Case Name: CITY OF DETROIT v. DETROIT POLICE OFFICERS ASSOCIATION
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1980-06-06
Citations: 408 Mich. 410
Docket Number: Docket No. 63929
Parties: CITY OF DETROIT v DETROIT POLICE OFFICERS ASSOCIATION
Judges: Ryan and Blair Moody, Jr., JJ., concurred with Williams, J.
Reporter: Michigan Reports
Volume: 408
Pages: 410–578

Head Matter:
CITY OF DETROIT v DETROIT POLICE OFFICERS ASSOCIATION
Docket No. 63929.
Argued January 10, 1980
(Calendar No. 16).—
Decided June 6, 1980.
Rehearing denied 409 Mich 1101.
A panel of arbitrators, proceeding under the statute which provides for compulsory arbitration of disputes concerning contract formation in police and fire departments, resolved the issues remaining between the City of Detroit and the Detroit Police Officers Association during the formation of a new collective bargaining agreement in 1977. The award essentially accepted the city’s last offer of settlement on most of the disputed economic issues but accepted the police officers’ offers to preserve the existing cost of living allowance (COLA) agreement with a lower increase in wages than that proposed by the city (with a limited COLA agreement) over the next three years. Most of the non-economic issues were settled or withdrawn or remanded to the parties and the order provided for consideration by the panel of a hardship exemption from the existing contractual requirement that the police officers reside in the city, unless the parties were able to resolve the residency issue by further negotiation within 30 days of the award. The City of Detroit brought an action seeking review of the arbitrators’ award and challenging the constitutionality of the statute which provides for compulsory arbitration. Defendant Detroit Police Officers Association and intervening defendant Detroit Fire Fighters Association brought counterclaims seeking enforcement of the arbitration award and payment of interest on its economic portions from the time of its issuance. The Wayne Circuit Court, Victor J. Baum, J., granted a judgment enforcing the award, and later enforced a supplemental award concerning the hardship exemption from the existing residency requirement and the use of grievance arbitration to resolve individual claims of hardship. The plaintiff appeals prior to decision of the Court of Appeals. In opinions by Justices Williams, Blair Moody, Jr., and Fitzgerald, and a dissenting opinion by Justice Levin, the Supreme Court held that the compulsory arbitration statute is constitutional.
References for Points in Headnotes
[1, 2, 5, 20, 21, 23-25, 27, 31-33, 35, 36] 5 Am Jur 2d, Arbitration and Award § 9.
16 Am Jur 2d, Constitutional Law §§ 335, 339.
48A Am Jur 2d, Labor and Labor Relations §§ 1772,1773.
Constitutionality of arbitration statutes. 55 ALR2d 432.
Validity and construction of statutes or ordinances providing for arbitration of labor disputes involving public employees. 68 ALR3d 885.
[3, 26, 28] 1 Am Jur 2d, Administrative Law § 102 et seq.
16 Am Jur 2d, Constitutional Law §§ 335, 339.
[4, 7, 8, 10, 12, 13] 48 A Am Jur 2d, Labor and Labor Relations §§ 1772, 1773.
Validity and construction of statutes or ordinances providing for arbitration of labor disputes involving public employees. 68 ALR3d 885.
[6, 9, 11, 13, 20] 5 Am Jur 2d, Arbitration and Award § 145.
[14] 48A Am Jur 2d, Labor and Labor Relations § 1999.
[15] 5 Am Jur 2d, Arbitration and Award § 143.
[16] 48A Am Jur 2d, Labor and Labor Relations §§ 1771, 1773.
[17] 16A Am Jur 2d, Constitutional Law § 384.
[18] 16 Am Jur 2d, Constitutional Law §§ 752, 753.
[19] 16 Am Jur 2d, Constitutional Law § 158.
[22] 16 Am Jur 2d, Constitutional Law §§ 150, 158.
[29] 16A Jur 2d, Constitutional Law § 735 et seq.
[30, 31, 34-36] 73 Am Jur 2d, Statutes §§ 38-41, 43.
Justice Williams, joined by Justices Ryan and Moody, wrote:
The statute, as amended in 1976, is a constitutional delegation of legislative power because it provides standards for guidance of the arbitrators as reasonably precise as the subject matter requires or permits, and, as a practical matter, the statutory scheme provides adequate political accountability. The arbitration award, with the exception of the hardship exemption from the city’s residency requirement, complies with the requisite statutory standards and is supported by competent, material and substantial evidence on the whole record. However, there is no statutory provision under which to grant interest on the economic portion of the award. The other claims the plaintiff raises, that the statutory scheme impermissibly usurps the powers of a home rule city and violates the Equal Protection Clause by denying the right to cast an effective ballot in a municipal election, have been previously rejected by the Court.
1. The Legislature may delegate its power, provided that the standards prescribed for guidance of the body to which it is delegated are as reasonably precise as the subject matter requires or permits. The statute at issue specifically states its guiding purpose, defines the parties to whom it applies, estab lishes specific time limits for initiation and resolution of arbitration, provides a detailed procedure for the appointment and removal of persons appointed to the Michigan Employment Relations Commission Panel of Arbitrators and for the selection of the arbitration panel’s representative delegates and public chairperson, formulates procedural guidelines for the arbitration hearing and remand, narrows the scope of the arbitrators’ authority to eight specific considerations ("factors”) for their decision of economic and non-economic issues, and details the effect of an arbitral decision subject to the availability of judicial review. The eight factors in the act provide standards which are at least as reasonably precise as the subject matter requires or permits in effectuating the purpose of the act to afford a procedure for the resolution of contract-formation ("interest”) disputes. The statutory requirement that the arbitration panel adopt the last offer of settlement which it finds more nearly complies with the applicable statutory factors shows the sufficiency of these standards more clearly. Neither the presence nor absence of the last-best-offer provision is necessary to the act’s constitutionality and the dictates of the delegation doctrine.
2. The City of Detroit argues that political, or public, accountability of the arbitrators is necessary, in addition to proper delegation, to sustain the constitutionality of the statute. The Supreme Court has previously recognized the inherent tension between the objectives of affording the arbitrators a high degree of independence and requiring public accountability and responsibility. In 1976 the Legislature significantly modified the scheme of the act as to the tenure of the impartial chairpersons of the arbitration panels and as to the method of their selection. These modifications have greatly increased the accountability of the persons available to serve as chairpersons of arbitration panels, tend to eliminate "hit-and-run” arbitrators, and lead to the establishment of a class of arbitrators with tenure and responsibility compatible with the notion of political or public accountability. Should the actions of the appointed arbitrators invite unfavorable comment, the voters may express their dissatisfaction by directing complaints to the Governor as well as to the gubernatorially appointed MERC commissioners.
3. The MERC commissioners and panel members need not be directly accountable to the people of the specific community over which arbitral authority is exercised. Interruptions of work by police and fire departments, although primarily local in their settings, were deemed by the Legislature to pose a threat to the state’s public health, safety and welfare. Should the people be dissatisfied with the accountability of the state’s statutory scheme, the burden is upon the state’s voters, including those locally affected, to exercise their political will upon the Legislature. The inherent tensions between the objectives of affording arbitrators sufficient independence in making decisions on complex disputes and maintaining their accountability to the public have been adequately balanced in view of the statutory provision of standards, the extremely public atmosphere in which the arbitration operates, and the statutory provision for judicial review. The statutory standards check the unfettered exercise of the arbitrators’ authority and provide them with guides which the Legislature deemed to be significant in resolving those issues which have been negotiated and sharpened by the parties, yet remain unresolved. Therefore, as a practical matter, the scheme exhibits adequate political or public accountability.
4. The statute provides the Court with a license neither to consider the wisdom of an arbitration award nor to subject it to de novo review, but specifically confines the scope of review to awards without or exceeding the panel’s jurisdiction, or unsupported by competent, material and substantial evidence on the whole record, or procured by unlawful means. The award must be based upon competent, material, and substantial evidence relating to the applicable factors prescribed by the statute in the case of non-economic issues, or to the last offer which "more nearly complies with” the factors in the case of economic issues. That is, the arbitration panel’s award must reflect the applicable statutory factors and they must be established by competent, material and substantial evidence on the whole record. However, the fact that a majority of the arbitrators may not have been persuaded by a party’s evidence and argument as to certain issues does not mean that they have failed to give the statutory factors that separate consideration required by law. The Legislature has evinced no intention that each factor be accorded equal weight; it is the arbitration panel that must decide which particular factors are more important in resolving a certain contested issue, although all applicable factors must be considered.
5. The Court’s review of the award must be undertaken with considerable sensitivity in order to accord due deference to the arbitrators’ expertise and not displace their choice between two reasonably differing views. On the economic issues of the cost of living allowance (COLA) and wages, because the City of Detroit advocated the abolition or severe diminution of the existing COLA agreement, its wage proposal was considerably higher than the one the police officers requested in conjunction with a continuation of the COLA provision. Therefore, the arbitrators discussed the two issues together in considering the statutory factors and reached a finding as to each one. There was uncontradicted evidence that the City of Detroit was at the legal limit of its taxing power, but the arbitrators did not consider this fact to be conclusive as to the economic issues. The city asserted that its ability to pay was “limited” but because the city did not introduce its budget the arbitrators were unable to determine what other needs of the city were met by the city’s previous spending compared with the importance of and amounts necessary for funding the police officers’ last offers on the wage and COLA issues. The panel considered it to be of major importance that, in another recent arbitration proceeding, the Detroit Police Lieutenants and Sergeants Association had obtained a continuation of a similar COLA agreement. Because the two police associations had enjoyed a strong historic relationship, the panel decided that a denial of the COLA to the police officers would imperil police morale and the effective performance of their services to the public. The panel also found that the more apt and persuasive comparisons of salaries and fringe benefits to be with the Detroit police lieutenants and sergeants and with other police officers working in the Detroit metropolitan area, rather than with other City of Detroit employees, out-of-state police officers, or private security employees. The panel also decided that it should maintain the historic relation between the compensation of police officers below the rank of sergeant and of those above. The panel concluded that the maintenance of high police morale could more effectively be insured by preserving the previous COLA arrangements, which were inextricably related to the resolution of the wage issue. The award of the defendant’s last offer as to these economic issues, i.e., the lower wage proposals with the continued COLA agreement, was supported by competent, material and substantial evidence on the whole record.
6. The City of Detroit argues that the economic award should be vacated because of refusal to admit into evidence the city’s Exhibit 30, which purported to show the financial effect that the award would have on the city because of the DPOA’s relationship with the Detroit Fire Fighters Association and the police lieutenants and sergeants. The city had already agreed, with respect to certain economic benefits, that there would be a parity between fire fighters and police officers, and the previous and proposed contracts with the police lieutenants and ser geants had provided that their pay would be computed upon that of a police officer. Thus the city argued that any economic award in this case would be reflected in the total cost to the city in the total budget, and its ability to pay. The chairman of the arbitration panel excluded Exhibit 30 from evidence on the ground that the statutory arbitration with the other two unions had not been completed at that time. Review of that decision is limited to whether the exclusion was so egregious as to cause the award on the contested economic issues to be unsupported by competent, material and substantial evidence on the whole record. In the light of remarks by the chairman of the panel to the effect that they were aware of the historic relations among the three bargaining units and the city, the exclusion from evidence of Exhibit 30 cannot be said to have caused the economic award to be unsupported by competent, material and substantial evidence on the whole record.
7. The panel of arbitrators, in considering the issue of the city’s residency requirement, erroneously failed to compare this condition of employment with residency requirements for public and private employees performing similar .services. The omission by the parties of evidence on this statutory factor does not excuse the arbitrators’ inattention to it. Therefore, the award of a hardship exemption from the residency requirement is not supported on this record and it remains up to the parties to either introduce evidence on the applicable factors before the arbitrators or to return to collective bargaining on the issue. The arbitrators did not make an award concerning the 1978 Detroit ordinance defining "residence” and therefore a reviewing court cannot fill this void by de novo amending the contract to include it. The parties should also resolve the issue of the inclusion of the ordinance by collective bargaining and arbitration.
8. The question of interest on the award is purely statutory. The arbitration panel is not a court, and the concept of a money judgment is totally alien to the concept of the arbitration of labor disputes in critical public services. Therefore, the provision of the Revised Judicature Act concerning interest on a "money judgment recovered in a civil action” does not apply to the arbitrators’ economic award. Neither is this an award "founded” on contract because the very purpose of the statutory arbitration is to form a contract and the award which results has not been executed to the extent that an amount upon which interest may be granted has been liquidated or ascertained. In sum, there is no statutory provision under which to grant interest on the economic portion of the arbitrators’ award.
Justice Moody, joined by Justice Ryan, concurring with Justice Williams, wrote separately to respond to Justice Levin’s opinion:
1. The result offered by the dissenting opinion of redetermination of the economic awards without the last-best-offer restriction, although it presents an attractive compromise solution to the economic problem, would require an ex post facto change of the rules of the contest. It would cause the parties to debate again what has been resolved in accordance with reasonable standards.
2. The conclusion that the last-best-offer system yields results which are unconstitutionally arbitrary does not necessarily follow in fact or law. No section of the Michigan or United States Constitution is cited to support the conclusion. Furthermore, it is conceded that there is a sound rationale for the adoption of the system: the promotion of private settlements by penalizing those who did not try hard enough to settle.
3. The Court must determine whether there is a rational basis for the Legislature’s judgment, but it is not the role of the Court to decide whether the Legislature acted wisely or unwisely in enacting this statute. The proper test for judging the constitutionality of the statute, enacted pursuant to the police power, under the Due Process Clause is whether the legislation bears a reasonable relation to a permissible legislative objective. The test to determine whether it comports with the Equal Protection Clause is essentially the same. The legislative classification must be sustained if it is rationally related to a legitimate government interest. The Court does not have the power to arbitrarily declare certain legislation to be unconstitutional.
Justice Fitzgerald agreed that the compulsory arbitration act is constitutional, but for different reasons from those advanced by Justice Williams. He also agreed with Justice Williams’ analysis of the other issues in the case. He wrote:
1. The degree of "political accountability” of the arbitration panel is not the crucial test for determining the act’s constitutionality. There is "accountability” in that the act specifically provides that any award must be based on certain legislatively prescribed criteria, and thus the arbitration panel is not free to issue an award premised on its unique view of what the criteria ought to be; more importantly, fidelity to the criteria will be examined by the judiciary if review is sought. But it stretches credulity to contend that the arbitrators, including the chairperson, are "politically accountable” in some fashion to the electorate. Debate on the question of political accountability is misplaced emphasis.
2. What has been ignored is that a "politically accountable” entity, the Legislature, has enacted this mechanism for the peaceful resolution of labor disputes, and another "politically accountable” entity, the local unit of government which constitutes "management” has been charged with the responsibility of putting on the bargaining table its offer to settle the dispute. The arbitrators themselves need not also be directly politically accountable; such a system, while it might make for politically expedient awards, would hardly be consonant with the spirit of having an impartial forum for binding arbitration.
3. Much of the language in the dissent is an examination of the wisdom of the legislation rather than of its constitutionality. If the act is simply bad legislation, the electorate should call to account those who were responsible for its promulgation.
Affirmed, except as to the hardship exemption from the city’s residency requirement.
Justice Levin, joined by Chief Justice Coleman and Justice Kavanagh, dissenting, would hold the statute unconstitutional on the ground that it delegates the power to prescribe policy (law) to the chairman of the arbitration panel without adequate safeguards circumscribing the exercise of that power, and the last-best-offer provision exacerbates rather than cures the statute’s deficiencies so that entirely apart from its constitutionality otherwise, it is unconstitutional with that provision. The holding should be given prospective effect, and this case and the Lieutenants and Sergeants Association case remanded for redetermination of the economic awards unrestrained by the last-best-offer limitation. Because the merits in this case depend in part on the merits of the city’s appeal in the Lieutenants and Sergeants Association case, for which application for leave to appeal is now being held in abeyance, there can be no final decision in this case until the city’s application in the Lieutenants and Sergeants case is decided.
1. Implicit in the Legislature’s constitutionally conferred power to enact laws for the resolution of disputes concerning public employees is the power to delegate the resolving authority. The delegation doctrine and other constitutional principles seek to protect against excessive delegation or misuse and abuse of delegated lawmaking power. The doctrine is rooted, at least in part, in the constitutional provision vesting the "legislative power” in the Senate and House of Representatives, and reflects the fundamental democratic premise that the law should be made by representatives chosen by the people. It attempts to reconcile that precept with the complexity of the governing process. The statutory “standards” test has proved ineffectual in assuring legislative responsibility for fundamental policy decisions and in structuring the exercise of delegated power. The more appropriate inquiry is whether the totality of standards and safeguards surrounding the delegation of legislative power sufficiently protects against unnecessary and uncontrolled discretionary power. A court should review a challenged delegation of legislative power to examine whether adequate checks have been provided against arbitrary or uncontrolled official action. Such an inquiry, however, cannot supplant the basic inquiry whether the legislatively devised framework for official action — considered in its application — secures the fundamental goal of the delegation doctrine: preserving legislative responsibility for the determination of public policy.
2. Accountability requires a structure which does not inhibit the emergence of intelligible principles and coherent policies to guide the resolution of individual cases because the possibility of constructive political response presupposes that the electorate and the Legislature can determine the policy being applied. The statute violates the delegation doctrine because it insulates the decision-making process and the results from accountability within the political process. It is novel in that the policy-making power is dispersed among ad hoc arbitrators, which prevents the emergence of visible and intelligible principles. Therefore, safeguards which are generally regarded as adequate in such a delegation of lawmaking power do not assure accountability in this context. The chairman of the panel of arbitrators decides the public policy which will govern a particular case and have the effect of law. Such a delegation of legislative power is generally made only to full-time public officers or administrative agencies. This provides a structure for the development of policy in a uniform and politically responsive manner. The delegation doctrine developed in the context of the safeguards implicit in centralization and continuing exercise of policy-making power and therefore few precedents recognize the mischief resulting from the unsupervised dispersal of policy-making power.
3. The decisions of the arbitrators involve questions of policy, principally the allocation of public funds. The statutory standards are sufficiently amorphous to allow a panel confronted with a given set of evidence to reach (and justify) a result in favor of either party on virtually any issue. The absence of principled decision-making inherent in the ad hoc structure of the statute, inhibits the emergence of a coherent body of law and precludes any meaningful accountability. When sensitive judgments of this sort are not based upon any known principles they cannot be said to be based upon questions of policy decided by the Legislature in the first instance. Therefore, the decisions once made must be accessible to legislative scrutiny. The absence of discernible principles also prevents the public from scrutinizing what is being decided in its interest.
4. The lack of uniformity in the process which is invited by the dispersal of policy-making power is in itself an evil. It is not consonant with a constitutional democracy for those who exercise the powers of government to apply different policies in the same situations. Inherent in the diffusion of state power among ad hoc arbitrators is potential non-uniformity in policy-making. Even if the chairman in one case fully explained his reasoning, there would be no assurance that the rule would be applied by him or by others in other cases. A related vice flowing from the absence of principles is that the Legislature is accomplishing indirectly that which it cannot do directly: the creation of what are, in practical effect, local laws.
5. It cannot be said that the issues presented in arbitration are not capable of resolution by principles, which may of necessity be complex in many cases. It is important that there be a continuing body responsible for the development of coherent principles and duty-bound to explain the bases for distinction when a result different from that of past cases is reached. The Legislature may adopt a mandatory procedure for resolving collective bargaining disputes, but the authority should be vested in a governmental officer or agency with continuing responsibility to the electorate through the appointing authority for the exercise of that power.
6. Although they may pass traditional standards-oriented inquiry, the "factors” provided by the Legislature as guides for decision-making by the arbitrators do not adequately protect against excessive delegation or unnecessary and uncontrolled discretionary power. The statement of public policy in the statute is no more than a general directive that the arbitrators shall go forth and settle disputes. Nor do the statutory standards supply the coalescing element of policy. In most cases, particularly in last-offer arbitration of economic issues, any reasonable decision can be justified by one or more of the statutory criteria. As a practical matter, the Legislature has offered the arbitrators little direction as to what they should consider or how they should reach a decision, and still less assurance to the electorate that arbitration awards will be fashioned through a principled, consistent, or fathomable process.
7. The inadequacy of the standards is shown in this case by the fact that the chairman of the arbitration panel suggested that a city’s claim of inability to pay the union’s wage demands will not receive serious consideration unless the asserted inability is absolute, which effectively eliminates the factor of financial ability of the city from consideration. In applying the "comparable” factor in the Lieutenants and Sergeants Association case, the chairman of the arbitrators indicated considerable reliance on the parties’ stipulations as to "comparable” communities in reaching the first decision only to dismiss the evidence in a later opinion because no testimony established that the functions of police lieutenants and sergeants in cities that the parties had agreed to were comparable. This change of position demonstrates the failure of the statute to give meaningful guidance or to insure a measure of consistency in reasoning even of the same arbitrator.
