13 CIR 262 (1999)



) CASE No. 973
LOCAL 3150, )
Petitioner, )
a Municipal Corporation, )
Respondent. )
Appearances: For the Petitioner: John P. Fahey Law Offices of John P. Fahey, P.C. 1905 Harney Street, Suite 620 Omaha, NE 68102

For the Respondent: Duncan A. Young

Young & White 8742 Frederick Street P. O. Box 241358 Omaha, NE 68124-5358

Before Judges Anderson, DeLay and Moore

ANDERSON, J: This matter comes before the Commission on Respondent's motion to add the Elkhorn Suburban Fire District as a party respondent in this proceeding in which Petitioner seeks to represent Respondent's fire and rescue personnel. Petitioner objects to the motion. Both parties have submitted briefs discussing the issues. Attached to Respondent's motion was a copy of an Agreement between the Respondent and the Elkhorn Rural Fire District. Petitioner submitted the affidavit of Darren Garrean, Petitioner's president, attaching a copy of the Personnel Rules of the City of Elkhorn. A hearing on the motion was held June 15, 1999. Both parties submitted post hearing briefs. For the reasons stated herein, Respondent's Motion to Add the Elkhorn Suburban Fire District is overruled. STATEMENT OF FACTS: For the purpose of ruling on this motion, the following will be taken as true: The City of Elkhorn, ("City") and the Elkhorn Rural Fire District ("District") entered into an agreement dated May 10, 1994 (the "Agreement") pursuant to Neb. Rev. Stat. §35-513, in which they agreed to jointly provide fire protection and rescue squad operations by entering this "Joint Venture." Although responsibilities were assigned to a "Volunteer Fire Department" ("Volunteers") (Agreement at para. 5), only the City and District signed the Agreement. Although the District agreed to immediately convert to a Suburban Fire Protection District in the Agreement, there is no evidence that the District accomplished this conversion. For purposes of our analysis, we assume the conversion has been accomplished, and that Elkhorn Suburban Fire District exists as the successor to the Elkhorn Rural Fire District. We will use the term "District" to refer to both the Elkhorn Rural Fire District and the Elkhorn Suburban Fire District. In this Agreement, each party was to deliver all fire equipment, supplies, and property, both real and personal, (excluding trust funds) to the Joint Venture to hold, control and retain for use in the performance of the Agreement. The City is responsible for administration and operation of all fire and rescue services, provided that it consults with the District, and makes "a bona fide effort to accommodate and comply with requests of the Fire District...." Agreement at para. 3. The duties delegated to the City in the Agreement include :
1. Employment of the full time fire and rescue personnel; 2. Determination of the number of full time fire and rescue personnel necessary to supplement the volunteer force after consultation with the District and Volunteer Fire Department ("volunteers"); 3. Preparation of a table of organization after consultation with the District and Volunteers. 4. Consultation with the District and Volunteers on the salary, wages and benefits to be paid to the employed fire and rescue personnel, on the anniversary date of the Agreement; 5. Maintainence of all payroll and personnel records for fire and rescue employees, and pay all necessary payroll and other employment taxes; 6. Maintainence of workers compensation and other insurance policies naming the District and City as co-payees. Agreement at para. 4.

The annual budget process for fire and rescue operations begins with Volunteer's preparation and submission to the City of recommendations for expenditures for the next fiscal year. From this recommendation of expenditures, the City prepares a budget of expenses and income which it submits to the District for its comment. The District has 15 days to review the proposed budget and recommend changes to the City. "If there is no agreement on any changes recommended to the City, the budget proposed by the City, with the agreed changes shall be the budget for the Joint Venture for the next fiscal year." Agreement at paragraph 7. The total budget is then allocated between the City and the District pro rata on the basis of assessed valuation as determined by the Douglas County Assessor.

