Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
06/15/2017 05:14 PM CDT




                                                      - 703 -
                                Nebraska Court of A ppeals A dvance Sheets
                                     24 Nebraska A ppellate R eports
                               PUBLIC ASSN. OF GOVT. EMPL. v. CITY OF LINCOLN
                                            Cite as 24 Neb. App. 703




                    Public Association of Government Employees, appellee,
                           v. City of Lincoln, Nebraska, appellant.
                                                  ___ N.W.2d ___

                                        Filed May 16, 2017.     No. A-16-007.

                1.	 Commission of Industrial Relations: Appeal and Error. In review-
                     ing an appeal from the Commission of Industrial Relations in a case
                     involving wages and conditions of employment, an order or decision
                     of the commission may be modified, reversed, or set aside by an appel-
                     late court on one or more of the following grounds and no other: (1) if
                     the commission acts without or in excess of its powers, (2) if the order
                     was procured by fraud or is contrary to law, (3) if the facts found by
                     the commission do not support the order, and (4) if the order is not
                     supported by a preponderance of the competent evidence on the record
                     considered as a whole.
                2.	 Labor and Labor Relations. It is a prohibited practice for any
                     employer, employee, employee organization, or collective-bargaining
                     agent to refuse to negotiate in good faith with respect to mandatory
                     ­topics of bargaining.
                3.	 ____. Mandatory subjects of bargaining include the scale of wages,
                      hours of labor, or conditions of employment.
                 4.	 ____. Management prerogatives, such as the right to hire, to maintain
                      order and efficiency, to schedule work, and to control transfers and
                      assignments, are not mandatory subjects of bargaining.
                 5.	 ____. A matter which is of fundamental, basic, or essential concern to an
                      employee’s financial and personal concern may be considered as involv-
                      ing working conditions and is mandatorily bargainable even though
                      there may be some minor influence on educational policy or manage-
                      ment prerogative.
                 6.	 ____. Ordinarily, mandatory subjects of bargaining must be negotiated
                      between the parties, and as such, an employer may not alter a term
                      or condition of employment unless it has bargained with regard to
                      the issue.
                                    - 704 -
            Nebraska Court of A ppeals A dvance Sheets
                 24 Nebraska A ppellate R eports
           PUBLIC ASSN. OF GOVT. EMPL. v. CITY OF LINCOLN
                        Cite as 24 Neb. App. 703

 7.	 ____. No bargaining is required before altering a mandatory subject
      of bargaining if the issue is covered by the collective bargaining
      agreement.
  8.	 ____. When parties bargain about a subject and memorialize the results
      of their negotiation in a collective bargaining agreement, they create a
      set of enforceable rules—a new code of conduct for themselves—on
      that subject.
 9.	 Contracts. Because of the fundamental policy of freedom of contract,
      parties are generally free to agree to whatever specific rules they like,
      and in most circumstances it is beyond the competence of the courts to
      interfere with the parties’ choice.
10.	 Labor and Labor Relations: Contracts. Where the contract fully
      defines the parties’ rights as to what would otherwise be a mandatory
      subject of bargaining, the contract will control, and under the contract
      coverage rule, if the issue was covered by the collective bargain-
      ing agreement, then the parties have no further obligation to bargain
      the issue.

  Appeal from the Commission of Industrial Relations.
Affirmed.
  John C. Hewitt, of Cline, Williams, Wright, Johnson &
Oldfather, L.L.P., for appellant.
  Gary L. Young and Thomas P. McCarty, of Keating, O’Gara,
Nedved & Peter, P.C., L.L.O., for appellee.
   Moore, Chief Judge, and Inbody and R iedmann, Judges.
   R iedmann, Judge.
                     INTRODUCTION
   The City of Lincoln, Nebraska (the City), appeals from a
decision of Nebraska’s Commission of Industrial Relations
(CIR), which determined that when the City unilaterally
changed employee shifts and standby staffing without bargain-
ing with the Public Association of Government Employees
(PAGE), it violated Nebraska’s Industrial Relations Act (IRA).
See Neb. Rev. Stat. §§ 48-801 through 48-842 (Reissue 2010
& Cum. Supp. 2016). Finding no error in the CIR’s decision,
we affirm.
                             - 705 -
         Nebraska Court of A ppeals A dvance Sheets
              24 Nebraska A ppellate R eports
         PUBLIC ASSN. OF GOVT. EMPL. v. CITY OF LINCOLN
                      Cite as 24 Neb. App. 703

