BENTON, C.J.
Four labor unions representing employees of the City of Gainesville appeal a final order of the Public Employees Relations Commission (PERC) that rejected Hearing Officer Choppin's ruling that the City had engaged in unfair labor practices, in violation of sections 447.501(1)(a) and (c), Florida Statutes (2008), by refusing to bargain over changes it made to health insurance benefits for city employees, once they retire. The parties' collective bargaining agreements did not address the issue, so it was incumbent on the appellants to show that the City's furnishing retirees' health benefits amounted to an established past practice. Persuaded the hearing officer got it right, we reverse and remand to PERC for further proceedings.
The parties' collective bargaining agreements do not discuss health insurance benefits for retirees. But the City has helped pay for such benefits for many years. In fact, until 1995 the City paid 100% of retirees' health insurance premiums (for individual coverage) including all premium increases occurring after retirement. The City reduced the percentage in 1995, but continued to pay a fixed percentage of retirees' insurance premiums, including the same fixed percentage of premium increases occurring after retirement.
The City effected the change in 1995 by adopting a city ordinance incorporating
When the unions filed unfair labor practice charges under sections 447.501(1)(a) and (c), Florida Statutes (2008), alleging the City's refusal to bargain, a PERC hearing officer conducted an evidentiary hearing. Eventually, the hearing officer recommended that PERC find that the City had engaged in an unfair labor practice by unilaterally changing the health insurance benefits employees would receive as retirees, without negotiating the changes with the unions. PERC rejected the hearing officer's recommendation, however, and dismissed the unfair labor practice charges. The unions then brought the present appeal.
Like PERC itself, we are "bound to honor a hearing officer's findings of fact unless they are not supported by competent, substantial evidence." City of Winter Springs v. Winter Springs Prof'l, 885 So.2d 494, 497 (Fla. 1st DCA 2004) (citing Belleau v. Dep't of Envtl. Prot., 695 So.2d 1305, 1307 (Fla. 1st DCA 1997)). In reviewing PERC's decisions, moreover, we must not lose sight of the fact that public employees have a constitutional right to bargain collectively. Art. I, § 6, Fla. Const. ("The right of employees, by and through a labor organization, to bargain collectively shall not be denied or abridged."). The Florida Supreme Court has made it clear that "`with the exception of the right to strike, public employees have the same rights of collective bargaining as are granted private employees by Section 6 [of Article 1 of the Florida Constitution].'" City of Tallahassee v. Pub. Emps. Relations Comm'n, 410 So.2d 487, 490 (Fla.1981) (quoting Dade Cnty. Classroom Teachers' Ass'n, Inc. v. Ryan, 225 So.2d 903, 905 (Fla.1969)). See also Chiles v. State Emps. Attorneys Guild, 734 So.2d 1030, 1036 (Fla.1999) (Article 1, section 6 of the Florida Constitution "expressly applies to `employees' without limitation, except that public employees do not have the right to strike.").
Implementing this constitutional right, the Public Employees Relations Act, Chapter 447, Part II (PERA), provides:
Job-related benefits, although not catalogued in an existing bargaining agreement, may nevertheless constitute terms and conditions of employment which are not subject to change by the employer unilaterally. See Palowitch v. Orange Cnty. Sch. Bd., 3 F.P.E.R. 280 at 282 (1977), approved 367 So.2d 730 (Fla. 4th DCA 1979). "It is settled law that a public employer's unilateral alteration of the status quo of a mandatory subject of bargaining, i.e., wages, hours, and terms and conditions of employment of its employees, is a per se violation of Section 447.501(1)(a) and (c), Florida Statutes, absent a clear and unmistakable waiver, legislative body action taken after impasse, or extraordinary circumstances requiring immediate action." Miami Beach Fraternal Order of Police. William Nichols Lodge No. 8 v. City of Miami Beach, 36 F.P.E.R. 127 at 275-76 (2010). The status quo depends both on the provisions of collective bargaining agreements and on the content of established past practices. At issue here is the City's allegedly established past practice of defraying a percentage of municipal employees' health insurance premiums upon retirement.
