Waterloo Educ. Ass'n v. Iowa Perb

• Decision Date: 19 October 2007
• Docket Number: No. 05-1068.,05-1068.
• Citation: 740 N.W.2d 418
• Parties: WATERLOO EDUCATION ASSOCIATION, Appellant v. IOWA PUBLIC EMPLOYMENT RELATIONS, Appellee, and Waterloo Community School District, Intervenor-Appellee.
• Court: Iowa Supreme Court

740 N.W.2d 418

WATERLOO EDUCATION ASSOCIATION, Appellant v. IOWA PUBLIC EMPLOYMENT RELATIONS, Appellee, and Waterloo Community School District, Intervenor-Appellee.

No. 05-1068.

Supreme Court of Iowa.

October 19, 2007.

Gerald L. Hammond, Des Moines, for appellant.

Jan V. Berry, Des Moines, for appellee.

Brian L. Gruhn of Gruhn Law Firm, Cedar Rapids, for intervenor-appellee.

APPEL, Justice.

In this case, we must decide whether an overload pay proposal submitted by the Waterloo Education Association (Association) to the Waterloo Community School District (District) is a mandatory or permissive subject of collective bargaining under section 20.9 of the Iowa Public Employment Relations Act (PERA). The Public Employment Relations Board (PERB) ruled that the proposal was a permissive subject of bargaining. The district court affirmed. We find the specific proposal in this case to be a mandatory subject of collective bargaining. We therefore reverse the district court and remand the matter for further proceedings.

I. Prior Proceedings.

The Association filed a petition with PERB seeking an expedited determination on whether the overload pay proposal it presented to the District was a mandatory subject of bargaining under section 20.9 of PERA. The overload pay proposal provided that elementary teachers who teach more than three hundred minutes per day as part of regular work assignments "shall receive additional compensation." "Secondary and middle school teachers who are assigned to teach six (6) classes per day" were also entitled to additional compensation. The overload pay proposal provided that additional teaching assignments would be compensated at "the employee's hourly proportionate per diem rate."

PERB issued a preliminary ruling finding that the proposal constituted a permissive subject of bargaining and followed the preliminary ruling with a lengthy final order containing the Board's reasoning. In its final order, PERB stated that it believed that the precedents of this court required the result. PERB, however, stated that this court's precedents suffer from an error that PERB itself may have precipitated through its own poorly reasoned decisions. The Board stated that if it did not feel constrained by our precedents, it would hold that the proposal was a mandatory subject of collective bargaining.

The Association appealed the decision to district court, which affirmed the PERB decision. The Association then filed a timely notice of appeal with this court.

II. Standard of Review.

As a threshold matter, we must determine whether the Board's interpretation of section 20.9 is entitled to deference. Under Iowa Code section 17A.19(10)(c), (l) (2005), deference is warranted where interpretation of the statute is "clearly ... vested by a provision of law in the discretion of the agency." "If the interpretation is so vested, then the court may reverse only upon a finding the agency's interpretation was `irrational, illogical, or wholly unjustifiable.'" Birchansky Real Estate, L.C. v. Iowa Dep't of Pub. Health, State Health Facilities Council, 737 N.W.2d 134, 138 (Iowa 2007) (quoting Iowa Code § 17A.19(10)(c), (l)). Alternatively, if interpretation has not been explicitly vested in the agency, our review is for errors at law. Id. Whether a proposal is a mandatory subject of collective bargaining, as defined by Iowa Code § 20.9, has not been explicitly vested in PERB's discretion. See Insituform Technologies, Inc. v. Employment Appeal Bd., 728 N.W.2d 781, 800 (Iowa 2007) (holding that interpretation of "willful" was not vested within the agency's discretion). Therefore, our review is for correction of errors at law. Iowa Code § 17A.19(10)(c).

III. Discussion.

A. Introduction to Scope of Bargaining Issues. With the enactment at the height of the Great Depression of the National Labor Relations Act (NLRA), 29 U.S.C. sections 151-69 (2005), the prevailing view was that mandatory collective bargaining was an appropriate mechanism to adjust the conflicting relationship between economically powerful employers and comparatively weak employees. While the power of employees would obviously be strengthened by collective bargaining, it was generally believed that market forces would prevent employees from gaining too much at the expense of an employer. If wages became too high, the price of goods or services offered by the employer could become uncompetitive, thereby forcing moderation in employee demands.

