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### S T A T E O F M I C H I G A N

**C O U R T O F A P P E A L S**

IONIA COUNTY INTERMEDIATE EDUCATION ASSOCIATION,

Respondent

- Appellant, UNPUBLISHED February 22, 2018

v No. 334573 MERC IONIA COUNTY INTERMEDIATE SCHOOL DISTRICT, LC No. 15

- 050935

Charging Party

- Appellee.

Before: C AVANAGH , P .J., and H OEKSTRA and B ECKERING , JJ.

P ER C URIAM

. Respondent, Ionia County Intermediate Education Association (the Association), ap peals by right an o rder of the Michigan Employment Relations Commission (MERC) granting summary disposition to charging party, Ionia County Intermediate School District (the District), on the basis that the Association had engaged in an unfair labor practice by demanding to arbitrate a grievance concerning a prohibited subject of bargaining under the p ublic e mploy ment

r elations a ct (PERA), MCL 423.201 et seq . MERC ordered the Association to withdraw its demand for arbitration and to cease and desist from demanding to arbitra te grievances concerning prohibited subjects of bargaining . We affirm.

On March 31, 2015, the District’s principal issued a probationary teacher, Renee Eis, a written reprimand for failing to prohibit male and female students from undressing in a locker room at the same time.

On April 17, 2015, the Association f ile d a grievance challenging the written reprimand and requesting that the discipline be reduced to a verbal warning in writing

. T he Association alleged , in part, that the District violated Article 6, Section 4 of the parties’ collective bargaining agreement 1 (CBA)

, a s well as the grievant’s due process rights under the Fifth and Fourteenth Amendments of t he United States Constitution.

1 Article 6, Section 4 of the CBA provides, in pertinent part: “No employee shall be disciplined or discharged arbitrarily or capriciously.” The CBA provides for a four

- level grievance process- 2

- T he grievance was denied and the District informed the A ssociation that teacher discipline was a prohibited subject of bargaining under PERA, MCL 423.215(3)(m) . T he District also denied that it had violated Eis’s right to due process because she was an at

- will probationary employee and the reprimand was a fair response to the nature of the infra ction.

T he Association then demanded arbitration , alleging that the District violated Eis’s due
process rights by issuing a written reprimand without allowing Eis to give her side of the story and by failing to in form h er of the investigation.

The District responded that the Association’s demand for arbitration was improper because teacher discipline was a prohibited subject of bargaining under PERA , MCL 423.215(3)(m). T he Association’s due process claim was merely an attack on the disciplinary procedures utilized by the District which was a prohibited subject of bargaining. T he District warned that if the Association did not withdraw its demand for arbitration, an unfair labor charge would be filed w ith MERC. The cas e was then held in abeyance by the arbitrator.

On August 24, 2015, the District filed an unfair labor practice charge against the Association , alleging that the Association filed a grievance concerning teacher discipline which was a prohibited subject of bargaining, MCL 423.215(3)(m), and then sought to arbitrate that grievance which was an unfair labor practice under PERA

, MCL 423.210 (2)(d). The District sought an order (1) finding that the Association failed to bargain in good faith in violation of PERA, (2) requiring the Association to withdraw its demand for arbitration

, and (3) requiring the Association to cease and desist from grieving an d demanding arbitration over prohibited subjects of bargaining

. On the same day, the District moved for summary disposition , arguing “that the Association committed an unfair labor practice by advancing the grievance concerning the prohibited subject of t eacher discipline to arbitration.” T eacher discipline is a prohibited subject of bargaining under PERA, MCL 423.215(3)(m)

. The Association responded that the due process violation alleged did not concern a prohibited subject of bargaining and that PERA d id not preclude it from arbitrating the grievant’s claim contesting the improper discipline.

