Dearborn Fire Fighters Union Local No 412 v. City of Dearborn

231 N.W.2d 226, 394 Mich. 229

• Court: Michigan Supreme Court
• Decided: June 24, 1975
• Docket: Docket Nos. 54308, 54309, (Calendar Nos. 3, 4)
• Status: Published

Opinions

Levin, J.

The City of Dearborn challenges the constitutionality of the act (1969 PA 312) which provides for compulsory arbitration of police and fire department labor disputes.¹

In 1970, the City of Dearborn and unions representing its policemen and firemen (Police Officers Association of Dearborn and Dearborn Fire Fighters Union) attempted to negotiate new labor agreements. When the negotiations and subsequent mediations failed, the unions initiated arbitration proceedings under the act.

Each union chose a "delegate” to its respective arbitration panel. The city refused to name a delegate to either panel. The absence of the city’s delegate precluded selection by delegates to the panels of a third person to act as "arbitrator/ chairman”. Pursuant to the act, the chairman of the Michigan Employment Relations Commission appointed the arbitrator/chairman of the panels.

Each two-member panel conducted hearings and rendered a decision. Upon the city’s refusal to comply with the decisions, the unions initiated these actions. The circuit court ordered enforcement. The Court of Appeals affirmed. 42 Mich App 51; 201 NW2d 650 (1972).

We hold the act to be unconstitutional. The arbitrator/chairman of the panel is entrusted with the authority to decide major questions of public policy concerning the conditions of public employment, the levels and standards of public services, and the allocation of public revenues. Those questions are legislative and political, not judicial or quasi-judicial. The act is structured to insulate the arbitrator/chairman’s decision from review in the political process. It is not intended that he be, nor is he in fact, accountable within the political process for his decision. This is not consonant with the constitutional exercise of political power in a representative democracy.

We give this ruling prospective effect. Orders of arbitration panels heretofore entered will be enforced.

I

Because we give our ruling on the constitutionality of the act prospective effect only, we consider the city’s other challenges to the validity of the orders. We find that the arbitration panels proceeded in accordance with the provisions of the act. Their orders, accordingly, will be enforced.

The absence of the city’s delegates from the arbitration panels did not deprive the panels of subject matter jurisdiction.

The act provides: "the employees or employer may initiate binding arbitration proceedings”.² (Emphasis supplied.) "Upon their [the city’s and the union’s delegates’] failure to agree upon and appoint the arbitrator * * * either of them may request the chairman of the state labor mediation board to appoint the arbitrator”.³ (Emphasis supplied.)

It is apparent that once either party requests arbitration, "the other party’s participation is compulsory, and arbitration necessarily follows”.⁴

The city would require a union confronted with a recalcitrant public employer to seek a court order to compel the employer to submit to arbitration. This additional step would encourage dilatory practices and would be at odds with the act’s policy of providing "an alternate, expeditious, effective and binding procedure for the resolution of disputes”.⁵

Also without merit is the city’s challenge to the fire fighter order on the ground that the panel failed to issue its order within the 30-day period prescribed in the act.⁶

II

The city contends that compulsory arbitration unconstitutionally divests home-rule cities of their powers under the Constitution.⁷

The powers reserved in the Constitution to home-rule cities are expressly "subject to the constitution and law”. Const 1963, art 7, §22 (see fn 7X_

The power of the Legislature to provide for the resolution of disputes in public employment is explicitly stated in § 48 of article 4 of the Constitution: "The legislature may enact laws providing for the resolution of disputes concerning public employees, except those in the state classified civil service”. The city contends that under this provision the Legislature may "regulate” but not "control” municipal labor relations. The proffered distinction between "regulation” and "control” eludes us.

This Court recently held⁸ that the home-rule powers⁹ of the Common Council of the City of Detroit to adopt a residency requirement and a retirement plan are subject to the City’s obligations as a public employer under the public employment relations act¹⁰ and that both residency and retirement benefits are mandatory subjects of collective bargaining under the PERA. Referring to § 48 of article 4, we said: "PERA is such a law ["for the resolution of disputes concerning public employees”] and we as a Court are required to follow the constitutional intent of the Legislature”. Detroit Police Officers Association v Detroit, 391 Mich 44, 59; 214 NW2d 803 (1974).

Relying on § 48 of article 4, we previously had rejected claims of the Regents of the University of Michigan that the PERA infringes upon the constitutional autonomy of the Regents.¹¹ Regents of the University of Michigan v Employment Relations Commission, 389 Mich 96; 204 NW2d 218 (1973). Still earlier, this Court held that the "authority and duty” of the Wayne County Civil Service Commission under an act of the Legislature¹² "was diminished pro tanto, by the” enactment of the PERA. Wayne County Civil Service Commission v Board of Supervisors, 384 Mich 363, 374; 184 NW2d 201 (1971).

The constitutional and statutory powers of a home-rule city to establish the conditions of public employment are subject to the power of the Legislature. The Legislature may properly provide for the resolution of disputes concerning employees of home-rule cities — as well as other public employees, except those in the state classified civil service — and may impose the resolution on both the public employer and the public employees.

The city additionally contends that the challenged act "indirectly, but undeniably, surrenders the power to tax” in violation of the following constitutional prohibition: "The power of taxation shall never be surrendered, suspended or contracted away”. Const 1963, art 9, § 2. The city premises that wage and benefit increases for policemen and firemen can only be paid by the imposition of new taxes. "Accordingly, the power to grant such pay increases includes the power to increase taxes.”

The orders of the arbitration panels do not in terms require an increase in taxes. Assuming the predicate of the city’s argument, that existing revenues are insufficient to fund the cost of the increases in compensation and benefits awarded, the orders can be read as contemplating either an increase in taxes or a decrease in other municipal expenditures. Be that as it may, implicit in the power conferred by the Constitution on the Legislature to "resolve” disputes concerning public employees is legislative power to require, if need be, a public employer to provide the necessary funds subject to constitutional limitations, e.g., the 15-mill limitation.¹³ The constitutional prohibition against surrender of the power of taxation has not been violated.

