Opinion

Toledo Police Command Officers' Assn. v. State Emp. Relations Bd.

2014 Ohio 4341

Court: Ohio Court of Appeals
Filed: Sep 26, 2014
Status: Published
On the bench: Yarbrough
Cited by: 3 cases
Authority: More cited than 47.6%

The opinion

[Cite as Toledo Police Command Officers' Assn. v. State Emp. Relations Bd., 2014-Ohio-4341.]

IN THE COURT OF APPEALS OF OHIO

SIXTH APPELLATE DISTRICT

LUCAS COUNTY

Toledo Police Command Court of Appeals No. L-13-1074

Officers’ Association

Trial Court No. CI0201103235

Appellee

State Employment Relations

Board, et al. DECISION AND JUDGMENT

Appellants Decided: September 26, 2014

*****

Gregory T. Lodge, for appellee.

Mike DeWine, Ohio Attorney General, Lori Weisman and

Michael L. Stokes, Assistant Attorneys General, for appellant

State Employment Relations Board.

Adam W. Loukx, Director of Law, and Michael J. Niedzielski,

Chief, Labor and Employment, for appellant City of Toledo.

*****

YARBROUGH, P.J.

I. Introduction

{¶ 1} Appellants, the city of Toledo (the city) and the State Employment Relations

Board (SERB), appeal the judgment of the Lucas County Court of Common Pleas,

reversing SERB’s dismissal of appellee’s, the Toledo Police Command Officers’

Association (TPCOA), unfair labor practice (ULP) charge. For the following reasons, we

affirm.

A. Facts and Procedural Background

{¶ 2} The facts of this case, as set forth in SERB’s opinion, are not in dispute. As

stated by SERB, the city is a “public employer” under R.C. 4117.01(B), and TPCOA is

an “employee organization” under R.C. 4117.01(D). TPCOA consists of 130 police

officers at the rank of sergeant, lieutenant, and captain. It is the exclusive representative

for the city’s command officers. The relationship between TPCOA and the city is

governed by a collective bargaining agreement (CBA).

{¶ 3} In early 2009, TPCOA and the city began negotiating for a successor CBA

to replace the CBA that expired at the end of 2008.1 Certain issues arose during those

negotiations, including the amount of money the city would contribute to the officers’

pensions and the amount it would contribute toward officers’ health insurance premiums.

{¶ 4} Concerning pension contributions, section 65 of the expired CBA detailed a

“pension pickup” provision, which described the amount of money the city was to

contribute to each officer’s pension fund. Ordinarily, the officers would be required to

contribute ten percent of their income toward their pension. However, under section 65,

the city agreed to pay the entire pension contribution. According to testimony provided

CBAs between the city and TPCOA typically last for three years, with negotiations for a

new CBA beginning three months prior to the expiration of the current CBA.

by TPCOA’s president, Terry Stewart, the city previously agreed to “pickup” the

officers’ pension contributions in lieu of increasing their wages. In addition to its

pension contributions, the city also agreed to pay the entire cost of the officers’ health

insurance premiums.

{¶ 5} As the negotiations for a successor CBA progressed, the city became aware

of an impending budget deficit, which was largely attributable to declining income tax

revenues and a faltering economy.2 Consequently, on April 9, 2009, the city sent a letter

to TPCOA withdrawing all economic proposals made by the city “due to a continuing

downturn in the city’s financial condition.” During that time, the city proposed passing

an ordinance declaring exigent circumstances, which would allow the city to reduce the

deficit by, among other things, eliminating its pension pickup obligation and reducing

officers’ wages by ten percent. The proposed ordinance that was presented to city

council acknowledged a budget deficit of $27 million for 2009. Additionally, on April 2,

2009, an article appeared in the Toledo Blade, reporting that then-mayor Carty

Finkbeiner was considering bankruptcy in light of the city’s “dire outlook.” Ultimately,

city council refused to pass the exigent circumstances ordinance.

{¶ 6} In May 2009, the Finkbeiner administration attempted, for a second time, to

pass an exigent circumstances ordinance. This time, the administration sought to utilize

According to the city’s director of finance, Patrick McLean, income tax revenue makes

up about 60 percent of the city’s total revenue. The revenue generated from the income

tax reached its peak in 2007, from which it declined “precipitously” starting in 2008.

exigent circumstances in order to lay off 60 patrolmen and 15 command officers. The

second effort also failed.

