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American Federation of State v. Pennsylvania Labor Relations Board

Commonwealth Court of Pennsylvania

August 1, 2013

American Federation of State, County and Municipal Employees, District Council 87, Petitioner
v.
Pennsylvania Labor Relations Board, Respondent

Argued: May 15, 2013

BEFORE HONORABLE DAN PELLEGRINI, President Judge HONORABLE BERNARD L. McGINLEY, Judge HONORABLE RENÉE COHN JUBELIRER, Judge HONORABLE ROBERT SIMPSON, Judge HONORABLE MARY HANNAH LEAVITT, Judge HONORABLE P. KEVIN BROBSON, Judge HONORABLE PATRICIA A.

OPINION

RENÉE COHN JUBELIRER, Judge

The American Federation of State, County and Municipal Employees, District Council 87 (Union) petitions for review of the Final Order of the Pennsylvania Labor Relations Board (Board) that sustained Luzerne County's (County) exceptions to a Hearing Examiner's Proposed Decision and Order (Proposed Decision). The Board held that the County did not engage in an unfair labor practice in violation of Sections 1201(a)(1) and (a)(5) of the Public Employe Relations Act[1] (PERA) when the Luzerne/Schuylkill Workforce Investment Board (L/S WIB) contracted out bargaining unit work without first bargaining with the Union. The Union argues that the Board's conclusion that no unfair labor practice occurred is incorrect as a matter of law and/or is not supported by the Board's findings of fact. Discerning no error, we affirm.

I. Statutory and Regulatory Background

The federal Workforce Investment Act of 1998[2] (WIA) provides federal funding for comprehensive workforce development activities. The purpose of the WIA is to increase employment, job retention, and occupational skills of local participants. The WIA requires that, in each local area of a state, a local workforce investment board (WIB) be established to "set policy for the portion of the statewide workforce investment system." Section 117(a) of the WIA, 29 U.S.C. § 2832(a). The WIB's purpose is to increase local employment through the provision of educational and training services, which are paid for by federal funds. In order to obtain federal funding under the WIA, the General Assembly enacted the Workforce Development Act[3] (WDA), which, inter alia, divided the state into workforce investment areas and created the local WIBs to expend federal funds and create programs to increase employment. Section 504 of the WDA, 24 P.S. § 6250.504.

Under the WIA and WDA, Pennsylvania created the Luzerne/Schuylkill workforce investment area (Area) and the Luzerne County and Schuylkill County chief elected officials designated the L/S WIB[4] as the entity responsible for WIA-funded activities in the Area. The L/S WIB oversees the provision of, inter alia, Title I services, [5] as well as Employment Advancement and Retention Network (EARN) services.[6] The County's Workforce Investment Development Agency (County Agency), whose employees are represented by the Union, have been providing the Title I and EARN educational and training services to County residents under the oversight of the L/S WIB. (Proposed Decision, Findings of Fact (Adopted FOF) ¶¶ 3, 5.)

II. Underlying Dispute

The underlying dispute in this matter arises from the change of providers for Title I and EARN services in the Area from the County Agency to third-party private entities as of July 1, 2010. In November 2009, [7] the L/S WIB informed the chief elected officials that it would be issuing Requests for Proposals for the Title I and EARN services.[8] (Final Order, Amended and Additional Findings of Fact (Amended FOF) ¶ 22.) In response to rumors that the County was considering contracting out certain bargaining unit work, the Union, in January 2010, demanded negotiations with the County regarding the potential subcontracting of the work. (Adopted FOF ¶ 20.) After negotiations, the County and Union reached an agreement regarding the positions identified as being at risk of subcontracting by the County. (Adopted FOF ¶ 20.) Neither the negotiations nor the agreement referred to the County Agency positions. (Adopted FOF ¶ 20.) Shortly after the County and Union reached this agreement, the Union heard rumors about subcontracting the County Agency positions, sought a meeting with the County, and demanded negotiations on the potential subcontracting of those positions; the County did not respond to the demand for negotiations. (Adopted FOF ¶¶ 21, 24.)