Ill

The constitutional principle restricting the delegation of legislative power is invoked against this delegation of the power to resolve a labor dispute to persons other than governmental officials or tribunals.¹⁴

Also implicit in the legislative power to enact laws providing for the "resolution of disputes concerning public employees” is the power to delegate the resolving authority; clearly it was not intended that the Legislature itself decide each and every dispute.¹⁵

The nondelegation doctrine, Professor Davis has written, is "almost a complete failure”.¹⁶ In his treatise, State Administrative Law, Professor Cooper demonstrated that it is not possible to devise a "true test” for determining whether a particular delegation will be sustained, one articulating and enumerating all the factors that motivate the judicial response.¹⁷ In the final analysis, courts, "weighing the advantage of [the] delegation against the hazards involved”,¹⁸ make a pragmatic analysis of whether the consequences of the delegation are so undesirable as to require judicial intervention.

Another writer pertinently notes that while "the old delegation doctrine” has been rightly repudi-. ated as an "absolutist legal theory”, the "doctrine has an underlying core of validity in that it requires that those who have been selected by a given process and from a given constituency retain the power to make ultimate policy decisions and override decisions made by others”.¹⁹

Compulsory arbitration is viewed by some as the corollary of the statutory prohibition of strikes by public employees. Unless there is some constraint on public employers, they may ignore legitimate negotiation demands of the employees and illegal strikes may result.

The challenged act represents a legislative attempt to prevent the dire consequences of strikes or work stoppages by certain public employees— policemen and firemen.

The experience in Michigan so far has been favorable. Work stoppages by policemen and firemen have been infrequent. But whether this is a function of compulsory arbitration or of the workers’ general satisfaction with the decisions is unclear. Montreal, despite compulsory arbitration, has experienced illegal policemen and firemen strikes.²⁰

A number of states have enacted legislation similar to Michigan’s providing for binding arbitration as the terminal step in the bargaining process between municipalities and policemen, firemen and some other public employees. The highest courts of several states have upheld the constitutionality of compulsory arbitration.²¹

Despite the uniformity of the judicial response in upholding compulsory arbitration provisions, the analysis is neither consistent nor persuasive.

The Supreme Court of Wyoming avoided the real issue by refusing to characterize as a delegation of legislative power the arbitrator’s power to decide "wages, hours of service, and working conditions”.²²

The Rhode Island Supreme Court acknowledged that the arbitrator’s "power to fix the salaries of public employees [is] clearly a legislative function”, but analyzed a challenge to the constitutionality of the delegation in a manner which has been correctly criticized as "wholly tautological”.²³

In Rhode Island, as in Michigan, the arbitration panel consists of three members.²⁴ Each party selects an "arbitrator” and the arbitrators "agree upon and select and name a third arbitrator” to serve as chairman of the panel. If the parties could not agree, the third arbitrator was selected by the Chief Justice of the Rhode Island Supreme Court.²⁵

The Rhode Island Supreme Court said that the determinative question was whether decisional authority had been delegated to public officials or improperly to private persons. It reasoned that since the panel enjoys the legislative "power to fix the salaries of public employees, * * * without control or supervision from any superior” and its term of service and duties are specified by statute, each member of the panel (including the union arbitrator and the public-employer arbitrator) is a "public officer and that collectively the three constitute a public board or agency”. Such nominalistic reasoning both begs the question and reduces the analysis of the issue to a. reason-free debate over labels. Such reasoning could countenance the syllogism that all enactments of the Legislature are constitutional because the Legislature cannot pass an unconstitutional law.

In Harney v Russo, 435 Pa 183; 255 A2d 560 (1969), the Pennsylvania Supreme Court upheld the constitutionality of a compulsory arbitration statute against a challenge based on the absence of statutory guidelines or standards. The Court’s decision rested heavily on the passage, subsequent to a judicial decision striking down a compulsory arbitration statute, of a constitutional amendment authorizing the legislature to enact laws making the findings of panels or commissions in policemen and firemen disputes binding on public employers. Because of the unique constitutional history of the Pennsylvania statute, obviating analysis of the question before us, its opinion is of little assistance.

In Pleasant Ridge v Governor, 382 Mich 225; 169 NW2d 625 (1969), this Court sustained the constitutionality of a statute providing for compulsory arbitration to select a highway route. The principal challenges concerned the adequacy of the standards prescribed to guide the administrative commission/arbitration board in the exercise of the delegated power and the failure to provide for judicial review of the decision. This Court did not consider whether there was an unlawful delegation of legislative power to an independent and politically unaccountable person.

In Pleasant Ridge, in contrast to the broad-ranging power of a police or fire department arbitration panel, the power delegated — to choose between alternative highway routes — was limited. After the Legislature had itself made the decision to proceed with construction of the highway and to expend the necessary public funds and, after the location of the alternative routes was outlined, the Legislature delegated a narrow responsibility to the panel.

The decision of the Pleasant Ridge arbitration panel set no precedent affecting other communities in the selection of other highway routes. It was a unique situation immediately affecting a relatively small number of persons.

Act 312 arbitration panels, in contrast, recurringly establish the level of wages and working conditions for firemen and policemen across the state. The awards granted by Act 312 panels establish guidelines affecting compensation packages of other policemen and firemen and establish precedents which are often advanced by other public employees. The attendant increase in the cost of public services and the possible effect on the level of services and taxes caused directly or indirectly by the awards of Act 312 panels concern the entire population of the state.

