Petitioner Oregon Public Employees Union (OPEU), the exclusive representative of a bargaining unit of classified staff employed by the Oregon University System (OUS), seeks judicial review of an order on reconsideration of the Employment Relations Board (ERB), in which ERB concluded that OPEU had committed an unfair labor practice under ORS 243.672(2)(d). Specifically, OPEU assigns error to ERB's conclusion that OPEU breached its duty of good faith and fair dealing under the parties' collective bargaining agreement (CBA) when its staff sent e-mail to OUS employees at work. OUS cross-assigns error to ERB's conclusions that OPEU did not violate the express terms of the CBA and that OPEU did not refuse to abide by an arbitration award. We review ERB's factual findings for substantial evidence and its legal conclusions for errors of law. ORS 183.482(8)(a)-(c). We reverse.
Because they are supported by substantial evidence, we take the following facts from ERB's order on reconsideration. OPEU entered into a CBA for the years 1993 to 1995 with OUS's predecessor agency. CBA allowed the union to use bulletin boards to communicate with its members in designated areas of the employer's work premises. During negotiations for a successor agreement, OPEU proposed to use an electronic bulletin board to post messages that its members could access. The 1995-97 agreement between OPEU and OUS's predecessor agency ultimately provided, in Article 10, Section 4, that union officers and stewards "shall" have access to electronic bulletin boards under specified conditions. That provision was carried over, in almost identical form, to the 1996-99 CBA between OPEU and OUS, which furnishes the basis for this proceeding.
On December 22, 1998, OUS filed a complaint with ERB, alleging that OPEU had violated ORS 243.672(2)(d) by not abiding by the first arbitrator's decision. On July 2, 1999, in response to the second arbitrator's decision, OUS filed an amended complaint, adding an allegation that OPEU had violated ORS 243.672(2)(d) by not abiding by the second decision. On August 2, 1999, OUS filed a second amended complaint alleging that OPEU had breached the CBA by its continued use of the OUS e-mail system. OUS filed a third and final amended complaint on September 9, 1999.
ERB agreed with the hearing officer that OPEU had not refused to abide by the second arbitrator's decision
ORS 243.672(2) provides, in part:
"* * * * *
Although we normally would begin our analysis with the petitioner's assignment of error on review, the nature of the issues here dictates otherwise. ERB concluded that OPEU breached its implied duty of good faith and fair dealing, but it necessarily reached that determination only after concluding that OPEU had not breached any express provision of the CBA. That is so because a duty of good faith and fair dealing—which
Logically then, where both types of claims are at issue on review, a breach of express contract claim should be analyzed before a claim of breach of the implied duty of good faith and fair dealing. Thus, we begin with OUS's first cross-assignment of error, that ERB erred in concluding that OPEU had not committed an unfair labor practice by breaching an express provision of the CBA. OUS concedes that the CBA is silent on e-mail use, but it argues that OPEU's use of its e-mail system is inconsistent with Article 10, Section 4, of the CBA. OUS also contends that the "Management's Rights" provision, Article 9 of the CBA, reserves to it all rights that are not specifically modified elsewhere in the CBA. According to OUS, those retained rights include control over its e-mail system. OPEU responds that Article 10, Section 4, is inapplicable here. It also asserts that Article 9 does not give OUS the right to direct the internal operations of OPEU staff and that, because the CBA is silent on the use of e-mail, OPEU did not bargain not to send e-mail from its own computers. OPEU further asserts that OUS does not lose control over its property when OPEU sends e-mail and that, in any event, OUS employees, not OPEU, are "using" OUS's property to receive such e-mail.
