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There Is No Duty to Bargain Over a Public Employer's Choice of PA 152 Options

March 24, 2015

Michigan's public schools districts have had great success in court over legal challenges made by employee unions to the school reforms that the Michigan Legislature passed in 2011. On Tuesday, March 17, 2015, the Michigan Court of Appeals issued another important decision in favor of public school districts. 

The latest case involved two unions' challenges regarding a school district's rights under the Publicly Funded Health Insurance Contribution Act (2011 Public Act 152, MCL 15.561, et seq.) and the Public Employment Relations Act (PERA). PA 152 mandates a school district choose between two options that limit its contributions toward healthcare insurance costs: hard caps or an 80/20 percent plan. In Decatur Public Schools v. Van Buren County Education Association and Decatur Educational Support Personnel Association, the Court reviewed the Michigan Employment Relations Commission's dismissal of two unfair labor practice charges regarding the school district's unilateral implementation of the hard cap option under PA 152. Clark Hill previously summarized the MERC's decision here.

On appeal, the Court held that PA 152 and PERA do not conflict and that, following the expiration of an existing collective bargaining agreement, a school district does not have a duty to bargain over its choice between the hard caps and the 80/20 plan. Since there is no duty to bargain over the implementation of either PA 152 option, nothing prevented the school district from unilaterally implementing its choice upon the expiration of the existing collective bargaining agreements. As a result of this finding, the Court affirmed the MERC's decision to dismiss the two unfair labor practice charges filed by the unions against the school district.

Although it is possible for the unions to appeal to the Michigan Supreme Court, given the MERC's and the Court of Appeals' decisions it is unlikely that a further appeal would be successful. Thus, school districts and other public employers should have confidence that they have no duty to bargain over their choice of contribution limits under PA 152 following the expiration of an existing contract.  

Importantly, however, this decision does not eliminate the duty to bargain over other health insurance issues. Although a public employer has the discretion to choose the PA 152 option with which to comply, that option only sets the parameters for what the employer may pay toward its employees' healthcare costs. As the Court explained in Decatur, employees "may still bargain for health insurance benefits up to the amount of the limits imposed by the employer, whether that limit be in the form of the hard caps or the 80/20 plan." As such, there remains a duty to bargain as to whether the public employer will pay the maximum allowed under the statute, or will pay some amount below the ceiling that PA 152 sets.

If you have questions regarding PA 152 or other collective bargaining issues, please contact Eric Griggs at (616) 608-1147 | or another attorney in Clark Hill's Education Law practice group. 

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