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       IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

KITSAP COUNTY and KITSAP
COUNTY SHERIFF,                                   No. 73637-0-1

                     Respondents,                 DIVISION ONE




KITSAP COUNTY CORRECTIONAL
OFFICERS' GUILD, INC., and PUBLIC
EMPLOYMENT RELATIONS                              PUBLISHED OPINION
COMMISSION,
                                                  FILED: March 21, 2016
                     Appellants.


       Becker, J. — Faced with a directive from the board of county

commissioners to cut the budget of the sheriff's office, the Kitsap County Sheriff

laid off two jail officers. The officers' union, appellant Kitsap County Correctional

Officers' Guild, demanded to bargain the layoff decision. Kitsap County and the

Kitsap County Sheriff (the county) refused and proceeded to obtain a declaratory

judgment that the layoff decision was not a mandatory subject of bargaining. The

court perceived the Guild's position as a demand to bargain the level of funding

allocated to the jail's budget. This was error. The subject of the demand to

bargain was the layoff decision, not the budget. Adopting a budget is a
No. 73637-0-1/2



management prerogative. But when a public sector employer proposes to

balance the budget by laying off workers who are represented by a union, the

union must have the opportunity to bargain over whether the cost saving can be

achieved by other means.

       The Public Employees' Collective Bargaining Act, chapter 41.56 RCW,

requires a public employer to bargain collectively with a union representing its

employees. Mandatory bargaining subjects include wages, hours, and working

conditions. Permissive bargaining subjects include managerial decisions that

only remotely affect personnel matters and decisions that are predominantly

managerial prerogatives. Kitsap County v. Kitsap County Corn Officers' Guild,

Inc.. 179 Wn. App. 987, 998, 320 P.3d 70 (2014). Parties to a collective

bargaining agreement must bargain on mandatory subjects. They may bargain

on permissive subjects, but they are not obliged to bargain to impasse. Ifan

employer makes a unilateral decision regarding a permissive bargaining subject,

the employer is still required to bargain over the effects of the decision upon a

mandatory subject such as wages, hours, and working conditions. Kitsap

County, 179 Wn. App. at 997-98.

       In February 2011, the county was still experiencing budgetary problems

stemming from the 2008 recession. The board of county commissioners notified

all county employees to expect more budget cuts in the 2012 budget as revenues

were still declining.

       The sheriff operates and supervises the county jail. Of the portion of the

overall budget allocated to the sheriff by the county commissioners, the sheriff
No. 73637-0-1/3



has the authority to determine how funds will be distributed and utilized within the

programs of the sheriff's office.

       In 2011, the most recent collective bargaining agreement between the

county and the Guild had expired two years earlier. Negotiations for a new

agreement had twice reached an impasse. The parties were certified for an

interest arbitration that had not yet occurred.

       In the last quarter of the year, the jail projected that its revenues would be

reduced by $935,000. On October 24, 2011, corrections chief Ned Newlin sent

an email to all correctional officers entitled "2012 Budget Update." He explained

that even after some significant cuts had been made to supplies and services,

"the bottom line is that the Sheriff's Office (including the jail) is now directed to

take an additional $513,000 cut from our budget requests for 2012."

       Newlin announced that the sheriff's office would take the cut by eliminating

three positions in the jail—the two correctional officer positions lowest in seniority

and an open position. Newlin stated in the letter, "This is not a decision that was

made lightly and it causes me great angst to do so, but there is no other

reasonable alternative available to us."

       The next day, Newlin received a demand to bargain letter from the

president of the Guild. The Guild represents correctional officers who are

responsible for the housing, control, and care of the inmates. The letter stated,

"We are demanding to bargain the decision to conduct any layoffs plus any

associated effects/impacts. Layoffs are a mandatory subject of bargaining [and]

our input was not invited or incorporated in the discussions you held with two of
No. 73637-0-1/4



our bargaining unit members this afternoon." The Guild requested that the status

quo be maintained until the parties had bargained the layoff decision and

reached an agreement. The Guild was prepared to "explore some potential cost

saving measures with the County to at least avoid one of the layoffs, if not both."

      The county engaged only in impacts bargaining, limited to voluntary layoff

procedures, changes in duties as a consequence of the layoffs, and safety

issues. The county did not retreat from its refusal to bargain the layoff decision

itself. The layoff of two correctional officers was effective on January 1, 2012.

       The county brought the dispute directly to superior court through a

complaint for a declaratory judgment. The Public Employee Relations

Commission (PERC) is empowered to enforce the act, but its jurisdiction is not

exclusive. Because interpretation of a statute is a question of law, the superior

court may also decide in the first instance whether an unfair labor practice exists

under a particular set of facts. State ex rel. Graham v. Northshore Sch. Dist. No.

