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Alaska Housing Finance Corporation v. Alaska State Employees Association (8/2/96), 923 P 2d 18
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, telephone (907) 264-0607, fax (907) 264-
THE SUPREME COURT OF THE STATE OF ALASKA
STATE OF ALASKA, and the )
ALASKA HOUSING FINANCE ) Supreme Court Nos. S-6600/6630
) Superior Court Nos.
Appellants/ ) 3AN-93-10311 CI
Cross-Appellees, ) 3AN-93-11539 CI
) O P I N I O N
ALASKA STATE EMPLOYEES )
ASSOCIATION/AFSCME LOCAL 52, ) [No. 4380 - August 2, 1996]
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
Charles K. Cranston, Judge.
Appearances: David T. Jones, Assistant
Attorney General, Anchorage, and Bruce M.
Botelho, Attorney General, Juneau, for
Appellants/Cross-Appellees. Don Clocksin, Don
Clocksin Law Office, Olympia, Washington, for
Before: Compton, Chief Justice, Rabinowitz,
Matthews, Eastaugh, Justices, and Carpeneti,
Justice pro tem.
This labor dispute arose after the Alaska legislature, in
consolidating various state housing programs, transferred housing
programs conducted by the Alaska Department of Community and
Regional Affairs (DCRA) to the Alaska Housing Finance Corporation
(AHFC). The Alaska State Employees Association (ASEA), the union
which represented the former DCRA employees, filed unfair labor
practice charges asserting AHFC and the State failed to bargain
over the transfer and the terms and conditions of employment of the
former DCRA employees. The Alaska Labor Relations Agency (Agency)
found against the State and AHFC. On appeal the superior court (1)
reversed the Agency's decision that the transfer law bound AHFC to
honor the collective bargaining agreement covering DCRA employees
when their positions where transferred to AHFC, but (2) affirmed
the Agency's decision that AHFC is a successor employer that must
bargain with the union. AHFC and the State appeal; the union
cross-appeals. We affirm in part and reverse in part.
II. FACTS AND PROCEEDINGS
In 1992 the Alaska legislature consolidated state housing
programs under AHFC. In doing so, the legislature transferred
housing programs administered by DCRA to AHFC, and merged the
Alaska State Housing Authority (ASHA) into AHFC. Ch. 4, FSSLA 1992
(hereinafter "transfer law").
The Finance Committee of the Alaska House of
Representatives introduced the transfer law on May 13, 1992, during
a special legislative session. 1992 House Journal 4359-60. The
House referred the bill back to the Finance Committee on the same
day. On May 14, 1992, the Finance Committee recommended a
substitute for the original bill; the House passed the substitute
bill and transmitted it to the Senate. The House also adopted a
Letter of Intent by a vote of 35-5 on May 14. The Letter of Intent
It is the intent of the Legislature that AHFC
will abide by collective bargaining agreements
in effect for Department of Community and
Regional Affairs employees on the date of
transfer. Said agreements shall remain in
effect until their expiration on December 31,
1992, at which time AHFC shall honor its duty
as successor employer to bargain with the
affected employee groups.
1992 House Journal 4373. The Senate read the substitute bill on
May 14 and May 15, and passed it on May 15. 1992 Senate Journal
3504, 3516, 3539-41. The Senate Rules Committee also approved the
Letter of Intent on the same day. The Senate then returned the
bill to the House for transmission to the Governor. 1992 Senate
While the legislature was considering consolidation of
the housing programs, ASEA representatives approached Senator
Patrick Rodey, one of the sponsors of the transfer law, with their
concerns about the impact of the legislation on the collective
bargaining rights of the DCRA employees. The ASEA representatives
asked Senator Rodey to add language to the legislation to ensure
that the ASEA labor agreement covered the transferred DCRA
positions. Senator Rodey later testified at the Agency hearing
that such language was not added and that he believed "that it was
thought that we didn't need to put any more lightning rods in the
legislation than . . . was needed and that as long as the problem
was solved, there was no . . . need to memorialize it as a . . .
matter of statute."
On May 14 Senators Rodey and Jim Duncan met with Robert
W. Sullivan, Intergovernmental Affairs Director at AHFC, and Eric
Wohlforth, bond counsel for AHFC. Barry Hulin, Chief Executive
Officer and Executive Director of AHFC, participated by telephone.
As a result of this meeting, Sullivan wrote a letter to Senator
Duncan, stating that AHFC agreed to honor the ASEA collective
bargaining agreement until its expiration on December 31, 1992.
