NO. 84-294
IN THE SUPREME COURT OF THE STATE OF MONTANA
1984
SAVAGE EDUCATION ASSOCIATION affiliated
with the Montana Education Assoc.,
Plaintiff and Respondent,
TRUSTEES OF RICHLAND COUNTY ELEMENTARY
DISTRICT # 7 and HIGH SCHOOL DIST. #2,
Defendants and Appellants.
APPEAL FROM: District Court of the Seventh Judicial District,
In and for the County of Richland,
The Honorable R. C. McDonough, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
R. W. Heineman, Wibaux, Montana
For Respondent:
Hilley & Loring; Emilie Loring, Great Falls, Montana
Submitted on Briefs: Oct. 18, 1984
Decided: December 28, 1984
Clerk
Mr. Justice John C. Sheehy delivered. the Opirllion of the
Court.
This is an appeal from an order of the Seventh Judicial
District, Pichland County by the Trustees of Richland County
Flementary District No. 7 and High School District Po. 2. The
order denied the Trustees' motion to modify, vacate or cor-
rect an arbitration award. The order of the District Court
ts affirmed.
This action has had a lona procedural history; this is
the second appeal to this Court by the parties involved in
this dispute. In March 1979, Dorothy Tone and Connie Undem,
both nontenured teachers in Savage, Montana, were notified
that their contracts were not being renewed. Both women
filed grievances as provided in their collective bargaining
agreement. The Trustees held a hearing on June 29, 1979,
denied the grievances, and refused to submit them to
arbitration.
The Savaae Education Assocjation (the Association) filed
a complaint charging unfair labor practices with the Montana
Board of Personnel Appeals claiming the Trustees were violat-
ing 39-31-401(5), MCA, by refusing to bargain in good
faith. The hearing examiner recommended the Trustees imple-
ment the arbit.ration proceedings to resolve the qrievance.
The Trustees appealed to the Board of Personnel Appeals.
The Board determined that the collectjve bargaining
agreement provided for arbitration of grievances. A griev-
ance between the Association and the Trustees existed con-
cerning whether the procedure for terminating nontenured
teachers contained in the collective bargaining agreement had
been followed. The Boar6 ordered arbitration to determine
whether the termination procedure was followed in the case of
Undem and Tone.
The Trustees appealed to the District Court which re-
versed the Board of Personnel Appeal's order to arbitrate.
The Association appealed to this Court. Tn Savage v. Savaqe
(Mont. 1982), 647 P.2d 833, 39 St.Rep. 1192, (Savage I) , we
reversed the District Court and reinstated the decision of
Roard of Personnel Appeals. We held that the issue of whether
the grievance procedure had been followed was a matter for
arbitration and we ordered the parties to arbitrate. The
arbitrator correctly determined the question before him wss
whether the Trustees complied with the procedural require-
ments of Rrticl-e XI11 of the collective bargaining agreement
entitled, Employment Status of Teachers. The article re-
quires the Trustees to evaluate the teachers and prepare
written findings. Evaluators must also point out specific
weaknesses in the teachers' performance and assist them in
overcoming such deficiencies. The article also requires that
notice of termination in writing, explicitly stating the
reasons for termination or nonrenewal, be given to a
nontenured teacher before April 15.
The arbitrator found that the Trustees failed to comply
with the terms of Article XI11 by neglecting to evaluate Ms.
Tone and notify her of any perceived deficiences in her
teaching performance. The arbitrator also found the the
Trustees violated Article XI11 S (1)(1) of the agreement by
not taking remedial steps to help teacher Undem as required
by Article XI1 of the aqreement. The arbitrator determined
the remedy for these contract violations was to offer full-
reinstatement of Connie Undum and Dorothy Tone to their
former or comparable positions, together with back pay less
all interim earnings from the effective date of terminati~r~
to the date of reinstatement or refusal of reinstatment and
the clearing of the grievant's official personnel files at
the School- District of notices of termination. The Trustees
refused to comply with the arbitrator's findings. When
respondents sought to enforce the arbitrator's award in
District Court, the Trustees moved to modify and vacate the
award. The motion was denied and the Trustees appealed.