At the hearing on the motion for summary disposition , the District argued that the Association could not pursue a grievance regarding teacher discipline. T he Ass ociation responded that

, because MCL 423.215(3)(m) pre vents an employer from adopting a disciplinary policy that is arbitrary and capricious, its due process challenge to Eis’s discipline did not concern a prohibited subject of bargaining. That is, PERA a llow s such a challenge to discipline that is a rbitrary and capricious. T he District responded that MCL 423.215(3)(m) only pre vented it from adopting a policy of discipline that was arbitrary and cap ricious which does not mean that individual teacher discipline may be challenged by grievance or arbitration.

to resolve disputes. At the fourth level

, the grievance is submitted to arbitration. However, the CBA also states that the grievance process does not apply to “[a]ny matter involving a prohibited topic for negotiation under state or federal law.”- 3

- Subsequently, t he administrative law judge (ALJ) for the Michigan Administrative Hearing System issued a decision and recommendation that MERC grant the District’s motion for summary disposition. The ALJ noted that a union commits an unfair labor practice when it attempts to force arbitration regarding a prohibited subjec t of bargaining and teacher discipline is such a prohibited subject . The ALJ reject ed the Association’s proposed interpretation of MCL 423.215(3)(m), reasoning that when the Legislature caused decisions concerning the discharge or discipline of an individual employee to be a prohibited subject , it clearly intended those decisions not to be subjec t to review by an arbitrator. And t o the extent that the CBA concerned this prohibited subject , it was unenforceable. The ALJ concluded that, by demanding to arbitrate the grievance on a prohibited subject of bargaining , i.e., teacher discipline , the Association violated its duty to bargain in good faith under PERA, MCL 423.210(2)(d).

Further, the ALJ rejected the Association’s due process challenge arising from the disciplinary procedure because “the Legislature intended to remove all topics re lated to teacher discipline, including disciplinary procedures and disciplinary due process, from the realm of collective bargaining.” That is, even “due process in the investigation of grievances has been removed from the sphere of collective bargaining. ” The ALJ noted that the Association and its members could “enforc[e] their due process rights outside of the contractual grievance process

. ” Therefore, the ALJ concluded that the Association “violated its duty to bargain in good faith by demanding to ar bitrate a grievance advancing an interpretation of the collective bargaining agreement that would require the [District] to follow certain procedures in making a decision to discipline a teacher.” Consequently, the ALJ recommended ordering the Association to : (1) cease and desist from demanding to arbitrate grievances concerning prohibited subjects of bargaining under PERA, MCL 423.215(3)(m), (2) advise the arbitrator that it is withdrawing its grievance , and (3) notify the members of its bargai ning unit o f MERC’s decision. The Association filed exceptions to the proposed order.

MERC found no error and adopted the order recommended by the ALJ . MERC held that the discipline of an individual teacher is a prohibited subject of bargaining under § 15(3)( m) of PERA and, thus, could never become an enforceable part of a CBA. Likewise, due process issues related to teacher disciplinary procedures have also been removed from the sphere of collective bargaining. And MERC rejected the Association’s argument t hat PERA requires the use of an “arbitrary and capricious standard” with regard to the discipline of individual teachers, holding that the Legislature clearly intended to eliminate grievance arbitration as a means to challenge an individual teacher’s disci pline. MERC concluded that the Association’s initiation of grievance arbitration in an attempt to obtain enforcement of provisions of the parties’ CBA related to teacher discipline

— a pr ohibite d subject of bargaining under MCL 423.215(3)(m)

— constituted a b reach of the duty to bargain in good faith in violation of PERA, MCL 423.210(2)(d). This appeal by the Association followed.

The Association argues that MERC erred as a matter of law in holding that the Association violated PERA in seeking to arbitrate a grievance challeng ing the discipline of a teacher as arbitrary and capricious

. We disagree.

When reviewing a decision from MERC, this Court reviews de novo questions of law, including issues of contract interpretation. Macomb Co v AFSCME Council 25 Locals 411 & 893 , 494 Mich 65, 77; 833 NW2d 225 (2013)

. In the absence of a factual dispute, this Court will- 4

- only set aside MERC’s rulings if they violate a constitution or statute, or involve a substantial and material error of law. Id

.

