Opinion
Docket No. 65567.
Decided February 7, 1984. Leave to appeal applied for.
Marston, Sachs, Nunn, Kates, Kadushin O'Hare, P.C. (by George H. Kruszewski), for plaintiff.
Edward L. Douglas, Acting Corporation Counsel, County of Wayne, Rheo C. Marchand, Principal Attorney, and N. McKinley Tounsel, Assistant Corporation Counsel, for defendant.
Defendant appeals as of right from a judgment of Wayne Circuit Court Judge Thomas Roumell ordering it to pay COLA benefits to certain Wayne County Sheriff's Department retirees for the period of July 1, 1977, through December 1, 1981.
Judge Roumell's order was issued as a result of a show cause hearing which culminated five years of litigation over the issue of whether the county was bound by an arbitration award (the Haber Award), pursuant to MCL 423.231 et seq.; MSA 17.455(31) et seq. (1969 PA 312), which awarded COLA benefits to certain sheriff's department retirees.
At the hearing, the county conceded its liability for COLA payments to the retirees of plaintiff Local 502-M, but contested the length of the contract and, hence, the period for which COLA payments were owed. It also challenged the status of certain "retirees" whom the plaintiff claimed were entitled to COLA benefits. The matter of the identity of retirees was not appealed by defendant. However, the parties could not agree as to the length of the contract under which the retirees were entitled to COLA benefits.
The primary issue on appeal is whether the trial court's determination that the terms of the Haber Award obligated the county to pay COLA benefits to Local 502-M retirees through December of 1981, as opposed to through November 30, 1979, was correct.
The contested provision of the contract states:
"DURATION OF AGREEMENT
"This Agreement shall be effective July 1, 1977 and shall remain in full force and effect through November 30, 1979. Wages (including overtime, but excluding the new triple time rate and differential pay), dental insurance, cost of living allowance, and mileage shall be retroactive to July 1, 1977. The uniform allowance provision is retroactive to March 1, 1978. The provisions for Corporal; Senior Detective and the new specialty pay are to be effective July 1, 1978. Other financial provisions of the contract shall be effective July 1, 1978, along with sections dealing with hours and conditions of employment.
"This Agreement shall continue in effect for consecutive yearly periods after November 30, 1979, unless notice is given, in writing, by either the Union or the Employer to the other party at least sixty (60) days prior to November 30, 1979, or any anniversary date thereafter, of its desire to modify, amend, or terminate this Agreement. "If such notice is given, this Agreement shall be open to modification, amendment, or termination, as such notice may indicate, on December 1, 1979, or the subsequent anniversary date, as the case may be." (Emphasis supplied.)
At the show cause hearing, defendant presented evidence that plaintiff union attempted to negotiate a new contract prior to November 30, 1979, the contract's originally scheduled expiration date. On this basis, defendant argues that the contract was effectively terminated on its originally scheduled expiration date.
Plaintiff presented evidence that it did not receive written notice of termination until September 25, 1981. Plaintiff argued that the contract, therefore, did not expire until December 1, 1981. The trial court agreed with plaintiff's reading of the contract's "Duration of Agreement" clause and awarded COLA benefits for a contract period ending December 1, 1981.
We first note that the cases relied upon on appeal by both parties involve the interpretation of termination or modification clauses in labor contracts under the NLRA, and involve relationships between private unions and private employers which implicate employees' statutory rights to strike. By contrast, the "Duration of Agreement" clause in the contract in the case at bar must be decided with reference to public employees' rights to bargain collectively under PERA.
In particular, the contested clause in the case at bar is part of a contract that resulted from compulsory arbitration under 1969 PA 312, MCL 423.240; MSA 17.455(40), which states:
"Sec. 10. A majority decision of the arbitration panel, if supported by competent, material, and substantial evidence on the whole record, shall be final and binding upon the parties, and may be enforced, at the instance of either party or of the arbitration panel in the circuit court for the county in which the dispute arose or in which a majority of the affected employees reside. The commencement of a new municipal fiscal year after the initiation of arbitration procedures under this act, but before the arbitration decision, or its enforcement, shall not be deemed to render a dispute moot, or to otherwise impair the jurisdiction or authority of the arbitration panel or its decision. Increases in rates of compensation [or other benefits may be] awarded [retroactively] to the commencement of [any period(s) in dispute,] any other statute or charter provisions to the contrary notwithstanding. At any time the parties, by stipulation, may amend or modify an award of arbitration." (Emphasis supplied.)
While the decisions relied on by the parties are instructive, they must be considered with reference to the fact that under the public employment relations act and 1969 PA 312, the members of plaintiff Local 502-M have no right to strike. See MCL 423.202; MSA 17.455(2). In lieu of the right to strike, the union is entitled to resort to the compulsory arbitration procedure of MCL 423.240; MSA 17.455(40).
