Board of Education v. Howard County Education Ass'n

BARBERA, C.J. We decide in this case whether a local public school superintendent’s decision to terminate a “noncertificated” employee— that is, an employee who does not have a professional teaching certifícate issued by the Maryland State Board of Education— is a proper subject of binding arbitration pursuant to a collective bargaining agreement. In order to answer that ⁵¹⁹ question we must resolve important questions concerning the interpretation and interplay of statutes affecting two State agencies, the Maryland State Board of Education and the Public School Labor Relations Board. We shall answer those important questions and, applying those answers to the ultimate question posed by this case, we conclude that the termination of a noncertificated employee is a proper subject of binding arbitration pursuant to a collective bargaining agreement. I. The parties to this dispute are Petitioner Board of Education of Howard County (“Howard County Board”) and Respondent Howard County Education Association-ESP, Inc. (“Association”).

The Association is the exclusive bargaining representative of non-supervisory, noncertificated employees of the Howard County Public School System. In the present case, the Association is acting on behalf of a school nurse who was terminated by the Howard County Public School System in January 2012. The Association and the Howard County Board negotiated a collective bargaining agreement (“CBA”) in July 2010. Article 4, entitled “Employee Rights,” provides in Section 4.1 that “[n]o employee will be discharged without cause.” Article 2 provides for a grievance process.

Article 2 defines “grievance” as a dispute “involving the express pro-visions of the terms of’ the CBA and establishes a three-step procedure. 1 ⁵²⁰ In the present case, the school nurse opted to challenge her termination by way of the grievance process. Upon completion of Step I she proceeded to Step II. At that juncture, the Superintendent of the Howard County Public School System, acting through a designee, denied the grievance on the ground that a superintendent’s decision to terminate a noncertificated employee is an illegal subject of collective bargaining and therefore not subject to the grievance process set forth in the CBA. The Association, on behalf of the school nurse, made a demand for arbitration, which in Step III of the grievance process provides that “[t]he arbitrator’s decision shall be final and binding on all the parties.” The Litigation Upon receipt of the Association’s demand, the Howard County Board filed a Motion for Injunctive Relief in the Circuit Court for Howard County, seeking to enjoin the arbitration.

The Howard County Board argued that the final decision on the termination of a noncertificated employee is committed to the exercise of the superintendent’s authority; ⁵²¹ therefore, a dispute concerning the termination of that employee cannot be the subject of binding arbitration. The Association opposed the injunction. The Circuit Court granted the Howard County Board preliminary injunctive relief and entered an order staying the arbitration to give both parties the opportunity to request an opinion from either or both the Maryland State Board of Education (“State Board”) and the Public School Labor Relations Board (“PSLRB”). The Howard County Board sought an opinion from the State Board.

The Association sought an opinion from the PSLRB. The State Board and the PSLRB issued conflicting opinions. We later detail the reasoning of the respective agencies. For now, however, it suffices to note that the State Board concluded that a provision of the Education Article authorizing the county school superintendent to make hiring decisions also, albeit impliedly, commits to the superintendent the exclusive authority to terminate, thereby rendering illegal the binding arbitration provision of the CBA.

The PSLRB came to the opposite conclusion by reference to other provisions of the Education Article that permit binding arbitration of matters relating to the discipline and discharge of noncertificated employees. Therefore, according to the PSLRB, the binding arbitration provision of the CBA is not illegal. Each party petitioned the Circuit Court for Howard County for judicial review of the respective opinions of the State Board and the PSLRB, and each party sought, in response to the other’s petition, an order to enforce the opinion of the agency that ruled in its favor. 2 The Circuit Court, agreeing with the State Board’s determination, entered orders that affirmed the decision of the State Board, reversed the decision of the PSLRB, and permanently enjoined the arbitration. ⁵²² The Association appealed to the Court of Special Appeals, which reversed the judgments of the Circuit Court. Howard Cty.

Educ. Ass’n-ESP, Inc. v. Bd. of Educ. of Howard Cty., 220 Md.App. 282, 284 , 103 A.3d 1060 (2014). The intermediate appellate court concluded in a thorough and well analyzed opinion that the State Board’s opinion would “clearly be contrary to the statute’s plain meaning”; therefore, deference may not be afforded to the State Board in this case. Id. at 307 , 103 A.3d 1060 (internal quotation marks omitted).

The Court of Special Appeals held that the PSLRB, not the State Board, is the entity with the jurisdiction to resolve the dispute; moreover, the PSLRB reasonably concluded that the sections of the Education Article concerning collective bargaining permit a local board to be bound to an agreement containing an arbitration provision for grievance matters. Id. at 305-06 , 103 A.3d 1060 . The Howard County Board petitioned this Court for review. We granted the Howard County Board’s petition for writ of certiorari to address two questions, 3 which we have combined into one: Does the PSLRB have the exclusive authority to decide the legality of a term in a collective bargaining agreement that provides for arbitration of a county superintendent’s decision to discharge a noncertificated employee?

