LOCAL 1593,

Charging Party,

v. CASE NO.: CA-97-093

HILLSBOROUGH TRANSIT AUTHORITY

(HILLSBOROUGH AREA REGIONAL

TRANSIT AUTHORITY),

Respondent.

/

BRIEF IN SUPPORT OF HILLSBOROUGH AREA

REGIONAL TRANSIT AUTHORITY'S EXCEPTIONS

TO THE HEARING OFFICER'S RECOMMENDED ORDER

Hearing Officer Frances H. Seidler issued her Recommended Order in the above-captioned matter on November 18, 1997. Simultaneously herewith, the Hillsborough Area Regional Transit Authority (hereinafter referred to as "Hart" or the "Authority"), has filed exceptions to that Recommended Order (hereinafter referred to as "HORO"). This Brief is submitted in support of those exceptions.

I. INTRODUCTORY STATEMENT

For the most part, the Hearing Officer's findings of fact are not in dispute. Rather, the case before the Commission is primarily one involving substantive legal issues. The first issue before the Commission is whether the Authority violated the Act when it imposed a management rights' article which contained the right to subcontract work. In reaching this decision, the Commission must decide whether the right to subcontract is an inherent management prerogative, whether it is mandatory subject of bargaining, and/or whether even assuming it is a mandatory subject of bargaining, the Employer has the right to resolve and impose such language after engaging in good faith bargaining.

The second issue relates to the resolution and imposition of a past practice article and whether or not the Authority had the right to take such action.

II. THE HEARING OFFICER ERRED WHEN SHE CONCLUDED THAT THE AUTHORITY VIOLATED SECTION 447.501(1)(a) and (c), FLORIDA STATUTES, BY RESOLVING THE MANAGEMENT RIGHTS' CLAUSE WHICH CONTAINED LANGUAGE RELATING TO SUBCONTRACTING.

The Union takes issue with the propriety of the management rights' clause resolved by the legislative body primarily because it contains the unrestricted right to subcontract work. It should first be noted that there is on contention in the instant case that the Authority did not lawfully bargain to impasse over the subcontracting language contained in the management rights' clause. Rather, the Union argues that, as a matter of law, even after good faith bargaining⁽¹⁾ and a lawful impasse, an employer cannot resolve and later impose a clause relating to subcontracting. In this case, there was good faith bargaining over the subcontracting language, the issue was submitted to the Special Master, and the Special Master issued a recommendation as to the subcontracting language. Accordingly, the Authority asserts that the legislative body had the right to consider and resolve the issue relating to subcontracting and the Hearing Officer erred by concluding that it did not.

A. The Employer has the inherent management right to subcontract pursuant to Section 447.209, Florida Statutes, without incurring any bargaining obligation.

The Public Employee Relations Commission has yet to decide the issue of whether or not subcontracting is solely a management prerogative, which is therefore not a mandatory subject of bargaining, but is solely within the discretion of management. In Amalgamated Transit Unit Local 1596 v. Orange-Seminole-Osceola aka Tri County Transit, 12 FPER ¶ 17134 (1986), the Commission expressly did not reach the issue of whether subcontracting is solely a management prerogative. Id. at 275. Similarly, in Monticello Professional Firefighters Association, Local 3095, IAFF v. City of Monticello, 15 FPER ¶ 20225 (1989), the Commission again determined that it did not need to decide whether subcontracting is a management right analogous to establishing class size or, in the alternative, a mandatory subject of bargaining, such as subcontracting. Id. at 450.

Although the Commission has yet to make a determination regarding the obligation to bargain over the decision to contract out work being performed by employees in the bargaining unit, the National Labor Relations Board has held that an employer is free to engage in subcontracting without bargaining over the decision when it is motivated by a change in the nature of the business rather than an intent to reduce labor costs. Applying Board precedent to the instant case reflects that the Authority enjoys the fundamental right to alter its operations through the contracting of services without triggering a bargaining obligation. First National Maintenance v. NLRB, 452 U.S. 666 (1981); Otis Elevator Company and Local 989, United Automobile, Aerospace & Agricultural Implement Workers, 269 NLRB 891 (1984); Teledyne Wisconsin Motor, 275 NLRB No. 76, p. 520 (1985).

