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STATE OF WASHINGTON BEFORE THE PUBLIC EMPLOYMENT RELATIONS COMMISSION |
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INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS, LOCAL 1445, |
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Complainant, |
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vs. |
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Respondent |
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Tedesco and Tedesco, by Michael J. Tedesco, attorney at law, appeared on behalf of complainant at the hearing, with Rosemarie Tedesco, attorney at law, on the brief before the examiner. Durning, Webster and Lonnquist, by Judith A. Lonnguist, attorney at law, on the petition for review.
Davis, Wright, Todd, Riese and Jones, by Mark A. Hutcheson, attorney at law, appeared on behalf of respondent at the hearing, with Carol S. Gown, attorney at law, on the briefs.
The examiner made findings of fact, drew conclusions of law that the city had failed to bargain in good faith as required by RCW 41.56.140(4) and violated RCW 41.56.430, and entered a cease and desist order. The city petitioned for review on a number of grounds, some of a clerical nature and others substantive, and asks dismissal of the complaint. The union cross-petitioned for review seeking an award of attorneys' fees.
At the outset we compliment both parties and, their legal counsel for their expeditious, complete, professional and courteous presentation of the case. A detailed stipulation of facts with fourteen exhibits attached, shortened the hearing. The courteous and professional representation of their clients by counsel at the hearing, despite the emotionalism which has characterized the parties' statements in the press and behavior toward each other, resulted in a clear record presenting the facts without significant conflict in the testimony. The briefs from both sides were succinct, thorough and very helpful.
Generally, we agree with the examiner. Our emphasis is a little different. We begin at the beginning.
Kelso is a city of eleven thousand people situated in Cowlitz County, of southwestern Washington. It has a council-manager form of government. The city council is elected by the people. It appoints one of its members to serve as mayor. The council is the policy-making body for the city. The council hires a city manager who is the chief administrative officer.
For a number of years the city's firefighters have been represented for collective bargaining by International Association of Fire Fighters, Local 1445, the complainant in this case. Other departments of the city have employees represented by other labor organizations.
In 1982, the parties had a collective bargaining agreement due to expire December 31, 1983. The agreement with Local 1445 provided for an 8% wage increase to take effect in January, 1983 and for certain "step increases". These step increases applied only to new hires, who went to work at 85% of base pay and thereafter received 5% increments until they reached 100% base pay.
Deeming itself financially distressed, the city asked the exclusive bargaining representatives of its employees to forego wage increases, including "step increases" scheduled to take effect in 1983. In other words, the city requested a wage freeze for 1983. All exclusive bargaining representatives except Local 1445 complied. Local 1445 refused to freeze employees at wage rates below what had been agreed on as base pay. Local 1445 offered to defer the 8% increase as long as eleven months if the city would guarantee that there would be no lay‑offs during that period. The city declined to give such a guarantee, and the 8% increase took effect January 1, 1983.
The fire chief became eligible to retire and did retire effective March 1, 1983. He was not replaced. Instead, the city designated the chief of police, Tony Stoutt, as Public Safety Director, and placed him in charge of both police and fire departments. Mr. Stoutt disclaimed any training or experience in fire suppression or fire prevention. He administered the fire department through the assistant fire chief. (In the course of events he demoted the assistant fire chief, who filed a grievance over the demotion which is pending before an arbitrator. The Civil Service Commission sustained the demotion).
The Public Safety Director employed some unidentified consultants to advise him about the fire department. No report by these people was offered in evidence. Mr. Stoutt testified, without objection, that they suggested four alternatives:
1. Retain the fire department and bolster it with volunteers.
2. Consider a merger with Cowlitz County Fire District #2.
3. Consider a merger with the Longview fire department.
4. Get out of the firefighting business and hire a private firefighting concern.
The city had and has statutory authority to adopt any of these alternatives. The consultants recommended adoption of the second alternative. In August, 1983, Mr. Stoutt recommended the first. The city council adopted Stoutt's recommendation and implementation was undertaken. At some time in 1983, not clear in the record, ten volunteer firemen were recruited and wholly or partially trained. Local 1445 apparently was less than enthusiastic about the volunteers.
