Opinion ID: 2520215
Heading Depth: 1
Heading Rank: 9

Heading: Legislative and Administrative Municipal Powers

Text: ¶ 10 May the People of any municipality require the governing body of the municipality to employ its employees in a manner that includes collective bargaining agreements? In the past we have distinguished between the exercise of legislative and administrative power, with the former being a proper exercise of power via the initiative process and the latter an improper exercise: The constitutional reservation of power to the citizenry of municipal corporations, Const. Art. 18-21-4(a), encompasses all municipal legislative power but does not encompass administrative power. In Yarbrough v. Donaldson, 67 Okl. 318, 170 P. 1165 (1918), this court refused to require the application of the referendum process to a resolution of the city council approving the sale of the city's electric light plant authorized by statute. Syllabus by the court states in part: `   such action is not legislative, but administrative action involving administrative discretion and not within the referendum powers reserved to the people of municipalities   .' In re Supreme Court Adjudication of Initiative Petitions in Norman, Oklahoma Numbered 74-1 and 74-2, 1975 OK 36, 534 P.2d 3, 7. How does the Court determine whether a particular exercise of power is administrative or legislative? ¶ 11 Public duties (or governmental functions) were identified with the exercise of legislative power, and distinguished from business and administrative (private) functions. For example, we said that: Municipal corporations in operating a water plant exercise business and administrative functions, rather than those strictly governmental in their nature, and in the exercise of such functions are governed largely by the same rules applicable to individuals or private corporations engaged in the same business, Moomaw v. Sions, 1923 OK 481, 220 P. 865, 867, quoting, Fretz v. City of Edmond, 1916 OK 516, 168 P. 800. Moomaw further described this dualistic view of municipal power thusly: A city has two classes of powers, the one legislative, public, governmental, in the exercise of which it is a sovereignty and governs its people; the other, proprietary, quasi private, conferred upon it, not for the purpose of governing its people, but for the private advantage of the inhabitants of the city and of the city itself as a legal personality. Moomaw, 220 P. at 867, quoting, Illinois Trust & Savings Bank v. City of Arkansas City, 76 F. 271, 22 C.C.A. 171, 34 L.R.A. 518 (8th Cir.1896). One question in Moomaw involved the contractual powers of a board of trustees of an incorporated town as such related to that city's operation of a facility for generating electricity, and we said that: The authority given the municipality to undertake the operation of a business enterprise necessarily carries with it the authority to deal with the same in the same manner that private corporations would deal with its property, subject only to constitutional and legislative restrictions. Moomaw, 220 P. at 867. Opinions such as In re Supreme Court Adjudication of Initiative Petitions in Norman, Yarbrough, and Moomaw do support defining the exercise of administrative power so as to include all aspects of a municipality's employer/employee relationships that are not otherwise specifically controlled by statutory or constitutional law. ¶ 12 Some opinions, such as Fite v. Lacey, 1984 OK 83, 691 P.2d 901, rely, in part, upon the underlying philosophy found in Moomaw, and define administrative power as that exercised to address a temporary condition. In Fite we said that: This court has repeatedly held that the constitutionally reserved powers of initiative and referendum apply only to legislative matters and not to administrative acts. Okl. Const. Art. 18, § 4(a) provides: The powers of the initiative and referendum, reserved by this Constitution to the people of the State and the respective counties and districts therein, are hereby reserved to the people of every municipal corporation now existing or which shall hereafter be created within this State, with reference to all legislative authority which it may exercise, and amendments to charters for its own government in accordance with the provisions of this Constitution. In Brazell v. Zeigler, 26 Okl. 826, 110 P. 1052 (1910), this court stated that acts which are subject to the initiative and referendum powers must be considered in the sense of general laws, namely rules of civil conduct prescribed by the lawmaking power and of general application ... the law is said to be a rule, not a transient, sudden order to and concerning a particular person, but something permanent, uniform and universal. The distinction between subjects of a temporary nature and those of a permanent character is also discussed in McQuillin, Municipal Corporations, § 1655 (3rd ed.1981). A pertinent portion of that discussion provides: Actions relating to subjects of a permanent and general character are generally regarded as legislative, and those providing for subjects of a temporary and special character are regarded as administrative... Obviously, details which are essentially of a fluctuating sort, due to economic or other conditions, cannot be set up in and by an Ordinance to be submitted to the vote of the people. Collective bargaining with compulsory binding arbitration is a tool of personnel management which involves the consideration of a number of factors which are subject to