Opinion ID: 834755
Heading Depth: 1
Heading Rank: 2

Heading: erb’s waiver analysis

Text: We begin our inquiry into whether ERB erred in its waiver analysis of DOC’s contractual defense with the applicable unfair labor practice statute—ORS 243.672(1)(e)— which provides, in part: “(1) It is an unfair labor practice for a public employer or its designated representative to do any of the following: “     “(e) Refuse to bargain collectively in good faith with the exclusive [bargaining] representative [of its employees].” “Collective bargaining” is deﬁned in ORS 243.650(4) as “the performance of the mutual obligation of a public employer and the representative of its employees to meet at reasonable times and confer in good faith with respect to employment relations for the purpose of negotiations concerning mandatory subjects of bargaining, to meet and confer in good faith in accordance with law with respect to any dispute concerning the interpretation or application of a collective bargaining agreement, and to execute written contracts incorporating agreements that have been reached on behalf of the public employer and the employees in the bargaining unit covered by such negotiations.” (Emphasis added.) “Employment relations”—about which a public employer must bargain in good faith—is deﬁned in ORS 243.650(7)(a) to include “matters concerning direct or indirect monetary beneﬁts, hours, vacations, sick leave, grievance procedures and other conditions of employment.” (Emphasis added.) “Employment relations” is further deﬁned in ORS 243.650(7)(g) to exclude “scheduling of services provided to the public[.]” Thus, a public employer commits an unfair labor practice under ORS 243.672(1)(e) if it refuses to bargain with respect to matters that are included within, and not excluded by, the deﬁnition of “employment relations.” Those matters are referred to as “mandatory” subjects of bargaining. See Tualatin Valley Bargaining v. Tigard School Dist., 314 Or 274, 277, 840 P2d 657 (1992) (so explaining). Cite as 353 Or 170 (2013) 177 As DOC acknowledges, a public employer commits a per se violation of ORS 243.672(1)(e) if it makes a unilateral change regarding a mandatory subject of bargaining while the employer has a duty to bargain.6 See Wasco County v. AFSCME, 46 Or App 859, 613 P2d 1067 (1980) (upholding ERB’s authority to adopt “violation per se” analysis of unilateral changes). When reviewing an allegation of unlawful unilateral change, ERB considers (1) whether an employer made a change to an “established practice,” often referred to as the “status quo”;7 (2) whether the change concerned a mandatory subject of bargaining; and (3) whether the employer exhausted its duty to bargain. Ass’n of Oregon Corr. Employees, 20 PECBR 890, 897. When asserted, ERB also considers an employer’s afﬁrmative defense of waiver: “A party may waive its right to bargain through (1) ‘clear and unmistakable’ contract language, (2) a bargaining history that shows the party consciously yielded its right to bargain, or (3) by the party’s action or inaction.” Id. At issue in this case is ERB’s use of the waiver standard to evaluate DOC’s contractual defense. DOC does not contend that ERB’s recognition of an afﬁrmative defense of waiver is beyond its statutory authority or conﬂicts with ORS 243.672(1)(e) or any other provision of PECBA. Instead, DOC argues that ERB erred in conﬁning its analysis of DOC’s contractual defense to a consideration of whether the parties’ collective bargaining agreement demonstrated a clear and unmistakable waiver of AOCE’s 6 ERB’s per se rule is modeled after an analogous rule adopted by the National Labor Relations Board to enforce the duty to “bargain collectively” under section 8(a)(5) of the National Labor Relations Act (NLRA). The Supreme Court explained the rationale for that rule in Labor Board v. Katz, 369 US 736, 747, 82 S Ct 1107, 8 L Ed 2d 230 (1962) (holding that an employer violates section 8(a)(5) of the NLRA if it makes a unilateral change to employment conditions without bargaining over the relevant term). 7 ERB has explained that cases dealing with allegations of unilateral change that occur during the term of a CBA generally refer to the prohibited activity as a change in employer “past practice,” while cases dealing with allegations of unilateral change during the course of post-contract negotiations (the “hiatus period”) refer to changes in the “status quo.” ERB has noted, however, that there is “little difference analytically between these two.” Coos Bay Police Ofﬁcers’ Ass’n v. City of Coos Bay, 14 PECBR 229, 232-33 (1993). 