Mulheim v. Knox Co. Board of Education

IN THE SUPREME COURT OF TENNESSEE

AT KNOXVILLE

FILED

FOR PUBLICATION

September 27, 1999

Filed: September 27, 1999

Cecil Crowson, Jr.

Appellate Court Clerk

MICHELE P. MUHLHEIM, )

)

PLAINTIFF/APPELLANT, ) Knox Chancery No. 137765-1

)

v. ) Hon. Frederick D. McDonald,

) Chancellor

KNOX COUNTY BOARD OF )

EDUCATION, )

)

DEFENDANT/APPELLEE. )

)

AND ) NO. 03S01-9808-CH-00089

)

JOANNE I. HAYDEN, A Citizen and )

Resident of Knox County, Tennessee, )

)

PLAINTIFF/APPELLANT, )

)

v. ) Knox Chancery No. 131939-1

)

KNOX COUNTY, A Political ) Hon. Frederick D. McDonald,

Subdivision of the State of Tennessee, ) Chancellor

)

DEFENDANT/APPELLEE. )

FOR APPELLANT MUHLHEIM: FOR APPELLANT HAYDEN:

WILLIAM C. CREMINS J. ANTHONY FARMER

Knoxville Knoxville

FOR APPELLEE:

WENDELL K. HALL

Knoxville

OPINION

REVERSED HOLDER, J.

OPINION

We granted this consolidated interlocutory appeal to determine whether a

school board, which is initially exempted by statute from providing workers’

compensation coverage, may divide its employees along professional and

nonprofessional lines, providing workers’ compensation benefits for

nonprofessional, nonunion employees while excluding certified teachers who are

represented by a union. We conclude that the Board made a valid division of its

workforce pursuant to Tenn. Code Ann. § 50-6-106(5) (1991) (current version

found at Supp. 1998). Accordingly, we reverse the trial court's denial of the

defendant's motions for summary judgment.

PROCEDURAL AND FACTUAL BACKGROUND

On October 17, 1996, Joanne I. Hayden, a certified teacher, filed suit

seeking workers' compensation benefits for an alleged work-related injury she

sustained in May 1996 while employed by the Knox County Board of Education

(“the Board”). On March 12, 1998, Michele P. Muhlheim, also a certified teacher,

filed suit seeking workers' compensation benefits for an alleged work-related

injury she sustained in October 1997 while employed by the Board.

In both cases, the Board moved for summary judgment claiming that

because both plaintiffs are certified teachers they are not eligible for workers’

compensation under a collective bargaining agreement between the Board and

the Knox County Education Association (KCEA), the union representing the

teachers.

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In support of its motion, the Board provided an affidavit from its former

chief negotiator, Bob Chambers, stating that workers’ compensation benefits

were “on the table” for negotiations in 1980, 1982, 1985, and 1990. In each

case, the benefits were rejected and were not included in the agreement

between the Board and the KCEA. Chambers stated that during the 1990-91

negotiations, the Board offered workers’ compensation benefits that the KCEA

rejected. Instead, the union bargained for monetary and financial benefits.

Chambers stated that the Board has provided “Accident Protection Insurance” to

teachers since 1982; a 1995 Memorandum of Agreement between the Board

and the KCEA confirms this coverage. The Memorandum of Agreement was in

effect when the two teachers were injured.

The Board also presented evidence that in 1987 it elected to provide

workers' compensation benefits to a group of nonprofessional, nonunion

employees. According to a letter to the Tennessee Department of Labor,

Division of Workers Compensation, the coverage applied to food service

employees, maintenance employees, custodians, clerks, teachers' aides,

secretaries, and substitute teachers. The supervisors for the food service and

maintenance departments were not covered.

In response, Hayden and Muhlheim both argued that the Board could not

provide workers’ compensation to certain employees within the department and

not provide coverage to all employees within the department. When the Board

elected to provide coverage for some employees in 1987, the effect was to elect

to provide coverage for all employees. Thus, the plaintiffs argue, all the

employees are currently covered by the Act, and the 1995 Memorandum violates

Tenn. Code Ann. § 50-6-114 (1991) (current version found at Supp. 1998), which

prohibits employers from making contracts relieving them of their obligations

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under the Act. The plaintiffs also contend that the Education Professional

Negotiations Act, Tenn. Code Ann. § 49-5-601, et seq., does not allow workers'

compensation to be a negotiable term in the bargaining process.

The trial court denied the Board’s motions for summary judgment in both

cases. Thereafter, the Chancellor granted the petitions of Muhlheim and the

Board seeking interlocutory appellate review in both cases pursuant to Rule 9,

Tenn. R. App. P. This Court granted the interlocutory appeals and consolidated

the cases. For the reasons that follow, we reverse the trial court and hold that

the defendant is entitled to summary judgment in both cases.

ANALYSIS

Summary judgment is appropriate if the movant can show that there is no

genuine issue as to any material fact and that the movant is entitled to a

judgment as a matter of law. Tenn. R. Civ. P. 56.04. The non-movant is entitled

to the strongest legitimate view of the evidence and is entitled to all reasonable

inferences that may be drawn from the evidence, discarding all countervailing

evidence. Shadrick v. Coker, 963 S.W.2d 726, 731 (Tenn. 1998) (citing Byrd v.

