decided: April 13, 1989.
COMMONWEALTH OF PENNSYLVANIA, PETITIONER
COMMONWEALTH OF PENNSYLVANIA, PENNSYLVANIA LABOR RELATIONS BOARD, RESPONDENT
Appeal from the Order of the Pennsylvania Labor Relations Board, in the case of American Federation of State, County and Municipal Employees, Council 13, AFL-CIO v. Commonwealth of Pennsylvania, Department of Public Welfare, Polk Center, Case No. PERA-C-86-359-E.
Patricia J. Goldbank, Assistant Counsel, with her, Frank A. Fisher, Jr., Deputy Chief Counsel, and John D. Raup, Chief Counsel, for petitioner.
Lisa K. Essman, with her, James L. Crawford, for respondent.
Alaine S. Williams, Kirschner, Walters & Willig, for intervenor, Council 13, American Federation of State, County and Municipal Employees.
President Judge Crumlish, Jr., and Judges Craig, Barry, Colins, Palladino, McGinley and Smith. Opinion by Judge Palladino.
[ 125 Pa. Commw. Page 116]
The Commonwealth of Pennsylvania (Petitioner) appeals from an order of the Pennsylvania Labor Relations Board (Board) finding that Petitioner had committed unfair labor practices by refusing to bargain with American Federation of State, County and Municipal Employees, Council 13, AFL-CIO (Union). Petitioner also appeals from an order of the Board denying its motion for reconsideration.*fn1 For the reasons set forth below, we affirm.
Petitioner, through the Department of Public Welfare, operated the Polk Center, an institution which provides care for mentally retarded children. Because of a decrease in funding, Petitioner decided to furlough a number of employees effective May 2, 1986, including certain employees represented by the Union. In making its decision as to which employees to furlough, Petitioner attempted to select those positions that did not involve the provision of continuous client care and that would not result in a violation of minimum staffing requirements pursuant to state and federal regulations. Petitioner held
[ 125 Pa. Commw. Page 117]
labor management meetings with the Union on March 26, 1986 and April 17, 1986, at which time the parties discussed the proposed furloughs.
Prior to the effective date of the furlough, the Union requested Petitioner to negotiate the impact of the furlough on the wages, hours, and working conditions of the affected bargaining unit employees. The Union also sought information from Petitioner regarding which employees would assume the tasks and duties of the furloughed employees. Petitioner responded that the collective bargaining agreement, to which Petitioner and the Union were parties, governed the issue of furloughs and that it (Petitioner) was responsible only for "meet and discuss" sessions. The bargaining unit employees were then furloughed; some of the work previously performed by those employees was assigned to employees of other bargaining units and to managerial employees.
On July 24, 1986, the Union filed unfair labor practice charges with the Board, contending that Petitioner had violated sections 1201(a)(1), (2), (3), (5), and (9) of the Public Employee Relation Act (PERA)*fn2 by refusing to
[ 125 Pa. Commw. Page 118]
bargain with the Union over the furloughs and transfer of work out of the bargaining unit. The Union also alleged that Petitioner failed to provide the requested information regarding which employees assumed the duties of the furloughed employees.*fn3
After a hearing, the hearing examiner issued a proposed decision and order (PDO) in which he concluded that Petitioner was obligated to bargain over the furloughs and their impact because they were matters of fundamental concern to the employees' interest in wages, hours, and other terms of employment. However, the hearing examiner went on to find that Petitioner had fulfilled its duty to bargain, as evidenced by the provisions of the parties' collective bargaining agreement. Accordingly, the hearing examiner concluded that Petitioner had not committed any unfair labor practices and dismissed the charges.
The Union filed exceptions to the hearing examiner's PDO. By order dated September 15, 1987, the Board sustained the exceptions in part and reversed the hearing examiner's determination that Petitioner satisfied its obligation to bargain with the Union. The Board concluded that although the parties had bargained about the furlough procedures, they had not bargained about the transfer of bargaining unit work to employees outside of that unit. Accordingly, the Board determined that Petitioner had violated sections 1201(a)(1) and (5) of PERA, but had not violated sections 1201(a)(3) and (9) of PERA. The Board ordered Petitioner to cease and desist from refusing to bargain with the Union and directed Petitioner to restore the work, previously performed by the furloughed unit employees, which had been transferred
[ 125 Pa. Commw. Page 119]
out of the unit. The Board also directed Petitioner to offer the furloughed employees, whose work had been transferred, unconditional reinstatement to their former positions.
Petitioner thereafter filed a motion for reconsideration, seeking a remand to present testimony concerning the parties' bargaining history. In its motion, Petitioner contended that this testimony would establish that, in the course of their contract negotiations, the parties bargained about the issue of transfer of unit work, that the Union demanded that the collective bargaining agreement include a provision relating to this issue, and that Petitioner considered this demand.*fn4 The Board denied reconsideration by order dated October 7, 1987.
