Case Name: FORT DODGE COMMUNITY SCHOOL DISTRICT, Appellee, v. PUBLIC EMPLOYMENT RELATIONS BOARD, Appellant, and Fort Dodge Education Association, Intervenor-Appellant
Court: Iowa Supreme Court
Jurisdiction: Iowa
Decision Date: 1982-05-19
Citations: 319 N.W.2d 181
Docket Number: No. 65796
Parties: FORT DODGE COMMUNITY SCHOOL DISTRICT, Appellee, v. PUBLIC EMPLOYMENT RELATIONS BOARD, Appellant, and Fort Dodge Education Association, Intervenor-Appellant.
Judges: All Justices concur except McCORMICK and HARRIS, JJ., who dissent and ALLBEE, J., who takes no part.
Reporter: North Western Reporter 2d
Volume: 319
Pages: 181–186

Head Matter:
FORT DODGE COMMUNITY SCHOOL DISTRICT, Appellee, v. PUBLIC EMPLOYMENT RELATIONS BOARD, Appellant, and Fort Dodge Education Association, Intervenor-Appellant.
No. 65796.
Supreme Court of Iowa.
May 19, 1982.
Thomas J. Miller,. Atty. Gen., Frank J. Stork, Asst. Atty. Gen., and Hugh Perry, General Counsel, Des Moines, for appellant Public Employment Relations Bd.
Charles E. Gribble, of Dreher, Wilson, Adams, Jensen, Sayre & Gribble, Des Moines, for intervenor-appellant, Fort Dodge Education Assn.
Rick Engel, Fort Dodge, for appellee.
Edgar H. Bittle & Terry L. Monson, of Ahlers, Cooney, Dorweiler, Haynie & Smith, Des Moines, for the Iowa Association of School Boards, Inc., amicus curiae.

Opinion:
LARSON, Justice.
Faced with the problem of declining enrollment, the Fort Dodge Community School District adopted a plan providing cash incentives for early retirement for teachers sixty years of age or older. Adoption of the plan evoked a prohibited practice complaint before the Public Employment Relations Board under chapter 20, The Code 1979, by the Fort Dodge Education Association, asserting that the plan was a mandatory subject of bargaining under section 20.9 and that the district had violated the act by unilaterally adopting it. The hearing officer, and a majority of the Public Employment Relations Board, agreed and ordered the district to negotiate the plan with the association. The district sought judicial review of the board's decision, § 17A.19, and the district court reversed. On appeal to this court by the board and the association, we affirm.
The case was presented upon the following stipulated facts. The association is an "employee organization" as defined in section 20.3(4), and is certified to represent the professional, non-supervisory employees within the district; the district is a "public employer," as defined in section 20.3(1). In 1979, while the association and the district were parties to a collective bargaining agreement, the district unilaterally adopted a policy "to encourage early retirement on the part of bargaining unit members . . . which provide[d] for the payment of cash bonuses to teachers accepting early retirement," and refused to negotiate with the association on the matter.
The plan provided in part:
A teacher [with at least ten years experience in Fort Dodge] who accepts early retirement will receive the following cash benefits on July 1, 1979:
A. Age 60: $2,000.00 plus 100% of the difference between $10,000 and the employee's position on the 1978-1979 salary schedule.
B. Age 61: $2,000.00 plus 90% of the difference between $10,000 and the employee's position on the 1978-1979 salary schedule.
C. Age 62: $2,000.00 plus 80% of the difference between $10,000 and the employee's position on the 1978-1979 salary schedule.
D. Age 63: $2,000.00 plus 70% of the difference between $10,000 and the employee's position on the 1978-1979 salary schedule.
E.Age 64: $2,000.00 plus 60% of the difference between $10,000 and the employee's position on the 1978-1979 salary schedule.
At the initial hearing a district administrative assistant, who was primarily responsible for drafting the plan, testified on its objectives:
We believed that some sort of a retirement income plan would soften the crisis of declining enrollment, which would require a reduction in staff. [The financial impact of the plan is that it] gives a percentage of the difference between a [veteran teacher's] salary and that of a [beginning teacher's] salary . . [and thus] it is entirely possible that it could be a savings of up to $6000-$7000 per teacher.
He further testified that although the first year's savings would only amount to $1279, savings would rise to $30,000-$35,000 the second year. On the basis of this testimony, the hearing officer found the purpose of the plan "was to soften the declining enrollment crisis which threatens to cause staff reductions . . ., [to] save jobs for younger teachers, and [to] provide financial benefits to the district." He concluded that the plan was a mandatory subject of bargaining under section 20.9 and that the district had acted improperly in adopting it without negotiation.
I. Scope of section 20.9.
Section 20.9 provides:
The public employer and the employee organization shall meet at reasonable times, including meetings reasonably in advance of the public employer's budget-making process, to negotiate in good faith with respect to wages, hours, vacations, insurance, holidays, leaves of absence, shift differentials, overtime compensation, supplemental pay, seniority, transfer procedures, job classifications, health and safety matters, evaluation procedures, procedures for staff reduction, in-service training and other matters mutually agreed upon.
(Emphasis added.) The statute was first discussed by this court in City of Fort Dodge v. Public Employment Relations Board, 275 N.W.2d 393, 397 (Iowa 1979), which held it is to be narrowly applied. Subsequent cases have agreed. E.g., Marshalltown Education Association v. Public Employment Relations Board, 299 N.W.2d 469, 470 (Iowa 1980); Charles City Education Association v. Public Employment Relations Board, 291 N.W.2d 663, 667 (Iowa 1980); Charles City Community School District v. Public Employment Relations Board, 275 N.W.2d 766, 773 (Iowa 1979).
