Senior Accountants, Analysts and Appraisers Ass'n v. City of Detroit

• Decision Date: 31 December 1976
• Docket Number: No. 3,3
• Citation: 399 Mich. 449,249 N.W.2d 121
• Parties: , 94 L.R.R.M. (BNA) 2401, 80 Lab.Cas. P 53,995 SENIOR ACCOUNTANTS, ANALYSTS AND APPRAISERS ASSOCIATION, a City Employee Union in Detroit, et al., Plaintiffs-Appellants, v. The CITY OF DETROIT, a Municipal Corporation, Defendant-Appellee.
• Court: Michigan Supreme Court

Page 121

249 N.W.2d 121

399 Mich. 449, 94 L.R.R.M. (BNA) 2401,

80 Lab.Cas. P 53,995

SENIOR ACCOUNTANTS, ANALYSTS AND APPRAISERS ASSOCIATION, a City Employee Union in Detroit, et al Plaintiffs-Appellants, v. The CITY OF DETROIT, a Municipal Corporation, Defendant-Appellee.

No. 3.

Supreme Court of Michigan.

Dec. 31, 1976.

David N. Walsh, Birmingham, for plaintiff-appellants; George Stone, Detroit, of counsel.

Kermit G. Bailer, Corp. Counsel, Anna J. Diggs, Linda D. Bernard, Asst. Corp. Counsels, Detroit, for defendant-appellee.

WILLIAMS, Justice.

The issue in this case is limited to the consideration of whether an unappealed determination by the Michigan Employment Relations Commission that plaintiff is not entitled to 'back pay' for a determined unfair labor practice operates as collateral estoppel to the subsequent maintenance of a suit in circuit court to recover the same reimbursement as 'damages' for breach of contract.

We hold that plaintiffs are barred from suing for 'damages' under a breach of contract theory by the doctrine of collateral estoppel because the questions of fact necessary for determination of 'damages' by the circuit court in this case would be identical to questions of fact already determined by the Michigan Employment Relations Commission in concluding 'back pay' was improper in this case.

Accordingly, we uphold the circuit court and the Court of Appeals.

I--FACTS

This case was submitted to the Court of Appeals on an agreed statement of facts, in compliance with GCR 1963, 812.10. The Court of Appeals well summarized the pertinent facts as follows:

'Certain of the plaintiffs prior to 1970 were employed in various city departments where, pursuant to Ordinance 90--F and Ordinance 303--G, they were allowed a reduced work schedule of 35 rather than 40 hours per week. On July 17, 1970 the mayor of the City of Detroit ordered all employees to begin working 40 hours per week. This order was held in an action in the Wayne County Circuit Court to be ineffective because, under the ordinances, only department heads had the power to so alter the work schedule. A comparable order was subsequently issued by the appropriate department heads requiring these employees to work 40 hours for the same annual salary they had received for 35 hours of work per week.

'On August 24, 1970, many of the unions representing city employees affected by this change filed an unfair labor practice charge with the Michigan Employment Relations Commission. On December 28, 1970, a trial examiner rendered a decision and recommended issuance of a cease and desist order to compel the city to rescind its unilateral action, and also recommending that the employees' claim for back pay for the extra five hours per week be denied. On March 12, 1971, the full Michigan Employment Relations Commission affirmed the trial examiner's decision and order. The City of Detroit filed an application for leave to appeal to this Court which was denied. The affected employees and their unions made no effort to appeal the commission's decision.

'In July, 1973, 200 members of the Senior Accountants, Analysts and Appraisers Association brought a class action seeking to recover compensation for the extra time worked during the period of approximately nine months before the cease and desist order was entered. On February 19, 1974, the trial court granted defendant city's motion for a summary judgment accompanied by a letter to the attorneys indicating 'that the defense of res judicata and/or collateral estoppel is valid for the reasons and grounds asserted by defendant city in its brief." 60 Mich.App. 606, 608--609, 231 N.W.2d 479, 480.

On April 25, 1975, the Court of Appeals affirmed the trial court. ¹ Plaintiffs applied for leave to appeal. This Court granted leave on December 5, 1975.

II--DISCUSSION

We granted leave in this case 'limited to the consideration of this issue: Does an unappealed determination by the Michigan Employment Relations Commission, that plaintiff is not entitled to 'back pay' for a determined unfair labor practice, operate as a collateral estoppel to the subsequent maintenance of a suit in circuit court to recover the same reimbursement as 'damages' for breach of contract?'

