Scottsbluff Police Officers Ass'n, Inc. v. City of Scottsbluff

• Decision Date: 04 November 2011
• Docket Number: No. S–10–960.,S–10–960.
• Parties: SCOTTSBLUFF POLICE OFFICERS ASSOCIATION, INC., F.O.P. LODGE 38, appellee, v. CITY OF SCOTTSBLUFF, Nebraska, a city of the first class, appellant.
• Court: Nebraska Supreme Court

192 L.R.R.M. (BNA) 2027

282 Neb. 676

805 N.W.2d 320

SCOTTSBLUFF POLICE OFFICERS ASSOCIATION, INC., F.O.P. LODGE 38, appellee,

v.

CITY OF SCOTTSBLUFF, Nebraska, a city of the first class, appellant.

No. S–10–960.

Supreme Court of Nebraska.

Nov. 4, 2011.

Syllabus by the Court

1. Commission of Industrial Relations: Appeal and Error. Any order or decision of the Commission of Industrial Relations may be modified, reversed, or set aside by an appellate court on one or more of the following grounds and no other: (1) if the commission acts without or in excess of its powers, (2) if the order was procured by fraud or is contrary to law, (3) if the facts found by the commission do not support the order, and (4) if the order is not supported by a preponderance of the competent evidence on the record considered as a whole.

2. Commission of Industrial Relations: Evidence: Appeal and Error. In an appeal from an order by the Commission of Industrial Relations regarding prohibited practices, an appellate court will affirm a factual finding of the commission if, considering the whole record, a trier of fact could reasonably conclude that the finding is supported by a preponderance of the competent evidence.

3. Labor and Labor Relations: Federal Acts: Statutes. Decisions under the National Labor Relations Act are helpful in interpreting Nebraska's Industrial Relations Act, Neb.Rev.Stat. § 48–801 et seq. (Reissue 2010), but are not binding.

4. Labor and Labor Relations: Contracts. Good faith bargaining includes the execution of a written contract incorporating the terms of an agreement reached pursuant to Neb.Rev.Stat. § 48–816(1) (Reissue 2010).

5. Labor and Labor Relations. Nebraska's Industrial Relations Act requires parties to negotiate only mandatory subjects of bargaining.

6. Labor and Labor Relations. Management prerogatives, such as the right to hire, to maintain order and efficiency, to schedule work, and to control transfers and assignments, are not mandatory subjects of bargaining under Nebraska's Industrial Relations Act.

7. Labor and Labor Relations. A matter which is of fundamental, basic, or essential concern to an employee's financial and personal concern may be considered as involving working conditions and is mandatorily bargainable even though there may be some minor influence on management prerogative.

8. Labor and Labor Relations: Insurance. Health insurance coverage and related benefits, including health insurance exclusions, are akin to fundamental, basic, or essential concerns to an employee's financial and personal concern and, therefore, may be considered as involving working conditions and are thus mandatory subjects of bargaining under Nebraska's Industrial Relations Act.

9. Commission of Industrial Relations: Labor and Labor Relations. An employer subject to Nebraska's Industrial Relations Act may implement unilateral changes to mandatory subjects of bargaining only when three conditions have been met: (1) The parties have bargained to impasse, (2) the terms and conditions implemented were contained in a final offer, and (3) the implementation occurred before a petition regarding the year in dispute is filed with the Commission of Industrial Relations. If any of these three conditions are not met, then the employer's unilateral implementation of changes in mandatory bargaining topics is a per se violation of the duty to bargain in good faith.

10. Appeal and Error. Error that does not prejudice a party does not provide grounds for relief on appeal.

Jerry L. Pigsley, of Harding & Shultz, P.C., L.L.O., Lincoln, for appellant.

John E. Corrigan, of Dowd, Howard & Corrigan, L.L.C., Omaha, for appellee.

HEAVICAN, C.J., WRIGHT, CONNOLLY, GERRARD, STEPHAN, McCORMACK, and MILLER–LERMAN, JJ.

GERRARD, J.

The City of Scottsbluff, Nebraska (the City), appeals from a decision of the Nebraska Commission of Industrial Relations (CIR), which determined that the City violated Nebraska's Industrial Relations Act (IRA),¹ when the City implemented changes to health insurance coverage and related benefits without bargaining with the Scottsbluff Police Officers Association, Inc. (the Union). The City appeals. For the following reasons, we affirm in part, and in part reverse and remand with directions.

