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State v. Public Safety Employees Association (06/25/2004) sp-5823
State v. Public Safety Employees Association (06/25/2004) sp-5823
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) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
STATE OF ALASKA, )
) Supreme Court No. S-10698
Appellant, )
) Superior Court No.
v. ) 3AN-01-10051 CI
) ALRA No. 00-1029-CBA
PUBLIC SAFETY EMPLOYEES )
ASSOCIATION, ) O P I N I O N
)
Appellee. ) [No. 5823 - June 25,
2004]
________________________________)
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, John E. Reese, Judge.
Appearances: Jan Hart DeYoung, Assistant
Attorney General, Anchorage, and Bruce M.
Botelho, Attorney General, Juneau, for
Appellant. James A. Gasper, Public Safety
Employees Association, Anchorage, for
Appellee.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, Bryner, and Carpeneti, Justices.
CARPENETI, Justice.
I. INTRODUCTION
I. Alaska labor relations law provides that if a public
employer and a labor union successfully negotiate a contract, it
shall include a grievance procedure which shall have binding
arbitration as its final step.1 Does this statute permit parties
to a collective bargaining agreement to waive their right to
grieve a subject governed by the agreement? The Alaska Labor
Relations Agency answered this question yes. We agree, and
therefore affirm the decision of the agency.
II. FACTS AND PROCEEDINGS
A. Facts
The Public Safety Employees Association (PSEA) is
certified by the Public Employment Relations Act2 as the
exclusive bargaining representative for state correctional
officers. The terms and conditions of the officers employment
are governed by a collective bargaining agreement between PSEA
and the state. The agreement contains a provision regarding
indemnification, under which the state agrees to provide a legal
defense to officers sued in their individual capacities unless
the state determines that the officer acted beyond the scope of
his or her authority or engaged in willful misconduct or gross
negligence in performing the acts underlying the complaint. The
agreement also explicitly exempts the states decision whether to
provide legal representation to a correctional officer from the
grievance procedure3 which governs the rest of the contract.
In July 1999 Raymond Jones, an inmate at the Spring
Creek Correctional Center in Seward, filed a complaint in state
court against corrections officer Vernon Gilliam,4 charging him
with threatening and intimidating Jones and calling him a rat in
front of two other inmates. The Department of Corrections
(Corrections) subsequently reprimanded Gilliam for his actions.
After Jones sued Gilliam, an assistant attorney general notified
Gilliam that the state would not provide him with legal
representation because it deemed the conduct underlying the
lawsuit to be willful misconduct or gross negligence. Through
PSEA, Gilliam filed a grievance, which the state refused to hear
because its contract with PSEA explicitly excluded the states
indemnification decisions from the grievance procedure.
At about the same time, Anthony Holland, an inmate at
the Palmer Correctional Center, filed complaints in federal and
state court against corrections officer Beth Donovan, alleging
that she made racially derogatory remarks in a conversation with
him. Corrections suspended Donovan for three days. Donovan was
also informed that the state would not defend her against
Hollands lawsuits because it considered her conduct to be outside
the scope of her authority and to constitute either willful
misconduct or gross negligence. Through PSEA, Donovan attempted
to grieve the states decision but this grievance was denied on
the same grounds that the state rejected Gilliams grievance.
B. Proceedings
A. After both grievances were rejected by the state, PSEA filed
a petition with the Alaska Labor Relations Agency (ALRA) to force
the state to arbitrate its indemnification decisions. PSEA
argued that its collective bargaining agreement with the state
provided that any controversy or dispute involving the
application or interpretation of the terms of the collective
bargaining agreement was subject to the grievance procedure.5
While conceding that the collective bargaining agreement excluded
the states indemnification decisions from the grievance
procedure, PSEA argued that this exclusion was contrary to law
and thus unenforceable.
The relevant provisions of the collective bargaining
agreement are sections A and F of Article 36. Section A
provides:
If the Employer determines that a bargaining
unit member did not engage in conduct beyond
the scope of the bargaining unit members
authority or which constituted willful
misconduct or gross negligence in the
performance of the bargaining unit members
duties, upon request the Employer agrees to
provide for the legal defense of the
bargaining unit member in any civil legal
action brought against the bargaining unit
member as a result of the performance of the
bargaining unit members duties.
(Emphasis added.) Section F provides:
For purposes of this Article, Employer means
the State of Alaska or designated
representative of the State or an agency of
the State. Consistent with past practice,
decisions of the Employer pursuant to this
Article shall not be subject to the grievance-
arbitration procedures.
