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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.