IV

The injection of compulsory arbitration into municipal labor relations has been the subject of considerable critical comment.²⁶

Professor George W. Taylor wrote that third-person arbitration is a greater threat to the performance of the functions of representative government than the strike it seeks to forestall:

"Some persons would 'simplify’ matters by 'forthrightly’ adopting some form of compulsory arbitration in all the political jurisdictions. This course, until now, has been almost universally rejected in the private sector, because it would undermine private agreement-making, which is the cornerstone of the enterprise system. Compulsory arbitration is not more, and perhaps less, appropriate in the government sector. For reasons expressed heretofore, a strike of government employees interferes with the orderly performance of the functions of representative government. Compulsory arbitration is a greater threat — it entails a delegation to 'outsiders’ of the authority assigned by the electorate to elected officials, who are subject to the checks and balances of our governmental institutions.”²⁷

A number of other commentators have questioned the propriety of government abdicating its responsibility to decide financial and other fundamental policy questions to a person who is not politically responsible and accountable, directly or even indirectly, to the electorate, locally or statewide:

"[Cjompulsory arbitration amounts to a delegation of the responsibilities of public management and of the lawmakers to outsiders. In my view, this is incompatible with the basic principles of representative government. In fact, it can become a most convenient way to duck hard issues by passing them on to a board that is only temporarily in office and that is not responsible to the electorate.”²⁸

A commentator wrote that compulsory arbitration of public-sector labor disputes "preempts] * * * public officials from deciding political issues”:

"Viewed mechanically, the arbitration process does not seem to allocate public resources: arbitrators fix equitable salaries for employees, and officials determine, given these cost figures, how much public service should be purchased. As a practical matter, however, employers rarely contemplate and unions would rarely permit curtailment of services and employment. Thus, the wage decision and the resource allocation decision are inevitably linked. Also, professional employees often bargain over programs. For example, teachers’ unions may demand certain kinds of educational offerings or limits on class size. Even if arbitrators were capable of dealing with the complexities of budgeting and choosing programs, elected officials should not delegate the duty they owe the electorate to settle these questions. Deciding policy issues is the vocation of officials, not of arbitrators.”²⁹

Others have been impressed that "[although the effect may not necessarily be the raising of taxes by an unaccountable arbitrator, the decision may well affect the allocation of governmental expenditures within a political unit. Such a decision arguably should remain with those who are politically accountable for it”.³⁰

Some writers have suggested as an alternative the creation of a permanent governmental tribunal exercising the power entrusted under compulsory arbitration statutes to the "outsider”.

Daniel P. Sullivan, in his treatise Public Employee Labor Law, while writing that "the delegation of governmental power to an outside body is in clear conflict with a democratic form of government” (emphasis supplied),³¹ suggests, as a "safeguard for the electorate”, that issues that cannot be resolved by the parties "be submitted to a tribunal for a binding decision. Under this plan, the people, through their representatives, would hire, pay and discharge the officers of this tribunal and also provide them with adequate safeguards to be used in making their decisions. The utilization of this system would render the tribunal responsive to the constituents through their elected representatives. Therefore, the electorate would retain its power to effectively determine the course of governmental actions, unlike the system in which an independent third party makes a decision which is enforceable by a court.” (Emphasis supplied.)³²

V

When the same term, here "arbitration”, is used in different contexts, the analysis may become blurred. While both "interest” arbitration and "grievance” arbitration concern disputes, the nature of the dispute in one case is considerably different than the other.

Grievance arbitration concerns disputes arising under written agreements negotiated and agreed upon by the parties. In grievance arbitration, the labor arbitrator acts in a judicial or quasi-judicial capacity. He determines the facts and seeks an interpretation of the agreement in accord with the understanding of the parties as gleaned from the writing and the relationship.

In interest arbitration, the functions and prerogatives of the arbitrator are significantly different. He is not bound by the agreement or understanding of the parties. He does not interpret a contract, he makes one. He then imposes his concept of what the "agreement” ought to be on the parties.

Grievance arbitration is a familiar procedure for resolving disputes arising in the administration of a negotiated labor agreement.

Interest arbitration is a new concept designed to avoid the disastrous economic and social consequences of labor strife arising from inability of the parties to reach an agreement. Strikes in public and private employment adversely affect not only the parties but also the public dependent on the continued supply of the affected goods and services.

It is the public interest which justifies governmental intervention and governmental imposition of a resolution upon the parties so that the flow of essential goods and services may continue and the economy and government can function in an orderly and productive manner.

In construing § 48 of article 4, authorizing the imposed resolution of disputes in public employment, we bear in mind its underlying rationale: the preservation and advancement of the public interest.

VI

Section 1 of article 1 of the Constitution states a fundamental principle:

"All political power is inherent in the people. Government is instituted for their equal benefit, security and protection.”

We generally classify the powers of government as legislative, executive and judicial. Of the three kinds of public officers, only judges are independent in the sense that they are not supposed to be accountable for their decisions through the political process. Persons who exercise legislative and executive power are, in contrast, expected to be politically accountable for their decisions.

When a judge considers a case, we expect independence and impartiality. We often speak of an independent judiciary, independent decision-makers in the adjudicatory function. When an arbitrator is called upon to resolve a grievance arising in the administration of a negotiated labor agreement, we also expect independence and impartiality.

Under the act, the arbitrator/chairman exercises delegated legislative power, political power, the kind of power the Legislature and the Governor possess. But, in contrast with the Legislature, the Governor, established agencies of government and other appointees who exercise a continuing responsibility for the administration of delegated legislative power, the arbitrator/chairman is not accountable through normal political processes for the critical decisions affecting the distribution and level of public services and the allocation of public revenues which he independently makes.

What is sound in the exercise of judicial power and the quasi-judicial power of the grievance arbitrator, when applied to interest arbitration in the public sector, is not consonant with a core concept of a representative democracy: the political power which the people possess and confer on their elected representatives is to be exercised by persons responsible (not independent) and accountable to the people through the normal processes of the representative democracy.

Some commentators consider the arbitrator/ chairman’s political unaccountability a virtue in that delegation to an outside person relieves both the union leaders and the public employer of the need to make an unpopular decision. "Rather than accepting criticism for making critical concessions, the public employer and union leaders can explain to the public and union members respectively that the blame must be shouldered by the arbitrator. It was he, and not the parties, who formulated the final award.”³³

Others have recognized this aspect of the resolution of impasses by independent and politically unaccountable outsiders:

"By relying upon arbitration, a governmental official can avoid an unpleasant decision for which he would otherwise be politically accountable.”³⁴

"[T]he arbitration route is becoming more interesting to some public officials who see it cynically as a way out. The arbitration board can be blamed for the tax hike which follows the pay increase.”³⁵

"Public officials may prefer to use the arbitrator as a scapegoat rather than attempt to justify an agreement to a legislative body or the electorate.”³⁶

Robert G. Howlett, chairman of the MERC, the public official who, if the parties cannot agree, picks the arbitrator/chairman of the panel under the challenged act, has similarly observed:

"One advantage of legislated arbitration, as in grievance arbitration, is the post-award expendability of the arbitrator. An award, in an emotionally charged situation, may prevent criticism from constituents or remove the threat to the re-election of a mayor or union president.”³⁷

Defenders of tripartite compulsory arbitration frequently cite the decision of the Rhode Island Supreme Court which concluded that the members of the panel are "public officers”, a characterization at odds with the acknowledged political unaccountability of the independent arbitrator/chairman.

