Ohio Historical Soc. v. State Emp. Relations Bd.

OPINIONS OF THE SUPREME COURT OF OHIO

The full texts of the opinions of the Supreme Court of

Ohio are being transmitted electronically beginning May 27,

1992, pursuant to a pilot project implemented by Chief Justice

Thomas J. Moyer.

Please call any errors to the attention of the Reporter's

Office of the Supreme Court of Ohio. Attention: Walter S.

Kobalka, Reporter, or Deborah J. Whitten, Administrative

Assistant. Tel.: (614) 466-4961; in Ohio 1-800-826-9010.

Your comments on this pilot project are also welcome.

NOTE: Corrections may be made by the Supreme Court to the

full texts of the opinions after they have been released

electronically to the public. The reader is therefore advised

to check the bound volumes of Ohio St.3d published by West

Publishing Company for the final versions of these opinions.

The advance sheets to Ohio St.3d will also contain the volume

and page numbers where the opinions will be found in the bound

volumes of the Ohio Official Reports.

Ohio Historical Society, Appellee, v. State Employment

Relations Board et al., Appellants.

[Cite as Ohio Historical Soc. v. State Emp. Relations Bd.

(1993), Ohio St.3d .]

State Employment Relations Board -- Exclusive jurisdiction to

decide matters committed to it pursuant to R.C. Chapter

4117 -- Common pleas courts may not exercise jurisdiction

over claims in declaratory judgment action that arise from

rights created by R.C. Chapter 4117.

(No. 91-2536 -- Submitted February 3, 1993 -- Decided June

23, 1993.)

Appeal from the Court of Appeals for Franklin County, Nos.

91AP-97 and 91AP-98.

This is an appeal from a judgment of the Court of Appeals

for Franklin County which held that appellee, the Ohio

Historical Society ("the Society"), is not a "public employer"

for the purposes of R.C. Chapter 4117.

This litigation began in 1984 when appellant Ohio Council

8, American Federation of State, County and Municipal

Employees, AFL-CIO ("AFSCME") filed a petition for

representation election with appellant State Employment

Relations Board ("SERB"). AFSCME sought to represent certain

employees of the Society for the purpose of collective

bargaining.

At approximately the same time as it filed its petition

with SERB, AFSCME filed a petition for certification of

representation with the National Labor Relations Board

("NLRB"). On June 14, 1984, the NLRB regional director to whom

the petition was assigned dismissed the petition on the grounds

that the Society is a "political subdivision" under federal

law. The NLRB denied AFSCME's request that it review the

regional director's decision.

The Society moved to dismiss AFSCME's state petition for

representation election on the very grounds we consider today:

that it is not a "public employer" as defined in R.C.

4117.01(B) and that SERB, therefore, does not have jurisdiction

over it. In response to the Society's motion, SERB directed a

hearing to be held to determine, inter alia, whether the

Society is a public employer.

After hearing evidence presented by the parties, the SERB

hearing officer concluded that the Society is a public employer

under R.C. Chapter 4117 and issued a recommendation to SERB

that it adopt that position. In February 1986, SERB issued an

order finding the Society to be a public employer and directed

that a representation election be held.

Using two procedural routes, the Society sought relief

from the SERB order in the Court of Common Pleas of Franklin

County. It filed an appeal from the SERB order pursuant to

R.C. 119.12. Both SERB and AFSCME moved to dismiss the appeal

on the grounds that the court lacked subject matter

jurisdiction. The Society also filed a complaint for

declaratory judgment pursuant to R.C. Chapter 2721. The court

dismissed the Society's declaratory judgment action because, it

concluded, the Society was entitled to appellate review under

R.C. 119.12. The court then held that the Society is not a

public employer and is, therefore, not subject to SERB's

jurisdiction.

The court of appeals reversed. It held that the trial

court did not have jurisdiction over the Society's R.C. 119.12

appeal because an appeal was premature. The court also

reversed the trial court's dismissal of the Society's

declaratory judgment action. It ruled that consideration of

that action was within the sound discretion of the trial court.

The Society appealed to this court and we accepted

jurisdiction. The only issue before the court was "whether

[the Society] can appeal the adjudication order issued by

SERB[.]" Ohio Historical Soc. v. State Emp. Relations Bd.

(1990), 48 Ohio St.3d 45, 46, 549 N.E.2d 157, 158. The issue

of whether the trial court could entertain the declaratory

judgment action was not before the court because that portion

of the court of appeals' decision was not appealed. Id. at 48,

549 N.E.2d at 160. As to the question of whether the R.C.

119.12 appeal was proper, we affirmed the judgment of the court

of appeals. We held that because the election ordered by SERB

had not yet taken place, SERB's order was not a final order and

was, therefore, not yet appealable to the common pleas court.

In response to our decision, the common pleas court issued

an order holding both the R.C. 119.12 appeal and the

declaratory judgment action in abeyance pending the outcome of

the representation election ordered by SERB. In April 1990,

SERB conducted the scheduled election; AFSCME, however, was not

successful in obtaining the votes necessary to be certified as

the Society's employees' exclusive bargaining agent.

After AFSCME lost the representation election, the Society

moved to renew its R.C. 119.12 appeal in the common pleas

court. In December 1990, the court issued its decision. It

held that the Society is not a public employer for purposes of

R.C. Chapter 4117. The case number appearing in the caption of

the decision indicated that it was on the R.C. 119.12 appeal

alone. The caption of the court's January 4, 1991 journal

entry, however, listed the case numbers for both the

declaratory judgment action and the R.C. 119.12 appeal.

