MAINE SUPREME JUDICIAL COURT                                         Reporter of Decisions
Decision: 2013 ME 63
Docket:   Ken-12-524
Argued:   May 14, 2013
Decided:  July 2, 2013

Panel:       SAUFLEY, C.J., and ALEXANDER, LEVY, SILVER, MEAD, GORMAN, and JABAR,
             JJ.


                               CITY OF AUGUSTA

                                          v.

                    MAINE LABOR RELATIONS BOARD et al.

SAUFLEY, C.J.

         [¶1] We are asked in this appeal to review the Maine Labor Relations

Board’s determination that certain employee retirement benefits are part of the

static status quo that must be maintained when negotiations are underway after the

expiration of a collective bargaining agreement between a public employer and its

employees. The Board determined that Augusta firefighters who retired after the

expiration of the collective bargaining agreement between the City of Augusta and

the firefighters union, Local 1650, IAFF, AFL-CIO-CLC, but were otherwise

qualified to receive retiree health insurance benefits, were entitled to retiree health

insurance benefits under the expired agreement’s terms in order to preserve the

static status quo when no arbitration was underway.

         [¶2] The City now appeals from a judgment entered in the Superior Court

(Kennebec County, Murphy, J.) affirming that determination.            Amicus curiae
2

Maine Municipal Association challenges the Board’s jurisdiction to make a

determination regarding the static status quo. We affirm the judgment.

                                I. BACKGROUND

      [¶3] In January 2010, the City of Augusta and the firefighters’ union entered

into a six-month collective bargaining agreement that expired on June 30, 2010.

As part of the collective bargaining agreement, the City agreed to cover certain

retiree health insurance benefits. At issue here is the following provision:

      Employees hired before March 1, 1991 – When a firefighter retires
      with a minimum of twenty (20) years of creditable service with the
      City of Augusta, Fire Department, and in good standing, the City will
      pay 100% of employee hospital insurance benefits until such time as
      eligible for Medicare coverage. Dependent coverage may be picked
      up at group rate at employee’s full cost.

      Employees hired by the Fire Department between March 1, 1991 and
      December 31, 2005 – When a firefighter retires with a minimum of
      twenty-five (25) years of creditable service with the City of Augusta,
      Fire Department, and in good standing, the City will pay 100% of
      employee hospital insurance benefits until such time as eligible for
      Medicare coverage. Dependent coverage may be picked up at group
      rate at employee’s full cost.

      Employees hired by the Fire Department on or after January 1, 2006
      are not eligible for any city contribution toward retiree health
      insurance.

      Employees hired by the Fire Department on or before December 31,
      2005: After such time the employee is accepted for Medicare
      coverage, the City will pay 100% of the reduced premium for the
      employee only. Dependent coverage may be picked up at group rate
      at employee’s full cost.
                                                                                  3

      [¶4]    When the six-month contract expired on June 30, 2010, no new

contract had yet been agreed upon, and the parties continued to negotiate. For

eligible employees retiring after June 30, 2010, the City declined to honor the

retiree health insurance provisions because the contract had expired.

      [¶5]    On September 1, 2010, the firefighters’ union filed a prohibited

practice complaint with the Maine Labor Relations Board alleging that the City of

Augusta violated its obligation “[t]o confer and negotiate in good faith.”

26 M.R.S. § 965(1)(C) (2012); see also 26 M.R.S. § 964(1)(E) (2012) (prohibiting

public employers from “[r]efusing to bargain collectively with the bargaining agent

of its employees as required by section 965”). According to the complaint, the

City implemented its understanding of a static status quo instead of complying

with an “evergreen clause” contained in separately executed ground rules for

negotiations that called for the existing agreement to remain “in full force and

effect” until the negotiation of a successor agreement.