While delegation of authority to resolve the dispute to an independent outsider may resolve the immediate crisis and relieves the public employer and union officials of the need to justify the result, this approach to legislative decision-making, precisely because it is designed to insulate and, in fact, does insulate the decision-making process and the results from accountability within the political process, is not consonant with proper governance and is not an appropriate method for resolving legislative-political issues in a representative democracy.

VII

Generally, when legislation is challenged as an invalid delegation of legislative power, the controversy revolves around the adequacy of the standards³⁸ and whether there are other safeguards such as a hearing, opportunity to introduce evidence, a written statement of findings and conclusions and judicial review.³⁹

The challenged act provides the traditional safeguards. A hearing is required; testimony and other evidence is received; a verbatim record is made; written findings of fact and a written opinion are issued; generalized standards to guide the exercise of this delegated power are stated;⁴⁰ and the decision is subject to judicial review. All that is generally required has been done.

Generally, however, discretionary power of this kind is vested in a governmental officer or agency with continuing responsibility for the day-to-day exercise of the delegated power in similar cases. The decision maker is not "expendable” but, rather, is responsible through the appointing authority to the electorate for the manner in which he exercises the delegated power.

Because decision making is concentrated in one person or agency exercising the delegated power on a continuing basis, the public can focus on the manner in which the power is exercised and can hold the appointing authority accountable.

Here decision-making power has been dispersed through so many individual, independent arbitrators that it is not possible to hold any public official or authority responsible for the manner in which the delegated power has been exercised.

A.

It is argued that while the act is susceptible of such an unconstitutional delegation, there is no unconstitutional delegation of power under the facts of this case because the arbitrator/chairman of each panel was appointed by the chairman of the MERC and if the city had named delegates to the panels, each panel would have consisted of a majority of publicly responsible arbitrators.

(On the other hand, if the city had named a delegate and the delegates named by the union and the city had, as contemplated by the act, agreed on an arbitrator/chairman for each panel, the panels would not have consisted of a majority of publicly responsible arbitrators, and this legislation as applied would then, presumably, have been unconstitutional. In this analysis, the provision of Act 312⁴¹ authorizing the delegates selected by the parties to select the arbitrator/chairman is unconstitutional because if the delegates do in fact select the arbitrator/chairman there could not be a majority of publicly responsible arbitrators — with the result that the act is constitutional to the extent it does not work as contemplated.)

The chairman of the MERC is indeed appointed by and accountable to the Governor. The chairman of the MERC, if the parties cannot agree on the arbitrator/chairman of the panel, is, however, required to choose as arbitrator/chairman an "impartial” person.⁴²

Political intervention would be regarded as an unwarranted intrusion on the independence of the "impartial” decision maker. It would be regarded as improper for the chairman of the MERC or higher governmental authority to attempt to influence the arbitrator/chairman.

Additionally, as the present chairman of the MERC observed, the arbitrator/chairman appointed by him is "expendable”. (See text accompanying fn 37.) The arbitrator/chairman’s decision relieves city and union officials from responsibility for the result and, if the other publicly responsible arbitrator dissents from the arbitrator/chairman’s decision, also relieves him from responsibility for the result.

The chairman of the MERC and his superior, the Governor, properly do not regard themselves to be and are not generally regarded by the citizenry as responsible or accountable for the decisions of the ad hoc, outside arbitrator/chairman. The statutory duty of the chairman of the MERC is to appoint an "impartial” person as arbitrator/ chairman. He is not expected to appoint an arbitrator/chairman who will render a decision which will have the support of the electorate or of their elected representatives.

After the award is made, the arbitrator/chairman goes back to his other pursuits. He does not answer to the chairman of the MERC nor does his livelihood depend on retaining the chairman’s favor. The ad hoc relationship between the arbitrator/chairman of an arbitration panel and the chairman of the MERC is too attenuated to provide political accountability. Interdependence and continuity — not expendability — are characteristic of accountability.

B.

It has been contended that the arbitrator/chairman exercises quasi-judicial power.

One can accept the characterization that the arbitrator/chairman’s decision is in the nature of an adjudication of the differences that exist between the parties without accepting the conclusion that this delegation is constitutional.

Viewed as a method of determining the wages and working conditions of particular persons employed by a particular employer, the arbitrator/ chairman’s decision is indeed in the nature of an adjudication. As such, the process by which the decision is reached properly includes the procedural safeguards of a hearing, fact finding and judicial review.

But his decision does more than resolve the differences between the parties. It affects the allocation of public resources, the level of public services provided the community as a whole and the cost of government. It also establishes precedents affecting the terms and conditions of public employment generally in both the directly-affected and other units of government.

The arbitrator/chairman cannot formally mandate, but his decision may necessitate, an increase in taxes. In this instance, Dearborn being a "city * * * the tax limitations of which are provided by charter or by general law”,⁴³ there is no constitutional impediment to levy by the city of additional taxes. But other taxing units to which this method of resolving collective bargaining impasses might be extended, e.g., school districts, are subject to the 15-mill limitation and the levy of additional millage ordinarily requires a vote of the people. Cf. Advisory Opinion re Constitutionality of 1973 PA 1 and 2, 390 Mich 166, 180 et seq.; 211 NW2d 28 (1973).⁴⁴

It may not be prudent or possible to cut expenditures or reduce personnel. There is a level below which police and fire services cannot safely be reduced. Additionally, if in response to a wage increase awarded by the arbitrator/chairman, the city were to lay off, as an economy measure, policemen or firemen, a reduction in manpower so timed would no doubt be viewed by the unions as retaliatory, as a bad faith attempt to circumvent the arbitrator/chairman’s decision, and could precipitate the strike which compulsory arbitration is said to "foreclose”.

Viewed from the governmental perspective, from the perspective of the citizens/taxpayers, the decision is legislative-political.