On March 8, 2010, [9] the L/S WIB issued the Requests for Proposals seeking bids from entities interested in providing Title I and EARN services. (Adopted FOF ¶ 23.) The County Agency submitted proposals, seeking to continue to provide the Title I and EARN services. (Amended FOF ¶ 32.) The L/S WIB initially delayed voting on the submitted proposals, but was told by the Department of Labor and Industry (Labor and Industry), through the County's chief elected official, to pursue the subcontracts and that any change in the plans to subcontract would require an explanation. (Adopted FOF ¶ 26.) The Department of Public Welfare (Public Welfare) also contacted the L/S WIB, advising that it must award the EARN services contract to the contractor that had been selected by the local management committee[10] and that neither the L/S WIB nor the Commissioners of both counties could overturn the local management committee's decision. (Adopted FOF ¶ 27.) Although the Requests for Proposals indicated that the choice of the contractor was subject to the approval of the Luzerne and Schuylkill Counties' Commissioners and the L/S WIB sent a recommendation to the Commissioners, the Commissioners did not act upon the recommendation. (Adopted FOF ¶¶ 25, 28-29.) The County Agency was not one of the recommended contractors. (Amended FOF ¶ 33.) Thereafter, the L/S WIB entered into the contracts, which were between the L/S WIB and third-party contractors, and beginning on July 1, 2010, the Title I and EARN services once provided by the County Agency's employees were being performed by three private companies. (Adopted FOF ¶¶ 29-30.)

III. Decisions Below

The Union filed an unfair labor practices charge against the County alleging that the County violated Sections 1201(a)(1) and (5) of PERA by unilaterally subcontracting the County Agency work without collective bargaining. The Board's secretary issued a complaint, and hearings were held before the hearing examiner. The hearing examiner issued the Proposed Decision concluding that, because the L/S WIB was controlled by the County, the County committed an unfair labor practice by removing bargaining unit work from the County Agency without bargaining. (Proposed Decision at 9.) To support the finding that the County controlled the L/S WIB, the hearing examiner determined that: it was the chief elected officials who directed the L/S WIB to seek bids for the bargaining unit work; the Requests for Proposals indicated that the Commissioners had to approve the contracts; and under the WIA and WDA, the L/S WIB had to act with the agreement of the chief elected officials in certain matters. (Proposed Decision at 8-9.)

The County filed timely exceptions with the Board. The Board issued its Final Order, which adopted those findings of fact of the Proposed Decision that were consistent with its decision, amended a finding of fact, and added three findings of fact. The Board concluded that the County did not control the L/S WIB, citing, inter alia, the facts that: the L/S WIB members do not serve at the pleasure of the chief elected officials; it was the L/S WIB that decided to subcontract the provision of Title I and EARN services; and, under the WIA and WDA, the L/S WIB is solely responsible for identifying eligible providers of the Title I services and entering into contracts with those providers. (Final Order at 7-8.) According to the Board, because the County did not control the L/S WIB, the decision to subcontract the bargaining unit work was made by a third party and did not constitute an unfair labor practice by the County pursuant to Ellwood City Police Wage and Policy Unit v. Pennsylvania Labor Relations Board, 731 A.2d 670, 673-74 (Pa. Cmwlth. 1999) (holding that where the action complained of being an unfair labor practice was performed by an independent third party, the public employer did not commit an unfair labor practice in violation of PERA). Thus, the Board sustained the County's exceptions, and the Union now petitions this Court for review.[11]

IV. Arguments and Analysis

The Union argues that the Board's conclusion that the L/S WIB acted independently and outside of the County's control is erroneous because: (1) when the L/S WIB enters into contracts, it does so as an agent of the County; (2) pursuant to the WIA and WDA, the L/S WIB works in partnership with the chief elected officials in the participating counties to develop the Area workforce plan and must obtain approval for its budget from the Commissioners; (3) the Board's interpretation of certain portions of the WIA and WDA to support its decision ignores other provisions that support the Union's position; and (4) the findings of fact and record evidence support the contrary conclusion that the County does control the L/S WIB. In essence, the Union ...


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