Snohomish Co. Public Transp. Benefit Area, App. V Wa Public Employment Relations Comm. Et Al, Resp. (Majority)

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E _ iLI- D COURT OF APPEALS D111 113100 II 2013 DEC { 7 AM D: 50 IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION II No. 43783 -0 -II SNOHOMISH COUNTY PUBLIC TRANSPORTATION BENEFIT AREA d /b /a COMMUNITY TRANSIT, Appellant, V. UNPUBLISHED OPINION STATE OF WASHINGTON PUBLIC EMPLOYMENT RELATIONS COMMISSION and AMALGAMATED TRANSIT UNION, LOCAL 1576, QUINN- BRINTNALL, J. Snohomish County Public Transportation Benefit Area d /b /a Community Transit appeals from the superior court' s order affirming an administrative order issued by the Public Employment Relations Commission ( "PERC "). In the administrative order, PERC ruled that Community Transit committed an unfair labor practice when it insisted to bargaining to impasse that PERC' s order a permissive subject of collective is invalid for three reasons: ( bargaining. Community Transit argues 1) PERC misinterpreted, or misapplied the law, 2) PERC exceeded its statutory authority, and ( 3) PERC' s order was arbitrary and capricious. Based on PERC' s earlier, unchallenged conclusion that the provision at issue was a waiver clause, PERC properly concluded that the provision was a permissive subject of bargaining and No. 43783 -0 -II Community Transit committed an unfair labor practice by insisting to impasse on a permissive subject of bargaining. Accordingly, we affirm. FACTS AND LEGAL BACKGROUND Amalgamated Transit Union, Local 1576 ( Amalgamated), represents bus drivers and other transit workers employed Amalgamated and executed by Community Transit.' From 1979 to 2007, Community Transit a series of collective bargaining agreements. Among their provisions, the parties' collective bargaining agreements have included ( 1) a management rights 2( clause , 3) 2) procedures for grievances filed either by the union or by an individual employee, and a provision known as " Section 18. 2." Section 18. 2 applies when, during the life of the collective bargaining agreement, Community Transit changes the employee rules, including standard operating procedures and the performance code. In 1997, Amalgamated brought an unfair labor practices complaint against Community Transit alleging that Community Transit unilaterally made changes to mandatory subjects of bargaining. 3 Amalgamated Transit Union, Local 1576 v. Cmty. Transit, No. 13219 -U -97 -3216, 1998 WL 1978452, at * I ( Wash. Pub. Emp' t Relations Comm' n July 23, 1998). In a 1998 order dismissing the complaint, PERC ruled that under Section 18. 2, Amalgamated waived its right to bargain Community Transit' s changes to the employee rules during the life of the contract. The bargaining instructors, unit customer includes the information following job specialists, classifications: sales and coach operators, dispatchers, distribution specialists, facility maintenance leads, workers, journey workers, and internal security officers. 2 A management rights clause is generally a clause that allows management to maintain control over decisions with respect to the operation and management of the organization. See Pasco Police Officers' Ass' n v. City ofPasco, 132 Wn.2d 450, 455 -56, 938 P.2d 827 ( 1997). 3 In the predecessor agreement considered by PERC in 1998, the Section 18. 2 language was found in Section 19. 2. Otherwise, the language is exactly the same. 2 No. 43783 -0 -II Amalgamated, 1998 WL 1978452, 18. 2 as a waiver clause. at * 6. Therefore, the 1998 PERC decision defined Section Neither party appealed PERC' s 1998 decision interpreting the identical language at issue here. Years later, Community Transit and Amalgamated attempted to negotiate a successor to the collective bargaining that agreement December 31, expired 2007. During negotiations, Amalgamated sought to revise Section 18. 2. For its part, Community Transit sought to retain the Section 18. 2 language without amendments. A mediator ultimately found the parties reached an impasse on Section 18. 2 and certified the issue to interest arbitration. Amalgamated filed an unfair labor practice complaint, alleging that Section 18. 2 is a permissive subject of bargaining and that Community Transit committed an unfair labor practice because it insisted to impasse on a permissive subject of bargaining. After convening a hearing on the complaint, a hearing examiner entered findings of fact and conclusions of law relying on the earlier permissive interpretation subject of of Section 18. 2 and, thus, determining that Section 18. 2 was a bargaining. Accordingly, the hearing examiner decided that Community Transit committed an unfair labor practice by insisting to impasse on a permissive subject of bargaining. Community adopting the Transit hearing appealed examiner' s the hearing findings of examiner' s fact and decision to PERC. PERC affirmed, conclusions of law. In affirming and adopting the hearing examiner' s order, PERC explained that Community Transit was bound by the previous interpretation of Section 18. 