Mayor and City Council of Baltimore v. Baltimore Fire Fighters

MOTZ, Judge. In each of these consolidated actions, appellees, Baltimore Fire Fighters, Local 734, and Baltimore Fire Officers, Local 964 (“the Unions”), sought a declaratory judgment and injunction to compel appellants, Mayor and City Council of Baltimore (“the City”), to arbitrate a dispute between the parties. One case involves a dispute as to reduction in staffing levels on fire engines (the “staffing” case), and the other involves employees’ right to use accrued vacation leave prior to retirement (the “accrued leave” case). Because both disputes are grievances and neither is so intimately involved in management prerogatives as to render it nonnegotiable, we affirm the grant of summary judgment by the Circuit Court for Baltimore City (Byrnes, J.). ⁶⁰⁷ (i) The staffing case arises from a June 1, 1990 decision by the Board of Fire Commissioners (“Fire Board”) to reduce the engine company crews from four to three members.

The crew size reduction was precipitated by a work week reduction and a financial crisis. In 1988, the Unions and City agreed, in two Memoranda of Understanding (“MOU”) covering fiscal years 1991 and 1992, to reduce the hours worked per week by union members from 47 hours per week to 44.4 or 44.8 hours per week. At the time of this agreement, the City and the Unions anticipated that this new work week would be implemented by the hiring of new employees. The City estimated that it would need 137 more firefighters after the work week reduction; the Unions estimated 120 more would be necessary.

When this agreement was made in 1988 the City indicated that it would be unable to implement the work week reduction until June 1, 1990. One union agreed to this timetable; the other submitted it to arbitration, and the arbitrator ruled in the City’s favor, stating that he “was strongly influenced by” the City’s assurances “that there is no question of its intent to abide in full” with the terms of the agreement. On June 1, 1990, however, the Fire Board determined that because of a fiscal crisis (the Fire Department’s overtime expenses were approaching a one million dollar deficit), it would implement the work week reduction by reducing from four to three the number of firefighters assigned to each engine, rather than by hiring more firefighters. On June 3, 1990, the Unions filed grievances alleging that the staffing reduction violated the Fire Department’s Manual of Procedure, the Municipal Employee Relations Ordinance of Baltimore City, and the MOU.

The Labor Commissioner of Baltimore City determined that the staffing dispute was “non-grievable” and refused to submit it to arbitration. The Unions then filed suit for a declaratory judgment and injunctive relief seeking to require the City to arbitrate the dispute. The City answered the complaint, and both parties moved for summary judgment. ⁶⁰⁸ Meanwhile, the City and Unions became embroiled in a dispute involving accrued vacation leave. For 25 years the accepted practice was to allow Fire Department employees to use accrued vacation leave just prior to their retirement.

During negotiations of the MOU governing fiscal years 1991 and 1992, the City had proposed that employees be allowed to so use “only one year accumulated vacation in combination with 90 days [terminal] leave; proper payment will be made for all other accumulated vacation [leave].” This proposal was rejected by the Unions. On January 28, 1991, an employee filed a notice of retirement and requested 166 work days of accumulated vacation leave in accordance with past practice; this request was denied. A grievance was filed alleging that this action violated the Fire Department’s Manual of Procedure and the MOU. On April 5, 1991, the Labor Commissioner was notified of the Union request for arbitration; on May 10, 1991, the Labor Commissioner determined that the issue was “non-arbitrable.” (The specific dates given apply to Local 734; on different dates, Local 964 followed a virtually identical chronology and process on behalf of two of its members.) On June 11, 1991, the Unions then filed suit for declaratory and injunctive relief seeking to have the City ordered to arbitrate the accrued leave issue.

The Unions’ complaint was accompanied by a motion for summary judgment; the City answered and filed a cross-motion for summary judgment. On August 7, 1991, the Unions moved to consolidate the staffing case and accrued leave case. That unopposed motion was granted. After hearing argument, the circuit court issued a comprehensive twenty-seven page opinion and order granting the Unions’ motions for summary judgment.

