Court Opinion

ID: 5065160
Source: CourtListenerOpinion
Date Created: 2021-10-01 09:48:38.498419+00
Date Added: 2024-06-11T08:19:35.672460
License: Public Domain

WINTERSHEIMER, Justice,
dissenting.
I must respectfully dissent from the majority opinion because the original collective bargaining contract requires that the parties submit their unresolved disputes to binding arbitration. The Authority is es-topped to escape its responsibility under the contract because it does not come within the classification of a municipal corporation whose policy-making function cannot be delegated.
The Authority and the Union have been parties to successive collective bargaining contracts since the Authority acquired the existing system in 1973. At that time, the Union was the representative for purposes of collective bargaining of the employees and the Authority adopted the existing agreement pursuant to KRS 96A.200. The present agreement was effective from April 1, 1982 to March 31, 1984. When the parties were unable to reach a new agreement the Union invoked the arbitration clause. The Authority originally agreed to proceed to arbitration but later withdrew that agreement.
The Authority is also a signatory to an agreement pursuant to Section 13(c) of the Urban Mass Transportation Act of 1964, as amended, 49 U.S.C. § 1609(c). Section 13(c) requires a local government to make arrangements to preserve transit workers’ existing rights before that governmental unit may receive any federal money under the act. The Authority entered into an agreement under which it agreed to submit to binding arbitration, any labor dispute.
I believe the circuit court correctly determined that the contract to arbitrate the dispute over the terms and conditions of a new contract did not violate the Kentucky Constitution. The Authority has the power and duty to submit to binding arbitration and to do so does not violate the Kentucky Constitution in any respect.
Submission to binding arbitration is not a delegation of its powers of the type found unconstitutional in City of Covington v. Covington Lodge No. 1, Fraternal Order of Police, Ky., 622 S.W.2d 221 (1981). That case is clearly distinguishable from the facts of this matter.
The only similarity is the provision for binding arbitration in each agreement. In contrast to this case, the parties to the collective bargaining agreement in City of Covington, supra, were the city and the police department. The contract was authorized by an ordinance adopted by the city commission and the control of the police department is expressly vested in the legislative body of a city of the second class. KRS 95.430(1).
In that case, this Court held that the city commission was elected by the people to have charge of the affairs of the city, and the legislature specifically placed control of the police in the city commission. There is no such statutory restriction in this case. Here the legislature gave the Authority broad powers to exercise generally all the powers of a private corporation. See KRS 96A.020.
Where the General Assembly intended to restrict the powers of transit authorities, it did so specifically. KRS 96A.090 provides that no transit authority shall have any *525power to levy taxes of any nature or in any amount.
When the City of Covington, supra, and this case are considered in the context of the separate enabling legislation for police departments and transit authorities, there is no doubt that the Authority here has both the power to comply with the arbitration agreement. The sole authority for managing the affairs of the municipal police department is vested in the elected legislative body of the municipality. KRS 95.430(1). Transit authorities have the express power to delegate the operation of the transit system by entering into management contracts under such terms and conditions as it may determine to be proper and desirable. KRS 96A.100. It can be argued that the entering of a collective bargaining agreement, whereby the Authority agrees to allow an arbitration panel to set wages, hours and working conditions is a management contract.
The fundamental difference between the exercise of the power to submit to binding arbitration by a police department and a transit authority is the distinction between the two bodies. The police department is a creature of the elected representatives of the residents of the city. The authority is a separate entity, a political subdivision, with no elected members.
The most compelling evidence of the obligation of the Authority to comply with the binding arbitration provision of the agreement is the fact that the General Assembly has imposed an affirmative duty on those authorities which acquire existing transit facilities to assume and observe all existing labor contracts and pension obligations. KRS 96A.200. This Authority acquired the existing transit system in 1973, and there was a labor agreement in existence which contained the same arbitration section as is found in Section 50 of the present contract. That provision has been renewed in each successive collective bargaining contract between the parties up to and including the most recent agreement. The refusal of the Authority to comply with the labor contract is a violation both of the contract and of the statute.
In City of Covington, this Court found that the arbitration clause was a delegation of the city’s legislative control over the police department and therefore, is illegal. This Court then limited its holding to that particular case only and specifically reserved the question of the legality of arbitration agreements to. settle future disputes.
