APPEAL FROM THE CIRCUIT COURT OF THE SIXTH JUDICIAL CIRCUIT HUGHES COUNTY, SOUTH DAKOTA THE HONORABLE JOHN L. BROWN Judge APPEAL FROM THE CIRCUIT COURT OF THE SECOND JUDICIAL CIRCUIT MINNEHAHA COUNTY, SOUTH DAKOTA THE HONORABLE WILLIAM J. SRSTKA, JR. Judge
The opinion of the court was delivered by: Zinter, Justice
[¶1.] AFSCME Local 1025 (Local 1025) and the Sioux Falls Education Assistants Association (SFEAA) filed grievances against the Sioux Falls School District (District). The unions alleged that the District violated the parties' labor agreements when the District provided 2.5% wage increases for the 2008-2009 school year. The issues on appeal are: whether the grievances were filed too late; and if not, what the proper wage increases were following a change in a school funding statute that was used in the agreements to determine wage increases.
Facts and Procedural History
[¶2.] Local 1025 and SFEAA are unions representing certain non-instructional employees of the District. The unions negotiated labor agreements with the District covering wages and other terms of employment for a six-year term (July 1, 2007 through June 30, 2013). Both agreements provided for a 10% salary increase the first year. Increases for years two through six were to correlate with the percentage change in what the agreements referred to as the "State Rate." The State Rate is defined in the agreements as "the 'Per Student Allocation' as defined in [SDCL] 13-13-10.1(4)." The per student allocation in SDCL 13-13-10.1(4) is set by the Legislature each year. It is the money the Legislature appropriates (on a per-pupil basis) to school districts for education funding. See Davis v. State , 2011 S.D. 51, ¶¶ 19, 20, 30, ___ N.W.2d ___. The parties agree that the appropriate wage increase for the 2008-2009 school year should be the percentage change in the per student allocation (the State Rate) approved by the 2008 Legislature. This dispute arose because, unlike prior years, the 2008 Legislature increased the per student allocation by two alternative percentages and the parties cannot agree which percentage applies. [¶3.] The 2008 legislation originated as Senate Bill 187.*fn1 Section 1 of Senate Bill 187 amended SDCL 13-13-10.1(4) by increasing the 2008-2009 per student allocation by 3%. Section 2, however, (later codified as SDCL 13-13-10.6) provided that the 2008-2009 per student allocation would increase by only 2.5% if a school district did not certify to the Secretary of Education that the district would increase its average teacher salary and benefits by at least 3% and that it would spend an additional $22.64 of the new per student allocation on teacher salaries and benefits. There is no dispute that the District's pre-existing contract with its teachers already required the District to provide more than a 3% increase in the average teacher salary and benefits for the 2008-2009 school year. [¶4.] On April 8, 2008, the District called a meeting for all unions affected by Senate Bill 187. Although it appeared that the District's contract with its teachers would satisfy Senate Bill 187's requirement for the 3% increase in per student allocation (the State Rate), the District Superintendent indicated that the District only intended to increase Local 1025 and SFEAA members' wages by 2.5%. The District did, however, offer a 3% increase to the members of Local 1025 and SFEAA if they would approve a memorandum of understanding (MOU) agreeing that a 3% increase was not required by the parties' labor agreements. The MOU also required the union members to agree that future State restrictions on local district spending (like that found in Section 2 of Senate Bill 187) would not be considered part of future State Rate increases as that term was used in the labor agreements.*fn2
[¶5.] On April 14, Local 1025 called the District Superintendent and advised that its members had voted to reject the MOU. Local 1025 also sent an email on April 18 stating its belief that it was entitled to a 3% raise under the existing agreement. Similarly, SFEAA sent the Superintendent an email on April 17 stating that it had been advised by counsel that it was entitled to a 3% raise without signing the MOU. On April 23, SFEAA advised the Superintendent that SFEAA's members had voted to reject the MOU.
[¶6.] On May 12, the District certified to the Secretary of Education that it would increase its average teacher salary and benefits by at least 3% and spend the additional $22.64 on those salaries and benefits. This certification complied with the requirements of Section 2 of Senate Bill 187 (SDCL 13-13-10.6) and entitled the District to receive the 3% increase in per student allocation referenced in Section 1 of Senate Bill 187 (SDCL 13-13-10.1(4)). Nevertheless, the District's Board of Education subsequently adopted a budget on June 23 that only granted a 2.5% wage increase for the members of Local 1025 and SFEAA.
[¶7.] The parties' agreements contained grievance procedures that were substantively the same. Class grievances were defined as complaints by more than one employee "concerning the interpretation of or application of the existing provisions" of the agreements. Both agreements required that grievances be filed within thirty days of the alleged "violation," or within thirty days of when through reasonable diligence the violation should have been discovered.
[¶8.] On June 18, the District received a written grievance from Local 1025. The grievance identified the "violation" as the: "Denial of wage increase . . ." as required by the agreement. Local 1025 requested "to be made whole [with a] 3% increase instead of 2.5% . . . ." On July 10, the District received a written grievance from SFEAA stating its "problem" was: "The District has misinterpreted . . . [the] Agreement. The state funding formula for the 2008-2009 school year for all Sioux Falls School District Employees [was] 3% not 2.5%." The SFEAA grievance indicated the incident date was June 23, 2008, the day the District implemented the wage increase. SFEAA requested "that [its members] be paid 3% plus interest . . . to be made whole when this grievance process is complete."
[¶9.] The District denied both grievances as untimely. Local 1025 and SFEAA subsequently petitioned the Department of Labor to review the matter. The Department dismissed both grievances as untimely. The unions then appealed the Department's decision to circuit court. The sixth judicial circuit court, Judge Brown presiding, concluded that the grievances were timely. Judge Brown reversed and remanded the matter to the Department to determine the correct percentage wage increase.
[¶10.] On remand, all parties moved for summary judgment. The Department concluded that the members of Local 1025 and SFEAA were entitled to a 3% wage increase for the 2008-2009 school year. The District then appealed that decision to circuit court. Following a change of venue, the second judicial circuit court, Judge Srstka presiding, affirmed the Department. The District now appeals to this Court, contending that the grievances were untimely and that the members of Local 1025 and SFEAA were only entitled to a 2.5% wage increase.
[¶11.] A resolution of these issues requires interpretation of the parties' agreements and the statute referenced in those agreements. Contract and statutory interpretation are questions of law we review de novo. Leonard v. State ex rel. S.D. Real ...