In Kaufman Broad Home Systems, Inc v International Brotherhood of Firemen Oilers, AFL-CIO, 607 F.2d 1104 (CA 5, 1979), the Fifth Circuit held that, under a duration of agreement clause in that contract, notice to terminate or to modify the contract acted to prevent automatic extension of the contract into the future. The pertinent contract language in Kaufman stated:
"Section 1. This Agreement shall become effective as of November 13, 1967, and shall remain in effect until November 12, 1970, and from year to year thereafter with the provision that should either party desire to terminate this Agreement or to modify any part thereof, it shall notify the other party in writing no less than sixty (60) nor more than seventy-five (75) days prior to the end of said three-year period or the end of any subsequent one-year period that the party giving such notice desires either to terminate the Agreement at the end of such period or to negotiate amendments or changes of the terms or provisions thereof." Kaufman, supra, p 1106.
The contract between the union and the employer in Kaufman also contained a no-strike clause.
The Kaufman court found the duration of agreement clause to be unambiguous, although the court noted that there was no explicit statement in the contract of the effect of notice to terminate or modify the contract. 607 F.2d 1109. That court also found that the effect of either notice to terminate or notice to modify was termination of the contract. Id. That court was particularly persuaded by the fact that the contract contained a no-strike clause, because in the face of the no-strike clause, if notice to modify did not operate as notice to terminate, the employer could indefinitely reject the union's offers without any fear of economic reprisal.
The Kaufman court distinguished the earlier case of International Union of Operating Engineers v Dahlem Construction Co, 193 F.2d 470 (CA 6, 1951), on the grounds that in the Dahlem case, the duration of agreement clause explicitly stated that the agreement between the parties would remain in effect until a new agreement was reached.
Other cases which address the issue under the NLRA have held that, depending upon the language of the particular contract clause, notice of modification does not necessarily amount to notice of termination of a contract. Cf. Motor Carriers Counsel of St Louis, Inc v Local Union No 600, 486 F.2d 650 (CA 8, 1973); see also Nashville Newspaper Printing Pressmen's Union Local 50 v Newspaper Printing Corp, 518 F.2d 351 (CA 6, 1975).
We find three reasons for distinguishing Kaufman from the instant case. First, because of the compulsory arbitration procedure available to both parties herein, MCL 423.240; MSA 17.455(40), the policy considerations governing Kaufman are not present in the instant case. The compulsory arbitration procedure provided by 1969 PA 312 eliminates the danger that the union would be forced to operate under the terms of the old agreement ad infinitum. Second, the policy considerations governing a private employee's statutory right to strike under the NLRA are not present in the case at bar because public employees have no right to strike. MCL 423.202; MSA 17.455(2). Finally, the defendant's actions in providing written notice of termination in September of 1981 belies its contention that it believed that the contract terminated on November 30, 1979, the originally scheduled expiration date.
We hold that the trial court, in its findings of fact and conclusions of law, properly considered the language of the contract itself, the actions of the parties, and the evidence presented in finding that the agreement did not terminate until the county provided notice of termination in September of 1981. The judgment of the trial court is affirmed.
Finally, we hold that the trial court was not required to consider the subsequent 1969 PA 312 arbitration award (the Senter Award) in resolving this dispute.
At the show cause hearing, the county conceded that, in the five years of litigation that preceded the show cause hearing, it failed to properly object to the Haber Award of COLA benefits to retirees on the ground that such award was not a mandatory subject of bargaining. That failure to object was the basis of this Court's prior decision affirming the trial court's enforcement of the Haber Award. National Union of Police Officers v Wayne County Bd of Comm'rs (Docket No. 78-4141, decided February 25, 1980 [unreported]). The sole issue at the show cause hearing was whether or not the county should be held in contempt for failing to comply with the terms of the Haber Award in accordance with this Court's and the lower court's orders that it ought to so comply.
The county conceded that compliance was necessary. However, it did contest certain former employees' status as retirees as well as the effect of the "Duration of Agreement" clause on its duty to pay. As noted earlier, the trial court properly found after hearing the evidence presented by the parties that the duration of agreement clause and the actions of the parties had the effect of extending the agreement which resulted from the Haber Award until December 1, 1981. As a result, the trial court held that the county was liable for COLA benefits to retirees through the period ending December 1, 1981. The subsequent resolution of the issue of whether or not the county had a duty to bargain on the issue of COLA benefits for retirees pursuant to the Senter Award has no effect on the court's determination of the issue herein.
Affirmed.