Numerous short-comings in the Kelso fire department had been pointed out by the consultants. The fire station was old, outmoded, in need of major repairs and badly located. A fire chief, fire marshall and fire inspector were all desirable. Air packs (breathing equipment) needed renovation; some hose was worn out and needed replacement. An additional fire engine was desirable. The three engines in place were in reasonable working condition. Mr. Stoutt had the air packs brought up to standard. Mr. Stoutt did not think the city needed a new fire truck. The Commission considers hose to be equipment subject to normal wear and tear and its replacement as routine maintenance.
Much has been made of the desirability of an aid car to respond to medical emergencies. Kelso has none. A bond issue to provide such service had been defeated by the electorate in 1979; but the area voting on the matter included much of the county beyond Kelso.
Alas, time and tide wait for no man. In November, 1983, Kelso had a municipal election. The councilman designated as mayor was up for reelection and one firefighter, a member of Local 1445, actively championed the mayor's opponent. About ten days before the election, firefighter Joe Brunelle heard a rumor to the effect that the city's "debt" of$175,000 (the Commission suspects that "deficit" would have been a better word) was going to come out of the fire department budget because Local 1445 was backing the mayors opponent. Up to that time the local had not done so.
Five days before the election, a formal meeting was held to continue negotiations on the 1984 contract. Mr. Brunelle testified:
But what took place when we had a formal negotiation meeting, at that meeting out of nowhere the Mayor stands up and says, well we've got to take a look at this, we are going to take$175,000 out of your budget, which is precisely the figure I had heard ten days to two weeks before.... He jumps up and makes this statement. At that meeting I asked him, does that mean the entire city debt is coming out of our budget, and he said, that's correct.
Immediately thereafter, Local 1445 had a meeting and voted "no confidence" in Public Safety Director Stoutt because Mr. Stoutt had sat by in the negotiation session and said nothing on behalf of the fire department. Local 1445 then vigorously campaigned for the mayor's challenger, picketing the city hall and fire station with informational pickets. The mayor was re-elected.
The fire department budget was cut about $100,000 for 1984. Other departments sustained cuts of from $6,000 to $10,000. Some departments, including the police department, received small increases. The ten volunteer firemen quit in a body; exactly why is not clear from the record. No volunteer fireman was called to testify. Neither the mayor nor any member of the city council testified. A bitter controversy over the fire department erupted in the press.
Not surprisingly, the parties reached an impasse over the 1984 bargaining agreement. Mediation was unsuccessful in resolving the dispute and on May 10, 1984 the matter was certified for interest arbitration under RCW 41.56.430, et seq.
By letter dated December 15, 1983,'Fire District #2 canceled its automatic response agreement with Kelso effective December 31, 1984, that agreement calling for a year's notice of termination. Personnel in the fire department was cut from seventeen to eleven. As a result, only one fire engine could be dispatched to respond to a fire, staffed by, at the most, three firefighters, and at worst, two. The volunteers would have relieve d this situation. In April 1984 the City of Longview canceled its automatic response agreement with Kelso. It seems that the reduced manning of the Kelso fire engines adversely affected the fire insurance rates on property dependent wholly or partially on Kelso for fire suppression.
On June 29, 1984, following the conclusion of mediation and certification of the bargaining dispute for interest arbitration, the city announced publicly that it was considering an intergovernmental agreement with Cowlitz County Fire District #2 to transfer its fire equipment to the District, go out of the fire fighting business and purchase that service from the District. For such service the city would pay the District 71 of the property taxes levied and collected from the people of Kelso, with a formula for limited increases in subsequent years. Of course, as a result of this arrangement, the Kelso fire department represented by Local 1445 would be extinguished. Suffice it to say that the deficiencies in fire suppression and prevention service rendered by the city of Kelso would be amply filled. The benefits to the city are undeniable, at least as projected.
