Washington State Ferries (Marine Engineers’ Beneficial Association), Decision 13027-A (MRNE, 2020)

STATE OF WASHINGTON

BEFORE THE PUBLIC EMPLOYMENT RELATIONS COMMISSION

Washington STate ferries, Complainant, vs. marine engineers’ beneficial association, Respondent.

CASE 130879-U-18 DECISION 13027-A - MRNE decision of commission

Thomas R. Knoll, Jr. and Gil Hodgson, Assistant Attorneys General, Attorney General Robert W. Ferguson, for the Washington State Ferries.

Michael R. McCarthy, Attorney at Law, Reid, McCarthy, Ballew & Leahy, L.L.P., for the Marine Engineers’ Beneficial Association.

On August 27, 2018, the day of its scheduled interest arbitration hearing with the Marine Engineers’ Beneficial Association (union), the Washington State Ferries (employer) filed an unfair labor practice complaint alleging that the union “insist[ed] to impasse on a non-mandatory, illegal, subject of bargaining” in violation of RCW 47.64.130(2)(c). The employer contended that the union’s proposal to retain “Section 26 – Welfare”[1] in the collective bargaining agreement was an illegal subject of bargaining. Section 26, a longstanding provision in their successive collective bargaining agreements, required the employer to remit premium contributions to a Taft‑Hartley medical plan[2] (the MEBA Plan) to secure medical coverage for temporary relief engineer employees (TREs).

On August 28, Executive Director Michael Sellars directed that the matter of premium contributions for the TREs be suspended from interest arbitration pending the outcome of a hearing on the employer’s unfair labor practice complaint. Following that hearing, Examiner Dario de la Rosa held that while the TRE premium contributions would ordinarily be a mandatory subject of bargaining,[3] legislative changes enacted eight years previously made continued inclusion of Section 26 in the parties’ agreement an illegal subject of bargaining.[4] As a result, the employer was relieved of any obligation to make premium contributions to the MEBA Plan, which, the Examiner found, was the TREs’ “only source of health care benefits.” Washington State Ferries (Marine Engineers’ Beneficial Association), Decision 13027 at 15, finding of fact 11 (MRNE, 2019).

In support of his conclusions the Examiner wrote that “RCW 47.64.270 specifically precludes this employer and union from engaging in direct negotiations for supplemental health insurance” for the TREs through the MEBA Plan. Decision 13027 at 16. The Examiner held that the union committed an unfair labor practice by seeking to retain Section 26 in the labor agreement. Id. He noted that RCW 47.64.270(2) provides that “[a]bsent a collective bargaining agreement to the contrary,” the employer should contribute to insurance and health care plans as determined by the state health care authority. The Examiner interpreted the statutory phrase “[a]bsent a collective bargaining agreement to the contrary” to mean that RCW 47.64.270(2) “governs health care benefits for ferry employees in the absence of a collective bargaining agreement.” Id. at 11. Because there is a collective bargaining agreement between the employer and union, the Examiner concluded that RCW 47.64.270(2) was inapplicable.

The Examiner ordered the union to cease seeking “supplemental health care benefits” for the TREs, to withdraw its proposal concerning “supplemental health care benefits,” to notify the interest arbitrator that the matter was withdrawn, and to post Commission-prepared notices in conspicuous places on the employer’s premises.

The union filed a timely appeal. The union and employer filed post-hearing briefs. On February 12, 2020, the Commission requested the parties appear for oral argument. On March 10, 2020, the parties appeared at the regularly scheduled Commission meeting and participated in helpful oral argument.

Issue

The issue before the Commission is whether the union committed a “refusal to bargain” unfair labor practice by seeking to retain Section 26 of the collective bargaining agreement, obligating the employer to make premium contributions to the MEBA Plan to secure health care coverage for its temporary relief engineer employees, in interest arbitration.

The Examiner answered this in the affirmative. We reverse.

