Burl. Public Emp. Union v. Champlain Water Dist.

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NOTICE: This opinion is subject to motions for reargument under V.R.A.P. 40
as well as formal revision before publication in the Vermont Reports.
Readers are requested to notify the Reporter of Decisions, Vermont Supreme
Court, 111 State Street, Montpelier, Vermont 05602 of any errors in order
that corrections may be made before this opinion goes to press.

No. 88-016

Burlington Area Public Employees Supreme Court
Union, Local 1343, AFSCME, AFL-CIO
On Appeal from
v. Labor Relations Board

Champlain Water District April Term, 1989

Charles H. McHugh, Chairman

Blais, Cain, Keller & Fowler, Inc., Burlington, for plaintiff-appellee

Dennis W. Wells of Downs Rachlin & Martin, Burlington, for defendant-
appellant

PRESENT: Allen, C.J., Peck, (FN1) Gibson, Dooley and Morse, JJ.

ALLEN, C.J. The Champlain Water District appeals from an order of
the Vermont Labor Relations Board ordering it generally to refrain from
conducting Step III grievance hearings without the presence of grievants and
their union representatives during management's presentation, and ordering
it to offer to grievant George Hedenberg and the Burlington Area Public
Employees Union in the instant case the opportunity to attend a grievance
meeting so conducted. We reverse and remand with direction for the Board to
defer to the arbitration provided for in the collective bargaining agreement
(agreement).
Grievant was dismissed from employment by the District, and the Union
filed a grievance on his behalf. The matter progressed to Step III of the
grievance process, which required the District's Board of Commissioners to
hear the grievance at a regularly scheduled meeting. After hearing from
the Union on grievant's claim that his dismissal violated the agreement, the
Commissioners sought to hear management's explanation of the dismissal
without grievant's presence. Section 14.7 of the agreement does not specify
whether a grievant has a right to be present at the Step III hearing, either
personally or through a Union representative. The provisions for the Step
III hearing stand in contrast to the provisions for Steps I and II of the
grievance process, which do specifically address the employee's right to be
present. The Union objected to this procedure, and grievant and his Union
representative left the meeting. The Board of Commissioners denied the
grievance, and the Union appealed that decision to binding arbitration.
The Union did not file a separate grievance concerning the grievant's
exclusion from the Step III hearing, but it filed an unfair labor practice
charge with the Board, alleging that the District had violated 21 V.S.A. {
1726(a)(1) (FN2) of the Municipal Employee Relations Act (MERA) by making it
impossible for the Union to represent grievant adequately.
The District moved for summary judgment before the Board on the ground
that the Union should have filed a second grievance on this issue rather
than an unfair labor practice charge. The Board considered the summary
judgment motion with the merits of the unfair labor practice charge.
The Board noted that Section 14.1 of the agreement defines a grievance
as "a dispute as to the meaning or application of a specific written
provision of the Agreement" and concluded that the grievant's right to be
present at the Step III hearing did not "involve the interpretation of
contractual language." The Board also found that the past practice of the
District had been to allow grievants and their Union representatives to be
present during the management portion of Step III grievance hearings
involving suspension. Even though there had not been previous Step III
grievance hearings involving dismissal, the Board concluded that the
exclusion of the grievant and Union representative from this Step III
dismissal hearing was a unilateral change in a mandatory subject of
bargaining and hence was an unfair labor practice. The Board concluded
that it should not defer its decision on the unfair labor practice charge
until after the conclusion of the grievance process. We disagree, and
remand for deferral to the grievance process provided in the agreement.
Parties to a collective bargaining agreement are required to exhaust
available contractual remedies before a statutory unfair labor practice
charge will lie under 21 V.S.A. { 1726(a). See AFSCME, Local 490,
Bennington Dep't of Public Works & Police Units v. Town of Bennington, 9
VLRB 195 (1986); Burlington Educ. Ass'n, Inc. v. Burlington Bd. of School
Comm'rs, 1 VLRB 335, 340 (1978). The Board should begin its analysis by
considering if the issue contained in the complaint is subject to
arbitration, irrespective of whether or not it might also be an unfair labor
practice under MERA. If the issue is subject to arbitration, the contract
grievance procedure should be applied, barring an overriding statute or
deferral policy. As the Board said in Burlington Educ. Ass'n:
If this board hears as an unfair labor practice a
complaint which is a grievance without first requiring
the resolution procedures agreed to in the Collective
Bargaining agreement, the collective bargaining process
would be undermined. . . . [A]n exhaustion of contract
remedies doctrine . . . insures the integrity of the
collective bargaining process by requiring the parties
to collective bargain agreements to follow the
procedures they have negotiated to resolve contract
disputes. This policy also encourages the parties to
negotiate grievance procedures to resolve contract
disputes which is sound labor relations policy. Labor
relations stability depends on the parties working
together to resolve disputes which directly affect them.