Local 1445 promptly requested bargaining on both the decision to enter into the arrangement with the District and on the effects of the arrangement on the employees represented by Local 1445. The city took the position that its decision was not a mandatory subject of collective bargaining. Nevertheless several meeting were held in which the decision was discussed without any agreement being reached. Local 1445 proposed that the city float a bond issue to finance improvements to the fire department. The city investigated the feasibility of that alternative, and was advised that such a bond issue had little chance for passage by the voters. The local then proposed that the city investigate an arrangement with the Longview fire department. The city did, but was told that Longview was not interested. On October 9, 1984 Local 1445 delivered to the city a written offer for a collective bargaining agreement making major concessions. The offer was summarily rejected by the city and that same evening the intergovernmental agreement with the District was signed.
Contracting out work, "albeit for economic reasons, is a matter within the statutory phrase 'other terms and conditions of employment', and is a mandatory subject of collective bargaining within the meaning of Section 8(a) (5) of the National Labor Relations Act. " Fibreboard Corp. v. NLRB, 379 U. S. 203, 208 (1964), quoting Town. & Country Mfg. Co., 136 NLRB 1022, 1027,enflcld., 316 F. 2d 846 (CA‑5 1963). Washington law and precedent under Chapter 41.. 56 RCW is similar. City of Kennewick, Decision 482‑B (PECB, 1978); City of Vancouver, Decision 808 (PECB, 1980).
The intergovernmental agreement contracted out the work being performed by members of the bargaining unit to District #2. The city agreed to turn its firefighting equipment over to the district. The district is to provide fire suppression service to the city (or people who live there) with its employees. Until its new fire station is built, the district will make do with the city's existing fire station. The city will pay the district 71% of the property taxes levied and collected within the city, a dollar amount roughly equivalent to that allocated by the city for fire suppression in its 1984 budget. The district's volunteer firefighting force is expected to be augmented by some paid firefighters. Under the intergovernmental agreement, the city will get more for its money than it would otherwise. It will get response by a bigger force, medical emergency service, a fire marshall and fire inspector, automatic response agreement (as formerly) with Longview. The intergovernmental agreement is terminable at will.
The city contends that the Fibreboard rationale should not apply to managerial decisions, unrelated to labor costs, concerning the basic scope and nature of the city enterprise. The facts, however, undermine the city's position. In August, 1983, an arrangement with Fire District #2 was considered and rejected by the city. The city itself had decided against having a fire chief in 1983. The inadequate condition of its fire department was largely a result of its deliberate slashing of the budget for the fire department, perhaps as a political reprisal. In effect, the city precipitated a crisis which is ostensibly solved by a business decision incidentally will wipe out the bargaining unit. Counsel for Local 1445 it as setting up a straw man and knocking him down.
The city relies on the concurring opinion of Justice Stewart to limit the Fibreboard holding. Justice Stewart, however, said this:
The question remains whether this particular kind of subcontracting decision comes within the employer's duty to bargain. On the facts of this case, I join the Court's judgment, because all that is involved is the substitution of one group of workers for another to perform the same task in the same plant under the ultimate control of the same employer. The question whether the employer may discharge one group of workers and substitute another for them is closely analogous to many other situations within the traditional framework of collective bargaining. Compulsory retirement, layoffs according to seniority, assignment of work among potentially eligible groups within the plant ‑‑ all involve similar questions of discharge and work assignment, and all have been recognized as subjects of compulsory collective bargaining. p. 224.
That is what we are talking about here. The city will continue to provide its inhabitants with fire suppression services paid for out of taxes.
The city relies heavily on First National Maintenance Corp. v. NLRB, 452 U. S. 666 (1981), contending that it is not contracting out work, but going out of the firefighting business in the exercise of its entrepreneurial rights. In First National Maintenance, a major customer canceled its contract with the result that the employees who had serviced that contract had nothing to do and were terminated. The Supreme Court held:
We conclude that the harm likely to be done to an employer's need to operate freely in deciding whether to shut down part of its business purely for economic reasons outweighs the incremental benefit that might be gained through the union's participation in making the decision, and we hold that the decision itself is not part of (Section) 8(d)'s "terms and conditions," see n.12, supra, over which Congress has mandated bargaining. p. 686
Where, however, no part of the city's operations are being terminated. They are merely being performed by somebody else performing (in light of the "terminable at will" contract) under the city's control. The NLRB cases cited by the city as following and applying First National Maintenance all involve an actual closure of a facility and change of operations.
