CITY OF BROCKTON --

CITY OF BROCKTON and BROCKTON CITY HALL ADMINISTRATIVE SERVICES ASSOCIATION and BROCKTON CITY HALL EMPLOYEES UNION, H.L.P.E, Case Nos. MUP-6672, MUP-6673, August 12, 1992, 19 MLC 1139

Walsh, Chairperson, and Morris and Hayward, Commissioners

A Commission hearing officer issued a decision and order in this matter on January 13, 1988, finding that the City of Brockton (City), through its agent the Brockton Retirement Board (Retirement Board) violated Sections 10(a)(1) and (5) of G.L. c.150E (the Law) by repudiating the wage provisions of collective bargaining agreements with the Brockton City Hall Administrative Services Association (Association) and the Brockton City Hall Employees Union, H.L.P.E. (HLPE).[1] The City has appealed the hearing officer's decision,[2] and both the City and the Association have filed supplementary statements which have been considered. The sole issue on appeal is whether the City is the c.150E public employer of Retirement Board employees.

Because no party has challenged the hearing officer's findings of fact, we adopt them and briefly summarize the relevant facts as follows:

The Association and HLPE (Union) have represented a unit of City clerical employees and a residual unit of City employees, respectively, since the 1970's. Until the present case arose, the positions of bookkeeper, principal clerk and administrative assistant in the Retirement Board's offices had been treated by the City and the Unions as included in one of the two bargaining units represented by the Unions.[3] The incumbents of those positions received the contractual wages and benefits, including lief and health insurance and paid union dues.[4] There is no evidence or contention that the Retirement Board ever recognized either Union as the exclusive collective bargaining representative of the employees. Nor did the Commission ever certify either Union as the representative of the Retirement Board's employees.[5] The Retirement Board's office is in the annex of Brockton City Hall, with some other City and School Department offices. It is reached through the same telephone number as other City offices.

The Retirement Board, which operates under G.L. c.32,[6] is composed of three members. The City auditor is a member ex officio, another member is elected by the City's employees, and these two members choose the third member. G.L. c.32 confers fiscal autonomy on municipal retirement systems. The City is obligated to fund both the expenses necessary to meet the Retirement Board's pension obligations and the expenses necessary for the administration of the Retirement Board. The Retirement Board maintains its funds in its own account from which it pays its bills, including employees' salaries. Unlike City departments, the Retirement board submits its warrants for payment directly to the City treasurer, rather than to the City auditor.

In June 1987, without notice to either Union, the Retirement Board submitted a budget to the Brockton City Council which included pay raises for the three positions in excess of the salaries provided for the Union contracts. The City Council appropriated the money for the raises. The Association's president protested the Retirement Board's action to the City's Mayor, who had not previously known of the raises. The Mayor took no action to rescind the raises.

The issue of whether the City or the Retirement Board is the employer of the three clerical employees involved in this case is crucial to determining whether the City violated c.150E when the Retirement Board raised employee salaries.

G.L. c.150E, Section 1 defines "public employer" as "...any county, city, town, district, or other political subdivision acting through its chief executive officer...". The Commission's longstanding policy of including employees in the largest practicable bargaining units, see, e.g., Massachusetts Board of Regents, 12 MLC 1643 (1986), and the fact that by tradition in Brockton, the Retirement Board clerical employees have been treated as employees of the City, contributed to the hearing officer's conclusion that the Retirement Board employees are employees of the City. The hearing officer also relied on the Commission's holding in a comparable representation case involving retirement board employees, that two clerical employees of the Malden Retirement Board were appropriately included in a city clerical unit for purposes of collective bargaining.

Malden relied heavily on the lack of a "tradition of independent action" on the part of the retirement board and the "virtually total application of City employment policies" to the retirement board clerical employees. City of Malden, 9 MLC at 1078. Malden also concluded that the method by which the retirement board's budget "proceeds through City funding mechanisms is no more determinative of employer status than is the fact that the City water department pays for itself through customer charges." Id. at 1079.

Malden made sense from a labor relations perspective because it crated a broad collective bargaining unit of employees performing similar work. The parties' consistent application of city personnel policies to the retirement board clerical employees demonstrated that, as a practical matter, there was no inherent impediment to treating retirement board and city employees similarly in terms of wages, hours and other terms and conditions of employment.[8] From a fiscal point of view, municipal resources could be used efficiently[9] and the city and its retirement board would not incur separate expenses for the costs associated with collective bargaining. Additionally, Labor Relations Commission v. Town of Natick, 369 Mass. 431 (1976), (hereafter Natick), had explicitly rejected a "compromise" two- part bargaining structure in cities and towns which had adopted statutes giving broad authority to police or fire chiefs. Natick held that a town's board of selectmen is the town's "chief executive officer" with exclusive authority to bargain concerning subjects which otherwise would be within the authority of the respective chiefs. Natick makes a strong statement that there should be only one locus of a municipality's bargaining authority. Natick, 369 Mass. at 439. The application of these policies in Malden resulted in a decision that the retirement board clerical employees were appropriately included in the overall city clerical unit.

