Commissioner of Administration and Finance v. Commonwealth Employment Relations Board

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SJC-12208

COMMISSIONER OF ADMINISTRATION AND FINANCE vs. COMMONWEALTH
EMPLOYMENT RELATIONS BOARD & another.1

Suffolk. January 5, 2017. - May 12, 2017.

Present: Gants, C.J., Lenk, Hines, Gaziano, Lowy, & Budd, JJ.

Commonwealth Employment Relations Board. Labor, Unfair labor
practice, Duty to bargain. Commonwealth, Financial
matters, Collective bargaining.

Appeal from a decision of the Division of Labor Relations.

The Supreme Judicial Court on its own initiative
transferred the case from the Appeals Court.

Robert L. Quinan, Jr., Assistant Attorney General, for the
plaintiff.
T. Jane Gabriel for the defendant.
Alan H. Shapiro (John M. Becker also present) for the
intervener.
Mathew D. Jones, for Massachusetts Teachers Association,
amicus curiae, submitted a brief.

LOWY, J. In June, 2010, near the height of the global

economic downturn that became known as the Great Recession, the

1
Coalition of Public Safety, intervener.
 2

Secretary of the Executive Office of Administration and Finance

(Secretary) submitted to the Legislature a request for an

appropriation to fund collective bargaining agreements between

the Commonwealth and two public employee unions reached more

than thirteen months earlier. In the letter containing the

request, the Secretary informed the Legislature that several

similar requests for salary increases had been rejected by the

Legislature; that attempts to renegotiate the agreements with

the unions had failed; and that approval of the request would

require renegotiating several other collective bargaining

agreements that the Legislature had already approved.

The unions both filed a charge of prohibited practice with

the Department of Labor Relations (department), arguing, in

essence, that the letter was a violation of the Commonwealth's

purported duty to support an appropriation's request pursuant to

G. L. c. 150E, § 7 (b), and also that the letter constituted a

failure to bargain in good faith, in violation of G. L. c. 150E,

§ 10 (a) (5). In January, 2014, a hearing officer with the

department agreed with the unions and found that the

Commonwealth had violated its § 7 (b) duty and had committed a

prohibited practice under § 10 (a) (5) by failing to bargain in

good faith. The Commonwealth Employment Relations Board (board)2

2
Formerly the Labor Relations Commission. See G. L. c. 23,
§ 9O, as appearing in St. 2007, c. 145, § 5. References to the
 3

affirmed, the Commonwealth appealed from the decision, and we

transferred the case to this court on our own motion.

We reverse the board's decision and conclude that the

Secretary's inclusion of information about the anticipated

fiscal effects of a legislative decision to fund the collective

bargaining agreements in his request for an appropriation did

not violate § 7 (b) or constitute a prohibited practice.

Background. The facts of this case are not in dispute. In

April, 2009, the Commonwealth, represented by the Executive

Office of Administration and Finance, and the Coalition of

Public Safety (COPS) entered into collective bargaining

agreements for the periods of July 1, 2009, through June 30,

2010, and July 1, 2010, through June 30, 2013 (2010-2013

agreement). The 2010-2013 agreement called for annual salary

increases of one per cent, three per cent, and three per cent,

respectively, over the three years it covered. The Commonwealth

had also entered into a collective bargaining agreement with the

Massachusetts Correction Officers Federated Union (MCOFU) that

covered the same period as the COPS 2010-2013 agreement and that

also contained cost items that required appropriation.

In June, 2009, then Governor Deval Patrick submitted a

revised appropriation recommendation to both houses of the

Commonwealth Employment Relations Board (board) include the
former Labor Relations Commission.
 4

General Court for fiscal year 2010 (July 1, 2009, to June 30,

2010). In his accompanying message, the Governor estimated that

there would be about $1.5 billion less in revenue compared with

earlier projections because "Massachusetts continue[d] to

experience the effects of a global economic downturn unseen

since the Great Depression."