(Emphasis added.)
In its petition to force the state to arbitrate its
indemnification decisions, PSEA argued that AS 23.40.210(a)
requires that any mandatory subject expressly included in a
collective bargaining agreement must be subject to a grievance
procedure, otherwise the provision waiving that right is illegal.
PSEA relied on Hemmen v. State, Department of Public Safety6 in
making this argument. Because PSEA maintained that
indemnification is a mandatory bargaining subject, it argued that
a collective bargaining agreement that exempted indemnification
from the grievance procedure violated AS 23.40.210(a) as we
interpreted it in Hemmen.
Alaska Statute 23.40.210(a) provides in relevant part:
Upon the completion of negotiations between
an organization and a public employer, if a
settlement is reached, the employer shall
reduce it to writing in the form of an
agreement. . . . The agreement shall include
a grievance procedure which shall have
binding arbitration as its final step.
(Emphasis added.) Hemmen is the only case in which this
provision has been interpreted. The controversy in that case
involved the involuntary transfer of a sergeant in the Department
of Public Safety from a position in Fairbanks to one in
Anchorage.7 To avoid being transferred, Hemmen resigned and then
filed suit alleging that he had been constructively discharged.8
At that time, PSEAs collective bargaining agreement provided for
binding arbitration as the final step in all grievances, except
for those grievances involving involuntary transfers.9 Hemmen
maintained that the contractual exception for binding arbitration
of involuntary transfers violated AS 23.40.210(a).10 We agreed:
We conclude that the objective of AS
23.40.210 is to ensure that all contracts
subject to the statute contain such a
procedure, and that binding arbitration be
included as the final step of all grievance
procedures. Consequently, we hold that the
agreements exclusion of grievances involving
involuntary transfers from binding
arbitration violates AS 23.40.210.[11]
A panel of the ALRA board heard the present dispute on
August 1, 2000. The panel considered two issues: first, whether
legal indemnification is a mandatory subject of bargaining and,
second, whether Alaska law requires that all mandatory subjects
of bargaining be subject to a grievance procedure, even if the
parties have explicitly waived that right during contract
negotiations.
Relying on our decisions in Kenai Peninsula Borough
School District v. Kenai Peninsula Education Assn (Kenai I)12 and
Alaska Public Employees Assn v. State,13 the board determined
that, because indemnification is more closely related to public
employees economic interests than to the states general policies,
it is a mandatory subject of bargaining. However, the board
rejected PSEAs interpretation of Hemmen, concluding instead that,
while binding arbitration must be the final step of any grievance
procedure, Hemmen does not require that all mandatory subjects of
bargaining be subject to the grievance procedure. It thus found
that PSEA and the state had explicitly exempted the states
indemnification decisions from the grievance process and it
denied PSEAs petition. PSEA appealed.
On June 29, 2002 Superior Court Judge John E. Reese
rejected the agencys interpretation of AS 23.40.210(a) and Hemmen
and held that Article 36F of the agreement, which exempted
indemnification decisions from the grievance procedure, was
illegal and unenforceable. While acknowledging that Hemmen did
not explicitly address a situation in which the contract entirely
excluded an area of bargaining from the grievance process, the
court interpreted Hemmen to apply AS 23.40.210(a) to all subjects
of negotiation, such that all contracts subject to the statute
[must] contain a grievance procedure that culminates with binding
arbitration. The court thus concluded that the parties to a
collective bargaining agreement may not waive the right to grieve
to binding arbitration any issue which has been negotiated into
the contract.
Judge Reese stayed his decision pending our review.
The state appealed, asking us to reverse the superior courts
interpretation of AS 23.40.210(a) and Hemmen, to reconsider our
decision in Hemmen should we agree with the superior courts
interpretation of that decision, and to reverse the agencys
determination that indemnification is a mandatory subject of
bargaining should we find that all mandatory subjects of
bargaining must be governed by the grievance-arbitration
procedure.