We review ERB's interpretation of the CBA for errors of law. ORS 183.482(8)(a). As ERB correctly recognized, CBAs generally are interpreted in the same manner as are other contracts. Portland Fire Fighters' Assn. v. City of Portland, 181 Or.App. 85, 91, 45 P.3d 162, rev. den., 334 Or. 491, 52 P.3d 1056 (2002) (citing OSEA v. Rainier School Dist. No. 13, 311 Or. 188, 194, 808 P.2d 83 (1991)). At the first level of analysis, we examine the text of the disputed contract provision in the context of the entire CBA. Yogman v. Parrott, 325 Or. 358, 361, 937 P.2d 1019 (1997). If the text is unambiguous, no further analysis is warranted. Marion Cty. Law Enforcement Assn. v. Marion Cty., 130 Or.App. 569, 576, 883 P.2d 222 (1994), rev. den., 320 Or. 567, 889 P.2d 1299 (1995) (finding error where ERB resorted to extrinsic evidence when contract provisions were not ambiguous). A contract provision is ambiguous if it can reasonably be given more than one plausible interpretation. Portland Fire Fighters' Assn., 181 Or.App. at 91, 45 P.3d 162.
We agree with ERB and the parties that the CBA here is unambiguous. The term "e-mail" does not appear anywhere in the CBA. Article 10, Section 4, does refer to an "electronic bulletin board or post office box system," to which "union officers and stewards" may "post" messages, and it mandates that any electronic bulletin board system be "noninteractive." However, that provision cannot be read to apply to e-mail. E-mail is "electronic mail" or "a message sent by electronic mail." Webster's Collegiate Dictionary 376 (10th ed. 1999).
Moreover, Article 10, which sets out 18 sections pertaining to union rights, does not purport to govern all of OPEU's rights and obligations relating to communication with its members. It fails to address, for example, whether OPEU representatives are permitted to communicate with OUS employees at the latter's work telephone numbers regarding union business. Read in context, Article 10, Section 4, simply does not prohibit OPEU staff from sending e-mail to union members at their work e-mail addresses.
As noted, OUS also asserts that Article 9—the Management's Rights provision of the CBA—prohibits OPEU's use of OUS's e-mail
"(e) Relieve employees from duty because of lack of work or other reasons.
"(g) Determine methods, means and personnel by which operations are to be conducted."
Although ERB did not address Article 9 in either its original order or its order on reconsideration, ERB apparently rejected OUS's argument that Article 9 provided the contractual basis for finding an express breach.
We likewise are not persuaded by OUS's argument. OPEU's conduct does not violate any of the specified management rights listed in Article 9. Article 9 focuses on the rights of management to direct its "work force," and each of the subsections, explicitly or implicitly, recognizes management's authority over its "employees." None of the management rights listed in Article 9 addresses union activity, however. Even assuming for the sake of argument that, when Article 9 reserves "all rights of management in the direction of [its] work force," it reserves OUS's right to control its employees' use of OUS computers to receive and read OPEU e-mails, it does not reserve a right to prevent OPEU from sending the e-mails. Article 9 governs the rights of management to direct its employees, not those of OPEU. Nor does OUS assert that OPEU's e-mail practices somehow interfere with its authority under Article 9 to direct its employees or to determine the method, means, or personnel by which operations are conducted. We conclude that the CBA is unambiguous and that it does not address the specific conduct at issue. Accordingly, we affirm ERB's ruling that OPEU did not breach any express provision of the CBA as alleged in OUS's complaint.
We turn to OPEU's assignment of error on review, in which it asserts that ERB erred in concluding that it committed an unfair labor practice by breaching its duty of good faith and fair dealing and in ordering OPEU to cease and desist from sending e-mail to OUS employees. OPEU argues that, because the CBA is silent with respect to e-mail use, there is no contractual obligation to which the duty of good faith and fair dealing could attach. According to OPEU, because the CBA is unambiguous, ERB erred in resorting to extrinsic evidence to discern such a duty.
Again, OUS concedes that the CBA does not specifically address e-mail. However, relying on Article 9 and the general principle that a union may not use an employer's property unless it has bargained for that right, it argues that, in the absence of a specific provision giving OPEU paid staff the right to use OUS's e-mail system, OPEU had no reasonable expectation that it had such a right.
