Opinion ID: 2273678
Heading Depth: 1
Heading Rank: 4

Heading: Repudiation of Existing Agreements

Text: Having determined that the law does not require the public employer to reach an agreement with its employees, what remains is the issue of whether the public employer can repudiate agreements that it has chosen to enter into. Despite the contractual nature of the agreements in this case, the district relies upon Sumpter for the proposition that the district  having accepted the proposals and entered into written agreements (contracts) with the employee groups regarding their represented employees  had the right unilaterally to rescind those agreements once it had agreed to them and put them into effect. The city in Sumpter reached an agreement with a union representing firefighters as to the firefighters' working conditions. This agreement was made into a written memorandum of understanding. The city council enacted an ordinance adopting the terms of the memorandum as the working conditions for the two years covered by the document. A few months later, while the agreement was still in effect, the city imposed a new work schedule that conflicted with the terms of the memorandum. The union attempted to enjoin the city from proceeding with these changes. The union argued that the public sector labor law authorizes a binding agreement between the public body and its employees when it authorizes adoption of the proposal by `ordinance, resolution, bill or other form required for adoption.' 645 S.W.2d at 362-63. This Court disagreed, noting that Clouse held that the employer could not enter into the agreement in the first place without violating the constitutional mandate of separation of powers. Id. at 363. Even if the employer adopted the agreed-upon proposal, it was not a binding contract, but rather an ordinance, administrative rule, or regulation that could be changed by the public body at any time. Id. This Court in Sumpter held that the city was not bound by the agreement it had signed with the union and that the terms could be changed unilaterally by the city even during the effective period of the agreement. There is no such principle  that is, that a contract's terms can be changed unilaterally  that applies to contracts between individual employees and governmental bodies. See, e.g., Kunzie v. City of Olivette, 184 S.W.3d 570, 574 (Mo. banc 2006) (recognizing that city employee could bring a contractual claim for wrongful discharge). Labor contracts with groups of public employees have been treated as the only contracts  entered into within the authority of the governmental entity  that have been considered unenforceable. Sumpter's treatment of collective bargaining agreements is inconsistent with article I, section 29, and, accordingly, Sumpter is overruled. [7] School districts execute binding contracts with school superintendents, creditors who hold the districts' bonded indebtedness, contractors that build and repair school buildings, textbook publishers, private cleaning services, and so forth. [8] These agreements are the subject of legislative action by the school district, but that does not mean the district can repudiate its agreements at will. No contractor or supplier could do business with an entity that repudiates its agreements. In any public contract, there is the question of what duration a public entity is permitted to bind itself. Some of these limits are set by statute, and some that involve financial commitments may be limited by the length of the budget process. [9] School districts certainly are free to include clauses excusing contractual obligations, just as the teacher tenure act provides for placing teachers on leave of absence in times of financial distress or failing enrollments. [10] Section 168.124, RSMo. Supp.2006. The parties did not address the question of how long the district would be obligated under its agreements, and that is an appropriate question for the circuit court to address on remand.