In contrast, it was almost unanimously assumed that the collective bargaining model had no application to the public sector. Even President Franklin D. Roosevelt advised public employee leaders that "the process of collective bargaining, as usually understood, cannot be translated into the public service" because the employer was "the whole people" speaking through their public representatives. Letter from Franklin D. Roosevelt to Luther Steward (August 31, 1937), as reprinted in Christine G. Cooper & Sharon Bauer, Federal Sector Labor Relations Reform, 56 Chi.-Kent L.Rev. 509, 511-12 (1980). In short, it was feared that collective bargaining would intrude too deeply upon public policy matters that should be decided by responsible public officials.

Over time, the presumption that the collective bargaining model had no application to the public sector came under challenge. As noted by Professor Merton Bernstein, after the enactment of the NLRA and the growth in the number and power of private sector unions, a large number of semiskilled and skilled workers entered the middle class, while public employees such as teachers did not experience similar gains. This apparent disparity increasingly caused government employees to demand reforms designed to improve their economic standing. Merton C. Bernstein, Alternatives to the Strike in Public Labor Relations, 85 Harv. L.Rev. 459, 460 (1971). Across the country, various commissions and studies were conducted to determine if and how collective bargaining concepts could be applied to the public sector.

Beginning with Wisconsin in 1959, state legislatures began to enact legislation authorizing collective bargaining in the public sector. Joan Weitzman, The Scope of Bargaining in Public Employment 40-41 (1975). By 1974, forty states had adopted some kind of collective bargaining for public employees, while twenty-eight states enacted comprehensive statutes of general applicability. Id.

Most of these state public collective bargaining statutes adopted language similar to the NLRA model, which expansively authorized mandatory collective bargaining over wages, hours, and "other terms and conditions of employment." Many state public collective bargaining statutes, however, also included management rights provisions designed to reserve certain managerial and policy decisions. The goal seems to have been to allow public employees to collectively bargain to improve their economic well-being without unduly sacrificing the ability of politically responsible officials to manage public bodies and establish the broad contours of public policy.

Iowa lagged behind in the enactment of public employment collective bargaining legislation. At first, public employees pursued collective bargaining through exclusive employee representatives without express legislative authorization. In State Board of Regents v. United Packing House Food & Allied Workers, Local No. 1258, 175 N.W.2d 110 (Iowa 1970), this court held that public agencies did not have the power to agree to exclusive representation by an employee organization for collective bargaining without legislative authorization. 175 N.W.2d at 113-14. Four years later in 1974, the Iowa legislature enacted PERA. 1974 Iowa Acts ch. 1095, § 9.

In PERA, the legislature declined to adopt the NLRA model on the question of what subject matters are mandatory subjects of collective bargaining. Instead of incorporating the expansive NLRA language mandating collective bargaining over wages, hours and "other terms and conditions of employment," the Iowa legislature instead specifically enumerated seventeen topics subject to collective bargaining. Iowa Code § 20.9.

These seventeen topics are sometimes referred to as the "laundry list" of mandatory subjects of collective bargaining. Specifically, section 20.9 provides that the public employer and the employee organization "shall" negotiate in good faith with respect to "wages, hours, vacations, insurance, holidays, leaves of absence, shift differentials, overtime compensation, supplemental pay, seniority, transfer procedures, job classifications, health and safety matters, evaluation procedures, procedures for staff reduction, in-service training, and other matters mutually agreed upon." Id.

Like many other states, the Iowa legislature also included a management rights provision in the statute. Section 20.7 of PERA states that public employers shall have "the exclusive power, duty, and right to," among other things, "[d]irect the work of its public employees," "[m]aintain the efficiency of governmental operations," and "[d]etermine and implement methods, means, assignments and personnel by which the public employer's operations are to be conducted." Id. § 20.7. Thus, Iowa's PERA contains both a provision establishing mandatory collective bargaining on specified matters and a contrapuntal management rights clause preserving exclusive, public management powers in traditional areas.

This court has recognized that section 20.9 establishes two classes of collective bargaining proposals: mandatory and permissive. City of Fort Dodge v. Iowa Pub. Employment Relations Bd., 275 N.W.2d 393, 395 (Iowa 1979). Mandatory subjects are those matters upon which the public employer is required to engage in bargaining. Id. Permissive subjects are those that the legislature did not specifically list in section 20.9, but are matters upon which both the public employer and the employee organization simply agree to...