Opinion ID: 1349697
Heading Depth: 3
Heading Rank: 2

Heading: Administrative Leave Buy-Back

Text: Thirty-seven employees invoked their administrative leave buy-back in order to participate in the seminar. Under this type of leave arrangement, the union designates those employees who will attend, and the employer submits a bill to the union for the net salary for the period of absence. Under the first prong of the test, the employer is reimbursed only the net salary of the employee for the period of absence. However, the insurance premiums and fringe benefits are paid by the employer. Because this partial payment constitutes compensation by the employer, the state may have a legitimate interest in regulating the conduct of its employees. Therefore, the first prong of the test is satisfied. As to the second prong, the state must demonstrate that the compensation is for the performance of [the employee's] duties as a public employee. The plaintiffs contend that the payment of fringe benefits is not compensation directly for the performance of duties. They cite federal cases that distinguish between `wages,' i.e., compensation paid to an employee specifically for the work he performs, and ... compensation occasioned by the fact that the employee has performed or will perform work for the employer, but which is not payment directly for that work.' BASF Wyandotte Corp. v. Local 227, Int'l Chemical Workers Union, 791 F.2d 1046, 1049 (C.A.2, 1986). Plaintiffs contend that continuation of fringe benefits during an employee's union leave is not direct payment for services rendered, but rather an incident of the employer-employee relationship generally. We agree. Whether an employee on union leave is compensated for the performance of the employee's duties as a public employee under the political freedom act is an issue of first impression. However, we have previously considered whether an employee's injury that occurred while the employee was conducting union business arose out of, and in the course of, his employment for purposes of worker's compensation. In Tegels v. Kaiser-Frazer Corp., 329 Mich. 84, 44 N.W.2d 880 (1950), we held that an employee is not considered to be in the employer's service when he is engaged in union activity. Citing California precedent, we stated [R]espondent[] was attending a union meeting from which her employer and his representatives were expressly excluded. At the time respondent [] was injured she was not acting for her employer nor engaged in his service. She was exercising a personal privilege for her own personal benefit in attending a meeting of an organization of which she was a member and the purposes of which were clearly for her own interests and not necessarily in any way for the benefit of her employer. [ Id. at 88, 44 N.W.2d 880, quoting Associated Oil Co. v. Industrial Accident Commission, 191 Cal. 557, 562, 217 P. 744 (1923).] We agree with Associated Oil that an employee is acting in the scope of employment when the employee is doing the duty he is employed to perform.... Id. Similarly, in interpreting the Civil Service Reform Act [6] , the United States Supreme Court has held that there is a basic assumption underlying collective bargaining in both the public and the private sector that the parties proceed from contrary and to an extent antagonistic viewpoints and concepts of self-interest. NLRB v. Ins. Agents' Int'l, 361 U.S. 477, 80 S.Ct. 419, 4 L.Ed.2d 454 (1960), quoted in General Building Contractors Ass'n v. Pennsylvania, 458 U.S. 375, 394, 102 S.Ct. 3141, 3152, 73 L.Ed.2d 835 (1982). [ Bureau of Alcohol, Tobacco & Firearms v. Federal Labor Relations Authority, 464 U.S. 89, 107-108, 104 S.Ct. 439, 449, 78 L.Ed.2d 195 (1983).][ [7] ] Finally, the collective bargaining agreement with the union and the state clearly indicates that employees on union leave are conducting business for the union and not for the state. The agreement provides that union representatives are to be considered as employees of the Union during the periods of absence covered by Administrate Leave from the bank. These arguments, while not binding on the issue presented, are persuasive authority for our holding today. We hold that under the political freedom act, an employee who receives fringe benefits for attending a union meeting is not being compensated by the employer for the performance of [the employee's] duties as a public employee. While attending a union meeting, the employee is not doing the duty he was employed to perform. Furthermore, the interests of the union and the employer are often antagonistic. It would be paralogistic to hold that an employee who receives compensation from the employer to engage in activity that is antagonistic to the employer's interest is somehow receiving compensation for the performance of the employee's duties as a public servant. Therefore, because the compensation is not for the performance of the employee's duties as a public employee, the prohibition is invalid under the political freedom act as it applies to administrative leave buy-back.