Snohomish County Public Transportation Benefit Area v. Public Employment Relations Commission
Snohomish County Public Transportation Benefit Area v. Public Employment Relations Commission
Opinion of the Court
¶1 — Under Washington’s Administrative Procedure Act (APA),
¶2 Here, the Public Employment Relations Commission (PERC) entered an adjudicative order dismissing an unfair labor practice complaint by Amalgamated Transit Union, Local 1576 against the Snohomish County Public Transit Benefit Area, d/b/a Community Transit. Amalgamated’s complaint alleged that Community Transit improperly failed to arbitrate employee grievances under the employee grievance arbitration provisions of an expired collective bargaining agreement. PERC, following established precedent that provisions for the arbitration of employee grievances do not survive a collective bargaining agreement, dismissed Amalgamated’s complaint. But it also announced a new, purely prospective rule that provisions for the arbitration of employee grievances would survive the expiration of future collective bargaining agreements.
¶3 Community Transit seeks judicial review,
¶4 We hold that Community Transit has standing to contest PERC’s decision on both procedural and substantive grounds. And because PERC’s new prospective rule did not determine the rights of specific persons, it exceeded PERC’s adjudicative authority. We remand to PERC with instructions to strike the prospective change in precedent from its order.
FACTS
A. Legal Background
¶5 This case involves a dispute over Amalgamated’s members’ right to labor arbitration after their collective bargaining agreement expires. Labor arbitration comes in two forms: grievance arbitration and interest arbitration.
¶6 Grievance arbitration is a process for resolving employee claims that the employer has violated the collective bargaining agreement. See Int’l Ass’n of Fire Fighters, Local 46 v. City of Everett, 146 Wn.2d 29, 46-47, 42 P.3d 1265 (2002). Grievance arbitration is available only if included in a collective bargaining agreement. See Teamsters, Local 313 v. Pierce County, No. 2693, at 15-16, Wash. Pub. Emp’t Relations Comm’n (May 29, 1987).
¶8 It has long been the rule that for employees eligible for interest arbitration, grievance arbitration provisions do not survive the expiration of a collective bargaining agreement. See Maple Valley Prof’l Fire Fighters Local 3062 v. King County Fire Prot. Dist. No. 43, 135 Wn. App. 749, 757-59, 145 P.3d 1247 (2006); Teamsters, Local 313, No. 2693, at 17. But in this case, while following this longstanding rule with respect to the parties before it, PERC prospectively announced a new rule that grievance arbitration provisions would survive the expiration of future collective bargaining agreements for employees eligible for interest arbitration.
B. Procedural Facts
¶9 Amalgamated’s collective bargaining agreement with Community Transit expired on December 31, 2007. That collective bargaining agreement included a grievance arbitration provision. In 2008, while the parties were bargaining over a new agreement, Community Transit announced that it would no longer arbitrate employee grievances that arose after the previous agreement’s expiration. Amalgamated instituted adjudication by filing an unfair labor practice complaint with PERC, alleging that Community Transit was required to arbitrate all employee grievances.
¶10 A PERC unfair labor practice manager, following established precedent, ruled that the grievance arbitration provisions expired with the collective bargaining agreement and accordingly dismissed Amalgamated’s complaint. Amalgamated appealed this decision to PERC.
¶12 In spite of prevailing on Amalgamated’s unfair labor practice complaint, Community Transit petitioned for judicial review of PERC’s decision in superior court, contesting the validity of PERC’s new, prospectively applied standard. The superior court affirmed PERC’s decision, holding that PERC had properly decided the case without following rule making procedures and that Community Transit lacked standing to challenge PERC’s new standard on its merits. Community Transit now appeals to this court.
ANALYSIS
I. Standing
¶13 As a threshold matter, although Amalgamated concedes that Community Transit has standing to challenge PERC’s failure to follow rule making procedures, Amalgamated argues that Community Transit lacks standing to challenge PERC’s decision on its merits. Although we do not
¶14 The APA provides for judicial review of most agency actions. RCW 34.05.510-.598. But only “aggrieved or adversely affected” persons have standing to obtain judicial review of agency action. RCW 34.05.530. The person seeking judicial review of agency action bears the burden of establishing standing to obtain judicial review. KS Tacoma Holdings, LLC v. Shorelines Hearings Bd., 166 Wn. App. 117, 127, 272 P.3d 876 (2012) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S. Ct. 2130, 119 L. Ed. 2d 351 (1992)). We review questions of standing de novo. Spokane Airports v. RMA, Inc., 149 Wn. App. 930, 939, 206 P.3d 364 (2009).