Now, however, there are compelling reasons to re-examine the 1982 Malden analysis in the context of this prohibited practice case and the remedial order requiring the City to take all necessary steps to cease paying the wage increases granted to the three employees of the Retirement Board. Chief among these reasons in the Appeals Court's opinion in Everett Retirement Board v. Board of Assessors of Everett, 19 Mass. App. Ct. 305, 306 (1985), (hereafter Everett), which held that the expense fund component of retirement system budgets is not subject to municipal control. Everett is particularly instructive because the issue giving rise to the dispute was the retirement board's addition of a $20,000/year administrative secretary position to its budget. The mayor objected to the increase and rejected from the budget submitted by the board almost $40,000 of the retirement board's administrative expenses. The Appeals Court held that the mayor's action was invalid and that neither the operation of "proposition 2 1/2"[10] nor the provisions of the municipal finance law[11] apply to retirement boards. The Court specifically concluded that municipal retirement boards are not "municipal departments," and noted that the only restrictions on retirement board spending are through operation of the Public Employee Retirement system and the powers conferred by G.L. c.32, Sec.21(4).[12]

In the present case, the City relies on Everett and argues that because it cannot control the Retirement Board[13] it cannot comply with the hearing officer's order to "take whatever steps are necessary to cease paying the wage increases granted to...[the retirement board clericals]... and to return those employees to their contractual wage rates."[14] Because Everett does not address issues arising under c.150E, its does not expressly determine the respective obligations of the City and the Retirement Board under the public employee collective bargaining law.[15] Nor does other case law describing the relationship between a retirement board and its corresponding government entity assist to determine whether a retirement board or the county, city or town to which it is related is the c.150E public employer of the retirement board employees. Buteau v. Norfolk County Retirement Board, 8 Mass. App. Ct. 391 (1979), describes the functioning of a county retirement board on the one hand as similar to a municipal board, both of which are "part of the administration" of the governmental unit, and not "agencies" as defined in G.L. c.30A, Section 1(2). On the other hand, Buteau also describes the county retirement system "in general [as] an independent unit having its own separate assets and liabilities." at 392. County Commissioners of Norfolk County v. Board of Norfolk County Retirement System, 377 Mass. 696, 698 (1979), requires at least minimal accountability by a county retirement system, holding that the retirement board must submit a detailed explanation of its explanation of its expenditures to the county commissioners pursuant to a statute requiring such action by every board of agency "supported wholly or in part by county funds." However, that decision does not suggest that the county commissioners possess the authority to disallow or change the retirement board's expense budget.

Commission case law under G.L. c.150E, other than Malden, fails to provide a clear-cut test applicable to the unique structure of retirement boards. Over the years, several cases have presented the issue of whether a city or town is the c.150E public employer of employees of a public entity or board with some degree of autonomy. The Commission consistently has sought to reconcile the policy of a single municipal employer, expressed in c.150E, s.1, with diverse funding, administrative and statutory structures. Thus in City of Springfield, 2 MLC 1233, 1236 (1975), the Commission found that employees employed under the Comprehensive Employment and Training Act of 1973 (CETA) were employees of the city which was part of a consortium of municipalities acting as the CETA prime sponsor because the city controlled the employees' working conditions. In another CETA case, the Commission found that a consortium of municipalities, rather than the town in which the employee performed his duties, was the public employer because the town exercised little, if any control over the employee's working conditions. Town of Grafton, 5 MLC 1833, 1834 (1979).

As noted earlier, the Commission has determined that a light commission, which exclusively controlled the wages, hours and terms and conditions of employment of light department employees, was the "chief executive officer" of the municipality for the purpose of bargaining with the employees. Town of Marblehead, 7 MLC 1240, 1242 (1980). But see, Town of Cohasset, 1 MLC 1184, 1186 (1974) (Board of Selectmen, not elected department heads, are "chief executive officers.") The commission also found that an elected board of sewer commissioners was "the designated representative" of a municipality within the meaning of Section 1 of c.150E. Town of Wareham, 2 MLC 1547, 1548 (1976). These and other cases have been based upon the necessity of reconciling the policies of c.150E with the wide variety of statutory and regulatory vehicles for delivering municipal services.

