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Collective bargaining for townships presents unique challenges that do not exist in the private sector. As the decision makers, township officials face constant oversight by their constituents throughout the bargaining process. As a result, the process that happens behind closed doors is still subject to an overlay of politics, public opinion, and concern over the proper use of taxpayer funds. This E-letter explains the basic process of bargaining to give township officials a better understanding of this unique area of the law – and an official’s job!

Public Sector Labor Laws

The Public Employment Relations Act (“PERA”) is one of Michigan’s primary labor laws that apply to township employees and other public employees. PERA includes the basic requirement to bargain in good faith and prohibits interfering with certain protected activities of employees. Public employees do not have the right to strike because Michigan’s legislature determined that public services, like public education, police and fire protection, are valued too greatly to be subject to periods of interruption due to strikes.

 Act 312 of 1969 is another important Michigan labor law. Act 312 requires the township and its police and fire service employees to resolve disputes over contract terms through binding arbitration. Act 312 does not replace the duty to bargain or any other obligation under PERA; but it adds that an arbitrator will decide the terms of the parties’ contract if they cannot reach an agreement on their own.

The “right-to-work” legislation implemented in 2012 prohibits mandatory union membership as a condition of employment for all township employees, except those in police or fire service. This creates a challenging dynamic, since a township employee may choose not to join a union or contribute to a bargaining representative, but the bargaining representative must still represent all employees in the bargaining unit.   The jury is still out as to how this will impact matters at the bargaining table and within unions, and we will continue to monitor this as the law continues to be applied.

Michigan Employment Relations Commission

Michigan’s Employment Relations Commission (“MERC”) is responsible for implementing and administering PERA and Act 312. The three-member Commission and the Bureau of Employment Relations certify bargaining units and representatives for township employees, hold elections, resolve unfair labor practice charges and appoint mediators, arbitrators and fact-finders to aid the parties in resolving disputes over contract terms.

Duty to Bargain & Overcoming Impasse

PERA requires “collective bargaining” over mandatory subjects of bargaining, such as rates of pay, hours of employment and other terms and conditions of employment. This obligation applies even if just two individuals attempt to discuss mandatory subjects of bargaining with the township – even when no union or bargaining representative is involved. Generally, the township and the employees will each have a team representing them during bargaining, with each group making the ultimate decision about whether to accept proposed terms.

It is important to understand that the duty to bargain is not a requirement to agree. PERA establishes procedures for overcoming disputes about issues (referred to as “impasse”) if the parties cannot agree, before a township may ultimately implement its position. However, if police or fire service employees are involved, Act 312 adds another layer to this obligation—and to the bargaining strategy—by requiring the dispute to be settled by an arbitrator.

Mediation

PERA authorizes either side to request mediation through MERC for disputes related to new contracts, contract renewals, and grievances. The parties must notify MERC of the status of negotiations at least 60 days before a contract expires. MERC must appoint a mediator if an agreement is not reached within the next 30 days.

Often, the MERC-appointed mediator helps the parties resolve a bargaining impasse. The mediator is neutral and typically assists the parties in negotiations at no cost. The mediator can be creative in crafting resolutions to overcoming an impasse. If mediation is unsuccessful, the parties generally move to the next step in the bargaining process: fact-finding.

Fact-Finding

If the parties are still at impasse after bargaining and mediation, either side may request fact-finding before a MERC-appointed fact-finder. The fact-finder conducts a hearing to receive evidence and argument on each party’s position on the open issue(s), and parties usually submit briefs to further explain their position. The fact-finder then issues a report and recommendation to settle the unresolved issues. The report and recommendation is not binding.

PERA requires the parties to meet and bargain at least once in the 60 days after the fact-finder issues the report and recommendation. Unless Act 312 applies, this is the final required opportunity for the parties to resolve their contract issues. If the parties are unable to resolve their differences at the final mandatory bargaining session, or in subsequent voluntary negotiations, a township may unilaterally implement the terms of a contract, as discussed below.

Unilateral Implementation

For bargaining units not covered by Act 312, such as clerical or technical employees, townships have a powerful tool: the option to unilaterally impose their position on issues that remain unresolved after bargaining, mediation and fact-finding. Imposed terms are combined with previously agreed upon terms to create the parties’ contract. Although this may seem like an attractive option, especially in tough negotiations, we do encourage townships to consider the potential consequences in employee morale, performance and additional labor strife that may be caused by such action.

Act 312 Arbitration

If employees in a bargaining unit are “public police or fire department employees” or “emergency medical service personnel,” the final step in overcoming impasse is dictated by Act 312. Either party can initiate arbitration proceedings through MERC 30 days after an unresolved issue is submitted for mediation. Each party also selects a representative to join a MERC arbitrator to form a three-member arbitration panel. This panel decides the terms of the parties’ contract—usually by a 2-1 vote on each issue.

The arbitrator holds a hearing to receive testimony, exhibits and argument on each open issue. The record is then evaluated based on the 10 standards set forth in Act 312, including the financial ability of the township to pay. Within 30 days after the hearing, the panel must issue an opinion that includes written findings on each unresolved issue identified in the parties’ last offers of settlement.

Unique Challenges

Bargaining for township officials includes unique obligations, processes and challenges. A process that typically occurs behind closed doors for the private sector employer is conducted publicly in the realm of the Open Meetings Act, the Freedom of Information Act, employees’ First Amendment free speech protections and the inquiring minds of taxpayers, political opponents and the like. Employees or their representatives may also appear at public meetings to comment on the bargaining process. It is critical for township officials and their bargaining representatives to be educated on the process, ensure clear and open communication and emphasize a consistent voice and clear authority at the bargaining table.

By:      Lizzie Mills

            Steve Koski

            Steve Schultz

A similar article written by the authors appeared in the September 2015 edition of the Michigan Bar Journal.