Background

The employer operates a ferry service in Washington State. The union represents licensed engineers working on the ferry vessels. Most of the licensed engineers working on the vessels are permanent employees. However, when there are not enough licensed engineers available to fully staff the fleet, the employer contacts the union’s hiring hall in Seattle and requests the dispatch of one or more temporary relief engineers. These are typically younger licensed engineers seeking work so as to improve their offshore dispatching opportunities through the union hiring hall and, under Section 26 of the collective bargaining agreement, to accrue service credit in order to meet the thresholds for coverage under the MEBA Plan. As the Examiner found, unlike permanent engineers (all of whom receive health care benefits under plans administered by the Public Employees’ Benefits Board (PEBB) under chapter 41.05 RCW) TREs do not qualify for health care benefits under those public employee plans. This is because the TREs do not work an average of at least eighty hours per month and for at least eight hours in each month for more than six consecutive months. See WAC 182-12-114(1)(a). The MEBA plan is thus the TREs’ “only source of health care benefits” through their employment. Decision 13027 at 5.

As earlier stated, the collective bargaining relationship between the employer and the union dates back many years. Negotiations between the employer and union are governed by chapter 47.64 RCW. In 2010, the legislature amended chapter 47.64 RCW. Laws of 2010, ch. 283, § 13. Those amendments broke RCW 47.64.270 into numbered paragraphs and added the following:

(1) The employer and one coalition of all the exclusive bargaining representatives subject to this chapter and chapter 41.80 RCW shall conduct negotiations regarding the dollar amount expended on behalf of each employee for health care benefits.

For roughly eight years after the amendment, the employer continued to make premium contributions to the MEBA Plan on behalf of the temporary relief engineers in accordance with Section 26 of the collective bargaining agreement. It negotiated and implemented multiple successive collective bargaining agreements containing Section 26 during that time. As the union notes, under RCW 47.64.170(9), over the ensuing five state biennial and supplemental budgets, two different governors applied to the legislature for funds necessary to implement “the compensation and fringe benefit provisions” set out in the collective bargaining agreement, including Section 26.[5] Each of those applications was approved by the legislature in accordance with RCW 47.64.170(9)(c). There is nothing in the record suggesting that by their actions the governor, the office of financial management, or the legislature objected to continued inclusion of Section 26 in the labor agreement.

In 2018, the employer and union were negotiating a successor collective bargaining agreement. The union proposed increasing the dollar amount the employer contributed to the MEBA plan from $54 to $58.[6] At the August 17, 2018, negotiation, employer negotiator Ron Stormer told the union representatives that RCW 47.64.120(1) and RCW 41.80.020(3) preempted negotiations over Section 26. This was the first time the employer raised concerns about the parties’ ability to negotiate Section 26 since the statute was amended in 2010.

When the parties were unable to reach agreement on all issues, pursuant to WAC 391‑55‑200(1)(b), they separately submitted lists of the unresolved issues for the Executive Director to certify to interest arbitration. The union included Section 26 on its list. On August 21, 2018, the Executive Director certified a list of issues for interest arbitration that included Section 26. The employer filed its unfair labor practice complaint on August 28, 2018. The Executive Director then suspended Section 26 and other provisions not here pertinent from the interest arbitration hearing in accordance with WAC 391-55-265. A hearing was held on June 13, 2019, and the Examiner issued his decision on July 5, 2019. This appeal by the union followed.

Analysis

Applicable Legal Standards

Standard of Review

The Commission reviews conclusions of law and applications of law, as well as interpretations of statutes, de novo. City of Wenatchee, Decision 8802-A (PECB, 2006). The Commission reviews findings of fact to determine if they are supported by substantial evidence and, if so, whether those findings in turn support the examiner’s conclusions of law. C-TRAN (Amalgamated Transit Union, Local 757), Decision 7087-B (PECB, 2002).

Statutory Construction

Statutory construction is a question of law and is reviewed de novo. City of Pasco v. Public Employment Relations Commission, 119 Wn.2d 504 (1992). Statutes must be interpreted and construed so that all language is given effect, and no portion is rendered meaningless or superfluous. Whatcom County v. City of Bellingham, 128 Wn.2d 537, 546 (1996), Western Washington University, Decision 10068-A (PSRA, 2008). To determine the intent of the legislature, a court “must look first to the language of the statute.” Condit v. Lewis Refrigeration Co., 101 Wn.2d 106, 110 (1984). “Where statutory language is plain and unambiguous, a statute’s meaning must be derived from the wording of the statute itself.” Human Rights Commission v. Cheney School District No. 30, 97 Wn.2d 118, 121 (1982).