Although Natick instructs that municipal collective bargaining authority should be vested in a single municipal chief executive, it reached that conclusion in the context of specific statutory authority. Natick notes that Section 7(d) of c.150E provides that statutes authorizing police or fire chiefs to direct the operations of their respective departments are expressly overridden by the conflicting terms of a collective bargaining agreement. In addition, Natick noted a potential for a conflict interest if police or fire chiefs, whose salaries often are set at some multiple of the salary of a police officer or firefighter, were to bargain autonomously about employees' wages.

No similar statutory scheme is applicable to retirement boards. G.L. c.32 is not one of the statutes overridden by the conflicting terms of a collective bargaining agreement under Section 7(d) of c.150E,[16] and neither c.32 nor the record in this case indicates that there would be any relation between compensation paid to retirement board members and wages paid to the board's employees.[17]

Moreover, a statutory provision unique to retirement boards lends additional weight to the argument that the City cannot be the c.150E employer of retirement board employees. G.L. c.32, Section 16 provides for a right to a hearing before the applicable retirement board for any member of a retirement system who is involuntarily retired or discharged.[18] Under this provision, therefore, a retirement board has statutorily mandated appellate review responsibility for personnel actions taken by the municipal employer.[19] Although this responsibility has been rather narrowly construed by the courts,[20] it demonstrates a potential conflict between a retirement board and the municipal employer in the area of labor relations or personnel administration.[21]

It is a municipality's absolute lack of control over the administration and expenditures of retirement boards, however, that is the most striking departure from the structure of other municipal departments and the control exercised by the municipal authority in other contexts. As a general matter, the chief executive officers of cities and towns have been held to have broad powers over appropriations. In some forms of city government, for example, a mayor's obligations under the municipal finance act supersede requirements established by ordinance. See e.g., Whalen v. Holyoke, 13 Mass. App. Ct. 446, 454-455 (1982), fur. rev. den. 386 Mass. 1104 (1982) (Mayor permitted to refuse to include funding in his budget recommendations for the full extent of department personnel provided by ordinance enacted under the authority of a board of alderman). A mayor's budgetary powers may even extend to legislative employees, Id. at 454, citing Mayor of New Bedford v. City Council of New Bedford, 13 Mass. App. Ct. 251 (1982). In sharp contrast, Everett establishes that a retirement board's absolute fiscal autonomy precludes even indirect municipal control through the appropriation or budget process. Natick's preference for a single municipal employer within the meaning of c.150E cannot override the mandated autonomy of the Retirement Board as provided by c.32 and interpreted in Everett. Instead, the Retirement Board must be recognized as a separate entity, independent of the municipality for administrative and fiscal purposes; and, therefore, independent of the municipality for the purposes of collective bargaining.

As the Unions in this case acknowledge, the Mayor's only ability to control the Retirement Board is limited to the authority to change the City Treasurer, thereby controlling one of the three Retirement Board votes. The ability to influence the vote of only one member of a three member Board, however, is insufficient to vest control of the board with the Mayor. If the board or commission membership served at the chief executive's pleasure it would be easier to classify the lines of authority by referring to traditional concepts of agency.[22] But even where local officials, who have direct authority to hire and fire employees, are elected, the employing entity in the vast majority of cases is still the municipality which controls the administrative and budget of the board or commission. In most situations the chief executive officer of the municipality retains sufficient authority over funding, and, therefore, over administration to engage in collective bargaining. See e.g., Town of Cohasset, 1 MLC 1184 (1974). (Fact that highway superintendent, water commissioners and sewer commissioner were elected does not determine whether town's selectmen are chief executive officers under c.150E for employees of highway, water and sewer departments.) Thus, the chief executive's ability to remove a "department head" is not the sole determinant of the city's status as employer of the retirement board employees, although it is a factor to consider along with the more important issue of fiscal and administrative autonomy.[23]

Therefore, because of its total fiscal and administrative autonomy from the City, and because of the absence of other means to control the administration, staffing and expense fund component of the Retirement Board, the Brockton Retirement Board, and not the City of Brockton, is the statutory employer of the employees of the retirement board. Accordingly, the employees of the Brockton Retirement Board could neither be included in the collective bargaining units of City employees[24] nor represented as members of those units by the Unions. Since the Unions did not represent the employees of the Retirement Board at the time of the alleged pay increase neither the City nor the Retirement Board had any obligation to notify or bargain collectively with the Unions concerning the employees' pay. The City, therefore, did not violate the Law when the Retirement Board increased the salaries of its employees. The complaint against the City in this matter in thus dismissed.

SO ORDERED.

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