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STATE OF MICHIGAN 

COURT OF APPEALS 

PORT HURON EDUCATION ASSOCIATION, 

 Charging Party-Appellant, 

UNPUBLISHED 

February 16, 2016 

v No. 325022 

MERC 

PORT HURON AREA SCHOOL DISTRICT, LC No. 10-000255 

 Respondent-Appellee. 

Before: HOEKSTRA, P.J., and METER and M. J. KELLY, JJ. 

PER CURIAM. 

 The Port Huron Education Association (PHEA) appeals as of right from a November 19, 

2014, order of the Michigan Employment Relations Commission (MERC). MERC concluded, 

among other things, that the Port Huron Area School District (the District) did not have a duty of 

collective bargaining with regard to the restructuring of the provision of psychological services 

to students. We affirm. 

 As a cost-saving measure, the District elected to contract with its local intermediate 

school district (ISD), Regional Educational Service Agency of St. Clair County (RESA), for 

school psychologists to service its special education students, resulting in the layoff of six school 

psychologists. RESA used outside contractors for the psychological work. PHEA filed an unfair 

labor practice charge with regard to the layoffs. The administrative law judge (ALJ) 

recommended a dismissal of the charge; MERC agreed, adopted the ALJ’s recommended order, 

and dismissed the charge. 

 PHEA first argues that MERC erred in determining that the District did not have a duty to 

bargain the alleged “subcontracting” of the work in question. 

 The Public Employment Relations Act (PERA), MCL 423.201 et seq., is “the dominant 

law regulating public employee labor relations.” Rockwell v Bd of Ed of School Distr of 

Crestwood, 393 Mich 616, 629; 227 NW2d 736 (1975). “It imposes a duty of collective 

bargaining on public employers, unions, and their agents . . . .” St Clair Intermediate School 

Distr v Intermediate Ed Ass’n/Michigan Ed Ass’n, 458 Mich 540, 550; 581 NW2d 707 (1998). 

MERC has exclusive jurisdiction over unfair labor practices. Id. 
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 “We review a decision of . . . MERC to determine whether it is authorized by law and 

whether the findings on which the decision is based are supported by competent, material, and 

substantial evidence on the whole record.” Bay City Ed Ass’n v Bay City Public Schools, 430 

Mich 370, 382 n 15; 442 NW2d 504 (1988). A reviewing court must not “invade the province of 

exclusive administrative fact-finding by displacing an agency’s choice between two reasonably 

differing views.” Michigan Employment Relations Comm’n v Detroit Symphony Orchestra, Inc, 

393 Mich 116, 124; 223 NW2d 383 (1974). “MERC’s legal determinations may not be 

disturbed unless they violate a constitutional or statutory provision or they are based on a 

substantial and material error of law. In contrast to . . . MERC’s factual findings, its legal rulings 

are afforded a lesser degree of deference because review of legal questions remains de novo . . . 

.” Pontiac School Distr v Pontiac Ed Ass’n, 295 Mich App 147, 152; 811 NW2d 64 (2012) 

(citations and quotation marks omitted). 

Here, MERC concluded that the District 

had no duty to bargain over its decision to use its RESA to provide psychological 

evaluations and testing. Under § 1751 of the School Code, MCL § 380.1751(1), a 

local school district may either operate special education programs directly, 

“contract” with its ISD for the delivery of special education programs and 

services or utilize a combination of these alternatives. Per that section of the 

School Code, once a local board transfers responsibility to its ISD, the ISD 

controls the manner in which the work is performed. 

MCL 380.1751 states: 

 (1) The board of a local school district shall provide special education 

programs and services designed to develop the maximum potential of each 

student with a disability in its district on record under section 1711 for whom an 

appropriate educational or training program can be provided in accordance with 

the intermediate school district special education plan, in either of the following 

ways or a combination thereof: 

 (a) Operate the special education program or service. 

 (b) Contract with its intermediate school board, another intermediate 

school board, another local school district board, an adjacent school district board 

in a bordering state, the Michigan schools for the deaf and blind, the department 

of community health, the department of human services, or any combination 

thereof, for delivery of the special education programs or services, or with an 

agency approved by the superintendent of public instruction for delivery of an 

ancillary professional special education service. The intermediate school district 

of which the local school district is constituent shall be a party to each contract 

even if the intermediate school district does not participate in the delivery of the 

program or services. 

 (2) A local school district contract for the provision of a special education 

program or service shall provide specifically for: 
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 (a) Special education buildings, equipment, and personnel necessary for 

the operation of the subject program or service. 

 (b) Transportation or room and board, or both, for persons participating in 

the programs or services as required under sections 1756 and 1757. 

