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FOR PUBLICATION

ATTORNEY FOR APPELLANT: GILBERT KING, JR. Gary, Indiana

ATTORNEY FOR APPELLEES: JAMES BALANOFF Merrillville, Indiana

IN THE COURT OF APPEALS OF INDIANA
GARY COMMUNITY SCHOOL CORPORATION, Appellant-Plaintiff, vs. SERVICE EMPLOYEES INTL., ET AL, Appellees-Defendants. ) ) ) ) ) ) ) ) ) )

No. 45A03-0503-CV-114

APPEAL FROM THE LAKE COUNTY DOMESTIC RELATIONS COURT The Honorable James Danikolas, Judge The Honorable Maria Luz Corona, Magistrate Cause No. 45D03-0409-PL-00080 MLC

December 27, 2005 OPINION - FOR PUBLICATION

VAIDIK, Judge

Case Summary The Gary Community School Corporation (the "Gary Schools") appeals the trial court's order of a condition on the Gary Schools to contribute additional money to the Health and Insurance Trust Fund for service employees in connection with the grant of a temporary restraining order and preliminary injunction. The injunction enjoined the Service Employees International Union Local 73, AFL-CIO and its members, nonteacher employees of the Gary Schools, from striking. Because the injunction was solely enjoining an illegal strike, as the employees are public employees, the trial court abused its discretion in imposing the contribution condition on the Gary Schools. We therefore affirm in part and reverse in part. Facts and Procedural History The collective bargaining agreements between the Gary Schools and the custodial and food service employees ("Employees"), represented by the Service Employees Union Local 73 ("Union"), expired on December 31, 2002. However, a provision in both agreements stipulated the extension of the terms until a new agreement was reached. Negotiations continued between the parties from the expiration of the agreements until new collective bargaining agreements (the "2004 Agreements") were signed in January 2004. Before the 2004 Agreements were signed, the actuary, William Bork, who oversaw the Health and Insurance Trust Fund (the "Insurance Fund") that provides the medical insurance coverage for the Employees as well as others from the Gary Schools, sent a letter to the Gary Schools' Board of Trustees and the Union detailing the possible
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future insolvency of the Insurance Fund. In his September 3, 2003, letter, Bork projected that at the current contribution rates the Insurance Fund would be insolvent by the end of 2004. Appellant's App. p. 74. Bork also projected that the necessary breakeven hourly contribution rate to prevent insolvency would be $4.79 for Division A employees (includes the Gary Schools' food service employees) and $4.50 for Division C employees (includes the Gary Schools' custodians). Id. The 2004 Agreements included wage increases as well as increases to the amount the Gary Schools would contribute to the Insurance Fund. Portions of the 2004

Agreements were retroactive to the beginning of 2003. The Gary Schools paid the retroactive difference in the wages and insurance as agreed to in the 2004 Agreements. The Gary Schools agreed to contribute $3.54 per hour for custodians and $2.43 per hour for food service employees to the Insurance Fund for 2004. Despite being informed of the rates required to keep the fund solvent, the Union and Employees agreed to lower contribution rates than recommended by Bork's letter. The wage and insurance

