This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. §. 480A.08, subd. 3 (1996).

STATE OF MINNESOTA

IN COURT OF APPEALS

C3-96-1433

City of Winona,

Respondent,

Minnesota Teamsters Public and Law

Enforcement Employees Union Local 320,

Respondent,

vs.

Law Enforcement Labor Services, Inc.,

Appellant.

Filed January 14, 1997

Affirmed

Foley, Judge

[*]

Winona County District Court

File No. C1-95-1135

William J. Everett, Jessica S. Ware, Greene Espel, P.L.L.P., 1700 Metropolitan Centre, 333 South Seventh Street, Minneapolis, MN 55402 (for Respondent City of Winona)

John W. Quarnstrom, James J. Hanton, Bannigan & Kelly, P.A., 445 Minnesota Street, #1750, St. Paul, MN 55101 (for Respondent Teamsters)

Marylee Abrams, Law Enforcement Labor Services, Inc., 373 Selby Avenue, St. Paul, MN 55102 (for Appellant)

Carla J. Heyl, 145 University Avenue West, St. Paul, MN 55103 (for Amicus Curiae League of Minnesota Cities)

Considered and decided by Peterson, Presiding Judge, Huspeni, Judge, and Foley, Judge.

U N P U B L I S H E D O P I N I O N

FOLEY, Judge

Appellant Law Enforcement Labor Services, Inc. (LELSI) challenges the district court's decision to vacate an arbitration award. LELSI contends the arbitrator did not exceed her powers in concluding that respondent City of Winona (the city) violated the labor agreement between the city and LELSI. In addition, respondent Minnesota Teamsters Public and Law Enforcement Employees Union Local 320 (teamsters) contends it was denied due process by being excluded from the arbitration proceeding. We affirm.

FACTS

In 1992 the Winona Police Department employed 25 members of the LELSI bargaining unit, which included 20 patrol-police officers and 5 investigator-police officers. After an investigator died, the city eliminated the vacant investigator-police officer position, created a new patrol-police officer position, and appointed Sergeant Walski, a member of the teamsters union, to a new supervisor of investigators position. The membership of the LELSI bargaining unit remained at 25 employees.

In May 1993, LELSI submitted a grievance to the police chief alleging that Walski was performing bargaining unit work in violation of the labor agreement between LELSI and the city. The police chief told LELSI that its "issues are not grievable." An arbitrator heard arguments by LELSI and the city and concluded that the city's act of placing Walski in the investigator position violated the labor agreement. The arbitrator ordered the parties to negotiate the distribution of overtime granted to Walski and the posting of the investigator position. The city moved to vacate the arbitration award on the ground that the arbitrator exceeded her authority. The district court granted the city's motion and this appeal followed.

D E C I S I O N

LELSI misstates the deference this court must accord the arbitrator on the issue of arbitrability by citing the standard for reviewing the merits of the arbitrator's decision rather than the standard for reviewing the arbitrator's authority to decide the labor issues. See, e.g., Ramsey County v. American Fed'n of State, County & Mun. Employees, Local 8, 309 N.W.2d 785, 790 (Minn. 1981) (holding that, once arbitrability is established, reviewing court should defer to arbitrator's interpretation of labor agreement). This court must vacate an arbitration award if the arbitrator exceeded her powers. Minn. Stat. § 572.19, subd. 1(3) (1994). To determine whether a grievance is arbitrable, the court must review the language of the parties' agreement to ascertain their intention. Minnesota Fed'n of Teachers, Local 331 v. Independent Sch. Dist. No. 361, 310 N.W.2d 482, 484 (Minn. 1981). An arbitrator is the final judge of both law and fact, but this court reviews the determination of arbitrability de novo. Independent Sch. Dist. No. 88 v. School Serv. Employees Union Local 284, 503 N.W.2d 104, 106 (Minn. 1993).

