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Fairbanks Police Department Chapter, APEA v. City of Fairbanks (6/28/96), 920 P 2d 273
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Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the
attention of the Clerk of the Appellate Courts, 303 K Street,
Anchorage, Alaska 99501, phone (907) 264-0607, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
FAIRBANKS POLICE DEPARTMENT )
CHAPTER, ALASKA PUBLIC )
EMPLOYEES ASSOCIATION, )
) Supreme Court No. S-7060
Appellant, )
) Superior Court No.
v. ) 4FA-94-865 CI
)
CITY OF FAIRBANKS, ) O P I N I O N
)
Appellee. ) [No. 4365 - June 28, 1996]
______________________________)
Appeal from the Superior Court of the State of
Alaska, Fourth Judicial District, Fairbanks,
Mary E. Greene, Judge.
Appearances: William K. Jermain and James A.
Gasper, Jermain, Dunnagan & Owens, P.C.,
Anchorage, for Appellant. Paul J. Ewers,
Deputy City Attorney, and Herbert P. Kuss,
City Attorney, Fairbanks, for Appellee.
Before: Compton, Chief Justice, Rabinowitz,
Matthews, Eastaugh, Justices, and Shortell,
Justice, pro tem.
SHORTELL, Justice pro tem.
RABINOWITZ, Justice, concurring.
I. INTRODUCTION
A chapter of the Alaska Public Employees Association
(APEA), a labor organization that represents employees of the
Fairbanks Police Department, sued the City of Fairbanks (the City)
for failure to comply with the result of mandatory interest
arbitration during collective bargaining between the parties. APEA
appeals the superior court's grant of summary judgment in favor of
the City. We affirm the superior court's decision.
II. FACTS AND PROCEEDINGS
APEA exclusively represents certain employees of the
Fairbanks Police Department. The collective bargaining
relationship between APEA and the City is governed by the Public
Employment Relations Act (PERA), AS 23.40.070 - .260.
PERA divides public employees into three classes. AS
23.40.200(a). APEA represents police employees, who by statute
belong to the first class: those employed to perform "services
which may not be given up for even the shortest period of time."
AS 23.40.200(a)(1), .200(b). PERA flatly prohibits this class of
employees from engaging in strikes and compels submission of their
unresolved collective bargaining issues to arbitration. AS
23.40.200(b).
In collective bargaining that began in 1990, APEA and the
City could not resolve three outstanding issues, one of which
concerned meal and clothing (or uniform) allowances. Under the
terms of PERA, the outstanding issues were submitted to
arbitration. On May 8, 1991, the arbitrator, John Abernathy,
issued a decision. In addition to awarding pay raises, Abernathy
awarded four percent increases in the meal and clothing allowances
to become effective on July 1, 1991 and on July 1, 1992.
Under PERA, monetary terms of collective bargaining
agreements are subject to legislative appropriation.
AS 23.40.215(a). The City's executive branch sought and obtained
approval for the pay increases from the Fairbanks City Council (the
Council). The Council never funded the future meal and clothing
allowance increases.
In 1993 a police employee noticed that employees had not
received the increases in meal and clothing allowances. APEA
demanded them. The City responded that under sec. 215(a) of PERA,
implementation of the arbitrator's award is subject to legislative
appropriation. Because the Council had never funded the allowance
increases, the City took the position that it did not have to
comply with the arbitral award.
APEA filed suit to enforce the award. The superior court
granted summary judgment in favor of the City, finding that
arbitration awards are subject to legislative funding under sec.
215(a), that this award had not been funded, and that employees
were therefore not entitled to it.
APEA appeals. At issue is a narrow question of statutory
interpretation. APEA urges us to find sec. 215(a) inapplicable to
arbitration results reached under sec. 200(b). The City urges us
to uphold the superior court's finding that sec. 215(a) applies to
the results of arbitration.
III. DISCUSSION (EN1)
A. Subsection 215(a) Applies to Arbitration Awards.
APEA asserts that sec. 215(a), the statute requiring
legislative approval, does not apply to arbitration awards
established under sec. 200(b). After the superior court issued its
opinion, this court clearly settled the law on the question.
Public Safety Employees Ass'n, Local 92 v. State, 895 P.2d 980, 986
(Alaska 1995), aff'd on reh'g, 902 P.2d 1334 (Alaska 1995) (citing
State v. Public Safety Employees Ass'n, 798 P.2d 1281, 1285 n.7
(Alaska 1990)). Subsection 215(a) does apply to arbitration
awards. Id.
