By Ben Solis
The term “normal salary schedule” in the Public School Employees Retirement Act was clarified by the Supreme Court on Tuesday, and was found to generally apply to job classification rather than to a specific employee.
In an opinion written by Justice Elizabeth Welch, the high court’s majority in Batista v. Office of Retirement Services (MSC Docket No 166305) also found that the term can be defined as “a written document established by statute or approved by a reporting unit’s governing body that indicates the time and sequence of compensation, and conforms to a norm, rule, or principle.”
The ruling, joined by Justice David Viviano, Justice Richard Bernstein and Justice Megan Cavanagh, partially affirmed the Court of Appeals in the case, but reversed and vacated the appellate panel’s conclusions in other parts of its holding. The case was remanded to the Court of Claims for further proceedings.
Chief Justice Elizabeth Clement, joined by Justice Kyra Harris Bolden, concurred dubitante, meaning the court’s leader was doubtful of the majority’s legal proposition but was hesitant to declare it wrong. Clement said she was not completely comfortable with defining the three words of the phrase “normal salary schedule” in isolation and then putting them together to define the whole phrase. That said, Clement was persuaded by the majority’s statutory interpretation absent any clear definition of the term.
Cavanagh wrote a concurring opinion joined by Welch. She agreed with the majority but wrote separately to urge the Legislature to revisit the governing statutory scheme to ensure the retirement allowances for public school employees were consistent with the reasonable expectation of pensions fairly reflecting compensation throughout their careers.
Justice Brian Zahra stood alone in his dissent, writing that he believed the majority went beyond the Court of Appeals’ holding to define “normal salary schedule.” He also questioned the majority’s decision to establish an “authoritative interpretation” of the phrase without the lower court’s weighing in on the matter.
The plaintiffs in Batista are current or retired public school superintendents and administrators who worked under personal employment contracts and not collective bargaining agreements.
They argued their pension benefits should be higher under the MPSERS Act, and further that the Office of Retirement Services didn’t have the authority to set salary schedules.
The case kicked back and for the between the Court of Appeals and the Supreme Court before returning to the high court this term. The bench was asked once again to determine whether the phrase “normal salary schedule” in MCL 38.1303a(3)(f) refers only to a provision contained in a collective bargaining agreement; and if not, from what other source may a “normal salary schedule” be derived.
As a threshold matter, Welch wrote that the majority agreed with the Court of Appeals that the MSPERS Act applies to all members regardless of whether they are employed through a collective bargaining agreement or a personal employment contract. Welch also agreed that, for annual compensation increases to count toward the final average compensation, the increase must be provided in a normal salary schedule.
The appellate panel declined to define that term, but Welch said the majority had to because it was essential to understand the statute and analyze the question at hand.
The bench defined each of the words separately to draw its conclusion, and looked to case law and Michigan law, but neither the Legislature nor the high court had defined the term, ever, in its history.
“However, both have indicated that in the context of public employment, a ‘salary schedule’ may be set by statute or by the relevant governing body,” Welch wrote.
The upshot was the definition derived in Batista, and the court held that “public school employees may have a normal salary schedule regardless of whether they are employed under a CBA or a personal employment contract.
“Nothing in the definition of ‘normal salary schedule’ precludes application to non-bargaining positions,” she wrote. “After all, many public employees in non-bargaining positions are paid according to a written list established or approved by a reporting unit’s governing body that indicates the time and sequence of compensation and conforms to a regularized norm. Neither the statute nor our case law suggest that only employees working under a CBA are subject to a normal salary schedule.”
With that in mind, Welch wrote that the majority did not want to decide whether the plaintiffs in Batista are subject to a “normal salary schedule” as defined in the opinion. That was, rather, a question for the Court of Claims to decide in further proceedings.
Clement’s concurrence expressed some doubt in the analysis, as she was not comfortable with defining “normal,” “salary,” and “schedule” as separate terms to form one whole phrase.
