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IN THE SUPREME COURT OF THE STATE OF WASHINGTON

KITSAP COUNTY DEPUTY                       )
SHERIFFS' GUILD, a Washington              )
labor organization,                        )     No. 89344-6
                                           )
          Respondent/Cross-Appellant,      )
                                           )
v.                                         )
                                           )      ENBANC
KITSAP COUNTY, a Washington                )
municipal corporation,                     )
                                           )
          Appellant/Cross-Respondent.      )      Filed         JUN 1 1 2015
                                           )
_______________________ )
          FAIRHURST, J.-This case arose from an interest arbitration award that

retroactively increased employee health care premiums for a period when there was

no enforceable collective bargaining agreement (CBA). The Pierce County Superior

    Court struck a portion of the award that granted the retroactive increase, ruling that

the award (1) was an unconstitutional taking in violation of the due process clause,

    (2) violated Washington's wage rebate act (WRA), chapter 49.48 RCW, and (3) was

    arbitrary and capricious. Kitsap County appealed this ruling and we granted direct

    review. We reverse, finding the arbitration award proper.
Kitsap County Deputy Sheriffs' Guild v. Kitsap County, No. 89344-6



      The Kitsap County Deputy Sheriffs' Guild (Guild) cross appeals the trial

court's decision to deny the award of attorney fees and also seeks attorney fees for

this appeal. We affirm the trial court's denial and also deny the Guild's request for

attorney fees for this appeal.

         I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

      The present dispute occurred as a result of the statutory interest arbitration

procedures found in the Public Employees' Collective Bargaining Act (PECBA),

chapter 41.56 RCW. PECBA governs the collective bargaining negotiations between

the Guild, who represents Kitsap County's deputies and sergeants, and Kitsap

County (County).

       The parties' last CBA was effective from 2008-2009. Under that CBA,

deputies were not required to pay for their own health insurance premiums, but were

required to pay 10 percent of their dependents' premiums. During negotiations for

the 2010-2012 CBA, the County proposed a shift in premiums such that employees

would have to pay 3 percent of their own premiums and 15 percent of their

dependents' premiums. The Guild rejected this proposal, and the parties were unable

to reach an agreement. They sought mediation services from the Public Employment

Relations Commission (PERC) as required by PECBA. Mediation was unable to

resolve the dispute, and the parties were declared to be at an impasse. Meanwhile,


                                          2
Kitsap County Deputy Sheriffs' Guild v. Kitsap County, No. 89344-6



the 2008-2009 CBA expired and Kitsap County deputies have been working without

a contract since the end of 2009.

      When a public employer and its uniformed personnel are at an impasse in

collective bargaining, PERC may require binding interest arbitration. RCW

41.56.450. Accordingly, the executive director of PERC certified any unresolved

issues for statutory interest arbitration. Due to the lengthy negotiation and mediation

process, the arbitration panel was not able to hold hearings until October 2012. The

arbitration panel held a five day hearing and did not issue its award until February

2013, after the end ofthe 2010-2012 CBA term, which was the subject ofthe interest

arbitration. Between the expiration of the 2008-2009 CBA and the issuance of the

arbitration award, the County maintained the same level of pay and benefits provided

under the 2008-2009 CBA as required by PECBA. RCW 41.56.470.

      The arbitration award adopted the County's proposal to mcrease the

employees' share of health care premiums such that employees were responsible for

3 percent of their own premiums and 15 percent of their dependents' premiums. The

arbitration award applied these increases retroactively to the last six months of the

contract period (July 2012-December 2012). To offset the cost of the retroactive

increase, the award also granted an additional 0.5 percent increase in wages for the

 same period as the retroactive premium increase.


                                           3
Kitsap County Deputy Sheriffi' Guild v. Kitsap County, No. 89344-6



      The Guild filed suit in Pierce County Superior Court, seeking to have the

retroactive increase in health insurance premiums declared invalid. The court

granted summary judgment in favor of the Guild, striking the retroactive increase in

health care premiums but leaving the remaining award intact. The court ruled that

the award amounted to an unconstitutional taking, violi:;tted the WRA, and was

arbitrary and capricious. The Guild also sought attorney fees, but the court rejected

this claim.

      The County moved for reconsideration, including a request that the trial court

reconsider whether it should remand the entire award to the arbitration panel rather

than striking the individual provision. The trial court denied the motion.

Subsequently, the County sought direct review, which we granted. The Guild also

cross appealed the denial of attorney fees, and we granted review.

                                     II. ISSUES

       A. Does the interest arbitration award violate the due process clause of the
Fifth and Fourteenth Amendments to the United States Constitution by retroactively
increasing employees' health insurance premiums during a period where the parties
had no effective contract?

       B. Does the retroactive increase in employee health insurance premiums
violate the WRA when there was no expectation of the same level ofhealth benefits?

       C. Was the interest arbitration award arbitrary and capricious?

       D. Should the Guild be awarded attorney fees in an action challenging an
interest arbitration award that has only a corollary effect on wages?

                                          4
Kitsap County Deputy Sheriffi' Guild v. Kitsap County, No. 89344-6



                                  III. ANALYSIS

      This is a case of first impression. We have never addressed whether an interest

arbitration award can retroactively increase health care premiums for the period after

a CBA expires but before the terms of the new CBA are decided (interim period).

We hold that such increases are proper.

      The trial court granted summary judgment in favor of the Guild. We review a

summary judgment de novo, engaging in the same inquiry as the trial court. City of

Sequim v. Malkasian, 157 Wn.2d 251, 261, 138 P.3d 943 (2006).

A.    A retroactive increase in employee health insurance premiums does not
      amount to a taking under the due process clause

      The Fifth Amendment to the United States Constitution provides that "[n]o

person shall ... be deprived of life, liberty, or property, without due process of law;

nor shall private property be taken for public use, without just compensation." The

Fifth Amendment applies to the County through the Fourteenth Amendment. State

v. Babic, 140 Wn.2d 250, 260, 996 P.2d 610 (2000).

       In order for the retroactive increase to constitute a taking in violation of the

Fifth Amendment, the deputies must have a property interest in health care benefits.

A property interest in a benefit exists if a person has a "legitimate claim of

entitlement to it." Ed. ofRegents ofState Calls. v. Roth, 408 U.S. 564, 577, 92 S. Ct.

2701, 33 L. Ed. 2d 548 (1972). A mere "abstract need or desire" or "a unilateral

                                           5
I(itsap County Deputy Sherifft' Guild v. Kitsap County, No. 89344-6



expectation" of the benefit is insufficient to create a property interest. I d.; see also

Godfrey v. State, 84 Wn.2d 959, 963, 530 P.2d 630 (1975) ("A vested right ... must

be something more than a mere expectation based upon an anticipated continuance

ofthe existing law." (emphasis omitted)).