In June, 2010, the Secretary3 submitted the cost items for

both of the 2010-2013 agreements to the Legislature for funding

pursuant to his obligation under § 7 (b). In the letter that

accompanied the request, the Secretary, addressing the

respective chairs of the committees on ways and means of the

Senate and House of Representatives, wrote:

"In addition to previous requests, I am fulfilling my
statutory obligation to ask your consideration of the
attached additional collective bargaining items in Section
2 of H.2, the Governor's fiscal year 2011 budget proposal.
These items fund the collective bargaining agreements
negotiated some time ago with [MCOFU] (Unit 4) and [COPS]
(Unit 5). We are submitting them now because their costs
first occur in fiscal year 2011.

"These items provide for collective bargaining salary
increases similar to contracts that were not funded during
calendar year 2009. We have worked with the MCOFU and COPS
leadership to reach agreement on contracts similar to those
signed by other unions for this fiscal year and have failed
to reach an agreement. Funding of these items will trigger

3
The positions of the Secretary of Administration and
Finance (Secretary) and the Commissioner of Administration were
effectively merged in 2012. See G. L. c. 7, § 4, as amended
through St. 2012, c. 165, § 33. The parties do not dispute that
it is now the Secretary who is responsible for submitting budget
requests pursuant to G. L. c. 150E, § 7 (b), and that the former
Secretary acted in that capacity.
 5

a reopener in collective bargaining agreements that the
Legislature recently did fund only because they contained
delays in the salary increases."

The Legislature did not appropriate funds in fiscal year

2011 for the cost items contained in the 2010-2013 agreements.

Since that time COPS and the Commonwealth have entered into two

successor agreements -- one of which covered the 2010-2013

period -- that were fully funded by the Legislature. The

successor agreement covering the 2010-2013 period, however,

resulted in the delay of each of the wage increases by one year.

About one week after the Secretary's June, 2010, request

letter, COPS filed a charge of prohibited practice with the

department, alleging that the Commonwealth failed to bargain in

good faith, as required by § 10 (a) (5), because the Secretary's

letter did not support the 2010-2013 agreement.4 A complaint was

issued following the department's investigation. The parties

waived a hearing and submitted the case to the hearing officer

on a stipulated record.

In January, 2014, the hearing officer found that the

Commonwealth had violated the law because it had refused "to

take all necessary and appropriate steps to support the

collective bargaining agreement." The hearing officer ordered

4
The Massachusetts Correction Officers Federated Union
(MCOFU) filed a similar charge three months later, and the cases
were consolidated. MCOFU subsequently withdrew its complaint on
the ground that the issue had become moot.
 6

the Commonwealth to "[s]ubmit to the Legislature a request for

an appropriation to fund the cost items and take all appropriate

steps to support the [2010-2013 agreement]."

The Commonwealth appealed to the board, which affirmed the

decision of the hearing officer.5 The Commonwealth appealed from

the board's decision to the Appeals Court, G. L. c. 150E, § 11

(i), and we transferred the case to this court on our own

motion.

Standard of review. This court reviews the board's

decisions in accordance with the standards laid out in G. L.

c. 30A, § 14 (7), which provides that a final administrative

agency decision will be set aside if, among other grounds, it is

"[u]nsupported by substantial evidence," G. L. c. 30A,

§ 14 (7) (e), or "[a]rbitrary or capricious, an abuse of

discretion, or otherwise not in accordance with law," G. L.

c. 30A, § 14 (7) (g). See G. L. c. 150E, § 11 (i). See also

Somerville v. Commonwealth Employment Relations Bd., 470 Mass.

563, 567-568 (2015).

Discussion. A crucial point in the board's decision is the

connection between the Commonwealth's statutory duty to request

appropriations for cost items in executed collective bargaining

5
Because the board incorporated the facts set forth by the
hearing officer, fully affirmed the officer's analysis, and
agreed with all of his conclusions, we refer to the two
decisions collectively as the board's.
 7

agreements under § 7 (b) and its obligation to bargain in good

faith under § 10 (a) (5). The board concluded that by failing

to affirmatively support the agreement, as required by § 7 (b),

the Commonwealth had committed a breach of its duty to bargain

in good faith, as required by § 10 (a) (5).