The Sullivan letter, however, did not contain a promise to bargain
with ASEA beyond the expiration of the existing agreement.
AHFC's Hulin authorized the letter to Senator Duncan.
AHFC contends that Hulin believed he was authorizing a commitment
by AHFC to honor the contract until its expiration, if legally
possible. After the bill was passed, but before the Governor
signed it into law, the Department of Administration informed AHFC
that it did not believe AHFC could honor the ASEA contract.
After the legislature transmitted the bill to the
Governor, the Attorney General's office reviewed the legislation
and summarized its effect. The Attorney General informed the
Governor that the affected DCRA employees would
no longer be in the classified service, and
therefore no longer [be] members of the
general government (GGU) bargaining unit.
Hence, while they, and other AHFC employees,
are covered by the Public Employment Relations
Act, these employees are no longer covered by
the collective bargaining agreement between
the GGU and the state.
Additionally, the Attorney General informed the Governor that the
Letter of Intent adopted by the House did not have the force of law
and that it was "not useful as legislative history, as it is
directly contradictory to what the legislature actually did, which
is remove the affected employees from the classified service and
from their bargaining unit." Approximately two weeks later, the
Governor signed the bill.
As a result of the transfer law, AHFC gained
approximately 250 ASHA employees and 36 DCRA employees. (EN ) The Alaska Public Employees Association (APEA) represented 56 of
the 250 former ASHA employees, who were primarily maintenance and
custodial workers. The other approximately 200 former ASHA
employees were unrepresented. After the merger, AHFC honored the
existing APEA collective bargaining agreement, and recognized APEA
as the representative for this specialized sub-set of former ASHA
Most of the affected DCRA employees were part of the GGU
while employed at DCRA, and they were represented by ASEA. The
transferred DCRA positions are very similar to existing AHFC
positions, and the two groups of employees now work side-by-side
carrying out similar duties and functions. Nonetheless, AHFC
employees are not part of the GGU, as they are in the exempt
service pursuant to AS 18.56.070. (EN ) As a public employer, AHFC is governed by the Public Employment
Relations Act (PERA), AS 23.40.070-.260. AHFC employees are not
covered by a collective bargaining agreement.
AHFC did not abide by the terms of the ASEA contract for
the former DCRA employees, nor did it bargain with ASEA.
Consequently, the transfer to AHFC altered considerably the terms
and conditions of employment for the former DCRA employees. (EN )
B. Proceedings Below
ASEA, as the representative for the employees formerly
employed by DCRA, filed unfair labor practice charges against AHFC
and the State of Alaska for their failure to bargain over the
transfer and the terms and conditions of employment for the former
DCRA employees. ASEA also petitioned the Agency for clarification
that the former DCRA employees retained their membership in the
The Agency heard ASEA's consolidated unfair labor
practice charge and unit clarification petition on April 15, 1993.
The Agency held that AHFC was bound by the transfer law to honor
the ASEA collective bargaining agreement, and that AHFC had a duty
to bargain with ASEA under the successorship doctrine. The Agency
ordered AHFC to bargain with ASEA upon its request. The Agency
also held that the GGU remained an appropriate bargaining unit for
the employees engaged in the job duties of the DCRA programs
assumed by AHFC under the transfer law, (EN ) and clarified that the GGU included these employees. Alaska State
Labor Relations Agency Order and Decision No. 164 at 21 (Sept. 17,
AHFC and the State appealed the Agency decision to the
superior court. The superior court reversed the Agency's decision
that AHFC was bound by the transfer law to honor the collective
bargaining agreement covering DCRA employees at the time of their
transfer to AHFC. The court affirmed the Agency's decision that
AHFC, as a successor employer, is obligated to bargain with ASEA.
The court also affirmed the Agency's decision that the bargaining
unit remained appropriate. AHFC and the State appeal the superior
court's decision that AHFC is obligated as a successor employer to
bargain with ASEA, and the court's clarification of the GGU to
include former DCRA employees. ASEA cross-appeals the superior
court's decision that the transfer law did not require AHFC to
honor the terms of the collective bargaining agreement.
A. Did the Transfer Law Bind AHFC to Honor the Existing ASEA
Collective Bargaining Agreement or Obligate AHFC to
Bargain with ASEA?
In holding that AHFC was bound to honor the ASEA
collective bargaining agreement, the Agency relied upon what it
regarded as the plain language of the statute, the legislative
intent, and the fact that AHFC honored the APEA collective
bargaining agreement for former ASHA employees. The superior court
disagreed with this finding but held that it was not dispositive as
to whether AHFC had an obligation to bargain.
