Opinion ID: 2086340
Heading Depth: 1
Heading Rank: 4

Heading: proper/improper delegation to politically unaccountable arbitrators?

Text: Plaintiff city has framed the first of its major arguments in the following terms: 1969 PA 312, insofar as it provides for compulsory arbitration, violates the United States Constitution and the Constitution of the State of Michigan by improperly delegating legislative and political responsibility to politically unaccountable arbitrators. As a matter of procedure in addressing ourselves to this argument as posited by the city, let us analyze the constitutionality of the Act 312 delegation scheme first without, and then in conjunction with, consideration of the city's point of political accountability.
The Michigan doctrine of delegation was succinctly stated by this Court in Osius v St Clair Shores, 344 Mich 693, 698; 75 NW2d 25 (1956), in terms of the following standards test: [29] There is no doubt that a legislative body may not delegate to another its lawmaking powers. It must promulgate, not abdicate. This is not to say, however, that a subordinate body or official may not be clothed with the authority to say when the law shall operate, or as to whom, or upon what occasion, provided, however, that the standards prescribed for guidance are as reasonably precise as the subject matter requires or permits. [30] (Emphasis supplied.) Factually addressing the adequacy of Act 312's legislatively prescribed standards, we need only highlight our precis of Act 312's provisions in Part III, B, supra, that Act 312: specifically enunciates its guiding purpose, MCL 423.231; defines the parties to whom it is and is not applicable, MCL 423.232; establishes specific time limits circumscribing arbitral initiation and resolution, MCL 423.233, 423.236 and 423.238; provides a detailed procedure for both the appointment and removal of a permanent MERC panel of potential chairpersons as well as for the selection of the arbitration panel's representative delegates and public chairperson, MCL 423.234 and 423.235; formulates procedural guidelines relative to the arbitral hearing and remand, MCL 423.236, 423.237 and 423.237a; narrowly channels the panel's scope of decisional authority to eight specific factors in its review of last-offer economic issues, MCL 423.238 and 423.239; mandates the application of eight specific factors in rendering a finding, opinion and order relative to both economic and non-economic issues, MCL 423.238 and 423.239; and details the effect of an arbitral decision subject to the availability of judicial review, MCL 423.240 and 423.242. It is generally acknowledged that the instant and similar statutory schemes are directed toward the resolution of complex contractual problems which are as disparate as the towns and cities comprising the locations for these critical-service labor disputes. [31] The Legislature, through Act 312, has sought to address this complicated subject through the promulgation of express and detailed standards to guide the arbitrators' decisional operations. [32] We must conclude that the eight factors expressly listed in § 9 of the act provide standards at least as, if not more than as, reasonably precise as the subject matter requires or permits in effectuating the act's stated purpose to afford an alternate, expeditious, effective and binding procedure for the resolution of disputes. MCL 423.231; MSA 17.455(31). These standards must be considered by the panel in its review of both economic and non-economic issues. In its resolution of noneconomic issues, the panel  shall base its findings, opinions and order upon the following factors, as applicable, MCL 423.239; MSA 17.455(39) (emphasis supplied). See MCL 423.238; MSA 17.455(38), The findings, opinions and order as to all other issues [i.e., non-economic issues] shall be based upon the applicable factors prescribed in section 9. (Emphasis supplied.) When these eight specific § 9 factors are coupled with the § 8 mandate that [a]s to each economic issue, the arbitration panel shall adopt the last offer of settlement which, in the opinion of the arbitration panel, more nearly complies with the applicable factors prescribed in section 9, MCL 423.238; MSA 17.455(38) (emphasis supplied), the sufficiency of these standards is even more patent. [33] Four Justices of this Court have already, in Dearborn, individually recognized that Act 312 provides sufficient standards to guide the exercise of delegated authority. [34] In Dearborn, each of the four participating Justices agreed to this proposition even before the § 9 factors had become operative to both non-economic and § 8 last offer economic issues alike. [35] As Justice LEVIN remarked in this regard: All that is generally required has been done. Dearborn, supra, 259 (opinion of LEVIN, J.). Applying the Osius explication of the delegation doctrine, all that is required to constitutionally sustain this dispute resolution mechanism is that the statutory scheme provide standards at least as reasonably precise as the subject matter requires or permits. We have found that the standards embraced by the § 9 factors fulfill this requirement. The Legislature has determined that these express and detailed § 9 standards must be considered in the panel's resolution of economic last best offer issues as well as non-economic issues alike. Although the Legislature has chosen to provide for the resolution of economic issues on a last offer of settlement basis expressly circumscribed by the applicable § 9 standards in an apparent attempt to effectuate the act's § 1 purpose of afford[ing] an alternate, expeditious, effective and binding procedure for the resolution of disputes, we do not believe that either the presence or absence of this last best offer provision is necessary to the act's constitutionality