The arbitrator concluded that the city's appointment of Walski as supervisor of investigators altered the terms and conditions of employment for the LELSI bargaining unit. However, "[n]egotiable terms and conditions of employment are limited to exclude matters of inherent managerial policy." Hill-Murray Fed'n of Teachers v. Hill-Murray High Sch., 487 N.W.2d 857, 866 (Minn. 1992).

A public employer is not required to meet and negotiate on matters of inherent managerial policy. Matters of inherent managerial policy include, but are not limited to, such areas of discretion or policy as the functions and programs of the employer, its overall budget, utilization of technology, the organizational structure, selection of personnel, and direction and the number of personnel.

Minn. Stat. § 179A.07, subd. 1 (1996) (emphasis added). A public employer may relinquish the right to determine matters of inherent managerial policy, but "must do so in clear and unmistakable language." Arrowhead Pub. Serv. Union v. City of Duluth, 336 N.W.2d 68, 72 (Minn.1983).

In vacating the arbitration award, the district court recognized that the city's modification of the organizational structure of the police department, including the creation of the working supervisor position, is not arbitrable because the city reserved the right to do so in Article 5 of the labor agreement. Article 5 provides:

The EMPLOYER retains the full and unrestricted right to operate and manage all manpower, facilities and equipment; to establish functions and programs; to set and amend budgets; to determine the utilization of technology; to establish and modify the organizational structure; to select, direct and determine the number of personnel; and to perform any inherent managerial function not specifically limited by this AGREEMENT.

Any "term or condition of employment" not explicitly established by this AGREEMENT shall remain with the EMPLOYER to establish, modify or eliminate.

The arbitrator erroneously asserted that Articles 1 and 6 of the labor agreement limit supervisory personnel from performing bargaining unit work. Those provisions merely (1) recognize that LELSI is the exclusive representative of certain employees of the Winona Police Department and (2) distinguish between police officers and investigators in stating the compensation to be provided employees. In view of Article 5, Articles 1 and 6 do not contain the clear and unmistakable language necessary for an employer to voluntarily relinquish its inherent managerial right to modify the organizational structure. See I.S.D. No. 88, 503 N.W.2d at 107 (holding that school district's decision to contract out food services was its inherent managerial right because the school board reserved "all management rights and management functions not expressly delegated" and there was no express delegation of contracting out food services).

Our decision is governed by Minneapolis Ass'n of Adm'rs & Consultants v. Minneapolis Special Sch. Dist., 311 N.W.2d 474 (Minn. 1981). There, the supreme court held that the school district's decision to decrease administrative staff concerned the district's organizational structure and the selection, direction, and number of its personnel. Id. at 476. The court explained:

Without question it is a decision regarding matters of inherent managerial policy.

* * *

The decision to divest a particular position of administrative functions is of necessity a decision to take administrative responsibility from the employee who holds the position. For the seven employees here that decision affected terms and conditions of employment because the loss of administrative responsibility was accompanied by reductions in wages, fringe benefits and assignments. That impact, however, does not render the manner in which the basic decision is made a subject of mandatory negotiation. If the manner in which the decision is made is a matter of inherent managerial policy, defendant may not be required to meet and negotiate concerning it.

Id. Although the city's decision to create a new sergeant/investigator position affected the terms and conditions of employment of the remaining investigators, the manner in which the city reorganized the police department is a matter of inherent managerial policy that is not subject to mandatory negotiation.

Teamsters argues that the arbitration award violated its due process rights because it affected the employment rights of one of its members without an opportunity to respond. See Conlin v. City of St. Paul, 418 N.W.2d 741, 743-44 (Minn. App. 1988) (holding that public employee has property right in continued employment and cannot be deprived of that right without due process of law, including notice and opportunity to respond), review denied (Minn. Mar. 30, 1988). We need not address teamsters' due process challenge because the district court properly vacated the arbitration award based on arbitrability.

Affirmed.

[ ]* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.