We also review de novo issues of statutory interpretation. Pohutski v City of Allen Park

, 465 Mich 6 75, 681; 641 NW2d 219 (2002). W hen interpreting a statute, this Court’s goal is to “discern and give effect to the Legislature’s intent as expressed in the words of the statute

. ” Id

. at 683. Thus, w ords are given their plain and ordinary meaning

. Id . This Court gives effect to every clause and sentence, and avoids a construction that render s any part of a statute surplusage. Id . at 683

- 684. “The statutory language must be read and understood in its grammatical context, unless it is clear that something different was intended.” Sun Valley Foods Co v Ward , 460 Mich 230, 237; 596 NW2d 119 (1999).

“ The PERA governs the relationship between public employees and governm ental agencies.” Macomb Co , 494 Mich at 77

– 78 . Section 15 of PERA provides that a public employer has a duty to bargain with representatives of its employees and may enter into collective bargaining agreements with those representatives with respect to “ wages, hours, and other terms and conditions o f employment ”

— which are considered “mandatory” subjects of bargaining. MCL 423.215(1); Detroit Police Officers Ass’n v Detroit , 391 Mich 44, 54 ; 214 NW2d 803 (1974) . “Permissive” subjects of bargaining are ma tters that the parties may bargain over which are not considered “wages, hours, and other terms and conditions of employment.” Id . at 54 n 6. “Illegal” or “prohibited” subjects of bargaining concern matters that are unlawful or prohibited under applicabl e statutes. Id

. at 54

- 55 n 6 ; Calhoun Intermediate Sch Dist v Calhoun Intermediate Ed Ass’n , 314 Mich App 41, 4 8 n 4 ; 885 NW2d 310 (2016). W hile parties may discuss prohibited subjects of bargaining, a contract provision pertaining to the prohibited subj ect may not be included in the collective bargaining agreement and, if it is, the contract provision is not enforceable. Id . at 4 8

- 50 ; Mich State AFL

- CIO v Mich Employment Relations Comm , 212 Mich App 472, 48 7 ; 538 NW2d 433 (1995)

. With regard to public school employers and their employees, PERA provides that certain
matters are “prohibited subjects of bargaining” and that those matters “are with in the sole authority of the public school employer to decide.” MCL 423.215(4). In part icular, MCL 423.215(3) states that collective bargaining shall not include any of the subjects listed in its subdivisions , including the subjects listed in subdivision (m): For public employees whose employment is regulated by

. . . MCL 38.71 to 38.191 [th e teacher s’ tenure act], decisions about the development, content, standards, procedures, adoption, and implementation of a policy regarding discharge or discipline of an employee, decisions concerning the discharge or discipline of an individual employee, or the impact of those decisions on an individual employee or the bargaining unit. For public employees whose employment is regulated by

. . . MCL 38.71 to 38.191, a public school employer shall not adopt, implement, or maintain a policy for discharge or discipline of an employee that includes a standard for discharge or discipline that is different than the arbitrary and capricious standard provided under

. . . MCL 38.101.

The first sentence of MCL 423.215(3)(m) contains three sections connected by the w ord “or

, ” which is a disjunctive term. State of Michigan v McQueen , 293 Mich App 644, 67 1 ; 811 NW2d- 5

- 513 (2011). T his first sentence prohibits bargaining on three distinct subjects : (1) “ decisions about the development, content, standards, procedures, adoption, and implementation of a policy regarding discharge or discipline of an employee

, ” (2) “decisions concerning the discharge or discipline of an individual employee

, ” or (3) “the impact of those decisions on an individual
emp loyee or the bargaining unit.”

The Association argues , however, that it may contest decisions of individual teacher disc ipline under Article 6, Section 4 of the parties’ CBA which provides, in pertinent part : “No employee shall be disciplined or discharged arbitrarily or caprici ously.” However, as also set forth in the parties’ CBA, Article 20, § 1, ¶ D

, no grievance may be filed pertaining to “[a]ny matter involving a prohibited topic for negotiation under state or federal law.” And MCL 423.215(3)(m) clearly and plainly prohib its

— through the words “shall not include”

— c ollective bargaining regarding “decisions concerning the discharge or discipline of an individual employee

. ” Again, CBA provisions pertaining to a prohibited subject are not enforceable. Calhoun Intermediate Sch Dist , 314 Mich App at 4 8

- 50 ; Mich State AFL

- CIO , 212 Mich App at 48 7

. The Legislature has made clear its intention that issues of individual teacher discharge or discipline “are with in the sole authority of the public school employer to decide.” MCL 423.215(4). Thus, this argument fails.

