Court Opinion

ID: 9671406
Source: CourtListenerOpinion
Date Created: 2023-08-24 03:36:01.933512+00
Date Added: 2024-06-11T18:16:09.866727
License: Public Domain

Cavanagh, J.
(dissenting). I do not agree with the majority’s analysis or conclusion on the issue whether a past practice supersedes express contract language to the contrary. The majority holds that the instant contract language is unambiguous, and thus the contract language controls, unless the past practice is so widely acknowledged and mutually accepted that the parties, in effect, agreed to modify the contract.11 dis*333sent from this holding because I prefer the analysis presented in Mid-Michigan Ed Ass’n v St Charles Community Schools, 150 Mich App 763; 389 NW2d 482 (1986). I would hold that the contract language was ambiguous when considered in connection with the parties’ past practice. Thus, I would also hold that the school district committed an unfair labor practice when it unilaterally changed its binding practice of providing persons hired midyear with insurance coverage throughout the following summer to providing only prorated benefits.
I. THE MERC’S DECISION
On many occasions, this Court has recognized the merc’s expertise and judgment in the labor relations area. This recognition is embodied in the rule that findings of fact made by the merc are conclusive if they are supported by substantial, material, and competent evidence on the record as a whole. Const 1963, art 6, § 28, MCL 423.216(e); MSA 17.455(16)(e). However, the merc’s legal rulings are not given the same level of deference; a court will set them aside if they are in violation of the constitution or a statute, or if they are affected by a substantial and material error of law. MCL 24.306(l)(a), (f); MSA 3.560(206)(l)(a), (f).
*334In its initial decision, the MERC found that the district’s past practice of paying full benefits to all teachers regardless of the date of hiring established a binding term of employment.2 I would affirm this finding because the competent evidence on the record supports a finding that a past practice existed and rose to the level of a term of employment.3
Additionally, in its original decision, the MERC concluded that, as a matter of law, the proration language was ambiguous. However, after appellate proceedings, a majority of this Court vacated the deci*335sion of the Court of Appeals and remanded to the merc to consider another provision of the collective bargaining agreement that, although not cited by either party, may have removed the ambiguity by clarifying the meaning of the proration provision.4
On remand, the merc concluded that the proration provision was unambiguous as a matter of law. I disagree with this legal ruling by the MERC, and with the majority’s finding that the merc’s decision regarding ambiguity was not affected by an error of law.5 The merc was obligated to follow the precedent established in St Charles, but did not do so when it found that the contract language was unambiguous.
n. ST CHARLES
In St Charles, the collective bargaining agreement contained a provision wherein the employer agreed to provide employees with hospitalization-medical insur-*336anee, provided that the employee was not covered by any other insurance carrier for such insurance. However, in spite of that provision, and for a period of about three years, the employer allowed coordination of benefits. The Court of Appeals held that the employer’s past practice of allowing coordinated benefits, although contrary to the contract provision, constituted a term of employment that could not be changed unilaterally. The employer was required to provide the union with notice and an opportunity to bargain and could not simply revert to enforcing the language of the collective bargaining agreement. Because it did not provide notice and an opportunity to bargain, the employer had committed an unfair labor practice.
The Court stated that “when an employer implements and continues a practice which is contrary to a contractual provision, the practice may constitute a term or condition of employment which is not subject to unilateral change.” St Charles at 769. Because the employer permitted the practice to continue, knowing that it was contrary to the contract, the employer could not then rely on the contractual language to unilaterally change the practice.
The MERC found that the contract did not clearly preclude coordinated benefits coverage. To support its finding it noted that the parties apparently believed that the language was sufficiently ambiguous to permit coverage because neither party attempted to change the language during later contract negotiations. The Court explained:
Although the contractual language, standing alone, is not inherently ambiguous, it becomes susceptible to interpretation when examined in connection with the parties’ past *337practice. “Where past practice has established a meaning for language that is used by the parties in a new agreement, the language will be presumed to have the meaning given to it by past practice.” Here, the parties’ incorporation of the disputed contractual provision in their . . . collective bargaining agreement must be viewed in terms of the district’s past practice of providing coordinated health care benefits. Accordingly, the union could have construed the provision as permitting the continuation of the practice. [Id. at 770 (citation omitted).]
m
In the instant case, the merc should have concluded that the proration provision was ambiguous when considered in conjunction with the parties’ past practice. Even if the provision was not inherently ambiguous when considered along with another provision on remand, the proration provision was subject to interpretation because of the parties’ past practice. Because the parties entered into a new contract each year after the employer had begun providing uninterrupted benefits for persons hired midyear, the employees could have interpreted the contract language as permitting the continuation of the practice.
As noted by the majority, when the collective bargaining agreement is ambiguous on the subject for which the past practice has developed, there need only be “tacit agreement that the practice would continue.” Amalgamated Transit Union v Southeastern Michigan Transportation Authority, 437 Mich 441, 454-455; 473 NW2d 249 (1991). I agree with and would affirm the merc’s original finding that the parties in this case had tacitly accepted the benefits as a term of employment because that finding is supported by competent evidence on the whole record.
*338IV
The merc committed a substantial and material error of law in failing to apply St Charles to the facts of this case. If it had been properly applied, the MERC would have concluded that the proration provision was ambiguous. Then, our holding in Amalgamated would have applied, and the MERC would have concluded that the district had committed an unfair labor practice when it unilaterally changed a term óf employment that the parties had tacitly accepted and reasonably believed would continue.
In this case, the employer had an obligation to bargain over changes in the past practice of providing uninterrupted insurance coverage for persons hired midyear independent of its contractual obligations. My resolution of this issue does not require the employer to provide this coverage. Further, it does not involve the remaking of the contract; nor does it force the employer to agree to a proposal or concession. However, it does require it to bargain with the union on this issue. This resolution will advance the basic goal of the public employees relations act: resolution of labor-management strife in the public sector through collective bargaining.
Levin, J., concurred with Cavanagh, J.

