City of Kalama, Decision 6739 (PECB, 1999)

STATE OF WASHINGTON BEFORE THE PUBLIC EMPLOYMENT RELATIONS COMMISSION
KALAMAPOLICE GUILD,	CASE13592-U-97-3324
Complainant,	DECISION 6739 – PECB
	CASE13593-U-97-3325
	DECISION 6740 - PECB
VS.
	CASE13640-U-98-3338
	DECISION 6741 – PECB
CITY OF KALAMA,	CONSOLIDATED FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER
Respondent.

Cline and Emmal, by Alex J. Skalbania, Attorney at Law, appeared on behalf the complainant.

Pond, Roesch, Rahn and Nelson, by David A. Nelson, Attorney at Law, appeared on behalf of the respondent.

On December 8, 1997, the Kalama Police Guild (KPG) filed two complaints with the Public Employment Relations Commission under Chapter 391-45 WAC, naming the City of Kalama (employer) as respondent. On January 6, 1998, the KPG filed a third complaint with the Commission under Chapter 391-45 WAC, also charging the employer with unfair labor practices under RCW 41.56.140.These cases were consolidated for processing,[1] and a hearing was held before Examiner Frederick J. Rosenberry at Olympia, Washington, on September 2, and October 28, 1998.The parties filed briefs.

The preliminary ruling issued under WAC 391-45-110 for Case 13592-U-97-3324 found a cause of action to exist on allegations of:

The employer’s failure and refusal to bargain in good faith by unilaterally changing terms and conditions of employment regarding work schedules, hours of work, standby time, call-backs, holiday work, and vacation scheduling.

The preliminary ruling issued in Case 13593-U-97-3325 found a cause of action to exist on allegations of:

The employer’s failure and refusal to bargain in good faith by unilaterally changing terms and conditions of employment regarding work schedules, hours of work, standby time, callouts, and contracting out the duties of the bargaining unit.

The preliminary ruling issued in Case 13640-U-98-3338 found a cause of action to exist on allegations of:

The employer’s failure and refusal to bargain in good faith by unilaterally changing its rate of contribution for, and the specifications of, a health care benefit.

On the basis of the evidence presented at the hearing, the Examiner holds that the employer unlawfully failed or refused to bargain in good faith, by unilaterally changing medical and dental insurance benefits; by unilaterally changing hours of work and the availabil­ity of work opportunities; and by transferring work normally performed by the members of the bargaining unit to the Cowlitz County Sheriff’s Department. A remedial order is issued to return the parties to the situations they occupied prior to the unfair labor practices, and to prevent recurrences.

BACKGROUND FACTS

The City of Kalama, located in Cowlitz County, was incorporated in 1871 and operates under a mayor-council form of city government.[2]Glen Munsey stepped down as mayor on December 31, 1997, after serving more than 10 years as an elected city official. Bud Gish took office as mayor on January 1, 1998.

The employer operates a police department. Michael R. Pennington has been chief of police since March 1, 1994.Because its population is only about 1,500, the employer's police officers are not “uniformed personnel” under RCW 41.56.030(7) and do not have access to interest arbitration under RCW 41.56.430 et seq.

For an undisclosed number of years the employer’s police officers were represented by Teamsters Union, Local 58.That changed on December 13, 1996, when the KPG was certified by the Commission as exclusive bargaining representative, based on the results of a representation proceeding under Chapter 391-25 WAC. City of Kalama, Decision5778 (PECB, 1996).[3]There were five non-supervi­sory police officers in the bargaining unit at that time.

At the time of the changeover from Teamsters Local 58 to the KPG, many of the terms and conditions of employment for the police officers were described in an expired collective bargaining agreement between the employer and Local 58.That contract had been in effect for the period from January 1, 1994 to December 31, 1996.While it appears that the employer and KPG commenced their negotiations for a new collective bargaining agreement, they did not sign a contract in the 10 months following the certification of the KPG.

By letter dated October 31, 1997, Mayor Munsey notified the KPG that the employer was “canceling” the Teamsters collective bargaining agreement. He stated:

Per Article 20.1 of the expired labor contract between the City of Kalama and Teamster, Local #58 covering the Police Department in the City of Kalama.

The City is hereby giving Notice of Intent to cancel the Collective Bargaining Agreement between the City of Kalama and Teamster Local #58 which was signed by the appropriate offi­cials on July 21, 1994.

It would be my hope to have a speedy attempt to negotiate a new contract with the Kalama Police Guild.

The record does not reflect a specific response by the KPG to that letter.

Health Care Benefits Complaint

For an undisclosed period of time while the bargaining unit was represented by Teamsters Local 58, the employer purchased dental and medical health care benefits for the members of the bargaining unit through the Oregon Teamster Employers Trust.[4]The record fairly reflects that the employer's eligibility to participate in those plans was dependent upon its having a collective bargaining relationship with the local Teamsters union affiliate.

In late 1996, the employer became aware that its continued participation in the Oregon Teamster Employers Trust health insurance program was in jeopardy, because the police officers were no longer represented by the Teamsters. Accordingly, it sought alternate medical insurance that offered the same premium structure and level of benefits as the Teamsters plans. The employer could not locate similar insurance plans, and it requested to continue in the Oregon Teamster Employer Trust program in 1997, but the trust rejected that request. The employer’s participation in the Teamsters plans was terminated on January 31, 1997.

On February 1, 1997, the employer enrolled the police officers in insurance plans offered by Regence Blue Shield. The KPG did not cooperate in that move.[5]The new program offered medical and dental benefits, but some features of the plan specifications provided lesser benefits than the Oregon Teamster Employer Trust program. The employer chose to reimburse the employees for any shortfalls between the benefits paid by the Blue Shield plans and the benefits that would have been paid under the Teamsters plans. The employer intended its self-insurance of those differences out of city funds to be a stopgap measure, until the health insurance matter was resolved in collective bargaining with the KPG.

