DOT v. MSEA
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MAINE SUPREME JUDICIAL COURT				Reporter of Decisions
Decision:1999 ME 7 
Docket:Ken-98-361
Argued:	November 30, 1998
Decided:January 6, 1999


Panel:WATHEN, C.J., and CLIFFORD, RUDMAN, DANA, SAUFLEY, and CALKINS, JJ.

DEPARTMENT OF TRANSPORTATION

v.

MAINE STATE EMPLOYEES ASSOCIATION, SEIU LOCAL 1989

WATHEN, C.J.

	[¶1]  The Department of Transportation ("DOT") appeals from a
judgment of the Superior Court (Kennebec County, Alexander, J.) denying its
motion to vacate an arbitration award concerning a dispute between DOT
and the Maine State Employees Association ("MSEA"), representing William
Wasson.  We conclude that the arbitrator erred as a matter of law and
exceeded his authority in determining that Wasson was a state employee. 
We vacate the judgment.
	[¶2]  The underlying facts may be briefly summarized as follows:  The
Maine Ferry Service, a division of DOT, experienced an increased demand
for service in the late 1980s.  DOT unsuccessfully requested authorization
for additional employee positions for the Ferry Service from the Legislature. 
Because it was left without legal authority to hire additional State employees,
the Ferry Service contracted with independent contractors to staff an
additional ferry to serve the Rockland to Vinalhaven route.  The ferry began
operation on an as-needed basis in the early 1990s.  The independent
contractors staffing the ferry were paid from fare revenues rather than from
the State's general fund.
	[¶3]  William Wasson was engaged by the Ferry Service as an
independent contractor and able-bodied seaman in August of 1991.  The
following year, he became a Ferry Captain and signed a "Contract for Special
Services" that remained in effect until June of 1995.  The contract specified
that Wasson was an independent contractor, would not have state or federal
income taxes deducted from his pay, would not obtain the benefits available
to state employees, and would work when called upon by the Ferry Service. 
By the summer of 1994, Wasson was working alternating weeks on the
Rockland to Vinalhaven route.  In September of that year, Wasson was
informed of a schedule change and he was asked to work one week on, two
weeks off.  Wasson objected on the basis that the schedule change would
result in a loss of income to him.  In addition to working fewer hours as a
Ferry Captain, Wasson stated that he would be forced to cancel his
independent employment as a hunting guide because of conflicts with the
new schedule.
	 [¶4]  In the spring of 1995, the Legislature created additional
employment positions for the Ferry Service, and in September of 1995,
Wasson accepted one of these positions as a state employee.  Wasson has
subsequently been terminated from that position.  The present dispute,
however, concerns only his objection to the schedule changes that occurred
while he was engaged as an independent contractor in September of 1994.
	[¶5]  MSEA filed a grievance on Wasson's behalf in October of 1994,
alleging that despite the contractual basis for his services, Wasson was a
state employee and a member of the Supervisory Services collective
bargaining unit and thus entitled to the protection of the collective
bargaining agreement with the State.  The collective bargaining agreement
prohibits a supervisor from altering an employee's schedule without
providing fourteen days notice and attempting to mitigate the adverse
effects on the employee to the extent practicable.  
	[¶6]  Pursuant to the grievance procedure established in the collective
bargaining agreement, the Department of Transportation, followed by the
State Bureau of Employee Relations, determined that Wasson was not a state
employee and therefore not eligible to file a grievance.  Thereafter, the
dispute was submitted to the arbitrator.  In October of 1997, the arbitrator
issued a decision asserting that he had jurisdiction over the matter and
holding that Wasson was a state employee and a member of the Supervisory
Services collective bargaining unit.  The arbitrator concluded that DOT had
violated Wasson's rights under the collective bargaining agreement by failing
to provide him with fourteen days notification of the schedule change and to
mitigate harm to the extent possible.  The arbitrator ordered DOT to
reimburse Wasson for the amount of time he would have worked within the
fourteen day notice period as well as for the hunting guide employment he
lost.  Pursuant to 14 M.R.S.A. § 5938 (1980),{1} DOT filed a motion in the
Superior Court to vacate the award, arguing that the arbitrator exceeded his
powers and that the award violated public policy.  The court denied DOT's
motion and confirmed the arbitrator's award.  This appeal followed.
	[¶7]  When we consider the appeal of an arbitrator's award, we review
the decision of the Superior Court for errors of law.  See Westbrook Sch.
Comm. v. Westbrook Teachers Ass'n, 404 A.2d 204, 206 n.3 (Me. 1979).  We
will uphold the Superior Court's confirmation of an arbitration award unless
the court was compelled to vacate the award.  See American Fed'n of State,
County, and Mun. Employees, Council 93 v. City of Portland, 675 A.2d 100,
102 (Me. 1996).  An arbitrator's award will be overturned, however, when
he exceeds his powers by contravening public policy.  See Department of
Transp. v. Maine State Employees Ass'n, SEIU Local 1989, 606 A.2d 775,
777 (Me. 1992).
	[¶8]  Under the terms of the collective bargaining agreement, if
applicable, the arbitrator has authority to decide a grievance, defined as "a
dispute concerning the interpretation or application of the terms or
provisions of this Agreement."  Regardless of the authority given to the
arbitrator under the collective bargaining agreement, however, such
authority does not vest unless Wasson is included within the group of
persons who are subject to the collective bargaining agreement.  This case
does not present the issue whether a lawfully appointed state employee is
included within the definition of the bargaining unit.  Rather, the issue is
whether an arbitrator has the authority to ignore the foundational
requirement that the grievant be a duly-appointed employee of the State. 
We conclude that, as  a matter of law, Wasson is not a state employee and,
therefore, is not a member of the bargaining unit.  The authority of the
arbitrator under the collective bargaining agreement is inapplicable to
disputes arising under Wasson's independent service contract.
	[¶9]  The arbitrator reasoned that even though "Wasson was not hired
pursuant to Civil Service procedures, and did not hold a legislatively
authorized permanent position," he could still be a member of the collective
bargaining unit.  The arbitrator noted that the collective bargaining
agreement mirrored the State Employees Labor Relations Act's definition of
"state employee," defining the term as "any employee of the State of
Maine," excepting temporary, seasonal, and on-call employees.  26 M.R.S.A.
§ 979-A(6) (1988 & Supp. 1998).{2} 
 	[¶10]  Beyond the matter of definition, the arbitrator reasoned that
the collective bargaining agreement mirrored the treatment of intermittent
employees under the Maine civil service system, and concluded that Wasson
was an intermittent employee and covered by the collective bargaining
agreement.  Under the agreement, "intermittent employees" are defined as
"employees who are appointed for a period of time on a sporadic basis and
who work not more than 500 hours in any consecutive twelve (12) month
period beginning with the date of hire or anniversary of date of hire." 
(Emphasis added).  The agreement goes on to state: 

