DECISIONS

City of Kent, Decision 11996 (PECB, 2014)

 

STATE OF WASHINGTON

 

BEFORE THE PUBLIC EMPLOYMENT RELATIONS COMMISSION

 

 

In the matter of the petition of:   washington state council of county and city employees   Involving certain employees of:   CITY OF Kent

CASE 25543-C-13-1542   DECISION 11996 - PECB   ORDER CLARIFYING BARGAINING UNIT

 

 

Summit Law Group, PLLC, by Bruce L. Schroeder, Attorney at Law, for the employer.

 

            Audrey B. Eide, General Counsel, for the union.

 

 

The City of Kent (employer) implemented a new Business and Occupation Tax (B&O Tax) effective January 1, 2013.  To administer this tax, the employer created the Business and Occupation Tax Auditor (B&O Tax Auditor) position in its Finance Department.  Two new employees were hired to fill those positions.  The Washington State Council of County and City Employees (union) currently represents a bargaining unit of employees in the Finance Department.  The parties jointly requested that this agency determine whether the B&O Tax Auditors should be included in the union’s Finance Department bargaining unit. 

 

Hearing Officer Page Garcia conducted a hearing on August 29, 2013 to receive evidence regarding the petition.  The parties submitted post-hearing written arguments in support of their positions.  

 

The issues before the Executive Director are: 1) whether the B&O Tax Auditors share a community of interest with the employees in the union’s Finance Department bargaining unit,  and if so,  2) whether the B&O Tax Auditors should be included in the union’s Finance Department bargaining unit without the need of an election.  

The B&O Tax Auditors share a community of interest with the employees in the union’s Finance Department bargaining unit.  It is appropriate to include the B&O Tax Auditors in the union’s Finance Department bargaining unit without the need of an election. 

 

BACKGROUND

 

Prior to 2012, city revenues were generated primarily through a gambling tax, an admissions tax, and a utility tax.  Employees in the Finance Department bargaining unit administer the day-to-day issues that arise under these taxes. 

 

The Finance Department consists of 32 employees, including 21 employees who are included in the bargaining unit represented by the union.  The union’s bargaining unit was certified by the Commission and is currently described as:

 

 

Regular full-time and regular part-time employees who work for the City of Kent in the department of finance; excluding specifically meter reader/maintenance worker II, temporary, confidential, supervisory, and all other employees of the employer.

City of Kent, Decision 3070-A (PECB, 1989).

 

Bargaining unit members are employed as financial analysts, accountants, and customer service representatives. 

 

The employer implemented the new B&O Tax to support its transportation infrastructure and enacted ordinances to effectuate that decision.  The tax became effective January 1, 2013 and businesses began filing their B&O Tax returns on a quarterly basis starting on April 30, 2013.

 

The employer determined that the B&O Tax was different and more complicated to administer than the existing taxes and concluded that none of its Finance Department employees were qualified to administer the B&O Tax.  To address those concerns, the employer created the new B&O Tax Auditor classification.  Before the B&O Tax Auditors were hired, a member of the bargaining unit fielded basic questions about the new tax from taxpayers by referencing an information sheet prepared by Finance Department management.  The employer subsequently hired two employees with B&O Tax experience in other jurisdictions. 

 

ISSUE 1

Do the B&O Tax Auditors share a community of interest with the employees in the unions Finance Department bargaining unit?

 

Conclusion

The B&O Tax Auditors share a community of interest with the employees in the Finance Department bargaining unit represented by the union.  The more complex nature of the B&O tax does not diminish or overcome the similarities the B&O Tax Auditors share with the employees in the bargaining unit.  The B&O Tax Auditors perform similar duties as other bargaining unit employees and ensure proper revenue collection for the employer. 

 

Analysis

Applicable Legal Standards –

The implementation of the right of public employees to join and be represented by labor organizations is the intent and purpose of Chapter 41.56 RCW.  Nucleonics Alliance, Local Union No. 1-369, Oil, Chemical and Atomic Workers Intern. Union, AFL-CIO v. Washington Public Power Supply System, 101 Wn.2d 24 (1984), RCW 41.56.010.  Chapter 41.56 RCW is remedial in nature and should be liberally construed to affect its purpose.  International Ass’n of Firefighters Local 469 v. Yakima, 91 Wn.2d 101, 109 (1978).