      [¶6] After the City filed its response and the parties presented evidence at a

May 2011 hearing, the Board accepted post-hearing briefs on the issue of the static

status quo.   The Board entered an interim order in August 2011 in which it

requested additional briefing regarding the nature of the status quo that must be

maintained when a collective bargaining agreement has expired.          The Board

reasoned that it was “incumbent upon the Board to resolve” the enforceability,
4

during continuing negotiations, of the retiree health insurance provision of the

agreement, which required that 100% of health insurance costs be paid by the City

for certain retirees.

        [¶7] After the parties submitted their additional briefs, the Board entered

two decisions. In one, the Board dismissed the prohibited practice complaint that

alleged a violation of the evergreen clause because, although the ground rules

containing that clause had been agreed to by the City’s negotiator, the City had not

ratified those ground rules.            The Board also determined that the statutorily

mandated “static status quo” controlled the City’s actions.                       See     26 M.R.S.

§§ 964-A(2), 965 (2012); Bd. of Trustees of the Univ. of Me. Sys. v. Assoc’d COLT

Staff of the Univ. of Me. Sys. (COLT), 659 A.2d 842, 845-46 (Me. 1995); Mtn.

Valley Educ. Ass’n v. Me. Sch. Admin. Dist. No. 43, 655 A.2d 348, 351-52 (Me.

1995); Lane v. Bd. of Dirs. of Me. Sch. Admin. Dist. No. 8, 447 A.2d 806, 809-10

(Me. 1982).1 In a second, separate decision, the Board determined that the status

quo to be maintained following expiration of the collective bargaining agreement

included 100% payment of the firefighter retirees’ health insurance for those

firefighters who qualified pursuant to the plain terms of the collective bargaining



    1
      The term “static status quo” appears only in section 964-A, based on a 2005 amendment. P.L. 2005,
ch. 324 (effective Sept. 17, 2005). Section 965 was not simultaneously amended, and language
addressing the “static status quo” was never added to that provision. Accordingly, we look to applicable
case law that preceded the statutory inclusion of the term.
                                                                                                         5

agreement, even if those firefighters retired after the expiration of the collective

bargaining agreement.

           [¶8] The City petitioned for review of the Board’s decision regarding the

retiree health insurance benefits in the Superior Court. See 26 M.R.S. § 968(5)(F)

(2012);2 M.R. Civ. P. 80C. The court affirmed the Board’s determination, and the

City appealed to us. See 26 M.R.S. § 968(5)(F);3 M.R. Civ. P. 80C(m); M.R.

App. P. 2.

                                            II. DISCUSSION

A.         Board Jurisdiction

           [¶9] Initially, we address the challenge to the Board’s jurisdiction.4 The

Maine Municipal Association argues that the Board lacks jurisdiction to resolve a

grievance involving a static status quo issue unless and until an arbitration of the

grievance has begun. MMA’s argument is that the Board acted ultra vires because

“the action itself is beyond the jurisdiction or authority of the administrative body

to act.” Sold, Inc. v. Town of Gorham, 2005 ME 24, ¶ 12, 868 A.2d 172.


     2
     Although this paragraph was amended after the City petitioned for review, see P.L. 2011, ch. 559,
§ A-26 (effective Aug. 30, 2012), the amendment did not alter the right to petition in any way of
consequence to this appeal, and we cite to the current statute.
     3
         Neither party requested an expedited process.
     4
      The jurisdictional issue was raised by the amicus curiae. Because the question relates to the Board’s
jurisdiction and authority to act, we address the question despite a lack of full briefing by the parties
themselves. See Sold, Inc. v. Town of Gorham, 2005 ME 24, ¶ 12, 868 A.2d 172; D’Amato v. S.D.
Warren Co., 2003 ME 116, ¶ 19 n.5, 832 A.2d 794; see also M.R. App. P. 4(d).
6

      [¶10] Specifically, MMA contends that the Board is authorized to consider

static status quo issues only pursuant to the statute entitled, “Continuation of

grievance arbitration provisions”:

      If a contract between a public employer and a bargaining agent signed
      after October 1, 2005 expires prior to the parties’ agreement on a new
      contract, the grievance arbitration provisions of the expired contract
      remain in effect until the parties execute a new contract. In any
      arbitration that is conducted pursuant to this subsection, an arbitrator
      shall apply only those provisions enforceable by virtue of the static
      status quo doctrine and may not add to, restrict or modify the
      applicable static status quo following the expiration of the contract
      unless the parties have otherwise agreed in the collective bargaining
      agreement. All such grievances that are appealed to arbitration are
      subject exclusively to the grievance and arbitration process contained
      in the expired agreement, and the board does not have jurisdiction
      over such grievances. The arbitrator’s determination is subject to
      appeal, pursuant to the Uniform Arbitration Act. Disputes over which
      provisions in an expired contract are enforceable by virtue of the
      static status quo doctrine first must be resolved by the board, subject
      to appeal pursuant to applicable law. The grievance arbitration is
      stayed pending resolution of this issue by the board. The board may
      adopt rules as necessary to establish a procedure to implement the
      intent of this section. Rules adopted pursuant to this subsection are
      routine technical rules as defined in Title 5, chapter 375, subchapter
      2-A. Nothing in this subsection expands, limits or modifies the scope
      of any grievance arbitration provisions, including procedural
      requirements.

26 M.R.S. § 964-A(2) (emphasis added). According to MMA, when no arbitration

grievance has been brought, the Board lacks the authority to “first” resolve

“[d]isputes over which provisions in an expired contract are enforceable by virtue

of the static status quo doctrine.” Id.
                                                                                  7

      [¶11] MMA’s argument overlooks the language of the statute that brought

this issue before the Board: 26 M.R.S. § 968(5)(A) (2012), which empowers the

Board “to prevent . . . any public employer . . . from engaging in any of the

prohibited acts enumerated in section 964.”      Section 968 authorizes a public

employee organization or bargaining agent such as the union in this matter to file a

complaint alleging a prohibited practice. 26 M.R.S. § 968(5)(B) (2012). After

hearing and argument, if the Board finds by a preponderance of the evidence that

“any party named in the complaint has engaged in or is engaging in any such

prohibited practice,” the Board may enter an order requiring that party to “cease

and desist from such prohibited practice.” 26 M.R.S. § 968(5)(C) (2012).

      [¶12]   Here, when the Board became aware of the issue regarding the

continuity of retiree health insurance benefits during the course of a prohibited

practice complaint, it ordered briefing and argument on the issue, and it entered a

decision on the matter. Given the broad language of section 968(5)(A) and (B), the

Board acted within its jurisdiction and authority in addressing the reach of the

static status quo as a part of the prohibited practice proceeding before it. See

COLT, 659 A.2d at 845-46 (interpreting a comparable statute governing labor

relations in the University of Maine System to require a static status quo

enforceable by the Board). The Board is the proper entity to rule on questions
8

about whether a particular provision in an expired collective bargaining agreement

remains in force due to the static status quo doctrine.5

B.       Retiree Health Insurance Benefits

         [¶13] The City argues that maintaining the static status quo in this situation

means that the City need not provide health insurance coverage to any employee

who retired after the expiration of the collective bargaining agreement. According

to the City, qualified employees had the right to elect to retire during the term of

the agreement if they wished to receive the retiree health insurance benefit.

         1.      Standards of Review

         [¶14]     In an appeal from a Superior Court judgment entered upon

intermediate appellate review of a Board decision, we “review the Board’s

decision directly for error of law, abuse of discretion, or clear error.” COLT, 659

A.2d at 844 (citation omitted). In that review, we will “defer to the agency’s

interpretation and application of the statute” when the administration of that statute

has been entrusted to the agency by the Legislature. AFSCME Council 93 v. Me.

Labor Rels. Bd., 678 A.2d 591, 593 (Me. 1996).