III. STANDARD OF REVIEW
In an appeal from an agency decision, we directly
review the agency action in question rather than the decision of
the superior court.14 In considering administrative appeals, we
have recognized four principal standards of review:
The substantial evidence test is used for
questions of fact. The reasonable basis test
is used for questions of law involving agency
expertise. The substitution of judgment test
is used for questions of law where no
expertise is involved. The reasonable and
not arbitrary test is used for review of
administrative regulations.[15]
In interpreting the language of AS 23.40.210(a)
generally, we apply our independent judgment.16 In attempting to
ascertain the intent of the legislature, we construe this
statutory language so as to adopt a rule of law that is most
persuasive in light of precedent, reason, and policy. 17
We have not previously decided the appropriate standard
of review applicable to the ALRAs determination of what
constitutes a mandatory subject of bargaining.18 We now hold
that, because this is a legal question19 to which the ALRA brings
specialized knowledge and experience 20 we will apply the
reasonable basis standard of review to the ALRAs categorization
of a subject as mandatory or permissive. Under this standard, we
will defer to the judgment of the ALRA so long as it is supported
by the facts and a reasonable basis in law.21
IV. DISCUSSION
A. Indemnification Is a Mandatory Subject of Bargaining.
We first address whether indemnification is a mandatory
subject of bargaining. The ALRA concluded that indemnification
is a mandatory subject of bargaining because public employees
would have strong economic interests in legal representation from
their public employer as a result of getting sued for a work-
related function. Because the agency employed its special
expertise in labor relations in reaching this conclusion, we will
affirm its judgment so long as it is reasonable.22 We believe
that it is.
The duty to bargain over what are often called
mandatory subjects of bargaining23 arises from the requirement
that the state and the union negotiate collectively over wages,
hours, and other terms and conditions of employment.24 The terms
and conditions of employment include the hours of employment, the
compensation and fringe benefits, and the employers personnel
policies affecting the working conditions of the employees.25
Mandatory subjects of bargaining have traditionally been defined
as those subjects most closely related to the economic interests
of employees.26
While the state concedes that its decision whether to
provide a legal defense will have a financial impact on its
employees, it contends that not all subjects that affect
employees economic interests are mandatory subjects of
bargaining. Indeed, the state argues that it has historically
considered legal indemnification to be a permissive subject of
bargaining due to the states prerogative to set public policy and
to control its litigation strategy. In support of this argument,
the state cites Public Defender Agency v. Superior Court, Third
Judicial District,27 a case in which we recognized the power of
the attorney general to bring any action which he thinks
necessary to protect the public interest, . . . [including the
corollary power] to make any disposition of the states litigation
which he thinks best, . . . [which] includes the initiation,
prosecution and disposition of cases.28 The state contends that,
because indemnification is more closely related to government
policies than to the economic interests of employees, it is a
permissive rather than mandatory subject of bargaining.
In holding that indemnification is a mandatory subject
of bargaining, the ALRA relied upon administrative decisions in
New York29 and New Jersey30 as well as the balancing test we
articulated in Kenai I.31 In that case, we explained:
a matter is more susceptible to bargaining
the more it deals with the economic interests
of employees and the less it concerns
professional goals and methods. Bargaining
over the latter topics presents particular
problems because there is less likely to be
any politically organized interest group
other than the union concerned with these
issues. . . . Furthermore, it is such an
abstract and abstruse subject that it is
unlikely that any appreciable portion of the
public will either understand it or care
greatly about it. In such circumstances, the
risk that effective power over the
governmental decision will come to rest with
the union is significantly greater.
Moreover, it is more likely there will be
disagreements among union members on
questions of this nature than on bread and
butter issues; the risk that minority
viewpoints within the union will not be
meaningfully represented in the bargaining is
a real one.[32]
We therefore held that matters such as salaries, fringe benefits,
the number of hours worked, and the amount of leave time were
mandatory subjects of bargaining, while issues such as
preparation time and class size were within the realm of school
management and function, despite their obvious relation to the
teachers working conditions.33
It is often difficult to characterize an issue as
either mandatory or permissive. The practical challenges of this
process were elucidated in Alaska Public Employees Assn v. State,34
a case in which we considered whether job classifications and
salary range assignments were mandatory subjects of bargaining.35
Because of the close relationship between the job classification
plan and the state merit principle, we held that job
classification should be exempt from bargaining.36 With respect
to the assignment of positions to salary ranges, we determined
the issue to be a permissive subject of bargaining one on which
state employees could be heard at the states discretion but not
a mandatory subject of bargaining under existing state salary
programs.37 In reaching this conclusion, we adapted the test for
negotiability set out in Kenai I, creating instead a division
between mandatory and permissive subjects of bargaining in cases,
such as this one, where the government employers constitutional,
statutory, or public policy prerogatives significantly overlap
the public employees collective bargaining prerogatives.38 Under
this modified test, a matter is more susceptible to
categorization as a mandatory subject of bargaining the more it
deals with the economic interests of employees and the less it
concerns the employers general policies.39
ALRA found that public employees . . . strong economic
interests in legal representation from their public employer as a
result of getting sued for a work-related function is sufficient
to ensure that they have the right to bargain over such an issue.