We are not persuaded that the two provisions operate in the

manner suggested by the board. In our view, there are three

flaws in the board's decision. First, the board erred in

determining that § 7 (b) requires an employer not only to submit

but also affirmatively to support a § 7 (b) appropriation

request; second, its conclusion that the Commonwealth failed to

bargain in good faith in violation of § 10 (a) (5) is

unsupported by substantial evidence; and third, the board

erroneously conflated the employer's obligations under the two

statutory provisions.

a. Employer's duty under § 7 (b). General Laws c. 150E,

§ 7 (b), provides in relevant part:

"The employer . . . shall submit to the appropriate
legislative body within thirty days after the date on which
the agreement is executed by the parties, a request for an
appropriation necessary to fund the cost items contained
therein . . . . If the appropriate legislative body duly
rejects the request for an appropriation necessary to fund
the cost items, such cost items shall be returned to the
parties for further bargaining."

We have previously discussed what constitutes a violation

of § 7 (b) and its statutory predecessor. We have held that an
 8

employer fails to comply with the statute when the employer

refuses even to submit a request for appropriations to the

appropriate legislative body, Boston Teachers Union, Local 66 v.

School Comm. of Boston, 370 Mass. 455, 474-475 (1976) (mayor

required to transmit school committee's request for

appropriations to city council, notwithstanding mayor's special

veto power);6 Mendes v. Taunton, 366 Mass. 109, 118-119 (1974)

(successor mayor must submit request to city council even though

predecessor negotiated collective bargaining agreement), or when

the employer submits a request that makes full funding of the

agreement contingent on voters passing an override to cover a

budget shortfall, Local 1652, Int'l Assoc. of Firefighters v.

Framingham, 442 Mass. 463, 464 (2004) (Framingham) (officials

did not fulfil obligation under § 7 [b] where budget submitted

to town meeting made full funding of collective bargaining

agreement contingent on voters passing property tax override).

We have also held that although successor officials must submit

6
In Boston Teachers Union, Local 66 v. School Comm. of
Boston, 370 Mass. 455, 474-475 (1976), we stated that "[t]he
mayor, of course, may recommend disapproval of the request." It
is important to note that in that case it was the school
committee that negotiated with the unions and not the mayor, and
thus if the mayor recommended his disapproval it could not have
been argued that the negotiations took place in bad faith based
on the mayor's subsequent conduct. See Alliance, AFSCME/SEIU,
AFL-CIO v. Secretary of Admin., 413 Mass. 377, 380, 382-383
(1992) (Alliance) (successor governor may recommend
disapproval); Labor Relations Comm'n v. Selectmen of Dracut, 374
Mass. 619, 626 (1978) (same for successor selectmen).
 9

the request, they may not be compelled to publicly support a

collective bargaining agreement negotiated by their

predecessors, because the successor officials' "constituents are

entitled to the unfettered exercise of their judgment on matters

of policy." Labor Relations Comm'n v. Selectmen of Dracut, 374

Mass. 619, 625 (1978).

Contrary to a number of board decisions cited by the board

and COPS, we have never required officials affirmatively to

support a § 7 (b) request. Contrast Town of Belmont, 22 M.L.C.

1636, 1639 (1996); Town of Rockland, 16 M.L.C. 1001, 1005

(1989); City of Chelsea, 13 M.L.C. 1144, 1149-1150 (1986);

Worcester Sch. Comm., 5 M.L.C. 1080, 1083 (1978). Based on our

review, these cases trace back to Turners Falls Fire Dist.,

4 M.L.C. 1658, 1662 (1977), where the board stated: "It is

well-settled law that an employer's refusal to take affirmative

steps to support the terms of a collective bargaining agreement

before the legislative body constitutes a violation of its duty

to bargain in good faith." The board cites only to Mendes v.