      The parties do not dispute that the 2008-2009 CBA created a property interest

in the compensation package for work performed during those years. Nor do they

dispute that the arbitration award could have prospectively adjusted their share of

health care premiums. This issue depends on whether the deputies had a property

interest to the same level of health care premiums from an expired CBA during the

interim period. We hold that they did not.

       1.    Neither the 2008-2009 CBA nor RCW 41.56.470 created a property
             interest to an expired compensation package

       The 2008-2009 CBA did not create a property interest during the interim

period because "[a]n expired CBA itself is no longer a 'legally enforceable

document.'" Office & Prof' l Emps. Ins. Trust Fund v. Laborers Funds Admin. Office

ofN Cal., Inc., 783 F.2d 919, 922 (9th Cir. 1986) (quoting Cement Masons Health

& Welfare Trust Fund v. Kirkwood-Ely, Inc., 520 F. Supp. 942, 945 (N.D. Cal.

 1981)). Although it does not create a property interest, the expired CBA does retain

some legal significance. Under PECBA, neither the County nor the Guild may

unilaterally change the conditions of employment during the pendency of an

                                             6
Kitsap County Deputy Sheriffs' Guild v. Kitsap County, No. 89344-6



arbitration proceeding. RCW 41.56.470. Thus, the terms of the expired CBA retain

legal significance only because they define the status quo for purposes of the

prohibition on unilateral changes. Accordingly, neither party made any unilateral

changes since the expiration of the 2008-2009 CBA.

      The Guild argues that the terms of the 2008-2009 CBA rolled over into the

interim period by operation of RCW 41.56.470, creating '"the floor'" for any new

agreements. Corrected Resp't's Br. at 24. According to the Guild, the deputies had

a property interest in any benefits earned once services were performed. We reject

this interpretation ofRCW 41.56.470.

      The Guild relies on Navlet v. Port of Seattle, 164 Wn.2d 818, 194 P.3d 221

(2008), and Foley v. Carter, 526 F. Supp. 977 (D.D.C. 1981). Navlet addressed a

CBA that required the Port of Seattle to maintain the same level of health and welfare

benefits to eligible retirees for life. 164 Wn.2d at 824. After the CBA expired, the

port ceased contributions to the trust that funded these retirement benefits, causing

the trust to terminate along with the benefits for eligible retirees. Id. at 823. We held

that the retirement welfare benefits constituted a form of deferred compensation that

could not be retroactively terminated once vested. I d. at 841. We stated in a footnote

that a benefit vested once an employee "renders service in exchange for

compensation." Id. at828n.5 (citingLeonardv. CityofSeattle, 81 Wn.2d479,487,


                                            7
Kitsap County Deputy Sheriffs' Guild v. Kitsap County, No. 89344-6



503 P.2d 741 (1972)). Similarly, in Foley, the United States District Court for the

District of Columbia was confronted with federal legislation that retroactively

reduced pay for certain federal employees. 526 F. Supp. at 985. The court held that

the employees had a property interest in salary at "the rate admittedly effective

during the period when the work was performed." Id. Thus, any retroactive decrease

to wages already earned violated the due process clause of the Fifth Amendment. Id.

      Neither of these cases guide our analysis because they do not address the

present issue. Navlet concerned welfare benefits that were conferred in a CBA. 164

Wn.2d at 827. Here, the benefits in dispute were conferred after the expiration of

the 2008-2009 CBA, when no contract was in place. Foley similarly did not concern

compensation during an interim period. Rather, Foley addressed whether the

legislature could retroactively reduce compensation that was granted by statute and

earned while that statute was effective. 526 F. Supp. at 985. Because these cases do

not answer whether the deputies have a vested property right to a particular level of

compensation for work performed when there was no effective CBA, the Guild's

approach is not supported by precedent and we reject it.

      2.     The County's reliance on RCW 41.56.950 is misplaced

       We also reject the County's cited authority. The County argues that PECBA's

mandate to maintain the status quo created only a temporary right to the


                                          8
Kitsap County Deputy Sheriffs' Guild v. Kitsap County, No. 89344-6



compensation package, meaning that the arbitration award could properly adjust the

compensation package retroactively. The County relies on RCW 41.56.950, 1 which

authorizes a public employer and a bargaining representative to make a new CBA

retroactive to the day after the prior CBA expired. The statute further provides that

"all benefits included in the new collective bargaining agreement including wage

increases may accrue beginning with such effective date." RCW 41.56.950

(emphasis added).

      The fundamental objective of statutory construction is to ascertain and carry

out the intent of the legislature. Dep 't of Ecology v. Campbell & Gwinn, LLC, 146

Wn.2d 1, 9, 43 P.3d 4 (2002). Where statutory language is plain and unambiguous,

the statute's meaning must be derived from the wording of the statute itself. !d. at 9-

10. But where legislative intent is not clear from the face of the language, we may

resort to various tools of statutory construction. !d. at 10.




       1RCW   41.56.950 provides in full:

       Whenever a collective bargaining agreement between a public employer and a
       bargaining representative is concluded after the termination date of the previous
       collective bargaining agreement between the same parties, the effective date of such
       collective bargaining agreement may be the day after the termination date of the
       previous collective bargaining agreement and all benefits included in the new
       collective bargaining agreement including wage increases may accrue beginning
       with such effective date as established by this section.

                                                9
Kitsap County Deputy Sheriffs' Guild v. Kitsap County, No. 89344-6



      The statute's plain language authorized the CBA here to be effective the day

after the 2008-2009 CBA expired. RCW 41.56.950. However, the latter portion of

the statute references only wage increases, making it unclear whether the legislature

intended this provision to authorize retroactive decreases in compensation packages,

such as the increase in health care premiums here. Id. Thus, we turn to legislative

history.

      Prior to the enactment of PECBA, an issue arose regarding whether

retroactive wage increases for public employees amounted to unconstitutional gifts

or extra compensation for work already performed. In Christie v. Port of Olympia,

27 Wn.2d 534, 543-44, 179 P.2d 294 (1947), we addressed this issue and held that a

retroactive increase in compensation was not a gift in violation of article VIII,

section 7 of the Washington Constitution, or extra compensation for previously

rendered services in violation of article II, section 25 of the Washington

Constitution. RCW 41.56.950 codified our decision in Christie. Christie did not

address the scenario of retroactive wage and benefit decreases. Moreover, nothing

indicates that the legislature enacted RCW 41.56.950 to authorize retroactive

decreases. Thus, we reject the County's argument that RCW 41.56.950 permits a

retroactive change in the compensation package to the deputies' detriment.




                                          10
Kitsap County Deputy Sheriffs' Guild v. Kitsap County, No. 89344-6



      3.     The policy underlying PECBA and analogous case law support a
            finding that the deputies did not have a property interest to the same
             compensation package after the 2008-2009 CBA expired

      No case has directly addressed whether, during the interim period, employees

have a property interest to the same compensation package that was granted in an

expired CBA. We hold that there is no such property interest. The policy behind

PECBA guides our decision, which is consistent with our own precedent as well as

analogous case law from other states.

