Opinion ID: 901992
Heading Depth: 1
Heading Rank: 6

Heading: Implementing the District's Last Offer

Text: [¶ 15.] The Association concedes that the first sentence of SDCL 3-18-8.2 gave the District the authority to issue contracts to teachers hired under the terms and conditions of the 2005-06 agreement while negotiations were in progress. The parties agree that the second sentence of the statute is relevant to the current circumstances. The second sentence provides: If no agreement is reached in negotiations and the intervention of the labor department under § 3-18-8.1 fails to bring about an agreement, the board shall implement, as a minimum, the provisions of its last offer, including tentative agreements. Id. The Association claims the statute requires the District to implement its last offer to all teachers. The last offer would then replace and supersede the interim contract terms that were issued pursuant to the first sentence in the statute. Generally, the District agrees that the last offer would control teacher contracts for the ensuing year and that the contracts previously issued would be adjusted to reflect the terms of the last offer. However, the District contends that the statutory language requiring it to implement, as a minimum, the provisions of its last offer allows it to honor individual teacher contracts if the individual contracts are more favorable than the last offer. SDCL 3-18-8.2 (emphasis added). The circuit court agreed with the District and determined that the statute's as a minimum language applies not only to the collective bargaining agreement negotiated between the District and the Association, but also to the individual teachers' contracts. [¶ 16.] The as a minimum language of the statute must be read in conjunction with the entire statute and the collective bargaining statutes as a whole. Wiersma v. Maple Leaf Farms, 1996 SD 16, ¶ 4, 543 N.W.2d 787, 789. In Wiersma, this Court stated `[i]ntent must be determined from the statute as a whole, as well as enactments relating to the same subject.' Id. (quoting Whalen v. Whalen, 490 N.W.2d 276, 280 (S.D.1992)). Such intent is derived from the plain, ordinary and popular meaning of statutory language. Id. (citation omitted). The plain meaning of the statutory language in this case is clear. In the event of an impasse, a school board must, as a minimum, implement... the provisions of its last offer, including tentative agreements. SDCL 3-18-8.2. [¶ 17.] The as a minimum language refers to a district's last offer and the salary schedule incorporated in it. In context, this phrase means that the District can offer better terms and conditions than those contained in its last offer, but cannot impose inferior terms. To interpret the as a minimum language, as the District and dissent do, to mean that the District is not required to implement the last offer to all members of the bargaining unit is not in conformity with its plain meaning and would undermine the collective bargaining process. The District's last offer clearly specified in Article X how new teachers entering the school system were to be compensated. The District's last offer did not provide for a deviation for individual teachers whose compensation decreased from the prior year's salary schedule. Had the District recognized the effect of Article X on some of the new hires during the negotiation process, the issue could have been addressed and, perhaps, a provision to avoid such a result could have been included in the last offer. However, that was not the situation. The last offer only provided one salary schedule for determining new hire compensation. [¶ 18.] The District unilaterally decided to deviate from its last offer and not apply Article X to seven newly hired teachers. The question then becomes whether SDCL 3-18-8.2 allows the District to make this unilateral decision not to apply its last offer to all members of the bargaining unit. The District claims that the statutory phrase as a minimum authorizes it to deviate from the last offer for certain members of the bargaining unit and to hire some teachers according to the expired 2005-06 District-Association agreement. The District and dissent want to interpret SDCL 3-18-8.2's as a minimum language as applying to individual teachers' contracts because their contracts were entered into pursuant to the terms of the then current agreement. See Dissent ¶ 49. [¶ 19.] The District and dissent's contention is not supported by the plain language of SDCL 3-18-8.2 and runs contrary to principles of collective bargaining. SDCL 3-18-8.2's as a minimum language does not mention, reference, or contemplate that it is applicable to anything other than the last offer. The language from this statute, in relevant part, provides, in the event of an impasse, a school district must, as a minimum, implement... the provisions of its last offer. SDCL 3-18-8.2. The provisions of the last offer