Independence-National Education Ass'n v. Independence School District

223 S.W.3d 131, 2007 Mo. LEXIS 83, 181 L.R.R.M. (BNA) 3224, 2007 WL 1532737

• Court: Supreme Court of Missouri
• Decided: May 29, 2007
• Docket: SC 87980
• Status: Published

Opinions

MICHAEL A. WOLFF, Chief Justice.

I. Introduction

The Missouri Constitution’s bill of rights contains the following guarantee: “employees shall have the right to organize and to bargain collectively through representatives of their own choosing.” Missouri Constitution article I, section 29.

This case raises two issues:

1. Does the “right to organize and to bargain collectively” apply to public employees as well as private-sector employees?

2. If the public employer, in this case the school district, negotiates an agreement with its employee groups, may the public employer unilaterally impose a new employment agreement that contradicts the terms of the agreements then in effect?

The answer to the first question, which follows the plain words of the constitution, is yes.

The answer to the second question— with the understanding that the law does not require the school district as public employer to reach agreements with its employee associations — is no.

Unquestionably, public employees are differently situated from private employees and are treated differently under the law. The law, for instance, forbids strikes by public employees. St. Louis Teachers Ass’n. v. Board of Education, 544 S.W.2d 573, 575 (Mo. banc 1976). There are two basic reasons for the no-strike laws. The first is that many public employees — especially police and firefighters — are deemed essential to the preservation of public safety, health, and order. The second is that the economic forces of the marketplace— that limit, at least in theory, the extent to which employers can meet employee groups’ demands — do not constrain the public sector. In the public sector, meeting the demands of employee groups is thought to infringe on the constitutional prerogative of the public entity’s legislative powers by forcing the entity to raise taxes or distribute public services in a manner inconsistent with the best judgment of the entity’s governing board.

The trial court held that the Independence School District was not required to bargain collectively with its employees and was not bound by any agreements that it had entered with groups representing its employees.

The rights guaranteed by article I, section 29 apply to “employees.” Under the express words of the constitution, this provision is not limited to private-sector employees. All employees, including those represented by the employee associations in this case, have the “right to bargain collectively.” Although the employer is not required to reach an agreement with employees as to working conditions, once an employer has done so, it is bound by the terms of that agreement.

The judgment of the trial court is reversed, and the case is remanded.

II. Facts and Procedural History

The facts are not in dispute. The case was tried on a stipulation of facts.

Three employee associations sued the Independence School District, a public school district governed by a board of education. The Independence-Transportation Employees Association represents the district’s transportation employees. The Independence-Educational Support Personnel represents the district’s custodial employees. These associations are certified as the exclusive bargaining representatives for their respective employees pursuant to Missouri’s public sector labor law; section 105.500, et seq.1 The Independence-National Education Association represents the district’s teachers and paraprofessionals.

Before the events at issue in this litigation, it was customary for representatives of the transportation and custodial employee associations to meet and confer separately with representatives of the board about proposals relating to the salaries and working conditions of their represented employees. The results of these discussions were reduced to writing in the form of memoranda of understanding, in accordance with the public sector labor law. Each memorandum of understanding was approved by the board’s authorized representatives.

Though teachers are not included in the public sector labor law, it was customary for the district to hold discussions with representatives of the Independence National Educational Association relating to teachers’ working conditions, pursuant to a “discussion procedure” that was adopted by the board.

In April 2002, the board and the employee groups had in effect memoranda of understanding and, in the case of the teachers, a “discussion procedure” agreement that the board had previously approved.

The board, however, unilaterally adopted a new “Collaborative Team Policy” in April 2002 that changed the terms of employment of the employees represented by these associations. The district did not meet and confer with the employee associations or obtain their consent before imposing the “Collaborative Team Policy.”

The new policy conflicted with the mem-oranda of understanding then in effect for both the transportation employees and the custodial workers. The memorandum of understanding for the transportation employees contained substantive provisions, including those relating to grievances, payroll deductions, discipline, and dismissal, that were rescinded by the board’s unilateral adoption of the new policy. The adoption of the policy also resulted in the unilateral rescission of the discussion procedure governing the teachers and paraprofessionals represented by the Independence National Educational Association.