417, 99 Wn.2d 232, 239-40, 662 P.2d 38 (1983). The county chose the superior

court as a forum rather than PERC because in the county's view, PERC's

decisions have created uncertainty about when layoffs are a mandatory subject

of bargaining.1

       It is an unfair labor practice to refuse to bargain a mandatory subject to

impasse. It is also an unfair labor practice to demand to bargain a permissive

subject to impasse. Kitsap County, 179 Wn. App. at 998. The county's complaint
asked the court to declare that the Guild committed an unfair labor practice when



       1 Brief of Respondents at 32.
                                          4
No. 73637-0-1/5



it insisted that the layoff decision was a mandatory subject. The Guild cross-

claimed and moved for summary judgment declaring that the county had

committed an unfair labor practice by refusing to bargain the layoff decision.

After a hearing, the court signed a proposed order granting the county's motion

and denying the Guild's motion. The Guild appealed.

      That first appeal was decided by Division Two of this court in March 2013.

Kitsap County, 179 Wn. App. at 987. The court determined that the issue of

layoffs was related both to a mandatory subject of bargaining and a permissive

subject. In such a case, a balancing test is used to determine which

characteristic predominates. Int'l Ass'n of Fire Fighters, Local Union 1052 v. Pub.

Emp't Relations Comm'n, 113 Wn.2d 197, 203, 778 P.2d 32 (1989).

       Under RCW 41.56.030(4), the duty to bargain extends to "personnel

matters, including wages, hours and working conditions."2 "The scope of

mandatory bargaining thus is limited to matters of direct concern to employees.

Managerial decisions that only remotely affect 'personnel matters', and decisions

that are predominantly 'managerial prerogatives', are classified as nonmandatory

subjects." Int'l Ass'n of Fire Fighters, Local Union 1052, 113 Wn.2d at 200.



      2As defined by the act:
      "Collective bargaining" means the performance of the mutual
      obligations of the public employer and the exclusive bargaining
      representative to meet at reasonable times, to confer and negotiate
      in good faith, and to execute a written agreement with respect to
      grievance procedures and collective negotiations on personnel
      matters, including wages, hours and working conditions, which may
      be peculiar to an appropriate bargaining unit of such employer.
RCW 41.56.030(4).
No. 73637-0-1/6



       The court found the record inadequate to determine whether the trial court

had engaged in the balancing analysis.3 "Arguably, the layoffs heavily impact

employees' working conditions, but, on these facts, the County's duty to

implement a budget weighs on the management prerogative side of the balance.

With such significant interests on each side of the balance, it is important that the

trial court carefully consider the specific facts of this case and balance the

competing interests." Kitsap County, 179 Wn. App. at 999. Following

International Association of Fire Fighters, the court remanded "for the trial court

to conduct a balancing test based on the facts of this case." Kitsap County, 179

Wn.App. at 1000.

       On remand, PERC moved for permission to intervene in view of its interest

in promoting uniform application of the law of labor relations in the area of public

employment, see RCW 41.58.005(1), particularly its interest in developing

uniform standards for determining what subjects of bargaining are mandatory.

The trial court allowed intervention. The parties submitted additional evidence

and briefing. In August 2014, the trial court again ruled in favor of the county.

This time, to demonstrate application of the balancing test, the court adopted and

entered findings and conclusions prepared by the county. The findings of fact

are undisputed:

       1.   The evidence before this Court was well developed, including
            testimony and exhibits submitted to the Court from the record in
            a four-day interest arbitration hearing.




        3 The trial court had inquired of the parties whether the order was
sufficiently detailed and was advised by both parties that it was.
                                          6
No. 73637-0-1/7



       2.   The Kitsap County Board of Commissioners adopts an annual
            budget fixing revenues and expenditures for the ensuing fiscal
            year.
       3.   In adopting a budget the Board of County Commissioners
            takes into consideration revenue sources including revenue
            from property and sales taxes, reductions in revenue from
            annexations, the existence or elimination of grant funding, the
            County's debt servicing obligations, and managing reserves.
       4.   In adopting a budget the Board of County Commissioners
            takes into consideration expenditures necessary to provide
            public services, including whether the services are mandated
            by law or proprietary, the level of services needed, and the
            amount of revenues available to fund particular services.
       5.   The Kitsap County Sheriff's Office is limited in the making of
            expenditures or incurring of liabilities as fixed in the budget by
            the Board of County Commissioners.
       6.   For year 2012, the Kitsap County Board of County
            Commissioners adopted a budget reducing the Sheriff's jail
            budget by $935,000 because of declining County revenues.
       7.   The Sheriff's Office reduced the jail's budget by $935,000 as
            established in the budget adopted by the Board of County
            Commissioners.
       8.   The Sheriff's Office reduced the jail's budget in part by
            eliminating two corrections officer positions.
       9.   On October 24, 2011, two corrections officers were informed
           that their positions would be eliminated and they would be laid
           off as of January 1, 2012, due to the budget reduction.
       10. The Corrections Officers' Guild demanded to bargain the
           layoffs, and the County agreed to bargain the impact of layoffs,
           and did bargain the impact with the Guild.
       11. Two corrections officers were laid off on January 1, 2012.
       12. No allegation or evidence exists that the reduction of the
           County's or Sheriff's budget, the elimination of two corrections
           officer positions, or the layoff of two corrections officers was
           motivated by retaliation.

