Regents of University of Michigan v. Michigan Employment Relations Commission

• Decision Date: 20 February 1973
• Docket Number: No. 4,4
• Citation: 204 N.W.2d 218,389 Mich. 96
• Parties: , 82 L.R.R.M. (BNA) 2909, 70 Lab.Cas. P 52,993 REGENTS OF the UNIVERSITY OF MICHIGAN, a constitutional body corporate, Respondent-Appellee, v. MICHIGAN EMPLOYMENT RELATIONS COMMISSION, Appellant, and University of Michigan Interns-Residents Association, Petitioner-Appellant.
• Court: Michigan Supreme Court

Page 218

204 N.W.2d 218

389 Mich. 96, 82 L.R.R.M. (BNA) 2909,

70 Lab.Cas. P 52,993

REGENTS OF the UNIVERSITY OF MICHIGAN, a constitutional body

corporate, Respondent-Appellee, v. MICHIGAN EMPLOYMENT RELATIONS COMMISSION, Appellant, and University of Michigan Interns-Residents Association,

Petitioner-Appellant.

No. 4.

Supreme Court of Michigan.

Feb. 20, 1973.

Butzel, Long, Gust, Klein & Van Zile, by Robert J. Battista, Robert M. Vercruysse, Detroit, for respondent-appellee.

Frank J. Kelley, Atty. Gen. of State of Michigan, Robert A. Derengoski, Sol. Gen., Francis W. Edwards, Asst. Atty. Gen., Detroit, for defendant-appellant.

Levin, Levin, Garvett & Dill, by Harvey I. Wax, and Robert J. Finkel, Detroit, for petitioner-appellant.

Before the Entire Bench.

SWAINSON, Justice.

In 1966, a group of interns, residents and post-doctoral fellows connected with the University of Michigan Hospital and its affiliates organized the University of Michigan Interns-Residents Association (hereinafter referred to as the Association). The Association attempted to bargain with the University Hospital Administrators concerning the compensation of interns and residents. The University asserted its right to unilaterally determine such compensation. On March 19, 1970 the Association filed a written request that the Regents of the University of Michigan recognize it as the bargaining representative of the interns, residents and post-doctoral fellows serving at the University Hospital and its affiliates. The Regents denied this request on or about March 31, 1970.

The Association then filed a petition for representation with the Michigan Employment Relations Commission (hereinafter referred to as MERC) on April 19, 1970. A formal hearing was held before a commission trial examiner on June 5, July 6, 7 and 27, 1970. The transcript of the hearing totaled over 700 pages and 28 exhibits were introduced into evidence. Briefs were filed with the MERC in October 1970 and oral arguments were held before the commission on March 2, 1971.

On March 16, 1971 a majority of the members of the commission issued a decision holding:

1. That the Association is a labor organization within the meaning of the Michigan Public Employees Relations Act ¹ (hereinafter referred to as PERA).

2. That the University of Michigan is a public employer subject to the provisions of PERA and thus the commission has jurisdiction of the mater.

3. That the members of the Association are public employees under the provisions of PERA.

4. The employment relationship between the parties is not a casual one as that term is used to designate exclusions from a bargaining unit.

The majority of the commission further ordered that an election be held and defined the appropriate bargaining unit. One member of the commission held in a dissent that interns and residents are post-graduate students whose activities are primarily educational and are not employees in the traditional sense.

The Regents applied for leave to appeal in the Court of Appeals and such was granted on June 9, 1971. The Court of Appeals denied the Regent's motion to stay the representation election and MERC conducted such an election. Of the 419 individuals who cast votes, 296 voted for representation, 115 voted against, and four ballots were challenged. The Association soon after the election requested that negotations be instituted, but the Regents refused on the theory that the matter was still pending in court. The Court of Appeals on June 24, 1971 issued an order staying all proceedings until a final decision of that Court.

On January 21, 1972 the majority of the Court of Appeals reversed the findings of the MERC and held as a matter of law that interns, residents, and post-doctoral fellows cannot be characterized as employees. 38 Mich.App. 55, 195 N.W.2d 875. Judge McGregor in dissent held that the members of the Association could be both students and public employees. 38 Mich.App. 66, 195 N.W.2d 875. We granted leave to appeal. 387 Mich. 773.

Several issues have been raised on appeal. The first issue is whether the Court of Appeals applied the proper scope of review in reviewing a decision of the Michigan Employment Relations Commission, an administrative agency. Counsel for the Association and MERC contend that the proper scope of review requires the Court of Appeals to determine whether the decision is supported by competent, material and substantial evidence of the whole record. The majority opinion of the Court of Appeals makes no reference to the record prepared by the commission and hence petitioners contend that the Court of Appeals applied an improper scope of judicial review.

