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Intern. Broth. of Elec. Workers, A. F. of L. v. Salt River Project Agr. Imp. and Power Dist.

Supreme Court of Arizona

October 18, 1954

LOCAL 266, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, A. F. of L., an unincorporated association, Lin Boice, President of said Local 266, John O'Malley, Secretary of said Local 266; and A. J. Kuikendall, Al E. Martin, L. H. Mayes, Jr., Al Chlarson, Boyd Mowery, H. H. Wilke, Joe Flower and John Doe 1 to John Doe 1,000, all members of said Local 266, Appellants,
v.
SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT, a political subdivision of the State of Arizona, Appellee.

Page 394

Rehearing Denied Feb. 2, 1955.

Page 395

[78 Ariz. 33] Geo. T. Wilson, Minne & Sorenson, Phoenix, for appellants.

Jennings, Strouss, Salmon & Trask, Phoenix, for appellee.

LA PRADE, Justice.

This appeal presents two questions:

1. Can an agricultural improvement district of the State of Arizona, organized by virtue of and pursuant to the provisions of Article 7 of Chapter 75, A.C.A.1939, as amended, legally enter into collective bargaining agreement with its employees regarding wages, hours, and other conditions of employment?

2. May the employees of such a District, by concerted action, strike to enforce the execution of such an agreement?

The appellant, Local 266, International Brotherhood of Electrical Workers, A.F.L., is a labor organization whose membership is comprised exclusively of the employees of the appellee District and Salt River Valley Water Users' Association. The individual appellants are either officers or members of the local. The Union employees of appellee are interested in and affected by the wages, hours and working conditions generally which prevail in the business engaged in by the appellee in the production and distribution of its electrical power.

The Salt River Project Agricultural Improvement and Power District is engaged in the manufacture and development of electric power through hydroelectric power installations located along the Salt River, and is engaged in the distribution of electric power to consumers, principally in the city of Mesa, Arizona, which it serves exclusively, and in other areas of the Salt River Valley, both within and without the corporate limits of incorporated towns, where it has in the neighborhood of 20,000 customers, serving approximately 100,000 private and commercial users in Maricopa and Pinal counties; and is engaged in the construction, extension, operation, control, maintenance and management of the facilities[78 Ariz. 34] and works necessary or incidental to the successful operation of said businesses.

For some years prior to November 1, 1949, there existed between the parties hereto (or their predecessors in interest) a collective bargaining agreement which expired on that date. Upon its expiration appellee refused to enter into any agreement covering the terms and conditions of employment, pertaining to the generation and distribution of electrical energy or to the construction or maintenance of facilities necessary therefor, on the ground that as a political subdivision of the State of Arizona, with the rights, privileges, and immunities of a municipal corporation, it

Page 396

could not lawfully so do. Upon the District's refusal to recede from this position, the Union called a strike and placed the usual picket line about the several business establishments of the District.

The District filed its complaint against the Union and caused a temporary restraining order to issue, enjoining the Union from picketing, striking, or causing a slow down. After various court proceedings the parties stipulated all the material facts which they deemed essential to a proper determination of the issues presented by the pleadings, whereupon the superior court granted a judgment and made its temporary restraining order permanent. This appeal followed.

The appellants claim error

'for the reason that the acts and conduct of appellants, which the injunction restrained, were but the lawful exercise of lawful rights for a lawful objective granted to and confirmed to the appellants by the Constitution, statutes and court decisions of the State of Arizona.'

In support of this assignment appellants assert (1) that the District is engaged in a purely proprietary business for the benefit of a restricted class of citizens, and is governed generally by the same rules that govern private individuals and corporations engaged in similar business, and (2) that the law under which the District is organized vests in the District full power and authority to negotiate and execute collective bargaining ageements affecting terms and conditions of their employment in the District's business.

Any discussion of the legal status of the District must begin with Section 7 of Article 13 of the Constitution of the State of Arizona, which provides as follows:

'(Improvement districts political subdivisions)-Irrigation, power, electrical, agriculateral improvement, drainage, and flood control districts, and tax levying public improvement districts, now or hereafter organized pursuant to law, shall be political subdivisions of the state, and vested with all the rights, privileges and benefits, and entitled to the immunities and exemptions granted municipalities and political subdivisions [78 Ariz. 35] under this Constitution or any law of the state or of the United States; but all such districts shall be exempt from the provisions of sections 7 and 8 of article 9 of this constitution.'

