FOURTH DIVISION
May 26, 2005

JUSTICE THEIS delivered the opinion of the court:

Petitioner, the Chicago Transit Authority (CTA), appeals from a decision of the IllinoisState Labor Relations Board, Local Panel (the Board), finding that Amalgamated Transit UnionLocal 241 (the Union) did not fail to bargain in good faith in violation of section 10(b)(4) of theIllinois Public Labor Relations Act (the Act) (5 ILCS 315/10(b)(4) (West 2000)), when it tookactions in furtherance of a strike. The CTA also appeals from the Board's finding that it engagedin unfair labor practices under section 10(a)(1) of the Act (5 ILCS 315/10(a)(1) (West 2000)), byinterfering with its employees' rights to engage in the protected concerted activities ofparticipating in a strike authorization vote, distributing flyers to the public, and conducting a rerunelection on CTA property.

The CTA contends that (1) the Board erred in finding that the Union did not violatesection 10(b)(4) of the Act because it took actions in furtherance of an unlawful strike, repudiatedthe parties' collective bargaining agreement, violated the Act, and thus, failed to bargain in goodfaith; and (2) the Board erred in finding that the CTA violated section 10(a)(1) when it threatenedemployees with discharge and disciplinary action because the employees were not engaged inprotected concerted activities. For all of the following reasons, we vacate the Board's order andremand the matter to the Board for further proceedings consistent with this opinion.

BACKGROUND

The Collective Bargaining Agreement

In January 1996, the CTA and the Union entered into a collective bargaining agreement(the 1996 Agreement). The 1996 Agreement was effective until December 31, 1999, "and fromyear to year thereafter," subject to each party's right to seek modifications and/or additions asprovided for in section 19.2 as follows:

"19.2 CHANGES Either of the parties hereto shall have theright to open this Agreement for modifications and/or additions tobe effective January 1, 2000, or any anniversary date thereafter bywritten notice to the other party sixty (60) days prior to suchanniversary date. Notification submitted in accordance with theforegoing shall contain a written statement of all modificationsand/or additions to the Agreement which are proposed. If noagreement is reached within said sixty (60) days, or such furthertime as both parties may agree upon, the matter shall be submittedto arbitration as provided in Article 17. All conditions of thisAgreement are to continue in full force and effect until changed,revised or amended from time to time by agreement of the partiesor by the decision of the Board of Arbitration."

Section 17 of the 1996 Agreement provided as follows:

"17.1 AGREEMENT TO ARBITRATE It is herebyagreed that the properly accredited officers of the [CTA] shall meetand treat with the properly accredited officers of [the Union] on allquestions and grievances that may arise during the life of thisAgreement, and should there be any that cannot be amicablyadjusted between the [parties], same shall be submitted to[arbitration]."

In January 2000, the parties gave the requisite notice and began negotiating the terms of asuccessor collective bargaining agreement. By the spring of 2001, Wanda Black, president of theUnion, believed that the parties had reached a new tentative agreement. However, the CTAdisagreed with that assertion, leading Black to conclude that the CTA had "reneged" on the newagreement. On May 21, 2001, the Union filed an unfair labor practice charge against the CTA forunlawfully refusing to recognize the existence of a new collective bargaining agreement, for failingto execute the tentative agreement, and for unlawfully changing the terms of the new agreement.

The Board issued a complaint for hearing on those charges. However, that complaint wasnot consolidated with the charges at issue in this appeal and neither the administrative law judge(ALJ) nor the Board ultimately considered the merits of those issues. Rather, the record reflectsthat sometime after June 26, 2001, the parties began arbitration proceedings over the terms of asuccessor collective bargaining agreement. The Union initially objected, but ultimately stipulatedto the jurisdiction of the arbitrators to issue an arbitration award as more fully set forth below.

Strike Authorization Vote

In June 2001, the Union was preparing for an upcoming delegate election which wasscheduled to occur on CTA property. After receiving permission from the CTA to use itsproperty to hold the election, the Union decided on the eve of the election to add a strikeauthorization vote to the ballot. On June 26, 2001, the employees voted to authorize an unfairlabor practice strike and the Union posted the results at all work locations. However, the Unionnever gave the CTA notice of its intent to strike and no strike by CTA employees ever occurred.