{¶ 7} The city eventually resumed bargaining with TPCOA in July 2009. On

August 13, 2009, the city reached a tentative agreement with TPCOA in which the union

agreed that: (1) members would be responsible for paying seven percent of their pension

pickup for 15 consecutive pay periods; (2) medical copays would be added to members’

health insurance plans; (3) overtime would be reduced; (4) wage increases would be

eliminated for 2009; (5) promotions would be suspended; and (6) five positions would be

eliminated. According to Stewart’s testimony, the city saved between $3 million and $4

million as a result of these concessions.

{¶ 8} Eventually, TPCOA’s members ratified the tentative agreement and the city

adopted the agreement on August 18, 2009. The three-year agreement was retroactively

effective beginning January 1, 2009. The agreement does not contain a provision for

midterm bargaining.

{¶ 9} In November 2009, Michael Bell was elected mayor of Toledo. After the

election, Bell appointed Steve Herwat as deputy mayor of operations for the city. As

deputy mayor, Herwat was asked to lead Bell’s transition effort. During the transition

period, Herwat obtained a copy of the city’s 2010 budget that was submitted by the

Finkbeiner administration, which expressed a $30 million deficit. Mayor Finkbeiner

planned to eliminate the deficit by imposing a refuse fee and eliminating tax credits for

city residents who work outside the city. However, city council failed to enact the

proposed changes prior to Bell taking office on January 4, 2010.

{¶ 10} By the time Bell took office, the city’s budget deficit had ballooned to $37

million. Attempting to address the budget issues, Herwat met with the city’s finance

director to discuss the accuracy of the city’s revenue projections for 2010. At the

meeting, Herwat learned that the city’s revenues were likely to fall short of the

projections.

{¶ 11} In addition to its 2010 deficit, the city closed 2009 with a deficit of $8.4

million. Consequently, the city’s 2010 deficit grew to approximately $44 million. The

deficit presented a significant problem for the Bell administration because, under Ohio

law and the city’s charter, the city was required to pass a balanced budget by March 31,

2010.

{¶ 12} On January 10, 2010, Bell met with union leaders to discuss the budget

deficit and seek their help in balancing the budget. The leaders were invited to attend

meetings that Bell was conducting with members of the community in January and

February to discuss the budget.

{¶ 13} On January 14, 2010, Bell sent a letter to city council informing them of a

projected budget deficit of $43.86 million. Subsequent adjustments were made to the

assumptions contained in the budget, resulting in an increase in the deficit to $48 million,

which represented approximately 24 percent of the revenues generated in 2009.

{¶ 14} With the budget deficit issues in mind, Herwat sent Bell a memo on

February 7, 2010, outlining the city’s options for balancing the budget. According to the

memo, the city had the potential to increase revenue by $35.9 million, cut expenditures

by $20.2 million, and reduce labor costs by $18.9 million through modifications to labor

contracts. Ultimately, Bell decided to address the deficit by utilizing a combination of all

three options.

{¶ 15} Having ascertained the extent of the budget deficit, and the options for

addressing it, Bell provided the adjusted figure to city council on February 10, 2010. On

that same day, representatives for the city, TPCOA, and other city unions met to discuss

concessions that would be necessary in order to balance the budget. At the meeting, the

city proposed the elimination of pension pickups, a reduction in its payment of employee

health care costs, and a reduction in base wages. The city asked the unions to respond to

its proposal by February 25, 2010. The unions did not respond.

{¶ 16} While awaiting a resolution with its unions regarding the proposed

concessions, the city began to address the deficit in other ways. By March 15, 2010, the

city had enacted expenditure reduction measures that brought the deficit down to $28

million.