 (c) The contribution to be made by the sending local school district if the 

program or service is to be operated by another party to the contract. The 

contribution shall be in accordance with rules promulgated by the superintendent 

of public instruction. 

 (d) Other matters the parties consider appropriate. 

 (3) Each program or service operated or contracted for by a local school 

district shall be in accordance with the intermediate school district’s plan 

established pursuant to section 1711. 

 (4) A local school district may provide additional special education 

programs and services not included in, or required by, the intermediate school 

district plan. 

 (5) This section shall be construed to allow operation of programs by 

departments of state government without local school district contribution. 

 PHEA contends that “[a]lthough Section 1751 appears to empower school boards to 

unilaterally contract part or all of their special education services, the PERA requires that 

employers bargain over the subcontracting of instructional bargaining unit work.” PHEA cites 

MCL 423.215, which states, in part: 

 (1) A public employer shall bargain collectively with the representatives 

of its employees as described in section 11 and may make and enter into 

collective bargaining agreements with those representatives. Except as otherwise 

provided in this section, for the purposes of this section, to bargain collectively is 

to perform the mutual obligation of the employer and the representative of the 

employees to meet at reasonable times and confer in good faith with respect to 

wages, hours, and other terms and conditions of employment, or to negotiate an 

agreement, or any question arising under the agreement, and to execute a written 

contract, ordinance, or resolution incorporating any agreement reached if 

requested by either party, but this obligation does not compel either party to agree 

to a proposal or make a concession. 

PHEA contends that the school psychologists were “included in the instructional bargaining unit 

under the collective bargaining agreement” because they were professional staff members who 

worked closely with certified teachers. PHEA contends that the District was required to bargain 

before transferring work to RESA and that PERA prevails over MCL 380.1751. 

 MERC, as well as the ALJ, found the Michigan Supreme Court’s opinion in Bay City, 

supra, to be dispositive on this issue. In Bay City, 430 Mich at 372, unions “brought unfair labor 
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charges against Bay City Public Schools after the school board decided to terminate its operation 

of a special education center and to transfer the responsibility for the programs conducted there 

to the Bay-Arenac Intermediate School District . . . .” The unions “requested to bargain over the 

decision, arguing that the . . . ‘transfer’ of . . . the special education programs to the ISD 

constituted an implied subcontract giving rise to a mandatory duty to bargain.” Id. at 373. The 

Supreme Court stated: 

It is within the scope of a local school board’s management prerogative to 

determine its role in the delivery of educational services. The disputed decision at 

issue here was a cooperative one made in recognition of the interrelationship and 

funding concerns of all the constituent districts and their intermediate school 

district. The school district’s transfer of special education center programs to the 

ISD was a fundamental management policy decision anticipated and authorized 

by the Legislature. As was the MERC, we are persuaded that the board’s decision 

is analogous to a partial closing of a business. [Id. at 381-382.] 

The Court also concluded that the purpose of PERA “would not be served by requiring 

negotiations over this subject” because it was “not the type of situation where labor concessions 

may have alleviated the employer’s economic considerations . . . .” Id. at 382. The Court 

concluded: 

Therefore, we hold that the board’s decision to terminate its operation of the 

special education center programs was an educational policy decision within its 

managerial discretion and was not a “term and condition of employment” subject 

to the duty to bargain under § 15 of the PERA. To hold otherwise would unduly 

restrict local school boards from making decisions that are specifically authorized 

by the Legislature and that, although based on economic concerns, also advance 

the best interests of their special education students. [Id. at 384.] 

In the present case, there was a financial crisis in the District, and it was decided that RESA 

would take responsibility for providing some of the legally mandated services; the director of 

legal services and human resources for RESA pointed out that RESA could get more funding 

than the District could on its own. The Bay City case is persuasive under the circumstances and 

renders PHEA’s argument unavailing. 

 PHEA argues that MERC erred in finding that the District did not violate PERA when it 

“agreed to disregard the employment protections provided by section 1742 of the Revised School 

Code.” In Bay City, the Court emphasized the existence of MCL 380.1742, which states, in part: 

 (1) When employing additional personnel to implement a special

education program or service, the intermediate school board shall employ first an 

employee of a constituent district whose employment is discontinued because the 

constituent district is discontinuing a special education program or service for 

which the person was employed. 

 
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The Bay City Court stated: 

Plaintiffs’ employment security, however, was protected by statute which directed 

the ISD to give hiring priority to the employees of the constituent district whose 

employment was discontinued. MCL 380.1742; MSA 15.41742. Plaintiffs have 

not suggested that this statutory mandate is inapplicable or that it has been 

violated, and the local district remains ready to bargain regarding the 

implementation of its decision. [Bay City, 430 Mich at 383.] 