      Because "the Legislature did not intend statutory interest arbitration to

displace the negotiating process ... it is more appropriate to view interest arbitration

not as a substitute for collective bargaining, but as an instrument of the collective

bargaining process" itself. City of Bellevue v. Int'l Ass 'n of Fire Fighters, Local

1604, 119 Wn.2d 373, 381-82, 831 P.2d 738 (1992). Viewing the arbitration award

this way, and recognizing that parties to collective bargaining may agree to make

increases to health care premiums retroactive, so too may employees be required to

concede to such increases.

      The Guild argues that a term determined by statutory interest arbitration is not

entitled to the same level of deference as a mutually bargained for term. The Guild

bases this argument on the tripartite relationship inherent in collective bargaining

negotiations, emphasizing the distinction between the Guild and the deputies. The


                                           11
Kitsap County Deputy Sheriffs' Guild v. Kitsap County, No. 89344-6



Guild represents the deputies in labor negotiations, but the deputies do not

themselves participate. Thus, the Guild contends that it is not able to waive the

statutory rights that belong to individual deputies. However, because we find no

property right to the expired compensation package during the interim period, the

Guild would not be waiving any rights.

      The United States Supreme Court has found additional policy reasons that

guide our decision. The Court recognized that the terms of a prior CBA must

necessarily lack force after they expire in order to facilitate labor negotiations. Litton

Fin. Printing Div. v. Nat'! Labor Relations Bd., 501 U.S. 190, 206, 111 S. Ct. 2215,

115 L. Ed. 2d 177 (1991). "Although after expiration most terms and conditions of

employment are not subject to unilateral change, in order to protect the statutory

right to bargain, those terms and conditions no longer have force by virtue of the

contract." Id. (emphasis added). Indeed, as the King County Sheriffs' Office amicus

brief notes, if employees had a property interest to the same compensation package

from the expired CBA, there would be no incentive for either employers or

employees to bargain for a new contract if either party was satisfied with the terms

of the expired CBA. Br. of King County Sheriffs' Office at 8.

       Our holding that the deputies had no property interest m an expired

compensation .package during the interim period is consistent with analogous case


                                            12
Kitsap County Deputy Sheriffs' Guild v. Kitsap County, No. 89344-6



law. Although addressing property interests in future benefits, Conard v. University

of Washington, 119 Wn.2d 519, 834 P.2d 17 (1992), is instructive. In Conard, we

addressed whether several students at the University of Washington were entitled to

the renewal of their athletic scholarships.Jd. at 530. We held that a legitimate claim

of entitlement to renewed scholarships could be created only by the terms of the

athletic contract, by mutually explicit understanding, or by substantive procedural       '.;.

restrictions on the part of the decision-maker.Jd.

      Because the duration of the contract was for only one academic year, the

contract did not create a protected property interest for all four years of attendance.

Id. at 530-31. Further, plaintiffs could not establish any mutually explicit

understandings, as no assurances were made to plaintiffs that the scholarships would

continue, nor did any university rule or policy support entitlement. Id. at 533.

Finally, we recognized that procedural guaranties created protected property

interests if they contained "'substantive predicates'" that guide the discretion of

decision-makers to a particular outcome.Jd. at 535 (quoting Kentucky Dep 't ofCorr.

v. Thompson, 490 U.S. 454, 462-63, 109 S. Ct. 1904, 104 L. Ed. 2d 506 (1989)).

Because there were no such procedures, the plaintiffs failed to demonstrate a

protected property interest in the renewal of their scholarships. Jd. at 537.




                                           13
Kitsap County Deputy Sheriffs' Guild v. Kitsap County, No. 89344-6



      As discussed above, because the 2008-2009 CBA was no longer effective

after it expired, it did not create a protected property interest in compensation for

work performed in 2010-2012. Further, the parties did not have any mutually explicit

understanding that subsequent CBAs would contain the same compensation

package. To the contrary, given the nature of the collective bargaining process, both

parties lmew that any employment terms were subject to change in subsequent

CBAs. Finally, there were no procedural guaranties that would give rise to a property

interest. RCW 41 .56.4 7 0 required both parties to maintain the status quo during the

pendency of arbitration. However, there are no substantive predicates within this

statute that guide the arbitration panel to a particular outcome. The deputies had no

property interest to the same compensation package from the expired CBA during

the interim period and can show no more than a mere expectation. See Roth, 408

U.S. at 577 (mere "abstract need or desire" or "a unilateral expectation" of a benefit

is insufficient to create a property interest). The retroactive increase of the deputies'

share of health care premiums was proper.

       This conclusion is consistent with language from two other state supreme

courts. In the context of retroactive CBAs, the Massachusetts Supreme Judicial

Court has noted that "there is no reason why a retroactive award or agreement

detrimental to union members could not be made." Local 589, Amalgamated Transit


                                           14
Kitsap County Deputy Sheriffs' Guild v. Kitsap County, No. 89344-6



Union v. Mass. Bay Transp. Auth., 414 Mass. 323, 328, 607 N.E.2d 1011 (1993)

(emphasis added). Similarly, in addressing whether a new CBA could retroactively

increase wages during the interim period, the Wisconsin Supreme Court noted:

      The fact that the law requires the parties to maintain the status quo
      during the period of contract negotiations does not mean that the parties
      have agreed to a contractual wage agreement for the [interim] period.
      We believe it would be illogical to conclude that the law requires the
      parties to adopt an interim wage agreement when that is one of the
      overriding issues in collective bargaining negotiations. The retroactive
      wage adjustment, whether it be up or down, is a necessary ingredient of
      such negotiations. The adjusted wage rates can properly be retroactive
      to the date when the wages became indefinite as a result of the
      expiration of the old contract and thus became subject to future
      determination by the execution of a new contract.

Dep 't ofAdmin. v. Wis. Emp 't Relations Comm 'n, 90 Wis. 2d 426, 432-33, 280

N.W.2d 150 (1979) (emphasis added).

      The deputies had no property interest to the same compensation package

during the interim period. The expired 2008-2009 CBA did not provide any property

interest, and the parties were not proceeding under a contract during the interim

period. The County maintained the 2008-2009 compensation package only because

it was required to maintain the status quo under PECBA. RCW 41.56.470. Because

the deputies had no property interest during the interim period, any compensation

made during that time was subject to adjustment by the arbitration award. We reverse




                                          15
Kitsap County Deputy Sheriffs' Guild v. Kitsap County, No. 89344-6



the trial court's holding that the interest arbitration award amounted to an

unconstitutional taking.

B.    The retroactive increase in employee health insurance premiums did not
      violate the WRA

      The trial court found that the arbitration award violated the WRA. We reverse

and hold that the arbitration award did not constitute an illegal wage withholding for

two reasons.