In resolving this issue, it is essential that we keep in mind the precise questions of law and fact decided by the Michigan Employment Relations Commission (MERC) trial examiner. First, the trial examiner held, as a matter of law, that the City's unilateral increase of the work week to forty hours 'without notice and bargaining with the representatives of its employees violated Section 10(a) and (e) of the Public Employment Relations Act (PERA)' (see Joint Appendix, Exhibit A, p. 45). Accordingly, the trial examiner recommended 'the usual remedial order in such cases * * *' ² This decision and order of the trial examiner was affirmed by the full Michigan Employment Relations Commission and is not in dispute in this appeal.

Second, the trial examiner was asked by the charging parties 'that the City be required to pay all employees affected by the increase in hours time and one-half for all hours worked between 35 and 40' (see Joint Appendix, Exhibit A, p. 48) as an additional remedial order to the order stated Supra. Clearly, it was within the trial examiner's power to order such a 'backpay' remedy. As § 16(b) of the Public Employment Relations Act, M.C.L.A. § 423.216(b); M.S.A. § 17.455(16)(b) provides in pertinent part:

'If upon the preponderance of the testimony taken the board is of the opinion that any person named in the complaint has engaged in or is engaging in the unfair labor practice, then it shall state its findings of fact and shall issue and cause to be served on the person an order requiring him to cease and desist from the unfair labor practice, and to take such affirmative action including reinstatement of employees with or without back pay, as will effectuate the policies of this act.'

The trial examiner correctly noted that the legal test for determining whether a 'back-pay' order (or monetary reimbursement) is appropriate is 'whether or not the employee in question would have been paid absent the unlawful unilateral action.' Hooker Chemical Corp., 186 NLRB No. 49, 75 LRRM 1357 (1970). Applying this test to the case before him, the trial examiner made the following determinations of fact:

'The record in the instant case conclusively establishes that under the ordinances and the collective bargaining agreements applicable to employees working a 35 hour week, the practice has been that the pay week is computed on a 40 hour basis and no overtime is paid for work between 35 and 40 hours in a normal work week. The only exception to this policy and practice has been those instances where the employees involved worked a 35 hour week and were called in to work a sixth day of work. This exception to the policy of crediting overtime only for work in excess of 40 hours was designed to alleviate a hardship on employees required to work a sixth day without forcing them to work five hours without any compensation or compensatory time. * * * In the absence of any evidence to establish that under past practice, ordinance, or contract such payment has ever been made for the additional five hours work in a normal work week, or that such payment even could be made under existing City policy, the undersigned can find no basis for a reimbursement remedy herein. Therefore, the undersigned will refuse to recommend any monetary reimbursement or compensatory time as part of the remedy in this case.' (See Joint Appendix, Exhibit A, pp. 48--50.)

The full MERC also affirmed this decision of the trial examiner. Furthermore, as mentioned in the facts, the affected employees and their unions made no effort to appeal the affirmance of the full Commission.

Plaintiffs Senior Accountants, et al., then brought suit in circuit court against the City alleging breach of contract and asking the court to award damages 'in an amount equal to five hours wages per, at overtime rates, for the full period they were forced to work 40 hours, plus interest at five percent (5%) from the date of work * * *', (See Joint Appendix, p. 6) i.e. damages based on the extra 5 hours per week worked since the 40-hour work order went into effect (essentially the same remedy sought before MERC). The question before us is whether plaintiffs are barred from maintaining this suit because of the doctrine of collateral estoppel. In this particular case, the answer to this question is yes.

It is established law in this state that the doctrines of res judicata and collateral estoppel apply to administrative determinations which are adjudicatory in nature, where a method of appeal is provided, and where it is clear that it was the legislative intention to make the determination final in the absence of an appeal. Roman Cleanser Co. v. Murphy, 386 Mich. 698, 703--704, 194 N.W.2d 704 (1972) reversing and adopting Judge (now Justice) Levin's dissent in Roman Cleanser Co. v. Murphy, 29 Mich.App. 155, 166-171, 185 N.W.2d 87 (1970).

The applicable test for collateral estoppel in this case is accurately stated in § 68 of the Restatement of the Law of Judgments, p. 293:

'Where a question of fact essential to the judgment is actually litigated and determined by a valid and final judgment, the determination is conclusive between parties in a subsequent action on a different cause of action * * *' ³

See, Howell v. Vito's Trucking & Excavating Co., 386 Mich. 37, 41--42, 191 N.W.2d 313 (1971); Jones v. Chambers, 353 Mich. 674, 680--681, 91 N.W.2d 889 (1958).

In the instant case, if the trial court were to rule on whether plaintiffs are entitled to the 'damages' for which they complain ('an amount equal to five hours wages per, at overtime rates, for the full period they were forced to work 40 hours'; see Joint Appendix, p. 6), the court would have to determine whether the legal basis of p...