Because the superior court acted as an intermediate court
of appeal, we give no deference to its decision. Public Safety
Employees Ass'n v. State, 799 P.2d 315, 318 n.3 (Alaska 1990);
Tesoro Alaska Petroleum Co. v. Kenai Pipe Line Co., 746 P.2d 896,
903 (Alaska 1987). As this is a question of statutory
interpretation which does not involve the special expertise of the
Agency, we apply our independent judgment. Kodiak Island Borough
v. State, Dep't of Labor, 853 P.2d 1111, 1113 (Alaska 1993); Union
Oil Co. v. State, 804 P.2d 62, 64 (Alaska 1990).
The key statutory section at issue is Ch. 4, 142(a),
FSSLA 1992. This subsection includes transitional provisions for
the transfer of DCRA's housing programs to AHFC. Subsection 142(a)
addresses the contracts, rights, and liabilities assumed by AHFC
under the transfer. It states:
All contracts, rights, liabilities, bonds,
notes, or other obligations of the Department
of Community and Regional Affairs under former
AS 44.47.370 - 44.47.560 and 44.47.635 created
by or under a law amended or repealed by this
Act and in effect on the effective date of
this section, remain in effect notwithstanding
this Act's taking effect, with all contracts,
rights, liabilities, bonds, notes, or other
obligations of the Department of Community and
Regional Affairs incurred under former AS
44.47.370 - 44.47.560 and 44.47.635 becoming
contracts, rights, liabilities, bonds, notes,
and other obligations of the Alaska Housing
Ch. 4, 142(a), FSSLA 1992.
The parallel provision that addresses the ASHA merger,
section 141(a), does not qualify AHFC's assumption of contracts and
other obligations by referring to specific statutory provisions.
ASEA argues that the transfer law bound AHFC to assume
the DCRA collective bargaining agreement, despite the language
differences between the DCRA and ASHA transfer provisions, and
despite the fact that the collective bargaining agreement was not
"created by or under"statutes specified in the transfer law or by
a law amended or repealed by the act. ASEA argues that the
Agency's interpretation of the statute is correct and more
consistent with legislative intent. The Agency found that the
specific statutory references in section 142(a) are necessary in
order to delineate the statutory sources of the specific DCRA
programs that were transferred to AHFC. Because ASHA totally
merged into AHFC, Ch. 4, 2(a), FSSLA 1992, no such references
were necessary. ASEA argues that the clause "under former AS
44.47.370 - 44.47.560 and 44.47.635"only modifies the phrase
"other obligations of [DCRA],"and that all contracts, including
the ASEA collective bargaining agreement, remain in effect after
ASEA contends that legislative intent supports its
interpretation of the statute. We have rejected a mechanical
approach to the plain meaning rule of legislative interpretation,
and have adopted a sliding scale approach instead. Marlow v.
Municipality of Anchorage, 889 P.2d 599, 602 (Alaska 1995); State
v. Alex, 646 P.2d 203, 208 n.4 (Alaska 1982). "Where a statute's
meaning appears clear and unambiguous . . . the party asserting a
different meaning bears a correspondingly heavy burden of
demonstrating contrary legislative intent." University of Alaska
v. Geistauts, 666 P.2d 424, 428 n.5 (Alaska 1983).
The transfer law's statement of purpose supports a
finding that the legislature intended to limit the transfer of DCRA
responsibilities, assets, and liabilities to AHFC. Ch. 4, 2(a)
FSSLA 1992. In stating that it intended to create a successor
corporation for ASHA by merging ASHA into AHFC, the legislature
expressly excepted the transfer of DCRA programs from that merger.
Id. (EN ) Furthermore, the findings the legislature made in support of the
transfer law focused on consolidating programs to serve state
housing needs more efficiently, and did not include any findings
concerning employee/employer relations. This rebuts ASEA's
contention that the legislature intended to bind AHFC to the
existing DCRA collective bargaining agreement. Rather, the
legislative history indicates that, at best, the legislature
settled for ambiguity with respect to this issue.
The record indicates that the legislature was aware of
the issue potentially presented by the collective bargaining
agreement. ASEA representatives brought the issue to the attention
of the legislators backing the bill. These legislators met with
AHFC representatives, and the House and the Senate Rules Committee
directly addressed the issue in the House's Letter of Intent. The
legislature could have enacted provisions in the transfer law that
would have bound AHFC to honor the terms of the collective
bargaining agreement for the former DCRA employees. Nonetheless,
the transfer law itself does not require AHFC to honor the ASEA
agreement. Instead, it explicitly limits AHFC's assumption of
obligations and liabilities held by DCRA.