The statutes which created the Authority do not vest it with the powers of a legislative body. This Court clearly noted what is essential in determining what is a legislative body. If there is one essential characteristic inherent in legislative power, it is that such power must be exercised by an elected representative or representatives of the people and not by a person, persons or agencies created or designed by those representatives. Miller v. Covington Development Authority et al., Ky., 539 S.W.2d 1 at 4 (1976).
The Authority was created to carry out an already established goal, that of operating a mass transportation system. The Authority has the power of a private corporation. KRS 96A.020. A private corporation lacks legislative power. It follows that a private corporation can enter a contract agreeing to binding arbitration.
Certainly the Authority can establish wages as set out in KRS 96A.070(6). A private corporation also sets wages. The statute also permits the broad latitude in how those wages are arrived at so long as the taxing body, the city or the county, does not incur any obligation. The language of the statute prohibits a non-legislative body, the Authority, from incurring any debt or obligation for the legislative taxing body. The statute allows the Authority to set wages by entering collective bargaining agreement or any agreement which it chooses in order to establish wages. The Authority’s board has determined that wages can best be set by collective bargaining.
Submission to arbitration does not constitute a delegation of legislative power be*526cause the Authority has no such legislative power. It cannot delegate what it does not have. See City of Newport v. Gugel, Ky., 342 S.W.2d 517 (1960); also Miller v. Covington, supra. The Authority cannot prescribe a new policy. It can and is required, however, to pursue a plan already adopted by the legislative body. The legislature has adopted a clear policy of requiring municipal transit authorities to abide by collective bargaining agreements.
Delegations of responsibility involving a great amount of discretion have long been recognized as appropriate in Kentucky. See Settle v. Jones, 306 Ky. 9, 206 S.W.2d 59 (1947). In that case the statute in question authorized any city of the third class to operate its combined utilities through a board appointed by the chief executive of the governing body of the municipality. The statute fixed the salary of each member and the superintendent to be employed by the board. This Court held that the statute did not confer legislative power on the board in conflict with Section 160 of the Kentucky Constitution. The board’s powers were found to be comparable to those of the bridge commission which was found constitutional in Klein v. City of Louisville, 224 Ky. 624, 6 S.W.2d 1104 (1928). Klein, supra, held that the commission functioned as an administrative body to carry out the legislative intent and in so doing, it necessarily was vested with discretion.
The Authority in this case is functioning in the same way as those commissions. The General Assembly intended that employees’ rights under existing collective bargaining contracts be preserved and carry out that intent, mandated that the Authority adopt and adhere to those agreements. The Authority cannot carry out the legislative intent of the statute unless it complies with the binding arbitration provision of this agreement.
The intent of the General Assembly was to resolve disputes quickly by those with an in-depth knowledge of the subject matter of the dispute. The goal of the legislature was the same when it instructed transit authorities to adopt existing agreements to resolve disputes between the Authority and its employees quickly and with a minimum of disruption of transit service to the public. A decision of an arbitration panel familiar with the resolution of labor/management disputes would meet that legislative aim.
The arbitration of labor disputes falls within the purview of the doctrine of clear necessity as set out in Administrative Law Treatise, Yol. 1, pages 148-149, by Kenneth Culp Davis and quoted in Butler v. United Cerebral Palsy of Northern Kentucky, Inc., Ky., 352 S.W.2d 203 (1961). Here the Authority cannot effectively handle the dispute because the parties are at an impass in their negotiations. The alternatives to arbitration are an extended labor dispute, possibly resulting in an unfortunate disruption of mass transit service to the members of the public and the destruction of collective bargaining rights by the employees of the system. Either of these results are against public policy as set out by the General Assembly in the Kentucky Transit Authority Act.
The arbitration of this dispute by a fair and impartial arbitrator, mutually selected by the parties, would achieve the legislative goals of uninterrupted transit service and the preservation of employee rights. Labor arbitration has long been recognized as the most effective means to end such disputes. Submitting the controversy to an experienced arbitrator provides a guarantee of an equitable, well-reasoned resolution of the dispute.
I would affirm the circuit court.