      First, the County was authorized by law to withhold the wages. The WRA

generally prohibits an employer from receiving any "rebate of any part of wages"

owed to an employee, depriving an employee from earned wages, or paying "any

employee a lower wage than the wage such employer is obligated to pay." RCW

49.52.050(1), (2). However, the WRA provides for an exception from the general

rule under several circumstances, including when the employer is authorized to

withhold wages by state law. RCW 49.52.060. Our state law authorizes employers

to make deductions from an employees' future wage payments if that employee

previously received an overpayment of wages, RCW 49.48.200(1), and the employer

provides written notice of overpayment before it withholds future earnings. RCW

49.48.210(10). 2

       2
        Because the Guild filed its complaint only two weeks after the release of the arbitration
award, the County has not implemented any wage withholding. See also Clerk's Papers (CP) at
380 (declaration recognizing that award has not yet been implemented). Although the deputies
                                               16
Kitsap County Deputy Sheriffs' Guild v. Kitsap County, No. 89344-6



      As discussed above, the deputies had no property interest in fully paid health

care premiums during the interim period, but the County continued to maintain the

status quo as required by PECBA. Given the outcome of the interest arbitration, the

deputies received an overpayment of wages during the interim period. This is

particularly true in light of the 2.5 percent retroactive increase in wages, part of

which was expressly designed to offset any burden from the retroactive increase in

health care premiums. 3 State law authorized the County to withhold subsequent

wages. The County has not violated the WRA.

       Second, the legislature's intent for the WRA supports our conclusion. The

legislature enacted the WRA "to prevent abuses by employers in a labor-

management setting, e.g., coercing rebates from employees in order to circumvent

collective bargaining agreements." Ellerman v. Centerpoint Prepress, Inc., 143

Wn.2d 514, 519-20,22 P.3d 795 (2001). Nothing here shows that the County abused

the collective bargaining process. At no point did it attempt to circumvent a CBA.



have notice from the arbitration award, the County will have to provide written notice when it
actually implements the award in order to satisfy RCW 49.48.210(10).
        3
          The parties dispute whether the retroactive increase was sufficient to cover this burden.
The Guild argues that the offset is "inadequate in terms of incontrovertible math" but provides no
citation or explanation. Corrected Resp't's Br. at 35. Conversely, Director of Administrative
Services for Kitsap County Amber D' Amato testified in a declaration that "[:(]or every deputy
sheriff covered by [the arbitration award], the wage increases ... offset the Award's retroactive
increases in employee contributions to premiums." CP at 382 (emphasis added). D' Amato explains
that even a deputy at the bottom of the pay scale who elected for the most expensive health care
plan would have still netted about $907.60 in addition to his or her regular take home pay.
                                                17
Kitsap County Deputy Sheriffs' Guild v. Kitsap County, No. 89344-6



During the interim period there was no effective CBA and the County maintained

the status quo from the 2008-2009 CBA, as required by statute, until the interest

arbitration award determined the terms of the 2010-2012 CBA. The County

bargained in good faith and followed all procedures under PECBA. 4

       The Guild argues that the WRA requires the County to receive written consent

from the deputies before withholding wages. This is not necessarily true. The WRA

provides that it is not "unlawful for an employer to withhold or divert any portion of

an employee's wages when required or empowered so to do by state or federal law

or when a deduction has been expressly authorized in writing in advance by the

employee." RCW 49.52.060 (emphasis added). Thus, the WRA does not require

written consent if the employer is authorized to withhold wages by law. As discussed




       4
         Contrary to the dissent's view, we do not claim that the legislature's sole purpose in
enacting the WRA was to prohibit abuse of the collective bargaining process. Dissent at 4.
Undoubtedly, the WRA was enacted to protect employee wages in addition to prohibiting abuse
of the collective bargaining process. But the WRA was not enacted to prevent a wage increase or
decrease as a result of the collective bargaining process itself. Indeed, the dissent quotes from
Ellerman, which recognized that the act was intended to ensure employees received what they are
entitled to under '"statute, ordinance, or contract'" and that "'which the employer is obligated to
pay.'" Ellerman, 143 Wn.2d at 520 (emphasis added) (internal quotation marks omitted) (quoting
Schilling v. Radio Holdings, Inc., 136 Wn.2d 152, 159, 961 P.2d 371 (1998)). Viewing the
arbitration award as an extension of collective bargaining, as we must, it becomes clear that the
arbitration award acts as a contract that the parties would have reached themselves. See Int 'lAss 'n
of Fire Fighters, Local 1604, 119 Wn.2d at 381-82 (Interest arbitration is not a substitute for
collective bargaining but "an instrument of the collective bargaining process" itself.). Under this
contract, the County is not obligated to fully pay for employee health care premiums.
                                                 18
Kitsap County Deputy Sheriffs' Guild v. Kitsap County, No. 89344-6



above, the County was authorized and the deputies' written consent was not

required.

      The County relies on a statutory exception that allows an employer "to

withhold deductions for medical, surgical, or hospital care or services." RCW

49.52.060. But as the Guild points out, the County omits the latter portion of the

exception, which makes any deductions for medical purposes conditional in that the

employer may not derive a financial benefit from the deduction and must "openly,

clearly and in due course record[] [the deduction] in the employer's books." Id.

Because the arbitration award imposed the retroactive increase in the employees'

share of health care premiums for the purpose of the employer's financial benefit,

the exception does not apply. See Br. of Appellant at 4 (the shift in employees' share

of premiums "would save nearly a half million dollars for the three-year contract

period").

       In sum, we reverse the trial court and hold that the arbitration award did not

violate the WRA.

C.     The arbitration award was not arbitrary and capricious

       RCW 41.56.450 provides that an arbitration award issued pursuant to PECBA

"shall be final and binding upon both parties, subject to review ... solely upon the

question of whether the decision of the panel was arbitrary or capricious." We have


                                          19
Kitsap County Deputy Sheriffs' Guild v. Kitsap County, No. 89344-6



defined "arbitrary and capricious" as "willful and unreasonable action, without

consideration and a disregard of facts or circumstances. Where there is room for two

opinions, action is not arbitrary and capricious when exercised honestly and upon

due consideration though it may be felt that a different conclusion might have been

reached." Buell v. City of Bremerton, 80 Wn.2d 518, 526, 495 P.2d 1358 (1972).