change. Variable economic conditions, distribution of work force and a number of ever-changing factors which effect the work environment must be taken into consideration. Periodic re-examination of established policies is necessary for effective personnel management. Such a process cannot logically be said to be of a permanent character. Due to this lack of permanence, it is more properly characterized as an administrative function of elected officials. Fite v. Lacey, 691 P.2d at 904-905. Thus, Fite defines administrative acts as transient in nature and affecting particular people, as opposed to legislative acts that are general laws and rules of civil conduct that are of general application. ¶ 13 Historically, courts identified legislative and administrative powers with governmental and private powers, e.g., the common-law distinction between public wrongs (or public duties) and private wrongs (or private duties). A private wrong [2] springs from a breached duty owed to a particular individual as opposed to the public at large, and thus, a city's duty to provide a safe working environment for its employee was said to be private, and springing from the private contractual relationship with its employees as opposed to any duty to the citizenry at large. Rhobidas v. City of Concord, 70 N.H. 90, 47 A. 82, 87 (1900). Fite's conclusion that collective bargaining is an administrative function is consistent with the common-law distinction. ¶ 14 But this Court is not bound to blind adherence to every rule of common law. A universal and literal application of Fite would also necessarily mean that the People residing in a particular municipality would not have the power to legislate with regard to any subject relating to that municipality's employment contracts unless specifically authorized by some authority that supercedes municipal authority, e.g., when specifically allowed by state statute or constitution. This view fails to incorporate the more modern view expressed by many courts that the nature of a municipality's employer/employee contractual relationship with its employees does involve an exercise of governmental power. ¶ 15 Employees of governmental entities may possess, as employees, certain liberty and property interests protected by the Due Process Clause. Hennigh v. City of Shawnee, 155 F.3d 1249,1253 (10th Cir.1998). One source for these protected rights may be the contractual obligations and rights of the parties. For example, this Court recently reviewed an allegation of a procedural due process violation in the context of a municipal employment contract which limited an employer's discretion, and gave an employee a legitimate expectation of continued employment in a certain capacity. Barnthouse v. City of Edmond, 2003 OK 42, ¶¶ 13-14, 73 P.3d 840, 847. This case involved a contract that was a collective bargaining agreement, but this fact is not the critical one. The form of the contract as a collective bargaining agreement did not create the protected interest; rather, it was its substance, i.e., the fact that the employer's discretion was limited and the employee's expectation was created by a contract or agreement made by the parties. ¶ 16 When explaining Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972), the Tenth Circuit court said that: The Court explained that legitimate claims of entitlement arose from independent sources such as state law, rules, or understandings that secure benefits to an employee.  Asbill v. Housing Authority of Choctaw Nation of Oklahoma, 726 F.2d 1499, 1501-1502 (10th Cir.1984), (emphasis added). For example, we applied Asbill in Blanton v. Housing Authority of City of Norman, 1990 OK 38, 794 P.2d 412, 414-415, where we explained that Blanton's evidence was insufficient to show that his employment contract contained a substantive restriction on the Authority's power to discharge him from employment. ¶ 17 It is certainly true that not every provision of a public contract gives rise to a corresponding constitutional interest. But the illustrative importance of these Due Process opinions to the case today is simply this: a municipal employment contract is no longer considered to be merely a private business activity between the contracting parties. Such contracts are no longer considered to involve matters outside the scope of an exercise of governmental power. The case today is not about personnel decisions with regard to specific employees. Instead, the issue is the policy controlling the general nature of employment contracts a city should have with its employeesif approved by the People. ¶ 18 One of the ironies in this controversy is that a municipality is claiming that it, in an administrative capacity, has authority, to the exclusion of the expressed will of the People, to determine if the municipality should create collective bargaining employment contracts, with the contemporaneous creation of expectation (or Due Process) interests. In other words, the city claims that it should, as an administrative matter, determine to what extent constitutional rights are created by its contracts, and the People should not have the ability to vote on this issue. I must conclude that The People do possess an interest in determining the policy and the general nature of how a city contracts with its employees, and whether constitutionally protected property and liberty interests are thereby created. I would thus issue mandamus and require the clerk to proceed without invalidating the petition by reason of its substance.