Court Opinion

ID: 9723159
Source: CourtListenerOpinion
Date Created: 2023-08-26 10:04:19.865053+00
Date Added: 2024-06-11T18:24:45.201532
License: Public Domain

N. J. Kaufman, J.
Plaintiff American Federation of State, County and Municipal Employees Michigan Council 7, AFL-CIO (hereinafter referred to as AFSCME) filed a charge with the Michigan Employment Relations Commission (hereinafter referred to as MERC) against the Michigan Department of Health and Wayne Center for Retarded (hereinafter referred to as WCR) and the Detroit-Wayne County Mental Health Services Board (hereinafter referred to as the Board) alleging an unfair labor practice in that WCR and the Board refused to bargain with AFSCME who was a *419representative of employees at WCR. The defendant Board appeals from an adverse determination by MERC.
The facts are not in dispute. On October 10, 1973, AFSCME filed a petition for election with MERC in accordance with the provisions of the labor mediation act (hereinafter referred to as LMA), MCLA 423.1 et seq.; MSA 17. 454(1) et seq. (1939 PA 176). The petition designated WCR as a private employer and delineated the appropriate bargaining unit. On February 4, 1974, MERC issued a certification of representative effectuating AFSCME’s request. WCR and AFSCME thereupon engaged in collective bargaining.
Apparently AFSCME became dissatisfied with the collective bargaining arrangement because, on November 22, 1974, it filed an "unfair labor practice” charge with MERC, MCLA 423.216; MSA 17.455(16), alleging inter alia a refusal to bargain on the part of the Michigan Department of Mental Health and the Board. The charge was filed pursuant to the provisions of the public employment relations act (hereinafter referred to as PERA), MCLA 423.201 et seq.; MSA 17.455(1) et seq. (1965 PA 379), and for the first time it asserted the existence of an employer-employee relationship with governmental entities.
AFSCME’s dissatisfaction stemmed from the fact that WCR was unable to act on certain key bargaining subjects such as wages and fringe benefits without involving the appellant Board. To remedy this situation, AFSCME sought to include the Board in contract negotiations, but its efforts were opposed by WCR and rejected by the Board.
At the hearing on the unfair labor practice charge, counsel for the Board noted that neither the petition for election nor the certification of *420representative named it as an employer. It therefore contended that it could not be subject to an unfair labor practice charge. The Board noted that both the LMA and the PERA place a duty to bargain on the employer. The administrative law judge overruled the Board and conducted the hearing.
The testimony and exhibits elicited at the proceeding revealed considerable evidence of the precise nature of the relationship between the appellant Board and WCR.
The Michigan Mental Health Code, (MCLA 330.1001 et seq.; MSA 14.800(1) et seq.), authorizes a Michigan county to establish a county community mental health program which will provide a range of mental health services for persons located within the county.
Such programs are administered by an official -county agency, known as a county community mental health board. These boards are charged with the planning, coordinating, funding and evaluating of mental health services within the county. They are authorized to enter into contracts with public or private agencies for the purchase of mental health services or, if they desire, to provide such services directly through employees whom they directly hire, pay and control. The latter method is followed by most counties throughout the state. Wayne is one of the few counties which contracts for the purchase of such services.
The mental health program adopted by Wayne County is administered by the appellant Board. It is funded principally with money furnished by the state and some matching funds supplied by the county.
The Board has entered into contracts with approximately 40 agencies (some of which are public, *421and some of which are private) to provide the services necessary to carry out the program which the county has adopted. One of the agencies which has contracted to provide services for the Board is WCR.
WCR is a private nonprofit corporation. It is staffed by a number of employees, including social workers and other technicians, who are equipped to provide services to the mentally retarded. It has no source of financing other than the funds which are allocated to it by the Board.
The contract between the Board and WCR provides that the services to the retarded will be performed by individuals who are hired by the center, and paid with funds which the center receives from the Board.
Since 1973, the defendant Board has entered into annual contracts with WCR for the . delivery of services to the mentally retarded. WCR has functioned on full funding from the appellant Board, with the contractual understanding that the Board would reduce its payments to WCR by any amount of revenue obtained elsewhere by the agency. Consequently, the budgetary figure awarded WCR in its contract with the Board reflects the total dollar revenue available to the agency.
The annual contracts between WCR and the Board are drawn pursuant to a budget plan which the center submits to the Board. Such a plan normally includes "manning tables” with the names and classifications of the workers involved and their salary and fringe benefit allocations. The contract, when executed, limits WCR to the pay schedules and position classifications set forth therein.