8. The judicial review provided by the statute is not a safeguard against the improper exercise of delegated policy-making power. Requiring that the award reflect consideration of all applicable statutory factors provides no assurance that the decisions will show consistent use of intelligible principles of broader application than the particular case. The standards are so general that any reasonable decision can be justified. Affirmance of the award is assured unless the chairman of the panel has considered evidence outside the record or employed decisional criteria not contemplated by the statute. Arbitrariness cannot even be detected if the rules of decision-making are unknown. The awards are not required to be published, nor are the arbitrators required to make their decisions of policy separate from their findings of fact. But, in any event, a court confronted with non-uniformity of policy could not resolve the conflict. Furthermore, requiring the panels to solicit evidence from the parties on applicable factors concerning the noneconomic issue but permitting the chairman of the panel discretion to ignore properly admitted evidence as to the economic issue shows a practical, if not a logical, inconsistency in the judicial review of the evidence which supports the award.
9. The last-offer provision requires that the arbitrators choose one party’s proposal on each economic issue, but forbids them to fashion their own award. The requirement in effect forces adoption of a policy which may not be uniform with the policy applied to similar communities, and the lack of uniformity is exacerbated by the last-best-offer feature. The vitality of any policy that the chairman might develop is in the parties’ hand: they can fashion their offers in accordance with it, they can reject it because certain the other side will, or if there is no discernible policy, the parties have inadequate information to guide them in fashioning their bargaining strategy or devising an acceptable last offer except what they can discern of the individual chairman’s personal preferences. In sum, there can be no principled development to govern in all cases because each one is shaped and determined by the parties’ last offer. Last-offer arbitration further reduces the political accountability of the chairman of the panel who is no longer required to announce the result which he thinks most in accord with the statutory factors declared by the Legislature or the particular policy implicit in the decision he makes. The chairman, as he did in this case, can dissociate himself from the result he announces by indicating that if he were not restrained by the last best offer he would reach a different result, presumably lying between the last best offers. Responsibility for the terms of the award now has moved even further from the Legislature and falls somewhere between the parties and the chairman of the panel. The last-best-offer arbitration eliminates the most appropriate result as an option, and it is a question of some moment whether the Legislature can deprive itself, or its delegate, of the authority to make the best public policy. The Legislature may encourage collective bargaining, but peaceful resolution of collective bargaining disputes is not a mandatory constitutional principle. The efficacy of binding arbitration as a method of resolving collective bargaining disputes does not depend on the last-offer procedure, and the last-offer system yields results which are unconstitutionally arbitrary because it is apt to impose a costly and arbitrary penalty on the party who, although proceeding in good faith, did not more nearly satisfy the statutory criteria. The chairman of the panel in this case indicated that he might have made an economic award substantially less costly to the city had he not been required to select the last best offer of one of the parties. The Legislature cannot constitutionally provide for so arbitrary a solution and penalty.
10. The 1976 amendments to the process of selecting a chairman have not provided any significant measure of political accountability in the arbitral process. While the set of persons eligible to become chairman may in theory have been narrowed and the likelihood that some arbitrators will be chairmen of a number of panels has been correspondingly increased, it remains impossible to assign meaningful responsibility to any public official or authority for the manner in which a chairman exercises delegated power. Arbitrators continue to be selected to determine the terms of contracts on a case-by-case basis, and their tenures as decision-makers are only as long as the disputes remain unresolved by agreement or award. It is entirely conjectural whether the new method of selection motivates arbitrators to conduct themselves so as to enhance their chances of continued employment in such arbitrations. Even if the chairman’s sensitivity to the effect of his decisions is heightened by his awareness of the personal consequences to him, that provides no safeguard against non-uniformity of policy and lack of political responsiveness. The connection between the chairmen of the arbitration panels and the Governor is too attenuated to provide any measure of political accountability for the arbitrators’ decisions. The Legislature is undoubtedly within its prerogative in creating a system which allocates to a group composed largely of persons with grievance arbitration experience the power to resolve public policy concerning the terms and conditions of public employment, but the persons chosen to make those decisions for the state may not be isolated from the political process.
11. It is contended that, because it was the intention of the Constitutional Convention of 1961 to leave the choice of procedures for resolving disputes concerning public employees to future Legislatures, the Legislature and not the Court is the appropriate body to determine whether the delegation of power is an appropriate allocation of authority in a representative democracy. The power to determine whether acts of the Legislature comport with constitutional principles is confided to the judicial branch. Even if the delegates to the 1961 Constitutional Convention specifically intended to authorize compulsory interest arbitration, there is no indication that they intended to approve any particular method of arbitration or to permit the adoption of such measures without regard to other constitutional precepts. The entire framework of the Civil Service Commission, for a contrasting example, is constitutional because it is embodied in the Constitution; moreover, certain provisions of its constitutional charter endow the Civil Service Commission with a measure of political accountability and subject its policy-making powers to limited legislative review. The constitutional authorization for the statute in this case simply permits the Legislature to enact laws providing for the resolution of disputes concerning public employees except those in state civil service. Finally, the 1978 amendment to the Constitution authorizing collective bargaining for Michigan State Police officers and binding arbitration "the same as now provided by law for public police and fire departments” does not amount to a ratification by constitution of the statutory binding arbitration scheme. It concerns only the State Police. The Legislature remains free to modify or repeal the binding arbitration statute for local police and fire departments, and its constitutionality must be decided without regard to the constitutional amendment.
12. The award in this case cannot properly be approved without deciding the merits of the city’s appeal in the Detroit Police Lieutenants and Sergeants Association case. The chairman of the arbitrators in this case declared that the cost-of-living allowance in the award rendered by another panel in the Lieutenants and Sergeants case is the central issue in this dispute. He emphasized that acceptance of the DPOA cost-of-living-allowance offer was virtually mandated by the award of an identical provision in the Lieutenants and Sergeants arbitration. The merits of this appeal thus depend in part on the merits of the city’s appeal in the Lieutenants and Sergeants case and therefore this appeal cannot finally be decided before decision of the city’s application for leave to appeal.
Decision of the Court
1. Labor Relations — Arbitration — Police and Fire Departments — Municipal Corporations — Constitutional Law.
The statute which provides for compulsory arbitration of disputes concerning contract formation in police and fire departments, as amended in 1976, is a constitutional delegation of legislative power (MCL 423.231 et seq.; MSA 17.455[31] et seq.).
Opinion by Williams, J.
2. Labor Relations — Arbitration — Police and Fire Departments — Municipal Corporations — Constitutional Law.
The statute which provides for compulsory arbitration of disputes concerning contract formation in police and ñre departments, as amended in 1976, is a constitutional delegation of legislative power because it provides standards for guidance of the arbitrators as reasonably precise as the subject matter requires or permits and, as a practical matter, the statutory scheme exhibits adequate political or public accountability of the arbitrators (MCL 423.231 et seq.; MSA 17.455[31] et seq.).
3. Administrative Law — Constitutional Law — Delegation of Powers.
The Legislature may not abdicate its lawmaking powers; how ever, a subordinate body or official may be delegated the power to apply the laws provided that the statutory standards prescribed for guidance of the body or official to which the power is delegated are as reasonably precise as the subject matter requires or permits.
4. Labor Relations — Arbitration — Police and Fire Departments — Municipal Corporations — Public Policy.
Interruptions of work by police and lire departments were deemed by the Legislature to pose a threat to the state’s public health, safety and welfare; the appointment by the Employment Relations Commission from its permanent panel of arbitrators of the chairpersons of panels arbitrating disputes concerning contract formation in police and ffre departments serves to effectuate the state’s labor policy, as established by the Legislature, although such disputes are primarily local in their settings (MCL 423.231 et seq.; MSA 17.4BB[31] et seq.).
5. Labor Relations — Arbitration — Police and Fire Departments — Statutes — Administrative Law — Delegation op Powers.
The inherent tensions between the legislative objectives of affording arbitrators sufficient independence in deciding complex disputes concerning contract formation in police and lire departments and maintaining the arbitrators’ accountability to the public have been adequately balanced by the Legislature in view of the statutory provision of standards ("factors”) to be considered in making the award, the extremely public atmosphere in which the statutory arbitration operates, and the provision for judicial review; the statutory standards check the unfettered exercise of the arbitrators’ authority and provide them with guides for their consideration which the Legislature deemed to be significant in resolving those issues which have been negotiated and sharpened by the parties, yet remain unresolved (MCL 423.231 et seq.; MSA 17.4B5[31] et seq.).
6. Labor Relations — Arbitration — Police and Fire Departments — Appeal.
The statute providing for compulsory arbitration of disputes concerning contract formation in police and fire departments provides a reviewing court with a license neither to consider the wisdom of an arbitration award nor to subject it to de novo review; rather, the statute specifically confines the scope of review to awards exceeding jurisdiction, unsupported by competent, material and substantial evidence on the whole record, or procured by unlawful means (Const 1963, art 6, § 28; MCL 423.242; MSA 17.455[42]).
7. Labor Relations — Arbitration — Police and Fire Departments — Appeal.
The award of an arbitration panel on any issue, whether economic or non-eeonomic, in disputes concerning contract formation in police and fire departments must emanate from a consideration of the eight specific statutory "factors” as they are applicable to the issue, and the factors must be established by competent, material and substantial evidence on the whole record (MCL 423.231 et seq.; MSA 17.455[31] et seq.).
8. Labor Relations — Arbitration — Police and Fire Departments — Appeal. '
The Legislature has evinced no intention that each "factor” in the statute providing for compulsory arbitration of disputes concerning contract formation in police and fire departments be accorded equal weight; it is the arbitration panel that must decide which particular factors are more important in resolving a certain contested issue and the fact that the arbitrators have not been persuaded by a party’s evidence and argument as to certain issues does not mean that they have failed to give each of the eight statutory factors that separate consideration required by law (MCL 423.231 et seq.; MSA 17.455[31] et seq.).
9. Labor Relations — Arbitration — Police and Fire Departments — Appeal.
Review of an arbitration award under the statute providing for compulsory arbitration of disputes concerning contract formation in police and fire departments must be undertaken by courts with considerable sensitivity in order to accord due deference to the arbitrators’ expertise and not to displace their choice between two reasonably differing views (Const 1963, art 6, § 28; MCL 423.231 et seq.; MSA 17.455[31] et seq.).
10. Labor Relations — Arbitration — Police and Fire Departments — Economic Issues — Municipal Corporations — Taxation.
An arbitration award on the economic issues in a contract-formation dispute in the Detroit Police Department which accepted the police officers’ offer of the existing cost-of-living allowance agreement in conjunction with a lower increase in wages over the next three years rather than a higher wage increase but reduced cost-of-living allowance offered by the city complies with the applicable statute where it is established, by compe tent, material and substantial evidence on the whole record, that the arbitrators considered certain circumstances to be of greater importance than the fact that the city’s budget was at the legal limit of its taxing power (MCL 423.231 et seq.; MSA 17.455[31] et seq.).
11. Arbitration — Evidence — Admissibility — Labor Relations — Police and Fire Departments — Appeal.
The statute which provides for compulsory arbitration of disputes concerning contract formation in police and fire departments explicitly accords a wide discretion to the arbitrators in deciding evidentiary questions; the arbitration panel "may” receive into evidence any testimony, document or other data which it deems relevant, and review of the arbitrators’ discretion is generally limited to whether the evidentiary decision caused the award on the contested issues to be unsupported by competent, material and substantial evidence on the whole record (Const 1963, art 6, § 28; MCL 423.231 et seq.; MSA 17.455[31] et seq.).
12. Labor Relations — Arbitration — Police and Fire Departments — Residency Requirement.
Arbitrators considering the issue of a contractual requirement by the City of Detroit that its police officers reside in the city erred reversibly in failing to compare this condition of employment with residency requirements for other public and private employees performing similar services; the omission by the parties of evidence on this statutory "factor” of comparison does not excuse the arbitrators’ inattention to it (MCL 423.231 et seq.; MSA 17.455[31] et seq.).
13. Labor Relations — Arbitration — Police and Fire Departments — Residency Requirement.
A reviewing court cannot amend an arbitration award in a contract-formation dispute between the City of Detroit and its police officers over a requirement that the police officers reside in the city to include the language of a new city ordinance defining the term "residence” where the arbitrators did not make specific findings of fact and an award on the issue under the applicable statute; the courts may not act as de novo arbitrators in the matter but the parties should resolve it by collective bargaining and further arbitration under the statute (MCL 423.231 et seq.; MSA 17.455[31] et seq.).
14. Arbitration — Labor Relations — Economic Issues — Interest on Award.
Interest on the economic portion of an arbitration award in a contract-formation dispute of a police department may not be granted, because there is no statutory provision for it (MCL 423.231 et seq., 438.7; MSA 17.455[31] et seq., 19.4).
Concurring Opinion by Blair Moody, Jr., J.
15. Labor Relations — Arbitration — Police and Fire Departments — Appeal — Last Best Offer.
Requiring redetermination of economic awards without the statutory last-best-offer restriction in an arbitration of a dispute concerning contract formation in police and ñre departments, would be changing ex post facto the rules of the contest because it would be requiring the parties to debate again what has been resolved in accordance with reasonable standards (MCL 423.231 et seq.; MSA 17.455[31] et seq.).
16. Labor Relations — Arbitration — Police and Fire Departments — Last Best Offer — Statutory Purpose.
The promotion of private settlements of disputes concerning contract formation in police and ñre departments by penalizing those who did not try hard enough to settle them is a sound rationale for the adoption of statutory last-best-offer limitation on arbitrators making the economic award in such cases (MCL 423.231 et seq.; MSA 17.455[31] et seq.).
17. Constitutional Law — Due Process — Police Power.
The test to determine the constitutionality of a statute enacted pursuant to the police power, under the Due Process Clause, is whether the legislation bears a reasonable relation to a permissible legislative objective (US Const, Am XIV; Const 1963, art 1, §17).
18. Constitutional Law — Equal Protection.
The test to determine the constitutionality of a statute enacted pursuant to the police power, under the Equal Protection Clause, is that the legislative classiñcation must be sustained if it is rationally related to a legitimate government interest (US Const, Am XTV; Const 1963, art 1, §2).
19. Constitutional Law — Statutes — Courts — Separation of Powers.
The Supreme Court does not have the power, upon judicial whim, to arbitrarily declare that certain legislation is unconstitutional; it is not the role of the Court to . decide whether the Legislature acted wisely or unwisely in enacting social and economic legislation, or to substitute its own social and economic beliefs for those of the Legislature (Const 1963, art 3, §2).
Opinion Concurring in Result by Fitzgerald, J.
See headnotes 7-14.
20. Labor Relations — Arbitration — Police and Fire Departments — Statutes — Administrative Law — Delegation of Powers.
There is constitutionally required "accountability” in the statute which provides for compulsory arbitration of disputes concerning contract formation in police and ñre departments in that the statute speciñcally provides that any award must be based upon certain legislatively prescribed criteria, and thus the arbitration panel is not free to issue an award premised on the panel’s unique view of what the criteria ought to be; more importantly, the arbitration panel’s ñdelity to the application of the criteria, and the evidentiary support for the award, will be examined by the judiciary if review of the award is sought (Const 1963, art 6, §28; MCL 423.231 et seq.; MSA 17.45B[31] et seq.).
21. Labor Relations — Arbitration — Police and Fire Departments — Statutes — Administrative Law — Delegation of Powers.
The degree of "political accountability" of the arbitration panel is not the crucial test for determining the constitutionality of the statute which provides for compulsory arbitration of disputes concerning contract formation in police and ñre departments because the Legislature has enacted the mechanism for the peaceful resolution of labor disputes, and the local unit of government which constitutes "management" has been charged with making its offer to settle the dispute; the arbitrators themselves need not also be politically accountable (MCL 423.231 et seq.; MSA 17.455[31] et seq.).
22. Constitutional Law — Statutes — Courts — Separation of Powers.
Courts cannot declare legislation to be unconstitutional because they think it unwise; if an act is simply bad legislation, the electorate should call to account those who were responsible for its promulgation (Const 1963, art 3, §2).
Dissenting Opinion by Levin, J.
23. Labor Relations — Arbitration — Police and Fire Departments — Constitutional Law — Delegation of Powers.
The statute which provides for compulsory arbitration of disputes concerning contract formation in police and ñre departments is unconstitutional because it delegates the power to prescribe policy (law) to the chairman of the arbitration panel without adequate safeguards circumscribing the exercise of the power (MCL 423.231 et seq.; MSA 17.45S[31] et seq.).
24. Labor Relations — Arbitration — Police and Fire Departments — Constitutional Law — Last Best Offer.
The last-best-offer requirement concerning economic issues, which was added in 1976 to the statute providing for compulsory arbitration of disputes concerning contract formation in police and £re departments, exacerbates rather than cures the statute’s deñciencies so that, entirely apart from its constitutionality otherwise, it is unconstitutional with that provision (MCL 423.231 et seq.; MSA 17.455[31] et seq.).
25. Labor Relations — Public Employees — Constitutional Law — Delegation of Powers.
Implicit in the Legislature’s constitutionally conferred power to enact laws for the resolution of disputes concerning public employees is the power to delegate the resolving authority (Const 1963, art 4, § 48).
26. Constitutional Law — Administrative Law — Delegation of Powers.
A court should review a challenged delegation of legislative power to examine whether adequate checks have been provided against arbitrary or uncontrolled official action; such an inquiry, however, cannot supplant the basic inquiry whether the legislatively devised framework for official action — considered in its application — preserves legislative responsibility for the-determination of public policy (Const 1963, art 4, § 1).
27. Labor Relations — Arbitration — Police and Fire Departments — Constitutional Law — Delegation of Powers.
The statute which provides for compulsory arbitration of disputes concerning contract formation in police and ñre departments violates the constitutional doctrines concerning the delegation of legislative power because it insulates the decision-making process and the results from accountability within the political process; it is novel in that the policy-making power is dispersed among ad hoc arbitrators, preventing the emergence of visible and intelligible principles and coherent policies, and therefore, safeguards which are generally regarded as adequate in a delegation of lawmaking power do not assure accountability in this context (Const 1963, art 4, § 48; MCL 423.231 et seq.; MSA 17.455[31] et seq.).
28. Constitutional Law — Administrative Law — Delegation of Powers.
A delegation of legislative power to decide the public policy which will govern a particular case and have the effect of law is generally made only to full-time public officers or administrative agencies; this provides a structure for the development of policy in a uniform and politically responsive manner with the safeguards implicit in centralization and continuing exercise of policy-making power (Const 1963, art 4, § 1).
29. Constitutional Law — Delegation of Powers.
It is not consonant with a constitutional democracy for those who exercise the powers of government to apply different policies in the same situations; the lack of uniformity in the governmental process which is invited by the dispersal of policy-making power is in itself an evil.
30. Labor Relations — Arbitration — Police and Fire Departments — Constitutional Law — Local Legislation.
The absence of principled decision-making inherent in the ad hoc structure of the statute which provides for compulsory arbitration of disputes concerning contract formation in police and ffre departments permits the Legislature to accomplish indirectly that which it cannot do directly: the creation of what are, in practical effect, local laws (Const 1963, art 4, § 29; MCL 423.231 et seq.; MSA 17.455[31] et seqj.
31. Labor Relations — Arbitration — Police and Fire Departments — Constitutional Law — Administrative Law.
The Legislature may adopt a mandatory procedure for resolving collective bargaining disputes in police and ffre departments but the authority should be vested in a governmental officer or agency with continuing responsibility to the electorate through the appointing authority for the exercise of that power (Const 1963, art 4, §48).
32. Labor Relations — Arbitration — Police and Fire Departments — Constitutional Law — Delegation of Powers.
The "factors” provided by the Legislature as guides for decision-making by the arbitrators in resolving collective bargaining „ disputes in police and lire departments do not adequately protect against excessive delegation of lawmaking power, or unnecessary and uncontrolled discretionary power; in most cases, particularly in last-offer arbitration of economic issues, any reasonable decision can be justified by one or more of the statutory criteria, which offers the arbitrators little direction as to what they should consider or how they should reach a decision, and still less assurance to the electorate that arbitration awards will be fashioned through a principled, consistent, or fathomable process (MCL 423.231 et seq.; MSA 17.455[31] et seq.).
33. Labor Relations — Arbitration — Police and Fire Departments — Constitutional Law — Last Best Offer.
The last-best-offer system for arbitration of economic issues concerning contract formation in police and lire departments yields results which are unconstitutionally arbitrary because it is apt to impose a costly and arbitrary penalty on the party who, although proceeding in good faith, did not more nearly satisfy the statutory criteria; the Legislature cannot constitutionally provide for so arbitrary a solution and penalty in resolving a collective bargaining dispute (Const 1963, art 4, § 48; MCL 423.231 et seq.; MSA 17.455[31] et seq.).