The school district acknowledges that its unilateral adoption of the new policy constituted a refusal to bargain collectively with these employee associations.

The employee associations filed this suit in March 2003 challenging the district’s refusal to bargain with them and the district’s rescission of agreements that already had been established.

In the previous appeal in this case, the trial court had granted the district’s motion for summary judgment. The court of appeals reversed the judgment in part and remanded. Independence-National Education Ass’n v. Independence School Dist., 162 S.W.3d 18 (Mo.App.2005). This Court denied transfer. Id. The case was then tried on a stipulated factual record, and the trial court entered judgment for the district. The trial court agreed that the district had refused to bargain collectively with the unions and had unilaterally rescinded its agreement, but concluded that Missouri law allowed such actions.

The employee associations now appeal to this Court which, by order, treated this as an application for transfer prior to opinion by the court of appeals and sustained the application. This Court has jurisdiction. Mo. Const, art. V, section 10.

III. The District’s Refusal to Bargain Collectively

A. Is legislative power being delegated?

Appellants’ first claim is that the district violated article I, section 29 of Missouri’s Constitution by refusing to bargain collectively with the representatives of the employee associations. There is no dispute that the district refused to bargain collectively with its employees.

Despite the plain language of the constitutional provision, which states that “employees shall have the right to bargain collectively,” this Court held in City of Springfield v. Clouse, 356 Mo. 1239, 206 S.W.2d 539, 542 (1947), that article I, section 29 does not apply to public employees. If the guarantee applies to public employees, this Court said, the legislative powers of the public entity would be unconstitutionally delegated to nongovernmental entities through the collective bargaining process. Id.

Clouse recognizes that all employees have the right to join unions and to bring “their views and desires to any public officer or legislative body,” but distinguishes this from the right to bargain collectively. Id. This distinction is based on the now largely defunct nondelegation doctrine, which holds that it is unconstitutional for the legislature to delegate its rule-making authority to another body. Clouse cites A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495, 55 S.Ct. 837, 79 L.Ed. 1570 (1935), which has been abandoned in subsequent decisions. Schechter Poultry has been called “aberrational” because it is one of very few cases that were “departure[s] from a generous recognition of congressional power to delegate rulemaking authority!)]” United States v. Frank, 864 F.2d 992, 1010 (3rd Cir.1988). Since 1935, the United States Supreme Court has generally upheld delegations of congressional authority. Id.; see, e.g., Lichter v. United States, 334 U.S. 742, 68 S.Ct. 1294, 92 L.Ed. 1694 (1948) (delegation of authority to determine excessive profits); Federal Power Comm’n v. Hope Natural Gas Co., 320 U.S. 591, 64 S.Ct. 281, 88 L.Ed. 333 (1944) (delegation to determine reasonable rates); Nat’l Broadcasting Co. v. United States, 319 U.S. 190, 63 S.Ct. 997, 87 L.Ed. 1344 (1943) (delegation to regulate broadcast licensing).

Similarly, the nondelegation doctrine has been largely abandoned in Missouri. See Menorah Medical Center v. Health and Educational Facilities Authority, 584 S.W.2d 73, 83-84 (Mo. banc 1979) (recognizing modern tendency towards liberal interpretation of delegation authority); Murray v. Mo. Highway and Transportation Commission, 37 S.W.3d 228, 234 (Mo. banc 2001) (statute requiring the commission to submit disputes to arbitration panel is not an unconstitutional delegation). The nondelegation dictum in Clouse and public employee cases that follow Clouse has rightly been called an “anachronism.” James E. Westbrook, “The Use of the Nondelegation Doctrine in Public Sector Labor Law: Lessons From Cases That Have Perpetuated an Anachronism,” 30 St. Louis Univ. L.J. 331 (1986).

