Milton Board of School Directors v. Milton Staff Ass'n.

MILTON_SCHOOL_DIRECTORS_V_MILTON_STAFF_ASSN.94-162; 163 Vt 240; 656 A.2d 993

[Filed 27-Jan-1995]

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, 109 State Street, Montpelier, Vermont 05609-0801 of any errors in
order that corrections may be made before this opinion goes to press. 


                                 No. 94-162


Milton Board of School Directors                  Supreme Court

                                                  On Appeal from
     v.                                            Chittenden Superior Court

Milton Staff Association,                         November Term, 1994
Local 130 VEA/NEA


Merideth Wright, J.

Dennis W. Wells and Christopher D. Roy of Downs Rachlin & Martin, Burlington,
 for plaintiff- appellant 

Donna Watts, Vermont-NEA, Montpelier, for defendant-appellee


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


     ALLEN, C.J.   The Milton Board of School Directors (Board) appeals from
a decision of the Chittenden Superior Court confirming an arbitrator's award
in favor of the members of the Milton Staff Association (Union).  We reverse.

     The Board and the Union entered a collective bargaining agreement
effective from July 1, 1990 through June 30, 1992.  At the completion of that
term, the parties were unable to agree to a successor contract.  The Board
continued to pay the Union's members at 1991-92 rates. The Union objected on
grounds that its members were entitled to automatic pay increases each year,
even after the agreement expired and filed a grievance in accordance with the
procedure set forth in Article VI of the agreement. 

     The issue was submitted to an arbitrator for binding resolution.  The
Board challenged the arbitrator's authority to hear the question of
post-expiration compensation.  The Board argued that the section within the
agreement establishing the procedure for negotiating a successor agreement
did not mention arbitration.  Only the section on grievance procedures

 

provided for the Union to elect arbitration if not satisfied with disposition
of a grievance at a certain stage. This section directed that "[t]he
arbitrator shall have no power to alter the terms of this agreement."  The
agreement further stated that its written terms "incorporate[d] the entire
understanding of the parties of all matters which were the subject of
negotiations." 

     After a hearing, the arbitrator issued an award and decision, ruling
that the implied terms of the agreement included an automatic level increase
in wage rates for the Union's members for the school year following
expiration of the agreement.  On the question of his post-expiration
jurisdiction, the arbitrator concluded that the Union had not secured the
benefits of an evergreen clause, which would have continued the terms of the
existing contract until a successor agreement was negotiated.  He concluded,
however, that the Union had secured more limited protection by
contractualizing its statutory rights under 21 V.S.A.  1726(a)(5)(FN1) by
stating in the agreement that "[n]egotiations shall take place in good faith
in order to reach agreement upon the subsequent Agreement."  Because this
agreement provision mirrored the language of the statute, the arbitrator
concluded that the Union had bargained for the option of pursuing relief via
arbitration.(FN2)

     On the merits, the arbitrator concluded that although not explicitly set
forth in the agreement, the annual advancement principle "is implicit in the
14-level salary schedule" and "should have been honored by the Board on and
after July 1, 1992."  The arbitrator added that abandonment of that principle
violated the Board's obligation to bargain in good faith under  1726(a)(5)
and Article 5.3 of the agreement. 

 

     The Board moved in superior court to vacate the award, but the court
confirmed the award, concluding that the practice of allowing an annual
advance to the next salary level was the status quo under the agreement.  The
court also concluded that the arbitrator did not exceed his power in applying
the status quo doctrine.  The present appeal followed. 