Like private employees,
Palowitch, 367 So.2d at 731-32 (emphasis supplied). Public employees' right to bargain for changes to established past practices includes the right to bargain for changes to the employer's contribution to current employees' health care premiums upon retirement
In City of New Port Richey, PERC held that the city had committed an unfair labor practice, in violation of §§ 447.501(1)(a) and (c), by amending its ordinance to reduce its required contribution to the retirement fund where the city's contribution had been established by ordinance for four years and the union contract was silent on the matter. PERC explained that:
Id. PERC went on to say that ". . . the City's rate and ratio of contribution to the pension fund had, through past practice [four years], ripened into an extra-contractual term and condition of employment which was unilaterally changed by the City." Id. Surprisingly, PERC made no mention of its decision in City of New Port Richey in the order under review.
The formula under which the City made its contribution toward retirees' health insurance premiums in the present case remained in effect from 1995 to 2008. "To constitute an established practice, it must be demonstrated that the practice was unequivocal, that it existed substantially unvaried for a significant period of time, and that the bargaining unit employees could reasonably have expected the practice to continue unchanged." Clay Educ. Staff Prof'l Ass'n v. Sch. Dist. of Clay Cnty., 34 F.P.E.R. 139 at 275 (2008) (citing Hillsborough Cnty. Police Benevolent Ass'n, Inc. v. City of Tampa, 15 F.P.E.R. 20028 (1988); Manatee Educ. Ass'n v. Manatee Cnty. Sch. Bd., 7 F.P.E.R. 12017 (1980)). The hearing officer found as a fact that appellants' members reasonably expected the City's contributions
This finding of fact has ample support in the evidence, and should not have been overturned. See Green v. Fla. Dep't of Bus. & Prof'l Regulation, 49 So.3d 315, 318-19 (Fla. 1st DCA 2010) (determining that ALJ's determinations that an appraisal report was not misleading or insufficient were factual findings, "susceptible to ordinary methods of proof and, thus, the Board was not permitted to reject these findings unless they were not supported by competent substantial evidence"); City of Winter Springs, 885 So.2d at 497 ("Agencies are bound to honor a hearing officer's findings of fact unless they are not supported by competent, substantial evidence." (citing Belleau, 695 So.2d at 1307)). PERC has in the past found that practices lasting much shorter periods of time gave public employees sufficient reason to expect the practice to persist. For example, in City of New Port Richey, PERC found that the city committed an unfair labor practice when it unilaterally reduced its contribution to a pension plan. PERC found that New Port Richey's employees could reasonably have expected the practice to remain unchanged where the city's rate of contribution to the plan had lasted from 1981 to 1985, or, as PERC said, "remained substantially unvaried for an extended period of time." 12 F.P.E.R. 17040 at 61. There the contribution rates and ratios remained unchanged for a period of four years, while the period here lasted thirteen years.
PERC has, indeed, held that such a past practice can develop over the course of only two years. See Cent. Fla. Prof'l Firefighters, Local 2057 v. Bd. of Cnty. Comm'rs of Orange Cnty., 9 F.P.E.R. 14372 at 775-76 (1983) (employees had reasonable expectation that June 1, 1981 to May 2, 1983 practice allowing firefighters to leave the station to purchase food and eat at restaurants would continue). An agency's interpretation of a statute it is charged with administering is normally entitled to judicial deference. But
United Faculty of Fla. v. Pub. Emps. Relations Comm'n, 898 So.2d 96, 100-01 (Fla. 1st DCA 2005) (quoting City of Safety Harbor v. Commc'ns Workers of Am., 715 So.2d 265, 266 (Fla. 1st DCA 1998)) (reversing PERCs dismissal of unfair labor practice charges). Deference is particularly inappropriate where, as here, PERC has suddenly changed its interpretation of a statute with little or no explanation. See Fla. Cities Water Co. v. State, 705 So.2d 620, 625-26 (Fla. 1st DCA 1998); cf. Smith v. Crawford, 645 So.2d 513, 521 (Fla. 1st DCA 1994) ("Deference to an agency's interpretation is even more compelling where an agency's interpretation, as here, is consistent with its prior published opinions."). The unequivocal past practice in the present case remained in place over the course of thirteen years, and was clearly well established, as the hearing officer found.
