                                                                                                                   EIL. EL
                                                                                                         COURT OF APPEALS
     IN THE COURT OF APPEALS OF THE STATE OF WASHINGT                                                              W1SJON' 11

                                                                                                       2015         14      P N 9: 49
                                              DIVISION II
                                                                                                        ST           WASHINGTON
AMALGAMATED TRANSIT UNION,                                                       No. 45687 -7 -II
                                                                                                        BY
LOCAL 1384,                                                                                                              TY

                                     Appellant,                            PUBLISHED OPINION                                  1


           v.




KITSAP TRANSIT and the PUBLIC
EMPLOYMENT RELATIONS
 COMMISSION,


                                     Respondents.



           BJORGEN, A.C. J. — The Amalgamated Transit Union, Local 1384 ( ATU) appeals superior


court orders ( 1) denying its motion to supplement the record in its appeal of a decision and order

by   the    Public Employment Relations Commission ( Commission)                          and (   2)   affirming the


Commission' s order. The Commission' s order found that Kitsap Transit had committed two unfair

labor practices related to the loss of one of the two health insurance options ATU' s members had

obtained through collective bargaining with Kitsap Transit, but ordered remedial measures that

ATU contends were legally inadequate.

           On appeal, ATU contends that ( 1) the superior court abused its discretion when it declined


either to receive new evidence when considering ATU' s petition for review or to remand the matter

back to the Commission for further fact               finding, (   2)   the Commission acted arbitrarily and

capriciously and made factual findings unsupported by the record when determining that Kitsap

Transit could not comply with an order requiring it to restore the lost health insurance option, and

 3) the Commission erroneously interpreted or applied the provisions of chapter 41. 56 RCW and

acted   arbitrarily   and   capriciously   when   it ( a) declined to   order   Kitsap   Transit to    restore   the lost
No. 45687 -7 -II



health insurance option and ( b) failed to order Kitsap Transit to pay monetary damages sufficient

to make ATU' s members whole for the loss of the health insurance option.


         We hold that the superior court erred when it denied ATU' s motion to remand the matter


back to the Commission for further fact            finding. We hold also that the Commission erroneously

interpreted and applied the provisions of chapter 41. 56 RCW when it declined to order Kitsap

Transit to make ATU' s members whole for the damages inflicted by its unfair labor practices and

that the   superior court     therefore   erred   in upholding that   commission action.   Consequently, we

reverse the superior court' s decision upholding the Commission' s order and remand this matter to

the Commission for further proceedings consistent with this opinion.

                                                       FACTS


           ATU and Kitsap Transit agreed to the collective bargaining agreements relevant to this

appeal in 2004       and   2005.    Under these agreements and past practice between the parties, Kitsap

Transit provided ATU' s members with two health insurance options. One was a preferred provider


organization ( PPO) plan offered          by   Premera Blue Cross.     The second was a health maintenance


organization (HMO) plan provided by Group Health. The HMO plan resulted in less out -of-pocket

expense for ATU' s members, but the PPO plan offered them a broader, national network of


physicians and allowed enrolled workers to see a specialist without first obtaining a referral from

a primary care physician.


           In 2007 and 2008, the collective bargaining agreements between ATU and Kitsap Transit

expired.     ATU and Kitsap Transit tried and failed to negotiate successor agreements, eventually

bargaining     to   an   impasse.   Because ATU' s members were eligible for interest arbitration under


state   law, RCW 41. 56. 492, that impasse triggered mandatory               arbitration proceedings.   RCW


41. 56. 450.




                                                          2
No. 45687 -7 -II



          State law also froze the terms of employment of ATU members during the pendency of the

arbitration,   preventing both ATU          and    Kitsap   Transit from unilaterally changing the " existing


wages,    hours,   and other conditions of employment."          RCW 41. 56. 470. Because the Commission' s


precedent " has     long recognized that health insurance benefits are a form of wages," Yakima County

Law Enforcement Guild            v.   Yakima     County,   No. 19234 -U -05 -4887, 2006 WL 1547092,         at *   1


 Wash. Pub.     Emp' t   Relations Comm' n June 2, 2006),          RCW 41. 56. 470 prevented Kitsap Transit

from unilaterally altering the health insurance options available to ATU' s members without either

successfully bargaining to do so or receiving an arbitrator' s award.'

