On July 15, 1994, the Commission issued an order staying the case until AFSCME's representation petition concerning these same employees pending before the National Labor Relations Board (NLRB) had been resolved. On August 16, 1994, AFSCME filed a motion to lift the stay, accompanied by a copy of the NLRB=s decision not to assert jurisdiction over AFSCME's petition. On August 18, 1994, the Commission lifted the stay and directed the School District to file a response to AFSCME's petition. After considering this response, the Commission scheduled an evidentiary hearing and granted ARA intervenor status.

On January 5, 1995, after due notice, an evidentiary hearing was held in Jacksonville before a Commission-appointed hearing officer. On February 17, 1995, the hearing officer issued his recommended order concluding that the School District is the employer of all food service employees hired after June 1, 1990, and recommending that the Commission grant AFSCME's unit clarification petition.

On March 9, 1995, the School District filed six exceptions to the hearing officer's recommended order. On this same day, ARA filed sixty-six exceptions and a motion requesting oral argument. [1/For purposes of clarity, we have renumbered the School District's and ARA's excedptions in the order that they appear in the post-hearing documents.] A transcript of the hearing was filed on January 23, 1995.

Upon consideration, the Commission concludes that oral argument would not be beneficial in resolving the issues presented by this case. Therefore, ARA's motion for oral argument is denied.

Upon review of the hearing officer's recommended order, exceptions thereto, and the record before us, the Commission concludes that ARA is the employer of the food service workers at issue, and consequently, we are without jurisdiction in this matter. [Our added emphasis]

We will first address ARA's exceptions. [2/In so doing, we also address the School Districts first exception, which incorporates by references all of the exceptions filed by ARA. ] In exception 4, ARA takes issue with that portion of the hearing officer's finding of fact five which states, "the School District retains control of its food service operation." ARA argues that the record indicates that the School District's control is limited to financial matters.

Upon review of the entire record, it is our conclusion that the hearing officer has merely restated a portion of the food service management agreement between ARA and the School District. In this finding, the hearing officer outlines the different aspects of control exercised by the School District as set forth in the agreement. We do not regard this finding as misleading or inaccurate. Accordingly, ARA's exception 4 is denied.

In exception 5, ARA objects to the word "decision" as used by the hearing officer in his finding of fact twenty-five. It argues that Duval County Superintendent Dudley Brewton did not "decide" the starting wage rate for ARA employees. Rather, Brewton merely approved the wage rate recommended by ARA. The record supports ARA's distinction. Accordingly, its exception is granted and finding of fact twenty-five is modified to reflect this distinction.

ARA's exceptions 6 and 7 take issue with the hearing officer's rejection of its proposed findings of fact 6, 7, 8, 9, 10, and 11 as argument, and its proposed findings 12, 13, 19, and the first sentence of 51, as unnecessary. Upon review of the entire record, we agree with the hearing officer's reasons for rejecting these proposed findings. Accordingly, exceptions 6 and 7 are denied.

In its exceptions 8 through 39, and 47, ARA contends that the hearing officer neglected to make particular findings of fact. After reviewing the facts which ARA contends were omitted, it is our conclusion that these facts would not affect our resolution of the case, and are therefore immaterial. See Forrester v. Career Service Commission, 361 So.2d 220 (Fla. 1st DCA 1978), cert. denied, 368 So.2d 1366 (Fla. 1979). Accordingly, we deny ARA's exceptions 8 through 39, and 47.

Rather, we find that, except as modified above, there is competent, substantial evidence to support the hearing officer's findings of fact. The proceedings upon which those findings of fact are based comply with the essential requirements of law. Accordingly, the hearing officer's factual findings, as modified, are adopted as the Commission's factual findings.

In its exceptions 1, 2, 3, and 40, ARA objects to the hearing officer's statement of the issue in this case as, "[w]hether the School District or Aramark is the employer of the food service employees hired after June 1, 1990." It argues that this statement evidences the hearing officer's failure to consider that it and the School District might be joint employers of these employees. It further asserts that the hearing officer failed to identify and consider the following pertinent issues: (1) whether the Commission has jurisdiction over employees where certain substantial terms of employment are controlled by a private employer; and (2) whether the Commission can assert jurisdiction over employees the National Labor Relations Board (NLRB) has determined are employed by a private employer.

Because no statutory guidelines exist for determining employer status, the Commission has adopted a common law test which requires the following factors be considered:

(1) the selection and engagement of servants;

(2) the payment of wages;

(3) the power of dismissal; and

(4) the control of the servant's conduct.

See ATU v. Orange-Seminole-Osceola Transportation Authority, 9 FPER & 14094, reconsideration denied, 9 FPER & 14123 (1983). The purpose of this inquiry being a determination whether the public employer retains sufficient control over the employees' terms and conditions of employment to engage in meaningful collective bargaining. See District 2A, Transportation, Technical, Warehouse, Industrial and Service Employees Union v. Port Everglades Authority, 18 FPER & 23046 (1992).