Because the decision is also in the nature of an adjudication in the sense that it affects particular persons (the members of the union and the city as a juridical entity) differently than the citizenry at large, it is appropriate to structure the arbitrators’ exercise of decision-making power with the safeguards traditionally surrounding the proper exercise by a governmental agency of quasi-judicial power — a hearing, introduction of evidence, standards to guide decision, formal findings, opinion and judicial review.

However, because of the strong public policy component in Act 312 arbitration decisions, such decisions cannot be shielded from review in the political forum.

C.

The PERA, like the NLRA, provides that it is the mutual obligation of the employer and the representative of the employees to bargain collectively regarding "wages, hours, and other terms and conditions of employment”.⁴⁵

Michigan has adopted a broad view of "conditions of employment”, making most issues mandatory subjects of collective bargaining and, presumably, subject to arbitration under Act 312. See Detroit Police Officers Association v Detroit, supra, holding that residency and the employees’ retirement plan are mandatory subjects of collective bargaining.⁴⁶

Act 312 provides a means of resolving impasses in policemen and firemen collective bargaining. Act 312 arbitration panels decide the legislative-political questions involved in determining the wages, hours and the other terms and conditions of employment of policemen and firemen.

The only issue remaining unresolved in the pending Detroit police officers arbitration proceeding is the manifestly legislative⁴⁷-political question whether Detroit residency should continue to be a condition of police employment. An arbitration panel recently concluded that supervisory police officers in the City of Inkster need no longer reside within the environs of that city.⁴⁸

The Court of Appeals, relying⁴⁹ on Federal cases, which have held that work loads, work rules, management-right clauses and safety are among the conditions of employment,⁵⁰ ruled that an Act 312 arbitration panel has "jurisdiction” to make a "manpower award”, to decide the number of firemen to be on duty at a particular time, on the rationale that such a decision affects "the firemen’s safety”.⁵¹

A broad range of questions may affect the safety of firemen and policemen — and concomitantly the safety of the entire community — e.g., whether policemen shall patrol or ride in squad cars, alone, in pairs or in greater numbers, how many fire fighters shall be assigned to each pumper and what kind of firearms and fire fighting equipment shall be used. Act 312 panels have made precisely those kinds of decisions.

The arbitrator/chairman might, in making a decision regarding crew size, require an increase in the total work force and is in a position to preclude a reduction in force (assuming for the moment that such a reduction would otherwise be feasible) which would alleviate to some extent the costs of any wage increase or other benefits he has ordered.

D.

There are innumerable "disputes” difficult of resolution which may become hot political issues— e.g., zoning, the location of public buildings, school hours and school programs. These can all be viewed as "disputes” or "differences” between the property owners, parents or school teachers immediately affected and the government. It would be an enormous departure from present concepts of responsible exercise of governmental power if the practice were to develop of resolving difficult political issues in an arbitrator’s conference room as an alternative to facing up to vexing problems in the halls of state and local legislatures.

Reposing power to resolve political issues in a person called an arbitrator áp.d characterizing the issue a "dispute” or "difference” and his decision an "adjudication” does not obviate the need for political accountability of the manner in which political issues are resolved.

E.

The unions jely on the provision for judicial review of the arbitrator’s result.

Although there have been more than a hundred awards, many of them controversial, there is no reported opinion of the Court of Appeals and we are aware of no circuit court opinion where "court review” resulted in modification of an arbitration award because it was not supported "by competent, material and substantial evidence”.⁵²

Judicial review of the manner in which delegated legislative power is exercised is a safeguard against arbitrary exercise of discretionary power. Within the range of reasonableness, the choice of the Legislature or its delegate is not subject to judicial alteration.

Most disputes in public employment will present a wide range of reasonable alternatives each of which is supported by "competent, material and substantial evidence on the whole record”.⁵³ Providing for judicial modification of those few decisions not so supported is not a substitute for political accountability and review of the choice between reasonable alternatives. Judicial review cannot fulfill the constitutional need for review and accountability through the political process.

F.

The Legislature’s ultimate political responsibility for the establishment and success of Act 312 cannot sustain this legislation. Such "accountability” is present in every legislative enactment. Similar logic would sustain legislation delegating any or all legislative power to any group or person.

G.

We are the product of our experiences. Drawn at one time or another from private life to the public sector, many governmental officials return to private endeavors when their public service is concluded. While in office, however, it is expected that governmental officials will develop a quickening sense of their public responsibility transcending insular concerns and that they will eschew outside endeavors which may be or appear to be incompatible with their public responsibility.

Arbitrator/chairmen, only temporarily in office, all have "nonpublic” occupations. A number of them accept employment from labor unions and employers as labor grievance arbitrators interspersed between their temporary service on police and fire department panels. That is not wholly compatible with development of the kind of solitary concern for the public interest which the citizenry properly expects of its public officials.

H.

It is the unique method of appointment, requiring independent decision makers without accountability to a governmental appointing authority, and the unique dispersal of decision-making power among numerous ad hoc decision makers, only temporarily in office, precluding assessment of responsibility for the consequences of their decisions on the level of public services, the allocation of public resources and the cost of government,⁵⁴ which renders invalid this particular delegation of legislative power.

In an apparent effort to meet the objection that compulsory arbitration hinders normal collective bargaining, and to narrow the differences between the parties on economic issues, the Legislature amended the act to provide for last-offer arbitration of economic issues.⁵⁵ Last-offer arbitration does not, however, address the constitutional deficiency we find in this act: the power of the decision maker, who does not have continuing responsibility, to make critical choices on economic and noneconomic issues without political accountability.

The primary obligation of government is to govern. We seek to safeguard the final authority of government. Decision making by an independent outsider in operative effect excludes government as the final authority.⁵⁶

VIII

Decisions holding legislative acts unconstitutional have, on occasion, been given limited retro-activity in recognition of the necessities of governmental administration.⁵⁷

Lemon I (Lemon v Kurtzman, 403 US 602; 91 S Ct 2105; 29 L Ed 2d 745 [1971]) held Pennsylvania’s statutory program to reimburse nonpublic sectarian schools for certain secular educational programs violative of the Establishment Clause of the First Amendment.. Lemon II (Lemon v Kurtzman, 411 US 192; 93 S Ct 1463; 36 L Ed 2d 151 [1973]) questioned whether the payment of some 24 million dollars, already allocated to nonpublic sectarian schools for services rendered before the statute’s invalidation, should be enjoined.⁵⁸

The majority in Lemon II, particularly concerned with the obligations incurred by the schools in reliance on the compensatory statute, affirmed the district court’s allowance of the payments.