During the balance of 1997, the employer reimbursed the police officers for the differences between the Blue Shield plan benefits and the Teamsters plan benefits. By memorandum dated December 31, 1997, Mayor Munsey notified the KPG that the employer was changing certain personnel practices, stating:

Effective January 1, 1998, the collective bargaining agreement affecting your terms of working will be non-existent. Beginning Janu­ary 1, 1998, the wages, vacation & holidays will be paid the same as in 1997.

Health Care premiums will be paid in January 1998 for February 1998 coverage, but the city will no longer provide self-insurance for any gap between the Blue Shield and old Teamster coverage. Thus medical benefits will be limited to the Blue Shield coverage. I be­lieve sixty days is ample time for the Guild to have in place a new health care package with the City of Kalama’s premiums to be no greater than what is paid for the other city employees.

The conditions offered/agreed to here will be in effect for 30 days. Any other extension and the conditions of the extension must be agreed to by Mayor Elect Bud Gish and the 1998 City Council.

[Emphasis by bold supplied.]

Although bargaining for a first agreement between the parties had been underway for a considerable period of time, they had not reached an agreement regarding medical and dental insurance. The KPG was opposed to the reduction of health care benefits, and viewed it as an unlawful unilateral change of terms and conditions of employment. It then filed the unfair labor practice complaint docketed as Case 13640-U-98-3338.

Hours of Work and Overtime “Reorganization” Complaint

Since at least 1994, the police department had used a “four 10's” work schedule that was looked upon with favor by the police officers. The schedule called for not less than two shifts per day, seven days a week. The day shift was from 8:00 a.m. to 6:15 p.m.; the night shift was from 5:45 p.m. to 4:00 a.m. The collective bargaining agreement required the payment of an additional $.35 per hour for night shift work.

The “four 10's” schedule normally provided a minimum of 140 hours of on-duty police coverage in Kalama each week. For the remaining 28 hours per week (4:00 a.m. to 8:00 a.m., daily), the officer scheduled to report for duty at 8:00 a.m. that day was placed on “call time” and was paid $1.00 per hour. The department practice called for the officer going off duty at 4:00 a.m. to notify the police communication center which officer was designated to be on “call time” that day. Any police matter that required immediate attention during those early morning hours was directed to the officer on “call time”. An officer who was required to respond was paid for a minimum of two hours as “call-out” pay, in addition to their normal wages.

According to Sergeant Robert Heuer, who occasionally serves as the acting chief and whose normal duties include scheduling the police officers and auditing their pay claims, the department practice was to staff all shifts. Heuer recalled that vacant shifts were offered to the officers as overtime, on a rotating basis. If no officer volunteered to cover an open shift, an officer would be required to work overtime to fill the vacancy. Heuer further recalled that if no officer was available, the chief would be designated as the officer to be called out between 4:00 a.m. and 8:00 a.m., although this occurred infrequently.

Mayor Munsey testified that he determined that the employer's expenses were exceeding available revenues in the autumn of 1997, and that he desired to reduce the cost of the employer's opera­tions. The mayor met with Chief Pennington on November 24, 1997, to address fiscal concerns. At that meeting, the mayor notified the chief that the police department was to be reorganized effective December 1, 1997.The reorganization called for:

•                     Discontinuing a graveyard shift on holidays;

•                     limiting the department to one officer on vacation at a time;

•                     establishing new work schedules with a mixture of four-day and five-day work weeks, and 8-hour and 10-hour work shifts;

•                     leaving unfilled shifts vacant, rather than scheduling officers for overtime work;

•                     discontinuing assigning officers “call time”; and

•                     arranging for the Cowlitz County Sheriff’s Department to respond, on a fee for service basis, to police calls in Kalama when no Kalama officer was on duty.

Munsey provided the chief with the type of work schedule that he desired, and a memorandum outlining how it should be implemented. That memorandum stated:

REORGANIZATION OF THE

KALAMA POLICE DEPARTMENT

Only two (2) shifts shall work on a holiday. Graveyard will not be scheduled on a holiday.

Only one certified Law Enforcement Officer shall be on vacation at the same time.

The D shift worker shall relieve A, B, or C for absence because of vacation, bereavement leave, approved training days, sick leave, DARE training & duties, or any other approved absence.

While D shift worker is relieving other shifts, the graveyard shift shall be left unmanned.

A shift will work five (5) eight (8) hour shifts.

B shift will work four (4) ten (10) hour shifts.

C shift will work five (5) eight (8) hour shifts.

D shift shall consist of eight (8) hour shifts except when relieving B shift.

Chief Pennington spoke against the changes, advising the mayor that he felt they were disruptive to the officers. He predicted that implementation of the proposed changes would increase the em­ployer’s cost to operate the department, and that implementation could be in conflict with the expired collective bargaining agreement or other legal obligations. The chief pointed out that, except for a brief period in 1994, the “four 10's” schedule had been used exclusively. Other adverse effects pointed out by the chief were that 38 shifts would not be covered in December of1997; vacations and holidays would have to be changed; and the chief would be required to be on-call (and respond to emergency calls) between 4:00 a.m. and 8:00 a.m. daily. It was the mayor’s intention that the reorganization go forward, however.

On December 1, 1997, Chief Pennington issued a memorandum directed to the mayor and to the sheriff of Cowlitz County, stating his understanding of the mayor’s order. Pennington wrote:

Mayor Munsey has ordered me to implement a new work schedule for the Kalama Police Department effective December 1, 1997 which he developed.

Per Mayor Munsey orders he stated that un­manned shifts will be covered by the Cowlitz County Sheriff Office personnel. Mayor Munsey also gave me a reorginization [sic] schematic on how the shift would work.