Clouse disapproves of including public employees in the “right to bargain collectively” because decisions relating to public employment are “legislative.” 206 S.W.2d at 544-545. As applied to the municipal employees in Clouse, “qualifications, tenure, compensation and working conditions of public officers and employees are wholly matters of lawmaking and cannot be the subject of bargaining or contract.” Id. at 545. For this reason, Clouse found that article I, section 29 did not apply to public employees because “the right to bargain collectively⁵’ in the public sector “could amount to no more than giving expression to desires for the lawmaker’s consideration and guidance.” Id.

In 1965, the legislature passed the public sector labor law, which authorized most public employees “to form and join labor organizations and to present proposals to any public body relative to salaries and other conditions of employment through the representatives of their own choosing. ...” Section 105.510. The public sector labor law excludes “all teachers of all Missouri schools.” Id.2 After the law went into effect, many public employees— including the custodial, transportation, and paraprofessional employees represented by the associations in this case — had a recognized right to bargain collectively, despite this Court’s language in Clouse that public employment can never be the subject of bargaining or contract. To be consistent with article I, section 29, the statute’s exclusion of teachers cannot be read to preclude teachers from bargaining collectively. Rather, the public sector labor law is read to provide procedures for the exercise of this right for those occupations included, but not to preclude omitted occupational groups from the exercise of the right to bargain collectively, because all employees have that right under article I, section 29. Instead of invalidating the public sector labor law to the extent that it excludes teachers, this Court’s reading of the statute recognizes the role of the general assembly, or in this case, the school district — in the absence of a statute covering teachers — -to set the framework for these public employees to bargain collectively through representatives of their own choosing. In this regard, it is noteworthy that prior to this controversy, the district in effect recognized the teachers’ right to bargain collectively through its “discussion procedure.”

There is nothing in the law, as it has developed, that requires a public entity to agree to a proposal by its employee unions or organizations. In fact, this Court has repeatedly recognized that the public sector labor law allows employers to reject all employee proposals, as long as the employer has met and conferred with employee representatives. State ex rel. Missey v. City of Cabool, 441 S.W.2d 35, 41 (Mo.1969); State ex rel. O’Leary v. Missouri State Board of Mediation, 509 S.W.2d 84, 88-89 (Mo. banc 1974); Curators of the University of Missouri v. Public Service Employees Local No. 45, 520 S.W.2d 54, 57 (Mo. banc 1975); Larry Reichert, et al. v. The Board of Education of the City of St. Louis, 217 S.W.3d 301 (Mo. banc 2007).

Under this interpretation, what legislative power or prerogative is being delegated? The answer today, of course, is none. If the public employer is free to reject any proposals of employee organizations, and thus to use its governing authority to prescribe wages and working conditions, none of the public entity’s legislative or governing authority is being delegated. Missey, 441 S.W.2d at 41.

B. Applying the plain meaning of article I, section 29

Both sides of this controversy cite the debates of the constitutional convention to support their respective positions as to whether the constitutional convention delegates did or did not intend that public employees be included in article I, section 29.³

Section 29 is part of Missouri’s current Constitution, which was the product of a constitutional convention in 1943 and 1944 and was adopted by the voters in 1945. While the debates of the convention are interesting, they neither add to nor subtract from the plain meaning of the constitution’s words. Missouri’s voters did not vote on the words used in the deliberations of the constitutional convention. The voters voted on the words in the Constitution, which says “employees shall have the right to organize and to bargain collectively....”

“Employees” plainly means employees. There is no adjective; there are no words that limit “employees” to private sector employees. The meaning of section 29 is clear and there is, accordingly, no authority for this Court to read into the Constitution words that are not there. Kearney Special Road Dist. v. County of Clay, 863 S.W.2d 841, 842 (Mo. banc 1993).⁴

The doctrine of stare decisis promotes security in the law by encouraging adherence to previously decided cases. Medicine Shoppe Int’l, Inc. v. Director of Revenue, 156 S.W.3d 333, 334-35 (Mo. banc 2005). Stare decisis, however, “is not absolute, and the passage of time and the experience of enforcing a purportedly incorrect precedent may demonstrate a compelling case for changing course.” Id. at 335. This is such a case. Clouse contradicts the plain meaning of article I, section 29, which states simply that employees, without qualification, have the right to collective bargaining. Deviations from clear constitutional commands — although longstanding — do not promote respect for the rule of law. If the people want to change the language of the constitution, the means are available to do so. Mo. Const, art. Ill, sec. 50. This Court will not change the language the people have adopted. Clouse is overruled.

