Court Opinion

ID: 893192
Source: CourtListenerOpinion
Date Created: 2013-06-05 18:48:54.514937+00
Date Added: 2024-06-11T12:39:09.784324
License: Public Domain

I attest to the accuracy and
                                                     integrity of this document
                                                       New Mexico Compilation
                                                     Commission, Santa Fe, NM
                                                    '00'05- 15:00:00 2012.12.05
Certiorari Granted, November 16, 2012, No. 33,792

       IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

Opinion Number: 2012-NMCA-114

Filing Date: August 8, 2012

Docket No. 30,847

STATE OF NEW MEXICO,

       Plaintifff/Movant-Appellant,

v.

AMERICAN FEDERATION OF STATE, COUNTY,
AND MUNICIPAL EMPLOYEES COUNCIL 18,
AFL-CIO, CLC, and COMMUNICATION WORKERS
OF AMERICA, AFL-CIO, CLC,

       Defendants/Respondents-Appellees.

APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY
Alan M. Malott, District Judge

Tinnin Law Firm, P.C.
Robert P. Tinnin, Jr.
Albuquerque, NM

Rodey, Dickason, Sloan, Akin & Robb, P.A.
Thomas L. Stahl
Albuquerque, NM

for Appellant

Youtz & Valdez, P.C.
Shane Youtz
Marianne Bowers
Albuquerque, NM

for Appellees

                                      OPINION

                                         1
FRY, Judge.

{1}     Appellees American Federation of State, County, and Municipal Employees, Council
18 (AFSCME) and Communication Workers of America (CWA) (collectively, the Unions)
represent two groups of classified employees who work for the State of New Mexico. In
fiscal year 2009 (FY2009), the State implemented salary increases for its classified
employees that differed from those required by collective bargaining agreements previously
executed by the State and the Unions. Each Union reacted by filing grievances that were
ultimately submitted to arbitration for resolution. The arbitrators determined that the State’s
pay package for FY2009 violated the terms of the agreements and accordingly issued awards
in favor of the Unions. The State appeals from the district court’s confirmation of the
arbitration awards, arguing that the district court employed an improper standard of review
and that the arbitrators acted in excess of their authority. We affirm.

BACKGROUND

Terms of the Agreements

{2}     In September 2005, AFSCME and CWA each entered into a collective bargaining
agreement (collectively, the Agreements) with the State that covered, in relevant part,
contractual salary increases for three fiscal years, ending in FY2009. This appeal
specifically concerns two contractual salary increases for FY2009 required by the
Agreements. The first of these contractual salary increases provided a two percent general
salary increase subject to “the Governor’s Recommendation” for employees in each Union’s
bargaining unit that was to be effective the first full pay period following July 1, 2008. The
second salary increase was “[s]ubject to legislative appropriation” and was a compa-ratio
based within-band salary increase that was to be effective the first full pay period following
January 1, 2009. Both Agreements were identical with respect to these two contractual
salary increase provisions. In addition, the Agreements provided that:

       In the event the salary increases described [above] are not implemented
       because the [L]egislature fails to appropriate sufficient funds in any fiscal
       year, the Union[s] ha[ve] the right to reopen bargaining over general salary
       and within band [salary] increases that would be effective for the fiscal year
       following the fiscal year in which the [L]egislature fails to appropriate
       sufficient funds[.]

The Agreements included grievance and arbitration provisions to be followed by the parties
in the event of an alleged violation, misapplication, or misinterpretation of the Agreements.

{3}     The Union-represented employees constituted a subset of all classified employees
working for the State in FY2009. During the 2008 legislative session at issue in this case,
it is undisputed that the Legislature would have needed to appropriate approximately $8
million to fund the two salary increases required by the Agreements—$5.8 million for

                                              2
employees within the AFSCME bargaining unit and approximately $1.9 million for the
CWA bargaining unit employees. By contrast, the Legislature would need to appropriate
approximately $15.9 million dollars in order to extend the two salary increases provided for
in the Agreements to all eligible classified employees—both unrepresented workers as well
as Union-represented employees.

Legislative Appropriations for FY2009

{4}     The Legislature’s appropriation bill for FY2009 appropriated $12,833,000 “to
provide incumbents in agencies governed by the Personnel Act . . . with an average salary
increase of two and four-tenths percent . . . based on employee job performance as
determined by the personnel board.” (Emphasis added.) This increase was to be effective
July 1, 2008. A second bill passed by the Legislature provided “an additional average salary
increase of one-half percent” to be effective on July 1, 2008, that was to be paid by each
state agency using its “cash balances, vacancy savings[,] and other available funds.”
(Emphasis added.) This bill authorized the Department of Finance and Administration to
distribute up to $500,000 of the appropriation contingency fund to those agencies that did
not have available funds for the one-half percent salary increase.

{5}     Following the legislative session, the State Personnel Office (SPO) contacted
representatives of the Unions and informed them that it believed the Legislature had not
appropriated sufficient funds to cover the salary increases required by the Agreements. Two
meetings were held between the Unions and SPO to discuss the legislative appropriations
and the pay package that SPO was planning to recommend to the Personnel Board. At the
conclusion of the second meeting, the Unions requested an additional meeting and an
opportunity to present a counterproposal to SPO’s planned recommendation. This request
was denied, and the Personnel Board then approved and the State implemented a pay
package for FY2009 that differed not only from the terms of the Agreements, but also from
the pay package discussed by SPO and the Unions at the two meetings. The package that
was implemented provided: “[a] salary increase of [two and four-tenths percent] of pay-
band midpoint to incumbents in agencies governed by the Personnel Act” and “[a]n
additional [one-half percent] of pay-band midpoint salary increase for incumbent employees
subject to the Personnel Act.” This flat two and nine-tenths percent salary increase was
effective July 1, 2008, and applied to all classified employees, including unrepresented and
Union-represented employees.

Arbitration Proceedings

{6}     Both AFSCME and CWA filed grievances with SPO following the implementation
of the pay package for FY2009. The Unions’ primary argument was that even if the funding
appropriated by the Legislature was insufficient to give all classified employees the two
salary increases contracted for under the Agreements, there were nonetheless sufficient funds
appropriated to fully fund the increases for Union-represented employees and still provide
an “average” of two and four-tenths percent and an additional “average” of one-half percent

                                             3
in salary increases for all employees. The Unions also alleged that SPO had negotiated in
bad faith by failing to give the Unions an opportunity to bargain over the pay package that
was ultimately implemented by the State.

