MTA v. MTA POLICE No. 131, September Term, 2010.
21 A.3d 1098 (2011)
420 Md. 141
MARYLAND TRANSPORTATION AUTHORITY v. MARYLAND TRANSPORTATION AUTHORITY POLICE LODGE # 34 OF THE FRATERNAL ORDER OF POLICE.
Court of Appeals of Maryland.
June 20, 2011.
Kathleen E. Wherthey , Asst. Atty. Gen. ( Douglas F. Gansler , Atty. Gen. of Maryland, Baltimore, MD), on brief, for petitioner.
Michael Marshall ( Herbert R. Weiner of Schlachman, Belsky & Weiner, P.C., Baltimore, MD), on brief, for respondent.
Argued before BELL, C.J., HARRELL, BATTAGLIA, GREENE, MURPHY, ADKINS and BARBERA, JJ.
In 2006, the Maryland Transportation Authority Police Lodge # 34 of the Fraternal Order of Police, Inc. ("FOP") convinced a receptive member each of the Maryland House of Delegates and of the Senate to introduce legislation in their respective chambers authorizing collective bargaining for the FOP's members. Subsequently, the FOP and the Maryland Transportation Authority ("MdTA") discussed the pending legislation. In an effort to avoid a legislative showdown over the proposed legislation, the parties struck a written memorandum agreement ("the Agreement") in which the MdTA agreed to fund a three-year, $11.46 million "personal patrol vehicle program" ("the take-home vehicle program" or "THV program"), "[p]rovided the bills [were] withdrawn, and no collective bargaining legislation covering the MdTA[ was] passed this session...." In addition, the FOP agreed not to advocate for such legislation in the following two legislative sessions. This multi-million dollar agreement was spread over a single page.
In the maiden year of the THV program, then-Governor Robert Ehrlich's administration funded the program. The incoming administration of Governor Martin O'Malley, however, declined to continue the funding. The FOP sued on theories of breach of contract and promissory estoppel, claiming in a sense that "the King has [simply and illegally] changed his mind." It is our view that, under well-settled principles of State collective bargaining law, the agreement between the FOP and the MdTA is unenforceable.
Factual and Procedural Background
The February 2006 Agreement
Without more, the Agreement concludes that the take-home vehicle program "will be essentially the program outlined in the [N]otebook prepared by the MdTA, in conformance with all laws and regulations." The referenced Notebook was approximately 400 pages in length.
According to the FOP's complaint, "[o]n 20 April 2006, the [MdTA] Board held a meeting where the members unanimously approved the plan to implement, over a three[-]year period, a police vehicle take[-]home program for sworn [MdTA] police personnel in exchange for withdrawal of [the] bills...." The governing body of the MdTA "consists of" the Secretary of the Transportation Department as ex officio chairman and eight other members appointed by the Governor. Maryland Code (2001, 2008 Repl.Vol., 2009 Supp.), Transportation Article ("Transp."), § 4-202(a)-(b). For its part under the Agreement, the FOP entreated successfully Delegate Steven DeBoy, Jr. and Senator John Gianetti, Jr., the bills' respective sponsors, to withdraw their collective bargaining bills. According to the FOP, thereafter, the MdTA "undertook steps to implement the [THV] program," "includ[ing] ordering an initial 25 cars, which the MdTA successfully purchased and delivered, and marketing the [THV] program to prospective recruits as an incentive for joining the MdTA force." The FOP noted several benefits from the adoption of the THV program, including that it would lead to an increased police street-presence. The briefs filed with this Court, the content of oral argument, and a review of the Notebook, however, make clear that the primary value of the THV program was as a non-monetary benefit for new and current officers.
In 2006, Governor O'Malley was victorious in the gubernatorial election. A few months after his administration assumed control of the Executive Branch, a newly-configured MdTA Board voted to discontinue the MdTA take-home vehicle program. On 29 June 2007, a day after that vote, the FOP filed a complaint in the Circuit Court for Baltimore County for breach of contract and promissory estoppel.
The MdTA filed a motion to dismiss, asserting that (1) the Agreement was unenforceable as too indefinite and (2) against public policy.
The Circuit Court agreed ultimately with the MdTA. In granting the MdTA's motion to dismiss, the Circuit Court stated that:
Despite verbalizing various grounds for its ruling in favor of the MdTA, the Circuit Court issued a written order, citing more generally as grounds for its action "the reasons stated in the [MdTA's] motion and the memoranda submitted in support thereof."
