Police Officers Ass'n v. Oakland County

354 N.W.2d 367, 135 Mich. App. 424

• Court: Michigan Court of Appeals
• Decided: June 18, 1984
• Docket: Docket 69798
• Status: Published

Opinions

Bronson, P.J.

Plaintiffs, Police Officers Association of Michigan (POAM) and Johannes Spreen, Oakland County Sheriff, appeal as of right from an order dismissing their complaint against defendants, Oakland County, Oakland County Board of Commissioners, Daniel T. Murphy, Oakland County Executive, and C. Hugh Dohany, Oakland County Treasurer.

Plaintiff POAM, as the union representing the employees of the Oakland County Sheriffs Department, entered into a collective-bargaining agreement with the Oakland County Sheriff and the Oakland County Board of Commissioners on January 23, 1981. The agreement was to remain in effect until December 31, 1981, and thereafter while a new agreement was being negotiated. . The agreement incorporated the Oakland County Merit System Rules. Rule 9 provides for separation from county employment because of curtailment of work or lack of funds. The rule defines "curtailment of work” as:

"[A] situation in which the need for the employee’s services are no longer required because the county no longer performs the function to which the employee was assigned, to the degree that the same number of employees are needed.”

and defines "lack of funds” as:

"[A] situation in which the county is forced to drop positions because it does not have the funds to pay the salaries of the incumbent employees.”

On May 20, 1982, after POAM and the employer had negotiated unsuccessfully for a new agreement, plaintiff POAM filed an amended petition for compulsory arbitration with the Michigan Employment Relations Commission (MERC) pursuant to MCL 423.231 et seq.; MSA 17.455(31) et seq.

On December 2, 1982, defendant Oakland County Board of Commissioners passed the 1983 General Appropriations Act. The 1983 budget reduced the number of road patrol positions in the sheriffs department from 45 to 25. Plaintiff POAM, later joined in the action by the Oakland County Sheriff, Johannes Spreen, filed its original complaint in the instant suit, alleging that defendants had unilaterally altered the conditions of employment set forth in the rules of the Oakland County Merit System in violation of MCL 423.24; MSA 17.454(26). Plaintiff POAM requested that defendants be temporarily and permanently enjoined from effecting the scheduled layoffs on January 1, 1983, and sought a declaratory judgment as to whether the layoffs violated the Oakland County Merit System Rule 9.

The trial court denied plaintiff POAM’s request for a permanent injunction. The parties agreed that the case could be resolved on a stipulation of facts. Following oral argument, the trial court dismissed plaintiff POAM’s amended complaint, ruling that neither the state constitution, the applicable statute, the collective-bargaining agreement, nor the pending arbitration compelled the board of commissioners to appropriate funds for the road patrol.

The electorate of Oakland County has adopted the optional unified form of county government and has chosen to lodge administrative and executive power in an elected county executive pursuant to MCL 45.551 et seq.; MSA 5.302(51) et seq. Under MCL 45.558; MSA 5.302(58), the annual county budget is initially prepared by the county executive and submitted to the board of commissioners for consideration. MCL 45.556; MSA 5.302(56) authorizes the board of commissioners to adopt a county budget and work program. The county executive may veto the board’s action, subject to the board’s authority to override the veto by a two-thirds vote of all board members. MCL 45.561; MSA 5.302(61).

The separation of powers doctrine mandates the preservation of the legislative, executive, and judicial branches of government as entities distinct from one another. Const 1963, art 3, § 2. The power to appropriate money is exclusively legislative in character. OAG 1979-1980, No 5816, p 1079. This Court has consistently refrained from interfering with a legislative body’s exercise of discretion in appropriating funds. Wayne County Prosecutor v Wayne County Bd of Comm’rs, 93 Mich App 114, 121; 286 NW2d 62 (1979); Wayne County Sheriff v Wayne County Bd of Comm’rs (Court of Appeals opinion, docket no. 60933, decided November 22, 1983 [unreported]). In order to warrant judicial intrusion, the legislative action must be "so capricious or arbitrary as to evidence a total failure to exercise discretion”. 93 Mich App 122-123; Veldman v Grand Rapids, 275 Mich 100, 113; 265 NW 790 (1936).

