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Title: Clatsop County, and AFSCME Courthouse/Roads Local 2746, and AFSCME Sheriff's Local 2746-0
Date: July 5, 1995 
Arbitrator: Luella E. Nelson
Citation: 1995 NAC 115 

IN ARBITRATION PROCEEDINGS

PURSUANT TO AGREEMENT BETWEEN THE PARTIES

 

In the Matter of a Controversy

                 between  

AFSCME COURTHOUSE/ROADS LOCAL 2746, and AFSCME SHERIFF'S LOCAL 2746-0,

                 and

 

CLATSOP COUNTY.

RE:       PERS Grievances

 

ARBITRATOR'S

OPINION AND AWARD

 

 

 

                                                                                            

        This Arbitration arises pursuant to Agreement between AFSCME Courthouse/Roads Local 2746 and AFSCME Sheriff's Local 2746-0 ("Union" or "Local 2746" and "Local 2746-0"), and Clatsop County ("County"), under which LUELLA E. NELSON was selected to serve as Arbitrator and under which her Award shall be final and binding upon the parties.

Hearing was held on May 4, 1995, in Astoria, Oregon.  The parties had the opportunity to examine and cross-examine witnesses, introduce relevant exhibits, and argue the issues in dispute.  The County filed a pre-hearing brief; the Union filed a post-hearing brief, and both parties filed responsive briefs.  The matter was fully submitted for decision on May 30, 1995.

APPEARANCES:

On behalf of the Union: 

Jim Younger, Council Representative, Oregon AFSCME Council No. 75, 2545 SW Spring Garden Street, Suite 201, Portland, OR   97219. 

On behalf of the County: 

Ken Eiler, County Counsel, Clatsop County, P. O. Box 179, 749 Commercial, Astoria, OR   97103. 

            ISSUES 

Courthouse Unit, Represented by Local 2746 

Did the County violate Article 1 - Management Rights, Section 2 - Changes in Working Conditions, Article 18 - General Provisions, Section 2 - Work Rules, Section 5 - Entire Agreement when the County unilaterally implemented effective January 1, 1995 a require­ment that employees pay the employee portion of PERS by way of payroll deduction? 

If yes, what is the appropriate remedy? 

Sheriff's Unit, Represented by Local 2746-0 

Did the County violate Article 11 - Compensation, Section 11.1(L), Article 17 - General Provisions, Section 2 - Work Rules when the County unilaterally implemented effective January 1, 1995 a requirement that employees pay the employee portion of PERS by way of payroll deduction? 

If yes, what is the appropriate remedy?

      RELEVANT SECTIONS OF AGREEMENTS 

   COURTHOUSE UNIT

(Effective July 1, 1993, through June 30, 1997) 

            ARTICLE 1

MANAGEMENT RIGHTS 

Section 1.  Management Rights:  The Union recognizes the prerogative of the County to operate and manage its affairs in all respects in accordance with its responsibilities, except as otherwise spe­cifically limited by the terms of this Agreement.  The County retains all rights, decision-making au­thor­ity, prerogatives and functions connected with or in any way incidental to its responsibility to manage the affairs of the County or any part of it, except as otherwise specifically limited by the terms of this Agreement.  The rights hereunder of the employees in the bargaining unit and the Union are limited to those specifically set forth in this Agreement.  The County shall have no obli­ga­tion to bargain with the Union with respect to any such subjects or the exercise of its discretion and decision-making with regard thereto.  Subjects covered by the terms of this Agreement are closed to further bargaining for the term hereof.  Any subject which was or might have been raised in the course of collective bargaining is closed for the term hereof.

...

Section 2.  Changes in Working Conditions:  The exercise of any management prerogatives, func­tions, or rights which constitute a change in a working condition which is not specifically addressed by this Agreement shall follow notice to the Union and bargaining in accordance with the PECBA.

.... 

          ARTICLE 15

     SETTLEMENT OF DISPUTES 

Section 1.  Grievance and Arbitration Procedure.... 

Step 4.  Arbitration  ... 

The arbitrator's decision shall be final and binding upon both parties, but he shall have no power to alter in any way the terms of this Agreement or to impose on either party a limitation or obligation not explicitly provided for in this Agreement.  ...

.... 

          ARTICLE 18

             GENERAL PROVISIONS

...

Section 2.  Work Rules:  It is jointly recognized that the County, acting by and through the County Manager and County department heads, must and does retain broad authority to fulfill and imple­ment its responsibilities and may do so by adoption of work rules.  It is agreed that no existing work rule or new work rule will be promulgated or implemented which is inconsistent with a spe­cific provision of this Agreement or Oregon law. 