          By   2010   Kitsap   Transit   was     experiencing budget   shortfalls and   facing   service cuts.   Its


director of human resources, Jeff Cartwright, began looking for potential cost savings to alleviate

these   financial   pressures.   Cartwright determined that, although roughly equal numbers of ATU' s

members chose the PPO and HMO options, the PPO option cost Kitsap Transit over a million

dollars more a year. Cartwright asked Kitsap Transit' s insurance broker to look for a cheaper PPO

option.




          Cartwright then took the step that ultimately caused Premera to refuse to continue covering

ATU' s    members with     the PPO       plan.   Cartwright offered incentives to PPO members to abandon


the plan, even though the insurance broker warned that decreasing the number of Kitsap Transit

workers covered by Premera could make the pool of insured workers so small as to make coverage

uneconomical        for Premera.       Eventually, as the broker had warned, so few of Kitsap Transit' s

employees chose PPO coverage that Premera withdrew its bid to continue PPO coverage for

ATU' s members in 2011.




1 ATU did have some flexibility in choosing a provider other than Premera, so long as the level
of benefits remained unchanged.



                                                             3
No. 45687 -7 -I1



       The search by Kitsap Transit' s insurance broker for other, comparable PPO coverage

proved futile. Consequently, ATU members lost the ability to choose PPO coverage for 2011, and

all ATU members received HMO coverage.


       ATU responded by filing a complaint with the Commission alleging, among other things,

that Kitsap •Transit had violated RCW 41. 56. 140( 4) by refusing to engage in collective bargaining

with it by unilaterally taking the steps resulting in the elimination of the PPO coverage.

       The parties contested ATU' s allegations before one of the Commission' s hearing

examiners.   Ultimately, the examiner determined that Kitsap Transit had refused to bargain with

ATU when it caused the loss of PPO coverage for ATU' s members.


       The examiner, in her remedial order, required Kitsap Transit to cease and desist its

unlawful labor practices and to take affirmative action " to effectuate the purposes and policies of


Chapter 41. 56 RCW."          Administrative Record ( AR)     at   1905..   Among these affirmative acts, the

examiner ordered Kitsap Transit to:

         2] a. Restore the status quo ante by reinstating a health insurance plan with benefit
        levels substantially equivalent to the December 31, 2010 Premera PPO plan or
        implementing another plan option as agreed upon by the union.

        2] b. Make bargaining unit employees who were on the Premera PPO plan in 2010
        or who documented their desire to switch to the Premera PPO plan in 2011 whole
        by paying these employees the premium savings ( difference in cost of the 2011
        Premera and Group Health plans, minus employee contribution rates as described
        in the   collective   bargaining   agreement),   plus interest, from the time the employer
        terminated the Premera PPO           plan   on   January   1,   2011, until the time that the
        employer either: 1) restores a comparable PPO plan option, 2) reaches a negotiated
        agreement with the union on health benefit plans, or 3) implements health benefits
        as determined by an interest arbitration award.

AR at 1905 -06 ( emphasis omitted).


        Kitsap Transit appealed to the Commission, arguing that the examiner had erred by finding

it had committed the unfair labor practice, by rejecting its excusal defense, and by ordering


                                                         4
No. 45687 -7 -II



monetary       remedies   that amounted to      an    impermissible        windfall     for ATU' s    members.     The


Commission rejected Kitsap Transit' s first two claims and affirmed the examiner' s conclusion that

Kitsap   Transit had     committed unfair     labor   practices.    However, the Commission determined that


compliance with the examiner' s order to reinstate the PPO coverage could prove impossible and


agreed with     Kitsap    Transit that the   examiner' s   monetary       remedies were punitive.        Accordingly,

the Commission adopted the examiner' s findings of fact, conclusions of law, and order, but

modified the remedies section set out above so that


         I.        Paragraph 2 a. is stricken.
         II.       Paragraph 2 b. is modified as follows:
                   b. Make bargaining unit employees who were formerly covered under the
         Premera PPO plan whole for their losses incurred as a result of the employer' s
         unilateral elimination of the Premera PPO plan. The employer shall reimburse the
         employees the difference between what would have been paid under the Premera
         PPO plan less any payments made under the HMO plan for all medical expenses.
         We order the employer to make these reimbursements from the date the employer
         unilaterally     stopped   offering    the    PPO       plan   until   the   parties   negotiate,   and

         implement, a good faith agreement or obtain, and implement, an award from an
         interest arbitrator on health insurance coverage.


