Relying on decade-old precedent, the Ohio State Employment Relations Board (“SERB” or “Board”) issued a decision on April 28 that is very much a reflection of current economic times. In a 2-1 decision, SERB held that because the City of Toledo faced “exigent circumstances,” the City did not commit an unfair labor practice when it made changes to an existing bargaining agreement without negotiating with the union. SERB v. City of Toledo, SERB 2011-001 (4-28-2011) (pdf).
The City of Toledo modified its existing agreement with the Toledo Police Command Officers’ Association (“Union”) by unilaterally increasing Union members’ healthcare premiums and rescinding the City’s 10% payment into the Union’s pension fund. The City argued that the existence of exigent circumstances necessitated the changes and, therefore, the City’s unilateral implementation without bargaining or reaching agreement with the Union did not constitute an unfair labor practice.
Generally, decisions involving mandatory subjects of bargaining (e.g., wages, hours, and terms and conditions of employment), must be bargained before implementation, except where “emergency situations,” render prior bargaining impossible. In re Toledo City School Dist. Bd. of Ed., SERB 2001-005 (9-20-2001) (“Toledo Schools”). “[E]xigent circumstances that were unforeseen at the time of negotiations” constitute “emergency situations” within the meaning of Toledo Schools. Id. at 3-29. Thus, the question for the Board was whether the City needed to act immediately due to exigent circumstances, unforeseen at the time of negotiations.
Following an assessment of the City’s dire economic situation and noting the “predicament” the City faced, including a 24% funding deficit unforeseen at the time negotiations began and a budget that must be balanced, the Board concluded that this “certainly fits the description of exigent circumstances.” City of Toledo, SERB 2011 at 11. Accordingly, SERB concluded that the City did not commit an unfair labor practice.
To those labor professions who have followed the discussion related to Ohio Senate Bill 5, the law that reforms Ohio’s public employee collective bargaining rules, SERB’s decision, which hinges on the determination of “exigent circumstances,” may sound familiar. Indeed, Senate Bill 5 contains provisions which effectively permit an employer in a state of “fiscal emergency,” as determined by the auditor of the state, to terminate, negotiate, or modify an existing collective bargaining agreement, including modification of the agreement to suspend established salary or benefit increases, or both. Perhaps SERB v. City of Toledo is an indication that even without Senate Bill 5, public employers in dire economic situations may find some relief from stringent collective bargaining agreements via the SERB’s interpretation of “exigent circumstances," assuming that the case is not overturned on appeal or reversed by a future Board with different members.