Work rules shall be reduced to writing.  New rules shall be posted within affected de­part­ments for a period of ten (10) consecutive days and shall be furnished to the Union.  In the event that the Union considers a work rule to be inconsistent with a specific provision of this Agreement or otherwise wishes to discuss the rule it shall so notify the County within the ten (10) working day posting period.  In such event, the rule shall be discussed between the County and/or it(s) desig­nees and the Employee Relations Committee.  Work rules, when and if adopted, will not be arbi­trary, capricious or discriminatory.

...

Section 5.  Entire Agreement: 

A. The parties acknowledge that during negotiations which resulted in this Agreement each had the unlimited rights and opportunity to make demands and proposals with col­lective bargaining and that the understandings and agreements arrived at by the parties after the exer­cise of that right and opportunity are set forth in this Agreement. 

B. This Agreement constitutes the sole and entire Agreement between the parties.  Ex­cept as specifically modified by or treated in this Agreement, all policies, matters, questions and terms affecting unit employees in their employment relationship with the county shall be governed by the policies of Clatsop County, Oregon.  The County and the Union for the life of this Agreement each voluntarily and without qualification waives the right and agrees that the other shall not be obligated to bargain collectively with respect to any other subject or matter referred to or covered by this Agreement, or with respect to any subject or matter which was or might have been raised in bargaining but which is not specifically referred to or covered in this Agreement even though such subject or matter may not have been within the knowledge or contemplation of either or both parties at the same time that they negotiated or signed this Agreement. 

C. Consistent with the County's charter mandate to establish a personnel system, the County will adopt a comprehensive personnel manual governing all aspects of personnel admin­is­tra­tion during the life of this Agreement.  The County and the Union mutually agree to reopen this Agreement on any matter which is a mandatory, noneconomic subject of bargaining which the County finds necessary to include in the personnel manual and which either party determines is incon­sistent with or not covered by this Agreement. 

SHERIFF'S UNIT

(effective July 1, 1993, through June 30, 1996) 

PREAMBLE 

... Unless specifically modified by a provision of this Agreement, the County's authority and discretion may be exercised to the fullest extent permitted by law.  Nothing in this Preamble is intended to waive or modify any legal duty arising under the Public Employee Collective Bargaining Act, or to limit the authority of an arbitrator or the Employment Relations Board to interpret and apply the provisions of this contract in accordance with applicable legal standards. 

ARTICLE 11 - COMPENSATION 

11.1 - Wages.

...

L. Public Employees Retirement System.  The County will pay the employer con­tri­bution to PERS in accordance with the rules and regulations of the PERS Board.

.... 

ARTICLE 15 - SETTLEMENT OF DISPUTES 

15.1 - Grievance and Arbitration Procedure.  To promote better Employer-employee relationships, both parties pledge their immediate cooperation to settle any grievance or complaint that might arise out of the application, meaning, interpretation, or omission of this Agreement. ...

...

Step 4 - Arbitration.  ... The Arbitrator's decision shall be final and binding upon both parties, but the Arbitrator shall have no power to alter in any way the terms of this Agreement ....

.... 

ARTICLE 17 - GENERAL PROVISIONS

            ...

            17.2 - Work Rules.  It is jointly recognized that the County, acting by and through the County manager and Department Heads and the Sheriff, must and does retain broad authority to fulfill and im­ple­ment its responsibilities and may do so by adoption of oral or written work rules.  It is agreed that no existing work rule or new work rule will be promulgated or implemented which is in­con­sis­tent with a specific provision of this Agreement, provided that the requirements of Oregon law will be paramount.

 

            All work rules which have been or shall hereafter be reduced to writing shall be posted within affected departments and shall be furnished to the Union.  In the event the Union considers a work rule to be inconsistent with a specific provision of this Agreement or otherwise wishes to dis­cuss the rule, it shall so notify the County within three (3) working days after receipt of the proposed rule, in which case the rule shall not take effect.  The rule shall be discussed between the County and/or its designee(s) and the Union Grievance Committee.  After this meeting the County may notify the Union of the effective date of the rule.  The Union shall then have ten (10) working days to invoke the procedures of Section 15.1, Step 4 if the work rule constitutes a man­da­tory sub­ject of bargaining.  Work rules, when and if adopted, will not be arbitrary, capricious, or discriminatory.

            ...

           RELEVANT LAW 

                 PUBLIC EMPLOYEES' RETIREMENT ACT OF 1953 (ORS 237.001 ET SEQ.) 

237.071  Contributions of employes; rate and payment; additional units for police and fire fighters.  (1)(a)  Each employee who is an active member of the system shall contribute to the fund and there shall be withheld from salary of the employee six percent of that salary.

...

