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No. 2--03--0020

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IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT

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JUSTICE BOWMAN delivered the opinion of the court:

The City of Loves Park (City) appeals a decision by the State Panel of the Illinois LaborRelations Board (Board) finding that the City committed an unfair labor practice by repudiating theterms of its collective bargaining agreement (Agreement) with the International Union of OperatingEngineers, Local 150 (Union). The City sets forth four issues for review. In our view, the City'scontentions can be consolidated into the following two issues: (1) whether the arbitration clausecontained in the Agreement is legal and enforceable, and (2) whether the Board erred in finding thatthe City committed an unfair labor practice.

                                                                           BACKGROUND

The following statement of facts is taken in large part from the Board's written decision in thismatter. At all relevant times, the Union was the exclusive representative of a bargaining unit ofproduction and maintenance employees for the City's street and water department. The Union andthe City entered into a collective bargaining agreement that was effective from May 1, 1996, untilApril 30, 2000. At issue in this case is section 8.2 of the Agreement, which provides in relevant partthat, "[i]n cases of discipline or discharge, an employee who files a grievance under this Agreementshall have no recourse to the City's Civil Service Commission, and the Commission shall not havejurisdiction to review a case regarding discipline or discharge."

On January 13, 2000, the City notified Union member David Turnrose that he would beplaced on suspension beginning January 17, 2000, and that the City intended to file charges with theCivil Service Commission (Commission) seeking his discharge. The Union filed a grievance onTurnrose's behalf on February 1, 2000, and informed counsel for the City that the Union objected toprocessing the matter through the Commission. On February 8, counsel for the City acknowledgedby letter that Turnrose had waived his right to a hearing before the Commission and that the Cityintended for the issue of Turnrose's discharge to be heard in only one forum.

Nonetheless, the Commission conducted a hearing on February 11 on the charges againstTurnrose. The Union moved to dismiss the matter because Turnrose had opted for grievancearbitration rather than a hearing before the Commission. Pursuant to an agreement with the City'slegal counsel, the Union waived its right to defend Turnrose before the Commission and allowed theCommission to render its decision following a brief prove-up by the City. The City, in return, agreedthat it would not raise any procedural or collateral estoppel arguments in the grievance arbitrationproceedings. The Commission then discharged Turnrose on February 11. The Union filed agrievance that same day.

The arbitration hearing commenced on September 26, 2000. At the hearing, the partiesstipulated that the issue was whether Turnrose was suspended and discharged for just cause. Theyfurther stipulated that the grievance was properly before the arbitrator for a final and binding decisionand that the procedural requirements were either satisfied or waived. On February 27, 2001, thearbitrator issued a decision sustaining the Union's grievance, concluding that the City did not havejust cause to discharge Turnrose, and ordering the City to reinstate Turnrose to his former positionwith full seniority, back pay, and benefits.

Following the arbitrator's decision, the City's mayor, Darryl Lindberg, asked the City'sattorney to review options for appealing the arbitrator's ruling. Mayor Lindberg was concerned withthe legality of the grievance arbitration provision of the Agreement. Prior to the arbitrator's ruling,the City had decided that there was no reason to look into the legality of this provision unless thearbitrator's ruling was unfavorable to the City.

The City filed a complaint for declaratory judgment in the Winnebago County circuit courton March 22, 2001, requesting the entry of orders holding that (1) the City, as a non-home-ruleentity, does not have the authority to contract away the requirements of the Illinois Municipal Code(Code) (65 ILCS 5/10--1--1 et seq. (West 2000)), and (2) the arbitrator's ruling is void for lack ofjurisdiction. The City refused to reinstate Turnrose and grant him back pay.

The Union then filed a charge with the Board, alleging that, by refusing to comply with thearbitrator's decision and challenging the validity of the arbitration clause in the circuit court, the Cityrepudiated the Agreement and committed an unfair labor practice. The administrative law judge(ALJ) concluded that the City did commit an unfair labor practice in violation of sections 10(a)(1)and 10(a)(4) of the Illinois Public Labor Relations Act (5 ILCS 315/10(a)(1), (a)(4) (West 2000)). The City filed exceptions to the ALJ's recommended decision, and the Board subsequently adoptedthe ALJ's decision. The City filed a timely petition for review of the Board's decision.

