Iowa High Court Sends Back State Labor Negotiation Dispute

Iowa case law summary by Attorney Richard Clem: Collective bargaining, Iowa Code 20.9.

AFSCME Iowa Council 61 v. Iowa Public Employment Relations Board. IA Collective bargaining, Iowa Code 20.9

Under Iowa Code 20.9, one subject about which a public employer is required to collectively bargain is "procedures for staff reduction." This case arose out of AFSCME's 2013-15 collective bargaining agreement with the State of Iowa. During negotiations, the state proposed deleting language from the agreement with the union. The state took the position that the provision was not a "procedure for staff reduction." Therefore, according to the state, the provision could permissibly be included in collective bargaining negotiations, but that collective bargaining was not mandatory. The union, on the other hand, took the position that the provision was a "procedure for staff reduction," and that collective bargaining was therefore mandatory. The provision in question read as follows:

If, as a result of outsourcing or privatization following an Employer initiated competitive activities process, positions are eliminated, the Employer shall offer affected employees other employment within Iowa State government. Other employment shall first be sought within the affected employee’s department and county of employment. Affected employees accepting other employment shall not be subject to loss of pay nor layoff pending placement in other employment under this Section. Neither shall such employees be subject to a decrease in pay in their new position. However, affected employees will not be eligible for any pay increase until such time as their pay is within their new pay grade range. In the alternative, employees may elect to be laid off.

Employees placed in other employment under this Section, as well as those electing to be laid off, will be eligible for recall to the classification held at the time of outsourcing or privatization, in accordance with Article VI of this Agreement.


The state sought a ruling from the Iowa Public Employment Relations Board (PERB), which ruled in favor of the union. Dissatisfied with this turn of events, the state then filed a petition for judicial review in the District Court of Polk County. That court, Judge Michael D. Huppert, agreed with the state. Judge Huppert reasoned that the provision did not cover procedures that had as their purpose a reduction in staff. Instead, the provision in question related to the "aftermath of a reduction that has already resulted from outsourcing or privatization." AFSCME then appealed to the Iowa Supreme Court.

The Supreme Court first noted that the standard of review in the case should be deferential to PERB's decision. The party asserting invalidity of the agency's action (in this case, the State) bears the burden of proof. The Court also noted that PERB merely decides whether the proposal is subject to collective bargaining, not whether the provision is meritorious.

The Court then looked at the meaning of the phrase "procedure for staff reduction" and concluded that the inquiry focused on the word "for"--in other words, the purpose of the provision. And since the word has multiple dictionary definitions, the Court concluded that PERB was the agency vested with determining the exact meaning of the phrase. Since PERB's determination was consistent with those definitions, it's ruling would be upheld, even though the District Court's interpretation might also be valid.

However, the Court did have to look to the overall effect of the provision, and had to determine the predominant purpose of the provision. The state argued that the provision was actually a procedure for staff retention after a workforce reduction, rather than a procedure for staff reduction by itself. The Court noted that the original decision to outsource would be a mandatory subject of collective bargaining. And the Court went on to hold that the critical time was when an particular employee leaves the state payroll, and not when a particular job title was eliminated.

Therefore, if an employee would leave the payroll as a result of the provision, then it would be a "procedure for staff reduction". On the other hand, if the employee left the payroll as the result of an earlier outsourcing decision, then the outsourcing decision itself would be subject to mandatory collective bargaining, but this provision would not.

And in this case, the record was unclear which category this provision fit into. Therefore, it remanded the case back to PERB to make the decision. If, on remand, PERB determines that the State is permitted to reduce employment by bumping employees after transfers from outsourcing, then the contested provision would be a mandatory subject of bargaining.

No. 13-1158 (Iowa May 9, 2014).

Please see the original opinion for the court's exact language.


Richard P. Clem is an attorney and continuing legal education (CLE) provider in Minnesota. He has been in private practice in the Twin Cities for 25 years. He has a J.D., cum laude, from Hamline University School of Law in St. Paul and a B.A. in History from the University of Minnesota. His reported cases include: Asociacion Nacional de Pescadores a Pequena Escala o Artesanales de Colombia v. Dow Quimica de Colombia, 988 F.2d 559, rehearing denied, 5 F.3d 530 (5th Cir. 1993), cert. denied, 510 U.S. 1041 (1994); LaMott v. Apple Valley Health Care Center, 465 N.W.2d 585 (Minn. Ct. App. 1991); Abo el Ela v. State, 468 N.W.2d 580 (Minn. Ct. App. 1991).

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