Opinion ID: 2424301
Heading Depth: 2
Heading Rank: 2

Heading: Does the Agreement Fall within the McCulloch Exception?

Text: As stated previously, absent express legislative authority, a government agency cannot enter into binding arbitration or binding collective bargaining agreements establishing wages, hours, pension rights, or working conditions for public employees. McCulloch, 347 Md. at 275-76, 701 A.2d at 100 (internal quotation marks and citation omitted). In interpreting this principle, we explained that not all collective bargaining agreements to which the State or a governmental agency is a party[, however,] require prior express legislative approval; it is only those that contain a binding arbitration clause or are otherwise binding upon and enforceable against the State. McCulloch, 347 Md. at 275, 701 A.2d at 100 (citations omitted). [T]he purpose of the rule ... is to insure that a governmental agency does not, without authority, abdicate or bargain away its statutory discretion. McCulloch, 347 Md. at 276, 701 A.2d at 100 (internal quotation marks and citation omitted). By entering into a binding contract, a government agency bargains away statutory discretion that the Legislature intended the agency alone to steward and exercise. Because the MdTA possessed no prior express legislative approval to bargain collectively, the question, therefore, is whether such express approval was necessary to make the Agreement enforceable. In that vein, the Court of Special Appeals held that authorization was not required because the Agreement: [D]id not bargain away the MdTA's statutory discretion, or attempt to delegate to a third party the discretion of the MdTA or any other State body. Indeed, the Agreement does not delegate any decision making power to an arbitrator or any other third party.... [T]he only obligation the Agreement placed on the [MdTA] was to fund and implement the [THV] program. The Agreement was signed by the [MdTA's] Executive Secretary and was subsequently ratified unanimously by the [MdTA]. The Agreement presents no danger of any party, other than the MdTA itself, controlling the [MdTA's] purse strings. Md. Transp. Auth., 195 Md.App. at 203-04, 5 A.3d at 1220 (footnote omitted). Patently, the Agreement does not include a binding arbitration clause. This, however, does not end the analysis. Our precedents instruct that a government agency, without authority, may not enter into binding arbitration or binding collective bargaining agreements establishing wages, hours, pension rights, or working conditions.... McCulloch, 347 Md. at 275-76, 701 A.2d at 100 (emphasis added) (internal quotation marks and citation omitted). That is to say, a government agency needs prior express legislative approval to enter into an agreement that contain[s] a binding arbitration clause or [is] otherwise binding upon and enforceable against the State. McCulloch, 347 Md. at 275, 701 A.2d at 100 (emphasis added) (citations omitted). In the present case, the MdTA entered into an agreement which altered and, thereby, established the compensation package afforded MdTA police officers. Stated another way, the MdTA formed an agreement that bound purportedly the agency and, therefore, the State. [12] By limiting its otherwise independent discretion, the MdTA relinquished in the Agreement a large portion of the discretion entrusted by the Legislature. Transp., § 4-205(d) states that the [MdTA] may ... fix the compensation of any other agents and employees that it considers necessary to exercise its powers and perform its duties. The section refers only to the MdTA. Yet, the MdTA decided, in conjunction with its employees and outside its statutorily-regulated decision-making process, a matter the Legislature reserved for the agency's singular judgment. Cf. McCulloch, 347 Md. at 292, 701 A.2d at 109 (upholding an executive order authorizing a certain form of collective bargaining because none of th[e provisions of the order], either singularly or collectively, causes State officials to bind themselves to exercise ... discretionary legislative powers) (internal quotation marks and citation omitted). Because the Legislature did not authorize expressly the MdTA and its employees to bargain collectively at the time the Agreement was executed, the Agreement is unenforceable. JUDGMENT OF THE COURT OF SPECIAL APPEALS REVERSED. CASE REMANDED TO THAT COURT WITH INSTRUCTIONS TO AFFIRM THE JUDGMENT OF THE CIRCUIT COURT FOR BALTIMORE COUNTY. COSTS IN THIS COURT AND THE COURT OF SPECIAL APPEALS TO BE PAID BY RESPONDENT.