Milwaukee Police Association v. Nannette H. Hegerty
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2005 WI 28 SUPREME COURT CASE NO.: COMPLETE TITLE: OF WISCONSIN 03-3081 Milwaukee Police Association, Local 21, IUPA, AFL-CIO, Matthew Grauberger, Milwaukee Police Supervisors' Organization, Plaintiffs-Respondents-Petitioners, v. Nannette H. Hegerty, Chief of Police for the City of Milwaukee, and City of Milwaukee, Defendants-Appellants. REVIEW OF A DECISION OF THE COURT OF APPEALS 2004 WI App 148 Reported at: 275 Wis. 2d 300, 685 N.W.2d 864 (Ct. App. 2004 Published) OPINION FILED: SUBMITTED ON BRIEFS: ORAL ARGUMENT: February 3, 2005 SOURCE OF APPEAL: COURT: COUNTY: JUDGE: Circuit Milwaukee Daniel A. Noonan March 22, 2005 JUSTICES: CONCURRED: DISSENTED: NOT PARTICIPATING: ATTORNEYS: For the plaintiffs-respondents-petitioners there were briefs by Jonathan Cermele, Rachel L. Pings and Eggert & Cermele, S.C., Milwaukee, and oral argument by Jonathan Cermele. For the defendants-appellants there was a brief by Grant F. Langley and Donald L. Schriefer, Milwaukee, and oral argument by Donald L. Schriefer. 2005 WI 28 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 03-3081 (L.C. No. 02 CV 9910) STATE OF WISCONSIN : IN SUPREME COURT Milwaukee Police Association, Local 21, IUPA, AFL-CIO, Matthew Grauberger, Milwaukee Police Supervisors' Organization, FILED Plaintiffs-RespondentsPetitioners, MAR 22, 2005 v. Nannette H. Hegerty, Chief of Police for the City of Milwaukee, and City of Milwaukee, Cornelia G. Clark Clerk of Supreme Court Defendants-Appellants. REVIEW of a decision of the Court of Appeals. ¶1 ANN WALSH BRADLEY, J. The Reversed. petitioners, Milwaukee Police Association, Local 21, IUPA, AFL-CIO, Matthew Grauberger, and Milwaukee Police Supervisors' Organization, seek review of a published decision of the court of appeals reversing an order of the circuit court, which had ruled in favor of the petitioners.1 1 Milwaukee Police Assoc. v. Hegerty, 2004 WI App 148, 275 Wis. 2d 300, 685 N.W.2d 864 (reversing an order of the circuit court for Milwaukee County, Daniel A. Noonan, Judge). No. 03-3081 In this case we must determine whether the parties' collective bargaining agreements establish a different frequency for payment of overtime compensation than the 31-day frequency set forth in Wis. Stat. § 109.03(1) (2001-02).2 The petitioners assert that the court of appeals erred in concluding that the 31-day frequency for payment controlled. their collective bargaining agreements They maintain that establish a shorter frequency of payment, 12 days after the end of the pay period in which the overtime was earned. ¶2 We agree with the petitioners that the City of Milwaukee is required to pay overtime compensation within 12 days after the end of the pay period in which the overtime was earned. Here, the collective bargaining agreements in question defer to the Milwaukee City Charter Ordinances. We interpret Milwaukee City Charter Ordinance § 5-06 as requiring the biweekly payment of overtime compensation. Moreover, custom and past practice of the parties indicate that the City of Milwaukee has historically paid overtime on the payday following the period in which it was earned. immediately Accordingly, we reverse the decision of the court of appeals. I ¶3 The Milwaukee Police Association (MPA) and Milwaukee Police Supervisors' Organization (MPSO) are labor organizations recognized by the City of Milwaukee (City) for the Milwaukee 2 All references to the Wisconsin Statutes are to the 200102 version unless otherwise noted. 2 No. Police Department. representative The for former certain is the exclusive non-supervisory 03-3081 bargaining police officers, while the latter is the exclusive bargaining representative for certain officers from rank of Sergeant through Deputy-Inspector of Police. ¶4 This case arose after delays in processing a number of overtime cards in periods 16-21 of 2002 because of problems with the Police Department's mainframe computer.3 During that time, the City allegedly failed to pay members of the MPA and MPSO a total of amount $824,040.29 of earned in overtime overtime, compensation. together with what It was the this police organizations believed was its untimely eventual payment, which formed the basis for this cause of action. ¶5 Since 1972, City employees have been paid bi-weekly on every other Thursday. The payday falls 12 days after the end of a two-week pay period in which the compensation is earned. ¶6 On October 2, 2002, the MPA and MPSO commenced suit seeking a declaratory judgment that the defendants-appellants' actions