.

In construing the PERA, this Court frequently looks to the interpretation of analogous provisions of the NLRA by the federal courts. Id., at 318, n. 13, 550 N.W.2d 228. The United States Supreme Court accords great deference to the NLRB's interpretation of the NLRA, 11 and this Court extends similar consideration to the MERC's interpretation of the PERA. Gibraltar School Dist...

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