34. Labor Relations — Arbitration — Police and Fire Departments — Constitutional Law — Delegation of Powers.
The connection between the chairmen Of the arbitration panels for disputes concerning contract formation in police and lire departments and the Governor is too attenuated to provide any measure of political accountability for the arbitrators’ decisions; the Legislature is undoubtedly within its prerogative in creating a system which allocates to a group composed largely of persons with grievance arbitration experience the power to resolve public policy concerning the terms and conditions of public employment, but the persons chosen to make those decisions for the state may not be isolated from the political process (MCL 423.231 et seq.; MSA 17.455[31] et seq.).
35. Labor Relations — Arbitration — Police and Fire Depart- . ments — Constitutional Law.
The constitutional authorization for the statute concerning arbitration of disputes concerning contract formation in police and ñre departments simply permits the Legislature to enact laws providing for the resolution of disputes concerning public employees except those in state civil service; even if the delegates to the 1961 Constitutional Convention speciñcally intended to authorize compulsory interest arbitration, there is no indication that they intended to approve any particular method of arbitration or to permit the adoption of such measures without regard to other constitutional precepts (Const 1963, art 4, § 48; MCL 423.231 et seq.; MSA 17.455[31] et seq.).
36. Labor Relations — Arbitration — Police and Fire Departments — State Police — Constitutional Law.
The 1978 amendment to the Constitution authorizing collective bargaining for Michigan State Police officers and binding arbi-' tration "the same as now provided by law for public police and fire departments” does not amount to a ratification by constitution of the statutory binding arbitration scheme because it concerns only the State Police; the Legislature remains free to modify or repeal the binding arbitration statute for local police and fire departments, and the constitutionality of that statute must be decided without regard to the constitutional amendment (Const 1963, art 4, § 48; art 11, § 5; MCL 423.231 et seq., 423.271 et seq.; MSA 17.455[31] et seq., 17.455[81] et seq.).
George G. Matish, Acting Corporation Counsel (by Bernard J. Fieger, William M. Saxton and Michael A. Hurvitz, Special Assistants Corporation Counsel), for plaintiff.
Gregory; Van Lopik, Korney & Moore for defendant Detroit Police Officers Association.
Marston, Sachs, Nunn, Kates, Kadushin & O’Hare for intervening defendant Detroit Fire Fighters Association.

Opinion:
Williams, J.
(for affirmance). In 1969, the Michigan Legislature enacted 1969 PA 312, an act to provide for the compulsory interest arbitration of municipal police and fire department disputes. MCL 423.231 et seq.; MSA 17.455(31) et seq. The purpose and intent of the act is described in § 1:
"It is the public policy of this state that in public police and fire departments, where the right of employees to strike is by law prohibited, it is requisite to the high morale of such employees and the efficient operation of such departments to afford an alternate, expeditious, effective and binding procedure for the resolution of disputes, and to that end the provisions of this act, providing for compulsory arbitration, shall be liberally construed." MCL 423.231; MSA 17.455(31).
This case involves two major issues: (1) whether 1969 PA 312, as amended, includes an unconstitutional delegation of "legislative and political responsibility to politically unaccountable arbitrators", to use the words of the plaintiff City of Detroit; and (2) whether the arbitration panel's award was supported by "competent, material and substantial evidence on the whole record" as required by § 12 of Act 312, MCL 423.242; MSA 17.455(42), as well as Const 1963, art 6, § 28.
The first issue has been inconclusively considered by four Justices of this equally-divided Court in Dearborn Fire Fighters v Dearborn, 394 Mich 229; 231 NW2d 226 (1975), where pre-amendment Act 312 was assessed. All four Justices found that there existed sufficient standards to guide the exercise of delegated authority. Beyond this consensus, however, one Justice would hold the preamendment act constitutional on the facts with relation to public accountability where the impartial chairperson of the arbitration panel was appointed by the Michigan Employment Relations Commission ("MERC") chairperson, but indicated that the act was of doubtful constitutionality in that instance where the panel chairperson was alternatively selected by the parties' delegates alone. Two Justices would hold the act unconstitutional because both the method of panel member selection and tenure of the panel chairperson did not provide sufficient political responsibility and accountability. Another Justice would hold the act constitutional in all respects.
Subsequent and responsive to the Dearborn opinion, the Legislature significantly amended Act 312 by providing for the composition of an arbitra tion panel including a representative of each party plus an impartial chairperson selected by MERC from a permanent panel established by MERC and known as the MERC Panel of Arbitrators. Eligibility for this permanent panel is restricted to impartial, competent and reputable United States citizens, who must be residents of Michigan. Members of the panel must subscribe an oath or affirmation of office. The term of these panelists is indeterminate and they are subject to removal without cause by the MERC. Such persons are appointed to this panel by the MERC Commissioners who are, in turn, direct appointees of the Governor with the advice and consent of the state Senate.
The first question before us, then, is whether a delegation, accompanied by otherwise sufficient standards, to such an arbitration panel as provided in Act 312, as amended, is constitutional.
The second issue raises the question whether the arbitration panel's award as to the economic issue of cost of living allowance ("COLA") and wages and as to the non-economic issue of a residency hardship exemption was supported by competent, material and substantial evidence on the whole record. More specifically, as to the economic issue, we must answer the threshold question whether the city's last best offer of elimination of the already existing police officers' cost of living program plus wage increases over a three-year period of 4.8%, 4% and 4% more nearly complied with the applicable legislative standards than did the defendant Detroit Police Officers Association's ("DPOA") last best offer of continuation of the already existing cost of living program and the somewhat lower wage increases of 4.5%, 4% and 3.5% over a three-year period. As to the non-economic award of a residency hardship exemption, we must determine the threshold question whether that award was based on the applicable legislative standards.
Since the Dearborn decision, similar schemes have been enacted in many jurisdictions, upheld as constitutional by the overwhelming weight of authority, and stamped by many with the imprimatur of success in averting critical-service strikes. Guided by this ample judicial and schol arly authority, we are compelled to conclude that 1969 PA 312, as significantly amended by 1976 PA 84, is constitutional in all respects. Furthermore, after careful review of the record and its relationship to the act's § 9 factors, MCL 423.239; MSA 17.455(39), relative to both economic and non-economic issues, and mindful of the statutorily prescribed standard of judicial review codified in § 12, we hold that the arbitration panel's economic award must also be upheld, whereas the record does not sustain the panel's non-economic award as to the residency hardship exemption. Interest is denied. The lower court is affirmed except as to the residency hardship exemption.
I. Facts
The city and the DPOA, the certified bargaining agent of the police officers of Detroit, reached an impasse in 1977 on several of the terms and conditions of employment in bargaining for a new contract. Thereafter, upon demand of the DPOA, the MERC appointed an arbitration panel pursuant to 1969 PA 312, as amended ("act" or "Act 312"); the unsettled issues remaining between the parties were submitted to that panel for binding arbitration. After some 15 hearings before this panel, plus oral arguments by the parties, conducted over a period of eight months, the panel issued its award on December 20, 1978.
In essence, the panel majority accepted the city's "last offer of settlement" as to all disputed economic issues except its COLA and wage proposals. On these two items, the DPOA's last offers — a preservation of the parties' previous COLA arrangement and a lower three-year wage increase than that proposed by the city — were adopted by the panel. As to the non-economic issues, most were settled, withdrawn or remanded to the par ties. One of the remanded issues involved the prior contractual provision that all city police officers be residents of the City of Detroit. The city had won this provision in the parties' previous contract through the award of another Act 312 arbitration panel (Platt panel) issued September 5, 1977. Although the present panel upheld the city's position that the residency provision be maintained, it ruled for the DPOA that some provision should be made for the exercise of reasonable discretion by either the mayor or a city official designated by the mayor to exempt persons with hardship circumstances. Accordingly, the panel remanded this narrow issue to the parties with the instruction that should they be unable to resolve the matter themselves within 30 days of the issuance of the award, the panel would do so.
Shortly after the issuance of this arbitration panel's December 20, 1978 award, this matter began its complicated procedural course in our courts. On January 9, 1979, the city filed suit in the circuit court for Wayne County seeking judicial review of the arbitration panel's award. Initially, the city sought review of the award limited to those portions which dealt with COLA, wages and the residency hardship exemption. Thereafter, the city filed the first of two amended complaints, the first one raising the issue of Act 312's constitutionality. Meanwhile, both the DPOA and the Detroit Fire Fighters Association ("DFFA"), which had been allowed to intervene by stipulation of the parties, filed counterclaims seeking enforcement of the panel's December 20, 1978 award and the payment of interest on the economic awards from the time of their issuance.
The circuit court initially declined to either stay the proceeding as requested by the city or to order immediate city compliance with the arbitration award as requested by both the DPOA and the DFFA. On February 13, 1979, however, the circuit court issued an opinion pendente lite which or dered enforcement of the panel's award in its entirety pending that court's complete review of the panel's decision and order. The reasons given by the trial court in its interlocutory opinion ordering enforcement of the arbitration panel's award were threefold:
"(1) The public policy underlying and expressed in Act 312 encourages immediate enforcement under the circumstances present in this case;
"(2) The city is not likely to prevail in the proceedings for judicial review [the court had earlier stated that the order of the panel seemed to be supported by competent, material and substantial evidence on the whole record]; and
"(3) The DPOA and DFFA [Detroit Fire Fighters Association] make a somewhat stronger showing than the city on the issue of irreparable or disproportionate injury."
In an addendum to its opinion, also dated February 13, 1979, the trial court found no reason to alter its order of enforcement despite the city's first amended complaint challenging the act's constitutionality. The trial court reasoned, inter alia, that: every statute enacted by the Legislature is presumed constitutional; the presumed constitutionality of Act 312 was left unaltered by our equally divided decision in Dearborn Fire Fighters v Dearborn, supra, which affirmed the Court of Appeals ruling of constitutionality; and, the weight of national authority favored the constitutionality of compulsory arbitration statutes in public labor disputes.
The city appealed the trial court's interlocutory order to the Court of Appeals. On February 26, 1979, that Court applied the "clearly erroneous" standard to uphold the trial court's order of immediate enforcement. The ruling was made applicable to the period commencing January 1, 1979 and continuing until completion of either the trial court's review or until further order of the Court of Appeals. As to the award period commencing July 1, 1977 (the date on which the previous contract between the city and the DPOA had expired) and ending December 31, 1978, the Court of Appeals stayed enforcement of the arbitration award until the trial court should enter final judgment. On July 5, 1979, we denied the city's emergency application for leave to appeal from this decision.
Thereafter, acting pursuant to the DPOA's and DFFA's motions seeking dismissal of the city's complaint and an order of enforcement, the trial court, on April 6, 1979, remanded the residency hardship exemption issue to the arbitration panel for completion of its award. This was done because the parties had failed to reach agreement on this issue pursuant to the panel's remand order. In response to the trial court remand, the panel issued a supplemental opinion and award on May 21, 1979. This award granted the DPOA's minimum request of a hardship exemption to the residency requirement as contemplated in the panel's original December 20, 1978 opinion. That award was supplemented, however, with an additional grievance procedure , provision, including final and binding arbitration, to contest the grant or denial of such an exemption. The city's delegate to the panel dissented to the inclusion of this grievance procedure, while the city itself filed a second amended complaint based on this same provision, claiming that the supplemental award was invalid.
On June 29, 1979, the DPOA and the DFFA again sought to dismiss the city's complaint and enforce the arbitration panel's award. However, the circuit court again denied these motions and sua sponte remanded the hardship exemption issue to the panel for findings relating its May 21, 1979 supplemental award to the applicable factors of § 9 of Act 312. In its opinion on remand dated August 8, 1979, the panel found its supplemental award on the residency hardship exemption to have met the applicable § 9 factors. The panel also concluded that the use of grievance arbitration as a terminal provision in the resolution of individual hardship cases was proper.
In response to the arbitration panel's opinion on remand of the residency issue, the DPOA and the DFFA again filed motions for enforcement of the panel's award. Accordingly, on August 31, 1979, the circuit court issued a final order enforcing the panel's award in its entirety and holding the city's complaints to be without merit. In doing so, the trial court relied on the reasoning found in its pendente lite opinion of February 13, 1979. In this final order the trial court also denied the DPOA's and DFFA's prayer for interest. Shortly thereafter, the city filed a motion for a stay of proceedings with the Court of Appeals in conjunction with its appeal of the trial court's order granting the motion for enforcement of the entire award. The DPOA and DFFA cross-appealed on the trial court's ruling which denied interest.
By a 2-to-l order dated October 5, 1979, the Court of Appeals denied the city's motion for a stay of proceedings and ordered the award enforced in its entirety. This order included the July 1, 1977 to December 31, 1978 retroactive period which the Court of Appeals had earlier exempted from its enforcement order of the trial court's pendente lite decision; one judge would have continued the stay as to the retroactive period. The Court of Appeals based its decision on the belief that: (1) the city was not likely to prevail on appeal; (2) a balancing of hardships favored immediate enforcement; and (3) the act had as its stated policy the provision of an "alternate, expeditious, effective and binding procedure for the resolution of disputes", was to be liberally construed, and was subject to a statutorily limited scope of judicial review.
On November 8, 1979, this Court granted the city's delayed application for leave to appeal prior to a Court of Appeals decision on the merits. We also granted the city's motion to stay enforcement, pending appeal, of the arbitration award restricted to the retroactive period beginning July 1, 1977 . and ending December 31, 1978. 407 Mich 909 (1979). Oral arguments of the city, the DPOA, and the DFFA were heard by this Court on January 10, 1980.
II. Issues
Since our order granting leave to appeal simply requested the parties "to include among the issues to be briefed whether 1969 PA 312 is constitutional", 407 Mich 909 (1979), we have framed the following general issues in accordance with our sense of the parties' statement of the issues and their arguments:
(1) Whether 1969 PA 312, as amended, constitutes an invalid delegation of authority?
(2) Whether 1969 PA 312, as amended, impermissibly usurps constitutionally vested home rule powers?
(3) Whether 1969 PA 312, as amended, unconstitutionally denies the right to cast effective ballots in municipal elections?
(4) Whether the instant panel's award is unsupported by competent, material and substantial evidence on the whole record?
(5) Whether interest should be permitted on the panel's award?
For the reasons offered below, we resolve all five issues in the negative except that part of issue 4 re the panel's residency hardship exemption, which we remand. Because issue 2 was definitively addressed and rejected in Dearborn by all four participating Justices, we will not consider the home rule argument further. Because issue 3 is without merit and has been universally rejected by other courts considering this equal protection challenge to similar binding arbitration schemes, we will likewise not consider this argument further.
III. 1969 PA 312
A brief survey of Act 312, as amended, will be of assistance in understanding our rulings. *
A. The Constitutional Background of 1969 PA 312, as Amended
Constitution 1963, art 4, § 48 replaced the former provision of Const 1908, art 16, § 7 for "courts of conciliation". The contemporary provision reads as follows:
"The legislature may enact laws providing for the resolution of disputes concerning public employees, except those in the state classified civil service."
The convention's committee comment to art 4, § 48 stated the article's purpose in the following terms:
"The purpose of this section is to make it clear that the legislature has power to establish procedures for settling disputes in public employment. This section does not say what the procedure should be, but leaves that decision up to future legislatures." 2 Official Record, Constitutional Convention 1961, p 2337.
Unlike the 1908 Constitution, therefore, art 4, § 48 did not specify the type of legislation which it authorized but posited wide discretion in the Legislature to establish those means and methods most effective for the accomplishment of the article's objective.
A legislative response to the 1908 organic grant of authority was the 1947 enactment of the public employment relations act ("PERA"), MCL 423.201 et seq.; MSA 17.455(1) et seq.
Twenty-two years later, the Legislature enacted 1969 PA 312, a statutory scheme to provide for the compulsory interest arbitration of labor disputes in municipal police and fire departments, MCL 423.231 et seq.; MSA 17.455(31) et seq. The Legislature stated the act's purpose as follows:
"It is the public policy of this state that in public police and fire departments, where the right of employees to strike is by law prohibited, it is requisite to the high morale of such employees and the efficient operation of such departments to afford an alternate, expeditious, effective and binding procedure for the resolution of disputes ." MCL 423.231; MSA 17.455(31).
In considering the constitutional propriety of Act 312 prior to its critical amendments in 1972 and 1976, then-Justice, now-Chief Justice Cole man summarized the raison d'étre of the scheme:
"PERA procedurally requires the parties to meet at the bargaining table and confer in good faith with an open mind and a sincere desire to reach an agreement. It does not mandate agreement. If the parties fail to agree on one or more mandatory subjects, an 'impasse' situation is reached and the employer may take unilateral action on an issue consistent with its final offer to the employees' representative. The duty to bargain is then suspended until there is a change in the surrounding conditions or circumstances.
"In the private sector 'impasse' often results in a strike. The employees refuse to accept the unilateral conditions imposed by the employer and withhold their services as a bargaining weapon. In the public sector strikes are prohibited but nevertheless occur. If the public employees do strike, the public employer may resort to the courts in order to return the labor situation to the status quo. By the time that court relief is obtained, however, the public may well have been left for a long period without the services and protection of the striking employees.
"When policemen engage in a strike, the community becomes immediately endangered by the withdrawal of their services. Likewise, our case law has often focused on the fact that fire fighters have a distinct and crucial employment relationship with a public employer.
"The Legislature, with knowledge of the vital character of police and fire services and with reference to the specific recommendations of the Governor's Advisory Committee on Public Employee Relations (February, 1967) moved to foreclose strikes to police officers and fire fighters by enacting 1969 PA 312." Dearborn, supra, 278-279 (opinion of Coleman, J.) (footnotes omitted).
There is and has been no question that pursuant to the broad discretionary grant of authority embodied in art 4, § 48, the Legislature may enact such supplementary labor schemes subject to other constitutional constraints. Indeed, this was made clear by each of the four Justices participating in Dearborn and is supported by a series of earlier decisions. However, it is on the topic of the application of such constitutional constraints to Act 312 that the parties differ. Before responding to these differences, a brief sketch of the act as amended will be of assistance in analyzing the scheme's constitutional viability.
B. 1969 PA 312, as Amended
Act 312, as it read at the time of the Dearborn case, substantially resembles the amended statute except as to both the § 5 mechanism for appointment of arbitrators and the § 8 consideration of last offer economic issues. The following précis of the act's present structure will, therefore, largely reflect the pre-amendatory as well as post-amendatory scheme except in those two significant respects.
As was earlier stated, the act has as its principal objective the provision of "an alternate, expeditious, effective and binding procedure for the reso lution of [interest] disputes". MCL 423.231; MSA 17.455(31).
Act 312 seeks to accomplish this purpose through the development of a final and binding compulsory arbitration scheme emanating from the broad constitutional grant of discretionary authority in Const 1963, art 4, § 48. Attempting to constitutionally animate the act's stated policy, the Legislature has provided through § 3 that, in those instances where the public employer and employee representatives have arrived at an impasse concerning a dispute other than a grievance, within 30 days of such dispute's submission to a mediator, either party may initiate binding arbitration to avert a proscribed strike. MCL 423.233; MSA 17.455(33).
Binding arbitration having been initiated, the following mechanism has been legislatively prescribed for the selection of three arbitration panel members. First, pursuant to § 4, the employer and employee are each required to select a single delegate to represent their respective interests on a three-member panel. MCL 423.234; MSA 17.455(34).
Next, § 5, as amended, clearly describes the important selection of the chairperson/third, public, member of the panel:
"(1) Within 7 days of a request from 1 or both parties, the employment relations commission shall select from its panel of arbitrators, as provided in subsection (2), 3 persons as nominees for impartial arbitrator or chairman of the arbitration panel. Within 5 days after the selection each party may peremptorily strike the name of 1 of the nominees. Within 7 days after this 5-day period, the commission shall designate 1 of the remaining nominees as the impartial arbitrator or chairman of the arbitration panel.
"(2) The employment relations commission shall establish and appoint a panel of arbitrators, who shall be known as the Michigan employment relations commission panel of arbitrators. The commission shall appoint members for indefinite terms. Members shall be impartial, competent, and reputable citizens of the United States and residents of the state, and shall qualify by taking and subscribing the constitutional oath or affirmation of office. The commission may at any time appoint additional members to the panel of arbitrators, and may remove existing members without cause."