AR at 1986.

         ATU petitioned the superior court for review of the Commission' s order, contending that

the Commission erroneously interpreted or applied the law, acted arbitrarily and capriciously, and

made factual findings unsupported by substantial evidence. To remedy these errors, ATU sought

reinstatement of the examiner' s remedial order.


         In conjunction with its appeal of the Commission' s order, ATU moved in the superior

court to supplement the record with additional evidence, either through its admission in superior

court or through a remand to the Commission for further fact finding. ATU' s evidence showed

that, subsequent to the examiner' s decision but before the Commission' s, Cartwright informed it

that he had located a health plan he considered comparable to the lost PPO coverage. After the


Commission' s decision, Kitsap Transit made the coverage available to ATU' s members, with

                                                             5
No. 45687 -7 -II



ATU' s assent. Eventually ATU' s bargaining units ratified new collective bargaining agreements

that allowed ATU' s members to choose the new PPO -like coverage or the HMO coverage. ATU


contended in superior court that this evidence showed the Commission had erred in finding that

it might be impossible for Kitsap Transit to restore the lost PPO coverage or its substantial
equivalent.



       The trial court denied ATU' s motion to . supplement the record and affirmed the


Commission' s order. ATU appealed.


                                              ANALYSIS


       On appeal, ATU     claims   that the   superior   court erred   in ( 1)   denying ATU' s motion to

supplement the record, (2) determining that compliance with an order to restore PPO coverage was

impossible, and ( 3) striking the examiner' s order requiring Kitsap Transit to restore substantially

equivalent PPO coverage and pay affected ATU members damages based on its premium savings.

        We agree that the superior court' s decision not to remand this matter to the Commission

with orders to perform further fact finding was erroneous and that the Commission' s remedies

were an erroneous application of   RCW 41. 56. 160( 2).     Accordingly, we vacate the Commission' s

order and remand this matter back to the Commission for further proceedings consistent with this


opinion.2




2 Our disposition of ATU' s appeal on these grounds makes it unnecessary to reach the remainder
of ATU' s claims.

                                                    6
No. 45687 -7 -II



                                               I. STANDARD OF REVIEW


         We review a trial court' s denial of a motion to supplement the record for an abuse of

discretion. Samson       v.   City   of Bainbridge Island, 149 Wn.             App.   33, 65, 202 P. 3d 334 ( 2009). " A


trial court abuses its discretion if its decision is manifestly unreasonable or exercised on untenable

grounds or    for   untenable reasons."        McCoy        v.   Kent   Nursery,   Inc.,   163 Wn. App. 744, 758, 260

P. 3d 967 ( 2011).


         We review a commission order " under the standards prescribed by the [ Administrative

Procedures Act,      chapter   34. 05 RCW (APA)],"           City of Vancouver v. Pub. Emp' t Relations Comm 'n,

180 Wn. App. 333, 347, 325 P. 3d 213 ( 2014), applying those standards directly to the record before

the agency.    City of Federal Way v. Pub. Emp' t Relations Comm' n, 93 Wn. App. 509, 511, 970.

P. 2d 752 ( 1998).    Under the APA we may grant relief from an agency order for any one of the nine

reasons set out      in RCW 34. 05. 570( 3).         Of these, the one relevant to our disposition of ATU' s


appeal is its claim that the Commission erroneously interpreted or applied the law. As the party

challenging the Commission' s order, ATU bears the " burden of demonstrating [ its] invalidity."

RCW 34. 05. 570( 1)( a).


         We review de novo claims that the Commission erroneously interpreted or applied the law.

City   of Vancouver, 180 Wn.            App.   at   347.    We review the Commission' s interpretation of the


provisions of chapter         41. 56 RCW    under     the   error of     law   standard.    Cobra Roofing Serv., Inc. v.

Dep' t   of Labor & Indus., 122 Wn.            App. 409,         97 P. 3d 17 ( 2004).      Under this standard, we " may

substitute our interpretation of the law for the Commission' s, although we give the Commission' s

interpretation      of chapter   41. 56 RCW         great weight         and   substantial    deference" because of the


expertise   the Commission           has developed administering the            chapter.     City of Vancouver, 180 Wn.

App. at 347.



