Court Opinion

ID: 9696851
Source: CourtListenerOpinion
Date Created: 2023-08-25 19:00:17.429128+00
Date Added: 2024-06-11T18:20:27.194442
License: Public Domain

Skoglund, J.
This case involves the obligation of parties to a collective-bargaining agreement to exhaust available contractual remedies before a statutory unfair-labor-practice charge will he under the Vermont Municipal Relations Act. The Milton Board of School Trustees (school board) appeals from a decision of the Vermont Labor Relations Board (Labor Board), which held that the school board violated 21 V.S.A. § 1726(a)(5) by failing to bargain in good faith with the Milton Education and Support Association (association) over the decision to lay off bargaining-unit employees and to subcontract for custodial services. On appeal, the school board claims that, because the scope of its management rights under the collective-bargaining agreement is a question of contract interpretation, the Labor Board erred by refusing to defer to the arbitration process provided for in the collective-bargaining agreement. Further, the school board claims that the Labor Board erred in concluding that the association did not waive its right to bargain over the subcontracting decision. We agree with the school board’s first argument; however, we disagree with its second argument. Therefore, we affirm in part, reverse in part and remand for the Labor Board to reconsider its decision in light of the result of the parties’ arbitration.
I.
The association is the exclusive bargaining representative for the teachers and support personnel, including custodial staff, employed in the Milton Town School District. The parties, pursuant to 21 V.S.A. § 1725, have engaged in collective bargaining periodically over the *66years and have entered into several successive collective-bargaining agreements for nonteacher employees. A brief review of the parties’ negotiation history and prior bargained agreements is helpful to this discussion.
Article III of the parties’ 1992-94 collective-bargaining agreement contained the following language enumerating management rights:
It is herein agreed that except as specifically and directly modified by the express language in a specific provision of this Agreement, the Board retains all rights and powers that it has, or may hereafter be granted by law, and may exercise such powers at its discretion.
The parties continued to be governed by the 1992-94 agreement into 1995 while they negotiated a successor agreement.
In the spring of 1995, the school board openly considered, and decided against, subcontracting the school district’s custodial and maintenance services to a nonbargaining-unit provider. Consequently, the association was aware of the school board’s consideration of subcontracting at the time it commenced negotiations for a successor agreement.
During negotiations for the 1994-96 agreement, the association acceded to a change in Article III of the agreement, replacing the more general language with a provision offered by the school board listing “management rights” in greater detail. Article III then read in pertinent part as follows:
3.1 Management rights shall include, but not be limited to the right
a. to hire, discharge, discipline, lay off, recall, transfer, promote and demote employees,
b. to assign work and require overtime,
c. to organize, enlarge, reduce or discontinue a function, position or department,
d. to introduce new technology, tools, equipment or laborsaving devices,
e. to establish new jobs,
f. to classify and reclassify employees,
g. to determine or change shifts, starting and quitting times and the number of hours and days worked,
h. to evaluate employees,
i. to promulgate rules and regulations which do not otherwise contravene the terms of this Agreement,
*67j. to determine the manner, means and methods by which all operations and all educational missions and goals of the School District will be carried out,
k. to take such other action as it deems necessary to maintain the efficiency of the District’s operations.
The association and the school board executed the 1994-96 agreement on August 31, 1995.
After executing the 1994-96 agreement, due to expire June 30, 1996, the parties began negotiations for a successor agreement. In its first proposal for contract changes, the association requested a “protective clause re subcontracting of various services.” At the request of the school board for more specific language, the association submitted two proposals that would have prohibited the school board from subcontracting any bargaining-unit work. One proposal provided: “The duties of any bargaining unit member or the responsibilities of any position in the bargaining unit shall not be altered, increased, or transferred to persons not covered by this Agreement.” The other proposal provided: “The Board shall not employ persons or services to perform work regularly and customarily performed by bargaining unit personnel except for major projects and emergencies.” The school board rejected both provisions. In December 1995, the parties ratified an agreement covering the period July 1,1996, to June 30,1999, and the agreement was signed by the parties on April 4, 1996. The provisions of Article III of the 1994-96 agreement were carried forward unchanged to the 1996-99 agreement.
On February 19, 1996, the school district superintendent sent the president of the association a memorandum stating that the school district business manager was considering contracting out custodial services for July 1, 1996, to June 30,1997, to save costs and improve services. The president of the association wrote to the school board on March 28, 1996, requesting “to negotiate over the impact of the implementation of the sub-contracting for custodial services.” The school board agreed to negotiate over the impact, and the parties met on April 17. As no decision to subcontract had yet been made, the issue was discussed only in general terms.