      The court concluded from the findings that the layoff decision was a

permissive subject of bargaining. The Guild and PERC appeal from this

decision.


       We must first decide what standard of review to apply. The county

suggests that the findings of fact entered by the court are entitled to deference.
No. 73637-0-1/8



But the findings of fact do not resolve conflicts in evidence. Because there is no

genuine issue of material fact and only the court's conclusions are disputed, it is

appropriate to treat the declaratory judgment as an order resolving cross motions

for summary judgment. Our review is de novo. CR 56(c); Kitsap County. 179

Wn. App. at 997.

       Two United States Supreme Court cases provide the framework for

analyzing whether a layoff decision will be classified as permissive or mandatory:

Fibreboard Paper Products Corp. v. National Labor Relations Board, 379 U.S.

203, 85 S. Ct. 398, 13 L. Ed. 2d 233 (1964), and First National Maintenance

Corp. v. National Labor Relations Board, 452 U.S. 666, 101 S. Ct. 2573, 69 L.

Ed. 2d 318 (1981). In Fibreboard, employees were laid off as a result of the

employer's decision to contract out the work union employees had been

performing. In that situation, the Court held the layoffs to be a mandatory

bargaining subject. Because the decision did not alter the employer's basic

operation, requiring the employer to bargain "would not significantly abridge his

freedom to manage the business." Fibreboard, 379 U.S. at 213. The Court

noted that the employer was induced to contract out the work by assurances that

economies could be derived by reducing the work force, decreasing fringe

benefits, and eliminating overtime payments, all of which had "long been

regarded as matters peculiarly suitable for resolution within the collective

bargaining framework." Fibreboard, 379 U.S. at 213-14.

       Yet, it is contended that when an employer can effect cost savings
       in these respects by contracting the work out, there is no need to
       attempt to achieve similar economies through negotiation with
       existing employees or to provide them with an opportunity to

                                          8
No. 73637-0-1/9



       negotiate a mutually acceptable alternative. The short answer is
       that, although it is not possible to say whether a satisfactory
       solution could be reached, national labor policy is founded upon the
       congressional determination that the chances are good enough to
       warrant subjecting such issues to the process of collective
       negotiation.
               . . . While "the Act does not encourage a party to engage in
       fruitless marathon discussions at the expense of frank statement
       and support of his position." [National! Labor [Relations] Board v.
       American Nat. Ins. Co., 343 U.S. 395, 404, [72 S. Ct. 824, 829, 96
       L. Ed. 1027 (1952)] it at least demands that the issue be submitted
       to the mediatory influence of collective negotiations. As the Court
       of Appeals pointed out, "[i]t is not necessary that it be likely or
       probable that the union will yield or supply a feasible solution but
       rather that the union be afforded an opportunity to meet
       management's legitimate complaints that its maintenance was
       unduly costly."

Fibreboard. 379 U.S. at 214.

       By contrast, First National is a case where the employer made an

economically motivated decision to shut down a part of its business. First Nat'l,

452 U.S. at 680. As a result of a financial dispute with one of its customers, the

employer terminated the contract and discharged the employees who worked for

that customer. The employer claimed it had no duty to bargain about its decision

to terminate operations, and the court agreed. The issue raised was whether the

shutdown decision should be considered part of the employer's "retained

freedom to manage its affairs unrelated to employment." First Nat'l, 452 U.S. at

677. The Court concluded that "the harm likely to be done to the employer's

need to operate freely in deciding whether to shut down part of its business

purely for economic reasons outweighs the incremental benefit that might be

gained through the union's participation in making the decision." First Nat'l, 452

U.S. at 686.
No. 73637-0-1/10



       Washington courts and PERC follow Fibreboard and First National. The

parties agree that under First National, there is no duty to bargain when layoffs

are an indirect result of programmatic or service changes by the employer. They

also agree that under Fibreboard, bargaining the layoff decision is mandatory

when an employer decides to reduce labor costs by replacing union workers with

nonunion workers. The county argues that when a public employer lays off

employees in response to a budget shortfall, it is more like the partial shutdown

of operations in First National. In the county's view, the decision to layoffthe two

correctional officers implicated a core management prerogative: the county's duty

to maintain a balanced budget.

       The trial court ratified the county's position that the layoff decision was a

component of the decision to reduce the jail's budget. Although the findings of

fact correctly state that the Guild "demanded to bargain the layoffs," the court did

not balance the competing interests involved in the layoff decision. Rather, the

court balanced the competing interests in "the decision to reduce the budget,

reduce staffing levels, and layoff employees."