SERB and AFSCME appealed the trial court's decisions to

the Court of Appeals for Franklin County. The court

of appeals affirmed. It held that the trial court had

jurisdiction to consider the declaratory judgment action

and that the Society is not a public employer under R.C.

4117.01(B).

The cause is now before this court upon the allowance of

AFSCME's and SERB's motions to certify the record.

Vorys, Sater, Seymour & Pease and James P. Friedt; Fred J.

Milligan, Jr., Assistant Attorney General, for appellee.

Lee I. Fisher, Attorney General, and Toki M. Clark, for

appellant SERB.

Ronald H. Janetzke, for appellant Ohio Council 8, AFSCME.

Wright, J.

I

AFSCME argues that pursuant to this court's decision in

Franklin Cty. Law Enforcement Assn. v. Fraternal Order of

Police, Capital City Lodge No. 9 (1991), 59 Ohio St.3d 167, 572

N.E.2d 87, inter alia, the common pleas court did not have

jurisdiction to hear the Society's declaratory judgment

action. We agree.

The court of appeals held that the issue of whether the

Society is a public employer is "properly determinable by

declaratory judgment." In doing so it cited our opinion in

Ohio Historical Soc. v. State Emp. Relations Bd.(1990), 48 Ohio

St.3d 45, 549 N.E.2d 157 ("Historical Soc. I"). This reliance

was improper, however, because we expressly declined to

consider the issue, since it was not before this court on

appeal. Id. at 48, 549 N.E.2d at 160. The issue was squarely

before the court, however, in Franklin Cty. Law Enforcement

Assn., supra, which was decided the following year. It is this

precedent which we must follow.

In Franklin Cty. Law Enforcement Assn., this court

considered whether the common pleas court had jurisdiction to

entertain a complaint requesting preliminary and permanent

injunctions and a declaratory judgment. We decided that

because the matters alleged in the complaint are governed

exclusively by the Ohio Public Employees' Collective Bargaining

Act, R.C. Chapter 4117, the trial court could not exercise

jurisdiction. "The State Employment Relations Board has

exclusive jurisdiction to decide matters committed to it

pursuant to R.C. Chapter 4117." Id. at paragraph one of the

syllabus. Writing for the court, Chief Justice Moyer explained

that "R.C. Chapter 4117 has created a series of new rights and

set forth the remedies and procedures to be applied regarding

those rights. *** [T]hose remedies and procedures are

exclusive." Id. at 170, 572 N.E.2d at 90. The "procedures

created in R.C. Chapter 4117 do not provide for the filing of a

private action in the common pleas court." Id. When a

complainant in a labor relations case asserts rights that are

completely independent of R.C. Chapter 4117, the common pleas

court may exercise jurisdiction. However, "[i]f a party

asserts claims that arise from or depend on the collective

bargaining rights created by R.C. Chapter 4117, the remedies

provided in that chapter are exclusive." Id. at 171, 572 N.E.2d

at 91.

The only substantive allegation in the Society's complaint

for declaratory judgment was that it is not a public employer.

Resolution of this allegation depends entirely on the

provisions of R.C. Chapter 4117, over which SERB has exclusive

original jurisdiction. Determination of its jurisdiction over

a petition for a representation election is to be decided, in

the first instance, by SERB. Id. at 169-170, 572 N.E.2d at

90-91.

R.C. Chapter 4117 "was meant to regulate in a

comprehensive manner the labor relations between public

employees and employers." Id. at 171, 572 N.E.2d at 91. The

Declaratory Judgments Act, R.C. Chapter 2721, was not intended

to be used to circumvent such comprehensive agency processes.

SERB has exclusive jurisdiction to consider issues concerning

petitions for representation elections. Common pleas courts

are limited to appellate jurisdiction, at the proper time, over

these and other matters arising under R.C. Chapter 4117. As to

this issue the judgment of the court of appeals is reversed.

II

AFSCME also argues that the courts below did not use the

proper standard of review in reaching their decisions. The

lower courts were considering both the R.C. 119.12

administrative appeal and the declaratory judgment action filed

by the Society. In light of our disposition of the Society's

declaratory judgment action, the issue presented to us is

whether the courts below exercised the proper standard of

review over the Society's administrative appeal.

Generally, appeals to the common pleas courts from agency

adjudications are governed by Ohio's Administrative Procedure

Act, which is codified in R.C. Chapter 119. "[E]xcept where

specific appeal procedures are provided, such as R.C.

4117.13(D) (unfair labor practices)[1] and R.C. 4117.23

(penalty for unlawful strike), or where appeals to a court are

prohibited, such as R.C. 4117.06(A) (determination of unit

appropriate for collective bargaining purposes), the general

provisions of R.C. 119.12 govern the appealability of an

adjudication order issued by SERB." Historical Soc. I, supra,

48 Ohio St.3d at 46, 549 N.E.2d at 158.

R.C. 119.12 provides in part: "The court [of common

pleas] may affirm the order of the agency complained of in the

appeal if it finds, upon consideration of the entire record and

such additional evidence as the court has admitted, that the

order is supported by reliable, probative, and substantial

evidence and is in accordance with law." This standard

requires two inquiries: a hybrid factual/legal inquiry and a

purely legal inquiry.

