Offutt v. Montgomery County Board of Education

Eldridge, J., delivered the opinion of the Court. This proceeding arises out of a labor dispute between a ⁵⁵⁹ group of public school employees on the one hand, and their union and the school system by which they are employed on the other hand. The individual plaintiffs, plus the others in the class they purport to represent, comprise a group of approximately 1,800 “twelve-month” teachers, counselors, librarians and athletic coaches who are employed by the defendant, Montgomery County Board of Education (hereinafter sometimes referred to as the “School Board”). These plaintiffs, unlike the majority of county teachers who work only for the ten month school year, had contracts to work the entire year in the school system.

This so called “twelve-month program” was initiated by the School Board in 1967, its purpose being to afford certain of the best qualified instructors the opportunity to teach summer school and also to “enrich” the curriculum. In addition, resource teachers, football coaches, librarians and guidance counselors were required by the School Board to accept twelve-month status as a condition of their employment. In 1968, the General Assembly enacted legislation permitting collective bargaining for public school personnel, Ch. 483 of the Acts of 1968, and the defendant Montgomery County Education Association (hereinafter sometimes referred to as the “Association”) is the collective bargaining representative for Montgomery County public school employees pursuant to that statute. Each year the twelve-month program has been subject to negotiation between the defendant Association and the defendant School Board.

Prior to the 1976-1977 school year, the contracts negotiated between the School Board and the Association essentially provided that once an employee receives a year-round assignment, this status would continue without subsequent change to a 10 month position. Faced with mounting financial problems, in the fall of 1975 the School Board first explored the idea of eliminating the twelve-month employment program as a means of saving money. This proposal was first publicly aired in a brochure, sent to the parents of school children, explaining the economic problems confronting the school system. In the brochure, ⁵⁶⁰ elimination of twelve-month personnel was discussed as a way to reduce expenditures without appreciably damaging the instruction program.

Under this proposal, employees compensated on a per diem basis would be used to perform tasks previously done by twelve-month personnel during the summer. 1 Other cost cutting proposals, with varying educational and economic consequences, were also presented in the brochure. Later, several “town meetings” were held by the School Board in order to further acquaint parents with the poor financial situation affecting the schools. Public comment and suggestions were solicited to find ways to deal with the growing crisis. On October 31, 1975, the Association presented to the School Board its initial list of demands for the 1976-1977 ⁵⁶¹ school year contract.

Included within this list was the continuation and expansion of the twelve-month program. The School Board responded by announcing its intent to abolish the twelve-month program. After several negotiating sessions in which both sides adhered to these positions, pursuant to Maryland Code (1978), § 6-408 (d) of the Education Article, an impasse was declared. 2 In accord with this section, a mediation panel was set up and a contract finally arrived at between the parties. The result of the mediation was that the twelve-month program was terminated; however, the former twelve-month personnel were guaranteed a minimum amount of summer employment, to be paid on a per diem basis for any days actually worked.

This contract was ratified by a majority of the membership of the Association and unanimously approved by the Montgomery County School Board. Some of the former twelve-month teachers and administrators, being dissatisfied with the new contract, filed in the Circuit Court for Montgomery County, on behalf of themselves and others similarly situated, a bill of complaint, naming as defendants the Montgomery County School Board and the Montgomery County Education Association. It was alleged, inter alia, that the School Board failed to negotiate the continued existence of the twelve-month program in good faith, but instead, in violation of § 6-408, unilaterally abolished these positions. It was further alleged that the Association failed to represent the plaintiffs “fairly and without discrimination” as required by § 6-407 (b).

The plaintiffs requested an injunction against the implementation of the new contract provisions to the extent that they related to the twelve-month program. They also sought to have the twelve-month program made the subject of renegotiation between the School Board and the affected personnel. The defendant Association filed a motion raising ⁵⁶² preliminary objection, arguing that primary jurisdiction was in the Maryland State Board of Education and that the plaintiffs should first exhaust their administrative remedy before the State Board. The circuit court, agreeing with this argument, stayed the action pending proceedings before the State Board on the issues raised by the bill of complaint.

The plaintiffs then filed a petition with the State Board, repeating the allegations in their circuit court bill of complaint. After a full hearing, a hearing examiner for the State Board of Education held in favor of both defendants, finding, inter alia, that the Montgomery County Board of Education negotiated the 1976-1977 agreement in good faith and that the Montgomery County Education Association did not breach its statutory duty to fairly represent the twelve-month employees. The State Board of Education agreed with this result and adopted the opinion of the hearing examiner. The twelve-month employees, pursuant to Code (1957, 1978 Repl.

Vol.), Art. 41, § 255, and Maryland Rule B1 et seq., appealed this ruling to the Circuit Court for Montgomery County. The circuit court consolidated the administrative appeal with the original equity suit in which proceedings had been stayed. In reviewing the decision of the State Board, the circuit court upheld the findings of the State Board on all matters raised with one exception. Specifically, the court held that substantial evidence supported the State Board’s finding that the Association did not breach its duty to fairly represent the plaintiffs.