{¶ 17} One week later, a meeting was held between the city and its unions. At that

meeting, TPCOA was informed that it would need to make concessions in the amount of

$902,000 in order to assist the city in addressing the remaining budget deficit. To reach

that amount, the city proposed eliminating the pension pickup and requiring TPCOA

members to pay 20 percent of the total cost for their health insurance premiums. TPCOA

refused the city’s proposal, and suggested that their share of the concessions could be

reached by deferring overtime payments to the members. In addition, TPCOA’s board

member, Michael McGee, explained to Herwat that the city was already set to save a

substantial amount of money due to a hiring freeze implemented pursuant to the

concessions made by the TPCOA and embodied in the existing CBA. Furthermore,

TPCOA’s vice president, Dan Schultz, asserted that the concessions TPCOA made

during the CBA negotiations with the Finkbeiner administration were given in order to

address the economic situation facing the city at the time.

{¶ 18} In responding to TPCOA’s assertions, city officials explained that the

savings realized under the hiring freeze would not be credited toward the $902,000 goal

because that money was already taken into consideration in the budget. Further, Bell

informed Schultz that TPCOA would be given no credit for the concessions it made

during the course of CBA negotiations with the Finkbeiner administration. Finally,

TPCOA’s offer to defer overtime payments was rejected on the basis that such deferrals

were not a true savings since the payments would eventually need to be made. Notably,

the city agreed to a similar proposal made by the firefighters’ union, Local 92, resulting

in a 2010 savings of over $2 million.

{¶ 19} On March 26, 2010, the city’s safety director, Shirley Green, telephoned

TPCOA officials to ascertain whether TPCOA was willing to accept the city’s proposal.

During the four days between the meeting and the telephone call, the city reached a

settlement with the Toledo Police Patrolmens’ Association. However, Green did not

offer the same settlement to TPCOA. Ultimately, TPCOA refused the city’s proposed

concessions.

{¶ 20} With the March 31 deadline looming, the city decided it would need to

unilaterally modify its labor contracts in order to pass a balanced budget and avoid

shutting down the city. Accordingly, on March 30, 2010, city council passed a number of

budget ordinances that included a declaration of exigent circumstances and a

modification of its labor contracts. The ordinances took effect on April 1, 2010.

Pursuant to the ordinances, the city unilaterally eliminated its pension pickup

responsibilities and increased the health insurance copays for its exempt employees and

members of six unions, including TPCOA. Members of two city bargaining units, Local

92 and Teamsters, were excluded from the unilateral modifications. According to

Herwat’s testimony before SERB, the city was forced to declare exigent circumstances

because the city “did not have sufficient revenues in its 2010 budget to be able to meet

the commitments that were made by the [Finkbeiner] administration in the contract that

they negotiated.” However, Herwat acknowledged that there were other options that

could be selected to balance the budget as an alternative to declaring exigent

circumstances, including laying off police officers, but those options were not feasible

because city council refused to adopt them, presumably for political reasons. Further,

Bell testified before SERB that he considered layoffs but decided not to utilize that option

as a deficit-reduction strategy because the city was already operating with a “lean” staff

and further reductions in numbers could jeopardize the city’s economic development

efforts.3

{¶ 21} On March 31, 2010, TPCOA filed a grievance with the city in an effort to

prevent the city from making the changes to the CBA under the budget ordinances. The

city denied the grievance, noting that the matter was not subject to arbitration because it

involved “unilateral changes to the [CBA], via the enactment of Ordinance 103-10, that

affect wages, hours, terms and conditions of employment within the meaning of R.C.

4117.08(C).”

{¶ 22} TPCOA filed several subsequent grievances with the city, complaining that

the city violated the “me too” provision of the CBA by offering Local 92 a deal prior to

the enactment of exigent circumstances that was never offered to TPCOA, and arguing

that its members were not receiving the pay to which they were entitled under the CBA as

a result of the elimination of the pension pickup. Once again, the city refused to process

the grievances.

{¶ 23} As a result of the city’s refusal to process the grievances, TPCOA filed a

complaint with the Lucas County Court of Common Pleas on May 12, 2010, seeking,

inter alia, to compel arbitration on the various grievances that had been filed with the

In its decision, SERB found that the city ended up passing a budget with a surplus of

$1.1 million for 2010. Further, SERB found that the city repealed the exigent

circumstances provisions for every union except TPCOA, deciding instead to utilize the

funds generated from the elimination of its pension pickup obligations to fund a new

police class of 60 police officers.

city. In addition, TPCOA filed an unfair labor practice charge with SERB on May 3,

2010.