An employer's unratified reservation of rights, whether in a retirement plan or in other documents not expressly incorporated into the collective bargaining agreement, does not abridge employees' right to bargain collectively. See S. Nuclear
Rinzler v. Carson, 262 So.2d 661, 668 (Fla. 1972) (citations omitted). An employer's published claim that it has retained the right to change a past practice without bargaining, does not give the employer the legal right to make the unbargained for change. See Pasco Cnty. Prof'l Firefighters, Local 4420, IAFF v. Pasco Cnty. Bd.
The key is the parties' reasonable expectation that a past practice will continue. See Seminole Cnty. Prof'l Firefighters, Local 3254 v. Seminole Cnty., 31 F.P.E.R. 197 at 457-58 (2005) (finding employees had a reasonable expectation that the practice of providing take-home vehicles would continue despite the County's generally unknown and amorphous policy that allowed County to eliminate take-home vehicles upon an annual review); Daytona Beach Fire/Rescue, Local 1162 v. City of Daytona Beach, 19 F.P.E.R. 24068 at 138-39 (1993), aff'd., 630 So.2d 194 (Fla. 5th DCA 1993) (holding an annual wage increase was a past practice despite City's discretion); Fla. Nurses Ass'n v. Pub. Health Trust-Metro. Dade Cnty., 14 F.P.E.R. 19312 at 700-06 (1988) (finding employees whose collective bargaining agreement did not contain express provision regarding employer's contribution to employee health insurance premium had a reasonable expectation that employer's nine-year practice of subsidizing the cost of certain HMO family coverage would continue, notwithstanding this statement in the employer's insurance booklet: "You. . . must pay the cost of your family's coverage"). The past practice in the present case was substantially unvaried for more than a decade. The hearing officer understandably found that the parties expected it to continue. PERC erred in overturning the hearing officer's recommendation to treat the City's unilateral change of this established past practice as an unfair labor practice.
Reversed and remanded.
THOMAS, J., concurs; DAVIS, J., Dissents With Opinion.
DAVIS, J. dissenting.
I respectfully dissent and would affirm PERC's order. In reversing, the majority primarily focuses on the length of time that the City of Gainesville used the 1995 formula in calculating its contribution toward retiree health insurance premiums. However, to constitute an established past practice, it must not only be shown that a practice has existed substantially unvaried for a significant period of time, it must also be shown that the practice was unequivocal and that the bargaining unit employees could reasonably have expected the practice to remain unchanged. United Faculty of Fla. v. Univ. of Cent. Fla. Bd. of Trs., 30 F.P.E.R. ¶ 229 (2004). This case turns on whether the employees had a reasonable expectation that the 1995 formula would remain unchanged. In my opinion, PERC was correct in concluding that they did not. Although the employees may have believed that the City's contribution amount would remain unchanged, whether a practice has created a reasonable expectation must be analyzed on an objective, rather than a subjective, basis. See Daytona Beach Fire/Rescue, Local 1162 v.
As PERC noted, the City has, on multiple occasions throughout the years, warned all of its employees of its reservation of rights with respect to its contribution toward retiree health care premiums. For instance, in the 1995 ordinance, wherein the City adopted its contribution formula, the City set forth:
The same or similar language was included in subsequent ordinances, as well as in memoranda, employee health care handbooks, and policy statements. This express reservation of rights distinguishes this case from the many PERC decisions cited by the majority. Had this case dealt only with a thirteen-year practice, those decisions would support reversal. However, in this case, the employees were continuously notified that the City could alter its contribution at any time, including in 1995, the point at which the unions argue that the status quo or past practice began. As PERC concluded, the employees could not reasonably expect that the City's 1995 contribution formula would remain unchanged.
Accordingly, I would affirm.
Id. at 1358 (emphasis supplied) (citation omitted). In the present case, the 1995 change to a percentage contribution less than 100% was separate and distinct from the change made in 2008, abandoning any percentage formula.