The proper scope of review of an opinion of an administrative agency is controlled both by constitution and statutory provision. Article VI, section 28 of the 1963 Constitution provides:

'All final decisions, findings, rulings and orders of any administrative officer or agency existing under the constitution or by law, which are judicial or quasijudicial and affect private rights or licenses, shall be subject to direct review by the courts as provided by law. This review shall include, as a minimum, the determination whether such final decisions, findings, rulings and orders are authorized by law; and, in cases in which a hearing is required, whether the same are supported by competent, material and substantial evidence on the whole record. Findings of fact in workmen's compensation proceedings shall be conclusive in the absence of fraud unless otherwise provided by law.'

The Administrative Procedures Act, 1969 P.A. 306; M.C.L.A. § 24.201 et seq.; M.S.A. § 3.560(101) et seq. provides in section 106:

'Except when a statute or the constitution provides for a different scope of review, the court shall hold unlawful and set aside a decision or order of an agency if substantial rights of the petitioner have been prejudiced because the decision or order is any of the following:

(a) In violation of the constitution or a statute.

(d) Not supported by competent, material and substantial evidence on the whole record.'

Under M.C.L.A. § 24.306(1)(a); M.S.A. § 3.560(206)(a) the Court may review the law regardless of the factual findings of the commission.

The problem of determining questions of fact versus questions of law versus mixed questions of law and fact is one that has concerned many courts and legal commentators. As Justice Souris stated in Wickey v. Employment Security Commission, 369 Mich. 487, 490, 493, 120 N.W.2d 181 (1963):

'Nothing in the foregoing statutory language limits the judiciary's power to review administrative determinations of issues of law as distinguished from issues of fact. However, with reference Only to 'findings of fact made by the appeal board,' we are required by the statute to consider such findings conclusive unless they are 'contrary to the great weight of the evidence.' Therein lies part of our difficulty, for only rarely have we made the sometimes difficult effort to distinguish between issues of fact, issues of law, and compound issues of fact and law. Too frequently we have applied to all such issues the statutory limitation upon our review of factual determinations set forth above from section 38 of the act.

'As we view our appellate function, and that of the circuit court, we must determine first whether or not the appeal board's conclusion of law, accepting for this purpose all of the findings of fact of the appeal board, was a legally valid conclusion. Only if we conclude that it was, need we determine whether or not the appeal board's findings of fact were supported by the great weight of the evidence.'

This view as to the proper scope of review was cited with approval by Justice O'Hara in his opinion in American Telephone & Telegraph Co. v. Employment Security Commission, 376 Mich. 271, 277, 136 N.W.2d 889 (1965). Both petitioners cite numerous cases holding that our Court should not substitute its own judgment for that of an administrative agency. We agree with that principle of law but such agreement merely assumes that we are dealing with a purely factual question. In this case, the Court is of the opinion that it is also dealing with questions of law, particularly since respondent contends that it would violate Article VIII, section 5 of the 1963 Constitution ² to apply the provisions of the PERA to members of the Association.

A conflict between the Constitution and the statute is clearly a legal question which only a court can decide. We must first determine the legal questions involved and in so doing are not limited by the requirement of M.C.L.A. § 24.306(d), M.S.A. § 3.560(206)(d). ³

The threshold issue is whether the application of the provisions of PERA to the members of the Association would violate Article VIII, section 5 of the 1963 Constitution by infringing upon the autonomy of the Regents in the operation of the educational sphere of the University of Michigan. It should be noted that both the MERC and the Court of Appeals found that the University of Mighican is a public employer within the meaning of the PERA. The Regents have not appealed this issue. We believe that both the MERC and the Court of Appeals were correct in holding that the University of Michigan is a public employer within the meaning of the PERA.

In Regents of the University of Michigan v. Labor Mediation Board, 18 Mich.App. 485, 171 N.W.2d 477 (1969), the Regents filed a complaint for declaratory judgment contending they were not a public employer within the meaning of the PERA. The complaint was filed after the Labor Mediation Board had ruled that the University of Michigan was subject to the provisions of the PERA. Both the trial court and the Court of Appeals ruled against the Regents. The Court of Appeals stated (p. 490, 171 N.W.2d p. 479):

'Thus, the plaintiff derives its being from a provision of the basic law of this State, the constitution, which was adopted by the...