                        BACKGROUND
   PAGE is a labor union which represents various employees
of the City, including street maintenance employees. PAGE
and the City were operating under a collective bargaining
agreement (CBA) that was effective from August 14, 2014,
through August 31, 2016. Relevant to the matter at hand, the
CBA provides:
              ARTICLE 3 - MANAGEMENT RIGHTS
        ....
        Section 2. The Union acknowledges the concept of
     inherent management rights. These rights, powers, and
     authority of the City include, but are not limited to
     the following:
        ....
        C. The right to establish, allocate, schedule, assign,
     modify, change, and discontinue City operations and
     work shifts, so long as changes in days off, shifts, and
     working hours, other than in emergencies, which shall
     include but not be limited to, unplanned absences, are
     made only after the order for such change has been
     posted for seven (7) calendar days; except in instances
     which affect a single work crew or a single employee,
     the City will make a good faith attempt to deliver
     such notice.
        ....
                 ARTICLE 18 - HOURS OF WORK
                        AND DUTY SHIFTS
        Section 1. Eight (8) consecutive hours, exclusive of
     lunch, shall constitute a day[’]s work and five (5) con-
     secutive calendar days shall constitute a week[’]s work.
     From time to time, ten (10) hour working shifts are
     available, the option, within demand constraints, to work
     these shifts will be made available to employees working
     eight (8) hour shifts. When an employee elects to change
     his work shift to either an eight (8) or ten (10) hour work
     shift, he may not, without management consent, again
                             - 706 -
         Nebraska Court of A ppeals A dvance Sheets
              24 Nebraska A ppellate R eports
         PUBLIC ASSN. OF GOVT. EMPL. v. CITY OF LINCOLN
                      Cite as 24 Neb. App. 703

      change his work shift from eight (8) to ten (10) hours or
      from ten (10) to eight (8) hours.
         Section 2. Each employee shall be entitled to two (2)
      or three (3) days off each week which shall be consecu-
      tive, unless in conflict with shift or other assignments.
         ....
         Section 4. All employees who are regularly assigned
      to second and third shifts shall be paid an additional
      fifty-two (52) cents per hour for second shift and seventy
      (70) cents per hour for third shift. . . .
         ....
              ARTICLE 19 - OVERTIME, CALL BACK,
                         AND STAND-BY PAY
         ....
         Section 5. ALTERATION OF ORDINARY SHIFT[.]
      Except for those employees that are on paid on-call or
      standby status, an employee may be called into work on
      a shift that is not his or her regular shift on a mandatory
      basis only when there is an emergency.
   In January 2015, after meeting with PAGE representa-
tives on several occasions, the City unilaterally implemented
changes to employee work schedules, including imposing
a mandatory standby staffing plan. Previously, employees
worked 8-hour shifts with 2 consecutive days off or could
elect to work 10-hour shifts with 3 consecutive days off.
They were also able to volunteer for standby status during
winter months, which permitted them to be called into work
during inclement weather. Under the new standby plan, street
maintenance workers were mandatorily placed on standby
status where they were required to report for duty if called
upon, and if called to duty, they were required to work on a
7-day-per-week basis subject to 12-hour shifts or face disci­
plinary action.
   In July 2015, PAGE filed a prohibited practice petition
in the CIR alleging that in implementing the new standby
plan, the City engaged in a prohibited practice in violation
                              - 707 -
          Nebraska Court of A ppeals A dvance Sheets
               24 Nebraska A ppellate R eports
         PUBLIC ASSN. OF GOVT. EMPL. v. CITY OF LINCOLN
                      Cite as 24 Neb. App. 703

of § 48-824(1) and (2)(e) based upon its “unilateral change
to, and refusal to negotiate in good faith over, a mandatory
subject of bargaining.” The City filed an answer generally
denying the allegations and asserting that the CIR lacked
jurisdiction over the matter, the changes implemented by the
standby plan were not mandatory subjects of bargaining, and
the changes were covered by the terms of the CBA.
   After conducting a trial, the CIR entered an order finding
that because the facts of the case constituted a viable prohib-
ited practice claim, it had jurisdiction to adjudicate the matter.
The CIR concluded that the employee work schedule changes
the City implemented were mandatory subjects of bargaining,
because they would “‘vitally affect’ the hours and terms and
conditions of employment” and the past practice of voluntary
standby duty had been in place for at least 20 years such that
employees could reasonably expect the practice to continue.
As such, the City had a duty to bargain in good faith with
PAGE regarding implementation of the plan, and because it
failed to do so, its unilateral implementation of the plan was a
“per se violation of the [IRA] and a prohibited practice.” The
City appeals.
                  ASSIGNMENTS OF ERROR
   The City assigns, restated and renumbered, that the CIR
erred in (1) finding the City’s standby plan constituted a man-
datory subject of bargaining under the IRA and not a manage-
ment prerogative, (2) failing to find the City’s standby plan
was covered by the parties’ CBA and therefore not subject
to a duty to bargain under the IRA, (3) finding the imple-
mentation of the standby plan constituted a per se violation
of the IRA and a prohibited practice, and (4) finding it had
jurisdiction to determine whether the City committed a pro-
hibited practice.
                  STANDARD OF REVIEW
   [1] In reviewing an appeal from the CIR in a case involv-
ing wages and conditions of employment, an order or decision
                              - 708 -
          Nebraska Court of A ppeals A dvance Sheets
               24 Nebraska A ppellate R eports
         PUBLIC ASSN. OF GOVT. EMPL. v. CITY OF LINCOLN
                      Cite as 24 Neb. App. 703