On May 2, 1996, the school board voted to authorize the business manager to execute a contract with a maintenance company for custodial services from July 1,1996, to June 30,1997. On May 9,1996, the association filed a grievance alleging that the school board violated the collective-bargaining agreement by contracting out the custodial work. This grievance proceeded to arbitration under the *68agreement.1 On June 12, 1996, the association president wrote the superintendent and, for the first time, requested negotiation over the decision to subcontract itself, not just the impact thereof. This letter was followed by one, dated June 27, 1996, from the Vermont-NEA UniServ District #1 Director, informing the superintendent of the association’s intention to file an unfair-labor-practice charge as a result of the subcontracting decision. On July 1, 1996, the subcontracted services began. In a letter dated July 12, 1996, the superintendent responded to the association’s representative that the school board would not rescind its decision to subcontract and remained ready to further negotiate the impact of the decision to subcontract.
On July 19, 1996, the association filed a charge of unfair labor practices with the Labor Board, alleging that the school board unilaterally decided to contract out custodial services during the term of a collective-bargaining agreement under which custodial services is bargaining-unit work, in violation of 21 V.S.A. § 1726(a)(5). The school board moved for summary judgment before the Labor Board, arguing that the Labor Board should defer to the grievance procedure of the agreement, and that the association’s delay of several months before requesting decisional bargaining constituted a waiver of any such bargaining right in light of the prior request for impact bargaining only. The association did not file an opposition to the motion.2
*69In a decision issued June 6, 1997, the Labor Board denied the school board’s summary judgment motion and further ruled that it would not defer the dispute to the arbitration procedure because: (1) the issue of subcontracting is central to the association’s ability to protect the bargaining-unit employees; (2) 21 V.S.A. § 1726(a)(5) mandates good-faith bargaining prior to subcontracting work that is done by bargaining-unit employees; and (3) the agreement does not explicitly grant the school board the right to subcontract work without negotiating with the association, and absent such an explicit provision, deferral of the dispute to arbitration is not appropriate. The Labor Board also held that the association did not waive its right to bargain over the subcontracting decision by failing to request bargaining until four months after it was notified that the school board was considering the issue. The Labor Board concluded that the school board committed an unfair practice by unilaterally subcontracting bargaining-unit work during a period when it had a legal duty to bargain in good faith. The school board appeals.
Our review of decisions of the Labor Board is limited. See In re Butler, 166 Vt. 423, 425, 697 A.2d 659, 661 (1997). We give substantial deference to the Labor Board, see id., and presume its actions are correct and reasonable. See In re Towle, 164 Vt. 145, 148, 665 A.2d 55, 58 (1995). We will uphold the Labor Board’s order if the findings, taken as a whole, justify its ultimate conclusion, see In re West, 165 Vt. 445, 449, 685 A.2d 1099, 1102 (1996), even if we would not have reached the same decision. See Butler, 166 Vt. at 425, 697 A.2d at 661. Nevertheless, this Court will reverse Labor Board decisions if they are not supported by the evidence, see Vermont State Colleges Faculty Fed’n v. Vermont State Colleges, 152 Vt. 343, 348, 566 A.2d 955, 958 (1989), or if the statutory analysis does not withstand the Court’s review. See Vermont State Employees’ Ass’n v. State, 151 Vt. 492, 495-96, 562 A.2d 1054, 1056-57 (1989).
*70II.
The issue presented in this case is whether the Labor Board erred by refusing to defer to the arbitration process. Parties to a collective-bargaining agreement are required to exhaust contractual remedies before bringing a statutory unfair-labor-practiee charge. See Burlington Area Pub. Employees Union v. Champlain Water Dist., 156 Vt. 516, 518, 594 A.2d 421, 422-23 (1991). Thus, the Labor Board should defer to the grievance procedure in the agreement if the issue in the complaint is covered by the agreement, regardless of whether the issue might also involve an unfair-labor-practice claim. See id. at 519, 594 A.2d at 423. We require the parties to resolve their disputes under their agreement to foster the collective-bargaining relationship and to show our favor for voluntary arbitration. See id. at 519-20, 594 A.2d at 423. Nonetheless, the exhaustion doctrine does not bind the parties if the issue “does not qualify as a matter of contract interpretation, if an overriding statute negates deferral, or if the Board’s own deferral guidelines indicate that deferral would not serve the purposes of the statute.” Id. at 520, 594 A.2d at 423.
