On September
29, 2009, an arbitration award was issued involving our client, the
Grand Rapids Public Schools (GRPS), finding that the District did not
violate the parties' collective bargaining agreement by
subcontracting student transportation services during the term of a
two year collective bargaining agreement. GRPS outsourced its
school busing services to a private vendor in April 2005 to achieve
approximately $18.5 million in cost savings. At the time, GRPS
was in the middle of a two year collective bargaining agreement
covering a wall-to-wall support staff unit that included bus drivers.
The Grand
Rapids Educational Support Personnel Association, MEA/NEA (GRESPA)
grieved the subcontracting decision and argued that it violated the
parties' collective bargaining agreement. GRESPA asked the
arbitrator to order GRPS to return the transportation work to the transportation
employee bargaining unit and award all of the affected employees lost
wages and benefits. GRPS argued that its subcontracting
decision was not prohibited by the parties' collective bargaining
agreement and, even if such a prohibition existed in the contract,
the decision constituted a "prohibited subject" of
bargaining under Sections 15(3)(f) and (4) of the Michigan Public
Employment Relations Act (PERA) and, therefore, was unenforceable.
The arbitrator
agreed with GRPS that the collective bargaining agreement did not
prohibit subcontracting. He noted that the contract did not
contain any express prohibition on subcontracting and that the layoff
provision expressly allowed the district to lay off employees
"for any reason." The arbitrator found there was a
strong bargaining history in which GRESPA had tried but failed to add
explicit contract restrictions on subcontracting. He also
rejected GRESPA's arguments that various contract provisions, such as
the recognition, seniority, job classification, wages and benefits,
and duration clauses constituted implied prohibitions on GRPS' right
to subcontract.
More
significantly, the arbitrator also found that "even if there
could have been a slim possibility that the [parties' prior collective
bargaining agreements] could be interpreted as prohibiting
subcontracting, it was eliminated in subsequent contracts by the
statutory declaration in PERA Section 15(4) that whether or not to
contract non-instructional services to third parties is a matter
'within the sole authority of the public school employer to
decide.'" Thus, to the extent any contractual prohibition
on subcontracting had previously existed or could be inferred, any
implied restrictions were not enforceable in light of PERA's statutory
language.
The
arbitrator's decision demonstrates that school districts have, as
PERA states, "sole authority" to determine whether to
provide non-instructional services through contracts with outside
vendors. School districts considering subcontracting
non-instructional classifications such as transportation, food
service, custodial, and maintenance should first look at their
contract language and bargaining history on the subject as those were
primary considerations by the arbitrator in the GRPS/GRESPA
arbitration. However, where a subcontracting prohibition
exists, a school district should be able to successfully argue that
it has "sole authority" under PERA to subcontract its
non-instructional support services.
If your
district is considering the subcontracting of non-instructional
support services as an option to achieving cost savings, or you have
any questions about the scope of a school district's statutory right
to subcontract its non-instructional support services, please feel
contact any of the following Clark Hill school labor attorneys:
John Gierak (248) 988-5845, Joe Urban (248) 988-1829, Barb Ruga (616)
608-1105, or Marshall Grate (616) 608-1103.