under the dictates of the delegation doctrine or otherwise. [36] However, we are unaware of any court which has declared a similar critical-service act unconstitutional on the basis of the inclusion of such an economic issue provision but can point to two cases which have considered last-best offer settlement and have willingly sustained their act's constitutionality provided sufficient standards are enumerated to focus arbitral decision-making. [37] In reaching this conclusion, we are also persuaded by the fact that the Act 312 standards are patently more precise than those which this and other courts have previously upheld under similar modes of delegation analysis and involving subject matters at least as complex as that considered here. [38] Other jurisdictions have sanctioned their compulsory interest arbitration schemes even though presented with less precise [39] or even nonexplicit standards for decision. [40] Furthermore, in two cases where standards identical to those codified in Act 312 were subjected to judicial scrutiny, their sufficiency was upheld. [41] Also, in another case where the prescribed standards were found insufficient, the court expressly indicated that its decision would have been otherwise had the Legislature modeled its standards after those found in Michigan's Act 312. [42]
We have just made clear that Act 312 meets the constitutional delegation requirements as framed in Osius without directly considering the city's question of political responsibility. Does, however, the theory of public accountability nonetheless require us to rule Act 312, as amended, unconstitutional? For the reasons offered below, we conclude not. Indeed, since we find as a practical matter that the act as now amended sufficiently provides for public responsibility and accountability, this Court in this matter is neither required to accept nor reject the city's argument that political responsibility is necessary to sustain the act's constitutionality separate and apart from the overall question of constitutional delegation. In Dearborn, lack of political, or public, accountability was basically approached from two viewpoints. First, individuals chosen as arbitrators were thought by two Justices to have been provided insufficient tenure to ensure responsibility and accountability. Then-Chief Justice T.G. KAVANAGH referred, for example, to pre-amendment Act 312 arbitrators as hit-and-run arbitrators. Dearborn, supra, 273 (opinion of T.G. KAVANAGH, C.J.). [43] Second, the system of arbitrator selection was attacked as rendering the line of accountability between the arbitrators and the people too tenuous. [44] One opinion indicated that choice of the panel's impartial chairperson by the parties' delegates alone would provide insufficient public accountability even though one party represented a municipal corporation; appointment of that impartial arbitrator by the MERC chairperson, however, provided sufficient public accountability and responsibility largely because the MERC chairperson was the Governor's direct appointee with the advice and consent of the Michigan Senate. [45] It was also recognized that there existed an inherent tension, if not dichotomy, in the twin objectives of affording the arbitrators a high degree of independence on the one hand, and, on the other, requiring public accountability and responsibility. [46] 1976 PA 84 significantly modified the Act 312 scheme addressed in Dearborn both as to the § 5 tenure of the impartial chairperson and as to the § 5 method of the chairperson's selection. [47]
As to the tenure of the impartial chairperson, the Legislature responded to the hit-and-run characterization of Act 312 arbitrators by significantly modifying § 5 of the original act in four major respects. First, eligibility for and MERC appointment as panel chairperson is now restricted to MERC-appointed members of a MERC-established permanent panel  the Michigan Employment Relations Commission Panel of Arbitrators  whereas, before, any impartial, competent and reputable person might be selected by either the delegates or the chairperson of the State Labor Mediation Board to fulfill this role. Second, members of the MERC-established and -appointed permanent panel now not only have to be impartial, competent, and reputable citizens of the United States but must also be residents of the state of Michigan; this latter requirement was absent from the earlier act's express terms. Third, permanent panelists must qualify by taking and subscribing the constitutional oath or affirmation of office, whereas neither an oath nor an affirmation had been previously required. Fourth, the term of office on the MERC Panel of Arbitrators is indeterminate; tenure can either run as long as a panelist chooses  for that matter, for life  or the panelist may be removed without cause by the MERC. The four modifications wrought by the 1976 PA 84 amendments to § 5 have greatly altered the atmosphere of accountability surrounding the service of arbitration panel chairpersons. In the first place, the chairperson is no longer treated as an at-large one-time chair of a single and particular labor dispute panel. Rather, the chairperson is treated as a member of a permanent MERC Panel of Arbitrators who can be called upon by MERC, as appropriate, to serve as panel chairperson for any number of labor disputes. [48] This obviously paints out the picture of a hit-and-run arbitrator who is allegedly unconcerned about the impact of his or her decision, and paints in the true picture of an arbitrator seeking continued employment by both MERC and public employers/employees over a length of time, and consequently recognizing the impact of his or her decisions as a significant factor in re-employment. [49] Second, since members of the MERC Panel of Arbitrators must be