II

A State agency’s declaratory ruling “is subject to judicial review in the same manner as provided for a ‘contested case’ decided under the Administrative Procedure Act.” Potomac Valley Orthopaedic Assocs. v. Md. State Bd. of Physicians, 417 Md. 622, 635 , 12 A.3d 84 (2011). When, as here, the administrative rulings at issue do not involve any ⁵²³ disputed facts, this Court’s “role is limited to determining ... if the administrative decision is premised upon an erroneous conclusion of law.” Id. (alteration in original) (internal quotation marks omitted). In conducting that inquiry, we generally afford “considerable weight” to “the agency’s interpretation and application of the statute which the agency administers.” Id. at 635-36 , 12 A.3d 84 (internal quotation marks omitted).

This Court, however, is not bound by an agency’s decision that is “premised solely upon an erroneous conclusion of law.” Id. at 636 , 12 A.3d 84 (internal quotation marks omitted). This Court has recognized that “the paramount role of the State Board of Education in interpreting the public education law sets it apart from most administrative agencies.” Montgomery Cty. Educ. Ass’n v. Bd. of Educ. of Montgomery Cty., 311 Md. 303, 309 , 534 A.2d 980 (1987) (internal quotation marks omitted).

We therefore accord considerable deference to an opinion of the State Board interpreting public education law. See Balt. City Bd. of Sch. Comm’rs v. City Neighbors Charter Sch., 400 Md. 324, 343 , 929 A.2d 113 (2007).

Such deference to the State Board’s decision, however, is not absolute; rather, a reviewing court must reject a decision of the State Board, or, for that matter, of the PSLRB, if either agency’s decision “would clearly be contrary to the statute’s plain meaning.” See Montgomery Cty. Educ. Ass’n, 311 Md. at 309 , 534 A.2d 980 . When, as in the present case, a party to a collective bargaining agreement has sought judicial intervention to stay arbitration, the court’s role is limited.

Balt. Cty. Fraternal Order of Police Lodge No. Ip v. Baltimore County, 429 Md. 533, 549 , 57 A.3d 425 (2012). We have said that, “[i]f one could decide that [the] grievance was arbitrable without interpreting the underlying [collective bargaining agreement] or addressing the merits of [the party’s] claims,” then arbitrability is “an issue for the court to decide initially.” Id. at 553 , 57 A.3d 425 . ⁵²⁴ III.

Before delving further into the respective opinions of the State Board and the PSLRB, it is helpful to review the legislative grant of authority to each of them. The General Assembly created the PSLRB in 2010. Since then, the Education Article has contained multiple references to the division of authority between the PSLRB and the State Board. We begin with § 2-205.

Md.Code (2010, 2014 RepLVol., 2015 Supp.), § 2-205 of the Education Article. 4 Section 2-205(e) delineates the respective powers and duties of the State Board and the PSLRB. Subsections (e)(1), (2) and (3) address the authority of the State Board: (1) ... [T]he State Board shall explain the true intent and meaning of the provisions of: (i) This article that are within its jurisdietion[.] (2) Except as provided in paragraph (4) of this subsection and in Title 6, Subtitles 4 and 5 of this article, the [State] Board shall decide all controversies and disputes under these provisions. (3) The decision of the [State] Board is final. Subsection (e)(4) in turn provides: (i) The Public School Labor Relations Board shall decide any controversy or dispute arising under Title 6, Subtitle 4 or Subtitle 5 of this article.

(ii) A decision of the Public School Labor Relations Board is final. Read together, these subsections expressly transfer from the State Board to the PSLRB the authority to decide any controversy or dispute arising under Subtitles 4 and 5, i.e., the collective bargaining subtitles of Title 6. Title 6 is entitled “Teachers and Other Personnel.” Section 6-510(c)(5)(i) provides that, [i]f a public school employer and an employee organization dispute whether a proposed topic for negotiation is a man ⁵²⁵ datory, a permissive, or an illegal topic of bargaining, either party may submit a request for a decision in writing to the [PSLRB] for a final resolution of the dispute. The General Assembly added, as well, § 6-807(a)(2), which provides that the PSLRB “[s]hall decide controversies and disputes” concerning matters covered by Title 6, Subtitle 4 (providing for collective bargaining between public school employers and certificated employees) and Subtitle 5 (providing for collective bargaining between public school employers and noncertificated employees).

And in § 6-807(d), the General Assembly provided that “a prior order, action or opinion issued by the State Board before the enactment of this section may be considered as precedent in matters arising after the enactment of this section, but it is not binding on the [PSLRB].” Particularly relevant to the present case are several additional subsections of § 6-510. Subsection (b) states that a negotiated agreement between the public school employer and the employee organization “may provide for binding arbitration of the grievances arising under the agreement that the parties have agreed to be subject to arbitration.” Subsection (c)(1) provides that representatives of the public school employer and the employee organization “shall meet and negotiate ... on all matters that relate to ... working conditions, including the discipline and discharge of an employee for just cause.” (Emphasis added). Subsection (c)(3) provides: “A public school employer may not negotiate the school calendar, the maximum number of students assigned to a class, or any matter that is precluded by applicable statutory law.” (Emphasis added). Subsection (c)(5)(i) provides that, “[i]f a public school employer and an employee organization dispute whether a proposed topic for negotiation is a mandatory, a permissive, or an illegal topic of bargaining, either party may submit a request for a decision in writing to the [PSLRB] for final resolution of the dispute.” The Agencies’ Opinions The State Board recognized in its opinion in the present ⁵²⁶ case 5 that the school nurse challenged her termination by resort to Section 4.1 of the CBA (providing that “[n]o employee will be discharged without cause”) and Article 2 of the CBA (providing that, at Step III of the grievance process, a dissatisfied employee is entitled to submit the dispute to binding arbitration).

