Nass v. State ex rel. Unity Team

• Decision Date: 12 October 1999
• Docket Number: No. 49A04-9901-CV-34.,49A04-9901-CV-34.
• Citation: 718 N.E.2d 757
• Parties: Connie NASS, Auditor of the State of Indiana, Appellant-Defendant, v. STATE ex rel. UNITY TEAM, LOCAL 9212, INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA (UAW) and American Federation of Teachers (AFT) and pursuant to Trial Rule 19, Frank O'Bannon, Governor of the State of Indiana, and as intervening Relator, American Federation of State, County and Municipal Employees, Council 62 (AFSCME), Appellees-Relators.
• Court: Indiana Appellate Court

718 N.E.2d 757

Connie NASS, Auditor of the State of Indiana, Appellant-Defendant, v. STATE ex rel. UNITY TEAM, LOCAL 9212, INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA (UAW) and American Federation of Teachers (AFT) and pursuant to Trial Rule 19, Frank O'Bannon, Governor of the State of Indiana, and as intervening Relator, American Federation of State, County and Municipal Employees, Council 62 (AFSCME), Appellees-Relators.

No. 49A04-9901-CV-34.

Court of Appeals of Indiana.

October 12, 1999.

Rehearing Denied November 22, 1999.

James Bopp, Jr., Barry A. Bostrom, Bopp, Coleson & Bostrom, Terre Haute, Indiana, Doris Anne Sadler, Legal Counsel, Indianapolis, Indiana, Attorneys for Appellant.

Jeffrey A. Modisett, Attorney General of Indiana, A. Scott Chinn, Geoffrey Slaughter, Special Counsels to the Attorney General, Indianapolis, Indiana, Attorneys for Appellee Governor.

Barry A. Macey, Macey, Macey and Swanson, Indianapolis, Indiana, Attorney for Appellee Unity Team.

Mary Jane Lapointe, Richard J. Darko, Lowe Gray Steele & Darko, LLP, Indianapolis, Indiana, Attorneys for Appellee AFSCME.

OPINION

RUCKER, Judge.

Case Summary

This is an appeal by the Auditor of the State of Indiana challenging the trial court's grant of partial summary judgment arising out of a complaint for mandamus. On petition by several unions and the Governor of the State of Indiana, the trial court mandated the Auditor to honor certain voluntary wage assignments for the deduction of fair share payments from the paychecks of non-union member State employees. The wage assignments were an outgrowth of labor settlement agreements negotiated between executive branch department heads and several unions. The agreements were approved by the Governor. In addition to the order of mandate the trial court also declared that the fair share provision contained in the settlement agreements was legal and enforceable. The Auditor raises several issues for our review. We address the following dispositive issues rephrased as: (1) did the Governor have the authority to approve the settlement agreements without specific enabling legislation; (2) did the trial court err in declaring legal and enforceable the fair share provision contained in the settlement agreements; and (3) were the voluntary wage assignments authorized by statute. We affirm in part and reverse in part.

Facts and Procedural History

In 1990 then Governor Evan Bayh issued Executive Order 90-6 which laid the groundwork for executive branch State employees to join labor unions. In issuing the Order the Governor acknowledged that he could not institute meaningful and responsible collective bargaining by executive order. However, according to the Governor he did have the authority to lay the foundation for collective bargaining by providing for elections of employee representatives. Accordingly, Executive Order 90-6 created a procedure for the recognition of an employee organization as the exclusive negotiating organization for members of an appropriate unit. Among other things, the Order provided that the negotiating organization was entitled to meet and negotiate with the State Personnel Director on matters of wages, hours, and working conditions in an effort to reach a settlement subject to the Governor's approval. In addition, the Order required the negotiating organization to represent all employees of the bargaining unit regardless of whether the employee was a member of the organization.

Pursuant to Executive Order 90-6 employees in various units chose representation by either the "Unity Team"¹ or the American Federation of State, County, and Municipal Employees (AFSCME) (referred to collectively as "the Unions"). Thereafter the Unions proceeded to negotiate with the State Personnel Director and other executive branch department heads extensive and detailed labor agreements which the parties refer to as "Settlements." The Settlements covered wages, hours, and other terms and conditions of employment. They applied to union and non-union members alike. In 1994, the Settlements were approved by Governor Bayh through Executive Orders 94-1 and 94-2. Those Settlements expired by their terms at midnight June 30, 1997. Thereafter the Settlements were renegotiated and on October 1, 1997, were approved by present Governor Frank O'Bannon through Executive Order 97-33. Among other things the Settlements contain what is commonly referred to as a "fair share" provision.² In relevant part the provision dictates:

[a]ll employees hired after October 1, 1997 must begin paying to the Union, on January 1, 1998, their fair share of the costs of providing Union representation, in an amount not exceeding eighty-five percent (85%) of the dues required to be paid by employees who are members of the Union. The amounts required of nonmembers shall not include fees, charges, and assessments involving political contributions. Employees required to pay fair share may make such payments by paycheck withholding.... All monies collected by the Union pursuant to this provision must be held in escrow until it is determined by a court of general jurisdiction that this fair share provision is lawful.