The District's share of monthly operating expenses are billed each month to the District payable within 10 days. All equipment, supplies and other personal and real property purchased by funds within the Joint Venture budget are co-owned in the same proportion as each party paid into the Joint Venture fund during that fiscal year. The Agreement may be terminated upon one year written notice by either party. Upon termination of the Agreement, all property delivered to the Joint Venture will be returned to the originating party, and the remaining property shall be sold and the proceeds distributed between the parties or the property distributed to the parties according to their agreement. In his affidavit, Darren Garrean, president of Petitioner, stated that he is employed as a firefighter by the City. He is paid by the City. To be hired as a firefighter, an applicant is interviewed by members of the City Civil Service Board, the City's Chief of Police and City Administrator. Garrean was issued a City employee handbook. He is not directed, controlled or supervised by the Elkhorn Suburban Fire District. LEGAL ANALYSIS In its motion, City seeks to add the District as a party because it is an employer pursuant to Neb. Rev. Stat.§48-801(4). In its brief, City seeks to add both the District and the Joint Venture as necessary parties. All of these issues will be addressed herein. The overall question to be resolved is whether the Elkhorn Suburban Fire District ("Suburban"), and/or the Joint Venture should be a party to these proceedings either as an employer or a necessary party where the District entered an agreement with the City, termed an "interlocal governmental agreement", to provide for fire and rescue protection to the residents of both parties. Agreement We first must decide whether the relationship of the parties merely delegates certain duties to the City, or creates a separate legal entity which independently undertakes specified duties and can be sued in its own name. The parties disagree in their respective briefs on the interpretation of the Agreement. The City interprets the Agreement as an interlocal agreement creating a separate legal entity pursuant to Neb. Rev. Stat. §13-804. The Petitioner interprets it as a contract delegating certain duties for fire protection services pursuant to Neb. Rev. Stat. §35-513. The Agreement states in its introductory paragraph: "THIS AGREEMENT entered into on the 10 day of May, 1994, pursuant to Neb. Rev. Stat. §35-513..." Agreement at p.1. No mention is made of Neb. Rev. Stat. §13-804. Although the agreement refers to an "interlocal governmental agreement for establishing a Joint Venture...." (Agreement at p.1), it neither creates a separate legal entity, names the entity, nor establishes a board of governance or the rules for governance. I conclude that the Agreement is a contract for the delegation of duties "pursuant to Neb. Rev. Stat. §35-513" (Agreement at p.1) and not an interlocal agreement pursuant to Neb. Rev. Stat. §13-804. Therefore, there is no separate entity that can be named as an additional party respondent. Employer and Necessary Party The next question is whether the District is an employer and necessary party to this proceeding, where District entered a contract delegating power to employ the fire and rescue personnel and to administer and manage fire and rescue operations for both entitites. Nebraska statute, Neb. Rev. Stat.§48-801(4) defines an employer as "the State of Nebraska or any political or governmental subdivision of the State of Nebraska....Employer shall also mean any municipal corporation...." In American Fed. S., C., & M. Emp., AFL-CIO v. County of Lancaster, 196 Neb 89 (1976), the Supreme Court held that where much of the prerogatives of management are shared by two employers so that neither one alone has the authority to bargain on all issues, both will be treated as co-employers, and must be included as respondents in a representation action under the Nebraska Industrial Relations Act. Id. at 96-97. In the case of Sarpy County Public Employees Association v. County of Sarpy, 220 Neb. 431 (1985) the Supreme Court held that although Sarpy County is the employer of employees in the respective offices of the elected county officials, absent a specific statute to the contrary, the respective elected county officials, not the county board, are the proper parties to negotiate for the county in labor negotiations over wages, terms and conditions of employment. Although the county board approves all salaries set by the respective officials, it may not act arbitrarily or capriciously. Id. at 435-436. The Court held that the county board is not a co-employer of the workers or necessary party in this proceeding. In reaching this conclusion the Court stated: "This does not in any manner, however, require the presence of the county board any more than the presence of the Legislature is required when the various agencies of state government engage in labor negotiations with bargaining units, even though the Legislature must ultimately approve the agreement to recognize a bargaining unit or approve a budget sufficient to pay the wages." Id.at 437-438. In Hall County Public Defenders v. County of Hall, 253 Neb 763 (1998), the Supreme Court held that an action for labor representation before this Commission which did not name the Hall County Public Defender as respondent, should be dismissed for failure to name him as a necessary and indispensable party. Id. at 770. The county board was determined by the Commission to be an employer because of its power to set the budget for that office and fix the compensation of all public defender employees. The court held that the elected Hall County Public Defender is a co-employer because this official has authority over many bargainable issues such as working conditions, hours, vacations, hiring, firing, promotion, assignment of work, individual salary of employees, and allocation of the budget. Id. at 769-770. The Nebraska Supreme Court has defined a necessary party as