While IAFF Local 2157 initially demanded to bargain the 1995 change, it and the other unions later acquiesced in the change. In doing so, however, the unions did not relinquish the right to bargain future changes. "[T]he burden of proving waiver by a preponderance of the evidence is on the City, which must show that the waiver was clear and unmistakable." Hillsborough Cnty. Police Benevolent Ass'n, Inc. v. City of New Port Richey, 12 F.P.E.R. 17040 at 61 (1985). As explained in Southern Nuclear Operating Company:
524 F.3d at 1357 (quoting Dep't of the Navy, Marine Corps Logistics Base v. FLRA, 962 F.2d 48, 57 (D.C.Cir.1992)). The unions in the present case did not waive their right to bargain based on their acquiescence or agreement to changes to retiree health insurance benefits in 1995. The prefatory language of the 1995 ordinance ("Whereas, the City Commission of the City of Gainesville, Florida, has in the past chosen to pay some of the premium costs for continued health insurance coverage for retirees and/or their dependents, the percentage or amount of which payment for either the retirees or dependent coverage has varied over the years and may continue to do so in the future . . . .") does not alter this fact.
PERC has repeatedly recognized this principle. See Royal Palm Beach Prof'l Fire Fighters Ass'n, IAFF, Local 2886 v. Vill. of Royal Palm Beach, 14 F.P.E.R. 19304 (1988) (employer's unilateral change to work schedule on November 19, 1987 was an unfair labor practice despite the union's failure to object to prior changes in July 1985 and October 1986); United Faculty of Fla. v. Univ. of Cent. Fla. Bd. of Tr., 30 F.P.E.R. 229 (2004) (holding that, although UFF waived right to bargain over out-of-cycle wage increases paid for first six weeks, Board committed an unfair labor practice when it continued to grant out-of-cycle wage increases after UFF notified the Board that it desired to negotiate over the increases); Fire Fighters of Boca Raton, Local 1560 v. City of Boca Raton, 12 F.P.E.R. 17051 (1986) (union did not waive right to contest change to city's rules and regulations even though it had not objected to other recent changes); Escambia Educ. Ass' n, FTP-NEA v. Sch. Bd. of Escambia Cnty., 10 F.P.E.R. 15160 (1984) (that the employee organization in prior years did not assert its contractual or status quo right to receive salary experience increments held not to waive its right to challenge School Board's unilateral discontinuance of payment of salary experience increments for current year).
Nor did the unions waive their rights to bargain changes to the City's past practice formula by not objecting to the ordinances, summary plan descriptions and plan descriptions containing or referring to the reservation of rights language. The unions never "consciously explored" or "fully discussed" the City's reservation of rights language with the City. See S. Nuclear Operating Co. 524 F.3d at 1357-58; see also Ga. Power Co., 325 N.L.R.B. 420, 421 (1998), aff'd without opinion, 176 F.3d 494 (11th Cir.1999) (finding no waiver where the contract did not refer to medical or life insurance benefits and the reservation of rights language in the benefit plans was never the subject of collective bargaining). Whatever the effect of the City's reservation of rights language on its non-unionized employees and retirees, it did not affect the rights of employees represented by the unions. City Attorney Hauck and various City documents recognized that any changes that might occur remained subject to the City's collective bargaining obligations.
The zipper clause stated: "All terms and conditions of employment not covered by this agreement shall continue to be subject to the City's sole discretion and control." Id. at 63. PERC stated that "[b]ecause zipper clauses are generally interpreted as closing out bargaining during the contract term and maintaining the status quo of a contract, they are not to be used to allow an employer to make unilateral changes in working conditions without bargaining." Id. PERC explained:
Id. (emphasis supplied). As in City of New Port Richey, the "Entire Agreement" zipper clause here is general and does not specifically and explicitly waive the Unions' right to bargain changes to the City's contribution for retiree health insurance premium payments. There is no clear and unmistakable waiver.
The zipper clauses in the present case do not waive the unions' bargaining rights. "`A waiver of this type [contractual] must be stated with such precision that simply by reading the pertinent contract provision employees will be reasonably alerted that the employer has the power to change certain terms and conditions of employment unilaterally.'" Int'l Ass'n of Fire Fighters, Local 754 v. City of Tampa, 13 F.P.E.R. 18129 at 317 (1987) (quoting Fraternal Order of Police Miami Lodge 20 v. City of Miami, 12 F.P.E.R. 17029 at 40 (1985)). Neither broadly worded zipper clause nor management rights clause constitute a clear and unmistakable waiver of the right to bargain. See Pinellas Cnty. Police Benevolent Ass' n, Inc. v. City of Dunedin, 8 F.P.E.R. 13102 (1982) (zipper clause and management rights clause did not waive union's right to bargain over employer's increased health insurance payroll deductions).