R. at 44, 102-03 (emphasis added). In October 1997, the Unions began submitting to the Auditor authorization forms referred to as wage assignments. The forms were signed by State employees requesting that their fair share assessment be withheld from their wages. However, in April 1998, Morris Wooden, the State Auditor at the time, began printing the following notation on the pay stubs of State employees: "THE AUDITOR OF STATE WILL NOT HONOR A UNION FAIR SHARE DEDUCTION. IF YOU HAVE AN ERRONEOUS FAIR SHARE DEDUCTION, PLEASE CONTACT YOUR PAYROLL CLERK TO HAVE THE DEDUCTION STOPPED." R. at 23. The Auditor thus refused to honor the wage assignments. This policy has continued under Connie Nass, the current State Auditor.

Joining the Governor as a necessary party under Ind. Trial Rule 19, on May 8, 1998, the Unions filed a complaint for mandate seeking to compel the Auditor to process the wage assignments. The Unions also sought damages on its mandate action. In addition, the Unions filed a request for declaratory judgment asking the court to declare that the fair share provision in the Settlements was lawful and thus entitled to enforcement. Thereafter the Unions filed a motion for partial summary judgment reserving only the issue of damages. The Auditor filed a cross motion for summary judgment. After a hearing, the trial court granted the Unions' motion and entered judgment mandating the Auditor to process voluntary wage assignments from State employees who are subject to the Settlements. The trial court also declared that the fair share provision contained in the Settlements is legal and enforceable. This appeal followed.

Discussion

I. Resolving this Case on its Merits

We first address a procedural issue. This appeal is prosecuted as one of right based on Ind. Appellate Rule 4(B)(1).³ The Auditor relies upon this provision because the issue of damages has not yet been resolved. As a result, the judgment before us is not final and may be pursued only as an interlocutory appeal. Troyer v. Troyer, 686 N.E.2d 421, 424 (Ind.Ct.App.1997) (When less than all of the parties' claims, rights, and liabilities have been adjudicated, then the order or judgment is interlocutory.). The authority to pursue an interlocutory appeal before this court is controlled by Ind. Appellate Rule 4(B). Only Rules 4(B)(6) and (4)(B)(1) are potentially applicable here. Rule (4)(B)(6) requires trial court certification. The Auditor did not seek certification and accordingly the trial court did not enter an order of certification. Thus, unless Rule 4(B)(1) applies to the facts of this case, then this appeal is not properly before us.

Matters that are appealable as of right under App. Rule 4(B)(1) involve trial court orders which carry financial and legal consequences akin to those more typically found in final judgments such as payment of money, delivery of securities and so on. Cua v. Morrison, 600 N.E.2d 951, 952 (Ind.Ct.App.1992). However, our research reveals no Indiana authority where this proposition has been explored in the context of a party having no legal or pecuniary interest in the money ordered to be paid. In this case, the Auditor concedes that she has "no ultimate interest in whether the employees receive these funds as salary, or whether, on proper wage assignments, they are distributed to the Relator Unions in order to satisfy the employee's obligation to pay fair share." Reply Brief of Appellant at 3. Absent such interest we are reluctant to declare that a party may avail itself of App. R. 4(B)(1). However we need not explore that issue today. Even if the Auditor's appeal is not properly before us, we have "declined to dismiss improperly brought appeals and retained jurisdiction of the appeal under [Ind. Appellate Rule] 4(E) in cases of a significant public interest and where the same issue would be raised in a new appeal." Northwestern Mut. Life Ins. Co. v. Stinnett, 698 N.E.2d 339, 341 (Ind.Ct.App. 1998). This is a case of significant public interest the merits of which would again be raised in a subsequent appeal. Accordingly we exercise our discretion to decide this case on its merits.

II. The Governor's Authority

The Auditor contends the Governor lacked authority to enter into Settlements with the Unions, and thus the fair share provision incorporated into the Settlements are invalid as a matter of law. More specifically the Auditor contends "the Governor is without authority to engage in collective bargaining without an enabling statute." Brief of Appellant at 27. In support of her argument the Auditor cites Rice, Auditor of State v. State ex rel. Drapier, 95 Ind. 33, 44 (1884) in which the court held:

[S]ince a State can not be sued in its own courts without its

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