ASSOCIATED STUDENTS OF UNIVERSITY OF WASHINGTON ‑- RELATIONSHIP TO STATE AND TO UNIVERSITY ‑- NECESSITY OF DEALING THROUGH DIVISION OF PURCHASING ‑- STATE RETIREMENT ELIGIBILITY OF ASUW EMPLOYEES

ASSOCIATED STUDENTS OF UNIVERSITY OF WASHINGTON ‑- RELATIONSHIP TO STATE AND TO UNIVERSITY ‑- NECESSITY OF DEALING THROUGH DIVISION OF PURCHASING ‑- STATE RETIREMENT ELIGIBILITY OF ASUW EMPLOYEES ‑- SEVERANCE PAY

 1. Although ASUW is arm and agency of state it need not deal thru the Division of Purchasing since money is derived from local sources.

 2. ASUW employees are properly included in state retirement system.

 3. Severance pay of discharged employee must be founded upon contract of employment.

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                                                                   May 10, 1956

 Honorable William A. Gissberg
State Senator, 39th District
315 State Street
Marysville, Washington                                                                                                              Cite as:  AGO 55-57 No. 267

 Dear Sir:

             In your letter of March 28, 1956, you advise that the subcommittee on Education of the Legislative Council is studying the relationship of the ASUW to the University of Washington.  In order to assist your committee in preparing a report to the Legislative Council you have asked our opinion on the following questions:

             (1) Is the ASUW required to deal through the division of purchasing in the department of general administration in purchasing commodities, printing and the letting of concessions?

              [[Orig. Op. Page 2]]

            (2) Are ASUW employees properly included as members of the state retirement system?

             (3) In the absence of contractual obligation must the ASUW provide for severance pay to discharged employees?

             Our conclusions may be summarized as follows:

             (1) No.

             (2) Yes.

             (3) No.

                                                                      ANALYSIS

             A recent decision at the University of Washington to terminate the services of head football coach John Cherberg precipitated a controversy which received considerable publicity.  Despite the fact that the Associated Students of the University of Washington has had a corporate existence of more than fifty years it became clear that the legal relationship of the ASUW to the University and the state of Washington is not clearly defined.

             We believe that if the legal status of the nonprofit corporation known as the ASUW had been established more definitely and understood more completely that much of the Cherberg controversy and the unpleasantness connected with it could have been avoided.

             We know that those genuinely interested in the welfare of our state university are anxious to resolve this uncertainty with the hope that future incidents of this nature thereby may be avoided.

             It is our opinion that the ASUW is an arm and agency of the University and of the state of Washington.  In 1935 the legislature enacted a revenue act providing for a business and occupation tax.  The ASUW brought an action against the state tax commission seeking a declaratory judgment holding that the ASUW was not subject to such tax.  The ASUW alleged in its complaint "that plaintiff is controlled by, and, in fact, is an arm and agency of the state and University of Washington."  The tax commission in its answer denied this allegation.  On  [[Orig. Op. Page 3]] September 6, 1935, the superior court of Thurston county entered a declaratory decree adjudging that the ASUW was not subject to the B. and O. tax.  In a companion case the court also reached the same result with respect to the Associated Students of the State College of Washington.

             In 1938 four University of Washington students commenced an action against the Board of Regents, the president and the ASUW challenging the right of the University officials to require payment of an ASUW fee as a condition precedent to registration and enrollment.  The status of the ASUW was placed squarely in issue by the pleadings.  On October 17, 1938, the court entered a declaratory judgment and decree to the effect that the regents were lawfully requiring payment of such fees.

             The court made rather detailed findings of fact which included the following language in paragraph VII:

             "That the defendant corporation, the Associated students of the University of Washington, acting as an arm and agency of the Board of Regents of the University of Washington and under its direction and control, and under the direction and control of the President of the University, fosters, conducts and finances as part of the general educational program of the University, and for the benefit of its student body, the following activities: Debate, Glee Club, University Chorus, Band, Student Publications, which include a daily newspaper, a monthly magazine and the Year Book, a Concert Series, a Lecture Series, Women's Social and athletic activities, and men's directed athletics of all sorts, both inter-collegiate and intra-mural.  * * *"

             We are aware of no case in which our supreme court has considered this problem.  It is significant however that the superior court has subscribed to the "arm and agency" theory of the relationship in cases in which the state of Washington and students themselves were  [[Orig. Op. Page 4]] advocating an opposite theory.  In each of these cases the Board of Regents and the ASUW have consistently accepted and relied upon the proposition that the ASUW is an arm and agency of the state and the University.

             The corporate existence of the ASUW began on April 18, 1906, when its articles of incorporation were adopted.  These articles were twice amended in 1955.  The first amendment provides that the ASUW originally incorporated for a fifty-year term should have perpetual existence.  The second amendment added Article IX which provides as follows:

             "The President of the University, acting for the Board of Regents, has the right of final approval or disapproval of all actions of the Associated Students of the University of Washington (ASUW), and the President, acting for the Board of Regents, has the right to require any affirmative action to be taken which he deems proper, and to take such action on behalf of the ASUW, after request by him that such action be taken and failure of the governing body of the ASUW to take such action, except that the President may not require any affirmative action to be taken which would change the corporate structure of the ASUW."