The circuit court found that both disputes were “grievable as a matter of law” and should be submitted to arbitration. The circuit court, however, concluded that the arbitrator was not free in the staffing case to order, “as an arbitrated remedy a return to the four person staffing level without the express consent of the Mayor and City Coun ⁶⁰⁹ til”; the Unions do not appeal this limitation on the arbitrator’s power. 1 The City does appeal the grant of summary judgment to the Unions, asserting that: 1. Neither dispute is a “grievance” as that term is defined in the MOU, the negotiated agreements between the parties; and 2. Even if the disputes are grievances, as defined in the MOU, they involve “management rights” which “may not be divested absent statutory authority” and there is no such authority here. 2 (ü) In the MOU, a multi-stage grievance and arbitration procedure is specified; the parties agree to submit to an arbitrator “grievances” not satisfactorily resolved at earlier stages. “Grievance” is defined in the governing MOU and in the Municipal Employee Relations Ordinance, Baltimore City, Md.Code, art. 1, § 120(f) (1983) (hereinafter “Baltimore City Code”) as: ⁶¹⁰ (1) a dispute concerning the application or interpretation of the terms of a memorandum of understanding, [or] (2) a claimed violation, misinterpretation or misapplication of the rules or regulations of a municipal agency or the employer affecting the terms and conditions of employment.

The City’s initial argument is that neither dispute at issue here fits “within [this] definition of ‘grievance’ the Unions assert that both disputes are grievances as defined in the MOU. Where, as here, the parties are “in disagreement on the very question whether there exists an agreement to arbitrate the subject matter of the dispute,” the resolution of that question is for the court. Messersmith, Inc. v. Barclay Townhouse Assoc., 313 Md. 652, 661 , 547 A.2d 1048 (1988) (iquoting with approval Mayor & City Council of Baltimore v. Baltimore Fire Fighters, Local 734, 49 Md.App. 60, 65-66 , 430 A.2d 99 , cert. denied, 291 Md. 771 (1981)). See also United Steelworkers of Am. v. Am.

Mfg. Co., 363 U.S. 564, 567-78 , 80 S.Ct. 1343, 1346-47 , 4 L.Ed.2d 1403 (1960). Although unacknowledged by any party, the definition of grievance in the MOU at issue here is “not ... ‘extremely broad’ but is limited by the terms of” the MOU and “the rules and regulations of the employer.” Mayor & City Council of Baltimore v. Fire Fighters, Local 734, supra, 49 Md.App. at 69 , 430 A.2d 99 (interpreting identical language). Compare Gold Coast Mall v. Larmar Corp., 298 Md. 96, 104 , 468 A.2d 91 (1983).

On the other hand, as the City properly concedes, the Supreme Court has made it clear that arbitration is a favored remedy, and in reviewing any arbitration clause a court is to order arbitration unless “it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.” AT & T Technologies, Inc. v. Communications Workers of Am., 475 U.S. 643, 650 , 106 S.Ct. 1415, 1419 , 89 L.Ed.2d 648 (1986). Doubts are to be “resolved in favor of coverage.” Id. See Howard Co. Bd. of ⁶¹¹ Educ. v. Howard Co. Educ. Ass’n, 61 Md.App. 631, 641 , 487 A.2d 1220 (1985); Mayor & City Council of Baltimore v. Baltimore City Fire Fighters, 49 Md.App. at 66 , 430 A.2d 99 ; Corvallis School Dist. v. Corvallis Educ.

Ass’n, 35 Or.App. 531 , 581 P.2d 972, 974 (1978); West Fargo Pub. School Dist. v. West Fargo Educ. Ass’n, 259 N.W.2d 612, 620 (N.D.1977); Iowa City Community School Dist. v. Iowa City. Educ.

Ass’n, 343 N.W.2d 139, 141 (Iowa 1983). With these principles in mind, we turn to determination of whether the disputes at issue here constitute “grievances” subject to arbitration under the MOU. The Unions assert that the staffing reduction dispute “concerns” an “application or interpretation,” and indeed constitutes a violation of Article IX (Overtime) and Article XV (Safety and Health) of the MOU. 3 Article IX of the MOU provides in pertinent part: The Employer shall not vary or rearrange work schedules to avoid the payment of overtime. Article XV provides in pertinent part: The Employer and the Union shall cooperate in the enforcement of safety.

Should any employee feel that his work requires him to be in unsafe or unhealthy situations, the matter shall be considered by the Employer. If the matter is not adjusted satisfactorily, it may become the subject of a grievance and will be processed according to the grievance procedure. ⁶¹² The circuit court found, inter alia, that the staffing reduction might involve an application or interpretation of both of these clauses. That finding appears to be clearly correct. It may be, as the City asserts, that the “benefit claimed” by the Unions, i.e., the right to continuance of four-member engine companies, is “specified nowhere in” the MOU.