This interpretation is dictated by the explicit provision
that sec. 215(a) applies to "any agreement entered into under AS
23.40.070 - 23.40.260." AS 23.40.215(a). Moreover, this
interpretation is in keeping with the purpose of sec. 215(a): to
preserve legislative authority over governmental appropriations.
Public Employees' Local 71 v. State, 775 P.2d 1062, 1064 (Alaska
1989). The alternative would ignore the purpose of sec. 215(a) and
would fail to interpret PERA as a consistent whole. (EN2)
Legislative approval is a common requirement in public
sector collective bargaining. See State v. Florida Police
Benevolent Ass'n, Inc., 613 So. 2d 415, 417 (Fla. 1992) (public
employees' unions may need "'to, in effect, obtain approval of a
proposed contract by a legislative body through appropriation'")
(quoting Antry v. Illinois Educ. Labor Relations Bd., 552 N.E.2d
313, 343 (Ill. App. 1990)). The requirement ensures legislative
control over fiscal appropriations.
The superior court concluded, based on the statute's
plain meaning and purpose, that the legislative funding requirement
of sec. 215(a) applies to collective bargaining agreements reached
through arbitration under sec. 200(b). We reach the same
conclusion as did the superior court. The legislative
appropriation requirement of sec. 215(a) applies to arbitration
awards under sec. 200(b). Public Safety Employees Ass'n, Local 92,
895 P.2d at 986.
B. Subsection 215(a) Applies to Political Subdivisions of
the State.
APEA suggests that sec. 215(a) does not apply "to
political subdivisions of the State." This interpretation
contradicts PERA. Both sides agree that other provisions of PERA
apply to this agreement and that the City is a public employer
under PERA. (EN3) Subsection 215(a) states, "[t]he monetary terms
of any agreement entered into under [PERA] are subject to funding
through legislative appropriation." The word "legislative"can
describe the Council, and nothing else in sec. 215(a) indicates
inapplicability to political subdivisions of the state. Although
the terms of sec. 215(b) refer only to the state, the superior
court correctly noted that sec. 215(a) predates sec. 215(b) and
nothing indicates an intent to make sec. 215(a) inapplicable to
municipalities.
C. The City Is Not Estopped from Applying Subsection 215(a).
Arguing in the alternative, APEA claims that equitable
estoppel bars the City from applying sec. 215(a) to the
arbitrator's award. (EN4) The City conceded in oral argument that
APEA raised equitable estoppel at the superior court level;
therefore APEA is not deemed to have waived this argument. Zeman
v. Lufthansa German Airlines, 699 P.2d 1274, 1280 (Alaska 1985).
The elements of estoppel are assertion of a position by
word or conduct, reasonable reliance on that assertion, and
resulting prejudice. Municipality of Anchorage v. Schneider, 685
P.2d 94, 97 (Alaska 1984). APEA contends that the City asserted a
position when the City Council resolved that the disputed issues
"are to be submitted to binding arbitration." APEA interprets this
resolution as establishing that the City would consider itself
bound by the arbitration results and would comply with them.
APEA had notice by virtue of the plain language of sec.
215(a) that the "monetary terms of any agreement entered into under
AS 23.40.070 - 23.40.260 [would be] subject to funding through
legislative approval." In addition, this court in 1989 said "it is
clear that the monetary terms of a collective bargaining agreement
are not effective until the funds are appropriated by the
legislature." Public Employees' Local 71, 775 P.2d at 1064. In
1990, the court reiterated that finality in interest arbitrations
could not be achieved until legislative funding took place. Public
Safety Employees Ass'n, 798 P.2d at 1285 n.7 (recognizing that,
although finality is an important consideration in interest
arbitration, "the legislature eventually might decide not to fund
an arbitrator's award"). Other jurisdictions have also upheld the
discretionary power of state legislatures to veto collective
bargaining agreements by refusing to fund them. See Florida Police
Benevolent Ass'n, 613 So. 2d at 420 ("the vast majority of courts
have held that the agreements were subject to this contingency")
(citing District 2A, Transp., Tech., Wrhse., Indus. & Serv.
Employees Union v. Government of the Virgin Islands, 794 F.2d 915
(3d Cir. 1986)); Public Employees' Local 71, 775 P.2d at 1062;
Suffolk County v. Labor Relations Comm'n, 444 N.E.2d 953 (Mass.
App. 1983), rev. denied, 447 N.E.2d 670 (Mass. 1983); Minnesota
Educ. Ass'n v. State, 282 N.W.2d 915 (Minn. 1979), appeal
dismissed, 444 U.S. 1062 (1980); Stephen F. Befort, Public Sector
Bargaining: Fiscal Crisis and Unilateral Change, 69 Minn. L. Rev.