                                                                  7
No. 45687 -7 -II



                                      II. MOTION TO SUPPLEMENT THE RECORD


         The APA permits supplementation of an administrative record in two ways: through a trial


court' s acceptance of new evidence or a trial court' s order remanding a matter back to the agency

for further fact    finding.     RCW 34. 05. 562( 1), (       2).     ATU contends that the trial court abused its


discretion by denying its motion to supplement the record through either of these means. We agree

as to the second means; the trial court abused its discretion by denying the motion to remand for

further fact finding.

         As relevant, a court may receive new evidence on appeal of an administrative decision

         only if it relates to the validity of the agency action at the time it was taken and is
         needed  to decide disputed issues regarding .. [ m] aterial facts in rule making, brief

         adjudications, or other proceedings not required to be determined on the agency
         record.




RCW 34. 05. 562( 1)(      c).   ATU'    s evidence     did   not    satisfy these   criteria.   The Commission' s order


resulted from a full adjudicatory proceeding, which required a decision based on the record, RCW

34. 05. 476( 3),   see WAC 391 -45 -001, not from the type of proceeding that permits a court to receive

new evidence       during   review of    the agency'    s order.     See RCW 34. 05. 010( 16) ( definition of a rule),


 482 -.491 (   defining   a   brief   adjudication).    Because the superior court could not, under the APA,


receive and consider the evidence, it did not abuse its discretion by declining to do so. We affirm

this portion of the superior court' s order denying ATU' s motion to supplement the record.

         Alternatively, a superior court is authorized to remand a matter back to the agency for

further fact finding and consideration before final disposition of a petition for review if it finds

that


         new evidence has become available that relates to the validity of the agency action
         at the time it was taken, that one or more of the parties did not know and was under
         no duty to discover or could not have reasonably been discovered until after the
         agency     action, and ...       the interests of justice would be served by remand to the
         agency.

                                                               8
No. 45687 -7 -II




RCW 34. 05. 562( 2)( b). • ATU   argues      that its   evidence met    this   criteria.   Kitsap Transit contends

that it did not, because it did not relate to the validity of the Commission' s decision at the time it

was taken and because ATU could reasonably have discovered it before the Commission' s

decision. ATU is correct.


        ATU' s evidence related to the validity of the Commission' s decision at the time it was

taken. The evidence with which ATU sought to supplement the record described Kitsap Transit' s

attempts, during the pendency of its appeal to the full Commission, to locate a substantially

equivalent   PPO   plan   to comply   with   the   examiner' s order.    As ATU argues, the fact that Kitsap

Transit found a health insurance plan meeting the examiner' s specifications, and did so before the

Commission decided Kitsap Transit' s appeal, contradicts the Commission' s conclusion that Kitsap

Transit could not possibly obtain PPO -like coverage.

        ATU' s evidence was also of the type that it was under no duty to discover or present to the

Commission.        The examiner had ordered Kitsap Transit to restore the coverage, and we find

nothing in the record that would have alerted ATU that the Commission would consider striking

that portion of the order on appeal. In fact, Kitsap Transit' s appeal brief raised only three issues:

whether Kitsap Transit committed unfair labor practices, whether business necessities excused the

unfair labor practices, and whether the examiner' s make -whole remedy was punitive. We cannot

say that ATU had a duty to discover and present what would have been irrelevant evidence to the

Commission on appeal.


        For these reasons, we hold that the trial court abused its discretion by denying ATU' s

motion to remand this matter back to the Commission for further fact finding. We therefore reverse

the trial court' s denial of ATU' s motion to supplement the record, and we remand to the


 Commission to reconsider whether Kitsap Transit should be ordered to restore substantially

                                                           9
No. 45687 -741



equivalent PPO coverage, taking into consideration the new evidence offered by ATU, described

above. 3

           We    note   also   that the APA   requires   agencies   to "   include a statement of findings and


conclusions, and the reasons and basis therefor, on all material issues of fact, law, or discretion


presented    on    the record,    including   the remedy."     RCW 34. 05. 461( 3) (   emphasis   added).   The


examiner made no explicit finding or conclusion that ordering the reinstatement of PPO coverage

would be impossible, nor did the Commission. The only mention of impossibility comes, without

explanation, in the body of the Commission' s decision. On remand, if the Commission affirms its

finding that Kitsap Transit could not have restored PPO coverage after engaging in further fact

finding, the Commission must make the findings required by RCW 34. 05. 461( 3) so that we might

understand the basis for its decision in the event of an appeal.