"The scope of court review should be very narrow, . . . and one who seeks to

demonstrate that action is arbitrary or capricious must carry a heavy burden." Pierce

County Sheriffv. Civil Serv. Comm 'nfor Sheriff's Emps., 98 Wn.2d 690, 695, 658

P.2d 648 (1983). We give such high deference to arbitration because public policy

in Washington strongly favors the finality of arbitration awards. Davidson v. Hensen,

135 Wn.2d 112, 123, 954 P.2d 1327 (1998).

      The arbitration award here was not arbitrary and capricious. We have declined

to strike an arbitration award as arbitrary and capricious where the arbitrator (1)

conducted a two-day long hearing, (2) explained his decision in a 16-page opinion,

and (3) provided detailed findings that demonstrated he considered the relevant facts

and legal authority. Fed. Way Sch. Dist. No. 210 v. Vinson, 172 Wn.2d 756, 769-70,

261 P.3d 145 (2011). Here, the arbitration panel held a five-day long hearing where

the County and the Guild presented various witnesses and evidence. The neutral

arbitrator explained the panel's decision in a 33-page opinion. That opinion


                                         20
Kitsap County Deputy Sheriffs' Guild v. Kitsap County, No. 89344-6



addressed all of the statutory factors the panel was required to consider. See RCW

41.56.465 (providing factors that an arbitration panel shall consider). The opinion

also explained the various facts and circumstances the panel relied on in fashioning

the award. For example, the panel looked to health care costs for deputies in

comparable counties and recognized that 100 percent employer paid premiums are

no longer standard or sustainable. Mindful of any potential inequities, the arbitration

panel offset the cost of increased health care premiums with a retroactive wage

increase. Given our deference to arbitration awards as well as the arbitration panel's

careful deliberation, we hold that the award was not arbitrary and capricious.

      The Guild argues that the award was arbitrary and capricious because it

contained conflicting terms. We reject the Guild's argument for two reasons.

      First, the award does not contain terms that conflict with itself. The Guild

appears to concede this point and contends that the arbitration award conflicts with

terms in the expired 2008-2009 CBA, specifically, terms that provide the right to opt

out of any changes to health care benefits. But the 2008-2009 CBA did not contain

express language providing the right to opt out of changes to health care benefits.

Rather, the Guild relies on past practices that it argues are an implied part of the

2008-2009 CBA. An award is not arbitrary and capricious merely because its

implementation is inconsistent with past practices from an expired CBA.


                                           21
Kitsap County Deputy Sheriffs' Guild v. Kitsap County, No. 89344-6



      Second, the practical realities facing the arbitration panel reveal that their

actions were not arbitrary and capricious. Due to the lengthy negotiation process, the

arbitration panel was not able to hold hearings until October 2012 and did not issue

its award until February 2013, after the 2010-2012 CBA term ended. As the Guild

argues, it would be impossible to provide an opportunity for the deputies to

retroactively opt out of any health care benefits at this point. Further, the arbitration

panel considered the Guild's objections regarding the inability of employees to opt

out and addressed these concerns by providing a wage increase expressly designed

to offset the increased cost of health care premiums. Such deliberation cannot be

said to constitute willful or unreasonable action that disregards the facts or

circumstances of the case.

       The trial court additionally found that the award was arbitrary and capricious

because it "incorporates unlawful provisions beyond the lawful authority of the

employer." Clerk's Papers at 436. As discussed in the first two issues, the terms of

the arbitration award were not unlawful. We reverse the trial court.

D.     Because the underlying action had only a corollary effect on wages, the
       Guild is not entitled to attorney fees

       In its cross appeal, the Guild argues that the underlying suit was a wage

recovery action and that the Guild is thus entitled to attorney fees upon prevailing in

the trial court. The Guild is incorrect for two reasons. First, the Guild did not prevail

                                           22
Kitsap County Deputy Sheriffs' Guild v. Kitsap County, No. 89344-6



in the underlying action because we now reverse the trial court. Second, as the

County notes, this was not a wage recovery action. Rather, this was an action seeking

review of an interest arbitration award and any effect on wages was corollary.

      We are persuaded by the reasoning in City of Moses Lake v. International

Ass 'n of Firefighters, Local 2052, 68 Wn. App. 742, 748-49, 847 P.2d 16 (1993),

where Division Three rejected an award of attorney fees in an appeal from an interest

arbitration proceeding. While the court order enforcing the award resulted in a salary

increase, the court reasoned that this effect was "corollary, rather than central, to the

Legislature's purpose of providing judicial review of the arbitration process." I d. at

748. Similarly, the Guild is seeking review of an interest arbitration award. While

the trial court ruled in favor of the Guild, any effect on salary was merely corollary.

       The Guild asks us to rely on International Ass 'n ofFire Fighters, Local 46 v.

City of Everett, 146 Wn.2d 29, 42 P.3d 1265 (2002). However, that case concerned

grievance arbitration. Id. at 47. Notably, we cited to City of Moses Lake to explain

the unavailability of attorney fees in interest arbitration and noted the important

distinction between interest and grievance arbitration in the context of attorney fees.

I d. at 46-4 7. Thus, the Guild cannot rely on International Ass 'n of Fire Fighters,

Local46. We affirm the trial court's denial of attorney fees. Because the Guild has

not prevailed on appeal, we deny its request for attorney fees based on this appeal.


                                           23
Kitsap County Deputy Sheriffs' Guild v. Kitsap County, No. 89344-6



                                IV. CONCLUSION

      We reverse the trial court and hold that the arbitration award (1) did not

amount to an unconstitutional taking, (2) did not violate the WRA, and (3) was not

arbitrary and capricious. We affirm the trial court's decision to not award attorney

fees to the Guild and deny the Guild's request for attorney fees based on this appeal.




                                          24
Kitsap Cnty. Deputy Sheriffs' Guild v. Kitsap Cnty., No. 89344-6




WE CONCUR:




                                        25
Kitsap County Deputy Sheriff's Guild v. Kitsap County, No. 89344-6 (Gonzalez, J.
concurring)




                                    No. 89344-6



       GONZALEZ, J. (concurring)-! concur with the lead opinion that the

Kitsap County Deputy Sheriffs Guild has not shown that the arbitrators'

decision was arbitrary or capricious under RCW 41.56.450. However, I also

agree with the dissent that wages, once paid, are the property of the employee

and that the health care premiums already paid by the county from July through

December 2012 were part of the employees' compensation for work done. See

Cockle v. Dep 't of Labor & Indus., 142 Wn.2d 801, 823, 16 P.3d 583 (2001).

Given that the retroactive increase in premiums is balanced by a retroactive

wage increase, and given that no wages already paid will be clawed back, I find

no takings or violation of the wage rebate act, chapter 49.52 RCW. But for the

offsetting retroactive wage increase, I would agree with the dissent that the

arbitration award was arbitrary or capricious. Given that, I do not join the

portion of the lead opinion that might support the proposition that a retroactive

wage reduction for work already done imposed by arbitration and not offset by

a corresponding benefit is lawful.

        With these observations, I concur with the lead opinion.