In Univ. of Cincinnati v. Conrad (1980), 63 Ohio St.2d

108, 17 O.O.3d 65, 407 N.E.2d 1265, and Andrews v. Bd. of

Liquor Control (1955), 164 Ohio St. 275, 58 O.O. 51, 131 N.E.2d

390, this court described the hybrid factual/legal inquiry

required by R.C. 119.12. "It is obvious that, if the General

Assembly had intended the appeal provision to afford a trial de

novo, the court would be required to hear all material,

relevant and probative evidence which either party might desire

to present. On the other hand, the language of [then recently

amended R.C. 119.12] extends the authority of the Common Pleas

Court, upon appeal, beyond that court's former authority which

did not permit it to substitute its judgment for that of the

agency and which confined it to determining the rights of the

parties in accordance with the statutes and law applicable."

Andrews, supra, at 279-280, 58 O.O. at 53, 131 N.E.2d at 393.

In undertaking its review, the common pleas court must give

deference to the agency's resolution of evidentiary conflicts,

but "the findings of the agency are by no means conclusive."

Conrad, supra, at 111, 17 O.O.3d at 67, 407 N.E.2d at

1267-1268. "Where the court, in its appraisal of the evidence,

determines that there exist legally significant reasons for

discrediting certain evidence relied upon by the administrative

body, and necessary to its determination, the court may

reverse, vacate or modify the administrative order." Id. at

111, 17 O.O.3d at 67, 407 N.E.2d at 1268. We take this

precedent to mean that an agency's findings of fact are

presumed to be correct and must be deferred to by a reviewing

court unless that court determines that the agency's findings

are internally inconsistent, impeached by evidence of a prior

inconsistent statement, rest upon improper inferences, or are

otherwise unsupportable. See id. at 111-112, 17 O.O.3d at 67,

407 N.E.2d at 1268. The agency's order survives the first

prong of the common pleas court's review if the court finds

that the evidence the agency relied on is indeed "reliable,

probative, and substantial."

Andrews recognized that even before R.C. 119.12 was

amended to require reviewing courts to make the hybrid inquiry

described above, courts were to determine "the rights of the

parties in accordance with the statutes and law applicable."

Andrews, supra, 164 Ohio St. at 280, 58 O.O. at 53, 131 N.E.2d

at 393. Under R.C. 119.12, a reviewing court is obligated to

determine whether the agency's decision is "in accordance with

law." An agency adjudication is like a trial, and while the

reviewing court must defer to the lower tribunal's findings of

fact, it must construe the law on its own. To the extent that

an agency's decision is based on construction of the state or

federal Constitution, a statute, or case law, the common pleas

court must undertake its R.C. 119.12 reviewing task completely

independently.

AFSCME argues that the common pleas courts must affirm

SERB orders as long as they are supported by "reliable,

probative, and substantial evidence." This is an incomplete

statement of the proper standard of review. The Society

correctly points out that the courts must also exercise

independent judgment as to matters of law.

In this case none of the parties has argued that the SERB

hearing officer's findings of fact are not supported by

"reliable, probative, and substantial evidence." Thus, the

inquiry for the reviewing courts is whether, accepting the

facts found by the hearing officer as true, the Society is a

public employer, as a matter of law, under R.C. 4117.01(B). We

find that the courts below properly limited their review to

this purely legal question.

III

A

The origins and development of the Society were detailed

in a 1974 report prepared by the Society for Governor Gilligan

and the General Assembly. Ten Year Plan of the Ohio Historical

Society (June 1974) 5-7. The report's discussion of the

organization's history highlights the tension between the

Society's public and private roles:

"Ohio's prehistoric Indian sites were being looted of

their primitive art treasures. State archives were being

removed from the State House. The personal papers of Ohio

leaders were being destroyed or dispersed. No state

organization existed to halt the loss of Ohio's patrimony."

Id. at 5.

In 1884, Governor Hoadly and the Secretary of State began

looking for supporters to form a historical society. On March

12, 1885, one hundred and fifty citizens met in the Ohio Senate

chamber and organized the Society. Id.

"The interest of a combination of public officials and

private persons in the creation of a state historical agency

cast the newly formed group into a quasi-public, quasi-private

framework. Governor Hoadly and the other founders envisioned

the Society as becoming a large and effectively administered

museum and library institution. They expected the organization

to assume a leadership role in the cultural life of the state.

To achieve these ambitious objectives, the founders anticipated

state support of historical activities, a desire promptly

translated into reality." Id. at 5-6.

The informal arrangement between the private, non-profit

Society and the state of Ohio lasted until 1963 when that

relationship was questioned in the courts. Id. at 7. A

declaratory judgment action was brought in Franklin County

Common Pleas Court to determine "whether or not the Society's

policies and procedures, particularly in regard to the handling

of funds of a private source, should be administered strictly

in accordance with the regulations governing state government

operations." Id. The court held that the Society was a

private, non-profit corporation and was, therefore, required to

operate under laws governing corporations rather than under the

procedures and regulations that apply to state agencies. The

court also held, however, that a new basis for state support of

the Society's public functions had to be enacted. The General

Assembly responded to the court's decision by amending R.C.

149.30 to create a situation in which a formal contractual

relationship could exist between the state and the Society. Id.

In considering the petition for representation election

filed by AFSCME in this case, the SERB hearing officer made

findings of fact that were adopted by SERB (with modifications

not relevant here) in its decision. These undisputed findings

paint a picture of the Society as it is today. Among them are

the following:

(1) The Society is governed by a constitution which was

written and adopted by its members. The constitution vests the

government of the Society in a board of trustees ("board").

The board includes eighteen members, nine of whom are elected

from the membership and nine of whom are appointed by the

Governor. The officers of the corporation are elected annually

by the board.

