Howard County Education Ass'n-ESP, Inc. v. Board of Education

MEREDITH, J. In these consolidated appeals, we will resolve a dispute between two State agencies that have taken conflicting positions with respect to whether the collective bargaining agreement between a county board of education and the labor representative for support employees can legally include a requirement providing for arbitration of disputes regarding the discharge of such employees. The Maryland State Board of Education has taken the position that, because the power to appoint and terminate nonprofessional personnel is committed to the county superintendent of schools, the arbitration provision which appellee Board of Education of Howard County agreed to include in its collective bargaining agreement was illegal and nonbinding. The Circuit Court for Howard County accepted the State Board of Education’s interpretation of the law on this point, and enjoined the labor representative’s efforts to compel arbitration of a school nurse’s discharge. But the Maryland Public School Labor Relations Board takes a contrary view of the law, and has taken the position that the provision in the Howard County collective bargaining agreement providing for binding arbitration of disputes regarding the discharge for cause of nonprofessional employees is legally enforceable.

In an amicus brief, the Maryland Attorney General agrees with the labor relations board. And so do we. Accordingly, we shall rule in favor of the appellant, Howard County Education Association-ESP, Inc., and reverse the judgments of the Circuit Court for Howard County. 1 ²⁸⁵ BACKGROUND The incident that precipitated the dispute between two State agencies was the discharge of a school nurse who was an employee of the Board of Education of Howard County, appellee. Because this employee was covered by a collective bargaining agreement that provided “[n]o employee will be discharged without cause,” her labor representative — Howard County Education Association-ESP, Inc., appellant — filed a grievance asserting that there was insufficient cause to impose the ultimate disciplinary sanction of discharge.

The county board of education rejected the employee’s grievance, and advised the employee’s labor representative that, despite the fact that the collective bargaining agreement had provided for such issues to be subject to the grievance process, the discharge of a non-certificated employee such as the school nurse “is an illegal subject of bargaining and thus not grievable.” Relying upon another provision in the collective bargaining agreement, the employee’s labor representative then filed a demand for arbitration with the American Arbitration Association. Rather than submit to arbitration, the Board of Education of Howard County filed suit against the Howard County Education Association-ESP, Inc., in the Circuit Court for ²⁸⁶ Howard County to enjoin the arbitration. The county school board alleged that, notwithstanding any provision in the applicable collective bargaining agreement, “[b]y statute and case law, a county Superintendent of Schools has the sole authority to dismiss a non-certificated employee,” and therefore, the arbitration provision “that affects the merits of the Superintendent’s discussion to terminate a non-certificated employee is contrary to law and invalid.” The circuit court issued a preliminary injunction providing that the arbitration was stayed. But the preliminary injunction further provided that it would expire in ten days “unless one or both of the parties file a request with the Maryland State Board of Education or the Public School Labor Relations Board for statutory interpretation. ...” The Board of Education of Howard County asked the Maryland State Board of Education for a declaration of interpretation, and the Howard County Education Association-ESP, Inc., similarly asked the Maryland Public School Labor Relations Board for its statutory interpretation.