On timely appeal to this court, Petitioner contends that the Board erred in determining that Petitioner was required to bargain with the Union over the furloughs and transfer of unit work to employees outside of the bargaining unit. Petitioner further asserts that even assuming it was required to bargain, it satisfied that obligation, as evidenced by the provisions of the collective bargaining agreement. Finally, Petitioner argues that its proffered testimony on the parties' bargaining history on the issue of transfer was improperly excluded.
Our scope of review of a Board final order is limited to a determination of whether constitutional rights have been violated, an error of law has been committed or whether the findings of fact are supported by substantial evidence. Harbaugh v. Pennsylvania Labor Relations Board, 107 Pa. Commonwealth Ct. 406, 528 A.2d 1024
[ 125 Pa. Commw. Page 120]
(1987). In this case, Petitioner has not contended that the findings of fact are unsupported by substantial evidence. Therefore, we need review only the Board's legal conclusions.
Duty To Bargain
Petitioner first contends that the Board erroneously concluded that it (Petitioner) was required to bargain over the furloughs and transfer of work out of the bargaining unit, alleging that the furloughs and transfer were matters of inherent managerial policy. As support for this argument, Petitioner asserts that, in determining which employees to furlough, it attempted to select those positions that would cause the least disruption in the provision of services to its clients. Petitioner also alleged that it chose the particular furloughed employees so as to comply with minimum staffing requirements at the facility. Petitioner contends that the Board committed an error of law by failing to consider these policy interests in determining whether Petitioner was obligated to bargain with the Union in the first instance.
Initially, we note that section 701 of PERA provides that "[c]ollective bargaining is the performance of the mutual obligation of the public employer and the representative of the public employes to meet at reasonable times and confer in good faith with respect to wages, hours and other terms and conditions of employment. . . ." 43 P.S. § 1101.701. In contrast, section 702 of PERA provides in pertinent part:
Public employers shall not be required to bargain over matters of inherent managerial policy, which shall include but shall not be limited to such areas of discretion or policy as the functions and programs of the public employer, standards of services, its overall budget, utilization of technology,
[ 125 Pa. Commw. Page 121]
the organizational structure and selection and direction of personnel. Public employers, however, shall be required to meet and discuss on policy matters affecting wages, hours and terms and conditions of employment as well as the impact thereon upon request by public employe representatives.
43 P.S. § 1101.702. In Pennsylvania Labor Relations Board v. State College Area School District, 461 Pa. 494, 337 A.2d 262 (1975), the Pennsylvania Supreme Court addressed the conflict between the above sections of PERA and posited the following test for determining the extent of a public employer's bargaining obligation:
[W]here an item of dispute is a matter of fundamental concern to the employes' interest in wages, hours and other terms and conditions of employment, it is not removed as a matter subject to good faith bargaining under section 701 simply because it may touch upon basic policy. It is the duty of the Board in the first instance and the courts thereafter to determine whether the impact of the issue on the interest of the employe in wages, hours and terms and conditions of employment outweighs its probable effect on the basic policy of the system as a whole.
461 Pa. at 507, 337 A.2d at 268. Thus, the Board, as well as a reviewing court, must engage in a balancing test of the various competing interests of the public employer and the public employees in order to determine whether a particular issue is subject to bargaining. See Council 13, American Federation of State, County and Municipal Employees, AFL-CIO v. Pennsylvania Labor Relations Board, 84 Pa. Commonwealth Ct. 458, 479 A.2d 683 (1984).
[ 125 Pa. Commw. Page 122]
In this case, the Board noted that a public employer's decision to furlough employees for legitimate business reasons, such as lack of funding or reduction in the demand for certain services, is a matter of managerial policy under section 702 of PERA (matters not subject to bargaining). However, the Board concluded that, in the absence of compelling policy reasons, a public employer must bargain with the employees' representative where the furlough of unit employees is coupled with a transfer of the work performed by those employees to employees outside of the bargaining unit. The Board determined that the reasons for the transfer of work in this case "were not 'compelling policy reasons' but economic ones." Board's Final Order at 3.
In its appeal to this court, Petitioner contends that the Board failed to utilize the balancing test set forth in State College and instead employed a per se rule in determining whether Petitioner was required to bargain.*fn5 We recognize that the Board did not specifically reference the State College balancing test in its decision. However, we conclude that the Board properly determined that Petitioner was obligated to bargain over the furloughs and transfer of bargaining unit work. While Petitioner had legitimate reasons for selecting certain employees when making its furlough decisions so as to cause the least disruption in the provision of services, Petitioner's furlough of those employees and re-assignment of their work
[ 125 Pa. Commw. Page 123]
were clearly matters of fundamental concern to the employees' interest in wages, hours, and other terms and conditions of employment under the State College test. See also Pennsylvania Labor Relations Board v. Mars Area School District, 480 Pa. 295, 389 A.2d 1073 (1978) (school district's unilateral dismissal of teacher aides, who were union members, and substitution of volunteer workers based upon economic reasons constituted unfair labor practice).