In addition to the almost insurmountable administrative, political, and judicial problems that would be created by any attempt to unravel and renegotiate the "contracts” imposed by police and fire department arbitration panels, application of this decision retroactively would cause hardship on employees and employers and would not be constructive. Michigan labor organizations, their members and municipalities have justifiably relied on a presumptively valid statute.⁵⁹

IX

To avoid possible misunderstanding, we add that our holding does not preclude the Legislature from vesting the authority to resolve disputes concerning public employees in a governmental officer or agency with continuing responsibility for the day-to-day exercise of that delegated power. Such a decision-maker (arbitrator) would not be "expendable” but, rather, would be responsible through the appointing authority to the electorate for the manner in which the delegated power is exercised. See fn 32 and accompanying text.

1969 PA 312 is unconstitutional. This ruling is given prospective effect only. Accordingly, we affirm the decisions of the Court of Appeals and the circuit court granting enforcement of the arbitration orders. No costs are awarded, a public question being presented.

T. G. Kavanagh, C. J., concurred with Levin, J.

1 MCLA 423.231, et seq.; MSA 17.455(31), et seq.

2 MCLA 423.233; MSA 17.455(33).

3 MCLA 423.235; MSA 17.455(35).

4 Note, Michigan Compulsory Arbitration Act for Essential Services, 3 J Law Ref 239, 243 (1969).

5 MCLA 423.231; MSA 17.455(31).

6 The city concedes that the act permits, upon the parties’ agreement, extensions beyond the 30-day limit (MCLA 423.238; MSA 17.455[38]) but argues that it, a "party”, never gave the requisite permission.

The panel’s inability to complete its task within 30 days does not vitiate the order. The dominant cause of the delay was the nonparticipation of the city. The statutory purpose would not be served by requiring absolute compliance with these time limitations. Moreover, the city has not shown any prejudice to its interests resulting from the delay in decision.

7 Const 1963, art 7, §§ 22, 34:

"Sec. 22. Under general laws the electors of each city and village shall have the power and authority to frame, adopt and amend its charter, and to amend an existing charter of the city or village heretofore granted or enacted by the legislature for the government of the city or village. Each such city and village shall have power to adopt resolutions and ordinances relating to its municipal concerns, property and government, subject to the constitution and law. No enumeration of powers granted to cities and villages in this constitution shall limit or restrict the general grant of authority conferred by this section.”

"Sec. 34. The provisions of this constitution and law concerning counties, townships, cities and villages shall be liberally construed in their favor. Powers granted to counties and townships by this constitution and by law shall include those fairly implied and not prohibited by this constitution.”

8 See Detroit Police Officers Association v Detroit, 385 Mich 519; 190 NW2d 97 (1971).

9 MCLA 117.1, et seq.; MSA 5.2071, et seq.

10 MCLA 423.201, et seq.; MSA 17.455(1), et seq., authorizing public employees to select a collective bargaining representative and to engage in collective bargaining with their public employer.

11 Const 1963, art 8, § 5.

12 MCLA 38.401, et seq.; MSA 5.1191(1), et seq., providing for a civil service system in counties having a population of 1,000,000 or more.

13 Const 1963, art 9, § 6.

14 The Constitution provides that the "legislative power” is vested in a Senate and a House of Representatives. Const 1963, art 4, § 1.

15 It is not claimed that this specifically conferred legislative authority is not subject to other constitutional limitations, explicit and implicit. The power is plenary, in the sense that the power is not shared, but it is not an unbridled power any more than countless other powers possessed by the Legislature. The Legislature could not, for example, provide for "resolution” by tossing a coin, by holding a turtle race, or by combat.

16 Davis, Administrative Law Treatise (1970 Supp), § 2.00, p 40.

17 1 Cooper, State Administrative Law, pp 53, 73 (1965).

18 1 Cooper, supra, p 53.

19 Goldstein, Book Commentary on Wellington & Winter, The Unions & the Cities, 22 Buffalo L Rev 603, 608 (1973).

20 See McAvoy, Binding Arbitration of Contract Terms: A New Approach to the Resolution of Disputes in the Public Sector, 72 Colum L Rev 1192, 1212 (1972): "[T]he Montreal strike provides clear evidence that when employees feel passionately that a binding award is unjust they are likely to strike, illegality notwithstanding”.

One commentator has observed that "[n]o scheme of legislation can supply a foolproof strike preventative”. Witt, The Public Sector Strike: Dilemma of the Seventies, 8 Cal West L Rev 102, 116 (1971).

21 State v Laramie, 437 P2d 295 (Wyo, 1968); Harney v Russo, 435 Pa 183; 255 A2d 560 (1969); City of Warwick v Warwick Regular Firemen’s Association, 106 RI 109; 256 A2d 206 (1969). Contrast State v Johnson, 46 Wash 2d 114; 278 P2d 662 (1955).

22 The reasoning of the Wyoming Court has been described as "superficial at best”. Smyser, Public Employees and Public Employees Unions: Their Rights and Limitations in South Dakota, 17 SD L Rev 65, 72 (1972).

23 Comment, Collective Bargaining for Public Employees and the Prevention of Strikes in the Public Sector, 68 Mich L Rev 260, 284 (1969). See, also, McAvoy, Binding Arbitration of Contract Terms: A New Approach to the Resolution of Disputes in the Public Sector, 72 Colum L Rev 1192, 1206 (1972).

24 RI Gen Laws Anno, § 28-9.1-8.

25 By amendment, the Rhode Island Act now empowers the American Arbitration Association, if the arbitrators selected by the parties are unable to agree, to select the third arbitrator. RI Gen Laws Anno, § 28-9.1-8, § 28-9.2-8.