In addition to being consistent with the plain meaning of article I, section 29, this decision does not violate the nondelegation doctrine, to whatever extent the doctrine still exists. To allow employees to bargain collectively does not require the employer to agree to any terms with the represented groups. The employer is free to reject any and all proposals made by the employees. The employer is therefore not delegating or bargaining away any of its legislative power. Missey, 441 S.W.2d at 41.

The nondelegation doctrine is no impediment to applying the plain meaning of this explicit constitutional command.

C. The Extent of the Constitutional Right

This Court in Sumpter v. City of Moberly, 645 S.W.2d 359 (Mo. banc 1982), held — following Clouse — that a city was free to disregard agreements made with employee associations or unions. The starting point was this Court’s statement in Clouse that the “qualifications, tenure, compensation and working conditions of public officers and employees are wholly matters of lawmaking and cannot be the subject of bargaining or contract.” 206 S.W.2d at 545. (Emphasis added.) If that statement is true — that such matters cannot be the subject of bargaining — then the public sector labor law must be held to be invalid. The title of section 105.510 states “certain employees may join labor unions and bargain collectively.”⁵ (Emphasis added). This law, however, was upheld in Missey, 441 S.W.2d at 41, which affirmed the viability of Clouse at the same time as it undercut it by ignoring its broad proscription of bargaining by employees in the public sector.

The public sector labor law upheld in Missey does not define what is meant by the right to “bargain collectively,”⁶ but describes the actions allowed under the statute: employees are granted the right to present proposals, through their representatives, to the employer; the employer is required to “meet, confer, and discuss” such proposals; and the results of this discussion are to be put in writing and “presented to the appropriate administrative, legislative or other governing body in the form of an ordinance, resolution, bill or other form required for adoption, modification or rejection.” Id. at 40-41; section 105.520. The law makes clear that a public employer is not required to agree to anything. Section 105.520; Missey, 441 S.W.2d at 41; O’Leary, 509 S.W.2d at 88-89; Curators, 520 S.W.2d at 57.

The point of bargaining, of course, is to reach agreement. Public employers routinely engage in bargaining for employees. A school district that wishes to hire a superintendent may negotiate and reach an agreement that then becomes the subject of a contract. Sections 168.191; 168.201'; 168.211. Nothing obligates the school district to agree to the superintendent’s proposal — the school district can set the salary and other terms of employment and the superintendent can take them or leave them.

How does individual negotiation differ from bargaining that occurs with groups of employees? Conceptually it would appear to be the same process: proposals are made and either accepted or rejected. There hardly is any need, of course, to spell out that individuals have the right to negotiate and enter agreements as a simple matter of the right of contract. See American Law Institute, Restatement of Contracts 2d § 12 (1981).

By contrast, it has been necessary to give legal recognition to the right of employees to “bargain collectively through representatives of their own choosing.” See, e.g., 29 U.S.C. section 157. Before the right to “bargain collectively” was statutorily authorized, such collective or concerted action would be considered unlawful. Hitchman Coal & Coke Co. v. Mitchell, 245 U.S. 229, 250-51, 38 S.Ct. 65, 62 L.Ed. 260 (1917).

Federal law, through the National Labor Relations Act, 29 U.S.C. section 151 et seq, regulates labor relations between employers and employees. That law, however, does not apply to employees of “any State or political subdivision thereof.” 29 U.S.C. section 152(2). The federal statute protects the right of the employees it covers to engage in “collective bargaining.” 29 U.S.C. section 157. This provision was part of the federal statute when article I, section 29 was drafted and adopted as part of Missouri’s Constitution in 1945. The question, then, is why is article I, section 29 in the Missouri Constitution if private employees already had that right to bargain collectively under federal law? One reason is that Article I, section 29, which has no exclusions, is broader than the federal statute, which does have exclusions— most notably for employees of the state or its subdivisions. Another reason is that the Missouri Constitution protects the right to bargain collectively regardless of whether protections under federal law continue to exist.

