IN THE COURT OF APPEALS OF THE STATE OF OREiGON

JAMES SCHERZINGER and PORTLAND SCHOOL DISTRICT NO. lJ,

Petitioners-Respondents,

v.

THE PORTLAND CUSTODIANS CIVIL SERVICE BOARD,

Respondent,

and

TAMARA MCWILLIAMS, HENRY SHAMBRY, and 90 CIVIL SERVICE CUSTODIANS,

Intervenors-Appellants.

STATE ex re1 TAMAIL4 MCWILLWS, HENRY SHAMBRY, and 90 CJYIL SERVICE CUSTODIANS,

Plaintiffs-Appellants,

PORTLAND PUBLIC SCHOOL DISTRICT NO. 1 J; M U L T N O W COUNTY, OREGON; PORTLAND BOARD OF EDUCATION; MARC ABRAMS; LOLENZO POE; SUE HAGMEIER; DERRY A. JACKSON, SR.; DEBBIE GOLDBERG MENASHE; JUL,IA BRIM EDWARDS; KAlUA WENZEL; and J M E S S CHERZINGER,

Defendants-Respondents.

PORTLAND SCHOOL DISTRICT NO. 1 J, an Oregon Public School District,

Plaintiff-Respondent,

v.

THE PORTLAND CUSTODIANS CIVIL SERVICE BOARD, an Oregon Civil Service Board,

Defendant,

Court of Appeals No. A1 207 12 (Control)

Multnomah County Circuit NO. 0208-08 154

SUPPLEMENTAL BRIEF ON R E W IN TWO CONSOLIDATED CASES

Court of Appeals No. A120713

Multnomah County Circuit NO. 0210-09876

Court of Appeals No. A122865

Multnomah County Circuit NO. 0302-01 196

August 2006

CRAIG S. JAMES, STETSON N. JAMES7 RANDALL L. JARVIS? ALAN C. J E L m M ? JACK M. JENSEN, BRENT L. JOHNSON? HOWARD s . JOHNSON7 RAY N. JOHNSON, FRANK c . JONES? CALVIN B. KAISER, JOSEPH G. KEENON? BERTHA M. KIRK, RICHARD L. m I T Z , KEITH E. KVERNVIK? DREW M. LETANG, LOWELL K, LINSTROM, DOUGLAS I. LORENSON? TERRY Q. LUPER? DANIEL J. MARKEY? RICHARD G. MARTIN, TERRY C. MARTIN? RODNEY D. MATHIESEN, JAMES P. MCMAHON? KEN MIGAKI? KEVIN G. MILLER? BRYCE D. MITSEFF? FRANK E. MORGAN? BAREMU J . MULLER? SCOTT E. MYERS? PAUL D. NEIGHORN? BERNARD E. NELSON? MICHAEL A. NELSON, NICHOLAS W. NEWCOMER, THANG V. NGUYEN? DONALD R. NIECE, PAUL D. NYMAN? VINCENT 0 . O W 7 DEB1 L. PAIGE, WILLIAM R. PARK? SHIRLEY A. PAYTON, ANN E. PIMENTEL, JOHN H. POLLARD, LEE R. POMMERVILLE? JOHN M. PONT7 THOMAS I, POSEY? FRANK R. POWERS? KENNETH P. PRAY, CLAYTON W. PRICE? BARRY D. PULLEN? DAVID B. PULLEN, JOHN R. RIDER? CHARLES J. RrNEHART7 ELIZAl3ETH RODGERS, MARK A. ROGERS, RICHAFSI R. ROGERS? CRAIG M. ROTHSCHILD, ALAN L. RUDY? HENRY L. SCHAMEL JR.? DAVID P. SCHIEIGER? MARK J. SCHNOOR? STEVEN A. SCOTT? JULIAN J. SEBASTW7 SAMUEL N. SHALKOWSKY7 VINCYNTHIA SHEPARD? MITSUTOSHI SHIBLJYA7 LEON C. SLIDER? KENNETH W. SMITH? PEARLIE M. SMITH? DAVID D. STEWARD? MICHAEL L. STFUND? RONALD R. STREETER? THOMAS M. SUMMEWIELD, W A L L B. SUVA? BOBBY L. SYKES, KEVIN C. TEST? MICHAEL A. THOMAS? RAYMOND C. THOMAS? CYNTHIA J. VANORTWICK? DALE A. VANORTWICK7 BRAD J. VINCENT SR.? MICHAEL F. VODKA? GERALD D. WALLACE? DERTHAL G. WALTER? DOUGLAS K. WARNER, KAIXEN J. WATERS, MICHAEL T. W B B 7 MICHAEL A. WEWERGER? DENNIS D. WILEY? DAVID F. WILLIAM, JAMES M. WILLIAMS, MAJOR S. WILLIS? RONALD

WILLOUGH13Y7 KEiITH L. WITHERSPOON, WILLIAM R. WOLFE, SUI L. WONG A 0 7 K E W T H A. YAMBRA? MASON L. YOUNG7 TIMOTHY G. YOUNG7 Individuals (the "Individual Defendants")?