STANDARD OF REVIEW

Before reaching the merits, we must first address the proper standard of review. The Citycontends that our review is de novo because there are no disputed facts. The Board and the Union,on the other hand, argue that the appropriate standard is whether the Board's decision was clearlyerroneous.

In City of Belvidere v. Illinois State Labor Relations Board, 181 Ill. 2d 191 (1998), oursupreme court held that the applicable standard of review of an administrative agency's decisiondepends on whether the question presented is one of fact or law. A reviewing court will overturn anagency's findings of fact only if the agency's determinations are against the manifest weight of theevidence. City of Belvidere, 181 Ill. 2d at 204. An agency's determination of a question of law,however, is entitled to less deference and is reviewed de novo. City of Belvidere, 181 Ill. 2d at 205. The court in City of Belvidere further held that the appropriate standard of review for a mixedquestion of fact and law is the clearly erroneous standard. City of Belvidere, 181 Ill. 2d at 205.

The issue of whether section 8.2 of the Agreement is legal and enforceable involvesinterpretation of the Code and the Agreement, both of which are questions of law. Department ofPublic Aid v. Brewer, 183 Ill. 2d 540, 554 (1998) (construction of a statute is a question of law); Gray v. Mundelein College, 296 Ill. App. 3d 795, 803 (1998) (construction of a contract is aquestion of law). Accordingly, we apply a de novo review to this issue.

We further conclude that the issue of whether the City committed an unfair labor practiceconstitutes a mixed question of fact and law, as the Board's determination involved examining thelegal effect of a given set of facts, namely, the City's actions following the arbitration decision. Consequently, we will apply the clearly erroneous standard of review to the City's second issue.

ANALYSIS

The City asserts that the arbitration provision in the Agreement was not legal and enforceable. That provision provides as follows:

"In cases of discipline or discharge, an employee who files a grievance under this Agreementshall have no recourse to the City's Civil Service Commission, and the Commission shall nothave jurisdiction to review a case regarding discipline or discharge."

Section 10--1--18(a) of the Code provides as follows with respect to a municipality's ability tonegotiate regarding arbitration of employment disputes as part of a collective bargaining agreement:

"Except as hereinafter provided in this Section, no officer or employee in the classifiedcivil service of any municipality who is appointed under the rules and after examination, maybe removed or discharged, or suspended for a period of more than 30 days, except for causeupon written charges and after an opportunity to be heard in his own defense. The hearingshall be as hereinafter provided, unless the employer and the labor organization representingthe person have negotiated an alternative or supplemental form of due process based uponimpartial arbitration as a term of a collective bargaining agreement. In non-home rule unitsof government, such bargaining shall be permissive rather than mandatory unless suchcontract term was negotiated by the employer and the labor organization prior to or at thetime of the effective date of the amendatory Act, in which case such bargaining shall beconsidered mandatory." 65 ILCS 5/10--1--18(a) (West 2000).

The City contends that, under the Agreement, it was required to conduct a civil servicehearing in order to terminate Turnrose, and only after that hearing did Turnrose have the option ofseeking an arbitrator's review of the termination. The City further argues that the Commission'stermination decision constitutes a final administrative decision that, pursuant to section 3--104 of theAdministrative Review Law (735 ILCS 5/3--104 (West 2000)), is reviewable only by the courts. Consequently, the City maintains that the arbitrator lacked jurisdiction to review the Commission'sdecision that termination of Turnrose's employment was proper. We find the City's argumentuntenable for the following reasons.

First, we disagree with the City's premise that under the Agreement the employee may seekarbitration only after the Commission has terminated his employment. Section 8.2 of the Agreementstates that "[i]n cases of discipline or discharge, an employee who files a grievance under theAgreement shall have no recourse to the City's Civil Service Commission, and the Commission shallnot have jurisdiction to review a case regarding discipline or discharge." The plain language ofsection 8.2 does not support the City's interpretation. It does not state that an employee must beofficially discharged by the Commission before he may file a grievance. Instead, it discusses the effectof filing a grievance "[i]n cases of discipline or discharge." Under section 10--1--18(a) of the Code,a municipality must file written charges before it may discharge an employee. In our view, a fair andreasonable interpretation of section 8.2 is that, once a Union employee receives notice that the Cityintends to seek discipline or discharge, the employee may file a grievance. By doing so, the employeeremoves the matter from the Commission's jurisdiction. The provisions of section 8.3 of theAgreement, entitled "GRIEVANCE STEPS," support our interpretation.

