Opinion ID: 2177966
Heading Depth: 1
Heading Rank: 3

Heading: Effectiveness of the MOUs

Text: The major issue at the Circuit Court level was whether Governor Ehrlich was obliged to fund the wage increases agreed to by Governor Glendening. The defendants argued that he was not so obliged for three reasons: (1) the MOUs were never ratified by Governor Glendening and therefore never became effective at all; (2) they were not, in any event, signed by January 1, 2003, which was a prerequisite with respect to any term requiring an appropriation; and (3) even if the MOUs were properly signed and ratified, in light of provisions in Article III, § 52 of the Maryland Constitution and § 3-205 of the State Government Article, Governor Ehrlich was entitled to present his own budget to the General Assembly and was not bound to include appropriations to fund agreements made by Governor Glendening. Although the court found that Governor Glendening had ratified the MOUs, it agreed with the second and third points made by the defendants and for those reasons denied relief with respect to the economic issues. The significance of ratification extends beyond the pay raise or other economic issues, for the effectiveness and enforceability of the non-economic termsthose not requiring specific appropriationsdepends on whether Governor Glendening ratified the MOUs. Apart from the question regarding the duty of the Secretary of Budget and Management to adopt regulations regarding unfair labor practices, that is the only live issue in the appeal. The Circuit Court seemed to believe that the Governor could effectively ratify the MOUs by directing a designee, in this case his chief of staff, Mr. Lynch, to do so in his stead. That does not suffice. Both SPP § 3-501(d) and SPP § 3-601(a)(2)(i) permit the Governor's designee to sign or execute an MOU on behalf of non-collegiate State agencies. Section 3-601(c) makes quite clear, however, that an MOU on behalf of a non-collegiate agency, even though signed by the Governor's designee at the Governor's direction, is not effective until it is ratified by the Governor. It does not permit ratification by a designee of the Governor, but only by the Governor him/herself. Section 3-601(c) was a new provision. There was no counterpart to it in the Executive Order. Because, as we made clear in McCulloch, supra, 347 Md. 272, 701 A.2d 99, the Executive Order did not bind the Governor to do anything and did not serve to limit any discretion on his part, whether he ratified an MOU was of no consequence. If he or, at his direction, some designee signed an MOU that required appropriations or statutory changes to implement and the Governor later decided not to request such appropriations or changes, he could not be compelled to do so. The statute, at least on its face, does purport to limit the Governor's discretion. Section 3-501(c)(2)(ii) requires that [i]n the budget bill submitted to the General Assembly, the Governor shall include any amounts in the budgets of the principal units required to accommodate any additional cost resulting from the negotiations.... Given that statutory mandate which, coupled with the Constitutional mandate of Art. III, § 52(4)(g) of the Maryland Constitution, would seem to require at least the incumbent Governor during whose term of office the MOU was signed to include appropriations to fund the MOU provisions, the Legislature obviously wanted to make certain that the Governor personally understood and approved what was in any MOU signed at his direction. It may well be that, if the Governor personally signs an MOU rather than having it signed by some designee, his act of personally signing it will suffice as a ratification, but that is not what occurred here and we need not rule on that point in this case. Clearly, when the Governor does not sign the MOU, a separate ratification by the Governor is required. The question arises, then, of what is required for ratification. The term is neither defined nor described in the statute, but, because the term can be construed in a number of ways, depending on the context of its use, we need to focus on what the Legislature likely intended. Black's Law Dictionary gives two definitions of the term, one generic and one with particular reference to contracts: 1. Confirmation and acceptance of a previous act, thereby making the act valid from the moment it was done . 2. Contracts. A person's binding adoption of an act already completed but either not done in a way that originally produced a legal obligation or done by a third party having at the time no authority to act as the person's agent . BLACK'S LAW DICTIONARY 1268-69 (7th ed.1999). The Restatement Second of Agency is generally in accord. It defines ratification as the affirmance by a person of a prior act which did not bind him but which was done or professedly done on his account, whereby the act, as to some or all persons, is given effect as if originally authorized by him. RESTATEMENT (SECOND) OF AGENCY § 82 (1958). Although in some instances, ratification may be done expressly or by implication and may be achieved orally, in writing, or even by mere acquiescence, in other instances more formality is required. In Sprecher v. Sprecher, 206 Md. 108, 114-15, 110 A.2d 509, 512 (1955), where the question was whether the grantor who had executed a deed while she was a minor had sufficiently ratified the deed upon reaching majority, we observed that [a]ll of the authorities seem to recognize that there must be some positive act or declaration of an unequivocal nature in order to establish ratification. Neither general statements nor acquiescence sufficed. The context here, we think, requires some clear, affirmative, public act by the Governor. MOUs that embody collective bargaining agreements can affect the salaries or fringe benefits of 80,000 or more State employees. They can have enormous fiscal implications for the State and will likely be a significant factor in the Legislature's budget deliberations and, through those deliberations, in the establishment of public policy priorities. By requiring gubernatorial ratification, not required in the precursor Executive Order, the General Assembly no doubt wanted to make certain that the Governor not only fully understood the terms and conditions of the agreement but expressed his/her approval in an unmistakable and public mannera manner that could be documented in a way as to be beyond dispute. If, for whatever reason, the Governor chooses not to document his/her ratification in the most normal way, by signing the MOU, there must be some public act or statement of an equivalent nature. Nothing of that kind occurred here. Governor Glendening neither signed the MOUs nor made any public pronouncement, following their execution by his designees, that he had read them and affirmatively ratified them. In deposition testimony, he said that Mr. Lynch had summarized the MOUs for him: He did get back and said, We have an agreement. I said, Great, and I said, What are the main issues, and I recall specifically he went through them and said that they were all consistent, and I don't recall the details right now, but that's what he said, and that's when I said, Great, go ahead and wrap it up, which means do the final drafts and sign it. The Governor testified further that, in January, Mr. Lynch advised that it was done, and it ended the process as far as I was concerned, and he signed the contracts by authority as was to be the case. Although the record demonstrates that Governor Glendening personally discussed some of the main issues with AFSCME officials, gave general direction to his designees regarding those issues, and was kept apprised from time to time of the status of the negotiations, there is simply nothing in the record to indicate that he ever actually read the MOUs once they were completed and signed or that he took any clear, positive step to ratify them. Accordingly, under the clear terms of SPP § 3-601(c), those MOUs never became effective.