Defendants-Appellants.

SUPPLEMENTAL BRIEF ON REMAND

Appeal fiom the Judgment of the Circuit Court of the State of Oregon for Multnomah County

The Honorable Janice R. Wilson? Judge

Appeal fiom the Judgment of the Circuit Court of the State of Oregon for Multnomah County

The Honorable Jerome E. LaBarre, Judge

PANEL: Brewer, Chief Judge? Landau and Armstrong, Judges

Bruce L. Campbell7 OSB No. 92537 William H. Walters, OSB No. 8248 1 Jeffiey D. Austin? OSB No. 83 142 MILLER NASH LLP 3400 U.S. Bancorp Tower 1 1 1 S. W. Fifth Avenue Portland, Oregon 97204-3699 Telephone: (503) 224-5858

Attomeys for Respondents

William D. Brandt? OSB No. 72036 WILLIAM D. BFL4NDT7 P.C. 1820 Commercial Street? S.E. Salem, Oregon 97302

Mark E. Griffin? OSB No. 76 152 GRIFFIN & McCANDLISH 11 1 S.W. Naito Parkway7 2nd Floor Portland, Oregon 97204 Telephone: (503) 224-2348

Attomeys for Appellants

TABLE OF CONTENTS

Page

INTRODUCTION ......................................................................................................................... 1

7 ......................... BACKGROUND: UNDISPUTED FACTS AND PROCEDURAL POSTURE - ..................................................................................................... SUMMARY OF ARGUMENT 4

........................................................................... ALTERNATIVE BASES FOR AFFRhIANCE 5

I. The CCSB did not have jurisdiction to provide the relief the Custodians seek because ERB has exclusive jurisdiction over all public labor law matters. ........................................................................................ 5

11. The CCSB lacks jurisdiction to consider the propriety of a layoff. ....................... 9

111. Assuming that the CCSB had jurisdiction, it exceeded its authority. .................. 10

............................................................................................................................ CONCLUSION 13

TABLE OF AUTHORITIES

Page

CZQ of Eugene v . PERB? 341 Or 120. - P3d - (2006) ............................................................. 8

......................................................... Civ of Portland v. Garner? 226 Or 80. 358 P2d 495 ( 1 960) 12

City of Roseburg v . Roseburg City Firefighters7 292 Or 266? 639 P2d 90 ( 1 98 1 ) .......................... 5

Portland Public School District No . IJ v. PCCSB. 198 Or App 1 1 108 P3d 63 (2005). vacated. 340 Or 483 (2006) ................................................................................................... l 7 3

Scherzinger v . Portland Custodians Civil S e n . Bd., 196 Or App 3 lo3 P3d 1 122 (2004)? vacated? 340 Or 483 (2006) ......................................................................... 1. 3-4. 7. 13

Springf?eld Education Assn v . Springfield School Dist.. 290 Or 21 7> 621 P2d 547 ( 1 980) ............ 5

................................... Walter v . Scherzinger (A1 18490)? 193 Or App 3717 89 P3d 1273 (2004) 6-8

Walter v . Scherzinger (A118491)7 193 Or App 355? 89 P3d 1265 (2004). rev'd. 339 Or 408 (2005) ............................................................................................................ 3

Walter v . S~herzinger~ 339 Or 408? 121 P3d 644 (2005) ..................................................... 1.2. 4? 7

Wied v . Marion County7 275 or 7 1 1 542 P2d 149 ( 1 976) ............................................................ 1 1

STATUTES

................................................................................................................................... O m 115-015 6

ORS 183.410 .................................................................................................................................... 6

ORS 242.620 .................................................................................................................................... 9

ORS 242.630(1) ............................................................................................................................... 9

ORS 243.650(4) ............................................................................................................................... 6

ORS 243.672(1) ............................................................................................................................... 6

ORS 243.698 .................................................................................................................................... 6

TABLE OF AUTHORITIES

Page

OTHER AUTHORITIES

Declaratory Ruling, Case No. DR-4-02 (ERB 7 ) ................................................................ 3, 6, 7, 10

Oregon Ass'n of Classified Employees v. Union School Dist. No 5, 5 PECBR 4261 (198 1) .......... 7

