A Florida public employer's decision to subcontract is a statutory management right.

• Author: Smith, Nina Q.

The unresolved issue in Florida of whether a public employer must collectively bargain with a union over the decision to subcontract out work performed by employees represented by a union has now been decided by the Florida Public Employees Relations Commission in Amalgamated Transit Union, Local 1593 v. Hillsborough Area Regional Transit Authority (HARTA), 24 FPER [paragraph] 29,247 (July 1, 1998). In Florida, public employers are required under the Public Employees Relations Act (PERA) to bargain with unions over "wages, hours, and terms and conditions of employment" before making any changes to such items. See F.S. [sections] 447.309. They are not, however, required to bargain before making changes in the workplace that are reserved to public employers under the management rights provision, F.S. [sections] 447.209.[1] The issue before the commission, therefore, was whether the decision to subcontract is a term or condition of employment under [sections] 447.309, or whether a public employer may unilaterally subcontract the work of bargaining unit employees to a public or private entity without first bargaining with the union over the decision. After avoiding the issue since the 1980s,[2] the commission held that the decision to subcontract is a management right under [sections] 447.209.

In HARTA, the union and public employer bargained to impasse over management rights and past practices provisions in a successor contract. Within the management rights provision of the predecessor contract was a clause that limited the employer's right to subcontract to only newly created positions. After the parties rejected the special master's recommendation for resolving the impasse, HARTA, acting as the legislative body pursuant to the impasse procedures under PERA, imposed a management rights provision that permitted HARTA to unilaterally subcontract not only new positions, but all bargaining unit jobs. An unfair labor practice charge ensued, alleging that HARTA committed an unfair labor practice under [sections] 447.501(1)(a) and (c)[3] by legislatively imposing a waiver on the union's right to bargain over the issue. The hearing officer recommended that the commission find that the decision to subcontract was a mandatory subject of bargaining and that HARTA violated PERA.

In a splintered decision, the commission rejected the recommendation and held that subcontracting is permitted without bargaining as a management prerogative essential to the public employer's ability "to `determine unilaterally the purpose of its constituent agencies ... and [to] exercise control and discretion over its organization and operations.'" Id. at *10 (quoting [sections] 447.209). In reaching this result, the commission relied heavily on the approach taken in New Jersey, a state that also constitutionally guarantees public employees the right to collectively bargain.[4]

Subcontracting a "Political Question" Properly Decided in Public Forum

A public employer may decide to subcontract with a private enterprise for a variety of reasons. The employer may seek to make changes in operations or in the manner it will manage, finance, or deliver a public service, decisions that may be reserved to public employers under [sections] 447.209. At the same time, the employer may seek to lower costs by having the work performed at lower wage and benefit levels--subjects that are amenable to collective bargaining under [sections] 447.309.[5] In Florida public sector labor law, when a disputed subject of bargaining "both directly relates to employment security or conditions of employment and also directly relates to the functioning of an enterprise ... a balancing test must be applied to determine which characteristic predominates." Fraternal Order of Police, Miami Lodge 20 v. City of Miami, 609 So. 2d 31, 34 (Fla. 1992). In City of Miami, the court declared that if the decision to subcontract "fundamentally impacts" a public employer's ability to determine its purpose, set standards for the services it provides to the public, or exercise control over its organization and operations, the decision falls within [sections] 447.209 and may be made without the obligation to bargain.

Rather than balance the parties' interests in subcontracting on a case-by-case basis, the commission in HARTA decided that in all cases a public employer's interest in unilaterally deciding to subcontract outweighed the collective bargaining interests of public employees. After quoting at length a passage from a 1982 New Jersey Supreme Court decision, Local 195, International Federation of Professional and Technical Engineers, AFL-CIO v. State, 88 N.J. 393,443 A.2d 187 (N.J. 1982),[6] the commission stated that the decision to subcontract is a "political question" that involves the restructuring of an employer's operations and is, therefore, more appropriately decided in a public forum than at the collective bargaining table. To hold otherwise, the commission stated, would be to "significantly interfer[e] with the determination of policy by elected officials."

The commission also was concerned that there was no practical way for it to review a subcontracting decision case by case before the decision was made--the approach taken in a number of other public sector jurisdictions. In addition, reviewing the decision after it was made would place a hearing officer in the difficult position of determining what factors motivated a public employer, which by law must make its decisions collectively by vote of several public officials. By holding the decision to subcontract is a per se management right, the commission alleviated the uncertainties in bargaining and adjudication which otherwise would result from a case-by-case approach. This notwithstanding, the commission also held that the employer must provide the certified bargaining agent enough notice of its "intention to subcontract" that the union has a "reasonable opportunity" to request that the employer bargain over the impact of the decision--including, possibly, a separation package and out-placement assistance for those bargaining unit employees whose jobs are eliminated.

Commissioner...