Once the panel is composed, its action is bounded by both express time limitations and procedural guidelines. For instance, the panel is directed to commence its hearing within 15 days of impanelment and, unless otherwise agreed by the parties, to conclude its hearing within 30 days of commencement. MCL 423.236; MSA 17.455(36). Also, unless either otherwise agreed or in the event the dispute has been remanded for further bargaining subject to a three-week limitation, MCL 423.237a; MSA 17.455(37a), the Legislature has mandated rendition of a decision within 30 days of the hearing's conclusion. MCL 423.238; MSA 17.455(38). Additionally, evidentiary guidelines are detailed — the onus, of course, being on the parties to introduce supporting evidence — MCL 423.236; MSA 17.455(36), subpoena power is imparted for the production of documents and the attendance of witnesses, MCL 423.237; MSA 17.455(37), and the panel is directed to make written findings of fact and to promulgate a written opinion and order upon the issues presented based upon the record developed by the parties. MCL 423.238; MSA 17.455(38).
Beyond these careful time limitations and evidentiary guidelines, the panel's decisional authority has been significantly channeled by eight specific factors or standards listed in § 9. MCL 423.239; MSA 17.455(39). That section trenchantly circumscribes the arbitral tribunal's inquiry to only those disputes involving "wage rates or other conditions" of employment embraced by a newly proposed or amended labor agreement, and commands the panel to "base its findings, opinions and order" relative to those narrow disputes on the eight listed "factors, as applicable":
"Where there is no agreement between the parties, or where there is an agreement but the parties have begun negotiations or discussions looking to a new agreement or amendment of the existing agreement, and wage rates or other conditions of employment under the proposed new or amended agreement are in dispute, the arbitration panel shall base its findings, opinions and order upon the following factors, as applicable:
"(a) The lawful authority of the employer.
"(b) Stipulations of the parties.
"(c) The interests and welfare of the public and the financial ability of the unit of government to meet those costs.
"(d) Comparison of the wages, hours and conditions of employment of the employees involved in the arbitration proceeding with the wages, hours and conditions of employment of other employees performing similar services and with other employees generally:
"(i) In public employment in comparable communities.
"(ii) In private employment in comparable communities.
"(e) The average consumer prices for goods and services, commonly known as the cost of living.
"(f) The overall compensation presently received by the employees, including direct wage compensation, vacations, holidays and other excused time, insurance and pensions, medical and hospitalization benefits, the continuity and stability of employment, and all other benefits received.
"(g) Changes in any of the foregoing circumstances during the pendency of the arbitration proceedings.
"(h) Such other factors, not confined to the foregoing, which are normally or traditionally taken into consideration in the determination of wages, hours and conditions of employment through voluntary collective bargaining, mediation, fact-finding, arbitration or otherwise between the parties, in the public service or in private employment." See MCL 423.238; MSA 17.455(38).
Perhaps of interest here is that among the standards listed are two interacting legislative directives: first, that the panel invest its deliberations with. specific contemplation of the public welfare, both as a distinct inquiry as well as an inexorable adjunct of the governmental unit's financial ability to sustain the proposed costs; and, second, that the tribunal consider comparable public- and private-sector wages, hours and conditions of employment.
The panel's decisional authority is further restricted by § 8, as significantly amended by 1972 PA 127, to provide for last-offer arbitration of economic issues subject to the factors enunciated in § 9. Section 8 provides in pertinent part:
"As to each economic issue, the arbitration panel shall adopt the last offer of settlement which, in the opinion of the arbitration panel, more nearly complies with the applicable factors prescribed in section 9. The findings, opinions and order as to all other issues shall be based upon the applicable factors prescribed in section 9." MCL 423.238; MSA 17.455(38).
Significantly, the conjunction of the § 9 factors with the panel's consideration of both economic and non-economic issues, therefore, further circumscribes the panel's scope of decisional authority.
Finally, the Legislature has made specific provision for appellate review of such limited orders of the panel as to both economic and non-economic issues. Thus, although the tribunal's order "shall be final and binding upon the parties", MCL 423.240; MSA 17.455(40), that decision
"shall be reviewable for reasons that the arbitration panel was without or exceeded its jurisdiction; the order is unsupported by competent, material and substantial evidence on the whole record;[ ] or the order was procured by fraud, collusion or other similar and unlawful means." MCL 423.242; MSA 17.455(42).
IV. Proper/Improper Delegation to Politically Unaccountable Arbitrators?
Plaintiff city has framed the first of its major arguments in the following terms:
"1969 PA 312, insofar as it provides for compulsory arbitration, violates the United States Constitution and the Constitution of the State of Michigan by improperly delegating legislative and political responsibility to politically unaccountable arbitrators."
As a matter of procedure in addressing ourselves to this argument as posited by the city, let us analyze the constitutionality of the Act 312 delegation scheme first without, and then in conjunction with, consideration of the city's point of political accountability.
A. Constitutionality of Delegation Generally: Act 312 Standards Are as Reasonably Precise as the Subject Matter Requires or Permits
The Michigan doctrine of delegation was succinctly stated by this Court in Osius v St Clair Shores, 344 Mich 693, 698; 75 NW2d 25 (1956), in terms of the following "standards" test:
"There is no doubt that a legislative body may not delegate to another its lawmaking powers. It must promulgate, not abdicate. This is not to say, however, that a subordinate body or official may not be clothed with the authority to say when the law shall operate, or as to whom, or upon what occasion, provided, however, that the standards prescribed for guidance are as rea sonably precise as the subject matter requires or permits. " (Emphasis supplied.)
Factually addressing the adequacy of Act 312's legislatively prescribed standards, we need only highlight our précis of Act 312's provisions in Part III, B, supra, that Act 312: specifically enunciates its guiding purpose, MCL 423.231; defines the parties to whom it is and is not applicable, MCL 423.232; establishes specific time limits circumscribing arbitral initiation and resolution, MCL 423.233, 423.236 and 423.238; provides a detailed procedure for both the appointment and removal of a permanent MERC panel of potential chairpersons as well as for the selection of the arbitration panel's representative delegates and public chairperson, MCL 423.234 and 423.235; formulates procedural guidelines relative to the arbitral hearing and remand, MCL 423.236, 423.237 and 423.237a; narrowly channels the panel's scope of decisional authority to eight specific factors in its review of last-offer economic issues, MCL 423.238 and 423.239; mandates the application of eight specific factors in rendering a finding, opinion and order relative to both economic and non-economic issues, MCL 423.238 and 423.239; and details the effect of an arbitral decision subject to the availability of judicial review, MCL 423.240 and 423.242.
It is generally acknowledged that the instant and similar statutory schemes are directed toward the resolution of complex contractual problems which are as disparate as the towns and cities comprising the locations for these critical-service labor disputes. The Legislature, through Act 312, has sought to address this complicated subject through the promulgation of express and detailed standards to guide the arbitrators' decisional operations.
We must conclude that the eight factors expressly listed in § 9 of the act provide standards at least as, if not more than as, "reasonably precise as the subject matter requires or permits" in effectuating the act's stated purpose "to afford an alternate, expeditious, effective and binding procedure for the resolution of disputes". MCL 423.231; MSA 17.455(31). These standards must be considered by the panel in its review of both economic and non-economic issues. In its resolution of non-economic issues, the panel "shall base its findings, opinions and order upon the following factors, as applicable", MCL 423.239; MSA 17.455(39) (emphasis supplied). See MCL 423.238; MSA 17.455(38), "The findings, opinions and order as to all other issues [i.e., non-economic issues] shall be based upon the applicable factors prescribed in section 9." (Emphasis supplied.) When these eight specific § 9 factors are coupled with the § 8 mandate that "[a]s to each economic issue, the arbitration panel shall adopt the last offer of settlement which, in the opinion of the arbitration panel, more nearly complies with the applicable factors prescribed in section 9", MCL 423.238; MSA 17.455(38) (emphasis supplied), the sufficiency of these standards is even more patent.
Four Justices of this Court have already, in Dearborn, individually recognized that Act 312 provides sufficient standards to guide the exercise of delegated authority. In Dearborn, each of the four participating Justices agreed to this proposi tion even before the § 9 factors had become operative to both non-economic and § 8 last offer economic issues alike. As Justice Levin remarked in this regard: "All that is generally required has been done." Dearborn, supra, 259 (opinion of Levin, J.).
Applying the Osius explication of the delegation doctrine, all that is required to constitutionally sustain this dispute resolution mechanism is that the statutory scheme provide standards at least as reasonably precise as the subject matter requires or permits. We have found that the standards embraced by the § 9 factors fulfill this requirement. The Legislature has determined that these express and detailed § 9 standards must be considered in the panel's resolution of economic "last best offer" issues as well as non-economic issues alike. Although the Legislature has chosen to provide for the resolution of economic issues on a last offer of settlement basis expressly circumscribed by the applicable § 9 standards in an apparent attempt to effectuate the act's § 1 purpose of "afford[ing] an alternate, expeditious, effective and binding procedure for the resolution of disputes", we do not believe that either the presence or absence of this last best offer provision is necessary to the act's constitutionality under the dictates of the delegation doctrine or otherwise. However, we are unaware of any court which has declared a similar critical-service act unconstitutional on the basis of the inclusion of such an economic issue provision but can point to two cases which have considered last-best offer settlement and have willingly sustained their act's constitutionality provided sufficient standards are enumerated to focus arbitral decision-making.
In reaching this conclusion, we are also persuaded by the fact that the Act 312 standards are patently more precise than those which this and other courts have previously upheld under similar modes of delegation analysis and involving subject matters at least as complex as that considered here. Other jurisdictions have sanctioned their compulsory interest arbitration schemes even though presented with less precise or even non-explicit standards for decision. Furthermore, in two cases where standards identical to those codified in Act 312 were subjected to judicial scrutiny, their sufficiency was upheld. Also, in another case where the prescribed standards were found insufficient, the court expressly indicated that its decision would have been otherwise had the Legislature modeled its standards after those found in Michigan's Act 312.
B. Public Accountability
We have just made clear that Act 312 meets the constitutional delegation requirements as framed in Osius without directly considering the city's question of "political responsibility". Does, however, the theory of public accountability nonetheless require us to rule Act 312, as amended, unconstitutional? For the reasons offered below, we conclude not. Indeed, since we find as a practical matter that the act as now amended sufficiently provides for public responsibility and accountability, this Court in this matter is neither required to accept nor reject the city's argument that political responsibility is necessary to sustain the act's constitutionality separate and apart from the overall question of constitutional delegation.
In Dearborn, lack of political, or public, accountability was basically approached from two view points. First, individuals chosen as arbitrators were thought by two Justices to have been provided insufficient tenure to ensure responsibility and accountability. Then-Chief Justice T. G. Kavanagh referred, for example, to pre-amendment Act 312 arbitrators as "hit-and-run arbitrators". Dearborn, supra, 273 (opinion of T. G. Kavanagh, C.J.). Second, the system of arbitrator selection was attacked as rendering the line of accountability between the arbitrators and the people too tenuous. One opinion indicated that choice of the panel's impartial chairperson by the parties' delegates alone would provide insufficient public accountability even though one party represented a municipal corporation; appointment of that impartial arbitrator by the MERC chairperson, however, provided sufficient public accountability and responsibility largely because the MERC chairperson was the Governor's direct appointee with the advice and consent of the Michigan Senate. It was also recognized that there existed an inherent tension, if not dichotomy, in the twin objectives of affording the arbitrators a high degree of independence on the one hand, and, on the other, requiring public accountability and responsibility.
1976 PA 84 significantly modified the Act 312 scheme addressed in Dearborn both as to the § 5 tenure of the impartial chairperson and as to the § 5 method of the chairperson's selection.
1. Tenure of the Impartial Chairperson
As to the tenure of the impartial chairperson, the Legislature responded to the "hit-and-run" characterization of Act 312 arbitrators by significantly modifying § 5 of the original act in four major respects. First, eligibility for and MERC appointment as panel chairperson is now restricted to MERC-appointed members of a MERCestablished permanent panel — "the Michigan Employment Relations Commission Panel of Arbitrators" — whereas, before, any "impartial, competent and reputable person" might be selected by either the delegates or the chairperson of the State Labor Mediation Board to fulfill this role. Second, members of the MERC-established and -appointed permanent panel now not only have to be "impartial, competent, and reputable citizens of the United States" but must also be "residents of the state" of Michigan; this latter requirement was absent from the earlier act's express terms. Third, permanent panelists must "qualify by taking and subscribing the constitutional oath or affirmation of office", whereas neither an oath nor an affirmation had been previously required. Fourth, the term of office on the MERC Panel of Arbitrators is indeterminate; tenure can either run as long as a panelist chooses — for that matter, for life — or the panelist may be removed without cause by the MERC.
The four modifications wrought by the 1976 PA 84 amendments to § 5 have greatly altered the atmosphere of accountability surrounding the service of arbitration panel chairpersons. In the first place, the chairperson is no longer treated as an at-large one-time chair of a single and particular labor dispute panel. Rather, the chairperson is treated as a member of a permanent MERC Panel of Arbitrators who can be called upon by MERC, as appropriate, to serve as panel chairperson for any number of labor disputes. This obviously paints out the picture of a "hit-and-run arbitrator" who is allegedly unconcerned about the impact of his or her decision, and paints in the true picture of an arbitrator seeking continued employment by both MERC and public employers/employees over a length of time, and consequently recognizing the impact of his or her decisions as a significant factor in re-employment.
Second, since members of the MERC Panel of Arbitrators must be "residents of the state", the panelist cannot escape the impact of his or her decision by retreating to a foreign jurisdiction but will be required to bear its impact on his or her reputation and credibility for arbitral employment in Michigan where continued employment is sought. This too militates against a "hit-and-run" mentality.
Third, the oath-taking requirement certainly imposes an aura of tenure. It is an aspect of public office and responsibility. This requirement should act as both a psychological deterrent to "hit-and-run" service and an encouragement to public responsibility.
Fourth, the indeterminate term on the permanent panel, although terminable without cause, certainly implies a degree of tenure and continuation. It also implies the importance of continued responsible behavior. This is so especially because obviously irresponsible behavior can terminate tenure. Again, this tenure provision encourages accountability and responsibility.
Considered collectively, the aforementioned factors tend to eradicate the image of "hit-and-run arbitrators" and act as a catalyst to the establishment of a class of arbitrators possessing both the aspects of tenure and responsibility which are certainly compatible with the notion of political or public accountability. This complexion of political responsibility and accountability has been further magnified by the 1976 PA 84 intensification of selection responsibility in a traditionally politi cally accountable center of authority, i.e., MERC Commissioners who are direct appointees of the Governor subject to Senate confirmation.
2. Method of Chairperson Selection
Under § 5, as originally enacted, the chairperson selection system alternatively permitted either appointment by the parties' delegates alone or, in the event of their default, appointment by the MERC chairperson.
Obviously, there was very little political accountability in the first alternative as that approach shielded the private selectors from both public scrutiny and the democratic form of government's greatest sanction — the vote. The line of political accountability drawn between the private representatives and the public was very far from direct.
The second alternative, however, presented quite a different accountability perspective since that alternative required MERC intervention in the selection process. By appointing the panel chairperson, it could be presumed that the MERC chairperson — a direct appointee of the Governor with the Senate's advice and consent — would exercise great concern for the Governor's political welfare as well as the chief executive officer's concern for good public service. This alternative precluded isolation from the public process and cleared the way for direct public expressions of satisfaction or dissatisfaction to those individuals ultimately responsible for the panel members' decisions.
The present § 5 selection system, as amended by 1976 PA 84, has eliminated the minimally accountable first alternative of delegate selection and expressly retained the second alternative's spirit of public accountability through its provision for MERC selection of a chairperson from a MERC-appointed permanent panel. Albeit tempered by the parties' right of exercising a peremptory veto, § 5 focuses the power of chairperson appointment in the commission alone to the exclusion of either the parties' delegates or the MERC chairperson as earlier provided. Furthermore, the MERC appointee is no longer chosen at large but must have been earlier screened by, appointed to, and selected from a permanent panel of MERC arbitrators established by the commission, a gubernatorial^ appointed body.
Considered together, these significant amendments fix a high order of political accountability in the chairperson appointment scheme. Indeed, the majority of jurisdictions which have considered this question have found accountability; those which have ruled otherwise have done so primarily on the basis of distinguishable constitutional provisions. Little interference exists in that line of public accountability connecting the Governor, MERC, the panel chairperson and the MERC permanent Panel of Arbitrators. Should the appointees "give away the store" or otherwise invite unfavorable comment, the electorate may easily express dissatisfaction by directing complaints to the Governor as well as the gubernatorially appointed MERC Commissioners. These complaints may ultimately be couched in the democratic form of government's greatest sanction — the vote.
The city's argument that political accountability is absent since the MERC Commissioners and panel members are not directly accountable to the people of the specific community over which arbitral authority is exercised proves entirely too much. Read carefully, the city's principal objec tion to Act 312 is really directed at the underlying legislative wisdom of formulating a state-wide pol icy governing resolution of inherently local public-sector labor disputes. Thus, the city claims that the relationship of the Act 312 panel — including the MERC appointed chair — to the City of Detroit electorate is diluted by the § 4 and 5 panel selection process.
This argument blinks the reality that the role of both the Act 312 arbitrators and the MERC appointing authority is to effectuate a state labor policy as formulated by the state Legislature serving the state electorate. Work stoppages by municipal police and fire departments, although primarily local in situs, were legislatively deemed to pose a threat to the state's public health, safety and welfare. Should the people be dissatisfied with the accountability aspect of the engineered scheme which must necessarily transcend local boundaries, the onus is upon the state's electorate, including the locally affected voting population, to exercise its political will.
3. Inherent Tension Between Independence and Accountability
Inherent in the Act 312 scheme, as well as such delegation schemes in general, is the tension, if not apparent dichotomy, between the act's dual objective of affording arbitrators sufficient decisional independence to resolve complex disputes on the one hand, and, on the other, maintaining public responsibility and accountability of those arbitrators. Indeed, since the act specifically seeks to speedily resolve complex contractual impasses in the dynamic critical-service public labor sector, this tension is especially and necessarily enhanced by the scheme's need to allow flexibility in the resolution of those disputes.
However, we find that these inevitable tensions have been adequately balanced in view of the act's provision for standards, the extremely public atmosphere in which the Act 312 mechanism operates, and the § 12 provision for judicial review.
As we have seen, operational flexibility has been successfully maintained within the context of legislatively prescribed standards both to check unfettered exercise of arbitral authority and to provide the arbitrators with guideposts of decisional consideration which have been deemed significant by the people through their representatives. Although the panel operates with a certain degree of independence in fashioning economic as well as non-economic awards, its exercise is significantly guided by a well-articulated series of standards for resolving those previously negotiated and sharpened, yet unresolved, matters.
This tension between independence and accountability is further alleviated by the extremely public atmosphere in which the chairperson is appointed by MERC and the Act 312 panel operates. Indeed, the context in which the matter proceeds is one of high visibility and profound scrutiny, where publicity is sharply focused on both MERC's selection and the panel's deliberations. Such public attention undoubtedly enhances the accountability of both the appointers and the appointees. Since both bodies are the focal point of great public and political interest during this intense session of activity, any affront to either the legislative mandates or the public will would likely invite immediate and effective reaction. The twin facts that, first, permanent panelists do not serve for a fixed term but are removable at any time at the discre tion of the MERC and, second, seek continuing employment in this area of concern, presumably quicken the arbitrator's awareness that statutory guidelines are to be closely heeded, thereby encouraging enhanced accountability.
Further balancing the exercise of arbitral independence is the act's § 12 provision for judicial review. See Part V, A, for interdependence of § 8 and 9 requirements with § 12. This section resembles the Const 1963, art 6, § 28 provision for review of administrative orders which is more expansive than the restrictive court rule provision for the review of arbitral awards in general, GCR 1963, 769.9(1), which precludes judicial inquiry into the factual merits of an arbitrator's resolution. As such, § 12 significantly incorporates all appropriate bases for review without either permitting expansive de novo litigation as some jurisdictions have provided — which would likely frustrate the binding and expeditious nature of the Act 312 concept — or, as in the case of GCR 1963, 769.9(1), so narrowly restricting the judiciary's basis for review as to arguably shelter such significant arbitral decisions from judicial inquiry. The inclusion of similar provisions in other acts has likewise recommended their wisdom.
Because Act 312, as amended, provides standards as reasonably precise as the subject matter requires or permits, Osius, supra, and since we find, as a practical matter, that the scheme exhibits adequate accountability, we find the amended act constitutional.
V. Review of the Arbitration Panel's Award
Having ruled Act 312 constitutional, we turn our attention to the general question of whether the arbitration award should be enforced. In addressing this issue, we must be especially alert to follow the limited scope of judicial review expressly provided by § 12 of the act. That section, in relevant part, states:
"Orders of the arbitration panel shall be reviewable only for reasons that the arbitration panel was without or exceeded its jurisdiction; the order is unsupported by competent, material and substantial evidence on the whole record; or the order was procured by fraud, collusion or other similar and unlawful means." MCL 423.242; MSA 17.455(42).