The Maryland State Board of Education issued an opinion pursuant to its power under Maryland Code (1978, 2008 Repl.Vol., 2011 Supp.), Education Article (“Educ.”), § 2-205(e)(1), which authorizes the agency to “explain the true intent and meaning of the provisions of [the Education Article].” The opinion recognized that the nurse had filed a grievance challenging her termination pursuant to Article 4.1 of the collective bargaining agreement, which provided in part: “No employee will be discharged without cause.” The opinion also noted that the collective bargaining agreement provided that an employee who was not satisfied with the county board’s ruling on a grievance could submit the dispute “to arbitration under the Voluntary Labor Arbitration Rules of the American Arbitration Association,” and the agreement provided that “[t]he arbitrator’s decision shall be final and binding on all parties.” The opinion also recognized that the Maryland Public School Labor Relations Board had also been asked to issue an opinion regarding this same controversy, and it had ruled that “discipline and discharge is a mandatory subject of bargaining and that the grievance involved here is ²⁸⁷ ‘subject to arbitration.’ ” Notwithstanding the authority of the labor relations agency to decide whether a “proposed topic for negotiation is a mandatory, a permissive, or an illegal topic of [collective] bargaining,” the State Board of Education asserted: “[W]e retain jurisdiction to explain the true intent and meaning of all other sections of the Education Article.” The State Board of Education’s opinion initially interpreted the arbitration provision in the collective bargaining agreement as being voluntary rather than mandatory because the provision states that “the grievance may be submitted to arbitration.” If this interpretation was correct, and the superintendent retained the option to voluntarily submit a dispute to arbitration, the opinion stated, the non-delegable duty of the superintendent would not be impinged. But, because “the true intent and meaning of [Educ.] § 6-201 is that the power to hire and fire is non-delegable,” the opinion expressed the following conclusion: “If the superintendent’s decision to terminate is subject to mandatory binding arbitration, it is our view that that would violate [Educ.] § 6-201.” In followup correspondence with counsel for the local board of education, after counsel for the Board of Education of Howard County pointed out that the nurse’s collective bargaining agreement in fact “provides for mandatory binding arbitration of an employee grievance,” the State Board of Education confirmed that it would consider “such a provision to violate § 6-201(c) of the Education Article.” In the meantime, the Maryland Public School Labor Relations Board considered the same dispute pursuant to its authority under Educ. § 2-205(e)(4) to “decide any controversy or dispute arising under Title 6, Subtitle ... 5 of [the Education Article],” and its authority under Educ. § 6-510(c)(5)(i) to decide the “final resolution” of any dispute between a “public school employer and an employee organization” as to “whether a proposed topic for negotiation is ... an illegal topic of bargaining.” It is the opinion of this agency that Educ. § 6 — 510(c)(5)(i) “expressly charges the PSLRB with responsibility for resolving the type of negotiability dis ²⁸⁸ pute that is presented in this case.” The labor relations board observed: “[T]he State Board [of Education’s] interpretation of Section 6201(c)(1) may (or may not) have some bearing on whether Section 4.1 of the [collective bargaining] Master Agreement deals with a mandatory or an illegal subject of bargaining, but under the express language of Section 6-510(c)(5)(i), the authority to resolve that question resides with the PSLRB.” The answer to that question, the labor relations board concluded, was self-evident from the express language of Educ. § 6 — 510(c)(1), which requires a public school employer to negotiate with the employees’ labor representative “on all matters that relate to ... working conditions, including the discipline and discharge of an employee for just cause.” (Emphasis added.) Although the labor relations board considered the language clear enough to be dispositive, it also considered the legislative history of the statutory provisions to be supportive of its interpretation. In its written opinion, it provided the following detailed explanation for its conclusion that the dispute regarding the discharge of the school nurse was properly covered by the collective bargaining agreement and properly subject to binding arbitration: For many years prior to the 1990s, Maryland’s collective bargaining statute provided only for mandatory subjects of bargaining, defined as “all matters related to salaries, wages, hours, and other working conditions.” At that time, both the State Board and the courts permitted boards of education and exclusive representatives to negotiate a just cause standard for discipline and discharge, and to arbitrate such disputes. In 1994, however, the Maryland Court of Special Appeals, in Livers v. Board of Educ. of Charles County, 101 Md.App. 160 [ 643 A.2d 523 ] (1994), deferred to the interpretation of the State Board of Education, which held that “the remedies or means by which a non-certificated employee may challenge a discipline or discharge decision are non-negotiable matters of educational policy,” and therefore an illegal subject of bargaining.

Id. at 409 [ 643 A.2d 523 ]. While many agreements, including those be ²⁸⁹ tween HCEA-ESP and the County Board, continued to include language regarding just cause for discipline and discharge, such language was no longer enforceable, and disputes were subjected to the administrative appeal process in [Education Article] Section 4-205. In 2002, the General Assembly made significant changes to the collective bargaining statute [in the Education Article] by creating mandatory, permissive, and illegal subjects of bargaining. At that time, Section 6 — 510(b) was amended to read as follows (added language in Section 510(b)(2) in italics): (b) Representatives to negotiate. — (1) On request, a public school employer or at least two of its designated representatives shall meet and negotiate with at least two representatives of the employee organization that is designated as the exclusive negotiating agent for the public school employees in a unit of the county on all matters that relate to salaries, wages, hours, and other working conditions.