It is important to note that there is no evidence in the record to indicate that the Authority has decided to take any subcontracting action in order to save labor costs or impose language that would allow such conduct. Indeed, no decision has been made to subcontract. Since the mere recognition of the right to contract out services does not turn upon an action premised upon negotiable labor costs, the decision is a management prerogative not requiring the satisfaction of any bargaining obligation. Rock-Tenn Company and Teamsters Local Union 728, International Brotherhood of Teamsters, Case No. 10-CA-26925 (1995); Otis Elevator Company, 269 NLRB 891 (1984); West Virginia Baking Company, Inc. and Chauffeurs, Teamsters, Warehousemen, and Helpers Local Union No. 175, 299, NLRB No. 37 (p. 306)(1990).

The Authority submits that in accordance with the statutory management rights language the Employer has the unilateral right to "set standards of service to be offered to the public and exercise control and discretion over its organization and operations" which clearly encompasses the right to determine whether or not to subcontract certain aspects of its work. Section 447.209, Fla. Stat. (1997). In deciding whether or not to subcontract work, the Employer is necessarily making a decision as to how it is going to be organized and how its operations are going to operate. The statutory management rights clause provides that the employer has the unilateral right to exercise control and discretion over its organization and operations. Simply applying the concept of subcontracting to the language contained in the statutory management rights provision, it is clear that subcontracting is an inherent statutory management right.

It is beyond dispute that virtually every public employer in Florida has actively engaged in subcontracting. It is further undisputed that the right to contract pre-exists the enactment of Chapter 447, Part II and continues today. The Governor, Cabinet, Legislature and this Commission have unmistakably recognized the public employer's inherent right to subcontract and have, in fact, encouraged such.

This policy is evinced in several sections of the Florida statutes that promote and, even mandate, subcontracting by public employers. For example, the Legislature has directed the Florida Department of Corrections to "purchase services" wherever practical. See Section 20.315(25), Fla. Stat. (1997). The Governor and Legislature have created the State Council on Competitive Government and charged the Council with the responsibility of promoting and directing an increase in the use of subcontracting. Section 14.203 et. seq., Fla. Stat. (1997). The preamble of the law creating the State Council on Competitive Government expressly states that "competition among service providers may improve the quality of services provided, and that competition, innovation, and creativity among service providers should be encouraged." Section 14.203, Fla. Stat. (1997).

Likewise, this Commission has recognized the need to adopt a policy that encourages the inherent right of a public employer to set the standards of service through the act of subcontracting. In Duval County School District v. AFSCME, Council 79, 21 FPER 26231 (1995), the Commission held that:

It is the Commission's policy to give effect, whenever possible, to a public employer's expressed intent to divest itself of employer status when contracting-out or privatizing services it provides to the public. Our policy in this area is designed to impinge as little as possible upon a public employer's ability to provides services efficiently and at the least cost to the taxpayer, while at the same time protecting the right of public employees to engage in collective bargaining.

Id. at 407.

Additionally, in Hillsborough Classroom Teachers Association, Inc. v. School Board of Hillsborough County, 7 FPER ¶ 12411 (1981), the Commission held that the School Board was not required to bargain over the Union's proposals concerning establishment of class size and minimum staffing levels because it was an inherent right contained in the statutory rights of the employer. In reconsidering its decision at 8 FPER ¶ 13074 (1982), the Commission did not recede from this holding but did clarify its decision.

In its initial decision, PERC held that union proposals to set specific limits on class size were not mandatory subjects of bargaining because class size did not itself constitute a matter falling within the ambit of wages, hours and terms and conditions of employment. The Commission went on to find that "such proposals merely represent an attempt to limit the educational public employer's Section 447.209 right to set a standard of service by determining a class size; they do not represent an attempt to accommodate the impact of the exercise of a management right upon the existing wages, hours or conditions of employment of public employees..."

This decision was affirmed by the First District Court of Appeals in Hillsborough Classroom Teachers Association, Inc. v. School Board of Hillsborough County, 423 So.2d 969 (Fla. 1st DCA 1982). The court agreed with the Commission's view that the setting of class room size and minimal staffing levels are policy decisions which are incorporated in the term "standards of service to be offered to the public" which are to be unilaterally set by the public employer, pursuant to Section 447.209, Florida Statutes, and thus are not mandatorily bargainable." This same analysis applies to the subject of contracting services.

In view of the foregoing, subcontracting must be deemed to be an inherent management right and the legislative body's action including such language in the management rights' clause should not be deemed to constitute an unfair labor practice charge. The Hearing Officer violated the language of the statutory management rights' clause and ignored the inherent rights of management as established by the legislature when she concluded that subcontracting was a mandatory subject of bargaining. Accordingly, the Commission should reject the Hearing Officer's Findings of Fact and Conclusions of Law in this regard and conclude that subcontracting is an inherent management right and that the Authority did not violate the Act when it resolved the subcontracting issue.