{¶ 24} In its ULP charge, TPCOA complained that the city violated the terms of

the CBA when it “announced that it would be unilaterally eliminating its payment of the

10% pension pick-up for bargaining unit employees, and also unilaterally increasing

bargaining unit employee contributions for health care benefits.” On June 3, 2010, SERB

issued its finding of probable cause, thereby authorizing a complaint to be issued and

referring the matter to an expedited hearing. SERB issued its complaint on July 12, 2010,

alleging that the city’s actions taken pursuant to the exigent circumstances ordinance

constituted a violation of R.C. 4117.11(A)(1), and also amounted to a refusal to bargain

in good faith in violation of R.C. 4117.11(A)(5).4 On that same day, SERB set the matter

for an evidentiary hearing. Subsequent to the filing of SERB’s complaint, TPCOA

moved to intervene in the action.

R.C. 4117.11 sets forth the activities that constitute an unfair labor practice. Relevant

here, subsection A provides:

(A) It is an unfair labor practice for a public employer, its agents, or

representatives to:

(1) Interfere with, restrain, or coerce employees in the exercise of the

rights guaranteed in Chapter 4117 of the Revised Code or an employee

organization in the selection of its representative for the purposes of

collective bargaining or the adjustment of grievances;

***

(5) Refuse to bargain collectively with the representative of his

employees recognized as the exclusive representative or certified pursuant

to Chapter 4117 of the Revised Code * * *.

10.

{¶ 25} A hearing was held before SERB on January 24, 2011. The issue to be

decided by SERB was “whether immediate action was required by the City due to exigent

circumstances that were unforeseen at the time of negotiations, thereby requiring the City

to modify an existing collective bargaining agreement without the negotiation by and

agreement of both parties.” SERB issued its decision on April 29, 2011, in which it

found that the city did not violate R.C. 4117.11(A)(1) and (5) when it “unilaterally

increased the health-care premiums for [TPCOA members] and rescinded its 10%

payment into the [TPCOA] pension fund.” Accordingly, SERB dismissed the complaint,

along with TPCOA’s ULP charge.

{¶ 26} With regard to the question of whether the budget deficit constituted

exigent circumstances, SERB stated:

[T]he employer’s predicament – facing a 24% funding deficit and

requiring a budget that must be balanced, submitted to the legislative body,

and a balanced budget adopted by said legislative body in less than three

months, with potential spending reductions spread across six different

bargaining units as well as exempt employees – certainly fits the

description of exigent circumstances in the present case.

{¶ 27} As to foreseeability of the exigent circumstances, the opinion stated:

Mayoral Candidate Michael Bell, while campaigning for the office,

attempted to ascertain the City’s financial situation. He was told that the

City had a potential deficit for the next fiscal year of $10-15 million in

11.

April 2009, $20 million during the summer of 2009, and $30 million by the

election. He was later told that the potential deficit would be $37 million

(in December 2009), then $40 million (by the time he took office in January

2010), and finally $48.2 million (in February 2010). With a moving target

that escalates from a potential deficit of 5% of expenditures to 24% of the

Fiscal Year 2009 revenues, it would have been impossible to have foreseen

those changes at the time that negotiations concluded in July 2009. This

foreseeability determination is further complicated by the retroactivity

within the CBA – it was negotiated in July 2009, but is effective from

January 1, 2009 through December 31, 2011.

{¶ 28} Following the issuance of SERB’s decision, TPCOA filed a timely appeal

to the Lucas County Court of Common Pleas, asserting that SERB’s decision was not

supported by the evidence, and was contrary to R.C. 4117.11. Specifically, TPCOA

argued that SERB’s decision should be reversed for the following reasons: (1) SERB’s

decision ignores the city’s duty to bargain to impasse prior to making a midterm

modification to the CBA; (2) SERB erroneously concluded that the exigent

circumstances were unforeseeable; (3) the decision erroneously permits the city to

rescind a contract merely because of a projected budget deficit; and (4) the city’s

response to the exigent circumstances was overbroad.