The House's Letter of Intent and the Senate Rules
Committee's approval of that letter cannot serve as a substitute
for formal enactment of these obligations. (EN ) The personal intentions of Senators Rodey and Duncan concerning
the legislation, or subsequent testimony about the legislature's
intentions, are also irrelevant to determining legislative intent.
[W]e are of the view that subsequent testimony
of even the prime sponsor of a bill as to
either his own understanding or the
legislature's understanding of the meaning of
that bill should not be considered by a court
in construing legislative intent. We do not
wish to transform statutory construction into
a parade of legislators' affidavits containing
their perceptions of the meaning of a bill.
Lynden Transport, Inc. v. State, 532 P.2d 700, 716 (Alaska 1975)
(alteration in original) (quoting Alaska Pub. Employees Ass'n v.
State, 525 P.2d 12, 16-17 (Alaska 1974)).
ASEA has not met its heavy burden of proving legislative
intent contrary to the plain language of section 142(a). We affirm
the superior court's holding that the transfer law did not bind
AHFC to honor the existing DCRA collective bargaining agreement, or
obligate AHFC to bargain with ASEA.
B. Did the Agency Lack a Rational Basis for Its Holding that
AHFC Is a Successor Employer, that the GGU Remains an
Appropriate Bargaining Unit, and thus that AHFC Is
Obligated to Bargain with ASEA?
1. Standard of review
When we review agency decisions that implicate special
agency expertise or determine fundamental policies within the scope
of an agency's statutory function, we apply the rational basis
standard. Alaska Pub. Employees Ass'n v. State, 831 P.2d 1245,
1247 (Alaska 1992) (citing Tesoro, 746 P.2d at 903). Under this
standard, we defer to the agency determination as long as it is
supported by the facts and has a reasonable basis in law. Tesoro
746 P.2d at 903 (citing Kelly v. Zamarello, 486 P.2d 906, 918
(Alaska 1971)). We must ensure that the agency "has taken a 'hard
look' at the salient problems and has genuinely engaged in reasoned
decision making." Trustees for Alaska v. State, Dep't of Natural
Resources, 865 P.2d 745, 747 (Alaska 1993) (citing Alaska Survival
v. State, Dep't of Natural Resources, 723 P.2d 1281, 1287 (Alaska
1986)). If the decision fails to consider an important factor, it
will be regarded as arbitrary. Trustees for Alaska, 865 P.2d at
747 (citing the related case of Trustees for Alaska v. State, Dep't
of Natural Resources, 795 P.2d 805, 809 (Alaska 1990)).
In this case, the Agency was required to analyze the
successor employer doctrine and determine the appropriate
bargaining unit under AS 23.40.090 of PERA. As both of these
endeavors require agency expertise, we apply the rational basis
standard of review.
As an initial matter it is important to point out that
"[t]he Agency gives 'great weight' to federal decisions in the area
of labor relations." Public Safety Employees Ass'n, 799 P.2d at
318 n.4 (citing 2 AAC 10.440(b)). Nonetheless, the governing
Alaskan statute, PERA, differs from federal labor law in some
significant aspects. PERA dictates that in determining appropriate
bargaining units, the Agency shall make those units "as large as is
reasonable, and [that] unnecessary fragmenting shall be avoided."
AS 23.40.090. (EN )
2. Doctrine of successor employers
The successorship doctrine governs whether AHFC is
obligated to bargain with ASEA. This doctrine states that when
business operations and employees are transferred in such a way
that the employing industry remains essentially the same after the
transfer, successor employers are obligated to bargain with the
labor representatives previously chosen by the transferred
employees. Northwest Arctic Regional Educ. Attendance Area v.
Alaska Pub. Serv. Emp., Local 71, 591 P.2d 1292, 1295 (Alaska 1979)
(citing NLRB v. Burns Int'l Sec. Servs., Inc., 406 U.S. 272
(1972)). In Northwest Arctic we stated that "[f]actors used to
determine whether the employing enterprise has remained
substantially the same include continuation of the same product
lines, departmental organization, job functions, and continuity of
the work force." Id. (citing Burns, 406 U.S. at 280 n.4).
Northwest Arctic makes clear, however, that successor obligations
will not be imposed despite the existence of all of these factors
if the bargaining unit is no longer appropriate after the transfer.