{7}      Unable to resolve their disputes through the grievance process, the State and the
Unions submitted to arbitration. Arbitration between AFSCME and the State occurred on
March 27, 2009, before arbitrator Alvin Goldman. On June 15, 2009, Goldman issued an
opinion and award in favor of AFSCME. Goldman determined that the State had not
violated the first salary increase requirement of the AFSCME Agreement—the two percent
increase effective on July 1, 2008—because the pay plan implemented by the State for
FY2009 provided an increase of two and nine-tenths percent on July 1, 2008. However, he
determined that the State failed to provide the compa-ratio increases required by the
AFSCME Agreement and, therefore, the total “received wage increases for bargaining unit
employees were less than would have been received had the pay [package] conformed” with
the requirements of the AFSCME Agreement. Goldman concluded that the $12.5 million
dollars appropriated by the Legislature was “more than enough” to meet the State’s
obligation to pay the AFSCME Agreement increases to Union-represented employees and
“still permit smaller increases for non bargaining unit personnel.”

{8}     In terms of the award, Goldman directed the State to calculate what the salary levels
would have been for AFSCME-represented employees had they received the salary increases
contemplated by the AFSCME Agreement and, if permitted by FY2010 allocations, to adjust
the FY2010 salary levels to reflect the level they would have been had the salary increases
been provided. In addition, the award directed that “bargaining unit employees shall be paid
the difference between what they were paid in [FY]2009 and what they would have been
paid had their pay been raised by” the two salary increases required by the AFSCME
Agreement.

{9}     Arbitration between CWA and the State took place at a hearing on May 6, 2009,
before arbitrator John Criswell, during which the parties submitted evidence and presented
testimony. On September 25, 2009, Criswell issued what he termed an “interim award” in
favor of CWA. He concluded that there was “undisputed evidence” demonstrating that the
Legislature appropriated sufficient funds for the salary increases required by the CWA
Agreement and, thus, the State improperly failed to pay the salary increases. Like Goldman
in the AFSCME arbitration, Criswell determined that the language of the legislative
appropriation bills required only that the salary increases received by all classified
employees total an “average” of two and nine-tenths percent and that there was no evidence
presented by the State that it “was impossible to comply with this requirement by granting
the [Union-]represented employees their legally required salary increase[s]” under the terms
of the CWA Agreement “while providing a lesser increase to [an] unrepresented
employee[].” Criswell concluded that there was no evidence presented that the State “owed
any legal obligation to pay to the unrepresented employees the same salary increases that the
[CWA Agreement] called for.”

                                             4
{10} After finding in favor of CWA, Criswell expressed his uncertainty as to the possible
remedies available to make the CWA-represented employees whole. He therefore indicated
that the award was of an interim nature and that he would retain jurisdiction until: (1) the
State provided CWA with a list of employees who should have received the two salary
increases required by the CWA Agreement along with the amounts of the increases for each
employee; and (2) the parties attempted to agree on a “proper, legal method” which could
permit payment of the two salary increases to the employees.

District Court’s Review of the Arbitration Awards

{11} The State filed a motion in district court seeking judicial review of the arbitration
awards pursuant to the Uniform Arbitration Act (UAA), NMSA 1978, Sections 44-7A-1 to
-32 (2001). The Unions filed cross-motions seeking confirmation of the awards. After
consolidating the individual cases involving each Union, the district court confirmed the
arbitration awards. The district court found that while it “may or may not have reached the
same conclusions as the [a]rbitrators, the [c]ourt d[id] not find the decisions of the
[a]rbitrators in each of these cases to have been so ‘palpably mistaken,’ so ‘completely
irrational,’ or so violative of public policy as to warrant the [c]ourt’s substitution of its
interpretation and conclusions for that of the duly chosen arbitrators who had the benefit of
first hand review of the testimony and the subject matter expertise of an experienced
arbitrator.” This appeal followed.

DISCUSSION

{12} The State raises four issues on appeal that it contends require reversal of the district
court’s confirmation of the AFSCME and CWA arbitration awards. As a preliminary matter,
the State contends that the district court applied an improper standard of review in the
proceedings below. The State also challenges substantive aspects of the arbitration awards,
arguing that the awards must be vacated because the arbitrators exceeded their powers under
the UAA by: (1) committing “gross error of fact or law” in determining that the Legislature
appropriated sufficient funds to cover the Agreement salary increases and (2) mandating
remedies that violate provisions of the Public Employee Bargaining Act (PEBA), NMSA
1978, §§ 10-7E-1 to -26 (2003, as amended through 2005), and the New Mexico
Constitution. See § 44-7A-24(a)(4) (providing that a district court “shall vacate an award
made in the arbitration proceeding” if the arbitrator exceeded his/her powers).

I.     District Court’s Review of the Arbitration Awards

{13} The State initially argues that the district court applied an erroneous standard of
review under Section 44-7A-24(a)(4) in determining whether to confirm or vacate the
arbitration awards. The district court relied on Fernandez v. Farmers Ins. Co. of Arizona,
115 N.M. 622, 857 P.2d 22 (1993), for the applicable standard of review. In Fernandez, our
Supreme Court emphasized that the UAA “controls the scope of the district court’s review
of an arbitration award” and that such review is generally limited to allegations that the

                                             5
award was the result of “fraud, partiality, misconduct, excess of powers, or technical
problems in the execution of the award.” 115 N.M. at 625, 857 P.2d at 25. The UAA
neither empowers the district court to review an arbitration award on the merits of the
controversy nor grants the district court the authority to review an award for errors of law
or fact. Id. at 626, 857 P.2d at 26.

{14} The State maintains that the district court should have conducted an independent
review of the arbitration records prior to determining whether the arbitrators exceeded their
powers. This view is contrary to our case law, including Fernandez, which holds that a
district court’s review of an arbitration award is limited in scope and does not permit de novo
review. Our Supreme Court noted in In re Arbitration Between Town of Silver City and
Silver City Police Officers Ass’n that judicial review of arbitration awards is strictly limited
and that “[d]e novo review of the merits of arbitration awards by the district court would
only serve to frustrate the purpose of arbitration, which seeks to further judicial economy by
providing a quick, informal, and less costly alternative to judicial resolution of disputes.”
115 N.M. 628, 632, 857 P.2d 28, 32 (1993). The district court is not to apply de novo review
and “should simply conduct an evidentiary hearing and enter findings of fact and conclusions
of law” with respect to each statutory basis raised as a ground for vacating or modifying the
award. Id. at 631-32, 857 P.2d at 31-32 (internal quotation marks and citation omitted).
Thus, the district court determines, based on the evidence presented to it, whether the award
was the result of “fraud, partiality, misconduct, excess of powers, or technical problems in
the execution of the award.” Fernandez, 115 N.M. at 625, 857 P.2d at 25.