Because this case presents issues of legislative intent behind amendments to the Marine Employees’ Act, review of the act’s legislative purpose of chapter 47.64 RCW is appropriate. As is true of the Public Employees’ Collective Bargaining Act, chapter 41.56 RCW, the Marine Employees’ Act is remedial in nature and, as such, “is entitled to a liberal construction to effect its purpose.” Nucleonics Alliance, Local Union No. 1-369 v. Washington Public Power Supply System (WPPSS), 101 Wn.2d 24, 29 (1984). “A liberal construction requires that the coverage of the act’s provisions ‘be liberally construed and that its exceptions be narrowly confined.’” Peninsula School District No. 401 v. Public School Employees of Peninsula, 130 Wn.2d 401, 407–08 (1996) (citing Nucleonics, 101 Wn.2d at 29. See also Hearst Corp. v. Hoppe, 90 Wn.2d 123, 128 (1978) (“Declarations of policy requiring liberal construction are a command that the coverage of an act’s provisions be liberally construed and that its exceptions be narrowly confined.”)).[7]

In applying that liberal construction, we are mindful that the legislature, when it enacted the Marine Employees’ Act, declared as a matter of public policy its desire to promote fair compensation and benefits for ferry workers, as compared to other similar jurisdictions operating ferries in the United States and Canada. Among other things, the public policy of the Marine Employees’ Act is to

promote just and fair compensation, benefits, and working conditions for ferry system employees as compared with public and private sector employees in states along the west coast of the United States, including Alaska, and in British Columbia in directly comparable but not necessarily identical positions.

RCW 47.64.006(7). The comparison of “fair compensation, benefits, and working conditions” is to be carried out in the binding interest arbitration process established by RCW 47.64.300 et seq. In considering this matter, we are thus guided by the legislature’s intent to promote just and fair compensation, benefits, and working conditions for ferry system employees and to protect the ability of the parties to submit the matter of compensation, benefits, and working conditions for comparison by a neutral arbitrator in interest arbitration.

In addition, the principal statute here at issue, RCW 47.64.270, refers in several places to chapter 41.05 RCW establishing the state health care authority. It is therefore appropriate to consider the legislative purpose behind that act. RCW 41.05.006(1) reads as follows:

The legislature recognizes that (a) the state is a major purchaser of health care services, (b) the increasing costs of such health care services are posing and will continue to pose a great financial burden on the state, (c) it is the state’s policy, consistent with the best interests of the state, to provide comprehensive health care as an employer, to employees and school employees, officials, their dependents, and to those who are dependent on the state for necessary medical care, and (d) it is imperative that the state begin to develop effective and efficient health care delivery systems and strategies for procuring health care services in order for the state to continue to purchase the most comprehensive health care possible. (emphasis added).

The Examiner’s conclusion that certain legislative amendments stripped temporary relief engineer employees of premium contributions to the MEBA Plan, and his removal of Section 26 of the labor agreement from binding interest arbitration, must be examined in light of these legislative declarations of state policy.

Duty to Bargain

The employer has a duty to bargain with the exclusive bargaining representative of its employees over “wages, hours, working conditions, and insurance, and other matters mutually agreed upon.” RCW 47.64.120(1). The obligation to bargain in good faith encompasses a duty to engage in full and frank discussions on disputed issues and a duty to explore possible alternatives that may achieve a mutually satisfactory accommodation of the interests of both the employer and the employees. University of Washington, Decision 11414-A (PSRA, 2013).

A party eligible for interest arbitration may bargain to impasse and seek interest arbitration of a mandatory subject of bargaining. City of Bellevue, Decision 11435-A (PECB, 2013). A party commits an unfair labor practice when it bargains to impasse over a “nonmandatory” subject of bargaining, meaning a permissive or illegal one. Klauder v. San Juan County Deputy Sheriffs’ Guild, 107 Wn.2d 338, 341–42.

Application of Standards

In holding that the union committed an unfair labor practice by seeking to retain Section 26 in the collective bargaining agreement over the employer’s objection, the Examiner relied primarily on RCW 47.64.270(1) through (3):

(1) The employer and one coalition of all the exclusive bargaining representatives subject to this chapter and chapter 41.80 RCW shall conduct negotiations regarding the dollar amount expended on behalf of each employee for health care benefits.

(2) Absent a collective bargaining agreement to the contrary, the department of transportation shall provide contributions to insurance and health care plans for ferry system employees and dependents, as determined by the state health care authority, under chapter 41.05 RCW.

