Teamsters Local 839 v. Benton Cnty.

15 Wash.App.2d 335

475 P.3d 984

TEAMSTERS LOCAL 839, Respondent,

v.BENTON COUNTY, Appellant.

No. 36974-9-III

Court of Appeals of Washington, Division 3.

FILED NOVEMBER 12, 2020

Stephen John Hallstrom, Benton County Prosecutor's Office, 7122 W Okanogan Pl Bldg. A, Kennewick, WA, for Appellant.

Thomas A. Leahy, Reid McCarthy Ballew & Leahy LLP, 100 W Harrison St. Ste. N300, Seattle, WA, Mark Spencer Lyon, Office of the Atty. General, 7141 Clearwater Dr. Sw, Po Box 40108, Olympia, WA, for Respondent.

Christopher Elliott Horner, Kittitas County Prosecutor, 205 W 5th Ave. Ste. 213, Ellensburg, WA, for Amicus Curiae on behalf of Washington Association of County Officials.

Mellani R. Hughes McAleenan, Washington State Association of Counties, 206 10th Ave. Se Olympia, WA, for Amicus Curiae on behalf of Washington State Association of Counties.

Charlotte A. Archer, Inslee Best, PS, 10900 Ne 4th St. Ste. 1500, Bellevue, WA for Amicus Curiae on behalf of Washington State Association of Municipal Attorneys.

PUBLISHED OPINION

Lawrence-Berrey, J. ¶1 Benton County appeals the Public Employment Relations Commission's (PERC) order that determined the County committed unfair labor practices (ULPs) in the methods it used to recoup overpayment of wages from its employees, unit members of Teamsters Local 839. The County argues the methods it used complied with RCW 49.48.200 and RCW 49.48.210(10), the wage overpayment statutes. It argues PERC misapplied the law by determining that the procedures in the wage overpayment statutes are subject to chapter 41.56 RCW, the Public Employees’ Collective Bargaining Act (PECBA). We disagree.

¶2 We hold that recovery of overpaid wages from a union member's future paychecks or accrued leave is a mandatory subject of bargaining. We also hold that the PECBA and the wage overpayment statutes do not conflict. Read together, a public employer must provide employees covered by a collective bargaining agreement the notice required by RCW 49.48.210(10) and then bargain with the union about how overpaid wages are to be repaid. We affirm PERC's order determining that the County committed ULPs.

¶3 The County also argues PERC's remedy is arbitrary and capricious. PERC required the County to return the parties to status quo ante¹ by returning the wages and accrued leave it recouped from employees, plus interest. We affirm PERC's remedy and clarify the applicable interest rate and when interest commences.

FACTS

¶4 On November 1, 2016, the Benton County Auditor's Office discovered an accounting software error had caused sheriff office employees, including 85 corrections officers, to be overpaid from June 2016 through September 2016. Whenever hours were entered into a particular accounting system pay code, the software error caused an improper increase in compensation. The County, aware that RCW 49.48.200 permitted it to recoup overpaid wages from its employees’ future wages, decided it would do so.

¶5 The next day, Benton County Auditor Brenda Chilton sent Sheriff Steven Keane a memo that notified him of the coding error. The memo explained how the error occurred and that the County had the right to recoup overpayments by deducting up to five percent of gross earnings from employee wages. On November 3, the sheriff's office e-mailed the memo to its employees.

¶6 Teamsters Local 839 is the bargaining representative for the County's corrections officers. Teamsters learned of the November 3 e-mail and the next day filed a Step 2 grievance with Sheriff Keane. The grievance notified Sheriff Keane that state law permitted deduction from disposable wages, not gross wages, and the memo failed to provide various information required by state law. Teamsters offered to discuss the grievance with Sheriff Keane prior to his formal response.

¶7 On November 15, the sheriff's office served its employees with a "Notice-Wage Overpayment Repayment Demand" letter. Clerk's Papers (CP) at 61-62. This letter notified each affected employee that the employee had received wage overpayments, the overpaid amount, an explanation of the software error, and it provided the entire text of RCW 49.48.200.

¶8 The letter stated the County had begun the statutory process for overpayment recovery and requested that the employee select one of three options for repayment and sign the letter. The options were: (1) deduct the full overpayment amount from the employee's next paycheck, (2) deduct an employee-specified amount from future paychecks, or (3) deduct an amount that would not exceed five percent of the employee's disposable earnings in a pay period from future paychecks. There was no option for contesting the County's assertion that overpayment occurred or the County's calculation of the overpaid amount. The letter stated, if the employee did not respond within 20 days, and if the amounts were not disputed, the County would begin deducting the statutory five percent of disposable earnings beginning with the employee's January 2017 paycheck. The County did not send a copy of the November 14 letter to Teamsters.