             The bylaws of the ASUW are called the Constitution.  Article III of the Constitution relates to management and control of the ASUW.  Section 2 of this article provides:

             "The ASUW and its members recognize that the ASUW is an integral part of the University of Washington and that therefore the President of the University, acting for the Board of Regents, has the right of final approval or disapproval of all actions of the ASUW and its governing body and agent and agencies."

              [[Orig. Op. Page 5]]

            The governing body of the ASUW is called the Board of Control.  Five of its twenty-four members are from the faculty and appointed by the president of the University.  The finance and budget committee controls ASUW expenditures.  Four of its seven members are appointed by the president of the University from the faculty.

             An examination of the changes in the Constitution of the ASUW clearly demonstrates that the University today has the right to assert a much greater degree of supervision and control by virtue of the articles and bylaws than it had in 1935 and 1938.  We mention this only to show that the superior court determinations above referred to have not lost their applicability because of changes in the ASUW articles or bylaws.

             Having concluded that the ASUW is an arm and agency of the University and the state of Washington, we now proceed to your specific inquiries.

            (1) RCW 43.19.190 (1955 Supp.) provides in part as follows:

             "The director of general administration through the division of purchasing, shall:  (1) Purchase all supplies for the support and maintenance of the state institutions under the control of the department of institutions, and all supplies needed for the support, maintenance, and use of the state's educational institutions * * *."

             RCW 43.19.200 (1955 Supp.) provides in part:

             "* * * Purchase made for the state's educational institutions * * * shall be paid for out of the moneys appropriated for supplies, material and service of the respective institutions.  * * *"

             The statutory language above quoted has been substantially the same since the division of purchasing was established in 1921.  The division has been transferred to various departments as the various state administrative departments have been reorganized but its functions and authority remain essentially the same.

              [[Orig. Op. Page 6]]

            This office has consistently ruled that purchase need be made through the division of purchasing only where state funds are involved.  See OAG November 2, 1927, to the Secretary of the University Board of Regents.  On May 4, 1946, we wrote the Supervisor of Purchasing as follows:

             "You are, accordingly advised that you have the exclusive authority to purchase and contract for all supplies for the maintenance, support and use of the state educational institutions whenever payments shall be made from state funds * * *."

             Since we understand that no portion of ASUW expenditures is disbursed from state moneys appropriated by the legislature, we conclude that the ASUW need not make purchases through the division of purchasing.

             (2) RCW 41.40.120 (1955 Supp.) provides in part:

             "Membership in the retirement system shall consist of all regularly compensated employees and appointive and elective officials of employers as defined in this chapter who have served at least six months without interruption * * *."

             RCW 41.40.010 (5) (1955 Supp.) provides:

             "'Employer' means every branch, department, agency, commission, board and office of the state admitted into the retirement system."

             We are advised that employees of the ASUW were accepted for membership in the state employees retirement system in 1953.  We believe this administrative action was proper and consistent with our conclusion that the ASUW is an agency of the state.

             (3) Article II, § 25 of the state constitution provides in part:

              [[Orig. Op. Page 7]]

            "The legislature shall never grant any extra compensation to any public officer, agent, servant, or contractor after the services shall have been rendered or the contract entered into * * *."

             This office has ruled that this provision prevents the Board of Regents from making retroactive pay increases to linotype operators employed by the University.  See the opinion to the President of the University of Washington dated March 20, 1946.  The opinion pointed out that the pay of such employees was derived from regularly appropriated state funds.  This also was true inState ex rel. Bonsall v. Case, 172 Wash. 243; andState ex rel. Eshelman v. Cheetham, 21 Wash. 437, two cases construing this constitutional provision.

             If, as we understand, the salaries and wages of employees of the ASUW are paid from money totally derived from ASUW fees and local revenues we do not believe this section of the constitution would invalidate the granting of severance pay to discharged employees.

             Any obligation on the part of the ASUW to pay severance pay to a terminated employee must be founded upon the contract of employment.  We do not have sufficient information on the terms of any particular employment contract to express an opinion on the merits of any claim for salary.  For a case indicating the importance of the terms of a contract of public employment, seeChristie v. Port of Olympia, 27 Wn. (2d) 534.

             In its first half century of formal existence the ASUW has made a tremendous contribution to the traditions and reputation of our University.  We firmly believe that this organization of students has been and will continue to be motivated by considerations of advancing the prestige and good name of the University of Washington.  We share what we conceive to be the view of both the administration of the school and all alumni‑-that any misunderstanding as to the role of the ASUW which would cause incidents tending to dampen the enthusiasm of the members of the ASUW would be unfortunate.

             We believe the conclusions and observations contained herein have equal applicability to the relationship between the Associated students of the State College of Washington and WSC.

              [[Orig. Op. Page 8]]

            We hope the foregoing comments will prove helpful.

 Very truly yours,
DON EASTVOLD
Attorney General 

ANDY G. ENGEBRETSEN
Assistant Attorney General