BACKGROUND

The Union represents Scottsbluff law enforcement officers below the rank of captain. The City and the Union negotiate these officers' contracts on a year-to-year basis. Past contracts typically ran on a fiscal year basis, from October through September of the following year. However, health insurance premiums were determined on a calendar year basis, so past contracts between the City and the Union contained a reopen clause, which stated that during the term of the contract, negotiations could be reopened for individual, specifically defined issues, such as cost-of-living increases, salary comparisons and increases, and health and dental premiums.

The present dispute arose out of contract negotiations for the October 2009 through September 2010 term. During negotiations, the City presented several proposed changes, including changes to the article of the contract which allowed for the reopening of negotiations for health and dental premiums each year prior to open enrollment. After several negotiation sessions, on June 24, 2009, the parties arrived at a tentative agreement, subject to ratification of the agreement by the parties.

On July 30, 2009, the City adopted an amendment to its health insurance plan which pertained to hazardous hobbies or activities, effective August 1. The previous hazardous hobbies or activities provision had generally excluded health insurance plan coverage for injuries which resulted from hazardous activities, and the provision had identified some of those activities. The City's amendment clarified the provision by further defining hazardous pursuits, hobbies, and activities, and enumerating several examples of such hazardous activities. The examples included “ultimate fighting,” reckless operation of machinery, all-terrain vehicle use, and travel to countries with advisory warnings. The City did not negotiate these changes with the Union and later stated that it did not view the health insurance exclusion as a negotiable item. The City informed the Union of the changes to the health insurance plan on August 4.

On August 19, 2009, the Union ratified the agreement for the 2009–10 term and, thereafter, informed the City of the Union's decision. However, according to the Union, after it ratified the agreement, individual union members approached the Union's president and voiced concerns about the unilateral changes to the hazardous hobbies or activities exclusion in the health insurance plan. Though the Union had voted to ratify the agreement for the 2009–10 term, the Union's president sent an e-mail to the City asking the City to refrain from presenting the agreement to the city council for approval until the health insurance exclusions could be discussed between the parties. The City refused to remove the agreement from the city council's consideration, and the city council ratified the agreement on September 8 and then notified the Union that the approved contract had been signed by the mayor and was available for the Union president's signature. The Union's president refused to execute the agreement until the parties could “get the insurance issues taken care of.”

The parties then met three times to discuss the health insurance hazardous activities exclusion. However, the City maintained that the terms of the health insurance plan were solely within its control as long as reasonable coverage was provided. On November 10, 2009, the City informed the Union that the City intended to review the group insurance rates and benefits for 2010. The Union declined to discuss those issues without the presence of the Union's attorney. The City then implemented changes to the City's health insurance plan, including changes to the deductibles, copays, and maximum out-of-pocket amounts. The City later admitted to implementing changes in the health care benefits and hazardous activities exclusion section because the City believed those changes to be within its management control.

The Union then filed a petition with the CIR, alleging that the City had violated § 48–824(1) by unilaterally implementing changes in the health insurance hazardous activities exclusion and by unilaterally changing the group health care benefits. The City counterclaimed that the Union had violated §§ 48–816(1) and 48–824(3)(c) when the Union failed to execute a written contract incorporating the agreement reached by the parties for the 2009–10 term. The City also claimed that the Union had refused to negotiate and meet with the City in good faith to discuss calendar year increases in health and dental premiums for 2010, in violation of §§ 48–816(1) and 48–824(1) and (3)(c).

The CIR noted that § 48–816(1) requires parties to negotiate only mandatory subjects of bargaining. Ultimately, the CIR determined that both the health insurance exclusion and the health care benefits were mandatory subjects of bargaining and that the City had violated § 48–824(1) in refusing to bargain with the Union regarding those issues. The CIR determined that the Union had not violated the IRA in refusing to execute the written contract incorporating the parties' prior agreement for the 2009–10 term, nor had the Union refused to negotiate the calendar year increases in health and dental premiums for 2010. The CIR ordered the City to return the parties to the status quo ante and ordered the parties to commence good faith negotiations within 30 days. Finally, the CIR denied the Union attorney fees, determining that the City's violation was not repetitive, egregious, or willful.

ASSIGNMENTS OF ERROR

The City assigns, summarized and restated, that the CIR erred when it (1) determined that the Union had not violated the IRA when it...