In re Ulrich

 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. 89-608


In re Grievance of Sedney Ulrich             Supreme Court

                                             On Appeal from
                                             Labor Relations Board

                                             February Term, 1991


Louis A. Toepfer, Acting Chairman

Michael R. Zimmerman, VSEA Staff Attorney, Montpelier, for plaintiff-
  appellant

Jeffrey L. Amestoy, Attorney General, and Michael Seibert, Assistant
  Attorney General, Montpelier, for defendant-appellee


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


     ALLEN, C.J.   Grievant, a state employee, appeals from an order of the
Vermont Labor Relations Board dismissing her grievance.  We affirm.
     In early 1985 the Division of Mental Retardation, Department of Mental
Health, employed grievant as a Mental Retardation Protective Services
Worker, pay grade 13.  In May of that year, the Department asked grievant to
supervise the care of fifteen retarded adults until it was able to find a
new private contractor to provide those services.  As a result of the
change in her job duties, grievant's position was temporarily reallocated to
the position of Brandon Training School Program Supervisor, pay grade 17.
By the end of 1987, grievant was assigned to pay grade 24, and effective
January 1988, grievant's position was permanently reallocated to that higher
grade.
     In May 1988, the Division reached an agreement with a private mental
health organization to provide, among other things, the services that
grievant had administered over the previous three years.  The Division
informed grievant that she would be reassigned to her old position as a
protective services worker and that she would not have reduction in force
(RIF) rights.  If she had had RIF rights that summer, she would have been
entitled to a pay grade 24 position for which she had applied but was not
hired.  On October 30, 1988, grievant's position was reallocated to Mental
Retardation Protective Services Worker, pay grade 19.  As a result of the
reallocation, plaintiff's salary increased by twenty-six cents per hour;
however, her future salary increases within the lower pay grade were
limited, and her next salary increase would not be available for a longer
period than if she had remained at pay grade 24.
     Grievant argued that the Department violated the collective bargaining
agreement (Contract) by involuntarily demoting her and by refusing to
provide her with RIF rights.  The Board concluded that the Contract
permitted the downward reallocation of her position because her "demotion"
was "for cause" and that no "reduction in force" had occurred.  The Board
further concluded that grievant had waived her argument that she was
entitled to RIF rights under Article 2 of the Contract, which provides RIF
rights to employees who are laid off because the work they performed had
been contracted out.
     On appeal, grievant argues that the Board erred in concluding (1) that
grievant was demoted "for cause," and (2) that grievant had waived her right
to argue that the employer had violated Article 2 of the Contract.
     Grievant's first argument is settled by our recent decision in In re
Hood, 2 Vt. L.W. 182 (May 3, 1991).  Although we disagree with the Board's
conclusion that a downward reallocation is a demotion "for cause," we agree
with the Board that the State has the authority to reallocate unilaterally
positions downward, subject to challenge through a classification grievance.
Id. at 183.  Thus, the Board properly dismissed grievant's claim that the
State had involuntarily demoted her in violation of the collective
bargaining agreement.
     Regarding the second claim of error, grievant does not challenge on
appeal the Board's conclusion that the downward reallocation of her
position did not constitute a "reduction in force."  Rather, grievant
challenges the Board's determination that she waived her right to argue that
the Department violated Article 2 of the Contract by not providing her with
RIF rights.  Under Article 2,
         the State may contract out work . . . and may discon-
         tinue services or programs, in whole or in part.  As a
         result of such discontinuance a permanent status
         employee who is laid off shall have reduction in force
         rights under Article 71.

         . . . .