                                            1
Kitsap County Deputy Sheriff's Guild v. Kitsap County, No. 89344-6 (Gonzalez, J.
concurring)




                                            2
Kitsap County Deputy Sheriffs' Guild v. Kitsap County, No. 89344-6
(Wiggins, J., dissenting)




                                       No. 89344-6


       WIGGINS, J. (dissenting)-The trial court properly struck down the retroactive

increase in employee health insurance premiums as arbitrary and capricious because

the arbitrator did not consider the statutory authority of the employer as required in

statutorily mandated interest arbitration under RCW 41.56.465(1 )(a). The award thus

violates the wage rebate act (WRA), chapter 49.52 RCW. An employer violates the

WRA when it collects or receives "from any employee a rebate of any part of wages

theretofore paid .... " RCW 49.52.050(1 ). In this case, after the expiration of the

collective bargaining agreement (CBA), Kitsap County (County) (the employer) paid

the deputies (the employees) the same wages for the same work for three years. The

arbitration award required the deputies to return a portion of their previously earned

health insurance premiums to the County, effectively rebating wages previously paid

to their employees. We have always recognized that "[h]aving once received his

wages in full, the employee is at liberty to do what he will with his earnings." State     v.
Carter, 18 Wn.2d 590, 622, 142 P.2d 403 (1943). I respectfully dissent. 1



1Although I would decide the case based solely on the WRA violation under principles of
constitutional avoidance, I recognize that taking wages triggers due process concerns. The
deputies have a property interest in earned wages. Because we have never held that workers
do not have a property interest in wages received for work performed, the lead opinion relies
Kitsap County Deputy Sheriff's Guild v. Kitsap County, No. 89344-6
(Wiggins, J., dissenting)


                                        ANALYSIS

  I.    The WRA protects an employee from employer rebates

  A. Plain language

        The meaning of a statute is a question of law reviewed de novo. Dep't of

Ecology v. Campbell & Gwinn, LLC, 146 Wn.2d 1, 9, 43 P.3d 4 (2002). "The court's

fundamental objective is to ascertain and carry out the Legislature's intent, and if the

statute's meaning is plain on its face, then the court must give effect to that plain

meaning as an expression of legislative intent." /d. at 9-10.

        We begin with the plain language of the statute. The WRA states in relevant

part:

        Any employer or officer, vice principal or agent of any employer, whether
        said employer be in private business or an elected public official, who

             (1) Shall collect or receive from any employee a rebate of any part
        of wages theretofore paid by such employer to such employee;



             Shall be guilty of a misdemeanor.

RCW 49.52.050. Because the WRA does not define "wage" or "rebate," the court may

look to related statutes and dictionary definitions for meaning. Campbell & Gwinn, 146




on two inapposite cases, i.e., Bd. of Regents of State Colis. v. Roth, 408 U.S. 564, 92 S. Ct.
2701, 33. L. Ed. 2d 548 (1972) and Godfrey v. State, 84 Wn.2d 959, 530 P.2d 630 (1975), for
support. However, Roth's analysis applies only to an employee's property interest in future
employment and Godfrey addressed whether a "vested right to a common-law bar to
recovery" existed. Godfrey, 84 Wn.2d at 962. The lead opinion's analysis is inapposite
because the deputies are not contending that they had the right to future employment during
this period; they are asking to keep what they earned.

                                              2
Kitsap County Deputy Sheriff's Guild v. Kitsap County, No. 89344-6
(Wiggins, J., dissenting)


Wn.2d at 4 (discussing related statutes); Garrison v. Wash. State Nursing Bd., 87

Wn.2d 195, 196, 550 P.2d 7 (1976) (discussing dictionary definitions).

       We used both related statutes and the dictionary to define the terms "rebate"

and "wage" as used in the WRA in LaCoursiere v. Camwest Development, Inc., 181

Wn.2d 734, 742-44, 339 P.3d 963 (2014). Using the Washington Minimum Wage Act,

chapter 49.46 RCW, and a dictionary definition of "wage," we asserted that wages

encompassed both '"moneys due by reason of employment"' and payment for work

performed. /d. at 743 (internal quotation marks omitted) (quoting Flower v. T.R.A.

Indus., Inc., 127 Wn. App. 13, 34, 111 P.3d 1192 (2005)), 743-44 (holding that

"LaCoursiere's bonuses were wages because the bonuses were already paid for work

performed"). This definition "gives effect to the legislature's intent to protect money

due to employees and comports with the broad definition of 'wage."' /d. at 744.

       In LaCoursiere, we considered the context of the statute and other provisions

in the WRA in concluding that a "rebate occurs when an employee receives less than

his or her expected wages because a portion of those wages have returned to the

employer or its agent." /d. We also considered the plain language in the WRA, RCW

49.52.050(1 ), and concluded that "a 'rebate' occurs when an employer or its agent

collects or receives a portion of an employee's wage after the wage has been paid."

/d.

       Thus, the plain language of the WRA protects an employee from having to

rebate wages to his or her employer. The Kitsap County arbitration award violates the

WRA if the health insurance premiums paid to the deputies were "wages" and if a



                                             3
Kitsap County Deputy Sheriff's Guild v. Kitsap County, No. 89344-6
(Wiggins, J., dissenting)


"rebate" occurred when the deputies were ordered to retroactively pay for an increase

in their health benefit premiums.

  B. The purpose of the WRA is to protect wages

       The purpose of the WRA supports its application to these facts. The legislature

enacted the WRA "to protect the wages of an employee against any diminution or

deduction therefrom by rebating, underpayment, or false showing of overpayment of

any part of such wages." Carter, 18 Wn.2d at 621. Accordingly, the WRA "must be

liberally construed to advance the Legislature's intent to protect employee wages."

Schilling v. Radio Holdings, Inc., 136 Wn.2d 152, 159, 961 P.2d 371 (1998).

       Rather than effectuating the legislature's purpose by construing the WRA

liberally, the lead opinion limits the WRA to prohibiting abuse of the collective

bargaining process in reliance on a fragment from one of our prior decisions: "[t]he

legislature enacted the wage rebate act 'to prevent abuses by employers in a labor-

management setting, e.g., coercing rebates from employees in order to circumvent

collective bargaining agreements."' Lead opinion at 17-18 (quoting Ellerman v.

Centerpoint Prepress, Inc., 143 Wn.2d 514, 519-20, 22 P.3d 795 (2001)). The rest of

the paragraph in Ellerman clearly reveals that the WRA is not limited to abuse of

collective bargaining but protects against "any diminution or deduction" from wages

by rebating:

           "[T]he fundamental purpose of the legislation, as expressed in both
           the title and body of the act, is to protect the wages of an employee
           against any diminution or deduction therefrom by rebating,
           underpayment, or false showing of overpayment of any part of such
           wages. The act is thus primarily a protective measure, rather than a
           strictly corrupt practices statute. In other words, the aim or purpose


                                             4
Kitsap County Deputy Sheriff's Guild v. Kitsap County, No. 89344-6
(Wiggins, J., dissenting)


          of the act is to see that the employee shall realize the full amount of
          the wages which by statute, ordinance, or contract he is entitled to
          receive from his employer, and which the employer is obligated to
          pay, and, further, to see that the employee is not deprived of such
          right, nor the employer permitted to evade his obligation, by a
          withholding of a part of the wages .... "

Ellerman, 143 Wn.2d at 520 (alterations in original) (internal quotation marks omitted)

(quoting Schilling, 136 Wn.2d at 159)). The lead opinion correctly states that abusing

the collective bargaining process is protected by the WRA, but importantly, so is "any

diminution or deduction" of an employee's wages "by rebating, underpayment, or false

showing of overpayment of any part of such wages." /d. Here there was no abuse of

the collective bargaining process, but a rebate plainly occurred when the arbitration

award required the deputies to retroactively pay for the increase in health care

premiums that were covered by the County during the three years when there was no

collective bargaining agreement in place.