(4)(1)  A police officer or fire fighter who is a member of the system may elect to make addi­tional contributions to the fund to purchase increased benefits between the date of retirement and age 65.  The rate of additional contribution shall be determined by the actuary, dependent upon the age of the police officer or fire fighter at the date of election, so as to provide monthly pay­ments on the basis of $10 per unit of benefits purchased.  No police officer or fire fighter may elect to purchase more than eight units.  For each $10 unit purchased by the police officer or fire fighter, the employer shall purchase an equal $10 unit ... 

237.075  Payment of employee contribution by employer.  Notwithstanding any other provision of ORS 237.001 to 237.315, and subject to the provisions of this section, a public employer partici­pating in the system may agree, by a written employment policy or agreement in effect on or after July 1, 1979, to "pick-up," assume or pay the full amount of contributions to the fund required of all or less than all active members of the system employed by the employer.  If a public employer so agrees:

(1) The rate of contribution of each active member of the system employed by the em­ployer who is covered by such policy or agreement shall uniformly be six percent of salary regard­less of the amount of monthly salary.

(2) The full amount of required employee contributions "picked-up," assumed or paid by the employer on behalf of its employees shall be considered "salary" within the meaning of ORS 237.003(11), only for the purpose of computing a member's "final average salary" within the mean­ing of ORS 237.003(15), and shall not constitute additional "salary" or "other advantages" within the meaning of ORS 237.003(11) for any other purpose.

(3) The full amount of required employee contributions "picked-up," assumed or paid by the employer on behalf of its employees shall be added to the individual account balances of the employees for their annuities and shall be considered employee contributions for all other pur­poses of ORS 237.001 to 237.315. 

              OREGON ADMINISTRATIVE RULES

CHAPTER 459, DIVISION 10 - PUBLIC EMPLOYEES RETIREMENT SYSTEM 

Employer "Pick-Up" of Employee Contributions

459-10-208  On and after July 1, 1979, participating employers may, in lieu of employee con­tri­butions required by ORS 237.071, voluntarily agree to "pick-up", assume or pay the uniform six percent contri­bu­tions as provided by enrolled House Bill 5077, Section 3(1), 1979 Regular Session, on behalf of such employer's participating member employees, on the following terms and condi­tions:

(1) The employer's agreement to "pick-up", assume or pay its employees' contri­bu­tions must be evidenced by a written employment policy or agreement, which may be a collective bargaining agreement.

.... 

              OREGON CONSTITUTION, ARTICLE IX, SECTION 10

(1)       Notwithstanding any existing State or Federal laws, an employee of the State of Oregon or any political subdivision of the state who is a member of a retirement system or plan established by law, charter or ordinance, or who will receive a retirement benefit from a system or plan offered by the state or a political subdivision of the state, must contribute to the system or plan an amount equal to six percent of their [sic] salary or gross wage.

(2)        On and after January 1, 1995, the state and political subdivisions of the state shall not there­after contract or otherwise agree to make any payment or contribution to a retirement system or plan that would have the effect of relieving an employee, regardless of when that employee was em­ployed, of the obligation imposed by subsection (1) of this section.

(3)        On and after January 1, 1995, the state and political subdivisions of the state shall not there­after contract or otherwise agree to increase any salary, benefit or other compensation payable to an employee for the purpose of offsetting or compensating an employee for the obligation im­posed by subsection (1) of this section.

             FACTS

These grievances arise out of the passage of Ballot Measure 8 in the November 1994 elections.  Measure 8 added provisions to Article IX of the Oregon Constitution, including Section 10, quoted above.  The Union filed grievances on behalf of employees in two bargaining units.  Both grievances protest the County's decision to discontinue "picking up" the employees' contribution to the Public Employee Retirement System ("PERS").  Until January 1, 1995, the County paid the PERS pick-up in both units, as well as for unrepresented employees.

On July 5, 1994, anticipating the vote on Measure 8, Union Council Representative Jim Younger wrote to County Manager William B. Barrons.  Younger requested a reopener of both contracts to add 6% to the salary schedules prior to January 1.  No evidence exists of any response from the County at that time.  In September, Younger sent Barrons a 20-year PERS side agreement signed by another public employer.  He pointed out that other public employers were taking one of two courses to deal with the predicted passage of Measure 8:  (1) in­creas­ing salary schedules by 6% to offset the payroll deduction, or (2) signing long-term agreements to maintain the pick-up.  Later that month, Younger offered to withdraw two pending grievances if the County would sign a 20-year side agreement to con­tinue picking up the 6% PERS contribution and crediting unused sick leave to retirement benefits.  The County Board of Commissioners declined to consider this request until after the November election.

