City of Edmonds, Decision 8798-A (PECB, 2005)

Cline & Associates, by George E. Merker, Attorney at Law, for the union.

Ogden Murphy Wallace, by W. Scott Snyder, Attorney at Law, for the employer.

This case comes before the Commission on a timely appeal filed by the Edmonds Police Officers Association (union), seeking to overturn Findings of Fact, Conclusions of Law, and Order issued by Examiner Robin A. Romeo. The Examiner dismissed union complaints concerning an alleged unilateral change in the employee prescrip­tion co-payments for brand-name drugs.[1] The City of Edmonds (employer) supports the Examiner’s order. We affirm.

BACKGROUND

The union is the exclusive bargaining representative of two bargaining units. The first is a unit of nonsupervisory commissioned law enforcement officers. The second is a unit of non-supervisory noncommissioned law enforcement support service employees.

On April 30, 2003, the union filed complaints on behalf of both bargaining units, alleging identical facts and theories against the employer. Specifically, the union alleged that the employer unilaterally changed the employee co-payments on prescriptions for brand-name drugs. The complaints were reviewed under WAC 391-45-110, and a preliminary ruling issued on December 31, 2003, found a cause of action to exist under RCW 41.56.140(1) and (4). The Examiner held a hearing on the consolidated cases on June 8 and 9, 2004. On December 10, 2004, she dismissed the union’s complaints based on findings of a waiver by inaction and a waiver by contract. The union appealed the dismissals on December 30, 2004.

ISSUE PRESENTED

The union challenges several of the Examiner’s findings and conclusions, but the only issue we need to address is:

Did the Examiner correctly decide that the union failed to request bargaining (and thus waived its bargaining rights by inaction) with regard to the change in employee co-payments for brand-name drugs?

We find substantial evidence in the record to support the Examiner’s findings and conclusions that the union failed to timely request bargaining over the change in co-payments for brand-name drugs, and thus waived its bargaining rights by inaction.[2]

ANALYSIS

Standard of Review

This Commission does not conduct a de novo review of examiner decisions in unfair labor practice proceedings under Chapter 391‑45 WAC. Rather, we review the findings of fact to determine whether they are supported by substantial evidence and, if so, whether those findings of fact support the conclusions of law and order. Cowlitz County, Decision 7007‑A (PECB, 2000). Substantial evidence exists if the record contains competent, relevant, and substantive evidence which, if accepted as true, would, within the bounds of reason, directly or circumstantially support the challenged finding or findings. Ballinger v. Department of Social and Health Services, 104 Wn.2d 323 (1985). The Commission attaches consider­able weight to the factual findings and inferences made by its examiners. Cowlitz County, Decision 7210‑A (PECB, 2001).

Unchallenged Findings of Fact are Verities on Appeal

Unchallenged findings of fact are considered verities on appeal.[3] WAC 391‑45‑350(3) requires that a notice of appeal identify, in separate numbered paragraphs, the specific rulings, findings of fact, conclusions of law, or orders claimed to be in error.

In this case, the union’s appeal only asserts that paragraphs 4, 8 and 9 of the findings of fact, paragraphs 3, 4 and 5 of the conclusions of law, and the order of dismissal were in error.

The Bargaining Obligation

The parties in this case bargain collectively under the Public Employees' Collective Bargaining Act, Chapter 41.56 RCW. The duty to bargain is defined in RCW 41.56.030(4), as follows:

"Collective bargaining" means . . . to meet at reasonable times, to confer and negotiate in good faith, and to execute a written agreement with respect to grievance procedures and collective negotiations on personnel matters, including wages, hours and working conditions . . . .

That duty is enforced on employers through RCW 41.56.140(4) and unfair labor practice proceedings under RCW 41.56.160 and Chapter 391‑45 WAC. Where an unfair labor practice is alleged, the complainant has the burden of proof. WAC 391‑45‑270(1)(a). The burden to establish affirmative defenses lies with the party asserting the defense. WAC 391‑45‑270(1)(b).

The parties’ collective bargaining obligations require that the status quo be maintained regarding all mandatory subjects of bargaining, except where such changes are made in conformity with the collective bargaining obligation or the terms of a collective bargaining agreement. City of Yakima, Decision 3501‑A (PECB, 1998), aff'd, 117 Wn.2d 655 (1991); Spokane County Fire District 8, Decision 3661‑A (PECB, 1991).

The duty to bargain requires a party proposing a change involving a mandatory subject of collective bargaining to: (1) give notice to the other party; and (2) provide opportunity to request bargaining on the subject; and (3) bargain in good faith, if requested, and reach an agreement or impasse before implementing the change. See, for example, South Kitsap School District, Decision 472 (PECB, 1978) (citing Fibreboard Paper Products Corp. v. NLRB, 379 U.S. 203 (1964); City of Vancouver, Decision 808 (PECB, 1980).