                                   III. THE COMMISSION' S REMEDIAL ORDER


           The Commission affirmed the examiner' s conclusion that Kitsap Transit had committed

unfair labor practices through measures it took that caused ATU' s members to lose their PPO


coverage. In this appeal ATU challenges the remedial measures imposed by the Commission for

those   unfair    labor   practices.   We hold that the Commission' s remedial order was an erroneous


application of governing statutes.


           Where the Commission finds that a party has committed an unfair labor practice, it must

 issue [   an]   appropriate remedial order[]."      RCW 41. 56. 160( 1).        An appropriate remedial order


must require the offending party " to cease and desist from [the] unfair labor practice, and to take




3 On any potential mootness question on remand, see Green River Community College v. Higher
Education Personnel Board, 107 Wn.2d 427, 730 P. 2d 653 ( 1986).

                                                          10
No. 45687 -7 -II



such affirmative action as will effectuate the purposes and policy of" chapter 41. 56 RCW. RCW

41. 56. 160( 2).


          Our review of the remedial measures the Commission selects to effectuate the purposes

and    policy   of chapter   41. 56 RCW is deferential.        The Commission has substantial expertise in

administering labor law,         and   the "`   relation of remedy to policy is peculiarly a matter of

administrative competence. "'          Municipality of Metro. Seattle v. Pub. Env 't Relations. Comm' n,

118 Wn.2d 621, 634, 826 P. 2d 158 ( 1992) ( quoting            State ex rel. Wash. Fed' n ofState Emps. v. Bd.

of Trs., 93 Wn.2d 60, 69, 605 P. 2d 1252 ( 1960)).        Consequently, we may not set aside the remedies

ordered by the Commission because we believe others more appropriately accomplish the purposes

of RCW 41. 56. 160; we may instead do so only where the Commission abuses the discretion

granted to it by the legislature with the remedies it orders. In re Case E -368, 65 Wn.2d 22, 29 -30,

395 P. 2d 503 ( 1964) ( quoting 2 AM. JUR. 2D Administrative Law § 672 ( 1962)).


          Our deference is     not,   however,   unlimited.    The courts, not the Commission, possess the


ultimate    power     to " determine the    purpose    and     meaning   of   statutes,"   Overton v. Economic


Assistance      Authority,   96 Wn.2d 552, 555, 637 P. 2d 652 ( 1981), and thus the power to determine


the bounds of the discretion granted to the Commission with the enactment of RCW 41. 56. 160.

See Sure -Tan, Inc. v. Nat' l Labor Relations Bd., 467 U.S. 883, 900, 104 S. Ct. 2803, 81 L. Ed. 2d

                4
732 ( 1984).        Accordingly, while we owe deference to the means the Commission employs to




4 Sure -Tan involved judicial interpretation of the appropriate remedies for a violation of the
National Labor Relations Act (NLRA).              Federal precedent interpreting the NLRA is persuasive
precedent for our court' s interpretation of similar provisions of chapter 41. 56 RCW. State ex rel.
Wash. Fed' n. of State Emps., AFL -CIO v. Bd. of Trs. of Cent. Wash. Univ., 93 Wn.2d 60, 67 -68,
605 P. 2d 1252 ( 1980). The remedial provisions of chapter 41. 56 RCW and the NLRA are
largely similar, with the notable exception that RCW 41. 56. 160( 2) specifically empowers the
Commission to        order   monetary damages. Compare RCW 41. 56. 160             with    29 U. S. C. § 160( a),
 c).


                                                         11.
No. 45687 -7 -II



accomplish its statutory duties, we owe no deference in determining whether the Commission' s

remedial choices accomplish the ends the legislature required the Commission' s remedial powers


to serve.



         We have already identified those ends. Orders issued under RCW 41. 56. 160 are intended

to " restore the situation, as nearly as possible, to that which would have occurred but for the [ unfair

labor   practice]"    and must " restrain ...   and remove or avoid the consequences of [an unfair labor


practice]."   Municipality ofMetro. Seattle v. Pub. Emp. Relations Comm 'n, 60 Wn. App. 232, 240,

803 P. 2d 41 ( 1991),     reversed on other grounds,    118 Wn.2d 621, 826 P. 2d 158 ( 1992). Persuasive


precedent accords with this interpretation. In Sure -Tan Inc. the court held that the NLRA requires

the NLRB to          attempt "   restore the situation ` as nearly as possible, to that which would have

obtained    but for the '    unfair labor practice and that any remedy must " be tailored to the unfair

labor   practice   it is intended to   redress."   467 U.S. at 900 ( quoting Phelps Dodge Corp. v. Nat' l

Labor Relations Bd., 313 U. S. 177, 194, 61 S. Ct. 845, 85 L. Ed. 1271 ( 1941)).              Similarly, the

Commission has held that             under   RCW 41. 56. 160 the "   standard   remedy" for an unfair labor


practice " includes ordering the offending party to cease and desist and, if necessary, to restore the

status quo; [   and to] make employees whole" for injuries caused by the unfair labor practice. Wash.

