                                  Illinois Official Reports

                                          Appellate Court



     Community Unit School District No. 5 v. Illinois Educational Labor Relations Board,
                               2014 IL App (4th) 130294




Appellate Court              COMMUNITY UNIT SCHOOL DISTRICT NO. 5, McLEAN AND
Caption                      WOODFORD COUNTIES, ILLINOIS, Described in the
                             Administrative Proceedings as McLean County Unit School District
                             No. 5, a/k/a Board of Education of McLean County Unit District
                             No. 5, Petitioner, v. THE ILLINOIS EDUCATIONAL LABOR
                             RELATIONS BOARD; and THE AMERICAN FEDERATION OF
                             STATE, COUNTY, AND MUNICIPAL EMPLOYEES (AFSCME),
                             COUNCIL 31, Respondents.


District & No.               Fourth District
                             Docket No. 4-13-0294


Filed                        June 5, 2014
Rehearing denied             July 14, 2014


Held                         The finding of the Illinois Educational Labor Relations Board that
(Note: This syllabus         petitioner school district’s decision to outsource its arrangements for
constitutes no part of the   student transportation services involved unfair labor practices against
opinion of the court but     the union representing the bus drivers and monitors employed by the
has been prepared by the     district at the time the decision was made was reversed by the
Reporter of Decisions        appellate court on the ground that the decision was clearly erroneous,
for the convenience of       since the termination of the district’s bus drivers and monitors was the
the reader.)                 result of bona fide and legitimate reasons, not antiunion animus, the
                             district bargained in good faith with the union and there were no
                             violations of the Illinois Educational Labor Relations Act.

Decision Under               Petition for review of order of Illinois Educational Labor Relations
Review                       Board, No. 12-CA-43-S.

Judgment                     Reversed.
     Counsel on              Robert B. McCoy, Patrick A. Murphey, and Dennis Triggs (argued),
     Appeal                  all of Miller, Hall & Triggs, LLC, of Peoria, for petitioner.

                             Gail E. Mrozowski (argued), of Cornfield & Feldman, of Chicago, for
                             respondent American Federation of State, County, and Municipal
                             Employees.

                             Lisa Madigan, Attorney General, of Chicago (Michael A. Scodro,
                             Solicitor General, and Sharon A. Purcell (argued), Assistant Attorney
                             General, of counsel), for respondent Illinois Educational Labor
                             Relations Board.

                             Stanley B. Eisenhammer and John L. DiJohn, both of Hodges, Loizzi,
                             Eisenhammer, Rodick & Kohn LLP, of Arlington Heights, for amicus
                             curiae Illinois Association of School Boards.




     Panel                   JUSTICE TURNER delivered the judgment of the court, with opinion.
                             Justices Harris and Holder White concurred in the judgment and
                             opinion.




                                              OPINION

¶1         In April 2013, respondent, the Illinois Educational Labor Relations Board (IELRB), found
       petitioner, Community Unit School District No. 5, McLean and Woodford Counties, Illinois
       (District), engaged in unfair labor practices against respondent, the American Federation of
       State, County and Municipal Employees, Council 31 (AFSCME), with respect to its decision
       to contract with First Student, Inc. (First Student), for student transportation services.
       American Federation of State, County, & Municipal Employees, Council 31, 29 PERI ¶ 174
       (IELRB 2013) (hereinafter, McLean County, 29 PERI ¶ 174).
¶2         On direct administrative review of the IELRB’s order, the District argues (1) the IELRB
       had no jurisdiction over the parties, (2) the charges against it were preempted by the School
       Code (105 ILCS 5/1-1 et seq. (West 2010)), (3) the IELRB applied an incorrect standard of law
       in finding the District committed unfair labor practices, (4) the IELRB’s findings were
       erroneous, and (5) the IELRB’s remedy violated state and federal law. We reverse the
       IELRB’s decision.

¶3                                        I. BACKGROUND
¶4         On May 22, 2012, AFSCME filed an unfair-labor-practice charge with the IELRB against
       the District, alleging it violated sections 14(a)(1), 14(a)(3), and 14(a)(5) of the Illinois

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       Educational Labor Relations Act (Act) (115 ILCS 5/14(a)(1), (a)(3), (a)(5) (West 2010)).
       AFSCME alleged the District violated the Act by deciding to contract out school bus services
       in retaliation against the bus drivers and bus monitors for choosing AFSCME as their
       representative and by failing to bargain in good faith.
¶5          On June 15, 2012, the Executive Director of the IELRB issued a complaint and notice of
       hearing against the District, alleging it had engaged in unfair labor practices regarding its
       decision to subcontract student transportation work in violation of the Act. The Board of
       Education of Community Unit School District No. 5 (Board of Education) was not named as a
       respondent. The Executive Director indicated a hearing would take place on August 20 and 21,
       2012, before an administrative law judge (ALJ).
¶6          On June 20, 2012, the District filed its answer and affirmative defenses. In part, the District
       argued the complaint for hearing failed to name the governing entity educational employer,
       i.e., the Board of Education, as respondent under section 2(a) of the Act (115 ILCS 5/2(a)
       (West 2010)) and thereby failed to state a basis for relief. The District also asserted no service
       had been made upon the educational employer under section 2(a).
¶7          On June 25, 2012, the IELRB, by and through its counsel, the Attorney General, filed a
       verified complaint for injunctive relief and a petition for temporary restraining order and
       preliminary injunction in the circuit court against the District, seeking to enjoin the District
       from effectuating an agreement with First Student to subcontract the District’s student
       transportation services.
¶8          On July 17, 2012, the District filed a motion for temporary or preliminary order of
       prohibition, seeking to prohibit the IELRB from taking any action on any administrative
       complaint or charges arising out of the District’s decision to contract with First Student. On
       July 17 and 18, 2012, the circuit court held a hearing on the motions and granted the
       preliminary injunction. The court denied the District’s motion for an order of prohibition and
       its motion for stay of the order granting the injunction.
¶9          On appeal, this court affirmed, finding the circuit court did not abuse its discretion in
       granting the petition for the preliminary injunction where the IELRB raised a fair question of
       an unfair labor practice by the District. Illinois Educational Labor Relations Board v. Board of
       Education of Community Unit School District No. 5, 2012 IL App (4th) 120690-U.
¶ 10        In August and September 2012, the ALJ conducted hearings on this matter. In January
       2013, the ALJ issued her recommended decision and order with her findings of fact, which we
       will rely on in setting forth the facts that follow. McLean County, 29 PERI ¶ 174 (ALJ
       decision). Prior to October 2011, a meet-and-confer committee was certified by the IELRB as
       the exclusive bargaining representative of the bus drivers and bus monitors employed by the
       District. The District and the meet-and-confer committee were parties to a
       collective-bargaining agreement that expired in August 2011. In or around August 2011, the
       IELRB held a representation election between AFSCME and the meet-and-confer committee.
       On October 20, 2011, the IELRB issued an order and opinion certifying AFSCME as the
       exclusive bargaining representative of the approximately 215 bus drivers and bus monitors.
¶ 11        The District serves approximately 13,500 students in McLean and Woodford Counties in
       25 different buildings. Due to the size of the District, most of these students must be
       transported to school. The District employed bus drivers and bus monitors as part of its
       in-house transportation department. The District considered subcontracting its transportation
       services in 2003 and 2009. In 2009, the District contracted with an outside consultant, who