That, however, does not mean a dispute as to that benefit is not a “grievance.” Rather, the dispute is a grievance if it cannot be said with “positive assurance” that it does not “concern” the “application or interpretation of the terms” of the MOU. AT & T Technologies, supra, 475 U.S. at 650 , 106 S.Ct. at 1419 . See City & County of Denver v. Denver Firefighters, 663 P.2d 1032, 1040 (Colo. 1983) (“[o]n its face,” dispute “is arbitrable because it requires interpretation and application” of term of collective bargaining agreement). There was uncontroverted evidence in the record (the minutes of the Fire Board) that one of the costs sought to be avoided by implementation of the staffing reduction was substantial overtime expenses.

Moreover, as the Circuit Court remarked, “a factual case could be made that there is an enhanced risk to health and safety by reason of the changed” circumstances, i.e., the staffing reduction. Thus, since it cannot be said with “positive assurance” that the staffing dispute does not “concern ” the “application or interpretation” of Articles IX or XV, it constitutes a “grievance” under the MOU. As to the accrued leave decision, the Unions assert that it concerns an “application or interpretation” of Articles XVI, XXX and XXXII of the MOU and a violation of the Department Manual of Procedure (M.O.P.) Policies 322 and 366-5. Article XXX generally deals with vacation leave; Article XXXII deals with other leave and provides in pertinent part that: ... all employees shall receive ninety (90) days leave with pay just prior to retirement.

Neither provision enunciates the undisputed past practice of permitting employees to use accrued vacation leave just ⁶¹³ prior to their retirement. Article XVI of the MOU, however, provides: All privileges, benefits, and rights, presently enjoyed by employees covered by this Memorandum which are not specifically provided for or abridged in this Memorandum, such as, but not limited to holidays, uniforms, equipment, etc., are hereby included in and protected by this Mem orandum. (emphasis added.) Moreover, M.O.P. Policy 366-5 provides in pertinent part: Members contemplating retirement may convert to cash their unused leave authorized at the time of retirement or will be allowed to take their earned vacation and personal leave in accordance with established procedures. * * * * * * Conversion of unused leave [to cash] is not compulsory. (emphasis added.) See also M.O.P. Policy 322-1 (“Employees have the option of converting vacation leave to cash at termination”), (emphasis added.) In light of the uncontroverted evidence that the accepted past practice was to permit Fire Department employees to use accrued leave just prior to retirement, it seems too clear to require extended discussion that the accrued leave dispute may well concern an “application or interpretation” of Articles XVI, XXX and XXXII of the MOU and a “claimed violation” of M.O.P. Policies 366-5 and 322-1.

Accordingly, it too is a grievance under the MOU. So that there can be no mistake, we reiterate that we are only holding that the staffing dispute and accrued leave dispute constitute grievances under the MOU. This is not a holding that either or both disputes constitute meritorious grievances or that either or both decisions violated the MOU or M.O.P. Policies. We emphasize this because the essence of the City’s argument on this point is that the Unions’ claims are not meritorious, ie., the Unions have not demonstrated any “right” to the benefits they claim.

This ⁶¹⁴ is an argument to be made to the arbitrator; it is not a consideration in determining whether a dispute is arbitrable. (iii) Alternatively, the City argues that, even if the staffing and accrued leave disputes are grievances, they are not arbitrable because they involve “management rights” that “may not be divested absent statutory authority” which, the City asserts, is absent here. It should be noted at the outset that even in the private sector certain “management rights” are retained by the employer. See, e.g., United States Steel Corp. v. Nichols, 229 F.2d 396, 399-400 (6th Cir.), cert. denied, 351 U.S. 950 , 76 S.Ct. 846 , 100 L.Ed. 1474 (1956).

When a municipality or government agency is the employer, these “management” rights are even more jealously guarded. See Arrowhead Pub. Serv. Union v. City of Duluth, 336 N.W.2d 68, 71 (Minn.1983) (“Without question decisions concerning a city’s budget, its programs and organizational structure, and the number of personnel it employs to conduct its operations are matters of [managerial] policy ... [which] it is not required to negotiate ... although it may do so voluntarily”).