The State Board further acknowledged that, pursuant to § 6—510(c)(5), the PSLRB is authorized to decide whether a “proposed topic for negotiation is a mandatory, a permissive, or an illegal topic of [collective] bargaining.” The State Board concluded nonetheless that it “retain[s] jurisdiction to explain the true intent and meaning of all other sections of the Education Article,” including § 6-201, which addresses the superintendent’s power to appoint noncertificated employees. The State Board looked specifically to § 6-201(c)(l), which provides: “Except in Worcester County and Baltimore City, the county superintendent shall appoint clerical and other nonprofessional personnel.” The State Board concluded that “the true intent and meaning of § 6-201 is that the power to hire and fire is non-delegable”; consequently, “[i]f the superintendent’s decision to terminate is subject to mandatory binding arbitration,” then such action “would violate” § 6-201(c)(l) of the Education Article. In so deciding, the State Board essentially reaffirmed the position it had taken in an earlier opinion, Harford County Board of Education v. Harford County Educational Services Council, MSBE Op. No. 05-24 (2005) (“the 2005 Harford County Board decision”).

In that 2005 opinion, the State Board determined that the express authority granted in § 6-201(c)(1) to the county superintendent to appoint noncertificated personnel carries with it the implied authority to discharge such personnel. Relying upon the 2005 Harford County Board decision, about which we shall say more, infra, the State Board reemphasized in its opinion in the present case that under § 6-201 the superintendent’s “power to hire and ⁵²⁷ fire is non-delegable.” The State Board adhered in the present case to its reasoning in its 2005 decision, notwithstanding the State Board’s recognition that since 2009 the General Assembly has provided for mandatory negotiation of just cause for employee discharge. The PSLRB came to the opposite conclusion in its opinion. 6 The PSLRB noted its jurisdiction to decide the legality of a topic of negotiation, referring in particular to the authority granted to the PSLRB in § 6-510(c)(5)(i) to resolve any dispute between “a public school employer and an employee organization” concerning “whether a proposed topic for negotiation is ... an illegal topic of bargaining.” The PSLRB thoroughly traced the legislative history of Maryland’s collective bargaining subtitle, including the 2009 amendments to what was then § 6—510(b) and now is renumbered at § 6-510(c), which effectively overruled the State Board’s 2005 Harford County Board decision. The PSLRB described the 2009 amendments to § 6—510(c)(1) as “limiting] a superintendent’s authority to discipline and discharge non-certificated employees by making both the procedural and substantive aspects of due process mandatory subjects of bargaining.” 7 Given the legislative history of § 6-510(c), the PSLRB wrote: “If there was nothing more involved, our analysis could begin—and end—with Section 6-510(c)(l).” The PSLRB noted that it nevertheless would respond to the argument raised in a memorandum the Howard County Board had sent to the PSLRB.

In that memorandum, the Howard County Board raised § 6-510(c)(3), which provides that “A public school ⁵²⁸ employer may not negotiate ... any matter that is precluded by applicable statutory law.” The Howard County Board asserted that § 6-510(c)(3) essentially trumped § 6—510(c)(1), which provides that the parties are required to negotiate the “discharge of an employee for just cause.” The Howard County Board recounted the State Board’s interpretation of § 6—201(c)(1) (providing the county superintendent with the power to appoint noncertificated employees). The State Board interpreted that section (consistent with that Board’s adherence to its 2005 Harford County Board decision) as committing to the superintendent the sole authority to hire and discharge noncertificated employees. Relying on that interpretation, the Howard County Board argued that § 6-201(c)(1) is “applicable statutory law” that pursuant to § 6-510(c)(3) precludes the negotiation of an arbitration clause to review a superintendent’s termination of an employee, thereby rendering the arbitration clause in this case “unenforceable.” The PSLRB made short work of that aspect of the Howard County Board’s argument: We need not for present purposes debate the merit of the State Board’s interpretation of Section 6—201(c)(1). We acknowledge that the State Board had the authority to interpret the provisions of the Education Article other than those in Title 6, Subtitles 4 and 5.

But the operative provision—i.e., “any matter that is precluded by applicable statutory law”—appears in Title 6, Subtitle 5, and, as the County Board concedes, it is the PSLRB that has the authority to interpret the provisions of that Subtitle. This means that the PSLRB has jurisdiction to determine what does and does not constitute “applicable statutory law.” We conclude that the State Board’s interpretation of Section 6-201(c)(1) does not constitute “applicable statutory law” precluding the negotiation of “the discipline and discharge of an employee for just cause.” The “applicable statutory law” for purposes of this negotiability dispute is Section 6-510(c)(1),