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       ultimately recommended the District contract out bus services. However, the District did not
       do so at that time.
¶ 12       State funding had decreased by 23% during the three years prior to the hearing. At the same
       time, district enrollment had increased, which created a greater demand for transportation
       services. As the District grew, the District’s transportation department experienced difficulty
       in hiring drivers to cover all the routes. In addition, absenteeism became a problem. A lack of
       staffing led to frequent late buses and occasional drop-off violations. The District employed 8
       to 10 substitute drivers to fill in for absent drivers, but often there were too many open routes
       for the substitute drivers to cover. Prior to October 2011, the District’s practice was to use
       office personnel and bus mechanics with school bus permits to cover bus routes that were not
       staffed due to absences and driver shortages. However, this arrangement resulted in less time
       for mechanics to maintain buses.
¶ 13       In 2010 and 2011, District administrators and the Board of Education regularly received
       complaints from parents and the public regarding the District’s transportation services. Board
       of Education member Gail Briggs testified she heard complaints about students’ late arrival at
       school, students missing class time, students not arriving home on time, and students dropped
       off at the wrong places. Although this was not the first time the transportation department had
       experienced problems, the testimony indicated the problems in 2011 were more severe than in
       prior years. In October 2011, District superintendent Gary Niehaus asked for and received
       from the Board of Education authority to spend up to $500,000 in emergency busing services.
       The District subsequently contracted out a portion of its transportation services to Illinois
       Central School Bus Company to avoid having to use other employees to cover bus routes.
¶ 14       In October 2011, Renee Nestler, AFSCME’s staff representative, sent the Board of
       Education a demand to bargain a new collective-bargaining agreement for the bus drivers and
       bus monitors. In December 2011, Nestler received a phone message from Dennis Triggs, the
       Board of Education’s outside counsel, informing her that the District was considering the
       possibility of outsourcing the entire transportation department. Nestler later sent a letter to
       Triggs demanding to bargain over the decision. Nestler then spoke with Curt Richardson, the
       District’s in-house counsel, who informed her the District was considering outsourcing the
       entire transportation department because of operational issues, including absenteeism,
       turnover, and frequent late buses. Richardson also informed Nestler that economics were not
       the primary reason the District was considering outsourcing. Nestler stated AFSCME wished
       to bargain over the District’s decision to outsource.
¶ 15       The parties met for negotiations on December 12, 2011. When asked the reason behind the
       District’s decision to consider subcontracting the entire transportation department, Triggs
       answered the decision was based on operational concerns, including attendance, turnover, and
       retention of drivers. Triggs also stated the District’s administration spent a disproportionate
       amount of time dealing with the transportation department. On December 14, 2011, the Board
       of Education unanimously adopted a resolution authorizing and directing the superintendent to
       solicit bids for third-party transportation services to address the operational issues and
       determine any cost savings. The resolution noted the excessive absenteeism and turnover of
       bus drivers and that the District experienced reductions in reimbursable state transportation
       payments. The following day, Nathaniel Cunningham, the District’s assistant superintendent
       of human resources, issued a memorandum to transportation department employees informing
       them the District would be soliciting bids for third-party transportation services.

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¶ 16       The parties met for another negotiation session on or about January 12, 2012, and
       discussed the District’s reasons for exploring outsourcing all transportation services. Niehaus
       referred to operational problems such as attendance, driver shortages, late buses, and missed
       stops. With regard to bargaining for a collective-bargaining agreement, AFSCME submitted
       two additional noneconomic proposals. The parties met again on or about January 26, 2012,
       and the District presented a proposal regarding attendance and absences.
¶ 17       On January 31, 2012, the District issued bid documents for student transportation services.
       On February 6, 2012, Richardson contacted Nestler to inform her the District was conducting a
       mandatory prebid meeting later that day. The purpose of the meeting was to allow companies
       interested in bidding to acknowledge themselves and have their questions answered. Nestler
       attended, as did representatives from other vendors, including First Student and Durham
       School Services (Durham).
¶ 18       On February 9, 2012, the parties held a negotiation session and bargained over discipline
       issues. On February 14, 2012, Nestler sent a letter to Triggs asking him to clarify and be more
       specific with respect to statements made during bargaining concerning the District’s reasons
       for considering the contracting out of transportation services. AFSCME did not receive a
       written response.
¶ 19       On March 1, 2012, the District indicated it received no bids and indicated it would seek out
       another bid. On March 7, 2012, the parties met for a negotiation session and discussed prior
       noneconomic proposals.
¶ 20       On March 15, 2012, the District again issued bid documents for student transportation
       services. In contrast to the first request for proposal, the second requested a three-year contract.
¶ 21       On March 22, 2012, the parties met for another bargaining session. AFSCME presented a
       proposal for a grievance procedure. The District informed AFSCME it was anxious to see the
       union’s economic proposal before the next meeting. Nestler inquired whether Triggs would be
       responding in writing to the letter she sent on February 4, 2012, and Triggs responded the
       District had already responded to the matters inquired about in the letter.
¶ 22       On April 2, 2012, bids were received from First Student and Durham. On or about April 5,
       2012, AFSCME presented its first economic proposal to the District. AFSCME proposed that
       starting wages for bus drivers be increased from $10.50 per hour to $13.50 per hour with a $.50
       increase for each year of seniority. AFSCME proposed the wage increases would be
       retroactive to August 2011 and that, over the contract duration of three years, employees would
       receive a 3% increase in the second and third years. AFSCME proposed that drivers maintain
       the health coverage that was provided by the District and that monitors be given the option of
       health insurance. The proposal also included a provision that the drivers and monitors continue
       to complete their own time cards instead of using a time clock. AFSCME also proposed
       attendance and recruitment incentives to discourage absenteeism and improve staffing.
¶ 23       In the meantime, the District continued to consider the possibility of outsourcing. After
       evaluating the bids, Erik Bush, the District’s business manager, recommended that Niehaus
       forward to the Board of Education a recommendation to contract with First Student. Bush
       estimated that First Student’s bid would cost approximately $1.5 million less over a three-year
       period than AFSCME’s current operating costs. On April 11, 2012, the Board of Education
       held a public hearing on the issue of outsourcing the entire transportation department. Based on
       the staff recommendation and the estimated cost savings, the Board of Education authorized
       the superintendent to enter into negotiations with First Student.