of the CIR may be modified, reversed, or set aside by an
appellate court on one or more of the following grounds and
no other: (1) if the CIR acts without or in excess of its pow-
ers, (2) if the order was procured by fraud or is contrary to
law, (3) if the facts found by the CIR do not support the order,
and (4) if the order is not supported by a preponderance of
the competent evidence on the record considered as a whole.
Service Empl. Internat. v. Douglas Cty. Sch. Dist., 286 Neb.
755, 839 N.W.2d 290 (2013).

                              ANALYSIS
     The City argues that the CIR erred in finding that the
standby plan was a mandatory subject of bargaining rather than
a management prerogative. We disagree.
     [2-5] It is a prohibited practice for any employer, employee,
employee organization, or collective-bargaining agent to
refuse to negotiate in good faith with respect to mandatory
­topics of bargaining. Service Empl. Internat., supra. See, also,
 § 48-824(1). Mandatory subjects of bargaining include the
 scale of wages, hours of labor, or conditions of employment.
 Service Empl. Internat., supra. Management prerogatives, such
 as the right to hire, to maintain order and efficiency, to sched-
 ule work, and to control transfers and assignments, are not
 mandatory subjects of bargaining. Id. A matter which is of
 fundamental, basic, or essential concern to an employee’s
 financial and personal concern may be considered as involv-
 ing working conditions and is mandatorily bargainable even
 though there may be some minor influence on educational
 policy or management prerogative. Id.
     The City argues that the changes implemented by the
 ­mandatory standby plan were solely to employee work sched-
  ules and therefore fall within management prerogative. We
  agree that scheduling work is not a mandatory subject of
  bargaining; however, the changes to standby staffing were
  not simply scheduling employees to work. Rather, the man-
  datory plan would force employees to work 12-hour shifts
                             - 709 -
         Nebraska Court of A ppeals A dvance Sheets
              24 Nebraska A ppellate R eports
         PUBLIC ASSN. OF GOVT. EMPL. v. CITY OF LINCOLN
                      Cite as 24 Neb. App. 703

instead of 8- or 10-hour shifts and would require employees to
forgo their weekends off, working 7 consecutive days rather
than 4 or 5 days with 2 or 3 consecutive days off. These are
matters of employee work hours—a mandatory subject of
bargaining.
   In addition, employees would no longer have a set sched-
ule, but instead, they would be placed on mandatory standby
status with little notice. As the CIR concluded, the plan imple-
mented by the City would vitally affect the hours and terms
and conditions of employment and was therefore a manda-
tory subject of bargaining. Indeed, the significant change in
lifestyle required by the mandatory standby plan constitutes
a matter of fundamental, basic, or essential concern to an
employee’s personal concern and therefore may be consid-
ered as involving working conditions. The CIR’s conclusion
is not contrary to law, and we therefore find no error in
its decision classifying the changes as mandatory subjects
of bargaining.
   [6,7] Ordinarily, mandatory subjects of bargaining must be
negotiated between the parties, and as such, an employer may
not alter a term or condition of employment unless it has bar-
gained with regard to the issue. See Service Empl. Internat.
v. Douglas Cty. Sch. Dist., 286 Neb. 755, 839 N.W.2d 290
(2013). However, no bargaining is required before altering a
mandatory subject of bargaining if the issue is “‘covered by’”
the CBA. Douglas Cty. Health Ctr. Sec. Union v. Douglas Cty.,
284 Neb. 109, 115, 817 N.W.2d 250, 255 (2012).
   [8-10] Generally, when parties bargain about a subject
and memorialize the results of their negotiation in a collec-
tive bargaining agreement, they create a set of enforceable
rules—a new code of conduct for themselves—on that sub-
ject. Douglas Cty. Health Ctr. Sec. Union, supra. Because of
the fundamental policy of freedom of contract, the parties are
generally free to agree to whatever specific rules they like,
and in most circumstances it is beyond the competence of the
courts to interfere with the parties’ choice. See id. Therefore,
                             - 710 -
         Nebraska Court of A ppeals A dvance Sheets
              24 Nebraska A ppellate R eports
         PUBLIC ASSN. OF GOVT. EMPL. v. CITY OF LINCOLN
                      Cite as 24 Neb. App. 703

