Court Opinion

ID: 4149687
Source: CourtListenerOpinion
Date Created: 2017-03-02 16:06:45.667517+00
Date Added: 2024-06-11T13:19:08.147224
License: Public Domain

Supreme Court of Florida
                                   ____________

                                  No. SC13-1882
                                  ____________

   WALTER E. HEADLEY, JR., MIAMI LODGE NO. 20, FRATERNAL
                  ORDER OF POLICE, et al.,
                           Petitioner,

                                         vs.

                         CITY OF MIAMI, FLORIDA,
                                Respondent.

                                  [March 2, 2017]

QUINCE, J.

      Walter E. Headley, Jr., Miami Lodge No. 20, Fraternal Order of Police, Inc.

(“the Union”), seeks review of the decision of the First District Court of Appeal in

Walter E. Headley Jr., Miami Lodge No. 20, Fraternal Order of Police v. City of

Miami, 118 So. 3d 885, 887 (Fla. 1st DCA 2013), on the ground that it expressly

and directly conflicts with the decision of the Fourth District Court of Appeal in

Hollywood Fire Fighters Local 1375 v. City of Hollywood, 133 So. 3d 1042 (Fla.
4th DCA 2014),1 regarding whether an employer must demonstrate that funds are

available from no other possible reasonable source before unilaterally modifying a

collective bargaining agreement. We have jurisdiction. See art. V, § 3(b)(3), Fla.

Const. For the reasons that follow, we approve the decision of the Fourth District

and quash the decision of the First District.

                                        FACTS

      This case involves a certified bargaining agreement (“CBA”) between

Miami Lodge No. 20, Fraternal Order of Police (the Union), which represents

officers employed by the City of Miami’s police department, and the City of

Miami (“the City”). The agreement covered the period of October 1, 2007,

through September 30, 2010. Headley, 118 So. 3d at 888. On July 28, 2010, the

City declared a “financial urgency” and invoked the process set forth in section

447.4095, Florida Statutes (2010). Id. It notified the Union that it intended to

implement changes regarding wages, pension benefits, and other economic terms

of employment. Id. Following negotiations concerning the financial urgency, the

City informed the Public Employees Relations Commission (PERC)2 that a dispute

       1. In its decision, the Fourth District also certified conflict with the First
District’s decision in Headley.

      2. PERC is a commission created by the Legislature to carry out the
provisions of part II, chapter 447, Florida Statutes. §§ 447.205,.207, Fla. Stat.
(2010).

                                          -2-
remained between the parties. Headley, 118 So. 3d at 888. Despite agreeing on a

special magistrate, the parties did not pursue the impasse resolution process. Id.

      On August 31, 2010, the City’s legislative body voted to unilaterally alter

the terms of the CBA in order to address the financial urgency, and adopted

changes that:

      [I]mposed a tiered reduction of wages, elimination of education pay
      supplements, conversion of supplemental pay, a freeze in step and
      longevity pay, modification of the normal retirement date,
      modification of the pension benefit formula, a cap on the average final
      compensation for pension benefit calculations, alteration of the
      normal retirement form, and modification of average final
      compensation.

Id. The Union then filed an unfair labor practice (“ULP”) charge with PERC on

September 21, 2010, arguing that the City improperly invoked section 447.4095

and unilaterally changed the CBA before completing the impasse resolution

process provided for in section 447.4095. Id. at 889.

      At a hearing before a PERC hearing officer, the City presented evidence of

its financial situation. Id. The evidence showed that:

      [T]he City’s budget was approximately $500 million and that it faced
      a deficit of approximately $140 million for the 2010/2011 fiscal year;
      that the City had already implemented hiring freezes, completed all
      previously contemplated layoffs, ceased procurement, and instituted
      elimination of jobs as employees left; that labor costs comprised 80%
      of the City’s expenses; that, if additional action was not taken to
      reduce expenditures, the City’s labor costs would exceed its available
      funds, which would leave the City unable to pay for utilities, gas, and
      other necessities and render it unable to provide essential services to
      its residents; and that the City’s unemployment rate was 13.5% and

                                        -3-
      property values were in decline, with 49% of homes in the City
      having negative equity.