     5
     See also Comm. Amend. A to L.D. 1123, No. H-492, Summary (122d Legis. 2005) (stating, in
adopting the current version of 26 M.R.S. § 964-A, the intention to “give[] the Maine Labor Relations
Board authority over disputes concerning the application of the static status quo doctrine, as well as
rulemaking authority to implement the amendment’s purposes”).
                                                                                  9

      2.    “Static Status Quo” and the Prohibition of Unilateral Changes to
            Collective Bargaining Agreements

      [¶15] In Maine, as part of the statutory duty to bargain collectively in good

faith, a public employer and the employees’ representative may not make unilateral

changes to certain contractual provisions during post-contract negotiation while

bargaining is underway and before impasse is reached. Mtn. Valley Educ. Ass’n,

655 A.2d at 351-52; Lane, 447 A.2d at 809-10; see 26 M.R.S. § 965 (describing

municipal public employers’ and employee bargaining agents’ obligation to

bargain collectively); see also 26 M.R.S. § 964(1)(E), (2)(B) (2012) (prohibiting

municipal public employers and employee bargaining agents from refusing to

bargain collectively as required by section 965); Allied Chem. & Alkali Workers of

Am. v. Pittsburgh Plate Glass Co., 404 U.S. 157, 180 (1971) (“[T]he future

retirement benefits of active workers are part and parcel of their overall

compensation and hence a well-established statutory subject of bargaining.”).

      [¶16] To prevent unilateral changes from being made, when a collective

bargaining agreement has expired and the negotiation of a new contract is

underway, “[t]he parties are required to maintain the status quo while bargaining.”

Mtn. Valley Educ. Ass’n, 655 A.2d at 352. This status quo must be maintained

until a new agreement is ratified or the parties reach a bona fide impasse. See id.;
10

Teamsters Union Local #340 v. Portland Water Dist., 651 A.2d 339, 342 (Me.

1994).6

           [¶17] In interpreting the meaning and reach of the “status quo” in 1995, we

held that the Maine Labor Relations Act required the University of Maine to

maintain a “static status quo,” not a “dynamic status quo,” when the parties were

negotiating a collective bargaining agreement after the existing agreement had

expired. COLT, 659 A.2d at 845-46. The “dynamic status quo” advocated by the

clerical, office, laboratory, and technical staff of the University would have

required the University to continue paying annual step increases on the terms set

forth in the expired agreement.                   See id. at 843 & n.1, 845.   We held that

implementing such a dynamic status quo was contrary to the legislative intent

expressed in the plain language and history of the labor statutes, and would

obligate public employers to pay substantial wage increases that were not

approved by their governing bodies. Id. at 846. In short, we held that step

increases would “change[], rather than maintain[], the status quo,” which would

undermine the legislative purpose to “protect municipal and state agency budgets

from increases in wages imposed without agreement by the governing body.” Id.

at 845-46; see also AFSCME Council 93 v. State of Maine, Dep’t of Admin. & Fin.



     6
         There is no assertion that impasse was reached in this matter.
                                                                                11

Servs., M.L.R.B. Nos. 03-13 & 04-03 at 22 (Apr. 21, 2004) (following the holding

of COLT).

      [¶18]   Following our ruling in COLT, the Legislature incorporated the

concept of the “static status quo” into the municipal employee collective

bargaining statutes. See 26 M.R.S. § 964-A(2). In applying the holding of COLT,

the Board has held that, if a collective bargaining agreement requires the employer

to pay a certain percentage of the annual cost of a health insurance premium, the

employer continues to be responsible for paying that percentage if the costs

increase during negotiations following the expiration of the agreement. See Me.