The NLRB stated the same proposition very clearly in National Radio Co., 198
NLRB 527, 531 (1972) (discussing Collyer Insulated Wire, 192 NLRB 837
(1971):
Here, as [in Collyer], an asserted wrong is remediable
in both a statutory and a contractual forum. Both
jurisdictions exist by virtue of congressional action,
and our duty to serve the objectives of Congress
requires that we seek a rational accommodation within
that duality. We may not abdicate our statutory duty to
prevent and remedy unfair labor practices. Yet, once an
exclusive agent has been chosen by employees to repre-
sent them, we are charged with a duty fully to protect
the structure of collective representation and the
freedom of the parties to establish and maintain an
effective and productive relationship.

In this context, abstention simply cannot be equated
with abdication. We are, instead, adjuring the parties
to seek resolution of their dispute under the provisions
of their own contract and thus fostering both the
collective relationship and the Federal policy favoring
voluntary arbitration and dispute settlement.

The exhaustion doctrine does not bind the parties in this case if the issue
raised before the Board does not qualify as a matter of contract inter-
pretation, if an overriding statute negates deferral, or if the Board's own
deferral guidelines indicate that deferral would not serve the purposes of
the statute. As none of these contingencies are present here, exhaustion is
required.
I. Contract Interpretation.
The Board, distinguishing AFSCME, Local 490 and Burlington Educ. Ass'n,
Inc., analyzed the central issue as follows:
At issue is the procedure adopted by the Employer during
a grievance meeting on an employee's dismissal of having
the Union present its case on behalf of the dismissed
employee to the Board of Commissioners and then the
Union and involved employee being absent when management
presents its case. The procedure to be used by the
Board of Commissioners during grievance meetings is
nowhere addressed in the Contract and the Contract
limits the definition of grievance to "a dispute . . .
as to the meaning or application of a specific written
provision of the Agreement." Thus, the contractual
grievance procedure does not provide adequate redress
for the alleged wrongs.

