City of Brainerd Restructures Fire Department, Bargains Over Impact, and Lays Off Full-Time Employees. MN Court of Appeals: “Not So Fast.”

City of Brainerd Restructures Fire Department, Bargains Over Impact, and Lays Off Full-Time Employees. MN Court of Appeals: “Not So Fast.”

Those who have worked in public labor in Minnesota know the drill: if you’re going to make changes to the structure of organization, you inform the union of the proposed changes, bargain over impact, and go forward with the move.  The structure and makeup of an organization is an inherent management right under PELRA.  In fact, it says so right in the law:

Matters of inherent managerial policy include, but are not limited to, such areas of discretion or policy as the functions and programs of the employer, its overall budget, utilization of technology, the organizational structure, selection of personnel, and direction and the number of personnel.

Minn. Stat. §179A.07, Subd. 1.

However, in the case of Firefighters Union Local 4725 v. City of Brainerd, the Minnesota Court of Appeals saw things a little differently when the city attempted to restructure its fire department, moving away from full-time staff to being fully-staffed by volunteer paid-on-call firefighters.  To see the full decision, you can go here: https://law.justia.com/cases/minnesota/court-of-appeals/2018/a18-0398.html.

In a change that took place over a number of years, the city finally made the decision that it could no longer pay for the continuing operation of a full-time fire department and shifted to volunteers while laying off the five full-time employees – the entirety of the bargaining unit.  Because there were no more members of the union, the move effectively eliminated the collective bargaining representative.

The Court of Appeals held that the elimination of the jobs, and thereby the union, was an unfair labor practice.  The Court held, “we conclude that City violated Minn. Stat. § 179A.13, subd. 2(2), when, during the midst of an operating bargaining agreement, it unilaterally eliminated all FEO positions, effectively dissolving Union.”

The Court relied on the language of Minn. Stat. §179A.13, subd. 2, which discusses unfair labor practices:

Public employers, their agents and representatives are prohibited from

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(2) dominating or interfering with the formation, existence, or administration of any employee organization or contributing other support to it;

The Court continued, “We conclude that it is not an ‘inherent managerial policy’ for an employer to reorganize a department when the reorganization interferes with the existence and administration of a union. Minn. Stat. §§ 179A.07, .13, subd. 2(2).”   The Court of Appeals remanded the case to the district court to fashion a remedy.

The city argued that its change was a valid exercise of its inherent managerial right to restructure its organization.  The court distinguished the cases cited by the city by noting that in none of the cases did the management changes eliminate all members of a bargaining unit.  See Minneapolis Ass’n of Adm’rs & Consultants v. Minneapolis Special Sch. Dist. No. 1, 311 N.W.2d 474 (Minn. 1981); State ex rel. Quiring v. Bd. of Educ. of Indep. Sch. Dist. No. 173, 623 N.W.2d 634 (Minn. App. 2001).

Importantly, the Court of Appeals did not make a finding that there was anti-union animus by the city, or a finding that the city failed to negotiate over the impacts.  It is also noteworthy that the Court of Appeals cited no precedent from Minnesota or elsewhere for its holding.

To call this a shocking decision for management is an understatement.  Arguably, this holding brings an end to management’s right to control the operations of its organization, and mandates that all employers maintain operations so that employee organizations can remain in existence ad infinitum once a bargaining unit is formed. It could be argued that to ignore the managerial rights of an employer in favor of maintaining the existence of an unnecessary employee organization is to subjugate the employer to the employee, which is something that was never contemplated by the legislature.

This appears to be another decision that is ripe for review.  We, at the Wiley Law Office, will keep an eye on what happens with this case, and be happy to work with you on any changes you’re looking to make within your organization.