Service Employees International Union, Local 199 v. Iowa Board of Regents

• Citation: 928 N.W.2d 69
• Decision Date: 17 May 2019
• Docket Number: No. 18-0018,18-0018
• Parties: SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL 199, Appellant, v. State of Iowa, IOWA BOARD OF REGENTS, Appellee.
• Court: United States State Supreme Court of Iowa

928 N.W.2d 69

SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL 199, Appellant,

v.State of Iowa, IOWA BOARD OF REGENTS, Appellee.

No. 18-0018

Supreme Court of Iowa.

Filed May 17, 2019

Charles Gribble and Christopher Stewart of Parrish Kruidenier Dunn Boles Gribble Gentry Brown & Bergmann, L.L.P., Des Moines, and Nathan Willems of Rush & Nicholson, Cedar Rapids, for appellant.

Andrew T. Tice of Ahlers & Cooney, P.C., Des Moines, for appellee.

WATERMAN, Justice.

In this appeal, we must determine whether the Iowa Board of Regents and a public employee union entered into an enforceable collective bargaining agreement. The fighting issue is the validity of an agency rule that requires the Board to meet to vote to accept a tentative voluntary agreement ratified by the union before the contract becomes effective. The parties’ negotiations are governed by the Public Employment Relations Act (PERA), Iowa Code chapter 20, and rules promulgated by the Public Employment Relations Board (PERB). Iowa Code section 20.17(4) (2017) provides that "[t]he collective bargaining agreement shall become effective only if ratified by a majority of [union members] voting by secret ballot." This statute makes no mention of requiring the public employer to vote to ratify the agreement, but a related statute generally requires final action to be conducted in an open meeting. Iowa Code § 21.5(3). In 1976, PERB enacted Iowa Administrative Code rule 621—6.5 to implement the voting requirements for both the employer and union.¹ The union and Board had each voted to ratify their voluntary collective bargaining agreements consistent with that rule in 2009, 2011, and 2015. However, in 2017, the Board did not vote to approve the proposed agreement ratified by the union.

The union filed this action under Iowa Code section 20.17(5) to enforce the collective bargaining agreement. The Board moved for summary judgment, relying on rule 621—6.5(3). The union argued the agency rule was invalid because it imposed a ratification requirement not included in section 20.17(4). The district court, reading chapter 20 and 21 together, upheld the validity of the agency rule and granted summary judgment dismissing the union’s enforcement action. The union appealed, and we retained the appeal.

On our review, for the reasons explained below, we hold PERB acted within its statutory authority in promulgating rule 621—6.5(3), which has the force of law. The legislature expressly granted PERB rulemaking and interpretive authority. Chapters 20 and 21 are interrelated and must be construed together. Rule 621—6.5 implements ratification voting requirements for both the Board and the union. The district court correctly applied rule 621—6.5(3) to hold the parties had no enforceable collective bargaining agreement without the Board’s vote to ratify it. Accordingly, we affirm the summary judgment dismissing this action.

I. Background Facts and Proceedings.

Service Employees International Union, Local 199 (SEIU) represents approximately 3500 employees of the State of Iowa who work at the University of Iowa Hospitals and Clinics (UIHC). The UIHC is governed by the Iowa Board of Regents. Iowa Code § 262.7(1). The Board consists of nine members appointed by the Governor. Id. §§ 262.1–.2. The Board meets periodically to "adopt[ ] rules and policies having general application to the institutions subject to its governance," including the UIHC. Iowa Admin. Code r. 681—11.1(5) ; see also Iowa Code § 262.9(3). The Board, when acting as a public employer, has discretion to retain attorneys to "carry[ ] out collective bargaining and related responsibilities provided for under chapter 20." Iowa Code § 262.9(16). The Board is subject to the open-meetings requirements of Iowa Code chapter 21. Id. §§ 21.2(1)(a ), .3.

SEIU and the Board negotiated voluntary two-year collective bargaining agreements in 2009, 2011, and 2015.² In each of those years, the Board formally voted to approve the collective bargaining agreement after the ratification vote by SEIU’s membership. The agreement negotiated in 2015 expired by its terms on June 30, 2017.

In the fall of 2016, the Board and SEIU began negotiating a new agreement to begin on July 1, 2017. SEIU selected James "Jim" Jacobson as its lead negotiator, and the Board chose Michael Galloway as its lead negotiator. Jacobson and Galloway met on October 10, 2016, to discuss a timeline for the upcoming exchange of offers and ensuing negotiations. The Board met on October 20 and went into a closed session to discuss collective bargaining strategy with counsel and institutional representatives. The Board did not vote to approve any bargaining agreement during this closed session.