(3) The employer and employee organizations may collectively bargain for insurance plans other than health care benefits, and employer contributions may exceed that of other state agencies as provided in RCW 41.05.050.

Neither the Examiner nor the parties contend that the language of the statute is ambiguous.

RCW 47.64.270(1) of the statute states that the employer and all unions subject to the Marine Employees’ Act and the Personnel System Reform Act, chapter 41.80 RCW, shall conduct negotiations regarding the “dollar amount expended on behalf of each employee for health care benefits.” The Examiner wrote that RCW 47.64.270(1) “does not allow ferry employees to directly bargain over health care benefits except as provided by Chapter 41.80 RCW,” and on that basis found that the union committed an unfair labor practice “when it submitted its Welfare proposal for clarification to interest arbitration.” Decision 13027 at 9 (emphasis added).

In so holding, the Examiner misinterpreted RCW 47.64.270(1). By its plain terms, RCW 47.64.270(1), added to the statute in 2010, is confined to describing the procedure for bargaining the “dollar amount” to be expended “on behalf of each employee” for health care benefits. It says nothing about the health care plans to which those agreed dollar amounts might eventually be directed, nor the “health care benefits” such plans might offer. Nothing in RCW 47.64.270(1) suggests that the coalition is empowered to bargain over health care benefits, and there is nothing in RCW 47.64.270(1) pertinent to the issue whether the union committed an unfair labor practice in seeking to retain Section 26 in the labor agreement.^[8] The Examiner erred in holding that the union violated RCW 47.64.270(1) by seeking to retain Section 26 in interest arbitration.

Our dissenting colleague asserts that RCW 47.64.270(1) bars the union and employer from “directly negotiating health insurance for any employee outside of the statewide coalition.”  The paragraph “served to eliminate the right of ferry employees to separately bargain” with the state for health insurance, the dissent contends.

The assertion burdens RCW 47.64.270(1) with weight it cannot bear. By its terms RCW 47.64.270(1) steers the various labor organizations representing state employees into a multiunion coalition which, in negotiations with the state, is charged with determining the “dollar amount expended on behalf of each employee for health care benefits.” The paragraph says nothing about the ultimate destination of that agreed “dollar amount”; it is concerned solely with standardization of the process by which the per-employee expenditures of the state are set. It cannot reasonably be read to express a legislative purpose to “eliminate the right of ferry employees to separately bargain” with the state for health insurance, as the dissent maintains.

Our dissenting colleague errs in locating within RCW 47.64.270(1) a “clear legislative intent to create a uniform, statewide system of bargaining health care benefits” and the elimination of what are termed “side agreements,” presumably a reference to the longstanding Section 26 of the collective bargaining agreement. But RCW 47.64.270(1) established a coalition to negotiate with the state over the “dollar amount expended on behalf of each employee for health care benefits,” not to negotiate particular benefits as such. There is nothing in the record to suggest that the coalition has ever served as the forum for bargaining over “health care benefits” as opposed to the “dollar amount expended” for such benefits. See, e.g., Appendix B of the parties’ 2017 – 19 collective bargaining agreement.

Projecting a broad legislative intent to “eliminate the right of ferry employees to separately bargain” over health care onto RCW 47.64.270(1) also conflicts with the legislature’s declared public policy favoring the establishment of “just and fair compensation, benefits, and working conditions” for ferry system workers through the mechanism of binding interest arbitration. RCW 47.64.006(7). By stripping the TREs of “their only source of health care benefits,”[9] the dissent’s interpretation of RCW 47.64.270(1) would further conflict with the legislative purpose that the state “provide comprehensive health care as an employer, to employees” and their dependents. RCW 41.05.006(1)(c). This is the antithesis of the liberal construction we are to apply to remedial legislation in order to accomplish its purpose. We do not believe that the statute can be fairly construed in the parsimonious manner urged by our dissenting colleague.

Nor do we accept our dissenting colleague’s construction of RCW 47.64.270(3). That paragraph allows the parties to bargain for “insurance plans” and authorizes the employer to contribute an amount to such plans in excess of the amount authorized for employees of other agencies. It creates an exception to this latter authorization for “insurance plans” providing “health care benefits.” The employer contribution to those types of plans cannot exceed the “dollar amount” negotiated by the employer and the coalition of unions under RCW 47.64.270(1). Thus, in paragraph (3), the legislature only addressed the limits on employer premium contributions to “insurance plans.”