{15} We conclude that the standard advocated by the State is a de novo standard that our
case law has firmly rejected. In contrast, the review applied by the district court was
consistent with the standard established by our jurisprudence. In the district court, the
parties requested a hearing, filed several written pleadings in support of their arguments, and
submitted the arbitration records and exhibits. The district court’s final order stated that the
court held a hearing on the matter, reviewed the parties’ briefs and the arbitration decisions
prior to reaching its decision, and concluded that there was no ground for vacating the
award.

{16} The State further argues that the district court’s reliance on Fernandez for the
applicable standard of review was incorrect because Fernandez does not articulate a standard
governing judicial review of arbitration awards under Section 44-7A-24(a)(4). We are not
persuaded for two reasons. First, the State itself relied on Fernandez as the appropriate
standard of review for the district court in its initial motion seeking vacatur of the arbitration
awards and in its response brief to the Unions’ cross-motions for confirmation of the awards.
See Cordova v. Taos Ski Valley, Inc., 1996-NMCA-009, 121 N.M. 258, 263, 910 P.2d 334,
339 (explaining that “[a] party who has contributed, at least in part, to perceived
shortcomings in a trial court’s ruling should hardly be heard to complain about those
shortcomings on appeal”).

                                                6
{17} Second, the district court’s reliance on Fernandez was not improper. Although
Fernandez was decided under a prior version of the UAA, the basis for vacating an award
due to an arbitrator exceeding his or her powers is the same in both the current and the
previous versions of the UAA. Compare NMSA 1978, § 44-7-12(A)(3) (1971) (repealed
2001), with § 44-7A-24(a)(4). The Supreme Court stated in Fernandez that New Mexico
courts should follow the majority view and should “only find that arbitrators have exceeded
their powers when the arbitrators rule on a matter that is beyond the scope of the arbitration
agreement; inconsistent with the arbitration agreement; removed from their consideration
by statute; or removed from their consideration by case law.” Fernandez, 115 N.M. at 628,
857 P.2d at 28 (citations omitted). Consequently, it was proper for the district court to rely
on Fernandez for guidance in determining whether the arbitrators exceeded their powers in
the present case.

{18} We also decline to follow the authority from other jurisdictions that the State relies
on in arguing that the district court should have conducted an independent review of the
arbitration records. As demonstrated above, New Mexico appellate decisions have addressed
the standard of review applicable to Section 44-7A-24(a) challenges to an arbitrator’s
decision, and we therefore see no reason to look for guidance from other jurisdictions. See
Fernandez, 115 N.M. at 628, 857 P.2d at 28 (holding that an arbitrator’s error of law did not
equate to the arbitrator having exceeded his power); see also In re Town of Silver City, 115
N.M. at 632, 857 P.2d at 32 (involving an argument that an arbitrator exceeded his power
by applying an incorrect standard of law); Nat’l Union of Hosp. Emps. v. Bd. of Regents,
2010-NMCA-102, ¶¶ 31-32, 149 N.M. 107, 245 P.3d 51 (involving a request to vacate an
award on the ground that the arbitrator exceeded his powers by conducting a final-offer
arbitration that was contrary to a hospital labor resolution and the PEBA); K.R. Swerdfeger
Constr., Inc. v. Bd. of Regents, 2006-NMCA-117, ¶¶ 1, 18-19, 140 N.M. 374, 142 P.3d 962
(involving a contractor who argued that the arbitrator exceeded his powers because the
award violated public policy).

II.    Our Standard of Review

{19} On appeal, we review a district court’s confirmation of an arbitration award to
determine whether substantial evidence in the record supports the district court’s findings
of fact and whether the district court correctly applied the law to the facts when making its
conclusions of law. Casias v. Dairyland Ins. Co., 1999-NMCA-046, ¶ 8, 126 N.M. 772, 975
P.2d 385. Therefore, in this case, we review the district court’s conclusion that the
arbitrators did not exceed their powers and determine whether that conclusion flows from
sufficiently supported facts and whether it is a correct application of the UAA’s
requirements.

III.   Whether the Arbitrators Exceeded Their Powers

{20} We next address whether the district court erred in determining that the arbitrators
did not exceed their powers under Section 44-7A-24(a)(4). As noted above, an arbitrator is

                                              7
considered to have exceeded his/her powers when the arbitrator rules on a matter that is
beyond the scope of the arbitration agreement, inconsistent with the arbitration agreement,
or removed from the arbitrator’s consideration by statute or by case law. Fernandez, 115
N.M. at 628, 857 P.2d at 28. In this case, the State contends that the arbitrators exceeded
their powers (1) by determining that the Legislature had appropriated sufficient funds to
cover the salary increases mandated by the Agreements and (2) by entering awards that
violate provisions of the New Mexico Constitution as well as (3) Section 10-7E-17(E) of the
PEBA. We address each of these arguments in turn.

A.     The Arbitrators Did Not Exceed Their Powers in Finding That the Legislature
       Appropriated Sufficient Funds to Cover the Salary Increases

{21} The State argues that the arbitrators exceeded their powers and committed gross error
in finding that the Legislature appropriated sufficient funds to cover both salary increases
required by the Agreements. The State challenges the arbitrators’ legal and factual findings
concerning the language of the two legislative appropriation bills, House Bill 2 (HB2) and
Senate Bill 165 (SB165), from the 2008 legislative session. Specifically, the State argues
that the arbitrators erroneously interpreted the phrase “average salary increase” in the bills
and that the arbitrators made faulty calculations in determining whether the legislative
appropriations were sufficient to fund the two salary increases.

{22} We view the State’s arguments as an attempt to have this Court review de novo the
arbitrators’ determinations. We decline to do so. The UAA does not permit de novo review
of the merits of the arbitrations at issue in this case. In re Town of Silver City, 115 N.M. at
632, 857 P.2d at 32 (emphasizing that the UAA “neither empowers the district court to
review an arbitration award on the merits of the controversy, nor grants the district court the
authority to review an award for errors of law or fact”). “Judicial reexamination of
arbitrators’ rulings on findings of fact and issues of law . . . prolong adversary proceedings,
thereby frustrating the parties’ goals of using [arbitration as] an expeditious and relatively
inexpensive alternative to litigation.” Fernandez, 115 N.M. at 626, 857 P.2d at 26.
Consequently, judicial review of arbitration awards should avoid making an arbitration
award “the commencement, not the end, of litigation.” Id. (internal quotation marks and
citation omitted).