On June 27, 2001, the CTA filed an unfair labor practice charge against the Union. Therein, it alleged that a strike was prohibited by the 1996 Agreement and section 17 of the Act,and therefore, the Union's strike authorization vote violated section 10(b)(4) of the Act, whichmakes it an unfair labor practice "to refuse to bargain collectively in good faith with a publicemployer." 5 ILCS 315/10(b)(4) (West 2000).

The CTA's Actions Following the Vote

Shortly after the election and strike authorization vote, the Union requested that the CTAallow it to conduct a rerun election on CTA property due to a balloting error at one of theelection sites. Robert Geirut, CTA vice-president of employee relations, sent the Union a letterstating that, in view of its unauthorized ballot proposition, which included a vote to authorize anillegal unfair labor practice strike, it was denying the Union's request to conduct the election onits property.

Additionally, after the strike authorization vote, the Union notified the public of its labordispute with the CTA by distributing a flyer and requesting the support of the public. The flyerstated in part:

"While we recognize that the riding public relies on CTA for its livelihood, we alsorely on the CTA for our livelihood. While we do not want to disrupt thetransportation system in the City of Chicago, we may have to should the CTAcontinues [sic] to not respect and stand behind their [sic] agreement with us."(Emphasis in original.)

Black distributed the flyers to CTA bus operators with instructions to pass them out to the public,but not to distribute them on CTA property or in uniform. The flyers were distributed to thepublic per Black's instructions at bus stops and street corners. There was no testimony at thehearing before the ALJ that the flyers were being distributed on CTA buses or on CTA property.

Black testified that at the time the flyer was passed out to the public, it was the intent of theUnion to have the public believe that the transit system would be shut down or impaired and thatwould help the Union in negotiations with the CTA.

In response to the flyers, the CTA sent Black a letter stating that the flyers were appearingon CTA vehicles, that these documents were not authorized or approved by the CTA, andtherefore, that their distribution was strictly prohibited as per the CTA general rule bookgoverning all employees. The letter cited the CTA's no-solicitation rule and indicated that,"[A]ny employee who participates in the distribution of these notices is subject to disciplinaryaction up to and including discharge for engaging in this activity." In addition, the letter focusedon the Union's reference to disrupting the transportation system in the City of Chicago, andconsidered the statement an illegal strike threat to coerce the CTA to accept the terms proposedby the Union in contract negotiations. Therefore, the CTA insisted that the Union repudiate thedocuments and inform Union members that the distribution of these notices was strictlyprohibited. The letter ended by stating that, "[A]ny employee who does participate in thedistribution of this document will be subject to disciplinary action up to and including discharge." The CTA issued its memo to CTA employees, but did not discipline any employee for distributingthe flyer.

Thereafter, on July 2, 2001, Frank Kruesi, the president of the CTA, sent a letter to allCTA employees stating that there was a rumor that some Union members were threatening anillegal strike. The letter further reiterated the CTA's position that the Union declined to reach anagreement, that the parties were at an impasse, and that the current 1996 Agreement requiredthem to pursue interest arbitration. The letter then stated as follows:

"What is not allowed under our agreement, and is also prohibitedby the [Act], is threatening illegal strikes and putting jobs at risk. But that is what some representatives of [the Union] havethreatened to do. Make no mistake about it. An illegal job actionwill put jobs at risk."

In closing, Kruesi stated that, "[i]f there are illegal job actions, we will take whatever legal anddisciplinary measures are called for."

Thereafter, the Union filed two unfair labor practice charges against the CTA. Therein, italleged that the CTA's communications of June 28 and July 2, 2001, threatened to disciplineemployees for engaging in protected concerted activities and, therefore, violated section 10(a)(1)of the Act, which makes it an unfair labor practice to "interfere with, restrain, or coerce publicemployees in the exercise of rights guaranteed in [the] Act." 5 ILCS 315/10(a)(1) (West 2000). Additionally, the Union alleged that the CTA violated section 10(a)(1) by refusing to allow theUnion to conduct its rerun election on CTA property in retaliation for the Union having engagedin the protected concerted activity of a strike authorization vote.