While we are sympathetic to the states argument that
indemnification is closely tied to a governmental function and
implicates more than just a public employees financial interests,
we nonetheless conclude that the ALRA had a reasonable legal and
factual basis to find otherwise. But because we also agree with
the ALRA that the parties to a CBA can waive the right to grieve
a mandatory subject of bargaining, we conclude that requiring the
parties to negotiate over the subject of indemnification will not
infringe upon the states right to direct its litigation
strategies and legal resources where, as here, it exempts such
decisions from the grievance process.
B. Alaska Statute 23.40.210(a) Requires that All Mandatory
Subjects of Bargaining Culminate in a Grievance-Arbitration
Procedure Unless that Right Is Clearly and Unmistakably Waived.
Resolution of this case depends primarily on our
interpretation of the Public Employment Relations Act (PERA):
Under the Act, may the parties to a collective bargaining
agreement waive the right to arbitrate a mandatory subject of
negotiation? We recently set out the principles for interpreting
statutory language in Tesoro Petroleum Corp. v. State,40
explaining that, where the text of the statute is arguably
ambiguous, we will apply the following precepts to give meaning
to the statute:
The purpose of statutory construction is to
give effect to the intent of the legislature,
with due regard for the meaning that the
statutory language conveys to others.
Statutory construction begins with the
language of the statute construed in light of
the purpose of its enactment. If the statute
is unambiguous and expresses the legislatures
intent, statutes will not be modified or
extended by judicial construction. If we
find a statute ambiguous, we apply a sliding
scale of interpretation, where the plainer
the language, the more convincing contrary
legislative history must be.[41]
1. The plain language of the statute is ambiguous.
Alaska Statute 23.40.210(a) generally addresses the
legislatures requirements for labor relations agreements
involving public employers.42 In addition to mandating that every
such agreement be in writing, that its term not exceed three
years, and that it include a cost-of-living differential for in-
and out-of-state employees, subsection .210(a) commands that each
collective bargaining agreement include a grievance procedure
which shall have binding arbitration as its final step.
The state claims that this requirement is satisfied
because the agreement in this case includes a grievance-
arbitration procedure, albeit one that exempts the states
indemnification decisions. According to the state, the statute
requires only that the agreement include a grievance-arbitration
procedure, but it does not require that all mandatory subjects of
bargaining be governed by the grievance procedure. The state
claims that it would deter collective bargaining and defeat the
purposes of PERA if we interpret AS 23.40.210(a) to require that
arbitration be available for all subjects of bargaining. In the
states view, AS 23.40.210(a) does not prohibit bargaining about
the availability of arbitration.
The states analysis notwithstanding, the plain language
of subsection .210(a) does not answer the question before us.
While the statute on its face requires only that an agreement
include a grievance procedure which culminates in binding
arbitration, the states interpretation would permit the parties
to waive the right to grieve each negotiated provision. Because
that interpretation could potentially read all meaning out of the
statute, we cannot rely on the plain language of the statute
alone in ascertaining the legislatures intent. We therefore look
to other sources to determine what result the legislature
intended to achieve.
2. The legislative history of AS 23.40.210 is not instructive.
In a prior case involving a different provision of the
statute in question here, we noted the lack of legislative
history available for AS 23.40.210:
The legislative history of AS 23.40.210 is
not particularly enlightening.[fn] Given the
ambiguous language of the statute and the
absence of relevant legislative history, we
construe this statutory language so as to
adopt a rule of law that is most persuasive
in light of precedent, reason, and policy.[43]
__________
[fn] House Bill 683 was passed as a
rider to a minor amendment to the penalty
provision of the Wage and Hour Act. See 1972
H.J. 1312 (May 22, 1972). Then Governor Egan
sponsored the bill, but the historical
materials give no indication as to the source
of the text. Id. at 1321.