in failing to make timely payments of earned overtime violated Wis. Stat. Ch. 109; temporary and permanent injunctions enjoining the defendants-appellants 3 from failing to make As the City explains in its brief, contractual overtime is tracked by use of cards that employees complete whenever they work outside their regular hours. The data on these cards is then entered into the Police Department's mainframe computer by data entry personnel and transferred to the City Comptroller's Office where the information is processed for payment. The problems with the mainframe computer resulted in delays both in entering and transferring the overtime card data. 3 No. overtime payments according to the parties' 03-3081 collectively bargained and long-standing practices; penalties of up to 50 percent of liquidated delayed overtime damages.4 The payments; police attorney organizations fees; also and filed a motion for a temporary restraining order. ¶7 A hearing on the police organizations' request for a temporary restraining order was held on October 16, 2002. The circuit court granted the motion, preserving the status quo. The police organizations then filed a summary judgment motion, and the City responded with a summary judgment motion of its own. After oral argument, the circuit court found there were no genuine issues of material fact and determined that the police organizations were entitled to judgment as a matter of law. ¶8 Milwaukee In its decision, the circuit court concluded that (1) City Charter Ordinance (MCCO) § 5-06 required all wages, including overtime, to be paid 12 days after the end of the two-week pay period in which the wages were earned; (2) the parties frequency collectively of payment bargained contained an in exception Wis. to Stat. the Ch. 31-day 109 by subordinating their agreements to the MCCO in cases of conflict between the two; and (3) the City historically paid overtime in the pay period immediately following the period in which it was earned. 4 The police organizations indicate in the statement of facts in their brief that they subsequently "waived their claims for damages and penalties under ch. 109." 4 No. ¶9 03-3081 On June 2, 2004, a divided court of appeals reversed the order of the circuit court. acknowledged that the parties In doing so, the majority subordinated their collective bargaining agreements to the MCCO in cases of conflict between the two. present However, it held that no such conflict existed in the case because neither agreement overtime compensation must be paid. specified how soon Milwaukee Police Assoc. v. Hegerty, 2004 WI App 148, ¶6, 275 Wis. 2d 300, 685 N.W.2d 864. Accordingly, the majority observed that, "[s]imply put, there is nothing in their collective bargaining agreements that, in the words of § 109.03(1)(a), can be read as 'establishing a different frequency for wage payments' than the thirty-one day Id., ¶9. period mandated by § 109.03(1)." ¶10 Although Judge Wedemeyer dissented from the majority opinion. he agreed with the majority that the analysis was simple, he concluded that this case presented a conflict in the application of the collective bargaining agreements. Id., ¶14 (Wedemeyer, from J., dissenting). The conflict stemmed the City's contention that the agreements did not have to comply with MCCO § 5-06. Id. Therefore, the City was applying the agreements to permit overtime compensation to be paid within 31 days or monthly rather than the bi-weekly payment as set forth in the MCCO. Id. Because of this conflict in application, the MCCO requirement of paying its employees bi-weekly trumped the terms of the agreements. that "[w]ith computer the exception glitches, the Id. Judge Wedemeyer further noted of City's occasional past 5 mistake, practice has error, been to or pay No. 03-3081 overtime to the union employees in the pay period immediately following the period in which it was earned." Id., ¶16 (Wedemeyer, J., dissenting). II ¶11 must This case presents a single issue for our review. determine agreements whether establish the a parties' different collective frequency for We bargaining payment of overtime compensation than the one set forth by Wis. Stat. § 109.03(1). of Resolution of this inquiry involves interpretation statute, collective bargaining agreement, and ordinance. Each of these present a question of law subject to independent See Roth v. City of Glendale, 2000 WI 100, appellate review. ¶15, 237 Wis. 2d 173, 614 N.W.2d 467; State v. Ozaukee County Bd. of Adjustment, 152 Wis. 2d 552, 559, 449 N.W.2d 47 (Ct. App. 1989). III ¶12 We begin our discussion with the relevant statute. Wisconsin Stat. § 109.03(1) addresses the general time period that employees must be paid wages. It provides that, "[e]very employer shall as often as monthly pay to every employee engaged in the employer's business . . . all wages earned by the employee to a day not more than 31 days prior to the date of payment." ¶13 Wis. Stat. § 109.03(1). That statute further provides, however, that this "default" period of 31 days does not apply when employees are "covered under a valid establishing a different collective frequency 6 for bargaining wage agreement payments . . . ." No. Wis. Stat. § 109.03(1)(a). the police organizations bargaining agreements. 