       Balancing the relationship between the decision to reduce the
       budget, reduce staffing levels, and layoff employees bears to
       conditions of employment on the one side, and to entrepreneurial
       control or management prerogative on the other, the Court must
       determine which characteristic predominates.141

The court concluded, "The decision to reduce the budget and staffing levels lies

at the core of entrepreneurial control and management prerogative."5 The court

reasoned that the layoff decision was a result of the decision to reduce the

       4 Conclusion of Law B.
       5 Conclusion of Law D.

                                          10
No. 73637-0-1/11



budget and was therefore necessarily and inherently a management prerogative:

"the decision involves the performance of statutory duties in that the Board of

County Commissioners has a statutory duty to adopt a budget and the Kitsap

County Sheriff's Office must abide by the budget adopted for it by the

Commissioners."6 The court concluded that bargaining over the layoffs could not

be fruitful "because the employer cannot negotiate the level of revenues and

expenditures fixed and adopted in the budget."7

        In applying the balancing test, the first step is to characterize accurately

the decision that is the subject of the bargaining demand. The county's position

on appeal depends entirely on redefining the Guild's position as a demand to

bargain over the reductions in the budget. The county claims the Guild

demanded to bargain "the Board's decision to reduce the budget in order to

balance expenditures with revenues."8 If that were true, the county's position

would likely prevail. A public employee organization does not have the right to

negotiate with the employer "upon the subject of budget allocations." Spokane

Educ. Ass'n v. Barnes. 83 Wn.2d 366, 374, 517 P.2d 1362 (1974). As stated in

PERC's brief, "Funding rates, allocation of county budget among county

agencies and similar decisions are properly decisions of the voters and elected

public officials."9

       Contrary to the county's rhetoric about the budget, however, the record is

clear that the Guild's demand was only to bargain over the layoff decision. The


       6 Conclusion of Law F.
       7 Conclusion of Law G.
       8 Brief of Respondents at 27.
       9 Brief of Appellant PERC at 29.
                                          11
No. 73637-0-1/12



Guild consistently recognized that it was the prerogative of the county

commissioners to reduce the jail's budget to meet the shortfall in revenues. The

budget set for the jail by the county commissioners did not specifically require or

itemize layoffs of employees. The Guild demanded to bargain over the jail's

decision to achieve the reduction by laying off two employees. By

mischaracterizing the Guild's position as a demand to bargain the budget, the

county thoroughly undermines its argument. The layoff decision alone was the

subject of the Guild's demand to bargain.

       It is also inaccurate for the county to say that the Guild was demanding to

bargain over "staffing levels." In using that phrase, the county invokes the

principle that "general staffing levels are fundamental prerogatives of

management." Int'lAss'n of Fire Fighters, Local Union 1052, 113 Wn.2d at 205.

That principle, however, refers to programmatic decisions about how large or

how small an agency should be as a matter of policy—for example, whether a

community "'will have a large police force, a small one, or none at all.'" Int'l Ass'n

of Fire Fighters, Local Union 1052, 113 Wn.2d at 205, quoting Yakima v. Yakima

Police Patrolman's Ass'n, Pub. Empl. Relations Comm'n Dec. 1130-PECB, at 4

(1981) (examiner's opinion). Chief Newlin did not decide as a matter of policy

that the jail staff had become too large. He did not announce a programmatic

decision to reduce inmate population or reorganize the jail's services in a way

that could be managed with fewer correctional officers. Indeed, he expressed

"great angst" at having to cut staff. His layoff decision represented his unilateral

judgment that laying offthe two officers was the only way to comply with the


                                          12
No. 73637-0-1/13



budget set by the county commissioners after all other possible cuts had been

considered and implemented. For this reason, his layoff decision was not

analogous to the employer's decision in First National to shut down the part of

the operation affected by the loss of a customer. It was a decision to reduce

labor costs in order to meet the budget cut.

       All parties cite and discuss decisions by PERC in support of their

respective positions. Administrative decisions are not binding on a court, but a

court may find guidance in an agency's interpretation of the law. Miotke v.

Spokane County, 181 Wn. App. 369, 325 P3d 434, review denied, 181 Wn.2d

1010(2014).

       The county claims PERC's decisions are inconsistent with each other.