II. The Court of Special Appeals's Decision
In a 102-page reported opinion, a panel of the Court of Special Appeals concluded ultimately that the Circuit Court erred. Md. Transp. Auth. Police Lodge # 34 of FOP, Inc. v. Md. Transp. Auth., 195 Md.App. 124, 5 A.3d 1174 (2010). The intermediate appellate court began its opinion with a review of the formation, statutory authorization, and operations of the MdTA. Md. Transp. Auth., 195 Md.App. at 134, 5 A.3d at 1179. This prefatory foray was understandable—the Court of Special Appeals grounded significant portions of its later analysis on the notion that the MdTA has been ceded by the General Assembly a unique degree of independence and power, perhaps unprecedented among State agencies. Then, the panel of the intermediate appellate court examined each of the MdTA's arguments against the enforceability of the Agreement and the sustainability of a promissory estoppel claim. Although we shall reverse the Court of Special Appeals's judgment solely on the ground of the collective bargaining laws (as explained infra), we shall summarize, for contextual purposes, the intermediate appellate court's expansive treatment of the parties' arguments and counter-arguments.
As it did before the Court of Special Appeals, the MdTA argues that "`no action will lie upon a contract, whether written or verbal, where such a contract is vague or uncertain in its essential terms.'" Brief of Petitioner at 16 (quoting Robinson v. Gardiner, 196 Md. 213, 217, 76 A.2d 354, 356 (1950)). "[T]he one page memo," which "contains no fixed type, quantity, or price terms concerning a multi-year take-home car program," the MdTA continues, "[is] not clear and definite enough to constitute an enforceable contract."
The FOP maintains that the parties incorporated by reference the 400-page Notebook, which provides all of the necessary essential terms, including:
Quoting the principle that "`courts are reluctant to reject an agreement, regularly and fairly made,'" the intermediate appellate court held the one-page "Memorandum," standing alone, "sufficiently expresses, with definiteness and certainty, the nature and extent of the parties' obligations." Md. Transp. Auth., 195 Md. App. at 160, 161, 5 A.3d at 1195 (quoting Quillen v. Kelley, 216 Md. 396, 407, 140 A.2d 517, 523 (1958)). "Even if the Agreement... contained insufficient detail to be enforceable," the court explained in reasoning in the alternative, "the Agreement's reference to the `[N]otebook,' and its explicit indication that `the [THV] program will be essentially the program outlined in the notebook,' make clear that the `[N]otebook' was incorporated by reference into the Agreement, and provided the details of the program that the MdTA was agreeing to implement." Md. Transp. Auth., 195 Md.App. at 162, 5 A.3d at 1196.
B. Public Policy
1. Legislative Ethics
The MdTA contends that the Agreement constituted a "contract under which one party [would] obtain compensation for
The FOP retorts that "the Agreement only required that ... FOP members present the legislators with factual information explaining their preference for the [take-home vehicle p]rogram over collective bargaining." Moreover, the FOP disputes the characterization of the Agreement as contingent on the defeat of legislation. The FOP argues that "[t]he Agreement states [only] that the FOP will `ask sponsors to withdraw the collective bargaining bills.'" (Emphasis added.) It does not require that "the FOP `defeat' the bills ... or ... that the two bills not be passed."
After a survey of relevant Maryland law and treatises, the Court of Special Appeals determined that "whether ... contracts contemplate improper influence upon State officials" is "a question of fact...." Md. Transp. Auth., 195 Md.App. at 170, 5 A.3d at 1200; see id. (stating that the Court of Appeals in Frenkil v. Hagan, 146 Md. 94, 105, 125 A. 909, 913 (1924), "remanded for an evidentiary determination of whether the contracting parties expected to advocate to exert improper `political influence'"). In the present case, the intermediate appellate panel concluded that the FOP's "uncontroverted affidavits ... describ[ed] advocacy that, on its face, was above-board." Md. Transp. Auth., 195 Md.App. at 171, 5 A.3d at 1201.