Interest Arbitration Proceedings

The record reflects that simultaneous to the unfair labor practice charges, the partiesbegan interest arbitration proceedings over the terms of a successor collective bargainingagreement. Hearings commenced on March 19, 2002. The Union argued that the arbitrationboard lacked jurisdiction to address the dispute as to whether the parties had reached a newagreement and requested that the arbitration board defer the award until completion of the unfairlabor practice proceedings. That request was denied and a preliminary award was issued by thearbitrator on October 2, 2002. Thereafter, the record reflects that on October 24, 2002, theUnion filed a complaint in the circuit court for a declaratory judgment and to vacate the award. On March 27, 2003, the circuit court dismissed the lawsuit with prejudice and denied the Union'smotion to reconsider on June 3, 2003. Therein, the circuit court ruled that the arbitrator was fullywithin his authority to decide the issue of whether the dispute was arbitrable. The Union appealedthe decision of the circuit court, but that appeal was ultimately withdrawn.

ALJ's Recommended Decision

The unfair labor practice charges brought by the CTA against the Union and thesubsequent charges brought by the Union against the CTA were consolidated. After a hearing,the ALJ issued a recommended decision and order on May 15, 2003. With respect to the CTA'sallegations, the ALJ dismissed its contentions that the Union violated section 10(b)(4) of the Actwhen it engaged in the strike authorization vote. The ALJ found in pertinent part that (1) whetherthe Union could meet the requirements for a lawful strike under section 17 of the Act had nobearing on the CTA's allegation that it engaged in an unfair labor practice because the Act doesnot provide that an unlawful strike is an unfair labor practice; and (2) section 19.2 of the 1996Agreement did not require that the parties arbitrate a dispute over whether they had reached atentative agreement in the spring of 2001, and therefore, section 19.2 had no bearing on whetherthe Union undertook a lawful strike authorization vote.

With respect to the Union's allegations, the ALJ found that the CTA violated section10(a)(1) of the Act when it threatened employees and denied the Union access to its property inretaliation for the strike authorization vote because the Union was engaged in protected concertedactivity. However, the ALJ dismissed the Union's allegation that the CTA violated section10(a)(1) when it issued the memorandum to employees warning of discipline if they engaged inillegal job action.

Thereafter, the CTA filed exceptions to the recommended decision. Therein, it reiteratedits argument that the Union was prohibited from striking due to the terms and conditions of thethen-existing 1996 Agreement and section 17 of the Act and that, therefore, any action infurtherance of an unlawful strike amounted to a failure to bargain in good faith and was notprotected concerted activity.

Interest Arbitration Award

On November 20, 2003, in the interim period between the ALJ's recommended decisionand the Board's order, the arbitrators entered their interest arbitration decision and award settingforth a successor collective bargaining agreement. Both parties stipulated to the jurisdiction ofthe arbitrators to issue that opinion and award. Thereafter, the CTA filed a motion with theBoard to supplement the record with the interest arbitration award as relevant to the matters inthe case before the Board. The Union objected, but the record before this court does not indicatewhether the CTA's motion was granted or denied.

Board's Final Decision and Order

On April 30, 2004, after hearing oral argument and considering the record, exceptions,and the briefs filed by the parties, the Board affirmed the ALJ's determination that the Union didnot violate section 10(b)(4) of the Act as alleged by the CTA. In its holding, the Board rejectedthe CTA's premise that CTA employees did not have the legal right to strike. The Board statedthat "Section 17 makes clear that CTA employees possess the right to strike." While the Boardrecognized that section 17 establishes certain prerequisites to a lawful strike, it listed only four ofthe five prerequisites, failing to list the requirement that the parties must not have agreed tosubmit the disputed issues to arbitration.

Instead, the Board focused on the fact that "There is no evidence that any strike everoccurred in this matter. We are therefore unable to determine whether a strike that neverhappened complied with Section 17's prerequisites." The Board further stated that CTAemployees "clearly possess the right to strike and a strike authorization vote is not illegal." Furthermore, "as no strike ever occurred in this case, we fail to see how any of the parties'agreement could have been repudiated."

Additionally, the Board affirmed the ALJ's findings that the CTA engaged in conduct thatviolated section 10(a)(1) of the Act, finding that a strike or any strike-related activity was "clearlyprotected under the Act." As a result, the Board found that the CTA's various actionsconstituted unlawful interference, restraint and coercion of public employees in the exercise of therights guaranteed in the Act. The Board also found, contrary to the ALJ, that the CTA violatedsection 10(a)(1) of the Act when it issued the memorandum that warned of discipline if employeesengaged in "illegal job action." The CTA filed a timely appeal.

