American Federation v. Phoenix

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

AMERICAN FEDERATION OF STATE COUNTY AND MUNICIPAL
EMPLOYEES, AFL-CIO, LOCAL 2384, Plaintiff/Appellant,

v.

CITY OF PHOENIX, et al., Defendants/Appellees.

No. 1 CA-CV 22-0632
FILED 10-17-2023

Appeal from the Superior Court in Maricopa County
No. CV2021-016584
The Honorable Jay R. Adleman, Judge

AFFIRMED

COUNSEL

Martin & Bonnett, P.L.L.C., Phoenix
By Daniel L. Bonnett, Jennifer L. Kroll
Counsel for Plaintiff/Appellant

Osborn Maledon, P.A., Phoenix
By Eric M. Fraser, Andrew G. Pappas
Counsel for Defendant/Appellee City of Phoenix

William R. Brown Attorney at Law, Phoenix
By William R. Brown
Counsel for Defendant/Appellee PERB
 AMERICAN FEDERATION v. PHOENIX, et al.
Decision of the Court

MEMORANDUM DECISION

Judge Michael S. Catlett delivered the decision of the Court, in which
Presiding Judge David D. Weinzweig and Judge Maria Elena Cruz joined.

C A T L E T T, Judge:

¶1 The American Federation of State, County, and Municipal
Employees, Local 2384 (“Union”) filed an unfair labor practice charge (the
“charge”) against the City of Phoenix (“City”) alleging the City violated the
Phoenix City Code (“Code”) by failing to meet and confer with the Union
about contracting out certain work to a private company. Because we
conclude the Code did not require the City to meet and confer, we affirm
the superior court’s judgment.

FACTS AND PROCEDURAL BACKGROUND

¶2 The Union and the City entered a memorandum of
understanding (“MOU”) concerning wages, hours, and working conditions
for the Union employees, which was effective from July 1, 2019 to June 30,
2021. The 2019 MOU required, among other things, the City to “notify the
Union, in writing, of the City’s intent to contract with a private agency for
the provision of municipal services.”

¶3 The Union filed an unfair labor practice charge with the
Phoenix Employment Relations Board (“Board”), alleging the City violated
the Code by not meeting and conferring with the Union before contracting
out certain work to Felix Construction, Inc. (“Felix”). The Union alleged its
member employees could perform the outsourced work.

¶4 The Board referred the charge to a hearing officer who held
an evidentiary hearing. The hearing officer issued a report concluding the
City violated the Code’s meet and confer ordinance. After the City filed
written objections to the report, the Board rejected the hearing officer’s
conclusion that the City was required to meet and confer.

¶5 The Union filed an action in the superior court, seeking
special action review of the Board’s decision and a declaratory judgment
regarding the City’s meet and confer obligations. The Union later filed an
amended complaint, which the City moved to dismiss under Arizona Rule

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of Civil Procedure 12(b)(6), arguing the ordinance did not require the City
to meet and confer with the Union about contracting out to Felix.

¶6 The superior court accepted special action jurisdiction but
denied relief on grounds the Code did not require the City to meet and
confer with the Union under the circumstances. The court reasoned that
“the meet and confer process is specifically identified as a temporary,
periodic method by which the parties are intended to finalize a collective
bargaining agreement.” The court dismissed the complaint.

¶7 The Union timely appealed. We have jurisdiction. See A.R.S.
§ 12-2101(A).

DISCUSSION

¶8 We review de novo the dismissal of a complaint for failure to
state a claim. Hopi Tribe v. Ariz. Snowbowl Resort Ltd. P’ship, 245 Ariz. 397,
400 ¶ 8 (2018). We assume the complaint’s well-pleaded facts are true and
“affirm only if, as a matter of law, the plaintiff[] would not be entitled to
relief under any interpretation of the facts susceptible of proof.” Id.
(cleaned up).

¶9 The Code contains an ordinance requiring the City “to meet
and confer” about certain subjects “with an authorized representative of the
employees[.]” Code § 2-220(A)(5). For example, the Code requires the City
to bargain with an authorized employee representative—here, the Union—
about “[t]he provisions contained in the 1988-90 and subsequent
memoranda of understanding[.]” Code § 2-215(A).