Fed' n ofState Emps. v. Univ. of Wash., No. 24344 -U -11 -6238, 2013 WL 3322566, at * 6 ( Wash.

Pub. Emp' t Relations Comm' n June 24, 2013).

          The examiner, in keeping with this precedent, ordered Kitsap Transit to make ATU' s

affected employees whole by paying them the premium savings Kitsap Transit realized by

switching     employees       from the lost PPO       coverage   to the remaining     HMO    coverage,   with




adjustments.         The Commission struck this aspect of the order after accepting Kitsap Transit' s

argument that the examiner' s formula created a windfall for ATU' s affected workers, making the



                                                         12
No. 45687 -7 -II



award punitive and beyond the Commission' s power to order. Deming Hosp. Corp. v. Nat '1 Labor

Relations Bd. (N.L.R. B.)., 665 F. 3d 196, 201 ( D. C. Cir 2011) (                    windfall   awards   are punitive);




Burlington Police Emps. Guild v. City ofBurlington, No. 12587 -U -96 -2995, 1997 WL 394806 at

 5 ( Wash. Pub.      Emp' t     Relations Comm'          n   1997) ( RCW 41. 56. 160 does not authorize punitive


damage   awards).     In its place, the Commission ordered the County to reimburse the employees the

difference between what would have been paid under the Premera PPO plan and any payments

made under the HMO plan for all actual medical expenses. While agreeing that the remedial nature

of RCW 41. 56. 160 does not authorize punitive damages, we conclude that the examiner' s remedy

did not award ATU' s members a windfall, and therefore was not punitive, for two reasons.


         First, under the collective bargaining agreements, ATU' s members provided labor for

Kitsap Transit in return for compensation. Some of this compensation came in the form of health

insurance premium payments. For this reason, both judicial and commission precedent treat those


premium payments as wages.               Moore     v.   Health Care Auth., 181 Wn.2d 299, 311 - 12, 332 P. 3d 461


 2014) ( citing Cockle         v.   Dep' t   of Labor & Indus., 142 Wn.2d 801, 16 P. 3d 583 ( 2001));              Yakima


County   Law Enforcement Guild, 2006 WL 1547092                       at *   1.   Kitsap Transit wrongfully withheld

those   wages     with   its   unfair   labor    practice.    The record here documents both the number and


identities of the ATU members affected by the loss of PPO coverage and the substitution of HMO

coverage and       the difference in          premium payments       between the PPO       and   HMO      plans.   As the


examiner recognized, given this data it is possible to calculate with mathematical precision the


wage losses inflicted on ATU' s members by Kitsap Transit' s unfair labor practice. The examiner' s

order properly compensated ATU' s affected members for their actual losses and did not award a

windfall;   it   was not punitive.           See Moore, 181 Wn.2d at 314 ( where monetary damages provide

appropriate compensation they are, by definition, remedial and not punitive).



                                                                13
No. 45687 -7 -II



         Second, apart from wage considerations, the record contains evidence that Kitsap Transit' s

unfair labor practice caused damage to ATU' s affected members or their families. Kitsap Transit

did not cross -appeal the examiner' s finding of fact 32, which the Commission adopted, making it

a   verity    on appeal.   City   of Vancouver, 180 Wn.       App.   at   347.   In it, the Commission found that


Kitsap   Transit'     s unfair   labor   practice   forced ATU' s   members      to "   chang[ e] doctors and service

providers" to the more limited set of health care providers covered by the HMO plan. AR at 1903.

This " disrupted      some patients[']     care and caused delays in office visits, surgeries, and procedures,"


as well as " caused at      least   one employee' s college age child       to lose     access   to   care."   AR at 1903.