In ruling that the decision to eliminate 20 road patrol positions was within the discretion of the board of commissioners, the trial court stated:

"Now, they also eliminated these particular, in quotes, [sic] road patrol positions, and there’s no question under the case law, statutory law, and not included in the constitutional duties of the sheriff, there is no mandate for road patrol. It’s absolutely a permissive— perfectly lawful — but permissive function of the sheriff and its [sic] solely within the legislative discretion of the board of commissioners whether they want to undertake that or not.”

The statement is correct, but begs the question. Just because the board had discretion to eliminate the road patrol does not ipso facto mean that the board exercised its discretion without abuse. Furthermore, if the original appropriations decision was an abuse of discretion, the board could not remedy such abuse merely by complying with the Merit System Rules and the collective-bargaining agreement in determining which deputies would be laid off and in notifying the deputies.

In Wayne County Sheriff v Wayne County Bd of Comm’rs, supra, we were able to conclude that that board had not abused its discretion because the record was replete with evidence of the decision-making process undertaken by the board prior to eliminating the sheriff’s road patrol. We were unable to find any indication that the elimination was motivated by malice, ill will, or bad faith on the part of the board.

In the instant case, plaintiff POAM alleged that the road patrol positions were eliminated in retaliation for the position taken by POAM in a pending labor dispute. Such a reason would not be a legitimate basis for a decision to eliminate the road patrol positions; therefore, plaintiff’s allegation, if proved, would be evidence of an arbitrary or capricious exercise of discretion. We do not intimate that this was necessarily the basis for the board’s decision. We do find, however, that the trial court, by terminating its inquiry with a finding that the board had discretion to eliminate the positions, failed to address the pertinent issue, i.e., whether the board abused its discretion. We, therefore, remand this case to the trial court to determine whether the board of commissioners abused its discretion when it eliminated the 20 road patrol positions. Such a determination may require the taking of additional evidence.

We now turn to a second issue raised by plaintiffs. Plaintiffs argue that defendants were prohibited from effecting the layoffs during the pendency of the compulsory arbitration proceedings instituted by plaintiffs. MCL 423.243; MSA 17.455(43) provides:

"During the pendency of proceedings before the arbitration panel, existing wages, hours and other conditions of employment shall not be changed by action of either party without the consent of the other but a party may so consent without prejudice to his rights or position under this act.”

In Local 1277, Metropolitan Council No 23, AFSCME, AFL-CIO v City of Center Line, 414 Mich 642, 654; 327 NW2d 822 (1982),¹ the Supreme Court held that compulsory arbitration extends only to mandatory subjects of collective bargaining under MCL 423.201 et seq.; MSA 17.455(1) et seq. (PERA).

While acknowledging PERA as the dominant law regulating public employee relations, Rockwell v Crestwood School Dist Bd of Ed, 393 Mich 616, 629; 227 NW2d 736 (1975), our courts have recognized that PERA does not compel bargaining over every subject proposed by a party. Some subjects may be "beyond the scope of collective bargaining under PERA because they fall within the powers granted exclusively to the employer by the Michigan Constitution”. National Union of Police Officers Local 502-M, AFL-CIO v Wayne County Bd of Comm’rs, 93 Mich App 76, 87; 286 NW2d 242 (1979).²

In City of Center Line, supra, the police officers’ union had requested in its collective-bargaining agreement with defendant city a clause mandating that any layoff of police officers because of a general lack of funds could be made only in conjunction with layoffs and cutbacks in other city departments. In a unanimous opinion, the Supreme Court held that the initial decision to lay off employees is within the scope of the city’s management prerogative and, therefore, was not a mandatory subject of bargaining. The Court stated:

"The [requested layoff provision] unduly restricts the city in its ability to make decisions regarding the size and scope of municipal services. As the city argued in both oral argument and its brief, the city no longer would be able to base its decision on factors such as need, available revenues, or public interest. The decision regarding layoffs could only be based on the level of services in other departments if the layoff clause was to be upheld. This severely restricts the city in its ability to function effectively and poses serious questions with regard to political accountability for such decisions.” 414 Mich 660.