where the contract fully defines the parties’ rights as to what
would otherwise be a mandatory subject of bargaining, the
contract will control, and under the contract coverage rule,
if the issue was covered by the collective bargaining agree-
ment, then the parties have no further obligation to bargain
the issue. See id.
   In Douglas Cty. Health Ctr. Sec. Union, supra, the Supreme
Court concluded that the issue of subcontracting of bargaining
unit jobs was clearly covered by the applicable CBA, because
the CBA specifically noted the steps that the county needed to
follow when the contracting out or subcontracting of bargain-
ing unit work had the effect of eliminating bargaining unit
jobs, and the elimination of bargaining unit jobs was at issue
in the dispute. The steps included notifying the union of the
impending changes and providing the union with an oppor-
tunity to discuss with the county the necessity and effect on
employees. The Supreme Court therefore concluded that the
issue of subcontracting of bargaining unit jobs was covered
by the CBA.
   Similarly, in Dept. of Navy, Marine Corps Logistics Base
v. FLRA, 962 F.2d 48 (D.C. Cir. 1992), cited by the Supreme
Court in Douglas Cty. Health Ctr. Sec. Union, supra, the
D.C. Circuit Court of Appeals held that the reassignment of
employees and establishment of new performance standards
were covered by the CBA. The court relied on the fact that
the CBA contained provisions covering the implementation
of both actions, including detailed provisions concerning the
procedures for temporarily reassigning employees or modify-
ing performance standards. The CBA defined when employee
“details” would be implemented, to what kinds of positions
an employee may be detailed, how long a detail may last,
and what effect a detail would have on an employee’s salary
and liability for union dues. 962 F.2d at 51. Similarly, the
CBA established comprehensive procedures that the agency
must follow when it modified performance criteria—includ-
ing advance notice to employees, an opportunity for employee
                             - 711 -
         Nebraska Court of A ppeals A dvance Sheets
              24 Nebraska A ppellate R eports
         PUBLIC ASSN. OF GOVT. EMPL. v. CITY OF LINCOLN
                      Cite as 24 Neb. App. 703

participation in the creation of performance standards, and an
overarching requirement that the standards implemented be
fair and reasonable. Accordingly, the appellate court held that
under any reasonable definition of the term “covered by,” the
impact and implementation matters related to employee details
and performance criteria were covered by the CBA.
   In the present case, the main change at issue is the modi-
fication of the procedure for standby staffing, which in turn
alters employees’ work hours, days, and overtime status. The
parties’ CBA refers to the hours and shifts employees work,
contemplating three separate work shifts and 8- or 10-hour
shifts. Thus, under article 3 of the CBA, the City retained the
right to change employee work shifts, meaning, for example,
it could move employees from first shift to second shift, so
long as 7 days’ notice was provided. The CBA is silent on the
issue of voluntary standby staffing (except as to the issue of
pay) and says nothing about the steps the City would need to
follow to make standby staffing mandatory—thereby impos-
ing mandatory overtime on employees and altering their work
hours and days off. Article 19 of the CBA contemplates man-
datorily calling employees into work on a shift that is not a
regular shift but applies only in the case of an emergency,
which does not affect the changes at issue here. We therefore
cannot find that the changes implemented by the City are
covered by the CBA. As a result, the parties were required to
negotiate prior to implementing any changes to the standby
staffing procedures.
   Because we conclude that the changes the City imple-
mented were not covered by the CBA, we also reject PAGE’s
argument that the issues became moot with the expiration of
the CBA. We additionally find no merit to the City’s argu-
ment that the CIR lacked jurisdiction over the matter because,
instead of a prohibited practice claim, the matter was actu-
ally a breach of contract claim over which the CIR does not
have jurisdiction. See Lamb v. Fraternal Order of Police
Lodge No. 36, 293 Neb. 138, 876 N.W.2d 388 (2016) (CIR
                             - 712 -
         Nebraska Court of A ppeals A dvance Sheets
              24 Nebraska A ppellate R eports
         PUBLIC ASSN. OF GOVT. EMPL. v. CITY OF LINCOLN
                      Cite as 24 Neb. App. 703

has no jurisdiction over breach of contract claims, but for
claims involving determination of prohibited practice under
IRA, jurisdiction lies with CIR). Because we determined that
the claim was, in fact, a prohibited practice, we conclude
that the CIR did not err in exercising its jurisdiction over
PAGE’s claim.
                      CONCLUSION
   We conclude that the City’s implementation of changes to
standby staffing, employee work hours, and days off was a
mandatory subject of bargaining that was not covered by the
CBA. Therefore, the City had a duty to negotiate the changes
with PAGE prior to implementation. Because the City failed
to do so, it committed a prohibited practice under the IRA.
Accordingly, we affirm the decision of the CIR.
                                                  A ffirmed.