178 Assn. of Oregon Corrections Emp. v. State of Oregon statutory right to bargain. DOC argues that ERB also was required to consider whether the CBA authorized DOC to take the unilateral action that it did. That requirement is imposed, DOC contends, both by this court’s decision in OSEA v. Rainier School Dist. No. 13, 311 Or 188, 808 P2d 83 (1991), which instructs ERB to consider the terms of a collective bargaining agreement according to ordinary rules of contract interpretation, and by PECBA. ERB’s analysis is at odds with PECBA, DOC contends, because it “undermines the sanctity of the written contract;    injects uncertainty and instability into the labor-management relationship; and    effectively ignores the preliminary step in any unilateral change claim—namely, whether there has, in fact, been a change in the status quo.” (Emphasis in original.) Before we consider DOC’s arguments, it is helpful to trace the origins of ERB’s waiver analysis. ERB initially applied the waiver analysis in considering an employer’s contract defense to an unfair labor practice charge in Corvallis School Dist. 509J v. Oregon School Employees Ass’n, Chapter No. 2, 6 PECBR 5409 (1982). ERB took guidance from cases decided by the National Labor Relations Board (NLRB) under the National Labor Relations Act (NLRA), the federal act on which PECBA was modeled. Elvin v. OPEU, 313 Or 165, 177, 832 P2d 36 (1982). ERB held that, under those cases, it was “settled law that any waiver of the statutory right to bargain over a mandatory subject of bargaining must be in clear and unmistakable language.” Corvallis School Dist. 509J at 5412 (citing N L Industries v. NLRB, 92 LRRM 2937, 2938 (1976)). The NLRB ﬁrst applied a waiver analysis in considering an employer’s contractual defense to an unfair labor practice charge in Tidewater Associated Oil Company, 85 NLRB 1096, 1098 (1949). In that case, a union charged that an employer had made a unilateral change to its employees’ pension plan without ﬁrst bargaining with the union. In its defense, the employer relied on a “Management Functions” clause in the parties’ collective bargaining agreement. The NLRB rejected the employer’s defense, upholding the Trial Examiner’s ﬁnding that the broad “Management Functions” clause “was at least ambiguous.” “Our agreement with the Cite as 353 Or 170 (2013) 179 Trial Examiner,” the NLRB wrote, “is based primarily upon the absence of a speciﬁc waiver of the Union’s right to bargain   . We are reluctant to deprive employees of any rights guaranteed them by the [NRLA] in the absence of a clear and unmistakable showing of a waiver of such rights.” Id. at 1098. The United States Supreme Court afﬁrmed the NLRB’s application of waiver as a defense to an unfair labor practice charge in Metropolitan Edison Co. v. NLRB, 460 US 693, 103 S Ct 1467, 75 L Ed 2d 387 (1983). In that case, a union had charged that an employer had committed an unfair labor practice by treating union ofﬁcials more harshly than other union members in the aftermath of a strike, thus discouraging union membership in violation of 29 USC §158(a)(3).8 The Court considered whether a general no-strike provision, such as the one in the parties’ collective bargaining agreement, was sufﬁcient to waive the speciﬁc right to strike over an unfair labor practice. Id. at 708. The Court began by stating that it “long has recognized that a union may waive a member’s statutorily protected rights[.]” Waivers are valid, the Court explained, because they rest on the premise of fair representation and presuppose that the selection of the bargaining representative remains free. Id. at 705. However, the court cautioned: “[W]e will not infer from a general contractual provision that the parties intended to waive a statutorily protected right unless the undertaking is ‘explicitly stated.’ More succinctly, the waiver must be clear and unmistakable.” Id. at 708.9 8 29 USC § 158(a)(3) provides, in part: “(a)    It shall be an unfair labor practice for an employer “     “(3) by discrimination in regard to    any term or condition of employment to encourage or discourage membership in any labor organization   .” 9 In Metropolitan Edison, the Court relied on Mastro Plastics Corp. v. Labor Board, 350 US 270, 76 S Ct 349, 100 L Ed 309 (1956), in which it had addressed the question whether a general no-strike provision waived the speciﬁc right to strike over an unfair labor practice. The Court in Mastro Plastics determined that, although a waiver could be valid if it were “explicitly stated,” the terms of the collective bargaining agreement at issue were not clear enough: a “more compelling expression” of the waiver was required. Id. at 283. 