Rulings, Findings of Fact, Conclusions of Law and Order, Case No. UP-44-02 ( E m IZ) ....... 7, 10

Teamsters Local 57 v. City of Bandon, 13 PECBR 55 1 (1 992) ... ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . .. .. .. .7

INTRODUCTION

These two cases-Scherzinger v. Portland Custodians Civil Sen. Bd.,

196 Or App 384,103 P3d 1 122 (2004), vacated, 340 Or 483 (2006) ("Portland Custodians"),

and Portland Public School District No. U v. PCCSB, 198 Or App 1 1, 108 P3d 63 (2005),

vacated, 340 Or 483 (2006) ("PCCSB")-come to the court on remand from the Oregon

Supreme Court. Although the supreme court vacated these decisions affirming judament in

favor of the Portland School District in light of Walter v. Scherzinger, 339 Or 408, 121 P3d 644

(2005) (I' Walter"), this court should nonetheless affirm the trial court's judgments in both cases

on the alternative ground that the Custodians Civil Service Board (the "CCSB") lacked

jurisdiction to address the claims asserted by the plaintiff custodians ( the "Custodians") in this

litigation.

The CCSB lacked jurisdiction to address the Custodians' claims for several

reasons. First and foremost, the Public Employees Collective Bargaining Act ("PECBA") and

the supreme court's decisions interpreting that legislation expressly provide that the Employee

Relations Board ("ERB'') has exclusive jurisdiction over public labor law disputes. If the

Custodians wished to challenge the District's decision to contract out its custodial workforce,

they were required to assert their claims with ERB, not the CCSB.

Additionally, the CCSB lacked jurisdiction to address the Custodians' claims

under the Custodian Civil Service Law (the "CCSL"). The CCSL grants the CCSB jurisdiction

to investigate individual "dismissals" of custodians to determine whether they were made in

good faith or for improper reasons, such as age or religion. The District's decision to contract out

its custodial workforce, however, constituted a layoff or reduction in force, which is outside the

scope of the CCSB's jurisdiction. To properly challenge this layoff, the Custodians were

required to go to ERB, not to the CCSB.

Finally, even if the CCSB could be deemed to have had jurisdiction to consider

the Custodians' claims, it exceeded that jurisdiction when it second-guessed the wisdom of the

District's decision to contract out its custodial workforce in the face of a budgetary crisis. The

CCSB's role is limited to determining whether the District has dismissed a custodian based on

improper reasons or has acted in good faith for the purpose of improving public service. The

CCSB has no power to substitute its judgment for that of the District as to the best method of

responding to a budgetary shortfall. Based on the undisputed evidence in the record, the trial

court correctly concluded that even assuming that the CCSB had jurisdiction, it exceeded its

statutory authority when it concluded that the District had acted improperly in contracting out

custodial services.

Each of these three reasons provides an independent basis to affirm the judgments

of the trial court, and they are entirely consistent with the supreme court's decision in Walter. In

Walter, the court concluded that the CCSL requires the District to employ custodians.' Even

assuming that the logical implication of that ruling is that the District was prohibited from

contracting out custodial work, the Custodians' exclusive remedy was to challenge the District's

decision with ERB. The CCSB lacked jurisdiction to consider the Custodians' claims, and its

rulings are void ab initio. Consequently, this court should affirm the judgments of the trial court.

BACKGROUND: UNDISPUTED FACTS AND PROCEDURAL POSTURE

The District accepts the following recitation of the facts set forth by this court in

the two cases now on remand:

''The material facts are not in dispute. In 2002, [the District] faced a serious budget crisis, and its then-superintendent, James Scherzinger, sent a letter to the president of the custodians' union informing him that [the District] proposed to contract out all of the custodial services currently being performed by members of the union. A series of legal proceedings ensued. The first pertinent proceeding here was an administrative proceeding before ERE3 under ORS 183.41 0 and OAR 1 15-01 5-0000. The union sought a declaratory ruling that the contracting out of custodial services by [the District] is a prohibited subject of bargaining, and that [the CCSL] prohibits [the District] from terminating its custodial employees and contracting out its custodial services.' * * * ERB framed the issue before it as 'whether [the District's] proposal to contract out its

' In light of the supreme court's decision in Walter, the District has begun the process of returning the laid off custodians to work at the District and otherwise converting to a District- employed custodial workforce. The District has provided the laid-off custodians with an unconditional offer of recall to employment, has terminated its contract with the Portland Rehabilitation Center ("PHC"), and will phase out the custodial services provided by PHC as the District returns the laid-off custodians to employment and converts back to a District-employed custodial workforce.

custodial services is contrary to the provisions of the CCSL or requires violation of those statutes.' ERB concluded that [the District's] proposal did not violate the CCSL, reasoning that the CCSL applies only to the custodians in [the District's] employ, and the CCSL does not prohibit [the District] from choosing not to employ the custodians. ERE3 therefore entered an order ruling that the proposal was not a prohibited subject of bargaining. [Declaratory Ruling, Case No. DR-4-02 (ERB I) (copy included in Appendix)] * * *

''After ERB entered its order, [the District] and the union bargained over the proposal but reached no agreement. [The District] accordingly implemented its proposal to contract out custodial work * * * ." Portland Custodians, 196 Or App at 387-88 (footnotes omitted) (copy included in Appendix).