3. The National Labor Relations Act is inapplicable.
1. When interpreting the provisions of the Act in the past, we
have sought guidance from decisions interpreting the National
Labor Relations Act (NLRA),44 on which the Act was based.45 But in
contrast to the Act, the NLRA does not require that labor
contracts include a grievance procedure that culminates in
binding arbitration.46 While we recognize the instructive value
of the NLRA and the many cases interpreting it, we cannot rely on
federal precedent to resolve whether grievance-arbitration must
be available for all mandatory subjects given that the NLRA does
not require that a grievance procedure be included in a labor
contract.47 The legislature clearly intended to diverge from the
NLRA on this point. We therefore conclude that it would be
inappropriate to rely on NLRA precedent to determine whether
grievance-arbitration must be available for all mandatory
subjects of bargaining pursuant to AS 23.40.210(a).
4. The Public Employment Relations Act, taken as a
whole, requires that mandatory subjects of
bargaining be subject to grievance-arbitration.
We next examine the PERA, the legislation of which AS
23.40.210(a) is a part, in recognition of the principle that
[t]he meaning of a statutory provision is determined by the
language of the particular provision construed in light of the
purpose of the whole instrument.48
Alaska Statute 23.40.070(2) requir[es] public employers
to negotiate with and enter into written agreements with employee
organizations on matters of wages, hours, and other terms and
conditions of employment.49 These are the mandatory subjects of
bargaining on which the parties must bargain in good faith,
although they need not reach agreement.50 Alaska Statute
23.40.210(a) in turn requires that written agreements include a
grievance procedure with binding arbitration as its final step.
These sections are best read together to require the parties to a
collective bargaining agreement to negotiate on all mandatory
subjects of bargaining and, if agreement is reached, that those
negotiations be memorialized in a written agreement that includes
a binding grievance-arbitration procedure. Accordingly, we hold
that the legislature intended all mandatory subjects of
bargaining on which agreement has been reached to be
presumptively subject to the agreements grievance-arbitration
procedure. This conclusion is consistent with our prior cases
addressing the scope of public employees right to arbitration.
a. Our prior cases imply that mandatory subjects
of bargaining must be arbitrable.
Much of the controversy in this case arises from the
competing interpretations of Hemmen v. State, Department of
Public Safety51 and its bearing on the present situation. Our
decision in Hemmen was brief, and can be summarized in the
following two sentences:
We conclude that the objective of AS
23.40.210 is to ensure that all contracts
subject to the statute contain such a
procedure, and that binding arbitration be
included as the final step of all grievance
procedures. Consequently, we hold that the
agreements exclusion of grievances involving
involuntary transfers from binding
arbitration violates AS 23.40.210.[52]
The ALRA interpreted Hemmen to require binding
arbitration as the final step of the grievance process, but not
to require that all areas of bargaining be subject to the
grievance process in the first place. The superior court
rejected this reasoning and held that [t]he more appropriate
interpretation of Hemmen is that AS 23.40.210(a) applies to all
subjects of negotiation. According to the superior court, the
objective of AS 23.40.210 is to insure that all contracts subject
to the statute contain a grievance procedure that culminates with
binding arbitration.
We conclude that the ALRA correctly interpreted Hemmen:
binding arbitration must be the final step of a contract dispute
subject to the grievance process. This means that the grievance
process must conclude with binding arbitration, but it does not
require that all contract provisions be subject to the grievance
process. This interpretation of Hemmen is consistent with our
prior cases construing the scope of bargaining by public
employees, which have implied that arbitration is required only
for mandatory subjects of bargaining, and not for all subjects of
bargaining.
In Kenai I53 we first considered what types of subjects
can be bargained by public employers. We endeavored to balance
the requirement to bargain in good faith on matters pertaining to
public school employees employment and the fulfillment of their
professional duties54 with the legislative directive prohibiting
the delegation of the legal responsibilities, powers, and duties
of the school board including its right to make final decisions
on policies.55 Recognizing the risk that permitting teachers
unions to bargain on matters of educational policy might result
in the erosion of school board control over those issues, we set
out a test to determine which subjects could be negotiated by
school boards and which could not.56 The test primarily focused
on the nexus between the issue sought to be bargained over and
the economic interests of the employees.57 Under our holding in
Kenai I, certain issues tangentially related to teachers working
conditions, but more closely tied to professional goals and
methods an area over which the school board must retain control
were exempted from the bargaining process.58 However, we
nonetheless encouraged school boards to discuss these issues with
their teaching staffs, to consider teacher proposals on such
issues, and to draw from the expertise and experience of teachers
in establishing educational policy.59
Our subsequent decision in Kenai Peninsula Education
Assn v. Kenai Peninsula Borough School District (Kenai II)60 drew
extensively on our discussion in Kenai I. In Kenai II we
considered whether a grievance involving a negotiated contract
provision regarding a teachers non-professional duties could be
submitted to arbitration.61 The collective bargaining agreement
negotiated by the teachers and the school board contained two
types of grievance procedures, one for violations of the
agreement, which would be subject to binding arbitration, and
another for violations of school board policy, which could be
aired before the school board but could not be arbitrated.62
Based on our earlier holding, we concluded in Kenai II that items
which could not be negotiated because they are too closely
related to school board policy likewise could not be arbitrated.63
As we explained:
To allow such bargaining raised the danger
that control over educational policy could be
effectively transferred from the school board
to the union over a series of contracts and
thus undermine the ability of elective
officials to perform their duties in the
public interest. This danger would be
equally present if matters of educational
policy were allowed to go to arbitration.