{¶ 29} SERB responded to TPCOA’s arguments by noting that (1) there was no

time to bargain to impasse because the city had only three months to pass a balanced

12.

budget, (2) there was substantial evidence that the city could not have foreseen the rapid

increase in the deficit and falling revenues, (3) its decision did not allow the city to

rescind the CBA, but rather, allowed it to address the exigent circumstances without

shutting down the city, and (4) TPCOA cannot argue that the city’s response was

overbroad because it failed to preserve the record on that argument.

{¶ 30} On April 22, 2013, the trial court reversed SERB’s decision. In its entry,

the court concluded that SERB failed to consider whether the city had bargained to

impasse with TPCOA prior to its unilateral changes to the CBA, as required under

SERB’s opinion in In re State Emp. Relations Bd. v. Toledo City School Dist. Bd. of Edn.,

SERB No. 2001-005, 2001 WL 36023280 (Oct. 1, 2001) (“Toledo City Schools”).

Pointing to the ongoing negotiations that took place between the city and TPCOA after

the exigent circumstances ordinance was passed, the court additionally concluded that the

record only supports a finding that the city did not bargain to impasse. Thus, the court

found that the city was not entitled to unilaterally modify the CBA. Ultimately, the court

ordered the midterm changes rescinded and stated that TPCOA members should be

provided equitable relief for the losses they sustained as a result of the midterm changes.

B. Assignment(s) of Error

{¶ 31} Appellants have timely appealed the trial court’s decision, each asserting

their own assignments of error as follows:

13.

SERB:

ASSIGNMENT OF ERROR #1: THE TRIAL COURT ERRED

WHEN IT REVERSED THE STATE EMPLOYMENT RELATIONS

BOARD’S DECISION DISMISSING THE TOLEDO POLICE

COMMAND OFFICERS’ ASSOCIATION (TPCOA) UNFAIR LABOR

PRACTICE CHARGE AGAINST THE CITY OF TOLEDO ON THE

BASIS THAT SERB MISINTERPRETED THE DOCTRINE OF

“EXIGENT CIRCUMSTANCES.”

ASSIGNMENT OF ERROR #2: THE TRIAL COURT ERRED

WHEN IT DETERMINED THAT SERB’S DECISION WAS NOT

SUPPORTED BY SUBSTANTIAL EVIDENCE.

ASSIGNMENT OF ERROR #3: THE TRIAL COURT ERRED

WHEN IT SUBSTITUTED ITS JUDGMENT FOR THAT OF SERB AND

FAILED TO ACCORD THE REQUISITE DUE DEFERENCE TO

SERB’S FACTUAL FINDINGS AND SERB’S INTERPRETATION OF

THE LAW.

{¶ 32} The city:

ASSIGNMENT OF ERROR #1: THE TRIAL COURT ERRED

WHEN IT REVERSED AN ORDER FROM SERB AND RULED THAT

THE CITY HAD COMMITTED AN UNFAIR LABOR PRACTICE BY

14.

UNILATERALLY CHANGING THE COLLECTIVE BARGAINING

AGREEMENT BETWEEN THE CITY AND THE TPCOA.

ASSIGNMENT OF ERROR #2: THE TRIAL COURT ERRED

WHEN IT ADOPTED SERB’S REMEDY AND ORDERED THE CITY

TO PROVIDE RELIEF TO THE MEMBERS OF TPCOA FOR ANY

FINANCIAL LOSSES SUSTAINED AS A RESULT OF THE MID-

TERM CHANGES.

II. Standard of Review

{¶ 33} Our review of SERB’s decision in the underlying unfair labor practice case

is more deferential than that used by the trial court. Akron v. State Emp. Relations Bd.,

9th Dist. Summit No. 26227, 2013-Ohio-1213, ¶ 6; citing State Emp. Relations Bd. v.

Adena Local School Dist. Bd. of Edn., 66 Ohio St.3d 485, 491-492, 613 N.E.2d 605

(1993). In Adena, the Supreme Court of Ohio stated:

[D]ifferent standards of review are to be applied by a common pleas

court and by a court of appeals when reviewing an order of SERB in a ULP

case. When a common pleas court reviews a SERB order, the court must

determine whether the order is supported by substantial evidence in the

record. This standard of review for a common pleas court is supplied by

R.C. 4117.13(D), which provides that “[t]he findings of the board [SERB]

as to the facts, if supported by substantial evidence, on the record as a

whole, are conclusive.” Adena at 491-492, quoting Lorain City Bd. of Edn.

