Snohomish Cnty. Pub. Transp. Benefit Area v. Wash. Pub. Emp't Relations Comm'n

• Decision Date: 12 February 2013
• Docket Number: No. 42435–5–II.,42435–5–II.
• Citation: 294 P.3d 803
• Parties: SNOHOMISH COUNTY PUBLIC TRANSPORTATION BENEFIT AREA, d/b/a Community Transit, Petitioner, v. STATE of Washington PUBLIC EMPLOYMENT RELATIONS COMMISSION and Amalgamated Transit Union, Local 1576, Respondents.
• Court: Washington Court of Appeals

294 P.3d 803

SNOHOMISH COUNTY PUBLIC TRANSPORTATION BENEFIT AREA, d/b/a Community Transit, Petitioner,

v.STATE of Washington PUBLIC EMPLOYMENT RELATIONS COMMISSION and Amalgamated Transit Union, Local 1576, Respondents.

No. 42435–5–II.

Court of Appeals of Washington, Division 2.

Feb. 12, 2013.

Shannon E. Phillips, Sofia D'almeida Mabee, Summit Law Group PLLC, Seattle, WA, for Appellant.

Spencer Walter Daniels, Office of the Attorney General, Olympia, WA, Michael Craig Subit, Clifford Freed, Frank Freed Subit & Thomas LLP, Seattle, WA, for Respondent.

WORSWICK, C.J.

¶ 1 Under Washington's Administrative Procedure Act (APA),¹ agencies have discretionwhether to issue decisions through adjudication or rulemaking. But the APA limits the scope of an adjudicative order to one that determines the rights, duties, privileges, or other legal interests of specific persons. Hence, an adjudicative order cannot be used to promulgate a new, purely prospective rule or policy.

¶ 2 Here, the Public Employment Relations Commission (PERC) entered an adjudicative order dismissing an unfair labor practice complaint by Amalgamated Transit Union, Local 1576 (Amalgamated) against the Snohomish County Public Transit Benefit Area, d/b/a Community Transit. Amalgamated's complaint alleged that Community Transit improperly failed to arbitrate employee grievances under the employee grievance arbitration provisions of an expired collective bargaining agreement. PERC, following established precedent that provisions for the arbitration of employee grievances do not survive a collective bargaining agreement, dismissed Amalgamated's complaint. But it also announced a new, purely prospective rule that provisions for the arbitration of employee grievances would survive the expiration of future collective bargaining agreements.

¶ 3 Community Transit seeks judicial review,² arguing that PERC's decision was invalid because it was decided after an adjudicative proceeding rather than a rulemaking proceeding, arid arguing that the decision exceeded PERC's authority.³ Amalgamated argues that while Community Transit has standing to challenge PERC's failure to follow rulemaking procedures, Community Transit lacks standing to challenge PERC's decision on the merits. Amalgamated further argues that, assuming PERC exceeded its authority by issuing a purely prospective adjudicative order, we should amend the order and apply PERC's new precedent to Community Transit.

¶ 4 We hold that Community Transit has standing to contest PERC's decision on both procedural and substantive grounds. And because PERC's new prospective rule did not determine the rights of specific persons, it exceeded PERC's adjudicative authority. We remand to PERC with instructions to strike the prospective change in precedent from its order.

FACTS

A. Legal Background

¶ 5 This case involves a dispute over Amalgamated's members' right to labor arbitration after their collective bargaining agreement expires. Labor arbitration comes in two forms: grievance arbitration and interest arbitration.

¶ 6 Grievance arbitration is a process for resolving employee claims that the employer has violated the collective bargaining agreement. See Int'l Ass'n of Fire Fighters, Local 46 v. City of Everett, 146 Wash.2d 29, 46–47, 42 P.3d 1265 (2002). Grievance arbitration is available only if. included in a collective bargaining agreement. See Teamsters, Local 313 v. Pierce County, Pub. Emp't Comm'n Dec. 2693 PECB at 15–16 (1987).

¶ 7 Interest arbitration is a process whereby, if the union and the employer cannot agree on a new contract during collective bargaining, an arbitration panel will be formed to resolve any disputes over the terms of the new contract. RCW 41.56.450; City of Everett, 146 Wash.2d at 46, 42 P.3d 1265. Unlike grievance arbitration, interest arbitration is not a matter of contract. Instead, it is made available to certain public employees by statute, including the transit employees that Amalgamated represents. RCW 41.56.450, .492. ¶ 8 It has long been the rule that, for employees eligible for interest arbitration, grievance arbitration provisions do not survive the expiration of a collective bargaining agreement. See Maple Valley Prof'l Fire Fighters Ass'n v. King County Fire Prot. Dist., 135 Wash.App. 749, 757–59, 145 P.3d 1247 (2006); Teamsters, Local 313, Pub. Emp't Comm'n Dec. 2693 at 17. But in this case, while following this longstanding rule with respect to the parties before it, PERC prospectively announced a new rule that grievance arbitration provisions would survive the expiration of future collective bargaining agreements for employees eligible for interest arbitration.