         . . . A permanent status employee who, as a result of
         contracting out, loses his job will be deemed to have
         been reduced in force under Article 71, Reduction in
         Force.
Although she sought RIF rights, grievant did not specifically allege a
violation of Article 2 of the Contract at any of the prior steps of the
grievance procedure, including Step III, the appeal to the Department of
Personnel, which precedes a Step IV appeal to the Board.  In her Step III
grievance filing, grievant listed the following applicable contract
sections:  Article 18, Article 20, Article 71, "and any and all other
relevant articles, provisions of Personnel Rules and Regulations, Vermont
Statutes and other applicable law."
     An appeal to the Board "shall be . . . in accordance with the rules and
regulations established by the Board."  Contract, Article 18, section 3D.
As the Board pointed out, Article 18 of the Contract (Grievance Procedure)
requires that a grievance contain certain information, including "[s]pecific
references to the pertinent section(s) of the contract or of the rules and
regulations alleged to have been violated."  Section 2b.  A Step III grie-
vance "shall be submitted . . . in the form set forth under Section 2b,
above, within ten workdays . . . of the Step II decision, otherwise the
matter shall be considered closed."  Article 18, section 3C(a).  The Board
concluded that "[t]his language mandates specific raising of issues when the
grievance is first submitted or the right to raise the issue is waived."
     According to grievant, the step III hearing officer was under
constructive notice that grievant was claiming a violation of Article 2
because he knew (1) that grievant sought RIF rights, (2) that RIF rights are
available in only three situations, one of which is the contracting out of a
state employee's job, and (3) that grievant's former position had been
contracted out.  Grievant contends that past Board decisions do not stand
for the proposition that the Board will consider only issues on which the
relevant sections or rules were cited, but rather that the Board will
consider only issues raised at earlier proceedings, regardless of the
references.  Further, grievant insists that Article 18 requires closure of
the matter upon failure to file the grievance within ten days, not failure
to list every relevant provision.  Cf. Cone Mills Corp., 86 Lab. Arb. 992,
996 (1986) (construing a similar provision, arbitrator held that union's
failure to cite relevant provision did not constitute abandonment of the
grievance because underlying issues were squarely raised throughout
grievance procedure).  We agree with the Board that grievant did not
sufficiently raise the issue of whether she was entitled to RIF rights under
Article 2.
     The grievance procedure seeks to have employees and employers
"reconcile their differences as quickly as possible at the lowest possible
organization level."  Article 18, section 1a.  Toward that end, the rules
require that grievants make known the specifics of their complaints before
their disputes reach the Board.  In the instant case, it is manifest from
the step III filing and the hearing officer's ruling that grievant never
suggested that she should "be deemed to have been reduced in force" as a
result of the contracting out of the work that she once performed.  That
issue was never raised before the appeal reached the Board.  The fact that
grievant claimed that she was entitled to RIF rights does not indicate that
the hearing officer was on notice as to the Article 2 claim.  Grievant
claimed RIF rights and cited Article 71, which explains when a reduction in
force occurs, who receives benefits, and what procedures are followed. (FN1)
The hearing officer denied the grievance because no reduction in force, as
defined by the contract, had occurred.  Whether there was a reduction in
force is a distinct issue from whether grievant was entitled to RIF rights
pursuant to Article 2, which allows RIF benefits even when no actual
reduction in force occurs.  The hearing officer should not be expected to
speculate as to grievant's claim.  A grievant must give sufficient notice of
a specific issue at an earlier grievance step in order to preserve the issue
before the Board.  Grievance of Colleran and Britt, 6 V.L.R.B. 235, 259
(1983); cf. Grievance of Hetzel, 8 V.L.R.B. 325, 331 (1985) (failure to cite
specific section concerning discrimination was not fatal where
discrimination claim had been part of grievance since it was first filed).
This rule encourages grievants to have their disputes resolved before they
reach the Board.  The Board did not err in concluding that grievant's
failure to provide fair notice of her Article 2 argument waived the claim.
     Affirmed.

                              FOR THE COURT:


                              ___________________________________________
                              Chief Justice




FN1.    The provision of RIF rights to employees who have been laid off as a
result of the contracting out of the work they had performed is not covered
under Article 71 because no reduction in force has occurred.  Under Article
2, RIF rights are available to such employees as if there had been a
reduction in force.