follows: "An indispensable or necessary party to a suit is one who has an interest in the controversy to an extent that such party's absence from the proceedings prevents a court from making a final determination concerning the controversy without affecting such party's interest." (Citation omitted) Hall County Public Defenders v. County of Hall, 253 Neb. at 767. See also, Calabro v. City of Omaha, 247 Neb. 541 (1995). In the case of Calabro v. City of Omaha, Id., the Plaintiff on behalf of certain retired firefighters brought a class action against the City of Omaha seeking a declaration of their rights under a supplemental cost-of-living benefit provided by the city which the city had eliminated. The District Court granted the Plaintiff's motion for summary judgment finding that the benefit was a pension and a constitutionally protected contractual right which the city could not terminate. In its appeal, the city raised the issue that its demurrer to the Plaintiff's amended petition should have been dismissed because it failed to name the Police and Fire Pension Board of Trustees as necessary parties defendant or the four employee bargaining units as parties . The Supreme Court affirmed the District Courts decision finding that neither the pension board nor the bargaining units were necessary parties to the action. The court in reaching its conclusion regarding the board of trustees the court stated: "The city council created the supplemental benefit, and the funds for the supplemental benefit were derived solely from city funds. The board of trustees took no part in managing the supplemental benefit, and the board of trustees will face no liability if we find for the plaintiffs. A necessary party is one who may be compelled to respond to the prayer of the plaintiff's petition, and where there is nothing such a one is called upon to do, or can be compelled to do as a duty, one is not a necessary party. State ex rel. Stenberg v. Murphy, 247 Neb. 358 (1995). Clearly the board of trustees is not a necessary party." Calabro v. City of Omaha, 247 Neb. at 974. An indispensable or necessary party must be joined as a party defendant. Hall County Public Defenders v. County of Hall, 253 Neb at 770. If a party is an employer or co-employer, it is a necessary party to a representation action under the Industrial Relations Act. Hall County Public Defenders v. County of Hall, supra., Fed. S., C., & M. Emp., AFL-CIO v. County of Lancaster, supra. From a reading of these cases, it is apparent that the Nebraska Supreme Court in determining who is an employer or necessary party, looks at the employment functions performed and whether meaningful bargaining can proceed without that party. Hall County Public Defenders v. County of Hall, supra.; American Fed.S.,C.& M. Emp.,AFL-CIO v. County of Lancaster, supra.; Sarpy County Public Employees Association v. County of Sarpy, supra. In the instant case, all responsibility for administration, management and operation of fire and rescue services resides exclusively with the City, including the employment, hiring, supervision and assignment decisions. Agreement at para.4(a) - (b). The district has no authority over these decisions. The responsibility for determining the table of organization and the job descriptions resides with the City. Agreement at para. 4 (c). The District is limited to consultation on these issues. Likewise, the City is responsible for determining the wages and fringe benefits to be paid to the fire and rescue employees. Agreement at para 4(d). The District is limited to consultation. The City pays all payroll and employment taxes and insurance. Agreement at para 4(e)-(f). The right to determine the annual budget for fire and rescue operations resides with the City. The District is limited to suggesting changes. When the City disagrees with the suggestions, the City's budget stands. Agreement at para. 7. There is no employment function which the District performs. There is no meaningful employment issue over which the District may bargain. This is not a situation like that in American Federation of State and Municipal Employees v. Lancaster County, supra, or Hall County Public De fenders v. County of Hall, supra, where each of two parties has authority over some aspect of the employment relationship so that meaningful bargaining may only proceed with both parties as co-employers. All authority over bargaining issues resides with the City. None is reserved to the District. Although the financial interests of the District may be affected by a decision in this case, this affect is no different than that of the county board in Sarpy County Public Employees Association v. County of Sarpy, supra. It does not make the District a co-employer or a necessary party, any more than the county board is a co-employer or necessary party in most cases involving county employees, or the Legislature is a co-employer or necessary party in proceedings regarding state employees. Sarpy County Public Employees Association v. County of Sarpy, 220 Neb. at 437-438. The District has no authority over the bargainable issues such as wages, and the terms and conditions of employment of the fire and rescue employees whom the Petitioner seeks to represent. There is nothing in the prayer of the petition which can compel the District to respond, nor is there a duty which the Commission can compel the District to perform. I find that the District is not a co-employer of the City's fire and rescue personnel. Therefore, just as the board of trustees in Calabro v. City of Omaha, supra, were not necessary parties, I find that the District is not a necessary party in this action. IT IS THEREFORE FOUND, ORDERED, ADJUDGED AND DECREED that the Elkhorn Rural Fire District and its successor, Elkhorn Suburban Fire District, is neither an employer nor a necessary party to this action. The City's motion to add the Elkhorn Suburban Fire District as a necessary party is hereby denied. All judges assigned to the panel in this case join in the entry of this Order. Entered August 4, 1999.