Appellants contend that the foregoing amendment to the Arizona Constitution did nothing more than to grant the District immunity from taxation. We believe that a plain reading of the constitutional provisions unequivocally defines agricultural improvement districts of the state as political subdivisions of the state and vested with all the rights, privileges and benefits, and entitled to the immunities and exemptions granted municipalities and political subdivisions under the constitution or any law of the state or of the United States. A review of all of the decisions of this court since the adoption of the foregoing constitutional provisions establishes that the court has consistently recognized improvement districts organized under Article 7 of Chapter 75, A.C.A.1939, to be political subdivisions of the state, vested with the rights, privileges, and immunities granted municipalities and political subdivisions of the state. See Maricopa County Municipal Water Conservation Dist. No. 1 v. LaPrade, 1935, 45 Ariz. 61, 40 P.2d 94; Hallenbeck et ux. v. Yuma County (Miners & Merchants Bank et al., Intervenors), 1944, 61 Ariz. 160, 145 P.2d 837; Shumway v. Fleishman, 1947, 66 Ariz. 290, 187 P.2d 636; Maricopa County Municipal Water Conservation Dist. No. 1 v. Warford et ux., 1949, 69 Ariz. 1, 206 P.2d 1168; Taylor v. Roosevelt Irr. Dist., 1950, 71 Ariz. 254, 226 P.2d 154, and the rehearing of the same case, 1951, 72 Ariz. 160, 232 P.2d 107; Rubenstein Const. Co. v. Salt River Proj. Agr. Imp. & Power Dist., 1953, 76 Ariz. 401, 265 P.2d 455. Appellants' contention is incorrect.

As a municipal corporation the District asserts the following consequences. The first is that the District, as a political subdivision of the state, is powerless to enter into collective bargaining negotiations with

Page 397

its employees. They state the reason to be that,

'The process of collective bargaining calls upon the governmental agency to delegate to a private agency the authority to operate and control the activities of the governmental agency itself.'

The second contention of the District is that since it is powerless to enter into a collective bargaining agreement, a strike by its employees for this purpose should be permanently enjoined as illegal.

To support the assertion that it is powerless to enter into a collective bargaining agreement the District cites us cases from other jurisdictions. The first of these is Mugford v. Mayor and City Council of Baltimore, 1946, 185 Md. 266, 44 A.2d 745, 747, 162 A.L.R. 1101. There a taxpayer enjoined the City of Baltimore and the Municipal Chauffeurs and Garage Employees Union from entering into a collective bargaining agreement. The lower court held [78 Ariz. 36] that the city was denied the power to do so by the terms of its charter. This finding was not appealed to the Maryland Court of Appeals and was held to be the rule of the case. The issue considered by the Court of Appeals was whether the City could voluntarily agree to check off union dues upon the request of its employees. A question which is not before this court.

The District refers us to comments made by that court on the findings of the lower court which had not been appealed. The case constitutes no precedent. In its dicta the Maryland court stated,

'To the extend that these matters are covered by the provisions of the City Charter, creating a budgetary system and a civil service, those provisions of law are controlling.'

Statutory regulation of employment negates the view that such would be open for contractual negotiations between the employer and employees. If a civil service scheme provides for the regulation of matters normally contained in a collective bargaining agreement the conflicting terms of both could not exist concurrently. The inconsistency would be resolved in favor of the statute. Under these circumstances the power to enter into a collective bargaining agreement would be properly denied as an attempt to subvert legislative direction. A statute must be given effect. Buggeln v. Cameron, 1907, 11 Ariz. 200, 90 P. 324.

In the case before this court we have no legislative expression of public policy to control the terms of employment by a District as existed in the Mugford case, supra.

The District cites us next to City of Springfield v. Clouse, 1947, 356 Mo. 1239, 206 S.W.2d 539, 546. There a declaratory judgment was requested to determine whether the city was empowered to enter into collective bargaining with its employees. The Union argued that the Missouri Constitution, section 29, Article 1, V.A.M.S., which granted employees the right to organize and bargain collectively, applied. The City asserted that this provision was intended to apply only to private employers. An argument not before this court.

The court in the Springfield case found this provision of the constitution not applicable to governmental employees. The court then considered whether the city had the power to enter into collective bargaining negotiations with the union, even if not so required by the constitution. The court ruled that while these public employees may organize they may not demand the right to bargain collectively. The court specified the manner in which such a collective bargaining agreement would conflict with the laws of Missouri. Under Missouri Stats. 6678-6688, V.A.M.S., ยงยง 75.620 to 75.710, ...


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