B. Even if subcontracting is a mandatory subject of bargaining, the parties engaged in good faith bargaining and lawfully submitted the issue to the legislative body for resolution.

In the event the Commission refuses to recognize that subcontracting is an inherent management right, then, in the alternative, it must be considered a mandatory subject of bargaining, Monticello Professional Fire Fighters, Local 3095 v. City of Monticello, 15 FPER 20225 (1989). The Hearing Officer concluded that it was a mandatory subject of bargaining, but then went on to find that the Employer still did not have the right to legislatively resolve or impose such language. However, even assuming subcontracting is a mandatory subject of bargaining, it may still be imposed through the legislative process. In this case, it is uncontroverted that the Authority met its obligation to engage in good faith bargaining over the issue of subcontracting to the point of impasse. Therefore, once the provision was lawfully submitted for resolution pursuant to the statutory impasse process, it was appropriately imposed pursuant to § 447.403(4)(d). However, the Hearing Officer erroneously concluded that since it was a mandatory subject of bargaining, the Authority's imposition of such language was an unfair labor practice. This conclusion of the Hearing Officer is totally unsupported and unfounded in any precedent.

As the evidence clearly indicates, the parties engaged in good faith bargaining over the issue to subcontract but were unable to reach agreement. Following unsuccessful negotiations the issue was submitted to a Special Master for resolution. The Special Master heard and considered the issues, and issued a recommendation regarding subcontracting. The Special Master's recommendation was rejected by both parties. There is no contention that the parties reached agreement at any time prior to resolution of the issue by the legislative body. Accordingly, under the clear law of the Commission relating to the right of the legislative body to resolve the impasse, the legislative body of the Authority had the right to resolve this issue. Section 447.404 Fla. Stat. (1997).

There is nothing inappropriate regarding this exercise of the statutory right to resolve an impasse. There is no authority which establishes that the right to subcontract constitutes a permissive subject of bargaining nor that it represents a unilateral waiver.

Any reliance on the Supreme Court's decision in Palm Beach Junior College v. United Faculty, 475 So.2d 1221 (Fla. 1985) is misplaced. In that case, the court held that it was an unfair labor practice for an employer to insist to impasse on a clause imposing a blanket waiver of future impact bargaining. The instant subcontracting language, as well as the entire management rights clause, does not contain a blanket impact bargaining waiver nor does it contain any waiver of a statutory right. Therefore, the Palm Beach Junior College is not applicable. A substantive term of employment that is resolved through the impasse resolution process, even if contained in a "Management Rights" article, may be legitimately imposed by the legislative body. The Palm Beach Junior College decision was not determined by the placement of certain language in a management rights clause. Rather, the case turned on the fact that the language imposed constituted a waiver of future impact bargaining.

To accept the position of the Charging Party and the Hearing Officer would offend the collective bargaining process and undermine the ability of the legislative body to resolve disputes regarding mandatory subjects of bargaining. Assuming arguendo that subcontracting is a mandatory subject of bargaining, the parties engaged in good faith bargaining and declared impasse on the issue of subcontracting pursuant to Section 447.403, Florida Statutes. The parties proceeded through the steps of the impasse resolution process and obtained a recommendation by a Special Master. As both parties rejected the Special Master's recommendation, the issue of subcontracting was submitted to the legislative body for resolution pursuant to Section 447.403(4)(d), Florida Statutes.

The Public Employees Relations Commission has consistently held that a public body acting in a legislative capacity to resolve an impasse pursuant to Section 447.403(4)(d) should be granted wide latitude to take such action "as it deems in the public interest." City of Winter Haven, 4 FPER 4287 (1978). To find that the instant action of the legislative body is an unfair labor practice because the employee organization does not like the outcome invites a dangerous precedent. To accept the Hearing Officer's conclusion would allow the employee organization to challenge any unfavorable legislative resolution, thus rendering the impasse resolution process ineffective. The subcontracting clause in this contract is no different than any other term and condition of employment. Once the parties bargain about it, the legislative body has the right to resolve the issue.

Just as with the prior decisions relating to class size, the issue before the Commission here is not whether the parties have a duty to bargain over the impact of the subcontracting decision. Indeed, the Commission need not address that issue. The issue before the Commission is whether the right to subcontract itself is a management right, mandatory subject of bargaining, or permissive subject of bargaining, and whether the legislative body had the right to resolve this issue.