Mayor Munsey told me that no Kalama Officer would be on call, stating that the Sheriff’s Department would handle the calls in Kalama and bill the city based upon those services. I have attached a copy of the December 1997 work schedule for your review. At the present time there are 38 unmanned shifts for December 1997.

I write this letter to both inform and to receive clarification on this new work sched­ule if any is required.

[Emphasis by bold supplied.]

Shortly after receiving notice of these changes, the KPG notified the employer that it was opposed to the changes, that they violated the terms of the expired collective bargaining agreement, that they changed established practices, and the unilateral action was an unfair labor practice. The KPG complaints focused on:

•                     The change of work shifts from 10 hours to 8 hours;

•                     the new limitations on overtime work opportunities;

•                     moving the shift premium threshold from 6:00 p.m. to 11:00 p.m.

•                     the new limitations on holiday premium pay work opportunities;

•                     the limitation of vacation leave to one officer at a time;

•                     the reduction of access to “call time” remuneration; and

•                     the transfer of work historically performed by employees in this bargaining unit to employees of Cowlitz County.

On December 8, 1997, the KPG filed the unfair labor practice complaints docketed as Cases 13592-U-97-3324 and 13593-U-97-3325.

On January 1, 1998, Bud Gish took office as mayor. By memorandum dated January 8, 1998, Gish instructed the chief to reinstate the “four 10's” schedule. While “call time” was to be used to maintain 24-hour coverage, overtime was to be kept to a minimum. The chief then reinstated the “four 10's” schedule for all of the officers. The union did not file an amended complaint on those changes.

POSITIONS OF THE PARTIES

The KPG contends it was faced with an unlawful “fait accompli”. It alleges that the employer unilaterally, and without bargaining or the consent of the KPG, reduced the level of health care benefits that had been in place; imposed changes regarding work shifts, work weeks, and access to night shift premium pay; reduced opportunities for overtime pay, “call time” pay, and “call back” pay; restricted the number of officers who could be on vacation at any one time; and expanded the circumstances in which an outside police agency or the chief would be used to perform officer duties. The KPG maintains that all of those changes affect mandatory subjects of bargaining. According to the KPG, the expired collective bargain­ing agreement marks the status quo ante for mandatory subjects of bargaining, but any waiver of a bargaining obligation contained in the expired agreement between the employer and the previous exclusive bargaining representative expired with that contract and cannot be relied upon by the employer as authority to impose the changes. The KPG requests that the employer be ordered to reinstate the status quo ante, that the members of the bargaining unit be made whole for all losses of income and other benefits resulting from the changes, and that the KPG be awarded attorney’s fees for its prosecution of these unfair labor practice charges, because of the repetitive nature of the unlawful actions.

The employer defends its actions on the basis that it was faced with fiscal problems, and had insufficient revenue to continue the scope of police coverage it maintained in the past. The employer maintains that its collective bargaining agreement with the involved employees continued in effect by virtue of RCW 41.56.123, and permitted the employer to unilaterally change its personnel practices. The employer also cites a provision of that agreement which automatically extended it in one-year increments, and notes that neither party provided notice to terminate or modify that agreement until the employer gave notice in October of 1997 to cancel the contract. According to the employer, the management rights clause and other sections of that contract gave it the right to establish and change work schedules within limits set by the contract, and that overtime work has always been discretionary on the part of the employer. The employer also points out that it did not initiate or cause the change in the medical benefits, but rather the employees caused it by leaving the Teamsters union. Theemployer contends that it sought to maintain or replicate the Teamsters health benefits, but could not do so. The employer comments that it did not voluntarily pay the benefits “gap” payments, but did so to meet its statutory obligation to maintain the terms of the expired agreement until a new agreement could be negotiated. The employer takes the position that such contract obligation ceased upon the employer’s notice to the KPG that it was terminating the collective bargaining agreement, and that it was then entitled to discontinue the “gap” coverage because it was not an established practice. The employer denies that its actions were an unlawful interference or failure or refusal to bargain, and requests that the complaints be dismissed.

DISCUSSION

The Duty to Bargain and Unilateral Changes

These parties bargain collectively pursuant to the Public Employ­ees' Collective Bargaining Act, Chapter 41.56 RCW. Their 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 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.The burden to establish affirmative defenses lies with the party asserting the defense.

This case presents a number of issues arising from the employer's change of medical and dental insurance benefits, changes in the manner in which it schedules hours of work, and related terms and conditions of employment, and its calling on the county sheriff’s department to provide police service. The issues are not matters of first impression, however. Similar issues have previously been raised before and decided by the Commission.

The Standards to be Applied

The potential subjects for bargaining between an employer and union are commonly divided into three categories: “mandatory", “permis­sive", and “illegal". Federal Way School District, Decision 232‑A (EDUC, 1977), citing NLRB v. Wooster Division of Borg Warner, 356 U.S. 342 (1958).Matters affecting wages, hours, and working conditions are mandatory subjects of bargaining about which an employer is obligated to bargain in good faith, upon request, with the exclusive bargaining representative. Matters of management or union prerogatives which do not affect wages or hours, or which are considered remote from “terms and conditions of employment" are categorized as non-mandatory or “permissive" subjects. The parties may bargain regarding permissive subjects, but are not required by law to do so. The parties to a collective bargaining relationship have a legal obligation to refrain from bargaining matters which would result in an unlawful outcome (i.e., “illegal” subjects).

Some issues that arise at the workplace do not fall neatly into the “mandatory”, “permissive”, and “illegal” categories. The Commis­sion has utilized a balancing approach to determine whether a particular matter is a mandatory subject of bargaining, and that approach has been endorsed by the Supreme Court of the State of Washington. IAFF, Local 1052 v. PERC, 113 Wn.2d 197 (1989).