15.

v. State Emp. Relations Bd., 40 Ohio St.3d 257, 259-261, 533 N.E.2d 264

(1988).

{¶ 34} Substantial evidence has been defined as “such relevant evidence that a

reasonable mind might accept as adequate to support a conclusion, but less than the

weight of the evidence.” Oak Hills Edn. Assn. v. Oak Hills Local School Dist. Bd. of

Edn., 158 Ohio App.3d 662, 2004-Ohio-6843, 821 N.E.2d 616, ¶ 12 (1st Dist.), citing

Consol. Edison Co. v. Natl. Labor Relations Bd., 305 U.S. 197, 59 S.Ct. 206, 83 L.Ed.

126 (1938). Substantial evidence has been further described as a “low burden.” Id.

{¶ 35} In examining the trial court’s review of SERB’s decision, we are limited to

a determination of whether the trial court abused its discretion. Adena at 492. If no

abuse of discretion occurred, we must affirm the trial court. Id. An abuse of discretion

connotes that the trial court’s decision was unreasonable, arbitrary, or unconscionable.

Blakemore v. Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d 1140 (1983).

III. Analysis

A. SERB’s Interpretation of the Exigent Circumstances Doctrine

{¶ 36} In SERB’s assignments of error, it argues that the trial court erroneously

reversed SERB’s decision on the basis that the city did not bargain in good faith, to

ultimate impasse, as required under SERB’s decision in Toledo City Schools. Likewise,

in the city’s first assignment of error, it argues that the trial court failed to properly defer

to SERB’s interpretation of the exigent circumstances doctrine. Because the parties’

assignments of error are interrelated, we will address them simultaneously.

16.

{¶ 37} In Toledo City Schools, SERB was tasked with disposing of a dispute that

arose between the Toledo City School District Board of Education (school board) and the

Toledo Association of Administrative Personnel (TAAP). The dispute concerned the

school board’s decision to unilaterally implement an extended school day in order to

comply with a statute that went into effect three years earlier, which required students to

complete an increased number of units in order to graduate. The relevant CBA included

a provision governing extension of school days and a concomitant obligation to

compensate TAAP members when such an extension takes place. Despite the provision,

the school district’s superintendent sent TAAP a proposal to extend the work day without

an increase in members’ compensation. After extensive negotiations between the parties,

the school district notified TAAP that it was implementing its proposal over TAAP’s

objections. Soon thereafter, TAAP filed a ULP charge with SERB.

{¶ 38} In its charge, TAAP alleged that the school district violated R.C.

4117.11(A)(1) and (5) by unilaterally modifying the terms of the underlying CBA. Upon

a finding of probable cause, SERB held a hearing to determine “whether the District

engaged in bad-faith bargaining when it implemented its final proposal and modified

Article VIII of the CBA.” Toledo City Schools, SERB No. 2001-005, 2001 WL

36023280 at *3. In resolving this issue, SERB stated:

Where the parties have not adopted procedures in their collective

bargaining agreement to deal with midterm bargaining disputes, SERB will

apply the following standard to determine whether an unfair labor practice

17.

has been committed when a party unilaterally modifies a provision in an

existing collective bargaining agreement after bargaining the subject to

ultimate impasse as defined in [In re Vandalia-Butler City School Dist. Bd.

of Ed., SERB No. 90-003, 1989 WL 1633487 (Feb. 9, 1990)]:

A party cannot modify an existing collective bargaining agreement

without the negotiation by and agreement of both parties unless immediate

action is required due to (1) exigent circumstances that were unforeseen at

the time of negotiations or (2) legislative action taken by a higher-level

legislative body after the agreement became effective that requires a change

to conform to the statute. Id. at *6.

{¶ 39} Under the legislative-action prong, SERB found that the statute at issue

was passed before an agreement was reached regarding the relevant CBA. Id.

Consequently, SERB determined that the school board’s action was not justified under

the legislative-action prong. Further, SERB concluded that the action was not valid

under the exigent circumstances prong, because the school board waited over two years

to begin negotiations with TAAP regarding an extended school day. Id. Finding no

justification for the school board’s actions, SERB held that the school board violated R.C.