2 as a waiver provision and that it could not now argue it was a managerial rights provision. Therefore, an earlier decision, Whatcom County Deputy Sheriff's Guild v. Whatcom County, No. 15383 -U -00 -3889, 2004 WL 725698 ( Wash. Pub. Emp' t Relations Comm' n Feb. 11, 2004), controlled the outcome rather than the balancing test in 3 No. 43783 -0 -II 4ss' International of Fire n Fighters, Local Union 1052 v. Public Employment Relations Commission, 113 Wn.2d 197, 203, 778 P. 2d 32 ( 1989), which is used to determine whether a hybrid provision is primarily concerned with mandatory or permissive subjects of bargaining. Because waiver provisions are permissive subjects of bargaining under Whatcom County, PERC concluded that the hearing examiner properly decided that Community Transit committed an unfair labor practice by insisting to impasse on a permissive subject of bargaining. Community Transit then petitioned for judicial review of PERC' 4 s order. The superior court denied Community Transit' s petition and affirmed PERC' s order. Community Transit now appeals to this 5 court. RNOVEIVAIA30k, Community Transit argues that PERC' s order is invalid. First, Community Transit argues that PERC misapplied the law by ( 1) failing to engage in the balancing test set out in Fire Fighters, 113 Wn.2d at 203; and ( 2) determining that Section 18. 2 is a permissive subject of bargaining. creating Second, Community Transit argues that PERC exceeded its statutory authority by a novel unfair labor practice. - Third, Community Transit argues that PERC' s order was arbitrary and capricious because it summarily determined that Section 18. 2 was a permissive subject of bargaining. We disagree. The Administrative Procedure Act (APA), ch. 34. 05 RCW, governs this court' s review of PERC' City s order in an unfair labor practice case. RCW 41. 56. 165; Pasco Police Officers' Ass' n v. of Pasco, 132 Wn.2d 450, 458, 938 P. 2d 827 ( 1997). Under the APA, the party challenging 4 PERC chose not to appear in the superior court or defend its order on judicial review. 5 In support of Community Transit' s argument, the Washington State Association of Municipal Attorneys filed a brief as amicus curiae. 4 No. 43783 -0 -II the agency' s bears the burden action of demonstrating its invalidity. RCW 34. 05. 570( 1)( a). There are nine circumstances under which we may grant relief from an agency order, including 1) the is order interpreted outside the applied or the 34. 05. 570( 3)( b), ( d), ( i). agency' law, s and ( statutory authority, ( 2) 3) the order is the agency has erroneously and arbitrary capricious. RCW When reviewing agency action under the APA, we sit in the same position as the superior court and apply. the APA standards to the record before the agency. Mader v. Health Care Auth., 149 Wn.2d 458, 470, 70 P. 3d 931 ( 2003). Accordingly, we review PERC' s order, not the decision of the superior court or the hearing examiner. City of Vancouver v. Pub. Emp' t Relations Comm' n, 107 Wn. App. 694, 703, 33 P. 3d 74 ( 2001), review denied, 145 Wn.2d 1021 ( 2002). We review PERC' s conclusions of law de novo and may substitute our interpretation of the law for that deference" to Seattle v. expertise of Pasco Police, 132 Wn.2d PERC. an administrative on matters 458. falling At the within its same time, we in labor relations. of a reviewing give " area of expertise. Pollution Control Hearings Bd., 151 Wn.2d 568, 595, 90 P. 3d 659 ( 2004). 319, 96 P. 3d 957 ( 2004). deference agency at due Port of PERC has Christensen v. Grant County Hosp. Dist. No. 1, 152 Wn.2d 299, Therefore, PERC' s expertise in labor relations deserves the due court. See Pub. Emp' t Relations Comm' n v. City of Kennewick, 99 Wn.2d 832, 842, 664 P. 2d 1240 ( 1983). Community Transit argues that PERC erroneously interpreted or applied the law because 1) PERC failed to conduct the balancing test adopted in Fire Fighters, and (2) PERC concluded that Section 18. 2 was a permissive subject of bargaining. We disagree. Here, the Fire Fighters balancing test would be necessary if Section 18. 2 were a management rights clause; however, because PERC already determined that Section 18. 2 is a waiver clause, PERC appropriately E No. 43783 -0 -II applied its earlier atcom County to conclude that Section 18. 