Court Opinion

ID: 9620160
Source: CourtListenerOpinion
Date Created: 2023-08-22 05:39:25.133097+00
Date Added: 2024-06-11T13:14:58.614487
License: Public Domain

*1253COMPTON, Justice,
with whom RABINO WITZ, C.J. joins, dissenting in part.
The court concludes that the assignment of position classifications to salary ranges is not a mandatory subject of collective bargaining. I do not agree with this conclusion and therefore dissent. In all other respects I agree with the court.
I agree that the constitutionally mandated merit system,1 and the State Personnel Act (Personnel Act)2 which implements it, take precedence over the Public Employment Relations Act (PERA)3 to the extent that there is a conflict between them. However, the court has not articulated any conflict between the merit system and Personnel Act on the one hand and PERA on the other, nor is any apparent.
An examination of the steps to be taken under AS 39.25.150(1) and (2) is necessary for an understanding of the case. The first step is the development of the position (job) classification plan. This entails “(A) a grouping together of all positions into classes on the basis of duties and responsibilities; [and assigning] (B) an appropriate title, a description of the duties and responsibilities, training and experience qualifications, and other necessary specifications for each class of positions.” AS 39.25.-150(1).4
For example, within Department A certain employees, who have had similar education or on-the-job training, have jobs with roughly equivalent duties and responsibilities. They have in common other objectively determinable characteristics considered necessary to perform this job. The employer determines that this job will be titled “Operator I.” Thus, in order to assume the duties and responsibilities of an Operator I, an employee must have the education or training and other previously identified characteristics which the employer now specifies in a job description. Applying this procedure to all employees within all departments will result in a number of different job classifications.
The second step is development of the pay plan. It is based on the job classification plan and “shall provide for fair and reasonable compensation for services rendered, and reflect the principle of like pay for like work.” AS 39.25.150(2).
Development of the pay plan involves several considerations. At some point a wage for each job must be identified, ie., what wage should an Operator I be paid? Presumably the employer will refer to available wage data regarding wages paid to other public employees, and perhaps private employees, for comparable employment. By this process “fair and reasonable compensation for services rendered” should be established. Wage comparability also must be applied in order to effectuate the principle of “like pay for like work.”
The employer and union determine the available ranges into which each job classification ultimately will be placed.5 If the *1254job classification of Operator I in Department A and Examiner III in Department B are roughly equivalent in terms of duties, responsibilities and qualifications, these classifications should be grouped together for the purpose of assignment to a range.6 Applying this procedure to all job classifications will result in the emergence of a number of different job classification groupings and ranges. A hierarchy of ranges will be established. If there are ten such groupings, they may be denominated Ranges I through X. These ranges are commonly referred to as “salary ranges.”
The court holds that development of the job classification plan is a matter that is not a mandatory subject of collective bargaining. I agree. However, one of the two integral components of the pay plan is the placement of the employee’s job classification in a particular salary range by the personnel director. This determines how much a specific employee will receive as wages. The court holds that this also is not a mandatory subject of collective bargaining. I disagree.
This court said in Kenai Peninsula Borough School District v. Kenai Peninsula Education Association, 572 P.2d 416, 422 (Alaska 1977) (Kenai I), that “a matter is more susceptible to bargaining the more it deals with economic interests of employees and the less it concerns professional goals and methods.” Except for assignment of dollar figures to salary ranges, nothing deals with the economic interests of employees more than assignment of job classifications to those salary ranges.
The state argues that assignment of job classifications to salary ranges is a “general polic[y] describing the function and purpose[ ] of a public employer,” and therefore does not fall within AS 23.40.250(8)’s definition of “terms and conditions of employment.” The essence of the state’s argument is that denying the state complete control over job classification decisions will undermine the merit system7 since otherwise the state will have to bargain with the union over the placement of approximately 1,000 different job classifications across multiple salary ranges. Further, according to the state, the stated purpose of PERA to maintain “merit-system principles among public employees,” AS 23.40.070(3), indicates the clear intent of the legislature to immunize the state’s job classification decisions from mandatory bargaining obligations.
The court’s analysis proceeds along similar lines. The court notes that the merit system defined in AS 39.25.010(b)(2) embodies “regular integrated salary programs.” Op. at 1250. A salary program “is the schedule produced by integrating the applicable job classification plan with the applicable pay plan. See AS 39.25.150(1) & (2).” Id. From this the court declares that “arguably, the first aspect of the pay plan— the assignment of salary ranges to job classes — actually embodies, in practical form, the state’s preeminent policy of establishing personnel administration according to the merit principle.” Id. Reasoning from what it has declared to be arguable, the court then opines that bargaining over assignment of salary ranges to job classifications “necessarily impinges upon the merit principle.” Id. Thus it concludes that assignment of salary ranges to job classifications is not subject to collective bargaining.8
*1255Having already arrived at its ultimate conclusion, the court then acknowledges that assignment of job classifications to salary ranges also impinges on the issue of compensation. This leads the court to remark that “on the issue of salary range assignments, employee and governmental interests substantially overlap.” Op. at 1251. The “overlap of employer and employee interests on this issue actually may benefit public employment administration. ... Consequently, the assignment of salary ranges clearly should be a permissive subject of bargaining.” Op. at 1251.
The court’s reliance on an overlapping of interests to exclude from mandatory collective bargaining the assignment of job classifications to salary ranges is misplaced. The employer’s and employees’ interests will always overlap, to a greater or lesser degree.
It must be noted that assignment of dollar figures to salary ranges, the other integral component of the pay plan required by AS 39.25.150(2), does not impinge on the merit principle. The state does not claim that it does. Instead, the state acknowledges that assignment of dollar figures to ranges “is a matter of ‘wages’ and thus a mandatory subject of bargaining.” Op. at 1250. The court does not question either the state’s analysis or its conclusion regarding the propriety of assignment of dollar figures to salary ranges.