If the Hearing Officer's conclusion stands, this would be the same as saying that the legislative body cannot resolve and impose a wage increase. The parties may bargain over a wage increase, reach an impasse, submit the issue to a special master, and then lawfully submit the issue to the legislative body for resolution. There is no waiver involved. This is simply the procedure established by the legislature for resolving impasses. Certainly wages is a mandatory subject of bargaining, yet a legislative body has the right to resolve and impose a wage increase. Thus, simply stating that a subject is a mandatory subject of bargaining does not mean the legislative body cannot act upon it. Indeed, all issues which are legislatively resolved would be mandatory subject of bargaining, yet that is the very purpose of the statutory impasse procedure, that the legislative body has the right to resolve and impose such issues. The Hearing Officer's conclusions fly in the face of this clear and obvious legislative intent.

The Hearing Officer's conclusion is misleading in that it characterizes the language imposed by the legislative body as a "waiver." All provisions of a collective bargaining agreement, whether mutually ratified by the parties or imposed through the legislative process, constitute a waiver of bargaining for the term of the contract. This is not akin to a waiver as a permissive subject of bargaining. Permissive subjects of bargaining encompass the waiver of future statutory rights and not the mere right to continue to bargain or alter mandatory subjects of bargaining during the term of the contract. Indeed, to accept the Hearing Officer's conclusion would be to render all subjects of bargaining permissive rather than mandatory.

In view of the foregoing, even assuming subcontracting is a mandatory subject of bargaining, it is a term and condition of employment just like wages, leave and scheduling. The legislature has set forth a statute which clearly provides that the legislative body of the employer has the final authority to resolve impasses. In the instant case, the legislative body acted pursuant to that authority and lawfully decided the issue of subcontracting.

III. THE HEARING OFFICER ERRONEOUSLY CONCLUDED THAT THE AUTHORITY IMPROPERLY IMPOSED THE "PAST PRACTICE" CLAUSE PURSUANT TO THE STATUTORY IMPASSE RESOLUTION PROCESS.

The Hearing Officer concluded that the past practice clause in issue was not a mandatory subject of bargaining and therefore could not be imposed unilaterally by legislative action. It should be noted that the Hearing Officer cited no case law or other precedent to support her conclusion. Contrary to the Hearing Officer's findings and conclusions in this regard, the past practice language in issue is a mandatory subject of bargaining and in view of the fact that the Authority bargained in good faith to impasse regarding this language, it had the right pursuant to the statutory impasse procedure to resolve and impose such language.

The Hearing Officer failed to carefully consider each sentence within the past practice article as it was resolved by the legislative body. The first sentence states that "Employees shall be entitled to those wages, benefits, and terms and conditions of employment contained herein." How can this language not be a mandatory subject of bargaining or be considered a waiver as the Union would argue? The whole purpose of a collective bargaining agreement is to set forth the wages, benefits and terms and conditions of employment. As a matter of law, employees are not entitled to wages, or terms and conditions of employment which are not negotiated and placed in the collective bargaining agreement. Therefore, this sentence is nothing but an accurate statement of the law.

The second sentence of the Article states that the agreement supersedes any past practice or prior agreement between the parties. Again this directly relates to terms and conditions of employment. Quite frankly, even the Union did not argue that this was not a mandatory subject of bargaining. Rather, the Union based its argument upon assertion it was an unlawful waiver. In view of the fact that the Hearing Officer cited no case law, the Authority finds it difficult to even understand how the Hearing Officer concluded that such a clause was not a mandatory subject of bargaining. In any event, this language is not an unlawful waiver of the right to bargain over terms and conditions of employment. Rather, the second sentence of the Article simply reflects a codification of existing law. A ratified collective bargaining agreement operates, as a matter of law, to supersede prior agreements or past practices.

The Employer and Union enjoyed both the right and obligation to bargain over any past practice or prior agreement that it wished to perpetuate within the collective bargaining agreement. Indeed, the evidence in the record establishes that the Union had this opportunity and, by its own choosing, failed to make any proposals relating to any past practices or agreements, even when invited to do so by the Authority representatives. For example, the Union presented evidence and the Hearing Officer found that the parties had previously entered into an agreement settlement relating to the Series 400 buses. (HORO, ¶15, page 8). However, the Union had the right to request that the terms of that grievance settlement be incorporated into the collective bargaining agreement, yet it failed to make any such request. Thus, the Union failed to seek any language relating to that prior agreement. This does not make the imposition of the past practice clause unlawful. Rather, the parties bargained in good faith and the legislative body resolved the impasse as permitted by law.