(2) The board is responsible for formulating and

approving the policies of the society, including personnel and

labor relations policies.

(3) The Society by-laws provide that the board delegates

administrative duties for the operation of the Society to a

director, who acts as the chief administrative officer. The

board establishes the terms of the director's employment.

(4) The wages, terms, and conditions of employment of all

employees are set by the board.

(5) The Society is, in part, self-supporting. It

generates revenue from, among other things, admission fees to

museums and other historic sites, the sale of meals, and the

sale of goods and other services.

(6) The Society enters into contractual relationships

with different public and private entities for the provision of

services.

(7) The Society contracts with the state of Ohio to

perform certain public functions designated in R.C. 149.30 for

which the Society receives public funds.

(8) Approximately sixty-five to seventy percent of the

Society's total operating budget is comprised of state

appropriations. This money funds services contracted for

between the Society and the state. The remaining thirty to

thirty-five percent of the Society's operating budget

represents private money from retail sales, admission fees,

membership dues, private donations, contract fees and other

similar activities.

(9) Society wage rates and salary increases are

comparable to those of the state. No specific legislative or

state approval is necessary for granting a Society wage

increase.

(10) Society employees participate in the Public

Employees Retirement System.

(11) Society employees are not covered by Ohio civil

service laws.

(12) The Society is not required to consult or obtain

approval from the state as to any matter relating to employment

policies.

(13) The Auditor of State is required to annually examine

the Society's records.

(14) Former state employees hired by the Society receive

credit for state work time.

(15) The Society has a regular mail pick-up at the Ohio

Statehouse.

(16) Approximately ninety-five percent of the Society's

1985 funds for capital improvements came from the state.

(17) The Society does not use the same rule-making

procedures as state agencies do.

(18) The Society has a state agency number for

identification purposes in the state budget.

Based upon these and other findings of fact, the SERB

hearing officer concluded that the Society is a "public

employer" under R.C. 4117.01(B). SERB came to the same

conclusion, and recognized that "a respectable argument could

be mounted that the Society is a public employer based on the

similarities between the functions of the society and those of

state government." SERB, however, rested its decision on the

ground that because Society employees are "public employees"

under R.C. 4117.01(C), the Society is necessarily a public

employer under R.C. 4117.01(B).

This appeal presents three issues for the court's

consideration. The first is whether the common pleas court had

jurisdiction to consider the Society's declaratory judgment

action. The second is whether the common pleas court and the

court of appeals used the proper standard of review in

considering the Society's R.C. 119.12 appeal from SERB's

decision. The third is whether the Society is a "public

employer" under R.C. 4117.01(B).

B

The substantive issue presented by this case is whether

the Society is a "public employer" under R.C. 4117.01(B). If

the Society is a public employer, SERB may exercise

jurisdiction over it for labor relations purposes. See

Cincinnati Metro. Hous. Auth. v. State Emp. Relations Bd.

(1990), 53 Ohio St.3d 221, 560 N.E.2d 179. Both R.C.

4117.01(B) and 4117.01(C) are relevant to the parties'

arguments and our disposition. R.C. 4117.01(B) provides:

"'Public employer' means the state or any political

subdivision of the state located entirely within the state

including, without limitation, any municipal corporation with a

population of at least five thousand according to the most

recent federal decennial census, county, township with a

population of at least five thousand in the unincorporated area

of the township according to the most recent federal decennial

census, school district, state institution of higher learning,

any public or special district, any state agency, authority,

commission, or board, or other branch of public employment."

(Emphasis added.)

R.C. 4117.01(C) provides:

"'Public employee' means any person holding a position by

appointment or employment in the service of a public employer,

including any person working pursuant to a contract between a

public employer and a private employer and over whom the

national labor relations board has declined jurisdiction on the

basis that the involved employees are employees of a public

employer[.]" It then lists fifteen specific groups of

employees that are not included in the definition of "public

employees."

Under R.C. 4117.01(B) an entity is a public employer if it

is one of three things: (1) the state, (2) a political

subdivision of the state, or (3) an "other branch of public

employment." We come to this conclusion by way of the plain

language of the statute. "[T]he state" and "any political

subdivision of the state" are defined to include ten specific

government entities (any "municipal corporation with a

population of at least five thousand * * *, county, township

with a population of at least five thousand * * *, school

district, state institution of higher learning, any public or

special district, any state agency, authority, commission, or

board"). The words "without limitation," however, indicate

that entities considered "the state" or a "political

subdivision" are not limited to those listed. After the final

example of a state or political subdivision is listed (a

board), the definition of public employer somewhat vaguely

reaches "other branch[es] of public employment."

SERB argues that the Society is a public employer because

it fits under all three categories set forth in R.C.

4117.01(B). It asserts that the Society is "the state" because

the state of Ohio has turned over significant state functions

to the Society and substantially funds its operations. SERB's

position is that the Society has become, at least, a de facto

state agency. SERB also argues that the Society is a

"political subdivision of the state" because it was "created

for a public purpose, [and] authorized to exercise a limited

portion of the sovereign power of the state." Finally, SERB

asserts that the Society is a "branch of public employment" for

two reasons: the Society has the "attributes" of a public

employer and its employees are public employees under R.C.

4117.01(C). SERB states that "[t]he General Assembly could not

have intended the ludicrous result urged by [the Society] that

'public employees' do not work for 'public employers' and do

not have the right to collectively bargain specifically granted

them in R.C. 4117.03."

