Court Opinion

ID: 9521752
Source: CourtListenerOpinion
Date Created: 2023-08-07 02:11:10.831224+00
Date Added: 2024-06-11T12:50:35.690968
License: Public Domain

JUSTICE SIMON, dissenting: I would affirm on the ground that the terms of the collective bargaining agreement are unambiguous as to the obligations of the school board: The contract was for an annual salary rather than a daily wage, so that the annual amount was due even if the Board did not use all the teaching services it was entitled to; and the Board has not overcome the Union’s showing that there was no “lack of funds” such as would defeat the Board’s promise to pay full wages. The majority opinion, rather than attempting to deal with the agreement on its own terms, elevates the Board’s statutory “discretion” in managing its affairs to such an exalted status as to render the Board virtually incapable of entering into binding contracts. Such a broad view of discretion is not supported by the statutes involved in this case, and it has ominous implications not only for the Board’s future ability to manage its affairs, particularly with respect to securing credit, but for the law of contracts generally. The appellate court’s opinion exhaustively demonstrates that the Board was contractually required to pay its teachers their full annual salaries, based on the regular 39-week year. (89 Ill. App. 3d 861.) The matter should end there. As I understand the majority opinion, the problem is that the Board’s discretion to lay people off is something that cannot be restricted by a collective bargaining agreement, regardless of what contract law might otherwise say about the validity of the agreement and regardless of the terms of the agreement. The unbridled discretion the Board claims to have does not come from the agreement itself, for the agreement conditions the right to lay off on lack of work or lack of funds and thus requires at least some inquiry into whether either of these conditions is met. Rather, if from anywhere, it must arise from section 34—18 of the School Code, which provides that “[t]he specifications of the powers herein granted are not to be construed as exclusive, but the board shall also exercise all other powers that may be requisite or proper for the maintenance and the development of a public school system, not inconsistent with the provisions of this Code which apply to all school districts” (Ill. Rev. Stat. 1975, ch. 122, par. 34—18) and from section 10—19 of the Code, which gives the Board discretion to “specify a closing date earlier than that set on thé annual calendar” when the schools have been open for the statutory minimum number of days (Ill. Rev. Stat. 1975, ch. 122, par. 10—19). Unbridled discretion in the Board results, according to the majority, even though neither section of the School Code says anything about collective bargaining agreements, or rights the Board may retain in derogation of its contracts, or anything about salaries. I find nothing in either of these statutory sections which gives the Board the power to cut salaries at will in derogation of contracts or restricts the Board’s ability to enter into bargaining agreements with employees, collective or otherwise, so long as the terms of the agreements do not exceed budgetary appropriations. In fact, the words “all **** powers that may be requisite or proper for the maintenance and the development of a public school system” would appear, if anything, to be a statutory license to the Board to exercise its discretion by contracting with employee unions, if it decides such contracts will improve morale and employer-employee relations and promote effective management and operation of the school system. Collective bargaining has come to be a standard procedure in dealings between public bodies and their employees, and the legislature no doubt had this in mind as one of the necessary courses to be made available to the Board. The Board had the statutory “discretion” to enter into the collective bargaining agreement being challenged here. To say that this “discretion” allows the Board to do what it pleases in the name of good management, in disregard of its contract, is like saying that “freedom of contract” allows a person to do whatever he wants even after he has contracted with another. What happens in fact is that the discretion and the freedom to contract become subject to the provisions of the contract, and this applies to bargains entered into by public bodies as well as private parties. See Arlington Heights national Bank v. Village of Arlington Heights (1965), 33 Ill. 2d 557. The majority opinion strongly relies on Illinois Education Association v. Board of Education (1975), 62 Ill. 2d 127, and on Board of Trustees v. Cook County College Teachers Union (1976), 62 Ill. 2d 470, which was decided on the basis of Illinois Education Association, for the proposition that the school board cannot contract away its discretion to close schools early or fix salaries. Those cases, however, do not involve the power to close schools or fix salaries; they deal instead with the power to refuse to rehire or promote nontenured teachers from year to year. The basis of the Illinois Education Association decision (and, indirectly, of Board of Trustees, which followed Illinois Education Association) was that the discharge of a teacher, unlike the decision to close schools early due to lack of funds, is the subject of a comprehensive statutory system. The legislature has decreed the status various teachers have, their rights, and what procedures are to be followed in discharging them. The legislature has covered the subject in depth as a matter of policy. The Board must be able to eliminate inferior teachers if it is to maintain the quality of the schools, and the necessary decisions about individual teachers can hardly be made in advance. The legislature has struck an elaborate balance between that need and the opposing interest in job security. The Board is not permitted to contract away its essential powers and adopt a system in conflict with the one created by statute. The Board does not have authority to refrain from exercising its own discretion in discharging employees when occasion arises; it has a statutory duty to exercise that discretion to discharge, which it cannot abandon. Obviously, however, the Board has authority to enter into some enforceable contracts. It must be able to order supplies on credit. Could the Board repudiate its contracts with suppliers on the ground that it does not need the supplies once it