The bargaining obligation may be applicable as to both a managerial decision and the effects of that decision:

•                     Both a decision to contract out bargaining unit work and its effects on the employees are normally mandatory subjects of bargaining. Skagit County, Decision 6348 (PECB, 1998); City of Kelso, Decision 2120 (PECB, 1985) [Kelso I].

•                     Because matters of entrepreneurial control are permissive subjects of bargaining, a decision may not be a mandatory subject of bargaining. City of Centralia, Decision 5282 (PECB, 1995).In cases where there is no obligation to bargain a decision, the employer will still have an obligation to bargain the effects of the decision on employee wages, hours, and working conditions. Thus, while an employer has no duty to bargain concerning a decision to reduce its budget, under Spokane Education Association v. Barnes, 83 Wn.2d 366 (1974) and Federal Way School District, Decision 232-A (EDUC, 1977), affirmed WPERR CD-57 (King County Superior Court, 1978), the “effects” of such decision could be mandatory subjects of collective bargaining. See, also, Wenatchee School District, Decision 3240-A (PECB, 1990).

It is well settled that wages (including overtime compensation and premium pay for various circumstances, and health insurance benefits which are all alternative forms or computations of wages), hours of work (including shift schedules and work opportunities), and transfers of bargaining unit work to employees outside of the bargaining unit (referred to as “skimming” or “contracting out”), are all mandatory subjects of bargaining. See, City of Seattle, Decision 651 (PECB, 1979); City of Poulsbo, Decision 2068 (PECB, 1985).While medical plan specifications are a mandatory subject of bargaining, an employer does not necessarily breach its bargaining obligation by unilaterally determining the plan provider. City of Dayton, Decision 1990 (PECB, 1984).

The status quo ante must be maintained regarding all mandatory subjects of bargaining, except where 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), affirmed 117 Wn.2d 655 (1991); Spokane County Fire District 8, Decision 3661‑A (PECB, 1991); Pierce County Fire District 2, Decision 4146 (PECB, 1992).A complainant alleging a “unilateral change" must establish the relevant status quo. Municipality of Metropolitan Seattle, Decision 2746‑B (PECB, 1989).An employer thus commits an unfair labor practice under RCW 41.56.140(4), if it imposes a new term or condition of employment, or changes an existing term or condition of employment, upon its represented employees, without having exhausted its bargaining obligation under Chapter 41.56 RCW. City of Tacoma, Decision 4539‑A (PECB, 1994).Accordingly, an employer also violates RCW 41.56.140(4) if it presents a union with a fait accompli, or if it fails to bargain in good faith, upon request. Federal Way School District, supra; Green River Community College, Decision 4008-A (CCOL, 1993); North Franklin School District, Decision 5945-A (PECB, 1998).

The Commission has found refusal to bargain violations inherently interfere with the rights of bargaining unit employees, and so routinely finds “derivative" interference violations under RCW 41.56.140(1), when a violation is found under another of the subsections of RCW 41.56.140.See, Washington State Patrol, Decision 4757-A (PECB, 1995); Battle Ground School District, Decision 2449-A (PECB, 1986).

Exceptions and Waivers to the Bargaining Obligation -

An employer has no obligation to bargain collectively on a curtailment of the scope of its operations, or where a reduction of staff or of employee work hours is the result of a curtailment of the employer’s operation. First National Maintenance Corporation v. NLRB, 452 U.S. 666, 678 (1981).The Commission recently wrote:

In [First National Maintenance], the United States Supreme Court said that management must be free from the constraints of the bargaining process to the extent essential for the run­ning of a profitable business, and held that the decision to shut down part of a business purely for economic reasons is one for the employer to make. In the process of deciding that case, however, the Court considered that an employer’s desire to reduce labor cost alone is a matter “peculiarly suitable for resolution within the bargaining framework”. First National Maintenance Corporation v. NLRB, at 679-680.

City of Centralia, Decision 5282-A (PECB, 1996) [emphasis by italics in original.]

Also consistent with federal precedent, the Commission has held that an employer has an obligation to bargain when a desire to reduce employee work hours is motivated solely for the purpose of reducing its labor costs. City of Centralia, supra.

There is an exception to the employer's obligation to bargain for an employer faced with a “business necessity". City of Chehalis, Decision 2803 (PECB, 1987).Although a violation was found in Spokane County, Decision 2167-A (PECB, 1985), that decision inherently acknowledges the possibility of an employer showing a compelling business necessity for changing a medical plan.

A “waiver by inaction” defense is available where an employer has given appropriate notice of a proposed change of employee wages, hours or working conditions, and the union fails or refuses to request bargaining in a timely manner. See, Lake Washington Technical College, Decision 4721-A (PECB, 1995); Newport School District, Decision 2153 (PECB, 1985).

A “waiver by contract” defense is available where the matter at issue in an unfair labor practice complaint alleging a unilateral change is controlled by a collective bargaining agreement in effect between the parties. When a contract is signed, the parties will have met their bargaining obligations as to the matters set forth in the contract, those matters in essence become permissive subjects of bargaining for the life of the contract, and the parties are relieved of the duty to bargain them for the term of the contract. No unfair labor practice violation will be found if a party then acts or makes changes in a manner authorized by the contract, or consistent with established practice. North Franklin School District, Decision 5945-A (PECB, 1998).The Commission does not assert jurisdiction to remedy violations of collective bargaining agreements through the unfair labor practice provisions of the statute. City of Walla Walla, Decision 104 (PECB, 1976).

The Public Employees’ Collective bargaining Act was amended in 1989, to provide a one-year extension of the terms and conditions of a collective bargaining agreement beyond its stated termination date. It states:

RCW 41.56.123 COLLECTIVE BARGAINING AGREEMENTS‑‑EFFECT OF TERMINATION‑‑APPLICATION OF SECTION.(1) After the termination date of a collective bargaining agreement, all of the terms and conditions specified in the collec­tive bargaining agreement shall remain in effect until the effective date of a subse­quent agreement, not to exceed one year from the termination date stated in the agreement. Thereafter, the employer may unilaterally implement according to law.

