LABOR ‑- CITIES AND TOWNS ‑- MUNICIPALITIES ‑- COUNTIES ‑- CONTRACTS ‑- VALIDITY OF RETROACTIVE PAY PROVISION IN INITIAL COLLECTIVE BARGAINING AGREEMENT UNDER CHAPTER 41.56 RCW

LABOR ‑- CITIES AND TOWNS ‑- MUNICIPALITIES ‑- COUNTIES ‑- CONTRACTS ‑- VALIDITY OF RETROACTIVE PAY PROVISION IN INITIAL COLLECTIVE BARGAINING AGREEMENT UNDER CHAPTER 41.56 RCW

An initial collective bargaining agreement executed under chapter 41.56 RCW between a county, municipality or political subdivision and the bargaining representative of its employees may contain a provision whereby the salary or wage rates therein agreed upon will be payable for services previously rendered, from and after a designated date prior to its execution, but only if there was in existence during that previous period some kind of agreement that the wages received for their work performed between the date of such agreement and the execution of the collective bargaining agreement are not to be considered to be their full compensation; and no such agreement or understanding can be found from the mere act of certification or recognition of a bargaining agent under RCW 41.56.080.

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                                                              September 18, 1974

Honorable Gary Grant
State Senator, 11th District
25823 132nd S.E.
Kent, Washington 98031

                                                                                                                 Cite as:  AGO 1974 No. 19

Dear Sir:

            By letter previously acknowledged you have requested the opinion of this office in response to a question which we paraphrase as follows:

            Can salary or wage rates contained in an initial collective bargaining agreement entered into between a county, municipal corporation or political subdivision and the bargaining representative of its employees under chapter 41.56 RCW be applied retroactively to the date upon which the bargaining representative involved was certified under RCW 41.56.080, which date is prior to the date of execution of the collective bargaining agreement.

             [[Orig. Op. Page 2]]

            We answer this question in the manner set forth in our analysis.

                                                                     ANALYSIS

            Your question has reference to chapter 41.56 RCW which, among other matters and with certain exceptions, provides for collective bargaining between representatives of the employees of any county, municipal corporation or political subdivision of the state and their public employers.1/   Specifically, your inquiry presents a situation in which theinitial collective bargaining agreement between a public employer covered by that law and a bargaining representative for its employees seeks to apply the agreed rate of compensation retroactively to a date prior to the date on which that agreement was executed; specifically, the date of certification of the bargaining representative under RCW 41.56.080.2/   The legal problem involves both a statute,  [[Orig. Op. Page 3]] RCW 41.56.950, and two sections of the state Constitution.  The statute, which was added to chapter 41.56 RCW by an amendment in 1971,3/ provides that:

            "Whenever a collective bargaining agreement between a public employer and a bargaining representative is concluded after the termination date of the previous collective bargaining agreement between the same parties, the effective date of such collective bargaining agreement may be the day after the termination date of the previous collective bargaining agreement and all benefits included in the new collective bargaining agreement including wage increases may accrue beginning with such effective date as established by this section."

            The two constitutional provisions which bear upon your question are Article II, § 25 (Amendment 35) and Article VIII, § 7, the first of which states that:

            "The legislature shall never grant any extra compensation to any public officer, agent, employee, servant, or contractor, after the services shall have been rendered, or the contract entered into, nor shall the compensation of any public officer be increased or diminished during his term of office.  Nothing in this section shall be deemed to prevent increases in pensions after such pensions shall have been granted."

             [[Orig. Op. Page 4]]

            The second, Article VIII, § 7 provides that:

            "No county, city, town or other municipal corporation shall hereafter give any money, or property, or loan its money, or credit to or in aid of any individual, association, company or corporation, except for the necessary support of the poor and infirm, or become directly or indirectly the owner of any stock in or bonds of any association, company or corporation."

            In responding to your request we will deal, first, with these constitutional restraints upon retroactive pay for public employees, and then turn to the above‑quoted statute.