AFSCME focuses its argument on SERB's last point: that

the definitions of "public employer" and "public employee" must

be read together and in light of the policies of the labor

law. AFSCME asserts that "[a] private not for profit

corporation can be a public employer and its employees public

employees as those terms are defined in R.C. [Chapter] 4117 as

R.C. 4117.01(B) and R.C. 4117.01(C) must be read in pari

materia." It argues that Society employees are public

employees under R.C. 4117.01(C) and that, therefore, the

Society is a "branch of public employment."

The Society argues that the General Assembly could have

extended its definition of "public employer" to private

entities such as the Society but chose not to do so. Instead,

the Society argues, the legislature "intended to limit the

application of the Act to truly public entities." (Emphasis

sic.) It reasons that an entity can be "public" or "private"

but not both -- the terms are mutually exclusive.

The Society places heavy reliance on our decision in

Cincinnati Metro. Hous. Auth. v. State Emp. Relations Bd.,

supra ("CMHA"). One issue in that case was whether CMHA is a

"public employer" and is subject to SERB's jurisdiction under

R.C. Chapter 4117. This court cited R.C. 4117.01(B) and

concluded that "the General Assembly clearly intended to

include within such definition any state-created public body

such as CMHA." Id., 53 Ohio St.3d at 224, 560 N.E.2d at 182.

We reasoned that because a metropolitan housing authority is

defined as "a body corporate and politic" under R.C. 3735.31

and "political subdivision" has been defined to include bodies

"corporate and politic," CMHA is a public employer under R.C.

Chapter 4117. The Society argues that our decision in CMHA

holds that only "state-created public bod[ies]" can be "public

employers."

The court of appeals agreed with the Society. The court

held that "R.C. Chapter 4117 is strictly limited in its

application to the regulation of employment relations between

public employers and public employees. It has no application

to the private sector." The court reasoned that while R.C.

149.30 gives the Society many attributes of a public entity,

"nothing contained in that statute has altered the basic legal

status of [the Society] as a private, non-private [sic]

corporation."

1

SERB's position that the Society is a state or a political

subdivision is not persuasive. The issue is not, as SERB would

have it, whether the Society possesses a larger or smaller

number of the attributes of a government entity. The issue is

straightforward: whether the Society is in fact a government

entity. Quite simply, the Society is not public; it was

neither created by the state nor is it subject to state control.

The Society is a private, not-for-profit corporation. It

was created by a group of individuals, in their capacities as

private citizens, "[t]o promote a knowledge of archaeology and

history, especially in Ohio * * * ." Section 1, Article II,

Constitution of the Ohio Historical Society. The SERB hearing

officer found that the Society is governed by a constitution

written and adopted by its members; the constitution may be

amended by a simple majority of votes cast by Society members.

A board of trustees ("board") runs the Society. The corporate

constitution, not a state statute, provides that half of the

trustees are elected from the Society's membership and half are

appointed by the Governor of Ohio. The board elects corporate

officers to operate the Society and these officers report

directly to the board. The Society is, in short, not a public

or government entity. It was neither created by the state nor

is it subject to state control. In both form and substance the

Society is a private corporation.

Neither the Society leaders nor its members are subject to

the political process. The members of its board, whether

appointed by the Governor or elected by the membership, are

responsible to the membership of the Society alone. Its

corporate officers are responsible to the board alone. Neither

directly nor indirectly do the citizens of the state of Ohio

exercise control over the Society. Simply because a large

portion of the Society's budget is derived from public funds

does not render it a state agency.

The fact that the Society has a close relationship with

the state does not make it an arm of the state. The Society's

relationship with the state is based on contract. The Society

contracts with the state to perform certain public functions

designated in R.C. 149.30 for which the Society receives public

funds. It is authorized by its constitution to enter into

contracts with the state. The state is authorized to contract

with the Society by R.C. 149.30. Nowhere, however, is the

Society required by statute to perform state functions.

Moreover, the Society is not one of the ten entities

specifically deemed to be "the state or any political

subdivision of the state" by R.C. 4117.01(B). The Society is

not a municipal corporation, a county, a township, a school

district, an institution of higher learning, a public or

special district, a state agency, authority, commission, or

board.

The General Assembly could have expressly included

entities like the Society in its definition of "public

employer." In 1970, fourteen years before the General Assembly

adopted the current definition of "public employer," the

Pennsylvania legislature adopted a definition of "public

employer" that almost certainly would include the Society. In

the Pennsylvania Public Employee Relations Act, 43 P.S. Section

1101.101 et seq., the definition of "public employer" expressly

includes "any nonprofit organization or institution ***

receiving grants or appropriations from local, State or Federal

governments ***." 43 P.S. Section 1101.301(1). Our General

Assembly apparently chose not to follow Pennsylvania's

example.

The Society is also not a "political subdivision" under

state law.2 R.C. Chapter 4117 does not specifically define

"political subdivision" and there is no general statutory

definition of "political subdivision." In the absence of

specific definitions, however, case law and Attorney General

opinions provide a general definition: "A political

subdivision is a limited geographical area of the State, within

which a public agency is authorized to exercise some

governmental function." 1972 Ohio Atty. Gen. Ops. No. 72-035

(citing other authorities). Because the Society does not

exercise governmental authority in a limited geographical area,

it is not a political subdivision.

2

The question of whether the Society is an "other branch of

public employment" is more difficult to resolve. AFSCME's

position is, essentially, that the General Assembly intended to

give all public employees, except those specifically excluded

from coverage, the right to collectively bargain under state

law and that the Society's employees are "public employees"

under R.C. 4117.01(C). The Society's position is that only

employees of truly public entities have the right to

collectively bargain under Ohio law.