See also West Irondequoit Teachers Ass’n v. Helsby, 35 N.Y.2d 46 , 358 N.Y.S.2d 720, 723 , 315 N.E.2d 775, 777 (1974) (determination of class size is nonnegotiable management prerogative). This is so because, while in the private sector, “collective bargaining is the only instrument through which employees can have any effective voice in determining the terms and conditions of employment____public sector employees ... as citizens” already have a voice in such matters and public employers only have a duty to bargain as to those “decisions where [a] larger voice is appropriate.” C.W. Summers, Public Employee Bargaining: A Political Prospective, 83 Yale L.J. 1156 , 1193 (1974). Moreover, while a private employer can bargain away whatever prerogatives it deems appropriate, a “citizen’s right to participate in governmental decisions cannot be bargained away” by the public employer. Id. ⁶¹⁵ Baltimore City, Md. Charter, art.

VII, § 45 (herein after Baltimore City Charter) creates the Fire Department, headed by the Board of Fire Commissioners. The Board is given the power to appoint a Chief of the Department and other employees. The Charter also expressly provides: The Board shall have control, regulation and supervision of the Department, the personnel and properties thereof and all matters relating to the same. Id.

The City maintains that this power “clearly encompasses the specific power to hire or fire, determine the mission of the Department, and determine how many individuals may be required to carry out the mission, or to perform a given task” and that nothing in the MOU, “the Municipal Employee Relations Ordinance or the Baltimore City Charter ... abridges this authority.” 4 Article II, Section 55 of the Charter provides: The Mayor and City Council of Baltimore are authorized consistent with the provisions of the Charter of Baltimore City, to submit to binding arbitration any dispute arising from the interpretation of, or application of any collective bargaining agreement with an exclusive representative. (emphasis added.) The Municipal Employee Relations Ordinance, Baltimore City Code art. 1, § 123 provides: Notwithstanding any other provision contained herein, it is the exclusive right of the employer 5 to determine the mission of each of its constituent agencies, set ⁶¹⁶ standards of services to be offered to the public, and exercise control and direction over its organization and operations. It is also the right of the employer to direct its employees, to hire, promote, transfer, assign or retain employees in positions within an agency and in that regard to establish reasonable work rules. It also retains the right to suspend, demote, discharge or take any other appropriate disciplinary action against its employees for just cause, and in accordance with the provisions relating to Civil Service of employer’s Charter and other applicable laws; or to relieve its employees from duty in the event of lack of work, funds, or for other legitimate reasons.

The provisions of this section shall be deemed to be a part of every memorandum of understanding reached between the employer and an employee organization provided, however, that nothing contained in this section shall be deemed to deny the right of any employee to submit a grievance as defined in Section 120(f)(2) hereof. Any memorandum of understanding reached between the employer and employee organization shall be subject to the provisions of the Charter or applicable ordinance concerning salaries, hours of work, fringe benefits, pensions and other conditions of employment. (emphasis added.) The MOU provides that “[sjubject to the provisions of this Memorandum, the Employer shall have all of the rights set forth in Article I, Section 123 of the Baltimore City Code ... and Article VII, Section 45 of the Baltimore City Charter.” 6 The City relies on the language emphasized above to argue that: (1) all decisions as to the “control and regula ⁶¹⁷ tion of Fire Department personnel” are vested by the Charter in the Fire Board and are not negotiable or arbitrable; and (2) the staffing and accrued leave decisions at issue here are decisions as to control and regulation of the Department and so cannot be negotiated or arbitrated. The Unions, in contrast, rely on the language in Article II, Section 55 of the Charter which authorizes “the City to provide ... the procedure for the negotiation of a collective bargaining agreement with respect to terms and conditions of employment” and further authorizes the City “to submit to binding arbitration any dispute arising from the interpretation of or application” of an MOU.

(emphasis added.) The Unions also rely on two portions of the Baltimore City Code. They point out that Article I, Section 123 provides that “nothing contained in this section shall be deemed to deny the right of any employee to submit a grievance” and that Article I, Section 120(k) defines “terms and conditions of employment” as “salaries, wages, hours and other matters relating to employee benefits and duties, such as, but not limited to, holidays, pensions and vacations." (emphasis added.) The Unions argue that both the staffing and accrued vacation disputes involve “terms and conditions of employment” as to which the Charter authorizes labor agreements, negotiation, and arbitration. The problem with both the City’s and the Unions’ arguments is that each proves too much — and too little. Under the City’s