COURT OF APPEALS DECISION
DATED AND RELEASED AUGUST 14, 1990
STATE OF WISCONSIN
IN COURT OF APPEALS
LOCAL 2236, AFSCME, AFL-CIO,
WISCONSIN EMPLOYMENT RELATIONS COMMISSION and CHIPPEWA
Decision No. 24521-B
APPEAL from a judgment of the circuit court for Chippewa county: GREGORY A.
Before Cane, P.J., LaRocque and Myse, JJ.
MYSE, J. Local 2236 of AFSCME (the union) appeals a judgment affirming the
Employment Relation Commission's determination that Chippewa County's decision to sell
health care center was a permissive rather than mandatory subject of collective bargaining.
union contends that the decision to sell was primarily related to considerations of wages and
the sale was, in effect, a device to subcontract the services to another and, therefore, a
subject of bargaining. Because we agree with the commission's determination that Chippewa
County's sale of its health care facility was primarily related to its management and public
making functions and was not a decision to subcontract for the same services previously
we affirm the commission's determination.
Chippewa County has been operating a health care facility for a substantial period of
to the county's decision to sell its facility, the health care center had incurred significant
deficits. In May 1986, the county sold its facility by land contract to Dennis Heyde, the
of a nursing home in Bloomer, Wisconsin. Both Heyde, the county and the county's then
care director assured the public and the patients that the facility would continue in operation
extend the same services to the existing clientele even though there was a change of
The union charged the county with a prohibited practice when it refused to bargain its
to sell the center, alleging that this decision was a mandatory subject of bargaining. The
commission determined that the decision to sell the center was not a mandatory subject of
bargaining and dismissed the union's complaint. The matter was appealed to the circuit court
Chippewa County, which remanded it to the commission with directions to apply the
related" standard established in Beloit Educ. Ass'n v. WERC, 73 Wis.2d 43,
242 N.W.2d 231
(1976) and developed in subsequent cases. In reaffirming its determination that the county's
decision to sell was not a mandatory subject of bargaining, the commission reiterated its
findings of fact and conclusions of law and incorporated specific findings in regard to the
primarily related standard. The circuit court affirmed the commission's determination.
Under the Municipal Employment Relations Act (MERA), municipal employers have a
collectively bargain with their organized workers about wages, hours and conditions of
employment. These are mandatory subjects of bargaining, and municipal employers may not
refuse to negotiate such issues. Section 11 1. 70 (1) (a) , Stats. The employer, however, is
"required to bargain on subjects reserved to management and direction of the governmental
unit..." Id. Issues falling within the management and public policy area are permissive
of bargaining that need not be negotiated. Thus MERA attempts to accommodate the
public employees with those of the public through its municipal officials. Where these
conflict the court applies its "primarily related" standard.
As applied on a case-by-case basis, this primarily related standard
is a balancing test which
recognizes that the municipal employer, the employees, and the public have significant
at stake and that their competing interests should be weighed to determine whether a
subject for bargaining should be characterized as mandatory. If the employees, legitimate
in wages, hours, and conditions of employment outweighs the employer's concerns about the
restriction on managerial prerogatives or public policy, the proposal is a mandatory subject
bargaining. In contrast, where the management and direction of the school system or the
formulation of public policy predominates, the matter is not a mandatory subject of
West Bend Educ. Ass'n v. WERC, 121 Wis.2d 1, 9, 357 N.W.2d 534,
538 (1984). While the
impact of the implementation of permissive subjects of bargaining must also be negotiated
issue is not raised in the instant case.
The commission's determination that the county's decision to sell was a permissive
bargaining is a question of law that we will review in the same fashion as the circuit court.
Boynton Cab Co. v. DILHR, 96 Wis.2d 396, 405, 291 N.W.2d 850, 855
commission has developed significant experience and expertise in determining what are
and what are permissive subjects of bargaining. Accordingly, this court will give "great
to the commissions ruling on the issue of mandatory bargaining. West Bend,
121 Wis.2d at 13,
357 N.W.2d at 540. We must therefore sustain the commission's determination provided the
commission has properly applied the existing law and its conclusion has a rational basis of
The union first contends that the commission incorrectly concluded that the county's
abandon the services offered at the health care center was not a mandatory subject of
The union argues that the county was primarily interested in avoiding high labor costs. The
claims that the decision to sell did not represent a choice among alternative social policy
Rather, the decision was essentially related to wades and benefits, thus requiring mandatory
bargaining. Moreover, the union argues that the commission failed to apply the "primarily
related" standard. The union contends that despite lip service to a balancing test, the
actually applied a per se test based on the nature of the county's action rather than balancing
specific managerial or public interests against those of the employees.
