HR REPORT: Collective Bargaining Factfinder Reports and the Impact of the New Hampshire Supreme Court’s Decision in Appeal of New Hampshire Troopers Association

Spring is here – the flowers are blooming, the birds are hatching, and labor negotiations are in progress or about to get underway in your communities.  For many, the negotiation process has become relatively routine and is well-understood.  But, as with the Right To Know law and its application to employee personnel records, interpretations of law regarding collective bargaining that were thought to be well-settled have been recently taken up by the New Hampshire Supreme Court and interpreted in a way that has significantly changed our understanding of post-impasse dispute resolution procedures.  Specifically, the Court’s May 12, 2022 decision in Appeal of New Hampshire Troopers Association fundamentally changed our understanding of the use of fact finding in the negotiation process.

For background, the Public Employee Labor Relations Act, RSA 273-A (the “Act”), requires that parties negotiate in good faith towards a goal of reaching a tentative agreement.  Commonly a negotiated tentative agreement includes items that have a specific cost (such as wages) and operational items that have no direct cost component, such as procedures for posting positions, resolving grievances, etc.  If a tentative agreement is reached and is subsequently approved by both the union and the board of the public employer, the Act provides that “only cost items” resulting from the negotiations be submitted to the legislative body for funding.  If the cost items are funded, then the tentative agreement becomes final and binding on both the employer and the union.

However, if negotiations have stalled and the parties declare an impasse, the Act specifies a dispute resolution process intended to assist the parties’ reach a new agreement.  The first step is generally mediation, in which a neutral third party works with the parties to find common ground.  If mediation is unsuccessful, the parties can engage the same or another neutral third party to review and assess each party’s respective bargaining position and issue a report including recommended terms for a tentative agreement.  The “Factfinder” report may address any open negotiation issues, including both cost and non-cost items.  The negotiating team for each party then has the opportunity to review and accept the Factfinder’s report and recommendations.  If either negotiating team rejects the Factfinder’s report and recommendations, then the report is submitted directly to the full membership of the employee organization and the full board of the public employer, respectively, for a vote.  If either party votes to reject the Factfinders’ report and recommendation, then it is submitted to the legislative body of the public employer, which “shall vote to accept or reject so much of the recommendations as otherwise is permitted by law.”  RSA 273-A:12, III.  Thereafter, “[i]f the impasse is not resolved following the action of the legislative body, negotiations shall be reopened.”  RSA 273-A:12, IV.

As the legislative body has the authority to approve or disapprove cost items, it has been generally understood that the legislative body’s approval of the Factfinder’s report is binding on the public employer, but not with regard to non-cost items.  However, this issue had never been directly considered by the Court until its decision in Appeal of New Hampshire Troopers Association.  In that case, the Union representing several bargaining units of state employees reached impasse in its negotiations with the Governor.  The parties engaged a neutral Factfinder who issued a report and recommendations to resolve the impasse, which addressed both cost and non-cost items.  While the Union accepted the report and recommendations, the Governor rejected it and declined to submit it to the Executive Council for consideration.  The report was then submitted the Legislature, which voted to accept the Factfinder’s recommendations with regard to both cost and non-cost items.  The Governor refused to implement the Legislature-approved cost items.  The Union then filed a petition for declaratory relief from the PELRB, arguing that the Legislature’s approval was binding on the State, at least with regard to the cost items in the report.  This argument was rejected by the PELRB, which reasoned that , “[t]here is no provision in [the Act] which confers upon a legislative body any authority to establish, unilaterally or otherwise, the terms and conditions of employment for bargaining unit employees through negotiations or by vote on a fact finder’s report.”

On appeal, the Court upheld the PELRB’s decision.  The Court held that a legislative body’s vote on a Factfinder’s report cannot be treated as binding on the public employer, even with regard to cost items, because such an interpretation of RSA 273-A:12 would effectively transfer the authority to negotiate the terms of the collective bargaining agreement from the public employer’s executive body to its legislative body, in contravention of RSA 273-A.  The Court refused to “interpret [the Act] in a manner that conflates the authority of a legislative body to vote on a fact-finder’s report . . . with its authority to ratify cost items in collective bargaining agreements.”

As now clarified by the Court, a legislative body’s vote to approve a Factfinders report and recommendations is purely advisory on public employers.  This means that, even if a report is approved, the board of the public employer may opt not to agree to a collective bargaining agreement consistent with those terms and instead resume negotiations with the Union.  Of course, such negotiations would occur in a political setting where the Union is aware of the cost tolerance of the legislative body.  Therefore, a public body should carefully evaluate the circumstances with legal counsel when deciding what steps to take if it finds itself in this position.