(2) Except as provided in paragraph (3) of this subsection, a public school employer or at least two of its designated representatives may negotiate with at least two representatives of the employee organization that is designated as the exclusive negotiating agent for the public school employees in a unit of the county on other matters, including due process for discipline and discharge, that are mutually agreed to by the employer and the employee organization. (3) A public school employer may not negotiate the school calendar, the maximum number of students assigned to a class, or any other matter that is precluded by applicable law. (2008 RepLVol.). Thus, “due process for discipline and discharge” was made a permissive subject of bargaining, but there was no reference to any substantive standard that a public school employer was required to meet in order to discipline or discharge a non-certificated employee. ²⁹⁰ It was under that statutory framework that the State Board, in 2005, decided the case of Harford County Board of Education v. Harford County Educational Services Council, MSBE Opinion No. 05-24, which the County Board relies on so heavily in the July 8, 2012, Memorandum that it filed with the PSLRB in this case.

In the Harford County Board of Education case, the State Board concluded that the phrase “due process for discipline and discharge” as used in Section 6 — 510(b)(2) encompassed only the procedural aspects of due process. Id. at 7. In reaching this conclusion, the State Board opined that a superintendent had the exclusive authority to appoint non-certificated personnel pursuant to Section 6-201(c)(l), and the power to remove should be incident to the power to appoint. Based upon that interpretation, the State Board held that “the ‘due process’ reference in Section 6-510(b)(2) does not encompass substantive due process concerns.

Rather, we find it specifically refers to the procedural aspects of due process.” Id. at 7. In 2009, exclusive representatives of non-certificated employees approached the General Assembly in an effort to overturn the State Board’s decision in the Harford County Board of Education case. That effort was successful. Senate Bill 569 amended Section 6-510(b) as follows (added language in Section 6-510(b)(1) in italics; deleted language in Section 6510(b)(2) in brackets): (b)(1) On request, a public school employer or at least two of its designated representatives shall meet and negotiate with at least two representatives of the employee organization that is designated as the exclusive negotiating agent for the public school employees in a unit of the county on all matters that relate to salaries, wages, hours, and other working conditions, including the discipline and discharge of an employee for just cause.

(2) Except as provided in paragraph (3) of this subsection, a public school employer or at least two of its designated representatives may negotiate with at least two representatives of the employee organization that is ²⁹¹ designated as the exclusive negotiating agent for the public school employees in a unit of the county on other matters [including due process for discipline and discharge,] that are mutually agreed to by the employer and the employee organization. In short, the State Board’s decision in the Harford County Board of Education case was overturned by statute: the 2009 amendments limited a superintendent’s authority to discipline and discharge non-certificated employees by making both the procedural and substantive aspects of the due process mandatory subjects of bargaining. The testimony of the Maryland Association of Boards of Education (“MABE”) recognized the implication of these amendments in the written testimony that it submitted to the Senate Finance Committee on March 5, 2009, in opposition to Senate Bill 569. MABE, speaking on behalf of “all of the state’s boards of education,” noted that Senate Bill 569 would: limit the superintendent’s discretion to discipline or discharge support staff.