With respect to the contingent-agreement argument, the Court of Special Appeals held that the Agreement did not represent a prohibited arrangement under S.G., § 15-713(1)(i). Md. Transp. Auth., 195 Md.App. at 172, 5 A.3d at 1202. The panel stressed that Maryland caselaw is concerned with "contingent financial incentive[s]," and the present Agreement involves only "public policy compromises...." Id. "To describe the trade-offs struck in the course of lawmaking as `compensation' on a `contingency basis,'" the Court of Special Appeals concluded, "is to stretch the meaning of those terms beyond their breaking point." Md. Transp. Auth., 195 Md.App. at 172-73, 5 A.3d at 1202. Thus, as neither "the [FOP nor] its members [were] ... disinterested parties hired to represent others' interest without any personal stake in the outcome," the statute governing lobbyists is inapplicable. Md. Transp. Auth., 195 Md.App. at 172, 5 A.3d at 1202 (emphasis added) (internal quotation marks omitted). But see S.G., § 15-701(a)(1)(ii) (defining "regulated lobbyist" as an entity that, "for the purpose of influencing any legislative action ...[,] communicates with an official or employee of the Legislative Branch ... and ... earns at least $5,000 compensation for all such communication and activities"); Brief of Respondent at 17, 19 (describing the multimillion dollar THV program, which required the FOP's promise to communicate with two legislators, as "a benefit for all MdTA police officers").
2. Delegated Powers and Sovereign Immunity
The MdTA alleges further that, in forming the Agreement, the "Secretary of the Authority ... exceeded ... legislatively granted powers, and[,] therefore[,] the ... resulting contract is [(1)] unenforceable
In riposte, the FOP asserts that the MdTA possesses a unique and vast amount of autonomy with respect to use of its funds. As such, the MdTA enjoyed necessarily the authority to enter into this contract. Moreover, in drafting this agreement, the MdTA was not hiring private lobbyists, but rather promoting the "recruit[ment] and retain[ment of] qualified police officers," a "strong" and presumably proper "interest to the MdTA...." As further indication that the MdTA was not hiring private lobbyists, the FOP reiterates that "no money [was] paid to the FOP or its members; rather the benefit was to the MdTA Police Force as a whole."
The Court of Special Appeals agreed with the FOP that the THV program "was not an elaborate means of compensating the [FOP] for advocating the agency's position to the Legislature." Md Transp. Auth., 195 Md.App. at 184-85, 5 A.3d at 1209 (footnote omitted). Therefore, the intermediate appellate court concluded "the Agreement ... is [not] an ultra vires hiring of lobbyists, beyond the scope of the agency's enumerated powers." Md. Transp. Auth., 195 Md.App. at 185, 5 A.3d at 1209. In emphasizing the word "agency's," the intermediate appellate panel seemed to suggest that the FOP was advocating its own position by seeking withdrawal of the collective bargaining bills. But see Brief of Respondents at 5 ("For approximately three years, the FOP had been seeking collective bargaining by attempting to introduce legislation providing for collective bargaining.").
With respect to the doctrine of sovereign immunity, the Court of Special Appeals determined that "the State has waived [such] ... immunity under limited circumstances in regard to claims based on written contracts," as in the present case. Md. Transp. Auth., 195 Md.App. at 156, 5 A.3d at 1193 (citing Magnetti v. Univ. of Md., 402 Md. 548, 560-62, 562 n. 6 937 A.2d 219, 226, 227 n. 6 (2007)). Having decided that the MdTA was not hiring lobbyists via the Agreement, the intermediate appellate court did not consider further the MdTA's contention that the doctrine applies nevertheless to ultra vires written contracts. See id.
The MdTA proffers that the Agreement is a procurement contract, be it either for vehicles or lobbying services. In either case, it did not comport with relevant procurement laws, or so the MdTA avers, and is therefore unenforceable. The FOP argues (as it did before the Court of Special Appeals) that the Agreement, which involves the procurement of only vehicles
The Court of Special Appeals agreed that procurement includes "the process of obtaining services," i.e., the process of obtaining "the labor, time, or effort of a contractor." Md. Transp. Auth., 195 Md. App. at 175-76, 5 A.3d at 1204 (quoting S.F.P., § 11-101(m)(1), (w)(1)(ii)). The intermediate appellate court noted, however, that the FOP overlooked S.F.P., § 11-101(m), which states that procurement includes also "`the process of ... obtaining supplies....'" Md. Transp. Auth., 195 Md.App. at 175, 5 A.3d at 1204. The term "supplies" may refer to "tangible personal property," presumably including vehicles. Md. Transp. Auth., 195 Md.App. at 175-76, 5 A.3d at 1204 (quoting S.F.P. 11-101(w)(1)(ii)). The intermediate appellate court explained also that the statute excepts the MdTA in some, but not all, respects. Md. Transp. Auth., 195 Md.App. at 177, 5 A.3d at 1204 (quoting S.F.P. § 12-101(a), which states that "[t]his section does not apply to capital expenditures by the ... [MdTA], in connection with State roads, bridges, or highways...."). As a result, it concluded that, unless exempted expressly, the Legislature intended for the procurement laws to apply to the MdTA. Id.