closes school early? Even the Board does not claim that it could have kept the schools open, accepted the teachers’ services the last day, and then simply not paid for them. The majority is saying, in effect, that the Board may contract only to pay for teaching services by the day, not by the year. The statute does not say that, and maintenance and development of the school system do not require it. In Board of Trustees v. Cook County College Teachers Union (1976), 62 Ill. 2d 470, 480-82, the court upheld a contractual provision requiring the board of trustees to offer any available summer work to its qualified teachers in strict rotation. Teachers who had been passed over in the rotation were held entitled to full pay for the jobs they should have been offered, even though they had not done the work. The court remarked that the board of trustees retained the power to decide what summer programs to offer and who was qualified to teach them, and the board of trustees did not argue that the complaining teachers were not qualified. Decisions about the details of which of several qualified teachers were to do the work and get paid did not have to be committed to the inalienable discretion of the Board in order to maintain the schools properly; those decisions, this court held, could be controlled by contract and left to an arbitrator. I believe the present case is more like the summer work rotation controversy than like the discharge controversy. Salaries are routinely contracted for, even by school boards. The Board does not have to, and is not authorized by statute to, change its mind at any moment about how much it will pay its teachers. Indeed, the point of the annual budgeting process mandated by law is that the Board’s appropriations are not supposed to change from day to day, with the Board considering everything anew at each meeting; the Board is supposed to anticipate and stabilize its obligations at the beginning of the year. The Board has no duty to exercise continuing discretion to juggle salaries as the year progresses, and the contract it signed was not an illegal attempt to abandon any such duty. By signing a contract, the Board was not giving away future discretion; it was simply exercising its present discretion to set salaries. The Board had discretion to engage teachers and pay salaries by the year. That discretion could be exercised by contract. Having fixed annual salaries by contract, the Board has exercised its discretion as fully as is required by law, and it must abide by its decision. Compelling the Board to honor its promises does not deprive it of its lawful discretion. See Arlington Heights National Bank v. Village of Arlington Heights (1965), 33 Ill. 2d 557. The Board is, of course, entitled to close schools early, to save whatever expenses it is obligated to pay only on a daily basis. But it cannot thereby repudiate obligations that are not determined by the length of the school year. If the Board contracts to pay a fixed annual salary, rather than a per diem wage, it has to pay the annual salary, school or no school, especially when, as here, the main reason for closing the schools was to avoid paying the salaries. The Board seems to argue, and the majority opinion does not dispute, that there is some public policy which should exonerate a public body from contractual obligations when honoring them would endanger its financial position. Unfortunately good public policy in such a situation is not so easy to discern. Allowing the Board to breach some of its obligations on account of financial need might well foster an attitude that, since it is a public body, it should be able to repudiate its obligations towards other creditors when need arises. Such an attitude will result only in greater financial difficulty over time as creditors become wary of the school board and require better terms to compensate for the risk of extending credit under those circumstances. The danger is especially great because there was no intrinsic link between the teachers’ salaries and the Board’s financial difficulties. The circuit court found that the fund out of which teachers’ salaries were paid had an operating surplus. The appellate court determined that so long as that account had funds, the Board could not justify its action on the basis of lack of funds, a conclusion I believe was sound. The Board’s troubles consisted of staggering deficits in other accounts hung over from previous years. Any other breach of contract would have been an equally plausible way of saving money. In addition, significant labor problems may arise from the majority’s holding, even if it is limited to its facts. Teachers would become less willing to bargain with a body whose promises are not binding, and even when they do bargain, what prevents them from engaging in wildcat strikes of their own on the theory that, if the Board can renounce its agreements, so can the teachers? The legislature’s version of public policy is that the Board is not allowed to make contracts unless it has already appropriated the necessary money in its budget. Any contract in violation of this provision is void. (Ill. Rev. Stat. 1975, ch. 122, par. 34—49.) The legislature requires that the budget be balanced. (Ill. Rev. Stat. 1975, ch. 122, par. 34—44.) In other words, the Board members are supposed to know where the money is coming from before they promise to pay it. The Board here did appropriate ample money for teachers’ salaries, and in my view, the contract is therefore valid and enforceable. The Board’s scheme of evading the balanced-budget requirement through unorthodox accounting procedures and then using the resulting insolvency as an excuse for escaping its obligations does not conform to the system the legislature has established for keeping the Board financially sound. This court should not sanction that scheme in the name of public policy. Contract law was created to make legitimate expectations enforceable and thus encourage bargaining, which is the basis of our economic system. When a public agency is allowed to repudiate a contract, it loses some of the credibility it must have in order to continue its relationship with its employees. The ultimate loser is the public. Once the board of education signs an agreement and its obligations under the agreement come due, it is too late for it to raise “discretion” as an argument for nullifying the contract. In effect, the Board is now claiming the right to prefer some creditors over others, more or less as it pleases. I would not permit it.