''[The District] implemented its proposal by sending layoff notices, in three rounds, to custodians then in its employ. The first round of layoff notices gave rise to our [Portland Custodians] decision. * * * 196 Or App 384. In that case, a group of custodians who lost their jobs * * * asked the [CCSB] to investigate their 'dismissals' and reinstate them pursuant to ORS 242.620 and ORS 242.630. Those statutes authorize the [CCSB] to investigate dismissals and reinstate any custodian whom it determines was dismissed because of political or religious reasons or reasons of age as described in ORS chapter 659A, or because of a decision that was not made in good faith for the purpose of improving public service. The [CCSB] determined that the [Portland Custodians] custodians had been dismissed in bad faith in violation of the CCSL and ordered [the District] to reinstate them. [Findings of Fact, Conclusions of Law, Order (July 19, 2002)l (copy included in Appendix). In response, [the District] sought a writ of review in circuit court. That court annulled the reinstatement order on issue preclusion grounds * * *.

'[PCCSB] involve[d] another group of custodians who received layoff notices. They, too, asked the [CCSB] to investigate their dismissals pursuant to ORS 242.620. The [CCSB] commenced an investigation and issued several subpoenas to [the District] to advance that task. In response, [the District] brought this action against the [CCSB] and defendants, seeking a declaratory judgment that the [CCSB] has no authority to investigate [the District's] elimination of its in house custodial positions. [The District] also sought an injunction to prevent the [CCSB] from conducting such an investigation. As in [Portland Custodians], the trial court here decided, on summary judgment, that ERB's decision precluded the [CCSB] from investigating whether [the District] dismissed defendants in violation of the CCSL requirement that dismissals be made in good faith for the purpose of improving public service. ORS 242.620." PCCSB, 198 Or App at 15-16 (footnotes omitted) (copy included in Appendix).

In both Portland Custodians and PCCSB, this court affirmed the trial court on the

basis of ERB's prior determination that the CCSL did not prohibit the District from contracting

out custodial services. The Custodians' Union, Local 140, had appealed ERB's decision to this

court and this court had affirmed. Walter v. Scherzinger (Al18491), 193 Or App 355, 89 P3d

1265 (2004), rev'd, 339 Or 408 (2005). The supreme court granted review of that case to address

the question "whether, in accordance with the text of the [CCSL, the District] must employ

custodians and whether the district must do so consistently with the merit system set out in that

law." Walter, 339 Or at 410 (copy included in Appendix). The supreme court concluded that the

CCSL was a "comprehensive statutory scheme to govern the selection of custodial workers" at

the District, id. at 422, and that, as a part of that statutory scheme, "when the 1937 legislature

defined custodians and assistant custodians as 'employe[e]s,' it intended to define the legal status

of those workers." Id. at 426. Based on these conclusions, the supreme court reversed the

decision of this court and the declaratory ruling of ERB. Id.

The supreme court subsequently granted the Custodians' petitions for review in

both Portland Custodians and PCCSB and remanded these cases to this court.

The issue before this court on remand is one of jurisdiction: Did the CCSB have

jurisdiction to provide the relief that the Custodians sought from the CCSB? As explained

below, the CCSB did not have jurisdiction; rather, exclusive jurisdiction lay with ERB.

Consequently, the court should affirm the judgments in these cases in favor of the District.

SUMMARY OF ARGUMENT

The CCSB lacked jurisdiction in these cases for several reasons. Most

fundamentally, ERB has exclusive jurisdiction to provide relief if a public employer acts illegally

in implementing a layoff. Whether the District acted illegally in laying off the Custodians and, if

so, what relief should be provided are questions that should have been addressed to ERB, not to

the CCSB.

In addition, the CCSB lacked jurisdiction in these cases for each of the two

alternative bases identified by Judge Janice ~ i l s o n . First, the CCSB has jurisdiction only to

address individual "dismissals" as opposed to a layoff or reduction in force. The undisputed

evidence established as a matter of law that the Custodians were not dismissed-rather, they

were all laid off as a result of the District's decision to implement its contracting-out proposal.