On November 29, Jacobson and Galloway exchanged initial bargaining proposals. They met again on December 8 and 14 to discuss the initial proposals and exchange additional proposals. At the December 14 meeting, Jacobson presented SEIU’s counteroffer. Galloway made clear to Jacobson that any terms they set at the bargaining table would have to be approved by the Board and that Galloway would have to "sell it" to the Board. Galloway canceled bargaining sessions scheduled for January 5 and 12, 2017.

On January 9, Galloway copied Jacobson on an email to the PERB reporting the status of the parties’ negotiations. Galloway’s email explained that the Board would soon be extending its final offer:

We will be giving the union a final offer in writing this week. Jim is correct that we cancelled the 5th so that I could visit with the Board and the hospital regarding my financial authority. I am having surgery on the 11th so I can’t make the 12th.

Our final offer will contain all the financial authority I will have. If it is not acceptable, then we should just schedule mediation. Thanks[.]

On January 10, Galloway emailed Jacobson and attached the Regents’ final offer accompanied by this explanation:

Please find attached the Board of Regents’ final offer to SEIU. The offer includes all the items we had agreed previously upon during negotiations. I believe this offer represents a substantial increase to the inpatient nurses and is a fair offer to the other members of the bargaining unit. This offer contains all the financial authority we have from the Board of Regents. Please let us know if this offer is acceptable.

If the offer is not acceptable, we will need to schedule mediation during the week of January 30th.

The cover page of the January 10 offer stated, "This is a package proposal and must be accepted or rejected in its entirety." Yet the cover page also noted, "The [Board] reserves the right to add to, delete from, and/or revise this proposal."

On January 17, Jacobson called Galloway to ask whether better terms were available on the Weekend Option Program for nurses and a probationary period for new employees. The next day, Jacobson followed up by email to ask if Galloway had spoken to the Board about those matters. Galloway responded that he did "not have a response." However, Galloway foreshadowed headwinds for the Board’s ultimate approval of the pending proposal:

I know UIHC would be much more comfortable leaving the probationary status current contract and maintaining our position on weekend option. That being said, the biggest issue now is that the Regents have heard rumors regarding the position AFSCME has taken with the State. It is my understanding that the Union’s offer was dramatically lower than 2% and increased the insurance contributions.

I understand these are different units, but there will be grave concerns regarding our offer once it is received/understood by the Governor’s office. I knew this could become an issue and was hoping to avoid it by getting this contract completed quickly.

On January 25, Jacobson emailed Galloway to inform him SEIU had accepted the Regents’ final offer, stating,

I left you a voicemail earlier today. But I thought I better put it in writing. SEIU has agreed to the terms of the [Board]’s final offer sent via email on January 10, 2017.

SEIU will hold a ratification vote as quickly as possible and let you know the results.

Please contact me regarding drafting a final, clean version of the document.

On January 31, Galloway spoke with Jacobson on the phone and "informed him that there was not an agreement to be ratified and that the parties need[ed] to continue to bargain." Galloway did not expressly withdraw the Board’s January 10 offer. On February 1, Jacobson sent Galloway an email clarifying SEIU’s position,

In light of our conversation yesterday, I wanted to recap the situation in which SEIU, as the legal representatives of approximately 3,500 health care professionals, and the Board of Regents find themselves.

On January 10, 2017 you sent SEIU, as the chief negotiator for the Board of Regents, a final contract offer.

On January 25, 2017, SEIU accepted the offer with both a voice message and an email message.

On January 31, during a telephone conversation, you and Tim Cook informed me that the Board of Regents believed the parties had not, in fact, reached an agreement.

As I said yesterday, SEIU plans to hold its ratification vote in the very near future. I will inform you of the results.

Please let me know if the Board of Regents’ position changes.

On February 8, Jacobson emailed Galloway to inform him of SEIU’s ratification vote,

SEIU, Local 199 ratified the tentative agreement the parties reached on January 25, 2017. The vote was held February 7, 2017 with 98.6 percent of the voters in favor of accepting the agreement. Please let me know if you have any questions.

On February 9, House File 291 was introduced in the Iowa House of Representatives. H.F. 291, 87th G.A., 1st Sess. (Iowa 2017). House File 291 made significant amendments to PERA by substantially limiting the number of mandatory bargaining topics for most public employees, including the employees in SEIU’s bargaining units. The Governor signed House File 291 into law on February 17, and the amendments took effect...