¶15 A person is “aggrieved or adversely affected” by agency action under RCW 34.05.530 when:
(1) The agency action has prejudiced or is likely to prejudice that person;
(2) That person’s asserted interests are among those that the agency was required to consider when it engaged in the agency action challenged; and
(3) A judgment in favor of that person would substantially eliminate or redress the prejudice to that person caused or likely to be caused by the agency action.
Our Supreme Court has held that these statutory requirements are derived from federal case law. Seattle Bldg. & Constr. Trades Council v. Apprenticeship & Training Council, 129 Wn.2d 787, 793, 920 P.2d 581 (1996) (Trades Council). The first and third factors are equivalent to the federal injury-in-fact test, while the second factor is equivalent to the federal “zone of interest” test. See Trades Council, 129 Wn.2d at 793-95.
¶16 The parties do not contest whether Community Transit satisfies the zone of interest test, and thus we do
¶17 Washington courts interpret the injury-in-fact test consistently with federal case law. See, e.g., KS Tacoma Holdings, 166 Wn. App. at 126-27. To meet this test, Community Transit must show an injury-in-fact, which is an invasion of a legally protected interest. Lujan, 504 U.S. at 560.
¶18 Community Transit’s claimed injury-in-fact is that PERC’s decision will cause it to suffer a loss of “negotiating leverage.” Br. of Appellant at 40. This argument is well taken. Prior to PERC’s decision here, if Amalgamated wished for its members to benefit from grievance arbitration provisions after the expiration of its collective bargaining agreement, it was required to negotiate with Community Transit for such a benefit. But under PERC’s decision, Community Transit can no longer obtain concessions in exchange for an agreement to continue the arbitration of grievances past the collective bargaining agreement’s expiration; its negotiating leverage has been reduced.
¶19 The United States Supreme Court’s holding in Clinton v. City of New York, 524 U.S. 417, 432, 118 S. Ct. 2091, 141 L. Ed. 2d 393 (1998), bolsters our conclusion that Community Transit has suffered an injury-in-fact. In Clinton, a farmers’ cooperative challenged the Line Item Veto Act
II. PERC’s Authority
¶21 Community Transit argues that PERC’s decision was invalid because it used adjudication proceedings instead of rule making proceedings to promulgate a purely prospective rule. We agree that the prospective nature of PERC’s decision rendered it invalid, but on alternate grounds.
A. The Plain Text of the Washington APA Precludes Purely Prospective Adjudicative Orders
¶23 PERC’s authority is limited to that which the legislature has granted. Local 2916, IAFF v. Pub. Emp’t Relations Comm’n, 128 Wn.2d 375, 379, 907 P.2d 1204 (1995). The question of PERC’s authority is thus a question of law. Local 2916, IAFF, 128 Wn.2d at 379. Courts will grant relief from an agency order in an adjudicative proceeding if the order exceeds the agency’s authority. RCW 34.05.570(3)(b).
¶24 The legislature has granted PERC the authority to adjudicate unfair labor practice complaints and to issue rules and regulations to carry out the provisions of the public employee collective bargaining statutes. RCW 41.56-.160; RCW 41.58.050. PERC must exercise this authority in accord with the APA. RCW 41.56.165; RCW 41.58.050.
¶25 Examining PERC’s authority here thus presents a question regarding the agency’s authority under the APA, a matter of statutory interpretation, which we review de novo. Dep’t of Ecology v. Campbell & Gwinn, LLC, 146 Wn.2d 1, 9, 43 P.3d 4 (2002). Our fundamental objective in statutory interpretation is to give effect to the legislature’s
¶26 The APA provides two primary sets of proceedings for agency action: adjudication and rule making. RCW 34-.05.310-.395, .410-.494. Rule making requires agencies to give public notice of proposed rules and allow for public comment. RCW 34.05.320, .325.
¶27 In contrast to rule making, agencies are not required to give public notice of adjudicative proceedings or to allow for public comment. See RCW 34.05.434. The APA defines an “adjudicative proceeding” as one where an opportunity for a hearing is required “before or after the entry of an order by the agency.” RCW 34.05.010(1). “ ‘Order,’ without further qualification, means a written statement of particular applicability that finally determines the legal rights, duties, privileges, immunities, or other legal interests of a specific person or persons.” RCW 34.05.010(ll)(a) (emphasis added).
¶28 At the outset, the definition of “order” in the APA plainly limits adjudication to resolving the rights and duties of specific persons, rather than announcing general policies of a purely prospective nature. The plain text of RCW 34.05.010(ll)(a) does not confer on agencies authority to decide rules in adjudication that apply to everyone except the specific persons before the agency, as PERC did here.