As we have just noted, this section neither provides this Court with a license to consider the wisdom of an arbitration award nor to subject an award to de novo review. Dearborn, supra, 318. Rather, the Legislature having confined our scope of review in assessing compulsory, binding arbitration awards, we are statutorily bound to uphold an award if it meets the prescriptions of § 12.
The city claims that the arbitration panel re versibly erred in only three particulars: the panel's ruling and award on wages, COLA, and the hardship exemption to the city's requirement that all Detroit police officers be residents of Detroit. The main thrust of the city's attack on the award as to these three items is twofold: (1) the award is violative of § 12 as "unsupported by competent, material and substantial evidence on the whole record"; and (2) the arbitration panel failed to comply with the requirements of § 8 and 9 in rendering its award. Except as to one facet of the panel's residency hardship exemption award which will be discussed infra, fn 73, the city does not assert that the panel was without or exceeded its jurisdiction or that the order was procured by fraud, collusion or other similar and unlawful means.
However, before we may entertain these two central issues, we must dispose of two collateral issues.
A. The Contextual Interdependence of § 8, 9 and 12 of the Act: Judicial Review of the § 9 Factors
Preliminary to our consideration of the contested items of the award, it is necessary to stake out the perimeters of judicial review under § 12 of the. act. Close examination of the act, in light of the well-known rule of statutory construction that each section of an act is to be read with reference to every other section so as to produce a harmonious whole, see 2A Sutherland, Statutory Construction, § 46.05, p 56, leads us to conclude that § 8, 9 and 12 evidence a contextual interdependence that necessitates their joint consideration by a court sitting in review of an Act 312 arbitration panel's award.
Section 12 specifically provides that an order of the arbitration panel shall be reviewable for the reason that it is unsupported by competent, material and substantial evidence on the whole record. To make such a review, however, we must of necessity have in mind the statutorily mandated requirements of such an order. Section 9 unequivocally directs that where "wage rates or other conditions of employment are in dispute, the arbitration panel shall base its ñndings, opinions and order upon the following [eight listed] factors, as applicable" (emphasis supplied). Section 8 likewise directs the arbitration panel, in its determination of both economic and non-economic issues, to these same § 9 factors: "As to each economic issue, the arbitration panel shall adopt the last offer of settlement which, in the opinion of the arbitration panel, more nearly complies with the applicable factors prescribed in section 9. The findings, opinions and order as to all other issues shall be based upon the applicable factors prescribed in section 9." It is patent therefore that these sections require the rendition of an ultimate award which is either "based" on the § 9 factors— in the case, of non-economic issues — or "more nearly complies with" the § 9 factors — in the case of economic issues governed by the last offer prescription. In effect then, any finding, opinion or order of the panel on any issue must emanate from a consideration of the eight listed § 9 factors as applicable.
In making an Act 312 disposition which must statutorily be "based upon" or "in compliance with" the § 9 factors as applicable, the Legislature has deemed such a disposition of the panel final and binding "if supported by competent, material and substantial evidence on the whole record". MCL 423.240; MSA 17.455(40). Section 12 likewise provides that such final and binding determina tions or "[o]rders of the arbitration panel" shall be reviewable by the courts "only for reasons that the order is unsupported by competent, material and substantial evidence on the whole record". Construing § 9 and 12 together then, our review must find that the arbitration panel did indeed base its findings, opinion or order upon competent, material and substantial evidence relating to the applicable § 9 factors. Cf. Caso v Coffey, 41 NY2d 153, 158; 359 NE2d 683, 686 (1976). In other words, the order of the panel must reflect the applicable factors and the evidence establishing those factors must be competent, material and substantial evidence on the whole record. It is only through this judicial inquiry into a panel's adherence to the applicable § 9 factors in fashioning its award that effectuation can be given to the legislative directive that such awards be substantiated by evidence of, and emanate from consideration of, the applicable § 9 factors.
B. Relation of Economic and Non-Economic Issues to §9 Factors
One other matter of statutory interpretation needs to be addressed preliminary to our examination of the panel's award. The city seems to argue that the act must be considered unconstitutional if the panel has the freedom to determine which of the § 9 factors are most applicable to a certain case. The apparent foundation for this argument is some perceived repugnance between the concept of assessing a statute's constitutionality on the sufficiency of its standards to guide delegated author ity, while simultaneously allowing the recipient of this delegated authority the discretion to weight these standards within the context of a particular case.
We disagree with the city's contention. The fact that an arbitral majority may not be persuaded by a party's evidence and argument as to certain items does not mean that those arbitrators failed to give the statutory factors that consideration required by law. The Legislature has neither expressly nor implicitly evinced any intention in Act 312 that each factor in § 9 be accorded equal weight. Instead, the Legislature has made their treatment, where applicable, mandatory on the panel through the use of the word "shall" in § 8 and 9. In effect then, the § 9 factors provide a compulsory checklist to ensure that the arbitrators render an award only after taking into consideration those factors deemed relevant by the Legislature and codified in § 9. Since the § 9 factors are not intrinsically weighted, they cannot of themselves provide the arbitrators with an answer. It is the panel which must make the difficult decision of determining which particular factors are more important in resolving a contested issue under the singular facts of a case, although, of course, all "applicable" factors must be considered. Our comment in Midland Twp v State Boundary Comm, 401 Mich 641, 676; 259 NW2d 326 (1977), is here apposite.
"Merely because some criteria were factually inapplicable or were found by the commission to be of less importance than other criteria does not mean that the commission 'ignored' relevant criteria. The commission may regard a particular criterion to be of decisive importance outweighing all other criteria."
C. The Economic Award is Supported by Competent, Material and Substantial Evidence on the Whole Record
At this juncture, our initial observation respecting our limited scope of review deserves quick reiteration. If a panel's award is supported by competent, material and substantial evidence on the whole record, we are mandated to uphold it. As we noted in the analogous context of appellate review of a MERC finding:
"Such review must be undertaken with considerable sensitivity in order that the courts accord due deference to administrative expertise and not invade the province of exclusive administrative fact-finding by displacing an agency's choice between two reasonably differing views. Cognizant of these concerns, the courts must walk the tightrope of duty which requires judges to provide the prescribed meaningful review." Michigan Employment Relations Comm v Detroit Symphony Orchestra, Inc, 393 Mich 116, 124; 223 NW2d 283 (1974).
After having made a painstaking examination of the voluminous arbitration hearing record as well as the opinions (original and supplemental) and orders of the arbitration panel, the trial court and the Court of Appeals, we are satisfied that the instant arbitration award on the economic issues of COLA and wages is supported by competent, material and substantial evidence on the whole record.
The arbitration panel conducted some 15 hearings not including final arguments by the parties and wrote a 44-page opinion setting forth the basis of its award. In its original opinion on COLA and wages the panel carefully delineated specific evidence relating to each of the factors of § 9. Indeed, this opinion included a specific section devoted to an analysis of the § 9 factors with respect to the two contested economic items. As the trial court noted in its opinion pendente lite, which reasons were later adopted in its final order of enforcement, "[t]he Panel's opinion is replete with specific findings related to the criteria of § 9 of the act and related, also, to the evidence in the case".
1. A Review of the Panel's Application of the § 9 Factors in Rendering Its Economic Award
However, in recognition of the importance of this case, and at the risk of being considered tedious, we have decided to briefly summarize on these pages the weightier evidence pertaining to the § 9 factors which was heard by the panel and formed the basis of its award. It is this evidence which compels our conclusion that the arbitration award respecting the economic issues of COLA and wages must be upheld.
As a framework to our consideration of the evidence in support of the panel's disputed economic awards, some general observations merit voicing: We stress again that § 8 of the act requires the panel to choose one of the parties' "last offer of settlement". Thus while the panel is precluded from fashioning what it might consider a more equitable award or a compromise award, it is also prevented from independently shooting too high or too low. Further, it should be recognized that § 8 gives the arbitrators a not insignificant measure of discretion in adopting a particular last offer of settlement vis-á-vis the § 9 factors by providing that the last offer chosen by the panel shall be the one that "in the opinion of the arbitration panel, more nearly complies" with the "applicable" factors prescribed in § 9. We would also note that the economic issues of COLA and wages were inextricably related in this case, COLA being the item of paramount significance to both parties. Thus, because the city advocated the abolishment, or severe diminution, of the COLA arrangement won by the DPOA in its previous contract, its wage proposal was understandably higher than that of the DPOA. Conversely, because the DPOA requested the maintenance of the previous COLA provision, its wage proposal was more modest than that of the city. In recognition of this nexus, the panel discussed together the relationship of the COLA and wage proposals to the § 9 factors. Finally, it must also be recognized that evidence relating to the eight factors of § 9 is not completely segregable; evidence relevant to one factor will often be relevant to others, causing some measure of interdependence among the factors. However, each factor, if applicable, must still be given separate consideration by the panel.
Factor 1: The lawful authority of the employer.
Evidence on this factor centered on the city's taxing powers. The panel acknowledged the city's uncontradicted evidence that it was at the legal limit of its taxing powers. Although the panel explicitly recognized these limits on the lawful authority of the employer to tax in rendering its economic award, this factor was not considered conclusive in and of itself by the panel; rather it was simply a facet of the city's basic contention that its ability to pay was limited.
Factor 2: Stipulations of the parties.
To this point, the panel expressly acknowledged its appreciation to the parties for stipulations on economic and non-economic matters which helped simplify or dispose of issues.
Factor 3: The interests and welfare of the public and the financial ability of the unit of government to meet those costs.
Respecting its financial capabilities, although the city specifically failed to present its budget or other evidence as to how the city spent its money, the city introduced evidence of a "limited" ability to pay any arbitral award. The city also introduced considerable evidence concerning the various strains on the city's fiscal abilities due inter alia to a reduction in city population and the dependency of the city budget on state and federal revenues.
While recognizing such limitations on the city's finances, the panel was acutely aware of the city's explicit statement that it did not have an inability to pay an award. As an attorney for the city stated, "The city does not assert an inability to pay any additional sum as may be determined, but that its ability to pay has limits".
The third factor juxtaposes the city's ability to pay and the interests and welfare of the public. Respecting the public interest and welfare, the panel considered of major consequence the fact that the Detroit Police Lieutenants and Sergeants Association ("LSA") had recently been awarded, in another Act 312 arbitration, a continuation of its previous COLA provision which was substantially the same as the DPOA's last COLA offer in the instant case. In light of the fact that the DPOA and LSA enjoyed a strong historic relationship, a majority of the panel believed that a denial of COLA to the DPOA would imperil police morale and the effective performance of their services to the detriment of the public.
Factor 4: Comparison of the wages, hours and conditions of employment of the employees involved in the arbitration proceeding with the wages, hours and conditions of employment of other employees performing similar services and with other employees generally:
(i) In public employment in comparable communities.
(ii) In private employment in comparable communities.
With respect to this factor, the panel reviewed evidence comparing Detroit police officers' salaries and fringe benefits to those of Detroit metropolitan area communities, as well as to large, out-of-state cities. The panel found the former the more appropriate, since not only is there a lack of comparability of conditions in other major cities, but it is against these nearby communities that Detroit must compete for police officers. The panel also relied on the recent LSA award for comparison since the LSA was the only other group of Detroit employees performing services similar to those of the DPOA. In short, the panel found the more apt and persuasive comparisons for purposes of this factor to be with other city security personnel, and not with other city employees in general. The panel did not consider comparisons with private employment persuasive and therefore did not base any of its conclusions upon such comparisons.
Factor 5: The average consumer prices for goods and services, commonly known as the cost of living.
The panel regarded as of importance testimony concerning the need for and use of a COLA provision as a not unusual means, in the public sector, of providing some protection to the real wage position, as well as the standard of living, of both wage and salary workers during inflationary periods. Thus the panel determined that with an expected increase in the cost of living from 6% to 8% a year during the three years of the new contract, the COLA requested by the DPOA would only afford 50% to 80% protection.
Factor 6: The overall compensation presently received by the employees, including direct wage compensation, vacations, holidays and other excused time, insurance and pensions, medical and hospitalization beneñts, the continuity and stability of employment, and all other beneñts received.
It was very significant to the panel that the DPOA's last offer respecting COLA merely represented a continuation of the COLA provision that had been won by the DPOA in the collective bargaining agreement which expired at the end of June, 1977. In adopting the DPOA's COLA proposal, the panel simply opted for a maintenance of the status quo regarding that provision.
Factor 7: Changes in any of the foregoing circumstances during the pendency of the arbitration proceedings.
The development of primary importance to the panel was the award in the LSA arbitration case handed down October 18, 1978 by the Howlett panel. As noted earlier, in relevant part this award granted the LSA a COLA provision essentially the same as that put forth in the DPOA's last offer. The LSA award was of considerable importance to the instant panel in fashioning its own award since the panel was intent on maintaining the historic relationship between the compensation of police officers below the rank of sergeant and those above.
Factor 8: Such other factors, not conñned to the foregoing, which are normally or traditionally taken into consideration in the determination of wages, hours and conditions of employment through voluntary collective bargaining, mediation, fact-ñnding, arbitration or otherwise between the parties, in the public service or in private employment.
The panel noted that the parties had not specifically delineated in their presentations any "other factors". Therefore, the only "other factor" which the panel relied on was morale. As noted under our discussion of the third factor, the panel believed that the maintenance of high police morale was an important factor to be considered in rendering its award.
Briefly summarizing the panel's application of § 9 in rendering its award on the economic issues in dispute, the panel determined that the interests of the public in high police morale could more effectively be insured by a preservation of the previous COLA arrangements. Since the panel had adopted the city's proposal that the contract run for three years, as opposed to the DPOA's proposal of a two-year contract, the panel was persuaded of the necessity of such a COLA provision to maintain some partial shield against the unforeseeable erosion of an officer's wage position by inflation that could occur over such an extended period. Also of concern to the panel in the maintenance of the COLA provision was the recognition of the DPOA's relationship to the LSA. Central to this award was the city's failure to plead or establish a position of inability to pay or to introduce its budget indicating what curtailment of services would be necessitated by the DPOA's last COLA offer.
Given the fact that the wage issue was inextricably related to that of COLA, the panel, having opted for the COLA proposal of the DPOA, then chose the lower of the two wage proposals; it chose the DPOA's proposed 4-1/2%, 4% and 3-1/2% wage increase in each of the three years of the contract as compared to the city's proposed 4.8%, 4% and 4% wage increase in each of those same three years. While we recognize that the city's wage proposal was higher than that of the DPOA due to the city's lack of (or, in the case of its Plan II, a minor) COLA proposal, the fact remains that having accepted the DPOA COLA proposal, the panel then awarded the lower of the two wage proposals.
In light of the foregoing analysis, we find the panel's award of the DPOA's last offers on the contested economic items to have been supported by competent, material and substantial evidence on the whole record.
One final argument of the city remains to be discussed with respect to the arbitration panel's economic award. The city asserts that the panel's award should be vacated due to the panel's refusal to admit into evidence City's Exhibit 30. This exhibit was intended to show the cost impact of any award made by the instant panel on COLA and wages, relative to the DFFA and the LSA. In short, the city argued that such an award would affect the DFFA since the city had already agreed in another Act 312 arbitration proceeding to a parity agreement, respecting certain economic benefits, between the police officer and the fire fighter, the police sergeant and the fire lieutenant, and the police lieutenant and the fire captain. The effect on the lieutenant's and sergeant's bargaining unit inhered in the fact that the previous contract between the city and the LSA, as well as the proposed one before an Act 312 arbitration panel at the time Exhibit 30 was offered, provided that the lieutenant's and sergeant's pay would be a percentage of that of a police officer. The city's argument, then, was that Exhibit 30 was relevant, as one piece of evidence under the third factor of § 9, to the extent that it illustrated the ramification of any COLA or wage award of the instant panel on total cost to the city on the total budget, and the ability of the city to pay.
At the time Exhibit 30 was offered, the chairman of the panel, per the parties' pre-hearing statement, exercised his responsibility for ruling on evidentiary and procedural matters and declined to receive the exhibit. He did so on the grounds that its admission was premature since the Act 312 arbitration proceedings involving the fire fighters and the lieutenants and sergeants had not then been concluded.
Preliminarily, we stress that this Court is not constituted some "super-arbitrator" to oversee and redirect the arbitral process when our opinion may differ with a panel's on such an evidentiary/procedural matter as this. Section 6 of the act explicitly accords a wide degree of latitude to the panel in the introduction of evidence. It is true that the "[technical rules of evidence" do not apply to the hearings; however, the panel "may" receive into evidence any oral or documentary evidence and other data "deemed relevant" by it. In view of such discretion reposed in the panel on this matter, our review is limited to the determination of whether, in this instance, the exclusion of City's Exhibit 30 was so egregious as to cause the award of the panel on the contested economic issues to be unsupported by competent, material and substantial evidence on the whole record.
The arbitration panel was well-informed on the cost of its award to the city. In making the disputed evidentiary ruling, the panel chairman observed:
"[Y]our panel is composed of persons who are knowledgeable and sophisticated as far as public affairs gener ally, and indeed about labor relations matters. And, what everybody else knows, we are charged with knowing."
"I know the cost, and everyone on the panel, everyone sitting out there is very conscious of the fact cost is of consideration. We're not naive, and we're not unmindful of costs."
More specifically, we find the following in the majority panel's decision:
"The panel cannot escape the history of the city in its relations with its unions, not only as evidenced by contractual undertakings but by actions of the electorate from time to time. For years there has been a correlation between benefits of police and fire personnel, commonly referred to as security personnel. After years of debate, both the general electorate and in collective bargaining, the principle of parity was established between police and fire. Even more interestingly, there is a correlation to a degree between certain positions in the Fire Department and positions among the Lieutenants and Sergeants."
"As indicated earlier, the chairman is of the opinion that this panel cannot remake or change history nor can it escape the history the parties themselves have made, that is, of certain internal relationships in comparisons between and among Lieutenants and Sergeants and DPOA members as well as between and among these groups or bargaining units and the fire fighters."
In light of the foregoing, the exclusion of City's Exhibit 30 from evidence cannot be said to have caused the economic award to be unsupported by competent, material and substantial evidence on the whole record. Accordingly, we reaffirm our holding as to the validity of the economic award.
D. The Non-Economic Award is Not Supported by Competent, Material and Substantial Evidence on the Whole Record
We cannot find that the hardship exemption to the residency requirement is supported by competent, material and substantial evidence on the whole record. The panel, in its August 8, 1979 opinion on remand on the residency issues, did not consider all the applicable § 9 factors in making its award, as Act 312 mandates.
As we emphasized under Part V, B, supra, the Legislature, through the language of § 8 and 9, has unequivocally directed that the panel, in making an award, treat the § 9 factors where applicable. Such language is not precatory and therefore the panel does not have the discretion to ignore any applicable § 9 factors. Moreover, this legislative directive is no less obligatory on the panel when the parties themselves have failed to introduce evidence on an applicable factor. In such a case the panel, in order to comply with the intention of Act 312 that arbitral decisions be substantiated by evidence of, and emanate from consideration of, the applicable § 9 factors, must direct the parties to introduce evidence relating to the applicable factors. By so doing, the panel will be able, per the dictates of § 8 and 9, to make findings based upon the applicable factors enumerated in § 9 from the evidence of record before it.
In rendering the present award on the non-economic issue of a hardship exemption to the residency requirement, the panel did not consider all applicable factors. The panel only considered the first, third and last factors of § 9 in its August 8, 1979 opinion on remand from the trial court. As to the other factors, the panel merely stated:
"So far as the other § 9 criteria, neither party offered comparisons and except in the enforcement sense, as noted, money factors are not in issue."
Such pro forma deference to the requirements of § 8 and 9 of the act will not do. These sections, by their terms, require rigid adherence. Thus, for example, it was error for the panel, in making an award of a residency hardship exemption, to refuse to consider, however convincing the evidence on other factors, the applicable fourth factor involving a comparison of the residency requirement for DPOA members (a condition of employment) with the residency requirements for other employees performing similar services and for other employees generally in both public and private employment in comparable communities, as well as any other factors if applicable. The parties' omission of evidence on this factor did not excuse the panel's inattention to the factor.
We note that the residency requirement requested by the city and affirmed in the earlier Platt panel award was left intact and unchanged by the panel's award except for the hardship exemption. Since we find the hardship exemption award by the panel to have been unsupported by competent, material and substantial evidence on the whole record, the residency requirement, in its entirety, must be reaffirmed. It is now up to the parties to either introduce evidence on the applicable factors before a reconvened panel or to return to collective bargaining.
