17 CIR 240 (2012) 


                                  Petitioner, ) FINDINGS AND ORDER
         v. )  
CITY OF OMAHA, NEBRASKA, A Political Subdivision of the )
State of Nebraska, and )  
PETE FESTERSEN Member of the City Council of the City )  
of Omaha, Nebraska; )  
CHRIS JERRAM, Member of the City Council of the City )  
of Omaha, Nebraska; )  
THOMAS MULLIGAN, Member of the City Council of the City )  
of Omaha, Nebraska; )  
JEAN STOTHERT, Member of the City Council of the City )  
of Omaha, Nebraska; )  
FRANKLIN THOMPSON, Member of the City Council of the City    
of Omaha, Nebraska,    
                                  Respondents. )

Entered January 3, 2012


For Petitioner: John E. Corrigan
Dowd Howard & Corrigan, L.L.C.
1411 Harney Street
  Suite 100
  Omaha, NE  68102
For Respondents: Bernard in den Bosch
  Assistant City Attorney
804 Omaha/Douglas Civic Center
  1819 Farnam Street
Omaha, Nebraska  68183

Before:  Commissioners Blake, Burger, and Lindahl

BLAKE, Commissioner


On August 19, 2011, the Professional Firefighters Association of Omaha, Local 385, AFL-CIO CLC (“Petitioner”) filed a petition with the Commission alleging that the City of Omaha (“City”) and Omaha City Council Members Mr. Pete Festersen, Mr. Chris Jerram, Mr. Thomas Mulligan, Ms. Jean Stothert and Mr. Franklin Thompson (collectively with City, “Respondents”) engaged in surface bargaining with Petitioner in violation of Neb. Rev. Stat. § 48-824(1) and § 48-824(2)(a), (e) and (f).

The issues presented at trial were as follows:

1)      Whether Respondent’s conduct in failing to approve the collective bargaining agreement negotiated by the City’s negotiation team amd the Petitioner’s team constituted a prohibited practice violating the Respondents’ obligation to bargain in good faith imposed upon Respondents by Neb. Rev. Stat. § 48-824(1) and § 48-824(2)(a), (e), and (f), and if so, what is the appropriate remedy.

2)      Whether the Respondents, Pete Festersen, Chris Jerram, Thomas Mulligan, Jean Stothert, and Franklin Thompson have legislative immunity from the allegations in the Petition because any actions taken were in the performance of their duties.

3)      Whether the action of Petitioner in filing this matter before the Commission of Industrial Relations was intended to interfere with the legislative autonomy of Respondents.

On September 28, 2011, a hearing was held on said issues.  The parties submitted post-hearing briefs and reply briefs, after which the case was deemed submitted.


            The evidence shows a lengthy negotiations process, no doubt frustrating for both sides, and ultimately fruitless.  One-hundred fifty negotiations sessions occurred, with the City Council being briefed 17 times, on a fairly regular basis.  Pension underfunding and the City’s overall financial crisis were major factors.  The important issues discussed included a paid fulltime union representative and health care issues.  The parties negotiated from April to August 2009, and the administration and the union agreed as to the key issues for 2009 and beyond.  The parties continued to negotiate into the fall, but could not reach an agreement.  As a result, the Union filed a wage case with the Commission for 2009.  Additionally, the Union filed suit in state district court requesting enforcement of a Commission status quo order, and filed suit in U.S. District Court seeking to enjoin the City from unilaterally changing the terms of retiree health care.  At the same time, another suit was pending in district court regarding implementation of a 2008 Commission wage decision.  Wage cases for 2010 and 2011 had also been filed with the Commission.  (See Case Nos. 1251 and 1275).

            In May 2011, the City Administration and the Union reached a tentative agreement.  This agreement was presented to the Omaha City Council and an extensive public hearing was held on August 9, 2011.  Amendments were proposed and voted upon by Council members.  One such amendment was adopted, although it was not part of the agreement as negotiated by the Union and the Administration.  Ultimately, the proposed ordinance to approve the agreement, with the one amendment, failed on a vote of three in favor and four opposed.


Petitioner accuses Respondent of violating its duty to bargain in good faith as required under Neb. Rev. Stat. § 48-8241(1) and § 48-824(2)(a), (e) and (f) by engaging in surface bargaining, arguing that such practice would be prohibited.  Neb. Rev. Stat. § 48-824(1) states that “it is a prohibited practice for any employer…to refuse to negotiate in good faith with respect to mandatory topics of bargaining.”  Additionally, § 48-824(2) states in pertinent part:

“(2) It is a prohibited practice for any public employer or the public employer’s negotiator to:

(a) Interfere with, restrain, or coerce employees in the exercise of rights granted by the Industrial Relations Act;

(e) Refuse to negotiate collectively with representatives of collective-bargaining agents as required by the Industrial Relations Act;

(f) Deny the rights accompanying certification or recognition granted by the Industrial Relations Act.” 