The Trustees contend that the arbitrator exceeded his
authority under the contract; that the School District lacked
the statutory and constitutional authority to waive certain
rights through negotiation and arbitration; that the arbitra-
tor erred in construing the contract; and that the arbitrator
exceeded his power in shaping the above remedy. We find the
Trustees' arguments to be without merit and consequently
affirm the District Court.
In Savage I, we held that under the terms of the collec-
tive bargaining agreement, the question of whether or not the
Trustees had complied with procedural requirements in Article
XLII was subject to arbitration. The agreement called for
binding arbitration after exhaustion of grievance procedures.
Failure to submit to arbitration was an unfair labor practice
as defined in S 33-31-401, MCA.
The arbitrator fol.lowed the directive of this Court in
Savage I. For the Trustees to argue now that they did not
agree to arbitrate this issue and that they are powerless to
do so is an attempt to raise issues foreclosed by Savage I.
The Trustees argue that § 20-3-324, MCA, and
S 39-31-303, MCA, give them sole direction in hiring and
firing teachers.
"Section 20-3-324, MCA. Powers and duties. As
prescribed elsewhere in this title, the trustees of
each district shall have the power and it shall be
th.eir duty to perform the following duties or acts:
"(1) employ or dismiss a teacher . . .
as the
board may deem necessary, accepting or rejecting
such recommendation as the trustees shall in their
sole discretion determine, in accordance with the
provisions of Tile 20, chapter 4;"
"Section 39-31-303, MCA. Management riqhts of
public employers. Public employees and their
representatives shall recognize the prerogatives of
employers to operate and manage -their af-
fairs in such areas as, but not limited to:
" (2) hire, promote, transfer, assign, and retain
employees;
We recognize the broad managerial power conferred on the
School District by statute.
Montana law specifically gives public employees the
right to bargain collectively. Section 39-31-201, MCA.
Statutes which govern the bargaining process between public
employers and their employees are found in Chapter 31, Part 3
of Title 39 of the Montana Code Annotated. Included in this
Part is 5 39-31-303, MCA, which sets forth the management
rights of public employers including the right to hire and
fire. However, S 39-31..-305,MCA, imposes a d.uty upon public
employers to bargain coll.ectively in good faith with its
employees:
"Section 39-31-305. Duty - bargain collectively
to
--
- good faith.
" (1) The public employer and the exclusive repre-
sentative, through appropriate officials or their
representatives, shall have the authority and the
duty to bargain collectively. This duty extends to
the obligation to bargain collectively in good
faith as set forth in subsection ( 2 ) of this
section.
" (2) For the purpose of this cha-pter,to bargain
collectively is the performance of the mutual
obligations of the public employer or his designat-
ed representatives and the representatives of the
exclusive representative to meet at reasonable
times and negotiate in good faith with respect to
wages, hours, fringe benefits, and other conditions
- employment or the negotiation of an agreement or
of
any question a.rising thereunder and the execution
of a written contract incorporating any agreement
reached. Such obligation does not compel. either
pa.rty to agree to a proposal or require the making
of a concession." (Emphasis added.)
Section 39-31-304, MCA, provides:
"Section 39-31-304. Necrotiable items for school
d
districts. Nothing in this chapter shall require
or allow boards of trustees of school d-istricts to
bargain collectively upon any matter other than
matters specified in 39-31-305 (2) ."
We held in Savage I that the procedural guarantees
contained in Article XI11 of the collective bargaining agree-
ment and the grievance procedure which culminated in arbitra-
tion were conditions of employment within the meaning of:
S 39-31-305, MCA. We hold that the School District has the
constitutional and sta.tutory authority to enter into the
collective bargaining agreements and that the sections of the
agreement at issue here were proper subjects of bargaining.
We hold that the Trustees, having entered into the agreement
in pood faith, are bound by it.
The Trustees contend that the arbitrator misinterpreted
the contract and provided a remedy to Tone and Undum that was
not within his power under the contract. When parties agree
to binding arbitration the role of a court in reviewing the
arbitrator's findings is a narrow one. The scope of review
is governed by §§ 27-5-301 and 27-5-302, MCA. They provide:
"Section 27-5-301. When court may vacate award.