03-3081 In this case, it is undisputed that are covered under valid collective The question therefore becomes whether their agreements with the City establish a different frequency of payment than the one set forth in Wis. Stat. § 109.03(1). ¶14 The pertinent provision of the agreement between the MPA and the City is Article 4. It states that the MCCO applies if any of its provisions or its application conflicts with the collective bargaining agreement. Article 4 provides as follows: In the event that the provisions of this Agreement or its application conflicts with the legislative authority which devolves upon the Common Council of the City of Milwaukee as more fully set forth in the provisions of the Milwaukee City Charter, Section 62.50, Wisconsin Statutes, 1977, and amendments thereto, pertaining to the powers, duties and responsibilities of the Chief of Police and the Board of Fire and Police Commissioners or the Municipal Budget Law, Chapter 65, Wisconsin Statutes, 1971, or other applicable laws or statutes, this Agreement shall be subject to such provisions. (Emphasis added.) ¶15 Article 4 of the collective bargaining agreement between the MPSO and the City similarly provides that the MCCO controls in the event that it conflicts, either expressly or in application, with the collective bargaining agreement. states: In the event that the provisions of this Agreement or its application conflicts with the legislative authority delegated to the City Common Council, the Chief of Police and Fire and Police Commission (which authority being set forth more fully by: The Milwaukee City Charter; the statutory duties, responsibilities and obligations of the Chief of 7 It No. 03-3081 Police and the Fire and Police Commission as they are provided for in Section 62.50 of the Wisconsin Statutes; the Municipal Budget Law, which is set forth in Chapter 65 of the Wisconsin Statutes; or other applicable laws or statutes); then this Agreement shall be subordinate to such authority. (Emphasis added.) ¶16 contend Citing that these the provisions, parties the police subordinated organizations their collective bargaining agreements to existing legislation in the event that the two conflicted. They assert that MCCO § 5-06 requires that all compensation, including overtime, be paid bi-weekly (i.e., 12 days after earned). the pay period in which the compensation was Because the City has applied the collective bargaining agreements in a manner conflicting with MCCO § 5-06, the police organizations submit that MCCO § 5-06 controls the frequency of overtime payments. ¶17 The City, meanwhile, asserts that MCCO § 5-06 does not require it to pay overtime on the 12th day following the end of the pay period in which the compensation was earned. To begin, the City notes that MCCO § 5-06 is silent as to the frequency of overtime payments. Moreover, it questions the import of Article 4, arguing that (1) there is no conflict triggering its resort to MCCO managerial § 5-06, rights and (2) conferred the provisions upon the 8 City merely and thus guarantee have no No. relevance to this case. 03-3081 Accordingly, the City maintains that the 31-day statutory rule governs its overtime payments.5 ¶18 In addressing the arguments of the parties, we must consider three separate matters. Initially, we must determine whether the MCCO provides for a frequency of overtime payments. Then, we must decide collective bargaining agreements conflict whether either agreements with the or MCCO the of the application the provisions of the regarding that frequency. Finally, if such a conflict exists, we must resolve whether the language of the collective bargaining agreements is sufficient to provide complete deference to the MCCO. A. ¶19 payments We begin required follows: by under examining the MCCO. the frequency MCCO § 5-06 of overtime provides as "Officers and employes of the city of Milwaukee shall be paid bi-weekly." Admittedly, the charter ordinance