Dr. Mel Ravitz, Director of the Detroit/Wayne County Mental Health Services Board, testified *422that the Board provides funds to WCR but does not participate in the day-to-day operations of the facility. Funding for WCR is derived solely from the state and the Board only monitors its activities to insure fulfillment of the contract. Dr. Ravitz furthér testified that WCR employees were completely independent of the Board, with the Board having no input into screening, hiring, firing or discharge.
Dr. Ravitz stated further that the Board received the line item appropriation from the state which the Board was obligated to spend for the provision of specified services for the retarded.
Ravitz conceded in his testimony before MERC’s administrative law judge, that any deviation in WCR’s manning pattern must be approved by the Board. Likewise, once the budget is set, WCR is not free to abolish a position in order to allocate the money elsewhere, unless approved by the Board. In fact, any transfer of funds from one account item to another requires the Board’s permission.
Affirming the findings of the administrative law judge, MERC found that the Board and WCR had engaged in an unfair labor practice under § 10 of the PERA, MCLA 423.210; MSA 17.455(10), and § 16 of the LMA, MCLA 423.16; MSA 17.454(17). Specifically, the Board and WCR were found to have refused to bargain as joint employers with AFSCME.
On appeal, the defendant Board contends that it cannot be found guilty of unfair labor practices where AFSCME petitioned for an election and designated WCR as the employer. Defendant Board argues it could not bargain if it wanted to because WCR did not want it involved.
In briefs submitted by the Wayne County Corpo*423ration Counsel, defendant-appellant argues that MERC erred as a matter of law in concluding that the Board is a joint employer of WCR employees. Additionally, it contends that MERC erred as a matter of law in using a refusal-to-bargain proceeding as a procedure for determining employer status.
At the outset of our discussion, we note that this is a case of first impression. The decision in this case thus would appear to have far-reaching implications in an area in which little or no authority exists. There seems much merit in defendant-appellant’s contention that none of the common law indicia of an employment relationship between WCR employees and the Board are present. It is true that the Board merely reviews and approves WCR’s budget; it does not hire, fire, discipline, or supervise WCR employees. However, we must examine the statutory framework in which the Legislature has cloaked this area to see whether a contrary intent is discerned among the folds.
A preliminary matter that provides a logical introduction to the issues presented on appeal is appellant’s claim that MERC is not authorized to impose on a public employer a duty to bargain with employees of a private employer.
The public employer’s duty to bargain is mandated by MCLA 423.215; MSA 17.455(15), (Section 15 of PERA):
"A public employer shall bargain collectively with the representatives of its employees as defined in Sec. 11 [Sec. 423.211] and is authorized to make and enter into collective bargaining agreements with such representatives. For the purposes of this section, to bargain collectively is the performance of the mutual obligation of the employer and the representative * * * in good faith with respect to wages, hours, and other terms and *424conditions of employment, or the negotiation of an agreement, or any question arising thereunder, and the execution of a written contract, , ordinance or resolution incorporating any agreement reached if requested by either party, but such obligation does not compel either party to agree to a proposal or require the making of a concession.”
Thus, PERA requires that a public employer bargain with the representatives of its public employees. We agree with the Board that PERA does not obligate a public employer to bargain with the employees of a private employer.
But that statement does not end our inquiry. If the WCR employees are also Board employees then the Board must collectively bargain with them as public employees. It should be noted that the Michigan Supreme Court in Detroit Police Officers Ass’n v Detroit, 391 Mich 44, 53; 214 NW2d 803 (1974), held:
"Section 15 .of PERA undoubtedly was patterned after § 8(d) of the National Labor Relations Act (NLRA). Both statutes use almost identical language in describing the duty to bargain. The decision by the Michigan Legislature to adopt the language of section 8(d) of the NLRA is significant. Section 8(d) has been a part of the NLRA since the Taft-Hartley amendments of 1947. The terms of section 8(d) have been litigated in numerous cases before the National Labor Relations Board (NLRB) and the Federal courts. Although we cannot state with certainty, it is probably safe to assume that the Michigan Legislature intentionally adopted § 15 PERA in the form that it did with the expectation that MERC and the Michigan courts would rely on the legal precedents developed under NLRA, § 8(d) to the extent that they apply to public sector bargaining. Edwards, The Emerging Duty to Bargain in the Public Sector, 71 Mich L Rev 885, 895 (1973).”
*425Both the Board and AFSCME agree that PERA does not define "public employer”. In Wayne County Civil Service Commission v Wayne County Board of Supervisors, 22 Mich App 287, 294; 177 NW2d 449 (1970), Judge (now Justice) Fitzgerald said:
"We note that this whole action comes to us as a byproduct of the passage of PA 1965, No. 370, supra. After a careful examination of the pertinent provisions of this act, nowhere within it is the term 'public employer’ defined.”