The issue here is not whether subcontracting is a mandatory subject of collective bargaining. See Fibreboard Paper Prod. Corp. v. NLRB, 379 U.S. 203, 210, 215 (1964) (under facts of case, decision to subcontract is subject of mandatory collective bargaining within statutory phrase “terms and conditions of employment” found in § 8(d) of National Labor Relations Act); Middlebury Union High Sch. Educ. Support Personnel Unit v. Middlebury Union High Sch. Bd. of Sch. Dirs., 15 V.L.R.B. 397, 408-09 (1992) (construing statutory phrase “conditions of employment” as in Fibreboard, and holding that contracting out custodial work was mandatory subject of bargaining). Both parties agree that, under the facts of this case, it is. Rather, the question presented in the original grievance and in the subsequent Labor Board proceedings is whether the agreement contains bargained-for managerial rights that include the ability to subcontract bargaining-unit work.
The management-rights provision before us provides that the school board has the right, among others: (1) to hire, discharge, discipline, lay off, recall, transfer, promote and demote employees; (2) to reduce or discontinue a function or position; (3) to determine the manner by which all operations of the school district will be carried out; and (4) “to take such other action as it deems necessary to maintain the efficiency of the District’s operations.” The school board maintains that this provision covers the issue of subcontracting and *71grants it the authority to decide how the school district’s maintenance operation will be carried out, and to discontinue a function or position and subcontract the duties and responsibilities of such function or position if the efficiency of the school district’s operations so requires.
The association, at least initially, gave credence to the school board’s belief that the agreement authorized management to subcontract the maintenance work, as it responded to the decision to subcontract by requesting bargaining over the impact of such subcontracting, and not the subcontracting decision itself. Further, the association may be said to have tacitly conceded this was a contractual issue by filing a grievance over the subcontracting decision alleging a violation of the terms of the agreement.
In one sentence, the Labor Board dismissed the school board’s claim that subcontracting was covered by the agreement, with no analysis of the management-rights section of the agreement. It held that the management-rights article of the agreement provided no basis for deferral, as it did not “explicitly refer to management’s ability to subcontract work.”
The Labor Board further did not believe that the parties’ negotiating history supported the school board’s claim, notwithstanding the fact that subcontracting was the subject of contract talks.3 As noted above, the association had attempted to include “a protective clause re subcontracting” in the 1996-99 contract that would have specifically eliminated any ability of management to subcontract, but abandoned the effort short of impasse. Why the association did not insist on inclusion of a protective clause to the point of impasse is not revealed in the record. It certainly had the right to take its demand to impasse. See First Nat’l Maintenance Corp. v. NLRB, 452 U.S. 666, 674-75 (1981).4 The actions of the association during negotiations would *72support a conclusion that the issue presented in this case requires an interpretation of the management-rights provision of the agreement.
The management rights spelled out in the provisions of Article III and the contract as a whole must be evaluated to determine whether those provisions allow the school board to subcontract the duties and responsibilities of the custodial function. The question of whether the contract provisions govern the specific action taken by management is properly deferred to grievance arbitration, particularly where, as here, the matter has already been the subject of negotiations.
Furthermore, no exception to deferral applies here. First, in this case, there is no overriding statute that negates deferral. Many grievances under a collective-bargaining agreement could also be construed as statutory violations. As we have previously stated: “If the deferral were limited to cases where grievances implicated no possible statutory violation, deferral would be rare indeed.”' Champlain Water Dist., 156 Vt. at 521, 594 A.2d at 424. As noted earlier, both parties agree that subcontracting is a “condition of employment” and subject to collective bargaining pursuant to statute. The question is, was it a bargained-for element of management rights. Thus, in the instant case, contract interpretation may resolve the dispute, and the Labor Board should have deferred to the arbitration procedure. “It is merely the prudent exercise of restraint, a postponement of the use of the Board’s processes to give the parties’ own dispute resolution machinery a chance to succeed.” In re United Technologies Corp., 268 N.L.R.B. 557, 560 (1984).