The county cites 10 cases to demonstrate the alleged inconsistency.10 The cited




       10 Pub. Sch. Emps. of Wenatchee v. Wenatchee Sch. Dist., No. 7425-U-
88-1542, 1990 WL 656165 (Wash. Pub. Emp't Relations Comm'n Sept. 1, 1990);
Pub. Sch. Emps. of Wash, v. N. Franklin Sch. Dist., No. 12665-U-96-3022, 1998
WL 84382 (Wash. Pub. Emp't Relations Comm'n Feb. 1, 1998); Anacortes Police
Guild v. City of Anacortes, No. 13634-U-98-03336, 2000 WL 1448857 (Wash.
Pub. Emp't Relations Comm'n July 5, 2000); Wash. State Council of County &
City Emps. v. Tacoma-Pierce County Health Dep't, No. 14710-U-99-03693, 2001
WL 1069585 (Wash. Pub. Emp't Relations Comm'n April 26, 2001); Wash. Fed'n
of State Emps. v. State Attorney Gen., No. 21156-U-07-5399, 2010 WL 1644961
(Wash. Pub. Emp't Relations Comm'n April 16, 2010); Wash. Fed'n of State
Emps. v. State Corrs., No. 23325-U-10-5941, 2011 WL 1979692 (Wash. Pub.
Emp't Relations Comm'n May 10, 2011); Kirkland Police Officers' Guild v. City of
Kirkland, No. 22415-U-09-5718, 2012 WL 1385445 (Wash. Pub. Emp't Relations
Comm'n April 13, 2012); Bellevue Police Support Guild v. City of Bellevue, No.
22416-U-09-5719, 2012 WL 1385444 (Wash. Pub. Emp't Relations Comm'n April
13, 2012); Int'l Ass'n of Fire Fighters. Local 451 v. City of Centralia, No. 11233-U-
94-2625, 1996 WL 387999 (Wash. Pub. Emp't Relations Comm'n June 1, 1996);
Teamsters Local Union 252 v. Griffin Sch. Dist., No. 22170-U-08-5653, 2010 WL
2553112 (Wash. Pub. Emp't Relations Comm'n June 18, 2010).
                                         13
No. 73637-0-1/14



cases, however, show PERC to be consistent.11 In seven of them, PERC ruled

that a reduction in staffing was not a mandatory subject of bargaining where the

employer was closing operations, reorganizing, or changing the scope of

services.12 Another was decided on the ground that although the decision to

conduct layoffs was "within the 'mandatory' category," the union waived its right to

bargain layoff decisions.13 In two cases that did not involve a change in

operations or services, PERC ruled that the employer had a duty to bargain the

layoff decisions because the employer was making layoffs to save labor costs.14

In these cases and others, PERC has maintained the distinction that flows from

Fibreboard and First National: generally, a layoff decision motivated by budget

cuts is a mandatory subject of bargaining because of the impact it has on wages,

hours, and working conditions, while a decision to change an agency's

programmatic priorities or scope of operations is a permissive subject because it

implicates management prerogatives.




      11 It is true that two different PERC hearing examiners heard nearly
identical cases and ruled opposite on the duty to bargain issue. See Kirkland
Police Officers' Guild v. City of Kirkland, No. 22415-U-09-5718, 2010 WL
4058051 (Wash. Pub. Emp't Relations Comm'n Oct. 7, 2010); Bellevue Police
Support Guild v. City of Bellevue, No. 22416-U-09-5719, 2010 WL 3283656
(Wash. Pub. Emp't Relations Comm'n Aug. 12, 2010). But PERC has since
reconciled these conflicting decisions. See City of Kirkland, 2012 WL 1385445;
City of Bellevue, 2012 WL 1385444.
     12 Wenatchee Sch. Dist., 1990 WL 656165; State Attorney General, 2010
WL 1644961; City of Anacortes, 2000 WL 1448856; Tacoma-Pierce Health, 2001
WL 1069585; State Corrs., 2011 WL 1979692; City of Kirkland, 2012 WL
1385445; City of Bellevue, 2012 WL 1385444.
      13 N. Franklin Sch. Dist., 1998 WL 84382, at *2.
     14 City of Centralia, 1996 WL 387999: Griffin Sch. Dist, 2010 WL 2553112.



                                        14
No. 73637-0-1/15



       Three PERC decisions in particular are illustrative. The first involved the

Wenatchee School District's decision to convert from half-day to full-day

kindergarten as a means of managing a budget crisis.15 Making the change to

full day kindergarten resulted in the elimination of mid-day bus runs, and that

saved the school district the wages and benefits for the bus drivers who had

driven those runs. PERC rejected the union's argument that the decision to

convert to full-day kindergarten had to be bargained. PERC's decision cited

Spokane Educ. Ass'n, 83 Wn.2d at 366, recognizing and applying the principle

that an employer has "no duty to bargain the decision to reduce its budget."16

Noting that the decision was "clearly a decision regarding the educational

program to be offered," PERC concluded that the employer's prerogative of

defining the curriculum outweighed the decision's relationship to the wages,

hours and working conditions of the employees.17

       In PERC's Wenatchee School District decision, like in First National,

management interests predominated because the decision at issue involved a

change in services or a closure of facility or operations. On the other side of the

spectrum is a PERC case where the Griffin School District responded to a budget

squeeze by reducing the school calendar from 260 working days to 240 working

days, with the result that union employees lost 20 days of paid work.18 PERC

concluded that the reduction in the work calendar was a mandatory subject of

bargaining. The district was not reducing its services or closing its facilities on

       15 Wenatchee Sch. Dist., 1990 WL 656165.
       16 Wenatchee Sch. Dist., 1990 WL 656165, at *4.
       17 Wenatchee Sch. Dist. 1990 WL 656165, at *4.
       18 Griffin Sch. Dist., 2010 WL2553112.