By its nature alone, the forced change of doctors and other providers may easily disrupt or diminish

an individual' s care. These types of injuries are compensable using damages calculated based on

the wrongfully        withheld premium payments.          Indeed, our Supreme Court has recently stated that

doing so is the method most likely to avoid a windfall to either party. Moore, 181 Wn.2d at 309-

14.


             Nevertheless, Kitsap Transit contends that we should affirm the Commission' s order for

four reasons. We find each unpersuasive.


             1.   The Order Did Not Discharge the Commission' s Statutory Duty

             Kitsap Transit contends that our deferential review of the Commission' s remedial choices

requires that we affirm its order. As we have noted, we owe deference to the Commission' s choice


of remedies, but it is for us to determine what is necessary for the Commission to discharge its

statutory obligation to issue an appropriate remedial order. The Commission' s choice of remedy

here fails to discharge that statutory duty in two ways.

             First, the Commission' s order does little to put ATU' s affected members in the position


they    occupied       before Premera'      s   PPO    coverage   ended.     At best, the Commission' s order




                                                            14
No. 45687 -7 -I1



compensates ATU' s members for their out -of-pocket expenses arising from the unfair labor

practice.      ATU' s members, however, lost access to doctors they had formed relationships with,

faced the disruptions and attendant delays associated with finding new doctors and, in some cases,

lost   access   to health    care.   They   also, as noted above,   essentially lost   wages.   The Commission' s


order is not at all " tailored" to these aspects of the unfair labor practice and leaves ATU' s members


in a worse position than they would have been in had Kitsap Transit not committed the unfair labor

practice. Sure -Tan, 467 U. S. at 900.


             Second, the Commission' s order rewards Kitsap Transit for its unfair labor practices.

Kitsap Transit has reaped several hundred thousand dollars in gains because of its unfair labor
practice.      See AR   at   439 ( Premera'    s cost savings per employee who         lost PPO   coverage),   1241-


1337 ( 2011 health      care coverage selection       survey for ATU      members).      As ATU notes, requiring

Kitsap Transit to pay restitution to those from whom it reaped these gains is necessary to restore

the situation, as nearly as possible, to that which would have existed without the unfair labor

practice.      Failing to do so only creates an incentive to violations by allowing the wrongdoer to

benefit from its wrong, a result condemned by Moore, 181 Wn.2d at 314.

             2. ATU' s Members Were Harmed By the Loss of the PPO Plan

             Next, Kitsap Transit argues that, because it paid insurance premiums to insurance providers

rather than ATU' s members, the members never received those payments and therefore suffered


no loss based on the improperly withheld premiums, making anything other than the Commission' s

order inappropriate. We disagree. As noted above, Kitsap Transit essentially withheld wages from

ATU'     s members.      The fact that Kitsap Transit did not make the premium payments directly to

ATU'     s   members    is immaterial.        Kitsap Transit made the payments for the benefit of ATU' s

members, and they enjoyed the fruits of these premium payments as compensation for their labor.


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The '      most       elementary   conceptions of justice and public       policy '   require that Kitsap Transit make

ATU' s members whole for the loss as best as possible; here, that requires damages payments based

on   the   premium        differentials. Moore, 181 Wn.2d           at   314 ( quoting Wenzler &   Ward Plumbing &

Heating Co. v. Sellen, 53 Wn.2d 96, 99, 330 P. 3d 1068 ( 1958)).

            3.        Commission Precedent Does Not Foreclose a Remedy Based On Kitsap Transit' s
Premium Savings


            Kitsap Transit argues that commission precedent forecloses the damages ATU seeks,

payment based on the cost savings of its unfair labor practice, citing Public School Employees of

North Franklin / PSE v. North Franklin School District, No. 8854 -U -90 -1941, 1992 WL 753248


 Wash. Pub.            Emp' t   Relations Comm'   n   1992).   In that case the Commission' s examiner, although


noting that commission precedent forbade an employer from profiting from an unfair labor

practice, refused to order the school district to pay restitution to employees based on the savings

                      the unlawful labor                N. Franklin Sch. Dist., 1992 WL 753248            at *   9.   The
realized         by                         practice.




examiner based this decision on two factors. First, the school principal testified that it had saved


no money due to the unfair labor practice. N. Franklin Sch. Dist., 1992 WL 753248 at * 9. Second,

the union failed to show that any of its members lost work, and therefore wages, because of the

unfair     labor      practice.   N. Franklin Sch. Dist., 1992 WL 753248 at * 9.