1221, 1243-45 (1985)).
In the face of clear statutory language requiring
legislative funding of the arbitrator's award, Alaska case law
requiring legislative funding as the last step in the collective
bargaining process, and the "vast majority"of decisions from other
jurisdictions upholding legislative funding requirements, APEA
agreed to submit its proposals to arbitration. The City also
agreed to arbitration. Neither party explicitly agreed to waive
the funding requirement of AS 23.40.215(a), but the Council called
the agreed-upon arbitration "binding"in an ordinance ratifying the
agreements the parties had entered into before the arbitration.
Fairbanks Ordinance 4977 (Mar. 25, 1991). Use of that word without
further definition or explanation does not amount to an assertion
that the council would waive its statutory right to refuse to fund
all or part of the arbitration award.
APEA has not shown conduct or words amounting to
assertions by the City that the Council would not exercise its
prerogative not to fund the award. Nor has APEA demonstrated that
it reasonably relied on any such assertions as it claims to have
understood them. Finally, APEA has not specified any evidence
showing prejudice to it that resulted from its resubmission of the
contested issues to arbitration, except the prejudice that normally
results from the clear legal requirement that no arbitration awards
are final until they are legislatively funded.
IV. CONCLUSION
Alaska Statute 23.40.215(a) applies to arbitration
agreements. APEA's claim that sec. 215(a) is inapplicable to
political subdivisions of the state has no basis in the statutory
language and is incorrect. APEA's final argument, that equitable
estoppel bars the City from invoking sec. 215(a) to reject the
arbitration result, fails because APEA did not establish any of the
elements of equitable estoppel as a matter of law or fact.
Therefore, we AFFIRM the superior court's decision.RABINOWITZ, Justice, concurring.
I agree with the holdings set forth in sections III. A.
and B. of the court's opinion. Because I believe APEA waived the
equitable estoppel issue by failing to raise it in the superior
court, I concur in the court's rejection, in Section III. C., of
APEA's equitable estoppel argument. The court reaches the merits
of the argument and concludes that the record does not support
APEA's contention that equitable estoppel bars the City from
applying section 215(a) to the arbitrator's result.
The court reaches the merits of the equitable estoppel
issue because "The City conceded in oral argument that APEA raised
equitable estoppel at the superior court level; therefore APEA is
not deemed to have waived this argument." My study of the record
leads me to the conclusion that the issue was not adequately raised
before the superior court. Thus I would hold that equitable
estoppel has been waived by APEA for purposes of this appeal. (EN1)
In short, I would not accord controlling significance to counsel
for the City's concession at oral argument before this court that
APEA had "tangentially"raised equitable estoppel at the superior
court level, because record support is lacking for such concession.
ENDNOTES:
1. In reviewing a lower court's grant of summary judgment, this
court "determine[s] whether any genuine issue of fact exists and
whether the moving party is entitled to judgment on the law
applicable to the established facts." R.E. v. State, 878 P.2d
1341, 1345 (Alaska 1994) (quoting Wright v. State, 824 P.2d 718,
720 (Alaska 1992)). In questions involving statutory
interpretation, this court substitutes its independent judgment for
that of the trial court. Journey v. State, 895 P.2d 955, 957 n.5
(Alaska 1995).
2. Although the superior court reached this conclusion, it
determined that public policy might support the opposite result,
because PERA as written creates unequal bargaining power; sec.
215(a) allows the legislature to choose whether to accept or reject
a negotiated result, but sec. 200(b) prohibits essential employees
from striking, thereby denying them the same choice. Subsection
215(a) also allows the legislature to make that choice in several
stages, as each item of a negotiated result requires funding.
Because on its face sec. 215(b) applies only to the state
government, this problem may be heightened where the dispute
involves a municipality.
3. PERA defines a "public employer"to include "the state or a
political subdivision of the state." AS 23.40.250(7). The City
exempted itself from PERA in 1972, but waived its exemption in
1983, making PERA applicable to its labor relations. Fairbanks
Ordinance 4264 (Sept. 12, 1983).
4. APEA has only argued that the equitable estoppel doctrine
applies here. It asserts no other aspect of estoppel doctrine.
ENDNOTES (Concurrence):
1. Nenana City Sch. Dist. v. Coghill, 898 P.2d 929, 934 (Alaska
1995); Carvalho v. Carvalho, 838 P.2d 259, 261 n.5 (Alaska 1992);
Gates v. City of Tenakee Springs, 822 P.2d 455, 460 (Alaska 1991).
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