ANALYSIS

In rejecting the CTA's premise that the CTA employees were prohibited from striking, theBoard failed to acknowledge all of the prerequisites for a lawful strike by public employees. Pursuant to section 17 of the Act, there are five requirements that must be met for a lawful strikein the public sector in Illinois: (1) the employees must be represented by an exclusive bargainingrepresentative; (2) the existing collective bargaining agreement, if any, must have expired, or suchcollective bargaining agreement must not prohibit the strike; (3) the parties must not have agreedto submit the disputed issues to final and binding arbitration; (4) there must have been prior resortto mediation; and (5) the union must have given at least five days' notice of its intent to strike. 5ILCS 315/17 (West 2000). In its decision, the Board omitted any reference to the requirementunder the Act that the parties must not have agreed "to submit their disputed issues to final andbinding arbitration" in order to lawfully strike.

This omission becomes particularly significant if the parties had a collective bargainingagreement evidencing that they chose arbitration as the forum to settle their disputes. The 1996Agreement indicates under section 19.2 that the parties may elect to propose changes and/ormodifications to the collective bargaining agreement. If no agreement is reached within 60 daysof a notice of proposed modifications and/or additions or within such further time as both partiesagree, the matter shall be submitted to arbitration as provided in Article 17. Section 17.1 requiresarbitration of "all questions and grievances that may arise during the life of this Agreement." (Emphasis added.) Section 19.2 further provides that the 1996 Agreement shall remain in fullforce and effect until changed, revised or amended by agreement or by a decision of the board ofarbitration. Thus, if the 1996 Agreement remained applicable at the time of the strikeauthorization vote, then there is a question whether the parties agreed to submit their disputedissues to final and binding arbitration. Indeed, the record reflects that the parties ultimatelyparticipated in arbitration prior to the Board rendering its decision in this case.

Thus, where the Board omitted any reference to section 17(a)(3) of the Act, we mustvacate the Board's order and remand for reconsideration of the following issues. The Board mustaddress whether the parties "agreed to submit the disputed issues to final and binding arbitration." 5 ILCS 315/17(a)(3) (West 2000). If the parties were subject to arbitration, then it follows thatthe Board must consider whether section 17(a)(3) could have been satisfied and, therefore,whether a strike by CTA employees at the time of their dispute would have been prohibited underthe Act. If the Board finds that it would have been unlawful for CTA employees to strike undersection 17 of the Act, then the Board must consider whether the Union's activities in furtheranceof an illegal strike violated the Union's duty to bargain in good faith under section 10(b)(4) of theAct.

Additionally, if a strike would have been unlawful, the Board must also consider whetherthe Union's actions taken in furtherance of an illegal strike under the Act constituted protectedactivity. To establish a violation of section 10(a)(1) of the Act, the Union must first establish thatit was engaged in "the exercise of the rights guaranteed in this Act." 5 ILCS 315/10(a)(1) (West2000). The Board did not address whether actions taken in furtherance of a strike by publicemployees who are statutorily prohibited from striking would be exercising rights guaranteed bythe Act. Accordingly, for all of the foregoing reasons, we vacate the Board's order and remandthe matter to the Board to reconsider its findings in light of section 17(a)(3) of the Act.

Vacated and remanded.

REID, P.J., and QUINN, J., concur.

REPORTER OF DECISIONS - ILLINOIS APPELLATE COURT

CHICAGO TRANSIT AUTHORITY,

            Plaintiff-Appellant,

            v.

ILLINOIS LABOR RELATIONS BOARD,
LOCAL PANEL and AMALGAMATED
TRANSIT UNION LOCAL 241,

          Respondents-Appellees.

No. 1-04-1523

Appellate Court of Illinois

First District, Fourth Division

Filed: May 26, 2005

JUSTICE THEIS delivered the opinion of the court.

Reid, P.J., and Quinn, J., concur.

Appeal from an Order of the Illinois Labor Relations Board, Local Panel

For APPELLANT James P. Daley

David M. Novak

Bell, Boyd & Lloyd LLC

Three First National Plaza

70 W. Madison St., Suite 3100

Chicago, IL 60602

Joseph J. Stevens

Schuyler, Roche & Zwirner

One Prudential Plaza

130 E. Randolph St., Suite 3800

Chicago, IL 60601

For APPELLEE Lisa B. Moss

Noah Scott Warman

Carmell Charone Widmer Mathews and Moss

230 W. Monroe St., Suite 1900

Chicago, IL 60606

Lisa Madigan, Attorney General

Gary Feinerman, Solicitor General

Richard S. Huszagh

100 W. Randolph St., 12^th Floor

Chicago, IL 60601