The state’s differentiation between assignment of job classifications to salary ranges and assignment of dollar figures to salary ranges is significant. Neither the text of the Personnel Act nor its legislative history presumes or implies any differentiation between these two processes. This underscores the flaw in the state’s argument and the error to which it leads the court.
Alaska Statute 23.40.070(2) requires that “public employers ... negotiate with and enter into written agreements with employee organizations on matters of wages, hours, and other terms and conditions of employment.” In turn, AS 23.40.250(8) defines “terms and conditions of employment” to mean “the hours of employment, the compensation and fringe benefits, and the employer’s personnel policies affecting the working conditions of the employees; but does not mean the general policies describing the function and purposes of a public employer.” The economic impact on an employee’s wages and compensation by assignment of an employee’s job classification to one salary range rather than another is both significant and obvious. APEA provides the following example:
For instance, if the employee classification “Accounting Technician III” is assigned to Range 16, a new hire (Step A) is paid $2,702 per month. If the classification is assigned to Range 17, the new hire will receive $2,895 per month; if Range 15 is the salary benchmark, the employee’s monthly wages are $2,518. If an Accounting Technician III has a level of responsibility greater than an Accounting Technician II, then that fact is reflected in the wages paid.
I am not persuaded by the state’s argument that decisions affecting assignment of job classification to salary ranges are “general policies” within a public employer’s exclusive control. I conclude that “wages, hours, and other terms and conditions of employment” under AS 23.40.-*1256070(2), and “terms and conditions of employment” under AS 23.40.250(8), clearly include assignment of job classifications to salary ranges, and thus are mandatory subjects of collective bargaining. Seemingly the court does also, for in accepting the unions’ argument, the court declares that “assignment of salary ranges to job classes undeniably impinges upon the issue of ‘compensation ... and the employer’s policies affecting the working conditions of employees.’ ” Op. at 1250.
Job classification decisions do not concern professional goals and methods in the same way as do those matters, such as determination of class size and evaluation of administrators, that the court held nonnegotiable in Kenai I, 572 P.2d at 424. It is not obvious that assignment of job classifications to salary ranges falls within “the general polic[y] describing the function and purpose[] of a public employer.” AS 23.-40.250(8).
The unions’ position that collective bargaining over assignment of job classifications to salary ranges does not undermine the merit system is persuasive, in the absence of any articulated reasons or evidence to the contrary. I reiterate what the court has already quoted from State v. Public Safety Employees Association, 798 P.2d 1281, 1286 (Alaska 1990) quoted in Op. at 1251:
State employees are as familiar with their qualifications and positions as their administrators are. They may be able to make a valuable contribution to the process of assigning positions to salary ranges. In this respect, giving public employees a voice in matters like salary range classification seems consistent with the purposes of the [Personnel] Act.
Unfortunately, the court then silences the voice of these same public employees by immediately declaring that assignment of job classifications to salary ranges should be a subject of “permissive ” collective bargaining. “The state definitely should give its employees a voice in salary range assignments, by bargaining over assignments, when the state considers such interaction beneficial to the larger mission of public employment.” Op. at 1251 (emphasis added).
Assignment of dollar figures to salary ranges is a matter of “wages” and thus a mandatory subject of collective bargaining. Yet as important as are salary ranges, they are meaningless until job classifications are assigned to them. Nonetheless, the court concludes that this step in the development of the pay plan is not a mandatory subject of collective bargaining, only a permissive subject of collective bargaining. In so concluding, the court necessarily determines that assignment of job classifications to salary ranges is not a matter of “wages, hours, and other terms and conditions of employment.” Since “[e]mployers are free to make unilateral changes on matters which fall outside these mandatory subjects (wages, hours, and other terms and conditions of employment) of bargaining,” Alaska Community Colleges’ Federation of Teachers, Local No. v. University of Alaska, 669 P.2d 1299, 1305 (Alaska 1983), the state will be free unilaterally to reassign job classifications to salary ranges. In just what way this type of unilateral action on the part of the public employer encourages, develops and maintains an effective career service is not explained.
On the contrary, if we recognize a state right to unilaterally reassign job classifications, the real possibility exists that the merit principle will be impinged. In addition to “regular integrated salary programs” on which the court focuses, the merit principle includes “selection and retention of an employee’s position secure from political influences.” AS 39.25.-010(b)(5). Where individuals who are in political disfavor are employed in identifiable job classifications, the potential exists for abuse of a state right to unilaterally reassign a job classification to a lower range.
Job classification is the responsibility of the director of personnel, subject to approval of the commissioner of administration and personnel board. AS 39.25.150(1). The personnel board is comprised of three persons, not more than two of whom may *1257be from the same political party. They are appointed by the governor and confirmed by the legislature. On the other hand, the pay plan is the responsibility of the director of personnel alone. AS 39.25.150(2). The legislature,' in regular or special session, may amend, approve or disapprove of the pay plan. Id. This difference is significant because of the greater power vested in one person, the director of personnel, in preparing, maintaining, revising and administering the pay plan.
At the outset of its opinion, the court acknowledged that “[t]he stated purpose of PERA is to give public employees ‘the right to share in the decision-making process affecting wages and working conditions.’ ” Op. at 1248. Concluding that assignment of job classifications to salary ranges is a matter for only permissive collective bargaining is a repudiation of sharing in any sense of the word.
I would reverse the decision of the superior court, which upheld Alaska Labor Relations Agency Order and Decision No. 110, and direct that the case be remanded to the ALRA with directions that the public employer be ordered to enter into mandatory collective bargaining with the unions over assignment of job classifications to salary ranges.