{23} Our review of the record indicates that during the arbitration proceedings, the State
considered the legal and factual issues it now raises on appeal to be within the scope of the
arbitrators’ decision-making authority. At the start of the arbitrations, the parties stipulated
to a broad statement of issues, including whether the State had violated the Agreements by
implementing the pay package for FY2009 and, if so, what remedy was appropriate. During
both arbitrations, the State presented testimony concerning its interpretation of the two
legislative bills and, specifically, how it interpreted the language “average salary increase”
in these bills. The parties also presented testimony and exhibits concerning the factual issue
of whether the funds appropriated by the Legislature were sufficient to cover the salary
increases required by the Agreements. Either expressly or impliedly through its argument

                                               8
before the arbitrators, the State considered these legal and factual issues to be within the
scope of the arbitration. Accordingly, having agreed to submit these issues to the arbitrators,
the State was bound by the arbitrators’ legal and factual findings on these issues. United
Tech. & Res., Inc. v. Dar Al Islam, 115 N.M. 1, 6, 846 P.2d 307, 312 (1993) (“Having bitten
once at the arbitration apple, [the unsuccessful party] cannot now take a second bite from
the judicial one.”). “So long as the award is made fairly and honestly and is restricted to the
scope of the submission, it must be confirmed by the district court.” Fernandez, 115 N.M.
at 627, 857 P.2d at 27.

{24} Thus, just as the district court lacked authority to review the merits of the issues
arbitrated, we are also unable to reweigh the evidence and rule on the merits of the issues
arbitrated. Even if the arbitrators committed legal or factual error, as the State claims on
appeal, we see no permissible basis for reviewing the merits of the issues that were
arbitrated. We reiterate that “[l]egal and factual mistakes, such as applying the wrong
standard of proof, do not comprise an abuse of power” under Section 44-7A-24(a)(4). See
In re Town of Silver City, 115 N.M. at 632, 857 P.2d at 32 (determining that an arbitrator did
not exceed his power by applying the incorrect standard of proof); see also Fernandez, 115
N.M. at 625-26, 857 P.2d at 25-26 (determining that an arbitrator did not exceed his power
in interpreting a statute concerning uninsured motorist benefits, even if the interpretation was
arguably incorrect, because his actions were within the scope of the arbitration agreement
and the award was fairly and honestly made); K.R. Swerdfeger Constr., 2006-NMCA-117,
¶ 26 (“An arbitrator’s incorrect interpretation of a statute is not sufficient to show that
enforcement of the arbitration award would violate public policy.”).

B.     The Arbitrators Did Not Exceed Their Powers by Issuing Awards That the State
       Contends Require an Unconstitutional Retroactive Salary Increase

{25} The State argues that the arbitrators acted in excess of their authority by issuing
awards that allegedly require retroactive salary increases for the Unions’ employees in
violation of Article IV, Section 27 of the New Mexico Constitution. Article IV, Section 27
provides:

       No law shall be enacted giving any extra compensation to any public officer,
       servant, agent or contractor after services are rendered or contract made; nor
       shall the compensation of any officer be increased or diminished during his
       term of office, except as otherwise provided in this constitution.

The State maintains that the remedies provided in the arbitration awards constitute extra
compensation for services already performed in violation of Article IV, Section 27.

{26} We reject the State’s argument. As noted earlier, the arbitrators determined that
sufficient funds were allocated by the Legislature to cover the salary increases required by
the Agreements and, therefore, that the State violated its contractual obligations under the
Agreements by failing to provide these salary increases in FY2009. Thus, the arbitrators’

                                               9
chosen remedy was not payment for services already performed but, instead, payment that
the Unions’ employees were contractually entitled to at the time they performed their
services and failed to receive due to the State’s breach of its contractual obligations under
valid and binding Agreements. Stated differently, the remedies mandated by the arbitrators
were not “extra compensation” as used in Article IV, Section 27 for services performed in
FY2009, but compensation that the Unions’ employees were entitled to and would have
received were it not for the State’s violation of the Agreements. Moreover, the Unions’
employees cannot be faulted for undertaking grievance and arbitration procedures that were
resolved after the end of FY2009, which was the fiscal year during which the contractual
salary increases were to take effect. We therefore conclude that the arbitration awards did
not require an unconstitutional salary increase and that the arbitrators did not act in excess
of their authority in this regard.

C.     The Arbitrators Did Not Exceed Their Authority by Issuing Awards That
       Allegedly Violated Provisions of the PEBA

{27} The State also argues that the arbitrators exceeded their powers by mandating
monetary relief that will require the Legislature to appropriate funds. Emphasizing that the
legislative appropriations at issue in this case were specifically limited to FY2009, the State
contends that the funds are no longer available. Consequently, the State argues that the
monetary relief included in the arbitration awards violates Section 10-7E-17(E) of the PEBA.
In addition, the State asks that we apply the non-delegation doctrine to vacate the arbitration
awards.

{28} Section 10-7E-17 of PEBA covers the scope of bargaining between public employers
and labor representatives. In relevant part, Subsection 17(E) provides that:

               E.     An impasse resolution or an agreement provision by the state
       and an exclusive representative that requires the expenditure of funds shall
       be contingent upon the specific appropriation of funds by the [L]egislature
       and the availability of funds. . . . An arbitration decision shall not require the
       reappropriation of funds.

(Emphasis added.) The State argues that this provision prohibited the arbitrators from
“requiring a reappropriation of funds from an already enacted budget.” The Unions argue,
however, that Section 10-7E-17 applies only to arbitrations following an impasse, which is
defined under the PEBA as the “failure of a public employer and an exclusive representative,
after good-faith bargaining, to reach agreement in the course of negotiating a collective
bargaining agreement.” Section 10-7E-4(K). The Unions contend that this appeal arises
from grievances and arbitration proceedings filed after the parties had already negotiated and
signed the Agreements; therefore, they claim that Subsection 17(F)—which does not contain
an express reappropriation prohibition—is applicable here:

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                F.     An agreement shall include a grievance procedure to be used
       for the settlement of disputes pertaining to employment terms and conditions
       and related personnel matters. The grievance procedure shall provide for a
       final and binding determination. The final determination shall constitute an
       arbitration award within the meaning of the [UAA]; such award shall be
       subject to judicial review pursuant to the standard set forth in the [UAA].
       The costs of an arbitration proceeding conducted pursuant to this subsection
       shall be shared equally by the parties.

Section 10-7E-17(F).

