Opinion ID: 1378445
Heading Depth: 1
Heading Rank: 2

Heading: state pre-eminence in substantive legislation

Text: The parties have properly framed their arguments under the principles expressed by this court in LaGrande/Astoria v. PERB, supra . There, this court held in essence that the home rule amendments grant pre-eminence to local governments in matters of local political organization and that the legislature remains pre-eminent in matters of substantive law. Accordingly, we sustained the constitutionality of a statute requiring municipal firemen and police officers to be brought within the statewide, state-administered Public Employees Retirement System unless the municipal employer provided them with an equal or better retirement program. It is undisputed that it is within both the plenary authority of the state and the charter or statutory authority of Roseburg to enact legislation regulating public employment relations of local government. Roseburg agrees that PECBA, standing alone, would be constitutional even under the home rule amendments. The problem in this case is not posed by the existence of overlapping authority. Rather, as Roseburg frames the argument, this case involves a conflict in the exercise of overlapping authority and the issue is one of predominance. Roseburg acknowledges, as we held in LaGrande/Astoria, that state legislation controls unless it is limited by the constitution, but contends that under the home rule amendments, the municipal legislation predominates. But see, LaGrande/Astoria v. PERB, 281 Or. at 151, n 21, 576 P.2d 1204. We summarized the purpose of the home rule amendments in LaGrande/Astoria v. PERB :    [T]hese constitutional provisions are concerned with the structural and organizational arrangements for the exercise of local self-government, with the power of local voters to enact and amend their own municipal charters and to employ the initiative and referendum for `local, special [or] municipal legislation.' They address the manner in which governmental power is granted and exercised, not the concrete uses to which it is put.   . 281 Or. at 142-143, 576 P.2d 1204. We concluded that for purposes of home rule analysis, there are two types of statutes: those which regulate the organization of local government and those which deal with substantive state policy and affect local government. Each type has certain constitutional prerequisites. We described the first type of statute and the applicable constitutional limitations as follows: When a statute is addressed to a concern of the state with the structure and procedures of local agencies, the statute impinges on the powers reserved by the amendments to the citizens of local communities. Such a state concern must be justified by a need to safeguard the interests of persons or entities affected by the procedures of local government. 281 Or. at 156, 576 P.2d 1204. This statement is not applicable to this case because PECBA is not addressed to the structure and procedures of local agencies. The dissent contends that these are the dispositive principles from LaGrande/Astoria because PECBA requires procedures of local government. We will discuss that contention below. We also stated the principles by which the validity of state legislation regarding substantive objectives is to be determined when it conflicts with local legislation addressed to similar objectives: Conversely, a general law addressed primarily to substantive social, economic, or other regulatory objectives of the state prevails over contrary policies preferred by some local governments if it is clearly intended to do so, unless the law is shown to be irreconcilable with the local community's freedom to choose its own political form. In that case, such a state law must yield in those particulars necessary to preserve that freedom of local organization. (Footnote omitted.) 281 Or. at 156, 576 P.2d 1204. The ideas in this paragraph control this case. The dominant character of PECBA is that of a general law addressed primarily to social, economic and other regulatory objectives of the state. As the public employment retirement statutes which we upheld in LaGrande/Astoria v. PERB, supra , sought to protect the economic welfare of public employees after retirement, PECBA is intended to protect their economic welfare during their employment and to provide a means for them to affect certain negotiable working conditions. Another policy served by PECBA is to protect public safety by the substantive device of prohibiting strikes of public safety employees. The substantive goal of that ban is prevention of interruption in the provision of essential government services. The class of persons to be benefited by this policy extends beyond the population of any city. PECBA is expressly premised upon a legislative determination that the people of the state have an interest in public employment relations at both the state and local levels of government. ORS 243.656, a policy statement for the Act, states: The Legislative Assembly finds and declares that: (1) The people of this state have a fundamental interest in the development of harmonious and cooperative relationships between government and its employes;     . (4) The state has a basic obligation to protect the public by attempting to assure the orderly and uninterrupted operations and functions of government  . As in LaGrande/Astoria v. PERB, supra , the people and interests affected by the maintenance of municipal public safety services are not necessarily defined by reference to city boundaries:    [C]ity police officers and firemen are sometimes assigned duties beyond their cities, but this is hardly needed to demonstrate a state concern. Large complexes of state buildings and state personnel such as college campuses, and indeed the state Capitol, executive offices, and this court, depend on the quality of police and fire protection within city limits, and thousands of persons who frequent city streets and business districts every day are not city residents.   . 281 Or. at 154, 576 P.2d 1204. The method chosen for achieving these policies of protecting the interests of both the employees and of the public is the promotion of harmonious relations between labor and management in the public sector by imposition of a state-administered system of collective bargaining resembling in part that which regulates private employment. One difference between public and private employment regulation is in the treatment of employees engaged in providing public safety services. Instead of allowing the economics of a free labor market or of labor-management confrontation to control, as it might have, the legislature has provided arbitration as a quid pro quo for the prohibition of strikes by firemen and other public safety employees. Indeed, a city may not choose to allow a strike to occur as a labor-management tactic. Together, these statutes are intended to assure the public within and without each municipality of a continuity of certain essential governmental services while also recognizing the obligation of government and its employees to engage in collective bargaining. Clearly, these social and economic objectives are the primary purpose of PECBA. Local governments may prefer other policies or may prefer other means of achieving these policies, but the legislature, by enacting PECBA, has made that substantive decision as a matter of state law. As substantive legislation, state law prevails unless it unlawfully interferes with the structure of local government. PECBA does not deal with the structure of local government. Understanding of the distinction between legislated organization of local government and legislated organization of state government which affects local government may be aided by consideration of these hypothetical statutes: 1. A statute requires that cities provide workers' compensation for all municipal employees and establish municipal workers' compensation boards to administer the programs, adopt compensation schedules and adjudicate unsettled claims. 2. A statute requires that cities and city employees are covered by the state workers' compensation program and all unsettled claims are to be adjudicated by the state Workers' Compensation Board under compensation schedules adopted by it. Both examples involve governmental structure. Both involve decisional procedures in which the city must participate. Both involve decisions which affect the conduct of municipal business. They are, however, different. The first involves structure (a mandated municipal agency) and procedures (adoption of compensation schedules and adjudication of claims) of local government. The latter involves structure and procedures of state government. A decision under the first statute would be an exercise of municipal authority by a municipal agency. Under LaGrande/Astoria, the statute would therefore be reviewed as one which is addressed to a concern of the state with the structure and procedures of local agencies. A decision under the second statute would be an exercise of state power by a state agency. That statute would be examined under LaGrande/Astoria as a substantive statute for irreconcilability with the local community's freedom to choose its own political form. The dissent, although purporting to argue consistently with LaGrande/Astoria, fails to grasp that distinction, as if all procedural statutes were the same. Hence, much of the reasoning of the dissent simply is not in point. PECBA was enacted for social and economic objectives. Its resort to arbitration as a device to achieve those objectives is not irreconcilable with the local community's freedom to choose its own political form. 281 Or. at 156, 576 P.2d 1204. If the state legislation had required local government to resolve its labor disputes by means of specified local governmental agencies or procedures such as a Municipal Employment Relations Board, then PECBA would be open to challenge under the precedent of State ex rel. Heinig v. Milwaukie et al, 231 Or. 473, 373 P.2d 680 (1962). There, a statute required local governments to establish civil service commissions to control municipal employment relations of firemen. We held that because municipal interest in the organization of fire suppression was greater than the state's, the statute offended the principles of home rule. Like the Heinig legislation, PECBA establishes state policy. Unlike the Heinig statute, however, PECBA requires no local agencies. Rather, it assigns political responsibility for administration and decision making to an agency of the state. An ultimate decision under PECBA is made by a process of arbitration provided and conducted by ERB, an agency of the state. Arbitration is afforded by the state as part of a comprehensive statutory scheme by which ERB oversees and administers the entire process of public employment collective bargaining from initial certification through arbitration to contract compliance and unfair labor practice resolution. The statute does not specify a line of authority for the arbitrator, but assumes that the arbitrator works on behalf of the state in the implementation of state policy. Indeed, that assumption is so clearly implicit in the statutes that Roseburg, in its petition, complains of the statutory allocation of decisional power to a state arbitrator to decide employee questions in a manner contrary to the