Taunton, 366 Mass. 109 (1974), for that proposition of law. The

Mendes decision, however, merely requires that an official, even

a successor official, must submit a request to the appropriate

legislative body. Id. at 118-119.

We cited several of these board cases with approval in

Framingham. See Framingham, 442 Mass. at 469-470 & n.6. See
 10

also id. at 479-480 (Sosman, J., dissenting). Those cases were

cited, however, to illustrate that the obligation to seek

funding is "unconditional" in the sense that requests for

funding may not be conditioned on the occurrence of another

event under the language of § 7 (b). Id. at 469. To the extent

that these cited decisions of the board (and any dicta in

Framingham) suggest that a lack of affirmative support

inevitably constitutes a violation of § 7 (b), they rest on an

error of law, and we do not follow them.

Accordingly, when an employer submits a § 7 (b) request to

the appropriate legislative body for an appropriation to fully

fund cost items in a collective bargaining agreement and the

request includes pertinent information concerning fiscal and

public policy matters, it does not violate its statutory

obligation under § 7 (b). See Alliance, AFSCME/SEIU, AFL-CIO v.

Secretary of Admin., 413 Mass. 377, 380 (1992).7

7
In Alliance, 413 Mass. at 379, during the final days of
Governor Michael Dukakis's administration, the Secretary signed
a collective bargaining agreement with a number of unions. The
§ 7 (b) request obligation fell to the successor administration
of Governor William Weld. Id. at 380. At the time of the
§ 7 (b) request, Governor Weld also sent a written message to
the Legislature urging it to reject the appropriation request
because of the financial circumstances of the Commonwealth. Id.
In that case, neither party raised the issue whether Governor
Weld's message violated § 7 (b), and the court, without itself
remarking on the issue, had no trouble determining that the
Governor's actions in sending the message were appropriate. Id.
at 382-383.
 11

Here, the employer submitted the § 7 (b) request to the

Legislature and did not condition funding the request on the

occurrence of another event. Thus, there was no violation of

§ 7 (b), and the board's conclusion to the contrary was an error

of law.

b. Good faith in collective bargaining. Under the public

employee collective bargaining statute,8 G. L. c. 150E, both the

employer and the exclusive representative of the employee

organizations must "negotiate in good faith." G. L. c. 150E,

§ 6.9 Refusing to "bargain collectively in good faith" is a

prohibited practice. G. L. c. 150E, § 10 (a) (5).10 The duty to

bargain in good faith is the duty to meet and negotiate in good

faith. See School Comm. of Newton v. Labor Relations Comm'n,

8
The Commonwealth is a public employer, and the unions are
employee organizations within the meaning of G. L. c. 150E, § 1.
9
General Laws c. 150E, § 6, provides in relevant part:

"The employer and the exclusive representative shall
. . . negotiate in good faith with respect to wages, hours,
standards or productivity and performance, and any other
terms and conditions of employment . . . ."
10
General Laws c. 150E, § 10 (a) (5), provides in relevant
part:

"(a) It shall be a prohibited practice for a public
employer or its designated representative to:

". . .

"(5) Refuse to bargain collectively in good faith with
the exclusive representative as required in [§ 6] . . . ."
 12

388 Mass. 557, 572 (1983). "'Good faith' implies an open and

fair mind as well as a sincere effort to reach a common ground."

Id.

A comprehensive analysis of the precise contours of what

constitutes good faith during negotiations would fill volumes,

but a few examples may be helpful. Appellate courts in the

Commonwealth have held that a public employer violates the

obligation to bargain in good faith when the employer refuses to

bargain at all, id. at 574-575, or when it reaches an agreement

with a union but then makes its execution contingent on approval

by a supervisory entity, Springfield Hous. Auth. v. Labor

Relations Comm'n, 16 Mass. App. Ct. 653, 654, 658-659 (1983)

(bad faith where housing authority ratified agreement with

condition that it be approved by agency of Executive Office of

Communities and Development, which had supervisory functions

over housing authorities).