26 It has been asserted by some that compulsory arbitration inhibits the normal collective bargaining process. See Sullivan, Binding Arbitration in Public Employment Labor Disputes, 36 U of Cincinnati L Rev 666, 676 (1967); Comment, Collective Bargaining for Public Employees and the Prevention of Strikes in the Public Sector, 68 Mich L Rev 260, 287 (1969). Cf. Kheel, Strikes and Public Employment, 67 Mich L Rev 931, 941 (1969).

27 Taylor, Public Employment: Strikes or Procedures, 20 Industrial Labor Relations Rev 617, 632 (1967).'

28 Hildebrand, The Resolution of Impasses, Proceedings of the 20th Annual Meeting, National Academy of Arbitrators, pp 287, 291 (1967).

29 Bernstein, Alternatives to the Strike in Public Labor Relations, 85 Harv L Rev 459, 467 (1971).

30 Comment, Collective Bargaining for Public Employees and the Prevention of Strikes in the Public Sector, 68 Mich L Rev 260, 288 (1969).

Similarly, see Shaw and Clark, The Need for Public Employee Labor Legislation in Blinois, 59 111 Bar J 628, 642 (1971). See, also, Smyser, Public Employees and Public Employees Unions: Their Rights and Limitations in South Dakota, 17 SD L Rev 55, 68 (1972). The author argues that the power to fix the terms and conditions upon which government shall perform its governmental function cannot be delegated to nongovernmental agents and that an attempt to vest such power in a nongovernmental agent "is an attempt to create a new and private government”. It is not entirely clear to what extent this author’s argument rests on a South Dakota constitutional limitation which does not appear in the Michigan Constitution.

31 Sullivan, Public Employee Labor Law, § 13.4, p 93.

32 Sullivan, Binding Arbitration in Public Employment Labor Disputes, 36 U of Cincinnati L Rev 666, 678 (1967). Similarly, Sullivan, Public Employee Labor Law, § 13.17, p 102.

For similar proposals, see Shenton, Compulsory Arbitration in the Public Service, 17 Labor Law J 138, 142 (1966); Note, Public Labor Disputes — -A Suggested Approach for New Mexico, 1 NM L Rev 281, 294 (1971); Witt, The Public Sector Strike: Dilemma of the Seventies, 8 Cal West L Rev 102, 114 (1971); Good, Public Employee Impasse Resolution by Judicial Order: The Nebraska Court of Industrial Relations, 2 J of Law & Education 253 (1973); Comment, Collective Bargaining for Public Employees and the Prevention of Strikes in the Public Sector, 68 Mich L Rev 260, 284 (1969): "[T]he objection might be raised that the higher governmental authority which has ordered the arbitration has itself abdicated its responsibility by delegating it to an outside party. To the extent that this objection has merit, however, it can be avoided if the arbitration is governmental in nature. Thus, arbitration might properly be conducted by a state labor board, by a public employment board, or perhaps a Tabor court’.”

33 Garber, Compulsory Arbitration in the Public Sector: A Proposed Alternative, 26 The Arbitration J 226, 230 (1971).

34 Comment, Collective Bargaining for Public Employees and the Prevention of Strikes in the Public Sector, 68 Mich L Rev 260, 288 (1969).

35 Gershenfeld, Compulsory Arbitration is Ready When You Are, 23 Labor Law J 153, 155 (1972).

36 McAvoy, Binding Arbitration of Contract Terms: A New Approach to the Resolution of Disputes in the Public Sector, 72 Colum L Rev 1192, 1209 (1972).

37 Howlett, Contract Negotiation Arbitration in the Public Sector, 42 U of Cincinnati L Rev 47, 71 (1973).

38 See majority and dissenting opinions, People v Fields (On Rehearing), 391 Mich 206; 216 NW2d 51 (1974).

39 See the extensive writings of Professor Kenneth Culp Davis, e.g., Davis, Administrative Law Treatise (1970 Supp), § 2.00, et seq.

40 "Where there is no agreement between the parties, or where there is an agreement but the parties have begun negotiations or discussions looking to a new agreement or amendment of the existing agreement, and wage rates or other conditions of employment under the proposed new or amended agreement are in dispute, the arbitration panel shall base its findings, opinions and order upon the following factors, as applicable:

"(a) The lawful authority of the employer.

"(b) Stipulations of the parties.

"(c) The interests and welfare of the public and the financial ability of the unit of government to meet these costs.

"(d) Comparison of the wages, hours and conditions of employment of the employees involved in the arbitration proceeding with the wages, hours and conditions of employment of other employees performing similar services and with other employees generally:

"(i) In public employment in comparable communities.

"(ii) In private employment in comparable communities.

"(e) The average consumer prices for goods and services, commonly known as the cost of living.

"(f) The overall compensation presently received by the employees, including direct wage compensation, vacations, holidays and other excused time, insurance and pensions, medical and hospitalization benefits, the continuity and stability of employment, and all other benefits received.

"(g) Changes in any of the foregoing circumstances during the pendency of the arbitration proceedings.

"(h) Such other factors, not confined to the foregoing, which are normally or traditionally taken into consideration in the determination of wages, hours and conditions of employment through voluntary collective bargaining, mediation, fact-finding, arbitration or otherwise between the parties, in the public service or in private employment.” MCLA 423.239; MSA 17.455(39).

⁴¹

42 "[A]n impartial, competent and reputable citizen”. MCLA 423.235; MSA 17.455(35).

⁴³

44 We advised the Legislature that an act providing for repayment with non-voted millage of school district notes issued to fund accumulated operating deficits does not violate the 15-mill limitation.

We also noted (p 184) that "[t]he Legislature may impose whatever limitations it deems necessary to prevent deficit spending and the issuance of bonds and other evidence of indebtedness”.

A statute provides that school districts receiving state school aid "shall not adopt or operate under a deficit budget and a district shall not incur an operating deficit in any fund in any fiscal year. Each district shall submit its adopted budget for the current fiscal year to the department before November 1. If the department determines that the district is in violation of this section, the district shall not be allotted or paid any further sum under this act until a new budget is submitted and determined by the department to be in compliance with this section. However any district with a deficit as of June 30, 1973 that demonstrates progress in eliminating this deficit is not in violation of this section”. MCLA 388.1202; MSA 15.1919(602).

See, also, concurring opinion of Justice Williams at p 185.