We also note that First National Maintenance was careful to limit the scope of the decision so as to not interfere with the viability of Fibreboard type of sub‑contracting situations. The Court distinguished partial closures from subcontracting because, in balancing the interests of labor and management with respect to partial closures, it found more significant the management need for:
... speed, flexibility, and secrecy in meeting business opportunities and exigencies. It [business] may face significant tax or securities consequences that hinge on confidentiality, the timing of plant closing, or a reorganization of the corporate structure. The publicity incident to the normal process of bargaining may injure the possibility of a successful transition or increase the economic damage to the business. The employer also may have no feasible alternative to the closing, and even good‑faith bargaining over it may be both futile and cause the employer additional loss.
Id., at 682‑3.
Most public sector institutions do not exist to compete with private enterprise, and therefore the above considerations favoring management are not relevant. Those considerations certainly are irrelevant here, where secrecy and timing were not significant, and tax and securities consequences nonexistent. Moreover, it cannot be said that additional bargaining would be futile, since the union appeared willing to negotiate significant concessions which the city rejected.
Aside from the above considerations, we find particularly important the posture of this case with respect to the 1984 bargaining agreement impasse.
RCW 41.56.430 provides:
The intent and purpose of this 1973 amendatory act is to recognize that there exists a public policy in the state of Washington against strikes by uniformed personnel as a means of settling their labor disputes; that the uninterrupted and dedicated service of these classes of employees is vital to the welfare and public safety of the state of Washington; that to promote such dedicated and uninterrupted public service there should exist an effective and adequate alternative means of settling disputes.
The alternative means adopted by the legislature is binding interest arbitration. RCW 41.56.430 through. 490.
If such an alternative means of settling such disputes is to work, both parties must be able to rest assured that it will be allowed to work as the legislature has directed. To that end, RCW 41.56.470 provided:
During the pendency of the proceedings before the arbitration panel, existing wages, hours and other conditions of employment shall not be changed by action of either party without the consent of the other but a party may so consent without prejudice to his rights or position under this 1973 amendatory act.
We find that the policy considerations attendant on the prohibitions contained in RCW 41‑56. 470 compel the conclusion that the contracting out of bargaining unit work during the pendency of interest arbitration proceedings violates RCW 41.56.470 as well as RCW 41.56.140(4).
In First National Maintenance Corp. v. NLRB, supra, at page 678 in footnote 17 the court commented on the duty in the private sector to bargain in good faith in these significant words:
The employer has no obligation to abandon its intentions or to agree with union proposals. On proper subjects, it must meet with the union, provide information necessary to the union's understanding of the problem, and in good faith consider any proposals the union advances. In concluding to reject a union's position as to a mandatory subject, however') it must face the union's possible use of strike‑power. See generally Fleming, The Obligation to Bargain in Good Faith, 47 Va. L. Rev. 988 (1961). P. 678‑679.
The underscored language from the footnote points out the difference between bargaining in the private and public sectors. In the private sector, the union may invoke its strike power. In the public sector it may not. Under RCW 41.56.100 the parties may, if they so desire, invoke the offices of this commission. In the case of uniformed employees the parties must proceed to mediation and, if necessary, to interest arbitration in the event of an impasse. This is the balance which the Legislature has struck between municipal and county statutory authority and the state policy of governing labor relations through collective bargaining to maintain continuity of essential services. Therefore, it is important to maintain this balance by avoiding an overly narrow definition of the scope of bargaining in this case.
In its Memorandum in Opposition to the Union's Cross Petition for Review, the city contends that it did bargain to impasse. Although some bargaining took place, the fact that the city simply rejected, rather than bargained over Local 1445's offer making significant concessions negates a finding that bargaining to impasse took place. In any event, if bargaining occurs but the parties fail to reach agreement, the issue must be submitted to interest arbitration, and the city apparently concedes this point in its brief.
The city contends that Local 1445 waived any rights it may have had to bargain about the effects of the intergovernmental agreement on the employees. There is no evidence in the record of any such waiver having been knowingly made.
