In re State

• Decision Date: 29 October 2001
• Docket Number: No. 99–644.,99–644.
• Citation: 784 A.2d 695,147 N.H. 106
• Court: New Hampshire Supreme Court
• Parties: Appeal of the STATE of New Hampshire (New Hampshire Public Employee Labor Relations Board).

147 N.H. 106

784 A.2d 695

Appeal of the STATE of New Hampshire

(New Hampshire Public Employee Labor Relations Board).

No. 99–644.

Supreme Court of New Hampshire.

Oct. 29, 2001.

Philip T. McLaughlin, attorney general (Douglas N. Jones, assistant attorney general, on the brief and orally), for the State.

Michael C. Reynolds, of Concord, by brief and orally, for the State Employees' Association of New Hampshire, Inc., S.E.I.U., Local 1984.

NADEAU, J.

The State appeals the decision of the public employee labor relations board (PELRB) finding that the State's adoption of administrative rule changes constituted an unfair labor practice in violation of RSA 273–A:5 (1999). We vacate and remand.

The record supports the following facts. The State Employees' Association of New Hampshire, Inc., S.E.I.U., Local 1984(SEA) is the duly certified bargaining agent for the majority of State employees. The State and the SEA have been parties to collective bargaining agreements (CBAs) for at least the past twenty years. The CBA at issue in this case was effective from July 1, 1997, through June 30, 1999, and contains two articles—9.6 and 11.1.1—which provide for the accrual of floating holidays and bonus leave. Although the CBA is silent on whether these benefits accrue during unpaid leave, arbitration decisions in 1992 and 1993 interpreting identical benefit provisions under predecessor CBAs provide that they do. The decisions were the result of grievances brought by two different employees, and the awards in each case were granted solely to the individual employees who brought the grievances.

On April 21, 1998, the State modified, revised and readopted New Hampshire Administrative Rule, Per 1205.02(b), the amended version of which provides: "No annual leave, sick leave, bonus leave or floating holidays shall be accumulated during a leave of absence without pay." N.H. Admin. Rules , Per 1205.02(b) (effective April 21, 1998) (emphasis added). Prior to the 1998 amendment, Per 1205.02 did not proscribe the accrual of bonus leave or floating holidays during unpaid leave. See N.H. Admin. Rules , Per 1205.02 (effective April 27, 1992).

On August 14, 1998, the SEA filed an unfair labor practices complaint (ULP) with the PELRB alleging that the State's rule change affected procedures—the accrual of bonus leave and floating holidays during unpaid leave—that were terms and conditions of employment. The SEA further alleged that the adoption of a rule change without negotiating with the SEA was an unfair labor practice in violation of RSA 273–A:5, I(a), (e), (g), (h) and (i).

In a decision dated November 3, 1998, the PELRB dismissed the SEA's complaint on the basis that it failed to specifically identify the offending newly adopted rules and failed to establish that the rules had actually deprived an SEA member of a right under the CBA or RSA chapter 273–A. However, as the parties were entering the bargaining cycle for their next CBA, the PELRB directed them to bargain over the rule change.

The PELRB subsequently granted a rehearing at which it heard the parties' arguments but did not receive additional evidence. In a decision dated July 20, 1999, the PELRB reversed its prior dismissal and found that by amending Per 1205.02, the State had committed the following unfair labor practices: (1) refusing to negotiate in good faith; (2) breaching the CBA; and (3) adopting a rule relative to the terms and conditions of employment that invalidated portions of the CBA. See RSA 273 A:5, I(e), (h) and (i). The PELRB found that the arbitrator's decisions of 1992 and 1993 were binding and, thus, became incorporated into the terms of the CBA under the doctrine of the "law of the contract." This finding formed the basis for the PELRB's conclusion that the State had violated RSA 273–A:5, I(e), (h) and (i). After unsuccessfully moving for reconsideration, the State appealed.

When reviewing a decision of the PELRB, "we defer to its findings of fact, and, absent an erroneous ruling of law, we will not set aside its decision unless the appealing party demonstrates by a clear preponderance of the evidence that the order is unjust or unreasonable." Appeal of N.H. Troopers Assoc. , 145 N.H. 288, 289–90, 761 A.2d 486 (2000) (quotation and brackets omitted); see also RSA 541:13 (1997).

The State first argues that the PELRB erred by ruling that the subject matter of the 1992 and 1993 arbitration decisions had become the "law of the contract." This raises the threshold question of whether the PELRB has jurisdiction to interpret a CBA in order to determine whether arbitral decisions were intended to become the "law of the contract." After oral argument, we ordered the parties to brief this issue. We conclude that the PELRB lacked jurisdiction to interpret whether the terms of the CBA mandated that arbitral awards be considered the "law of the contract."

We have stated that absent a grievance process in a CBA, of which the last step implicitly or expressly mandates final and binding arbitration, "the PELRB, in the context of an unfair labor practice charge, has jurisdiction as a matter of law to interpret the [CBA]." Appeal of Campton School Dist ., 138 N.H. 267, 270, 639 A.2d 241 (1994). Implicit in this rule is the understanding that the PELRB does not regularly have jurisdiction to interpret the CBA when it provides for final and binding arbitration. Similarly, in the context of cases involving arbitrability, "[a]lthough the PELRB is not an arbitrator, it is empowered to determine as a threshold matter whether the dispute falls within the scope of the [CBA], even if this requires interpreting the CBA to the extent necessary to determine whether the dispute presents [an issue of contract interpretation]." Appeal of AFSCME Local 3657 , 141 N.H. 291, 295, 681 A.2d 100 (1996) (emphasis added). These cases support the general rule that the interpretation of a CBA is within the province of the arbitrator, subject to certain exceptions recognized by our case law. See, e.g., id .; Bd. of Trustees v. Keene State Coll. Educ. Assoc. , 126 N.H. 339, 342, 493 A.2d 1121 (1985) (PELRB may review CBA to ensure arbitral award consistent with terms of CBA). Indeed, "[w]hen the parties include an arbitration clause in their [CBA], they choose to have disputes concerning constructions of the [CBA] resolved by an arbitrator." W.R. Grace & Co. v. Local Union 759, Intern. Union of United Rubber Workers , 461 U.S. 757, 764, 103 S.Ct. 2177, 76 L.Ed.2d 298 (1983).

We now turn to whether the PELRB has jurisdiction to interpret a CBA to determine whether arbitral awards decided under a CBA's arbitration provisions should become the "law of the contract." One of the main goals of collective bargaining is avoiding strife among employers and employees by establishing terms and conditions governing the employment relationship. American Fed'n of State County and Mun. Employees, AFL–CIO, Local 298 v. City of Manchester , 116 N.H. 665, 666, 366 A.2d 874 (1976). Collective bargaining between an employer and its employees fosters this goal by assuring that each term and condition of a CBA is premised upon a...