Hall, 847 S.W.2d 208, 210-11 (Tenn. 1993)).

In determining whether summary judgment is appropriate in the case now

before us, we must consider whether the undisputed facts establish that the

election statute allows a governmental entity, such as the Board, to elect

coverage for nonunion employees while excluding the certified teachers who are

union members.

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A provision of the Tennessee’s Workers Compensation Act that

addresses governmental entities states:

[T]he state, any county or municipal corporation may

accept the provisions of this chapter by filing written

notice thereof with the division under the

commissioner of labor, at least thirty (30) days before

the happening of any accident or death, and may at

any time withdraw the acceptance by giving like

notice of the withdrawal. The state, any county or

municipal corporation may accept the provisions of

this chapter as to any department or division of the

state, county or municipal corporation by filing written

notice thereof with the division under the

commissioner of labor at least thirty (30) days before

the happening of any accident or death and may, at

any time, withdraw acceptance for the division or

department by giving like notice of the withdrawal,

and such acceptance by the state, county or

municipal corporation for any department or division

thereof, shall have effect only of making the

department or division designated subject to the

terms of this chapter;

Tenn. Code Ann. § 50-6-106(5) (1991) (emphasis added).

The issue now before us is whether a school board, which is initially

exempted by statute from providing workers’ compensation coverage, may divide

employees along professional and nonprofessional lines and may elect to

provide workers' compensation benefits for nonprofessional, nonunion

employees while excluding professional, certified teachers who are represented

by a union. This issue is one of first impression, and there is scant case law in

Tennessee interpreting the election provision set forth in Tenn. Code Ann.

§ 50-6-106(5). See generally Finister v. Humbolt General Hosp., 970 S.W.2d

435, 439 (Tenn. 1998) (holding that a hospital is exempt as a subsidiary of an

exempt hospital district); Presley v. Bennett, 860 S.W.2d 857, 858 (Tenn. 1993)

(holding that the filing of a notice of election under the act is directory; substantial

compliance is sufficient).

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While we have looked to other jurisdictions for guidance, we have found

little or no guidance, as apparently only Tennessee and Delaware have workers'

compensation provisions allowing public employers to choose whether to provide

workers' compensation coverage for public employees. Delaware has not

addressed the issue now before us, and the remaining jurisdictions generally

mandate some form of compulsory coverage.1 4 Arthur Larson & Lex K. Larson,

The Law of Workmen’s Compensation § 56.10 (1999).

Tennessee’s election statute allows an exempted entity to opt-in and to

provide workers' compensation coverage for public employees. The opt-in

provision also provides a public employer with the latitude to provide coverage

for segments or portions of its workforce. This latitude, however, is curtailed to

the extent that a public employer may only delineate by "departments" or

"divisions" when providing coverage to portions of its workforce.

While the Act permits an employer to delineate "departments" and

"divisions," the Act does not define either term. Black’s Law Dictionary defines

“division” as an “operating or administrative unit of government, court, business

or school system.” Black’s Law Dictionary 479 (6th ed. 1990). Accordingly, the

Act allows a governmental entity to provide workers' compensation benefits to an

operating or administrative unit of its workforce. The Act further permits an

employer to exclude operating or administrative units when electing to provide

coverage under the Act.

1

Thirty-nine states cover public employees generally. Six states cover employees but not

officials. Te xas co vers co unty em ployees a nd spe cified highw ay and sta te college a nd unive rsity

workers; it permits cities, towns, and villages to provide compensation. Georgia requires

covera ge whe n the pub lic emp loyer is either an instrum entality of the sta te or a cor poration. 4

Arthur La rson & L ex K. La rson, The Law of Workm en's Compensation § 56.10 (1999).

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In the case now before us, the school board is a governmental entity and

is exempt from providing workers’ compensation coverage to its employees. The

Board, however, can elect to provide coverage under the Act. In 1987, the

Board elected to provide coverage for the Board’s nonprofessional employees.

The Board, therefore, generally divided its employees into units of

nonprofessional, nonunion workers and professional, certified teachers who are

represented by a union. The Board did not elect to provide workers'

compensation benefits to the certified teachers or professional employees

because the teachers, represented by their union, had repeatedly rejected the

workers' compensation benefits during negotiations. The teachers have been

covered by Accident Protection Insurance since 1982. They are professional

employees required to maintain a license pursuant to Tenn. Code Ann.

§ 49-5-101 (1991) and are members of a union. The teachers represent a unit

of employees that is separate and apart from the nonprofessional employees of

the school board. We hold that the Board made a valid division of its workforce

pursuant to Tenn. Code Ann. § 50-6-106(5).

CONCLUSION

We hold that a school board, which is initially exempted by statute from

providing workers’ compensation coverage, may divide employees along

professional and nonprofessional lines and may elect to provide workers'

compensation benefits for its nonprofessional, nonunion employees while

excluding professional, certified teachers who are members of a bargaining unit.

Accordingly, we reverse the trial court and grant summary judgment to the

defendant in both cases. The costs of this appeal shall be taxed equally against

the plaintiffs for which execution shall issue if necessary.

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JANICE M. HOLDER, JUSTICE

Concurring:

Anderson, C.J.

Drowota, Birch, and Barker, J.J.

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