UE Local 893/IUP v. State

• Citation: 928 N.W.2d 51
• Decision Date: 17 May 2019
• Docket Number: No. 17-2093,17-2093
• Parties: UE LOCAL 893/IUP, Appellee, v. STATE of Iowa, Appellant.
• Court: Iowa Supreme Court

928 N.W.2d 51

UE LOCAL 893/IUP, Appellee,

v.STATE of Iowa, Appellant.

No. 17-2093

Supreme Court of Iowa.

Filed May 17, 2019

Thomas J. Miller, Attorney General, Jeffrey S. Thompson, Solicitor General, and Julia S. Kim, Assistant Attorney General, for appellant.

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 appellee.

WATERMAN, Justice.

In this appeal, we must decide whether the district court correctly granted summary judgment enforcing a collective bargaining agreement between the State of Iowa and a public employee union. The union argues its negotiators accepted the State’s pending offer and the union membership voted to ratify the terms, resulting in an enforceable collective bargaining agreement. The union filed this action in district court to enforce the agreement pursuant to Iowa Code section 20.17(5) (2017). The State moved to dismiss or stay the action in favor of administrative proceedings pending at the Public Employment Relations Board (PERB). The State argued that an Iowa Administrative Code rule requires the State to vote to ratify after the union vote and that without the State’s vote, no contract was formed. See Iowa Admin. Code r. 621—6.5(3) (2017).¹ The State argued the union failed to exhaust its administrative remedies and that the court should defer to PERB under the doctrine of primary jurisdiction. The union resisted, arguing Iowa Administrative Code rule 621—6.5(3) is invalid and the district court action should proceed in light of the agency’s limited enforcement powers. The district court denied the State’s motion without a definitive decision on rule 621—6.5(3), and both parties moved for summary judgment. PERB stayed its own agency proceedings pending resolution of the court proceedings.

The district court granted the union’s motion for summary judgment, noting in its ruling the State did not rely on rule 621—6.5(3) in resisting or moving for summary judgment. The State appealed without filing a motion to amend the judgment, and we retained the case. On appeal, the State renews its arguments relying on rule 621—6.5(3). The union argues the State failed to preserve error. We agree error was not preserved and decline to reach the State’s rule 621—6.5(3) challenge to the agreement. We hold the district court had subject matter jurisdiction and correctly ruled the State had not withdrawn its offer before the union’s acceptance and ratification resulted in an enforceable collective bargaining agreement. We also affirm the district court’s rulings rejecting the primary-jurisdiction and exhaustion doctrines, noting PERB’s limited enforcement powers. Accordingly, we affirm the district court’s judgment against the State.

I. Background Facts and Proceedings.

The facts are stipulated in the summary judgment record and are viewed in the light most favorable to the State. UE Local 893/IUP (UE) is a union representing two bargaining units comprised of State of Iowa employees: a science unit and a social services unit. The first collective bargaining agreement UE and the State negotiated for the social services unit went into effect on July 1, 1984, and the first agreement negotiated for the science unit went into effect on July 1, 1995. Thereafter, the parties negotiated successor two-year collective bargaining agreements for each bargaining unit. Most recently, UE and the State entered into collective bargaining agreements that were effective July 1, 2015, through June 30, 2017.²

In May 2016, the parties agreed to a schedule for the upcoming negotiations for successor agreements to go into effect on July 1, 2017. UE presented its initial offer on December 6, and the State presented its initial offer on December 20. The cover page of the State’s offer noted, "Throughout the course of these negotiations, the State reserves the right to add to, delete from and/or revise this proposal."

The parties met for a negotiation session on January 10, 2017. During this session, UE asked questions about the State’s insurance proposal, but neither party deviated from its initial offer. The State claims it did not want to deviate from its offer because it was waiting to see whether the legislature would amend the Public Employment Relations Act (PERA), Iowa’s collective bargaining statute, codified at Iowa Code chapter 20. The parties agreed to cancel bargaining sessions scheduled for January 11, 18, and 19.

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 UE’s bargaining units. The Governor signed House File 291 into law on February 17, and the amendments took effect immediately.³ 2017 Iowa Acts ch. 2 (codified in part at Iowa Code ch. 20 (2018)).