            The leading case on this question, from the standpoint of the Constitution, isChristie v. The Port of Olympia, 27 Wn.2d 534, 179 P.2d 294 (1947).  In that case, a new, higher rate of compensation decreed by a wartime arbitration authority for the defendant port district employees was applied retroactively to the expiration date of a prior labor contract covering those employees.  The court found, however, that an express agreement had been entered into at the time of expiration of the prior contract under which the employees agreed to continue to work after that date on condition that the pay currently being received by them was not to be considered full compensation and that the new rate, when determined through arbitration, would apply to such work.  The court then concluded that the additional payments reflected by this "retroactive" application of the new contract did not constitute gifts under Article VIII, § 7, or extra compensation for previously rendered services within the meaning of Article II, § 25; instead, these payments were held to be a form of deferred, or previously agreed to, compensation.  In so ruling the court explained itself as follows:

            ". . .  The payments contemplated are neither gifts nor 'extra compensation.'  Assuming for the present that the contract was legally made, the payments represent compensation which accrued in strict pursuance to a contract made before the work was done.  It is true that the resolution providing for the payments is unhappily worded.  It speaks of 'retroactive compensation,' but, plainly, it is  [[Orig. Op. Page 5]] merely deferred compensation that was provided for in the contract.

            "Retroactive payments and retroactive compensation, in the true sense, arise out of such situations as the following:  Workmen say to their employer:  Our wages are unfairly low and have been for many months.  We will strike on June 1st unless you not only raise our wages twenty cents an hour from then on, but also pay us an additional ten cents for each hour we have worked since January 1st.  Such contracts have been frequently made.  A private employer can validly make such a contract with his workmen, but, if a municipal corporation should make such a contract, it would probably run afoul of one or both of the constitutional provisions above quoted.  It would at least seem indisputable that the payment of the additional ten cents an hour for work done from January 1st to June 1st in the case supposed would be extra compensation after the service was rendered, but the payments claimed under the alleged contract (if there was such a contract) were earned day by day according to the terms thereof.  Payments were merely deferred."4/

             Then, having so ruled, the court went on to distinguish an earlier case relied upon by the plaintiff as follows:

            "The case ofState ex rel. Eshelman v. Cheetham, 21 Wash. 437, 58 Pac. 771, is readily distinguishable from the case at bar.  It was held in that case that the  [[Orig. Op. Page 6]] employees of the Senate agreed to accept a fixed per diem for their services when they entered upon their duties.  The additional compensation was claimed only through afterthought, that is, after the work was done.  Here, the hourly rate was not fixed.  On the contrary, it was explicitly agreed, prior to October 1, 1944, that the money the longshoremen were to be paid from day to day, or week to week, after October 1st, was not to be considered full compensation."  (Emphasis supplied.)

            Unlike the express authorization granted by RCW 41.56.950, supra, the principles set forth in theChristie case in support of "retroactive pay" are thus not limited to instances in which there was a previous collective bargaining agreement in effect.  While it is true that there was, in fact, such a prior agreement in that case, the essential ingredient for the court's decision was the additional understanding arrived at upon the expiration of the earlier contract, that (in the words of the court):

            ". . . the men would remain on the job after October 1st, receiving currently the hourly rates they had been receiving, but ultimately, in addition thereto, such additional sums, if any, which the national war labor board, after a hearing of the dispute, might hold to be a fair and reasonable rate of pay for work done after October 1st."

            Withoutthis arrangement, the additional payments would have been unconstitutional in that case; but because of it, they were not.  Accord, our prior opinion of June 12, 1951, to then State Senator Gerald G. Dixon (an opinion written shortly after the Christie decision), in which we said:

            "It will be seen from this decision of the Supreme Court that although a retroactive pay increase may not constitutionally be granted by a municipal corporation, if there was an agreement outstanding during the period for which it  [[Orig. Op. Page 7]] is sought to make the payment applicable to the effect that any final adjustment would apply to that period, such a payment may be made. . . ."