In Perkins v. Standard Oil Co., 235 Or. 7, 16, 383 P.2d 107 (1963), the Oregon Supreme Court first recognized that every contract includes an implied covenant of good faith and fair dealing. In that case, the court held that an oil company had an implied duty not to solicit its distributor's customers, even though the contract between them provided that the oil company retained the right to select its own customers. In doing so, the court observed that, if the oil company "was at liberty to solicit as direct customers, as it contends, [plaintiff's customers], plaintiff was in a state of economic servility; we do not believe that the parties intended such a result at the time the contract was signed." Id. at 17, 383 P.2d 107. Although the court invoked a duty that was not expressed in the contract, it did so in order to fulfill the parties' reasonable expectations, which, in its view, could not have been to create a completely one-sided agreement. Id. at 16, 383 P.2d 107.
" `Good faith performance or enforcement of a contract emphasizes faithfulness to an agreed common purpose and consistency with the justified expectations of the other party * * *.
" `* * * * *
" `* * * A complete catalogue of types of bad faith is impossible, but the following types are among those which have been recognized in judicial decisions: evasion of the spirit of the bargain, lack of diligence and slacking off, willful rendering of imperfect performance, abuse of power to specify terms, and interference with or failure to cooperate in the other party's performance.'"
Best, 303 Or. at 562-63, 739 P.2d 554 (quoting Restatement (Second) of Contracts § 205 comments a, d (1979)) (emphasis added).
Thus, even though every contract contains an implied duty of good faith and fair dealing, that duty does not operate in a vacuum. As the citations to the Restatement (Second) of Contracts in Best suggest, the duty focuses on the "agreed common purpose" and the "justified expectations" of the parties, both of which are intimately related to the parties' manifestation of their purposes and expectations in the express provisions of the contract.
We conclude that it was not. As noted, Article 10 does not purport to regulate comprehensively all forms of communication between OPEU and its members who are employed by OUS. Article 10, Section 4, governs only postings to a noninteractive electronic bulletin board system, if such a system exists at a particular OUS institution. Its provisions relating to establishment and maintenance of an electronic bulletin board—which must be used in accordance with the restrictions listed in that section—can be effectuated regardless of any conduct of OPEU staff relating to the use of e-mail.
Moreover, as noted, Article 9 focuses on the employer's rights to manage its work force, not on union conduct; if OPEU does not interfere with those management rights, it does not violate the letter or spirit of
Assuming without deciding that resorting to extrinsic evidence is proper in these circumstances, the evidence shows that, after extensive bargaining, the parties decided not to include an express term in the CBA regarding the union's use of OUS's e-mail system. ERB apparently accepted OUS's version of the parties' bargaining history in concluding that OPEU breached the implied duty of good faith and fair dealing. However, even if, as represented in that history, OUS refused to agree to a provision authorizing the use of e-mail, that history does not necessarily mean that both parties expected that such use would be prohibited. It is equally plausible to infer that the parties simply could not agree on the issue. On that point, our observation in Vanderselt v. Pope, 155 Or.App. 334, 339, 963 P.2d 130, rev. den., 328 Or. 194, 977 P.2d 1172 (1998), is apt:
(Emphasis in original.)