Id. In response, the Union suggested raising the millage tax rate, installing red

light cameras, imposing non-union employee layoffs and furloughs, freezing the

current cost of living adjustment, and changing the pension funding methodology.

Id. These changes, according to the City, “would not adequately address the

shortfall because they either failed to generate enough revenue to offset the deficit

or they would increase the City’s long term financial obligations.” Id.

      The hearing officer then issued an order recommending dismissal of the

Union’s ULP charge. Id. The hearing officer found that the statute had been

properly invoked by the City and the parties were not required to proceed through

the impasse procedures before implementing the changes. Id. In the final order,

PERC first defined “financial urgency” as “a financial condition requiring

immediate attention and demanding prompt and decisive action which requires the

modification of an agreement; however, it is not necessarily a financial emergency

or bankruptcy.” Id. PERC went on to explain that a determination of financial

urgency requires an examination “of the employer’s complete financial picture on

a case-by-case basis” and an evaluation of whether the employer acted in “good

faith.” Id. (quoting PERC’s final order). As to good faith, PERC focused on

whether “a reasonable person could reach the conclusion that ‘funding was not

available to meet the employer’s financial obligations to its employees.’ ” Id. at

                                         -4-
889-90 (quoting final order). The order also found that section 447.4095 did not

require the City to proceed through the impasse resolution process before

implementing changes to the CBA. Id. at 890. PERC interpreted the statute to

require “impact bargaining,” which allowed the employer to make the changes

after providing notice and a reasonable opportunity to bargain. Id.

      The First District affirmed PERC’s final order, finding that it did not err in

interpreting or applying section 447.4095. Id. at 896. Petitioner now seeks review,

arguing that an employer must demonstrate that funds are available from no other

possible reasonable source before unilaterally modifying a CBA and that

modification can only be made after completing the impasse resolution process.

                                    ANALYSIS

      Petitioner first argues that before unilaterally modifying a CBA pursuant to

the financial urgency statute, an employer must demonstrate that funds are

available from no other possible reasonable source. Deciding this issue will

require the interpretation of section 447.4095, Florida Statutes (2010). Issues of

statutory interpretation are subject to de novo review. See, e.g. Fla. Dep’t of Envtl.

Prot. v. ContractPoint Fla. Parks, LLC, 986 So. 2d 1260, 1264 (Fla. 2008).

However, on judicial review of a PERC order, “the view of the PERC majority is .

. . presumptively the product of special expertise to which courts should defer.”

                                        -5-
United Faculty of Fla. v. Pub. Emps. Relations Comm’n, 898 So. 2d 96, 100 (Fla.

1st DCA 2005).

      Thus, PERC’s determination that the statute does not require the employer to

demonstrate that the funds are available from no other possible reasonable source

is an interpretation of chapter 447 that is entitled to deference. See Pub. Emps.

Relations Comm’n v. Dade Cty. Police Benevolent Ass’n, 467 So. 2d 987, 989

(Fla. 1985) (“[A] reviewing court must defer to an agency’s interpretation of an

operable statute as long as that interpretation is consistent with legislative intent

and is supported by substantial, competent evidence.”). Despite this tenet of

appellate review, where an agency has erroneously interpreted a provision of the

law, an agency’s construction is not entitled to deference. See City of Safety

Harbor v. Commc’ns Workers of Am., 715 So. 2d 265, 266 (Fla. 1st DCA 1998)

(citing Pensacola Jr. College v. Public Emps. Rels. Comm’n, 400 So. 2d 59 (Fla.

1st DCA 1981); Se. Volusia Hosp. Dist. v. Nat’l Union of Hosp. & Health Care

Emps., 429 So. 2d 1232 (Fla. 5th DCA 1983)).

      The right to contract is expressly guaranteed by article 1, section 10 of the

Florida Constitution. It is equally enforceable in labor contracts by operation of

article 1, section 6 of the Florida Constitution. Petitioner argues that PERC’s

interpretation of the financial urgency statute violates the Union’s right to

collectively bargain under article 1, section 6 and its right to contract under article

                                          -6-
1, section 10 because the statute impermissibly allows for unilateral changes to

CBAs. Generally, an agreement regarding wages, hours, or terms and conditions

of employment reached through the collective bargaining process cannot be

unilaterally modified during the term of the agreement absent a compelling state

interest. Headley, 118 So. 3d at 890.