The effect of RCW 41.56.123 is that, unless specifically agreed otherwise, the terms and conditions of employment specified in an expired agreement (including any waivers of an obligation to bargain) remain in effect for one additional year. This provides employment and labor relations stability during a hiatus between contracts, while the parties to the expired contract are presumably engaged in negotiations for a successor agreement.[6]

Change of Representative Terminates Waivers -

The Commission has held that waivers of statutory bargaining rights contained in collective bargaining agreements expire with the certification of a new exclusive bargaining representative. City of Bremerton, Decision 2733 (PECB, 1987).In City of Marysville, Decision 5306 (PECB, 1995), an employer unsuccessfully argued that it could rely on waivers contained in an expired contract as authority to impose a unilateral change in a mandatory subject of bargaining, but the employees had changed exclusive bargaining representatives. “[W] aivers of statutory bargaining rights expire with the certification of a new exclusive bargaining representative”, according to the Examiner in Marysville.

In City of Tacoma, Decision 5085 (PECB, 1995), an incumbent union unsuccessfully argued that RCW 41.56.123 was tantamount to an automatic one year extension of a collective bargaining agreement and served as a contract bar, prohibiting the filing of a decertification petition. It was noted, however:

RCW 41.45.123 does not, by its terms, provide a universal solution to the “unilateral change” debate: ... it has no apparent effect on parties negotiating their first collective bargaining agreement.

The union’s arguments were thus rejected, and the representation proceedings went forward under RCW 41.56.070.

In addition to RCW 41.56.123, the Examiner notes that RCW 41.56.950 has application during a hiatus between collective bargaining agreements. That section states:

RCW 41.56.950 RETROACTIVE DATE IN COLLECTIVE BARGAINING AGREEMENTS ALLOWABLE, WHEN. Whenever a collective bargaining agreement between a public employer and a bargaining representative is concluded after the termina­tion date of the previous collective bargain­ing agreement between the same parties, the effective date of such collective bargaining agreement may be the day after the termination date of the previous collective bargaining agreement and all benefits included in the new collective bargaining agreement including wage increases may accrue beginning with such effective date as established by this section.

That provision of statute permits the parties to an ongoing collective bargaining relationship to negotiate terms in a successor contract which are retroactive to the expiration date of the expired contract between the same parties. RCW 41.56.950 was proposed to and enacted by the Legislature to avoid a constitu­tional problem. Unless there is a clear agreement by the parties to make (or at least preserve the possibility of making) the results of their subsequent negotiations retroactive to a date not earlier than the date of that agreement (i.e., a “Christie” agreement), retroactive compensation is prohibited by the state constitution.[7]The specific “between the same parties” language in RCW 41.56.950 has been enforced according to its terms. King County, Decision 4236 (PECB, 1992).This further supports finding a complete severance of contractual obligations where there is a change of exclusive bargaining representatives.

Fundamental principles of contracts also logically dictate a conclusion that a contract between an employer and union terminates in all respects when the union is decertified. A contract is a voluntary act of two parties. A union only enjoys the benefits of the duty to bargain while it holds status as exclusive bargaining representative. Under RCW 41.56.040 and 41.56.070, the employees in a bargaining unit have a statutory right to change or decertify unions. There is no logical reason to hold employees who have just rid themselves of a union to that union's contract.

Three Year Limit on Collective Bargaining Agreements -

RCW 41.56.070 addresses the duration and extension of public sector collective bargaining agreements, stating in relevant part:

Any agreement which contains a provision for automatic renewal or extension of the agree­ment shall not be a valid agreement; nor shall any agreement be valid if it provides for a term of existence for more than three years.

An automatic renewal clause is one which operates upon the inaction of the parties; three-year contracts are a widely-accepted norm in labor-management relations in both the private and public sectors.

The Commission has been faced with a number of different arguments regarding the application of RCW 41.56.070.An open-ended contract continuing for an indefinite period of time does not comport with RCW 41.56.070.Pierce County, Decision 2693 (PECB, 1987).The matter was addressed in Clark County, Decision 3451 (PECB, 1990), where it was stated:

The Commission has interpreted that language narrowly, however, so as to avoid negating contracts where parties have acted as if the contract was valid.

In Seattle School District, Decision 2079-A (PECB, 1985), the Commission interpreted the three year maximum so as to avoid the destructive effects of a retroactive invalidation of a contract, where it was clear that the parties to that agreement had acted as if their contract was valid in all respects. It was noted in City of Tacoma, Decision 5085 (PECB, 1995), however, that the rights of third parties are not extinguished by agreed‑upon contract extensions.

Application of Standards

The Automatic Contract Extension Argument -

The employer defends that the waivers of bargaining rights contained in the contract between the employer and Teamsters Local 58 remained applicable when the disputed personnel actions took place, because neither party had invoked the contract termination procedure. This argument relies upon the automatic extension provision contained in its expired collective bargaining agreement with the Teamsters, which stated:

ARTICLE 20DURATION OF AGREEMENT

20.1The agreement shall be in full force and effect from January 1, 1994 to and includ­ing December 31, 1996 and shall continue in effect from year to year thereafter unless either party gives notice in writing at least sixty (60) days prior to any expiration or modification date of its desire to terminate or modify such agreement.

[Emphasis by bold supplied.]

As previously pointed out, however, such a provision conflicts with the language of RCW 41.56.070, and cannot be relied on.