AFSCME argues that employees of the Society are public

employees pursuant to R.C. 4117.01(C). A "public employee" is

a person in the service of a public employer, including "any

person" (1) "working pursuant to a contract between a public

employer and a private employer" and (2) "over whom the

national labor relations board has declined jurisdiction on the

basis that the involved employees are employees of a public

employer." R.C. 4117.01(C). We agree that the Society's

employees fit the second prong of this test: the NLRB declined

to take jurisdiction over the employees because, under federal

law, they are considered employees of a political subdivision.

In so holding, the NLRB cited the National Labor Relations Act,

Section 2(2) (Section 152[2], Title 29, U.S. Code), and Natl.

Labor Relations Bd. v. Natural Gas Util. Dist. of Hawkins Cty.

(1971), 402 U.S. 600, 91 S.Ct. 1746, 29 L.Ed.2d 206.

We do not believe, however, that Society employees are

"working pursuant to a contract between a public employer and a

private employer." The record does not show that certain

Society employees are hired to perform discrete tasks, all of

which are "in the service of" the state of Ohio. Society

employees are employed to do the work of the Society -- some of

which is the private work of the Society and some of which may

be characterized as public work pursuant to a contract with the

state. The employees are paid from Society, not state, funds.

While sixty-five to seventy percent of the Society's budget is

comprised of state appropriations, thirty to thirty-five

percent of its budget comes from independent Society revenue

raising. The SERB hearing officer found that the Society

generates its own revenues from admission fees to museums, the

sale of meals, and the sale of goods and other services. Thus,

we cannot say that Society employees are employed solely as a

result of the Society's contractual relationship with the

state. The Society's privately funded work is inextricably

intertwined with the Society's publicly funded work. Its

employees are, therefore, not "public employees."

Moreover, as discussed above, the Society is a private

entity. Whatever the policy reasons for treating the Society

as a "branch of public employment," we cannot do so without

support from the language or structure of R.C. Chapter 4117.

If its employees were "public employees" under R.C. 4117.01(C),

we could conclude that the Society is a "branch of public

employment." But such is not the case. The Society is a

private entity and, accordingly, we hold that the Society is

not a public employer under R.C. 4117.01(B).

The judgment of the court of appeals as to this issue is

affirmed.

Judgment affirmed in part

and reversed in part.

Moyer, C.J., and Pfeifer, J., concur.

Douglas, J., concurs separately.

A.W. Sweeney, Resnick and F.E. Sweeney, JJ., dissent.

FOOTNOTE:

1 See Lorain City Bd. of Edn. v. State Emp. Relations Bd.

(1988), 40 Ohio St.3d 257, 533 N.E.2d 264. The standard of

review applied in Lorain ("[t]he findings of the board as to

the facts, if supported by substantial evidence on the record

as a whole, are conclusive") is specifically provided in R.C.

4117.13(D) to be used by courts reviewing SERB determinations

of unfair labor practices. See Lorain City Bd. of Edn. at 259,

533 N.E.2d at 266.

2 The NLRB regional director concluded that, under the

National Labor Relations Act, Section 151 et seq., Title 29,

U.S. Code, the Society is a "political subdivision." In Natl.

Labor Relations Bd. v. Natural Gas Util. Dist. of Hawkins Cty.

(1971), 402 U.S. 600, 602-603, 91 S.Ct. 1746, 1748, 29 L.Ed.2d

206, 209, the United States Supreme Court held that "[f]ederal,

rather than state, law governs the determination, under {2(2)

[of the Act] whether an entity created under state law is a

'political subdivision' of the State and therefore not an

'employer' subject to the Act."

Ohio Historical Soc. v. State Emp. Relations Bd.

Douglas, J., concurring. The only real issue presented

by this case is whether the Ohio Historical Society ("OHS") is

a "public employer." The court of appeals, in its opinion,

identified the question as "[t]he singular issue before us * *

*." Appellant SERB and appellee OHS did not brief or argue,

except in a general way, the other issues commented on and

decided by the majority.

Is OHS a public employer pursuant to R.C. 4117.01(B)? I

think not and I concur with the majority's discussion of the

issue as found in Part III(B)(1) and (2) of the majority

opinion. While OHS may have some of the indicia of a public

employer, and while it may even walk like, look like and quack

like a public employer, the fact remains that it is still a

private not-for-profit corporation and, under these peculiar

circumstances, cannot be a public employer.

I note in passing, as the majority does in fn. 2, that the

regional director of the NLRB has concluded that OHS is, under

federal law, a "political subdivision." Given our decision

today, I would respectfully suggest that this matter be

reviewed by proper authorities given the test set forth and

approved by the United States Supreme Court in Natl. Labor

Relations Bd. v. Natural Gas Util. Dist. of Hawkins Cty.

(1971), 402 U.S. 600, 91 S.Ct. 1746, 29 L.Ed.2d 206.

Ohio Historical Soc. v. State Emp. Relations Bd.

Alice Robie Resnick, J., dissenting. Although I have

misgivings about the manner in which the majority resolves some

of the procedural matters in this case, I limit my discussion

to the principal issue presented. That issue is whether the

Ohio Historical Society ("the Society") is a "public employer"

for purposes of R.C. Chapter 4117. A thoughtful consideration

of relevant statutory provisions points to one inescapable

conclusion: Even if one accepts the somewhat dubious

assumption that the Society is a private corporation, the

Society is clearly a "public employer" as that term is used in

R.C. 4117.01(B). The majority's determination that the Society

is not a public employer is irreconcilable with the undisputed

facts underlying this case. I dissent.