180 Assn. of Oregon Corrections Emp. v. State of Oregon The NLRB continues to use the same waiver analysis that it articulated in Tidewater. See Provena St. Joseph Medical Center, 350 NLRB 808, 815 (2007) (when an employer in a unilateral change case asserts that the contract authorizes it to act unilaterally, the employer must prove its defense by clear and unmistakable contract language). See also John E. Higgins ed., 1 The Developing Labor Law 1068 (6th ed 2012) (“Consistent with the traditional common law view of waiver, the [NLRB] [has]    conﬁned the waiver doctrine narrowly and [has] been reluctant to infer a waiver.”).10 In Oregon School Employees Ass’n v. Bandon School Dist. #54, 19 PECBR 609 (2002), ERB decided to adhere to the waiver analysis that it had articulated in Corvallis. That analysis, ERB explained, was “historically recognized by [ERB] and the private sector,” is “well-established,” and “there is a large body of case law available for guidance in deciding such cases.” Id. at 623-24. Considering the purposes of PECBA, ERB determined that a waiver analysis was most appropriate because it “keeps the focus where it should be: on the general rule that there is a continuing duty to bargain during the contract term over mandatory subjects 10 Although the Supreme Court has not yet applied the waiver analysis followed in Metropolitan Edison to a charge that an employer committed an unfair labor practice by refusing to bargain, the Ninth Circuit Court of Appeals has done so. See Local Joint Exec. Bd. Of Las Vegas v. N.L.R.B., 540 F3d 1072, 1075 (9th Cir 2008) (applying Metropolitan Edison to hold that “[w]here a unilateral change is defended on a claim of contractual right, the alleged waiver must be    clear and unmistakable”). Decisions from the Second, Third, Fourth, Seventh, and Eighth Circuits similarly have applied the waiver standard in cases where employers invoked contract provisions as authority for making unilateral changes in terms and conditions of employment. See, e.g., Bonnell/Tredegar Industries, Inc. v. N.L.R.B., 46 F3d 339, 346 n 6 (4th Cir 1995); Olivetti Ofﬁce U.S.A., Inc. v. N.L.R.B., 926 F2d 181, 187 (2d Cir 1991), cert den, 502 US 856 (1991); Ciba-Geigy Pharmaceuticals Div. v. N.L.R.B., 722 F2d 1120, 1127 (3d Cir 1983); American Oil Co. v. N.L.R.B., 602 F2d 184, 188-89 (8th Cir 1979); Murphy Diesel Company. v. N.L.R.B., 454 F2d 303, 307 (7th Cir 1971). Not all courts agree. See, e.g., Bath Marine Draftsmen’s Ass’n v. N.L.R.B., 475 F3d 14, 25 (1st Cir 2007) (adopting the District of Columbia Circuit’s “contract coverage” test); Enloe Medical Center v. N.L.R.B., 433 F3d 834, 838 (DC Cir 2005) (rejecting the NLRB’s use of the waiver standard in the context of a unilateral change case); Chicago Tribune Co. v. N.L.R.B., 974 F2d 933, 936-37 (7th Cir 1992) (adopting the District of Columbia Circuit’s “contract coverage” test). Cite as 353 Or 170 (2013) 181 unless there is showing of waiver.”11 Id. at 624 (emphasis in original). As noted, DOC does not contend that ERB’s waiver defense exceeds its statutory authority or constitutes legal error; instead, it contends that, under PECBA and this court’s decision in Rainier School Dist. No. 13, 311 Or 188, ERB cannot reach the issue of waiver until it ﬁrst decides whether a collective bargaining agreement permits an employer’s unilateral action. For the reasons that follow, we conclude that ERB’s analysis was not legally erroneous and that neither PECBA nor any other source of law compelled ERB to adopt the analysis for which DOC advocates. We return ﬁrst to the text of ORS 243.672(1)(e), set out infra, 353 Or at 176, and observe that it does not specifically delineate or address defenses to a charge that an employer has committed an unfair labor practice by refusing to bargain with respect to a mandatory subject of bargaining. We then look to the enactment history of that statute and case law interpreting it and learn that the Oregon legislature enacted PECBA in 1973 to model the NLRA. Elvin, 313 Or at 175 n 7. Therefore, cases decided under the NLRA, including those outlining afﬁrmative defenses to unfair labor practice charges, provide guidance in interpreting PECBA. Id. at 177-78. Importantly for this case, the NLRB’s use of a waiver rubric to analyze contract defenses to unfair labor practice charges was well-established by 