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Detroit Pub. Sch. v. Conn

Court of Appeals of Michigan

November 25, 2014

DETROIT PUBLIC SCHOOLS, Appellant,
v.
STEPHEN CONN, CHRISTAL BONNER, ENID CHILDERS, and REGINA DIXON, Appellees. and DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS, WAGE AND HOUR DIVISION, Appellee, DETROIT PUBLIC SCHOOLS, Appellee, and DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS, WAGE AND HOUR DIVISION, Appellant,
v.
STEPHEN CONN, CHRISTAL BONNER, ENID CHILDERS, and REGINA DIXON, Defendant-Appellees

Page 374

Wayne Circuit Court. LC No. 12-012014-AV. Wayne Circuit Court. LC No. 12-012013-AV.

For DETROIT PUBLIC SCHOOLS, Appellant: BRIAN M SCHWARTZ, DETROIT, MI.

For LICENSING & REGULATORY AFFAIRS DEPARTMENT OF/WAGE & HOUR DIVISION, Appellant: EMILY A MCDONOUGH, LANSING, MI.

For STEPHEN CONN, Appellee: GEORGE WASHINGTON, DETROIT, MI.

For DETROIT PUBLIC SCHOOLS, Appellant: BRIAN M SCHWARTZ, DETROIT, MI.

For LICENSING & REGULATORY AFFAIRS DEPARTMENT OF/WAGE & HOUR DIVISION, Appellee: THOMAS D WARREN, LANSING, MI.

For STEPHEN CONN, Appellee: GEORGE WASHINGTON, DETROIT, MI.

Before: BOONSTRA, P.J., and MARKEY and K. F. KELLY, JJ.

OPINION

Page 375

[308 Mich.App. 236] PER CURIAM.

Detroit Public Schools (DPS) (Docket No. 317007) and the Department of Licensing and Regulatory Affairs, Wage and Hour Division (the wage & hour division or agency) (Docket No. 317050) appeal separately by leave granted the Wayne Circuit Court order of June 12, 2013, affirming the July 13, 2012 decision of the hearings officer, Tyra Wright. The hearings officers ruled that a deduction from or reduction of appellee-teachers' pay, which was authorized by a collective bargaining agreement (CBA) between the DPS and the Detroit Federation of Teachers (DFT), violated several provisions of 1978 PA 390, the payment of wages and fringe benefits act (PWFBA or the act), MCL 408.471 et seq This Court subsequently consolidated the two appeals for the efficient administration of the appellate process. Detroit Pub Sch v Conn, unpublished order of the Court of Appeals, entered February 12, 2014 (Docket Nos. 317007 & 317050).

[308 Mich.App. 237] For the reasons discussed in this opinion, we find no merit to appellants' arguments that the hearings officer lacked jurisdiction to consider the complaints of appellee-teachers (hereafter " appellees" ) of violations of the PWFBA. But we also conclude that the hearings officer and the circuit court erred in their interpretation of the PWFBA and by finding that its provisions were violated. These conclusions render moot the other issues raised in these appeals; therefore, we reverse the circuit court's order affirming the July 13, 2012 decision of the hearings officer, vacate that decision, and remand this matter to the hearings officer for entry of an order or orders dismissing appellees' complaints.

I. SUMMARY OF FACTS AND PROCEEDINGS

Appellees are teachers and members of the DFT employed by the DPS. The DPS and the DFT entered into a CBA on December 18, 2009, that contains a provision known as the Termination Incentive Plan (TIP), which provided, in part:

Beginning January 12, 2010 and ending with the fourth . . . pay of the 2011-2012 school year (for a total of 40 payments), all salaried members of the bargaining unit (except assistant attendance officers, accompanists and members who work less than .50 FTE) shall have $250 per pay deducted from their pay and deposited into a TIP] account. . . .
Bargaining unit members who retire or resign from the District following ratification of the 2009-2012 Agreement shall receive a Termination of Service Bonus of [$1000] for each year of service with the District up to ten . . . years of service, with a cap of $10,000. Bargaining unit members on layoff status shall not be entitled to this Bonus until such time as they are removed from the layoff

Page 376

list . . . . However, no member's Termination of Service Bonus shall exceed the amount he/she contributed to his/her TIP account . . . .
[308 Mich.App. 238] Members may elect to have their Termination of Service Bonus paid as a lump sum, deposited into an annuity, or deposited into a Tax Deferred Plan (TDP). [Underlining and paragraph headings omitted.]

Appellees[1] initiated this action by filing complaints with the wage & hour division. They asserted that the TIP provision violates the PWFBA. The wage & hour division rejected the complaints on the basis of § 7(1) of the act, MCL 408.477(1), which states, in part:

Except for those deductions required or expressly permitted by law or by a collective bargaining agreement, an employer shall not deduct from the wages of an employee, directly or indirectly, any amount . . . without the full, free, and written consent of the employee, obtained without intimidation or fear of discharge for refusal to permit the deduction. [Emphasis added.]

The agency reasoned that a CBA between the DPS and the DFT authorized the TIP deductions; therefore, they were within the exception of § 7(1). The appellees also asserted claims in the administrative proceedings that the CBA was improperly adopted, but the agency ruled that it lacked authority to address such allegations.

Appellees appealed the wage & hour division's rejection of their claims, and the appeal proceeded to a hearing before the hearings officer. Appellees argued that the TIP provision violated § 7(2) of the act, MCL 408.477(2), which provides, in pertinent part:

Except as provided in this subsection and subsection (4), a deduction for the benefit of the employer requires written consent from the employee for each wage payment subject to the deduction, and the cumulative amount of the deductions [308 Mich.App. 239] shall not reduce the gross wages paid to a rate less than minimum rate as defined in the minimum wage law . . . .

The DPS asserted that deductions for any purpose are permitted when authorized by a CBA and that DFT members are deemed to have consented to the terms of a CBA. Appellees disagreed, arguing that deductions under the CBA exception of § 7(1) must be for dues and other union fees.

On April 22, 2011, the hearings officer issued her decision, which agreed with appellees' arguments that the TIP deductions were being made for the DPS' benefit and violated § 7(2) of the act because appellees had not given written consent for the deductions. She concluded:

DPS is withholding a portion of [appellees'] wages resulting in [appellees] failing to receive a portion of their wages in a timely manner. The $250 deduction from each paycheck is being withheld until some future time--weeks, months or years--depending on when a teacher retires or resigns; never, in those cases where a teacher is terminated. In short, there is no approval under the statute ...

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