In re Prof'l Fire Fighters of Hudson

• Decision Date: 28 October 2014
• Docket Number: No. 2013–690,2013–690
• Citation: 167 N.H. 46,104 A.3d 1063
• Parties: APPEAL OF PROFESSIONAL FIRE FIGHTERS OF HUDSON, IAFF LOCAL 3154 (New Hampshire Public Employee Labor Relations Board)
• Court: New Hampshire Supreme Court

167 N.H. 46

104 A.3d 1063

APPEAL OF PROFESSIONAL FIRE FIGHTERS OF HUDSON, IAFF LOCAL 3154 (New Hampshire Public Employee Labor Relations Board)

No. 2013–690

Supreme Court of New Hampshire.

Argued: June 26, 2014

Opinion Issued: October 28, 2014

Molan, Milner & Krupski, PLLC, of Concord (John S. Krupski on the brief and orally), for the petitioner.

Drummond Woodsum & MacMahon, PA, of Portsmouth (Mark T. Broth and Laurel A.V. McClead on the brief, and Mr. Broth orally), for the respondent.

CONBOY, J.

The petitioner, Professional Fire Fighters of Hudson, IAFF Local 3154 (Union), appeals a decision of the New Hampshire Public Employee Labor Relations Board (PELRB) finding that the respondent, the Town of Hudson (Town), did not commit an unfair labor practice. We affirm.

I. Background

The following facts are drawn from the record, the PELRB decision, or are otherwise undisputed. The Town is a public employer within the meaning of RSA 273–A:1, X (2010). The Union is the certified exclusive bargaining representative of certain members of the Town's fire department, including dispatchers, lieutenants, and firefighters. The Town and the Union have been parties to five collective bargaining agreements (CBAs) dating back to 1991. Under their most recent CBA, which covered the period of July 2006 through June 2009 ("2006 CBA"), the Union employees were eligible for step increases based upon their length of service, as outlined in a wage schedule appended to the agreement. The 2006 CBA did not contain an automatic renewal clause ("evergreen" clause) extending the terms of the agreement, in whole or in part, past its expiration date.

When each of the four earlier CBAs expired, but before the parties entered into a successor agreement, the Town provided Union members with step increases, despite the absence of an evergreen clause in the expired CBA. After the 2006 CBA expired in 2009, the Town's budget, which is approved by the Town's voters, included monies sufficient to fund step increases for eligible Union members in each of the budget years 2010, 2011, and 2012. All Union members received step increases between July 2009 and August 2011. In August 2011, the Town informed the Union by letter that the Town would no longer pay wage increases, including step increases. In response to the letter, the Union filed a grievance pursuant to the procedures in the 2006 CBA. The matter ultimately proceeded to arbitration.

At the hearing before the arbitrator, the Town and the Union stipulated that the issue in dispute was:

Whether the Town of Hudson violated the Collective Bargaining Agreement or past practice between the parties when it failed to pay in accordance with the step schedule after August of 2011? If so, what shall the remedy be?

The Town argued that it had a right not to pay the step increases because the 2006 CBA did not have an evergreen clause and, under the applicable state law, a public employer is not required to pay step increases after a CBA has expired. The Union contended that the Town was required to pay the step increases because there was a binding past practice of paying such increases during status quo periods.

The arbitrator determined that a public employer may, but is not required to, refrain from paying step increases during the status quo period, and, "[t]herefore, if the employer chooses to fund and pay step increases it is capable, in concert with the Union, of creating a binding past practice." The arbitrator found that the initiation of step increase payments following the expiration of the parties' most recent collective bargaining agreement was the continuation of a past practice. Accordingly, the arbitrator concluded that the Town violated the 2006 CBA and past practice between the parties when it failed to pay in accordance with the step schedule. The arbitrator ordered the Town to pay the increases that had accrued since August 2011.

The Town failed to comply with the arbitrator's award. The Union filed a complaint with the PELRB alleging that the Town's failure to comply constituted an unfair labor practice, see RSA 273–A:5, I(h), (i) (2010), and asking, in part, that the PELRB "order the Town to comply with the arbitrator's award." In response, the Town argued that the arbitration award violated the requirements of RSA 273–A:3, II(b) (2010) (amended 2013) and was contrary to public policy. The PELRB agreed with the Town, concluding that "[t]he arbitrator's award violates a strong and dominant policy, namely the need for approval by the local legislative body of the expenditure of public monies to fund benefits like step increases for bargaining unit employees both during a contract's express term and during any interval between collective bargaining agreements." Accordingly, the PELRB found that the Town did not commit an unfair labor practice by failing to comply with the arbitrator's award and, therefore, dismissed the Union's complaint. This appeal followed.