Nevertheless, our intermediate appellate brethren concluded that this particular agreement was not a procurement contract, making inapposite (1) State procurement laws, as well as (2) administrative law principles, which otherwise would require that the dispute be heard first by the relevant agency, the Board of Contract Appeals, before recourse to the courts. Md. Transp. Auth., 195 Md.App. at 181, 5 A.3d at 1207. The Court of Special Appeals granted that "the Board of Contract Appeals is not `palpably without jurisdiction' over a `contract for the procurement of ... services to be rendered to the State,' even if that contract may not technically be a `procurement contract.'" Md. Transp. Auth., 195 Md.App. at 182-83, 5 A.3d at 1208 (quoting State v. Md. State Bd. of Contract Appeals and Law Offices of Peter G. Angelos, P.C., 364 Md. 446, 458, 773 A.2d 504, 511 (2001)). It determined, however, that "[t]he Agreement is not a procurement contract for vehicles ... because it is not an agreement between the MdTA and the supplier of the vehicles to the agency." Md. Transp. Auth., 195 Md. App. at 184, 5 A.3d at 1208. Nor is the Agreement a procurement contract for lobbying services, the intermediate appellate court resolved, as "the [FOP was not] advocating for the agency's position to the Legislature." Md. Transp. Auth., 195 Md. App. at 184-85, 5 A.3d at 1209. To conclude, the Court of Special Appeals emphasized that "the Agreement did not create a buyer-seller relationship with a State agency." Md. Transp. Auth., 195 Md.App. at 185, 5 A.3d at 1209. Therefore, "whether the Agreement was a procurement contract is not `reasonably debatable,'" and the Board of Contract Appeals "is palpably without jurisdiction...." Md. Transp. Auth, 195 Md.App. at 183, 185, 5 A.3d at 1208-09; see Md. Transp. Auth., 195 Md. App. at 183, 5 A.3d at 1208 (stating that "Angelos ... teaches ... courts [to] defer to an agency to make its own jurisdictional determination in the first instance, if the question on which jurisdiction turns is `reasonably debatable'").
4. Collective Bargaining
The MdTA charges also that the purported contract was a collective bargaining agreement that was noncompliant with relevant law. The MdTA points out that Md.Code (1993, 2009 Repl.Vol., 2010 Supp.), State Personnel and Pensions ("S.P.P."), § 3-503(a) defines collective bargaining as "includ[ing] all matters relating to wages, hours, and other terms and conditions of employment," and that the FOP concedes freely that the Agreement concerned a "benefit" of employment—take-home vehicles. As the Agreement involves matters associated with collective bargaining, the MdTA posits that the parties should have complied with, but did not, Title 3 of the S.P.P., which governs the process of collective bargaining. The MdTA suggests a number of statutory "preconditions," required before any agreement involving matters of collective bargaining—that is, "wages, hours, and other terms and conditions of employment"—becomes enforceable. They include (1) the employees have the right to bargain collectively, (2) the employees elected an exclusive representative, (3) the election was certified by the State Labor Relations Board, (4) the agreement was reduced to a memorandum of understanding signed by the Governor or his/her designee, and (5) the agreement was ratified by a majority of the employees in the bargaining unit.
The FOP concedes that the Agreement did not comport with the collective bargaining statute, arguing instead that compliance was unnecessary. "[T]he Agreement is not a collective bargaining agreement," but rather "a simple contract," according to the FOP. "The MdTA is assuming that collective bargaining is the sole manner in which to contract"; however, "[n]othing in the statute or [caselaw] excludes the ability to enter into a simple contract absent the availability of collective bargaining."