¶29 Both PERC and Amalgamated point out that here, PERC did decide the rights and duties of specific parties: it decided that Community Transit did not commit an unfair labor practice against Amalgamated. And consequently, PERC and Amalgamated argue that nothing in the APA
¶30 Washington agencies are limited to the authority that the legislature has granted. Local 2916, IAFF, 128 Wn.2d at 379. Because RCW 34.05.010(ll)(a) does not authorize agencies to determine the rights and duties of persons in general via adjudication, they lack such authority. Agencies do not, as PERC and Amalgamated argue, have such authority by virtue of it not being expressly forbidden to them.
¶31 PERC also argues that adjudicative orders, being precedential, always bind persons other than the specific persons before the agency, making it irrelevant whether they are purely prospective. But this is incorrect. Adjudication decides matters ón a case-by-case basis. While
¶32 PERC and Amalgamated additionally argue that just like Washington courts, PERC has authority to issue purely prospective decisions. See Lunsford v. Saberhagen Holdings, Inc., 166 Wn.2d 264, 285, 208 P.3d 1092 (2009). But unlike courts, which are granted the “judicial power of the state” by the Washington Constitution, Const, art. IV, § 1, agencies are limited to the powers the legislature has granted them. Local 2916, IAFF, 128 Wn.2d at 379. Because PERC is bound by RCW 34.05.010(ll)(a), analogy to the authority of courts is unavailing.
f33 Because the plain text of the APA limits adjudicative orders to those determining the rights, duties, privileges, or other legal interests of specific persons, a purely prospective adjudicative order is beyond the authority granted by RCW 34.05.010(ll)(a). This point becomes clearer by contrast with the federal APA and the accompanying case law, which provide no such limitation on agency authority.
B. The Federal APA and Cases Thereon Illustrate by Contrast the Limited Scope of Adjudicative Orders under the Washington APA
¶34 Amalgamated, Community Transit, and PERC all cite federal cases to argue PERC’s authority to issue a prospective ruling, but because the text of the federal APA
1. The Federal APA Defines “Adjudication” Broadly
¶35 The federal APA defines “rule making” as “agency process for formulating, amending, or repealing a rule.” 5 U.S.C. § 551(5). And it defines “rule” as “the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency.” 5 U.S.C. § 551(4).
136 The federal APA’s definition of “adjudication” is similarly broad. It defines “adjudication” as “agency process for the formulation of an order.” 5 U.S.C. § 551(7). And it defines an “order” as “the whole or a part of a final disposition, whether affirmative, negative, injunctive, or declaratory in form, of an agency in a matter other than rule making but including licensing.” 5 U.S.C. § 551(6). In other words, the federal APA essentially defines “adjudication” as anything that is not rule making. And it defines “rule making” so broadly that the text of the federal APA does not appear to require that any particular proceeding (other than licensing) be conducted under one set of procedures or another.
2. The Supreme Court Gives Federal Agencies Discretion To Choose Adjudication or Rule Making
¶37 Although the United States Supreme Court has previously signaled the intent to police the boundary between adjudication and rule making, the modern Court has
¶38 The Court’s refusal to police the line between adjudication and rule making under the federal APA is reflected in National Labor Relations Board (NLRB) precedent. The NLRB routinely gives new rules decided in adjudication only prospective effect. See, e.g., Dana Corp., 351 N.L.R.B. 434, 443 (2007), overruled on other grounds by Lamons Gasket Co., 357 N.L.R.B. No. 72 (2011); Crown Bolt, Inc., 343 N.L.R.B. 776, 780 (2004); Levitz Furniture Co. of the Pac., 333 N.L.R.B. 717, 729 (2001). Such a practice is easily justified by the very broad definitions of “adjudication” and “rule making” under the federal APA.
3. The Narrower Definition of “Adjudication” under the Washington APA Shows that Washington Agencies Lack Authority To Issue Prospective Adjudicative Orders
¶39 While the Supreme Court has allowed federal agencies free reign to issue purely prospective adjudicative orders under the federal APA, such a result is not appropriate under the much narrower definition of “adjudication” under the Washington APA. Because the Washington APA
III. Remedy
¶40 Finally, Amalgamated argues that, assuming PERC exceeded its authority, we should amend PERC’s order to apply PERC’s new standard to Community Transit. But this remedy is improper. The APA directs us to “grant relief” from an agency order if it exceeds the agency’s authority. RCW 34.05.570(3)(b). Nothing in the plain meaning of the words “grant relief” permits us to amend invalid agency action in order to preserve its validity. In accord with RCW 34.05.570(3)(b), we must order the invalid agency action, the portion of the adjudicative order that purports to apply only prospectively, stricken.