B. Procedural Facts

¶ 9 Amalgamated's collective bargaining agreement with Community Transit expired on December 31, 2007. That collective bargaining agreement included a grievance arbitration provision. In 2008, while the parties were bargaining over a new agreement, Community Transit announced that it would no longer arbitrate employee grievances that arose after the previous agreement's expiration. Amalgamated instituted adjudication by filing an unfair labor practice complaint with PERC, alleging that Community Transit was required to arbitrate all employee grievances.

¶ 10 A PERC unfair labor practice manager, following established precedent, ruled that the grievance arbitration provisions expired with the collective bargaining agreement and accordingly dismissed Amalgamated's complaint. Amalgamated appealed this decision to PERC.

¶ 11 In a Written decision, two of PERC's three commission members recognized that under existing precedent, the grievance arbitration provisions had expired along with the collective bargaining agreement that contained them. But the majority overruled existing precedent and held that such provisions would, in the future, survive a collective bargaining agreement's expiration for employees eligible for interest arbitration. Because Community Transit relied on past precedent when it refused to arbitrate grievances, PERC affirmed the dismissal of Amalgamated's complaint and held that the new standard would apply only prospectively.⁴

¶ 12 In spite of prevailing on Amalgamated's unfair labor practice complaint, Community Transit petitioned for judicial review of PERC's decision in superior court, contesting the validity of PERC's new, prospectively applied standard. The superior court affirmed PERC's decision, holding that PERC had properly decided the case without following rulemaking procedures and that Community Transit lacked standing to challenge PERC's new standard on its merits. Community Transit now appeals to this court.

ANALYSIS

I. Standing

¶ 13 As a threshold matter, although Amalgamated concedes that Community Transit has standing to challenge PERC's failure to follow rulemaking procedures, Amalgamated argues that Community Transit lacks standing to challenge PERC's decision on its merits. Although we do not decide this case based on PERC's failure to follow rulemaking procedures, we accept Amalgamated's concession that Community Transit has standing to raise the issue. We further hold that Community Transit has standing to challenge PERC's decision on its merits.

¶ 14 The APA provides for judicial review of most agency actions. RCW 34.05.510–.598. But only “aggrieved or adversely affected” persons have standing to obtain judicial review of agency action. RCW 34.05.530. The person seeking judicial review of agency action bears the burden of establishing standing to obtain judicial review. KS Tacoma Holdings, LLC v. Shorelines Hearings Bd., 166 Wash.App. 117, 127, 272 P.3d 876 (2012) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)). We review questions of standing de novo. Spokane Airports v. RMA, Inc., 149 Wash.App. 930, 939, 206 P.3d 364 (2009).

¶ 15 A person is “aggrieved or adversely affected” by agency action under RCW 34.05.530 when:

(1) The agency action has prejudiced or is likely to prejudice that person;

(2) That person's asserted interests are among those that the agency was required to consider when it engaged in the agency action challenged; and

(3) A judgment in favor of that person would substantially eliminate or redress the prejudice to that person caused or likely to be caused by the agency action.

Our Supreme Court has held that these statutory requirements are derived from federal case law. Seattle Bldg. & Constr. Trades Council v. Apprenticeship & Training Council, 129 Wash.2d 787, 793, 920 P.2d 581 (1996)( Trades Council ). The first and third factors are equivalent to the federal “injury-in-fact” test, while the second factor is equivalent to the federal “zone of interest” test. See Trades Council, 129 Wash.2d at 793–95, 920 P.2d 581.

¶ 16 The parties do not contest whether Community Transit satisfies the zone of interest test, and thus we do not address it. But Amalgamated argues that Community Transit fails the injury-in-fact test. We disagree.

¶ 17 Washington courts interpret the injury-in-fact test consistently with federal case law. See, e.g., KS Tacoma Holdings, 166 Wash.App. at 126–27, 272 P.3d 876. To meet this test, Community Transit must show an injury-in-fact, which is an invasion of a legally protected interest. Lujan, 504 U.S. at 560, 112 S.Ct. 2130.

¶ 18 Community Transit's claimed injury-in-fact is that PERC's decision will cause it to suffer a loss of “negotiating leverage.” Br. of Appellant at 40. This argument is well taken. Prior to PERC's decision here, if Amalgamated wished for its members to benefit from grievance arbitration provisions after the expiration of its collective bargaining agreement, it was required to negotiate with Community Transit for such a benefit. But under PERC's decision, Community Transit can no longer obtain concessions in exchange for an agreement to continue the arbitration of grievances past the collective bargaining agreement's expiration;...