does not answer the precise question before us. That is, it makes no distinction as to the types of pay to which it refers (i.e., base pay, overtime, holiday pay, 5 etc.). However, by not In essence, the City argues that it need not pay on the first payday following the two-week period in which the compensation was earned. Rather, if circumstances warrant, it wants the flexibility to be able to pay on the second payday. It contends that a second payday approach complies with the statutory 31-day rule. The police organizations contend, however, that a second payday approach violates the 31-day rule because payment earned for the first week of the two-week pay period will be outside of 31 days from the date earned. Given our determination that the City must pay within 12 days of the end of the pay period in which the overtime is earned, we need not address this argument. 9 No. differentiating or limiting specific pay 03-3081 components, it is reasonable to infer that the drafters intended to require the bi-weekly payment of all compensation, including overtime. This inference supports our conclusion that the City is required to pay overtime compensation within 12 days after the end of the pay period in which the overtime was earned. Our conclusion is also supported by the title of MCCO § 5-06, Wis. Stat. Ch. 109, and the legislative history of MCCO § 5-06. We consider each in turn. 1. ¶20 The MCCO § 5-06 is entitled "Bi-weekly Payment of Salary." title of an ordinance is interpretation to be given to it. persuasive evidence of the See Mireles v. LIRC, 2000 WI 96, ¶60, n. 13, 237 Wis. 2d 69, 613 N.W.2d 875; Ozaukee County, 152 Wis. 2d at 559. Although the term "salary" is not defined in MCCO § 5-06, the term is referenced in the preceding section, MCCO § 5-05. We look to MCCO § 5-05 because a court cannot read individual sections of a charter ordinance rather must examine them as a whole. in a vacuum, but See State v. Tollefson, 85 Wis. 2d 162, 167, 270 N.W.2d 201 (1978). ¶21 Under MCCO § 5-05, the term "salary" has an expansive connotation. exception of That charter ordinance provides that, with the incentive compensation to improve productivity, officers and employees receiving a "salary" from the City may not receive compensation from the City other than the "salary" that is fixed and provided for the specific office. officers get paid more than 10 their base wage, Because "salary" No. necessarily implies all remuneration. 03-3081 Given this broad meaning of the term "salary" in the preceding section, it is reasonable to conclude that the salary referred to in the title of MCCO § 5-06 includes overtime compensation and that overtime is part of the "bi-weekly" payment. 2. ¶22 A broad reading of MCCO § 5-06 is also consistent with Wis. Stat. Ch. 109. Wisconsin Stat. § 109.03(1) sets forth the minimum or "floor" for the frequency of payment. Although the City can give its employees something better, it cannot give them less. ¶23 It cannot transgress this default period of 31 days. Significantly, Wis. Stat. Ch. 109 not only sets forth that at a minimum employees must be paid within 31 days of when compensation was earned, but also answers the question of what compensation must be paid within that 31-day period. Under Wis. Stat. § 109.01(1r), the term "wages" does not refer only to base salary or wage. including overtime. Rather, it refers to all remuneration, Wisconsin Stat. § 109.01(1r) provides: "Wage" or "wages" means remuneration payable to an employee for personal services, including salaries, commissions, holiday and vacation pay, overtime pay, severance pay or dismissal pay, supplemental unemployment benefit plan payments when required under a binding collective bargaining agreement, bonuses and any other similar advantages agreed upon between the employer and the employee or provided by the employer to the employees as an established policy. (Emphasis added.) ¶24 minimum By enacting MCCO § 5-06, the City has modified the standard for frequency 11 of payment set forth in Wis. No. Stat. § 109.03(1). 03-3081 However, it has not modified what must be paid within the newly established bi-weekly frequency. forth in Wis. Stat. § 109.01(1r), overtime is As set included. Accordingly, it is reasonable to conclude that MCCO § 5-06 also encompasses overtime compensation. 