¶41 We remand to PERC with instructions to strike the prospective change in precedent from its order.
Ch. 34.05 RCW.
Community Transit’s petition for review named both Amalgamated and PERC as respondents. PERC initially declined to participate in judicial review, leaving Amalgamated as the sole respondent before this court. But PERC submitted a brief regarding the agency’s authority to issue prospective adjudicative orders in response to our request for additional briefing, as set forth in further detail below at note 6.
Community Transit also argues (1) PERC erroneously interpreted and applied the law, (2) PERC acted inconsistently with a rule of the agency without a rational basis, and (3) PERC’s decision was arbitrary and capricious. Because we resolve this case on PERC’s authority, we do not address these arguments.
PERC held:
When this employer declined to arbitrate the post-expiration grievance, the employer relied upon what was then valid agency precedent. Although we have re-examined and overruled existing agency precedent and have adopted a new standard, we cannot apply that standard to this complaint. Our decision must be prospective in nature, and the union’s complaint is dismissed.
Clerk’s Papers at 24.
Former 2 U.S.C. §§ 691-692 (1996).
After oral argument, we asked the parties to supply additional briefing on whether the APA grants PERC the authority to issue a prospective adjudicative order. Amalgamated and Community Transit both submitted additional briefing on this issue. Additionally, we granted PERC’s motion for leave to file a brief addressing its authority to issue prospective adjudicative orders under the APA. PERC accordingly filed a brief addressing the issue.
Community Transit also argues that PERC exceeded its authority on different grounds: (1) that PERC exceeded its authority by creating a new unfair labor practice, (2) that PERC exceeded its authority by purporting to overrule judicial precedent, and (3) that PERC exceeded its authority by undermining the legislature’s intent. Because we resolve this case based on PERC’s lack of authority under the APA to issue a purely prospective adjudicative order, we do not address these arguments.
5 U.S.C. §§ 551-559.
The statute defines “person” to mean “any individual, partnership, corporation, association, governmental subdivision or unit thereof, or public or private organization or entity of any character, and includes another agency.” RCW 34.05.010(14).
Amalgamated also apparently argues that the words “specific persons” can validly refer to “all uniformed public sector employers and unions who were parties to expired collective agreements under which a matter previously amenable to grievance-arbitration arose post-expiration.” Corrected Suppl. Br. of Resp’t (Amalgamated) at 4-5. We disagree. Amalgamated refers not to specific persons, but to a class of persons.
This is not to say that agencies are always limited to the authority expressly granted to them by statute. We have recognized that agencies are impliedly granted the authority to do what is necessary in order to carry out their statutorily delegated authority. Irondale Cmty. Action Neighbors v. W. Wash. Growth Mgmt. Hearings Bd., 163 Wn. App. 513, 527, 262 P.3d 81 (2011), review denied, 173 Wn.2d 1014 (2012). But the record here demonstrates no necessity for PERC to exercise the power to issue prospective adjudicative orders. PERC had authority to apply its new standard to the specific parties before it, satisfying RCW 34.05.010(ll)(a). And PERC also had authority to enact the new standard via rule making. RCW 41.58.050.
PERC contends that it would be “difficult, if not impossible” to set forth “all the circumstances that might constitute an unfair labor practice” using rule making, but nothing in our opinion requires as much. Br. of Resp’t (PERC) at 3. PERC may decide all such questions via adjudication; it is simply limited to determining the rights of specific persons when doing so. PERC need use rule making only for those instances where it finds that purely prospective effect is required. Nothing in the record supports PERC’s assertion that this would be “difficult, if not impossible.” Br. of Resp’t (PERC) at 3.
Community Transit concedes that agencies may use adjudication to set administrative policy on a case-by-case basis, arguing that it was the prospective nature of PERC’s decision here that rendered it invalid, rather than PERC’s decision to alter existing precedent. We agree. Our Supreme Court has cautioned that “the APA’s provisions were not designed to serve as the straitjacket of administrative action.” Budget Rent A Car Corp. v. Dep’t of Licensing, 144 Wn.2d 889, 898, 31 P.3d 1174 (2001). We accordingly make clear that our invalidation of PERC’s order here is based on the prospective nature of the order, not the fact that PERC used adjudication to effect a change in agency policy.
Reference
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- Snohomish County Public Transportation Benefit Area v. The Public Employment Relations Commission
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