Second, the Labor Board’s guidelines on deferral policy, announced in Burlington Educ. Ass’n v. Burlington Bd. of School Comm’rs, 1 V.L.R.B. 335, 343-44 (1978), require a conclusion that deferral in this matter would not be adverse to the purposes of the Municipal Relations Act. See Champlain Water Dist., 156 Vt. at 523, 594 A.2d at 425. In determining whether to require exhaustion of contractual remedies, the Labor Board considers whether the employer’s action is intended to significantly undermine, or would have the effect of significantly undermining, the union, and whether the employees have adequate redress through the grievance procedure. The Labor Board may also examine “the nature of the alleged unfair practice and its effect on the union and its members,” and consider whether the *73employer’s conduct would have an unduly chilling effect on the union or union representation. See Burlington Educ. Ass’n, 1 V.L.R.B. at 848-44.
These guidelines do not negate deferral in this case. There is no basis in the record to conclude that the employer’s action was intended to, or did, undermine the association or its ability to bargain on behalf of its members. There is . no dispute that the school board was required to bargain over the “impact” of its decision to contract out the custodial services. And, when the association requested a bargaining session over the impact of the subcontracting decision, one was held. The association brought a grievance that was promptly referred to arbitration for resolution. Adequate redress was available through the grievance procedure.5 The record does not support a finding that the actions of the school board, taken with full notification to the association, in any meaningful way “chilled” the association’s ability to represent its members.
Both federal and state law have long recognized the importance of arbitration in resolving labor disputes, based on the underlying conviction “that the parties to a collective-bargaining agreement are in the best position to resolve, with the help of a neutral third party if necessary, disputes concerning the correct interpretation of their contract.” United Technologies Corp., 268 N.L.R.B. at 558. In deferring to arbitration, the National Labor Relations Board has opined that it would discourage the collective-bargaining procedure for it to “assume the role of policing collective contracts between employers and labor organizations.” Id. By allowing a dispute to go to arbitration, “its fragmentation is avoided to a substantial extent; and those conciliatory measures which Congress deemed vital to ‘industrial peace’ and which may be dispositive of the entire dispute, are encouraged.” Carey v. Westinghouse Elec. Corp., 375 U.S. 261, 272 (1964) (citation omitted).
Here, the association and the school board have voluntarily elected to create dispute-resolution machinery culminating in final and binding arbitration. It is contrary to basic policy principles for .the *74Labor Board to assume control of the disagreement prior to an honest attempt by the parties to resolve their disputes using that machinery.
We conclude that: (1) the question of whether the school board had the authority, under the management-rights section of the parties’ contract, to subcontract bargaining-unit work, requires an interpretation of the contract; (2) deferral in this case is not contrary to the purposes of the collective-bargaining statute; and (3) deferral in this case is not contrary to the Labor Board’s policy on deferral. Accordingly, the Labor Board erred in failing to defer to arbitration. To be clear, we do not decide the merits of the unfair-labor-practice claim. Rather, we remand to give the Labor Board the opportunity to reconsider its decision on the unfair-labor-practice .claim in light of the result of the parties’ arbitration.
III.
The school board also claims that the Labor Board erred in denying the school board’s motion for summary judgment. The school board argues that, because the association did not file an opposition to the motion, the Labor Board should have granted the motion.
In support of its argument, the school board relies on V.R.C.E 56(e), which provides, in pertinent part, that “the adverse party’s response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party.” (Emphasis added.) Further, the school board notes that, under V.R.C.E 56(c)(2), “[a]ll material facts set forth in the statement required to be served by the moving party will be deemed to be admitted unless controverted by the statement required to be served by the opposing party.” According to the school board, because the association filed no response, under V.R.C.E 56(c)(2), the school board’s factual allegations were deemed admitted, and thus, under V.R.C.E 56(e), the Labor Board should have granted its motion for summary judgment.
The Labor Board, following a full evidentiary hearing on the merits, concluded that, accepting all the material facts alleged by the school board in its motion for summary judgment as true, the facts were insufficient to warrant a grant of summary judgment as a matter of law. Thus, the Labor Board determined that summary judgment was not appropriate. “[Sjummary judgment is appropriate only when the record clearly shows that there is no genuine issue of *75material fact and that the movant is entitled to judgment as a matter of law.” Bacon v. Lascelles, 165 Vt. 214, 218, 678 A.2d 902, 905 (1996). Having reviewed the pleadings and the motion for summary judgment in light of the fully developed record, we find no error.
rv.
Finally, the school board claims that, even if the association were deemed to possess a right to request renewed bargaining over the subcontracting decision itself, it waived any such right by its conduct following notification of a potential subcontracting decision. The Labor Board found that, notwithstanding the association’s four-month delay in requesting decisional bargaining after previously requesting only impact bargaining, the association did not waive its right to bargain over the subcontracting decision itself. Finding no waiver, the Labor Board held that the school board’s unilateral decision to subcontract constituted an unfair labor practice.