The paragraph cannot be read to transform all negotiations over “insurance plans” providing health care benefits into illegal subjects of bargaining, as the dissent contends. That construction would conflict with RCW 47.64.270(2), allowing the parties to include in their labor agreement “insurance and health care plans” other than those offered by the state health care authority. The dissent’s expansive reading of RCW 47.64.270(3) would thus render RCW 47.64.270(2) a dead letter, in contravention of the principle that all parts of a statute must be read together and harmonized whenever possible. Snohomish County Public Utility District No. 1 v. Broadview Television Co., 91 Wn.2d 3, 8 (1978); Western Washington University, Decision 10068-A (PSRA, 2008).

In conclusion of law 2, the Examiner wrote that RCW 47.64.270 “specifically precludes this employer and union from engaging in direct negotiations for supplemental health insurance” such as that available in the MEBA Plan. It is unclear which paragraph of the statute supports this, as the phrase “supplemental health insurance” appears nowhere therein. In any event, premium contributions to the MEBA Plan for temporary relief engineers are not “supplemental health insurance.” The medical coverage available to the TREs under the MEBA Plan was, as the Examiner expressly found, their “only source of health care benefits,” not an appurtenance to another insurance plan. Decision 13027 at 15, finding of fact 11.

The health care plans to which those agreed “dollar amounts” set under RCW 47.64.270(1) might be directed is the subject of RCW 47.64.270(2). That paragraph provides that “[a]bsent a collective bargaining agreement to the contrary,” the employer should remit premium contributions to the state health care authority to secure health coverage for ferry system employees and their dependents. In this case there is a “collective bargaining agreement to the contrary” that, in Section 26, directs premium payments to the MEBA Plan. Only if no agreement on a plan is reached at the bargaining table (or as a result of interest arbitration) are the “insurance and health care plans for ferry system employees and dependents” offered by the health care authority under chapter 41.05 RCW triggered by default.

The Examiner adopted an unlikely construction of the phrase “[a]bsent a collective bargaining agreement to the contrary” in RCW 47.64.270(2). According to the Examiner, the phrase means “in the absence of a collective bargaining agreement.” But the phrase “[a]bsent a collective bargaining agreement to the contrary” anticipates the existence of a labor agreement providing “to the contrary,” not the absence of one. It essentially presents a fork in the road: the union and employer can contract for other “plans” for health care coverage (within the “dollar amount” cap under RCW 47.64.270(1)) but, failing that, the employer must contribute those “dollar amounts” to the health care authority plans under chapter 41.05 RCW.

The “[a]bsent a collective bargaining agreement to the contrary” language is not a recent addition to RCW 47.64.270. It has been part of the statute since at least 1983. See Laws of 1983, ch. 15 § 18. The employer and union relied on the language in the ensuing 37 years, over multiple collective bargaining agreements, as authority for inclusion of Section 26, dealing with the welfare of TREs, in their labor contract. The pertinent statutory phrase in RCW 47.64.270 did not change in 2010, only its construction by the employer did. We conclude that the phrase “[a]bsent a collective bargaining agreement to the contrary” anticipates and countenances collective bargaining agreements between the employer and unions providing for other plans, including the MEBA Plan.

On brief and again at oral argument, the employer stated that while it agreed with the Examiner’s ultimate conclusion, it did not support his holding that the phrase “[a]bsent a collective bargaining agreement to the contrary” in RCW 47.64.270 (2) meant “in the absence of a collective bargaining agreement.” Rather, the employer argues,

The correct interpretation of paragraph RCW 47.64.270(2) results in the harmonization of all paragraphs contained within that statute. This is accomplished when the phrase, “absent a collective bargaining agreement to the contrary,” is understood to mean that the MEBA may negotiate an employer contribution to the coalition health care plan greater than what the employer and coalition bargained.

Response to the Union’s Opening Br. on Appeal at 9:3–12.[10] Nothing suggests that the “absent a collective bargaining agreement to the contrary” language should be understood to enable the union to bargain for, and potentially submit to interest arbitration, a proposal seeking a higher contribution rate for the state health care authority plans for its represented workers than could be achieved by the coalition of unions under RCW 47.64.270(1). The “one coalition of all the exclusive bargaining representatives” is charged in RCW 47.64.270(1) with negotiating the “dollar amount” expended per employee. The union is not free to seek a higher contribution under RCW 47.64.270(2), and the clause was never applied that way in practice.