We will not award attorneys' fees.
FINDINGS OF FACT
1. The City of Kelso is a municipality located in Cowlitz County and is a "public employer" within the meaning of RCW 41.56.030(1).
2. International Association of Firefighters, Local 1445 is a "bargaining representative" within the meaning of RCW 41.56.030(3). The union represents certain uniformed employees employed in the Kelso Fire Department. The city and union have a bargaining relationship predating 1982.
3. Cowlitz County Fire Protection District No. 2 is a political subdivision of the State of Washington organized under terms of Title 52 RCW to provide firefighting services for residents in unincorporated Cowlitz County.
4. The union and the city were parties to a collective bargaining agreement which covered calendar year 1983.
5. During 1982 the city considered itself distressed financially and asked the exclusive bargaining representatives of its employees to forego wage increases scheduled for 1983. All but IAFF Local 1445 agreed. After negotiating about deferral of an 8% increase in exchange for a guarantee against layoffs, the parties failed to agree and the pay increases for firefighters took effect as scheduled.
6. Apart from the loss of firefighters, the fire chief position was eliminated in 1983. Supervision of the fire department was transferred to Police Chief Tony Stoutt, who was named "Public Safety Director".
7. While the parties were negotiating a 1984 agreement, a municipal election was held. At a negotiating meeting a few days before the election, the mayor threatened to take the city's entire "debt" of $175,000 out of the fire department's 1984 budget. The union responded to the threat by campaigning vigorously for the mayor's opponent. The mayor was re‑elected.
8. The city's 1984 budget provided cuts for some departments ranging from $6,000 ‑ $10,000. Some departments, including the police department, received slight increases. The fire department budget was cut about $100,000. The cut forced the layoff of four firefighters.
9. On December 15, 1983, the fire district notified the city that it was terminating a fire service agreement in effect for a number of years. Loss of the mutual service agreement meant a lack of secondary support from the fire district for fires occurring in the city.
10. During the latter part of 1983, and continuing at all pertinent times in 1984, the city and the union were engaged in collective bargaining negotiations to reach agreement on a replacement contract for the agreement that expired December 31, 1983. The parties were unable to reach agreement, and the matter is currently pending in the interest arbitration procedures set forth in RCW 41.56.430 et seq., having been certified for interest arbitration on May 10, 1984 in PERC case no. 52481‑84‑121.
11. On June 29,, 1984, the Kelso City Council issued a press release stating that the council would consider a resolution which would allow the city to enter negotiations with the fire district over supplying fire services to city residents.
12. On July 2, 1984, Mark Hutcheson, the city's labor attorney, contacted Michael Tedesco, union counsel, informing Tedesco that the city was considering discontinuation of the fire department's operation.
13. On July 3, 1984, the city council formally approved the resolution allowing negotiations between the city and the fire district. Tedesco was present at the council meeting and expressed union concerns about the proposal.
14. On July 5, 1984, the fire district passed a resolution allowing its representative to begin negotiations with the city on the fire service issue.
15. On July 9, 1984, Tedesco sent Hutcheson a letter demanding negotiations on the decision and effects of the city's actions.
16. On July 25, 1984, Kelso City Manager Jay Haggard sent union president Larry Hendrickson a letter stating that the city was not subcontracting but rather "going out of business" with respect to the fire department and that such a decision was not mandatory for purposes of collective bargaining. Haggard went on to say that the city was willing to meet and to negotiate the decision and effects of the change, without prejudice to its position.
17. On July 27, 1984, the parties met to discuss the situation. Several alternatives were explored, and the city made a commitment to procure information on a joint operating agreement between Kelso and the City of Longview.
18. On August 8, 1984, in response to the city's inquiries, the City of Longview declined to enter into such an arrangement.
19. On September 4, 1984, the union filed the unfair labor practice charges litigated in the instant proceedings.
20. On September 21, 1984, the parties met again. The status of negotiations was reviewed, and the city told union representatives that the fire district would not promise to hire Kelso firefighters when the district assumed operations. The city presented a proposal concerning layoff procedures and a referral service to the fire district. The union rejected the proposal. The union counter proposed that the existing wage rate and work schedule should be extended for calendar year 1985. The city rejected the union's counterproposal.