“Additionally, though the majority cites various sources apparently referring to salary schedules in a context not involving a collective bargaining agreement (CBA), I am hesitant to rely on this authority. The out-of-state statutes and case are in a very similar, if not identical, context as our own statute, all involving school employees. None of the sources uses the whole phrase ‘normal salary schedule,’ but rather just ‘salary schedules’ or ‘annual salary schedule,’” Clement wrote. “While the Michigan sources speak of salary schedules for different kinds of employees and the out-of-state sources speak of salary schedules for school employees generally, including for personnel and administrators, the sources are not completely clear that the employees to which the salary schedule applied do not have a CBA.”
Clement said she didn’t know enough about the use of CBAs for various kinds of employees in order to be confident that the examples cited by the majority were indeed examples of normal salary schedules outside the CBA context.
Still, Clement said she saw merit in the majority’s opinion.
“For these reasons, despite my lingering questions, I concur with the majority,” Clement wrote. “At the same time, I encourage the Legislature to amend the statute in order to clarify the definition of ‘normal salary schedule,’ particularly whether a normal salary schedule can exist outside the CBA context.”
Cavanagh was of the same mind and urged the Legislature to revise the statutory scheme.
“Most importantly, I emphasize that it is yet to be determined how our decisions in this case will affect the retirement allowances of public-school employees who previously worked without an applicable ‘normal salary schedule,’” Cavanagh wrote. “Given the change in the status quo wrought by this litigation, many public-school employees now face uncertainty regarding their retirement pensions. Legislative guidance could help to ensure that the retirement allowances of public-school employees are consistent with the reasonable expectation that their pensions would fairly reflect compensation earned during their careers.”
She added that she hopes the Legislature would take swift action on the issue in its upcoming term.
Zahra, in dissent, said the MPSERS Act was “poorly drafted and perplexingly complex.”
“Interpreting the phrase ‘normal salary schedule’ is thus a difficult task, especially when done without the benefit of lower-court intervention that undoubtedly would develop the issue,” Zahra wrote. “Besides, I am not convinced that this court needs to define the phrase ‘normal salary schedule’ at this juncture.”
Zahra would have remanded the case to the Court of Appeals to define the phrase, instead, “which would simultaneously afford the Legislature the opportunity to amend MCL 38.1303a(3)(f) and provide clarity to this portion of the statute if it wishes to do so.”
The term “normal salary schedule” in the Public School Employees Retirement Act was clarified by the Supreme Court on Tuesday, and was found to generally apply to job classification rather than to a specific employee.
In an opinion written by Justice Elizabeth Welch, the high court’s majority in Batista v. Office of Retirement Services (MSC Docket No 166305) also found that the term can be defined as “a written document established by statute or approved by a reporting unit’s governing body that indicates the time and sequence of compensation, and conforms to a norm, rule, or principle.”
The ruling, joined by Justice David Viviano, Justice Richard Bernstein and Justice Megan Cavanagh, partially affirmed the Court of Appeals in the case, but reversed and vacated the appellate panel’s conclusions in other parts of its holding. The case was remanded to the Court of Claims for further proceedings.
Chief Justice Elizabeth Clement, joined by Justice Kyra Harris Bolden, concurred dubitante, meaning the court’s leader was doubtful of the majority’s legal proposition but was hesitant to declare it wrong. Clement said she was not completely comfortable with defining the three words of the phrase “normal salary schedule” in isolation and then putting them together to define the whole phrase. That said, Clement was persuaded by the majority’s statutory interpretation absent any clear definition of the term.
Cavanagh wrote a concurring opinion joined by Welch. She agreed with the majority but wrote separately to urge the Legislature to revisit the governing statutory scheme to ensure the retirement allowances for public school employees were consistent with the reasonable expectation of pensions fairly reflecting compensation throughout their careers.
Justice Brian Zahra stood alone in his dissent, writing that he believed the majority went beyond the Court of Appeals’ holding to define “normal salary schedule.” He also questioned the majority’s decision to establish an “authoritative interpretation” of the phrase without the lower court’s weighing in on the matter.
The plaintiffs in Batista are current or retired public school superintendents and administrators who worked under personal employment contracts and not collective bargaining agreements.
They argued their pension benefits should be higher under the MPSERS Act, and further that the Office of Retirement Services didn’t have the authority to set salary schedules.