power allocated in the charter to the city manager and council. (Our emphasis.) Roseburg has phrased it correctly: the conflict is between a statute assigning ultimate authority to a state agency and a charter which assigns it to local government. According to the policy statement of ORS 243.742(1), the state is the governmental entity which affords arbitration: It is the public policy of the State of Oregon that where the right of employes to strike is by law prohibited, it is requisite to the high morale of such employes and the efficient operation of such departments to afford an alternate, expeditious, effective and binding procedure for the resolution of labor disputes   . The parties may contract for private arbitration of disputes, ORS 243.706 and 243.762, but if they do not, then after mediation and fact finding (also state administered, ORS 243.712 and 243.722), the parties shall petition the board to initiate binding arbitration or the board may do so on its own motion. ORS 243.742(2). In either event, ERB is the initiating party. The parties may agree on an arbitrator. If not, arbitrators are nominated by ERB and the parties may strike certain of them. The remaining ERB nominee is designated as the arbitrator. ORS 243.746. Arguably, the arbitrator is an independent decision maker in the sense that a coin tossed to decide a dispute is neutral or unaccountable. Clearly, however, it is the state's coin and the state's toss. State law specifies the factors upon which the decision must be based. ORS 243.746(4) provides: 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 interest 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 other employes performing similar services and with other employes generally: (A) In public employment in comparable communities. (B) 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 employes, 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, factfinding, arbitration or otherwise between the parties, in the public service or in private service. The arbitrator's decision is subject to judicial review for conformity to the requirements of state law on the petition of ERB or the parties, ORS 243.752. The members of ERB are appointed by the governor, ORS 240.065. If ERB and ERB's assigned arbitrators do their job unsatisfactorily, the governor is politically accountable to the electorate. PECBA makes no organic change to the political form of local government. The Common Council, budget committee, and executive agencies of Roseburg and the allocation of responsibility among them are unaffected by the statute. On its face, PECBA does not subject any matters of local governmental organization to negotiation, cf., LaGrande/Astoria v. PERB, 281 Or. at 156, n 31, 576 P.2d 1204. It provides generally for collective bargaining only regarding employment relations. That term is defined at ORS 243.650 and the definition refers to no issues of local government organization. (7) `Employment relations' includes, but is not limited to, matters concerning direct or indirect monetary benefits, hours, vacations, sick leave, grievance procedures and other conditions of employment. In summary, the authority of a city to make a particular decision of state concern is transferred to the state, but the political forms and procedures by which a city decides matters which remain within its legislative purview are unchanged. PECBA provides for certain decision-making arrangements at the state level as an implementive device for its primary substantive objectives of the state. Although the assumption by the state of decision-making authority affects the affairs of local government in certain ways, it does not mandate structural and organizational arrangements of local government contrary to Article XI, section 2. Therefore, we conclude, in the language of LaGrande/Astoria, that PECBA is a general law addressed primarily to substantive social, economic and other objectives of the state which does not affect the local community's freedom to choose its own political form. The dissent is a strong and able presentation of views which have much historical force. However, the dissent analyzes the application of the home rule amendments to PECBA in a way which reflects a misconception of our holding in LaGrande/Astoria. The dissent argues laboriously to prove a point which is not disputed: arbitration is a procedure. The first quoted statement from LaGrande/Astoria, upon which the dissent relies, does not refer to all statutes involving procedures, but only to those involving procedures of local agencies. For convenience, we repeat the quotation: When a statute is addressed to a concern of the state with the structure and procedures of local agencies, the statute impinges on the powers reserved by the amendments to the citizens of local communities. Such a state concern must be justified by a need to safeguard the interests of persons or entities affected by the procedures of local government. (Emphasis added.) 