The Court of Special Appeals held that "the Agreement was not subject to the [preconditions/] requirements related to collective bargaining agreements." Md. Transp. Auth., 195 Md.App. at 187, 5 A.3d at 1210. The intermediate appellate court devoted over twenty pages of its opinion to a detailed examination of nine opinions of this Court. Md. Trans. Auth., 195 Md.App. at 185-208, 5 A.3d at 1209-23. It relied, however, in large part upon a few key statements in McCulloch v. Glendening, 347 Md. 272, 701 A.2d 99 (1997); see Md. Transp. Auth., 195 Md. App. at 203-04, 5 A.3d at 1220. In McCulloch, we reiterated that, "`absent express legislative authority, a government agency cannot enter into binding arbitration or binding collective bargaining agreements establishing wages, hours, pension rights, or working conditions for public employees.'" McCulloch, 347 Md. at 275-76, 701 A.2d at 100 (quoting Office and Prof'l Employees Int'l Union, Local 2 v. Mass Transit Admin., 295 Md. 88, 97, 453 A.2d 1191, 1195 (1982)). "[T]he purpose of the rule," we continued, "is `to insure that a governmental agency does not, without authority, abdicate or bargain away its statutory discretion.'" McCulloch, 347 Md. at 276, 701 A.2d at 100 (quoting Montgomery County Educ. Ass'n v. Bd. of Educ. of Montgomery County, 311 Md. 303, 313, 534 A.2d 980, 984-85 (1987)). Therefore, "not all collective bargaining agreements to which the State or a governmental agency is a party require prior express legislative approval...." McCulloch, 347 Md. at 275, 701 A.2d at 100. "[I]t is only those that contain a binding arbitration clause or are otherwise binding upon and enforceable against the State." Id. (citations omitted).
Md. Transp. Auth., 195 Md.App. at 204-05, 5 A.3d at 1220-21 (footnote omitted). Earlier in its opinion, the Court of Special Appeals mentioned also that the MdTA "enjoys a `catch-all' grant of authority, empowering it to `do anything else necessary or convenient to carry out the powers granted' to it by statute." Md. Transp. Auth., 195 Md.App. at 141, 5 A.3d at 1183-84 (quoting Trans., § 4-205(g)).
Second, the intermediate appellate court decided, seemingly in the alternative, that explicit legislative authorization was unnecessary. See McCulloch, 347 Md. at 275, 701 A.2d at 100 ("[N]ot all collective bargaining agreements to which the State or a governmental agency is a party require prior express legislative approval; it is only those that contain a binding arbitration clause or are otherwise binding upon and enforceable against the State."
Md. Transp. Auth., 195 Md.App. at 203-04, 5 A.3d at 1220 (footnote omitted).
We granted the MdTA's petition for writ of certiorari, Maryland Transportation Authority v. Maryland Transportation Authority Police Lodge #34 of the Fraternal Order of Police, 417 Md. 500, 10 A.3d 1180 (2011).
Whatever our reservations with regard to the Court of Special Appeals's opinion respecting legislative ethics, delegated powers/sovereign immunity, and procurement, we shall limit our analysis and holding to the intermediate appellate court's treatment of the issue of the applicability of collective bargaining laws and principles.
We agree that "the resolution of th[is case] ... does not turn on the label that is applied to the Agreement." Md. Transp. Auth., 195 Md.App. at 203, 5 A.3d at 1220. We observe, however, that the substance of the Agreement may be said fairly to concern "collective bargaining"— considering that the statute defines "collective bargaining" as "includ[ing] all matters relating to wages, hours, and other terms and conditions of employment." S.P.P., § 3-502(a).
A. Did the Legislature Authorize or Approve Expressly Collective Bargaining?
We reviewed the many powers delegated to the MdTA throughout the Maryland Code. Undoubtedly, the General Assembly bestowed upon the MdTA not only a wide array of powers, but also a great measure of self-governance and autonomy. As such, we may conclude safely—in the same vein as the Court of Special Appeals—that the MdTA is a "special" agency, entrusted with a unique set of powers and tools to carry out those powers.