It begs the issue to state that the contract does not expressly state that
employees may or may not be present at Step III hearings. Interpretation of
an agreement may involve interpolating from a written text solutions not
expressly spelled out in the text. Clearly, Step III hearings are creatures
of contract and not required by statute. The Step III grievance process was
an integral part of the agreement, and the question of what constitutes a
valid, bona fide Step III hearing is an issue of contract interpretation.
The issue of who may be in the room during such a proceeding is but one
example of an incident or element of such a proceeding. Similar questions
might conceivably arise as to the length of the proceeding, whether
recording devices are allowed, and the order of presentation. The answers
to all of these issues might be found by interpreting the text of the
agreement or, as the Board points out, in blending textual interpretations
and the "contracts implied in fact" in the form of established past
practices. An arbitrator is ideally poised to consider and resolve such
issues; they are issues concerning the "law of the shop" as opposed to the
"law of the land," see Barrentine v. Arkansas-Best Freight System, 450 U.S. 728, 743 (1981), which arbitrators, in general, are in a better position
than judges to interpret.
In sum, the procedures to be used at a Step III grievance hearing must
be determined by comparing the specific written provisions of Article III
and Section 14 of the agreement and by determining whether those provisions
allow the District's Board of Commissioners to exclude the grievant from a
portion of a Step III grievance hearing. This is a suitable subject for
deferral to the grievance process provided in the agreement. See AFSCME,
Local 490, 9 VLRB at 195; Burlington Educ. Ass'n, 1 VLRB at 340-345.
II. Established Past Practice.
The Board in the present case also reasoned that since the presence of
all parties at Step III proceedings was an established past practice,
exclusion of the grievant in this case was a unilateral change, comparable
to the sick-leave policy at issue in Burlington Firefighters Ass'n, Local
3044, IAFF v. City of Burlington, 10 VLRB 53 (1987), or the smoking policy
at issue in Mt. Abraham Education Ass'n v. Mt. Abraham Union High School
Bd., 4 VLRB 224 (1981). We defer to the Board's factual determination that
allowing all parties to be present at Step III proceedings was an
established past practice. The error the Board committed, however, was in
concluding that because a violation of MERA could be made out -- a point we
accept arguendo -- the Board should not defer to the contractual grievance
process. Many grievances can be related to the kind of activities covered
under MERA. If the deferral were limited to cases where grievances
implicated no possible statutory violation, deferral would be rare indeed.
The Board's reliance on Burlington Firefighters Ass'n is misplaced.
In that case the City attempted to impose an entirely new sick-leave policy
during the term of a collective bargaining agreement. The agreement in
force addressed sick leave in considerable detail, and there was no
suggestion by the City or the Association that the new sick-leave policy was
consistent with the agreement or that it involved the interpretation of
contractual language. The Board detailed in its findings of fact the
differences between the old sick-leave policy and the new and stated in its
opinion that "[t]here also is no issue whether the policy constituted a
change in conditions of employment from what had previously existed. It is
clear that such a change occurred. The question is whether the Employer met
its obligation to bargain in good faith with the Association before
instituting the changes." 10 VLRB at 59. In short, Burlington
Firefighters was a case involving an alleged violation of MERA that
proceeded on the understanding of all parties that the issue was not the
interpretation of a contract term, but rather whether a change in the
contract had been imposed consistently with law.
Mt. Abraham Educ. Ass'n is likewise inapplicable. In that case the
school directors promulgated a new smoking policy without consulting the
Association. The Association pursued a grievance remedy under its
collective bargaining agreement. The question of the arbitrability of the
issue was presented to an arbitrator, who decided that the matter was not
arbitrable. The arbitrator did not reach or decide the merits of the
grievance. The Association then pursued its statutory rights, asserting
that the change in working conditions was a violation of the school board's
duty to bargain under the statute applicable to school agreements. Thus,
the case proceeded in a context in which deferral could not possibly arise,
as it had been explicitly decided and excluded in a prior proceeding.
III. Deferral Policies.
In addition to scrutinizing contract language, which should be the
principal means of effectuating the parties' intentions, the Board,
following the practice of the NLRB, has been guided in the past by general
policy guidelines that aid in the analysis and disposition of cases that
fall under both a labor statute and particular collective bargaining
agreements. See Burlington Educ. Ass'n, 1 VLRB at 342-45; Sharpe, NLRB
Deferral to Grievance-Arbitration: A General Theory, 48 Ohio State L. J. 595
(1987). Professor Sharpe summarizes the current prevailing criteria under
the analogous provisions of the Federal Labor Relations Act, 29 U.S.C. {
158(a)(1), for a determination of the appropriateness of grievance
arbitration:
[I]n order to determine whether the grievance procedure
is capable of resolving the dispute's unfair labor
practice issues, the Board considers the stability of
the collective bargaining relationship, the respondent's
willingness to use the contractual procedure, the
likelihood that individual interests would be defended
fairly during the process, and the scope of the
grievance procedure and its ability to encompass the
unfair labor practice dimensions of the dispute.

Id. at 642. In Vermont, it is the Board that is in the best position to
develop deferral policies, and in Burlington Educ. Ass'n it announced a
deferral policy not unlike that of the NLRB: (FN3)
In determining whether to require the exhaustion of
remedies doctrine, this Board will consider whether the
action of the employer is designed or would have the
effect of significantly undermining the union. The
Board will examine the nature of the alleged unfair
labor practice and its effect on the union and its
members. The Board will defer to the arbitration
procedure when it believes the dispute involves the
interpretation of a contract.
. . . .

. . . The Board will review whether the proceedings
were tainted by fraud, collusion, unfairness or serious
procedural irregularities or that the award was clearly
repugnant to the purposes and policies of the Vermont
Labor Relations Act for Teachers.