Thus, the realm of what is arbitrable is
bounded by the limits of what is
negotiable.[64]
Most recently, in Alaska Public Employees Assn v. State
(APEA),65 we again addressed what types of subjects could be
considered mandatory and therefore arbitrable.66 In APEA, the
union contested the agencys categorization of job classification
and salary range assignments as nonmandatory subjects of
bargaining and argued that, even if these subjects did not have
to be bargained over, the state should nonetheless be required to
submit disputes over those issues to binding arbitration.67 We
disagreed, holding that [b]inding arbitration is not absolutely
available when the matter in dispute is not a mandatory subject
of bargaining.68 We did not have occasion in the context of the
APEA decision to consider whether, conversely, all mandatory
areas of bargaining are subject to the grievance-arbitration
process. We explicitly hold today that they are.
5. The right to grieve mandatory subjects of
bargaining can be waived by PSEA.
But this case also presents the question whether a
union can waive the right to grieve a mandatory subject of
bargaining. The ALRA held that PSEA can waive the right to
arbitrate mandatory subjects if such waiver is clear and
unmistakable. In reaching this conclusion, the agency relied
upon decisions by the Tenth Circuit69 and the National Labor
Relations Board70 that permitted unions to waive the right to
bargain over wages or other mandatory subjects of negotiations so
long as the waiver was clear and unmistakable. We have
previously stated that unions must have broad discretion to serve
the employees they represent,71 and we see no reason why this
discretion should not extend to a unions ability to waive the
right to grievance-arbitration, even for a mandatory subject of
bargaining.
This approach finds support in federal decisions
allowing unions to waive employees statutory rights, but
requiring that such waiver be clear and unmistakable. In
Metropolitan Edison Co. v. NLRB,72 the United States Supreme Court
held that a union could waive its officers statutory rights under
the NLRA, but required that the waiver be clear and unmistakable.73
Likewise, in Wright v. Universal Maritime Service Corp.,74 the
Court stated that a union-negotiated collective bargaining
agreement could waive an employees statutory right to a judicial
forum for a discrimination claim in favor of binding arbitration
so long as the waiver of the statutory remedy was clear and
unmistakable.75 The Court has reached a similar conclusion in
numerous additional cases.76
The statutory right to grieve mandatory subjects of
bargaining is an important one, but certainly no more important
than an employees statutory right to a judicial remedy for a
discrimination claim. Just as an employee can waive a statutory
right to a judicial remedy for a discrimination claim, an
employees union can waive a statutory right to arbitrate
mandatory subjects of bargaining. Accordingly, we hold today
that PSEA can waive the right to grieve mandatory subjects of
bargaining. But, consistent with the federal courts and with our
own precedent,77 such waiver will be effective only when it is
clear and unambiguous.
The collective bargaining agreement negotiated by PSEA
and the state clearly and unmistakably waived the employees right
to grieve the states decision not to provide them with legal
representation if they acted beyond the scope of their authority
or engaged in willful misconduct or gross negligence. PSEA
agreed that the states decision not to indemnify an employee
shall not be subject to the grievance-arbitration procedures.
The collective bargaining agreement does not, however, waive an
employees right to grieve the states determination that he or she
acted outside the scope of his authority or committed misconduct.
Nor does it bar an employee from grieving the disciplinary action
imposed as a result of such misconduct.78 Just as important,
since a collective bargaining agreement can cover only a three-
year period,79 PSEA is free to negotiate new terms in a subsequent
agreement.