      The statute at issue in this case, section 447.4095, provides:

      Financial urgency – In the event of a financial urgency requiring
      modification of an agreement, the chief executive officer or his or her
      representative and the bargaining agent or its representative shall meet
      as soon as possible to negotiate the impact of the financial urgency. If
      after a reasonable period of negotiation which shall not exceed 14
      days, a dispute exists between the public employer and the bargaining
      agent, an impasse shall be deemed to have occurred, and one of the
      parties shall so declare in writing to the other party and to the
      commission. The parties shall then proceed pursuant to the provisions
      of s. 447.403. An unfair labor practice charge shall not be filed during
      the 14 days during which negotiations are occurring pursuant to this
      section.

The statute does not define “financial urgency,” and the term is not defined

elsewhere in chapter 447. Headley, 118 So. 3d at 891. Moreover, the legislative

history does not provide any guidance related to the meaning of the term. Id. The

staff analysis merely notes, “The term is undefined in the bill or in chapter 447 and

that its interpretation is left to practice.” Id. (citing Fla. S. Comm. on Govt. Ops.,

CS for SB 888 (1995) Staff Analysis (March 27, 1995) (on file with comm.)).

Because there are other statutes that apply where the government is facing a

financial emergency or bankruptcy, we adopt PERC’s definition that a financial

                                         -7-
urgency is a dire financial condition requiring immediate attention and demanding

prompt and decisive action, but not necessarily a financial emergency or

bankruptcy.

      We have long held that a “statute must be given its plain and obvious

meaning.” Holly v. Auld, 450 So. 2d 217, 219 (Fla. 1984) (quoting A.R. Douglass,

Inc. v. McRainey, 137 So. 157, 159 (1931)). If the language of the statute is “clear

and unambiguous and conveys a clear and definite meaning” there is no need to

resort to statutory construction. Id.; accord Forsythe v. Longboat Key Beach

Erosion Control Dist., 604 So. 2d 452, 454 (Fla. 1992). Because a government

entity acting under section 447.4095 has the potential to impair two fundamental

rights afforded to public employees, the statute must be given a strict construction.

State v. J.P., 907 So. 2d 1101, 1109 (Fla. 2004). Based on the plain language of

the statute, a financial urgency may only be invoked where modification of the

agreement is required. If there are other means of addressing the financial

condition, then modification is not “required.”

      We have previously set forth the standard that must be followed where a

government entity attempts to change a bargaining agreement to address a revenue

shortfall. In Chiles v. United Faculty of Florida, 615 So. 2d 671 (Fla. 1993), the

Legislature eliminated raises that had been authorized following an impasse

between the State and various public employee unions. Id. There, we held that the

                                        -8-
raise was a fully enforceable contract and once it had been funded by the

Legislature, “the state and all its organs are bound by that agreement under the

principles of contract law.” Id. at 672-73. While we recognized that the

Legislature must have leeway to respond to emergencies, we stated that the right to

contract severely limits the Legislature’s ability to alter a contract. Id. at 673.

Therefore, we held that “the legislature has authority to reduce previously

approved appropriations to pay public workers’ salaries made pursuant to a

collective bargaining agreement, but only where it can demonstrate a compelling

state interest.” Id. at 673. Before doing so, “the legislature must demonstrate no

other reasonable alternative means of preserving its contract with public workers,

either in whole or in part.” Id. Further, “the legislature must demonstrate that the

funds are available from no other possible reasonable source.” Finding that the

Legislature did not satisfy the requirements of this test, we ordered the

reinstatement of the pay raises. Id.

      Section 447.4095 is the codification of the strict scrutiny standard we

outlined in Chiles. The term “financial urgency” represents the first prong of strict

scrutiny. As previously stated, a financial urgency is “a dire financial condition

requiring immediate attention and demanding prompt and decisive action, but not

necessarily a financial emergency or bankruptcy.” Headley, 118 So. 3d at 892; see

also Hollywood Fire Fighters, 133 So. 3d at 1045 (quoting Headley). In showing

                                          -9-
that its current financial condition is dire and requires immediate attention, the

local government establishes a compelling state interest and satisfies the first prong

of strict scrutiny.