1 VLRB at 343.
It is not our purpose in this opinion to declare what the Board's
deferral policies should be, so long as they are within the range of the
Board's statutory authority. Such policy pronouncements, like those in
Burlington Educ. Ass'n, are for the Board to consider and enunciate, within
the boundaries implicit in its statutory mandate. Our sole concern with the
Board's decision in the present case is that the central issue -- employee
presence at a Step III hearing -- is a matter of contract interpretation,
whether or not it is also an issue under 21 V.S.A. { 1726(a)(2), and no
policies presently recognized by the Board appear to bar deferral. (FN4)
Finally, the fact that the dispute over presence of the grievant arose
in the course of another grievance "does not appear to be of such character
as to render the use of the [grievance-arbitration] machinery unpromising or
futile." United Aircraft Corp., 204 NLRB 879 (1973), enforced sub nom.
Lodges 700, 743, 1746, International Ass'n of Machinists & Aerospace Workers
v. N.L.R.B., 525 F.2d 237 (2d Cir. 1975).
Because we have remanded for the application of the deferral doctrine,
it is unnecessary for us to address appellant's remaining issues: whether
the District was deprived of due process because the violation found by the
Board was not one charged in the Union's complaint, and whether the Union
waived its right to be protected from unilateral changes in mandatory
bargaining subjects.
Reversed and remanded for proceedings consistent with this opinion.

FOR THE COURT:

_______________________________
Chief Justice

FN1. Justice Peck was present at oral argument, but did not participate
in the decision.

FN2. The statute provides:
(a) It shall be an unfair labor practice for an
employer:
(1) To interfere with, restrain or coerce
employees in the exercise of their rights
guaranteed by this chapter or by any other
law, rule or regulation.

FN3. Although Burlington Educ. Ass'n arose in the context of the Vermont
Labor Relations Act for Teachers, the broad policies announced by the Board
were not limited to cases arising under that act.

FN4. In fact, the Union representative stated before the board:
I agree we could have filed a grievance because it's a
past practice. I'm not saying we couldn't have filed a
grievance. I'm saying that we feel that [except] for
when we're looking for backpay or reinstatement in a
job, we have a right to take either the Board or the
grievance procedure[,] which[ever] is more convenient
for us.

The Union is candid in its view, and might have bargained for that option.
However, we are limited to the contract before us, and its provisions do not
support the Union or the plaintiff on this question.

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CONCURRING

No. 88-016

Burlington Area Public Employees Supreme Court
Union, Local 1343, AFSCME, AFL-CIO
On Appeal from
v. Labor Relations Board

Champlain Water District April Term, 1989

Charles H. McHugh, Chairman

Blais, Cain, Keller & Fowler, Inc., Burlington, for plaintiff-appellee

Dennis W. Wells of Downs Rachlin & Martin, Burlington, for defendant-
appellant

PRESENT: Allen, C.J., Peck, Gibson, Dooley and Morse, JJ.

DOOLEY, J., concurring. I am unable to conclude that the unfair labor
practice complaint in this case involves the meaning or application of the
bargaining agreement's specific written provisions. None of the provisions
of the bargaining agreement specify the procedure at a Step III grievance
hearing. I concur, however, because I do not believe that the Union made a
sufficient showing to establish a custom and practice that has become an
implied part of this contract. To find a custom and practice, "the conduct
of the parties must encompass a continuity, interest, purpose and
understanding which elevates a course of action to an implied contractual
status." General Committee of Adjustment v. Burlington Northern, 620 F.2d 161, 163 (8th Cir. 1980).
The Board's conclusion is based on its finding that "the Board of
Commissioners had held several Step III grievance meetings concerning
disciplinary suspensions of employees" and that in all those hearings the
Union representative and involved employee were permitted to remain in the
room during management's presentation. The evidence in support of this
finding comes from two witnesses. Grievant testified that he had grieved
suspensions four or five times in the past and that, in each instance, "we
[grievant and the Union] all stayed in the room" and management presented
its case first. The District operations supervisor stated that during step
III suspension hearings he was involved in "for the most part we normally
went first getting facts and [the Union] normally went second."
At best, the evidence showed that, at some hearings in the past, the
procedure was as the Union wanted. It is far short of showing "continuity,
interest, purpose and understanding" to elevate a course of action to an
implied contractual status.

Associate Justice

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