  II.   Application of the WRA

   A. Health insurance premiums are wages

        "In the absence of a specific statutory definition, words in a statute are given

their common law or ordinary meaning." State v. Chester, 133 Wn.2d 15, 22, 940 P.2d

1374 (1997).

        In determining whether the health insurance premiums paid by the county

constitute "wages" under the WRA, we look to our recent decision in LaCoursiere, in

which we held that wages encompass both payment for work performed and '"moneys

due by reason of employment."' LaCoursiere, 181 Wn.2d at 741-43 (internal quotation

marks omitted) (quoting Flower, 127 Wn. App. at 34). Liberally construing the WRA,


                                             5
Kitsap County Deputy Sheriff's Guild v. Kitsap County, No. 89344-6
(Wiggins, J., dissenting)


we construed "wages" using Websters' broad definition of "wage" to include not only

salaries but also "bonuses, once paid for work performed." /d. at 741.

       Applying the same reasoning to health care premiums, we have also explicitly

held that health care premiums are "wages" under Washington's Industrial Insurance

Act, Title 51 RCW. See RCW 51.08.178; Cockle v. Oep'tofLabor& Indus., 142 Wn.2d

801, 823, 16 P.3d 583 (2001) (recognizing that health care coverage is frequently a

significant part of an employee's compensation package and should be considered a

wage). Our decision in Cockle comports with the dictionary definition of "wage," which

includes "amounts paid by the employer for insurance." WEBSTER's THIRD NEW

INTERNATIONAL DICTIONARY 2568-69 (2002). Therefore, I would hold that health care

premiums are "wages" under the WRA.

       The record is clear that the health insurance premiums at issue here were

wages because they were paid for work performed. The deputies' wages were

established in the 2008-2009 CBA. The terms of that CBA required the County to pay

the entirety of the deputies' health insurance premiums and 90 percent of the deputies'

dependents' premiums. After the CBA expired, the County was required to maintain

the same level of "existing wages, hours, and other conditions of employment" under

the provisions of the Public Employees' Collective Bargaining Act (PECBA), chapter

41.56 RCW. RCW 41.56.470. The deputies worked with the reasonable expectation

that the County would continue to pay their salaries and health insurance premiums

at the statutorily prescribed level; indeed, for three years this is exactly what

happened.



                                             6
Kitsap County Deputy Sheriff's Guild v. Kitsap County, No. 89344-6
(Wiggins, J., dissenting)


    B. The arbitration award effects a rebate

        Having concluded that health insurance premiums are wages, we now consider

whether the decrease in the deputies' wages for the payment of retroactive health

care premiums constitutes a "rebate." "[A] 'rebate' occurs when an employer or its

agent collects or receives a portion of an employee's wage after the wage has been

paid." LaCoursiere, 181 Wn.2d at 744 (emphasis added) (citing RCW 49.52.050(1 )).

Employees have "[t]he right to a salary for work performed at the rate admittedly

effective during the period when the work was performed." Foley v. Carter, 526 F.

Supp. 977,985 (D.D.C. 1981); Navletv. Port of Seattle, 164 Wn.2d 818,828 n.5, 194

P.3d 221 (2008) ("In the employment context, an employee who renders service in

exchange for compensation has a vested right to receive such compensation." (citing

Leonard v. City of Seattle, 81 Wn.2d 479, 487, 503 P.2d 741 (1972))).

        In analyzing whether there was a rebate, we must first determine the effective

rate of pay during the period when the work was performed. PECBA, chapter 41.56

RCW, governs collective bargaining negotiations for public employees. Specifically,

as "uniformed personnel," 2 the deputies' wages during the interim period are defined

as the "existing wages, hours, and other conditions of employment," which were

defined by the expired CBA. RCW 41.56.470. Therefore, the expired CBA became the

deputies' effective rate of pay. The plain language of PECBA supports this conclusion:



2"Uniformed personnel" includes "[l]aw enforcement officers as defined in RCW 41.26.030."
RCW 41.56.030(13)(a). RCW 41.26.030(18) defines a "law enforcement officer" as "any
person who is commissioned and employed by an employer on a full time, fully compensated
basis to enforce the criminal laws of the state of Washington." This definition applies to the
deputies.

                                              7
Kitsap County Deputy Sheriff's Guild v. Kitsap County, No. 89344-6
(Wiggins, J., dissenting)


      During the pendency of the proceedings before the arbitration panel,
      existing wages, hours, and other conditions of employment shall not be
      changed by action of either party without the consent of the other but a
      party may so consent without prejudice to his or her rights or position
      under chapter 131, Laws of 1973.

RCW 41.56.470. The language of RCW 41.56.470 is mandatory; the imperative "shall"

does not permit either party to change the existing wages, hours, or conditions of

employment without the consent of the other.

       The intent and purpose of PECBA support the premise that RCW 41.56.470

controls the effective rate of wages for work performed:

       The intent and purpose of [PECBA] is to recognize that there exists a
       public policy in the state of Washington against strikes by uniformed
       personnel as a means of settling their labor disputes; that the
       uninterrupted and dedicated service of these classes of employees is
       vital to the welfare and public safety of the state of Washington; that to
       promote such dedicated and uninterrupted public service there should
       exist an effective and adequate alternative means of settling disputes.

RCW 41.56.430. The PECBAadvances a balance between uniformed employees and

employers. So long as the deputies remain employees, the deputies are required to

continue working the same hours under the same conditions of employment. Under

PECBA, a uniformed employee's right to strike, or engage in a work slowdown or

stoppage, is rescinded, but in return PECBA guarantees that existing wages will

continue until a dispute is resolved. RCW 41.56.490. The quid pro quo for the

deputies' "dedicated and uninterrupted public service" is that the County continues to

pay the deputies "existing wages."

       As discussed, the deputies' "existing wages" included health insurance

payments. Even the lead opinion appears to acknowledge that RCW 41.56.470



                                             8
Kitsap County Deputy Sheriff's Guild v. Kitsap County, No. 89344-6
(Wiggins, J., dissenting)


required the County to maintain "the same level of pay and benefits provided under

the 2008-2009 CBA." Lead opinion at 3 (emphasis added). We should hold that RCW

41.56.470 governs our analysis of the deputies' effective wages during the interim

period because the arbitration proceedings were pending and the statute explicitly

prohibits either party from changing the existing wages and conditions of employment.

