Snohomish Co. Public Transp. Benefit Area, App. V Wa Public Employment Relations Comm., Resp.

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

SNOHOMISH COUNTY PUBLIC No. 43783 -0 -II
TRANSPORTATION BENEFIT AREA d /b /a
COMMUNITY TRANSIT,

Appellant,

V.

STATE OF WASHINGTON PUBLIC UNPUBLISHED OPINION
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 a permissive subject of collective bargaining. Community Transit argues

that PERC' s order is invalid for three reasons: ( 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 by Community Transit.' From 1979 to 2007, Community Transit

and Amalgamated executed a series of collective bargaining agreements. Among their

provisions, the parties' collective bargaining agreements have included ( 1) a management rights
2(
clause , 2) procedures for grievances filed either by the union or by an individual employee, and

3) 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 includes the following job classifications: coach operators, dispatchers,
bargaining unit

instructors, customer information specialists, sales and 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.

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No. 43783 -0 -II

Amalgamated, 1998 WL 1978452, at * 6. Therefore, the 1998 PERC decision defined Section

18. 2 as a waiver clause. 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 agreement that expired December 31, 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 interpretation of Section 18. 2 and, thus, determining that Section 18. 2 was a

permissive subject of bargaining. Accordingly, the hearing examiner decided that Community

Transit committed an unfair labor practice by insisting to impasse on a permissive subject of

bargaining.

Transit the hearing examiner' s decision to PERC. PERC affirmed,
Community appealed

hearing findings of fact and conclusions of law. In affirming and
adopting the examiner' s

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

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No. 43783 -0 -II

International 4ss' n of Fire 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.
4
Transit then for judicial review of PERC' s order. The superior
Community petitioned

court denied Community Transit' s petition and affirmed PERC' s order. Community Transit now
5
appeals to this 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. Second, Community Transit argues that PERC exceeded its statutory authority by

creating 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' s order in an unfair labor practice case. RCW 41. 56. 165; Pasco Police Officers' Ass' n v.

City 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.
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No. 43783 -0 -II

the agency' s action bears the burden 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 order is outside the agency' s statutory authority, ( 2) the agency has erroneously

interpreted or applied the law, and ( 3) the order is arbitrary and capricious. RCW

34. 05. 570( 3)( b), ( d), ( i). 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 of PERC. Pasco Police, 132 Wn.2d at 458. At the same time, we give " due

deference" to an administrative agency on matters falling within its area of expertise. Port of

Seattle v. Pollution Control Hearings Bd., 151 Wn.2d 568, 595, 90 P. 3d 659 ( 2004). PERC has

expertise in labor relations. Christensen v. Grant County Hosp. Dist. No. 1, 152 Wn.2d 299,

319, 96 P. 3d 957 ( 2004). Therefore, PERC' s expertise in labor relations deserves the due

deference of a reviewing 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

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No. 43783 -0 -II

applied its earlier decision in " atcom County to conclude that Section 18. 2 is a permissive

subject of bargaining.

Washington law distinguishes between mandatory and permissive subjects of collective

bargaining. See, e. g., Yakima County v. Yakima County Law Enforcement Officers' Guild, 174

Wn. App. 171, 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 at 342. The distinction between mandatory and permissive subjects of

from definition bargaining" in RCW
collective bargaining derives the of " collective

41. 56. 030( 4). 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 procedures and ... personnel matters, including wages, hours and working

conditions." 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

Fire Fighters, 113 Wn.2d 200; City of Pasco, 119 Wn.2d at 512. In contrast,
bargaining. at

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

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No. 43783 -0 -II

conditions. Fire Fighters, 113 Wn.2d at 200; Klauder, 107 Wn.2d at 341 -42. Whether a

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 or permissive subject of bargaining. 113 Wn. 2d at 203. But
mandatory

PERC is not required to engage in the balancing test every time it is tasked with determining

whether an issue is a mandatory or permissive subject of bargaining. See Pasco Police, 132

Wn.2d at 459 -68 ( making no mention of the balancing test and deciding that a provision' s

subject was mandatory, not permissive). Specifically, there are some issues that are mandatory

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 working conditions) and permissive subjects of bargaining ( i.e., managerial

prerogatives). See Fire Fighters, 113 Wn.2d at 203. 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.

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No. 43783 -0 -II

The parties also dispute whether Section 18. 2 addresses a mandatory or permissive

subject of bargaining. Section 18. 2 states,

Community Transit] agrees tonotify [ Amalgamated] of any changes in the
Employee' s Rule and Regulations, including Standard Operating Procedures

SDP' s) and Performance Code, affecting employees in the Bargaining Unit. The
grievance procedure [ established in Article 14] shall not apply to any matters
covered by this section, except as to [ 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

is mandatory See Pasco Police, 132 Wn.2d at 463. But in 2004,
bargaining rights or permissive.

PERC concluded that " a broad waiver of statutory [ bargaining] rights" is a permissive subject of

bargaining. Whatcom County, 2004 WL 725698, at * 7; accord Int' l Ass' n of Fire Fighters,

Local 1604 v. City of Bellevue, No. 23828 - - - 6082, 2013
U 11 WL 3784086, at * 6 ( Wash. Pub.

Emp' t Relations Comm' n July 12, 2013) ( 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,

Community Transit argues on two grounds that Section 18. 2 is not broad. First, the scope of

Section 18. 2 is broad. 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, at * 10- 11. Community Transit asserts that, in contrast, Section 18. 2 merely waives

Amalgamated' s right to bargain " subjects specifically listed in [ Section] 18. 2," i. e., changes to

the employee rules, standard operating procedures, and performance code. Br. of Appellant at

40. But Community Transit' s assertion belies the parties' history 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, Community Transit attempts to distinguish Section 18. 2 from the broad

procedural" 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
2004 WL 725698, at
the changes and providing for arbitration of any unresolved objections.

10. But Section 18. 2 excludes Amalgamated from the process to 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
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No. 43783 -0 -II

to deal with the union." 2004 WL 725698, at * 4. Because this broad waiver of Amalgamated' s

right to bargain does not directly concern working conditions, Section 18. 2 addresses a

permissive, rather than a mandatory, subject of bargaining. Whatcom County, 2004 WL 725698,

at * 4; see Fire Fighters, 113 Wn.2d at 200. Therefore, PERC' s order is not based on an

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 in this case. PERC made a well reasoned decision to apply its earlier decision

dealing with the 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.)..

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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.

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