2 is a permissive decision in " subject of bargaining. Washington law distinguishes between mandatory and permissive subjects of collective See, bargaining. Wn. App. 171, e. g., Yakima County v. Yakima County Law Enforcement Officers' Guild, 174 181, 297 P. 3d 745, review denied, 178 Wn.2d 1012 ( 2013). On mandatory subjects, the parties must bargain in good faith; if they reach an impasse on a mandatory subject, their dispute will be resolved through interest arbitration. Pasco Police, 132 Wn.2d at 460 -61. In contrast, the parties may bargain on permissive subjects, but they are not required to do so. Klauder v. San Juan County Deputy Sheriffs' Guild, 107 Wn.2d 338, 342, 728 P. 2d 1044 ( 1986). Insisting to impasse on a provision addressing a permissive subject is an unfair labor practice. Klauder, 107 Wn.2d collective at 342. The distinction between mandatory and permissive subjects of bargaining derives 41. 56. 030( 4). from definition the of " collective bargaining" in RCW See Fire Fighters, 113 Wn.2d at 200. That definition imposes a mutual obligation on a public employer and a union to execute a collective bargaining agreement that governs grievance conditions." procedures and ... personnel matters, including wages, hours and working RCW 41. 56. 030( 4). Accordingly, grievance procedures and " matters of direct concern to employees," such as wages, hours, and working conditions, are categorized as mandatory subjects of collective bargaining. Fire Fighters, 113 Wn.2d at 200; City of Pasco, 119 Wn.2d at 512. In contrast, other subjects are permissive subjects on which the parties are not required to bargain. Klauder, 107 Wn.2d at 341 -42; see RCW 41. 56. 030( 4). Permissive subjects may include managerial decisions with attenuated effects on personnel matters; the exercise of managerial or union prerogatives; and the procedures used to establish contract terms on wages, hours, and working CI No. 43783 -0 -II Fire Fighters, 113 Wn.2d conditions. at 200; Klauder, 107 Wn.2d at Whether a 341 -42. proposed contractual provision addresses a mandatory or permissive subject of bargaining depends on the facts of each case. Fire Fighters, 113 Wn.2d at 203. As an initial matter, Community Transit argues that PERC misapplied the law because Fire Fighters has created a balancing test that must be used whenever PERC determines whether a provision is a mandatory or permissive subject of bargaining. However, Fire Fighters requires that PERC engage in a case -by -case analysis to determine whether a proposed contractual provision addresses a mandatory or permissive subject of bargaining. 113 Wn. 2d at 203. But PERC is not required to engage in the balancing test every time it is tasked with determining Wn.2d issue is an whether at 459 -68 ( subject was a mandatory or permissive subject of bargaining. See Pasco Police, 132 making no mention of the balancing test and deciding that a provision' s mandatory, Specifically, there are some issues that are mandatory not permissive). or permissive as a matter of law; for example, employee wages, hours, and working conditions are mandatory subjects of bargaining. PERC would not be required to apply the Fire Fighters balancing test to a provision that deals exclusively with employee wages, hours, or working conditions because that provision must be a mandatory subject of bargaining. The balancing test is meant to be used when a provision addresses both a mandatory subject of bargaining ( e. g., wages, hours, and prerogatives). working conditions) and permissive See Fire Fighters, 113 Wn.2d at 203. subjects of bargaining ( i.e., managerial Section 18. 2 is exclusively a waiver provision and does not address both mandatory and permissive subjects, so there is nothing to balance and the balancing test is not appropriate. Accordingly, PERC did not misapply the law when it did not conduct the Fire Fighters balancing test. 7 No. 43783 -0 -II The parties also dispute whether Section 18. 2 addresses a mandatory or permissive subject of Section 18. 2 states, bargaining. Community Employee' s Transit] Rule notify [ Amalgamated] of any changes in the Regulations, including Standard Operating Procedures agrees and to SDP' s) and Performance Code, affecting employees in the Bargaining Unit. The grievance covered in Article 14] shall not apply to any matters procedure [ established by this section, except to [ as Community Transit' s] administration of such provisions resulting in employee appeal of his /her discharge or suspension only as per Article 14 of this Labor Agreement. Administrative Record at 132. As explained above, PERC had already characterized Section 18. 2 as a waiver provision. Amalgamated, 1998 WL 1978452, at * 6. As PERC correctly noted in its decision here, its earlier decision governs the characterization of Section 18. 2 as a waiver provision. PERC' s 1998 decision did not directly address whether Section 18. 2 was a mandatory or permissive subject of bargaining. Therefore, here, PERC was required to determine whether the waiver provision in Section 18. 