On December 19, Barrons informed Younger of the County's intentions regarding PERS.  His letter noted that (1) the County would not reopen the contract to offset the impact of Measure 8; (2) the County would begin withholding the employee share of PERS contributions on any compensation earned after December 31; and (3) the County would establish a record of employee sick leave on the books as of December 31, for use if the courts later determined that it could be applied to retirement.

On January 4, 1995, Barrons sent a memo to unit employees and unrepresented employees.  The memo said (1) the County would deduct the PERS contribution from paychecks issued after January 5 for any income earned in 1995; (2) the County would set aside in a reserve the amount of the pick-up it had been paying to PERS; and (3) the money would be available if a court decided that employers had in­cor­rectly begun deducting the PERS contribution.  The Union filed these grievances on January 6.

SHERIFF'S UNIT BARGAINING HISTORY

The 1985-90 contract for the Sheriff's Unit included language stating "P.E.R.S. will be paid in accordance with statutory provisions."  That language was deleted from the successor Agreement.  In those negotiations, the County proposed the language that now appears as Section 11.1(L) of the Sheriff's Agreement.  Younger testified he corrected his copy of the County's proposal to substitute the word "employees" for "employer."  He did not discuss it with the County because the parties got wrapped up in the treatment of one employee, Corrections Counselor Cora Lane.  To accommodate Lane, the Union proposed to expand the County's language to read as follows:

The County will pay the employees contribution to PERS in accordance with the rules and regulations of the PERS Board, including sick leave conversion upon retirement.  All employees shall be classified as Police and Fire for the purpose of benefits under PERS.

The parties went to interest arbitration.  Before the Interest Arbitrator, the County quoted the Union's proposed language (in­clud­ing the word "employees") and noted "Second sentence is unacceptable."  It argued the proposal was contrary to Oregon law in that Lane did not meet the statutory requirements for such a classification.  The Union quoted its proposed language, and alleged that the County proposal in­cluded the language other than the last sentence.  The Union noted, "Above section is new, old language was in recognition clause."  It argued the proposal was legal and consistent with a promise made to Lane at the time of her hire.  The Interest Arbitrator found he was without authority to order classification contrary to statute.  He therefore concluded that "The proposed article shall not be included."

The County's then-attorney, C. Akin Blitz, agreed to have his staff type the final contract.  All drafts included the language of Section 11.1(L) as proposed by the County.  Younger testified he did not notice the continuing use of "employer" rather than "employees," which he characterized as a typo­graph­ical error.  Section 11.1(L) was not in dispute in negotiations for a successor Agreement.  The Union did not raise the alleged typographical error in those negotiations, and the language remained unchanged.

PAST PRACTICE

Younger testified the parties intended to require the County to bargain whenever it made a change in personnel policies, and that it has done so on all issues except PERS.  In the two units, the parties have discussed such matters as safety, job descriptions for existing and new positions, changes in recruitment methods, changes in "flex" time procedures, changes in the method for accruing vacation time, compen­sa­tion to canine officers for the cost of dog food and training, procedures for merging former State of Oregon building inspectors into the bargaining unit, complaint resolution pro­cedures under the federal Americans with Disabilities Act, and implementation of the federal Family Medical Leave Act.

POSITION OF THE UNION

The current and past Agreements require the County to pay the PERS pick-up.  The Union has been unable to find a written policy authorizing the County to pay the pick-up.  However, the County has made those payments.  Something has to have caused those payments to begin. 

In addition, the parties have treated the PERS pick-up as a mandatory subject of bargaining.  They have treated the pick-up as if it were in the Agreements.  The arguments in the interest arbitration make it clear the County's obligation to pay the employee contribution was not an issue.  The only issue was whether to treat Lane as a police or fire officer for purposes of PERS benefits.  The Interest Arbitrator recommended exclusion of the entire PERS provision, even though only one sentence was disputed.  Blitz included the undisputed portion of the provision in the typed drafts, but made a typographical error.  The County has the burden of explaining why Blitz put this language in the Agreement.  The County inexplic­ably has refused to contact Blitz for clarification of this matter.  The parties intended to have Section 11.1(L) refer to the employee contribution, to comply with the statutory requirements.

The Union had no obligation to request negotiations over Barrons' December 19 letter.  That letter was not open for negotiations; it was a statement of what the County was going to do.  The County vio­lated the Agreements by failing to notify the Union of its intent to change a bargaining issue and failing to allow the Union to negotiate the issue.  The remedy should include making employees whole for the term of the Agreements or until such time as the County has met its legal obligation to negotiate.