                                          15
No. 73637-0-1/16



certain days. Thus, its decision did not implicate the entrepreneurial right of

employers to control the level of service they provide. "Despite the employer's

legitimate need to achieve budgetary savings, the decision to close facilities for

20 days impacted employee wages and hours so substantially that the decision

must be bargained."19 The union, PERC concluded, had a "legitimate interest in

being afforded the opportunity to work with the employer through collective

bargaining to provide possible alternatives to reducing the wages and hours of

certain of its bargaining unit employees."20

       In the third case, PERC ruled that King County's decision to furlough its

employees was a mandatory subject of bargaining.21 King County faced budget

deficits and revenue shortfalls as a result of the 2008 financial crisis. The county

decided to shut down all nonessential services and furlough the affected

employees for 10 days in order to save enough money to balance the budget.

PERC acknowledged that the county had the right to determine and manage its

own budget. But that "did not make the decision to furlough employees a

permissive one."22 The county's chief motivation for imposing the furloughs was

to reduce labor costs. Unlike the Wenatchee School District case, where the

respondent made a wholesale change to the scope of its operation, "this




     19 Griffin Sch. Dist., 2010 WL 2553112, at *6.
     20 Griffin Sch. Dist, 2010 WL 2553112, at *7.
     21 Tech. Emps. Ass'n v. King County. No. 22175-U-09-5658, 2010 WL
2553113 (Wash. Pub. Emp't Relations Comm'n).
     22 King County. 2010 WL 2553113, at *7.
                                         16
No. 73637-0-1/17



employer's decision to close its offices does not constitute a programmatic

change to any employer service."23

       Here too, the decision to layoff the two officers was a decision to meet

budget cuts by reducing labor costs. The layoffs were not related to

programmatic changes, and they did not implicate Kitsap County's

entrepreneurial right to control the level of service provided in the jail.

The fact that the county had a legitimate need to achieve budgetary savings and

had a statutory duty to manage its own budget did not make the layoff decision a

permissive subject of bargaining.

       The bargaining unit employees clearly had an interest in the county's

decision to implement layoffs. "There is no greater possible impact on an

employee than the complete loss of the employment relationship."24 Even the

county concedes that the impact of layoffs on employees was "obvious and

significant." A declaration in the record details the financial, personal, and

emotional impacts of these two layoffs on the officers who lost their jobs.

       No one accuses the county of having an anti-union or retaliatory motive to

make the layoffs. But contrary to the county's argument, that does not bring this

situation back to the First National side of the spectrum. What is critical is that

bargaining the layoffs would not significantly abridge the prerogative and duty of

the county commissioners to adopt a budget. The predominant impact of the

layoff decisions was on wages, hours, or working conditions in the bargaining




       23 King County. 2010 WL 2553113, at *7.
       24 Bellevue Police Support Guild. 2010 WL 3283656, at *12.

                                          17
No. 73637-0-1/18



unit. The reason why such a decision must be subject to negotiation has been

succinctly explained by Judge Richard Posner:

         The rule that requires an employer to negotiate with the union
         before changing the working conditions in the bargaining unit is
         intended to prevent the employer from undermining the union by
         taking steps which suggest to the workers that it is powerless to
         protect them. Of course, ifthe change is authorized by the
         collective bargaining agreement, it is not in derogation of the union
         and is not an unfair labor practice. But there was no agreement
         here. Laying off workers works a dramatic change in their working
         conditions (to say the least), and if the company lays them off
         without consulting with the union and without having agreed to
         procedures for layoffs in a collective bargaining agreement it sends
         a dramatic signal of the union's impotence.

Nat'l Labor Relations Bd. v. Advertisers Mfg. Co.. 823 F.2d 1086, 1090 (7th Cir.

1987).

         Corrections chief Newlin stated when announcing the layoffs that "there is

no other reasonable alternative available to us." His announcement made the

layoff decision a fait accompli before the Guild had the opportunity to suggest

alternatives. Yet the possibility existed that bargaining with the Guild could have

revealed reasonable alternatives to layoffs.

         The Guild claims it could have offered various concessions, such as

changes in the work schedule, furlough days for officers, or suspension of certain

premium or specialty pays. A declaration from Guild president Terry Cousins

confirms that the Guild was "ready and willing to explore some potential cost

saving measures with the County to at least avoid one of the layoffs, if not both."