The rationale of this holding provides the resolution of the city's last argument. The city asserts that it was error for the trial court as well as the arbitration panel to ignore its request to amend the "residency" portion of the present collective bargaining agreement so that the word "resident" would be defined in terms of a 1978 City of Detroit ordinance which provides that "residence" is to be construed as the "actual domicile" of the individual, with an individual being capable of having only one "domicile". Detroit City Code, § 2-1-1.2; Detroit Ordinance No. 245-H. The predecessor 1968 ordinance had defined residency in terms of where an individual normally ate, slept and maintained his normal personal and household effects. Detroit Ordinance No. 327-G. This former ordinance, the city contends, created difficulties in enforcement.
Initially, we disagree with the city's complaint that the arbitration panel ignored the city's requested amendment. In its opinion on remand on the residency issue, the following appears:
"In the interest of completeness, it must be stated that the unanimous action of the panel as noted above, under its December 20, 1978, opinion, when it was reduced to formal award, brought a dissent from the city delegate, who asserted that it had been his understanding that the panel was adopting the definition change proposed by the city. The majority of the panel, the chairman with the labor delegate concurring, however, made clear that no changes were contemplated by the panel except a change that would provide a hardship exemption, and the award so provided."
More importantly, however, we, as a reviewing court, cannot amend the language of the contract to include the new Detroit ordinance. The panel has not made specific findings of fact and an award relating such a non-economic issue to the applicable § 9 factors and the evidence of record. It is not our job to fill this void by acting as de novo arbitrators in this matter. The proper course is for the parties to seek a resolution of this issue via collective bargaining, and failing that, through the invocation of Act 312.
VI. Interest on an Act 312 Economic Award?
Both the DPOA and the DFFA have appealed the trial court's denial of interest on the arbitration panel's economic award. Since Act 312 itself is silent on the subject of interest, the DPOA and the DFFA base their appeal on MCL 438.7; MSA 19.4, as well as MCL 600.6013; MSA 27A.6013.
We find MCL 600.6013 to be inapposite to the situation at bar. In relevant part, this statute provides:
"Interest shall be allowed on any money judgment recovered in a civil action, such interest to be calculated from the date of filing the complaint at the rate of 6% per year (Emphasis supplied.)
The Act 312 arbitration award is not a "money judgment recovered in a civil action". MCL 600.6013, as part of the Revised Judicature Act of 1961, does not apply to compulsory interest arbitration in the public sector. The preamble to the Revised Judicature Act states its concern, instead, to be with such matters as the "organization and jurisdiction of the courts" and the "forms and attributes of civil claims and actions". Our reasoning in the analogous context of disallowing an interest claim on a workers' compensation award made under MCL 600.6013 is here valid. Cf. Solakis v Roberts, 395 Mich 13; 233 NW2d 1 (1975). An Act 312 arbitration panel is not "a court", "is not possessed of judicial power" and the concept of a money judgment is "totally alien to the policy and philosophy" of Act 312 which looks to the expeditious and effective resolution of critical-service public sector labor disputes. 395 Mich 21-22.
We also find MCL 438.7 to be an inappropriate vehicle for the granting of interest. That statute, in pertinent part, states:
"In all actions founded on contracts express or implied, whenever in the execution thereof any amount in money shall be liquidated or ascertained in favor of either party, by verdict, report of referees, award of arbitrators, or by assessment made by the clerk of the court, or by any other mode of assessment according to law, it shall be lawful, unless such verdict, report, award, or assessment shall be set aside, to allow and receive interest upon such amount so ascertained or liquidated, until payment thereof or until judgment shall be thereupon rendered; (Emphasis supplied.)
As the trial court noted, an Act 312 arbitration proceeding is not "founded" on a contract, but instead has as its very purpose the making of a contract. Thus we find the rationale of Solakis, supra, ill-suited to the concerns of Act 312. Solakis, in construing our earlier decision of Wilson v Doehler-Jarvis Division of National Lead Co, 358 Mich 510; 100 NW2d 226 (1960), held that MCL 438.7 was the appropriate statute under which to grant interest on a workers' compensation award. The Solakis Court satisfied the "contract" requirement of MCL 438.7 by finding that the right to a workers' compensation award was contractual since it arose out of the contractual relationship between employer and employee. Here, conversely, Act 312 is not dependent on an already existing contractual relationship between employer and employee for its existence. Indeed, § 9 of the act expressly provides in its introductory phrase that it must be considered even "[w]here there is no agreement between the parties". Furthermore, as in the present case, an Act 312 award often will not be issued by an arbitration panel until the parties' previous collective bargaining agreement (or statutorily imposed Act 312 contract) has already expired.
Nor do we find entirely persuasive the argument that the statutorily imposed Act 312 contract can itself serve as the "contract" contemplated by the terms of MCL 438.7. The Act 312 contract, as issued by a panel, is not, as required by MCL 438.7, one that has been executed to the extent that an amount of money is liquidated or ascertained. Further, an Act 312 proceeding cannot be "founded" on a contract since its very purpose is to make a contract.
In sum, we can find no statutory provision under which to grant interest on the economic portion of the panel's award.
VII. Conclusion
As to the two major issues posed at the outset of this opinion, we conclude: (1) amended Act 312 does not include an unconstitutional delegation of power; and (2) considering the disputed award in accordance with our ruling that judicial review under the act requires § 12 to be read in conjunction with § 8 and 9, we find that — with the exception of the residency hardship exemption — the award complies with the requisite factors and is supported by competent, material and substantial evidence on the whole record. As to the issue of interest, we conclude that statutory support for the grant of interest on Act 312 arbitration awards is absent; interest is therefore denied. With respect to the home rule and equal protection claims discussed in footnotes 14 and 15 supra, we conclude that these subjects have been resolved by precedent adverse to the city.
No costs, a public question being involved.
Ryan and Blair Moody, Jr., JJ., concurred with Williams, J.
As originally enacted in 1969 and considered by Justices Levin, T. G. Kavanagh, Coleman and Williams in the 1975 Dearborn opinion, 1969 PA 312 provided the following § 5 mechanism for the selection of arbitration panel members:
"Within 5 days thereafter [after the employer's and employees' § 4 delegates have been selected to represent their interests on the three-member panel], or within such further additional periods to which they may agree, the delegates shall designate an impartial, competent and reputable person to act as an arbitrator, hereafter called the arbitrator or chairman of the panel of arbitration, and with them to constitute an arbitration panel to further consider and order a settlement of all matters. Upon their failure to agree upon and appoint the arbitrator within such time, or mutually extended time, either of them may request the chairman of the state labor mediation board to appoint the arbitrator, and the chairman of the state mediation board shall appoint, in not more than 7 days, an impartial, competent and reputable citizen as the arbitrator." MCL 423.235; MSA 17.455(35).
Subsequent to the Dearborn decision, § 5 was significantly amended by 1976 PA 84, to provide the following:
"(1) Within 7 days of a request from 1 or both parties [§ 4 delegate^)], the employment relations commission shall select from its panel of arbitrators, as provided in subsection (2), 3 persons as nominees for impartial arbitrator or chairman of the arbitration panel. Within 5 days after the selection each party may peremptorily strike the name of 1 of the nominees. Within 7 days after this 5-day period, the commission shall designate 1 of the remaining nominees as the impartial arbitrator or chairman of the arbitration panel.
"(2) The employment relations commission shall establish and appoint a panel of arbitrators, who shall be known as the Michigan employment relations commission panel of arbitrators. The commission shall appoint members for indefinite terms. Members shall be impartial, competent, and reputable citizens of the United States and residents of the state, and shall qualify by taking and subscribing the constitutional oath or affirmation of office. The commission may at any time appoint additional members to the panel of. arbitrators, and may remove existing members without cause." MCL 423.235; MSA 17.455(35).
Other minor amendments to Act 312 as originally enacted and considered in Dearborn are detailed in Part III, B, infra.
At the time of the 1975 Dearborn decision, 13 jurisdictions had enacted similar interest arbitration schemes, Dearborn, supra, 298, fn 9 (opinion of Williams, J.); none of these acts have been repealed although some have been amended. Today, at least 20 jurisdictions including Michigan have enacted legislation providing for binding interest arbitration for public employees, or specifically for police and fire fighters. Those jurisdictions which have enacted similar legislation since the Dearborn decision include: Conn Gen Stat Ann, § 7-472 et seq., 10-153Í; Hawaii Rev Stat, § 89-11; Iowa Code Ann, § 20.22; Mass Ann Laws, ch 150E, § 9; Mont Code Ann, § 39-34-101 et seq.; NJ Stat Ann, § 34:13A-16 et seq.; NY Civil Service Law (McKinney), § 205, 209; Or Rev Stat, § 243.742 et seq.; Wash Rev Code Ann, § 41.56.100, 41.56.125, 41.56.430 et seq.
See Grodin, Political Aspects of Public Sector Interest Arbitration, 64 Cal L Rev 678, 678-683 (1976). See, e.g., Newman, Interest Arbitration — Practice and Procedures, in Knapp, ed, Labor Relations Law in the Public Sector (Chicago: ABA, 1977), pp 54-61.
See, e.g., Amsterdam v Helsby, 37 NY2d 19; 371 NYS2d 404; 332 NE2d 290 (1975); Arlington v Board of Conciliation & Arbitration, 370 Mass 769; 352 NE2d 914 (1976); Biddeford v Biddeford Teachers Ass'n, 304 A2d 387 (Me, 1973); Division 540, Amalgamated Transit Union v Mercer County Improvement Authority, 76 NJ 245; 386 A2d 1290 (1978); Harney v Russo, 435 Pa 183; 255 A2d 560 (1969); Medford Fire Fighters Ass'n v Medford, 40 Or App 519; 595 P2d 1268 (1979); In the Matter of New Jersey Bell Telephone Co v Communications Workers of America, 5 NJ 354; 75 A2d 721 (1950); Richfield v Local No 1215, International Ass'n of Fire Fighters, 276 NW2d 42 (Minn, 1979); School Dist of Seward Education Ass'n v School Dist, 188 Neb 772; 199 NW2d 752 (1972); Spokane v Spokane Police Guild, 87 Wash 2d 457; 553 P2d 1316 (1976); State ex rel Fire Fighters Local No 946 v Laramie 437 P2d 295 (Wyo, 1968) (equally split decision); City of Warwick v Warwick Regular Firemen's Ass'n, 106 RI 109; 256 A2d 206 (1969). See generally Anno: Validity and construction of statutes or ordinances providing for arbitration of labor disputes involving public employees, 68 ALR3d 885, 891-892 ("The validity of statutory provisions for arbitration of labor disputes involving public employees has generally been upheld against attacks on a variety of grounds. The modern trend definitely appears to be in favor of finding a valid delegation.") But compare the distinguishable cases discussed in fn 56, infra. See also Fire Fighters Union, Local 1186 v Vallejo, 12 Cal 3d 608; 526 P2d 971; 116 Cal Rptr 507 (1974).
Indeed, in a report of the Michigan Departments of Labor and Management & Budget, "Review of Michigan's Compulsory Arbitration Act & Public Act 312 of 1979", May 21, 1979 (mimeo), it was stated that only one strike relating to bargaining has followed adoption of Act 312. Id., 8. This statement is to be compared with the following 1979 statement of Arvid Anderson, Chairperson of the New York City Office of Collective Bargaining, to the Association of Labor Relations Agencies:
"[Tjhere have been an increasing number of bitter strikes by police and firefighters causing real hardship to communities where there are no orderly procedures for resolving contract disputes. These occurred in Dayton, Cleveland, and Toledo, Ohio; New Orleans, La.; Louisville, Ky.; Anderson, Ind.; and Wichita, Kan." Government Employee Relations Report (Washington, DC: BNA, August 13, 1979), 823:54.
See generally Anderson, MacDonald & O'Reilly, Impasse Resolution in Public Sector Collective Bargaining — An Examination of Compulsory Interest Arbitration in New York, 51 St John's L Rev 453 (1977); Benjamin, Final Offer Arbitration Awards in Michigan, 1973-1977 (Institute of Labor and Industrial Relations, University of Michigan & Wayne State University, 1978); Howlett, Contract Negotiation Arbitration in the Public Sector, 42 Cincinnati L Rev 47, 63-65 (1973); Kaye, Impasse Resolution Mechanisms and Teacher Strikes, 7 U of Mich J of L Reform 575 (1974), cited in Dearborn, supra, 293, fn 2 (opinion of Williams, J.); Rehmus, Legislated Interest Arbitration, Proceedings of the 27th Annual Winter Meeting of the Industrial Relations Research Association (December 28-29, 1974), pp 307, 308-309.
In addition to our ruling on the focal issue of this opinion that Act 312, as amended, does not unconstitutionally delegate "legislative and political responsibility to politically unaccountable arbitrators", we also hold that the act does not impermissibly usurp constitutionally vested home rule powers and does not unconstitutionally deny the right to cast effective ballots in municipal elections. These claims of the city are summarily rejected in fns 14, 15, infra, and accompanying text for the reasons that the home rule issue was unanimously disapproved of in Dearborn and the equal protection argument is without merit.
The DPOA delegate concurred in the panel's decision on all issues except its rejection of the DPOA's dental plan, to which the DPOA delegate expressly dissented. The city delegate dissented from the panel's opinion on the issues of wages, COLA, and the hardship exemption from the residency requirement.
As provided in § 8 of the act, MCL 423.238; MSA 17.455(38), which has been significantly amended by 1972 PA 127, the panel is required to adopt "the last offer of settlement which, in the opinion of the arbitration panel, more nearly complies with the applicable factors prescribed in section 9 [MCL 423.239; MSA 17.455(39)]". See fn 17, infra, and accompanying text. As will be developed in Part III, B, infra, this requirement significantly differs from that effective at the time of the Dearborn decision in 1975.
As to the economic issue of how much sick time would be charged to an employee unable to finish his or her shift because of illness, although the DPOA's last offer of a continuation of the present practice was accepted by the panel, the panel additionally recommended that the parties effect a system of computerized hour-by-hour computation.
Reproduced below is a comparison of the three-year costs of the DPOA and city last best offers on an individual benefit basis. This comparison was included in the opinion of the arbitration panel dated December 20, 1978:
'Benefit Cost of DPOA Last Best Offer Cost of City Last Best Offer
Wages $32,810,000 $34,711,0002
COLA 28.130.000
Shift Premium 669,000
Dental Care 1.003.000
Longevity 4.280.000
Holidays 1.506.0001 1,456,000
Pension 18.027.000
Sick Leave Payoff 1,685,000
Total Cost $88,110,000 $36,167,000
"!This is the direct cost of the union proposal. In addition to this the city would lose 22 man years of service in 1978-79 and 66 man years of service in 1979-80. If the city hires additional employees to cover this lost time it would cost $600,000 in 1978-79 and $1,900,000 in 1979-80.
" This is the cost of the 4.8%-4.0%-4.0% wage proposal. The 4%-2%-2%-2%-2% plus limited COLA proposal would cost $33,000,000."
For an explanation of the city's two wage proposals, see fn 66, infra.
In reviewing this data, it is significant that the arbitration panel's actual award rejected the DPOA's last best offer on the economic issues of shift premium, dental care, longevity, holidays, pension and sick leave payoff in favor of the city's last best offer to continue the existing policy as to all those items, except holiday pay where the city's offer to raise holiday pay from an additional 150% to an additional 200% of daily pay was accepted.
Some non-economic issues were finally resolved by the panel itself. On the disputed issue of furlough allocation, the panel awarded the city's requested contract language limiting the number of police officers in a given precinct, section or unit who could be on furlough at the same time to 10% of the total number of police officers.
The DPOA, on the other hand, won contract language on the issue of police reserves which explicitly provided that the city could not use police reserves to do the normal work of bargaining unit members or to circumvent the holiday, overtime or other provisions of the agreement. The DPOA was also awarded its proposed continuation of the previous contract's sick leave language. Under this provision, an officer could be absent from home while sick without the permission of a superior officer.
Even though the arbitration award was announced on December 20, 1978, for purposes of its order and to facilitate accounting thereunder, the Court of Appeals assumed that the arbitration award was announced January 1, 1979.
This issue has been more specially framed by the city in the following terms:
"1969 PA 312, insofar as it provides for compulsory arbitration, violates the United States Constitution and the Constitution of the State of Michigan by improperly delegating legislative and political responsibility to politically unaccountable arbitrators."
We perceive the city's issue as incorporating two distinct questions: (1)whether Act 312, as amended, is violative of the Michigan delegation doctrine in general as framed by the "standards test" of Osius v St Clair Shores, 344 Mich 693, 698; 75 NW2d 25 (1956); and (2) whether Act 312, as amended, is violative of general notions of public accountability or political responsibility. These distinct questions are specifically addressed in Part IV, A and B, infra.
This geperal issue represents a summary of the four issues which the city framed in its brief relating to the validity of the rendered award with respect to wages, COLA and the hardship exemption from the residency requirement.
Verbatim, these four issues were framed as follows:
(1) "Whether the scope of judicial review under 1969 PA 312 is broader than that defined by the lower court, such review being governed by article 6 § 28 of the Constitution of the State of Michigan."
(2) "Whether the lower court erred in holding that the panel's award on a hardship exemption to the residency requirement of the contract met the standards required by the act and any failure to comply with the act had been corrected by the panel on remand."
(3) "Whether the lower court erred in holding that the panel's award denying the city's request to amend the collective bargaining agreement to conform to the amendments made to the city charter of the City of Detroit was supported on the record as a whole."
(4) "Whether the 1969 [PA] 312 panel, through its chairman, violated § 6 of 1969 [PA] 312 (MCL 423.236) by refusing to admit evidence relevant to economic demands of the union."
Although the city contends in its first issue that the applicable scope of judicial review of the arbitration award is that found in Const 1963, art 6, § 28, we find the review prescribed in § 12 of Act 312, MCL 423.242; MSA 17.455(42), for all relevant intents and purposes, to be identical with the constitutional standard, i.e., was the award supported by competent, material and substantial evidence on the whole record. Cf. Midland Twp v State Boundary Comm, 401 Mich 641, 671-672; 259 NW2d 326 (1977).
The city contends that the Act 312 compulsory arbitration scheme unconstitutionally divests home-rule cities of their powers granted by Const 1963, art 7, § 22 and 34. This contention was rejected by Justices Levin, T. G. Kavanagh, and Coleman and implicitly by Justice Williams in the 1975 Dearborn opinion. Dearborn, supra, 243-246 (opinion of Levin, J.), 273 (opinion of T. G. Kavanagh, C.J., concurring with Levin, J.), 281-283 (opinion of Coleman, J.). Since the city's contention substantially follows that set forth in Dearborn, we will not consider the home rule argument further. See Amsterdam v Helsby, 37 NY2d 19, 26-27; 371 NYS2d 404; 332 NE2d 290, 292-293 (1975); Arlington v Board of Conciliation & Arbitration, 370 Mass 769, 773-774; 352 NE2d 914, 918 (1976).
The city here contends that Act 312, because of the alleged delegation of authority to politically insensitive persons, violates equal protection by depriving city constituents of the right to cast effective ballots in local elections. The city's argument is a non sequitur; the equal protection principle of "one-man, one-vote" here invoked guarantees that legislative districts embrace substantially equal numbers of citizens in order to preclude debasement of the vote. Baker v Carr, 369 US 186; 82 S Ct 691; 7 L Ed 2d 663 (1962). Moreover, arguments similar to that made here against other binding arbitration schemes have likewise been rejected as lacking merit in those three jurisdictions expressly considering the claim. Amsterdam v Helsby, 37 NY2d 19, 28; 371 NYS2d 404; 332 NE2d 290, 293 (1975); Arlington v Board of Conciliation & Arbitration, 370 Mass 769, 777-778; 352 NE2d 914, 920-921 (1976); Harney v Russo, 435 Pa 183, 190-192; 255 A2d 560, 563-564 (1969).
Const 1908, art 16, § 7 provided that "The legislature may establish courts of conciliation with such powers and duties as shall be prescribed by law". Delegates to the Constitutional Convention of 1961 criticized this provision as ineffectual, stating:
"Mr. Hoxie: First I would like to state that neither agencies, cities, anyone hiring public employees, nor labor subscribe to the theory of courts in the way of settling disputes. They have never been used even though the provisions of the constitution so provided, because employers of public employees as well as organized labor did not want to resort to that particular provision.
"Mr. Murphy: Since 1850 the legislatures have had the right to establish courts of conciliation. After many long hours of public hearings and debate within the committee on legislative powers, the committee properly recognized the importance of giving the legislature the flexibility it needs to set up the necessary and appropriate machinery to solve legal problems in public employment without freezing into the constitution a particular agency which might be outmoded before we finish this constitution." 2 Official Record, Constitutional Convention 1961, p 2340.
Responsive to these criticisms, the Const 1908 provision was repealed and replaced by Const 1963, art 4, § 48, a significant departure from the prior call for courts of conciliation and more consistent with modern conditions. 2 Official Record, Constitutional Convention 1961, p 2340.
