Appeal from the District Court of Sheridan County The Honorable John G. Fenn, Judge
The opinion of the court was delivered by: Burke, Justice.
Before KITE, C.J., and HILL, VOIGT, BURKE, and DAVIS, JJ.
NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third. Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 82002, of any typographical or other formal errors so that correction may be made before final publication in the permanent volume.
[¶1] Appellant, Sheridan Fire Fighters Local No. 276, IAFF, AFL-CIO, CLC, filed suit in district court against the City of Sheridan alleging breach of their collective bargaining agreement. Local 276 claimed that the City breached the Agreement when it failed to provide pay raises to five firefighters who had qualified for a "step increase" in salary. The City contended that the raises were not required and that, under the terms of the Agreement, it retained discretion in the award of pay raises. Both parties filed motions for summary judgment, and the district court granted summary judgment in favor of the City. Local 276 challenges that decision in this appeal. We will reverse the district court's decision and remand for entry of summary judgment in favor of Local 276.
[¶2] Local 276 presents these issues:
1. Whether the Trial Court erred as a matter of law in determining that the provision regarding step increases in the 2010-2011 Collective Bargaining Agreement between the parties is not ambiguous, therefore not warranting the consideration of extrinsic evidence.
2. Whether the Trial Court erred as a matter of law in concluding that the provision regarding step increases in the 2010-2011 Collective Bargaining Agreement between the parties unambiguously allowed the City to unilaterally decide not to pay out step increases.
The City's statement of the issues is as follows:
I. Whether a collective bargaining agreement is ambiguous as to qualification for a "step" increase when the collective bargaining agreement contains the parties' express agreement that the City retained the power to determine all employee qualifications.
II. Whether an implied term can be added to a collective bargaining agreement when doing so would violate statutory budgeting provisions.
III. Whether an integral and material item such as a guaranteed pay raise can be added to a collective bargaining agreement by implication and without additional consideration therefore, and assuming arguendo such a material term can be added by implication would such an amendment be in contravention of Wyoming law concerning the contracting ability of a governing body.
[¶3] Local 276 and the City have been parties to annual collective bargaining agreements for more than thirty years. The collective bargaining agreement now at issue became effective on July 1, 2010, and expired on June 30, 2011. It covered all full-time firefighters and medical personnel of the Sheridan Fire-Rescue Department. It covered a broad array of employment-related topics, including work hours, vacations, sick leave, holidays, uniforms and clothing allowances, residency requirements, and medical insurance. In the article entitled "Wages," the Agreement contained a detailed table setting forth pay grades for the various positions, and a range of salaries or "steps" for each pay grade.*fn1 The basic thrust of the pay grade and step table was, as explained by the City, "if a firefighter moves up one step or one grade, he or she will get a pay raise."
[¶4] Facing budget issues in 2010, the City Council voted to freeze the salaries of all City employees. In a memorandum dated September 27, 2010, the City's Human Resources Director and the Fire Chief informed all fire department personnel that,
Due to the continued decrease in sales and use tax revenue as a result of the economic downturn that affects general fund expenditures, the City is suspending the 5% annual step increases for those employees who are not stepped out.*fn2 This suspension is in effect for the fiscal year beginning July 1, 2010.
Local 276 objected. The Union contended that, under the collective bargaining agreement, every covered employee who received a satisfactory performance rating would automatically move up one step, and thereby get a pay raise. It identified five firefighters who had received satisfactory evaluations and were not "stepped out," and claimed that the City owed them additional pay in the total amount of $6,651.78.
Following the procedures set forth in the collective bargaining agreement, Local 276 filed a grievance with the City on behalf of the five employees. The City denied the grievance, maintaining that the collective bargaining agreement "does not contain any requirement for . . . mandatory 5% annual wage increases." It asserted that the City was "in a state of financial crisis," and could not afford "to give any raise to any City employee."
[¶5] After the grievance was denied, Local 276 filed a complaint against the City in district court, claiming breach of the collective bargaining agreement. Both parties moved for summary judgment. In support of its motion, Local 276 presented evidence that the consistent practice under previous collective bargaining agreements was that employees who received satisfactory performance ratings automatically received salary increases. It also provided evidence demonstrating that, when the City wanted to freeze salaries in the past, it negotiated with Local 276 to include language in the Agreement specifically allowing for a pay freeze. Local 276 recognized that this evidence was extrinsic to the contract, but asserted that the evidence was admissible and should be considered because the collective bargaining agreement was ambiguous.
[¶6] The City contended in its summary judgment motion that the Agreement was clear and unambiguous, and did not mandate automatic salary increases. It asserted that the extrinsic evidence offered by Local 276 was inadmissible, and could not be used to contradict the unambiguous collective bargaining agreement. In addition, the City relied on Mariano & Assocs., P.C. v. Board of County Comm'rs, 737 P.2d 323, 331-32 (Wyo. 1987) to assert that Wyoming law prohibited the City Council from contracting away the discretion of future councils. Because the City could not lawfully agree to automatic raises in the future, it claimed that the collective bargaining agreement could not be interpreted to mandate automatic raises.
[¶7] After considering the competing summary judgment motions, the district court issued a two-page order containing these findings and conclusions:
1.) The contract is silent on the issue of step increases.
2.) The contract is not ambiguous because of this silence and, therefore, the consideration of extrinsic evidence is not permitted.
3.) The Court rejects the City's argument under the Mariano Doctrine.
4.) The Court rejects the City's argument of failure of consideration.
5.) The City of Sheridan, Wyoming is entitled to summary judgment.
On this basis, the district court denied Local 276's motion for summary judgment, and granted summary judgment to the City. ...