During the course of the hearing, the Union argued that there is a difference between the parties agreeing to language in a collective bargaining agreement and the language being resolved and imposed by the legislative body. There is a simple distinction: a permissive subject of bargaining, constituting a future waiver of a recognized statutory right can only be placed in an agreement by mutual consent. Mandatory subjects of bargaining, or in the instant issue, a mere recognition of the extant law, can be imposed through the impasse resolution process. The mere fact that the language was imposed, rather than accepted by mutual agreement, is irrelevant to the instant case. In this case, there is no unlawful imposition of a waiver of the right to bargain over terms and conditions of employment. The parties have engaged in good faith bargaining and have had ample opportunity to bargain over any past practices and agreements they desired to incorporate in the agreement. Moreover, there is nothing in this language that precludes the parties from making future agreements regarding resolution of grievances. There is simply no basis to conclude that the language as resolved by the legislative body constitutes the unlawful waiver of the right to bargain.

In view of the foregoing, the Hearing Officer's conclusion that the past practice clause was not a mandatory subject of bargaining and therefore could not be resolved by legislative action is erroneous. Rather, the clause in question was in fact a mandatory subject of bargaining and the parties bargained to impasse over that subject, the issue was submitted to the Special Master, and the legislative body had the authority to resolve that article. Accordingly, the Hearing Officer even when she concluded that the Authority violated the Act when it resolved the past practice language.

IV. THE HEARING OFFICER ERRONEOUSLY CONCLUDED THAT THE UNION WAS ENTITLED TO PART OF ITS FEES

The Hearing Officer did not permit fees as it relates to the Union's charge regarding subcontracting in view of the fact that the Commission precedent was not clear on this issue. However, she did conclude that the Union was entitled to reasonable fees for that portion of the charge involving the past practice article, finding that the Authority knew or should have known that the article in question was not a mandatory subject of bargaining.

The Hearing Officer erred by concluding that the Union was entitled to such fees on the past practice issue. As previously noted, the Hearing Officer has not cited any Commission precedent which states that the language contained in the past practice article is not a mandatory subject of bargaining. Thus, there is certainly no clear precedent that such language was not a mandatory subject of bargaining. Of course, as argued above, the Authority asserts that it is a mandatory subject of bargaining, but even if the Hearing Officer's conclusion is adopted by the Commission (which it should not be), the Commission precedent was certainly not well established. Thus, the Hearing Officer erred by concluding that the Authority knew or should have known that the past practice clause was not a mandatory subject of bargaining and therefore cannot be legislatively imposed. Accordingly, the Hearing Officer erred when she concluded that the Union was entitled to an award of fees and costs relating to this issue.

V. CONCLUSIONS OF LAW

The Commission is respectfully asked to issue an order including the following:

1. Finding that the Authority did not violate Section 447.501(1)(a) and (c), Florida Statutes by resolving the management rights' clause or the past practice clause.

2. That the Commission conclude that subcontracting is an inherent management right.

3. In the alternative, that even if subcontracting is not an inherent management right, but is a mandatory subject of bargaining, that the Authority had the right to resolve such language after bargaining to impasse.

4. That the Commission find that the past practices article in question is a mandatory subject of bargaining and that the Authority had the right to resolve that article as part of the statutory impasse procedure.

5. That the Commission issue an order finding that the Employer did not violate the Act in any respect.

6. That the Commission award the Authority its attorneys' fees and costs as the prevailing respondent in this matter.

Dated: October 30, 1998 Respectfully submitted,

Mark E. Levitt, Esquire

Florida Bar No. 193190

ALLEN, NORTON & BLUE, P.A.

324 South Hyde Park Avenue, Suite 350

Tampa, Florida 33606

Tel: (813) 251-1210

Fax: (813) 253-2006

Attorney for Employer

I HEREBY CERTIFY that the original and one copy of the foregoing has been furnished via hand delivery to: Stephen A. Meck, General Counsel, Public Employees Relations Commission, Koger Executive Center, Turner Building, Suite 100, 2586 Seagate Drive, Tallahassee, FL 32301-5032 and a copy sent via United States Mail to Frank Hamilton, III, Esq., 2620 West Kennedy Boulevard, Tampa, FL 33609, on October 30, 1998.

________________________________

Attorney

1. The Hearing Officer concluded in Finding of Fact 14 that the parties discussed the management rights' clause and that the Union made at least two counter proposals to the Authority's management rights' proposal. However, she fails to make a specific finding that the parties in fact bargained in good faith over the subcontracting language. The evidence in the record establishes that the parties did in fact bargain in good faith. Moreover, the Union never contended that the Authority failed to bargain in good faith. Thus, for the purposes of this case, it must be found as a fact that the parties did bargain in good faith over the subcontracting language.