281 Or. at 156, 576 P.2d 1204. This case involves structure and procedures of state government, not local government. We elaborated on this point in our discussion above wherein we concluded that PECBA is not irreconcilable with the local community's freedom to choose its political form. Hence, the quotation upon which the dissent relies is not dispositive. Nevertheless, it is arguable that compelled collective bargaining, culminating in arbitration, can be regarded as a decisional procedure in which local government is required to participate and hence should be considered a procedure of local government. Were we to accept that contention and apply the quoted holding of LaGrande/Astoria, our conclusion would be the same. The next inquiry to make under LaGrande/Astoria would be whether the state concern is justified by a need to safeguard the interests of persons or entities affected by the procedures of state government. Clearly it is. The interest of employees in organization for the purpose of collectively affecting their working conditions and compensation has long been a major force in American economic, social and political history. At least since the Great Depression and the New Deal, the general recognition of the interest of laboring people in effective collective activity has been reflected by law which protects that interest to various extent. Not to belabor the obvious, it is sufficient to say that the interest of working people in organizing to act collectively, including by collectively refusing to work as an economic tactic, has become a fact of American life. The approach of modern labor legislation has been to recognize that interest subject to exceptions in the public interest, and to regulate it with the objective of avoiding labor strife. In 1933, the Oregon legislature recognized the interest of laboring people in organizing for their common welfare. It did so in terms which left no question as to the importance of the interest and, although statutes regulating labor disputes have been modified over the years, the declaration of public policy in ORS 662.020 remains unchanged since its adoption in 1933:    [T]he public policy of Oregon is declared as follows: Whereas under prevailing economic conditions, developed with the aid of governmental authority for owners of property to organize in a corporate and other forms of ownership association, the individual unorganized worker is commonly helpless to exercise actual liberty of contract and to protect his freedom of labor and thereby to obtain acceptable terms and conditions of employment, wherefor, though he should be free to decline to associate with his fellows, it is necessary that he have full freedom of association, self-organization and designation of representatives of his own choosing to negotiate the terms and conditions of his employment and that he shall be free from the interference, restraint or coercion of employers of labor, or their agents, in the designation of such representatives or in self-organization or in other concerted activities for the purpose of collective bargaining or other mutual aid or protection   . See Or. Laws 1933, ch. 355; cf. National Labor Relations Act, 29 U.S.C. § 151. Whether or how to safeguard in public employment the interests of labor which are protected in private employment is a political question for the legislature and PECBA is the legislative determination of that issue in Oregon. The PECBA begins with a policy statement (parts of which were set out above) which recognizes that this interest of the persons and entities affected by PECBA in collective action exists in public as well as private employment, but that there are important public interests as well. ORS 243.656(2), (3) and (5) expresses this policy: (2) Recognition by public employers of the right of public employes to organize and full acceptance of the principle and procedure of collective negotiation between public employers and public employe organizations can alleviate various forms of strife and unrest. Experience in the private and public sectors of our economy has proved that unresolved disputes in the public service are injurious to the public, the governmental agencies, and public employes; (3) Experience in private and public employment has also proved that protection by law of the right of employes to organize and negotiate collectively safeguards employes and the public from injury, impairment and interruptions of necessary services, and removes certain recognized sources of strife and unrest, by encouraging practices fundamental to the peaceful adjustment of disputes arising out of differences as to wages, hours, terms and other working conditions, and by establishing greater equality of bargaining power between public employers and public employes;       (5) It is the purpose of ORS 243.650 to 243.782 to obligate public employers, public employes and their representatives to enter into collective negotiations with willingness to resolve grievances and disputes relating to employment relations and to enter into written and signed contracts evidencing agreements resulting from such negotiations. It is also the purpose of ORS 243.650 to 243.782 to promote the improvement of employer-employe relations within the various public employers by providing a uniform basis for recognizing the right of public employes to join organizations of their own choice, and to be represented by such organizations in their employment relations with public employers. These legislative statements of the policy of the PECBA express a legislative determination, in the words of LaGrande/Astoria, of the existence of a need to safeguard the interests of public employees in procedures which affect them. PECBA restricts those interests by denying to specified public safety employees the right to strike, regardless of whether their local employers would choose to deny that right. It then safeguards the interests of those employees by providing a substitute protection in the form of binding arbitration. We are not able to say that there is no reasonable basis for legislative action. [2] Therefore, even if the dissent were correct that PECBA should be deemed legislation addressed to the procedures of local government, it meets the LaGrande/Astoria test for validity of such legislation because it is justified by a need to safeguard the interests of affected persons in those processes.