21. On September 28, 1984, Hutcheson sent Tedesco a letter confirming his understanding that the parties were at impasse.
22. On October 9, 1984, at 3:30 P. M., the union made a proposal to the city in which significant concessions were made in wage rates and hours of work. The proposal did not address the city's desire to provide emergency medical service or fire inspection for Kelso residents. The city rejected the proposal.
23. On October 9, 1984 at 7:00 P.M., the city approved an agreement with the fire district. The district approved the agreement on October 11, 1984.
24. The agreement, scheduled to take effect January 1, 1985, specifies that the fire district will provide fire prevention and suppression services for all property and persons within the city limits of Kelso. In exchange for such services, the city will continue to collect property tax revenues, and will make payments to the fire district to help pay for the operation. In addition, the agreement provides that the city shall be assessed a six percent increase in its rate for each of the next two years. The city also provides the fire district with the city's existing firefighting apparatus for the district's use. The District is to provide additional and improved services to city residents over what they received under the 1984 budget.
CONCLUSIONS OF LAW
1. The Public Employment Relations Commission has jurisdiction in this matter pursuant to Chapter 41. 56 RCW.
2. By events described in the above findings of fact, the City of Kelso subcontracted its firefighting services to Cowlitz County Fire District No. 2 under circumstances such that the decision was a mandatory subject of bargaining under RCW 41.56.030(4).
3. By implementing the procedures necessary for the subcontracting of the fire department's operations without having bargained and Submitted any unresolved dispute for interest arbitration as provided in RCW 41.56.430, et seq., the City of Kelso has refused to bargain and has violated RCW 41.56.140(4).
4. By entering into the intergovernmental agreement while interest arbitration over the 1984 collective bargaining agreement was pending the city violated RCW 41.56.470.
5. The union did not waive its right to bargain under RCW 41.56.030(4) about the effects of the city's decision to enter into the intergovernmental agreement.
ORDER
Upon the basis of the above Findings of Fact and Conclusions of Law, and pursuant to RCW 41.56.160 of the Public Employees Collective Bargaining Act, it is ordered that the City of Kelso, its officers and agents shall immediately:
1. Cease and desist from:
(a) Taking any steps to lay off its firefighting employees or otherwise implement the intergovernmental agreement described in paragraphs 23 and 24 of the foregoing findings of fact.
(b) Unilaterally modifying wages, hours and conditions of employment during the pendency of interest arbitration proceedings.
(c) Refusing to bargain collectively in good faith with International Association of Firefighters, Local 1445 concerning the decision to subcontract firefighting services to Cowlitz County Fire District No. 2 and to submit any unresolved dispute for interest arbitration as provided in RCW 41.56.430, et seq.
2. Take the following affirmative action to remedy the unfair labor practice and effectuate the policies of the Act:
(a) Upon request, bargain collectively with International Association of Firefighters, Local 1445 concerning the decision to subcontract firefighting services.
(b) In the event that resolution is not achieved through negotiations, submit the dispute for mediation and, if necessary, to interest arbitration for determination.
(c) Post, in conspicuous places on the employer's premises where notices to all employees are usually posted, copies of the notice attached hereto and marked "Appendix A". Such notices shall, after being duly signed by an authorized representative of the City of Kelso be and remain posted for sixty (60) days. Reasonable steps shall be taken by the City of Kelso to ensure that said notices are not removed, altered, defaced, or covered by other material.
(d) Notify the Executive Director of the Public Employment Relations Commission, in writing, within thirty (30) days following the date of this Order, as to what steps have been taken to comply herewith, and at the same time provide the Executive Director with a signed copy of the notice required by the preceding paragraph.
DATED at Olympia, Washington, this15th day of March, 1985.
PUBLIC EMPLOYMENT RELATIONS COMMISSION
[SIGNED]
JANE R. WILKINSON, Chairman
[SIGNED]
MARK C. ENDRESEN, Commissioner
[SIGNED]
MARY ELLEN KRUG, Commissioner