 

The determination of appropriate bargaining units is a function delegated to this agency by the Legislature.  City of Richland, Decision 279-A (PECB, 1978), aff’d, IAFF Local 1052 v. Public Employment Relations Commission, 29 Wn. App. 599 (1981), review denied, 96 Wn.2d 1004 (1981).  The goal in making bargaining unit determinations under Chapter 41.56 RCW is to group together employees who have sufficient similarities (community of interest) to indicate that they will be able to bargain effectively with their employer.  Quincy School District, Decision 3962-A (PECB, 1993).  When making bargaining unit determinations, the Commission seeks to avoid fragmentation and potential work jurisdiction disputes.  King County, Decision 6696 (PECB, 1999).  Bargaining unit determinations are made on a case-by-case basis.  King County, Decision 5910-A (PECB, 1997).

 

In making bargaining unit determinations, RCW 41.56.060(1) directs this agency to consider “the duties, skills, and working conditions of the public employees; the history of collective bargaining by the public employees and their bargaining representatives; the extent of organization among the public employees; and the desire of the public employees.”^[1]  The criteria are not applied on a strictly mathematical basis.  King County, Decision 5910-A (PECB, 1997).  Not all of the factors will arise in every case, and where they do exist, any one factor could be more important than another, depending on the facts.  Renton School District, Decision 379-A (EDUC, 1978), aff’d, Renton Education Association v. PERC, 101 Wn.2d 435 (1984).

 

Application of Standards

The employer argues that the B&O Tax Auditors do not share a community of interest with the employees in the Finance Department bargaining unit and therefore cannot be included in that bargaining unit.  The employer asserts that the duties, skills and working conditions of the B&O Tax Auditors and the bargaining unit employees differ.  The employer points to the complex nature of the B&O Tax and the work performed by the B&O Tax Auditors and claims that this work is substantially different from the tax work being performed by existing bargaining unit employees.  The employer also claims that there is little to no overlap between the work performed by the B&O Tax Auditors and bargaining unit employees.  The employer asserts that the B&O Tax Auditors actually share a community of interest with other professional employees in the employer’s workforce who are not currently organized for purposes of collective bargaining. 

 

The union argues that the B&O Tax Auditors share a community of interest with the employees in its Finance Department bargaining unit and its bargaining unit is the only location for the B&O Tax Auditors.  The union points to the Finance Department bargaining unit description and asserts that the B&O Tax Auditors fit within that description.  To exclude the B&O Tax Auditors from its bargaining unit would fragment the employer’s workforce and create work jurisdiction issues.  The union argues the duties and skills of the B&O Tax Auditors and bargaining unit employees centers around the administration and analysis of employer collected taxes.  While there may be differences between the subject matter of the taxes, the union argues that the underlying work is of a similar nature.  The union also claims the B&O Tax Auditors and bargaining unit employees share common working conditions, such as lines of supervision and common policies and procedures, and the B&O Tax Auditors and bargaining unit employees also work in the same location. 

Duties, Skills, and Working Conditions –

The duties, skills and working conditions of the B&O Tax Auditors and employees in the Finance Department bargaining unit are substantially similar.  Both interact with the taxpaying public, review tax returns for accuracy and completeness, and calculate and prepare refunds and billing.  Although they work on different taxes, B&O Tax Auditors and other bargaining unit members work in close proximity on the same floor of the same building.  B&O Tax Auditors report to a non-represented manager in the same way that bargaining unit members report to other non-represented managers.  They share the same department head leadership. 

 

The education and experience required of B&O Tax Auditors are also similar to the requirements for the Finance Department bargaining unit members.  For the B&O Tax Auditor position, the position description requires a bachelor’s degree in accounting, finance, economics or related field and five years of related experience.  A certified public accounting (CPA) license is considered highly desirable.  These requirements are comparable to other positions in the bargaining unit.  The senior accountant position description calls for a bachelor’s degree in finance, accounting, economics or related field and five years of related experience with a CPA license preferred.  Of the eight bargaining unit member position descriptions offered into the record, five require a bachelor’s degree in a related field, two prefer a CPA, and one calls for five years of related experience.   