As originally enacted, Act 312 was scheduled to expire on June 30, 1972, MCL 423.245; MSA 17.455(45). This limitation was extended and later repealed by 1975 PA 3 "in view of the record of success of procedures under the act". Dearborn, supra, 295.
The first significant amendment to the act occurred in 1972 relative to the § 8 last offer provision, MCL 423.238; MSA 17.455(38). This amendment is discussed in greater detail in fn 26, infra, and accompanying text.
1976 PA 84, significantly amended the § 5 mechanism considered in Dearborn for the selection of particular dispute arbitration panel members. This amendment is discussed in fn 1, supra, and accompanying text.
Dearborn, supra, 244-246 (opinion of Levin, J.), 273 (opinion of T. G. Kavanagh, C.J., concurring with Levin, J.), 277 (opinion of Coleman, J.), 294 (opinion of Williams, J.).
Escanaba v Labor Mediation Board, 19 Mich App 273, 281-282; 172 NW2d 836 (1969). Prior to the institution of Const 1963, art 4, § 48, such schemes were constitutionally sanctioned under the police and general welfare powers of the state. See, e.g., Local Union No 876 International Brotherhood of Electrical Workers v State Labor Mediation Board, 294 Mich 629, 635-636; 293 NW 809 (1940); Grosse Pointe Park Fire Fighters Ass'n v Village of Grosse Pointe Park, 303 Mich 405, 409; 6 NW2d 725 (1942); Detroit v Division 26 of the Amalgamated Ass'n of Street, Electric Railway & Motor Coach Employees of America, 332 Mich 237; 51 NW2d 228 (1952).
See fn 1, supra, and accompanying text which discusses the 1976 PA 84, amendment to § 5 as originally enacted.
See fn 26, infra, which discusses the 1972 PA 127, amendment to § 8 which was not effective at the time of the Dearborn litigation although considered by the Justices in that decision.
After the Dearborn decision, § 3 was amended in minor part by 1977 PA 303, to expressly except from Act 312 those disputes "concerning the interpretation or application of an existing agreement (a 'grievance' dispute)". This amendment makes clear that the 'scope of Act 312 is restricted to interest arbitration alone.
While this amendment to § 3 expressly restricted the act's subject matter, two amendments to § 2, MCL 423.232; MSA 17.455(32), expanded its scope to include both emergency medical service personnel employed by a police or fire department, 1976 PA 203, and emergency telephone operators employed by a police or fire department, 1977 PA 303. Additionally, the award of retroactive benefits was simplified by the 1977 PA 303, amendment to § 10, MCL 423.240; MSA 17.455(40), by eliminating the former requirement that arbitration proceedings be initiated prior to the commencement of the relevant fiscal year.
See fn 1, supra, for a discussion of the significant amendments wrought by 1976 PA 84.
This section was added to the act by 1972 PA 127, effective May 4, 1972 and was, therefore, not before the Dearborn Court. This remand provision insures that the arbitration panel will be presented with sharpened issues necessitating resolution.
Prior to the 1972 PA 127, amendments to § 8, effective May 4, 1972, this section merely required the rendition of a written opinion and order upon the record, which shall be "just and reasonable and based upon the factors prescribed in sections 9 and 10"; it did not differentiate between economic or non-economic issues:
"Sec. 8. The arbitration panel, within 30 days after the conclusion of the hearing, or such further additional periods to which the parties may agree, shall make written findings of fact and promulgate a written opinion and order upon the issues presented to it and upon the record made before it, and shall mail or otherwise deliver a true copy thereof to the governing body of the public employer and to the attorney or other designated representatives of the employees of the public employer. The findings, opinions and order shall be just and reasonable and based upon the factors prescribed in sections 9 and 10."
Comparison of § 8 as enacted and amended reveals significant modification. Prior to 1972 PA 127, the panel was required by § 9 alone to consider and resolve all issues ("wage rates or other conditions of employment") based upon the applicable § 9 factors. Pursuant to the 1972 amendments, however, the panel is restricted by § 8 to the adoption of that last offer of settlement as to each economic issue which, in the panel's opinion, more nearly complies with the applicable § 9 factors; resolution of all other issues is to be based upon the applicable § 9 factors. Thus, not only is the panel's authority to resolve economic issues strictly circumscribed by the parties' sharpened last best offer but that authority is further bounded by the necessity of considering the applicable § 9 factors.
Although these amendments were not applicable to the litigation concerned in the 1975 Dearborn decision because that litigation preceded their effective date, Justices Levin, Coleman and Williams directly addressed their significance. Dearborn, supra, 270 (opinion of Levin, J. "Last-offer arbitration does not, however, address the constitutional deficiency we find in this act: the power of the decision maker, who does not have continuing responsibility, to make critical choices on economic and non-economic issues without political accountability."), 281, fn 6 (opinion of Coleman, J. "Indeed, the 1972 amendments to Act 312 have made the arbitrator's duty even more circumscribed."), 297 (opinion of Williams, J. "A subsequent amendment provides a further constraint on the authority of the panel in the requirement to consider only the last offer of settlement made by each party for each economic issue. This also encourages good-faith bargaining by the parties, as it prevents submission of an offer so outlandish as to effectively require acceptance of the other's position. Not only is the panel restricted to accepting or rejecting the last proposal, it must base its determinations on [the § 9] standards,
As indicated in fn 13, supra, the § 12 standard of judicial review is, for all relevant intents and purposes, identical to the constitutional standard of review of administrative decisions found in Const 1963, art 6, § 28, which provides in pertinent part:
"All final decisions, findings, rulings and orders of any administrative officer or agency existing under the constitution or by law, which are judicial or quasi-judicial and affect private rights or licenses, shall be subject to direct review by the courts as provided by law. This review shall include, as a minimum, the determination whether such final decisions, findings, rulings and orders are authorized by law; and, in cases in which a hearing is required, whether the same are supported by competent, material and substantial evidence on the whole record." (Emphasis supplied.) See MCL 24.301, 24.302, 24.306; MSA 3.560(201), 3.560(202), 3.560(206).
See fns 60-64, infra, and accompanying text.
This section resembles the Const 1963, art 6, § 28 provision for judicial review which is patently more expansive than the restrictive court rule provision for the review of arbitral awards in general, GCR 1963, 769.9(1):
".9 Vacating an [Arbitration] Award.
"(1) Upon application of a party, the court shall vacate an award whiere:
"(a) The award was procured by corruption, fraud or other undue means;
"(b) There was evident partiality by an arbitrator appointed as a neutral or corruption in any of the arbitrators or misconduct prejudicing the rights of any party;
"(c) The arbitrators exceeded their powers; or
"(d) The arbitrators refused to postpone the hearing upon sufficient cause being shown therefor or refused to hear evidence material to the controversy or otherwise so conducted the hearing as to prejudice substantially the rights of a party.
"But the fact that the relief was such that it could not or would not be granted by a court of law or equity is not ground for vacating or refusing to confirm the award."
As such, § 12 significantly incorporates all appropriate bases for review without either permitting expansive de novo litigation as some jurisdictions have provided, McAvoy, Binding Arbitration of Contract Terms: A New Approach to the Resolution of Disputes in the Public Sector, 72 Colum L Rev 1192, 1204, fn 73 (1972) — which would likely frustrate the binding and expeditious nature of the Act 312 concept— or, as in the case of GCR 1963, 769.9(1), so narrowly restricting the judiciary's basis for review as to arguably shelter such significant arbitral decisions from judicial inquiry. See fns 60-64, infra, and accompanying text.
Perhaps the most concise description of the delegation doctrine was enunciated in the seminal case of Locke's Appeal, 72 Pa 491, 498-499 (1873):
"The legislature cannot delegate its power to make a law; but it can make a law to delegate a power to determine some fact or state of things upon which the law makes, or intends to make, its own action depend. To deny this would be to stop the wheels of government."
As in Plato's allegory of the cave, since 1854 in People v Collins, 3 Mich 343 (1854), this Court has intermittently struggled to distinguish the shadows from the light surrounding the question posed in Locke's Appeal whether the Legislature may delegate authority to a subordinate body of non-elected individuals. Although this Court initially adopted "true" and "proper" tests to distinguish valid from invalid delegations, judicial focus has sharpened to an inquiry "whether the limits [on the exercise of discretion conferred on the non-legislator] are sufficiently defined to avoid delegation of legislative powers". Argo Oil Corp v Atwood, 274 Mich 47, 52; 264 NW 285 (1935). See People v Soule, 238 Mich 130, 139; 213 NW 195 (1927); Hoyt Brothers, Inc v Grand Rapids, 260 Mich 447, 451-452; 245 NW 509 (1932).
Despite certain criticism, 1 Davis, Administrative Law Treatise (2d ed), § 3:3, p 152, the test of delegation has come to be framed in terms of "standards" as developed in Osius. The standards test has been recently recognized as a valid measure of a delegation scheme's constitutionality in the context of both administrative agency action, Westervelt v Natural Resources Comm, 402 Mich 412; 263 NW2d 564 (1978); Dukesherer Farms, Inc v Director of the Dep't of Agriculture (After Remand), 405 Mich 1; 273 NW2d 877 (1979); Dep't of Natural Resources v Seaman, 396 Mich 299; 240 NW2d 206 (1976), as well as action by otherwise appointed groups or persons, see Dearborn, supra, 259, 269-270 (opinion of Levin, J.), 273 (opinion of T. G. Kavanagh, C.J., concurring with Levin, J.), 288 (opinion of Coleman, J.), 303-304 (opinion of Williams, J.); Westervelt, supra, 443-444, fn 21.
Construing the general principle enunciated in Osius that such standards must be "as reasonably precise as the subject matter requires or permits", it has been recognized that "[t]he preciseness of the standard will vary with the complexity and/or the degree to which [the] subject regulated will require constantly changing regulation". Dep't of Natural Resources v Seaman, 396 Mich 299, 309; 240 NW2d 206 (1976).
Neither exhaustive nor excessively detailed standards must be found to uphold a delegation scheme. As stated by the United States Supreme Court in American Power & Light Co v Securities & Exchange Comm, 329 US 90, 105; 67 S Ct 133; 91 L Ed 103 (1946):
"The legislative process would frequently bog down if Congress were constitutionally required to appraise beforehand the myriad situations to which it wishes a particular policy to be applied and to formulate specific rules for each situation. Necessity therefore fixes a point beyond which it is unreasonable and impracticable to compel Congress to prescribe detailed rules; it then becomes constitutionally sufficient if Congress clearly delineates the general policy, the public agency which is to apply it, and the boundaries of this delegated authority."
See Ray v Mason County Drain Comm'r, 393 Mich 294, 306-307; 224 NW2d 883 (1975); State Highway Comm v Vanderkloot, 392 Mich 159, 172-173; 220 NW2d 416 (1974) (opinion of Williams, J.); Pleasant Ridge v Governor, 382 Mich 225, 243-248; 169 NW2d 625 (1969). This sentiment was likewise urged by this Court in GF Redmond & Co v Michigan Securities Comm, 222 Mich 1, 5; 192 NW 688 (1923):
"The power to carry out a legislative policy enacted into law under the police power may be delegated to an administrative board under quite general language, so long as the exact policy is clearly made apparent, . This marks the line between arbitrary officiousness and the exercise of delegated power to carry out a designated policy under the police power." (Emphasis supplied.)
What is required to satisfy the Osius inquiry is the inclusion of either explicit or derivative standards, Pleasant Ridge v Governor, supra, 243-248; Vanderkloot, supra, commensurate with the complexity of the regulated area:
"In making this determination whether the statute contains sufficient limits or standards we must be mindful of the fact that such standards must be sufficiently broad to permit efficient administration in order to properly carry out the policy of the Legislature but not so broad as to leave the people unprotected from uncontrolled, arbitrary power in the hands of administrative officials." Seaman, supra, 308-309.
When standards as reasonably precise as the subject matter requires or permits are found, the principle that the Legislature may not delegate or dedicate "law-making" or "legislative" power, but only "administrative" power, becomes merely a principle of description or convenience, not substance. See Argo Oil Corp v Atwood, 274 Mich 47, 53; 264 NW 285 (1935). This tenet was analyzed with respect to administrative rule-making in Westervelt, supra, 440-441:
"[T]he making of rules by an administrative agency pursuant to legislatively delegated rule-making power differs from 'legislation' or 'law-making' in two essential aspects. First, the source of the power to make the rule is in the Legislature. Second, the concept of 'legislation', in its essential sense, is the power to speak on any subject without any speciñed limitations.
'However, constitutionally, 'standards as reasonably precise as the subject matter requires or permits' do specify limitations on agency rule-making. Thus, when such standards exist, agency rule-making is not an unconstitutional action because the Legislature has (1) authorized and (2) limited such action. Also, agency rule-making is not a usurpation of the 'legislative' law-making function because the Legislature has (1) directed the agency to so act and (2) limited the scope within which it may act. Finally, agency rule-making is not 'legislating' in the essential sense of the word, because the agency is acting within specified limitations ('standards') established by the Legislature and is not acting in accordance with its own will."
See generally Barr, The Public Arbitration Panel as an Administrative Agency: Can Compulsory Interest Arbitration Be an Acceptable Dispute Resolution Method in the Public Sector?, 39 Albany L Rev 377 (1975); Grodin, Political Aspects of Public Sector Interest Arbitration, 64 Cal L Rev 678 (1976); Howlett, Contract Negotiation Arbitration in the Public Sector, 42 Cincinnati L Rev 47 (1973); McAvoy, Binding Arbitration of Contract Terms: A New Approach to the Resolution of Disputes in the Public Sector, 72 Colum L Rev 1192 (1972); Case Note, The Uncertain Status of Public Sector Labor Arbitration. in Colorado, 48 Colo L Rev 451 (1977); Comment, Salt Lake City v International Ass'n of Firefighters, 1977 Utah L Rev 457; Summers, Public Employee Bargaining: A Political Perspective, 83 Yale L J 1156 (1974).
The express and detailed standards of § 9, MCL 423.239; MSA 17.455(39), applicable to both § 8 and 9 economic as well as non-economic issues, are set out in Part III, B, supra. The instant panel's consideration of those § 9 factors with relation to the issues before it is analyzed in Part V, C and D, infra.
The precision of these standards appears to have been tacitly conceded by the city as it merely attacks the relative weight to be given the § 9 factors rather than their sufficiency. The city's argument in this respect is discussed and rejected in Part V, B, infra.
Justice Williams' opinion began with the premise that "[t]his Court straight-forwardly requires 'sufficient standards so as to obviate any delegation of legislative power' ", Dearborn, supra, 303 (opinion of Williams, J.), and concluded that the pre-amendment scheme provided "legal accountability through sufficient standards of delegation". Id., 323.
Justice Coleman, also upholding the pre-amendatory scheme, similarly found the act's standards sufficient to sanction the delegation: "The final decision of the arbitrator is made pursuant to the adequate guidelines of § 9." Id., 280 (opinion of Coleman, J.).
Justice Levin's opinion likewise found sufficient the adequacy of the act's standards:
"Generally, when legislation is challenged as an invalid delegation of legislative power, the controversy revolves around the adequacy of the standards .
"The challenged act provides generalized standards to guide the exercise of this delegated power are stated [§ 9 reprinted in footnote]; and the decision is subject to judicial review. All that is generally required has been done." Id., 259 (opinion of Levin, J.). Justice Kavanagh, concurring separately with Justice Levin, implicitly agreed with this observation of Justice Levin, "satisfied that he has correctly stated the law". Id., 273 (opinion of T. G. Kavanagh, C.J., concurring with Levin, J.).
See the comments of Justices Coleman, Williams and Levin reprinted in fn 26, supra. It should be emphasized that Justice Levin did not consider this amendment in terms of the standards inquiry.
As discussed in footnote 26, supra, as originally enacted, Act 312 did not provide for last-offer settlement of economic issues. Rather, economic as well as non-economic issues were to be assessed by the § 9 standards alike. The last offer provision of § 8 was introduced into the act by 1972 PA 127. Although that provision was therefore not before this Court in its 1975 consideration of the act, both Justices Coleman and Williams commented favorably on this amendment in dicta, respectively as follows:
"The final decision of the arbitrator is made pursuant to the
adequate guidelines of § 9. The arbitrator resolves the dispute by selecting a bargaining position proposed by a party or by fashioning a compromise position. The arbitrator, acting as an adjunct to the PERA bargaining process, is not at liberty to impose his own solutions or to go beyond the boundaries established by the parties' bargaining positions. The arbitrator's singular duty is to fashion a workable resolution for the dispute in keeping with the limits set by the parties and the dynamics of the particular bargaining situation. Even this limited decision may be appealed to the courts." Dearborn, supra, 280-281 (opinion of Coleman, J.).
" Indeed, the 1972 amendments to Act 312 have made the arbitrator's duty even more circumscribed. When resolving a disputed economic matter the arbitrator must select the 'last best offer' that more closely reflects the guidelines found in § 9
"A subsequent amendment provides a further constraint on the authority of the panel in the requirement to consider only the last offer of settlement made by each party for each economic issue. This also encourages good-faith bargaining by the parties, as it prevents submission of an offer so outlandish as to effectively require acceptance of the other's position. Not only is the panel restricted to accepting or rejecting the last proposal, it must base its determinations on these standards, [§ 9]." Id., 297 (opinion of Williams, J.).
See New Jersey State Policemen's Benevolent Ass'n v Town of Irvington, 80 NJ 271; 403 A2d 473; 102 LRRM 2169 (1979); Arlington v Board of Conciliation & Arbitration, 370 Mass 769; 352 NE2d 914 (1976).
See fn 30, supra.
Amsterdam v Helsby, 37 NY2d 19, 27, 37 fn 4; 371 NYS2d 404; 332 NE2d 290, 293, 299 fn 4 (1975) ("[The Legislature] has also established specific standards which must be followed by such a panel [NY Civil Service Law (McKinney), § 209, subd 4, par (c), cl (v).] [The four §209 standards to be "take(n) into consideration" are enumerated in the concurring opinion, p 37, fn 4.]"); Harney v Russo, 435 Pa 183, 189; 255 A2d 560, 563 (1969) (Despite the lack of other precise standards, the. constitutional mandate that arbitrators act "in accordance with law" was sufficient in view of the legislative policy to protect the public from strikes by municipal police and fire fighters: "To require a more explicit statement of legislative policy in a statute calling for labor arbitration would be sheer folly."); Spokane v Spokane Police Guild, 87 Wash 2d 457, 463; 553 P2d 1316, 1320 (1976); City of Warwick v Warwick Regular Firemen's Ass'n, 106 RI 109, 117-118; 256 A2d 206, 211 (1969) ("The legislature in [RI Gen Laws] § 28-9.1-10 sets out specifically a number of comprehensive limitations on the actions of a board of arbitration when exercising the power delegated. They require that certain factors ' be given weight by the arbitrators in arriving at a decision V '•'). See East Providence v Local 850, International Ass'n of Fire Fighters, 117 RI 329, 333-336; 366 A2d 1151, 1153-1155 (1976); In the Matter of New Jersey Bell Telephone Co v Communications Workers of America, 5 NJ 354, 370-372; 75 A2d 721, 728-730 (1950); New Jersey State Policemen's Benevolent Ass'n v Town of Irvington, 80 NJ 271, 291-292; 403 A2d 473, 480-481; 102 LRRM 2169, 2174-2175 (1979). See generally Anno, 68 ALR3d 885, 902-908.
Division 540, Amalgamated Transit Union v Mercer County Improvement Authority, 76 NJ 245, 252; 386 A2d 1290, 1294 (1978) (The Court implied the "inherent" standards that the arbitrators must: act within the scope of statutory authority; consider the public interest as well as the decision's impact; act fairly and reasonably to stabilize and promote labor peace; and, make adequate and sufficient findings.); Richfield v Local No 1215, International Ass'n of Fire Fighters, 276 NW2d 42, 46-47 (Minn, 1979) (Sufficient standards provided although the only specific guideline was found in the act's provision that arbitration panel must give "due consideration to the statutory rights and obligations of public employers to officially manage and conduct its operations within the legal limitations surrounding the financing of such operations".) See Biddeford v Biddeford Teachers Ass'n, 304 A2d 387, 402, 412 (Me, 1973). Fire Fighters Union, Local 1186 v Vallejo, 12 Cal 3d 608, 613, fn 3; 526 P2d 971, 974, fn 3; 116 Cal Rptr 507 (1974). See generally Anno: 68 ALR3d 885.
Medford Fire Fighters Ass'n v Medford, 40 Or App 519, — fn 9; 595 P2d 1268, 1272 fn 9 (1979); Arlington v Board of Conciliation & Arbitration, 370 Mass 769, 775 fn 5; 352 NE2d 914, 919 fn 5 (1976). See City of Warwick v Warwick Regular Firemen's Ass'n, 106 RI 109, 117-118; 256 A2d 206, 211 (1969).