Allowing PSEA to waive an employees statutory right to
grieve certain decisions made by the state will allay the states
concern about losing control over such issues as its litigation
strategies without sacrificing public employees right to a
grievance procedure for mandatory subjects of bargaining. Legal
indemnification is a mandatory subject of bargaining which,
absent an express agreement to the contrary, must be subject to a
grievance procedure with binding arbitration as the final step.
But PSEA, in its capacity as the public safety employees union,
has the discretion to waive this right in the course of its
contract negotiations with the state. In all circumstances, such
waiver must be clear and unmistakable.
V. CONCLUSION
Because legal indemnification is a mandatory subject of
bargaining, it must be subject to the grievance-arbitration
procedure of the public employees contract with the state.
However, because unions have broad discretion to negotiate in the
interest of their members, PSEA can waive the right to grieve
even a mandatory subject of bargaining. We therefore REVERSE the
decision of the superior court and AFFIRM the decision of the
Alaska Labor Relations Agency.
_______________________________
1 AS 23.40.210(a).
2 AS 23.40.070-.260.
3 This procedure governs any dispute arising from the
interpretation or application of the collective bargaining
agreement. Efforts at dispute resolution follow four steps which
culminate in arbitration.
4 This complaint also named corrections officer Floyd
Ainsworth, Jr. and the Alaska Department of Corrections.
5 Article 16.01A of the CBA defines a grievance as any
controversy or dispute involving the application or
interpretation of the terms of this Agreement arising between the
Union or an employee or employees and the Employer.
6 710 P.2d 1001 (Alaska 1985).
7 Id. at 1001.
8 Id. at 1002.
9 Id. at 1003 (emphasis in original).
10 Id.
11 Id.
12 572 P.2d 416 (Alaska 1977).
13 831 P.2d 1245 (Alaska 1992).
14 N. Alaska Envtl. Ctr. v. State, Dept of Natural Res., 2
P.3d 629, 633 (Alaska 2000).
15 Handley v. State, Dept of Revenue, 838 P.2d 1231, 1233
(Alaska 1992).
16 State v. Alaska State Employees Assn/AFSCME Local 52,
923 P.2d 18, 22 (Alaska 1996).
17 Pub. Safety Employees Assn v. State, 799 P.2d 315, 319
(Alaska 1990) (quoting Guin v. Ha, 591 P.2d 1281, 1284 n.6
(Alaska 1979)).
18 We specifically declined to reach that issue in Alaska
Public Employees Assn v. State, 831 P.2d 1245, 1247-48 (Alaska
1992). In that case, the agencies had been reorganized before
our decision, and we declined the opportunity to rule on the
proper deference due either to the decision of a defunct agency
or to the decisions of a new agency that had no involvement
whatsoever with the case before us. Id. at 1248.
19 The definition of mandatory subjects of bargaining
comes from the Public Employee Relations Act, and includes the
hours of employment, the compensation and fringe benefits, and
the employers personnel policies affecting the working conditions
of the employees. AS 23.40.250(9). See also AS 23.40.070(2)
(requiring public employers to bargain on matters of wages,
hours, and other terms and conditions of employment).
20 Alaska Pub. Employees Assn, 831 P.2d at 1247 (quoting
Tesoro Alaska Petroleum Co. v. Kenai Pipe Line Co., 746 P.2d 896,
903 (Alaska 1987) (emphasis removed)).
21 Alaska State Employees Assn/AFSCME Local 52, 923 P.2d
at 24-25.
22 Id.
23 Alaska Pub. Employees Assn, 831 P.2d at 1246.
24 AS 23.40.070(2).
25 AS 23.40.250(9).
26 Alaska Pub. Employees Assn, 831 P.2d at 1251.
27 534 P.2d 947 (Alaska 1975).
28 Id. at 950.
29 In the Matter of Patrolmens Benevolent Assn of
Newburgh, NY, Inc. & the City of Newburgh, 18 Off. Dec. of N.Y.
Pub. Employ. Rel. Bd., 18 NYPER 3065 (1985) (explaining that
unions demand to negotiate over legal insurance was deemed demand
to negotiate over form of compensation and was therefore
mandatory).
30 In the Matter of Union County & Union County PBA Locals
199 & 199A, 25 N.J. Pub. Employee Rep. 30141 (1999) (stating
that agreement to compensate employees for cost of representation
and to indemnify them against judgments is mandatorily negotiable
term and condition of employment).