I

The employees of the Society are "public employees"

pursuant to R.C. 4117.01(C), and therefore their employer must

be a "public employer" pursuant to R.C. 4117.01(B), because the

Society inescapably is an "other branch of public employment"

as specified in the last phrase of R.C. 4117.01(B).

R.C. 4117.01(C) specifically provides that the term

"public employee" includes any person who works "pursuant to a

contract between a public employer and a private employer and

over whom the national labor relations board ['NLRB'] has

declined jurisdiction on the basis that the involved employees

are employees of a public employer[.]" (Emphasis added.) I

believe that the General Assembly, through this provision, was

addressing precisely the situation presented by this case.

SERB's order finding the Society to be a public employer relied

on R.C. 4117.01(C). While SERB noted that "a respectable

argument could be mounted that the Society is a public employer

based on the similarities between the functions of the

[s]ociety and those of state government," SERB realized there

was no need to entertain that inquiry. The Society's employees

clearly fit the definition of "public employees" contained in

the "including" language of R.C. 4117.01(C).

It is apparent that employees of the Society work pursuant

to a contract between the state and the Society. The majority

even seems to recognize this, stating that "[t]he Society's

relationship with the state is based on contract. The Society

contracts with the state to perform certain public functions

designated in R.C. 149.30 for which the Society receives public

funds." However, the majority appears to reason that, because

the Society's privately funded work and publicly funded work

are "inextricably intertwined," the Society's employees are not

working "solely" pursuant to a contract with the state, and

thus are not "public employees." However, the word "solely"

does not appear anywhere in R.C. 4117.01(C). As noted by the

majority, the Society performs numerous public functions and

receives approximately sixty-five to seventy percent of its

total operating budget from state appropriations. It is clear

that the Society's employees work "pursuant to a contract" with

the state. Because the NLRB has already declined jurisdiction

over the Society's employees, both requirements of R.C.

4117.01(C) are met, and the Society's employees are "public

employees."

The concurring opinion seems to intimate that the NLRB

erred by declining to exercise jurisdiction over the

employees. However, the propriety of the NLRB's determination

actually is irrelevant. What is of consequence is that the

NLRB ruled as it did, thereby fulfilling one of the specific

requirements of R.C. 4117.01(C). Moreover, the General

Assembly, when it enacted R.C. Chapter 4117, attempted to

provide that all employees in Ohio would be covered either by

that chapter (if public employees) under SERB's jurisdiction

unless expressly excluded, or by the National Labor Relations

Act (if not public employees) under the jurisdiction of the

NLRB. The General Assembly therefore chose to define "public

employee" two ways in R.C. 4117.01(C). In most cases, the

definition is straightforward: a public employee is one who

works for a public employer. However, the legislature did not

stop there in defining "public employee," but continued with

the "including" language. A public employee can also be one

who works for a private employer which has some, but not all,

the attributes of a public employer. When an employer's status

as a public employer is in doubt, the legislature provided that

that employer's employees might still be "public employees"

when the NLRB declined to exercise jurisdiction over them.

If the Society's employees are "public employees" (as they

obviously are), it is glaringly apparent that the Society, as

their employer, must be a "public employer" for R.C. Chapter

4117 purposes. The Society's argument that sometimes employees

may be "public employees," but their employer may at the same

time not be a "public employer" should be unequivocally

rejected. R.C. 4117.01(B) must be read in pari materia with

R.C. 4117.01(C). A "public employer" is, by definition, one

who employs "public employees." And a "public employee" is, by

definition, one who works for a "public employer." When the

definition of either R.C. 4117.01(B) or (C) is fulfilled, the

definition of the other provision is also fulfilled. The

General Assembly's decision to add the open-ended phrase "other

branch of public employment" at the end of R.C. 4117.01(B) is

an indication that in some instances a "public employer" may

not possess all of the attributes of a state body. The

Society, by advocating that we read R.C. 4117.01(B) and (C) as

if they are unrelated, fails to appreciate the legislative

intent that all employees in Ohio fall within the jurisdiction

of either the NLRB or SERB.

R.C. 4117.22 requires that "Chapter 4117. of the Revised

Code shall be construed liberally for the accomplishment of the

purpose of promoting orderly and constructive relationships

between all public employers and their employees." The

majority's narrow interpretation of the definitional provisions

of R.C. 4117.01 cannot be reconciled with the overall purpose

of R.C. Chapter 4117, which is to afford collective bargaining

rights, specified in R.C. 4117.03, to all "public employees."

As this court recognized in Cincinnati Metro. Hous. Auth. v.

State Emp. Relations Bd. (1990), 53 Ohio St.3d 221, 226, 560

N.E.2d 179, 184: "[R.C. Chapter 4117's] overriding purpose is

embodied in the very broad definition of 'public employer,' to

extend the coverage of [R.C. Chapter 4117] as widely as

possible in order to prevent the disruption of important public

services by labor disputes."

The majority states that "[i]n both form and substance the

Society is a private corporation." The majority appears to

rely heavily on the finding that the Society is a private

entity to reach the ultimate conclusion that the Society cannot

be a "public employer." The majority places too much emphasis

on the word "private" and does not thoughtfully consider the

purposes underlying R.C. Chapter 4117, including R.C.