¶9 On November 28, the sheriff's office forwarded a November 23 e-mail to its employees that informed them of a fourth repayment option—cashing out accrued leave. The e-mail stated that if an employee did not select a repayment option by December 20, the default five percent of disposable earnings would be withheld from future paychecks. The County did not send a copy of the November 23 e-mail to Teamsters.

¶10 On November 29, Sheriff Keane sent a letter to Teamsters responding to its Step 2 grievance. In the letter, he cited the following portion of RCW 49.48.210(10) : " ‘Any dispute relating to the occurrence or amount of the overpayment shall be resolved using the grievance procedures contained in the collective bargaining agreement.’ " CP at 400. Implying that no corrections officer had disputed the occurrence or amount of overpayment, he denied Teamster's grievance.

¶11 On November 30, Teamsters sent a demand-to-bargain letter to Sheriff Keane.

The letter stated if wage overpayments were made, Teamsters was in total agreement that employees should repay the overpaid amounts, but that Teamsters "must be allowed to bargain how this [would be] done." CP at 535. On December 1, Sheriff Keane sent an e-mail entitled "Demand to Bargain Letter" to Teamsters, Auditor Chilton, and others. CP at 537-38. Sheriff Keane stated he was willing to meet and discuss his role and limited authority, but he was unable to bargain the authority of the auditor's office and their statutory responsibility for recovering overpayments. He acknowledged that Teamsters had made clear to him that failure to bargain would result in the union filing a ULP complaint.

¶12 On December 1, Teamsters responded that it was "available to bargain anytime and eager to get the overpayment of wage issue(s) resolved as soon as possible" and requested dates Sheriff Keane would be available to bargain. CP at 538.

¶13 In January 2017, the County began deducting from employee wages and accrued leave. These deductions occurred without bargaining with or agreement of Teamsters. By August 2017, the County had fully recovered the overpayments from its corrections officers.

PROCEDURE

¶14 Teamsters filed two separate ULP complaints with PERC. The first complaint alleged the County circumvented Teamsters when it presented to corrections officers their options for repayment without first bargaining these options with Teamsters. It also alleged the County refused to bargain with Teamsters over its plan to recover overpayments. The second complaint alleged the County refused to bargain by unilaterally deducting overpayments from corrections officer's wages and accrued leave without providing Teamsters an opportunity to bargain. A PERC ULP manager reviewed the complaints, notified the parties of the stated causes of action, and forwarded them to an "Examiner" for processing. The Examiner consolidated the two complaints.

¶15 Teamsters and the County filed cross motions for summary judgment. The motions presented two legal questions. The first question was whether the PECBA applied to recovery of overpaid wages. The parties agreed that the PECBA applied only if recovery of overpaid wages was a mandatory subject of bargaining. If the PECBA applied, the second question was whether the PECBA prevailed in the event there was a conflict between it and RCW 49.48.200 and RCW 49.48.210(10), the wage overpayment statutes.

¶16 The Examiner concluded that recovery of overpaid wages was a mandatory subject of bargaining, so the PECBA applied. The Examiner also concluded that the wage overpayment statutes did not insulate the County from complying with the PECBA. The Examiner ruled the County committed ULPs when it circumvented Teamsters and refused to bargain the decision of how the employees would repay the overpayments and then unilaterally deducted the overpayments without bargaining. The Examiner ordered the County to restore the status quo ante by returning the wages and accrued leave collected, "plus interest." CP at 79.

¶17 The County appealed to the PERC board. The PERC board issued a decision affirming the Examiner and adopting its findings of fact, conclusions of law, and order. The County appealed PERC's decision to the Benton County Superior Court. That court affirmed PERC's decision. The County then appealed to this court.

ANALYSIS

STANDARDS OF REVIEW

¶18 We review an appeal from a PERC decision involving a ULP in accordance with the Administrative Procedure Act (APA), chapter 34.05 RCW. Amalgamated Transit Union, Local 1384 v. Kitsap Transit , 187 Wash. App. 113, 123, 349 P.3d 1 (2015) ; City of Vancouver v. Pub. Emp't Relations Comm'n , 107 Wash. App. 694, 702, 33 P.3d 74 (2001). Under the APA, we may grant relief from an agency order for any one of nine reasons set forth in RCW 34.05.570(3). Of these, the one relevant to our disposition is whether PERC erred in interpreting or applying the law. RCW...