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¶ 24       The bid documents did not commit the District to enter into a contract for transportation
       services, and negotiations continued between the District and AFSCME. On April 27, 2012,
       the parties met to discuss cost figures. The District presented a document comparing
       AFSCME’s April 5 economic proposal with the District’s current transportation operating
       costs and with First Student’s bid proposal. The District estimated First Student’s proposal
       would cost approximately $1.5 million less over a three-year period than the District’s current
       operating costs. In contrast, the District estimated AFSCME’s April 5 economic proposal
       would cost approximately $2 million more over a three-year period than the District’s current
       operating costs.
¶ 25       On or about May 7, 2012, the parties met for another bargaining session. Triggs stated that
       even if AFSCME agreed to a two-year wage freeze and the elimination of health-insurance
       benefits for all drivers and monitors, the deal would still cost more than First Student’s bid.
       Nestler testified Triggs stated a wage freeze and elimination of health insurance “would not get
       us there,” implying that it would still not be comparable to First Student. The District indicated
       that even if AFSCME was willing to accept those terms, the operational problems would still
       exist and the District would still consider outsourcing.
¶ 26       On May 16, 2012, AFSCME presented a revised economic proposal to the District.
       AFSCME reduced its original proposed starting salary for bus drivers and bus monitors by 50
       cents. AFSCME also proposed an attendance incentive of $25 if an employee works the full
       day before and after a scheduled holiday or vacation break. To address hiring difficulties,
       AFSCME proposed a recruitment incentive of $200 to any employee for the successful
       recruitment of a new bus driver who stays for three months. Triggs asked whether the revised
       economic proposal was AFSCME’s best proposal and informed AFSCME that the District was
       getting close to making a decision whether to outsource. Kent Beauchamp, AFSCME’s
       regional director, informed Triggs that AFSCME had a meeting with its membership
       scheduled for May 21.
¶ 27       On May 18, 2012, Triggs sent a letter to Nestler requesting AFSCME provide the District
       with AFSCME’s best offer as soon as possible so the District could compare it with First
       Student’s bid. On May 22, 2012, Nestler responded, stating AFSCME was not a company
       bidding for the District’s business and its members were not employees of a third party such
       that they deserved greater consideration than the District was giving them. On that same date,
       AFSCME filed its unfair-labor-practice charge with the IELRB against the District.
¶ 28       At a bargaining meeting on May 29, 2012, AFSCME submitted a proposal that removed a
       prior proposal that employees could waive health insurance and be paid $2,000 but not its
       proposal to provide coverage at employer expense to all monitors. It also reduced its demand
       for vacation and holiday pay that none of the employees then had but made no movement on
       wages or other items. In response, Triggs reiterated that it was close to making a decision on
       outsourcing and the District needed AFSCME’s best offer.
¶ 29       On June 3, 2012, Nestler indicated in a letter that AFSCME’s proposal would not be its
       final offer. Nestler contended the District’s position was not consistent with its obligation to
       bargain in good faith. On June 4, 2012, Triggs replied, in part, as follows:
               “We are confident that we have met the obligations imposed upon us by law. We have
               never declared that the only way to resolve the operational problems experienced by
               the District is to outsource. Nor have we declared that AFSCME cannot make an
               economic proposal that would dissuade the Board of Education from outsourcing. We

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               do understand that the advantages to the District of the proposal presented by First
               Student’s bid presents a unique problem for AFSCME. Nevertheless, we will once
               again come to the table tonight with an open mind.”
¶ 30       Thereafter, the parties met for another bargaining session. AFSCME presented a revised
       economic proposal in which it agreed to forgo retroactive wage increases. In lieu of the
       retroactive pay, AFSCME proposed a $1,000 signing bonus for each employee who was
       employed on August 18, 2011, and returned to work on August 22, 2012. By withdrawing its
       request for retroactive wage increases, AFSCME reduced the cost of its proposal by $613,000.
       AFSCME also withdrew its proposal for paid vacation for its members. While the proposal
       reduced AFSCME’s costs, it still left the proposal over $4 million higher than that of First
       Student and over $2.5 million more than the District’s costs for the same three years without
       the improvements demanded by AFSCME. After reviewing the proposal, the District’s
       representatives asked if the June 4 proposal was AFSCME’s best offer. When AFSCME’s
       representatives answered no, the District’s representatives asked why it was not its best
       proposal. Nestler explained that AFSCME’s membership found what was currently on the
       table on the District’s side to be unacceptable.
¶ 31       The District informed AFSCME that its June 4 proposal would be compared to First
       Student’s bid the following day at the Board of Education meeting. Niehaus testified the
       decision on outsourcing had to be made on June 5 due to the timing of the start of the school
       year, as the District had to give First Student adequate time to plan routes.
¶ 32       On June 5, 2012, the Board of Education unanimously adopted a resolution approving
       student transportation services with First Student. Niehaus testified he recommended the
       Board of Education contract with First Student due to the projected savings to the District and
       because of First Student’s experience in providing transportation services. Briggs testified she
       voted in favor of the resolution based on past problems with transportation services and the
       estimated cost savings over the District’s current operating costs. Board of Education President
       John Puzauskas testified he voted in favor of the resolution because he believed First Student
       could provide superior management due to its expertise in the field. Both Briggs and
       Puzauskas noted the estimated savings of $1.5 million over a three-year period was also a
       significant factor in the decision. The resolution stated First Student must offer available
       employee positions to qualified district employees whose employment is terminated because
       of the outsourcing and pay those employees comparable wages and benefits.
¶ 33       After the June 5 meeting, Nestler received a copy of the signed contract with First Student.
       Thereafter, AFSCME sent a letter to First Student demanding to bargain over wages, hours,
       and working conditions. On July 11, 2012, the Board of Education adopted a resolution
       honorably dismissing all transportation department employees.
¶ 34       In addressing the alleged violations of sections 14(a)(1) and 14(a)(3) of the Act, the ALJ
       found the bus drivers and bus monitors were engaged in protected union activity when they
       chose AFSCME as their exclusive bargaining representative. Aware of this activity, the
       District took adverse action against the bus drivers and monitors when it subcontracted out
       transportation services in June 2012 and discharged the employees in July 2012. The ALJ
       found the District “acted with anti-union animus when it subcontracted out transportation
       services and discharged members of [AFSCME’s] bargaining unit.” McLean County, 29 PERI
       ¶ 174, at 881 (ALJ decision). The ALJ found the District’s conduct “was inherently destructive
       of employee rights” and “had a long-term debilitating effect on the employees’ right to select