4117.11(A)(1) and (5) when it unilaterally extended the school day without providing

additional compensation to TAAP members. Id.

{¶ 40} Applying Toledo City Schools to this case, the trial court reversed SERB’s

decision, finding that the parties were not at ultimate impasse when the city modified the

18.

CBA. The court noted that SERB failed to make a finding that the city bargained in good

faith or to ultimate impasse with TPCOA prior to modifying the CBA. Further, the court

found that substantial evidence would not support such a finding.

{¶ 41} Having thoroughly examined the record that was before SERB, we agree

that the parties were not at ultimate impasse when the city unilaterally modified the CBA.

Regarding ultimate impasse, SERB has stated:

Ultimate impasse is a legal concept adopted from the private sector.

The test developed by the NLRB as to whether there is an ultimate impasse

is reflected and approved in the case of [Am. Fedn. of Television and Radio

Artists, AFLCIO, Kansas City Local v. National Labor Relations Bd., 395

F.2d 622, (D.C. Cir.1968)], and appears to be whether there is “no realistic

possibility that continuation of discussion at that time would have been

fruitful.” Under NLRB case law the existence of an impasse is very much a

question of fact, and many factors are considered in such factual

determinations. “The bargaining history, the good faith of the parties in

negotiations, the length of the negotiations, the importance of the issue or

issues as to which there is disagreement, the contemporaneous

understanding of the parties as to the state of negotiations are all relevant

factors to be considered in deciding whether an impasse in bargaining

exists.” Taft Broadcasting Co., 163 NLRB 475, 478 (1967). Thus, an

ultimate impasse is not a point in time which can be predetermined in

19.

theory. It is a case by case determination involving the development of a

record with enough factual data to determine whether at what point good

faith negotiations towards reaching an agreement have been exhausted.

Vandalia-Butler, supra, SERB No. 90-003, 1989 WL 1633487 at *7.

{¶ 42} Here, the record does not support a finding that the city bargained in good

faith to ultimate impasse. Appellants contend that ultimate impasse was reached on

March 30 (the day before the city was required to pass a balanced budget). However,

Vandalia-Butler did not create a bright-line rule allowing the city to determine that it is at

ultimate impasse simply because it is under an obligation to balance its budget and has

failed to do so by the deadline. Were we to adopt such a rule, we would be allowing the

city to shift its responsibility for balancing the budget to its unions. Moreover, we would

be ignoring the factor-based analysis instituted in Vandalia-Butler. We decline to do so.

We recognize that the city was running up against a deadline. However, TPCOA is

entitled to good faith bargaining to ultimate impasse and the city’s requirement to balance

its budget does not eliminate TPCOA’s rights.5

{¶ 43} Looking at the record before us, we find that TPCOA was given little

opportunity to bargain with the city. When presented with TPCOA’s offer to save the

city $902,000 by deferring overtime payments, the city flatly rejected the offer, stating

Notably, the record demonstrates that there were a range of available options that would

have allowed the city to balance its budget without forcing union concessions.

Nonetheless, the city elected to utilize a mix of those options that included union

concessions.

20.

that such deferrals were not a true savings since the payments would eventually need to

be made. Despite the city’s concerns, it allowed Local 92 to defer overtime payments as

a cost-savings measure. Additionally, the city reached a settlement with the Toledo

Police Patrolmens’ Association, but failed to offer the same arrangement to TPCOA.

Having examined the record, we agree with the trial court when it found that:

Toledo made no reasonable effort to meet the TPCOA part way

before unilaterally modifying the CBA. Rather, Toledo proposed that the

union members pay their own pension contributions and pay higher

premiums for health care insurance and summarily rejected the union’s

proposed alternatives. Eight days later, after the TPCOA declined to offer

any specific concessions, Toledo implemented its first and only specific

offer and passed the “exigent circumstances” ordinances eliminating

pension pick-ups and increasing health care costs for all City employees

except the members of two bargaining units. * * * Toledo did not bargain

in good faith, and instead engaged only in surface bargaining, before

unilaterally changing the terms of the TPCOA’s CBA.