1973. Thus, we infer that the Oregon legislature intended that defenses to unfair labor practice charges under ORS 243.672(1)(e) be analyzed under that same rubric. See State Treasurer v. 11 Prior to Oregon School Employees Ass’n v. Bandon School Dist. #54, 19 PECBR 609 (2002), ERB had permitted employers to defend unfair labor practice claims by demonstrating that the union had agreed to contract terms that were “speciﬁcally relevant to the issue in dispute.” See, Oregon School Employees Ass’n v. Astoria School District 1, 13 PECBR 474, 480 (1992). However, ERB also had continued to analyze contract terms asserted as an afﬁrmative defense under its waiver analysis. See Fed’n of Oregon Parole and Probation Ofﬁcers v. Washington County, 19 PECBR 441, 428 (2001) (holding that a general management rights clause did not constitute a waiver). In Bandon, ERB determined that it would no longer permit the “speciﬁcally relevant” defense. Id. at 609. The Court of Appeals afﬁrmed that shift, recognizing that ERB’s formulation of what constitutes an adequate defense may change over time. Lincoln Cty Ed. Assn. v. Lincoln Cty Sch. Dist., 187 Or App 92, 98, 67 P3d 951 (2003). In this case, DOC does not challenge ERB’s authority to make that shift, nor does it argue that the law requires ERB to permit a “speciﬁcally relevant” defense. 182 Assn. of Oregon Corrections Emp. v. State of Oregon Marsh & McLennan Companies Inc., 353 Or 1, 20, ___ P3d ___ (2012) (applying that principle of statutory interpretation). DOC’s argument that ERB’s waiver analysis conﬂicts with the purposes of PECBA is not convincing. ERB’s analysis does not undermine the sanctity of the written labor contract or inject uncertainty or instability into the labormanagement relationship. If an employer and a union agree by written contract terms that, going forward, the employer will have the right to make unilateral changes to employees’ terms and conditions of employment, then those contract terms will establish a waiver of the union’s statutory right to bargain over those issues and will be enforced. The parties can avoid uncertainty and instability by making the employer’s right to take that future unilateral action clear and unmistakable. The parties also may use ORS 243.672 to address alleged contract violations. ORS 243.672 makes it an unfair labor practice for a public employer or public employee to “[v]iolate the provisions of any written contract with respect to employment relations.” ORS 243.672(1)(g); ORS 243.672(2)(d). If a collective bargaining agreement requires or permits certain action, a party that alleges a failure to comply with such a provision may ﬁle an unfair labor practice complaint alleging a contractual violation under that statute. ERB’s waiver analysis does not conﬂict with the terms of PECBA or thwart the legislature’s intent or purpose. We also are not persuaded that ERB’s waiver analysis is legally erroneous because it is contrary to this court’s decision in Rainier School Dist. No. 13, 311 Or 188. It is true that in that case, the court held that “[a] collective bargaining agreement is one type of contract” and that “[i]n discharging its statutory responsibility, ERB is required to interpret collective bargaining agreements    in the same manner and pursuant to the same rules of construction as do courts.” Id. at 194. However, the court’s holding in Rainier School Dist. No. 13 arose not in the context of ORS 243.672(1)(e), the statutory provision at issue in this case, but in the context of ORS 243.672(1)(g), which makes it an unfair labor practice for a public employer to “[v]iolate the Cite as 353 Or 170 (2013) 183 provisions of any written contract with respect to employment relations.”12 In a charge under ORS 243.672(1)(g), the inquiry is whether an employer has done what the collective bargaining contract required it to do. In a defense to a charge under ORS 243.672(1)(e), the inquiry is whether the union, by agreeing to certain contract terms, has relinquished its statutory right to bargain. Both inquiries require the interpretation of the collective bargaining agreement, but because the purpose of the inquiry is different, the rules of construction also may differ. The fact that a collective bargaining agreement is a contract and must be construed as such does not preclude ERB from requiring that contract terms offered to establish an afﬁrmative defense to a charge under ORS 243.672(1)(e) be evaluated under a waiver rubric. Absent a sufﬁcient afﬁrmative defense, a union has a statutory right to insist that an employer bargain over mandatory subjects before making changes to the status quo. The general rule in Oregon is that, although waivers of constitutional and statutory rights may be expressed through contract terms, those terms must clearly indicate an “ ‘intention to renounce a known privilege or power.’ ” Johnson v. Swaim, 343 Or 423, 431, 172 P3d 645 (2007) (quoting Great American Ins. v. General Ins., 257 Or 62, 72, 475 P2d 415 (1970)). Under Oregon law, a waiver is “ ‘the intentional relinquishment of a known right.’ ” Id. at 431 (quoting Waterway Terminals v. P. S. Lord, 242 Or 1, 26, 406 P2d 556 (1965)). “To make out a case of waiver of a legal right there must be a clear, unequivocal, and decisive act of the party showing such a purpose   .” Waterway Terminals, 242 Or at 27. See also Taylor v. U.S. National Bank, 248 Or 538, 544, 436 P2d 256 (1968) (stating that contract language construed to relinquish a widow’s statutory right to homestead and exempt property must evince a “clear and explicit” waiver of those rights). 12 In its 2005 decision in this proceeding, ERB distinguished between AOCE’s claims that alleged that DOC had failed to bargain in good faith under ORS 243.672(1)(e) and those that alleged that DOC had breached its contract with AOCE in violation of ORS 243.672(1)(g). A breach of the CBA alone, the ERB explained, does not constitute bad faith bargaining; rather, such claims must be raised as grievances under the CBA or through an unfair labor practice complaint under ORS 243.672(1)(g). Ass’n of Oregon Corr. Employees, 20 PECBR 890 (2005). 184 Assn. of Oregon Corrections Emp. v. State of Oregon This court’s statement in Rainier School Dist. No. 13 does not preclude ERB’s waiver analysis, nor does it compel the analysis for which DOC advocates. As the United States Supreme Court explained in Mastro Plastics Corp. v. Labor Board, 350 US 270, 279, 76 S Ct 349, 100 L Ed 309 (1956), collective bargaining agreements are like other contracts in that they “must be read as a whole and in the light of the law relating to it when made,” but, when the terms of a collective bargaining agreement are raised to contest a union’s statutory right, the contract terms must demonstrate that the union waived that right. Finally, ERB’s analysis does not ignore, but in fact requires, consideration of the preliminary step in any unilateral change claim—whether there has been a change in the status quo. As noted, the ﬁrst step in ERB’s unfair labor practice inquiry is whether the employer made a change to an “established practice.” To make that determination, ERB considers “[w]hether the parties have, by their words or actions, deﬁned their rights and responsibilities with regard to a given employment condition.” Coos Bay Police Ofﬁcers’ Ass’n v. City of Coos Bay, 14 PECBR 229, 233 (1993). ERB looks to a variety of sources, including not only the terms of a current or an expired collective bargaining agreement, but work rules, policies, and an employer’s “pattern of behavior.” Id. Thus, ERB does consider the terms of the parties’ collective bargaining agreement, among other factors, in its analysis of whether the employer has made a change to the status quo. DOC has not convinced us that PECBA or any other provision of Oregon law required ERB to adopt a different analysis in its consideration of whether an employer has made a unilateral change in violation of ORS 243.672(1)(e). When an employer relies on contract terms as an afﬁrmative defense against a charge that it changed the status quo without ﬁrst bargaining with the union, ERB may consider those terms in evaluating whether they demonstrate that the union waived the right to bargain about such changes. The law does not demand that ERB ﬁrst consider those contract terms to determine, under the status quo rubric, whether they authorized the employer’s action. Such a Cite as 353 Or 170 (2013) 185 requirement would effectively displace the waiver analysis as a contract-based afﬁrmative defense to a charge under ORS 243.672(1)(e), and we can discern no legal basis for imposing it. In summary, the Court of Appeals was incorrect when it decided in AOCE I that ERB had erred in its use of the waiver analysis to evaluate the merits of DOC’s contractual afﬁrmative defense. ERB’s waiver analysis recognizes that the duty to bargain under ORS 243.672(1) (e) continues after the parties have entered into a collective bargaining agreement and that a union retains its right to bargain on mandatory subjects of bargaining unless it waives that right.