Despite these decisions, contrasting views of the scope of section 20.9 have remained and are illustrated by the split decision in the present case. A majority of the board held the early retirement incentive plan was a form of supplemental pay: "It is, quite simply, a provision for a supplemental cash payment to teachers to be paid at their retirement, with the amount of the payment determined by their age and length of service." Even given the restrictive definition of wages and supplemental pay established by City of Fort Dodge, 275 N.W.2d at 397, 398, the majority concluded there was a service rendered here: viz., the teachers retired early to help alleviate budgetary problems. The dissent took a more restrictive view of the statute: that the "pay" referred to in section 20.9 must actually be a supplement to, or in addition to, other payments for services rendered, and that the "service" rendered by early retirement was not the sort envisioned by the legislature. The district court agreed with the latter view.
The association urges us to reassess our oft-expressed view that the list of mandatory subjects of bargaining is to be restrictively applied, arguing there is no evidence the legislature intended such a construction. As noted above, however, we have concluded the act's wording and legislative history indicated an intent to retain broad employer rights and to carve out specific, narrowly defined, exceptions for mandatory negotiation. We further note the legislature has declined to make any changes in the statute which would indicate our view on its scope was erroneous. Under such circumstances, we do not depart from our earlier case law.
II. Application of section 20.9.
The association argues the early retirement compensation plan is a mandatory subject of bargaining because it is both "wages" and "supplemental pay" under the statute. The board contends it is only in-cludable as "supplemental pay." The district and the Association of School Boards, Inc., amicus curiae, argue it is neither wages nor supplemental pay under the statute, and the district court agreed.
Whether a particular proposal is a mandatory subject of bargaining is of considerable significance: If it is a mandatory one it carries with it enforcement through impasse and grievance procedures. § 20.-9, .10; see City of Fort Dodge, 275 N.W.2d at 395. We have employed a two-step analysis for determining whether a proposal falls within the scope of mandatory bargaining: first, it "must come within the meaning of one of the subjects listed in section 20.9," and second, "there must be no legal prohibition against bargaining on the particular topic." Charles City Education Association, 291 N.W.2d at 666.
A. The plan as "wages." We have said wages under the statute means "a specific sum or price paid by an employer in return for services rendered by an employee," id. at 668; and, adopting a dictionary definition, we have said that it also means "pay, given for labor, usually manual or mechanical, at short stated intervals, as distinguished from salaries or fees, [and denotes] the price paid for labor, especially by the day or week," City of Fort Dodge, 275 N.W.2d at 396.
We are convinced the legislature did not intend to give "wages" the broad application contended for here. If it had intended to include all "wage-related" remunerations of all species within the term "wages," it would have been unnecessary to include in the list of mandatory subjects so many wage-related items such as insurance, vacations, overtime compensation, and supplemental pay. See § 20.9; City of Fort Dodge, 275 N.W.2d at 397. In its commonly understood meaning wages would not include payment for services not rendered or labor not performed.
B. The plan as "supplemental pay."
The majority decision of the board proposed a construction of supplemental pay broader than that previously adopted by us which, according to it, would "encompass not only traditional forms of supplemental pay, but also innovative attempts to link teacher compensation to the public interest goals of a school district, as in the case of an early retirement program." However, we do not believe the legislature intended matters of possible negotiation to be made mandatory simply because they are linked to the public-interest goals of the district; subjects of bargaining could be almost unlimited.
Both the association and the board contend the staff reduction incentive plan is a mandatory subject of bargaining because it involves supplemental pay under section 20.9. They argue "supplemental pay" must have been intended to be distinguishable from "wages." Otherwise, they argue, there was no reason for the legislature to have included both in the statute; one of them would be surplusage, according to that view.
In City of Fort Dodge, 275 N.W.2d at 396-97, we noted "pay" and "wages" are used interchangeably. We believe that the term supplemental pay refers to pay for services rendered, and that the "service" rendered by early retirement is not the type of service envisioned by the legislature. Public employees, such as teachers, who are considered professional employees and thus not qualifying for "shift differentials" or "overtime compensation" under the act nevertheless may qualify for additional pay for services rendered over and above the pay for the primary duties of their contract. An obvious example is a teacher who performs extra duties as a coach.
At any rate, the term supplemental pay means pay for rendering a service; it does not appear to be intended as payment for not working. In other words, it is pay based upon extra services and directly related to the time, skill, and nature of those services. It is not intended to be tied solely to a person's age, as the cash incentive plan is here.
This view is consistent with the reasoning in Fairlawn Education Association v. Fair-lawn Board of Education, 79 N.J. 574, 401 A.2d 681, 684 (1979):
Under the [retirement] plan here at issue, payments are geared to age, not service. Moreover, the sums to which instructors are entitled decrease as length of service increases. It is thus clear that the parties to this contract intended to reward early retirement rather than the amount and quality of work that a particular teacher had performed. As such, these payments are not authorized by [the statute permitting a school board to set the "terms and tenure of employment, . . . salaries and time and mode of payment thereof."]
III. Other issues.
The district argues that this plan, even if a mandatory subject of bargaining, is a "retirement system," which is excluded from negotiation by section 20.9. Because we have concluded it is not a mandatory subject of bargaining, we do not address the issue. The association, on the other hand, argues it is a staff-reduction procedure and thus a separate mandatory subject of bargaining under section 20.9. This argument was not presented below and therefore we will not address it on appeal.
We find no error in the ruling of the district court.
AFFIRMED.
All Justices concur except McCORMICK and HARRIS, JJ., who dissent and ALLBEE, J., who takes no part.
. The association became a party to this action after the district court granted its application for intervention, Iowa R.Civ.P. 75.