PHEA argues that there was a conspiracy to avoid the protections of MCL 380.1742 and notes 

that the school psychologists whose positions were terminated were not hired by RESA. With 

regard to this issue, MERC concluded: “The Commission . . . agrees with the ALJ’s conclusion 

that PERA does not provide a cause of action for conspiracy or for conspiracy to violate another 

statute.” PHEA makes no attempt to demonstrate that PERA does in fact provide a cause of 

action for conspiracy. “It is not sufficient for a party simply to announce a position or assert an 

error and then leave it up to this Court to discover and rationalize the basis for his claims, or 

unravel and elaborate for him his arguments, and then search for authority either to sustain or 

reject his position.” Wilson v Taylor, 457 Mich 232, 243; 577 NW2d 100 (1998) (citation and 

quotation marks omitted). The remaining gist of PHEA’s argument appears to be that, because 

the psychologists whose positions were terminated were not hired by RESA,1

 the Bay City case 

is inapplicable to the present case and bargaining was required. PHEA also emphasizes that the 

District did not transfer total control of services to PERA but retained oversight, thus further 

distinguishing the present case from Bay City. However, we agree with the ALJ that the import 

of the Bay City decision is its emphasis on the fact that RESA had certain statutory obligations to 

fulfill in cooperation with the District. See Bay City, 430 Mich at 377. The Bay City Court 

stated: 

The Legislature crafted a statutory scheme that contemplates cooperative decision 

making and shared responsibility for providing programs and services designed to 

develop the maximum potential and address the special needs of each 

handicapped child in this state. In recognition of this comprehensive statutory 

scheme, we decline to consider this arrangement a subcontract . . . . [Id. at 378-

379.] 

As noted by the ALJ, “under the School Code, the decision as to what kind of psychological or 

any other type of services would be offered to Respondent’s special education students, and how 

 

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 MCL 380.1711(1) indicates that an ISD may “[e]mploy or engage special education personnel” 

or may “[c]ontract for the delivery of a special education program or service . . . .” Here, RESA 

used contractors, not “employees,” for the work. The psychologists whose employment was 

terminated were given an opportunity to bid for contracts. (5/23/12 transcript, p 15.) 
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they would be delivered, was ultimately not Respondent’s alone, but rather a decision to be made 

cooperatively with the RESA.”2 The ALJ continued: 

 

2

 MCL 380.1711 states: 

 (1) The intermediate school board shall do all of the following: 

 (a) Develop, establish, and continually evaluate and modify in cooperation with its 

constituent districts, a plan for special education that provides for the delivery of special 

education programs and services designed to develop the maximum potential of each student 

with a disability of whom the intermediate school board is required to maintain a record under 

subdivision (f). The plan shall coordinate the special education programs and services operated 

or contracted for by the constituent districts and shall be submitted to the superintendent of 

public instruction for approval. 

 (b) Contract for the delivery of a special education program or service, in accordance 

with the intermediate school district plan in compliance with section 1701. Under the contract 

the intermediate school board may operate special education programs or services and furnish 

transportation services and room and board. 

 (c) Employ or engage special education personnel in accordance with the intermediate 

school district plan, and appoint a director of special education meeting the qualifications and 

requirements of the rules promulgated by the superintendent of public instruction. 

 (d) Accept and use available funds or contributions from governmental or private sources 

for the purpose of providing special education programs and services consistent with this article. 

 (e) Lease, purchase, or otherwise acquire vehicles, sites, buildings, or portions thereof, 

and equip them for its special education staff, programs, and services. 

 (f) Maintain a record of each student with a disability under 26 years of age, who is a 

resident of 1 of its constituent districts and who has not graduated from high school, and the 

special education programs or services in which the student with a disability is participating on 

the fourth Friday after Labor day and Friday before Memorial day. The sole basis for 

determining the local school district in which a student with a disability is a resident shall be the 

rules promulgated by the superintendent of public instruction notwithstanding the provisions of 

section 1148. The records shall be maintained in accordance with rules promulgated by the 

superintendent of public instruction. 

 (g) Have the authority to place in appropriate special education programs or services a 

student with a disability for whom a constituent district is required to provide special education 

programs or services under section 1751. 

 (h) Investigate special education programs and services operated or contracted for by the 

intermediate school board or constituent district boards and report in writing failures to comply 

with the provisions of a contract, statute, or rule governing the special education programs and 

services or with the intermediate school district plan, to the local school district board and to the 

superintendent of public instruction. 
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Requiring Respondent to bargain with Charging Party over its decision to enter 

into an arrangement with the RESA would, I conclude, not only conflict with 

Respondent’s inherent right to make decisions about educational policy, but also 

interfere with the RESA’s ability to satisfy its own statutory responsibilities. I 

conclude that under the Court decision in Bay City, Respondent did not have an 

obligation under PERA to bargain with Charging Party over the decision to enter 

into an arrangement with the RESA to provide psychological evaluations and 

testing for Respondent’s special education students. 