residents of the state, the panelist cannot escape the impact of his or her decision by retreating to a foreign jurisdiction but will be required to bear its impact on his or her reputation and credibility for arbitral employment in Michigan where continued employment is sought. [50] This too militates against a hit-and-run mentality. Third, the oath-taking requirement certainly imposes an aura of tenure. [51] It is an aspect of public office and responsibility. This requirement should act as both a psychological deterrent to hit-and-run service and an encouragement to public responsibility. Fourth, the indeterminate term on the permanent panel, although terminable without cause, certainly implies a degree of tenure and continuation. It also implies the importance of continued responsible behavior. This is so especially because obviously irresponsible behavior can terminate tenure. [52] Again, this tenure provision encourages accountability and responsibility. Considered collectively, the aforementioned factors tend to eradicate the image of hit-and-run arbitrators and act as a catalyst to the establishment of a class of arbitrators possessing both the aspects of tenure and responsibility which are certainly compatible with the notion of political or public accountability. This complexion of political responsibility and accountability has been further magnified by the 1976 PA 84 intensification of selection responsibility in a traditionally politically accountable center of authority, i.e., MERC Commissioners who are direct appointees of the Governor subject to Senate confirmation. [53]
Under § 5, as originally enacted, the chairperson selection system alternatively permitted either appointment by the parties' delegates alone or, in the event of their default, appointment by the MERC chairperson. Obviously, there was very little political accountability in the first alternative as that approach shielded the private selectors from both public scrutiny and the democratic form of government's greatest sanction  the vote. The line of political accountability drawn between the private representatives and the public was very far from direct. The second alternative, however, presented quite a different accountability perspective since that alternative required MERC intervention in the selection process. By appointing the panel chairperson, it could be presumed that the MERC chairperson  a direct appointee of the Governor with the Senate's advice and consent  would exercise great concern for the Governor's political welfare as well as the chief executive officer's concern for good public service. This alternative precluded isolation from the public process and cleared the way for direct public expressions of satisfaction or dissatisfaction to those individuals ultimately responsible for the panel members' decisions. The present § 5 selection system, as amended by 1976 PA 84, has eliminated the minimally accountable first alternative of delegate selection and expressly retained the second alternative's spirit of public accountability through its provision for MERC selection of a chairperson from a MERC-appointed permanent panel. Albeit tempered by the parties' right of exercising a peremptory veto, [54] § 5 focuses the power of chairperson appointment in the commission alone to the exclusion of either the parties' delegates or the MERC chairperson as earlier provided. Furthermore, the MERC appointee is no longer chosen at large but must have been earlier screened by, appointed to, and selected from a permanent panel of MERC arbitrators established by the commission, a gubernatorially appointed body. Considered together, these significant amendments fix a high order of political accountability in the chairperson appointment scheme. Indeed, the majority of jurisdictions which have considered this question have found accountability; [55] those which have ruled otherwise have done so primarily on the basis of distinguishable constitutional provisions. [56] Little interference exists in that line of public accountability connecting the Governor, MERC, the panel chairperson and the MERC permanent Panel of Arbitrators. Should the appointees give away the store or otherwise invite unfavorable comment, [57] the electorate may easily express dissatisfaction by directing complaints to the Governor as well as the gubernatorially appointed MERC Commissioners. These complaints may ultimately be couched in the democratic form of government's greatest sanction  the vote. The city's argument that political accountability is absent since the MERC Commissioners and panel members are not directly accountable to the people of the specific community over which arbitral authority is exercised proves entirely too much. [58] Read carefully, the city's principal objection to Act 312 is really directed at the underlying legislative wisdom of formulating a state-wide policy governing resolution of inherently local public-sector labor disputes. Thus, the city claims that the relationship of the Act 312 panel  including the MERC appointed chair  to the City of Detroit electorate is diluted by the §§ 4 and 5 panel selection process. This argument blinks the reality that the role of both the Act 312 arbitrators and the MERC appointing authority is to effectuate a state labor policy as formulated by the state Legislature serving the state electorate. Work stoppages by municipal police and fire departments, although primarily local in situs, were legislatively deemed to pose a threat to the state's public health, safety and welfare. Should the people be dissatisfied with the accountability aspect of the engineered scheme which must necessarily transcend local boundaries, the onus is upon the state's electorate, including the locally affected voting population, to exercise its political will.