       The phrase “requiring modification of an agreement” represents the second

prong of strict scrutiny. While a local government may be able to show that its

financial condition requires immediate attention and demands prompt and decisive

action, this may not necessarily require modification of the agreement. As we

stated in Chiles, “the mere fact that it is politically more expedient to eliminate all

or part of the contracted funds is not in itself a compelling reason.” Chiles, 615 So.

2d at 673. Thus, the term “requiring modification” forces the local government to

demonstrate that the only way of addressing its dire financial condition is through

modification of the CBA. To do this, the local government must demonstrate that

the funds are available from no other reasonable source. This satisfies the second

requirement of strict scrutiny, that the law be narrowly tailored to achieve a

compelling state interest.

       In the instant case, the First District held that the language from Chiles is not

“constitutionally mandated” and should not be extended to section 447.4095.

Headley, 118 So. 3d at 893. The court further concluded that a local government

“is not required to demonstrate that funds are not available from any other possible

source to preserve the agreement.” Id. Instead, the court held that a local

                                         - 10 -
government need only show that “other potential cost-saving measures and

alternative funding sources are unreasonable or inadequate to address the financial

condition facing the local government.” Id. In the conflict case, the Fourth

District held that Chiles mandates that the Legislature must demonstrate that the

funds are not available from any other source. Hollywood Fire Fighters, 133 So.

3d at 1045. The Fourth District went on to reject the “modified Chiles test”

outlined in Headley, which it found lowers the standard that a local government

must satisfy before unilaterally modifying an agreement. Id. at 1046.

      We agree with the Fourth District. The First District erred in holding that

our precedent is not constitutionally mandated and should not be extended to the

financial urgency statute. Moreover, the First District incorrectly stated that Chiles

requires a local government to demonstrate “that funds are not available from any

other possible source.” Headley, 118 So. 3d at 893. Not so. As we stated in

Chiles, the employer must show that the funds are not available from any other

possible reasonable source. Therefore, as the First District held, if the other cost-

saving measures are unreasonable, then modification is warranted. However, we

do not agree with the First District that if the alternative funding sources are also

inadequate then modification is permissible. Instead, the government “must

demonstrate no other reasonable alternative means of preserving its contract with

                                         - 11 -
public workers, either in whole or in part.” Chiles, 615 So. 2d at 673 (emphasis

added).

       We have long recognized the right to bargain collectively and the right to

contract free of impairment. See Hillsborough Cty. Govtl. Emps. Ass’n v.

Hillsborough Cty. Aviation Auth., 522 So. 2d 358, 362 (Fla. 1988) (“The right to

bargain collectively is, as part of the state’s constitution’s declaration of rights, a

fundamental right. As such, it is subject to official abridgment only upon a

showing of a compelling state interest.”); Yamaha Parts Distribs., Inc. v. Ehrman,

316 So. 2d 557, 559 (Fla. 1975) (“Virtually no degree of contract impairment has

been tolerated in this state.”). Thus, our conclusions as to this issue “are compelled

by the Florida Constitution.” Chiles, 615 So. 2d at 673. Accordingly, we approve

the decision of the Fourth District and quash the decision of the First District on

this issue.

       Petitioner also argues that the First District erred in construing the statute to

allow an employer to unilaterally modify the CBA without first proceeding through

the impasse resolution process set forth in section 447.403, Florida Statutes (2010).

This issue centers on the procedure to be followed once a local government has

declared a financial urgency requiring modification of an agreement.

       As the First District explained:

             Section 447.4095 provides for an expedited period of
       negotiation, not to exceed 14 days, upon declaration of a financial

                                          - 12 -
      urgency by a local government and requires the parties to meet as
      soon as possible after the declaration to “negotiate the impact” of the
      financial urgency. The statute further provides that, if a dispute
      remains between the parties after the expiration of the expedited
      negotiation period, an impasse shall be deemed to have occurred and
      “[t]he parties shall then proceed pursuant to the provisions of s.
      447.403.” § 447.4095, Fla. Stat.