 

The primary difference separating the B&O Tax Auditors from the bargaining unit employees is the B&O Tax itself.  The B&O Tax is, in some ways, more complex to administer than the gambling, admission and utility taxes.  For instance, the B&O Tax contains two component structures under which a taxpaying business must calculate and report its B&O Tax liability.  Depending on the nature of their operations, some businesses report their B&O Tax return using a gross receipts calculation, while other businesses report using a square footage calculation.  Each calculation in turn requires application of various deductions, credits, and rates.  Determining which calculation applies requires application of knowledge that is different from that used to calculate taxpayer liability under gambling, admission and utility taxes.  The B&O Tax Auditors will likely spend considerable time performing field audits at taxpayer premises.^[2] 

 

Another difference between the B&O Tax Auditors and the other bargaining unit members is that the B&O Tax Auditors receive slightly higher pay and different benefits than bargaining unit members under the employer’s policies covering non-represented employees.  The B&O Tax Auditors are compensated at pay grade 41 whereas the highest paid employee in the Finance Department bargaining unit is the senior accountant who is compensated at pay grade 38.  Other bargaining unit members are compensated as low as pay grade 22.  The difference in pay and benefits can be attributed to the fact that the B&O Tax Auditors are currently unrepresented and subject to the employer’s unilateral compensation and benefit plan for non-represented employees. 

 

These differences do not outweigh the community of interest that is created by the similarities between the B&O Tax Auditors.  The work performed by the B&O Tax Auditors and bargaining unit members is all part of the continuum of duties in ensuring proper revenue collection for the employer.  To parse employees by the specific subject matter of their work when the employees share a common mission would lead to excessive fragmentation of the workforce.  See, e.g., State – Enterprise Services (Technology Solutions), Decision 11663 (PSRA, 2013).  History of Collective Bargaining –

The union has represented the Finance Department bargaining unit since 1989.  The bargaining unit historically includes positions that perform a variety of different tasks at varying levels of complexity.  It is consistent with the history of collective bargaining of this bargaining unit to include positions that are substantially different from each other in complexity. 

 

The employer argues that audit functions were historically performed by the audit manager, a non-represented employee, and that this supports a history of bargaining that excludes audit work from the bargaining unit work.  However, as the employer emphasized at hearing and in its written arguments, the B&O Tax is substantially different than any other tax levied by the employer.  Therefore, this argument is unpersuasive because the work performed by the B&O Tax Auditors did not exist prior to the implementation of the B&O Tax. 

 

The B&O Tax Auditor is a new position, the employees working in the position are new, and the work performed by the employees is new.  No bargaining history exists that specifically relates to the B&O Tax Auditors.  The history of bargaining does not assist in determining whether the B&O Tax Auditors share a community of interest with the Finance Department bargaining unit. 

 

Extent of Organization –

The extent of organization component examines the existing bargaining units of the employer’s workforce and how the at-issue positions fit into that workforce.  When faced with the question of whether a newly created position should be included in an existing bargaining unit, the starting point of the analysis is the bargaining unit description.  If the newly created positions logically fit within an existing bargaining unit certification, then this factor would tend to demonstrate that a community of interest exists.   

 

Here, the union is the certified representative of a bargaining unit of consisting of all “full-time and regular part-time employees who work for City of Kent in the Department of Finance…” except those specifically exempted.  City of Kent, Decision 3070-A (PECB, 1989).  A bargaining unit description that refers to the employees by describing the branch of the employer’s organizational table that includes those employees is commonly referred to as a vertical bargaining unit description.  See City of Bellingham, Decision 7322-A (PECB, 2001).  Where a bargaining unit is described vertically by the department, a presumption exists that all of the employees within that department are included in the bargaining unit unless specifically excluded. 

 

In this case, the bargaining unit description unambiguously includes all employees in the Finance Department unless otherwise noted.  Nothing in the bargaining unit description inherently contradicts including the B&O Tax Auditors in the bargaining unit. 

 

Other evidence supports a conclusion that the extent of organization component weighs in favor of the B&O Tax Auditors sharing a community of interest with the Finance Department bargaining unit.  An overlap of duties exists between the B&O Tax work and other tax work performed by bargaining unit members.  For example, B&O Tax returns are received and initially processed by bargaining unit members and tax refund payments are also processed, at least in part, by bargaining unit members.  The potential for work jurisdiction conflicts would exist if the B&O Tax Auditors are not included in the bargaining unit, thereby supporting inclusion in the bargaining unit.