Any employee designated as intermittent, who works in excess
of the limits set out above and who works more than 1,040
regularly scheduled hours during the period since appointment
as an intermittent employee without a break in service due to
resignation or dismissal shall be covered by the terms of this
Agreement.  

The arbitrator concluded that "after completing the statutorily-mandated
probationary period, the intermittent employee is a member of the
bargaining unit entitled to all contractual rights and protections."
	[¶11]  The arbitrator erred as a matter of law and exceeded his
powers in determining that Wasson was a state employee covered by the
collective bargaining agreement.  The arbitrator's interpretation of the
collective bargaining agreement violated Maine's personnel and civil service
laws. The  Maine civil service law, 5 M.R.S.A. §§ 7031-7085 (1989 & Supp.
1998), defines an "employee" as "any person holding a position subject to
appointment by an appointing authority."  5 M.R.S.A. § 7032(6) (1989)
(emphasis added).  Throughout, the statute emphasizes the fact that a state
employee is a person who occupies a legislatively-authorized position.  The
statute sets forth a  process for the Bureau of Human Resources to
implement, administer, monitor, and improve the civil service system.  5
M.R.S.A. §§ 7033-7042 (1989 & Supp. 1998).  The procedure for
appointing state employees is strictly prescribed:

Appointments to and promotions in the classified service shall
be made according to merit and fitness, from eligible lists
developed by the director pursuant to procedures and policies
established by the director and the Policy Review Board.  No
person may be appointed, transferred, promoted or reduced as
an officer, clerk or employee or laborer in the classified service
in any manner or by any means other than those prescribed by
law or rule pursuant to this chapter.