         Although it is not possible to say that bargaining will necessarily result in a

satisfactory solution, "national labor policy is founded upon the congressional



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No. 73637-0-1/19



determination that the chances are good enough to warrant subjecting such

issues to the process of collective negotiation." Fibreboard. 379 U.S. at 214.

       In the King County furlough case, PERC commented that "no outside

force compelled the employer to choose furloughs as the means by which to

reduce its budget."25 Similarly here, no outside force compelled the sheriffto

reduce the jail budget by laying off members of the Guild.

      The county contends there was not enough time to bargain the layoffs.

The county analogizes to the time crunch faced by the school board in Spokane

Educ. Ass'n. 83 Wn.2d 366. In that case, the school board had a statutory

deadline for giving notices of nonrenewal to employees who were not going to be

rehired for the ensuing school year. Four days before the deadline, voters

rejected a special levy, necessitating a reduction in the budget. The next day, the

teachers' association made a request to negotiate "'budget allocations and other

policy decisions related to the reduced school program.'" Spokane Educ. Ass'n.

83 Wn.2d at 370. The school board, while willing to negotiate to explore the

possibility of rehiring, nevertheless felt compelled to send out the nonrenewal

notices before the looming deadline. The teacher's association unsuccessfully

sought a writ to prevent the notices from being sent. Affirming, the Supreme

Court took the view that the request was not made within a reasonable time.

Spokane Educ. Ass'n, 83 Wn.2d at 372. The situation here was not comparable.

The Guild requested to bargain the layoffs on October 25, 2011. More than two

months remained before the layoffs were to occur. The record does not contain



      25 King County. 2010 WL 2553113, at *9.
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No. 73637-0-1/20



evidence that two months was too short to engage in potentially fruitful

negotiations.

       The county emphasizes its statutory responsibility to finalize a balanced

budget for 2012 by the end of the year. The county contends that agreeing to

bargain the allocation of funds within the county budget would have presented an

intolerable risk of creating a large budget deficit. Again, though, the demand was

to bargain layoffs, not the budget. The county also argues there was not enough

time to bargain layoffs, given the fact that interest arbitration can take months to

resolve an issue bargained to impasse. This argument too must fail, as it would

mean that the possibility of interest arbitration that might extend beyond the

current annual budget cycle could always be used to justify a refusal to bargain

over wages, hours and working conditions. When a demand to bargain about a

mandatory subject arises after a budget is set, the employer does not have to

agree to a specific proposal. But the employer must be willing to consider

alternatives suggested by the union and potentially agree on them, even if it

means an adjustment to a previously established budget amount. See City of

Spokane v. Spokane Police Guild. 87 Wn.2d 457, 465, 553 P.2d 1316 (1976).

       In the Griffin School District case, PERC provided guidance for public

employers when faced with a budget crisis:

       Chapter 41.56 RCW does not handcuff employers from taking
       action in the wake of a financial crisis. Should an employer be
       faced with a situation where it needs to make a change to a certain
       mandatory subject of bargaining, it should inform the union of the
       issue, the importance of the issue to the employer (including the
       timeline in which the employer needs to complete bargaining), and,
       upon request, bargain in good faith. Ifthe employer and union
       reach a lawful impasse, then the employer is permitted to lawfully

                                         20
No. 73637-0-1/21



       implement its last offer on that topic, while remaining willing to
       bargain all other mandatory subjects of bargaining, and remain
       willing to return to bargaining regarding the subject of bargaining
       implemented by the employer if the union makes such a request.'261

PERC's guidance is sensible. The county's assertion that bargaining the layoffs

would have introduced intolerable risk into the budget process is speculation not

supported by the record.

       Balancing the interests, we conclude that although the county's need to

achieve budgetary savings was a legitimate interest, the county's interest in the

method by which the savings would be achieved was not at the core of its

management prerogatives. The decision to achieve budget savings by laying off

the officers was suitable for collective bargaining, and it so substantially impacted

wages, hours, and working conditions in the bargaining unit that the decision was

a mandatory subject of bargaining.

                                      WAIVER


       The county argues that even if the layoffs are a mandatory subject of

bargaining, the Guild waived its right to bargain over layoffs.

       The collective bargaining agreement that expired in 2009 included

language stating that nothing in the agreement supersedes "any matter

delegated to" the Kitsap County Civil Service Commission by state law or

ordinance. The civil service rules applicable to the sheriff's employees provide

that layoffs made necessary by a shortage of funds will be done through

seniority. "TheAppointing Authority may layoff any employee . . . whenever such



       26 Griffin Sch. Dist.. 2010 WL 2553112, at *10.

                                         21
No. 73637-0-1/22



action is made necessary by reason of a shortage of work or funds ... in inverse

of seniority."