{29} We need not determine whether Subsections 17(E) or 17(F) applies to this case. The
State’s argument is premised on its contention that the arbitration awards would require
further appropriation or a reappropriation of funds by the Legislature. However, the
arbitrators determined that the Legislature already appropriated sufficient funds in FY2009
for the State to meet its contractual obligations under the Agreements and that the State
failed to meet its contractual obligation to distribute the funds according to the terms of the
Agreements. The State’s representation that it has already used the funds appropriated by
the FY2009 legislative appropriations should not affect the arbitrators’ decisions and awards
in favor of the Unions. There is no difference between this case and other cases where
adverse judgments are rendered against the State; as in those cases, the State cannot avoid
its obligation to comply with the judgment by maintaining that compliance would require
it to seek further appropriations from the Legislature. Cf. Salazar v. Ramah Navajo Chapter,
567 U.S. ___, 2012 WL 2196799, at *7 (June 18, 2012) (explaining that “[o]nce ‘Congress
has appropriated sufficient legally unrestricted funds to pay the contracts at issue, the
Government normally cannot back out of a promise to pay on grounds of ‘insufficient
appropriations,’ even if the contract uses language such as ‘subject to the availability of
appropriations,’ and even if an agency’s total lump-sum appropriation is insufficient to pay
all the contracts the agency has made’” (quoting Cherokee Nation of Okla. v. Leavitt, 543
U.S. 631, 637 (2005)) and that this rule “furthers the Government’s own long-run interest
as a reliable contracting partner in the myriad workaday transaction of its agencies.”
Salazar, 2012 WL 2196799, at *1 (internal quotation marks and citation omitted).

{30} At oral argument, the State raised a second argument based on Subsection 17(E) of
the PEBA. The State contended that the term “agreement provision” in Subsection 17(E)
means a collective bargaining agreement and, therefore, that the Agreements in this case
were dependent upon the “specific appropriation” of funds by the Legislature required by
that subsection. The State argued that the two legislative appropriation bills of relevance to
this case were not specific enough to meet this requirement because they did not contain
definitive language tying the appropriations to the Agreements.

{31} The term “agreement provision” is not defined in the statute and has not previously
been interpreted by our appellate courts. Assuming without deciding that Subsection 17(E)
applies to the Agreements in this case, we nonetheless conclude that the legislative

                                              11
appropriations were specific enough to withstand scrutiny. HB 2, the Legislature’s primary
appropriations bill during the 2008 legislative session, included several provisions discussing
appropriations for each state agency or department. The bill appropriated $12,833,000 “to
provide incumbents in agencies governed by the Personnel Act . . . with an average salary
increase of two and four-tenths percent based on employee job performance as determined
by the personnel board” to be effective on July 1, 2008. This provision within the bill
specified the effective date, the rate of the increase, and that it was an appropriation for all
agencies covered by the Personnel Act. Though the percent of the increase and effective
date varied from those specified in the Agreements, there is no question that this language
in HB 2 included the Union-represented employees, a subset of “incumbents in agencies
governed by the Personnel Act.”

{32} We are not persuaded that the Legislature, in using the term “specific” in Subsection
17(E), intended for it to be applied in the manner that the State raises. It would be unrealistic
to require the Legislature to specifically delineate within its appropriation bills all of the
contractual salary obligations the State enters into with various entities, including unions.
We therefore conclude that the arbitrators did not exceed their powers because the awards
do not violate Subsection 17(E) of the PEBA.

IV.     The Dissent’s View

{33} We briefly address the arguments asserted in the Dissent. The Dissent contends that
the UAA/Fernandez standard of review we employ in this Opinion is improper under the
circumstances of this case for two primary reasons: (1) our Supreme Court in Bd. of Educ.
of Carlsbad Mun. Sch. v. Harrell, 118 N.M. 470, 882 P.2d 511 (1994), requires broader
judicial review under these circumstances, and (2) the PEBA itself requires a different
standard of judicial review. The Dissent maintains that, under Harrell, the PEBA’s directive
in Section 10-7E-17(F) requiring application of the UAA’s limited judicial review violates
the doctrine of separation of powers and principles of due process. Because of these
violations, the Dissent contends, the arbitration awards in this case are subject to more
expansive judicial review than permitted by the UAA. The Dissent also maintains that the
PEBA itself restricts an arbitrator to the interpretation of the four corners of the collective
bargaining agreement and precludes interpretation of legislative bills.

{34} The problem with the Dissent’s contentions is that the State never raised these issues
or points in this Court, nor were they presented to the arbitrators or the district court. A
necessary prerequisite to the Dissent’s position based on Harrell is the determination that
Section 10-7E-17(F) is unconstitutional. See Harrell, 118 N.M. at 473, 882 P.2d at 514
(holding that a provision of the State Personnel Act limiting judicial review in an appeal
from a school board’s decision to discharge a certified employee was unconstitutional). In
their briefs in this Court, none of the parties cited Harrell or suggested that any part of the
PEBA was constitutionally infirm. Nor did any of the parties argue that the PEBA precluded
the arbitrators from interpreting the appropriation bills. In fact, both the State and the
Unions asked the arbitrators to interpret the bills in question, and both presented evidence

                                               12
to aid the arbitrators in their interpretation. On appeal, the State argues only that the
arbitrators’ interpretations were legally flawed, not that the interpretations were
unauthorized.

{35} In our view, it would be unfair to the parties for us, sua sponte, to conceive of and
articulate legal theories that never occurred to the parties and that were not raised in the
proceedings below or on appeal. The State did not make the arguments crafted by the
Dissent and, more importantly, the Unions have never had any opportunity to respond to
these unstated arguments. Were we to decide this case as the Dissent suggests, the Unions
would be justifiably dismayed that they have been denied the opportunity to present a
different view of Harrell and the PEBA. Our Supreme Court has admonished that “[c]ourts
risk overlooking important facts or legal considerations when they take it upon themselves
to raise, argue, and decide legal questions overlooked by the lawyers who tailored the case
to fit within their legal theories.” N.M. Dep’t of Human Servs. v. Tapia, 97 N.M. 632, 634,
642 P.2d 1091, 1093 (1982); see State v. Werner, 115 N.M. 131, 132, 848 P.2d 1, 2 (Ct. App.
1992) (explaining that appellate courts should not address arguments the parties have failed
to brief unless “there could be no valid reason for the lower court’s action” (internal
quotation marks and citation omitted)), rev’d on other grounds by 117 N.M. 315, 871 P.2d
971 (1994).

{36} While the Dissent correctly observes that the standard of review is not subject to the
usual preservation requirements, the Dissent’s contentions cannot reasonably be
characterized as a simple determination of the proper standard of review. Rather, for us to
determine that we should apply something other than the UAA standard governing the
judicial review of arbitration awards, we would first necessarily have to strike down Section
10-7E-17(F), which requires that any arbitration award “shall be subject to judicial review
pursuant to the standard set forth in the [UAA].” Id. The only way to strike down that
statute is to determine it to be unconstitutional, just as the Supreme Court in Harrell found
a provision in the State Personnel Act to be unconstitutional in order to adopt a different
standard of review. This is a proposition that is far more complex than the simple choice of
a de novo or abuse of discretion standard of review.