Id. at 1296. Therefore, the question of whether AHFC is obligated
to bargain with ASEA turns upon whether the Agency reasonably found
that (1) there was substantial continuity of product, departmental
organization, job functions, and work force after the transfer, and
(2) GGU remained an appropriate bargaining unit after the transfer.
The Agency made specific findings with respect to the
continuity of the product line, departmental organization, job
functions, and work force. (EN ) The Agency heard substantial testimony from transferred DCRA
employees and AHFC administrators, and the record provides a
reasonable basis for the Agency's finding of the continuity
required to impose successor obligations.
AHFC argues that the Agency's decision is fatally flawed,
however, because the Agency did not determine whether the GGU
remained an appropriate bargaining unit. Specifically, AHFC argues
that the Agency erroneously failed to consider employee preference
and the requirements that the unit be "as large as is reasonable,
and [that] unnecessary fragmentation shall be avoided." AS
a. Employee preference
In analyzing whether the bargaining unit remained
appropriate, the Agency discussed the employee preference factor,
and found that "there is not any evidence in the record of the
desires of the employees"and that "[a]n election would be needed
to determine the desires of the employees." Even though it did not
determine the desires of the employees, the Agency concluded that
the GGU remained an appropriate bargaining unit for the former DCRA
employees. The State argues that the Agency erred in not
determining the desires of the employees. In response, ASEA argues
that it benefits from a rebuttable presumption of majority employee
The United States Supreme Court has held that a union
will enjoy a rebuttable presumption of majority employee support if
it was the chosen representative of a majority of the new
employer's work force when they worked for their previous employer.
See, e.g., Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S.
27, 41 (1987). In Fall River Dyeing, the Court explained that the
presumption is triggered only when a majority of the new employer's
work force was hired from the predecessor employer, and not merely
when the new employer hired a majority of the old employer's work
force. Id.; see also 1 Patrick Hardin, The Developing Labor Law
781-83 (3d ed. 1992 & Supp. 1995). ASEA argues that, although
former DCRA employees do not constitute a majority of AHFC's work
force, the presumption applies because the total number of new
employees (former DCRA and ASHA employees) comprise a majority of
AHFC's work force.
This argument is unpersuasive in light of the purpose of
the presumption rule. In Fall River Dyeing, the Court stated that
a presumption was valid because "[i]f the employees find themselves
in a new enterprise that substantially resembles the old, but
without their chosen bargaining representative, they may well feel
that their choice of a union is subject to the vagaries of an
enterprise's transformation. This feeling is not conducive to
industrial peace." 482 U.S. at 39-40. Further, the Court reasoned
that an employer could easily avoid this presumption by not hiring
a majority of its work force from one previous employer. Id. at
40-41. If a majority of the new employer's work force was not
hired from the a single previous employer, it would undercut the
Court's rationale that the employees "find themselves in a new
enterprise that substantially resembles the old." Rather,
employees who comprise a minority of the new work force could point
to their minority status as the reason for the loss of a chosen
representative. More fundamentally, employers that create a work
force by hiring employees from various companies could not avoid
the presumption of majority support if ASEA's interpretation of
this rule were adopted. Thus, ASEA's interpretation of when the
rebuttable presumption applies would eradicate the safeguard
articulated by the Court that "to a substantial extent the
applicability of Burns rests in the hands of the successor."Id.
Consequently, we find that ASEA does not benefit from a presumption
of majority employee support.
We therefore agree with the State's argument that the
Agency erred in not determining and considering the desires of the
employees as AS 23.40.090 required. On remand, the Agency should
be directed to take this factor into account.
b. Size and fragmentation of bargaining unit
In deciding that the GGU remained an appropriate
bargaining unit, the Agency did not address either the size or
fragmentation of the bargaining unit. The Agency has previously
recognized the importance of these factors:
The differences between sec. 090 and the
comparable sections of the National Labor
Relations Act are significant. . . . [Sec.
090] imposed this mandate [that bargaining
units shall be as large as is reasonable and
unnecessary fragmenting shall be avoided] on
the Labor Relations Agency, a mandate that is
nowhere to be found in the National Labor
Relations Act. . . . [I]t seems that the
legislature acted in full knowledge of the
fact that in a state of Alaska's geographical
immensity, with but a small population, undue
fragmentation of bargaining units could only
frustrate collective bargaining.