Evidence of Bargaining
Petitioner next contends that, assuming the Board correctly determined that Petitioner was obligated to bargain with the Union, the Board erred in concluding that Petitioner had not fulfilled its bargaining obligations. Petitioner asserts that the provisions of the collective bargaining agreement indicate that the parties bargained over the issues of furlough and transfer of unit work.*fn6 In support of its contention that it satisfied its duty to bargain over the transfer of unit work, Petitioner references article 2, section 1 of the parties' agreement, which provides in pertinent part:
It is understood and agreed that the Employer, at its sound discretion, possesses the right . . . to manage all operations, including the direction of the working force. . . . Matters of inherent managerial policy are reserved exclusively to the Employer. These include but shall not be limited to
[ 125 Pa. Commw. Page 124]
such areas of discretion or policy as the functions and programs of the Employer, standards of service, its overall budget, utilization of technology, the organizational structure, and selection and direction of personnel.
Joint Exhibit No. 1. Petitioner also cites article 28, section 3, which states: "The Union recognizes the right of the Employer to direct its working force, which includes the assignment of work to individual employees and it further recognizes that such assignments may include work outside an employe's classification." Joint Exhibit No. 1.
In this case, the Board concluded that the above-referenced provisions did not clearly establish that the parties bargained about the transfer of unit work. The Board further stated that it would not infer that the Union had waived its right to bargain about the transfers. This court is mindful that the Board possesses administrative expertise in the area of public employee labor relations and that great deference should be given to the Board's assessment of the competing concerns relevant to the question of whether the conduct of an employer or a union constitutes a refusal to bargain in good faith. Minersville Area School District v. Pennsylvania Labor Relations Board, 82 Pa. Commonwealth Ct. 506, 475 A.2d 962 (1984). Accordingly, we will not disturb these conclusions.
Proffered Testimony on Bargaining History
Finally, Petitioner asserts that the Board improperly denied its request for a remand to present testimony concerning the parties' bargaining history on the issue of transfer of bargaining unit work.*fn7 As noted above, Petitioner
[ 125 Pa. Commw. Page 125]
made an offer of proof at the hearing before the hearing examiner, asserting that one of its witnesses would testify that the Union "has raised, at numerous negotiations, demand that the contract include a provision regarding the transfer of bargaining unit work, and that demand was entertained by the Commonwealth." N.T. at 60. The Union objected to the proffered testimony on the ground that it constituted parol evidence. The hearing examiner sustained the Union's objection, excluding the testimony as not probative of the issues before him. The hearing examiner went on to find that
[ 125 Pa. Commw. Page 126]
Petitioner satisfied its bargaining obligations, as evidenced by the collective bargaining agreement.
On appeal, the Board determined that the Union had not waived its right to bargain about the transfers by entering into the collective bargaining agreement with Petitioner nor had Petitioner demonstrated that it had otherwise fulfilled its duty to bargain. Board's Final Order at 5. In its motion for reconsideration,*fn8 Petitioner contended that the testimony which it sought to introduce at the hearing would have established that it otherwise fulfilled its duty to bargain during the negotiation of the contract and that the Union waived its right to further bargain by entering into a contract without a provision relating to transfer of bargaining unit work.
The Board denied Petitioner's motion, holding that Petitioner had not established such extraordinary circumstances to warrant reconsideration. Relying upon Timken Roller Bearing Co. v. National Labor Relations Board, 325 F.2d 746 (6th Cir. 1963), cert. denied, 376 U.S. 971 (1964), and National Labor Relations Board v. Item Co., 220 F.2d 956 (5th Cir. 1955), cert. denied, 350 U.S. 836 (1955), the Board concluded that even if the Union had requested during contract negotiations that a provision governing transfer of bargaining unit work be included in the contract, such request would not be sufficient to establish a clear waiver by the Union of its right to later bargain about the subject.*fn9 Petitioner argues that these
[ 125 Pa. Commw. Page 127]
cases are distinguishable because the courts of appeal reviewed the actual negotiations between the parties to determine whether there was an effective waiver of the right to bargain. Petitioner asserts that in this case, it was precluded from presenting any testimony on the bargaining history before the hearing examiner. However, based upon our review of the general language of the zipper clause and Petitioner's offer of proof, we do not believe the Board erred in declining to remand to the hearing examiner for the taking of additional testimony and to then reconsider the Union's charges in light of that testimony.
Accordingly, we affirm.
And Now, April 13, 1989, the order of the Pennsylvania Labor Relations Board in the above-captioned matter is affirmed.