MABE strongly opposes the mandated negotiation of the subjects of discipline and discharge of non-certificated staff. And yet again, this bill goes further. Senate Bill 569 would impose the standard of employee rights under disciplinary or termination actions to be “just cause.” MABE has consistently opposed legislation proposing this standard of review for superintendent decisions regarding non-tenured, non-teaching staff. [ ] If there was nothing more involved, our analysis could begin — and end — with Section 6-510(c)(l). But the County Board asserts that there is “more involved” — citing section 6 — 510(c)(3), which provides that: 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.) ²⁹² In its July 2, 2012, submission to the PSLRB, the County Board contends that — notwithstanding the 2009 amendments — the State Board’s 2005 interpretation of Section 6-201(c)(1) in the Harford County Board of Education case— ie., that the statutory authority of the county superintendent to “appoint clerical and other nonprofessional personnel” includes the power to remove such personnel — is “applicable statutory law” that precludes the negotiation of a just cause standard for discharge. Accordingly, the County Board argues, Section 4.1 of the Master Agreement is unenforceable. We need not for present purposes debate the merit of the State Board’s interpretation of Section 6-201(c)(l). We acknowledge that the State Board has the authority to interpret the provisions of the Education Article other than those in Title 6, Subtitles 4 and 5.

But the operative provision — ie., “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), and the clear and unambiguous language of that Section provides that “the discipline and discharge of an employee for just cause” is a mandatory subject of bargaining. [ ] Conclusion The PSLRB concludes that the topic of “discipline and discharge of an employee for just cause” is a mandatory subject of bargaining. In the context of this case, that means that Article 4.1 of the Master Agreement is enforceable, and the grievance involving that provision is subject to arbitration under Section 2.2 of the Master Agreement. ²⁹³ After the conflicting opinions were issued by the two State agencies, appellant and appellee each petitioned for judicial review, and each asked the circuit court to issue an order to enforce the opinion that was in its favor and grant appropriate injunctive relief. The circuit court found the board of education’s arguments more persuasive, and entered orders affirming the interpretive ruling of the Maryland State Board of Education, reversing the interpretive ruling of the Maryland Public School Labor Relations Board, and permanently enjoining the arbitration requested by appellant on behalf of the discharged nurse.

The employee’s labor representative appealed the circuit court’s rulings. DISCUSSION The two State agencies that issued conflicting rulings in this case share the distinctive characteristic of being granted broad statutory power to interpret statutes within their sphere of administration. In Bd. of Ed. for Dorchester Co. v. Hubbard, 305 Md. 774, 790-91 , 506 A.2d 625 (1986), the Court of Appeals commented on the power of the State Board of Education, stating: “While administrative agencies generally may interpret statutes, as well as rule upon other legal issues, and while an agency’s interpretation of a statute which it administers is entitled to weight, the paramount role of the State Board of Education in interpreting the public education law sets it apart from most administrative agencies.” (Footnote omitted.) The Hubbard Court further noted, id. at 788 , 506 A.2d 625 : The State Board’s broad authority specifically includes the power to interpret the provisions of the Education Article. Section 2-205(e) provides that: “... [T]he State Board shall explain the true intent and meaning of the provisions of ... [the Education Article] ... within its jurisdiction ... [and] shall decide all controversies and disputes under these provisions.” But the Court of Appeals has also recognized that there is a limit to the judicial deference that will be granted to ²⁹⁴ the State Board of Education’s statutory interpretation. “If the State Board’s interpretation or application of [the statute at issue], in a particular situation, would clearly be contrary to the statute’s plain meaning, a reviewing court must reject that interpretation.” Montgomery Co. Ed. Ass’n v. Bd. of Educ., 311 Md. 303, 309 , 534 A.2d 980 (1987).

When the General Assembly created the Maryland Public School Labor Relations Board in 2010, it transferred a portion of the authority to interpret the Education Article from the State Board of Education to the newly created labor relations board. As part of that reassignment of authority, Educ. § 2-205(e)(4) was added. It states: (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.