     An arbitrator's authority is no broader than the power granted by
contract.  R.E. Bean Constr. Co. v. Middlebury Assocs., 139 Vt. 200, 209, 428 A.2d 306, 311 (1980).  Paragraph 6.6 of the agreement provides that the
arbitrator "shall have no power to alter the terms of this agreement."  The
Union does not argue that the express terms of the agreement provided for
automatic increases in support staff wage rates after expiration of the
agreement or for continued arbitration.  Instead, the Union suggests that the
arbitrator's decision is enforceable because doctrines and principles
embedded in the case law under  1726(a)(5) were incorporated by reference
into the agreement.  The incorporating provisions of the agreement were
Articles 1.1 and 5.3, and the doctrine conferring authority over
post-agreement negotiations was the status quo doctrine, under which
automatic increases provided for in an expired agreement to be continued
during post-agreement negotiations as a matter of bargaining in good faith. 
See Windham Southwest Educ. Ass'n, Vermont-NEA/ NEA-Readsboro Chapter v.
Readsboro Bd. of School Directors, 15 V.L.R.B. 268, 271-73 (1992), and
Chester Educ. Ass'n v. Chester-Andover School Bd. of Directors, 1 V.L.R.B.
426, 433-43 (1978).  We find no support for this theory in the agreement. 

     Neither Article 1.1 nor Article 5.3 supports a "contractualization" of
 1726 into the agreement hence, the arbitrator lacked the authority to
speak to the post-agreement period. Article 1.1 simply states that "[t]he
Board recognizes the Association for the purpose of collective bargaining
pursuant to Title 21, Chapter 22 of the Vermont Statutes Annotated as the
exclusive representative for collective bargaining with the Board . . . ." 
This provision does little more than state the obvious -- that both parties
acknowledge that state law governs their relationship in general.  The
arbitrator's conclusion that a reference to a governing statute 

 

incorporates unrelated judicial or quasi-judicial doctrine developed anywhere
within the statute is unsupported. 

     Reliance on Article 5.3 as a contractualizing mechanism is equally
unsound.  That provision states "[n]egotiations shall take place in good
faith in order to reach agreement upon the subsequent Agreement."  The Union
posits, as did the arbitrator, that because both  1726(a)(5) and the
agreement both use the concept of good faith, all the other common law
principles in case law and statute are incorporated by reference.  Neither
the text of the agreement nor the history of the negotiations leading up to
execution of the agreement can support such a rationale. 

     The parties contemplated arbitration under specific circumstances;
post-expiration negotiations was not one of them.  The agreement expressly
stated that its written terms incorporated the entire understanding of the
parties of all matters which were subject of the negotiations.   Economou v.
Vermont Elec. Coop., Inc., 131 Vt. 636, 638, 313 A.2d 1, 3 (1973) (we presume
contracts contain the entire agreement and the parties intend to be bound by
express provisions).  We are further persuaded by the Board's argument that
it would be illogical "to believe that they would have failed to include
language requiring `automatic' post- expiration pay scale advancement -- if
there truly was an agreement to that effect."  We will not supply terms or
embrace a construction that would alter the rights of the parties as
expressed in the original agreement.  See Roy's Orthopedic, Inc. v. Lavigne,
145 Vt. 324, 327, 487 A.2d 173, 176 (1985) (courts shall enforce contracts as
written and not rewrite them).  Further, section 1726(a)(5) does not impose
on contracting parties who include an arbitration clause in their agreement,
a requirement that they submit post-agreement disputes to arbitration.  The
parties may not expand an arbitrator's authority to resolve disputes beyond
the terms of the agreement simply because the Union and the Board bargain
every contract under the umbrella of the bargaining law and all its
interpretations. 

     The arbitrator's theory of contractualization of  1726(a)(5) is
misplaced and the oblique 

 

references to the Vermont Municipal Labor Relations Act do not imply a mutual
agreement to extend any provision of the agreement beyond its expiration
date, including an implied agreement to arbitrate disputes arising after that
date.  Because the superior court relied on essentially the same rationale as
that of the arbitrator, it was in error. Therefore, the arbitrator lacked
authority under the agreement to grant the award, the decision of the
superior court is reversed and the award vacated. Accordingly, we have no
occasion to consider the merits. 

     Reversed.

                              FOR THE COURT:



                              _______________________________________
                              Chief Justice




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                             Footnotes


FN1.  Under 21 V.S.A.  1726(a)(5) it is an unfair labor practice for an
 employer to refuse to bargain collectively in good faith with the exclusive
 bargaining agent. 


FN2.  The arbitrator considered and rejected the argument that the Board's
 delayed claim of lack of arbitrability amounted to waiver of that point.  The
 Union does not raise a waiver argument on appeal.