St. Clair Intermediate School Dist. v. Intermediate Educ. Association/Michigan Educ. Ass'n
| Decision Date | 17 September 1996 |
| Docket Number | 161645,Docket Nos. 161643 |
| Citation | 555 N.W.2d 267,218 Mich.App. 734 |
| Parties | , 156 L.R.R.M. (BNA) 2541, 114 Ed. Law Rep. 302 ST. CLAIR INTERMEDIATE SCHOOL DISTRICT, Charging Party-Appellee, v. INTERMEDIATE EDUCATION ASSOCIATION/MICHIGAN EDUCATION ASSOCIATION, and Michigan Education Special Services Association, Respondents-Appellants. |
| Court | Court of Appeal of Michigan — District of US |
Thrun, Maatsch and Nordberg, P.C. by Donald J. Bonato, Lansing, for St. Clair Intermediate School District.
White, Beekman, Przybylowicz, Schneider & Baird by Arthur R. Przybylowicz, Okemos, for Intermediate Education Association/Michigan Education Association.
Fraser Trebilcock Davis & Foster P.C. by Iris K. Socolofsky-Linder, Lansing, for Michigan Education Special Services Association.
Before MARKEY, P.J., and McDONALD and M.J. TALBOT, * JJ.
Respondents Intermediate Education Association/Michigan Education Association (IEA/MEA), and Michigan Education Special Services Association (MESSA) appeal from the Michigan Employment Relations Commission (MERC) decision finding them in violation of the bargaining obligation of § 10(3)(c) of the public employment relations act (PERA), M.C.L. § 423.210(3)(c); M.S.A. § 17.455(10)(3)(c).
The St. Clair Intermediate School District (charging party) filed a charge with the MERC, alleging that respondents violated the bargaining obligation of the PERA when each took part in unilaterally changing the terms of the charging party's MESSA health-care coverage found in the parties' collective bargaining agreement. Without first negotiating with the charging party, respondents increased the initial $1,000,000 lifetime maximum health insurance benefit to a $2,000,000 coverage cap.
In finding respondents liable, the MERC determined that respondents implemented an improper unilateral change in the charging party's collective bargaining agreement, that the charging party did not waive its right to bargain with respect to the change, and that the MESSA acted as an agent of the MEA when it implemented the change. Respondents were ordered to cease and desist in making unilateral changes affecting the employees of the charging party and to reinstate the $1,000,000 lifetime benefit cap initially afforded to the charging party. We affirm.
Respondents first argue that the MERC erred in finding that the MESSA acted as an agent of the MEA when it modified the terms of its health insurance policy because there is nothing in the record to suggest that the MEA authorized or consented to the MESSA acting on its behalf, that the MESSA acted for the benefit of the MEA, or that the MEA exercised "actual control" over MESSA decision making. We disagree.
Our review of administrative agency decisions is limited by the statutory mandate that factual findings be deemed conclusive if supported by competent, material, and substantial evidence on the record considered as a whole and that due deference be given to administrative expertise. M.C.L. § 423.216(e); M.S.A. § 17.455(16)(e). Substantial evidence is that which a reasonable mind would accept as adequate to support a decision, being more than a mere scintilla, but less than a preponderance of the evidence. In re Payne, 444 Mich. 679, 514 N.W.2d 121 (1994). Likewise, legal rulings of administrative agencies are set aside if they are found to be in violation of the constitution or a statute or affected by a "substantial and material error of law." M.C.L. § 24.306(1)(a), (f); M.S.A. § 3.560(206)(1)(a), (f).
In Lodge No. 141, FOP v. Meridian Twp., 90 Mich.App. 533, 282 N.W.2d 383 (1979), this Court determined that when applying the PERA to a labor organization or its "agent," the Legislature intended to employ the law of agency as it had been developed at common law, stating that it is the "right to control," or the "actual ability to control," that is fundamental to the existence of an agency relationship. Having reviewed the record, we conclude that there was substantial evidence presented to support the MERC's finding that the MESSA acted as an agent of the MEA, as defined by common law.
The MESSA is a nonprofit subsidiary corporation created by the MEA to act as an agent in administering insurance plans for the MEA and its members and to provide health-care benefits to employees in bargaining units represented by local labor organizations affiliated with the MEA and to other school district employees. According to the MESSA's corporate by-laws, the MESSA's board of trustees acts pursuant to a majority vote and is composed of thirteen persons, including the MEA president and vice president, and an additional six who are elected "from and by" the MEA board. In addition, the MEA executive director also serves as the executive secretary (or chief executive officer) of the MESSA, oversees the internal operations of the MESSA, and implements the policies adopted by the MESSA board.
Aside from the physical interlocking of the two entities, the record also provides ample evidence to support the conclusion that it was the intent of the MESSA to act as a fiduciary for the MEA. Evidentiary documents contained statements that it was the MESSA's mission and goal to "serve members of the MEA" and to "meet the needs of the MEA," that the MESSA and the MEA members are in "partnership together," that the MESSA is "designed to service MEA members," that the "MESSA is a part of the MEA," and that the MESSA is a "membership organization governed by MEA members." Several documents also establish an explicit dual involvement between the MESSA and the MEA in negotiating insurance benefits. Accordingly, we find that the record provides competent, material, and substantial evidence of the MEA's ability to control the MESSA and of both corporations' intent to establish a fiduciary relationship. Meridian Twp., supra at 541, 282 N.W.2d 383.
Respondents next argue that the MERC erred in finding the change in MESSA benefits to be an improper unilateral "mid-term modification" of the collective bargaining agreement between respondents and the charging party, or a "change in working conditions," because the charging party never initially bargained for specific benefit levels. Furthermore, the modification did not change the fact that the charging party still possessed the insurance plan as bargained for. We disagree.
The PERA prohibits a "labor organization or its agent" from refusing to...
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