2 was a mandatory or permissive subject of bargaining. No Washington court has decided whether a provision waiving a party' s statutory bargaining rights is mandatory or permissive. See Pasco Police, 132 Wn.2d at 463. But in 2004, PERC concluded that " a broad waiver of statutory [ bargaining] rights" is a permissive subject of bargaining. Local 1604 Emp' t Whatcom v. City County, 2004 WL 725698, at * 7; accord Int' l Ass' n of Fire Fighters, WL 3784086, U 11 of Bellevue, No. 23828 - - - 6082, 2013 Relations Comm' n July 12, 2013) ( at * 6 ( Wash. Pub. submitted as additional authority by Amalgamated). In light of PERC' s prior decision that Section 18. 2 waived Amalgamated' s statutory right to bargain changes to the employee rules to impasse, it follows that Section 18. 2 is a broad waiver and therefore a permissive subject of bargaining. See Whatcom County, 2004 WL 725698, at * 7. No. 43783 -0 -II Attempting to distinguish Section 18. 2 from the broad waiver in Whatcom County, Transit Community argues Section 18. 2 is broad. on two grounds that Section 18. 2 is not broad. First, the scope of In Whatcom County, a broad waiver allowed the employer to adopt new rules on any subject on which the parties' collective bargaining agreement was silent. 2004 WL 725698, Amalgamated' the Community Transit asserts that, in contrast, Section 18. 2 merely waives 10- 11. at * s right employee rules, But 40. Community to bargain " standard Transit' subjects specifically listed in [ Section] 18. 2," i. e., changes to operating procedures, s assertion belies the Br. of Appellant at and performance code. history parties' and the record. In the course of 123 pages, the standard operating procedures govern practically every aspect of working conditions. Section 18. 2 is unquestionably broad. Second, procedural" Community Transit attempts to distinguish Section 18. 2 from the broad waiver in Whatcom County. This contention is also unpersuasive. Even the broad waiver in Whatcom County preserved an opportunity for the union to contest the employer' s changes to working conditions during the life of the contract by allowing the union to object to the changes 10. and providing for But Section 18. 2 arbitration of excludes any unresolved objections. Amalgamated from the process to 2004 WL 725698, at an even greater degree: it eliminates any real opportunity for Amalgamated to contest Community Transit' s changes to the employee rules. Like the waiver in Whatcom County, Section 18. 2 allows Community Transit to make changes to rules and procedures without having to deal with the union. Although it undoubtedly has an indirect impact, a broad waiver of Amalgamated' s right to bargain over changes to the employee rules is not a matter of direct concern to employees. Instead, as PERC explained in Whatcom County, this broad waiver addresses " the relationship between the employer and union, by enabling the employer to change work rules without having C No. 43783 -0 -II to deal with to right the union." bargain does permissive, rather at * 4; see 2004 WL 725698, not directly than a mandatory, at * concern 4. Because this broad waiver of Amalgamated' s working conditions, Section 18. 2 addresses a subject of bargaining. Whatcom County, 2004 WL 725698, 200. Therefore, PERC' s order is not based on an Fire Fighters, 113 Wn.2d at erroneous application of the law. Community Transit' s remaining arguments rest on assumptions which we have already held meritless. Community Transit argues that PERC exceeded its statutory authority by creating a new unfair labor practice; namely, insisting to impasse over a mandatory subject of bargaining. See RCW 41. 56. 140; Pasco Police, 132 Wn.2d at 460 -61. However, for the reasons explained above, PERC correctly determined that Section 18. 2 is a permissive subject of bargaining. Accordingly, Community Transit' s argument must fail. Community Transit also argues that PERC' s order was arbitrary and capricious because PERC failed to apply the Fire Fighters balancing test. However, the Fire Fighters balancing test was superfluous dealing with the PERC made a well reasoned decision to apply its earlier decision in this case. subject matter. Therefore, it also follows that PERC' s order is not arbitrary and capricious. Port ofSeattle, 151 Wn.2d at 589 ( An agency order is not arbitrary and capricious if the agency acted honestly and upon due consideration.).. 10 No. 43783 -0 -II Community Transit has not met its burden to show that PERC misinterpreted or misapplied the law, PERC acted outside its statutory authority, or PERC' s order was arbitrary and capricious. RCW 34. 05. 570( 1)( a), ( 3). Accordingly, we affirm PERC' s order. A majority of the panel having determined that this opinion will not be printed in the Washington Appellate Reports, but will be filed for public record in accordance with RCW 2. 06. 040, it is so ordered. Q INN- BRINTNALL, J. MAXA, J. 11

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