Opinion ID: 1733268
Heading Depth: 1
Heading Rank: 3

Heading: Contract Coverage.

Text: The hearing officer's ruling, adopted by the board, followed the dissenting position in Federal-Mogul Corp., 209 N.L.R.B. 343, 85 L.R.R.M. (BNA) 1353 (1974). That decision brings into focus the opposing views advanced in this controversy. In Federal-Mogul approximately 140 setup employees had been amended into a unit of about 2000 production and maintenance workers belonging to the United Auto Workers Union. This resulted from what in labor parlance is termed a Globe election. [1] The employer then unilaterally determined the setup employees were governed by the current agreement with the original unit. As a consequence these employees were stripped of certain benefits. When the employer refused to restore the benefits, the union filed an unfair labor practice charge, alleging a failure to bargain in good faith and interference with the Globed employees' organizational rights. The union prevailed when the majority of the National Labor Relations Board reasoned that extending immediate coverage to the Globed employees would force both them and their employer into a contract never contemplated by either. This, the majority concluded, would violate the doctrine of H.K. Porter Co. v. NLRB, 397 U.S. 99, 90 S.Ct. 821, 25 L.Ed.2d 146 (1970), holding that the parties should not be forced into contractual responsibilities they had no opportunity to negotiate. [2] The majority in Federal-Mogul found its result would promote bargaining stability, since the minority view would require both parties to make agreements for groups of employees whose number and identity would be totally unknown to, and unpredictable by, either party. Projected costs of wages and benefits would become equally unpredictable, as would the hazards and reach of health and pension plans. In a Globe election involving competing unions, the unions would be placed in disparate positions, as the voters would know the precise terms of the contract negotiated by the incumbent union, although neither union would have reached a bargain with the employer for the new group. The Federal-Mogul majority preferred separate interim bargaining for the newly represented employees: We believe this is what is needed to be bargained here, and that such bargaining is to be preferred, both legally and practically, over automatically fitting the new group, sans bargaining, into a fixed mold no matter how badly that mold may fit either the employees' or the employer's circumstances, needs, and desires at the time. 209 N.L.R.B. at 345, 85 L.R.R.M. at 1355. The two dissenting members concluded the Globed employees were voting not only for an existing union representative but also for an existing union contract. Thus, the provisions of [the existing] contract apply automatically and equally to all individuals in the unit, including those who are newly included. Id. at 346, 85 L.R. R.M. at 1356. The benefits and working conditions of the setup persons should be derived exclusively from the production and maintenance contracts, although, in the opinion of the minority, the employer had a limited post-election duty to bargain on items not included in the contract that were of unique concern to the setup employees. In the case before us, the minority position was adopted by the hearing officer and the board as the prime authority for holding against the city. The board found application of the majority rule in Federal-Mogul would cause inordinate delay in securing the benefits of collective bargaining for the newly represented employees under the Iowa Public Relations Act. It cited Des Moines Education Association, PERB No. 516 (1975), as holding the Iowa law contemplates that the parties bargain prospectively for the fiscal period to be covered by the concurrent budget-making process. See City of Des Moines, 275 N.W.2d at 760. In contrast, in the private sector the duty to bargain applies immediately. The reviewing district court made no recourse to Federal-Mogul. It simply found that the final 1980-81 contract, of necessity, had to be interpreted in light of the board's unit certification, because any unit, including an expanded one, is by nature indivisible. Other decisions in this area are few in number, distinguishable on their facts, and varying in their results. See NLRB v. Abex Corp., 543 F.2d 719 (9th Cir.1976) (functional similarity in the two groups of employees made it logical for all to be covered by the existing contract); Franklin Central School v. Franklin Teachers Association, 51 N.Y.2d 348, 414 N.E.2d 685, 434 N.Y.S.2d 185 (1980); Port of Portland v. Municipal Employees, Local 483, 27 Or.App. 479, 556 P.2d 692 (1976). We hold, with the majority in Federal-Mogul, that in these circumstances the newly represented employees cannot be accorded automatic coverage by the existing contract. It is anomalous to say the city should be forced to accept under the terms of the contract an additional and functionally dissimilar group of employees that doubled the unit, even though the city and the union both conceded in bargaining the new group was brought in too late to be included. It would be even more anomalous in these situations to say that the newly represented members must be bound by a contract negotiated without them. We do not believe, as the Federal-Mogul minority opinion suggests, that the employees voting in a Globe election ordinarily realize they are voting to be governed by an existing contract. It is more reasonable to suppose they only understand they are voting for representation by a union, and possibly for inclusion in an existing unit. There is nothing in the record before us to indicate the amended employees in this case were at any point in the election process informed they would be bound by a current contract. Certainly forcing public employers to negotiate terms and conditions of employment for units that could undergo significant changes during the life