Second, assuming that the CCSB had jurisdiction to entertain the Custodians' claims, it exceeded

1

Because this court agreed with Judge Wilson that issue preclusion barred the CCSB's decision, it did not address her alternative rulings that the CCSB lacked jurisdiction over the District's decision. Portland Custodians, 196 Or App at 389 n.5.

its authority under the CCSL by addressing the wisdom, not just the good faith, of the District's

decision to proceed with its contracting-out proposal.

For each of these reasons, the court should affirm the judgments in the two cases

on remand.

ALTERNATIVE BASES FOR AFFIRMANCE

I. The CCSB did not have jurisdiction to provide the relief the Custodians seek because ERB has exclusive jurisdiction over all public labor law matters.

PECBA gives ERB comprehensive jurisdiction over public labor law disputes.

The supreme court has long made this clear. In City of Roseburg v. Roseburg City Firefishters,

292 Or 266,268, 639 P2d 90 (1981), the supreme court described PECBA as "a comprehensive

statutory scheme authorizing and regulating collective bargaining between * * * public

employers and employees, administered by ERB." Then in Ahern v. OPEU, 329 Or 428,434-35,

988 P2d 364 (1 999), the court held that ERB has exclusive jurisdiction of all matters that come

within the purview of PECBA:

'PECBA is a comprehensive regulatory scheme for resolving public sector labor disputes. * * * Viewed in the context of PECBA's comprehensive regulatory structure, * * * we have no doubt that the legislature intended ERB to have exclusive jurisdiction to determine whether an unfair labor practice has been committed."

See also Springfield Education Assn v. Springfield School Dist., 290 Or 21 7,233-34, 621 P2d

The Custodians went to the CCSB, contending that they had been illegally

dismissed from their employment and seeking reinstatement. Over the District's objections, the

CCSB concluded that it had jurisdiction to determine whether the District's decision to

implement its contracting-out proposal violated the CCSL and, if so, to provide a remedy for that

violation. The CCSB concluded that the District had "dismissed" the Custodians within the

meaning of the CCSL,~ and ordered that the Custodians "be reinstated." Order at 2. The CCSB,

however, did not have jurisdiction to make that determination or to provide that relief. ERB has

I

See Finding of Fact 6 ("The employees were terminated. The characterization as a 'lay-off or reduction in force' are an intentionally false characterization of the facts.")

exclusive jurisdiction to determine whether the District's implementation of its proposal was

legal or illegal, and, if illegal, to fashion an appropriate remedy.

The expedited bargaining statute under PECBA (ORS 243.698) governs

bargaining during the term of a collective bargaining agreement.4 Under ORS 243.698(4), an

employer may implement its proposal at the conclusion of bargaining if the employer and the

union are unable to agree on an alternative proposal.5 A union may challenge such a decision

before ERB by filing an unfair labor practice complaint alleging a violation of ORS 243.672(1).

Public employers and unions may also at any time ask ElU3 to interpret PECBA through a

declaratory judgment proceeding. ORS 183.41 0; OAR 1 15-015-0000.~

In this case, after the District proposed contracting out custodial services and

laying off all custodians, Local 140 petitioned ERB for a declaratory ruling regarding whether

the District's proposal was a mandatory or prohibited subject of bargaining as a result of the

CCSL. ERB concluded that the District's proposal did not violate the CCSL and therefore was

not a prohibited subject of bargaining. ERB I at 7. There can be no dispute that in ERB I "ERB

had * * *jurisdictionn to determine the propriety of the District's proposal. Walter v.

Scherzinger (A1 l849O), 193 Or App 371, 374, 89 P3d 1273 (2004) (copy included in Appendix).

And because the issue before ERB was a labor relations issue, ERB's jurisdiction was exclusive.

Following ERB I, the District and Local 140 continued to bargain over the

District's proposal but were unable to reach agreement. The District implemented its proposal

upon completion of the bargaining period as permitted by law. ORS 243.698(4). See also

4 The term of the relevant collective bargaining agreement between the District and Local 140 (the "CBA") was 1999 to 2004.

PECBA does not require the parties to reach an agreement. As noted in the definition of 'collective bargaining," "[tjhe obligation to meet and negotiate does not compel either party to agree to a proposal or require the making of a concession." ORS 243.650(4).

6 Unlike an unfair labor practice complaint, a petition for a declaratory judgment does not initiate a contested case proceeding. The declaratory judgment process is governed by a separate set of rules and merely allows ElU3 to issue a legal interpretation of PECBA based on the facts presented to it by the parties. OAR 115-015.