The amendments relied upon by the Examiner as turning TRE premium contributions from a mandatory subject of bargaining into an illegal subject were enacted in 2010. In the ensuing years, the employer agreed to include Section 26 in its multiple labor agreements with the union and continued to remit premium contributions to the MEBA Plan on behalf of TREs. The payment of premiums to the MEBA Plan on behalf of TREs under Section 26 of the labor agreements was deemed “financially feasible” by the office of financial management, submitted to the legislature by successive governors for funding, and funded by the legislature on multiple occasions in the years after the 2010 amendments. See RCW 47.64.170(9). Neither the employer, the Office of Financial Management nor the legislature took the position in that multistep approval process that Section 26 premium contributions to the MEBA Plan were ultra vires.

The Supreme Court has long held that the legislature “is presumed to be aware of judicial interpretations of its enactments and that its failure to amend a statute following a judicial decision interpreting it indicates legislative acquiescence in that decision.” Soproni v. Polygon Apartment Partners, 137 Wn.2d 319, 327 n.3 (1999); see Friends of Snoqualmie Valley v. King County Boundary Review Bd., 118 Wn.2d 488, 496–97 (1992); Hangman Ridge Training Stables, Inc. v. Safeco Title Insurance Co., 105 Wn.2d 778, 789 (1986) (“We presume the Legislature is familiar with past judicial interpretations of its enactments.”). Although these court cases arise in a different forum and a different procedural context than the current matter, we consider that the principles are pertinent here if only to illuminate the matter of legislative intent in the 2010 amendments. In that regard we do not need to presume awareness on the part of the legislature that the employer had agreed to continue to remit premiums to the MEBA Plan in Section 26. Each successive agreement would have been subjected to the multistep review process under RCW 47.64.170(9), and each was then fully funded by the legislature. Knowledge of the inclusion of Section 26 in successive labor agreements is thus not a matter of presumption but of fact. As such it is appropriate to conclude that the legislature acquiesced in the continued funding by the employer of Section 26 under RCW 47.64.270(2).[11]

To adopt the Examiner’s position would require us to embrace the notion that, by amendments to other provisions of chapter 47.64 RCW, the legislature impliedly repealed the longstanding statutory authorization for including Section 26 in a ferry system labor agreement. Yet the Supreme Court has repeatedly held that “the implicit repeal of statutes is strongly disfavored.” Gilbert v. Sacred Heart Medical Center, 127 Wn.2d 370, 375 (1993); Tollycraft Yachts Corp. v. McCoy, 122 Wn.2d 426, 439 (1993). See also RCW 1.12.020 (“The provisions of a statute, so far as they are substantially the same as those of a statute existing at the time of their enactment, must be construed as continuations thereof.”); Philip A. Talmadge, A New Approach to Statutory Interpretation in Washington, 25 Seattle U. L. Rev. 179 (2001). The “[a]bsent a collective bargaining agreement to the contrary” language was unchanged in the 2010 amendments. We reject the claim that the legislature turned the matter of premium contributions for the TREs from a mandatory to an illegal subject of bargaining in 2010 without changing the operative statutory language, and thereby stripped TREs of their “only source of health care benefits.” Decision 13027 at 15, finding of fact 11.

Conclusion

As a matter of public policy, the legislature has endorsed the promotion of “just and fair compensation, benefits, and working conditions for ferry system employees.” It has embraced binding interest arbitration as the means to determine “just and fair” compensation, benefits, and working conditions for ferry workers. RCW 47.64.006(7). The legislature has also declared it to be in “the best interests of the state, to provide comprehensive health care as an employer, to employees . . . .” RCW 41.05.006(1). The Examiner’s conclusion that the union violated the Marine Employees’ Act by seeking to preserve the longstanding contractual practice of the employer paying premiums to secure health care coverage for temporary relief engineers cannot be reconciled with the text of the statutes when considered in light of these legislative policies. We do not believe that the legislature intended to strip the TREs of their health care coverage, nor does the record support that conclusion.