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       and be represented by a union.” Id. Further, even the District’s legitimate objective of
       operational concerns would “not erase the strong inference that [the District] intended to
       discourage the employees’ exercise of their statutory rights.” Id.
¶ 35       The ALJ noted the District’s argument that it decided to subcontract transportation services
       due to the significant costs savings. The ALJ, however, found the District’s contention lacked
       “legitimacy because it was not even proffered by [the District] until April 2012 when it
       received First Student’s bid, four months after [the District’s] initial decision to solicit bids for
       transportation services.” Id. at 882.
¶ 36       The ALJ also found the District violated sections 14(a)(1) and 14(a)(5) of the Act, stating
       the District failed to bargain in good faith or to impasse regarding its decision to outsource.
       The ALJ found that, although the parties had engaged in negotiations, the District did not
       bargain in good faith after learning of the cost savings to be achieved by contracting with First
       Student. The ALJ concluded the District “improperly and unfairly used First Student’s bid to
       gain bargaining power over [AFSCME] and force[d] [AFSCME] to bargain against itself.” Id.
       at 884.
¶ 37       In January 2013, the District filed timely exceptions to the ALJ’s recommended decision
       and order, alleging errors with respect to the merits, jurisdiction, and the proposed remedies. In
       April 2013, the IELRB adopted the ALJ’s findings and affirmed the recommended decision
       and order. The IELRB ordered the District to rescind its June 2012 decision to enter into a
       contract with First Student and, upon request, bargain collectively in good faith and to decision
       or impasse with AFSCME over the decision to subcontract transportation services. McLean
       County, 29 PERI ¶ 174. Thereafter, the District petitioned for direct administrative review of
       the IELRB’s final order. See 115 ILCS 5/16(a) (West 2012).
¶ 38       Prior to beginning our analysis, we note the record in this case consists of over 3,600 pages
       and 31 volumes. The District, AFSCME, the Illinois Attorney General, and the Illinois
       Association of School Boards as amicus have filed lengthy briefs setting forth their arguments.
       In those briefs, the parties have stated facts with reference to the pages of the record. We would
       encourage the parties, especially in cases involving such a voluminous record, to also include
       the corresponding volume numbers where those pages can be found, thereby allowing this
       court quick access to the cited materials.

¶ 39                                         II. ANALYSIS
¶ 40                                          A. Jurisdiction
¶ 41       The District argues the IELRB lacks subject-matter jurisdiction, where the District is not
       an educational employer, and also personal jurisdiction over the educational employer (the
       Board of Education), where service was not obtained on the Board of Education. We find the
       IELRB had jurisdiction over the unfair-labor-practice charges in this case.
¶ 42       “[I]n the administrative law context, the term ‘jurisdiction’ has three aspects: (1) personal
       jurisdiction (i.e., the agency’s authority over the parties and intervenors involved in the
       proceedings); (2) subject-matter jurisdiction (i.e., the agency’s power over the general class of
       cases to which the particular case belongs); and (3) an agency’s scope of authority under its
       statute.” Armstead v. Sheahan, 298 Ill. App. 3d 892, 895, 700 N.E.2d 149, 151 (1998).
¶ 43       In the case sub judice, AFSCME’s May 22, 2012, charge of unfair labor practices named
       McLean County District No. 5 as respondent, as did the complaint for hearing. The Board of

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       Education was not named as a respondent or served with the charge or complaint. In its June
       2012 answer, the District denied it is an educational employer, stating it is an Illinois school
       district and the Board of Education is the governing entity and educational employer under the
       School Code. The District’s first affirmative defense stated no service had been made upon the
       educational employer.
¶ 44       At the August 2012 hearing before the ALJ, AFSCME made a verbal motion to amend the
       complaint to change the status of respondent, claiming the charge and the complaint contained
       a misnomer. After reserving ruling on the issue, the ALJ granted the motion to amend, stating
       she would add to the caption McLean County Unit District No. 5, a/k/a Board of Education of
       Unit District 5, and thus “the Respondent now has notice of that.” See generally McLean
       County, 29 PERI ¶ 174, at 879 (ALJ decision).
¶ 45       In its April 2013 opinion and order, the IELRB disagreed with the District’s contention that
       the matter should be dismissed because the charge and complaint named the District instead of
       the Board of Education. The IELRB found the misnomer of a respondent is not sufficient
       grounds for dismissal and it had the authority to correct the name of a party at any time. 80 Ill.
       Adm. Code 1105.110(b) (2004). Further, the IELRB found respondent replied to the
       unfair-labor-practice charge, filed an answer, appeared at the hearing, filed a posthearing brief,
       and filed exceptions to the ALJ’s order. Thus, the IELRB concluded respondent had actual
       notice of the proceedings and was not prejudiced in any way by the misnomer. McLean
       County, 29 PERI ¶ 174, at 870.
¶ 46       Here, the IELRB has the authority to decide charges of unfair labor practices, giving it
       subject-matter jurisdiction over the case. The District argues the IELRB lacked personal
       jurisdiction over the Board of Education because service was not obtained on it. However, the
       Board of Education cannot be said to have lacked notice in this case. It cannot claim it was
       surprised at the hearing or that its ability to present a defense was prejudiced. Its position was
       considered at every stage of this dispute, and we find the IELRB properly exercised
       jurisdiction in this matter.

¶ 47                                          B. School Code
¶ 48       The District argues section 10-22.34c of the School Code (105 ILCS 5/10-22.34c (West
       2010)) divests the IELRB of jurisdiction over this matter or, in the alternative, the School Code
       defines and limits the scope of a board of education’s responsibilities under the Act with
       respect to outsourcing student transportation services. We disagree.
¶ 49       Section 10-22.34c of the School Code permits a board of education to enter into contracts
       with third parties “for non-instructional services currently performed by any employee or
       bargaining unit member or lay off those educational support personnel employees upon 90
       days written notice to the affected employees,” provided certain procedures and safeguards are
       followed. 105 ILCS 5/10-22.34c(a) (West 2010). Those procedures and safeguards include,
       inter alia, (1) the outsource contract cannot be entered into and become effective during the
       term of an existing collective-bargaining agreement; (2) bidders on the outsource contract
       must offer comparable benefits to those provided to school board employees who perform the
       same duties; (3) a public hearing; and (4) the contractor must offer available employee
       positions to qualified school district employees whose employment is terminated by the
       contract. 105 ILCS 5/10-22.34c(a) (West 2010).


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¶ 50       Subsection 10-22.34c(b) of the School Code (105 ILCS 5/10-22.34c(b) (West 2010))
       permits a board of education to enter into a contract, not to exceed three months in length, “in
       an emergency situation that threatens the safety or health of the school district’s students or
       staff, provided that the school board meets all of its obligations under the Illinois Educational
       Labor Relations Act.” (Emphasis added.)
¶ 51       The District argues the emphasized language in subsection 10-22.34c(b) mentioning the
       Act indicates the General Assembly “implicitly excluded from that Act a board of education’s
       decision to outsource work, on a non-emergency basis where no collective bargaining
       agreement exists, even where that work is currently performed by bargaining unit members.”
       Thus, the District contends the Act cannot apply to outsourcing decisions made pursuant to
       subsection 10-22.34c(a) and the IELRB has no jurisdiction over this matter.
¶ 52       We find the District’s argument unconvincing. The IELRB has jurisdiction over the
       matters contained in the Act, including any conduct by an educational employer that is alleged
       to have violated the Act, such as an unfair labor practice. The School Code, however, does not
       contain language that shows it controls over the Act. On the contrary, section 17 of the Act
       provides, in part, as follows: “In case of any conflict between the provisions of this Act and any
       other law ***, the provisions of this Act shall prevail and control.” 115 ILCS 5/17 (West
       2010); see also Board of Education, Granite City Community Unit School District No. 9 v.
       Sered, 366 Ill. App. 3d 330, 338, 850 N.E.2d 821, 829 (2006) (stating “where any other law
       conflicts with the Act, the Act controls”). Thus, we find the IELRB had jurisdiction over this
       matter.