¶10 The parties disagree about the nature and timing of the City’s
meet and confer obligations. The Union argues “[t]he plain text of the
Ordinance mandates that the City’s obligation to meet and confer on non-
economic items is ongoing and not limited to only meeting and conferring
as part of the negotiating process that precedes reaching and finalizing a
specific MOU.” The City responds that the ordinance instead sets out a
specific procedure for meeting and conferring and “[o]nce a memorandum
of understanding has been reached, the parties’ meet-and-confer
obligations under the Ordinance end.” We agree with the City.

¶11 We interpret ordinances using statutory interpretation
principles. Thomas & King, Inc. v. City of Phoenix, 208 Ariz. 203, 206 ¶ 9 (App.
2004). “Statutory interpretation requires us to determine the meaning of
the words the legislature chose to use. We do so . . . according to the plain
meaning of the words in their broader statutory context[.]” S. Ariz. Home

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Builders Ass’n v. Town of Marana, __ Ariz. __, 522 P.3d 671, 676 ¶ 31 (2023);
see also Glazer v. State, 244 Ariz. 612, 614 ¶ 9 (2018).

¶12 The Code’s text makes clear that the meet and confer process
is the means through which the parties attain a MOU. The Code defines
“meet and confer” as:

the performance of the mutual obligation of the public
employer through its chief administrative officer or his
designee and the designees of the authorized representative
to meet at reasonable times, including meetings in advance of
the budget-making process; and to confer in good faith with
respect to wages, hours and other terms and conditions of
employment or any question arising thereunder, and the
execution of a written memorandum of understanding
embodying all agreements reached[.]

Code § 2-210(11) (emphasis added).

¶13 The word “and” is a “conjunction connecting words or
phrases expressing the idea that the latter is to be added or taken along with
the first.” Bither v. Country Mut. Ins. Co., 226 Ariz. 198, 200 ¶ 10 (App. 2010)
(citation omitted). The Code’s meet and confer provisions thus require the
City and employee representatives to meet and confer and execute a written
MOU containing all agreements reached (if any). See City of Phoenix v. Phx.
Emp. Rels. Bd. ex rel. Am. Fed‘n of State, Cnty. & Mun. Emps. Ass’n, Local 2384,
145 Ariz. 92, 95 (App. 1985) (“[T]he meet and confer ordinance establishes
a procedure whereby City management and employee representatives are
expected to negotiate in good faith” and “produce a memorandum of
understanding[.]”). Viewing the meet and confer process as the means to
attain a particular end (the creation of MOUs) is consistent with a stated
and central purpose for that process: “[T]hat the results of agreements
between the employer and the employees will be drafted into written
memoranda of understanding.” Code § 2-209(4) (emphasis added).

¶14 Section 2-218 sets the procedures parties must follow when
meeting and conferring to reach a MOU. It instructs that “[o]n or before
December 1 of any year in which meeting and conferring is authorized by this
ordinance and the terms of memorandums of understanding in effect pursuant
thereto, authorized employee organizations shall submit their proposed
memorandum of understanding in writing to the City Manager or his
designee[.]” Code § 2-218(B). The section contains additional procedures,
including allowing the Union to present to the City Council and requiring

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the City to provide a written response to a proposed MOU. Code § 2-
218(C), (E).

¶15 If the parties are unable to “achieve agreement” within a
reasonable time, or if a MOU “has not been reached prior to March 1,” the
parties are required to begin impasse procedures. Code §§ 2-219; 2-210(8)
(“Impasse means the failure of a designated representative of the public
employer and a representative of an authorized employee organization to
achieve agreement in the course of meeting and conferring.”). Impasse
procedures include formal mediation and, if the parties are unable to agree,
submitting the issue to the City Council for resolution. Code § 2-219.

¶16 At bottom, the meet and confer ordinance only requires the
City to meet and confer about certain subjects—primarily those to be
addressed in a new or revised MOU—and at certain times. Once an MOU
is reached, either amicably or through impasse procedures, the Code’s meet
and confer process related to that MOU achieves its objective. The
mandatory bargaining process under the Code does not begin anew until
some period before the term of the MOU expires or as otherwise provided
in the existing MOU. See Code § 2-218(B); Code § 2-215(B) (“A
memorandum of understanding may be executed for a period not to exceed
three years.”). In the meantime, the existing MOU, including any provision
creating an interim obligation to meet and confer, governs the parties’
relationship for the duration of its term.