OUS had the burden, as the complainant in the underlying unfair labor practice complaint, to establish that OPEU breached its implied duty. OAR 115-035-0042(6). That burden required OUS to identify the parties' objectively reasonable expectations. It attempted to do so by referring to general labor law principles with respect to which, it contended, the parties presumably bargained. It relied on a principle that ERB explained as follows:
(Footnote omitted.) ERB discerned that principle from a National Labor Relations Board (NLRB) opinion, Adtranz, ABB Daimler-Benz Transportation, 331 NLRB 40, 2000 WL 739735 (2000), and used it to explain why it broadened its good faith inquiry on reconsideration. The problem is that, if that principle applies to the parties' relationship, it does not derive from the CBA but, rather, from an external source of law. OUS's complaint is based on ORS 243.672(2)(d), which requires a violation of the "provisions of [a] written contract," not statutory or common-law principles. OUS has not cited any evidence, and we have found none, supporting the proposition that these parties expected that general labor law rights and obligations would be enforced by means of a duty implied in their CBA. See Pacific First Bank v. New Morgan Park Corp., 319 Or. 342, 354, 876 P.2d 761 (1994) (holding, in rejecting party's argument that "its reasonable expectations also included the law that was applicable" at the time the contract was signed, that "the duty of good faith operates to effectuate the reasonable expectations of the parties as determined under the terms of their contract" (emphasis in original)).
For the foregoing reasons, it is not appropriate to imply a prohibition against e-mail communication between OPEU and OUS employees who are union members in order to enforce the parties' "agreed common purpose" and their "justified expectations" under the CBA. Accordingly, we conclude that ERB erred in determining that OPEU breached its duty of good faith and fair dealing under the CBA.
We examined the scope of an arbitrator's decision for purposes of ERB review in Deschutes Cty. Sheriff's Assn. v. Deschutes Cty., 169 Or.App. 445, 9 P.3d 742 (2000), rev. den., 332 Or. 137, 27 P.3d 1043 (2001). There, a county sheriff's association filed an unfair labor practice complaint alleging that the county had failed to comply with an arbitration award. The arbitration award ordered reinstatement of a corrections officer who was suspended for an incident involving the use of a chemical agent to restrain an inmate. The arbitrator concluded that the conduct for which the officer was disciplined did not furnish just cause for suspending the officer. The arbitrator also found that the officer had engaged in other misconduct but, because that misconduct was not the reason given for discipline, it was beyond the scope of arbitration under the CBA. The county asserted that it did not have to comply with the arbitrator's award by reinstating the officer because to do so would violate public policy.
ERB relied on the arbitrator's finding of other misconduct to conclude that the county's refusal to comply with the arbitration award was not an unfair labor practice. We reversed, explaining that "[f]indings made beyond the scope of [the CBA] are not within the arbitrator's jurisdiction, and, consequently, no award may be entered based on such findings." Deschutes Cty. Sheriff's Assn., 169 Or.App. at 454, 9 P.3d 742. We noted that the CBA limited the arbitrator to the determination of whether the officer engaged in the conduct for which he was disciplined. Id. at 454-55, 9 P.3d 742. We accorded the arbitrator's other "gratuitous findings" no legal significance. Id. at 454, 9 P.3d 742.
Here, OPEU filed a grievance requesting a determination of whether OUS violated the CBA. The arbitrator defined the issue before him as whether OUS had violated Article 10, Section 4. Once the arbitrator determined that OUS had not violated the CBA, he did not have the authority to make any award regarding OPEU's conduct. ERB correctly determined that any award regarding OPEU's possible contract violation would have been beyond the scope of the parties' submissions. See Eugene Educ. Assoc. v. Eugene School Dist. 4J, 58 Or.App. 140, 147, 648 P.2d 60 (1982) (arbitrator's determination that no contract violation occurred "divested him of authority to make any award").
Further, as ERB noted, the arbitrator's award consisted only of the dismissal of OPEU's grievance. Contrary to OUS's assertions, the inclusion of the phrase "for the reasons set forth above" in the award section does not, and could not, incorporate the arbitrator's other findings as part of the award. That phrase is merely a style of concluding an opinion, a reference to the decision's rationale. It does not direct any action or remedy. We therefore affirm ERB's ruling that OPEU did not commit an unfair labor practice by reason of refusing to abide by the arbitrator's decision.
In sum, although we affirm ERB's conclusions on the express breach and arbitration issues, we reverse ERB's order because we conclude that OPEU did not commit an unfair labor practice by breaching its duty of good faith and fair dealing.