provisions called for a reopening of negotiations to change these rates in January 2005. On June 30, 2004, Bork sent another letter to the Gary Schools' Board of Trustees and the Union explaining that insolvency of the fund would likely occur in August 2004 at the current contribution rates. Appellant's App. p. 70. The new hourly amounts projected for the Insurance Fund to break even for 2004 were $3.81 for Division A and $4.49 for Division C. Id. at 71. Bork wrote that immediate action should be taken by the Board of Trustees of the Insurance Fund to avoid insolvency. Id. at 72. Based on the likelihood of insolvency of the Insurance Fund, the Union attempted
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to open negotiations with the Gary Schools on the contribution rates needed to sustain the Employees' medical benefits. The parties did not reach an agreement. To preserve the solvency, on August 24, 2004, the trustees of the Insurance Fund were forced to drastically cut insurance benefits, including eliminating all benefits for dependents of the covered Employees starting on September 1, 2004. Id. at 30. In response to this drastic cut in benefits, the Employees went on strike on September 2, 2004. In anticipation of the Employees' strike, on September 1, 2004, the Gary Schools filed an emergency petition for a temporary restraining order ("TRO") and a verified complaint also requesting a preliminary and permanent injunction to prevent the Employees from striking. The following day the trial court granted the Gary Schools' request for a TRO enjoining the Employees' strike. On September 7, the trial court entered its Findings of Fact and Conclusions of Law, and upon the agreement of the parties, the TRO was converted to a preliminary injunction. The trial court ordered the parties to negotiate to find a solution. In addition, the trial court placed a condition on the Gary Schools to contribute $4.50 per hour for custodians and $423.20 per month for food service employees 1 toward the Insurance Fund for thirty days to maintain dependent insurance coverage during negotiations. On October 7, 2004, the Gary Schools filed a Motion to Modify Preliminary Injunction arguing that the condition of additional contribution should not be required. The trial court extended the preliminary injunction because negotiations still failed to resolve the dispute. The trial court later entered a Nunc Pro Tunc Order denying the

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The Gary Schools were also required to pay $423.20 per month for clerical employees.

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motion to modify but later granted a motion to clarify filed by the Gary Schools. In respect to the motion to clarify, the trial court confirmed its order requiring the Gary Schools to pay the additional amounts to the Insurance Fund. The Gary Schools now appeal the trial court's ruling. Discussion and Decision The Gary Schools appeal the trial court's imposition of the condition requiring Gary Schools to pay additional monies to the Insurance Fund. Among other arguments, the Gary Schools argue that the trial court abused its discretion in ordering the condition because the court's order changed the clear and unambiguous contract terms contained in the collective bargaining agreements. 2 Under Indiana common law, public employees do not have the right to strike, and thus a public employee strike is illegal. Anderson Fed'n of Teachers, Local 519 v. School City of Anderson, 254 N.E.2d 329, 331 (Ind. 1970) ("Anderson II"). The injunctive process may be used to prevent or halt a public employee strike. Anderson Fed'n of Teachers, Local 519 v. School City of Anderson, 251 N.E.2d 15, 16 (Ind. 1969) ("Anderson I"), clarified on reh'g by Anderson II. 3 The grant or denial of an injunction lies within the trial court's sound discretion. The decision will not be overturned unless it was arbitrary or amounted to an abuse of discretion. Burk v. Heritage Food Serv. Equip., Inc., 737 N.E.2d 803, 815 (Ind. Ct. App.
The Gary Schools also argue that the trial court's condition violates Article III, Section 1 of the Indiana Constitution. In particular, they argue that this condition unconstitutionally directs the executive branch as to how they may appropriate funds. Because we reverse on other grounds, we need not reach this issue. Anderson II cites United States v. United Mine Workers, 330 U.S. 258 (1947), which originally announced this common law rule.
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2000). An abuse of discretion will be found if the ruling is clearly against the logic and effect of the facts and circumstances before the court or if the trial court has misinterpreted the law. Hayworth v. Schilli Leasing, Inc., 669 N.E.2d 165, 167 (Ind. 1996). We only consider the evidence that supports the trial court's decision along with all of the reasonable inferences from that evidence, and we will reverse only where the evidence leads to a conclusion directly opposite of that reached by the trial court. Common Council of City of Peru v. Peru Daily Tribune, Inc., 440 N.E.2d 726, 728 (Ind. Ct. App. 1982). We do not reweigh the evidence or judge the witnesses' credibility. Id. We do not substitute our judgment for that of the trial court even though the circumstances might justify a different result. Id. The purpose of a preliminary injunction is to maintain the status quo pending adjudication of the underlying claim. Paul v. I.S.I. Services, Inc., 726 N.E.2d 318, 321 (Ind. Ct. App. 2000). Indiana Code

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