The case kicked back and for the between the Court of Appeals and the Supreme Court before returning to the high court this term. The bench was asked once again to determine whether the phrase “normal salary schedule” in MCL 38.1303a(3)(f) refers only to a provision contained in a collective bargaining agreement; and if not, from what other source may a “normal salary schedule” be derived.
As a threshold matter, Welch wrote that the majority agreed with the Court of Appeals that the MSPERS Act applies to all members regardless of whether they are employed through a collective bargaining agreement or a personal employment contract. Welch also agreed that, for annual compensation increases to count toward the final average compensation, the increase must be provided in a normal salary schedule.
The appellate panel declined to define that term, but Welch said the majority had to because it was essential to understand the statute and analyze the question at hand.
The bench defined each of the words separately to draw its conclusion, and looked to case law and Michigan law, but neither the Legislature nor the high court had defined the term, ever, in its history.
“However, both have indicated that in the context of public employment, a ‘salary schedule’ may be set by statute or by the relevant governing body,” Welch wrote.
The upshot was the definition derived in Batista, and the court held that “public school employees may have a normal salary schedule regardless of whether they are employed under a CBA or a personal employment contract.
“Nothing in the definition of ‘normal salary schedule’ precludes application to non-bargaining positions,” she wrote. “After all, many public employees in non-bargaining positions are paid according to a written list established or approved by a reporting unit’s governing body that indicates the time and sequence of compensation and conforms to a regularized norm. Neither the statute nor our case law suggest that only employees working under a CBA are subject to a normal salary schedule.”
With that in mind, Welch wrote that the majority did not want to decide whether the plaintiffs in Batista are subject to a “normal salary schedule” as defined in the opinion. That was, rather, a question for the Court of Claims to decide in further proceedings.
Clement’s concurrence expressed some doubt in the analysis, as she was not comfortable with defining “normal,” “salary,” and “schedule” as separate terms to form one whole phrase.
“Additionally, though the majority cites various sources apparently referring to salary schedules in a context not involving a collective bargaining agreement (CBA), I am hesitant to rely on this authority. The out-of-state statutes and case are in a very similar, if not identical, context as our own statute, all involving school employees. None of the sources uses the whole phrase ‘normal salary schedule,’ but rather just ‘salary schedules’ or ‘annual salary schedule,’” Clement wrote. “While the Michigan sources speak of salary schedules for different kinds of employees and the out-of-state sources speak of salary schedules for school employees generally, including for personnel and administrators, the sources are not completely clear that the employees to which the salary schedule applied do not have a CBA.”
Clement said she didn’t know enough about the use of CBAs for various kinds of employees in order to be confident that the examples cited by the majority were indeed examples of normal salary schedules outside the CBA context.
Still, Clement said she saw merit in the majority’s opinion.
“For these reasons, despite my lingering questions, I concur with the majority,” Clement wrote. “At the same time, I encourage the Legislature to amend the statute in order to clarify the definition of ‘normal salary schedule,’ particularly whether a normal salary schedule can exist outside the CBA context.”
Cavanagh was of the same mind and urged the Legislature to revise the statutory scheme.
“Most importantly, I emphasize that it is yet to be determined how our decisions in this case will affect the retirement allowances of public-school employees who previously worked without an applicable ‘normal salary schedule,’” Cavanagh wrote. “Given the change in the status quo wrought by this litigation, many public-school employees now face uncertainty regarding their retirement pensions. Legislative guidance could help to ensure that the retirement allowances of public-school employees are consistent with the reasonable expectation that their pensions would fairly reflect compensation earned during their careers.”
She added that she hopes the Legislature would take swift action on the issue in its upcoming term.
Zahra, in dissent, said the MPSERS Act was “poorly drafted and perplexingly complex.”
“Interpreting the phrase ‘normal salary schedule’ is thus a difficult task, especially when done without the benefit of lower-court intervention that undoubtedly would develop the issue,” Zahra wrote. “Besides, I am not convinced that this court needs to define the phrase ‘normal salary schedule’ at this juncture.”
Zahra would have remanded the case to the Court of Appeals to define the phrase, instead, “which would simultaneously afford the Legislature the opportunity to amend MCL 38.1303a(3)(f) and provide clarity to this portion of the statute if it wishes to do so.”
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