RETROACTIVE WAGE INCREASES GRANTED BY WASHINGTON TOLL BRIDGE AUTHORITY

RETROACTIVE WAGE INCREASES GRANTED BY WASHINGTON TOLL BRIDGE AUTHORITY

The Washington Toll Bridge Authority may agree with various labor unions holding union contracts with the Washington State Ferry System for settlement of a wage review question upon a retroactive basis provided the retroactive effect applies only to the period subsequent to the effective date of the notice calling for review.

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                                                                    May 5, 1952

J. W. Hoover, Secretary
Washington Toll Bridge Authority
Transportation Building
Olympia, Washington                                                                                                              Cite as:  AGO 51-53 No. 296

Dear Sir:

            Your letter of April 30, 1952, requests our opinion as follows:

            "A matter of considerable importance to pending Washington State Ferries labor negotiations has arisen upon which we request your opinion.  An early reply is necessary to the success of such labor negotiations.

            "In the month of May, 1951, just before the state acquired the Washington State Ferries, contracts were made with the various unions of employees to continue in effect the labor agreements which the predecessor company had with such unions.  The current contracts uniformly provided for a wage review in the light of economic and other conditions as of January 1, 1952.  It was further provided that notice of such desired review be given on or after  [[Orig. Op. Page 2]] January 1, 1952, calling for review thirty days later and in all the instances where the system had labor contracts, such notices were given and negotiations have been held with the various unions which have resulted in a tentative settlement of the wages to be applicable.  It has been found desirable to offer to make any wage adjustments retroactive to March 1, 1952.  During the course of the negotiations it was the opinion of the parties that such wages could, in fact, have been made retroactive to January 1, 1952, under the terms of the contract.

            "May the Washington Toll Bridge Authority agree with the various unions concerned for wage increases to be retroactive as of March 1, 1952?"

            It is our conclusion that the Toll Bridge Authority may agree with various labor unions holding labor contracts calling for wage review on a "cost of living" basis for wage increases to be retroactive as of March 1, 1952.

                                                                     ANALYSIS

            In 1949 the acquisition of the Washington State Ferry System was first authorized by the legislature.  At the same session an act was passed dealing with labor problems which might arise in connection with the acquirement of the ferry system.  It is a well known fact that for many years ferry system labor disputes disturbed the economic welfare of the Puget Sound area due to the shut-down of ferry operations during the periods of such disputes.  To alleviate this situation chapter 148, Laws of 1949, was passed.  Section 1 of such act reads as follows:

            "The State of Washington, as a public policy, declares that sound labor relations are essential to the development of a ferry and bridge system which will best serve the interests of the people of the State."

            Section 3 establishes a Marine Employee Commission authorized to deal with labor disputes and eventually to arbitrate such disputes when required due to the failure of labor negotiations between management of the ferry system and the unions concerned.  We quote from section 3 matter which seems significant to the question before us:

             [[Orig. Op. Page 3]]

            "* * * Members of the Commission shall be reimbursed by the authority for all necessary expenses incurred in the performance of their duties.  The Washington Toll Bridge Authority is empowered to negotiate and to enter into labor agreements with its employees or their representatives.  The Commission shall have the authority to administer labor relations and to adjudicate all labor disputes in the best interests of the efficient operation of any ferry or ferry system.  In adjudicating disputes, the Marine Employee Commission shall take into consideration that though an individual employee shall be free to decline to associate with his fellow employees, it is necessary that he have full freedom of association, self-organization and designation of representatives of his own choosing who shall represent him in all respects before the Marine Employee Commission to negotiate the terms and conditions of his employment and the settlement of his labor disputes.  The duties of the Commission shall be to make surveys of wages, hours and working conditions as it deems necessary and shall consider the prevailing practices for similarly skilled trades in the area in which the employee is employed, and shall adjust complaints, grievances and disputes concerning labor arising out of the operation of said ferry or ferry system.  Any employee, employee's representative, or Washington Toll Bridge Authority claiming labor disputes shall in writing notify the Marine Employee Commission who shall make careful inquiry into the cause thereof and issue an order in writing advising the employee, or his representative, and the authority as to the decision of the Commission.  * * *"

            The act makes decisions of the Marine Employee Commission binding upon employees and upon the Authority.  Thus, we have a unique situation where compulsory arbitration is provided by law and strikes or lockouts are forbidden.