The Commission has long recognized health benefits as mandatory subjects of bargaining. Spokane County, Decision 2167‑A (PECB, 1985). Prescription drug co‑payments fall within the umbrella of health benefits, and are mandatory subjects of bargaining. City of Kirkland, Decision 8822 (PECB, 2004).

Waiver by Inaction and Fait Accompli

The Examiner found the union waived its bargaining rights by inaction. The union claims that the decision to implement had already been made when the union received notice, so that the union was presented with a fait accompli and thus had no duty to request bargaining over the prescription co-payment issue. The employer supports the Examiner’s finding that the union had notice of the change and waived its right to bargain over the issue by inaction. We affirm the Examiner’s ruling.

The "waiver by inaction" defense is apt where appropriate notice of a proposed change has been given, and the party receiving notice does not request bargaining in a timely manner. See City of Yakima, Decision 1124-A (PECB, 1981) (union responded to notice of a bargaining opportunity with a public information campaign, but never requested bargaining); Lake Washington Technical College, Decision 4721‑A (PECB, 1995) (union filed a grievance under a collective bargaining agreement, but never requested bargaining). The key ingredient in finding a waiver by inaction by a union is:

[A] finding that the employer gave adequate notice to the union. Notice must be given sufficiently in advance of the actual implementation of a change to allow a reason­able opportunity for bargaining between the parties. If the employer's action has already occurred when the union is given notice, the notice would not be considered timely and the union will be excused from the need to demand bargaining on a fait accompli.

Washington Public Power Supply System, Decision 6058‑A (PECB, 1998) (footnotes omitted).

Here, the union had ample notice of the change, and the union’s notice of appeal does not assert that the Examiner’s findings of fact dealing with notice of the co-pay change were in error.[4] The union's notice of appeal challenged other findings of fact as error, but only asserted that findings of fact 6 and 7 are "correct but incomplete and materially misleading." Because we find that substantial evidence supports findings of fact 4, 8 and 9, we treat findings of fact 6 and 7 as verities on appeal and we decline to reach the “misleading” claim as to them.

The union claims the employer had “lulled” and “discouraged” it from requesting bargaining over the co-pay issue, by saying the employer would discuss the issue further with the Association of Washington Cities (AWC). The union does not claim it ever asked, or that the employer ever refused, to bargain. Instead, the union assumed it had been presented with an illegal fait accompli, and filed the unfair labor practice complaint now before us. As to this assertion, the union slept on its rights at its own peril.

The union also argues that the first two notices (the e-mail in October 2002, and the letter from the AWC in December 2002), were ineffective. Because those notices were not directly addressed to the union, the union claims there is no evidence that the union itself (as distinguished from the bargaining unit employees) was given notice of the proposed change sufficiently in advance of its implementation. We have previously discussed the issue of formal notice, stating:

Formal notice is not required. In the absence of formal notice, however, it must be shown that the union had actual, timely knowledge of the contemplated change. The Commission's focus should be on the circumstances as a whole, and on whether an opportunity for meaningful bargaining existed. If the union is adequately notified of a contemplated change at a time when there is still an opportunity for bargaining which could influence the employer's planned course of action, and the employer's behavior does not seem inconsistent with a willingness to bargain if requested, then a fait accompli should not be found. . . .

Washington Public Power Supply System, Decision 6058‑A (PECB, 1998) (footnotes omitted). Here, finding of fact 6 shows that the employer and the AWC both notified employees of the planned co-pay changes, while finding of fact 7 shows the union president had actual notice in December of 2002. The Examiner properly found, taking the circumstances as a whole, that the union had notice of the plan to increase the prescription co‑pay prior to the implemen­tation of the new co-pays.

Having found that the union waived its bargaining rights by its own inaction, the Examiner properly DISMISSED the union’s complaint.

NOW, THEREFORE, it is

ORDERED

The Findings of Fact, Conclusions of Law, and Order issued in the above-captioned case by Examiner Robin A. Romeo are affirmed and adopted as the Findings of Fact, Conclusions of Law, and Order Of the Commission.

Issued at Olympia, Washington, the 14^th day of November, 2005.

PUBLIC EMPLOYMENT RELATIONS COMMISSION

[SIGNED]

MARILYN GLENN SAYAN, Chairperson

[SIGNED]

PAMELA G. BRADBURN, Commissioner

[SIGNED]

DOUGLAS G. MOONEY, Commissioner