        In the first appeal, the county argued that the Guild had waived its right to

bargain layoffs by the provision in the collective bargaining agreement delegating

certain matters to the civil service commission. The court did not reach the

question of whether the quoted language amounted to a waiver of the right to

bargain layoffs. Instead the court determined that "waivers are permissive

subjects that expire with the collective bargaining agreement unless they are

renewed by mutual consent." Kitsap County, 179 Wn. App. at 996. Because the

agreement containing the alleged waivers had expired in 2010, the parties had

not yet negotiated a new agreement, and there was no evidence at the time of

the layoffs that the parties had agreed to renew the alleged waivers, the court

concluded the alleged waivers expired in 2010. Kitsap County, 179 Wn. App. at

996.


       The single issue on remand was for the court to conduct the balancing

test. The trial court did not reconsider waiver on remand. Nevertheless, the

county renews the waiver argument in the present appeal, with this addition: that

the civil service rules govern layoffs regardless of what was in the collective

bargaining agreement.

       To a great extent, the county's argument is barred by the law of the case

doctrine. The law of the case doctrine stands for the proposition that once there

is an appellate holding enunciating a principle of law, that holding will be followed

in subsequent stages of the same litigation. The doctrine seeks to promote


                                          22
No. 73637-0-1/23



finality and efficiency in the judicial process. Roberson v. Perez. 156 Wn.2d 33,

41, 123 P3d 844 (2005). The law of the case doctrine is discretionary, not

mandatory. Subsequent appellate reconsideration of an identical issue will be

granted only where the holding of the prior appeal is clearly erroneous and

application of the doctrine would result in manifest injustice. Folsom v. County of

Spokane. 111 Wn.2d 256, 759 P.2d 1196 (1988); see ajso RAP 2.5(c)(2). The

holding in the first appeal—that a waiver expires when the agreement expires—is

not clearly erroneous. And the county does not persuasively demonstrate that

reconsidering that holding is necessary to avoid a manifest injustice.

       To the extent that the first appeal leaves room for the county to argue that

the civil service rules preclude bargaining over layoffs, we reject the argument. A

waiver of a right to bargain must be clear, unmistakable, and knowingly made,

and it must specifically address the subject upon which the waiver is claimed.

Kitsap County. 179 Wn. App. at 995. By this standard, we cannot say that the

prior collective bargaining agreement included a waiver of the right to bargain

layoffs by its reference to the civil service rules.

                                       REMEDY


       The trial court provided declaratory relief only. The county contends a

declaratory order suffices to clarify the parties' bargaining obligations. PERC and

the Guild ask for a more detailed remedial order.


       Under the act, PERC has the authority to issue "appropriate remedial

orders." RCW 41.56.160(1). The act is to be liberally construed to accomplish its

purpose. Mun. of Metro. Seattle v. Pub. Emp't Relations Comm'n. 118 Wn.2d


                                           23
No. 73637-0-1/24



621, 633, 826 P.2d 158 (1992). The purpose of the act "is to provide public

employees with the right to join and be represented by labor organizations of

their own choosing, and to provide for a uniform basis for implementing that

right." City of Yakima v. Int'l Ass'n of Fire Fighters. AFL-CIO Local 469. 117

Wn.2d655, 670, 818P.2d 1076 (1991). guoted in Mun. of Metro. Seattle. 118

Wn.2d at 633. With that purpose in mind, the Supreme Court has interpreted the

statutory phrase "appropriate remedial orders" to be those necessary to

effectuate the purposes of the collective bargaining statute and to make PERC's

lawful orders effective. Mun. of Metro. Seattle, 118 Wn.2d at 633.

       Considering that the purpose of the act is to provide "a uniform basis" for

implementing the right of collective bargaining, we hold that the court has the

same authority and obligation as PERC to issue an appropriate remedial order. If

PERC determines that any person has engaged in an unfair labor practice, a

cease and desist order is appropriate, and PERC may also take affirmative action

such as ordering the payment of damages and the reinstatement of employees.

RCW 41.56.160(2). PERC's authority to fashion a remedy that suits the case is

broad. Mun. of Metro. Seattle. 118 Wn.2d at 633.

       The situation in the present case is clear-cut: either the county committed

an unfair labor practice by refusing to bargain the layoffs, or the Guild committed

an unfair labor practice by insisting on the right to bargain to impasse. Because

we conclude that the layoff decision was a mandatory subject of bargaining, it

follows that the county is the party who committed an unfair labor practice and

that an appropriate remedial order should be entered. We remand for the trial


                                        24
No. 73637-0-1/25



court to decide what directives to include in the order. The court should consider

PERC's precedent and practice in the matter of remedies. See Mun. of Metro.

Seattle, 118 Wn.2d at 634 (recognizing PERC's expertise in the relation of

remedy to policy). The trial court may also consider on remand the Guild's

arguments for an award of attorney fees.

      We reverse and remand for entry of judgment in favor of the Guild and an

appropriate remedial order.




WE CONCUR:




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