September 13, 2005

 

MPWMD Board

 

          Re:  Hearing of LIUNA grievance

 

By way of introduction, in the above-referenced matter I am representing the General Manager in the above referenced matter and acted as the chief negotiator of the District in its negotiations with the General Staff Bargaining Unit for the current MOU with LIUNA. 

 

The findings and recommendation of Hearing Officer Peter A. Lujan has been presented to your Board for consideration to adopt or reject, or for the Board to make its own findings and conclusions after a review of the record in the grievance.

 

Management representatives of the District recommend that the findings of Hearing Officer Lujan be rejected for the following reasons:

 

1.     The findings of the hearing officer do not contain any reference to factual evidence supporting the conclusion that there was an agreement to supplement the salary of employee opting out of the District provided medical plan beyond the opt-out payments specified in Article 10.

 

2.     Hearing Officer Lujan did not apply the law applicable to contract interpretation in making his findings or recommendations

 

 A.  Discussion:

 

1.    Factual dispute

 

As is clear from a review of the record of the grievance herein, including the recommendation of Hearing Officer Lujan, there is no factual evidence supporting the Union’s assertion that there was an agreement or understanding reached during negotiations that employee’s opting out of health care would receive, in addition to the amount specifically available for reimbursement to employees who opt out, $120 per month.  Indeed the record of the grievance reflects that there was no agreement, either orally, in bargaining notes or in the agreement itself that employees who opt out of participation in the District’s medical plan would also receive a cash stipend. Without factual support for this finding, the Hearing Officer’s recommendation must be supported by the interpretation of the contract itself according to the legal principles applicable to contract interpretation.  

 

2.  Applicable law:

 

The guiding principles of contract interpretation have evolved from the decisions of the Supreme Court and labor arbitrators based on a vast body of reported case law.  These guiding principles are utilized by arbitrators, hearing officers and Boards who are required to resolve disputes regarding the interpretation of a particular contract provision.

 

The rule primarily to be observed in the construction of a written agreement is that the interpreter must, if possible, ascertain and give effect to the mutual intent of the parties.  Elkori & Elkori, How Arbitrations Works, 4th Edition, 348- 349 (1985). As a necessary and essential corollary, if the language being construed is clear and unambiguous, such language is in itself the best evidence of the intention of the parties. Reasoning that understandable contract language means what it says, labor-management arbitrators and courts alike start with the premise that such intent can best be ascertained from the plain words used in the union contract, despite the contentions of one of the parties that something other than the apparent meaning was intended. See Independent School Dist. No. 47, 86 LA 97,103 (Gallagher, 1985). Safeway Stores, 85 LA 472,476(1985) (Thorp); Metropolitan Warehouse, 76 LA 14,17-18(1981) (Darrow).  An arbitrator may not and should not thereafter resort to the application of "equitable" principles to cloud the otherwise clear intentions reflected by the meaningful language adopted. He has no choice but to apply and enforce the provision as written. Weil-McClain, 86 LA 784, 786 (Cox, 1986); Houston Publishers Ass'n. 83 LA 767, 776 (Milentz, 1984)

 

An arbitrator can neither ignore clear-cut contractual language nor legislate new language, since to do so would usurp the role of the labor organization and employer. As stated by the U.S. Supreme Court

 

An arbitrator is confined to interpretation and application of the collective bargaining agreement; he does not sit to dispense his own brand of industrial justice.  He may of course look for guidance from many sources, yet his award is legitimate only as long as it draws its essence from the collective bargaining agreement. 

 

Steelworkers v. Enterprise Wheel & Car Corporation 80 S.Ct 1358 at 1361 (1960); Clean Coverall Supply Company, 47 LA 272, 277 (Fred Whitney, 1966). See also, Continental Oil Company, 69 LA 399, 404 (Wann, 1977).

 

If alternative interpretations of a clause were possible, one of which would give meaning and effect to another provision of the contract, while the other would render the other provision meaningless or ineffective, the contract should be interpreted to give meaning and effect to all provisions in the contract.  John Deer Tractor Co 5 LA 631,632(Updegraff1946);  Beatrice Foods Co.  45 LA 540, 543 (Stouffer 1965)  A broadly observed principle of contract interpretation also holds that specific language prevails over general language.  Arco Carbon, 86 LA 6,9 (Dworkin 1986) Thus, where two contract clauses bear on the same subject, the more specific should be given precedence.  Coca Cola Foods, 88 LA 129,131 (Nearing, 1986)

 

In the present grievance, at issue is the interpretation of Article 10.  That section specifically and unambiguously states that,

 

“The District shall pay the following amounts to employees as an increased health premium.  However, should the below designed amounts exceed the health premium increases, the excess amount shall be paid to the employee in the form of a salary increase.” …

 

Since there is no dispute that the health premium increases exceeded the designated monthly amounts for 2005, the express, clear and unambiguous language of the contract provides that the $120 per month would be added to increase the District paid health premiums.

 

Similarly, the opt-out provision, which is in the following paragraph specifically an unambiguously states what an employee who opts out of health coverage will receive:

 

“…the District shall reimburse the employee for that portion of the premium cost which is incurred, if any, to cover the employee under his/her family members’ medical plan.  In no event will reimbursement under the opt-out provision exceed 75% of the District contribution toward employee health premiums.”

 

These provisions are not only clear and unambiguous as to the amount to be paid employees who chose medical coverage from the District, it is also clear as to the amount received by the employees who opt out, which is strictly a reimbursement of costs incurred.  To interpret the specific provision on opt out as somehow including a salary payment of an additional $120 per month to employees would render meaningless both the opt out reimbursement provision and the paragraph which specifies that the $120 per month designated for 2005 goes to medical premium payments if the increases in such premiums are $120 per month or greater, which they were. 

 

Quite simply, the Hearing Officer’s recommended interpretation of the contract is in express contradiction of clear contract language of Article 10.  In essence, the Hearing Officer is making a recommendation to create a new contract provision which grants opt out employees more than the specified reimbursement of costs.  In his recommendation, Hearing Officer Lujan states:

 

“When language is used that is vague or general in nature and yet provides the flexibility to include those meanings which future experiences necessitates being filled in.” 

 

However, the general principles of contract interpretation do not allow those who interpret contracts to “fill in” new contract terms.  To do so is solely the prerogative of the parties to the collective bargaining agreement. For this reason, the grievance decision of the General Manager should become the findings of the Board and the recommendation of the Hearing Officer should be rejected.

 

Respectfully Submitted,

 

 

Ellen Aldridge