A review of the recommended order reveals that the hearing officer applied these four elements to the factual record, weighed these factors, and made a determination that the School District is the employer of the employees at issue. Such a conclusion rules out a determination that a joint employer relationship exists. Further, the parties' stipulation that the School District is a public employer pursuant to Section 447.203(11), Florida Statutes, rendered moot the issue of whether the Commission has jurisdiction in this matter once the hearing officer determined the School District was the employer. Consequently, we disagree with ARA's assertion that the hearing officer failed to consider the pertinent issues and to apply the appropriate legal standard. Accordingly, we deny its exceptions 1, 2, 3, and 40.

Having so stated, we now turn to ARA's remaining exceptions which take issue with the hearing officer's legal analysis and conclusions of law. ARA argues that the hearing officer gave undue significance to certain findings which form the basis of his conclusion that the School District is the sole employer of the employees at issue. It asserts that he did not attach enough importance to certain other facts which, it argues, demonstrate that it is also an employer of these employees.

In reviewing the complete record, we find certain factors which lend support to ARA's argument. For instance, by contract, ARA has been delegated substantial authority over hiring, disciplining and daily operations, while the School District reserves the right to require ARA to fire, and to not hire individual employees, and also retains final authority on employee wages and fringe benefits. ARA interviews all food service applicants, investigates their references, oversees applicants' security clearance, makes the hiring decision, conveys this information to the applicants, and determines in which school or geographic area new employees will be assigned to work. Further, although the School District has the authority to veto any of these applicants, it seldom exercises this authority.

The School District has also vested ARA with exclusive authority to discipline any of the food service workers hired after June 1, 1990, at levels beyond an oral reprimand. While this allows ARA to dismiss employees without seeking the School District's approval, ARA must dismiss an employee if the School District directs it to do so. However, the School District rarely makes such a request.

ARA directly compensates the employees hired after June 1, 1990, and is reimbursed by the School District for these expenses and for the costs of operating the food service program. However, the School District determines whether wage increases may be granted to the employees, and if so, what will be the effective date of the pay raises.

From a review of his recommended order, it is apparent that the hearing officer considered these facts, yet did not find that they impeded the School District's ability to bargain effectively with AFSCME. As we stated above, this analysis is consistent with the Commission's analysis on the issue of employer status. See City of Deerfield Beach v. Broward County Police Benevolent Association, Inc., 16 FPER & 21313 (1990). Accordingly, ARA's exceptions 47, 48, 50, 56, 57, 58, 59, 60, and 61 are denied.

Nonetheless, as evidenced by the amount of time it has taken us to render this decision, we are troubled by the hearing officer's ultimate conclusion in this case. We believe that, given the unique nature of school districts, judgements as to the existence of an employer-employee relationship must be made with more than these common law concepts in mind. specifically, we recognize the difficult task faced by school districts in educating and safeguarding the ever increasing number of students entering public schools each year, and in administering the limited public funds allocated to them for this purpose.

In performing these tasks, a school district may determine that there is a practical or economical benefit to be gained by contracting with a private employer to perform a particular service, and so may contract-out, or "privatize" the service in this way. Further, such privatizing may require the delegation of operational control of the service to the private entity. However, in so doing, a school district cannot surrender its responsibilities to safeguard the health and welfare of the children it is charged with educating.

When considered in this light, we believe the facts relied upon by the hearing officer in concluding that the School District was the employer of the employees at issue become less significant indicators of employer status. Rather, it appears to us that in this case the School District has retained control over the food service employees at issue only in those critical areas necessary to permit it to fulfill its fundamental responsibilities to its students and the public.

For instance, given that the food service workers perform their duties on school property and may come in direct contact with students, we can surmise that the School District retained final authority over hiring and firing to ensure that it would be able to protect students from individuals it perceives as potentially threatening. Similarly, the funds spent by the School District to pay ARA for providing food services come directly from the public's coffers. Despite the School District's decision to pay a private entity to perform a necessary school service, it nevertheless remains accountable to the public for any expenditures it makes towards providing that service.

The hearing officer's analysis also concerns us because it does not evidence that he considered ARA=s and the School District's intentions upon entering into the food service agreement. We believe that in determining employer status in the public sector, it is important not only to focus on which party can engage in meaningful collective bargaining, but also to examine the parties' intentions when they entered into the agreement which apportions control over the service function to be performed, and the nature of the service function being privatized.

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 provide services efficiently and at the least cost to the taxpayer, while at the same time protecting the right of the public employees to engage in collective bargaining. Consistent with the above policy, and as Commission case law illustrates, when a service contract contains expressions of the parties' intent that one or the other is to be the employer, the Commission has approved agreements divesting public employers of employer status even though the public employer retained vestiges of control over the employees affected. Thus, we believe that an examination of the parties' contractual expression of intent should be a threshold inquiry in such cases.

For example, in City of Deerfield Beach, as in other cases, the Commission considered the intent of the parties in entering into the service agreement to ensure that these intentions were in harmony with the determination of employer status. Specifically, we examined the agreement between the parties and found that the private entity, the Broward County Sheriff's Office (BSO), accepted responsibility for any claims arising from employee actions and agreed to indemnify the City for any expense it incurred due to employee conduct. We also found that the agreement included language which expressly stated that the parties intended the BSO to be the employer.