45 MCLA 423.215; MSA 17.455(15); § 8(d) of the NLRA (29 USC § 158[d]).

46 Cf. Regents of the University of Michigan v Employment Relations Commission, 389 Mich 96, 109; 204 NW 2d 218 (1973).

47 "[T]he question of whether or not to make residence within a city a condition of public employment is one which must be largely addressed to the legislative branch of government.” Williams v Civil Service Commission of the City of Detroit, 383 Mich 507, 517; 176 NW2d 593 (1970).

48 The "command” officers of the Inkster Police Department were in a separate bargaining unit from the patrolmen. The arbitration panel’s decision concerned the command officers’ contract only. In the Matter of the Arbitration between The City of Inkster and Teamster Local #214 Police Command Unit, MERC Mich PA-312 — Interest Arbitration opinion of M. David Keefe, Chairman, March 4, 1975. ,

49 "In construing the provisions and ramifications of the PERA, this Court has frequently looked to decisions of the Federal courts which construe and apply the National Labor Relations Act.” Kaleva-Norman-Dickson School Dist v Kaleva-Norman-Dickson Teachers’ Association, 393 Mich 583, 590-591; 227 NW2d 500 (1975).

50 See Morris, The Developing Labor Law, pp 404, 405, 409, 410.

51 "The union representative testified that the number of firemen on duty affected not only the public safety, but also the firemen’s safety. This position was supported by extensive testimony concerning fire fighting practices and procedures. A safety practice is a condition of employment. [Emphasis supplied.] NLRB v Gulf Power Co, 384 F2d 822 (CA 5, 1967); NLRB v Miller Brewing Co, 408 F2d 12 (CA 9, 1969); Fibreboard Paper Products Corp v NLRB, 379 US 203; 85 S Ct 398; 13 L Ed 2d 233 (1964), Mr. Justice Stewart concurring; see Annotation, Subjects of mandatory collective bargaining under Federal Labor Relations Act, 12 ALR2d 265. We hold, therefore, that the manpower award was within the subject matter and jurisdiction of the arbitration panel.” Alpena v Alpena Fire Fighters Association, AFL-CIO, 56 Mich App 568, 575; 224 NW2d 672 (1974).

Similarly, see Detroit Police Officers Ass’n v City of Detroit, 61 Mich App 487; 233 NW2d 49 (1975).

52 MCLA 423.242; MSA 17.455(42).

53 The scope of judicial review under the act is narrow. The circuit court may interfere only when “the order is unsupported by competent, material and substantial evidence on the whole record; or the order was procured by fraud, collusion or other similar and unlawful means”. MCLA 423.242; MSA 17.455(42). See Anderson, Compulsory Arbitration Under State Statutes, Proceedings of New York U Twenty-Second Annual Conference on Labor 259, 273 (1970).

Not only does the act fail to authorize, but the circuit court could not properly exercise a power of political review.

54 Arbitrator/chairmen of a number of panels appear to have concluded that it is the obligation of government, local, state or national, to provide additional revenues or to make adjustments in other programs required to fund their orders. For the views of some arbitrator/chairmen who have decided controversies pursuant to the challenged Michigan act, see excerpts from their decisions reprinted in Smith, Edwards & Clark, Labor Relations Law in the Public Sector, Cases & Material, p 833, et seq.

Some commentators have stated that an arbitrator/chairman can properly require a greater "fiscal effort”, that financial ability does not mean present resources but potential ability resulting from exploitation of additional revenue sources, i.e., raising taxes. McAvoy, Binding Arbitration of Contract Terms: A New Approach to the Resolution of Disputes in the Public Sector, 72 Colum L Rev 1192, 1200 (1972); Ross, The Arbitration of Public Employee Wage Disputes, 23 Ind & Labor Rel Rev 3, 6 (1967).

55 The amended act requires the arbitration panel to identify "the economic issues in dispute, and direct each of the parties to submit * ** * its last offer of settlement on each economic issue. * * * As to each economic issue, the arbitration panel shall adopt the last offer of settlement which, in the opinion of the arbitration panel, more nearly complies with the applicable factors prescribed” in the act. MCLA 423.238; MSA 17.455(38).

56 The presented question does not require consideration of whether, apart from obligation imposed by statute, a unit of local government can freely agree with a union representing public employees to submit an impasse in negotiations to binding arbitration.

Where such an agreement is made after the issues separating the parties have been narrowed, the authority of the arbitrator/chairman, freely chosen by the parties, can be confined to choosing between two alternatives, clearly defined before the public employer agrees to abide the result. Both alternatives may even be acceptable to the public employer. By agreeing to arbitrate, the public employer accepts a measure of responsibility for the scope of the decision. Cf. Pleasant Ridge v Governor, 382 Mich 225; 169 NW2d 625 (1969).

57 Cipriano v City of Houma, 395 US 701; 89 S Ct 1897; 23 L Ed 2d 647 (1969); Phoenix v Kolodziejski, 399 US 204; 90 S Ct 1990; 26 L Ed 2d 523 (1970); Allen v State Board of Elections, 393 US 544; 89 S Ct 817; 22 L Ed 2d 1 (1969).

58 There was no effort to effect the return of money that had already been paid for services rendered before Lemon I was decided. Lemon II considered only whether money allocated, but not yet paid, for services contracted before Lemon I should be paid.

59 Chief Justice Burger, writing for the majority in Lemon II, analyzed the stifling effect a doctrine of undeviating full retroactivity would have on the prompt implementation of new governmental programs in the future:

"Appellants would have state officials stay their hands until newly enacted state programs are 'ratified’ by the federal courts, or risk draconian, retrospective decrees should the legislation fall. In our view, appellants’ position could seriously undermine the initiative of state legislators and executive officials alike. Until judges say otherwise, state officers — the officers of Pennsylvania — have the power to carry forward the directives of the state legislature. Those officials may, in some circumstances, elect to defer acting until an authoritative judicial pronouncement has been secured; but particularly when there are no fixed and clear constitutional precedents, the choice is essentially one of political discretion and one this Court has never conceived as an incident of judicial review.” Lemon v Kurtzman, 411 US 192, 207-208; 93 S Ct 1463; 36 L Ed 2d 151 (1973).