            For a number of reasons, North Franklin School District speaks with a faint voice in this

appeal. First, the decision does not stand for the proposition that the Commission may never order

damages based on cost savings and, given judicial interpretations of RCW 41. 56. 160, it could not.


If unwinding the effects of an unfair labor practice requires the payment of damages based on cost

savings, the Commission must order those payments unless compliance would prove impossible.

Second, neither of the two factors that caused the examiner to decline to order payment of damages

in North Franklin School District is              present   here.    A reasonable inference from the testimony at


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the hearing is that Kitsap Transit saved considerable money from the demise of PPO coverage for

ATU' s    members.            At the very least, Kitsap Transit offered no testimony that it had not saved

money. Further, the record definitively establishes the ATU members who lost insurance and the

value   of     that   loss,    adjusted   for   mitigation.    Under Moore, the difference between premium


payments does reflect a careful and technical analysis of what ATU' s members lost in terms of

compensation due to the unfair labor practice. Moore, 181 Wn.2d at 312, 314.


          4.      NLRB Precedent Does Not Foreclose a Remedy Based on Kitsap Transit' s Premium
Savings


          Finally, Kitsap Transit contends that persuasive NLRB precedent precludes payment of

damages based          on premium savings,          citing Keystone Steel &     Wire v. National Labor Relations


Board ( NLRB), 606 F. 2d 171 ( 7th Cir. 1979).                   In that case, the Seventh Circuit found that the


NLRB' s original remedy for lost health insurance coverage was too onerous and remanded for the

NLRB to           adopt an " appropriate and more        limited remedy."     Keystone Steel &   Wire, 606 F. 2d at


180.    Kitsap Transit notes that the NLRB did not, either in its original opinion or on remand,

require   the      payment of     damages based      on premium savings.     See Keystone Steel & Wire, 606 F. 2d


at   180; Nat' l Labor Relations Bd. (NLRB)             v.   Keystone Steel & Wire, 653 F. 2d 304, 308 -09 ( 1981).


          We find Keystone Steel & Wire inapposite for two reasons. First, there is no evidence that


the   union       in Keystone Steel &      Wire sought damages based on premium savings or that either the


NLRB         or   the Seventh Circuit       considered   the issue.     The case therefore is not precedential as


concerns the Commission' s ability to order damages based on premium savings. Cont' l Mut. Say.

Bank    v.   Elliot, 166 Wash. 283, 300, 6 P. 2d 638 ( 1932).              Second, RCW 41. 56. 160( 2) is broader


than 29 U. S. C. section 160 in that it specifically authorizes the payment of monetary damages.

Given the broader authority to remedy unfair labor practices granted by our legislature, we do not



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find Keystone Steel &         Wire persuasive in Kitsap Transit' s attempts to limit the Commission' s

remedial powers.



          This   analysis, although   involved,      ineluctably   leads to   one conclusion:   the Commission' s


remedial order fails the requirement of RCW 41. 56. 160, established through the case law, to


restore the situation, as nearly as possible, to that which would have occurred but for the unfair

labor practice. With that, we must determine the proper remedy for that error. ATU asks us simply

to   reinstate   the   remedies ordered   by   the   examiner.     At oral argument, Kitsap Transit contended

that a remand for further proceedings would be more appropriate. We agree with Kitsap Transit.

          As we have noted, the Commission has substantial expertise in labor law developed


through administering chapter 41. 56 RCW. With that expertise, in our system of separated powers,

the Commission          has the primary responsibility for crafting       remedies.   We may, as we have done

here, invalidate those remedies, but it is for the Commission to propose them in the first place.

Given the logic of our holding here today, the examiner' s remedy is certainly a permissible one.

But the Commission may determine that there are others consistent with this opinion that vindicate

the   purposes and policies of chapter         41. 56 RCW.       We remand to the Commission so that it may

make that determination.


                                                     CONCLUSION


          We hold that the superior court abused its discretion when it denied ATU' s motion to

remand     the    matter   back to the Commission for further fact              finding.   We hold also that the


Commission erroneously interpreted and applied the provisions of chapter 41. 56 RCW when it

declined to order Kitsap Transit to make ATU' s members whole for the damages inflicted by its

unfair labor practices and that the superior court therefore erred in upholding that commission




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action. Consequently, we reverse the superior court' s decision upholding the Commission' s order

and remand this matter to the Commission for further proceedings consistent with this opinion.




                                                                     A.c.I
 We concur:




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