In any event, article I, section 29 applies to “employees,” regardless of whether they are in the private or public sector, and nothing in this constitutional provision requires public employers to reach agreements with their employee associations.

IY. Repudiation of Existing Agreements

Having determined that the law does not require the public employer to reach an agreement with its employees, what remains is the issue of whether the public employer can repudiate agreements that it has chosen to enter into.

Despite the contractual nature of the agreements in this case, the district relies upon Sumpter for the proposition that the district — having accepted the proposals and entered into written agreements (contracts) with the employee groups regarding their represented employees — had the right unilaterally to rescind those agreements once it had agreed to them and put them into effect.

The city in Sumpter reached an agreement with a union representing firefighters as to the firefighters’ working conditions. This agreement was made into a written memorandum of understanding. The city council enacted an ordinance adopting the terms of the memorandum as the “working conditions” for the two years covered by the document. A few months later, while the agreement was still in effect, the city imposed a new work schedule that conflicted with the terms of the memorandum. The union attempted to enjoin the city from proceeding with these changes. The union argued that the public sector labor law “authorizes a binding agreement between the public body and its employees when it authorizes adoption of the proposal by ‘ordinance, resolution, bill or other form required for adoption.’ ” 645 S.W.2d at 362-63. This Court disagreed, noting that Clouse held that the employer could not enter into the agreement in the first place without violating the constitutional mandate of separation of powers. Id. at 363. Even if the employer adopted the agreed-upon proposal, it was not a binding contract, but rather an ordinance, administrative rule, or regulation that could be changed by the public body at any time. Id. This Court in Sumpter held that the city was not bound by the agreement it had signed with the union and that the terms could be changed unilaterally by the city even during the effective period of the agreement.

There is no such principle — that is, that a contract’s terms can be changed unilaterally — that applies to contracts between individual employees and governmental bodies. See, e.g., Kunzie v. City of Olivette, 184 S.W.3d 570, 574 (Mo. banc 2006) (recognizing that city employee could bring a contractual claim for wrongful discharge).

Labor contracts with groups of public employees have been treated as the only contracts — entered into within the authority of the governmental entity — that have been considered unenforceable. Sump-ter’s treatment of collective bargaining agreements is inconsistent with article I, section 29, and, accordingly, Sumpter is overruled.⁷

School districts execute binding contracts with school superintendents, creditors who hold the districts’ bonded indebtedness, contractors that build and repair school buildings, textbook publishers, private cleaning services, and so forth.⁸ These agreements are the subject of legislative action by the school district, but that does not mean the district can repudiate its agreements at will. No contractor or supplier could do business with an entity that repudiates its agreements.

In any public contract, there is the question of what duration a public entity is permitted to bind itself. Some of these limits are set by statute, and some that involve financial commitments may be limited by the length of the budget process.⁹ School districts certainly are free to include clauses excusing contractual obligations, just as the teacher tenure act provides for placing teachers on leave of absence in times of financial distress or failing enrollments.¹⁰ Section 168.124, RSMo. Supp.2006. The parties did not address the question of how long the district would be obligated under its agreements, and that is an appropriate question for the circuit court to address on remand.

V. Conclusion

Article I, section 29’s guarantee that employees have “the right to bargain collectively” is clear and means what it says. Agreements that the school district made with employee groups are to be afforded the same legal respect as contracts made between the district and individuals, although public employees — unlike their private-sector counterparts — are not permitted to strike. As long as the duration and terms of such agreements comply with the limits provided by law for school districts to bind themselves, and are consistent with other statutes such as the teacher tenure act, the agreements are enforceable as any other contractual obligations undertaken by the district.

The judgment of the circuit court is reversed, and the case is remanded.

STITH, TEITELMAN, RUSSELL and WHITE, JJ., concur. PRICE, J., concurs in part and dissents in part in separate opinion filed. LIMBAUGH, J., concurs in opinion of PRICE, J.

1 . All statutory references are to RSMo 2000, unless otherwise indicated.