Portland Custodians, 196 Or App at 388 ("after the bargaining process has ended, an employer

may implement its proposed changes without any further obligation to bargain"). After the

District implemented its proposal, Local 140 filed an unfair labor practice complaint with ERB.

contending that the District had failed to bargain in good faith. ERB disagreed and dismissed the

complaint. Rulings, Findings of Fact, Conclusions of Law and Order, Case No. UP-44-02

(ERB 11) (copy included in Appendix). Local 140 could also have charged in the same

proceeding that the District committed an unfair labor practice by bargaining over and

implementing a prohibited subject of bargaining. See Teamsters Local 57 v. City of Bandon,

13 PECBR 55 1 (1992) (employer committed unfair labor practice by conditioning bargaining on

a permissive or prohibited subject of bargaining); Oregon Ass'n of Classified Employees v. Union

School Dist. No 5, 5 PECBR 4261 (198 1) (a public employer may not bargain over prohibited

subjects). Local 140, however, did not so do.7 Had Local 140 raised this issue in ERB 11, there

would be no question that ERE3 would have had jurisdiction to address it. Under Ahern, ERB1s

jurisdiction over this issue is exclusive.

Even assuming that Walter means that the District acted illegally in bargaining

over and implementing the contracting-out proposal under PECBA, ERB nonetheless has

exclusive jurisdiction to address the question of the appropriate remedy, if any. The CCSB

consequently lacked jurisdiction to determine whether the Custodians were entitled to

reinstatement. The two cases on remand should be affirmed on this basis.

In addition, the Custodians are precluded from contesting the issue of E m ' s

exclusive jurisdiction because that issue was decided adversely to them by Judge Ronald E.

Cinniger in Walter v. Scherzinger, 193 Or App 37 1 .8 Before Judge Cinniger, Local 140 argued

that "a proposal to contract out custodial services * * * was a prohibited subject of bargaining"

because it would be illegal under the CCSL. 193 Or App at 373. Judge Cinniger, however,

Local 140, of course, had lost on that issue in ERB I. But Local 140 was pursuing the issue on appeal and eventually received a favorable ruling from the supreme court in Walter.

The Custodians are in privity with their Union. See Portland Custodians, 196 Or App at 394.

"determined that ERB had 'exclusive jurisdiction'" to determine whether the proposal was a

mandatory or prohibited subject of bargainingand therefore dismissed plaintiffs' claims, leaving

the issue to ERB. In other words, Judge Cinniger concluded that the question whether the

District could legally bargain over its proposal and legally implement it if bargaining led to

impasse was a question exclusively for ERB.

Local 140 appealed from Judge Cinniger's dismissal, but this court dismissed the

appeal as moot. Id. ("We dismissfed] this appeal because, given our disposition of the

companion judicial review of ERB's order, this appeal is moot.").1Â Local 140 could have

requested that the court vacate the judgment from which it appealed to avoid the preclusive

effect of that judgment in other litigation. See City of Eugene v. PERE, 341 Or 120, P3d -

At the hearing before Judge Cinniger, counsel for both parties made clear to the court that the jurisdictional issue presented was which of three tribunals-the CCSB, ERE, and the circuit court-had jurisdiction to address the legality of the District's contracting out proposal.

Local 140's counsel told the court at the outset of the hearing:

Th i s is a case of first impression. It is a matter in which the jurisdiction to decide this question is not entirely free from doubt. I think both parties would agree with that.

"Because the plaintiffs and the defendants need to have a decision, and a final decision, as soon as they can, the plaintiffs have brought proceedings in three different places: We have the action here, we have attempted to file with the Employment Relations Board for a declaratory ruling; and [w]e have also filed a request for relief with the Custodial Civil Services Board, the board created by the statute we're talking about here.

"The Custodial Civil Service Board has issued a ruling in Plaintiffs favor, declaring the proposed action to violate the statute. And, again, just for the completeness of the record, this decision was issued last week, and I would like to submit that for the Court's file, to be part of the record." Tr. at 3-4.

The District's counsel responded:

'We don't object to adding the decision of the Civil Service Board to the record. This is a decision that was issued last week. We don't agree that the Civil Service Board had jurisdiction to issue the ruling that they did or that the ruling is substantively correct." Tr. at 4.

As Local 140's counsel later accurately stated: "The District argues that ERE3 has exclusive jurisdiction." Tr. at 23 (excerpt of transcript included in Appendix).

l o The court did not reach the exclusive jurisdiction issue. 193 Or App at 373-34 ("The only issue presented here is whether the trial court erred in dismissing this case on 'exclusive jurisdiction' grounds. Regardless of the correctness of that ruling, ERB had, at least, concurrent jurisdiction * * * . " 1.