Alaska State Labor Relations Agency Order and Decision No. 1 at 3-
4 (Feb. 2, 1973). Consideration of these factors is required by
the statute. AS 23.40.090 ("Bargaining units shall be as large as
is reasonable, and unnecessary fragmenting shall be avoided"
(emphasis added)). (EN )
We recently held that "where a decisional document shows
on its face that an important factor was not considered, the court
should remand the matter for further consideration." Keane v.
Local Boundary Comm'n, 893 P.2d 1239, 1245 (Alaska 1995) (citing
Southeast Alaska Conservation Council, Inc. v. State, 665 P.2d 544,
548-49 (Alaska 1983)). Because determining the appropriateness of
bargaining units involves Agency expertise, we remand for Agency
analysis of this issue, with instructions to consider whether the
resulting bargaining unit is as large as is reasonable and to
ensure that unnecessary fragmentation is avoided.
C. Did AHFC Voluntarily Assume the ASEA Collective
Even if it is a successor employer, AHFC is not
necessarily bound by the existing collective bargaining agreement.
Northwest Arctic, 591 P.2d at 1296 (stating that there are only
limited situations in which it is appropriate to bind a successor
employer to a preexisting collective bargaining agreement).
Although neither the lower court nor the Agency addressed this
issue, we consider ASEA's argument that AHFC voluntarily assumed
the bargaining agreement. In Ransom v. Haner, 362 P.2d 282 (Alaska
1961), we stated:
[I]t is a rule of law that an appellee may
urge, and the appellate court should consider
in defense of a decree or judgment any matter
appearing in the record, even if rejected
below and even if appellee's argument may
involve an attack upon the reasoning of the
lower court or an insistence upon matter
overlooked or ignored by it.
Id. at 285; see also Alaska State Employees Ass'n v. Alaska Pub.
Employees Ass'n, 825 P.2d 451, 458 (Alaska 1991).
In support of its voluntary assumption argument, ASEA
relies upon statements made during the meeting between Senator
Duncan and AHFC administrators and upon the resulting AHFC letter
to Senator Duncan. ASEA also relies upon statements made to DCRA
employees by Bob Brean, then the director of DCRA's Division of
Community and Rural Development, that the bargaining agreement
would be honored. ASEA does not assert that Brean's statements
were made on behalf of AHFC, nor is it clear that he was speaking
for AHFC when he made them. (EN )
Barry Hulin, then Executive Director of AHFC, authorized
the letter to Senator Duncan which committed AHFC to honoring the
ASEA agreement until its expiration on December 31, 1992. AHFC
argues that this letter was meant to memorialize their promise to
attempt to maintain the terms and conditions of employment for the
DCRA employees until the end of 1992, if legally possible. The
letter, however, contained no such conditional language. Based on
advice from the Department of Administration that AHFC could not
abide by the terms of the ASEA agreement, AHFC did not honor the
promise contained in its letter to Senator Duncan. However, AHFC
did not provide ASEA with the Department of Administration's reason
why AHFC could not voluntarily abide by the terms of the ASEA
agreement. Nor does AHFC articulate on appeal any reasons why it
could not legally abide voluntarily by the agreement's terms.
Because we have not been apprised of any legal impediments to
AHFC's voluntary assumption of the collective bargaining agreement,
we hold that AHFC's failure to fulfill its promise was unexcused.
Consequently, on remand the superior court should award the former
DCRA employees compensation for AHFC's breach of its promise to
abide by the terms of the collective bargaining agreement until
December 31, 1992. (EN )
For the reasons discussed above in Part III.A, we AFFIRM
the superior court's holding that AHFC was not bound by the
transfer law to honor the existing ASEA collective bargaining
agreement or obligated to bargain with ASEA over the terms and
conditions of employment for the former DCRA employees.
For the reasons discussed in Part III.B, we VACATE the
decision of the superior court that AHFC as a successor employer is
obligated to bargain with ASEA and that the GGU remains an
appropriate bargaining unit for the former DCRA employees. These
questions must be remanded for Agency consideration in light of the
statutory factors concerning employee preference, unit size, and
avoidance of unnecessary fragmentation.
