Ass'n of Oregon Corrections Employees v. State
2007 Ore. App. LEXIS 953, 164 P.3d 291, 213 Or. App. 648 (2007)
Rule of Law:
A public employer's insistence on a wage freeze during collective bargaining, if driven by genuine budgetary constraints and balanced with other concessions, does not constitute an unfair labor practice for failure to bargain in good faith under the Public Employees Collective Bargaining Act (PECBA). Furthermore, a contract proposal for a wage freeze for "up to" a certain period, with language allowing reopening for successor bargaining, does not render it a permissive subject of bargaining merely because the period could extend beyond the current collective bargaining agreement's term.
Facts:
- Following the dot-com boom, Oregon experienced a severe recession, resulting in a forecasted budgetary shortfall of over $1 billion for the 2003-05 biennium.
- The Governor proposed, and the legislature approved, a 2003-05 state budget that included a salary freeze for all state employees, meaning no money for cost-of-living adjustments (COLAs) or step increases.
- The state’s chief negotiator had very limited flexibility in bargaining over salaries due to the legislative budget constraints.
- In early 2003, the state negotiated with the Service Employees International Union Local 503 (SEIU), representing about 65% of state employees, and reached a tentative agreement for a 24-month wage freeze and a one-time $350 workload adjustment payment.
- Gary Weeks, administrator of the Department of Administrative Services, informed SEIU's bargaining unit head, Leslie Frane, that the Governor’s position on wage freezes would remain consistent across all unions due to lack of funds.
- The Association of Oregon Corrections Employees (AOCE) began negotiations with the Oregon Department of Corrections (DOC), and the Oregon State Police Officers’ Association (OSPOA) began negotiations with the Oregon State Police (OSP) for new collective bargaining agreements for the 2003-05 biennium.
- AOCE and OSPOA proposed continuing COLAs and step increases, while DOC and OSP maintained their proposals for a two-year wage freeze but offered concessions on other benefits, such as health insurance subsidies or workload adjustments.
- Unable to reach voluntary agreements, negotiations between AOCE and DOC, and between OSPOA and OSP, proceeded to mediation and then to binding arbitration where each side submitted a last best offer package.
Procedural Posture:
- The Association of Oregon Corrections Employees (AOCE) filed an unfair labor practice complaint against the Oregon Department of Corrections (DOC) with the Employment Relations Board (the board).
- The Oregon State Police Officers’ Association (OSPOA) filed an unfair labor practice complaint against the Oregon State Police (OSP) with the board.
- The board consolidated both complaints for hearing and disposition due to the common issues involved.
- The board, with one member concurring separately, ultimately dismissed the complaints.
- AOCE and OSPOA (collectively, petitioners) sought judicial review of the board’s order in the Court of Appeals of Oregon.
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Issue:
Does a public employer commit an unfair labor practice under PECBA for failure to bargain in good faith by (1) insisting on a wage freeze during collective bargaining due to severe budgetary constraints and aligning with a prior agreement made with another union, or (2) proposing a wage freeze provision that could extend beyond the current contract term but explicitly allows for renegotiation in successor bargaining?
Opinions:
Majority - Wollheim, J.
No, a public employer does not commit an unfair labor practice by insisting on a wage freeze during collective bargaining due to severe budgetary constraints, nor by proposing a wage freeze provision that could extend beyond the current contract term but explicitly allows for renegotiation in successor bargaining, and therefore does not fail to bargain in good faith under PECBA. The court affirmed the Employment Relations Board's (ERB) dismissal of the complaints, deferring to the board's interpretation and application of the good faith bargaining requirement in ORS 243.672(1)(e). The board's methodology distinguishes between per se violations and violations under a "totality-of-conduct" standard. The court rejected the petitioners' argument that the state’s promise to SEIU to not offer a better economic package to other unions constituted a per se violation of the duty to bargain in good faith. It reasoned that given the state's constitutional requirement for a balanced budget and legislative policy (ORS 291.232(1)) to operate within appropriated funds, the legislature could not have intended that the state's compliance with these fiscal mandates would per se violate its duty to bargain in good faith. The state's position was dictated by genuine budgetary constraints, not solely by the prior agreement. Applying the "totality-of-conduct" test, the court concluded that the state had bargained in good faith. While the state maintained a firm stance on the wage freeze, its proposals were not deemed "unduly harsh or unreasonable" considering the dire economic conditions. The state demonstrated a reasonable effort to settle differences by making concessions on other issues, such as health insurance and workload adjustment payments. Furthermore, the course of negotiations, involving multiple bargaining and mediation sessions, did not indicate a lack of serious intention to reach an agreement, as ORS 243.660(4) explicitly states that the obligation to negotiate does not compel either party to agree to a proposal or make a concession. Regarding the second assignment of error, the court held that the state's proposal for a wage freeze for a period of "up to 24 months" (which could extend past the CBA’s June 30, 2005, expiration) was not a permissive subject of bargaining. The court emphasized the qualifying language "up to 24 months" and the explicit statement that "nothing in this provision precludes the parties from reopening this subject for successor bargaining (2005-2007)." This language indicated that the proposal did not necessarily dictate terms beyond the current CBA's life but rather allowed for future renegotiation, making it a mandatory subject of bargaining akin to an evergreen clause.
Analysis:
This case significantly clarifies the parameters of a public employer's duty to bargain in good faith under PECBA, particularly when severe fiscal constraints are present. It establishes that a public employer may adopt a firm bargaining position on wages, even one aligned with a prior agreement with another union, without violating its good faith duty, provided such a stance is rooted in genuine budgetary necessity and accompanied by concessions on other negotiable terms. The ruling also offers crucial guidance on the classification of contract provisions, affirming that terms regarding future salary conditions that explicitly permit renegotiation are mandatory subjects of bargaining, rather than permissive subjects, thus ensuring flexibility in long-term agreement structures.