{37} In addition, the question here is not one of preservation. We would be concerned
with preservation if the State had made the Dissent’s contentions on appeal and the Union
had objected on the ground that the arguments were never made below. Here, the arguments
were never made in this Court—at least not until the Dissent made them. We decline to
create arguments that the parties themselves have not raised.

CONCLUSION

{38} We affirm the district court’s confirmation of both the AFSCME and the CWA
arbitration awards.

{39}   IT IS SO ORDERED.

                                             13
                                                ____________________________________
                                                CYNTHIA A. FRY, Judge

I CONCUR:

_______________________________________
JONATHAN B. SUTIN, Judge

J. MILES HANISEE, Judge (dissenting).

HANISEE, Judge (dissenting).

{40} At the heart of this case lie separate arbitral awards, each turning on a single legal
question: whether the 2008 Legislature, by its $12.8-million-dollar appropriation bills,
intended to specifically fund the State’s 2005 and 2006 collective bargaining Agreements
and thereby trigger salary increases for AFSCME/CWA bargaining unit employees over and
above those awarded to comparably situated, but unrepresented, classified public employees.
Both arbitrators interpreted the Legislature’s stated intention to fund “an average salary
increase of two and [nine]-tenths percent based on employee job performance as determined
by the personnel board” as unambiguously funding the union contracts, and rejected
evidence and argument presented to the contrary. By affirming the district court’s
confirmation of both awards, the majority ratifies application of the Uniform Arbitration
Act’s (UAA’s) built-in standard of review, which is “among the narrowest known to the
law,” permitting vacatur of an arbitral award only if tainted by corruption, fraud, misconduct,
or the like. Bowen v. Amoco Pipeline Co., 254 F.3d 925, 932, 936 (10th Cir. 2001) (internal
quotation marks omitted). Consequently, meaningful judicial review of the arbitrators’
legally determinative fiscal constructions is evaded. See supra, Majority Opinion ¶ 24
(“[W]e are also unable to . . . rule on the merits of the issues arbitrated[,] . . . [e]ven if the
arbitrators committed legal or factual error[.]”). Because I believe that application of the
UAA’s standard of review to these arbitral awards contravenes direct precedent, the New
Mexico Constitution, PEBA itself, and sound public policy, I respectfully dissent.

Standard of Review

{41} This Court independently determines the standard of its review. Clayton v.
Farmington City Council, 120 N.M. 448, 453, 902 P.2d 1051, 1056 (Ct. App. 1995) (“[O]ne
of our first tasks is to determine the standard of review we should apply in examining district
court judgments.”). This is true even when the parties have failed to adequately present the
issue below, or in this Court. Watson v. Town Council of Bernalillo, 111 N.M. 374, 376, 805
P.2d 641, 643 (Ct. App. 1991); see also State v. Barrera, 2001-NMSC-014, ¶ 20, 130 N.M.
227, 22 P.3d 1177 (“The standard of review on appeal is an issue that is separate and distinct
from the requirement of preservation.”). While the majority here precludes application of
a standard of review not specifically advanced by the parties, see supra, Majority Opinion

                                               14
¶¶ 34-37, my view is that our appellate obligation incorporates the identification and use of
the standard that is correct as a matter of law.

{42} The majority cites the general standard appropriate to our review of a district court’s
confirmation of an arbitral award, which requires that factual findings be supported by
substantial evidence and that applicable law be correctly utilized in relation to the facts. See
Casias, 1999-NMCA-046, ¶ 8. But that “standard of review depends on the nature of the
review undertaken by the district court[,]” Clayton, 120 N.M. at 453, 902 P.2d at 1056,
which here reviewed the arbitral awards only as directed by the UAA. See § 44-7A-3(a)
(“The [UAA] governs an agreement to arbitrate made on or after [July 1, 2001].”); see also
§ 10-7E-17(F) (“[D]isputes pertaining to employment terms and conditions and related
personnel matters[,] . . . shall constitute an arbitration award . . . [and] be subject to judicial
review pursuant to the standard set forth in the [UAA].”). Our New Mexico Supreme Court,
however, has plainly required that a broader, administrative standard of review be applied
when the parties have been compelled to arbitrate by statute. Harrell, 118 N.M. at 485-86,
882 P.2d at 526-27.

{43} Harrell distinguished voluntary arbitration from statutorily mandated arbitration and
assigned differing standards of review to each. When arbitration is volitional, a “limited
scope of judicial review of arbitration awards is appropriate [because] the parties have
voluntarily bargained for the decision of an arbitrator and, presumably, have assumed the
risks of and waived objections to that decision.” Id. at 476, 882 P.2d at 517 (emphasis
added). The Court explained, however, that “[w]hen arbitration is statutorily mandated as
the sole method for resolution of a particular dispute, the arbitration is not consensual even
if a provision for such arbitration is incorporated into a contract.” Id.; see also Rivera v. Am.
Gen. Fin. Servs., Inc., 2011-NMSC-033, ¶ 38, 150 N.M. 398, 259 P.3d 803 (“Arbitration is
a matter of consent, not coercion[.]” (internal quotation marks and citation omitted)).

{44} While the New Mexico Supreme Court ultimately upheld the enforceability of
statutorily mandated arbitration in Harrell, it declared unconstitutional the State Personnel
Act’s limited standard of review—which is directly analogous to that of the UAA—when
applied to the challenged product of compulsory arbitration:

        [D]ue process, together with separation of powers considerations, requires
        that parties to statutorily mandated arbitration be offered meaningful review
        of the arbitrator’s decision. In order for review of the arbitrator’s decision
        to be meaningful, the court must determine whether the litigant received a
        fair hearing before an impartial tribunal, whether the decision is supported
        by substantial evidence, and whether the decision is in accordance with law.
        [Any] provision . . . limiting judicial review of the arbitrator’s decision to
        cases “where the decision was procured by corruption, fraud, deception or
        collusion” does not permit meaningful review of the arbitrator’s decision by
        the court. We therefore strike th[ese] provision[s] as a violation of due
        process and as an unconstitutional delegation of judicial power.

                                                15
118 N.M. at 485, 882 P.2d at 526.

{45} Thus, the appropriate standard of district court review in this case turns on whether
the arbitration herein was compulsory or voluntary. There has been one case in our
jurisprudence to address this question in the context of PEBA, but for reasons explained
below its result is distinguishable. See generally Int’l Ass’n of Firefighters v. City of
Carlsbad, 2009-NMCA-097, ¶ 18, 147 N.M. 6, 216 P.3d 256. In Int’l Ass’n of Firefighters,
this Court reasoned that the final arbitration provided for in Section 10-7E-18(B) of PEBA
was voluntary, rather than compulsory, because the parties could have agreed to an
alternative impasse procedure under Section 10-7E-18(C), and because the arbitrator’s
election to adopt the “complete, last, best offer” was contingent on the future discretion of
the City in exercising its independent power to appropriate funds. 2009-NMCA-097, ¶¶ 7,
13, 18 (internal quotation marks and citation omitted).