¶17 The 2019 MOU between the City and the Union addressed the
parties’ interim meet and confer obligations. For example, the 2019 MOU
instructed that “[i]f any article or section of this Memorandum should be
held invalid . . . the parties . . . , shall meet and confer to endeavor to agree on
a substitute provision or that such a substitute provision is not indicated.”
(Emphasis added). Although the 2019 MOU established procedures if the
City decided to outsource work, those procedures did not require the City
to meet and confer with the Union before doing so. To the contrary, the
Union agreed that “[e]xcept as expressly provided in this Memorandum,
the City shall not be required to meet and confer concerning any matter,
whether covered or not covered herein, during the term or extensions
thereof.” The 2019 MOU did not stop there. It also provided that because
the Union “had an opportunity to raise all matters” during the meet and
confer process leading to the 2019 MOU, the Union “is precluded from
initiating any further meeting and conferring relative to matters under the
control of the City Council or the City Manager.” Requiring the City to
meet and confer about its agreements with Felix would be inconsistent with
the bargain the Union struck in the 2019 MOU.

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¶18 The Union argues that the ordinance requires the City to
provide the Union a “seat at the table” for any outsourcing discussions. If
any such requirement existed, it needed to be found in the 2019 MOU. To
be sure, the parties included a process in the 2019 MOU for the City to
follow before outsourcing work, including requiring the City to provide
notice to the Union. The 2019 MOU also provided that the parties would
“continue to meet with affirmative willingness to resolve grievance[s] and
disputes relating to wages, hours, and working conditions without
affecting the terms of” the 2019 MOU. If the City violated any of the 2019
MOU’s requirements, the Union could have filed a grievance or requested
a meeting to discuss a grievance. But the Code did not require the City to
meet and confer about contracting out, at least until the mandatory
bargaining process for a subsequent MOU began. This is particularly true
considering the Union’s agreement that the City was not required to meet
and confer during the 2019 MOU’s term, and that the Union was precluded
from asking the City to do so.

¶19 The Union also argues that because the ordinance exempts the
City from meeting and conferring about “economic items” during the
budgeting process, the City is required to continuously meet and confer
about non-economic items. As the Union explains, the deadline for
economic items “allows the City to meet its budget deadlines and
determine its financial commitment it is obligated to fulfill under the terms
of an MOU.” We assume, without deciding, that contracting out work to
Felix was a non-economic item. Yet we disagree that the inclusion of a
deadline for economic items implicitly created a continual obligation to
meet and confer regarding non-economic items.

¶20 The Union’s attempt to imply a perpetual meet and confer
obligation for non-economic items has at least two flaws. First, the
argument is not based on text in the Code but is instead implied from the
absence of text in the Code—the absence of a deadline for non-economic
items. We agree with the superior court that “none of the language
contained in [the Code] even remotely suggests that the parties are
perpetually obligated to meet and confer regarding any particular issue
whatsoever.” Second, the Union’s interpretation conflicts with text in other
provisions in the Code—those imposing temporal limitations on the meet-
and-confer process. In fact, the Union’s position would render those
provisions largely meaningless and the City’s meet and confer obligations
nearly limitless. See City of Phoenix v. Phx. Emp. Rels. Bd., 207 Ariz. 337, 340
¶ 11 (App. 2004) (“Courts avoid interpreting a statute so as to render any of
its language mere surplusage[.]”). Thus, based on the Code’s text, we
conclude that the meet and confer process—for economic and non-

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economic items alike—is a discrete process for completing a memorandum
of understanding on mandatory subjects of bargaining. When that process
is not ongoing, the parties are bound to follow the MOU in effect at the time,
including the grievance and interim meet and confer procedures (if any)
contained therein.

¶21 Lastly, the Union relies on several decisions from state and
federal courts addressing the National Labor Relations Act or state
analogues. None of those cases, however, address a statute or agreement
materially like the Code or the 2019 MOU. Thus, those decisions are
inapposite.

¶22 In sum, under the plain language of the Code and the 2019
MOU, the City was not required to meet and confer with the Union about
contracting out with Felix. The superior court was, therefore, correct to
dismiss the Union’s first amended complaint for failure to state a claim.

ATTORNEYS’ FEES

¶23 The City has requested its attorneys’ fees and costs pursuant
to A.R.S. § 12-341.01. We deny the City’s request for attorneys’ fees but
award the City its reasonable costs upon compliance with Arizona Rule of
Civil Appellate Procedure 21. The Union has likewise requested its
attorneys’ fees and costs pursuant to A.R.S. §§ 12-348 and 12-341. Because
the Union is not the prevailing party, we deny its request.

CONCLUSION

¶24 We affirm the superior court’s judgment.

AMY M. WOOD • Clerk of the Court
FILED: JT

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