5 M.R.S.A. § 7052 (1989).  Although the civil service system includes a
provision for intermittent employees, such employees are confined to those
who hold a "position [of] employment for not more than 1040 hours in any
consecutive 12-month period," and they are eligible for certain benefits only
after having worked more than 1040 hours in total.  5 M.R.S.A. § 7053(1)
(Supp. 1998) (emphasis added).{3}
	[¶12]  The arbitrator's classification of Wasson as an "intermittent
employee" was an error of law.  First, "intermittent employees" are
employees, occupying positions within the civil service system.  Wasson did
not occupy such a position.  Second, even if the definition of "intermittent
employee" were to apply to Wasson, he does not qualify.  The statutory
definition is confined to those who work a maximum of 1040 hours per
twelve month period.   Pursuant to his independent service contract,
Wasson worked 1684 hours in 1993 and 1782 hours in 1994.
	[¶13]  The legislative history of section 7053 reveals that its purpose
is to protect intermittent employees and provide them with benefits roughly
proportional to full-time state employees.  Nevertheless, an "intermittent
employee" is not merely any person performing services for the state, but
rather a state employee.  See Legis. Rec. 686 (1978).  Section 7053
delegates to the Bureau of Human Resources the authority to approve the
creation of limited intermittent positions and extends limited benefits and
rights to those employees.  Wasson's contract did not result from such a
process.
	[¶14]  In sharp contrast to an intermittent employee, Wasson was an
independent contractor for the Ferry Service.  He did not fill a legislatively-
authorized employee position, and he did not qualify as an intermittent
employee.   Instead, he provided special services as an independent
contractor, and signed a contract stating just that.  Wasson's independent
and irregular status is underscored further by the fact that he was paid
directly out of Ferry Service revenues rather than legislatively-authorized
payments from the general fund.  It is irrelevant that Wasson might, under
other provisions of law, be considered an employee, for example, for
purposes of income taxation, worker's compensation, or the vicarious
liability of the state.  In this instance, the arbitrator erred in determining
that Wasson was a state employee.{4}  The arbitrator has no authority, explicit
or implied, statutory or contractual, to substitute the "control test"  of the
common law for the personnel laws of Maine.   See Department of Transp. v.
Maine State Employees Ass'n, SEIU Local 1989, 606 A.2d 775, 777 (Me.
1992) ("An arbitrator exceeds his power when the award contravenes public
policy requiring conduct 'beyond that to which [a] public employer may bind
itself or allow itself to be bound.'" (citation omitted)).  Wasson was not a
state employee.  Only the Legislature can confer the benefits of state
employment on persons in his circumstances.  Thus, the Superior Court
erred in confirming the arbitrator's award.
	The entry is:
Judgment vacated.  Remanded to
Superior Court for entry of a judgment
vacating the arbitrator's award.

Attorney for plaintiff:

Peter H. Stewart, Esq., (orally)
Bureau of Employee Relations
79 State House Station
Augusta, ME 04333-0079

Attorney for defendant:

Timothy L. Belcher, Esq., (orally)
Service Employees International Union
P O Box 1072
Augusta, ME 04332-1072

