Wayne Cnty. v. Afscme Local 3317

• Decision Date: 28 August 2018
• Docket Number: No. 339493,339493
• Citation: 928 N.W.2d 709,325 Mich.App. 614
• Parties: WAYNE COUNTY, Respondent-Appellant, v. AFSCME LOCAL 3317, Petitioner-Appellee.
• Court: Court of Appeal of Michigan — District of US

325 Mich.App. 614

928 N.W.2d 709

WAYNE COUNTY, Respondent-Appellant,

v.AFSCME LOCAL 3317, Petitioner-Appellee.

No. 339493

Court of Appeals of Michigan.

Submitted August 8, 2018, at Lansing.

Decided August 28, 2018, at 9:00 a.m.

Bruce A. Campbell, Assistant Corporation Counsel, for Wayne County.

Jamil Akhtar, PC (by Jamil Akhtar ) for AFSCME Local 3317.

Before: Murphy, P.J., and Gleicher and Letica, JJ.

Murphy, P.J.

In the midst of a financial emergency, respondent, Wayne County (the County), entered into a consent agreement with Michigan’s treasurer (the State Treasurer) under the Local Financial Stability and Choice Act (Act 436), MCL 141.1541 et seq. , as enacted by 2012 PA 436. Pursuant to the consent agreement, the County was temporarily given a reprieve from being subject to mandatory collective bargaining under the public employment relations act (PERA), MCL 423.201 et seq. , for a period that will ultimately span approximately three years, ending October 1, 2018. The County’s position is that the Michigan Employment Relations Commission (MERC) did not and does not have subject-matter jurisdiction to adjudicate unfair labor practice (ULP) charges against the County during the three-year period. Petitioner, AFSCME Local 3317 (the Union), filed various ULP charges with MERC against the County, all of which, while filed at different times and pertaining to different conduct occurring before and during the three-year period, were pending after the County’s obligation to engage in collective bargaining ceased. MERC ruled that the administrative law judge (ALJ) hearing the ULP charges has subject-matter jurisdiction to enter recommended orders on the charges. MERC further concluded that if a particular ULP charge concerned a failure to collectively bargain during the time frame when the County had no obligation to bargain, the proper remedy would be dismissal for failure to state a claim, which is a matter for the ALJ to decide in the first instance, with MERC becoming involved only upon the filing of an exception. The County appeals MERC’s decision regarding subject-matter jurisdiction. We hold that nothing in the language of Act 436 reveals a legislative intent to divest MERC of its subject-matter jurisdiction to hear and resolve ULP charges during the period in which a local government is not subject to the requirement that it participate in collective bargaining. Accordingly, we affirm.

Because an understanding of the statutes implicated in this case is necessary to understand the history and background of the litigation between the parties, we begin our discussion by examining the relevant statutory schemes.

I. PUBLIC EMPLOYMENT RELATIONS ACT (PERA)

"The legislature may enact laws providing for the resolution of disputes concerning public employees, except those in the state classified civil service." Const. 1963, art. 4, § 48. Our Legislature enacted PERA, and "[t]he supremacy of the provisions of PERA is predicated on the Constitution ... and the apparent legislative intent that ... PERA be the governing law for public employee labor relations." Rockwell v. Crestwood Sch. Dist. Bd. of Ed. , 393 Mich. 616, 630, 227 N.W.2d 736 (1975) ; see also Bank v. Mich. Ed. Ass’n-NEA , 315 Mich. App. 496, 500, 892 N.W.2d 1 (2016) ("PERA governs public-sector labor relations...."). PERA drastically altered labor relations in Michigan with respect to public employees, reflecting legislative goals to protect public employees against ULPs and to provide remedial access to a state-level administrative agency with specialized expertise in ULPs. Macomb Co. v. AFSCME Council 25 Locals 411 & 893 , 494 Mich. 65, 78, 833 N.W.2d 225 (2013).

Section 10 of PERA, MCL 423.210, sets forth a list of prohibitions and conditions related to public employment,¹ and "[v]iolations of the provisions of section 10 shall be deemed to be unfair labor practices remediable by [MERC]," MCL 423.216. See St. Clair Intermediate Sch. Dist. v. Intermediate Ed. Ass’n/Mich. Ed. Ass’n , 458 Mich. 540, 550, 581 NW2d 707 (1998) (noting that violations of MCL 423.210 constitute ULPs under MCL 423.216 ). MCL 423.216 vests "MERC with exclusive jurisdiction over unfair labor practices." St. Clair Intermediate , 458 Mich. at 550, 581 N.W.2d 707 (emphasis added); see also Detroit Bd. of Ed. v. Parks , 417 Mich. 268, 283, 335 N.W.2d 641 (1983) ; Lamphere Schs. v. Lamphere Federation of Teachers , 400 Mich. 104, 118, 252 N.W.2d 818 (1977) ; Rockwell , 393 Mich. at 630, 227 N.W.2d 736 ; Bank , 315 Mich. App. at 500, 892 N.W.2d 1.