2 . Section 105.510 also excludes police, deputy sheriffs, Missouri state highway patrolmen, Missouri national guard, and college and university teachers.

3 . The employee associations stress that the constitutional convention delegates rejected two proposed amendments to the constitutional provision that would have specifically excluded public employees. The district argues that this Court in Clouse — decided just two years after the constitutional convention — determined that the framers’ intent was not to include public employees. 206 S.W.2d at 543. The Court noted that the sponsor of section 29, who was a labor leader, stated that the provision would not require municipalities to bargain for salaries. Id.

4 . It might be noted that Missouri’s voters in 2002 rejected a proposed constitutional amendment that would have granted firefighters the right to collective bargaining. The Court’s task is, of course, to discern what the voters meant when they enacted article I, section 29, which is in the constitution, not what the voters might have intended in rejecting the 2002 amendment. One could say that the voters in 2002 now disapprove of granting public employees the right to bargain collectively, or perhaps just as plausibly, one could say that voters did not wish to grant the right to bargain collectively for one group of public employees and not others, or even that some voters might have thought the 2002 proposal superfluous. Needless to say, the intent of the 1945 voters cannot be ascertained by the actions of the 2002 voters.

5 . The title of a statute is an editorial decision by the revisor of statutes rather than a legislative enactment and may not be considered in construing the statute. State ex rel. AgarcL v. Riederer, 448 S.W.2d 577, 581 (Mo. banc 1969). It is, however, an indication of a contemporaneous interpretation of the public sector labor law's provisions.

6 . What, by common understanding, is “the right to bargain collectively?” The dictionary definition says "collective bargaining” is “negotiation for the settlement of the terms of a collective agreement between an employer or group of employers on one side and a union or number of unions on the other.” Webster’s Third New International Dictionary (1993). Similarly, Black’s Law Dictionary (8th Ed.2004) says "collective bargaining” means "negotiations between an employer and the representatives of organized employees to determine the conditions of employment, such as wages, hours, discipline, and fringe benefits.”

7 . Glidewell v. Hughey, 314 S.W.2d 749 (Mo. banc 1958), which applied Clouse to employees of a municipal utility, also should no longer be followed.

8 . In Peters v. Board of Education, this Court held that an agreement between a school board and an association representing teachers that provided terms that the board could accept or reject was enforceable by the teachers' association once the district had entered into it. 506 S.W.2d 429 (Mo. 1974). The dissent in Sumpter recognized that the result in Peters was contrary to the Court’s decision in Sumpter, but the majority opinion does not cite, much less overrule, Peters. 645 S.W.2d at 366 (Seiler, J, dissenting).

9 . Section 168.201 authorizes most school districts to employ a superintendent for a term not to exceed three years and to employ "such other servants and agents as it deems necessary” for terms not exceeding three years. As to the budget process, see section 67.010 et seq.; cf., Green v. Lebanon R-III School Dist., 13 S.W.3d 278, 289 (Mo. banc 2000) (Wolff, J., concurring); see also Klotz v. Savannah R-III School Dist., 747 S.W.2d 708, 710 (Mo. App.1988) (last two years of three-year contract with superintendent void because contract did not set forth the essential term of salary for those two years). Westbrook suggests that agreements that have been bargained collectively be considered to run for a reasonable time, which is what courts often infer from contractual language. James E. Westbrook, “The Use of the Nondelegation Doctrine in Public Sector Labor Law: Lessons from Cases that Have Perpetuated an Anachronism,” 30 St. Louis Univ. L.I. 331, 381 (1986). In public contracts, however, courts should look first to applicable statutes and constitutional precepts.

10 . For over a century, courts in Missouri have enforced school districts’ contracts with teachers. Wilson v. Board of Education of Lee's Summit, 63 Mo. 137 (Mo.1876). Since the passage of the teachers’ tenure act in 1969, courts have held that school districts may not unilaterally change the terms of teachers’ contracts except as allowed in the limited circumstances set forth in section 168.110. Dial v. Lathrop R-II School Dist., 871 S.W.2d 444, 450 (Mo. banc 1994). The teachers’ tenure act does not preclude adherence to agreements with employee associations that are consistent with the act.