Vill. of N. Riverside v. Ill. Labor Relations Bd.

• Decision Date: 29 September 2017
• Docket Number: No. 1-16-2251,1-16-2251
• Parties: VILLAGE OF NORTH RIVERSIDE, Petitioner-Appellant, v. ILLINOIS LABOR RELATIONS BOARD, STATE PANEL, an Illinois administrative agency, John J. Hartnett, Michael Coli, John R. Samolis, Keith A. Snyder, Albert Washington, in their official capacities, North Riverside Firefighters and Lieutenants Union Local 2714 International Association of Firefighters AFL-CIO, CLC, Defendants-Appellees.
• Court: United States Appellate Court of Illinois

2017 IL App (1st) 162251

87 N.E.3d 394

VILLAGE OF NORTH RIVERSIDE, Petitioner-Appellant,

v.ILLINOIS LABOR RELATIONS BOARD, STATE PANEL, an Illinois administrative agency, John J. Hartnett, Michael Coli, John R. Samolis, Keith A. Snyder, Albert Washington, in their official capacities, North Riverside Firefighters and Lieutenants Union Local 2714 International Association of Firefighters AFL-CIO, CLC, Defendants-Appellees.

No. 1-16-2251

Appellate Court of Illinois, First District, THIRD DIVISION.

September 29, 2017

Cary A. Horvath and George R. Robinson, of Odelson & Sterk Ltd., of Evergreen Park, for petitioner.

Lisa Madigan, Attorney General, of Chicago (David L. Franklin, Solicitor General, and Sharon A. Purcell, Assistant Attorney General, of counsel), for respondent Illinois Labor Relations Board, State Panel, et al.

J. Dale Berry and Elisa Redish, of Cornfield & Feldman LLP, of Chicago, for other respondent.

OPINION

JUSTICE LAVIN delivered the judgment of the court, with opinion.

¶ 1 This appeal arises from a decision of the Illinois Labor Relations Board, State Panel (ILRB), which determined that the Village of North Riverside (the Village) committed unfair labor practices against the North Riverside Firefighters and Lieutenants Union Local 2714 International Association of Firefighters AFL-CIO, CLC (the Union). Specifically, the ILRB found that while the Union was pursuing interest arbitration, the Village improperly notified the Union that the parties' collective bargaining agreement (CBA) would be terminated.

¶ 2 On appeal, the Village contends that the ILRB's decision rests on a misinterpretation of the Illinois Public Labor Relations Act (the Act) ( 5 ILCS 315/1 et seq. (West 2014)). The Village argues that an employer's tender of termination notice under section 7 of the Act ( 5 ILCS 315/7 (West 2014) ) negates any obligation for the employer to maintain the status quo through the conclusion of interest arbitration under section 14 ( 5 ILCS 315/14 (West 2014) ). The Village also asserts that the notice tendered did not change employment terms during interest arbitration, and challenges the ILRB's determination that the Village interfered with Union activities. We disagree and affirm the ILRB's decision.

¶ 3 I. Background

¶ 4 The Village and the Union were parties to a CBA set to expire on April 30, 2014. Section 24.2 of the CBA stated, "this Agreement shall remain in full force and effect after any expiration date while negotiations or resolution of impasse proceedings for a new or amended agreement, or any part thereof, are under way between the parties." In January and February 2014, shortly before the parties' contract was to expire, the Union made two demands to begin bargaining. Bargaining did not begin, however. In March 2014, the Union and the Village requested mediation. See 5 ILCS 315/14 (j) (West 2014) (stating that "[a]rbitration procedures are initiated by requesting mediation as required under subsection (a) of this Section").

¶ 5 Meanwhile, the Village asked Paramedic Services of Illinois, Inc. (PSI) to submit a proposal for providing firefighting services. PSI already provided the Village with paramedic services. On June 18, 2014, the Village informed its residents by letter that the Village was seeking a proposal from PSI to provide fire protection services on the condition that PSI retain all current firefighters, "preserving their current base salaries, earned pension benefits and current health insurance, while allowing the Village to substantially reduce the adverse impact of future pension obligations imposed by the State." The letter stated that PSI would be "an excellent solution" to the Village's operating budget deficit of $1.9 million, $1.8 of which was "a direct result of the Village's growing public pension obligation, which [the Village has] not fully funded."¹ Although not stated in the letter, the Village anticipated that subcontracting with PSI would save the Village over $700,000 per year.