Hard bargaining is lawful, but a party would violate its duty to bargain in good faith by engaging in surface bargaining- negotiating under the pretense of bargaining while never intending to reach an agreement.  See Continental Ins. Co. v. NLRB, 495 F.2d 44 (2nd Cir. 1974) (citing NLRB v. Herman Sausage Co., 275 F.2d 229 (5th Cir. 1960)).

This Commission noted in County of Hall v. UFSW Local 22, 15 CIR 167 (2006), that in following its own decisions and the decisions of the NLRB, the Commission will consider the totality of circumstances reflecting the parties’ bargaining frame of mind to determine if the parties are in fact bargaining in good faith.  Citing Atlanta Hilton & Tower, 271 N.L.R.B. 1600 (1984), the Commission offered seven activities to serve as guideposts in determining whether an employer has engaged in hard but lawful bargaining or surface bargaining: delaying tactics, unreasonable bargaining demands, unilateral changes in mandatory subjects of bargaining, efforts to bypass the union, failure to designate an agent with sufficient bargaining authority, withdrawal of already agreed-upon provisions, and arbitrary scheduling of meetings.  County of Hall at 175.  

These guideposts are not an exhaustive list.  For example, an employer’s failure to ratify an agreement can be an incident of bad faith bargaining when such failure results from the employer’s intent to string out negotiations or avoid reaching an agreement.  An employer may lawfully reserve a right of ratification, and its negotiators do not need to have authority to enter into a binding agreement.  However, the negotiators must be able to speak for the employer and the employer must treat negotiation sessions as more than “a mere exchange of ideas.”  NLRB v. Alterman Transport Lines, 587 F.2d 212 at 222, 225-227 (5th Cir. 1979). 

In Alterman Transport Lines, the Fifth Circuit found that the totality of the employer’s actions under the guise of a right of ratification created an inference of bargaining in bad faith. The company’s negotiators and the union had bargained for nearly two years, agreeing upon several non-economic proposals.  Under the guise of exercising his reserved right of ratification, Alterman stepped into negotiations to make substantial changes or to outright reject proposals already agreed upon months before.  Alterman had hardly been involved in the negotiating process, having attended only the first meeting and instructing the company’s negotiators to not clear proposals or contract agreements with him during the negotiating process.  The court noted that an employer’s reservation of the right of ratification can give the employer a final opportunity to review the contract as a whole and determine if any individual articles agreed upon during the course of negotiations would actually present problems in the end.  However, an employer’s actions in reopening tentative agreements can give rise to the inference that the employer actually intends to string out negotiations to avoid reaching an agreement.  Id. at 225-226.  As the only person with ratification authority, the court stated that Alterman did not need to conduct the negotiations himself, but should have at least communicated his position to his negotiators and stayed knowledgeable of what was happening at the bargaining table.  Instead, Alterman remained aloof and did not communicate his displeasure with any of the parties’ proposals until he began to make his own proposals which were harsher than what his company’s negotiators had proposed and to outright reject proposals which had been completely discussed and bargained over several sessions.  Because Alterman’s actions of repudiation went far beyond adjustment of individual articles in light of the tentative contract as a whole, the Fifth Circuit held that those actions were enough to infer bad faith bargaining had occurred.

We agree with Petitioner that surface bargaining, if proven, would be prohibited under our Industrial Relations Act.  Petitioner argues, and we agree, that the record of bargaining by the City shows a long term pattern of hard bargaining and unilateral decision-making, which is, to say the least, not conducive to creating an atmosphere in which a negotiated agreement could be reached.  The record in this case makes it a close question as to whether there was surface bargaining.  However, we cannot say that the totality of the evidence establishes a prohibited practice.  There is not sufficient evidence to establish that the City Council acted to hinder, delay, or string out the process or to frustrate or bypass the Union.  The Administration was required by city ordinance to brief the Council every 35 calendar days as to what was happening in negotiations, as well as present a briefing during executive session.  The Administration did so on at least 17 occasions.  Any Council members who had concerns or suggestions were able to pass these on to the negotiators during these briefings.  Unlike the company negotiators in Alterman Transport Lines, the Administrators were aware of the Council’s position on the issues and presented proposals on behalf of the City accordingly.  The Administration had the authority to negotiate the agreement, but the Council reserved the right to approve or disapprove.  Petitioner cannot claim that the agreement was not subject to approval by the Council and it cannot claim that it was not aware at all times during the negotiations that the agreement was so subject.  All Petitioner can claim is that after many months of negotiations, Petitioner and its members did not expect the Council to reject the proposed agreement. 

Petitioner asks that the Commission order the City Council to vote the proposed agreement either up or down.  We need not do so.  The Council did vote, and ultimately did not approve the agreement.  On August 30, the Council placed the agreement on file, which is by Council rule an unfavorable and final disposition.  We do not decide how the Council should approve or reject.  Whether it is by an ordinance, resolution, or motion, we have no jurisdiction over their rules of procedure.  No matter how one interprets the record of the Omaha City Council, it cannot be doubted that the City Council rejected the agreement. 

