This opinion addresses whether a union may act on behalf of its members in a way that benefits some more than others, or preserves rights of active members at the expense of retired members. The short answer is “yes,” but the details are important because the answer will depend on the facts in each situation.
The case began in 2004, when the New Hampshire Troopers Association (Union) filed an unfair labor practice charge against the State Department of Safety, alleging that the State had unlawfully deducted annual and sick leave from the troopers’ accounts. The State was ordered to restore the leave time, with the details left up to the State and the Union to negotiate. Appeal of N.H. Dep’t of Safety, 155 N.H. 201 (2007).
Negotiations went on for over a year. Initially, the Union proposed restoring leave time for both active and retired troopers. The State was firmly opposed to restoring leave time for troopers who were no longer employees. Ultimately, based on advice from its attorney that it did not represent non-active troopers, the Union entered an agreement with the State that did not provide compensation for troopers who had retired or resigned before the settlement date.
The current case arose out of that settlement. The plaintiff, Johnson, was a trooper who retired before the settlement date. He filed an unfair labor practice charge against the Union alleging that it had breached its duty of fair representation to him when it agreed to a settlement that did not provide compensation to retired troopers. His claim alleged that the Union acted arbitrarily and in bad faith. The case went through the PELRB (which ruled in favor of the Union) and up to the N.H. Supreme Court on appeal on the sole issue of arbitrariness (the bad faith claim was not appealed).
The issue before the Court was whether the PELRB ruled correctly that the Union did not act arbitrarily and breach its duty of fair representation to retired troopers by entering into the settlement agreement. The threshold question in this inquiry was whether a union, in fact, owes any duty of fair representation to retirees under New Hampshire law, RSA Chapter 273-A. Under federal law (cited extensively in the opinion), it is well-established that the answer to this question is “no.” However, the question has not yet been answered under New Hampshire law, and the Court did not have to answer it in this opinion, either. Instead, the Court analyzed the facts to see whether, if such a duty exited, it had been breached. To this question, the Court answered “no.”
“A union breaches the duty of fair representation when its conduct toward a member of the bargaining unit is arbitrary, discriminatory, or in bad faith…Under the arbitrary prong, a union’s actions breach the duty of fair representation only if the union’s conduct can be fairly characterized as so far outside a wide range of reasonableness that it is wholly irrational or arbitrary. This wide range of reasonableness gives the union room to make discretionary decisions and choices, even if those judgments are ultimately wrong…A union’s conduct can be classified as arbitrary only when it is irrational, meaning that it is without a rational basis or explanation."
In this case, the plaintiff had to prove that the Union’s decision to negotiate a settlement agreement that did not provide a remedy for retired troopers was “without a rational basis or explanation.” The Court found that the Union reasonably could have decided, based on the State’s insistence upon excluding retirees from the settlement agreement, that there was an intolerable conflict of interest between active and retired troopers. Given the “ambiguous nature” of a union’s duty to retirees under New Hampshire law, the Court could not say that the Union’s agreement to exclude retirees was “so far outside a wide range of reasonableness” as to be “wholly irrational or arbitrary.” Contrary to the plaintiff’s assertions, the Union balanced the interests of retired troopers against those of active troopers when it entered into the settlement. It received information from its attorney regarding the balance of those interests and advising that the settlement include only active troopers. Finding that this advice was itself reasonable given the legal landscape at the time, the Union’s reliance on such advice was rational.
In making this ruling, the Court was careful to note that simply relying on the advice of counsel, without more, does not insulate a union from liability for a breach of duty to represent members fairly. In this case, however, there were enough facts to demonstrate that the Union fairly balanced the interests of active and retired members, and made a decision that was not arbitrary.