¶ 6 The Village finally began negotiating with the Union on June 24, 2014.² Following the first meeting, the Union's objective was to attempt to match the approximate $700,000 in savings that the Village would realize from privatizing services through PSI. The Union members also signed a declaration stating they would at no time accept employment with PSI. More meetings followed and mediation eventually occurred. Proposals and counter-proposals were made. The Village disputed, however, that the Union's proposals would achieve the same savings as privatization through PSI and otherwise found the Union's proposals undeveloped or unfeasible.

¶ 7 At a meeting with the mediator on September 3, 2014, the Village proposed an 11-year-contract providing that as Union members retired, they would be replaced by PSI employees. Within the week, the Union submitted (1) a reiterated prior offer, (2) a new offer dependent on privatization through a corporation yet to be formed by the Union, and (3) a new offer to form a regional fire protection agency, which depended on a Village referendum. According to the Village, the parties reached an impasse and completed mediation that day, September 9, 2014. Three days later, the Village filed an action in the circuit court (14 CH 14774) seeking a declaration that the Village's financial circumstances permitted it to outsource its fire protection services, that neither the parties' expired CBA nor the Act prevented the decision to outsource and that the decision was "based on a good faith legislative finding of economic necessity."

¶ 8 Less than a week later, the Union filed an unfair labor charge with the ILRB, arguing that the Village failed to bargain in good faith, and interfered with Union members' protected activities. On September 19, 2014, the Union also filed a demand for compulsory interest arbitration with the ILRB. See 5 ILCS 315/14 (West 2014). The ILRB subsequently denied the Village's request to hold interest arbitration in abeyance until the court resolved the Village's declaratory judgment action.

¶ 9 Meanwhile, on October 6, 2014, the Village presented Union members with a letter and accompanying notice that are central to this dispute. The letter stated that the Village was "again offering full employment opportunity for the Firefighters and Lieutenants through PSI. As initially proposed, PSI will hire all members of the bargaining unit at their current base salary, provide the same health care, as well as beginning a 401k pension plan." The letter added that "although the enclosed Notice terminates all employment of the bargaining unit members pursuant to statute and the contract," the firefighters would remain in their positions until the court made a determination in the declaratory judgment action. Furthermore, the enclosed "notice of collective bargaining termination," purportedly issued pursuant to section 7 of the Act ( 5 ILCS 315/7 (West 2014) ), informed the Union that the CBA "and all of its provisions" would terminate effective December 5, 2014. The Village added that it would meet with the Union to "confer and bargain concerning the impact of this termination."

¶ 10 In December, the ILRB issued a complaint for hearing, which recited the Union's allegation that the Village improperly issued termination notice and failed to maintain existing employment terms and conditions. In response, the Village argued that section 7 of the Act required the Village to issue the notice in question and, in any event, the Village had maintained employment terms and negotiated in good faith. On January 22, 2015, the parties proceeded to arbitration but the arbitrator stayed those proceedings pending the circuit court's resolution of the declaratory judgment action. The court dismissed the Village's complaint with prejudice for lack of jurisdiction in October 2015, and the Village appealed. We recently affirmed that judgment. See Village of North Riverside v. North Riverside Firefighters & Lieutenants Union Local 2714 International Ass'n of Firefighters AFL-CIO, CLC, 2017 IL App (1st) 152900-U, 2017 WL 1101048.

¶ 11 While that appeal was pending, a four-day evidentiary hearing on the ILRB complaint commenced before administrative law judge (ALJ) Anna Hamburg-Gal in December 2015. Three months later, she issued a recommended decision and order (RDO), finding that Village violated sections 10(a)(1) and 10(a)(4) by engaging in surface bargaining regarding the Village's proposal to privatize fire services. The ALJ also found the Village violated those subsections, and section 14(l), by unilaterally altering terms and conditions of employment when it issued the notice of termination while interest arbitration was pending. The ALJ rejected the Village's contention that because all employees remained in their positions, the Village made no changes to employment conditions. Specifically, the Village notified the firefighters that the existing employment terms would terminate, notwithstanding that the Village chose to delay implementing the termination of employment until the court ruled. Furthermore, by offering to discuss the effects of the termination letter, the Village acknowledged that the letter constituted a change. Finally, the ALJ determined that the Village interfered with, restrained or coerced Union members in their exercise of protected rights by issuing termination notice shortly after the Union requested compulsory interest arbitration, in violation of section 10(a)(1). The ALJ found the termination notice was issued, at least in part, because of the Union's decision to reject the Village's final offer and demand compulsory interest arbitration.

¶ 12 The ILRB affirmed the ALJ's decision, as modified. The ILRB rejected the ALJ's finding that the Village engaged in surface bargaining but agreed that the Village impermissibly changed terms and conditions of employment while interest arbitration was pending by issuing the notice of termination. The ILRB...