State Employees Ass’n v. Lewiston Sch. Dep’t, M.L.R.B. No. 09-05 at 3, 11-12

(Jan. 15, 2009). The static status quo is also maintained, as the Board held before

our decision in COLT, when a government employer continues to pay the specific

dollar amount for active employees’ health insurance set forth in an expired

collective bargaining agreement that defines the benefit in specific dollar amounts

rather than a percentage. See Teamsters Union Local 340 v. City of Augusta,

M.L.R.B. No. 93-28 at 24-26 (Jan. 13, 1994).

      [¶19]    Here, the health insurance premium contribution for retired

employees was set at 100% by the contract. That retiree benefit, established by the

collective bargaining agreement as a future benefit for current employees, cannot

be reduced by the City, here to 0%, without constituting a unilateral modification.
12

In other words, to preserve the status quo, an employee whose status changed from

active to retired would be entitled to receive benefits in place for retirees as set

forth in the expired agreement. Cf. Appeal of Town of Rye, 666 A.2d 948, 950,

952-53 (N.H. 1995) (holding that, unlike step-increase provisions, a provision for

the buyback of accumulated sick leave upon leaving employment must be

maintained during the status quo period); Appeal of Alton Sch. Dist., 666 A.2d 937,

942 (N.H. 1995) (holding that, to maintain the status quo, pay increases based on

increased education, unlike step increases, must continue).

         [¶20] If the parties had negotiated an agreement that explicitly restricted the

payment of retiree health insurance benefits to the term of the agreement, the

City’s argument would have traction. Similarly, if the contract required the City to

pay an amount certain, rather than 100%, the City’s expenses would not increase

with rising insurance costs. Because of the broad language of the agreement here,

however, and given our deference to the Board in the construction of a statute

entrusted to it by the Legislature, see AFSCME Council 93, 678 A.2d at 593, the

Board did not err in concluding that the City must continue to pay the identified

class of retirees 100% of retiree health insurance benefits during negotiations in

order to maintain the static status quo.7

     7
      The City urges us to analogize the present case to Winnett v. Caterpillar, Inc., 553 F.3d 1000,
1008-11 (6th Cir. 2009), in which the United States Court of Appeals for the Sixth Circuit held that
retiree medical benefits had not “vested” during the term of the collective bargaining agreement for those
                                                                                                       13

        The entry is:

                           Judgment affirmed.

___________________________

On the briefs:

        Stephen E. F. Langsdorf, Esq., and Jonathan G. Mermin, Esq., Preti
        Flaherty, LLP, Augusta, for appellant City of Augusta

        Lisa Copenhaver, Esq., Maine Labor Relations Board, Augusta, for appellee
        Maine Labor Relations Board

        Douglas L. Steele, Esq., Woodley & McGillivary, Washington,
        DC, and Howard T. Reben, Esq., Reben Benjamin & March, Portland, for
        appellee IAFF Local 1650

        Susanne F. Pilgrim, Esq., Maine Municipal Association, Augusta, for
        amicus curiae Maine Municipal Association

At oral argument:

        Stephen E. F. Langsdorf, Esq., for appellant City of Augusta

        Lisa Copenhaver, Esq., for appellee Maine Labor Relations Board

        Douglas L. Steele, Esq., for appellee, IAFF local 1650

Kennebec County Superior Court docket number AP-11-64
FOR CLERK REFERENCE ONLY



private employees who had not retired before the agreement expired. For several reasons, this case is
inapposite. The employer in Winnett was a private employer, not a public employer, so its employees
could—and did—strike, and the employer could—and did—implement its last best offer upon that strike.
Id. at 1003. The court was therefore determining not whether the expired agreement’s terms persisted to
maintain a static status quo but instead whether, under federal labor law, the employee’s retiree benefits
had “vested” as soon as he became eligible to retire. Cf. Appeal of Town of Rye, 666 A.2d 948, 950, 953
(N.H. 1995) (holding that an accumulated sick leave buyback provision, applicable when police officers
left the town police department, “vested when the CBA was in effect and must be maintained, without
change in substance or effect, during the status quo period”).