4117.01(C)'s clear provision that sometimes the employees of a

"private employer" can be "public employees." Cincinnati

Metro. Hous. Auth., supra, does not at all stand for the

proposition argued by the Society that only a public body can

be a public employer. Rather, that case is an affirmation that

an expansive, not a limiting, definition should be given to the

term. The Society clearly falls within the definition provided

by the General Assembly. The majority's analysis, which is

based on a very narrow interpretation of "public employer,"

cannot be accepted. The proper approach is diametrically

opposed to that of the majority, who would appear to require

the legislature to enact a statute explicitly declaring the

Society to be a public employer before it would acknowledge

that fact.

Even though the Society argues that it is a private

entity, the Society itself has admitted that it is not private

for all purposes. In State ex rel. Fenley v. Ohio Historical

Soc. (1992), 64 Ohio St.3d 509, 597 N.E.2d 120, the issue

presented involved whether R.C. 149.43 (Ohio's public records

law) obligated the Society to provide copies of public records

by mail. Not at issue in that case was the question whether

the Society is subject to the public records law--the Society

clearly conceded that it is. For an entity to fall within the

public records law, R.C. 149.43(A)(1) provides that the entity

must be a "public office," a term defined in R.C. 149.011(A).

In State ex rel. Toledo Blade Co. v. Univ. of Toledo Found.

(1992), 65 Ohio St.3d 258, 602 N.E.2d 1159, this court

determined that the University of Toledo Foundation, a private

nonprofit corporation, is a public office for R.C. 149.43

purposes, and is subject to the public records law. See, also,

State ex rel. Fostoria Daily Review Co. v. Fostoria Hosp. Assn.

(1988), 40 Ohio St.3d 10, 531 N.E.2d 313 (a private, nonprofit

corporation which performs a public function and is supported

by public tax money is a "public office" within the meaning of

R.C. 149.011[A], and is subject to the public records law).

Even though determining whether an entity is a public office

for R.C. 149.43 purposes differs significantly from determining

whether it is a public employer for R.C. Chapter 4117 purposes,

each inquiry requires a consideration of the distinction

between a public and a private entity. Univ. of Toledo Found.

and Fostoria Hosp. Assn. readily stand for the general

proposition that although an entity may be a private one, it

may still be public for some purposes. If the Society,

allegedly a private entity, can be a public office for R.C.

149.43 purposes (as it has admitted it is), the Society also

conceivably could be a public employer for R.C. Chapter 4117

purposes. As explained above, the Society is unquestionably a

"public employer." The Society's purported status as a private

corporation does not preclude that determination, because R.C.

4117.01(C) specifically provides that, in the proper

circumstances, the employees of a "private employer" are

"public employees." This case clearly presents those proper

circumstances.

In summary, the Society's employees work "pursuant to a

contract between a public employer and a private employer," and

"the national labor relations board has declined jurisdiction

on the basis that the involved employees are employees of a

public employer[.]" R.C. 4117.01(C). Because those two

conditions are met, the Society qualifies as an "other branch

of public employment" within the meaning of R.C. 4117.01(B),

and the Society is a "public employer." I would reverse the

judgment of the court of appeals on this issue.

II

The majority analyzes at length whether the Society

qualifies as "the state or any political subdivision of the

state" for R.C. 4117.01(B) purposes, ultimately determining

that the Society is neither the state nor a political

subdivision of it. Given the foregoing view (expressed in Part

I of this dissenting opinion) that R.C. 4117.01(C) specifically

leads to the conclusion that the Society is a "public

employer," there is no real need to reach this question.

However, the majority's reasoning cannot go unchallenged, and

so I address the issue.

R.C. 4117.01(B)'s definition of "public employer" includes

"*** any state agency, authority, commission, or board, or

other branch of public employment." It is apparent that the

Society is a "state agency" in the sense of this definition.

The Society has numerous attributes of a state agency, which

considered together make it at the very least the de facto

equivalent of a state agency for R.C. Chapter 4117 purposes.

It is incomprehensible how the majority is able to acknowledge

these attributes, and yet find the Society is not a public

employer. As the majority notes, the Society possesses the

following characteristics:

--Pursuant to the Society's constitution, nine members

(one-half) of the Society's board of trustees are appointed by

the Governor.

--The Society enters into contracts with public, as well

as private, entities.

--The Society performs numerous public functions for the

state, as detailed in R.C. 149.30.

--State appropriations provide approximately sixty-five to

seventy percent of the Society's total operating budget.

--Employees of the Society are explicitly authorized to

participate in the Public Employees Retirement System by R.C.

149.30.

--The Society's records are examined annually by the

Auditor of State.

--The Society awards credit for previous state work time

to former state employees it hires.

--State appropriations provided approximately ninety-five

percent of the Society's 1985 funds for capital improvements.

--The Society has a state agency number in the state

budget for identification purposes.

These characteristics, taken in the aggregate, present an

overwhelming scenario. Were several of these factors not

present, this might have been a closer case. However, the

large amount of state funding, taken alone, is a clear indicium

of a public employer. Likewise, when an employer's employees

participate in the Public Employees Retirement System, that

alone also provides a strong indicator that the employer must

be a public employer. The factors the majority relies on to

find that the Society is not a public employer do not come

close to countering the case in favor of finding that the

Society is a public employer. However, as explained in Part I

of this dissenting opinion, there is an even stronger ground

for finding that the Society is a public employer, so that a

resort to consideration of whether the Society possesses

indicia of a public employer should not even be necessary.

A.W. Sweeney and F.E. Sweeney, JJ., concur in the

foregoing dissenting opinion.