For the reasons discussed in Part III.C, we further hold
that AHFC voluntarily assumed the obligation to honor the ASEA
agreement until it expired on December 31, 1992. We REMAND to the
superior court for an award to the former DCRA employees of the
compensation they would have earned but for AHFC's breach of this
promise. (EN )
1. Forty-one DCRA positions were transferred to AHFC but only 36
employees actually followed their positions to AHFC. While the
DCRA positions transferred to AHFC, the employees were laid off and
rehired by AHFC. The superior court stated in its decision that 41
DCRA employees and 170 ASHA employees transferred to AHFC. State,
Alaska Housing Finance Corp. v. Alaska State Employees Ass'n/AFSCME
Local 52, No. 3AN-93-10311 Ci. at 11 n.7 (Alaska Super., August 9,
1994). The discrepancy in the numbers is irrelevant to our
2. Alaska State Labor Relations Agency Order and Decision No. 1
at 12-13 (Feb. 2, 1973) certified the GGU as including all "general
state government employees in the classified service,"subject to
a few enumerated exceptions. The classified service "consists of
all positions in the state service not included in the exempt
service." AS 39.25.100.
3. The changes included the following: loss of the right to
binding arbitration of grievances; loss of a holiday; an increase
in the work week from 37« hours to 40 hours with no increase in
pay, resulting in an approximate 7% decrease in hourly pay rate; a
decrease in the net leave accrual rate; loss of access to the GGU
Business Leave Bank and the GGU Legal Trust Fund; loss of a 3.1%
cost of living wage increase; a decrease in the per diem rates; and
different dress code requirements.
4. For sake of brevity we will refer to the persons filling these
positions as former DCRA employees, even though the persons now
employed in these positions may not have been employed by DCRA.
5. Ch. 4, 141(a), FSSLA 1992 provides:
TRANSITIONAL PROVISIONS RELATING TO MERGER OF
ALASKA STATE HOUSING AUTHORITY. (a) All
contracts, rights, liabilities, bonds, notes,
or other obligations of the Alaska State
Housing Authority created by or under a law
amended or repealed by this Act and in effect
on the effective date of this section, remain
in effect notwithstanding this Act's taking
effect, with all contracts, rights,
liabilities, bonds, notes, or other
obligations of the Alaska State Housing
Authority becoming contracts, rights,
liabilities, bonds, notes, and other
obligations of the Alaska Housing Finance
Corporation with the same limitations and
provisions as under a contract, right,
liability, bond, note, or other obligation of
the former Alaska State Housing Authority.
6. Subsection 2(a) states:
Merger is the process by which two or more
corporations are united by a transfer of the
responsibilities, assets, and liabilities of
all into one of them, with that one entity
continuing in existence as the successor
corporation. Except for the provisions
described in (b) [the transfer of DCRA
programs] . . . , the purpose of this Act is
to direct the merger of the Alaska State
Housing Authority . . . into the Alaska
Housing Finance Corporation . . . .
7. We cautioned against giving undue weight to such documents
when we wrote:
Our constitution imposes certain requirements
of formality on legislative action. Article
II, 14 provides that no bill may become law
until it has passed three readings in each
house on three separate days, no bill may
become law without an affirmative vote of a
majority of the membership of each house, and
the yeas and nays on final passage shall be
entered in the journal. One purpose of these
requirements is to ensure that the legislature
knows what it is passing. Any passed bill is
subject to veto by the governor. Article II,
15 Alaska Constitution. Only bills are
approved or vetoed, not the contents of the
house and senate journals, or the tape
recordings of committee and floor debates.
The legislature enacts laws by the passage of
bills meeting the foregoing formalities. It
may not enact a law or change one by committee
report. Such a report may be useful in
interpreting an enacted statute, but it is not
itself the statute.
North Slope Borough v. Sohio Petroleum Corp., 585 P.2d 534, 543
n.11 (Alaska 1978). The Attorney General informed the Governor
that the legislation would not protect the DCRA employees'
collective bargaining agreement and that the House Letter of Intent
did not have the force of law. This letter illustrates the
proposition recognized in North Slope that gubernatorial approval
or veto is limited to the actual bill and not extended to "the
contents of the house and senate journals." Id.
8. The statute states:
AS 23.40.090 Collective bargaining unit. The
labor relations agency shall decide in each
case, in order to assure to employees the
fullest freedom in exercising the rights
guaranteed by AS 23.40.070 - 23.40.260, the
unit appropriate for the purposes of
collective bargaining, based on such factors
as community of interest, wages, hours, and
other working conditions of the employees
involved, the history of collective
bargaining, and the desires of the employees.
Bargaining units shall be as large as is
reasonable, and unnecessary fragmenting shall
9. AHFC contends that the Agency's finding that the DCRA
employees continued to work as a unit is clearly erroneous. We
presume that this is an objection to the Agency's finding of
continuity of work force. However, AHFC offers no argument or
evidence to support this contention.