Findings of Fact

The findings of fact issued by Examiner Dario de la Rosa are AFFIRMED and adopted as the findings of fact of the Commission.

Conclusions of Law

Conclusion of law 1 is AFFIRMED and adopted by the Commission. Conclusions of law 2 and 3 are VACATED. We substitute the following conclusions of law:

2.         Inclusion of temporary relief engineer employees in a health care plan such as the one described in Section 26 of the collective bargaining agreement is a mandatory subject of collective bargaining.

3.         By its actions described in findings of fact 10 through 15, the union did not unlawfully seek to submit a nonmandatory issue of bargaining to interest arbitration in violation of RCW 47.64.130(2)(c).

Order

The complaint charging unfair labor practices filed in the above-captioned matter is DISMISSED. In accordance with WAC 391-55-265(2)(b), the Executive Director is directed to terminate his August 28, 2018, suspension from interest arbitration of the matters involved herein, and to immediately remand the issue or issues to the interest arbitration panel for a ruling on the merits.

ISSUED at Olympia, Washington, this  11th  day of August, 2020.

PUBLIC EMPLOYMENT RELATIONS COMMISSION

MARILYN GLENN SAYAN, Chairperson

KENNETH J. PEDERSEN, Commissioner

opinion Dissenting

The plain language and legislative history of RCW 47.64.270 indicate that the statute precludes the employer and union from directly negotiating health insurance for any employee outside of the statewide coalition. For this reason, I respectfully dissent from the majority opinion.

Unlike other state employees, the employees of Washington State Ferries have long enjoyed collective bargaining rights. From 1982 until 2010, RCW 47.64.270 provided, in relevant part:

Absent a collective bargaining agreement to the contrary, the department of transportation shall provide contributions to insurance and health care plans for ferry system employees and dependents, as determined by the state health care authority, under chapter 41.05 RCW; and the employer and employee organizations may collectively bargain for other insurance and health care plans, and employer contributions may exceed that of other state agencies as provided in RCW 41.05.050.

This language enabled the employer and the union to directly negotiate health insurance for ferry system employees and dependents. If the employer and union did not negotiate contributions to insurance and health care plans, then the health care authority (HCA) determined employee health care contributions and plans in the absence of a collective bargaining agreement. Between 1982 and 2010, when the employer and union negotiated and agreed to contributions to the MEBA Plan, they did so pursuant to RCW 47.64.270 and RCW 41.05.050(3).

While ferry system employees enjoyed broad collective bargaining rights, the collective bargaining rights of other state employees were more limited. In 2002, the legislature passed the Personnel System Reform Act, chapter 41.80 RCW, and created a coalition of all the exclusive bargaining representatives subject to chapter 41.80 RCW to negotiate with the employer over employer contributions to health care benefits. Laws of 2002, ch. 354, § 303. Initially, the legislature did not include ferry system bargaining representatives in the coalition. Id. In 2010, the legislature amended chapter 47.64 RCW. Laws of 2010, ch. 283 §12. In doing so, the legislature required unions representing ferry system employees to participate in the coalition. RCW 47.64.270(1); RCW 41.80.020(3). The amended RCW 47.64.270 provided, in relevant part:

(1) The employer and one coalition of all the exclusive bargaining representatives subject to this chapter and chapter 41.80 RCW shall conduct negotiations regarding the dollar amount expended on behalf of each employee for health care benefits.

(2) Absent a collective bargaining agreement to the contrary, the department of transportation shall provide contributions to insurance and health care plans for ferry system employee and dependents, as determined by the state health care authority, under chapter 41.05 RCW.

(3) The employer and employee organizations may collectively bargain for insurance plans other than health care benefits, and employer contributions may exceed that of other state agencies as provided in RCW 41.05.050.

The issue in this case requires us to interpret RCW 47.64.270 to determine whether the union and employer may negotiate the union’s proposal on Section 26 – Welfare, which concerns employer health care contributions to the MEBA plan for temporary relief engineer employees (TREs) and the TREs’ continued participation in the plan at the employer’s expense.

