Michigan Supreme Court Approves County’s Change In Retirement Pension Calculations and Dismisses Unfair Labor Practice Claim Filed by Union

In a 4-2 opinion (Viviano, J., not participating), the Michigan Supreme Court reversed a Court of Appeals decision affirming the conclusion of the Michigan Employment Relations Commission (MERC) that union members could bring an unfair labor practices claim against Macomb County because it did not bargain over a change in actuarial calculations for pensioners.

The retirement commission and the pensioners had allowed usage of a particular means of calculating retirement benefits for many years.  The commission then changed the methodology.  The union and its members filed an unfair labor practice claim.  The hearing officer dismissed the claim, but MERC found it could go forward.  In a 2-1 opinion, the Court of Appeals affirmed.

The Supreme Court reversed, holding that the change in the calculation method could not be subject to an unfair labor practice claim, but rather was subject only to the grievance and arbitration provisions in the existing collective bargaining agreement (CBA).

In a well-written dissent, Justice McCormack argues the 24-year practice of calculating benefits one way constituted a material change in the CBA which could not thereafter be unilaterally changed without the opportunity to bargain.  Since there was evidence the parties had relied on the long-standing practice, the unfair labor practice should have been allowed to go forward.

Although administrative agencies are generally accorded significant deference in their decisions, since the majority held MERC engaged in analyzing a question of statutory interpretation and of the CBA, these involved questions of law, which the Court could review under the de novo standard.  This gave the majority wider latitude in the outcome of the case.  Having freed itself from the tether of agency deference and the weight of primary doctrinal jurisdiction ordinarily vested in the agency, the Court was free to make its own rulings of law.

Here is the opinion:  20130612_S144303_75_macombco-op

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