10. Furthermore, even though the federal statute does not require
analysis of size and fragmentation, the significance of these
factors is not lost on the federal courts. The Ninth Circuit
recognized that "[w]hen the unit is overinclusive, several dangers
exist. . . . [C]onflict might . . . lead to instability in
employer-employee relations." Pacific Southwest Airlines v. NLRB,
587 F.2d 1032, 1045 (9th Cir. 1978) (citing Allied Chem. & Alkali
Workers of Am., Local Union No. 1 v. Pittsburgh Plate Glass Co.,
404 U.S. 157, 172-73 (1971)).
11. ASEA also seems to offer AHFC's actions vis-a-vis ASHA
employees either as proof of AHFC's statutory assumption of the
ASEA agreement or as proof of AHFC's voluntary assumption of it.
ASEA states that "AHFC essentially acknowledged [that the statute
obligates it to honor the ASEA agreement] . . . when it agreed to
honor the ASHA collective bargaining agreement." AHFC's actions
with respect to ASHA employees are not probative of the
legislature's intentions regarding AHFC obligations to DCRA
employees. Whatever AHFC's interpretation of the statute, it is
irrelevant to the meaning intended by the legislature.
Furthermore, AHFC's actions with respect to one bargaining
agreement and union representative do not support a claim it
voluntary adopted an entirely separate agreement. AHFC's adoption
of the ASHA agreement would not support a reasonable belief by DCRA
employees that AHFC had adopted DCRA's bargaining agreement.
12. We do not have the collective bargaining agreement before us.
If the agreement has a provision requiring "follow-on"bargaining
at its expiration, we hold that AHFC is not bound to this
provision. The letter to Senator Duncan expressly limited AHFC's
obligation to honoring the agreement until December 31, 1992. AHFC
did not otherwise act so as to bind itself to a greater obligation.
The National Labor Relations Board has held that an employer
can adopt some terms of an agreement and not be bound to the entire
agreement. All State Factors, 205 N.L.R.B. 1122 (1973). In All
State Factors, the Board held that an employer had not
voluntarily adopted an existing bargaining agreement, despite its
continuation of some of the agreement's benefits, because it
refused to acknowledge a total adoption and only honored terms of
its choosing. Id. at 1127. In arriving at this decision, the
Board stated that "Burns . . . counsels utmost restraint in
applying an adoption theory, absent clear and convincing evidence
of consent, either actual or constructive." Id. The Board noted
that as a result of negotiations between the employer and the
union, the employees were able to secure certain benefits through
the employer's agreement to apply provisions that were advantageous
to it. Id. The Board concluded, however, that "[w]hile the
[employer], by its conduct, gave tacit, if not explicit,
recognition to the Union, and negotiated with it on a variety of
problems related to the transition,"the record on the whole did
not support a finding of constructive adoption of the agreement.
The circumstances in All State Factors approximate the
situation between AHFC and ASEA. ASEA sought and received a
limited promise from AHFC that it would honor the agreement until
its expiration. However, AHFC did not expressly promise to adopt
an ongoing obligation to bargain with ASEA over the terms and
conditions of employment for the former DCRA employees. ASEA has
not provided clear evidence of constructive consent by AHFC to do
so. Because "[t]he Agency gives 'great weight' to federal
decisions in the area of labor relations,"we adopt the NLRB's
clear and convincing evidence rule for the adoption of labor
agreements. Public Safety Employees Ass'n v. State, 799 P.2d 315,
318 (Alaska 1990) (citing 2 AAC 10.440(b)).
13. ASEA additionally argues that the State is bound to honor the
collective bargaining agreement because the terms of the agreement
provide for maintenance of benefits if employees are transferred.
ASEA alleges that the former DCRA employees were to be transferred,
but instead were laid off and rehired when these rights under the
contract were discovered. ASEA implies a bad faith breach of
contract, but on appeal it does not specifically state a claim nor
does it cite any authority. Although Ransom allows this court to
consider arguments rejected or ignored by the court below, review
of this issue is not warranted because it is not clear that it was
raised below and because ASEA has not provided sufficient factual
or legal support to permit review. Ransom, 362 P.2d at 285; see
also L.E. Spitzer Co. v. Barron, 581 P.2d 213, 218 (Alaska 1978)
("[If a] point is not given more than cursory statement in the
argument portion of the brief, such point will not be considered by
the Supreme Court.") (alteration in original) (quoting Lewis v.
State, 469 P.2d 689, 691-92 n.2 (Alaska 1970)).