             The impasse resolution process in section 447.403 begins with
      the appointment of a special magistrate who is charged with
      conducting a hearing and making a recommendation to the local
      government’s legislative body as to the resolution of any disputed
      issues. See § 447.403(3), Fla. Stat. The statute does not establish a
      deadline for the hearing, but it does provide for at least 45 days of
      post-hearing procedures. See § 447.403(3)-(4), Fla. Stat. (providing
      15 days for the special magistrate to submit his or her recommended
      decision to the parties, 20 days for the parties to reject the special
      magistrate’s recommendations, and then 10 days for the local
      government’s chief executive officer to submit his or her
      recommendations to the legislative body). The legislative body is not
      required to accept the special magistrate’s recommendations and,
      thus, the end-result of the impasse resolution process may be the local
      government unilaterally imposing changes to the agreement. See §
      447.403(4), Fla. Stat.

Headley, 118 So. 3d at 894. Petitioner argues that by requiring the parties to

proceed through the impasse resolution process under section 447.403, the statute

mandates that no changes may be made to the agreement until after the conclusion

of that process. Petitioner argues that because the public employer seeks to change

                                       - 13 -
a mandatory term3 of the agreement, collective bargaining4 is required.

Respondent argues that the Legislature specifically used the term “impact” in

reference to “impact bargaining,” which is a type of bargaining applicable to

managerial decisions that impact terms and conditions of employment within the

bargaining unit. Impact bargaining requires only notice and an opportunity to

negotiate before the proposed changes are implemented. In essence, the parties

dispute the point at which a modification may be made.

      Employing the rules of statutory interpretation is appropriate here, as both

parties provide reasonable interpretations of the statute and the statute is

ambiguous as to when a modification may be made. “Impact” is a term of art in

public sector labor law. See Sch. Dist. of Indian River Cty. v. Fla. Pub. Emps.

Relations Comm’n, 64 So. 3d 723, 729 (Fla. 4th DCA 2011). Under the concept of

impact bargaining, if the modification of a subject classified as a management

       3. Chapter 447 does not provide a list of subjects to be treated as mandatory
in terms of bargaining. Accordingly, PERC is tasked to make that decision on a
case-by-case basis. Public Employees Relations Commission, Scope of Bargaining
2 (2d ed. 2005).
       4. Collective bargaining means a process of mutual obligations in which a
public employer and a bargaining agent have to meet at reasonable times, negotiate
in good faith, and effect a written contract encompassing agreements reached
concerning the wages, hours, terms and conditions of employment. § 447.309(1),
Fla. Stat. (2013).

                                         - 14 -
right5 would have an effect on the employees’ terms and conditions of

employment, then the public employer is required to give those employees’

bargaining agent an opportunity to bargain the impact of that modification. See

Jacksonville Supervisors Ass’n v. City of Jacksonville, 26 F.P.E.R. 31140 (2000).

The statutory language that Respondent relies on as an indicator that the

Legislature intended to allow for impact bargaining is “negotiate the impact of the

financial urgency.” § 447.4095, Fla. Stat. (2013).

      It is true that when the words in a statute are technical in nature and have a

fixed legal meaning, it is presumed that the Legislature intended that the words be

given their technical meaning. See 48A Fla. Jur. 2d Statutes § 135 (2014).

However, under the principle of expression unis, est exclusion alterius, meaning

“the mention of one thing implies the exclusion of another,” legislative direction as

to how a thing shall be done is, in effect, a prohibition against it being done any

other way. See Sun Coast Int’l, Inc. v. Dep’t of Bus. Reg., 596 So. 2d 1118, 1121

      5. The Florida Legislature defines public employers’ rights as:
             [T]he right of the public employer to determine unilaterally the
      purpose of each of its constituent agencies, set standards of services to
      be offered to the public, and exercise control and discretion over its
      organization and operations. It is also the right of the public employer
      to direct its employees, take disciplinary action for proper cause, and
      relieve its employees from duty because of lack of work or for other
      legitimate reasons.
§ 447.209, Fla. Stat. (2013).

                                        - 15 -
(Fla. 1st DCA 1992). Therefore, section 447.4095 permits the unilateral

implementation of changes to the CBA only after parties have completed the

impasse resolution proceedings and failed to ratify the agreement. If the

Legislature had intended the changes to take effect earlier or under any other

circumstances, it would have stated as much.