***

Instead of engaging in meaningful negotiation, Toledo made the

unilateral changes and then negotiated with the union, as it did with five

other bargaining units. Such post-implementation bargaining was bad-faith

21.

bargaining that violated R.C. 4117.11(A)(1) and (A)(5) and the rule of law

set forth in Toledo [City] Schools. (Emphasis sic.)

{¶ 44} Moreover, we find that the exigent circumstances relied upon by the city

(i.e. the budget deficit) were foreseeable at the time the CBA was negotiated. Indeed, the

city was already facing budget deficits and a flailing economy when it executed the CBA

on August 18, 2009. As indicated above, Toledo City Schools only permits an employer

to unilaterally modify a CBA based on exigent circumstances that are unforeseen. Toledo

City Schools, SERB No. 2001-005, 2001 WL 36023280 at *6.6

{¶ 45} While we recognize that the budget deficits were initially smaller and

constantly escalating, the economic indicators that were before the city during CBA

negotiations should have led the city to conclude that the deficit would balloon over time.

For example, income tax revenues for the city dropped from $169,689,103 in 2007 to

$154,475,390 in 2008, a 9.4 percent decline. Thereafter, tax revenue declined another 8.7

percent from 2008 to 2009. Furthermore, the city was well aware of the crippling

national recession that hit Northwest Ohio particularly hard. Given the rising

unemployment throughout the city due to the recession, it was likely that the city’s

revenue from income taxes would continue to decline for the foreseeable future. This

downward trend in revenues was before the city at the time of CBA negotiations.

Here, the parties acknowledge that Toledo City Schools’ legislative-action prong does

not apply to this case. Thus, only the exigent circumstances prong is at issue.

22.

{¶ 46} That the city was aware of the impending deficit is demonstrated in its

letter sent to TPCOA on April 9, 2009, in which the city recognized “a continuing

downturn in the city’s financial condition.” Additionally, the city attempted to declare

exigent circumstances on two separate occasions based on budget issues prior to agreeing

to the CBA. The situation was so grim, in fact, that Mayor Finkbeiner was contemplating

bankruptcy.

{¶ 47} In light of the foregoing evidence, which is not in dispute, we find that

SERB’s decision was not supported by substantial evidence. By extension, we find that

the trial court did not abuse its discretion in reversing SERB’s decision. Accordingly,

SERB’s assignments of error and the city’s first assignment of error are not well-taken.

B. The Trial Court’s Remedy

{¶ 48} In its second assignment of error, the city argues that the trial court erred in

adopting SERB’s remedy directing the city to provide equitable relief to TPCOA

members for any losses sustained as a result of the unilateral changes to the CBA. The

city asserts that the trial court ignored the fact that all of the other unions were forced to

make concessions with the city. The city contends that TPCOA would have made

concessions had the city not declared exigent circumstances and unilaterally modified the

CBA. In light of those concessions, the city argues that the trial court’s judgment creates

a windfall for TPCOA members.

{¶ 49} TPCOA, for its part, argues that the trial court properly deferred to the

remedy set forth by SERB. TPCOA contends that the remedy provided is the “traditional

23.

remedy for unlawful unilateral changes in terms and conditions of employment.” We

agree with TPCOA’s contention that the remedy provided in this case was the

appropriate, customary remedy.

{¶ 50} Historically, SERB has remedied unlawful midterm modifications to a

CBA by ordering the employer to “rescind the unilateral implementation of [the midterm

changes], thereby returning the parties to the status quo ante.” Toledo City Schools,

SERB No. 2001-005, 2001 WL 36023280 at *7. That is precisely the remedy imposed in

this case. We see no reason to conclude that the trial court abused its discretion in

adopting SERB’s remedy. The city’s argument invites us to speculate as to the

concessions that might have been made had the unilateral modifications not been

imposed. We decline to so speculate.

{¶ 51} Accordingly, the city’s second assignment of error is not well-taken.

IV. Conclusion

{¶ 52} Having found each of appellants’ assignments of error not well-taken, we

affirm the judgment of the Lucas County Court of Common Pleas. Appellants are

ordered to pay the costs of this appeal pursuant to App.R. 24.

Judgment affirmed.

24.

Toledo Police Command

Officers’ Assn. v. State

Emp. Relations Bd.

C.A. No. L-13-1074

A certified copy of this entry shall constitute the mandate pursuant to App.R. 27.