Inherent in the Act 312 scheme, as well as such delegation schemes in general, is the tension, if not apparent dichotomy, between the act's dual objective of affording arbitrators sufficient decisional independence to resolve complex disputes on the one hand, and, on the other, maintaining public responsibility and accountability of those arbitrators. [59] Indeed, since the act specifically seeks to speedily resolve complex contractual impasses in the dynamic critical-service public labor sector, this tension is especially and necessarily enhanced by the scheme's need to allow flexibility in the resolution of those disputes. However, we find that these inevitable tensions have been adequately balanced in view of the act's provision for standards, the extremely public atmosphere in which the Act 312 mechanism operates, and the § 12 provision for judicial review. As we have seen, operational flexibility has been successfully maintained within the context of legislatively prescribed standards both to check unfettered exercise of arbitral authority and to provide the arbitrators with guideposts of decisional consideration which have been deemed significant by the people through their representatives. Although the panel operates with a certain degree of independence in fashioning economic as well as noneconomic awards, its exercise is significantly guided by a well-articulated series of standards for resolving those previously negotiated and sharpened, yet unresolved, matters. This tension between independence and accountability is further alleviated by the extremely public atmosphere in which the chairperson is appointed by MERC and the Act 312 panel operates. Indeed, the context in which the matter proceeds is one of high visibility and profound scrutiny, where publicity is sharply focused on both MERC's selection and the panel's deliberations. Such public attention undoubtedly enhances the accountability of both the appointers and the appointees. Since both bodies are the focal point of great public and political interest during this intense session of activity, any affront to either the legislative mandates or the public will would likely invite immediate and effective reaction. The twin facts that, first, permanent panelists do not serve for a fixed term but are removable at any time at the discretion of the MERC and, second, seek continuing employment in this area of concern, presumably quicken the arbitrator's awareness that statutory guidelines are to be closely heeded, thereby encouraging enhanced accountability. Further balancing the exercise of arbitral independence is the act's § 12 provision for judicial review. See Part V, A, for interdependence of §§ 8 and 9 requirements with § 12. This section resembles the Const 1963, art 6, § 28 provision for review of administrative orders [60] which is more expansive than the restrictive court rule provision for the review of arbitral awards in general, GCR 1963, 769.9(1), which precludes judicial inquiry into the factual merits of an arbitrator's resolution. [61] As such, § 12 significantly incorporates all appropriate bases for review without either permitting expansive de novo litigation as some jurisdictions have provided [62]  which would likely frustrate the binding and expeditious nature of the Act 312 concept  or, as in the case of GCR 1963, 769.9(1), so narrowly restricting the judiciary's basis for review as to arguably shelter such significant arbitral decisions from judicial inquiry. [63] The inclusion of similar provisions in other acts has likewise recommended their wisdom. [64] Because Act 312, as amended, provides standards as reasonably precise as the subject matter requires or permits, Osius, supra, and since we find, as a practical matter, that the scheme exhibits adequate accountability, we find the amended act constitutional.