            It appears that under the contract which is attached to your letter, which you say is typical of other labor contracts, now under negotiation, that the provisions of the Marine Employee Commission Act are fully recognized.  The  [[Orig. Op. Page 4]] labor contract states that orders and awards made thereby are binding upon its members.  The contract contains many usual provisions as to wage rates, vacations, seniority, etc., and also contains a no-strike agreement.  It is effective until December 31, 1952, and contains automatic renewal clauses unless either party gives written notice of a desire to modify or terminate the same.

            The following portion quoted from the contract deals with the present question:

            "Be it further provided that, at the option of either party, there may be instituted a wage review for the purpose of adjusting monthly, hourly and overtime rates of pay, such adjustments to be limited to the framework established by the National Wage Stabilization Board.  Such wage review may be held upon submission of a written notice from one party to the other of its desire for such wage review.  Such notice may be submitted on or after January 1, 1952 and must be in effect at least thirty (30) days prior to the contemplated date for such wage review."

            It is apparent that the notice required by the above paragraph was given by the unions affected in a timely manner and called for a review as required by the contract.  It is further apparent that negotiations have taken place over a considerable period of time between the management of the system and the representatives of the union, and, from the text of your request, it also appears that a basis for agreement has been reached without resorting to arbitration by the Marine Employee Commission.  If the matter can be settled by agreement without resorting to arbitration, the result would probably be beneficial to the state as against the uncertainties of protracted hearings and eventual arbitration by the Commission.

            The question seems to us to be:  Does the making of an agreement adjusting the wages as of March 1st violate the Constitutional provisions contained in Article VIII, § 7, prohibiting gifts of public money, or Article II, § 25, prohibiting extra compensation to public officers or agents?  It appears to us that the whole tenor of the Marine Employee Commission Act which authorized labor agreements and recognized the fact that labor disputes might arise would contemplate a situation such as we have before us.  It is extremely common in labor disputes that as a part of a settlement, wages are adjusted to be effective on a date which has passed.  It would also appear that the provision  [[Orig. Op. Page 5]] for wage review which we quoted above implies a possible retroactive application when necessary to do justice between the contracting parties.  In fact, in the case of a protracted labor dispute with submission to the Marine Employee Commission, unless the eventual award could be made retroactive, the provision of the contract for review would be ineffective to give "cost of living" or other increases to employees who deserve the same.

            We think that the case ofChristie v. Port of Olympia, 27 Wn. (2d) 534, 179 P. (2d) 294, where a municipal port is concerned, states the present law as it applies to proprietary functions of government and is applicable in the instant problem.  A labor dispute had arisen between the Port of Olympia and its employees and an agreement was made that if they continued work they would receive the benefits of any agreement which was made generally by the longshoremen's union with the employers of the Pacific Coast area.  The commissioners of the Port of Olympia were doubtful as to whether they had any authority to enter into a labor agreement at all with employees when this agreement was made to avoid a strike.

            With these facts before it, the court held that a port district had implied power to enter into agreements with labor unions as to hours, wages, etc.; that such power was necessary for its continued functioning in competition with other ports and private industry, since no port could exist without employees.  It was held that the making of a contract with a retroactive effect was not contrary to public policy and that it did not violate the constitutional provisions mentioned.  The basis of the favorable opinion of the court appears to be the fact that the retroactive provision was contained as one of the original terms of the contract of employment between the men and the port; that such a provision was not violative of the constitution when contained in the original contract between the port and its employees.

            Applying the facts and reasoning of the Christie case, we think it is obvious that the state ferry system is also in competition for competent employees, particularly those of unusual ability such as masters, mates, or marine engineers, with private business; that in addition to the implied power recognized as to a port by the court, the legislature has authorized the making of ferry system labor contracts; that the possible retroactive effect of a labor dispute settlement is implied both in the Marine Employee Commission Act, supra, and the contracts with the unions; that a settlement on a retroactive basis would not violate constitutional provisions if the retroactive effect applies only to time subsequent to the effective date of the 30-day notice provided in the contract.

             [[Orig. Op. Page 6]]

            We return herewith the contract which you furnished us for examination.

Very truly yours,

SMITH TROY
Attorney General

DON CARY SMITH
Assistant Attorney General