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The Michigan Court of Appeals Affirms PA 54 Applies to Lane Changes

June 16, 2014

In a recently published opinion, the Michigan Court of Appeals held that MCL 423.215b (Public Act 54 of 2011) does not unconstitutionally deprive public employees of any vested right and held that the Michigan Employment Relations Commission (MERC) correctly applied the law in the case of Bedford Public Schools v Bedford Education Association MEA/NEA.

Before Public Act 54 became effective on June 8, 2011, when a collective bargaining agreement expired and the parties had not yet reached a new agreement, school districts were typically required under previous MERC decisions to pay their teachers step increases and lane changes in accordance with the terms of the expired contract while negotiations were ongoing and an impasse had not been reached. However, PA 54 changed this former general rule, stating in relevant part as follows: "After the expiration date of a collective bargaining agreement and until a successor collective bargaining agreement is in place, a public employer shall pay and provide wages and benefits at levels and amounts that are no greater than those in effect on the expiration date of the collective bargaining agreement. The prohibition in this subsection includes increases that would result from wage step increases."

In this case, the Union argued that this statutory provision did not prohibit the District from granting lane changes (increasing an employee's salary on the basis of additional education achievement, such as obtaining a Master's degree) during the time period when  the parties were operating under an expired contract and negotiating a successor agreement. The administrative law judge who initially heard the case agreed with the Union. MERC overruled his decision, however, and found that, contrary to the Union's assertion, the District did not violate its duty to bargain by refusing to grant lane changes after the expiration of the collective bargaining agreement.

The Court upheld the law's statutory prohibition upon a public employer providing any increase in compensation after the expiration of a contract, stating, "the plain language of MCL 423.215b unambiguously prohibits" such increases. To reach this conclusion, the Court consulted dictionary definitions of the words "level" and "amount." It stated that the way those terms are used in PA 54 requires that a school district "may pay its teachers no more than the quantity of wages and benefits of the wage scale" applicable on the expiration date of the collective bargaining agreement. Consequently, other wage increases, such as cost of living adjustments, are also prohibited during the time when PA 54 applies. 

The Court of Appeals' opinion affirming MERC's ruling is a win for school districts and will hopefully settle the matter, unless the Union appeals to the Michigan Supreme Court. 

The full text of the opinion may be found here.

Please contact your Clark Hill Education Law attorney if you have any questions.  

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