Measure 8 did not give the County the unilateral right to implement PERS deductions with­out nego­tiating.  The parties treated the two Agreements as meeting the requirements of ORS 237.075.  The Employment Relations Board ("ERB") has concluded that the PERS pick-up is still a mandatory sub­ject of bargaining.  The parties have a strong history of bargaining over changes, both economic and non-economic.  The County is therefore bound to negotiate with the Union prior to making such changes.

This case does not fall under the ERB ruling permitting employers to unilaterally begin deducting 6% PERS contributions from employees' paychecks during a period when the status quo must be main­tained.  Unlike the case before the ERB, this case does not involve a status quo issue.  The Agreements are in full force and effect.

The Attorney General's opinion regarding Measure 8 supports a finding that the County vio­lated the Agreement.  That opinion specifically notes that employers may not modify the terms and conditions of collective bargaining agreements unilaterally.  Such a collective bar­gain­ing agreement need not state in literal terms that the County must pay the PERS pick-up to meet the test of bilateral contract status.  The County's consistent practice has been not to change any condi­tions of employment--economic or non-economic--without giving the Union the opportunity to nego­ti­ate the issue.  Thus, the parties have created bilateral contracts that require the County to pay the PERS pick-up for the terms of the Agreements.

The Arbitrator should order the County to make all employees whole for PERS deductions made ef­fective January 1, 1995.  The Arbitrator should order the County to pay the PERS pick-up as it had before January 1, 1995, until such time as the current Agreements expire or until the parties negotiate a different provision.  If Measure 8 prevents the parties from negotiating, the Arbitrator should order the County to make employees whole and pay the PERS pick-up for the term of the Agreement.

POSITION OF COUNTY

Neither Agreement contains any provision obligating the County to pay a PERS pick-up.  Payment of a PERS pick-up is a "salary" issue, not a "work rule" or "working condition."  Before filing this griev­ance, the Union did not treat it as a "work rule" or "working condition."  Even if it is characterized as a "work rule" or "working condition," the Agreements merely require "discussion," which has occurred, and/or "negotiation," which is prohibited by Article IX, Section 10 of the Oregon Constitution.  Finally, the County has no authority to pay a PERS pick-up absent a written agreement authorizing the pick-up.  The Union cannot show that such an agreement existed before Measure 8, and it is unconstitutional to enter into or order such an agreement now.

No authority exists for the Arbitrator to modify the plain and unambiguous language of Section 11.1(L) of the Sheriff's Unit Agreement.  There is no compelling evidence that the parties intended to include such a provision in their agreement, but simply forgot.  This provision was first proposed by the Union [sic] during negotiations for the 1992 Agreement.  That proposal went to interest arbitration.  The Interest Arbitrator's decision is easily understood.

Neither party knows why the current language of Section 11.1(L) appeared in the final version of the Sheriff's Agreement.  The Arbitrator should not speculate that the parties actually intended the word "employer" to read "employees."  The language may have been intended merely to recite the County's obli­ga­tion to match employee contributions, as provided in ORS 237.071(4)(a).  The language is plain and unambiguous, and is not subject to interpretation or change.

The language of Section 11.1(L) is clear and unambiguous.  There is therefore no authority to re­sort to principles of contract interpretation.  The "intent" of the contract is best reflected by the ruling of the Interest Arbitrator.  If any mistake was made, it was to include any language, since to do so was inconsistent with the Interest Arbitrator's ruling.

If Section 11.1(L) is ambiguous, the Union bears the burden of demonstrating the parties intended the word "employer" to read "employees."  This intent must have arisen after the interest arbitration, since the County was under no obligation to include any PERS language in the Agreement.  The County's will­ing­ness to do something it was otherwise not required to do must have resulted from the exchange of some provision the Union was not otherwise required to offer.  However, no evidence exists of such an exchange, or of any negotiations after the interest arbitration award.  The Union had the opportunity to review the later drafts for errors.  Presumably, any language negotiated after the interest arbitration would have received special scrutiny.  The Union cannot claim error now.

The Union does not claim any typographical error in the language requiring payment of PERS con­tributions "in accordance with the rules and regulations of the PERS Board."  Those rules and reg­u­la­tions have been changed to comply with the new constitutional language.  Under the unchallenged portion of Section 11.1(L), the County is prohibited from paying a PERS pick-up.  ERB has clearly ruled that the passage of Ballot Measure 8 required the modification of existing plans to conform with the new con­sti­tu­tional language.

Neither Agreement defines the term "work rule."  The context in which each uses the term demon­strates that a work rule is an exercise of management discretion concerning the way the County operates its business.  Such flexible and relatively unilateral decision-making is not the same as a contractual agreement to pay a fixed salary or a PERS pick-up.  ERB has concluded that the PERS pick-up is a "direct or indirect monetary benefit."  ORS 237.075(2) considers the PERS pick-up as "salary."  Similarly, the Union sought to replace the loss of the PERS pick-up with a salary increase.