The court or judge, on motion, may vacate the award
upon any of the following grounds and may order a
new hearing before the same arbitrators or not, in
its or his discretion:
"(1) It was procured by corruption or fraud.
"(2) The arbitrators were guilty of misccnduct or
committed gross error in refusing, on cause shown,
to postpone the hearing or in refusing to hear
pertinent evidence or otherwise acted improperly in
a manner by which the rights of the party were
prejudiced.
"(3) The arbitrators exceed their powers in making
the award, or they refused or improperly omitted to
consider a part of the matters submitted to them.
" (4) The award is indefinite or cannot be
performed."
"Section 27-5-302. -- may modify - -
When court or tor-
rect award. The court or iudue mav. on motion.
.
, .
,
modify or correct the award where itLappea.rsthat;
"(1) there was a miscalculation in figures upon
.
which it was made or that there is a misteke in the
description of some persons or property therein;
" (2) a part of the award is upon matters not
submitted, which part can be sepa-rated from other
parts and does not affect the decision on the
matters submitted;
"(3) the award, though imperfect in form, could
have been amended if it had. been a verdict, or the
imperfection di-sregarded."
The District Court found that there were no grounds under
these statutes to vacate or mo6ify the award. We agree.
It would defeat the purpose and the intent of the par-
ties to allow a party d-issatisfiedby the result of arbitra-
tior. to litigate all the issues covered. in the arbitration
anew in court. This view is aptly reflected by the fol-lowing
quote from the United States Supreme Court:
"The function of the court is very limited when the
parties have agreed to submit all questions of
contract interpretation to the arbitrator. It is
confined to ascertaining whether the party seeking
arbitration is making a cia-im which on its face is
qoverned by the contract. Whether the moving party
is right or wrong is a question of contract
interpretion for the arbitrator. In these circum-
stances the moving party should not be deprived of
the arbitrator's judgment, when it was his judgment
and all that it connotes that was bargained for.
"The courts, therefore, have no business weighing
the merits of the grievance, considering whether
there is equity in a particular claim, or determin-
ing whether there is particular language in the
written instrument which will support the claim.
The agreement is to submit all grievances to arbi-
tration, not merely those which the court will deem
meritorious. The processing of even frivolous
claims may have therapeutic values of which those
who are not a part of the plant environment may be
quite unaware. United Steelworkers of America v.
American Manufacturing Co. (1960), 363 U.S. 564,
567, 80 S.Ct. 1343, 1346, 4 L.Ed.2d 1403, 1407."
The arbitrator must act within the scope of the con-
tract. In th.e instant case, the collectj.ve bargaining a.aree-
ment did not set forth any specific remedy for breach of the
procedural requirements contained in Article XI11 . The
Trustees contend the arbitrator did. not have the power under
the collective bargaining agreement to shape the remedy he
provided. The Trustees contend that their statutory power to
manage entitles them to prescribe a remedy. Such a position
is untenable for it effectively leaves the grievants no
remedy. If the remedy fashioned by the arbitrator has been
rationally derived from the agreement it will upheld on
review. Kittery Teachers Association v. Kittery School
Committee (Maine 1980), 413 A.2d 534.
In this case we find reinstatement with back pay and the
arbitrator's other remedies to be appropriate. The School
District denied Tone and Undum the procedural rights that
would have enabled them to save their jobs. Their jobs were
lost and the remedy prescribed by the arbitrator compensated
them for that loss. It is no answer for the Trustees to say
that if they had complied. with the bargained far procedures
under Article XIII, they would have terminated the teachers
anyway because they contend there is no substantive basis
required under the contract or the law to terninate the
teachers. It was the failure of the School District to
follow the procedural steps affecting non-tenured teachers as
required by law that now prevents any consideration of
substantive reasons for termination the School District may
have had. It is a matter of failure of due process.
The ord-er of the District Court is affirmed and the case
remanded to enforce the arbitrator's award.
Affirmed.