Nonetheless, we do not agree that the grant of these powers satisfies the requirement that the Legislature authorize expressly the formation of collective bargaining agreements. The MdTA possesses only those powers provided for in the statutes (notwithstanding a reference to "incidental" powers
In 1982, we rephrased a well-established rule: "[A]bsent express legislative authority, a government agency cannot enter into binding arbitration or binding collective bargaining agreements establishing wages, hours, pension rights, or working conditions for public employees." Mass Transit Admin., 295 Md. at 97, 453 A.2d at 1195 (citations omitted). We traced the original iteration of this rule to Maryland Classified Employees Ass'n, Inc. v. Anderson, 281 Md. 496, 508-09, 380 A.2d 1032, 1039 (1977), which explained that:
This exposition of the law, we held, was consistent with precedent dating to 1945. Anderson, 281 Md. at 509, 380 A.2d at 1039-40 (citing Mugford v. City of Baltimore, 185 Md. 266, 270, 44 A.2d 745, 746-47 (1945)), in which we stated that ("the Department of Public Works could not bind the City, by contract, in any particular relative to hours, wages or working conditions, either as to union employees, or as to all employees in the same classification. To the extent that these matters are covered by the provisions of the City Charter, creating a budgetary system and a civil service, those provisions of law are controlling. To the extent that they are left to the discretion of any City department or agency, the City authorities cannot delegate or abdicate their continuing discretion").
In 1999, the General Assembly enacted a statutory regime to govern collective bargaining at the State level. See Chapter 298 of the Laws of 1999. In this statutory scheme, the Legislature granted expressly the right to bargain collectively to a limited universe of employees, while restricting expressly such right to other types of employees. MdTA employees were not among either group.
In choosing the fortunate few, the Legislature provided a caveat. S.P.P., § 3-102(b)(8) provides that "[t]his title does not apply to ... an employee who is entitled to participate in collective bargaining under another law...." Therefore, the Legislature left open the possibility that another law may authorize collective bargaining— that is, the Legislature indicated that another statutory provision may arise to grant and govern the collective bargaining process between State entities and employees.
Although the Court of Special Appeals makes no reference to this statutory exception, its opinion expresses the same idea—that other parts of the Maryland Code, pertaining to the MdTA, authorize expressly the MdTA and its employees to bargain collectively. See Brief of Petitioners at 36 ("The Court of Special Appeals erroneously reversed the circuit court ... because, the opinion states, the Authority had sufficient budgetary autonomy to enter into discretionary agreements with its own employees and be bound by them, regardless of the collective bargaining statutes."). Indeed, the intermediate appellate court concluded that the MdTA enjoyed an array of delegated powers so expansive that, it stands to reason, the right to bargain collectively is included in them implicitly. The sum of these individual grants of power, our appellate brethren went so far as to suggest, imbue the MdTA with plenary power, such that the agency operates in an autonomous, parallel governmental universe. See Md. Transp. Auth., 195 Md.App. at 207, 5 A.3d at 1222 ("[B]y virtue of its plenary authority over its own budget, [the MdTA] occupies the same position as the Governor and General Assembly....").
We disagree with our appellate brethren that the Legislature authorized expressly the MdTA to bargain collectively. Without debate, the General Assembly delegated to the MdTA a range of powers, including
In these particular circumstances, the Legislature may not satisfy the requirement of "express legislative authori[zation]" implicitly, i.e., through broad grants of tangentially-related powers. Indeed, when we referred to such express authorization in the past, we described specific legal provisions that not only granted the power to bargain collectively, but also set forth a detailed framework by which such bargaining is to be conducted. We were not commenting on a broad swath of legislative delegations that, when taken collectively, may authorize arguably a certain agency action. See e.g., Anderson, 281 Md. at 507, 380 A.2d at 1038 (discussing the implications of a Harford County ordinance which authorized "County employees... to participate effectively in the determination of the terms and conditions of their employment" and set forth bargaining procedures); Mass Transit Admin., 295 Md. at 98, 453 A.2d at 1196 (holding that a legislative provision which permitted the Mass Transit Administration to bargain collectively with "accredited representatives of the employees who form part of any operating company," using particular procedures, did not include the union and, consequently, the two could not bargain collectively); Montgomery County Educ. Ass'n, 311 Md. at 305, 534 A.2d at 981 (interpreting a provision of the Education Article which "empowers a public school employer and its employees ... to meet and negotiate," in accordance with certain procedures, "a collective bargaining agreement") (internal quotation marks omitted); Anne Arundel County v. Fraternal Order of Anne Arundel Det. Officers and Pers., 313 Md. 98, 543 A.2d 841 (1988) (analyzing a county ordinance which "authorizes the County to bargain collectively" pursuant to pre-set procedures); Freeman v. Local 1802, AFSCME Council 67, 318 Md. 684, 569 A.2d 1244 (1990) (same); Fraternal Order of Police, Inc., Baltimore County, Lodge No. 4 v. Baltimore County, 340 Md. 157, 665 A.2d 1029 (1995) (same).