            See, also, our earlier opinion to you of June 6, 1970, copy enclosed, where, in speaking of theChristie case, we said:

            "It follows, based upon the reasoning of the court in the foregoing case, that, if the parties ‑ the county and its employees in this instance ‑ were to agreein advance to the working arrangements contemplated by your question, the payment of deferred compensation at a later date (back to the date of the original understanding) would not be prohibited by any statute or constitutional provision."

            This brings us, before turning to the problem presented by RCW 41.56.950,supra, to a consideration of the significance of certification of a bargaining representative under RCW 41.56.080, also quoted earlier in this opinion.5/   The issue you have thus raised, it will now readily be seen from the foregoing analysis of the constitution as applied in the Christie case, is whether the mere act of certifying or recognizing a bargaining representative ‑ an act which you have suggested in your letter might serve as the basis for the referral date for a retroactive wage raise ‑ will result in the establishment of an agreement covering an ensuing period of wage negotiations ‑ whereby the employees involved continue working with the understanding that the wages then paid to them will not necessarily constitute their full compensation for the services then rendered.  In our opinion, it would not.

            Certification, as you know, is not required in every case under chapter 41.56 RCW, but only where the employer and its employees are unable to agree on such matters as the identity of the bargaining representative or the appropriate employee unit.  Neither the statute nor the regulations issued  [[Orig. Op. Page 8]] thereunder by the department of labor and industries suggest that the process of certification under that law is to have legally significant implications beyond those recognized in the collective bargaining process as carried on in the private sector.

            Moreover, certification by itself does not terminate a preexisting arrangement concerning terms and conditions of employment, although such a preexisting agreement cannot be used by an employer to avoid the obligation to bargain in good faith with a bargaining agent newly designated through certification.  J.I. Case Co. v. Labor Board, 321 U.S. 332 (1944).  Where a change in the identity of a bargaining representative is effected through the certification process, some provisions of a preexisting agreement may be terminated because of the identity of the bargaining representatives, but this is not the equivalent of full termination of the existing agreement.  McLeod v. International Longshoremen's Ass'n, Inc., 177 F. Supp. 905 (E.D.N.Y. 1959).

            That is not to say, of course, that a public employer operating under chapter 41.56 RCW,supra, could not simultaneously recognize a bargaining representative of its employees (with or without certification by the department of labor and industries under the above statute) and enter into an interim arrangement regarding the workers' wages during an ensuing period of contract negotiations ‑ assuming no statute, charter provision or ordinance to the contrary in the case of a particular employer.  Given the general authority for collective bargaining which is provided for in that RCW chapter, this most certainly may be done in any case where the employees involved are not already under some prior contractual obligation to work during that period.6/   It is to say, however, that the mere act of recognition, or certification, will not by itself cause this arrangement between the parties to come into existence.

            This, then, is the situation under the constitution, as interpreted inChristie v. The Port of Olympia, supra:  while  [[Orig. Op. Page 9]] the existence of some form of interim arrangement arrived at prior to, and covering, the period of wage negotiations is necessary in order to permit an ultimate wage settlement to be made "retroactive" to a date prior to the date of execution of the collective bargaining agreement in which it is contained, the existence of a prior collective bargaining agreement is not ‑insofar as the constitution is concerned.  With this, we turn, finally, to the 1971 legislature's addition of RCW 41.56.950, supra, and its possible negative implications.

            Here repeated for ease of reference, RCW 41.56.950 provides that:

            "Whenever a collective bargaining agreement between a public employer and a bargaining representative is concluded after the termination date of the previous collective bargaining agreement between the same parties, the effective date of such collective bargaining agreement may be the day after the termination date of the previous collective bargaining agreement and all benefits included in the new collective bargaining agreement including wage increases may accrue beginning with such effective date as established by this section."

            The question which this statute raises by reason of its express reference to a prior collective bargaining agreement is whether, even though not required by the Christie rule, such a previous contract isalso now required in the case of those municipalities covered by chapter 41.56 RCW (and, hence, the provisions of RCW 41.56.950, supra) if certain of them are to be deemed authorized to include a retroactive effective date in a new collective bargaining agreement ‑ thereby precluding those municipalities which are dependent for their powers upon express or implied grants of authority from the legislature7/ from doing so.