%aM&4,%&
Chief Justice
Mr. Justice Fred J. Weber dissents as follows:
I respectfully d.issent from the majority opinion to the
extent that it affirms in its entirety the award fashioned by
the arbitrator. I have concluded that the avrard of rein-
statement to the teachers is beyond the power granted to the
arbitrator.
The extent of the power of review by the District Court
of the arbitration award is sta.ted in S 27-5-301, MCA.
"The court or judge, on motion, may vacate the
award upon any of the following grounds and may
order a new hearing before the same arbitrators or
not, in its or his discretion:
"(3) The arbitrators exceeded their powers in
making the award, or they refused or improperly
omitted to consider a part of the matters submitted
to them. ...
'I
In fashioning his award, it is my conclusion that the
arbitrator disregarded a key portion of the collective bar-
gaining agreement between the parties, that being Art. XVII,
Grievance Procedure; Section 7, Arbitration; Subdivision 6,
Jurisdiction:
"The arbitrator shall have jurisdiction over dis-
putes or disagreements relating to grievances
properly before the arbitrator pursuant to the
terms of this procedure. The :jurisdiction of the
arbitrator shall not extend to proposed changes in
terms and conditions of employment as defined
herein and contained in this written agreement; nor
shall an arbitrator have jurisdiction over any
grievance which has not been submitted to arbitra-
tion in compliance with terms of the grievance and
arbitration procedure as outlined herein; - shall
nor
the jurisdiction - - arbitrator extend - -
of the to mat-
ters of inherent managerial policy as defined in
- t i c l T-m i s Agreement. In considering any
~ r - -I
issue in dispute, in its order, the arbitrator
shall give due consideration to the statutory
rights and obligation of the school district to
efficiently manage and conduct its operation within
its legal rights in the operation of the school
district. " (emphasis supplied)
Article IV of the Agreement in pertinent part states:
"ARTICLE IV
"SCHOOL DISTRICT RIGHTS
"Section 1: Inherent Managerial Rights: The exclu-
sive representative recognizes that the school
district is not required to and is not permitted to
meet and negotiate on matters of inherent ma.nageri-
a1 prerogatives, which include but are not limited
to the following: directing employees, hiring,
promoting, transferring, assigning and retaining
employees. . . ."
Under Article IV it is apparent that there can be no
collective bargaining on the question of retaining an employ-
ee teacher. When we again look at the Grievance Procedure
under Artivle XVII, we see that the jurisdiction of the
arbitrator does - extend to matters of inherent managerial
not
prerogative, which would include the retaining of employees.
Thus, it seems clear that under this collective bargaining
agreement the arbitrator is not allowed to require retention
of a teacher as an arbitration remedy. I note that the
majority opinion disagrees with this conclusion and suggests
that such a position is untenable because it effectively
leaves the aggrieved teachers without a remedy. I respect-
fully disagree with that conclusion.
Under Subdivision 6, the arbitrator clearly has juris-
diction over this dispute. Notwithstanding this jurisdiction
over the dispute, it is clear that the subdivision does not
allow the arbitrator, as an example, to propose changes in
the terms and conditions of employment; nor does he have
jurisdiction to make decisions which are matters of inherent
managerial policy as defined under Article IV, which specifi-
cally includes retaining of employees.
In this instance, the arbitrator's award stated:
"2. The proper remedy for this violation is to
offer Dorothy Tone and Connie Undem reinstatement
to their former or comparable positions, together
with back-pay less all interim earnings from the
effective date of termination to the date of rein-
statement or refusal of reinstatement . . ."
The effect of this award is to require the District to retain
the two employees for their fourth year, thereby giving them
tenure. This award disregards the District's undisputed
prerogative to make decisions regarding the retaining of
employees. It seems clear that under the collective bargain-
ing agreement the remedy to be awarded in this instance
should have been limited to a dollar award equal in amount to
the loss suffered by the teachers. That would constitute an
appropriate remedy which does not violate the negotiated
contract.
I would va.cate the reinstatement remedy and remand for a
determination by the arbitrator of such a dollar amount as he
finds to be reasonable to meet the losses of the teachers,
but specifically excluding a reinstatement award.