       Because the compensation the County paid the deputies during the interim

period is statutorily defined, "[t]he promised compensation for services actually

performed and accepted ... may undoubtedly be claimed." Butter v. Pennsylvania, 51

U.S. (1 0 How.) 402, 416, 13 L. Ed. 472 (1850). The deputies had the right to the wages

they received. We conclude that deputies' health insurance premiums are wages and

that the deputies received no more than their due. By allowing the County to rebate

these wages, the arbitration award violates the WRA.

   C. There was no overpayment of wages
       The WRA authorizes an employer to withhold wages if empowered by state or

federal law, such as in the case of an overpayment of wages; however, no exception

to the WRA applies here. RCW 49.52.060 authorizes an employer to withhold a

portion of an employee's wages when authorized by state or federal law. RCW

49.48.200(1) authorizes the state, a county, or a city to withhold an "overpayment of

wages" from a public employee's current wages "as provided in RCW 49.48.210 .... "

RCW 49.48.21 0(11 )(c) defines an "overpayment" as "a payment of wages for a pay

period that is greater than the amount earned for a pay period." The wages paid to

deputies were not in any sense "greater than the amount earned" because they were



                                             9
Kitsap County Deputy Sheriff's Guild    v. Kitsap County, No. 89344-6
(Wiggins, J., dissenting)


exactly the wages due, i.e., exactly what the law provided they had earned. The
                                                                    3
deputies were not, as the lead opinion contends, overpaid.

 Ill.   Because the arbitration award violated the WRA, it is arbitrary and capricious

        We should uphold the trial court's finding that the arbitration award was arbitrary

and capricious. PECBA governs our review of the arbitration panel's decision. Under

PECBA, the statutorily mandated interest arbitration panel "exercises a state function

and is ... a state agency." RCW 41.56.452. We do not give the panel any "'great

deference"' "[b]ecause there is no guaranty that any member of the arbitration panel

will have any expertise in labor relations." City of Bellevue v. lnt'/ Ass'n of Fire Fighters,

Local 1604, 119 Wn.2d 373, 381, 831 P.2d 738 (1992). Instead, the superior court

reviews the decision of the panel to determine whether its decision was arbitrary or

capricious. 4 RCW 41.56.450.


3 In concluding that the deputies were overpaid, the lead opinion fundamentally misconstrues
the distinction between statutorily mandated arbitration and binding arbitration arising as the
result of a contract voluntarily entered into by parties. See lead opinion at 18 n.4 ("Viewing
the arbitration award as an extension of collective bargaining, as we must, it becomes clear
that the arbitration award acts as a contract that the parties would have reached
themselves."). It is true that we treat arbitrator decisions arising out of contract as part of the
contract itself. Kitsap County Deputy Sheriff's Guild v. Kitsap County, 167 Wn.2d 428, 435,
219 P.3d 675 (2009). The award is then treated like any other contract and can be vacated if
it violates public policy. /d. However, "[u]nlike grievance arbitration, interest arbitration is not
a matter of contract." Snohomish County Pub. Transp. Benefit Area v. Public Emp't Relations
Comm'n, 173 Wn. App. 504, 510, 294 P.3d 803 (2013) (citing RCW 41.56.450). We review
statutorily mandated arbitration that the parties have not bargained for in accordance with the
requirements of that statute. Under interest arbitration, we do not treat a panel's award as
 part of a contract that the parties entered into because the statute mandating the arbitration
 requires us to determine whether the panel's decision is arbitrary or capricious before the
 award is considered final and binding. If the panel's decision is arbitrary or capricious then
the award is not binding on the parties. RCW 41.56.450.
4The application of the arbitrary and capricious standard of review is unique in arbitration
under PECBA, and it is significantly different from arbitration created through contract.


                                                 10
Kitsap County Deputy Sheriff's Guild v. Kitsap County, No. 89344-6
(Wiggins, J., dissenting)


      We have defined "arbitrary and capricious" behavior as "willful, unreasoning,

and taken without regard to the attending facts or circumstances." Ass'n of Wash.

Spirits & Wine Distribs. v. Wash. State Liquor Control Bd., 182 Wn.2d 342, 358, 340

P.3d 849 (2015). The "attending facts or circumstances" require the panel to consider

"[t]he constitutional and statutory authority of the employer" when making its

determination. RCW 41.56.465(1)(a). If the panel issues an award that exceeds the

"statutory authority of the employer," then that award is arbitrary and capricious.

       I would hold that the arbitration award violates the WRA because under the

award the employer receives a rebate of wages earned by the employee. Thus the

award by definition was arbitrary and capricious because it failed to consider the

prohibitions against an employer's receiving a rebate as set forth in the WRA. I agree

with the trial court's determination that the award "incorporates unlawful provisions

beyond the lawful authority of the employer and is arbitrary and capricious for that

reason." 5 Clerk's Papers at 436.




Arbitration awards under the Washington uniform arbitration act are not reviewed to
determine if they are arbitrary or capricious, see RCW 7.04A.200, .220, .230, .240, and we
have expressly declined to review arbitration arising under contract under an arbitrary and
capricious standard because of the importance of supporting the finality of bargained for,
binding arbitration. Clark County Pub. Uti/. Oist. No. 1 v. tnt'/ Bhd. of Elec. Workers, Local
125, 150 Wn.2d 237, 247, 76 P.3d 248 (2003) ("When parties voluntarily submit to binding
arbitration, they generally believe that they are trading their right to appeal an arbitration
award for a relatively speedy and inexpensive resolution to their dispute."). The application of
this more searching review makes sense when we remember that despite the use of the term
"arbitration," the panel created by RCW 41.56.450 is in fact a state agency adjudicating a
dispute pursuant to a statutory, rather than a contractual, delegation of authority. See RCW
41.56.452.
5 The trial court also found that the award "improperly contains mutually exclusive terms
concerning insurance enrollment and is arbitrary and capricious for that reason." I would not
reach that issue.

                                               11
Kitsap County Deputy Sheriff's Guild v. Kitsap County, No. 89344-6
(Wiggins, J., dissenting)


                                      CONCLUSION

      The lead opinion holds that any compensation paid to public employees after

the expiration of a collective bargaining agreement can be rebated to the employer by

an arbitration award, i.e., an arbitrator has the power to retroactively declare wages

to be overpayments. Consequently, employees will not be able to determine the

amount of wages they are being paid for protracted periods of time and employers will

be allowed to withhold employees' wages months or years after the fact.

       For the reasons stated above, I would hold that the arbitration award violates

the WRA and affirm the trial court.




                                            12
Kitsap County Deputy Sheriff's Guild v. Kitsap County, No. 89344-6
(Wiggins, J., dissenting)


       I therefore dissent.




                                            13