MERC concurred with the reasoning of the ALJ. We do as well. Despite the differences 

between the factual scenarios in Bay City and the present case, we nonetheless find the reasoning 

in Bay City sufficiently persuasive to uphold the decision of MERC. 

 PHEA next argues that MERC erred in finding that PHEA failed to make a timely 

demand to bargain and thus waived any right to bargain. Given our decision, this issue is moot. 

Nevertheless, we find no error with respect to MERC’s decision. PHEA’s executive director, 

Kathleen Trongo, testified that by February 2010 she was aware that school psychologists may 

be laid off but that she did not demand to bargain over the issue. In addition, the District’s 

assistant superintendent testified that Trongo told him “they didn’t plan on bargaining or, you 

know, submitting a proposal because they had a contract.” MERC’s decision is supported by 

competent, material, and substantial evidence on the whole record. Bay City, 430 Mich at 382 n 

15. 

 (i) Operate the special education programs or services or contract for the delivery of 

special education programs or services by local school district boards, in accordance with section 

1702, as if a local school district under section 1751. The contract shall provide for items stated 

in section 1751 and shall be approved by the superintendent of public instruction. The 

intermediate school board shall contract for the transportation, or room and board, or both, or 

persons participating in the program or service as if a local school district board under sections 

1756 and 1757. 

 (j) Receive the report of a parent or guardian or, with the consent of a parent or guardian, 

receive the report of a licensed physician, registered nurse, social worker, or school or other 

appropriate professional personnel whose training and relationship to students with a disability 

provide competence to judge them and who in good faith believes that a person under 26 years of 

age examined by the professional is or may be a student with a disability, and immediately 

evaluate the person pursuant to rules promulgated by the superintendent of public instruction. A 

person making or filing this report or a local school district board shall not incur liability to a 

person by reason of filing the report or seeking the evaluation, unless lack of good faith is 

proven. 

 (k) Evaluate pupils in accordance with section 1311. 

 (2) The intermediate school board may expend up to 10% of the annual budget but not to 

exceed $12,500.00, for special education programs approved by the intermediate school board 

without having to secure the approval of the superintendent of public instruction. 
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 PHEA next argues that MERC erred in finding that the District did not fail to provide 

PHEA with requested documents in response to letters on April 29, 2010, June 16, 2010, and 

August 25, 2010. Essentially, PHEA contends that the District was hiding its intent to terminate 

the psychologist positions. However, Trongo admitted that the responses to both earlier letters 

were truthful because there was no evidence at the time of a “transfer” of positions. Trongo 

further admitted that in response to the third letter, she received “all the information [she] 

requested[.]” MERC’s decision thus was supported by competent, material, and substantial 

evidence on the whole record. Id. 

 PHEA lastly argues that MERC erred “in failing to draw an adverse inference regarding 

[the District’s] awareness of [PHEA’s] knowledge of its discussions with RESA.” PHEA states 

that the District “went to great lengths to keep [PHEA] from finding out about its agreement to 

subcontract bargaining work to RESA.” PHEA relies on second-hand information that (1) the 

District’s Director of Special Education met with the school psychologists toward the end of the 

2009/2010 school year and told them they would be transferred to work with RESA and (2) the 

District’s Human Resources Director told psychologists that the District was in the process of 

looking at “a deal” with RESA for the positions and more information was being sought. PHEA 

states that “[t]here is no explanation for [the District’s] failure to call witnesses with knowledge 

of [the District’s] true intentions” and that MERC should have drawn an adverse inference 

regarding the absence of these witnesses. See Isagholian v Transamerica Ins Corp, 208 Mich 

App 9, 15-16; 527 NW2d 13 (1994) (discussing missing witnesses and adverse inferences). 

MERC concluded that PHEA “has not specified any relevant facts that might properly be 

inferred from [the District’s] failure to call” the witnesses. MERC further noted that PHEA had 

offered insufficient evidence to establish a violation of PERA and that the District “was not 

obligated to offer additional testimony . . . .” Finally, MERC noted that PHEA could have 

subpoenaed the witnesses. 

 We find no error with regard to MERC’s decision. We cannot discern how the calling of 

these witnesses would have affected the outcome of this case, and nothing prevented PHEA from 

itself calling the witnesses. 

 Affirmed. 

/s/ Joel P. Hoekstra 

/s/ Patrick M. Meter 

/s/ Michael J. Kelly