(2006). But it did not do so. Consequently, the Custodians are precluded from contesting ERB's

exclusive jurisdiction in these cases.

Thus, both supreme court precedent and the doctrine of issue preclusion establish

that ERE3 has exclusive jurisdiction in these cases. The CCSB, therefore, lacked jurisdiction to

consider the petitions presented by the Custodians.

11. The CCSB lacks jurisdiction to consider the propriety of a layoff.

The CCSL provides that if the District dismisses a Custodian from employment,

the CCSB has jurisdiction to investigate the cause of the dismissal. ORS 242.620. This

authority, however, is limited. The CCSL provides that an investigation "shall be confined to

determining whether the dismissal was or was not for political or religious reasons, or because of

reasons of age as described in ORS chapter 659A, or was not made in good faith for the purpose

of improving public service." ORS 242.630(1).

Judge Wilson concluded that the Custodians were not "dismissed" under the

CCSL. Based on the undisputed evidence in the record, she ruled that the District had "laid off

the Custodians in accordance with the CBA, rather than dismissing them within the meaning of

the CCSL.

The CBA between the District and the Custodians distinguishes between a "lay

o f f and a "dismissal." Under Article 21 of the CBA, layoffs result from a reduction in force,

(which is something the District may implement for several reasons, including budgetary reasons

(see Article 7-Management Rights Clause)), while Article 12 addresses "dismissals." Under

Article 12, an employee may be dismissed from a continuing position only for cause and then

only after progressive and corrective discipline and subject to the procedural protections of

notice, representation, and the right to a disciplinary hearing. Article 12(A)-(F). Article 21, by

contrast, recognizes the District's authority to reduce staffing levels and to eliminate positions.

Article 21(A)(1), (2), (5). Unlike an employee who is subject to disciplinary dismissal, an

employee who is laid off has the right to "bump" a less senior employee and the right to recall if

the eliminated position is restored within the ensuing 24 months. Article 21 (A)(3), (4). ,

The undisputed evidence before Judge Wilson established that the District's

contracting-out proposal was to eliminate the custodial employee positions of Local 140

members and that "the District treated it as a lay off' under the CBA. Tr. 71 (copy of oral

rulings included in Appendix).

"They recognized and acknowledged these custodians' right to reinstatement under their [CBA] should there be custodian positions reestablished in the District." Id.

Furthermore, Local 140, in both of the proceedings it initiated with ERB, did not

dispute that the District's contracting-out proposal called for the elimination of all the custodial

employee positions held by members of Local 140. Thus, ERB I states that the proposal that the

District and Local 140 were "currently bargaining over" was "that the District will contract all of

its custodial services to a private provider and lay off all custodial employees." Declaratory

Ruling at 3. And in ERB 11, which was brought by Local 140 after the District had begun laying

off Custodians, the Union likewise did not dispute that the District was eliminating custodial

employee positions and laying off custodial employees in accordance with the terms of the

parties' CBA. See Findings of Facts 24,28,38 (reciting effective dates on which each of three

groups of Custodians will be "laid off').

Because the undisputed evidence in the record reveals that the Custodians were

laid off, not dismissed, the CCSB was without jurisdiction to consider their claims. The court

should affirm the judgments in both cases on this alternative ground.

111. Assuming that the CCSB had jurisdiction, it exceeded its authority.

Even if the CCSB had jurisdiction, it exceeded its statutory jurisdiction by

second-guessing the wisdom of the District's decision to implement the contracting-out proposal.

There never has been any suggestion that the District acted for "political or religious reasons,"

"because of reasons of age," or for any other statutorily proscribed reason. Thus, the only issue

that could possibly be brought before the CCSB (assuming that there had been a dismissal) was

whether the District had acted "in good faith for the purpose of improving public service."

The CCSB's July 19,2002, Order concludes that "the termination of the

[Custodians] from employment was not in good faith * * * for the purpose of improving public

service." But the CCSB's Findings of Fact do not support this conclusion. The CCSB apparently

determined that the continued employment of civil service custodians was "essential for the

health and safety of students and staff ' (Finding of Fact 3), that the District proceeded "without

notice to or discussions with the [CCSB] and in fact refused to permit a discussion between the

[CCSB] and the School Board" (Finding of Fact 4), and that the District disregarded the "likely

hood" (sic) that its budgetary requirements could have been achieved within the confines of the

CCSL. Finding of Fact 5.

Judge Wilson properly concluded that the CCSB had misconceived its statutory

authority. The CCSB does not have the power to substitute its policy judgment for that of the

District on the issue of how best to deploy limited resources to further its educational mission.