{46} The provision of PEBA applicable to this case is very different from that analyzed
in Int’l Ass’n of Firefighters. First, the grievance procedures contained within the 2005 and
2006 Agreements and invoked by the Unions were adopted pursuant to Section 10-7E-17(F),
which mandated binding arbitration for resolution of disputes arising under the Agreements:

       An agreement shall include a grievance procedure to be used for the
       settlement of disputes pertaining to employment terms and conditions and
       related personnel matters. The grievance procedure shall provide for a final
       and binding determination. The final determination shall constitute an
       arbitration award within the meaning of the [UAA] . . . .

(Emphasis added.)

{47} Also, Section 10-7E-17 lacks a comparable opt-out provision such as that present in
Int’l Ass’n of Firefighters, which would have allowed the parties to agree to a grievance
procedure other than binding arbitration. And while the Agreements at issue are similarly
“contingent upon the specific appropriation of funds by the [L]egislature and the availability
of funds[,]” the arbitrators’ decisions herein occurred as a product of past-funded legislative
appropriations. Section 10-7E-17(E). In contrast, the City in Int’l Ass’n of Firefighters
possessed the independent power to fund the terms adopted by that arbitrator’s decision at
some point in the future if it so chose. 2009-NMCA-097, ¶¶ 3, 12.

{48} Given these distinctions, it is my view that the mandatory arbitration clause provided
in Section 10-7E-17(F) and exported into these Agreements, is compulsory under Harrell.

                                              16
The terms of the Agreements requiring binding arbitration were non-negotiable.1 Thus,
UAA review of these awards ran structurally afoul of our Supreme Court’s careful effort to
limit cursory judicial review following involuntary resolution of disputes by an arbitrator.
Applying Harrell, I would declare the clause within PEBA’s Section 10-7E-17(F) that limits
“judicial review pursuant to the standard set forth in the Uniform Arbitration Act” to be
unconstitutional.

{49} Importantly, the applicability of our New Mexico Supreme Court’s analysis
goes beyond the simple determination of whether submission to an arbitrator’s authority is
a product of force or choice. Harrell based its ultimate determination on separation of
powers grounds in addition to due process, further rooting its decision within the New
Mexico Constitution. See 118 N.M. at 482, 882 P.2d at 523; N.M. Const. Art. III, § 1 (“The
powers of the government of this state are divided into three distinct departments, the
legislative, executive and judicial, and no person or collection of persons charged with the
exercise of powers properly belonging to one of these departments, shall exercise any
powers properly belonging to either of the others, except as in this constitution otherwise
expressly directed or permitted.”). Our Supreme Court stressed the critical role of the
judiciary as a separate and independent power, vital to the proper operation of government:

       The judiciary thus must maintain the power of check over the exercise of
       judicial functions by quasi-judicial tribunals in order that those adjudications
       will not violate our constitution. The principle of check requires that the
       essential attributes of judicial power, vis-a-vis other governmental branches
       and agencies, remain in the courts.

Harrell, 118 N.M. at 484, 882 P.2d at 525. Seperately, our Supreme Court has upheld the
Legislature’s constitutional role in assigning the location at which the funds it chooses to
disburse come to rest. State ex rel. Schwartz v. Johnson, 120 N.M. 820, 825, 907 P.2d 1001,
1006 (1995) (“The [L]egislature must exercise its ‘exclusive power of deciding how, when,
and for what purpose the public funds shall be applied in carrying on the government.’”
(citation omitted)).

{50} In my view, the arbitrators’ interpretations of the Legislature’s intent to discharge its
independent appropriative function ascend to a level of constitutional significance. Each
award is therefore subject to the judiciary’s power of check, and not the virtual rubberstamp
of UAA review. Pursuant to Harrell, that check is provided by way of an administrative
agency standard of review. See 118 N.M. at 485-86, 882 P.2d at 526-27 (“The scope of
review constitutionally required for compulsory arbitration is the review required for

       1
         The State was separately compelled from the outset—again, by PEBA—to negotiate
and reach agreements with the participatory bargaining units. See § 10-7E-17(A) (mandating
that the State “shall bargain in good faith . . . [and] shall enter into written collective
bargaining agreements covering employment relations”).

                                             17
administrative adjudications[,]” which entails “a determination whether the administrative
decision is arbitrary, unlawful, unreasonable, capricious, or not based on substantial
evidence.”). Because the district court did not employ the appropriate standard of review
to these arbitral awards, I would remand for it to do so.

PEBA Limits Arbitrator Power

{51} Further undermining the exclusive application of UAA-derived review to the
question of law at issue is PEBA itself, which expressly limits arbitrator authority to matters
of contractual interpretation within the four corners of a given collective bargaining
agreement. Section 10-7E-17(F) (limiting grievance arbitration to “the settlement of
disputes pertaining to employment terms and conditions and related personnel matters.”
(emphasis added)); cf. Agreement Between The State of New Mexico and State Employee
Alliance The Communications Workers of America AFL-CIO, CLC, art. 9, §§ 1(A), 5 (Feb.
1, 2006) (“Allegations of violation, misapplication, or misinterpretation of this Agreement
. . . shall be subject to this negotiated grievance procedure[,]” and “[t]he arbitrator shall have
no power to add to, subtract from, alter, or modify any of the terms of the Agreement, but
may give appropriate interpretation or application to such terms and provide appropriate
relief.” (emphasis added)). Thus, PEBA too supports the diminution of an arbitrator’s might
to questions of law that are answerable only beyond the confines of collective bargaining
agreements.

{52} To implement this distinction, PEBA defines two tracks for resolution of disputes
arising between the State and bargaining units: (1) administrative agency proceedings before
the Public Employee Labor Relations Board (the Board) and (2) binding arbitration. Board
rulings are subject to a typical administrative agency standard of review, reversible only
when found to be “(1) arbitrary, capricious or an abuse of discretion; (2) not supported by
substantial evidence on the record considered as a whole; or (3) otherwise not in accordance
with law.” Section 10-7E-23. The contrasting standard of review for arbitral awards is the
far narrower UAA provision within Section 44-7A-24(a): vacatable only for “fraud,
partiality, misconduct, excess of powers, or technical problems in the execution of the
award.”2 Fernandez, 115 N.M. at 625, 857 P.2d at 25. Like the dichotomy in Harrell that
separates these same standards of review based upon voluntariness or compulsion, PEBA
differentiates between disputes that are intrinsic to or extrinsic from the Agreement at issue.