The General Assembly also provided, in Educ. § 6-510(c)(5)(i): “If 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 [Public School Labor Relations] Board for final resolution of the dispute.” Further, Educ. § 6-807(a)(2) provides that, with respect to “matters covered under the provisions of Subtitles 4 and 5 of [Title 6],” the Public School Labor Relations Board “[s]hall decide controversies and disputes.” The General Assembly also adopted a provision to make it clear that prior rulings of the State Board of Education were not binding on the labor relations board. Educ. § 6-807(d) states: “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 [Public School Labor Relations] Board.” Although it seems plain to us that the present dispute turns on the question of whether a collective bargaining agreement ²⁹⁵ could properly provide for arbitration of an employee’s discharge, which is clearly a matter committed to the authority of the Public School Labor Relations Board to decide, the Board of Education for Howard County argues that the resolution of that question necessarily implicates the power of a superintendent to discharge an employee, and is therefore controlled by the State Board of Education’s unwavering opinion that the superintendent’s power to hire and fire nonprofessional personnel, pursuant to Educ. § 6 — 201(c)(1), overrides and invalidates any collective bargaining agreement to the contrary. We are not persuaded by the State Board’s opinion on this issue. The General Assembly created the Public School Labor Relations Board for the express purpose of deciding such issues relative to the permissible scope of collective bargaining agreements.

In our view, the plain language of the statutes enacted in 2009 and 2010 provides that agreements regarding the discharge of employees may be included in collective bargaining agreements, and if any doubt about that remained, the Public School Labor Relations Board was empowered to make the final decision regarding that topic. In the Attorney General’s amicus brief filed in this Court, the Attorney General described in detail the legislative history that led to the establishment of the Public School Labor Relations Board. Like the Attorney General, we are persuaded that the legislative history behind the statutes which created the labor relations board supports our reading of the statutes, and reflects a clear intent on the part of the General Assembly to have that agency, rather than the State Board of Education, be the final arbiter on any disagreement regarding the topics that can be covered in collective bargaining negotiations and agreements. The State Board of Education’s position of steadfastly refusing to recognize arbitration of disputes regarding the discharge of employees dates back to at least the early 1990s, when this Court addressed such a controversy in Livers v. Board of Education, 101 Md.App. 160 , 643 A.2d 523 (1994).

In May 1991, George Livers, a school custodian in Charles County, was arrested on drug charges. He was suspended ²⁹⁶ without pay by the Charles County Board of Education pending the disposition of the charges. On June 11, 1991, the State nolle prossed Livers’s drug charges. One week later, the Charles County Board of Education fired him for misconduct.

Livers, a non-certificated employee, attempted to contest his firing by filing a grievance pursuant to the master agreement between his union and the Charles County Board of Education. The grievance proceeded through various phases, and eventually, the superintendent of the Charles County Board of Education affirmed Livers’s dismissal. Livers and his union representative then sought to arbitrate the matter. The Charles County Board of Education refused to participate in arbitration, and filed a complaint for declaratory judgment and stay of arbitration.

The arbitration was stayed, by consent, “until the State Board rendered a declaratory ruling as to the arbitrability of Livers’s grievance.” Id. at 163-64 , 643 A.2d 523 . The dispute was heard by an administrative law judge, who sided with Livers and recommended that the Charles County Board of Education be required to participate in arbitration. But the State Board of Education rejected the ALJ’s recommendation, and ruled “that ‘a public school employer may not bargain over the remedies or means by which a non-certificated employee may challenge a discipline or discharge decision.’ ” Id. at 164 , 643 A.2d 523 . Livers filed a petition for judicial review of the State Board’s decision.

After the Circuit Court for Charles County affirmed the State Board, Livers appealed to this Court. We began our analysis in Livers by noting: [Education Article] § 6-510(b) defines the scope of bargaining between public school employers and unions as to non-certificated employees: On request, a public school employer or at least two of its designated representatives shall meet and negotiate with at least two representatives of the employee organization that is designated as the exclusive negotiating agent for the public school employees in a unit of the county on all ²⁹⁷ matters that relate to salaries, wages, hours, and other working conditions.[ 2 ] Id. at 164, 643 A.2d 523 (emphasis in Livers). Citing Montgomery Co. Ed. Ass’n v. Bd. of Educ., supra, 311 Md. at 318 , 534 A.2d 980 , we observed that the Court of Appeals had held that “the State Board retains authority to determine matters of educational policy and that, as a consequence, such matters are not proper for negotiation between local school boards and union representatives.” Livers, 101 Md.App. at 164 , 643 A.2d 523 . Although