On February 10, one week before House File 291’s amendments went into effect, UE sent a letter to the Iowa Department of Administrative Services disclosing that UE’s negotiation committee had unanimously voted to accept the State’s December 20, 2016 offer. The State did not respond. On February 14, UE’s members voted to ratify the State’s offer. UE notified the State of the ratification vote the following day. The State later stipulated that "[a]t no time prior to ratification by UE on February 14, 2017 of the State’s December 20, 2016 initial proposal did the State withdraw its December 20, 2016 initial proposal." Nevertheless, the State refused to acknowledge that an enforceable voluntary collective bargaining agreement had been formed.

On February 15, UE filed a prohibited-practice complaint against the State with PERB. The following day, the State filed its own prohibited-practice complaint with PERB. PERB has stayed these prohibited-practice complaints pending resolution of this court action.

On February 21, UE filed a petition in district court to enforce the terms of the collective bargaining agreement pursuant to Iowa Code section 20.17(5) (2017). The State filed a preanswer motion to dismiss UE’s petition. The State argued the district court lacked primary jurisdiction and UE had failed to exhaust its administrative remedies. The State argued that Iowa Administrative Code rule 621—6.5(3) governed whether a collective bargaining agreement had been formed and the interpretation and application of that rule was central to the resolution of that issue. The State argued that those issues were pending before PERB in the two prohibited-practices complaints. For that reason, the State argued PERB should have primary jurisdiction to resolve these issues. The State also argued that because the prohibited-practice complaints remained pending with PERB, UE had failed to exhaust its administrative remedies.

The district court denied the State’s motion to dismiss. The court declined to grant PERB primary jurisdiction to determine whether the collective bargaining agreement was enforceable. The court decided that the prohibited-practices complaints pending before PERB did not invoke the doctrine of primary jurisdiction because both the court and PERB could exercise their authority concurrently. The court concluded, "The ability of the defendant to challenge the existence of an enforceable collective bargaining agreement based on rule [621—6.5(3) ] will be for the court to decide[.]" The court, however, did not decide the validity or effect of that rule in its dismissal order.

Both parties filed motions for summary judgment. The parties filed a stipulation of facts. The State again argued that PERB had primary jurisdiction and asked the district court to stay its proceedings pending PERB’s resolution of the prohibited-practice complaints. The State also asked the court to apply traditional contract principles and find that UE had rejected the State’s initial offer and made a counteroffer by suggesting different terms. Alternatively, the State argued that even under the standard set out in Pepsi-Cola Bottling Co. of Mason City v. NLRB , the circumstances were such that UE should reasonably have believed the State’s offer was withdrawn. 659 F.2d 87, 90 (8th Cir. 1981). The State did not mention Iowa Administrative Code rule 621—6.5(3) in its motion for summary judgment, nor did the State argue that the collective bargaining agreement was unenforceable because the State never held a ratification vote.

UE argued in its motion for summary judgment that, applying ordinary contract principles, there was a valid offer and acceptance of the State’s December 20 offer. UE argued it did not reject the State’s proposal by merely inquiring about additional or alternative terms.

The district court granted summary judgment in favor of UE. The court declined to stay the proceedings under the doctrine of primary jurisdiction. The district court expressly noted, "Unlike in its motion to dismiss, the [State] makes no argument on summary judgment regarding the impact of regulations promulgated by PERB requiring the public employer to approve the ratified agreement before it is effective."

The district court adopted the Pepsi-Cola standard for evaluating the formation of a collective bargaining agreement. Under this standard, "an offer, once made, will remain on the table unless explicitly withdrawn by the offeror or unless circumstances arise which would lead the parties to reasonably believe that the offer had been withdrawn." Pepsi-Cola , 659 F.2d at 90. The district court concluded the State did not explicitly withdraw its offer, nor were the circumstances such that UE would reasonably believe the offer had been withdrawn. For that reason, the State’s offer remained on the table and was available for UE to accept. The court found no dispute of fact with regard to UE’s acceptance of the offer and the membership’s...