We expect to see such an unequivocal authorization of the right to bargain collectively, as well as a promulgation of practical bargaining requirements related thereto, given that collective bargaining involves (1) delegating powers previously-entrusted to the agency, and (2) the careful balancing of important considerations, such as (a) the right of employees to take part (or not) in an employee organization, S.P.P., § 3-301(a)(1); (b) the right of employees to be fairly represented by an exclusive representative, S.P.P., § 3-301(a)(2); and (c) the right of the State to carry out its mission efficiently and effectively, S.P.P, § 3-302(1)(ii), to name a few. The initial decision to permit an agency to bargain away legislatively-given powers— as well as the decision respecting how such a relinquishment may take place—involves material policy choices that belong to a legislature, not a government agency. As such, our rule forbidding agencies from bargaining collectively preemptively—that is, from "abdicat[ing] or bargain[ing] away... statutory discretion" without express authorization—remains sound.
In Title 3 of the S.P.P Article, the Legislature granted and denied, expressly, certain groups the right to bargain collectively. At the relevant time in this case, the Legislature did not include the MdTA or its employees in either group. Neither did the Legislature grant the MdTA, in any other statutory provision, the authority to bargain collectively. In these circumstances, we decline to view the broad grants of authority as an equivalent of, or a substitute for, an express legislative directive in this regard.
B. Does the Agreement Fall within the McCulloch Exception?
As stated previously, "absent express legislative authority, a government agency cannot enter into binding arbitration or binding collective bargaining agreements establishing wages, hours, pension rights, or working conditions for public employees." McCulloch, 347 Md. at 275-76, 701 A.2d at 100 (internal quotation marks and citation omitted). In interpreting this principle, we explained that "not all collective bargaining agreements to which the State or a governmental agency is a party[, however,] require prior express legislative approval; it is only those that contain a binding arbitration clause or are otherwise binding upon and enforceable against the State." McCulloch, 347 Md. at 275, 701 A.2d at 100 (citations omitted). "[T]he purpose of the rule ... is to insure that a governmental agency does not, without authority, abdicate or bargain away its statutory discretion." McCulloch, 347 Md. at 276, 701 A.2d at 100 (internal quotation marks and citation omitted). By entering into a binding contract, a government
Because the MdTA possessed no "prior express legislative approval" to bargain collectively, the question, therefore, is whether such express approval was necessary to make the Agreement enforceable. In that vein, the Court of Special Appeals held that authorization was not required because the Agreement:
Md. Transp. Auth., 195 Md.App. at 203-04, 5 A.3d at 1220 (footnote omitted).
Patently, the Agreement does not include a binding arbitration clause. This, however, does not end the analysis. Our precedents instruct that a government agency, without authority, may not enter into "binding arbitration or binding collective bargaining agreements establishing wages, hours, pension rights, or working conditions...." McCulloch, 347 Md. at 275-76, 701 A.2d at 100 (emphasis added) (internal quotation marks and citation omitted). That is to say, a government agency needs "prior express legislative approval" to enter into an agreement "that contain[s] a binding arbitration clause or [is] otherwise binding upon and enforceable against the State." McCulloch, 347 Md. at 275, 701 A.2d at 100 (emphasis added) (citations omitted).
In the present case, the MdTA entered into an agreement which altered and, thereby, "established" the compensation package afforded MdTA police officers. Stated another way, the MdTA formed an agreement that bound purportedly the agency and, therefore, the State.
Transp., § 4-205(d) states that "the [MdTA] may ... fix the compensation of any other agents and employees that it considers necessary to exercise its powers and perform its duties." The section refers only to the MdTA. Yet, the MdTA decided, in conjunction with its employees and outside its statutorily-regulated decision-making process, a matter the Legislature reserved for the agency's singular judgment. Cf. McCulloch, 347 Md. at 292, 701 A.2d at 109 (upholding an executive order authorizing a certain form of collective bargaining because "none of th[e provisions of the order], either singularly or collectively, causes State officials to bind themselves to exercise ... discretionary legislative powers") (internal quotation marks and citation omitted). Because the Legislature did not authorize expressly the MdTA and its employees to bargain collectively at the time the Agreement was executed, the Agreement is unenforceable.
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