31 572 P.2d 416 (Alaska 1977).
32 Id. at 422.
33 Id. at 423.
34 831 P.2d 1245 (Alaska 1992).
35 Id. at 1249.
36 Id.
37 Id. at 1251.
38 Id.
39 Id.
40 42 P.3d 531 (Alaska 2002).
41 Id. at 537 (citations omitted).
42 The statute provides, in relevant part:
Upon the completion of negotiations between
an organization and a public employer, if a
settlement is reached, the employer shall
reduce it to writing in the form of an
agreement. The agreement may include a term
for which it will remain in effect, not to
exceed three years. The agreement shall
include a pay plan designed to provide for a
cost-of-living differential between the
salaries paid employees residing in the state
and employees residing outside the state. . .
. The agreement shall include a grievance
procedure which shall have binding
arbitration as its final step. Either party
to the agreement has a right of action to
enforce the agreement by petition to the
labor relations agency.
43 Pub. Safety Employees Assn v. State, 799 P.2d 315, 319
(Alaska 1990) (quoting Guin v. Ha, 591 P.2d 1281, 1284 n.6
(Alaska 1979)).
44 29 U.S.C. 151 et seq.
45 See, e.g., Pub. Safety Employees Assn, 799 P.2d at 318-
24 (explaining that this court has looked to decisions of the
National Labor Relations Board . . . in interpreting Alaskas
labor laws).
46 Compare AS 23.40.210(a) with 29 U.S.C. 158(d).
47 NLRB v. Am. Natl Ins. Co., 343 U.S. 395 (1952) (duty to
bargain limited to wages, hours and other terms and conditions of
employment; all other subjects are permissive areas of
bargaining).
48 Forest v. Safeway Stores, Inc., 830 P.2d 778, 782 n.11
(Alaska 1992) (quoting Wien Air Alaska v. Arant, 592 P.2d 352,
356 (Alaska 1979)).
49 AS 23.40.250(9) defines terms and conditions of
employment as the hours of employment, the compensation and
fringe benefits, and the employers personnel policies affecting
the working conditions of the employees; but does not mean the
general policies describing the function and purposes of a public
employer.
50 See AS 23.40.110(a)(5) (prohibiting public employer
from refusing to bargain collectively in good faith); AS
23.40.110(c)(2) (prohibiting labor or employee organization from
refusing to bargain collectively in good faith).
51 710 P.2d 1001 (Alaska 1985).
52 Id. at 1003.
53 572 P.2d 416 (Alaska 1977).
54 Id. at 417 (quoting AS 14.20.550).
55 Id. (quoting AS 14.20.610).
56 Id. at 419, 422.
57 Id. at 422.
58 Id.
59 Id. at 423.
60 628 P.2d 568 (Alaska 1981).
61 Id. at 569.
62 Id.
63 Id.
64 Id. at n.1.
65 831 P.2d 1245 (Alaska 1992).
66 Id. at 1252.
67 Id.
68 Id.
69 Capitol Steel & Iron Co. v. N.L.R.B., 89 F.3d 692 (10th
Cir. 1996).
70 Allison Corp. & Furniture Workers Div., I.U.E. Local
282, 330 NLRB 1363 (2000).
71 See, e.g., Thomas v. Anchorage Tel. Util., 741 P.2d
618, 630 (Alaska 1987) (union must have valid reasons for
differentiating in its treatment of groups of employees but has
wide range of reasonableness to serve the unit it represents).
72 460 U.S. 693 (1983).
73 Id. at 708 (stating that Court will not infer from a
general contract provision that the parties intended to waive a
statutorily protected right unless the undertaking is explicitly
stated. More succinctly, the waiver must be clear and
unmistakable.).
74 525 U.S. 70 (1998).
75 Id. at 80.
76 See id. (listing cases holding that waiver of statutory
rights must be clear and unmistakable).
77 Univ. of Alaska v. Univ. of Alaska Classified Employees
Assn, 952 P.2d 1182, 1185 (Alaska 1998) (waiver of bargaining
subject by express agreement must be in clear and unmistakable
language).
78 Additionally, because no party to this litigation
asserts the existence of any statutory right to a judicial remedy
for a claim of wrongful denial of defense or indemnification, we
do not decide whether the collective bargaining agreements waiver
of the right to grieve might affect any employees right to a
judicial remedy.
79 AS 23.40.210(a).