'The CCSB's job is not to determine * * * what is good for the District. The CCSB's job is not under the statute to determine whether contracting out is for the purpose of improving public service. That's the School Board's job." Tr. 73.

See Wied v. Marion County, 275 Or 7 1 1, 720, 542 P2d 149 (1 976) (civil service commission's

authority limited by statute; no "license to do what it pleases").

The CCSB's statutory authority was limited to determining whether the District

acted in good faith when it adopted the contracting-out proposal and implemented that proposal.

As Judge Wilson explained,

'It does not get to substitute its judgment about whether or not that was the best way to improve public service, but only whether it was truly the [School] Board in good faith struggling legitimately to serve * * * the educational needs of the children and the District in making the decision that it did." Tr. 74.

Because the CCSB exceeded its authority in second-guessing the District,

Judge Wilson concluded that its order was void in that "it exceeded its jurisdiction":

''It was not the job of the CCSB to determine whether or not the District could have met its budgetary concerns in some other way than eliminating these positions and contracting it out, and it exceeded its jurisdiction here." Tr. 75.

City ofportland v. Garner, 226 Or 80,358 P2d 495 (1960), confirms the

conclusion that the CCSB exceeded whatever authority it had. In Garner, the Charter of the City

of Portland established a civil service system and a Civil Service Board. The Charter gave to the

Civil Service Board essentially the same authority regarding investigation of a charge of

wrongful discharge that the CCSL gives to the CCSB. In Garner, the Portland Charter provided:

"'* * * The investigation shall be confined solely to the determination of the question of whether such removal or discharge * * * was or was not for political or religious reasons, or was or was not made in good faith for the purpose of improving the public service.'" 226 Or at 91.

The supreme court reviewed an order of the Civil Service Board that decided that the Portland

Fire Commissioner's dismissal of a fireman "was not made in good faith and ordered [his]

reinstatement." 226 Or at 89. The court explained:

'The findings of fact made by the Civil Service Board seem to be irrelevant to the issue of the Commissioner's purpose. The board's conclusion of law, that the discharge had been made in bad faith, is not supported by any evidence whatever given at the hearing. The board hadjurisdiction to determine the issue of good faith only. Neither the evidence heard by the board nor its findings offact support the conclusion of bad faith." 226 Or at 92 (emphasis added).

Consequently, the court concluded that the Civil Service Board "exceeded its

jurisdiction by finding bad faith * * * without any evidence that could support such a finding"

and reversed the Civil Service Board. Id. at 93.

Just as the Civil Service Board exceeded its jurisdiction in Garner, the CCSB

exceeded its jurisdiction in this case. Even assuming that the CCSB had jurisdiction to consider

the Custodians' challenge to the District's contracting-out proposal, it did not have jurisdiction to

substitute its judgment for that of the District. It is beyond dispute that the District acted in good

faith when it implemented its proposal. The budgetary crisis confronting the District was quite

real, and the District did not adopt its proposal until after ERB had concluded that doing so was

legal. Under the circumstances, the CCSB had no basis for concluding that the District acted in

bad faith. Accordingly, the court should affirm the judgments of the trial court.

CONCLUSION

For each of the reasons set out above, the court should affirm the trial court's

judgments in Portland Custodians and in PCCSB.

MILLER NASH LLP )

William H. Walters

7 - = = =

Bruce L. Cainpbell

Attorneys for Respondents

I hereby certify that on the ?,,;>day of August, 2006, I served supplemental brief

on remand on:

Mr. William D. Brandt William D. Brandt, P.C. 1820 Commercial Street, S.E. Salem, Oregon 97302

Mr. Mark E. Griffin Griffin & McCandlish 215 S.W. Washington St., Suite 202 Portland, Oregon 97204-263 8

Attorneys for Appellants

Mr. Don Jeffery Secretary Portland Custodians Civil Service Board 37 15 N.E. Wistaria Drive Portland, Oregon 972 12

Mr. James E. Leuenberger James E. Leuenberger PC 4800 S.W. Meadows, Suite 300 P. 0 . Box 1684 Lake Oswego, Oregon 97035

by mailing to the above attorneys two full, true, and correct copies thereof, by certified mail,

return receipt requested. I further certify that the copies were contained in sealed envelopes

addressed as above stated, the last-known addresses of the attorneys, and deposited with the

United States Postal Service at Portland, Oregon.

I further certify that on the -'tdnAay of August, 2006, I filed the original and 20

copies of appendix to supplemental brief on remand by mailing the original and copies to:

Ms. Kingsley W. Click State Court Administrator Records Section Supreme Court Building 1 163 State Street Salem, Oregon 97301-2563

by certified mail, return receipt requested.

Of Attorneys for Respondents