The litigation between the parties in MERC implicated § 15(1) of PERA, MCL 423.215(1), which provides as follows:

A public employer shall bargain collectively with the representatives of its employees as described in section 11 and may make and enter into collective bargaining agreements with those representatives. Except as otherwise provided in this section, for the purposes of this section, to bargain collectively is to perform the mutual obligation of the employer and the representative of the employees to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment, or to negotiate an agreement, or any question arising under the agreement, and to execute a written contract, ordinance, or resolution incorporating any agreement reached if requested by either party, but this obligation does not compel either party to agree to a proposal or make a concession.

For purposes of § 15(1) of PERA, "[a]fter the parties have met in good faith and bargained over the mandatory subjects placed upon the bargaining table, they have satisfied their statutory duty." Detroit Police Officers Ass’n v. Detroit , 391 Mich. 44, 55, 214 N.W.2d 803 (1974).

Accordingly, absent contemplation of Act 436, the County has a mandatory obligation to bargain collectively with unions representing county employees, doing so in good faith with respect to the terms and conditions of employment, and any ULP charge falls within the exclusive jurisdiction of MERC.

II. LOCAL FINANCIAL STABILITY AND CHOICE ACT (ACT 436)

Act 436 was designed to address financial emergencies involving local governmental units and to provide fiscal stability and accountability for those entities. MCL 141.1543. Under Act 436, the State Treasurer, acting as the "state financial authority" for "municipal governments," which by statutory definition include counties,² may conduct, under certain enumerated circumstances, preliminary reviews in order to help determine whether a county is experiencing probable financial stress. MCL 141.1544(1) ; MCL 141.1542(n) and (u)(i). The preliminary-review process entails written notification to a county before the review is commenced, an interim and final report by the State Treasurer, and then a determination by a "local emergency financial assistance loan board" whether "probable financial stress exists for the" county. MCL 141.1544(3).

If probable financial stress is found, Michigan’s governor (the Governor) is required to appoint a "review team" for the county. MCL 141.1544(4). The review team then examines the county’s financial condition and prepares a written report, which must include statutorily specified information and state whether a "financial emergency" exists in the county. MCL 141.1545(1) to (4). After receiving the report and taking certain designated procedural steps, the Governor must determine whether a financial emergency exists in the county. MCL 141.1546(1) and (2).

If the Governor determines that a financial emergency exists, a county may appeal that decision in the Court of Claims, but only when 2/3 of the members of the county’s governing body adopt a resolution to appeal. MCL 141.1546(3). A county has various options to consider when faced with a determination that a financial emergency exists in the county, including, as relevant here, the option of entering into a "consent agreement." MCL 141.1547(1)(a). MCL 141.1548 provides details with respect to consent agreements, and Subsection (11), MCL 141.1548(11), states:

Unless the state treasurer determines otherwise, beginning 30 days after the date a local government enters into a consent agreement under this act, that local government is not subject to section 15(1) of 1947 PA 336, MCL 423.215 [that is, mandatory collective bargaining], for the remaining term of the consent agreement.

A reciprocal provision in PERA is MCL 423.215(9), which provides that "[a] unit of local government that enters into a consent agreement under the local financial stability and choice act ... is not subject to subsection (1) [mandatory collective bargaining] for the term of the consent agreement, as provided in the local financial stability and choice act ...."

III. CONSENT AGREEMENT

In light of severe financial distress, the County initiated and participated in proceedings under Act 436. And on August 21, 2015, upon the determination that a financial emergency existed in the County, the County entered into a consent agreement with the State Treasurer.³ Paragraph 2 of the consent agreement provided, in pertinent part:

(b) Consistent with [ MCL 141.1548(11) ] of Act 436, beginning 30 days after the effective date of this agreement the County is not subject to section 15(1) of [PERA], MCL 423.215, for the remaining term of this agreement.

(c) Beginning 30 days after the effective date of this agreement, if a collective bargaining agreement has expired, the County Executive may exercise the powers prescribed for emergency managers under [ MCL 141.1552(1)(ee) ] of Act 436 to impose by order matters relating to wages, hours, and other terms and conditions of employment, whether economic or noneconomic, for County employees previously covered by the expired collective bargaining agreement.

Taking into consideration the 30-day window in the consent agreement, the County’s PERA obligation to engage in collective bargaining with the Union was suspended starting September 20,...