II. Standard of Review

RSA chapter 541 governs our review of PELRB decisions. Appeal of Hillsborough County Nursing Home, 166 N.H. ––––, ––––, 103 A.3d 1186 (2014) ; see RSA 273–A:14 (2010); RSA 541:2 (2007). Pursuant to RSA 541:13 (2007), we will not set aside the PELRB's order except for errors of law, unless we are satisfied, by a clear preponderance of the evidence, that it is unjust or unreasonable. The PELRB's findings of fact are presumed prima facie lawful and reasonable. RSA 541:13. In reviewing the PELRB's findings, our task is not to determine whether we would have found differently or to reweigh the evidence, but, rather, to determine whether the findings are supported by competent evidence in the record. Hillsborough County Nursing Home, 166 N.H. at ––––, 103 A.3d 1186. We review the PELRB's rulings on issues of law de novo . Id.

III. Analysis

The Union argues that the PELRB erred in determining that the payment of step increases during the status quo period violated a strong and dominant public policy and that the PELRB exceeded its authority by divesting the arbitrator of the powers that the parties granted to him in their CBA and stipulated issue. The Union further asserts that the PELRB erred by failing to address the Union's equitable arguments and by admitting evidence not presented at the arbitration hearing. We address each argument in turn.

A. Payment of Step Increases

The Union first argues that the PELRB incorrectly concluded that the payment of step increases during the status quo period violated a "strong and dominant" public policy. The Union contends that the payment of step increases during the status quo period did not constitute a "cost item" and was not prohibited by law; therefore, the Town could and did "bind itself, through a past practice, to pay step increases during the status quo period." We disagree.

"Administrative agencies are granted only limited and special subject matter jurisdiction." Appeal of Amalgamated Transit Union, 144 N.H. 325, 327, 741 A.2d 66 (1999) (quotation, brackets, and ellipsis omitted). "Because administrative agencies act in a quasi-judicial capacity, agencies inherently have limited jurisdiction to apply strong and dominant public policy as expressed in controlling statutes, regulations, common law, and other applicable authority, to address matters necessary to resolve questions arising within the scope of their jurisdiction." Id . at 327–28, 741 A.2d 66 (citation omitted). "Just as this court will not enforce a contract or contract term that contravenes public policy, agencies may, within the confines outlined above, do the same" and may overrule an arbitrator's award. Id. at 328, 741 A.2d 66 (quotation and citation omitted).

We begin with an overview of the current state of the law. A CBA is a contract between a public employer and a union concerning the terms and conditions of employment. Appeal of Alton School Dist., 140 N.H. 303, 306, 666 A.2d 937 (1995). "[A]ny benefit acquired through collective bargaining whose implementation requires an appropriation by the legislative body of the public employer" is considered a "[c]ost item." RSA 273–A:1, IV (2010). Thus, "cost items" are limited by statute to benefits acquired through collective bargaining; they do not include financial payments made by the employer in its discretion. See id. The parties to a CBA are not bound by its cost items unless the legislative body ratifies them, which occurs only if the legislative body approves them with "full knowledge of their terms." Alton School Dist., 140 N.H. at 307, 666 A.2d 937 (quotation omitted); see also Appeal of Sanborn Regional School Bd., 133 N.H. 513, 520, 579 A.2d 282 (1990) ("[W]hether express or implied, ratification ... requires full knowledge of the financial terms of the collective bargaining agreement."). "Only cost items shall be submitted to the legislative body of the public employer for approval...." RSA 273–A:3, II(b) (emphasis added); see Appeal of Laconia Patrolman Assoc., 164 N.H. 552, 557, 62 A.3d 787 (2013). When a CBA ends, so do the benefits, including cost items, that were acquired through collective bargaining. See Alton School Dist., 140 N.H. at 311, 666 A.2d 937.

Here, when the 2006 CBA expired, the benefits that the parties had acquired through collective bargaining also expired. See id. In the absence of a current CBA, the parties' "obligations to one another [we]re governed by the doctrine of maintaining the status quo." Id. at 307, 666 A.2d 937. "The principle of maintaining the status quo demands that all terms and conditions of employment remain the same during collective bargaining after a CBA has expired." Id. (quotation and brackets omitted). "This does not mean that the expired CBA continues in effect; rather, it means that the conditions under which the [Union employees] worked endure throughout the collective bargaining process." Id. (quotation omitted).

We have consistently held that "[t]he status quo doctrine does not require payment of...