¶ 53                                     C. The IELRB’s Findings
¶ 54       The District argues the IELRB’s finding that the District violated section 14(a)(3) and,
       derivatively, section 14(a)(1) of the Act, was clearly erroneous as the IELRB misapplied the
       law to the facts in this case. We agree.

¶ 55                                      1. Standard of Review
¶ 56       Our supreme court has noted “judicial review of an IELRB decision is governed by the
       Administrative Review Law (735 ILCS 5/3-101 et seq. (West 1994)) and extends to all issues
       of law and fact presented by the record.” SPEED District 802 v. Warning, 242 Ill. 2d 92, 111,
       950 N.E.2d 1069, 1080 (2011). When issues of law are involved, we review the IELRB’s
       findings de novo; while its findings on issues of fact will be deemed prima facie correct unless
       they are against the manifest weight of the evidence. SPEED District 802, 242 Ill. 2d at
       111-12, 950 N.E.2d at 1080.
               “ ‘[T]he clearly erroneous standard of review is proper when reviewing a decision of
               the IELRB or the ILRB because the decision represents a mixed question of fact and
               law. [Citation.] An agency decision will be reversed because it is clearly erroneous
               only if the reviewing court, based on the entirety of the record, is “ ‘left with the
               definite and firm conviction that a mistake has been committed.’ ” [Citation.] While
               this standard is highly deferential, it does not relegate judicial review to mere blind
               deference of an agency’s order.’ ” SPEED District 802, 242 Ill. 2d at 112, 950 N.E.2d
               at 1080-81 (quoting Board of Trustees of the University of Illinois v. Illinois



                                                   - 10 -
              Educational Labor Relations Board, 224 Ill. 2d 88, 97-98, 862 N.E.2d 944, 950-51
              (2007)).

¶ 57                               2. Sections 14(a)(1) and 14(a)(3) of the Act
¶ 58       AFSCME filed an unfair-labor-practice charge with the IELRB against the District,
       alleging it violated sections 14(a)(1) and 14(a)(3) of the Act. 115 ILCS 5/14(a)(1), (a)(3) (West
       2010). The ALJ found the District violated section 14(a)(3) and, derivatively, section 14(a)(1),
       by entering into a contract for transportation services with First Student and discharging
       AFSCME’s members in retaliation for their union activity. The IELRB agreed.
¶ 59       Sections 14(a)(1) and 14(a)(3) of the Act provide as follows:
                    “(a) Educational employers, their agents or representatives are prohibited from:
                        (1) Interfering, restraining or coercing employees in the exercise of the rights
                    guaranteed under this Act.
                        ***
                        (3) Discriminating in regard to hire or tenure of employment or any term or
                    condition of employment to encourage or discourage membership in any employee
                    organization.” 115 ILCS 5/14(a)(1), (a)(3) (West 2010).
¶ 60       Our supreme court has noted “section 14(a)(1) refers to adverse action taken against an
       employee as a result of any protected concerted activity, while section 14(a)(3) refers
       specifically to discrimination based on union activity.” SPEED District 802, 242 Ill. 2d at 112,
       950 N.E.2d at 1081. Thus, where an alleged violation of section 14(a)(1) is based on the same
       conduct alleged in a section 14(a)(3) violation, “the section 14(a)(1) violation is essentially a
       derivative violation.” Bloom Township High School District 206 v. Illinois Educational Labor
       Relations Board, 312 Ill. App. 3d 943, 957, 728 N.E.2d 612, 623 (2000); see also SPEED
       District 802, 242 Ill. 2d at 113, 950 N.E.2d at 1081.
               “In such cases, the test to be applied is the one used to determine whether a section
               14(a)(3) violation occurred. [Citation.] A prima facie case of a section 14(a)(3)
               violation requires proof that the employee was engaged in activity protected by section
               14(a)(3); that the District was aware of that activity; and that the employee was
               discharged for engaging in that protected (union) activity. [Citation.] The third part of
               the test is established if the employee’s protected activity was a substantial or
               motivating factor for the discharge or other adverse action taken against the employee.
               [Citation.] Since motive is a question of fact, a Board’s finding as to motive can only be
               set aside if it is against the manifest weight of the evidence. [Citations.] However, even
               if a prima facie showing has been made, there can be no finding that an unfair labor
               practice occurred if the employer can demonstrate, by a preponderance of the evidence,
               that the adverse action would have occurred notwithstanding the protected activity.”
               SPEED District 802, 242 Ill. 2d at 113, 950 N.E.2d at 1081.
¶ 61       In this case, the bus drivers and bus monitors were engaged in protected activity when they
       chose AFSCME as their exclusive collective-bargaining representative, and the District was
       aware of this activity. Thus, the question becomes whether the employees were discharged for
       engaging in that protected union activity.
                    “Where an employer is charged with an unfair labor practice because of the
               discharge of an employee engaged in protected activity, the charging party must first