included the Article X salary schedule. The statute's plain language does not state, as the dissent would suggest, that the provisions of the District's last offer must be implemented, as a minimum, except for the salary schedule as it relates to teachers subject to less pay under its terms. The dissent's expanded definition and application of the as a minimum language is inconsistent with the plain language of SDCL 3-18-8.2, as well as the requirements of collective bargaining. [¶ 20.] To stretch the meaning of as a minimum to justify the District's action has certain appeal in this case because of the advantage for the seven teachers affected. This Court's role, however, is to interpret SDCL 3-18-8.2. To say that the statute allows the District to pay some teachers under the expired 2005-06 agreement and to pay others under the 2006-07 last offer conflicts with the statutory framework of labor negotiations. The labor negotiation statutes establish procedures to ensure meaningful bargaining power for employees. The statutes allow the employer district to implement its last offer when an agreement cannot be reached. [¶ 21.] To allow the employer to unilaterally decide that not all teachers will be paid according to the last offer would be to tip the scale in the District's favor more than the Legislature contemplated. The long-term effect of this case, as the District indicated at oral argument, would be that the seven teachers would always be out of sync with the salary schedule that applies to all other members of the bargaining unit. In other words, the teachers would always have an advantage on the salary schedule in comparison to where they should be under Article X of the last offer. [3] [¶ 22.] The dissent also argues that the District's decision not to apply Article X to the seven new hires is not inequitable to the seven new teachers or the returning teachers because the extra pay for the seven did not diminish the ADM Advancement Pool. However, that is not the issue before us. The issue is whether the District's unilateral decision to apply Article X only to certain teachers was an inequitable application of its last offer to the Association, thereby constituting a grievable offense. See SDCL 3-18-1.1 (listing inequitable application as a basis for filing a grievance). Inequitable application in the context of a grievance refers to whether the terms of the last offer were uniformly applied to all members of the bargaining unit. The District's actions were an inequitable application because the terms of the last offer were not uniformly applied to all teachers. Thus, the entity detrimentally affected by the grievable action was the Association. [¶ 23.] Moreover, the collective bargaining process would be undermined by the dissent's holding. The dissent would effectively hold that a district is free to deviate from the terms of the collective bargaining process so long as it does so to the benefit of certain teachers. However, there is no legal support for the dissent's conclusion that the last offer must always include advantages over last year's individual contracts. Furthermore, this result would be inconsistent with SDCL ch. 3-18, SDCL ch. 13-43, and SDCL ch. 60-9A. The provisions of labor-management negotiations are not matters for a court to second-guess or revise because of its own sense of equity or fairness. [¶ 24.] The collective bargaining statutes do not allow school districts to negotiate with individual teachers if those teachers are part of the bargaining unit. See SDCL ch. 3-18; SDCL ch. 13-43; SDCL ch. 60-9A. The seven new hires in this case became members of the bargaining unit when they were hired. Thus, as between the Association and the District, failure to apply the last offer to all members of the bargaining unit constituted a grievable action. Although not directly on point, some analogous cases from other jurisdictions provide context and support for our analysis. [¶ 25.] The New Hampshire Supreme Court dealt with a similar issue in Collins v. City of Manchester, 147 N.H. 701, 797 A.2d 132 (2002). In Collins, the city of Manchester hired 39 police officers pursuant to individual three-year training agreements. The individual agreements provided that the officers would be paid wages according to a specified comprehensive salary schedule incorporated in the collective bargaining agreement between the city and the police union. The comprehensive salary schedule included incremental wage and step increases. The officers automatically became members of the bargaining unit once employed. The city-union collective bargaining agreement expired, and until a subsequent agreement was reached, all employees in the bargaining unit did not get pay step increases. Ultimately, a new agreement was reached that eliminated step increases retroactively. The 39 officers sued the city claiming they were entitled to the step increases under their individual