The instant case is analogous in that the food service agreement provides that all employees hired after June 1, 1990 in the former bargaining unit positions shall be ARA employees, and not employees of the School District. This agreement also includes two indemnification clauses, one in which ARA indemnifies, defends, and holds harmless the School District from any liability arising from misconduct by ARA employees and the other in which the School District agrees to indemnify ARA for any costs it incurs as a result of personnel actions taken by, or at the direction of, the School District. From this, we conclude that the parties intended ARA to be the employer of the employees at issue. consequently, in light of the parties' clearly stated intention that ARA is to be the employer of the employees at issue and ARA's significant control over discipline, hiring, and daily operations, we disagree with the hearing officer's conclusion that the School District's retention of fiscal control is sufficient to confer upon its employer status.

Finally, we find support for our decision in the Commission's holding in National Union of Hospital and Health Care Employees RWDSU, AFL-CIO v. Board of Trustees of Santa Rosa Hospital, 8 FPER & 13095 (1982), the facts of which are strikingly similar to those in this case. In Santa Rosa Hospital, the Commission declined to assert jurisdiction over dietary workers it determined were employed, not by the public employer hospital, but by a private corporation under contract with the hospital. That determination was made despite terms of the agreement between the corporation and the hospital which gave the hospital substantial input into the procedures that were to be used to change any of the employees' working conditions and did not allow the corporation to make any substantial changes in the wages, fringe benefits or working conditions of the dietary employees without first obtaining the hospitals agreement.

Of importance in that case, as in this case, is the portion of the agreement between the public employer and the private corporation which provided that the dietary workers were employees of the corporation and, as such, were directly compensated by the corporation. [3/Distinguishable from both these cases and from City of Deerfield Beach is that of Amalgamated Transit Union v. Oranae-Seminole-Osceola Transportation Authority, 9 FPER P 14094 (1983). There, the Commission found the employees to be those of the public employer, notwithstanding that the declared intent of the parties, agreement was that the employees be those of the private corporation. Rather, this declaration of intent was inconsistent with the fact that the public employer directly paid the employees, wages and was required by the agreement to indemnify the private employer for tort liability arising from the employees' conduct. The facts regarding indemnification for misdeed of the dietary workers were not developed in Santa Rosa Hospital.] That is not to say, however, that the mere expression of such intent in an agreement is determinative of the issue of employer status. [4/By way of caution, parties should not be mislead into believing that by including such a statement of intent in their contracts, they might evade or manipulate employer status. The commission will continue to examine the actual control a party exerts over employees' wages and terms and conditions of employment to determine if there is support for that statement of intent.]

Accordingly, we reverse the hearing officer's determination that the School District is the employer and conclude that ARA is the employer of the food service workers hired after June 1, 1990.

Having so determined, the next issue to be resolved is whether ARA is a "public employer" within the meaning of Section 447.203(2), Florida Statutes (1993). This issue is readily resolved by the hearing officer's finding that ARA is a private corporation and by the lack of evidence to support a conclusion that ARA was created by, or that its continuing existence is dependent upon, the Florida Constitution, legislative enactment executive order, or other acts by a representative of the general electorate. See CWA v. Central Florida Community Health Center, 10 FPER & 15108 at 169 (1984).

As Section 447.203(2) clearly limits the Commission's jurisdiction to public employers, we are precluded from asserting jurisdiction over ARA. See International Brotherhood of Electrical Workers, Local 2358 v. Jacksonville Electric Authority, 13 FPER & 18025 (1986). We recognize that our decision in this case leaves these employees without an opportunity to exercise the bargaining rights provided by either the Public Employees Relations Act or the National Labor Relations Act. However, for the reasons stated above, we believe our decision is sound despite its effect upon the bargaining rights of ARA's employees. [5/We recognize that this decision effectively eliminates the School District's protection against strikes by these employees as provided public employers by the Florida Constitution. However, we are of the opinion that the School District assumed this risk when it contracted with ARA with the express intent that the food service workers hired thereafter would be employees of the private entity.]

Accordingly, AFSCME's petition is DISMISSED. Moreover, we also dismiss ARA's and the School District's remaining exceptions which, in light of our determinations here, we deem unnecessary to consider.

This order may be appealed to the appropriate district court of appeal. A notice of appeal must be received by the Commission and the district court of appeal within thirty days from the date of this order. Except in cases of indigency, the court will require a filing fee and the Commission will require payment for preparing the record of appeal. Further explanation of the right to appeal is provided in Sections 120.68 and 447.504, Florida Statutes, and the Florida Rules of Appellate Procedure.

Alternatively, a motion for reconsideration may be filed. The motion must be received by the Commission within fifteen days from the date of this order. The motion shall state the particular points of fact or law allegedly overlooked or misapprehended by the Commission, and shall not reargue the merits of the order. For further explanation, refer to Florida Administrative Code Rule 38D-15.005.

It is so ordered.

HORNE, Chairman, and GOODING, Commissioner, concur.

 

C. Hughes
Chief Deputy Commissioner