#25771-rev & rem-JKM

2011 S.D. 37

                          IN THE SUPREME COURT
                                  OF THE
                         STATE OF SOUTH DAKOTA

                                * * * *

INTERNATIONAL UNION OF
OPERATING ENGINEERS,                      Plaintiff and Appellant,

      v.

CITY OF PIERRE,                           Defendant and Appellee.

                                * * * *

                  APPEAL FROM THE CIRCUIT COURT OF
                      THE SIXTH JUDICIAL CIRCUIT
                    HUGHES COUNTY, SOUTH DAKOTA

                                * * * *

                       HONORABLE LORI S. WILBUR
                               Judge

                                * * * *

TODD A. LOVE of
Schmidt, Schroyer, Moreno,
 Lee & Bachand PC                         Attorneys for plaintiff
Pierre, South Dakota                      and appellant.

A. STEVENSON BOGUE of
McGrath, North, Mullin
 & Kratz, PC LLO                          Attorneys for defendant
Omaha, Nebraska                           and appellee.

                                * * * *

                                          ARGUED ON APRIL 28, 2011

                                          OPINION FILED 07/06/11
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MEIERHENRY, Retired Justice

[¶1.]         In August 2009, the City of Pierre (City) and the International Union

of Operating Engineers (Union) 1 began collective bargaining negotiations for

employment contracts to take effect in January 2010. After many attempts, the

parties were unable to reach an agreement. In March 2010, the City declared that

the parties were at an impasse. The City then imposed the terms and conditions of

one of its previously proposed contracts. This imposed contract was not the last

best offer and differed from the contract that had been in place. The Union

indicated that it had rejected the City’s previously proposed contract, in part,

because it included “take aways” that the Union sought to avoid.

[¶2.]         After receiving confirmation of the imposition of the previously

rejected contract, the Union filed for conciliation and fact-finding with the South

Dakota Department of Labor (Department) under SDCL 3-18-8.1. The Union then

argued that the City could not impose the previously rejected contract until after

the Department’s conciliation and fact-finding process was complete. In response,

the City argued that the conciliation and fact-finding process was permissive, not

mandatory, and therefore it could unilaterally impose a contract any time after

impasse was declared. The trial court agreed with the City. The question before

this Court is whether the City was permitted to impose a previously rejected

contract before the Department’s conciliation and fact-finding process was


1.      Since 2005, the Union has been the recognized bargaining unit for two
        separate groups. The first is comprised of the police and dispatch employees.
        The second is comprised of City employees, other than the electrical
        department and police department.
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complete. We hold that the City could not impose a previously rejected contract

until the Department’s conciliation and fact-finding was complete.

                                      Analysis

[¶3.]        In South Dakota, public employees are permitted to “negotiate matters

of pay, wages, hours of employment, or other conditions of employment” through

collective bargaining. See Bon Homme Cnty. Comm’n v. Am. Fed’n of State, Cnty,

and Mun. Emps. (AFSCME), Local 1743A, 2005 S.D. 76, ¶ 13, 699 N.W.2d 441, 448

(citing SDCL ch. 3-18 et seq.). “Employers and employees are required to ‘negotiate

collectively in good faith[.]’” Id. (quoting SDCL 3-18-3.2(4); SDCL 3-18-2). And

“[a]lthough we have no explicit definition of the term ‘negotiate collectively in good

faith,’ we interpret this requirement to mean that the parties must seriously work

to resolve differences and reach a common understanding.” Id. Because this case

requires interpretation and application of statutes, our review is de novo. Id. ¶ 11.

See City of Deadwood v. M.R. Gustafson Family Trust, 2010 S.D. 5, ¶ 6, 777 N.W.2d

628, 631 (citation omitted).

[¶4.]        The relevant statutes dealing with impasse in public sector collective

bargaining are SDCL 3-18-8.1, SDCL 60-10-1, and SDCL 60-10-2. When an

impasse is reached, either party may request Department intervention under SDCL

3-18-8.1:

             In case of impasse or failure to reach an agreement in
             negotiations conducted under the provisions of this chapter,
             either party may request the Department of Labor to intervene
             under the provisions of §§ 60-10-1 to 60-10-3, inclusive. Such
             request shall be mailed within ten days after a written
             statement is delivered to the designated representative for the
             other party declaring an impasse. Nothing in this section

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              prohibits the parties to an impasse from adopting any other
              procedure to facilitate a settlement that is mutually agreeable.