However, because the Labor Board failed to defer to arbitration, on remand, it must reconsider its decision that an unfair labor practice occurred. The question of whether the actions of the association, from the time it was informed of the potential subcontracting of custodial services in February until it requested decisional bargaining on this issue in June, constituted a waiver of its bargaining rights is separate and distinct from the ultimate question of whether the school board committed an unfair labor practice. Therefore, to limit the issues on remand, we address the waiver issue.
A party can waive its statutory right to have an issue bargained; however, “we will not lightly find a waiver.” Local 2787, AFSCME v. City of Montpelier, 161 Vt. 567, 568, 643 A.2d 838, 840 (1993) (mem.). See also Local 98, Int’l Union of Operating Eng’rs v. Town of Rockingham, 7 V.L.R.B. 363, 375 (1984) (waiver of bargaining rights must be conscious and explicit).
Here, we conclude that the association’s actions — seeking to bargain over only the impact of the decision, filing a grievance, and subsequently seeking decisional bargaining four months later — do not constitute a conscious-and-explicit waiver of a bargaining right. Nor was the delay of such duration as to suggest waiver. Therefore, we affirm the Labor Board’s ruling that the association did not waive its right to bargain over the subcontracting decision.

Affirmed in part, reversed in part and remanded for proceedings not inconsistent with this opinion.

 Article VI, entitled “Grievance Procedure,” provides:
6.1 Definitions
a. Any claim by the Association . . . that there has been a violation, misinterpretation, or misapplication of the terms of this Agreement, or a violation of its . . . rights to fair treatment shall be a grievance.
6.4 Procedure
Step J — Arbitration — If the Association is not satisfied with the disposition of the grievance at Step 3,. . . then the Association may submit the grievance to final and binding arbitration under the voluntary Labor Arbitration Rules of the American Arbitration Association.

 The Labor Board hearings were held on February 27 and March 27,1997. On June 6, 1997, the Labor Board issued its findings of fact, opinion and order. In June 1997, the school board filed a notice of appeal and a motion for stay pending appeal with the Labor Board. The Labor Board denied the stay and proceeded to the remedy portion of the case. In the meantime, the grievance had proceeded to arbitration, as noted. The arbitration was held, with a merits hearing conducted on April 29,1997. On September *693,1997, the arbitrator issued his opinion and award. On September 11,1997, the Labor Board held a hearing to consider the remedy portion of the case. On November 19, 1997, the Labor Board issued its final order. The Labor Board subsequently granted the school board’s outstanding motion for stay pending appeal. Because the Labor Board refused to defer to arbitration, the results of the arbitration were never before the Labor Board for consideration. The arbitrator’s opinion and award was submitted with the school board’s brief in this appeal without objection from the association. We do not consider the arbitrator’s opinion and award other than to note its existence.

The Labor Board held that “the School Board should have indicated during negotiations for the 1996-99 collective-bargaining agreement that consideration was being given to subcontracting custodial services. Instead, the school board was silent on this issue during negotiations and waited until a few months after the agreement was ratified to announce it was considering subcontracting custodial and maintenance services.” The Labor Board, however, made no finding that, indeed, the school board was considering subcontracting during the negotiations. Rather, the Labor Board found that, on February 1, 1996, the school board approved a proposal made by the school district business manager to revise job descriptions for maintenance and custodial personnel, the proposal that regenerated consideration of subcontracting those services. The agreement was ratified in December of 1995.

 The association’s negotiator, a ten-year veteran of the process, testified that when the association withdrew its request for the protective clause, he was aware that the legal and arbitration precedent on subcontracting varied throughout the state and the *72nation. He had determined that school boards had been allowed in some instances to subcontract bargaining-unit duties, even in the absence of contract language specifically authorizing them to do so. He testified that “inconsistency seemed to be the most consistent element behind subcontracting.”

 Following a merits hearing, the arbitrator found that the subcontract was, on balance, a reasonable exercise of inherent managerial rights and did not constitute a violation of the collective-bargaining agreement. He denied the grievance. He expressed no opinion on the question “of whether, as a prerequisite to exercising a reserved contract right, the Board should first have satisfied some statutory bargaining responsibility.” While the dissent suggests that the grievance procedure “provide[d] no redress for the union,” we disagree. 171 Vt. at 85-86, 759 A.2d at 494. The grievance procedure worked as it was intended; the association simply did not win the argument.