Evaluation of how the parties themselves viewed their relationship does not change the Examiner's conclusion. The decertification of Teamsters Local 58severed all ties between the employer and the former exclusive bargaining representative. The employer aptly comments that the KPG sought to have it both ways: Maintaining that the old contract was still in effect, while simultaneously arguing that any negotiated waivers of bargaining rights were no longer applicable. However, the record fairly reflects that the KPG processed the instant unfair labor practice complaints on the basis that there was a change of the status quo. No motion has been submitted for deferral of the disputes to the grievance and arbitration mechanism of the contract for resolution. This case is clearly distinguishable from Seattle School District, supra, where the parties to an ongoing collective bargaining relationship clearly and consistently behaved as if they both believed their contract remained in effect.

The Statutory Extension Argument -

The employer also defends by placing reliance on RCW 41.56.123, again reasoning that the admitted changes of practice were in accordance with waivers contained in the expired contract. This argument also fails.

Although RCW 41.56.123 would have applied to this bargaining unit if the police officers had not changed exclusive bargaining representatives, those are not the facts. By the time the employer implemented the disputed changes, the collective bargaining relationship was no longer between the same parties as the expired contract. “Good faith bargaining is never ‘from scratch', but from the status quo.”Shelton School District, Decision 579-B (EDUC, 1984).While the expired collective bargaining agreement with the former exclusive bargaining representative would have tended to mark the status quo on mentioned wages, hours and working condi­tions, there was no contract in effect or obligation under RCW 41.56.123.The KPG was a new exclusive bargaining representative, negotiating an initial agreement without any bargaining history baggage from the past. The employer was similarly relieved of any bargaining history baggage from the past. The waivers relied upon by the employer were gone. The status quo, not the terms of the previous collective bargaining agreement, became the starting point for negotiations and the standard for determining personnel practices until a new agreement could be reached.

The Health Insurance Changes

The parties’ medical and dental insurance predicament should not have come as a surprise to either of them. One of the inherent costs to the police officers of exercising their statutory right to change exclusive bargaining representatives was a predictable loss of eligibility to participate in the Oregon Teamster Employer Trust health plans. Although the employer sought (at the KPG's request) to continue to participate in the Teamsters plans, the plan administrator turned down that request. The employer was faced with a business necessity to change insurance plans.

The KPG apparently did not find fault with the self-insured “gap” supplement provided by the employer beginning in February of 1997.It has not filed a complaint charging unfair labor practice as to that program.

The employer raises four points in defense of its discontinuation of the self-insured “gap” supplement in January of 1998:

Gap Payment Was Not Voluntary - To the employer’s credit, it did its best to continue providing medical and dental insurance after February 1, 1997 that would match the status quo which had existed under the Teamsters plans. The Examiner need not rule on whether it was obligated to do so. The employer’s assertion that the “gap payment was not voluntary” is not relevant to the issue at hand, because this case only concerns the unilateral cessation of the “gap” benefit approximately 11 months later, in January of 1998.

Gap Payment Not the Status Quo - The employer’s point that the self-insured “gap” supplement was not the status quo prior to February 1, 1997 is correct, but is also irrelevant. Regardless of whether the employer was or was not obligated to implement the self-insured supplemental benefit, the fact is that it did so. Its “gap” program thus became a new status quo, for which notice and bargaining would be required before the benefit could be discontinued. A similar sequence of events occurred in City of Seattle, Decision 651 (PECB, 1979), where that employer volunteered a unilateral improvement of employee benefits, the union involved viewed the changes as favorable and did nothing, and that union successfully prosecuted a "refusal to bargain" complaint when the employer later reverted unilaterally to the original plan.

Gap Payment Not the Past Practice - The terms “past practice” and “status quo” are often used interchangeably. The status quo serves as a ratchet which impedes change in either direction. A union generally brings proposed improvements to the bargaining table in contract negotiations, and an employer generally brings proposed changes to the bargaining table in contract negotiations, and they then fulfill their bargaining obligations on those matters. A contract cannot possibly cover every potential situation. If there are changes of circumstances that are not controlled by an existing contract, the party proposing a change of practice must give notice to the other and provide opportunity for bargaining. Things that are a past practice at one point in time may change or cease to exist at other points in time. In this case, once the employer made the “gap” supplement a practice, the law prohibited a unilateral reduction of that level of benefits unless the bargain­ing obligation was satisfied.

City Did Not Cause the Change - Although there was a business necessity for the employer to change health insurance providers early in 1997, the change at issue here did not occur until some 11 months later. There is no evidence that the discontinuance of the “gap” supplement was forced upon the employer by parties or forces outside of the collective bargaining relationship.

The evidence supports a finding that the parties were not at a legal impasse, and that an unfair labor practice was committed, when the employer unilaterally eliminated the “gap” supplements.

The Reorganization

For the previously stated reasons, the Examiner finds that the employer’s claims that the terms of the expired collective bargaining agreement remained in effect are meritless.

The evidence supports a conclusion that budgetary considerations were the basis for the decision to reduce the overall hours of service provided by the police department. Former Mayor Munsey credibly testified that the revenue available was inadequate to continue funding the historical level of law enforcement services, and that the cost of operation had to be reduced. Accordingly, a decision by the employer to curtail the scope of its police operation could have been a permissive subject of bargaining.

Because of the changes actually implemented by the employer, the budgetary decision and its effects became intertwined. Thus:

•                     The changes of employee work hours were a mandatory subject of bargaining, as implemented in this case. The mayor went far beyond a curtailment of services, and got into the area of how the ongoing services would be provided. The KPG has met its burden of demonstrating that the “four 10's” schedule was an established practice and reflected the status quo. The employer’s defenses are inadequate.

•                     Overtime work opportunities, including covering a graveyard shift, as they are raised in this case are a mandatory subject of bargaining. Although the employer points out that overtime has always been at the discretion of the chief, the KPG has met its burden to show that the established practice actually called for the use of overtime to staff shifts that were vacant due to vacation, training, illness, etc. The em­ployer’s defenses are inadequate.