FOOTNOTES******************************** {1} The statute reads in pertinent part: 1. Vacating award. Upon application of a party, the court shall vacate an award where: A. The award was procured by corruption, fraud or other undue means; B. There was evident partiality by an arbitrator appointed as a neutral or corruption in any of the arbitrators or misconduct prejudicing the rights of any party; C. The arbitrators exceeded their powers; D. The arbitrators refused to postpone the hearing upon sufficient cause being shown therefor or refused to hear evidence material to the controversy or otherwise so conducted the hearing, contrary to the provisions of section 5931, as to prejudice substantially the rights of a party; E. There was no arbitration agreement and the issue was not adversely determined in proceedings under section 5928 and the party did not participate in the arbitration hearing without raising the objection; or F. The award was not made within the time fixed therefor by the agreement or, if not so fixed, within such time as the court has ordered, and the party has not waived the objection. 14 M.R.S.A. § 5938(1) (1980). {2} That provision of the State Employees Labor Relations Act reads in full: "State employee" means any employee of the State of Maine performing services within the executive department except any person: A. Elected by popular vote; or B. Appointed to office pursuant to statute, ordinance or resolution for a specified term by the Governor or a department head or body having appointive power within the executive department; or C. Whose duties necessarily imply a confidential relationship with respect to matters subject to collective bargaining as between such person and the Governor, a department head, body having appointive power within the executive department or any other official or employee excepted by this section; or D. Who is a department or division head appointed to office pursuant to statute, ordinance or resolution for an unspecified term by the Governor or by a body having appointive power within the executive department; or E. Who has been employed less than 6 months; or F. Who is a temporary, seasonal or on-call employee; or G. Who is serving as a member of the State Militia or National Guard; or H. Who is a staff attorney, assistant attorney general or deputy attorney general in the Department of Attorney General; or I. Who is appointed to a major policy-influencing position as designated by Title 5, chapter 71; or J. Who substantially participates in the formulation and effectuation of policy in a department or agency or has a major role, other than a typically supervisory role, in the administration of a collective bargaining agreement in a department or agency; or K. Who is a prisoner employed by a public employer during the prisoner's term of imprisonment, except for prisoners who are in work release or intensive supervision programs. 26 M.R.S.A. § 979-A(6) (1988 & Supp. 1998). {3} Section 7053 reads in pertinent part: It is the policy of the State to permit all employees of the State to participate to the fullest extent possible in the benefits of the civil service system for classified and unclassified employees. This policy shall be extended to full-time, part-time, intermittent and all other categories of employees. The Director of Human Resources shall . . . adopt rules to assure the attainment of this policy for intermittent employees. At a minimum, the rules must: 1. Define intermittent positions. Define intermittent positions and must in the definition limit the use of any position to employment for not more than 1040 hours in any consecutive 12-month period; 2. Eligibility provisions. Provide that a person who has been employed in an intermittent position for more than 1,040 hours shall: A. Be eligible to accrue and use vacation and sick leave days at the same rate, pro rata, as full-time state employees; B. Be eligible to receive holiday pay at the same rate, pro rata, . . . as full-time state employees, provided that the intermittent employee works on the days before and after the holiday; C. Be eligible to receive an increase in salary to the next step on the same basis as full-time employees, that is, after completing 2,080 hours of work; D. Be considered a classified employee for the purposes of: (1) Eligible registers; (2) Classification of positions; (3) The compensation plan; (4) Promotion in the classified service; (5) Provisional, emergency, exceptional and temporary appointments; (6) Probationary period; (7) Transfer; (8) Reinstatement; (9) Demotion; (10) Suspension, layoff and dismissal; (11) Leave of absence and resignation; (12) Personnel records; (13) In-service training; (14) Service ratings; and (15) Certification of payrolls; E. Be eligible to participate on a pro rata basis in the retirement program for state employees; and F. Be eligible to participate in health and hospitalization insurance programs at rates of participation reduced to reflect the less than full-time status . . . . 5 M.R.S.A. § 7053 (1989 & Supp. 1998). {4} The arbitrator noted that he would have reached the same conclusion whether he considered Wasson to be a seasonal, part-time, or intermittent employee. Our conclusion that the arbitrator's award violated public policy does not turn on his subsequent assumption that Wasson was an intermittent employee, because Wasson was not a state employee of any kind, whether it be seasonal, part-time, or intermittent.