Petitioner questions the discussions and motives of the City Council members, arguing that votes by the Council were inexplicable.  Substantial testimony was brought forward through one of the Council members, Ms. Stothert, who discussed her arguments, voting, and reasons therefore.  If it is proper and relevant to look at the motives of individual Council members, Ms. Stothert is but one member.  Ms. Stothert’s statements of her reasons for her arguments and votes are not irrational or unlawful.  Far too much is made of the comments, voting record, and reasoning of Council member Stothert.  It is troubling to be asked to judge the motives of that body outside the record of legislative proceedings, particularly upon the evidence regarding but a single member of that legislative body.  This Commission is not free to substitute its desire and will for that of the properly elected and acting City Council members.  Therefore, based on the guidance of County of Hall, supra, and federal case law, we find that the City did not engage in surface bargaining.

Respondent argues that it is clear that there is no evidence that the City engaged in surface bargaining.  We disagree.  There is significant evidence that could be interpreted as indicating surface bargaining.  We simply find that it is not sufficient to do so based on the totality of the City’s conduct.  Questionable bargaining action by a party could be lawful when viewed alone, but the same action analyzed with all other conduct as a whole could infer that surface bargaining has occurred.  In Continental Insurance Co. v. NLRB, 495 F.2d 44 (1974), the Second Circuit considered the totality of the employer’s conduct when it found that there was substantial evidence to support the NLRB’s finding that Continental Insurance Company had bargained in bad faith with two bargaining units of the American Communications Association, Communications Trade Division, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America.  In Continental Insurance Co., an agreement between the parties was not reached in the six years between the certification of the Teamsters as the bargaining unit for the two groups of employees in 1968 to the case being heard by the Second Circuit in 1974.  The Court noted that negotiations were delayed for 1½ years due Continental’s appeal of the NLRB’s determination of the bargaining unit, going so far as to insist on separate negotiation sessions with the two separate units despite their representation by the same spokesperson and the union’s proposals for both units were almost identical.  Once negotiations got underway, Continental made demands regarding matters outside the scope of mandatory collective bargaining, such as requiring that the union agree not to organize or represent any other company employees, took positions that were the extreme opposite to existing employment practices, offered proposals which would have constituted a waiver of any right by the union to enter a grievance or go on strike regarding a matter not specifically covered in the contract and allowing Continental’s hand-picked arbitrator to reverse the suspension of the no-strike clause.  Continental also unilaterally put wage increases into effect at varying times considered appropriate for individual employees and transferred employees from one office location to another without giving the union an opportunity to bargain.  Continental withdrew or modified some of these proposals, in some cases after several months had passed.  The Second Circuit looked at the entire scope of Continental’s conduct to determine that the NLRB was correct in finding an unfair labor violation:

“the time wasted on negotiation…served the Company’s overall effort to frustrate arrival at an agreement, with the result that we are confronted with unconscionably protracted negotiations which have made a mockery of bargaining procedure, delaying the outcome for several years…some of the Company’s bargaining positions and proposals, standing alone, might not support the charges against it.  When the totality of the circumstances are considered upon the record as a whole, however, we have no hesitancy in concluding that the Board’s findings of unfair labor practices on the part of the Company were supported by substantial evidence.”

Id. at 49.

            In the present case, questionable behavior in the bargaining process is not limited to the City.  Indeed, the most telling aspect of the case before us is the amount of acrimony between the parties.  Rather than engage in meaningful negotiations with an eye toward reaching an agreement, the parties are interacting in an atmosphere of distrust, frustration, acrimony, and almost constant litigation.  Nevertheless, the issue is whether the Council’s decision to reject the proposed agreement submitted to the Council was a prohibited practice.  To assist in resolving such problems is why this Commission exists, but the appropriate method of doing so in this particular situation is through a wage and benefit determination case.  We note that such cases are or have been before us at Case Nos. 1275, 1251, 1227, and 1173.  

While its actions are sometimes difficult to explain, such are the vagaries of the political arena.  Petitioner and its members were certainly aware at all times that the negotiated agreement was subject to that arena.  The City Council is the legislative body, and we will not attempt to asset our will or beliefs under the guise of a prohibited practice.  Therefore, the Commission finds that Respondent did not engage in surface bargaining in violation § 48-824(1) and § 48-824(2)(a), (e) and (f).  We do not need to address the second issue listed above, and there is no evidence before us regarding the third issue. 

Based on the above findings that Respondent did not violate § 48-824(1) and § 48-824(2)(a), (e) and (f), the petition shall be and is hereby dismissed. 


1.      The Petition is ordered and hereby dismissed.

All Commissioners assigned to the panel join in the entry of this Order.