3. ¶25 06 Finally, we find the legislative history of MCCO § 5- instructive payments. in establishing the frequency of overtime Before it was changed to its present form in 1972, the language of MCCO § 5-06 required payment of all wages on the very next payday following the pay period in which they were earned. It stated that, "Officers and employes of the City of Milwaukee shall be paid bi-weekly on the second Friday following completion of the work period." The subsequent modification removed "Friday" as the day on which the checks were to be issued. Apparently this was done because the City was having problems issuing checks on Fridays when the Friday fell on a holiday.6 ¶26 the Although the City maintains that 1972 change removed requirement of paying overtime on the very next payday following the pay period in which it was earned, we are not persuaded. that the At oral argument, the City Attorney acknowledged frequency of payment 6 is a term and condition of This was explained in a letter from the City Comptroller to the Common Council dated July 19, 1972. That letter stated in relevant part, "We would like not to have the ordinance specifically state the date of payment because of holidays and other circumstances." 12 No. employment. As such, the City would typically have 03-3081 had to bargain with the police organizations, which were in existence in 1972. Because there is no evidence that such bargaining took place, we will not interpret the ordinance to have made such a significant change. Instead, we conclude that the "bi-weekly" language of MCCO § 5-06 still requires payment of all wages, including overtime, on the very next payday following the pay period in which they were earned. B. ¶27 Having determined that MCCO § 5-06 provides for a frequency of overtime payments, we consider next whether either provision of application the of the collective agreements frequency of conflict, either expressed agreements bargaining payment. distinguish The conflict City or in between agreements with submits that application. base pay it and as or the to the there It is notes overtime no the pay, establishing the frequency of payment for the former but not the latter.7 Because the agreements do not specify the frequency of payment for overtime, the City argues that there is no conflict triggering resort to outside law. ¶28 It is true that the collective bargaining agreements in question do not contain express provisions relating to the timing of overtime payments. However, this fact is irrelevant 7 In the agreement between the City and the MPA, the relevant sections for base salary and overtime are Articles 10 and 15 respectively. Meanwhile, in the agreement between the City and MPSO, the relevant sections for base salary and overtime are Articles 9 and 12 respectively. 13 No. in light of Article 4. 03-3081 The Article 4 provisions demonstrate that the parties bargained for a different frequency of payment of overtime than the "default" period set forth in Wis. Stat. § 109.03(1). The reason for this is that Article 4 defers to MCCO § 5-06 in the event that a conflict exists. the conflict need not be in the Under Article 4, expressed terms of the agreements but may arise in the application of the agreements. ¶29 the This case presents a conflict in the application of parties' conflict collective arose from bargaining the City's agreements. failure to Here, pay the overtime compensation in a bi-weekly fashion, and its insistence that it has no obligation to do so. Thus, it is the City's position that it applied the collective bargaining agreements in a manner to allow overtime compensation to be paid within 31 days or monthly. Such an application conflicts with the requirements of MCCO § 5-06, as explained above. C. ¶30 Accepting this conflict in application, we turn next to whether the language of the collective bargaining agreements is sufficient to provide complete deference to the MCCO. the City maintains that it is not. Again, It asserts that the Article 4 provisions merely guarantee that managerial legislative rights conferred away. upon the City by various laws cannot be bargained According to the City, the Article 4 provisions do not have any relevance here. ¶31 On overstated. this matter, the argument of the City appears The only way to find Article 4 irrelevant is to 14 No. ignore much bargaining of its agreements authority. text, to which more subjects than 03-3081 collective City's the the managerial As relevant here, the provisions set forth above subordinate the agreements to the ordinances contained in the Charter and authority.8 enacted under the Common Council's legislative If this were not the case, there would have been no need to use the language as "set forth more fully by" or "as more fully set forth in" the provisions of the Charter. ¶32 make its Accordingly, we conclude that when the City agreed to