Section 8.3 delineates a three-step grievance process. Under the first step, the employee mayattempt to resolve the dispute with his or her immediate supervisor within the time period set forthin the Agreement. If the grievance remains unresolved after step one, the Union, on the employee'sbehalf, may submit a written grievance to the City's mayor. If the mayor denies the grievance, theUnion may proceed to step three, which allows the Union to refer the matter to arbitration. Thearbitrator's decision is final and binding upon the City, the Union, and the employee. Nothing insection 8.3 refers to any involvement by the Commission if the employee has elected to pursue thegrievance process. Thus, contrary to the City's argument, the Agreement does not require a hearingand decision to terminate by the Commission prior to the filing of a grievance.

Consequently, the remainder of the City's argument unravels. Because Turnrose and theUnion followed the proper grievance procedures in this case, the Commission did not havejurisdiction to review Turnrose's case. Therefore, the Commission's decision that Turnrose'stermination was for just cause was not a valid "final administrative decision" for purposes of section3--104 of the Administrative Review Law, which states in pertinent part that jurisdiction to reviewfinal administrative decisions is vested in the circuit courts (735 ILCS 5/3--104 (West 2000)).

The Administrative Review Law defines "administrative decision" as "any decision, order ordetermination of any administrative agency rendered in a particular case, which affects the legalrights, duties or privileges of parties and which terminates the proceedings before the administrativeagency." 735 ILCS 5/3--101 (West 2000). The Commission's decision cannot be said to haveaffected the parties' legal rights or to have terminated the proceedings between the parties when theCommission did not properly have jurisdiction over the proceedings. Accordingly, the arbitrator didnot improperly review a final administrative decision when it heard Turnrose's grievance. Thedifficulty in this case was caused by the City's insistence upon proceeding with the hearing before theCommission after the Union had filed its initial grievance and had objected to going forward with anyproceedings before the Commission.

The City also argues that the Board's determination that it committed an unfair labor practicewas erroneous. The Agreement provides that the arbitrator's decision shall be final and binding onthe parties. Nonetheless, the City refused to abide by the arbitrator's decision and filed suit in thecircuit court seeking to void the arbitrator's ruling and to have section 8.2 of the Agreement declaredinvalid. The Board found that the City's actions amounted to wrongful repudiation of the award.

The City claims that it was, in good faith, exercising its right to appeal the arbitrator's decisionin the only manner available to it. The Board found that, although the City had the right to seek tovacate the award, its attempt to have the grievance arbitration clause nullified and its refusal tocomply with the arbitrator's decision and the grievance arbitration clause demonstrated contempt anddisdain for the bargaining process and the public policies underlying the Act.

Section 10(a)(1) of the Act makes it an unfair labor practice for a public employer to interferewith a public employee's exercise of rights guaranteed under the Act. 5 ILCS 315/10(a)(1) (West2000). Section 10(a)(4) provides that it is an unfair labor practice for a public employer to refuse tobargain in good faith with an exclusive representative. 5 ILCS 315/10(a)(4) (West 2000). Whenan employer's conduct demonstrates a disregard for the collective bargaining process, evidences anoutright refusal to abide by a contractual term, or prevents the grievance process from working, thatconduct constitutes repudiation and violates section 10(a)(4). See City of Collinsville, 16 Pub. Employee Rep. (Ill.) par. 2026, No. S--CA--99--056 (ISLRB April 18, 2000), aff'd, City ofCollinsville v. Illinois State Labor Relations Board, 329 Ill. App. 3d 409 (2002).

Here, the City sought not merely to vacate the arbitrator's decision regarding Turnrose'semployment, but to retroactively nullify the entire bargained-for grievance provision and to depriveTurnrose of any meaningful due process. Under the specific facts of this case, we cannot say that theBoard's decision was clearly erroneous.

CONCLUSION

For the foregoing reasons, we confirm the Board's decision.

Confirmed.

McLAREN and GILLERAN JOHNSON, JJ., concur.