training agreements. See id. at 703-04, 797 A.2d at 134. The court held that the individual contracts did not entitle the officers to the retroactive step increases. The court found that once the new collective bargaining agreement went into effect, it superseded the individual contracts with conflicting terms. Id. at 704, 797 A.2d at 135. The court reasoned, [t]o hold otherwise would interfere with `the principles of collective negotiation.' Id. (citation omitted). [¶ 26.] The New Hampshire court relied on J.I. Case, wherein the United States Supreme Court said: The very purpose of providing by statute for the collective agreement is to supersede the terms of separate agreements of employees with terms which reflect the strength and bargaining power and serve the welfare of the group.... The workman is free, if he values his own bargaining position more than that of the group, to vote against representation; but the majority rules, and if it collectivizes the employment bargain, individual advantage or favors will generally in practice go in as a contribution to the collective result. Id. at 338, 64 S.Ct. at 580. The general rule is that [a] collective bargaining agreement will supersede the provisions of an individual agreement regarding wages[.] 20 Richard A. Lord, Williston on Contracts § 55:25 (citing Caldwell v. Am. Basketball Ass'n, 66 F.3d 523 (2d Cir.1995); Brown v. Pro Football, Inc., 50 F.3d 1041 (D.C.Cir.1995); Wood v. Nat'l Basketball Ass'n, 809 F.2d 954 (2d Cir. 1987); West Hartford Ed. Ass'n, Inc. v. DeCourcy, 162 Conn. 566, 295 A.2d 526 (1972)). Furthermore, [t]he principle that a collective bargaining agreement supersedes an inconsistent individual employment contract applies whether the individual agreement is reached prior to or during the formal employment relationship. Id. (citing Melanson v. United Air Lines, Inc., 931 F.2d 558 (9th Cir.1991)). [¶ 27.] In Melanson, the Ninth Circuit stated, [t]hrough the federal labor scheme, Congress has established a system of collective bargaining. Allowing an employee or employer, by virtue of an individual agreement, to establish an employment status different from that of other employees would undermine the efficacy of collective bargaining. 931 F.2d at 561 (citing J.I. Case, 321 U.S. at 337-39, 64 S.Ct. at 580-81). Additionally, this Court previously cited J.I. Case for the proposition that terms of an individual contract in conflict or inconsistent with those of a collective bargaining agreement yield to the latter. Niesent v. Homestake Mining Co. of CA, 505 N.W.2d 781, 782 (S.D.1993) [4] (citing J.I. Case, 321 U.S. at 339, 64 S.Ct. at 582 (The very purpose of providing by statute for the collective agreement is to supersede the terms of separate agreements of employees with terms which reflect the strength and bargaining power and serve the welfare of the group.)). In Order of R.R. Telegraphers v. Railway Express Agency, the United States Supreme Court stated that if the terms of an individual agreement were permitted to supersede those of a collectively bargained one, statutes requiring collective bargaining would have little substance, for what was made collectively could be promptly unmade individually. 321 U.S. 342, 346, 64 S.Ct. 582, 585, 88 L.Ed. 788 (1944). [¶ 28.] Consistent with these other authorities, we view individual teacher contracts in the context of the general principle that the Association is the exclusive representative of all teachers. See SDCL 3-18-3. Likewise, terms of an individual contract in conflict or inconsistent with those of a collective bargaining agreement yield to the latter. Niesent, 505 N.W.2d at 782. The implemented last offer's salary schedule for 2006-07 bound all teachers, including newly hired teachers, regardless of the effect on their pay. SDCL 3-18-3 binds all teachers to the Association's agreements regarding rates of pay, wages, hours of employment, or other conditions of employment. SDCL 3-18-8 outlines the exclusive nature of the Association's authority in negotiating future employment agreements for teachers. These statutes collectively outline the District's obligation to comport with the terms of its last offer in this case. [¶ 29.] Whether the seven new teachers may have a breach of contract claim against the District, as suggested by the dissent, is not the question before us. If so, it would be a separate legal action involving the teachers as parties. Any separate breach of contract action, however, should not confuse or obscure the grievance issue in this case. We are only asked to determine the issue as framed and briefed by the parties, that is, whether the District's action constituted a grievable offense under SDCL 3-18-1.1. We hold that the District's action constituted a grievable offense because SDCL 3-18-8.2 does not authorize the District to deviate from the salary schedule in its last offer for certain teachers in the bargaining unit.