“The primary objective of statutory construction is to carry out the intent of the legislature.” Bellevue Fire Fighters Local 1604 v. City of Bellevue, 100 Wn.2d 748, 751 (1984). The intent of the legislature in amending RCW 47.64.270 is clear, i.e., to create one coalition of unions to bargain with the employer for the dollar amount the employer expends on employee health insurance. The effect was to eliminate the right of ferry employees to separately bargain with the employer for health insurance. The majority decision ignores that express intent.[12]

Before 2010, the statutory language, “[a]bsent a collective bargaining agreement to the contrary,” allowed the parties to negotiate a plan outside of the plans offered by the HCA. The language that the employer and union could bargain “other insurance and health care plans” and “[a]bsent a collective bargaining agreement,” when read together, indicated an intent to allow ferry system employees the unique ability to negotiate health insurance plans different than those offered by the HCA.

After the 2010 amendments, the union was required for the first time to negotiate the dollar amount the employer expends on health care benefits through the coalition. The legislature expressed its intent to create a uniform system for the employer to negotiate its contributions to employee health care benefits when it enacted RCW 47.64.270(1). The legislature expressly removed the parties’ ability to negotiate health care benefits, other than those provided by the HCA, by declaring that the parties may only negotiate “insurance plans other than health care benefits . . . .” RCW 47.64.270(3) (emphasis added).

The union argues and the majority agrees that a collective bargaining agreement can provide different plans and rates than those offered by the HCA. They read RCW 47.64.270(2) to mean that ferry employees must participate in plans established by the HCA at established rates “[a]bsent a collective bargaining agreement to the contrary.” In other words, a collective bargaining agreement can provide for different plans at different rates, i.e., the MEBA Plan for TREs.

I disagree. In 2010, the legislature added RCW 47.64.270(1) and brought the ferry system bargaining representatives into the coalition for purposes of negotiating the employer’s contribution to health care benefits for “each employee.” The language of the statute does not permit MEBA to negotiate health care benefits for some employees, i.e., TREs, outside the coalition process. See RCW 47.64.270(3) (“The employer and employee organizations may collectively bargain for insurance plans other than health care benefits . . . .”) (emphasis added).

The union’s reliance on RCW 47.64.270(2) is misplaced. From 1982 to 2010, when the legislature amended RCW 47.64. 270, the union and the employer bargained “other insurance and health care plans,” including health care benefits for temporary relief engineers, pursuant to the enabling language of the statute. The “[a]bsent a collective bargaining agreement” alternative was irrelevant to the parties because an agreement existed between them.

As noted, the legislature drastically amended RCW 47.64.270 in 2010 and eliminated the statutory language that enabled the union and the employer to bargain health care benefits separately. Instead, it required ferry bargaining representatives to bargain as a part of the statewide coalition. Importantly, the “[a]bsent a collective bargaining agreement” language, now a part of RCW 47.64.270(2), remained largely intact, indicating the legislature intended the subsection to provide what it had prior to the amendment: a method of setting contribution rates if no bargaining agreement existed. It did not take on new meaning contrary to the clear legislative intent of the amendments, that is, authorizing the union and the employer to bargain supplemental insurance, i.e., non-HCA plans, outside the context of coalition bargaining.

The union also argues and the majority agrees that the legislature could not have intended to eliminate the union’s right to negotiate an agreement on behalf of TREs and to strip them of their health insurance. The argument ignores the clear legislative intent to create a uniform, statewide system of bargaining health care benefits and eliminate such side agreements. If the legislature intended to make an exception for marine employees, it would have done so expressly. See RCW 47.64.270, which permits state contributions for marine employee “insurance plans other than health care” to exceed the contributions of other state agencies.

Moreover, the argument ignores the fact that the union and TREs are not without recourse. The union could bring the issue of TRE health insurance forward through the coalition. Finally, the majority claims that the continued funding by the legislature of Section 26 after the 2010 amendments to chapter 49.64 RCW indicates an intent to permit the parties to negotiate supplemental health care benefits outside the coalition process. Majority opinion at 5, 13. The argument overlooks the reality of the legislative process. The role of the legislature is limited to approving or rejecting funding for the collective bargaining agreement based on financial feasibility. The legislature must approve or reject funding for the collective bargaining agreements in their entirety and cannot refuse to fund a portion of the collective bargaining agreement. Consequently, the legislature’s funding approval of the parties’ collective bargaining agreements after 2010 does not indicate a specific approval of Section 26 or an intent to permit its negotiation.

For the reasons stated above, I would find the union’s proposal on Section 26 an illegal subject of bargaining.

MARK BUSTO, Commissioner