Although the Connecticut Superior Court in Town of Berlin v Santaguida, 98 LRRM 3259, 3265 (Conn Superior Court, 1978), ruled the state's act unconstitutional on the grounds that it failed to provide either sufficient standards or judicial review and evidenced insufficient political accountability, the court had this to say with respect to the standards issue:
"The standards contained in the act, which are too imprecise to properly guide an arbitration panel in its decision-making, give arbitrators unbridled flexibility and will facilitate, rather than guard against arbitrary action by arbitration panels. When the standards set forth in the act are compared to the more precise standards included in similar arbitration statutes in other jurisdictions, the inadequacy of the act's standards is even more striking. See [Mass Ann Laws, ch 150E, § 9, note; MCL 423.239; MSA 17.455(39); NY Civil Service Law (McKinney), § 209, subd 4, par (c), cl (v); RI Gen Laws, § 28-9.1-10]."
Justice Levin concentrated his efforts on whether the scheme violated "[t]he constitutional principle restricting the delegation of legislative power to resolve a labor dispute to persons other than government officials or tribunals" enlisted as members of an arbitral panel pursuant to the procedures of pre-amendment § 4— delegate selection — and § 5 — chairperson selection. Dearborn, supra, 246 (opinion of Levin, J.). Primarily utilizing Professor Davis' "safeguards" approach to legislative delegation, and after finding the § 9 standards adequate, Justice Levin generally ruled the scheme unconstitutional but appended the following instructive caveat:
"To avoid possible misunderstanding, we add that our holding does not preclude the Legislature from vesting the authority to resolve disputes concerning public employees in a governmental officer or agency with continuing responsibility for the day-to-day exercise of that delegated power. Such a decision-maker (arbitrator) would not be 'expendable' but, rather, would be responsible through the appointing authority to the electorate for the manner in which the delegated power is exercised." Id., 272.
Justice Kavanagh concurred with Justice Levin but wrote separately to amplify Justice Levin's caveat:
"Although the present law's provision for hit-and-run arbitrators is constitutionally defective, a law providing for a continuing politically responsible arbitrator could meet the constitution's demands." Id., 273. (T. G. Kavanagh, C.J., concurring with Levin, J.).
Dearborn, supra, 241-242 (opinion of Levin, J.), 273 (opinion of T. G. Kavanagh, C.J., concurring with Levin, J.).
Dearborn, supra, 325 (opinion of Williams, J.).
Dearborn, supra, 321-323 (opinion of Williams, J.), 287-289 (opinion of Coleman, J.) (The pre-amended act is a "balanced, reasonable and fair implementation of a constitutional directive", id, 284, in reaction to which "[o]ur legislators balanced the competing interests with admirable skill", id, 287).
See fn 1, supra, and accompanying text.
Justice Coleman commented on the pre-amendment tenure of panel members in the following terms:
"Although the Legislature could have established another bureaucracy, it chose short-term panels to meet impasses immediately — no matter how many or where they might occur simultaneously. The duties do not require office work outside of th§ immediate arbitration activity, so a permanent staff could prove costly and unnecessary or inadequate. (There could be many or no impasses within a given span of time.) The Legislature also could have believed bias and corruption less likely to settle into these panels." Dearborn, supra, 285 (opinion of Coleman, J.).
Zemetis, Compulsory Binding Arbitration for Municipal Employees in Connecticut: Constitutional? Town of Berlin v Santaguida, 11 Conn L Rev 583, 592-593 (1979). See Richfield v Local No 1215, International Ass'n of Fire Fighters, 276 NW2d 42, 47 (Minn, 1979).
See fns 31 and 49, supra.
See City of Warwick v Warwick Regular Firemen's Ass'n, 106 RI 109, 114-115; 256 A2d 206, 209 (1969)..
See fn 49, supra.
MCL 423.3; MSA 17.454(3); MCL 423.4; MSA 17.454(4).
The city contends, in part, that exercise of the § 5 peremptory strike of each § 4 delegate against the MERC nominees is no more than a hollow contrivance aimed at sustaining the impression that the alleged accountability deficiencies of the original scheme have been eradicated without materially altering the chairperson selection mechanism.
Any time MERC submits three names to the delegates, it is representing that it is satisfied that any one of the nominees would be qualified to arbitrate that particular contract dispute. Even if, as the city suggests, in certain instances the delegates will eliminate two of the three nominees, thereby leaving MERC with the Hobson's choice of selecting the only remaining nominee, the MERC will have nonetheless initially selected who will be on the MERC permanent panel as well as which three of those panelists will be offered as nominees to the delegates. The decision as to which panelist will be enlisted to serve as chairperson, as well as which will be selected as a nominee, will always be made by MERC in the final instance, thereby rendering both MERC and, derivatively, the Governor, accountable for the manner in which the chairperson discharges his or her duties.
Similar mechanisms for the selection of arbitration panel members have been upheld in Richfield v Local No 1215, International Ass'n of Fire Fighters, 276 NW2d 42, 44-45 (Minn, 1979), and Arlington v Board of Conciliation & Arbitration, 370 Mass 769; 352 NE2d 914 (1976) (construing a provision similar to pre-amendment § 5 of Act 312).
The majority of decisions from other jurisdictions have rejected the "unaccountability" argument, generally treating such attacks as directed more "to the wisdom rather than the constitutional permissibility of the delegation of authority to an arbitrator to formulate a binding public employment agreement". Medford Fire Fighters Ass'n v Medford, 40 Or App 519, —; 595 P2d 1268, 1271 (1979).
In Richfield v Local No 1215, International Ass'n of Fire Fighters, 276 NW2d 42, 47 (Minn, 1979), the Minnesota Supreme Court offered the following insightful analysis in finding sufficient accountability:
"It is also insisted that the arbitrators are not accountable to the electorate with respect to decisions that involve fundamental determinations of public policy.
"There is also a pragmatic reason for the legislature's removal of the arbitrators from the immediate pressures of public opinion. The arbitrators' position is inherently one of trust; the parties must feel confident that the panel will listen to their positions, weigh the evidence, consider the panel's statutory obligations, and come to a reasonable decision. The legislature may well have believed that exposing the arbitrators to more direct public input would influence the panels and undermine the effort to prevent work stoppages."
Likewise, in Medford, supra, —, the Oregon Court of Appeals provided the following treatment to find the act constitutional:
"As to the City's contention that the arbitrator is neither elected nor otherwise politically responsible, we observe that an arbitrator appointed by ERB to carry out specified statutory functions acts in a public capacity. He is not to have a personal interest in the subject of the arbitration; therefore, this case is not analogous to cases in which the Supreme Court held unconstitutional statutes which delegated price-setting powers to interested private parties. [Citations omitted.] The arbitrator's decision is governed by the statutory criteria in [Or Rev Stat, § ] 243.746(4), set out above. The delegation of authority to the arbitrator does not create any substantial danger that his decision will be based on private interest." (Footnotes omitted.)
The Massachusetts Supreme Court in Arlington v Board of Conciliation & Arbitration, 370 Mass 769, 779-780; 352 NE2d 914, 921-922 (1976), stated:
"Furthermore, the town vigorously argues that this particular scheme, in that it imposes a decision of 'politically unaccountable' arbitrators against the wishes of popularly elected local goverment officials, is not consonant with the proper 'exercise of political power in a representative democracy.' While we do not question the respectability of the political philosophy articulated or the apparent sincerity with which it, is expressed, the town fails to give this argument constitutional content."
The New Jersey Supreme Court in Division 540, Amalgamated Transit Union v Mercer County Improvement Authority, 76 NJ 245, 251; 386 A2d 1290, 1293 (1978), reviewed the authorities and concluded that "most of the cases that have dealt with the question [of alleged unlawful delegation of public authority and responsibility to a private person(s)] have sustained the concept as an innovative way to avoid the morass of deadlocked labor disputes in the public sector".
Although the city relies on case law from other jurisdictions holding compulsory arbitration acts unconstitutional, those decisions are clearly distinguishable from the instant matter.
Sioux Falls v Sioux Falls Fire Fighters, Local 814, 89 SD 455; 234 NW2d 35 (1975), is cited as holding unconstitutional, as an unlawful delegation, a similar compulsory arbitration statute. The Court, however, expressly distinguished its constitutional provisions from Michigan's as well as from other states':
"The defendants urge this court to accept the reasoning of either the Michigan or Rhode Island courts upholding binding arbitration. The distinction between those decisions and our own in this case lies not only in the history of our constitutional provision but also on differing constitutional provisions.
"Michigan, as does Pennsylvania, has a speciñc constitutional provision which governs. [Const 1963, art 4, § 48. Dearborn Fire Fighters Union Local No 412 v Dearborn, 42 Mich App 51; 201 NW2d 650 (1972)]. Rhode Island, on the other hand, had no provision in its constitution of like import as our Article III, § 26 to confront the court. City of Warwick v Warwick Regular Firemen's Ass'n, [106 RI 109; 256 A2d 206 (1969)]." 89 SD 460 (emphasis supplied).
The city also relies on Greeley Police Union v City Council of Greeley, 191 Colo 419; 553 P2d 790 (1976), in which the Colorado Supreme Court disapproved a proposed city charter amendment authorizing binding arbitration. Colorado's constitution also contained the same non-delegation constitutional provision as did South Dakota's; the Colorado Court expressly relied on the Sioux Falls decision; the Colorado Court merely extended its policy of disapproving any public-sector arbitration, even grievance arbitration, as contrary to public policy unlike the Michigan policy; and, the disputed charter amendment would have provided for the selection of the arbitrator by the parties alone. The decision in Bagley v Manhattan Beach, 18 Cal 3d 22, 24-25; 553 P2d 1140; 132 Cal Rptr 668; 93 LRRM 2435 (1976), is also clearly distinguishable because that legislation did not permit the city to fix salaries by arbitration.
Although the Utah Supreme Court in Salt Lake City v International Ass'n of Fire Fighters, 563 P2d 786, 789 (Utah, 1977), declared its arbitration statute unconstitutional, the statute provided no standards, procedures or opportunity for judicial review. The Utah scheme clearly differs from Act 312.
Finally, the trial court decision in Town of Berlin v Santaguida, 98 LRRM 3259 (Conn Superior Court, 1978), is equally ofno persuasiveness. There, the court found a similar scheme invalid as providing no standards whatever. In fact, the court expressly contrasted that deficiency with the ample standards of Michigan, Massachusetts and various other states. See fn 42, supra. The Connecticut statute similarly was wanting in any judicial review. The Connecticut legislature has since responded by amending the statute to include provisions similar to those contained in Michigan's current law.
The decisions on which appellant relies have been roundly criticized. Case Note, The Uncertain Status of Public Sector Labor Arbitration in Colorado: Greeley Police Union v City Council, 48 Colo L Rev 451 (1977); Zemetis, Compulsory Binding Arbitration for Municipal Employees in Connecticut: Constitutional? Town of Berlin v Santaguida, 11 Conn L Rev 583 (1979); Comment, Salt Lake City v International Ass'n of Firelighters: A Responsive Analysis and Proposal for Public Sector Bargaining in Utah, 1977 Utah L Rev 457.
Dearborn, supra, 316, 323 (opinion of Williams, J.):
"If we push through the thicket of language which has grown up around this issue, we find what we are all really concerned about is not what the Legislature can or cannot give away, and what the circumstances of such donations should be, but rather, what the people can or cannot give away. What the people cannot give away seems to be public responsibility and accountability in the management of its business, whatever the managers .are called."
An authority on public sector collective bargaining and interest arbitration, Arvid Anderson, has written in a thoughtful law review article that the "political process" argument is "faulty":
"A frequently heard objection to interest arbitration in the public sector is that it removes from elected officials the ultimate power to fix wages and other terms and conditions of employment and thus constitutes a 'threat to the ability of elected officials to continue to set public policy priorities for use of public funds
"[T]he decision of the panel is not purely political, for the panel's award must adhere to the statutory standards, and be within the lawful scope of bargaining and is subject to judicial review. The existence of judicial review does not mean that it will always be utilized, nor that the judges will find themselves compelled to decide terms and conditions of employment for public employees. If past experience is taken as a guide, the majority of arbitration awards will be confirmed by the courts, and any awards that are found to be contrary to law will be sent back for a further arbitration proceeding." Anderson, MacDonald & O'Reilly, Impasse Resolution in Public Sector Collective Bargaining — An Examination of Compulsory Interest Arbitration in New York, 51 St John's L Rev 453, 512-513 (1977).
A second answer to the general contention that compulsory arbitration procedures in the public sector under laws like Act 312 are inimical to the concepts of representative government is found in the writings of Dr. Charles Rehmus of the University of Michigan, Co-Chairman of the Institute of Labor and Industrial Relations of the University of Michigan and Wayne State University, and currently Chairperson of MERC. In a paper on Legislated Interest Arbitration to the 27th Annual Winter meeting of the Industrial Relations Research Association (1974), Dr. Rehmus stated:
"Answers to such questions must in part be philosophical and in part practical. Rampant disregard of antistrike laws also erodes the foundations of government. If binding arbitration is necessary and sufficient to forestall illegal strikes, it too strengthens our democratic system.
"Secondly, it is not at all clear that binding arbitration awards invariably represent an imposition of terms to which the parties themselves are unalterably opposed. Nearly two-thirds of the arbitration awards rendered by tripartite panels thus far in Michigan have been unanimous, and a national survey of American Arbitration Association cases shows the same. Although some fear that arbitrators will impose unworkable or unreasonable contract terms on bargaining parties, experience to date is proving that arbitration has not resulted in a large number of third-party determinations imposed without regard to the needs or wishes of the parties." Rehmus, Legislated Interest Arbitration, Proceedings of the 27th Annual Winter Meeting of the Industrial Relations Research Association (December 28-29, 1974), pp 307, 308-309.
As noted by Professor Joseph R. Grodin in Grodin, Political Aspects of Public Sector Interest Arbitration, 64 Cal L Rev 678, 693 (1976):
"An attempt to make arbitrators more politically responsible by electing them, or by having them appointed by elected officials to serve on a continuing basis, poses a difficult dilemma. The problem of political responsibility arises initially from the fact that arbitrators may be called upon to determine policy issues otherwise subject to the local legislative process. But if the arbitrator is made politically responsible to the local electorate, which is in effect a party to the dispute, then arbitration loses its neutral character; and to the extent that the arbitrator's constituency is the same as that of the legislative body that would otherwise exercise authority over the policy questions posed, the process becomes redundant."
See City of Warwick v Warwick Regular Firemen's Ass'n, 106 RI 109, 117-118; 256 A2d 206, 211 (1969).
See fn 27, supra.
See fn 28, supra.
See fn 28, supra.
See Britton, Judicial Review and Enforcement of the Arbitration Award, 16 Trial (No. 3) 22, 24-25 (March, 1980).
Amsterdam v Helsby, 37 NY2d 19, 38-39; 371 NYS2d 404; 332 NE2d 290, 300-301 (1975) (by judicial interpretation); Division 540, Amalgamated Transit Union v Mercer County Improvement Authority, 76 NJ 245, 253-254; 386 A2d 1290, 1294 (1978) (by judicial interpretation); Medford Fire Fighters Ass'n v Medford, 40 Or App 519, — fn 1, —; 595 P2d 1268, 1269-1270 fn 1, 1272 (1979); Richfield v Local No 1215, International Ass'n of Fire Fighters, 276 NW2d 42, 47 (Minn, 1979); Spokane v Spokane Police Guild, 87 Wash 2d 457, 463; 553 P2d 1316, 1319-1320 (1976). Even in those cases where similar statutory schemes were ruled unconstitutional, the necessity for judicial review was expressed. Town of Berlin v Santaguida, 98 LRRM 3259, 3265 (Conn Superior Court, 1978) (no provision for judicial review); Salt Lake City v International Ass'n of Firefighters, 563 P2d 786, 789 (Utah, 1977) (no provision for judicial review).
Our review of the interrelationship between Act 312's sections requires us to overrule that part of Alpena v Alpena Fire Fighters Ass'n, AFL-CIO, 56 Mich App 568, 571-572; 224 NW2d 672 (1974), which held that failure to base an arbitral award on the applicable § 9 factors was not reviewable under § 12 of the act, but rather was reviewable under the constitutional requirement of due process.
The city actually proposed a two-plan alternative in their last offer. In the first plan the city offered no COLA, but offered wage increases of 4.8%, 4% and 4% in each of the three years of the contract. The city's second plan offered a settlement identical to that reached by the city and the American Federation of State, County, and Municipal Employees (AFSCME) after a short strike. Although the second alternative plan did provide for some COLA, it was less advantageous to the DPOA than the COLA under its prior contract. For example, the city's COLA offering in plan 2 required a greater increase in the consumer price index to trigger a cost of living allowance, provided no roll-in of COLA payments into base wage rates and provided no benefit from consumer price index increases above the "cap".
On the city's petition for judicial review of the October 18, 1978 LSA award as to wages, COLA and sick leave, the circuit court remanded the award to the arbitration panel on December 18, 1978 for supplemental findings of fact on wages and COLA, and directed the panel to adopt the last offer of one of the parties concerning the economic aspect of sick leave. On February 20, 1979 the circuit court upheld the arbitration panel's January 24, 1979 supplemental decision which reaffirmed its earlier decision adopting the LSA's last offer with respect to wages and COLA. Detroit v Detroit Police Lieutenants & Sergeants Ass'n (Wayne Circuit Court, Docket No. 78-836-638-AV, February 20, 1979) (order of affirmance). The circuit court's order of enforcement of the award was stayed by the Court of Appeals, until completion of the appeals process, only as to the retroactive period between July 1, 1977 and January 24, 1979. In an unpublished per curiam dated October 19, 1979, the Court of Appeals affirmed the circuit court's decision upholding the arbitration panel's award. (Mich App Docket No. 44095, October 19, 1979) (affirmance of trial court). The city appealed this decision to us on November 8, 1979 and we held the case in abeyance by order of February 7, 1980 pending the resolution of the instant case (Docket No. 64065).
The LSA award was placed into evidence as DPOA Exhibit 56.
The city's brief recognizes that the trial court noted in its opinion that the city failed to provide the budget to show how expenditures were made. The city did introduce a post-award affidavit of the city's budget director which tends to show, in a general way, that enforcement of the panel's award would have a detrimental effect on the city's public services. However, this affidavit is inadmissible for purposes of judicial review of the award since it was not before the arbitration panel at the time it rendered its award. See also the comments of the trial judge on the limited value of this affidavit.
Taking into account all of the terms and conditions of the city's alternate wage plan set out in fn 66 supra, the total benefits to the DPOA under this alternate plan, including COLA, would also amount, approximately, to wage increases of 4.8%, 4%, and 4% over the three-year life of the labor contract.
Alpena v Alpena Fire Fighters Ass'n, AFL-CIO, 56 Mich App 568; 224 NW2d 672 (1974), is overruled insofar as it held that an Act 312 arbitration panel need not consider a particular factor simply because the parties have failed to present evidence on it. Id., 573.
The failure to introduce comparability evidence on residency is patently different from either the city's decision not to introduce its budget, discussed supra, p 488, or the chairman's exclusion of City's Exhibit 30, discussed supra, p 493. The present situation involves the total failure of either party to introduce any evidence whatsoever on the applicable fourth factor, with the consequences that the panel was unable to consider a factor which the Legislature has deemed relevant in making an Act 312 award. In contradistinction to this total lack of evidence, the city's budget and Exhibit 30 would merely have been pieces of evidence in addition to others which were introduced relating to its ability to pay under the third factor. These omissions from evidence, therefore, did not serve to deprive the panel of the ability to consider the applicable third factor.
Since we have disallowed the panel's residency hardship exemption award favorable to the DPOA, there is no need to respond to the city's contention that the panel's hardship exemption award, as promulgated on May 21, 1979 in a supplemental opinion and award, is invalid because the panel lacked the jurisdiction to unilaterally alter its original December 20, 1978 award with which the city claims it had complied.
It has long been established that the question of interest in Michigan is purely statutory. Solakis v Roberts, 395 Mich 13, 19, fn 2; 233 NW2d 1 (1975).
The city's contention that the wages and COLA portions of the award are unsupported rests upon its claims that: (1) no record evidence supports the chairman's statement that failure to award the DPOA the same COLA awarded police lieutenants and sergeants would engender "despair, frustration and indeed, hostility" in day-today police operations; (2) the panel's failure to give equal consideration to all decisional criteria provided by the legislature violated the act's design and hence the award was not "authorized by law", and cannot survive review under Const 1963, art 6, § 28, which the city urges as the applicable standard.
Dearborn Fire Fighters v Dearborn, supra, pp 241-242 (Levin, J.).