What emerges from the case law is that for a public

employer to comply with the obligation to bargain and negotiate

in good faith it must have an open and fair mind during the

negotiating and bargaining process. A contrary conclusion would

run afoul of the plain language of G. L. c. 150E, §§ 6 and

10 (a) (5). See Hashimi v. Kalil, 388 Mass. 607, 609 (1983)

("In construing a statute, words are to be accorded their

ordinary meaning and approved usage").
 13

Here, the board concluded that the Commonwealth failed to

bargain in good faith in 2009 because it included statements

regarding the fiscal consequences of approving the submitted

appropriation in its § 7 (b) request submitted in June, 2010.

This conclusion was unsupported by substantial evidence.

There was no evidence presented to the board alleging bad

faith on the part of the Commonwealth at the time the agreement

was reached. The only purported evidence of bad faith was the

letter from the Secretary containing pertinent information

concerning the fiscal implications of funding the 2010-2013

agreement, sent thirteen months after negotiations concluded and

while the Commonwealth continued to find itself in the throes of

a nearly unprecedented economic crisis.

The temporal gap is indisputable, and there was no evidence

presented suggesting that the Secretary's characterization of

the economic consequences of funding the agreement was

inaccurate. In these circumstances, it cannot reasonably be

said that the employer did not have an "open and fair mind" when

it concluded its agreement with the unions, simply based on the

Secretary's letter.

c. Connection between § 7 (b) and § 10 (a) (5). Our

review of the board's decision in the case, as well as its prior

decisions, suggests that the board has viewed the employer's

obligation to submit an appropriations request under § 7 (b) as
 14

directly linked to its obligation to bargain in good faith under

§ 10 (a) (5).

In essence, the board appears to have used its

interpretation of § 7 (b) to impose an ongoing obligation on the

employer that covers the period of time between the conclusion

of negotiations and the submission of the § 7 (b) request.

Under this view, the employer's failure to affirmatively support

an agreement shows that it did not have an "open and fair mind"

when negotiating a collective bargaining agreement because the

"affirmative support" obligation reaches back to the moment in

time when the bargain is struck and thus could be said to be

dispositive of the employer's state of mind during negotiations.

See, e.g., Turners Falls Fire Dist., 4 M.L.C. at 1662.

That logic fails. The plain language of § 7 (b) and

§ 10 (a) (5) focuses on two distinct moments in time. Section

10 (a) (5) focuses on the state of mind of the employer during

the negotiations, up until the negotiations are concluded.

Indeed, § 10 (a) (5) contemplates that negotiations may not even

result in an agreement and imposes no obligation to reach an

agreement. Section 7 (b), however, contemplates action

occurring after a collective bargaining agreement has been

finalized and executed:

"The employer . . . shall submit to the appropriate
legislative body within thirty days after the date on which
the agreement is executed by the parties, a request for an
 15

appropriation necessary to fund the cost items contained
therein . . . ."11

Because of the distinct and different points of temporal

focus found in the respective statutes' plain language, it

cannot be said that a violation of § 7 (b) (e.g., submitting a

contingent request), in and of itself, constitutes a failure to

negotiate in good faith under § 10 (a) (5).

That is not to say, however, that the form, contents, or

legality of a § 7 (b) request may not be probative of whether

the employer negotiated in good faith. Under certain

circumstances, a § 7 (b) request may indicate that the employer

engaged in bad faith negotiations. For example, a particularly

negative letter requesting an appropriation but recommending

rejection sent shortly after negotiations concluded would be

probative of a lack of good faith during negotiations. Such

circumstances might constitute evidence that the employer had

entered into the agreement with the intention of repudiating it

before the legislative body. Those circumstances are not

present here, however.

Conclusion. We reverse the board's decision finding that

the Commonwealth violated G. L. c. 150E, § 7 (b), and committed

11
Although submission of the § 7 (b) request occurred
outside the thirty-day window mentioned in the quoted statute,
neither party suggests the timing has any bearing on the case.
 16

a prohibited practice in violation of G. L. c. 150E,

§ 10 (a) (5). The board's order is vacated.

So ordered.