 

The fact that B&O Tax Auditors perform more high level auditing duties than other bargaining unit employees also does not justify their exclusion from the bargaining unit.  In City of Kent, Decision 9005 (PECB, 2005), this employer sought to exclude the newly created “senior accountant” position from the Finance Department bargaining unit on the basis that the position performed higher level accounting work than other bargaining unit employees.  Applying the same certification that is at issue in this case, the Executive Director concluded that “exclusion of non-supervisory employees who perform accounting work at a high level would inherently create a potential for ‘work jurisdiction’ conflicts.”  City of Kent, Decision 9005, citing South Kitsap School District, Decision 472 (PECB, 1978).

The duties, skills and working conditions of the B&O Tax Auditors and the extent of organization in the employer’s workforce demonstrates that the B&O Tax Auditors share a community of interest with the employees in the Finance Department bargaining unit. 

 

ISSUE 2 – Accretions

 

Should the B&O Tax Auditors be included in the Finance Department bargaining unit without the need of an election?

 

Conclusion

The Finance Department bargaining unit is the only appropriate location for the B&O Tax Auditors.  That bargaining unit is clarified to include the B&O Tax Auditors. 

 

Applicable Legal Standards –

Accretions occur when the employer creates a new position that is then placed into an existing bargaining unit without a vote of the employee in that accreted position.  Accretion is the exception to the statutory general rule of employee free choice because it deprives employees of a vote in the determination of whether they are represented for purposes of collective bargaining.  City of Auburn, Decision 4880-A (PECB, 1995).  Accretions can be ordered when changed circumstances lead to the existence of positions which logically belong only in one existing bargaining unit.  City of Auburn, Decision 4880-A.  Accretion will be denied if the positions could stand on their own as a separate bargaining unit or could appropriately be included in any other bargaining unit. City of Auburn, Decision 4880-A.  An accretion cannot be ordered where the number of employees to be added to the bargaining unit is so large as to call into question the union's majority status in the enlarged unit.  Port of Seattle, Decision 11131 (PORT, 2011).  The party seeking an accretion has the burden to demonstrate that the conditions for accretion are present.  City of Auburn, Decision 4880-A.

 

Distilling the conditions set forth above, for accretion to be appropriate: 1) there must be changed circumstances that result in the creation of new positions, 2) the newly created positions must logically belong in only one existing bargaining, 3) the newly created positions must not be able to stand alone as a separate bargaining unit or be included appropriately in any other bargaining unit, and 4) including the position in the existing bargaining unit must not create a question concerning representation.

 

Application of Standards –

The employer argues that including the B&O Tax Auditors in the Finance Department bargaining unit would deprive those employees the right to freely choose their own bargaining representative.  The union argues that all conditions for including the B&O Tax Auditors in its Finance Department bargaining unit have been met. 

 

The parties stipulated that the implementation of the B&O Tax presented a change in circumstances that resulted in the creation of the B&O Tax Auditor positions.  They also stipulated that including the B&O Tax Auditors in the bargaining unit will not create a question concerning the representation status of the union.  Further, neither party argued that the B&O Tax Auditors could stand alone as a separate bargaining unit or be appropriately included in another existing bargaining unit.  The issue remaining is whether the B&O Tax Auditors logically belong only in the bargaining unit represented by the union.

 

B&O Tax Auditors also share a community of interest with the bargaining unit.  This fact, along with the unambiguous language of the bargaining unit certification, leads to the logical conclusion that the B&O Tax Auditors belong in the Finance Department bargaining unit.  The B&O Tax Auditors are regular employees working in the Finance Department and are not meter reader/maintenance worker II, temporary, confidential, or supervisory employees.  The clear presumption is that the B&O Tax Auditors should be accreted to the bargaining unit. 

 

The employer presents no compelling reason to overcome this presumption and rewrite the certification to exclude the B&O Tax Auditors from the bargaining unit.  However, the employer argues that the B&O Tax Auditors could, hypothetically, form a bargaining unit of “professional” employees across all the employer’s departments.^[3]  It argues that this currently nonexistent bargaining unit would be a more appropriate bargaining unit than the Finance Department bargaining unit at issue here.  The employer concludes that the potential for this bargaining unit makes accretion into the Finance Department bargaining unit inappropriate. 