(Emphasis added). Once the request is made, the Department “shall endeavor to

conciliate the parties to the controversy and induce them to confer with each other

and compose their differences.” SDCL 60-10-1. 2 If conciliation under SDCL 60-10-

1 is unsuccessful, the Department must undertake further actions to investigate,

enter findings, and make recommendations under SDCL 60-10-2, which provides:

              If its efforts as conciliator prove unsuccessful, the Department of
              Labor shall, if requested by either party, impartially investigate
              the matters in difference between the parties. The request to
              the department shall be mailed within twenty days after the
              conclusion of the conciliation procedure provided for in § 60-10-1.
              The department shall give each party ample opportunity for
              presentation of the facts and shall make a report of the issues
              involved and a recommendation for settlement of the
              controversy. The department shall furnish a copy of its
              recommendation to each of the parties and to any local
              newspaper for publication for the information of the public. 3

[¶5.]         The central question before this Court is whether SDCL 3-18-8.1

requires the City to participate in the conciliation process before it can unilaterally

impose an employment contract. The City claims that the statute’s language is not

mandatory and that the City has the option to decline to participate in the


2.      SDCL 60-10-1 in its entirety provides:

              In case of strikes, lockouts, or other labor disputes between employers
              and employees, the Department of Labor requested by either party,
              shall endeavor to conciliate the parties to the controversy and induce
              them to confer with each other and compose their differences.

3.      SDCL 60-10-3, the other statute cited in 3-18-8.1, provides that the secretary
        of labor has the authority to appoint two citizens to assist with the
        investigation related to the dispute. Neither party contends that this statute
        applies under the facts of this case.
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conciliation process. Council for the City, however, conceded at oral argument that

a city’s non-participation could demonstrate a lack of good faith bargaining as

required by SDCL 3-18-2(4), SDCL 60-9A-12(5), and SDCL 60-9A-13(4). The City

also relies on the absence of statutory language regarding unilateral imposition of

contracts, especially because the Legislature addressed unilateral imposition of

contracts when the Department intervenes in teacher-school district negotiations.

See SDCL 3-18-8.2.

[¶6.]        In Bon Homme County Commission, we outlined the general procedure

contemplated by SDCL 3-18-8.1:

             If negotiations are not successful, SDCL 3-18-8.1 permits either
             party to request Department of Labor conciliation. When these
             efforts do not result in an agreement, a request may be made by
             either party that the department investigate the situation and
             publicly report its recommendations. If an agreement still
             remains unattainable, South Dakota law provides that a public
             employer may unilaterally implement the disputed provisions if
             the parties have bargained in good faith and a legitimate
             impasse exists.

2005 S.D. 76, ¶ 14, 699 N.W.2d at 444 (citations omitted) (emphasis added). We see

no reason to retreat from this interpretation of the statutory procedure required by

SDCL 3-18-8.1. Only after the conciliation process is complete and “the parties

have bargained in good faith and a legitimate impasse exists” may “a public

employer . . . unilaterally implement the disputed provisions . . . .” Bon Homme

Cnty. Comm’n, 2005 S.D. 76, ¶ 14, 699 N.W.2d at 444. Any other interpretation

would render SDCL 3-18-8.1 meaningless. See Rapid City Educ. Ass’n v. Rapid

City Sch. Dist. No. 51-4, 522 N.W.2d 494, 498 (S.D. 1994) (“There is a presumption

against a construction which would render a statute ineffective or meaningless.”)

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(citation omitted). We therefore reverse and remand for further proceedings

consistent with this opinion.

[¶7.]           GILBERTSON, Chief Justice, and KONENKAMP and SEVERSON,

Justices, and JENSEN, Circuit Court Judge, concur.

[¶8.]           JENSEN, Circuit Court Judge, sitting for ZINTER, Justice,

disqualified.




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