                                                   - 11 -
                show, by a preponderance of the evidence, that the adverse employment action was
                ‘based in whole or in part on antiunion animus–or *** that the employee’s protected
                conduct was a substantial or motivating factor in the adverse action.’ [Citation.] Since
                motive is a question of fact, the Board may infer discriminatory motivation from either
                direct or circumstantial evidence, and, because motive involves a factual
                determination, the Board’s finding must be accepted if supported by substantial
                evidence. [Citation.] Antiunion motivation may reasonably be inferred from a variety
                of factors, such as an employer’s expressed hostility towards unionization, together
                with knowledge of the employee’s union activities [citation], proximity in time
                between the employees’ union activities and their discharge [citation], disparate
                treatment of employees or a pattern of conduct which targets union supporters for
                adverse employment action [citations], inconsistencies between the proffered reason
                for discharge and other actions of the employer [citation], and shifting explanations for
                the discharge [citations].” City of Burbank v. Illinois State Labor Relations Board, 128
                Ill. 2d 335, 345-46, 538 N.E.2d 1146, 1149-50 (1989).
¶ 62        Here, the ALJ found the District took adverse action against the bus drivers and monitors
       and acted with antiunion animus when it subcontracted out transportation services in June
       2012 and discharged the employees in July 2012. McLean County, 29 PERI ¶ 174, at 881 (ALJ
       decision). In support of its finding of antiunion animus, the ALJ relied on the timing of the
       District’s decision, stating the District’s decisions to subcontract a portion of its transportation
       services and then solicit bids for all of those services occurred within months of AFSCME’s
       certification. Id. Further, the ALJ noted evidence demonstrated there were other periods of
       time when the transportation department experienced operational problems. Although the
       District considered outsourcing as early as 2003, the ALJ found the District did not make the
       decision to outsource until AFSCME became the exclusive representative of the bus drivers
       and monitors. Id. The ALJ also found the District’s conduct was inconsistent in that it
       expressed concern about the operational problems in the transportation department but did
       little to address those problems. Id. Last, the ALJ found the District exhibited animus against
       AFSCME as evidence of its more favorable treatment of food-service employees who had
       retained a meet-and-confer committee as their bargaining representative. Id. at 881-82. The
       IELRB agreed with the ALJ’s reasoning. McLean County, 29 PERI ¶ 174, at 871.
¶ 63        We find the evidence does not support the IELRB’s conclusion of antiunion animus on the
       part of the District. The evidence does not support the District had viable alternatives to
       outsourcing or that it did little to address the transportation problem. Instead, the evidence
       showed District administrators responded to a growing problem by meeting with the union,
       reassigning staff and mechanics to driving duty, and entering into emergency subcontracting
       for transportation services. Also, the evidence failed to show the situation with the District’s
       other employees, including its food-service employees, was in any way comparable or
       relevant. A finding of antiunion animus on this ground was comparing apples and oranges,
       where the food-service employees had a noncertified committee and the District did not
       experience widespread operational problems with its food services.
¶ 64        While the evidence failed to show inconsistencies or disparate treatment on the part of the
       District, the ALJ’s and IELRB’s main reliance on the timing factor also failed to establish a
       prima facie case of a section 14(a)(3) violation. The IELRB has stated “[t]he timing of the
       action, even though arguably suspect, standing alone and unsupported by statements,


                                                    - 12 -
       documents, or data to suggest, at least in part, a desire to frustrate union organization or an
       anti-union animus is not sufficient to establish a prima facie case warranting the issuance of an
       unfair labor practice complaint.” Lake Zurich School District No. 95, 1 PERI ¶ 1031, at 67
       (IELRB 1984); see also Bloom Township, 312 Ill. App. 3d at 959, 728 N.E.2d at 625 (stating
       “proximity in time is insufficient by itself to sustain an unfair labor practice charge”); see also
       Hardin County Education Ass’n v. Illinois Educational Labor Relations Board, 174 Ill. App.
       3d 168, 185, 528 N.E.2d 737, 747 (1988).
¶ 65       Although the District had considered outsourcing as far back as 2003, the evidence clearly
       established that the transportation department’s problems had significantly worsened over the
       years. The record includes 6 bound volumes consisting of over 1,000 pages of complaints from
       concerned, and sometimes irate, parents regarding late buses and the unprofessional conduct of
       bus drivers and monitors. The District was prohibited from entering into a contract for
       transportation services during the term of the collective-bargaining agreement (105 ILCS
       5/10-22.34c(a)(1) (West 2010)), and it had only a limited window of time to address the
       growing problem. As with the other factors cited by the ALJ, the timing factor fails to support
       an unfair-labor-practice charge in this case.
¶ 66       Even if it could be said that a prima facie case was established based on the employees’
       engagement in protected activity, the District’s awareness of that activity, and the employees’
       discharge based on engaging in union activity, the District put forth a legitimate business
       reason for the adverse employment action.
                    “Once the charging party has established a [prima facie] case of discharge based in
                part on antiunion animus, the employer can avoid a finding that it violated the statute
                by demonstrating that the discharged employee would have been fired for a legitimate
                business reason notwithstanding the employer’s antiunion animus. [Citations.] Merely
                proffering a legitimate business reason for the adverse employment action does not end
                the inquiry, for it must be determined whether the reasons advanced are bona fide or
                pretextual. If the suggested reasons are a mere litigation figment or were not relied
                upon, then the determination of pretext concludes the inquiry. [Citation.] However,
                where the employer advances legitimate reasons for the discharge and is found to have
                relied upon them in part, then the case is characterized as one of ‘dual motive’ and the
                employer must demonstrate by a preponderance of the evidence that the employee
                would have been terminated notwithstanding his union involvement.” City of Burbank,
                128 Ill. 2d at 346-47, 538 N.E.2d at 1150.
¶ 67       It is undisputed the District demonstrated it had legitimate reasons for outsourcing the
       transportation department. The ALJ even conceded the District’s concerns about operational
       issues were legitimate. McLean County, 29 PERI ¶ 174, at 882 (ALJ decision). The Board of
       Education made formal findings of fact after a public hearing on why the contract was in the
       District’s best interest. The Board of Education noted the District had experienced an
       excessive amount of absences in the transportation department along with other issues that
       caused District administrators and staff “to spend an exorbitant amount of time responding to
       parental complaints and dealing with day to day operational issues.” Further, the Board of
       Education noted the bid from First Student would save $1.5 million for the District over the
       proposal offered by AFSCME.
¶ 68       The reasons proffered by the District were legitimate and bona fide. The ALJ found the
       cost savings lacked legitimacy because it was not proffered by the District until April 2012