It is impossible to determine on this record whether the hypothetical bargaining unit of professional employees suggested by the employer would be appropriate.^[4]  Even if it were, the employer’s argument fails because accretion standards do not require evaluation of whether a future hypothetical bargaining unit would be appropriate when a logical bargaining unit exists.  The B&O Tax Auditors logically belong in the Finance Department bargaining unit.  Because the accretion standards are met and no compelling reason to exclude B&O Tax Auditors from the bargaining unit exists, they are appropriately included in the bargaining unit.

 

The B&O Tax Auditors share a community of interest with other members of the bargaining unit. The conditions necessary for accretion are met in that the bargaining unit represented by the union is the only logical bargaining unit in which to place the B&O Tax Auditors.  Therefore, the bargaining unit is clarified to include the B&O Tax Auditors.   

 

FINDINGS OF FACT

 

1.                  The City of Kent (employer) is a public employer within the meaning of RCW 41.56.030(12).

 

2.                  Washington State Council of County and City Employees (union) is a bargaining representative within the meaning of RCW 41.56.030(2).

 

3.                  Prior to 2012, the city’s revenues were generated primarily through a gambling tax, an admissions tax, and a utility tax.  Employees in the Finance Department bargaining unit administer the day-to-day issues that arise under these taxes. 

 

4.                  The union represents a bargaining unit of employees in the Finance Department.  That bargaining unit is currently described as:

Regular full-time and regular part-time employees who work for the City of Kent in the department of finance; excluding specifically meter reader/maintenance worker II, temporary, confidential, supervisory, and all other employees of the employer.  

Bargaining unit members are employed as financial analysts, accountants, and customer service representatives. 

 

5.                  In 2012, the employer implemented a B&O Tax to support its transportation infrastructure and enacted ordinances to effectuate that decision.  The employer determined that the B&O Tax was different and more complicated to administer than the existing taxes.  The employer concluded that none of its Finance Department employees were qualified to administer the B&O Tax.  To address those concerns, the employer created the new B&O Tax Auditor classification. 

6.                  On March 18, 2013, the union and employer jointly filed a petition seeking clarification as to whether the newly created B&O Tax Auditor position should be included in the union’s Finance Department bargaining unit.

7.                  The duties, skills and working conditions of the B&O Tax Auditors and employees in the Finance Department bargaining unit are substantially similar.  Both interact with the taxpaying public, review tax returns for accuracy and completeness, and calculate and prepare refunds and billing.  Although they work on different taxes, B&O Tax Auditors and other bargaining unit members work in close proximity on the same floor of the same building.  

8.                  The B&O Tax Auditor is a new position, the employees working in the position are new, and the work performed by the employees is new.  No bargaining history exists that specifically relates to the B&O Tax Auditors.

 

9.                  An overlap of duties exists between the B&O Tax work and other tax work performed by bargaining unit members.  For example, B&O Tax returns are received and initially processed by bargaining unit members and tax refund payments are also processed, at least in part, by bargaining unit members.  The potential for work jurisdiction conflicts would exist if the B&O Tax Auditors are not included in the bargaining unit, thereby supporting inclusion in the bargaining unit.

CONCLUSIONS OF LAW

 

1.                  The Public Employment Relations Commission has jurisdiction in this matter under Chapter 41.56 RCW and Chapter 391-35 WAC.

 

2.                  The B&O Tax Auditors share a community of interest with employees in the bargaining unit described in Finding of Fact 4.

 

3.                  The B&O Tax Auditors cannot stand as a separate bargaining unit without impermissibly fragmenting the employer’s workforce and the B&O Tax Auditors cannot logically be included in another bargaining unit.

  

ORDER

 

The bargaining unit described in City of Kent, Decision 3070-A (PECB, 1989), is clarified to included the B&O Tax Auditors.

 

Issued at Olympia, Washington, this  21^st  day of February, 2014.

 

 

PUBLIC EMPLOYMENT RELATIONS COMMISSION

 

 

 

MICHAEL P. SELLARS, Executive Director

 

This order will be the final order of the

agency unless an appeal is filed with the

Commission under WAC 391-35-210