The Association also argues that grievance arbitration is not specifically prohibited under MCL 423.215(3)(m). But the purpose of ar bitration is to resolve a grievance. A “grievance” is defined by the parties’ CBA , Article 20, § 1, “as an alleged violation of the expressed terms and conditions of this contract relative to hours, wages, and working conditions.” Thus, grievance arbitration is a means to enforce contract ual rights arising from the CBA. It follows, t hen, that if the dispute relates to a prohibited subject of bargainin g

— such as individual teacher discipline

— there are no grounds to file a grievance much less advance a grievance to arbitration because no
contract ual rights exist in that regard to be enforce d, i.e., there is no violation of a contractual right arising out of the CBA

.

The Association further claims that it may challenge individual disciplinary decisions that

are “ arbitrary and capricious ” because this standard is included in the second sentence of MCL 423.215(3)(m) . The Association proposes a statutory interpretation that would apply the “arbitrary and capricious” phrase from the second sentence of MCL 423.215(3)(m) to the prohibited subjects set forth in the first sentence. We reject this interpretation.

As previously noted, MCL 423.215(3)(m) has two operative sentences. When a statute uses different language in its first sentence than in its second sentence, this Court will examine the language of the respective sentences. Pohutsk i , 465 Mich at 684

- 685. When a statute uses different terms in different sentences, this Court should take care not to deprive those terms of meaning. See id

.

The second sentence of MCL 423.215(3)(m) provides that “ a public school employer shall not ado pt, implement, or maintain a policy for discharge or discipline of an employee that includes a standard for discharge or discipline that is different than the arbitrary and capricious standard” provided in the teacher tenure act. Thus, the arbitrary and c apricious standard mentioned in the second sentence applies to the school’s adoption, implementation, or maintenance of policies

— not to disciplinary decisions made with regard to individual teachers.- 6

- To conclude that this sentence applies to individual disciplinary decisions, this Court would have to disregard the introductory phrase “adopt, implement, or maintain a policy for discharge or discipline ,” MCL 423.215(3)(m) (emphasis added), that immediate ly precedes the arbitrary and capricious language

. Accordingly, MERC did not commit legal error by concluding that individual teacher disciplinary decisions may not be challenged as arbitrary and capricious through grievance arbitration

. Finally, the Ass ociation argues that MERC erred in holding that due process issues related to teacher disciplinary procedures have also been removed from the sphere of collective bargaining. The Association bases its argument on the premise that the parties incorporated due process principles into their CBA and that, by requiring it to seek recourse in other forums, MERC’s decision violates the CBA. We reject this argument. I ndividual teacher disciplin ary decisions are a prohibited subject of bargaining under MCL 423.21 5(3)(m)

. As the ALJ and MERC held, because individual disciplinary decisions are prohibited subjects of bargaining, it follows that challenges to the procedures underlying those same decisions , including due process claims, are also prohibited subjects of bargaining. While the parties’ CBA provides that “ [n] o employee shall be disciplined or discharged arbitrarily or capriciously

, ” the CBA also states that the grievance process does not apply to “[a]ny matter involving a pr ohibited topic for negotiation under state or federal law.” Because a decision concerning the discipline of an individual teacher is a prohibited subject of bargaining, the grievance process does not apply to a claim challenging the d isciplinary procedure related to that decision

. In summary, MERC properly determined that individual teacher discipline , as well as the underlying disciplinary procedures, are prohibited subject s of bargaining and that the arbitrary and capricious language of MCL 423.215(3)(m ) did not apply to individual teacher discipline ; therefore

, the Association committed an unfair labor practice by demanding to arbitrate a grievance on a prohibited subject of bargaining in violation of PERA

, MCL 423.210(2)(d).

Affirmed.

/s/ Mark J. Cav anagh /s/ Joel P. Hoekstra /s/ Jane M. Beckering