The parties did not intend or envision that "work rules," as used in Sections 17.2 and 18.2 of the respective Agreements, included the PERS pick-up.  Even if they had so intended, those Sections explicitly make the adoption of such rules subject to the requirements of law.  Article IX Section 10 of the Oregon Constitution is such a requirement.  In any event, the County's obligation was merely to "discuss" and "bargain," if requested, over a change in work rules.  The Union did not request bargaining or discussion within the contractual 10-day period.  Further, the parties did discuss the imminent termination of the PERS pick-up before December 16.  By January 6, Measure 8 precluded bargaining a salary adjustment to account for the lost PERS pick-up.  Although retirement benefits may be a mandatory subject, the ne­ces­sity doctrine excused implementation of Measure 8 without bargaining.

For the same reasons, the PERS pick-up is not a "working condition" within the meaning of Section 1.2 of the Courthouse Agreement.  In context, "working condition" refers to the exercise of man­age­ment discretion concerning the operation of the County.  Even if it is a "working condition," the parties are prohibited from bargaining for a salary adjustment offsetting its loss.

Section 18.5(c) of the Courthouse Agreement does not apply to the termination of the PERS pick-up.  The County has not amended its personnel policies regarding the PERS pick-up.  PERS is not now, and never has been, mentioned in the County's personnel policies.  The PERS pick-up is a salary benefit.  It clearly is not a "noneconomic" subject, nor is the Union's request to bargain over salary adjustments a "noneconomic" subject.  Even if the termination of the PERS pick-up were an amendment to a personnel policy and a "noneconomic" subject, it is not subject to bargaining.

Assuming that the PERS pick-up is a "work rule" and that the Union made a timely request to discuss, the County and the Union did discuss alternatives to implementing the provisions of Measure 8.  Ultimately, in December, the County simply decided not to accept the Union's proposals.  Measure 8 prohibited the County from continuing these discussions after January 1.

The Union has never independently claimed that the past practice of paying the PERS pick-up created a binding obligation to continue that practice.  ORS 237.075 is clear that the County cannot authorize a PERS pick-up by oral agreement or implication.  At most, the "bilateral agreement" claimed by the Union is one not to change conditions of employment without giving the opportunity to negotiate.  This does not create a right to the continued payment of a PERS pick-up after January 1.

Neither Agreement obligates the County to pay a PERS pick-up.  It is questionable whether the County ever had authority to make such payments, since no written authorization required by ORS 237.075 can be located.  Even if such a written agreement existed, a public employer cannot continue to pay a PERS pick-up after January 1, 1995.

The facts do not support the Union's argument that the County violated the Agreements by not notifying the Union of an intent to change the PERS pick-up and denying an opportunity to negotiate the issue.  However, even if such a contract violation occurred, the requested remedy is not available.  The County cannot be ordered to pay a PERS pick-up until it negotiates the pick-up with the Union.  Measure 8 prohibits the County from negotiating the PERS pick-up.

         OPINION

THE IMPACT OF EXTERNAL LAW

The Arbitrator draws her authority from the parties' Agreements.  The Sheriff's Agreement explicitly permits the Arbitrator to interpret and apply its provisions "in accordance with applicable legal standards."  The Courthouse Agreement contains no such language.  Neither contract confers on the Arbitrator the authority to independently enforce external law in contravention of the parties' Agreements.  If one or both Agreements clearly and unambiguously set forth the parties' obligations, the Arbitrator will not rely on her inter­pretation of external law to modify or void the applic­able contractual provision.  Such revision would directly contravene the contractual limits on the Arbitrator's authority.

At the same time, the parties have contracted within a framework of law.  Where the contractual language permits two reasonable interpretations, one of which conflicts with the law and the other of which raises no such conflict, the Arbitrator will prefer that interpretation which does not conflict with law.  This factor comes into play only where the law is sufficiently settled to permit the Arbitrator to determine what the law is.  Where the law is unsettled, the better course is to interpret the contract without reference to external law.  In short, the Arbitrator will limit herself to interpreting the Agreements, and leave to the courts and administrative agencies the interpretation and enforcement of the law.

The Arbitrator must evaluate the alleged contract violation at the time it occurred.  On December 19, when the County announced its intention to begin deducting PERS payments, Measure 8 had not taken ef­fect.[1]  Neither party has pointed to any law in effect on December 19 excusing the County from con­tin­u­ing to adhere to a pre-existing obligation to pay the pick-up, if such an obligation existed.