We agree with the union that the primarily related test is not determined by set
conclusory labels. That does not mean, however, that the county's only interest to be placed
the scales is in saving labor costs. The record indicates that the operating deficit was caused
frozen federal and state medical funds and a decline in the resident population as well as high
labor costs. Thus, the county was required to make a determination as to whether, the
being offered by the center were going to be continued despite the substantial financial losses
being incurred by the taxpayers of that county. The county made a public policy decision
offer the services extended through the center to the county's citizens at public expense. It is
right of the county board to control the flow of tax dollars, establish priorities as to what
tax revenues will be allocated and apply those dollars as the board members determine to be
appropriate for the health, welfare and benefit of the citizens they serve. It is this right
commission considered in determining that the decision to sell the center was not a
subject of bargaining. The commission's determination correctly reflects the law established
Beloit and its progeny and is a rationally based conclusion that we are required to affirm.
The union argues that the commission relied extensively and incorrectly on City
of Brookfield v.
WERC, 87 Wis.2d 819, 275 N.W.2d 723 (1979). The union contends that
"harmonized" the exclusive grant of power to cities in ch. 62, Stats., with sec. 111.70(1)(a),
Stats., and, thus, does not apply to counties. We disagree.
The Brookfield decision rests primarily on the concern for the political
process and fiscal
responsibility. Indeed, that court quoted Unified School Dist. No. 1 v. WERC,
81 Wis.2d 89,
99, 259 N.W. 2d 724, 730 (1977) , for the proposition that "the principal limit on the scope
collective bargaining is concern for the integrity of political processes."
Brookfield, 87 Wis.2d
at 830, 275 N.W.2d at 728. These concerns are equally applicable whether the municipal
employer is a school district as in Unified School Dist., a city as in
Brookfield or a county as in
this case. The legislature gave county boards the power to buy and sell property. Section
Stats. Contrary to the union's contention, sec. 111. 70 (1) (a) , Stats. , in no way limits that
power under the facts of this case.
The union also suggests that the arrangement between the county and Heyde was
subcontracting agreement whereby the county continued to offer the same services to the
through its agreement with Heyde. As the argument continues, a decision to subcontract
affect the policies, functions or services of the municipal employer. A subcontracting
is essentially concerned with wages and benefits, thus mandating collective bargaining.
School Dist., 81 Wis.2d at 102-03, 259 N.W.2d at 732.
The question of whether a subcontract exists is a mixed question of law and fact. The
determined by the commission will not be disturbed as long as there is any substantial
that supports the findings made by the commission. Boynton, 96 Wis.2d at
404, 291 N.W.2d
at 854. Substantial evidence means evidence that a reasonable mind might accept as adequate
make the findings that were made by the commission. Gilbert v. State Med. Exam.
Wis.2d 168, 195, 349 N.W.2d 68, 80 (1984).
The union does not challenge the factual findings made by the commission in this case.
those factual findings support the union's assertion that a subcontract was created between
county and Heyde. The essence of a subcontract is the agreement, either express or implied,
one party to perform certain labor or services for another. In the present case, the county
surrendered all control of the physical plant and operations of the center when the sale to
was completed. They retained only the interest of a secured party in a land contract. No
rights were reserved to the county as a result of this sale. The union argues that the
continues essentially as before (except for the center's relationship with its employees). while
Heyde has continued the operation, that fact represents only his management decision as to
operation of this center and not proof of a subcontracting relationship between the county and
It is clear that power is vested in Heyde and that he is under no obligation to run the center,
particular way or to offer any particular services as a result of his purchase of this property.
commission specifically found that the control of the operation of the center did not remain
directly or indirectly with the county. In the absence of such a finding, no subcontractual
relationship exists between these parties.
We therefore conclude that the commission correctly determined that the county's
decision to sell
the center was not a mandatory subject of bargaining and that the county did not commit a
prohibited practice in its refusal to bargain that decision with the union.
By the Court.--Judgment affirmed.
Not recommended for publication in the official reports.