. Article XII, section 6 of the Alaska Constitution provides: "The legislature shall establish a system under which the merit principle will govern the employment of persons by the State.”

. AS 39.25.010 identifies the purpose of the State Personnel Act as follows:
It is the purpose of this chapter to establish a system of personnel administration based upon the merit principle and adapted to the requirements of the state to the end that persons best qualified to perform the functions of the state will be employed, and that an effective career service will be encouraged, developed and maintained.

. AS 23.40.070-.260.

. In its rebuttal brief before the Alaska Labor Relations Agency, the state declared:
The very essence of the State’s function in the execution of these constitutional and statutory mandates is the description of the work to be performed, the determination of the knowledge, skills and abilities of employees necessary to perform such work and the allocation of that work for pay purposes.

.It is not disputed that ranges are freely negotiated in the collective bargaining process. APEA provides the following example:
The State and the union negotiate over the appropriate salary schedule deciding the "pure” wage for an employee, e.g., Range 16, Step A salaries are $2,702 per month, $2,895 per month, or $2,518 per month. Determining a particular employee’s compensation requires matching the wage within the Range Schedule to the employee's classification.
Presumably the wage data which are used to establish "fair and reasonable compensation” *1254and “like pay for like work" for each job classification will also be used to establish groupings of job classifications and salary ranges.

. In its rebuttal brief before the Alaska Labor Relations Agency, the state declared: “As described earlier, each job is analyzed and assigned to a classification with groups of classifications assigned to a pay range.”

. Amicus Curiae Public Employees Local 71 points out that it has negotiated assignment of job classifications to salary ranges since 1972, with binding arbitration where an impasse re-suited. The state’s response is simply that because it permitted this subject to be negotiated does not mean that the subject is required to be negotiated. The state's reasoning may be flawless. However, it points to no incident when negotiation of this subject, and submission of the subject to binding arbitration, has "impinged" on the merit system. Neither does the court.

.As acknowledged by the court in State v. Public Safety Employees Association, 798 P.2d 1281, 1286 (Alaska 1990), decisions in other jurisdictions supporting the Alaska Labor Relations *1255Agency’s conclusion that the assignment of job classifications to salary ranges is not a mandatory subject of bargaining are not very helpful. Many states have more detailed provisions addressing the issue:
For example, based upon a very specific merit system exception to the definition of the terms and conditions of employment, the New Hampshire Supreme Court has held that most subjects within the jurisdiction of the Personnel Commission, including salary classification, are not negotiable. State Employees’ Ass’n v. New Hampshire Pub. Employee Labor Relations Bd. [118 N.H. 885] 397 A.2d 1035 (N.H.1978). Similarly, a New York court held that classification of court employees is not a mandatory subject of bargaining because the legislature specifically declared that "allocations and reallocations to salary grades of positions in the classified service of the state are not terms and conditions of employ-ment_" Evans v. Newman, 71 A.D.2d 240, 423 N.Y.S.2d 59, 62 (1979).
798 P.2d at 1286.
This court agrees with its prior assessment. Op. at 1251 n. 10.