                                                   - 13 -
       when it received First Student’s bid and the District did not establish it was experiencing
       significant financial problems. Id. We disagree with this reasoning. The District could not have
       known the amount of cost savings before it solicited and opened bids in April 2012. Moreover,
       it goes without saying that the State of Illinois is currently experiencing dire financial
       problems. The District has an obligation to be good fiscal stewards when it comes to costs, and
       a finding that significant cost savings lack legitimacy is oblivious to the current financial
       situation of this state and its effect on school districts. The evidence is also clear that the
       decision to terminate the employment of the bus drivers and monitors would have occurred
       notwithstanding their union activity.
¶ 69        In finding a lack of a legitimate business reason for the District’s actions, the ALJ and the
       IELRB found the District’s conduct “was inherently destructive of employee rights” under
       Carmi Education Ass’n, 6 PERI ¶ 1020 (IELRB 1990). McLean County, 29 PERI ¶ 174, at 881
       (ALJ decision); see also McLean County, 29 PERI ¶ 174, at 871. In that case, the IELRB held
       that “[i]f the employer’s conduct was ‘inherently destructive’ of employee rights, its proof of a
       legitimate objective may not erase the strong inference that the employer intended to
       discourage or encourage the employees’ exercise of their statutory rights.” Carmi Education
       Ass’n, 6 PERI ¶ 1020. Moreover, “[i]f the employer establishes important lawful objectives for
       its actions and tailors its conduct not to needlessly impinge on the exercise of statutory rights,
       the resulting infringement on the employees’ rights may be unavoidable and warranted.” Id.
       “Whether the employer’s discriminatory treatment of its employees is inherently destructive or
       comparatively slight in its effect on the exercise of employee rights depends in large measure
       on whether there will be a long-term debilitating effect on the employee right to select and be
       represented by a union.” Id.
¶ 70        The ALJ found the District’s action resulted in the discharge of all bus drivers and monitors
       and “effectively [AFSCME’s] bargaining unit ceased to exist.” McLean County, 29 PERI
       ¶ 174, at 881 (ALJ decision). The ALJ concluded the District’s action “clearly had a long-term
       debilitating effect on the employees’ right to select and be represented by a union” and “even
       proof of a legitimate objective will not erase the strong inference that [the District] intended to
       discourage the employees’ exercise of their statutory rights.” Id.
¶ 71        We note the “inherently destructive” theory has not been adopted by Illinois courts in this
       type of case. Moreover, if such a theory were permitted, every decision by an employer to
       subcontract work could be labeled “inherently destructive,” since such decisions deprive work
       to whole groups of employees. An employer would be foolish to even explore outsourcing
       because any decision could be found to be “inherently destructive” and thus lead to an
       unfair-labor-practice charge.
¶ 72        It should be noted the bargaining unit did not cease to exist in this case. AFSCME
       contacted First Student and demanded that First Student negotiate with it as the employees’
       exclusive bargaining representative. Thus, the union activity of the bus drivers and monitors
       continues despite the District’s decision to subcontract. Moreover, the student transportation
       services agreement between the Board of Education and First Student required First Student to
       offer comparable wages and benefits to qualified employees pursuant to section 10-22.34c of
       the School Code (105 ILCS 5/10-22.34c(a)(3)(B) (West 2010)).
¶ 73        We also note Carmi Education Ass’n is easily distinguishable under the current set of facts.
       Rather than a decision to outsource all transportation jobs, that case involved a school district’s
       conduct in treating nonstriking teachers more favorably than striking teachers. Carmi

                                                   - 14 -
       Education Ass’n, 6 PERI ¶ 1020; see also Wapella Education Ass’n v. Illinois Educational
       Labor Relations Board, 177 Ill. App. 3d 153, 166, 531 N.E.2d 1371, 1379 (1988) (explaining
       that an “ ‘inherently destructive’ ” contract is one where its provisions create a division
       between union and nonunion workers by offering them different terms). Moreover,
       subcontracting of bargaining unit work is not “inherently destructive” of employees’ rights but
       is both an inherent managerial right and an economic weapon of self-help. See P.W.
       Supermarkets, Inc., 269 N.L.R.B. 839, 840 (1984) (stating “it would not appear that an
       employer’s decision to subcontract work is itself an act inherently destructive of important
       employee rights”).
               “Employees may believe that the collective bargaining process has extracted
               concessions from the employer that have made the employer’s labor costs high enough
               to increase the likelihood the employer will subcontract. But that risk is omnipresent
               for employees who engage in collective bargaining. ‘Indeed, anytime a union secures
               economic gains through the collective bargaining process, it runs the calculated risk
               that the increased costs may eventually compel the employer to adopt cost-motivated
               changes such as layoffs or subcontracting.’ ” International Paper Co. v. National
               Labor Relations Board, 115 F.3d 1045, 1050 (D.C. Cir. 1997) (quoting P.W.
               Supermarkets, 269 N.L.R.B. at 841).
       Thus, an employer’s ability to outsource, or threaten outsourcing, is part of the bargaining
       process and an important weapon in negotiations.
¶ 74       We find the IELRB’s reliance on Carmi inappropriate in this case. The evidence fails to
       show the District acted with antiunion animus in terminating the employment of the bus
       drivers and monitors. Moreover, the District’s reasons for doing so were bona fide and
       legitimate. As such, we are left with the definite and firm conviction that a mistake was
       committed by the IELRB and thus find the IELRB’s decision that the District committed an
       unfair labor practice under section 14(a)(3) of the Act was clearly erroneous.

¶ 75                                     3. Section 14(a)(5) of the Act
¶ 76       AFSCME’s unfair-labor-practice charge against the District also alleged a violation of
       section 14(a)(5) of the Act. 115 ILCS 5/14(a)(5) (West 2010). The ALJ found the District
       violated section 14(a)(5) and, derivatively, section 14(a)(1), by unilaterally entering into a
       contract to subcontract all of its transportation services. McLean County, 29 PERI ¶ 174, at 883
       (ALJ decision). The IELRB affirmed the ALJ’s recommended decision and order.
¶ 77       In setting forth grounds for an unfair-labor-practice charge, section 14(a)(5) of the Act
       provides as follows:
                   “(5) Refusing to bargain collectively in good faith with an employee representative
               which is the exclusive representative of employees in an appropriate unit ***.” 115
               ILCS 5/14(a)(5) (West 2010).
¶ 78       Sections 4 and 10 of the Act require educational employers to engage in collective
       bargaining with respect to “wages, hours and terms and conditions of employment” of
       educational employees. 115 ILCS 5/4 (West 2010); see also 115 ILCS 5/10(a) (West 2010).
       Employers are not “required to bargain over matters of inherent managerial policy, which shall
       include such areas of discretion or policy as the functions of the employer, standards of