collective bargaining agreements "subject to" and "subordinate to" the Charter in the event of a conflict, it necessarily meant that the agreements deferred to all portions of the Charter, including MCCO § 5-06. Thus, by agreeing to the Article 4 provisions, the City relinquished what would otherwise have been a statutory right to pay overtime compensation within 31 days of the date earned. be unwise or impractical, If the City believes this result to its remedy lies at the bargaining table or in changing the relevant legislation. IV ¶33 Finally, we note that our decision today is consistent with the custom and past practice of the parties. Bodies like the Wisconsin Employment Relations Commission have often looked to past practice because it has 8 proven to be a reliable In addition to subjecting the agreements to the charter ordinances, the Article 4 provisions also subject the collective bargaining agreements to other outside bodies of law, such as Wis. Stat. § 62.50, Wis. Stat. Ch. 65, and "other applicable laws or statutes." 15 No. 03-3081 indicator of the parties' intent as to the status quo. St. Croix 522 Falls School Dist. v. WERC, 186 Wis. 2d 671, 678, N.W.2d 507 (Ct. App. 1994) (citing Mayville School Dist., Dec. No. 25144-D at 24 (WERC, 5/92); School Dist. of Wisconsin Rapids, Dec. No. 19084-C at 17 (WERC, 3/85)). ¶34 In this case, the custom and past practice of the parties indicate that the City of Milwaukee has historically paid overtime in the pay period immediately following the period in which it was earned.9 Indeed, the City acknowledges that overtime compensation has regularly been paid within 12 days after that compensation was earned except in those instances where it has been paid with one pay period of delay because of any conceivable type of mistake, delay, hang-up, glitch, or the like that might occur from the moment an officer starts to complete his card through computer processing of the data on the card.10 ¶35 Inevitably there are circumstances that prevent an employer from complying with the timely payment of wages such as 9 The police organizations buttress this number of extrinsic documents, including the Department's own Standard Operating Procedure, City Labor Negotiator, James Geissner, and a the Penny-Difference Report. 10 conclusion with a Milwaukee Police letters from then document entitled According to the City, the reason for this is simple. Because it is trying to run an orderly compensation system, it has to stay on top of things, especially when it is receiving 5,000 to 10,000 overtime cards per pay period. Although the City explains its actions in terms of "payroll prudence," we conclude that it is also a matter of contractual obligation for the reasons listed above. 16 No. overtime compensation. 03-3081 For example, computers may malfunction, payroll personnel may get sick, or data entry personnel may make mistakes. In such cases, circuit courts may exercise their discretion and choose not to award civil penalties or expenses to the employees.11 However, these exceptions cannot supplant the general rule that overtime compensation has customarily been paid within 12 days after the pay period in which that compensation was earned. V ¶36 In sum, we agree with the petitioners that the City of Milwaukee is required to pay overtime compensation within 12 days after the end of the pay period in which the overtime was earned. Here, the collective bargaining agreements in question defer to the Milwaukee City Charter Ordinances. We interpret Milwaukee City Charter Ordinance § 5-06 as requiring the biweekly payment of overtime compensation. Moreover, custom and past practice of the parties indicate that the City of Milwaukee has historically paid overtime on the payday following the period in which it was earned. immediately Accordingly, we reverse the decision of the court of appeals. 11 Indeed, this court recently observed that, "[a] circuit court ultimately has discretion to award few or no civil penalties or expenses. If the wage dispute was the result of an honest misunderstanding, a mistake, or a reasonable dispute, a circuit court might very well not award civil penalties or expenses to an employee who rushes into court and bypasses the alternative dispute resolution provided through the DWD." Hubbard v. Messer, 2003 WI 145, ¶40, 267 Wis. 2d 92, 673 N.W.2d 676. This discretion to impose civil penalties stems from the language "may order" in Wis. Stat. § 109.11(2). 17 No. By the Court. The decision reversed. 18 of the court of 03-3081 appeals is No. 1 03-3081
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