•                     Night shift premium pay is a mandatory subject of bargaining. Although the terms of the expired collective bargaining agreement granted discretion to the employer to define the night shift, such discretionary waiver expired with the decertification of Teamsters Local 58.A practice had developed, over a period of time, of paying night premium for work commencing at 6:00 p.m. The employer’s bargaining waiver defenses are inadequate.

•                     The record fairly reflects that the employer unilaterally imposed new limitations on holiday premium pay work opportuni­ties. The management rights clause of the expired contract ceased to operate with the decertification of the Teamsters.

•                     The record fairly reflects that the employer unilaterally imposed a new department personnel rule limiting vacation leave to one officer at a time. Again, the management rights clause of the expired contract ceased to operate with the decertification of Teamsters Local 58.

•                     The record fairly reflects that the employer unilaterally imposed a new department personnel rule reducing access to “call time” and “call-out” remuneration. The management rights clause of the expired contract ceased to operate with the decertification of the Teamsters.

•                     The record reflects that the employer unilaterally sought to contract out law enforcement work to Cowlitz County. The employer's intention to pay Cowlitz County for that work makes this case a contracting out situation indistinguishable from City of Kelso, supra.[8]

The police officers presumably decertified their former exclusive collective bargaining representative because they wanted to take their collective bargaining in a different direction. Even if the employer and the Teamsters would have been willing to honor their expiring contract under the automatic renewal clause or on the basis of RCW 41.56.123, the KPG stands in the shoes of a third party under City of Tacoma, supra. The employees' exercise of the statutory right secured to them by RCW 41.56.040 and RCW 41.56.070 severed the ties to the past except the obligation to commence the new bargaining relationship from the status quo which existed on the day the KPG was certified. The KPG has demonstrated by a preponderance of the evidence that the employer disregarded the status quo, and unilaterally imposed substantial and numerous personnel changes.

The evidence supports finding that an unfair labor practice was committed when the employer implemented its reorganization.

FINDINGS OF FACT

1.                  The City of Kalama is a public employer within the meaning of RCW 41.56.030(1), with a population of approximately 1,500.The employer maintains a police department under the direction of Chief of Police Michael R. Pennington.

2.                  The Kalama Police Guild, a bargaining representative within the meaning of RCW 41.56.030(3), has been the exclusive bargaining representative of non-supervisory police department personnel employed by the City of Kalama since December 13, 1996.Those employees do not come within the definition of “uniformed personnel” in RCW 41.56.030(7), and do not have access to the impasse resolution procedures detailed in RCW 41.56.430 et seq.

3.                  For an undisclosed period of time prior to December 13, 1996, Teamsters Union, Local 58, was the exclusive bargaining representative of non-supervisory police department personnel employed by the City of Kalama.

4.                  The employer and Local 58 were parties to a collective bargaining agreement which was in effect for the period from January 1, 1994 to December 31, 1996.That contract arguably contained waivers of the union's statutory bargaining rights which permitted the employer to implement various personnel actions without notice to or bargaining with that union.

5.                  The employer and the KPG commenced negotiations for an initial collective bargaining agreement after December 13, 1996.Notwithstanding their negotiations over a protracted period of time, the parties had not signed a collective bargaining agreement by the close of the hearing in these proceedings on October 28, 1998.

6.                  For an undisclosed period of time prior to December 13, 1996, the employer provided full family medical and dental insurance benefits for members of this bargaining unit through the Oregon Teamster Employer Trust. The employer paid the entire premium for those benefits.

7.                  After December 13, 1996, the employer was notified by the plan administrator that its participation in the Oregon Teamster Employer Trust would be terminated, because the bargaining unit was no longer represented by Teamsters Local 58.

8.                  Effective February 1, 1997, the employer enrolled the members of the bargaining unit in medical and dental plans offered by Regence Blue Shield. The new plans offered benefits generally similar to the Oregon Teamster Employer Trust plans, including medical, prescription, and dental benefits, although some features provided lesser benefits than those provided by the Teamsters plans.

9.                  Effective February 1, 1997, the employer unilaterally imple­mented a self-insured program of making payments to its employees to cover the “gap” between their former and current benefits. The program was designed to reimburse members of the bargaining unit for any benefit shortfalls resulting from the health plan changes. Although the record fairly indicates the employer intended that supplemental benefit to be a temporary arrangement pending the completion of collective bargaining negotiations with the KPG, it did not have the agreement of the KPG on the matter.

10.              For an undisclosed period of time prior to December 13, 1996, the employer scheduled the members of the bargaining unit for at least 40 hours of work per week, based upon working four 10-hour shifts per week. Day shift personnel worked from 8:00 a.m. to 6:15 p.m.; night shift personnel worked from 5:45 p.m. to 4:00 a.m., and were paid a $.35 per hour premium for all work performed during the night shift.

11.              For an undisclosed period of time prior to December 13, 1996, the employer scheduled a minimum of 140 hours of on-duty police coverage each week. For the remaining 28 hours in each week, the officer scheduled to report for duty at 8:00 a.m. was placed on standby and was paid “call-time” at the rate of$1.00 per hour. An officer who was required to respond to a police matter was paid “call back” pay for a minimum of two hours at the officer's normal rate of pay.

12.              For an undisclosed period of time prior to December 13, 1996, the employer’s practice was to staff all designated shifts. Vacant shifts were offered to the officers as overtime on a rotating basis; if no officer voluntarily accepted an open shift, an officer would be required to work overtime to fill the vacancy.

13.              During the autumn of 1997, the then-mayor determined that the employer was faced with a revenue shortfall, and desired to reduce the employer's operating expenses, including police department labor costs. At a meeting on November 24, 1997, the chief of police was directed to reorganize the police department according to a plan prescribed by the then-mayor.