                                                  - 15 -
       services, its overall budget, the organizational structure and selection of new employees and
       direction of employees.” 115 ILCS 5/4 (West 2010).
¶ 79       In Central City Education Ass’n v. Illinois Educational Labor Relations Board, 149 Ill. 2d
       496, 599 N.E.2d 892 (1992), our supreme court adopted a three-part test for determining
       whether a matter is a mandatory subject of collective bargaining under section 4 of the Act.
       Step one of the Central City test considers whether the issue “is one of wages, hours and terms
       and conditions of employment.” Central City, 149 Ill. 2d at 523, 599 N.E.2d at 905. If it does
       not, the employer need not bargain over it and the analysis is complete. Central City, 149 Ill.
       2d at 523, 599 N.E.2d at 905. If the issue does involve wages, hours, and terms and conditions
       of employment, the second step is to determine whether the issue is one of inherent managerial
       authority. Central City, 149 Ill. 2d at 523, 599 N.E.2d at 905. If the answer is no, “the analysis
       stops and the matter is a mandatory subject of bargaining.” Central City, 149 Ill. 2d at 523, 599
       N.E.2d at 905. If the answer is yes, the third step involves a balancing test, which weighs “the
       benefits that bargaining will have on the decisionmaking process with the burdens that
       bargaining imposes on the employer’s authority.” Central City, 149 Ill. 2d at 523, 599 N.E.2d
       at 905.
¶ 80       The ALJ and IELRB concluded the subject of subcontracting is a mandatory subject of
       bargaining. The ALJ found the removal or transfer of bargaining unit work affects the wages,
       hours, and working conditions of the unit; the District’s decision to subcontract transportation
       services is a matter of inherent managerial authority; the issue is amenable to bargaining and
       AFSCME membership would have benefited from the bargaining; and the benefits of
       bargaining on the decisionmaking process outweigh any burden imposed on the District’s
       authority. Because the District’s decision to subcontract transportation services was a
       mandatory subject of bargaining, the ALJ found the District was required to maintain the status
       quo until the parties bargained to impasse or reached agreement on the subject. McLean
       County, 29 PERI ¶ 174, at 883 (ALJ decision). The ALJ found the District failed to maintain
       the status quo and unilaterally subcontracted out its transportation services, which significantly
       affected the terms and conditions of employment for AFSCME’s members. Id. The ALJ also
       found the District demonstrated it lacked an open mind and a sincere desire to reach an
       agreement with AFSCME and a disregard of the collective-bargaining process. Id. at 884.
¶ 81       “Good faith in the overall bargaining context is assessed upon a review of all of the
       circumstances. However, the concept is variable and factors which indicate bad-faith
       bargaining in one circumstance will not be determinative in a different setting.” Service
       Employees International Local Union No. 316 v. Illinois Educational Labor Relations Board,
       153 Ill. App. 3d 744, 751, 505 N.E.2d 418, 424 (1987). Good-faith bargaining “presupposes an
       open mind and a sincere desire to reach an ultimate agreement.” Service Employees
       International Local Union No. 316, 153 Ill. App. 3d at 751, 505 N.E.2d at 424.
¶ 82       We agree with the ALJ and the IELRB that the District’s decision to subcontract the
       transportation services was a mandatory subject of bargaining under the Act. See Fibreboard
       Paper Products Corp. v. National Labor Relations Board, 379 U.S. 203, 215 (1964) (holding a
       manufacturer’s decision to subcontract maintenance work previously done by union members
       was a mandatory subject of bargaining); Service Employees International Local Union No.
       316, 153 Ill. App. 3d at 750, 505 N.E.2d at 423 (stating “[c]ontracting out, hiring of
       independent contractors to perform work which was formerly bargaining-unit work, is
       encompassed in the phrase ‘terms and conditions of employment’ ”). However, while the ALJ

                                                   - 16 -
       cited this court’s decision in Service Employees International Local Union No. 316 in setting
       forth the law of good faith in the overall bargaining context (McLean County, 29 PERI ¶ 174,
       at 882 (ALJ decision)), the ALJ neglected to cite our standard in the subcontracting context.
                “In the subcontracting context, the requirements for good-faith bargaining on the
                decision to subcontract are notice of the consideration of a subcontract, before it is
                finalized; meeting with the union to provide an opportunity to discuss and explain the
                decision; providing information to the union; and giving consideration to any
                counterproposals the union makes.” Service Employees International Local Union No.
                316, 153 Ill. App. 3d at 753, 505 N.E.2d at 425.
¶ 83       The evidence in this case is clear that the District complied with the standard for good-faith
       bargaining in the subcontracting context. In December 2011, Triggs provided notice to
       AFSCME that the Board of Education was planning to direct the administration to investigate
       contracting for future student transportation services. McLean County, 29 PERI ¶ 174, at 875
       (ALJ decision). This notice was given prior to the solicitation of any bids, and notice was given
       a full seven months before the Board of Education entered into its contract with First Student.
       The parties discussed the issue at multiple bargaining sessions from December 2011 through
       June 2012. At its December 14, 2011, meeting, the Board of Education unanimously approved
       a resolution authorizing the superintendent to solicit bids for transportation services. The
       resolution expressly stated that one reason the Board of Education was soliciting bids was to
       “determine any cost savings that may be achieved by contracting with a third party for
       transportation services.” AFSCME was invited to pre-bid conferences and received the same
       bid documents provided to third-party vendors. AFSCME also received copies of both bids
       received, along with Bush’s memorandum evaluating those bids and the current costs of
       student transportation. While AFSCME made several proposals after the April 27, 2012,
       meeting, AFSCME was unwilling to offer a proposal that would compete with First Student.
¶ 84       The evidence indicates the District gave AFSCME notice of its intent to solicit bids for
       transportation services before it entered into a contract. Further, the District met with
       AFSCME officials to discuss and explain the decision, responded to AFSCME’s information
       requests, and gave consideration to any of AFSCME’s counterproposals. The District even
       told AFSCME what it needed to do to meet the $1.5 million in savings that would result from
       subcontracting by stating, as the ALJ found, that the only way AFSCME could possibly
       compete with First Student was for its membership to accept a wage freeze for two years and to
       eliminate health insurance benefits.
¶ 85       The ALJ found this to be a close-minded act of bad faith, claiming the District “improperly
       and unfairly used First Student’s bid to gain bargaining power over [AFSCME] and force
       [AFSCME] to bargain against itself.” McLean County, 29 PERI ¶ 174, at 884 (ALJ decision).
       However, the District was not obligated to compromise its position. “In the area of
       subcontracting, if the employer were required to compromise, the [IELRB] would in effect be
       determining the substance of the bargaining agreement and the circumstances under which an
       employer could determine to contract out bargaining-unit work.” Service Employees
       International Local Union No. 316, 153 Ill. App. 3d at 754, 505 N.E.2d at 426.
                “Under the Act, in a subcontracting situation, it is not bad faith for either side to refuse
                to compromise its original position. The duty to bargain in good faith does not require
                an employer in a subcontracting situation to go above the potential subcontractor’s
                price or to meet the union ‘half way.’ A subcontractor’s bid is a legitimate ‘bottom line’

                                                    - 17 -
               proposal and adherence to it does not mean that the employer had a closed mind or does
               not sincerely want to reach an agreement. It also does not mean that the employer
               improperly ‘maintained a fixed, unyielding negotiations position’ or engaged in bad
               faith, ‘take-it-or-leave-it’ bargaining.” Service Employees International Local Union
               No. 316 & Carbondale Community High School District No. 165, 2 PERI ¶ 1067, at
               183 (IELRB 1986).
       The evidence indicates the District bargained in good faith. The District had to act to prepare
       for the upcoming school year, and its actions failed to rise to the level of an unfair labor
       practice. Thus, the IELRB’s finding that the District violated section 14(a)(5) of the Act is
       clearly erroneous.

¶ 86                              4. Unfair-Labor-Practice Findings
¶ 87       Because we have found the District did not violate sections 14(a)(1), 14(a)(3), and 14(a)(5)
       of the Act, the IELRB’s decision that the District committed an unfair labor practice when it
       entered into a subcontract with First Student for student transportation services is clearly
       erroneous and must be set aside.

¶ 88                                       III. CONCLUSION
¶ 89       For the reasons stated, we reverse the decision of the IELRB, wherein it found the District
       committed an unfair labor practice when it subcontracted with First Student for transportation
       services.

¶ 90      Reversed.




                                                  - 18 -