      This is especially true considering that the changes here are unlike the

changes that are usually the result of impact bargaining. As noted by Petitioner,

impact bargaining results from management making decisions outside of the scope

of an agreement which affect the agreement in some way. Bargaining under the

financial urgency statute, on the other hand, seeks to alter the terms of the

agreement itself. Impact bargaining requires a threshold determination as to

whether the employer’s decision affects employees’ wages, hours, or working

conditions. Bargaining under financial urgency inherently seeks to change wages,

hours, or working conditions. Moreover, altering the agreement effectively alters

the “status quo” between the parties that will remain in place until they are

changed through bargaining.

      The interpretation set forth by PERC and the First District would allow a

local government, once it has declared a financial urgency, the ability to exercise a

management right to unilaterally alter the terms and conditions of a contract before

completing the procedures set forth by the Legislature in section 447.4095. This

                                        - 16 -
interpretation does not comport with our acknowledgment of and respect for the

constitutional right of collective bargaining and prohibition of the impairment to

contract. Therefore, we also quash the decision of the First District and remand the

case for proceedings that are consistent with this decision.

      It is so ordered.

LABARGA, C.J., and PARIENTE, and LEWIS, JJ., concur.
POLSTON, J., concurs in result with an opinion.
CANADY, J., dissents.
LAWSON, J., did not participate.

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND
IF FILED, DETERMINED.

POLSTON, J., concurring in result.

      I agree with the majority’s view that a local government, once it has

declared a financial urgency, does not have the ability to unilaterally alter the terms

and conditions of a collective bargaining agreement before completing the

procedures required by the Legislature in sections 447.4095 and 447.403, Florida

Statutes. I would decide this on the plain requirements of the statutory provisions

rather than any constitutional grounds.

Application for Review of the Decision of the District Court of Appeal – Direct
Conflict of Decisions

      First District - Case No. 1D12-2116

      (Miami-Dade County)

                                          - 17 -
Ronald Jay Cohen of Rice Pugatch Robinson & Schiller, P.A., Fort Lauderdale,
Florida, and Robert David Klausner of Klausner, Kaufman, Jensen and Levinson,
P.A., Plantation, Florida,

      for Petitioners

Victoria Mendez, City Attorney, John Anthony Greco, Deputy City Attorney,
Diana Vizcaino, Former Assistant City Attorney, and Kerri Lauren McNulty,
Assistant City Attorney, Miami, Florida,

      for Respondent

Richard Anthony Sicking, Coral Gables, Florida,

      for Amicus Curiae Florida Professional Firefighters, Inc., International
      Association of Firefighters, AFL-CIO

Noah Scott Warman of Sugarman & Susskind, P.A., Coral Gables, Florida,

      for Amicus Curiae Hollywood Fire Fighters, Local 1375, IAFF, Inc.

Thomas Wayne Brooks of Meyer, Brooks, Demma and Blohm, P.A., Tallahassee,
Florida,

      for Amicus Curiae Florida Education Association

Paul Andrew Donnelly and Laura Ann Gross of Donnelly and Gross, P.A.,
Gainesville, Florida,

      for Amicus Curiae Communications Workers of America

G. Hal Johnson, Tallahassee, Florida,

      for Amicus Curiae Florida Police Benevolent Association

Daniel H. Thompson and Mitchell Wayne Berger of Berger Singerman LLP, Fort
Lauderdale, Florida, and Stephen Hale Cypen of Cypen & Cypen, Miami Beach,
Florida,

      for Amicus Curiae Board of Trustees of the City of Hollywood, etc., et al.

                                        - 18 -
David Clayton Miller and James Chumley Crosland of Bryant Miller Olive P.A.,
Miami, Florida,

      for Amicus Curiae The City of Hollywood, Florida

Michael Patrick Spellman, Hetal Desai McGuire, and Jeffrey Douglas Slanker of
Sniffen and Spellman, P.A., Tallahassee, Florida; and Harry Morrison, Jr. and
Kraig Armantrout Conn, Florida League of Cities, Inc., Tallahassee, Florida,

      for Amicus Curiae Florida League of Cities

John Maxwell Hament, Sarasota, Florida,

      for Amicus Curiae East Naples Fire Control & Rescue District

                                     - 19 -