14.              On December 1, 1997, the chief of police implemented changes affecting at least:(a) Staffing of the graveyard shift on holidays; (b) limiting the bargaining unit to one officer on vacation leave at a time; (c) establishing a new work schedule with a mixture of four-day and five-day work weeks and a mixture of 8-hour and 10-hour work shifts; (d) left unfilled shifts vacant, rather than scheduling officers for overtime work to staff them; (e) discontinued assigning officers “call time” and “call-out” opportunities; and (f) arranged for the Cowlitz County Sheriff’s Department to respond to police calls in the city when no officer was on duty, seeking to fund the response on a fee for service basis. The employer did not provide advance notice of those changes to the KPG, or provide opportunity for collective bargaining on either the decision or its effects.

15.              By memorandum dated December 31, 1997, the employer notified the KPG that it was discontinuing the self-insured “gap” supplement as of January 1, 1998, and that health benefits for employees in the bargaining unit would thereafter be limited to the benefits provided by Regence Blue Shield. The employer did not provide advance notice of those changes to the KPG, or provide opportunity for collective bargaining on either the decision or its effects.

16.              The employer has presented debatable defenses in these proceedings, including defenses based upon the collective bargaining agreement described in paragraph 4 of these findings of fact.

17.              The record in this proceeding does not support a conclusion that the employer has engaged in egregious or repetitive unfair labor practices, or that an extraordinary remedy would be necessary to make an order effective or to prevent future unfair labor practices.

CONCLUSIONS OF LAW

1.                  The Public Employment Relations Commission has jurisdiction in this matter under Chapter 41.56 RCW and Chapter 391-45WAC.

2.                  By its unilateral implementation, in February of 1997, of the self-insured “gap” supplement to the medical and dental benefits provided to its employees through Regence Blue Shield, the employer altered a wage-related benefit which is a mandatory subject of collective bargaining, and created a new status quo for purposes of implementing its collective bargaining obligations, under RCW 41.56.030(4).

3.                  The employer's decision to reduce its operating expenses in the autumn of 1997, including its labor costs in its police department, was, standing alone, an entrepreneurial decision which was not a mandatory subject of collective bargaining under RCW 41.56.030(4).

4.                  The reorganization implemented by the employer in its police department effective December 1, 1997, directly affected the employees represented by the Kalama Police Guild in a manner which inextricably intertwined the decision described in paragraph 3 of these Conclusions of Law with matters that were mandatory subjects of collective bargaining under RCW 41.56.030(4), including: Reduced work hours and opportuni­ties, affecting the wages and hours of bargaining unit employees; changes of work schedules, affecting the hours of bargaining unit employees; changes to the use of vacation leave, affecting the hours and working conditions of bargain­ing unit employees; and transferring work historically performed by bargaining unit employees to the employees of another employer, affecting the wages, hours and working conditions of bargaining unit employees.

5.                  By unilaterally implementing its reorganization of the police department on and after December 1, 1997, the City of Kalama failed and refused to bargain with the Kalama Police Guild and committed unfair labor practices under RCW 41.56.140 (4) and (1).

6.                  By unilaterally implementing the discontinuance of the “gap” supplement on and after January 1, 1998, the City of Kalama failed and refused to bargain with the Kalama Police Guild and committed unfair labor practices under RCW 41.56.140(4) and (1).

7.                  The Kalama Police Guild has not established grounds for imposition of an extraordinary remedy under RCW 41.56.160.

ORDER

The City of Kalama, its officers and agents, shall immediately take the following actions to remedy its unfair labor practices:

1.                  CEASE AND DESIST from:

a.                   Refusing to bargain collectively with the Kalama Police Guild, as the exclusive bargaining representative of the employees of the appropriate bargaining unit described in paragraph 2 of the foregoing Findings of Fact.

b.                  Imposing changes in terms and conditions of employment without having bargained in good faith to legal impasse.

c.                   In any other manner interfering with, restraining or coercing its employees in the exercise of their collec­tive bargaining rights secured by the laws of the State of Washington.

2.                  TAKE THE FOLLOWING AFFIRMATIVE ACTION to effectuate the purposes and policies of Chapter 41.56 RCW:

a.                   Restore the status quo ante which existed with regard to the changes described in paragraph 14 of the foregoing Findings of Fact, and maintain those wages, hours and working conditions until changes, if any, are reached through good faith collective bargaining with the KPG.

b.                  Restore the status quo ante which existed with regard to the changes described in paragraph 15 of the foregoing Findings of Fact, and maintain those wages, hours and working conditions until changes, if any, are reached through good faith collective bargaining with the KPG.

c.                   Make all employees adversely affected by the unilateral changes whole for all losses they suffered as a result of the unilateral changes.

d.                  Upon request, bargain collectively in good faith with the Kalama Police Guild prior to implementing any changes regarding mandatory subjects of bargaining.

e.                   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”. Such notices shall be duly signed by an authorized representative of the above-named respondent, and shall remain posted for 60 days. Reasonable steps shall be taken by the above-named respondent to ensure that such notices are not removed, altered, defaced, or covered with other material.

f.                   Read the notice attached hereto and marked “Appendix” aloud at the next public meeting of the Kalama City Council and append a copy thereof to the official minutes of said meeting.

g.                  Notify the above-named complainant, in writing, within 20 days following the date of this order, as to what steps have been taken to comply with this order, and at the same time provide the above-named complainant with a signed copy of the notice required by the preceding paragraph.

h.                  Notify the Executive Director of the Public Employment Relations Commission, in writing, within 20 days follow­ing the date of this order, as to what steps have been taken to comply with this order, and at the same time provide the Executive Director with a signed copy of the notice required by this order.

ISSUED at Olympia, Washington, on the 19^th day of July, 1999.

PUBLIC EMPLOYMENT RELATIONS COMMISSION

[SIGNED]

FREDERICK J. ROSENBERRY, Examiner

This order will be the final order of the agency unless a notice of appeal is filed with the Commission under WAC 391-45-350.