of the contract does not assure effective and orderly operations of government, one of the stated policies behind the Public Employment Relations Act. See Iowa Code § 20.1. Although units may also change through unit classification proceedings, see R. Gorman at 70, and through accretion, see id., NLRB v. Don Burgess Construction Corp., 596 F.2d 378, 387 n. 5 (9th Cir.), cert. denied, 444 U.S. 940, 100 S.Ct. 293, 62 L.Ed.2d 306 (1979), neither of these events occur without some preceding affirmative action by management. Thus, these processes are less destructive of orderly government operations. The inherent problems in attempting to bring these newly represented employees within the 1980-81 contract are illustrated by the ambivalence in the board's decision. The hearing officer's decision that the board affirmed was described as concluding that the employees amended into the unit should be immediately covered by the collective bargaining contract, yet no one has suggested the 1979-80 contract in force when the board's certification was issued would apply. At one point the board's decision holds the contract terms should be applied to the amended employees; at a later point it holds bargaining can be compelled on any contract clause which cannot be appropriately applied to the amended unit positions. This mandated interim bargaining concept is at war with an earlier statement in the decision that `interim bargaining' as envisioned by the majority in Federal-Mogul clearly cannot be required without contradicting our ruling in Des Moines Education Association.  In addition, it is inconsistent with the limitation found in Iowa Code section 20.17(7): If agreed to by the parties nothing in this chapter shall be construed to prohibit supplementary bargaining on behalf of public employees in a part of the bargaining unit concerning matters uniquely affecting those public employees .... (Emphasis added.) The teaching of our own decisions and decisions of the board is that the PERA must be administered in light of the fact that public employers undergo structured, public, closely scrutinized budgeting and tax levying procedures that necessitate prior finalized collective bargaining agreements. Unlike private employers, public institutions operate on tax revenues generated annually or biannually out of these procedures. The act contemplates that the financial obligations of the employers be fixed by March 15the certified budget submission date of the public employer. See Iowa Code §§ 20.17(10), 20.19. This requirement excludes the freedom of year-round bargaining, as we pointed out in City of Des Moines, 275 N.W.2d at 761: A construction of the Act which failed to recognize the certified budget submission date as a mandatory cut off for impasse procedures would be inimical to the purpose of the Act. Such a construction would make it impossible for a political subdivision to deal effectively with its duty to formulate a budget and carry out its provisions. The year-round bargaining which could result would only detract from the effective and orderly delivery of governmental services by political subdivisions. (Emphasis added.) In the past, upon proper application of the public employer, the board has terminated impasse procedures where the employee organization has been certified so late there could be no reasonable expectation the process could be completed within the statutory impasse period. See Iowa Western Community College, PERB No. 884 (1977) (employee organization certified January 14, 1976); City of Cedar Falls, PERB No. 712 (1976) (employee organization certified January 6, 1976). In the latter decision the board wrote: We are also mindful that there are unique characteristics about public sector bargaining that must be recognized and dealt with realistically. One of these realities is that there must be an end to the process of contract bargaining, and that as a matter of law government budgets must be compiled, fiscal policy determinations made and budgets certified.... [I]n the first year of certification of a bargaining unit, the bargaining unit may simply be too late to complete the process for that given bargaining year. In this case the union, like the employee organizations in the two board decisions cited above, obtained certification too late to permit implementation of the three-tiered procedure for reaching a final contract before the March 15 cut off. Both the union and the city seemed to concede this at the time. It follows that because the discharged employee was not covered by the contract, the contract grievance procedures were not available in her case. This does not mean that the union could not represent her in any disciplinary conferences [3] with the employer, or in any voluntary bargaining the employer would engage in. Nor was the city guilty of a prohibited practice in refusing, in the fall 1980, to negotiate for coverage of these newly represented employees under the 1980-81 contract. The window of time for such bargaining was closed March 15, 1980. The hearing officer found the city stood willing to negotiate regarding contract coverage for such employees for the period commencing July 1, 1981. The result we reach in this case is supported by our analysis that Iowa Code chapter 20 establishes a public policy against year-round contract negotiations. With the exception of the state and its employees, see section 20.15(6), chapter 20 lends itself and its procedures to annual negotiations leading to final terms by March 15. Whether the policies we find controlling in the one-year contract situation before us would apply to exclude annual contract changes in multi-year contracts where there is an interim amended bargaining unit will be determined when we confront such a case. Our holding on the above two issues removes any requirement to address the other issues the parties raise. This case is remanded to district court for further proceedings in conformance with this opinion. REVERSED.