In the instant case, Merit System Rule 9, incorporated into the collective-bargaining agreement, provided for layoffs in the event of a lack of funds. Although defendant board of commissioners failed to appropriate funds for the eliminated road patrol positions, the board reserved an amount in excess of the cost of the eliminated positions as a contingency fund in the adopted budget. Plaintiffs interpret the definition of "lack of funds” in Rule 9 to mean an "actual” lack of county funds rather than a lack of appropriated funds.

Plaintiffs concede that, under the optional unified form of government, defendants board of commissioners and county executive have power to adopt a county budget and allocate county funds to the various county departments. However, under plaintiffs’ interpretation of the "lack of funds” provision, the county executive "bargained away” the board of commissioners’ exclusive power to allocate funds. Such a contention is a variation of the argument rejected by the Supreme Court in City of Center Line, supra.

The discretionary authority to determine a county budget cannot be limited by a collective-bargaining agreement. The Legislature’s power to appropriate funds is constitutionally derived. Const 1963, art 4, § 31; art 9, § 17; Civil Service Comm v Auditor General, 302 Mich 673, 682-683; 5 NW2d 536 (1942). Under the optional unified form of government statute and pursuant to Const 1963, art 7, § 8, the Legislature granted budget authority to the board of commissioners and the county executive. Implicit in plaintiffs’ argument is the premise that under the optional unified form of government statute, the Legislature has authorized the county executive to transfer, through labor negotiations, a portion of the budget authority to a third party, i.e., plaintiffs. We do not believe the statute evinces such an intent. Instead, the statute provides that the county board of commissioners adopts the county budget and the county executive’s input is limited to the initial submission of a proposed budget and the statutory veto power. An attempt by the county executive to otherwise limit the board of commissioners’ authority to allocate county funds would infringe upon the Legislature’s constitutional authority in these matters.

Michigan courts have adopted a broad and expensive interpretation of what constitutes proper subjects for collective bargaining under PERA. Local 1383, International Ass’n of Fire Fighters, AFL-CIO v City of Warren, 411 Mich 642, 655; 311 NW2d 702 (1981). Nonetheless, we conclude that budget appropriations are not a proper subject for collective bargaining. Defendant board of commissioners has authority under its collective-bargaining agreement with plaintiff POAM to lay off road patrol deputies where the county budget failed to appropriate funds for the affected positions. Furthermore, defendant’s action was not preempted by the initiation of compulsory arbitration.

Remanded for proceedings in accordance with this opinion. We do not retain jurisdiction.

R. S. Hoffius, J., concurred.

1 Local 1277 v City of Center Line, supra, should not be confused with Metropolitan Council No 23, Local 1277, AFSCME, AFL-CIO v City of Center Line, 78 Mich App 281; 259 NW2d 460 (1977), lv den 402 Mich 814 (1977). We do not cite the Supreme Court case in the Local 1277 proceedings because of any supposed "connection” between the Court of Appeals case and the Supreme Court case. Were the Supreme Court case totally unrelated to the Court of Appeals case, we would nonetheless use it as the basis for our analysis in the instant case.

2 We note, however, that the Supreme Court has rejected the idea that an institution which derives its powers from the constitution is insulated from the collective-bargaining obligation of PERA. Central Michigan Univ Faculty Ass’n v Central Michigan Univ, 404 Mich 268, 279; 273 NW2d 21 (1978), reh den 406 Mich 1117 (1979).