Section 11.1(L) of the Sheriff's Agreement requires the County to make payments consistent with PERS Board rules and regulations.  That requirement can only refer to the rules and regulations in effect when the County acted.  No evidence exists that any change in those rules had occurred by December 19.  Future changes whose scope could only be guessed formed no basis for assessing the County's obligations as of December 19.

The Arbitrator has no authority to determine whether the County's payment of the PERS pick-up met the "written policy or agreement" requirements of ORS 273.075 or OAR 459-10-208(1).  The au­thority to enforce those provisions belongs to the PERS Board and/or the courts.  No evidence exists that either has ever suggested or held that those payments did not comply with the legal requirements, despite the fact that the County has paid them for years.  It would be improper for the Arbitrator now to void any obligation that otherwise may exist to make those payments based on the asserted more stringent interpretation of the applicable law. 

OTHER PRELIMINARY MATTERS

The applicable standards for contract interpretation are well established.  Where the language is clear and unambiguous, the Arbitrator must give effect to the parties' intent.  That is so even where one party finds the result unexpected or harsh.  Extrinsic evidence cannot be used to vary clear contract language.  It can be used to demonstrate a latent ambiguity or typographical error in the language.  How­ever, the party asserting the ambiguity or error bears the burden of demonstrating it.  If the final contract does not reflect the parties' true intent because of a typographical error, the Arbitrator may reform the Agreement so as to effectuate the parties' true intent.

Where contract language is unclear or ambiguous, the Arbitrator may look to extrinsic evi­dence of the parties' intent.  Bargaining history is significant where either the evolution of language or the parties' statements demonstrate the intent behind particular provisions.  Unexpressed intentions do not aid in interpreting language.  Past prac­tice under the contract is persuasive where the practice is clear, consistent, and known to both sides.

Absent evidence that the parties intended a specialized meaning, the Arbitrator must give words their common and accepted meanings.  The Arbitrator must avoid interpreting ambig­uous language to nullify or render meaningless any part of an Agreement if another reasonable inter­pre­tation gives effect to all provisions.  The Arbitrator must prefer that interpretation which avoids harsh, absurd, or nonsensical results.  The Arbitrator cannot grant to a party a provision which it was unable to achieve in bargaining.  Any ambiguity not removed by other rules of interpretation may be removed by construing the ambiguous language against its proponent.

Mutual intent is not applicable to language won through interest arbitration.  Mutual intent is relevant to the scope of the matter submitted to interest arbitration.  The parties have the power to include in their agreement provisions that were not awarded in Interest Arbitration.  As with any other agreed-upon contract terms, the normal rules of contract inter­pre­ta­tion apply to such provisions.

The stipulated issues direct the Arbitrator to consider whether the County violated specific provisions of the respective Agreements.  At the outset of the hearing, the parties agreed to delete the phrase "and any other Article/Section that may apply" from the stipulated issues.  None of the cited pro­visions give contractual status to past practice, such as the alleged practice of bargaining over all changes in subjects of bargaining.  Given the specificity of the submission, it would be improper to look to con­tractual provisions other than those cited to determine whether they preserve past practice.  Thus, the Arbitrator has no authority to determine whether a past practice existed that, in and of itself, would have obligated the County to bargain over this matter.[2]

THE MERITS

The record does not support the County's suggestion that Blitz mistakenly included Section 11.1(L) in pre­par­ing the draft and final copies of the Sheriff's Agreement.  Blitz knew which matters remained in dispute at the start of the interest arbitration.  He drafted the County's proposal.  The inclusion of the County's language in the draft contracts prepared by Blitz's office after the interest arbitration demonstrates that the parties agreed to include a PERS provision.  The question remains whether Section 11.1(L) accu­rately ex­pressed the parties' agreement.  The Union bears the burden of establishing that the use of the word "employer" was a typographical error.

The Union's position regarding the intent of Section 11.1(L) finds some support in the County's interest arbitration brief, which did not challenge the word "employees" in the Union's proposed language.  However, the record as a whole does not meet the Union's burden of proof.

The language that Section 11.1(L) replaced made no explicit reference to the PERS pick-up or employee con­tributions.  Younger did not testify to discussions in bargaining over payment of the PERS pick-up.  The Union also missed several opportunities to raise the alleged error.  Although Younger changed "employer" to "employees" on his copy of the County's proposal, he did not point out the alleged error to Blitz.  After the interest arbitration, the County continued to use its language in the draft and final con­tracts.  That language varied from the Union's proposal not only in its use of the term "employer," but in the omission of sick leave con­version language and the disputed final sentence.  On this record, the Union has not shown that the variance in language from its proposal was in­ad­vertent or a typo­graph­ical error.