The court observed that “the record reveals that [the Association] acted in good faith, that it actually proposed an expansion of the program and its benefits, and that it took the 12 month issue to impasse.” The one exception was that the circuit court held the State Board’s finding of good faith negotiations by the School Board to be unsupported by substantial evidence. Notwithstanding this latter holding the court decided that there was no appropriate remedy then available. Consequently, the circuit court upheld the ultimate decision of the State Board in favor of the ⁵⁶³ defendants, and it dismissed the plaintiffs’ bill of complaint in the equity action, observing: “Any damages claimed by the twelve month personnel are necessarily speculative, since it is impossible to determine at what rates they would have been paid had an agreement been negotiated in complete good faith by both parties. Furthermore, it is impossible to determine whether the County Council would have included enough money in the County Board’s budget to pay the teachers at whatever rate of pay could have been negotiated.

To order renegotiation of an already expired agreement would be pointless.” The plaintiffs then filed an appeal to the Court of Special Appeals, challenging the lower court’s ruling that there was no remedy currently available for the School Board’s failure to negotiate in good faith. They did not contest, however, the State Board’s finding, upheld by the circuit court, that the Association fairly represented them in the bargaining process. The School Board in turn filed a cross appeal, taking issue with the lower court’s holding that the Board failed to negotiate in good faith as required by § 6-408. Prior to a hearing in the Court of Special Appeals, we issued a writ of certiorari.

We shall affirm the judgment below, although on a ground not relied upon by the circuit court and not suggested by the parties. 3 In light of the finding by the State Board that the Association did not breach its duty to fairly represent the former twelve-month employees, which finding was upheld by the circuit court and is not challenged on appeal, the twelve-month employees are bound by the collective bargaining agreement entered into between their representative and the School Board. They are not entitled to ⁵⁶⁴ have certain provisions of that agreement set aside or renegotiated, regardless of whether the School Board negotiated in good faith with the Association. For this reason, the twelve-month employees were not entitled to the relief sought, and the final judgment of the circuit court denying them relief should be affirmed. Consequently, we do not reach the issues raised by the plaintiffs on appeal or the defendant School Board on its cross-appeal, and the cross-appeal will be dismissed. 4 Section 6-402 of the Education Article authorizes public school personnel to form and participate in employee organizations which are designed to represent the employees on all matters relating to “salaries, wages, hours, and other working conditions.” Sections 6-404 and 6-405 set forth how a particular employee organization can be designated the “exclusive representative of all public school employees in a specified unit in the county.” Once a particular employee organization is selected in accordance with the above provisions, its basic authority and obligations are set forth in § 6-407, which provides: “(a) Negotiating agent. — An employee organization designated as an exclusive ⁵⁶⁵ representative shall be the negotiating agent of all public school employees in the unit in the county. “(b) Fair representation. — An employee organization designated as an exclusive representative shall represent all employees in the unit fairly and without discrimination, whether or not the employees are members of the employee organization____” Thus, the employee organization has the duty of fairly representing the employees in the bargaining unit and is empowered to be the negotiating agent for “all” of the employees in that unit.

Once the representative has negotiated a collective bargaining agreement, and the majority of the employees in the unit have approved that agreement, as happened in the instant case, it would be inconsistent with the concept of collective bargaining if a dissatisfied minority of the unit were not bound by the agreement and could have it set aside on grounds such as asserted in this case. A leading case setting forth the broad scope of a collective bargaining representative’s authority is Ford Motor Co. v. Huffman, 345 U. S. 330 , 73 S. Ct. 681 , 97 L. Ed. 1048 (1953). There, a group of employees, dissatisfied with certain provisions of a collective bargaining agreement, filed a class action against their employer, the Ford Motor Company, and their union, challenging the validity of these provisions. Under the agreement certain military veterans who began their employment with Ford after being discharged from military service were given seniority status above that of the plaintiffs, whose employment had predated these veterans.

The plaintiffs complained that their position on the seniority roster had been lowered due to the collective bargaining agreement’s preferential treatment of veterans. They sought a declaration that the agreement prejudicing their seniority rights was invalid and an injunction against both the union and the employer. In holding that the union was authorized to enter the agreement, the Supreme Court commented on the breadth of the collective bargaining representative’s authority, noting .that it is limited by the duty to represent ⁵⁶⁶ honestly and fairly the interests of all of the members of the appropriate labor unit. 345 U. S. at 337 . The Court then went on to discuss the wide latitude given the negotiators in collective bargaining (id. at 337-338): “Any authority to negotiate derives its principal strength from a delegation to the negotiators of a discretion to make such concessions and accept such advantages as, in the light of all relevant considerations, they believe will best serve the interests of the parties represented.

A major responsibility of negotiators is to weigh the relative advantages and disadvantages of differing proposals. A bargaining representative . . . often is a labor organization but it is not essential that it be such. The employees represented often are members of the labor organization which represents them at the bargaining table, but it is not essential that they be such. The bargaining representative, whoever it may be, is responsible to, and owes complete loyalty to, the interests of all whom it represents....

Inevitably differences arise in the manner and degree to which the terms of any negotiated agreement affect individual employees and classes of employees. The mere existence of such differences does not make them invalid. The complete satisfaction of all who are represented is hardly to be expected. A wide range of reasonableness must be allowed a statutory bargaining representative in serving the unit it represents, subject always to complete good faith and honesty of purpose in the exercise of its discretion.” In many cases, the courts have refused to allow a minority group of employees to set aside a collective bargaining agreement in a suit against their employer, once it was determined that the labor organization satisfied its duty of fairly representing the employees.

Humphrey v. Moore, 375 U. S. 335 , 84 S. Ct. 363 , 11 L.Ed.2d 370 (1964), involved an ⁵⁶⁷ agreement between two competing companies whereby one would curtail its operations in a certain locale.