 I note that this is the specific holding. However, later in the opinion, it also appears to require evidence of a “purposeful decision evidencing similar deliberation [as in the collective bargaining agreement negotiations] . . . .” Ante at 330. Further, the majority opinion would also *333require the association “to present proof that the district knowingly paid employees hired midyear insurance benefits for the entire summer in disregard of contract language to the contrary, with the intent that such payment would supplant the agreement.” Id. at 331. The opinion also states that the parties must have “knowingly, voluntarily, and mutually agreed to new obligations.” Id. at 327. We interpret these later statements to be indicators of a past practice that is widely acknowledged and mutually accepted, and not as additional requirements for the charging party to hurdle.

 The district paid full summer benefits to teachers hired midway through the school years 1983-87: two in 1983, three in 1984, two in 1985, one in 1986, and three in 1987.

 As this Court stated in Amalgamated Transit Union v Southeastern Michigan Transportation Authority, 437 Mich 441, 454-455; 473 NW2d 249 (1991):
A past practice which does not derive from the parties’ collective bargaining agreement may become a term or condition of employment which is binding on the parties. The creation of a term or condition of employment by past practice is premised in part upon mutuality; the binding nature of such a practice is justified by the parties’ tacit agreement that the practice would continue. The nature of a practice, its duration, and the reasonable expectations of the parties may justify its attaining the status of a “term or condition of employment.”
In the instant review of the MERC’s decision, the Court of Appeals explained:
[T]he school district allowed the practice of paying year-round benefits to all teachers to continue for ten years. There was no isolated mistake or oversight. Accordingly the nature and duration of the practice was sufficient to support a finding that a past practice existed. It also met the reasonable expectation of the parties, in that several times during the ten years they continued to negotiate bargaining agreements. The maintenance of coverage for employees during the summer bréale time could reasonably be expected. Both parties bargained over the subject matter of health insurance and created provisions for coverage under the collective bargaining agreement. [Unpublished opinion per curiam, issued May 12, 1993 (Docket No. 135908).]

 445 Mich 890 (1994). In that order, I joined Justice Levin’s statement in which he stated that he would have denied leave to appeal. As he indicated, the remand order would not assist in resolving the question whether the MERC erred in concluding that the practice superseded the specific language of the collective bargaining agreement. If this Court had wanted to resolve the question left open by Amalgamated, it could have done so without a remand. As Justice Levin noted, “Remand might, however, bring about a change in the result at the MERC level because the entire membership of the MERC has changed since it issued its opinion in this case.” Id. at 893, n 2. On remand, the MERC did change its legal ruling on the ambiguity issue. Thus, the MERC’s conclusion regarding ambiguity depended on the composition of the board. Yet, the majority cursorily accepts the second MERC decision as “not affected by an error of law . . . .” Ante at 323. Also, I note that on remand, the MERC did not comment on or reverse its initial decision that the district had committed an unfair labor practice. I do not believe it could have done so if it properly resolved the issue under St Charles.

 Although I believe that the proration provision was ambiguous according to the reasoning in St Charles, I also believe that provision was ambiguous on its face (i.e., not considering the effect of the past practice). An indication of this ambiguity can be found in the fact that it took the MERC several lines to explain what the provision means.