Section 11.1(L), on its face, is clear and unambiguous.  It obligates the County to make the employer con­tri­bu­tion to PERS.  It does not refer in any way to other PERS payments.  Accordingly, the County did not violate this provision when it discontinued paying the PERS pick-up.

The Agreements are clear and unambiguous regarding the obligation to discuss changes in "work rules."  Nothing in either Agreement suggests the parties intended to give the term "work rule" a meaning other than the usual labor relations meaning, and the context in which this term appears is consistent with labor relations usage.  In labor relations parlance, "work rules" refer to the rules by which employee conduct is regulated.  The payment of the PERS pick-up is not such a work rule.  It is therefore unneces­sary to determine whether the Union met the contractual time limits for protesting changes in work rules.  Section 18.2 of the Courthouse Agreement, and Section 17.2 of the Sheriff's Agreement, simply do not apply to the contested action.  It is thus concluded that the County has not violated either provision by discontinuing the PERS pick-up.

Section 18.5(c) of the Courthouse Agreement is clear and unambiguous.  That language addresses only mandatory noneconomic matters included in the personnel manual.  No evidence exists that the PERS pick-up has ever been included in the personnel manual.  Moreover, while the PERS pick-up is a mandatory sub­ject of bargaining, by no means can it be considered a noneconomic subject.  It is therefore concluded that the County did not violate this provision by discontinuing the PERS pick-up.

"Working condition," as used in Section 1.2 of the Courthouse Agreement, is not synon­y­mous with "work rule," as used in Section 18.2.  The two terms are governed by separate provisions, suggesting the parties distinguished between them.  Unlike changes in work rules, which require only discussion, the Agreement explicitly requires the opportunity to bargain over a change in working conditions.  The two terms also have distinct meanings in common labor relations parlance.  While work rules refer to employee conduct, working conditions refer to matters which often constitute mandatory subjects of bar­gain­ing, including employee benefits.  Payment of the PERS pick-up is an employee benefit.  Section 1.2 of the Courthouse Agreement thus required notice and bargaining before dis­con­tin­uing the PERS pick-up.

The obligation to bargain is not an obligation to reach agreement.  It is an obligation to discuss with the good faith intent to reach agreement.  The County declined to bargain with the Union over the PERS pick-up before the November 1994 election.  On December 19, it an­nounced PERS de­ductions as a fait accompli and specifically declined to reopen the Agreements.  Simply put, the County did not bargain over this issue.  It is therefore concluded that the County violated Section 1.2 in suspending its payment of the PERS pick-up without first bargaining.

THE REMEDY

The usual remedy for a contractual violation is to reinstate the status quo ante and make employees whole for losses occasioned by the breach.  In this case, the status quo ante for the Courthouse Unit is the payment of the PERS pick-up by the County, subject to an obligation to bargain over any change.[3]  The Arbitrator will so order in this case.

           AWARD 

Courthouse Unit, Represented by Local 2746 

The County did not violate Article 18 - General Provisions, Section 2 - Work Rules, Article 1 - Management Rights, Section 5 - Entire Agreement when the County unilaterally implemented effective January 1, 1995 a require­ment that employees pay the employee portion of PERS by way of payroll deduction.  The County violated Article 1 - Management Rights, Section 2 - Changes in Working Conditions, when the County unilaterally implemented effective January 1, 1995 a require­ment that employees pay the employee portion of PERS by way of payroll deduction.

As a remedy, the County shall reinstate the status quo ante in the Courthouse Unit and shall make employees whole for losses occasioned by the unilateral implementation of a requirement that employees pay the employee portion of PERS by way of payroll deduction.  As agreed by the parties, the Arbitrator retains jurisdiction over the remedy portion of this Award and any dispute arising therefrom. 

Sheriff's Unit, Represented by Local 2746-0 

The County did not violate Article 11 - Compensation, Section 11.1(L), Article 17 - General Provisions, Section 2 - Work Rules when the County unilaterally implemented effective January 1, 1995 a requirement that employees pay the employee portion of PERS by way of payroll deduction. 

DATED:  July 5, 1995 

__________________________________

   LUELLA E. NELSON - Arbitrator


[1]           The Arbitrator notes that Measure 8 is the subject of review in several jurisdictions within the state court system.  That is the appropriate forum for determining the scope and meaning of Measure 8.

[2]           The Arbitrator expresses no opinion regarding whether such an obligation would ensue from the provisions of PECBA.  That decision must be left to the ERB, which has authority to interpret and apply that statute.

[3]           The Arbitrator expresses no opinion regarding whether Measure 8 prohibits the County from bargaining away its existing obli­ga­tion to pay the PERS pick-up.

 

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