             [[Orig. Op. Page 10]]

            Some support for this view is to be derived from the rule of statutory construction stated in the Latin maxim expressio unius est exclusio alterius (the principle that the expression of one thing excludes the expression of another).  That maxim, however, requires caution in its application.  As indicated inState ex rel. Becker v. Wiley, 16 Wn.2d 340, 351, 133 P.2d 507 (1943), it should be invoked only as one means of ascertaining legislative intent, not as a means of defeating an underlying purpose of a statute.

            Other authority likewise cautions that ". . . there should be some evidence the legislature intended its application lest it prevail as a rule of construction despite the reason for and the spirit of the enactment . . ."Columbia Hospital Asso. v. Milwaukee, 35 Wis.2d 660, 669, 151 N.W.2d 750 (1967).

            Bearing this qualification in mind we also note that our court, in the recent case ofRoza Irrigation Dist. v. State, 80 Wn.2d 633, 497 P.2d 166 (1972), took pains to characterize the instant Public Employees' Collective Bargaining Act (chapter 41.56 RCW) as being "remedial in nature" and, hence, ". . . entitled to a liberal construction to effect its purpose. . . ."8/   The over-all thrust of this act is to promise harmonious labor relations in the public sector.  See, RCW 41.56.010.  Consistent therewith, the 1971 amendment regarding "retroactive" pay with which we are here concerned, RCW 41.56.950 was passed after a legislative committee created by RCW 41.56.400 had recommended a change in the original 1967 act aimed at further improving public management-employee relationships by expressly authorizing retroactive wage  [[Orig. Op. Page 11]] provisions in collective bargaining agreements.  While the language ultimately enacted is more specific in some of its terms than was the committee's initial recommendation,9/ and so deals only with terms in a second, or later, collective bargaining agreement, it seems doubtful that the legislature would have thought that while such provisions would further improve labor-management relationships if put in a collective bargaining agreement renewing an earlier labor contract, they would not be of similar benefit in an initial contract entered into after negotiations covered by an interim wage agreement such as we have above described in discussing the constitutional limitations upon retroactive pay.

            In so concluding we have also taken note of another factor which could, arguably, lead to a more narrow view of the significance of the subject statute.  As initially introduced during the 1971 session in the form of House Bill No. 1075, the proposal which became RCW 41.56.950 provided for mandatory retroactive adjustments; however, it was later modified before passage to categorize such adjustments aspermissive only.10/   Thus, while enactment of the original statutory language in its mandatory form would have tended to imply that adjustments in compensation under an initial collective bargaining agreement, although not required, would bepermitted (subject to constitutional limitations), the present text of the statute, by expressly sanctioning permissive adjustments only in the case of successive collective bargaining agreements, could be said to infer that such adjustments are prohibited in other situations.  However, in the light of all that we have said thus far, it seems more likely to us that this change in the text of the original bill merely evidenced a determination by the legislature not to preclude the adoption of a later "effective" date for the adjustment of compensation (or other benefits) in those cases where that is agreed to by the parties to the negotiations.

                        SUMMARY

            In summary, we therefore conclude that a provision for increased compensation effective prior to the date of execution  [[Orig. Op. Page 12]] of an initial collective bargaining agreement is not prohibited by existing decisions of the courts of this state or by reason of the present language of RCW 41.56.950.  The constitutional validity of such arrangement, however, depends on the existence of some form of interim agreement that the wages then paid for the work performed between the date of such agreement and the execution of the initial collective bargaining agreement is not necessarily to be considered to be full compensation for that work.  No general prescription can be given for the type of conduct or action by the negotiating parties that will give rise to such an agreement in all cases.  The particular course of dealings between the parties in any given situation must be examined for the presence of any such qualifying arrangement.  However, no such agreement or understanding can be found from the mere act of certification or recognition of a bargaining agent.

            We trust the foregoing will be of assistance to you.

Very truly yours,

SLADE GORTON
Attorney General

JOHN C. MARTIN
Deputy Attorney General