{53} The limitation of an arbitrator’s reach is expressed by the referral of intrinsic disputes
for arbitration, while legally broader extrinsic matters are resolved by the Board PEBA

        2
         Arguably, even under UAA review, these arbitral awards require vacatur because
they are products of the extrinsic interpretation of legislative appropriation, an area of
inquiry that exceeds an arbitrator’s power pursuant to PEBA. The majority, however, does
not address that question based upon its conclusion that the State failed to preserve the
argument with a requisite level of specificity. See supra, Majority Opinion ¶ 23.

                                               18
created. See §§ 10-7E-8, -9 (providing that Board powers and duties include “the filing of,
hearing on and determination of complaints of prohibited practices”). Prohibited practices
complaints are defined at Section 10-7E-19, and include complaints relating to the failure
“to comply with a collective bargaining agreement.” Section 10-7E-19(H). Additionally,
PEBA directs that “[t]he board shall promulgate rules necessary to accomplish and perform
its functions and duties.” Section 10-7E-9(A). One of the regulations promulgated by the
Board expresses the same effort to define an arbitrator’s power in a manner that expresses
its outer boundaries:

       If the subject matter of a prohibited practices complaint requires the
       interpretation of a collective bargaining agreement; and the parties waive in
       writing any objections to timeliness or other procedural impediments to the
       processing of a grievance, and the director determines that the resolution of
       the contractual dispute likely will resolve the issues raised in the prohibited
       practices complaint, then the director may, on the motion of any party, defer
       further processing of the complaint until the grievance procedure has been
       exhausted and an arbitrator’s award has been issued.

11.21.3.22(A) NMAC (02/28/2005) (emphasis added)3; accord S. Barry Paisner & Michelle
R. Haubert-Barela, Correcting the Imbalance: The New Mexico Public Employee
Bargaining Act and the Statutory Right Provided to Public Employees, 37 N.M. L. Rev. 357,
373 (2007) (noting that under the Civil Service Reform Act a more rigorous review process
applies to unfair labor practices, whereas an arbitrator’s “interpretation of the collective
bargaining agreement . . . remains largely unreviewable”).

{54} The proper confinement of an arbitrator’s power to the contracts which create it also
enjoys broad historical support. The United States Supreme Court, for instance, has
recognized that:

       [A]n arbitrator is confined to interpretation and application of the collective
       bargaining agreement . . . . Thus the arbitrator has authority to resolve only
       questions of contractual rights . . . . [T]he specialized competence of
       arbitrators pertains primarily to the law of the shop, not the law of the land.
       . . . [T]he resolution of statutory or constitutional issues is a primary
       responsibility of courts . . . .”

Alexander v. Gardner-Denver Co., 415 U.S. 36, 53-57 (1974) (first alteration in original)
(internal quotation marks and citations omitted). Thus, pursuant to the language contained
within the Agreements and PEBA itself, judicial review is required as to whether these

       3
         Also arguably, the nature of the Union’s grievance—which began as a prohibited
practices complaint charging that the State failed to comply with the Agreements—was
unsuited for deferral to arbitration and instead required resolution by the Board.

                                             19
arbitrators erred as a matter of law, and not simply whether they exceeded their powers or
were corrupt.

Public Policy

{55} Lastly, under the UAA the decision of an arbitrator cannot be vacated for legal error
or contravention of public policy. See Fernandez, 115 N.M. at 627-28, 857 P.2d at 27-28
(noting that arbitral awards are not reviewable for legal error); see also K.R. Swerdfeger
Constr., 2006-NMCA-117, ¶ 19 (“[We are] not convinced . . . that anything in the UAA
permits a court to vacate an arbitration award on public policy grounds.”). Accordingly,
today’s Opinion also leaves unanswered the question of whether the discrepant entitlement
of select classified employees to participate in non-commensurate wage increases comports
with New Mexico public policy.

{56} Pursuant to the Agreements, employees within the represented bargaining units were
each entitled to claim both a two percent general salary increase, as well as a within-band
increase of a compa-ratio-determined amount between one percent and three and one-half
percent, each contingent upon funding. When added together, these increases meant that a
represented employee’s combined anticipated raise ranged from three percent to five and
one-half percent. Unrepresented employees within parallel occupational classifications, but
who were not included within AFSCME or CWA’s bargaining units, stood to gain no
increase pursuant to the Agreements. See contra § 10-7E-2 (“The purpose of [PEBA] is to
. . . promote harmonious and cooperative relationships between public employers and public
employees and to protect the public interest . . . .”). Today’s ruling affirms that the State is
bound by its 2005 and 2006 Agreements, thereby setting aside the State’s effectuation of the
2008 legislative appropriations to provide a two and nine-tenths percent, across-the-board
salary increase for all eligible state employees—union represented or not.

{57} It appears to me to be contrary to public policy for eligible state employees to be
awarded substantially differing income increases for the performance of parallel public
services, when that determination is based upon union representation and not upon merit.
See State v. Pub. Safety Emps. Ass’n, 798 P.2d 1281, 1286 (Alaska 1990) (“[T]he merit
system and the principle of like pay for like work are fundamental to public employment.”).
The result this Court reaches today prevents us from discharging our constitutional duty to
determine whether the inequitable impact of the Agreements comports with the even-
handedness with which New Mexico citizens expect state government to treat and
compensate public employees who perform state business on a day-to-day basis. See
Hartford Ins. Co. v. Cline, 2006-NMSC-033, ¶ 8, 140 N.M. 16, 139 P.3d 176 (“The
predominant voice behind the declaration of public policy of the state must come from the
[L]egislature, with an additional supporting role played by the courts and the executive
department . . . .”). Had the district court applied the administrative standard of review
required by Harrell and established within PEBA, this would not be the case.

                                              20
{58} Because I cannot agree with the manner in which the majority resolves the issues in
this appeal, I respectfully dissent.

                                           ____________________________________
                                           J. MILES HANISEE, Judge

Topic Index for State v. Am. Fed. of State, Co., & Mun. Empl. Council 18, No. 30,847

APPEAL AND ERROR
Preservation of Issues for Appeal
Standard of Review

CIVIL PROCEDURE
Arbitration

COMMERCIAL LAW
Uniform Arbitration Act

CONSTITUTIONAL LAW
New Mexico Constitution, General

EMPLOYMENT LAW
Collective Bargaining
Compensation and Commissions
Employment Contract
Labor Unions

GOVERNMENT
Public Employees

REMEDIES
Arbitration

STATUTES
Legislative Intent

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