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American Federation of State, County and Municipal Employees, Council 31 v. State, Department of Central Management Services

Court of Appeals of Illinois, First District, First Division

January 22, 2018


         Petition for Review of a Decision and Order of the Illinois Labor Relations Board, State Panel, No. S-RC-11-078

          JUSTICE MIKVA delivered the judgment of the court, with opinion. Presiding Justice Pierce and Justice Harris concurred in the judgment and opinion.



         ¶ 1 This is a direct appeal from a final order of the Illinois Labor Relations Board, State Panel (Board), finding that six directors at the Illinois Commerce Commission (Commission) are managerial employees excluded from collective bargaining. The Board denied a representation petition filed by the American Federation of State, County and Municipal Employees, Council 31 (Union), seeking to include the employees in one of its existing bargaining units, and the Union now appeals. For the reasons that follow, we affirm the Board's decision and order with respect to each of the six directors that the Union seeks to represent.

         ¶ 2 I. BACKGROUND

         ¶ 3 The Illinois Commerce Commission is a quasi-judicial body, charged under the Public Utilities Act (220 ILCS 5/1-101 et seq. (West 2016)) with regulating public utilities in the state. 220 ILCS 5/2-101, 3-105, 4-101, 4-201, 13-101 (West 2016). The Commission is engaged in, among other things, rate-setting, the certification of private entities seeking to provide public utilities, safety oversight, and the investigation and resolution of complaints against utility companies. American Federation of State, County, & Municipal Employees (AFSCME), Council 31 v. State of Illinois, 2014 IL App (1st) 130655, ¶ 3 (hereinafter AFSCME). The Commission is comprised of five commissioners, who appoint an executive director to oversee its day-to-day operations. 220 ILCS 5/2-101, 2-105(a) (West 2016). The executive director is authorized to organize the Commission into bureaus or other subunits and to delegate the supervision and direction of those bureaus to staff members. Id. § 2-105(a). Bureaus are typically headed by chiefs and subdivided into divisions headed by directors. At present, six bureaus and an Office of Retail Market Development report to the executive director.

         ¶ 4 On October 5, 2010, the Union filed a representation petition with the Board seeking to include nine directors in its RC-63 bargaining unit. The Commission opposed the petition, arguing that the directors are excluded from collective bargaining for three reasons: because they are managerial employees pursuant to section 3(j) of the Illinois Public Labor Relations Act (Labor Relations Act) (5 ILCS 315/3(j) (West 2010)); the directors are supervisory employees, pursuant to section 3(r) (id. § 3(r)); and the directors are confidential employees, pursuant to section 3(c) (id. § 3(c)). The Commission alternatively argued that, even if the directors are not excluded from collective bargaining, the RC-63 unit is not the appropriate bargaining unit for those employees. The Union ultimately stipulated that three of the nine directors should be excluded from the bargaining unit, leaving the status of only six directors in dispute. They are (1) Torsten Clausen, director of the Office of Retail Market Development; (2) Jerry Oxley, director of Information Technology Services in the Bureau of Planning and Operations; (3) Peter Muntaner, director of Consumer Services in the Bureau of External Affairs; and (4) Harry Stoller, Joy Nicdao-Cuyugan, and Jim Zolnierek, the directors, respectively, of the Energy, Financial Analysis, and Telecommunications Divisions of the Bureau of Public Utilities.

         ¶ 5 At an evidentiary hearing in June 2011, the administrative law judge (ALJ) in this case heard testimony primarily from the Commission's executive director and the bureau chiefs to whom these six directors report. In her recommended decision and order issued on February 27, 2013, the ALJ recommended that the Board find that three of the directors (Mr. Clausen, Mr. Oxley, and Mr. Muntaner) were managerial employees excluded from collective bargaining and that the remaining three directors (Mr. Stoller, Ms. Nicdao-Cuyugan, and Mr. Zolnierek) were public employees with full collective bargaining rights. Both the Union and the Commission filed exceptions to the ALJ's recommendations.

         ¶ 6 The Board agreed in part with the ALJ, finding in its February 14, 2014, decision and order that all six directors were managerial employees. The Union appealed directly to this court. To avoid repetition, where we discuss the Board's finding as to each of the directors below, we include in that discussion a summary of the relevant evidence and the ALJ's recommendations.

         ¶ 7 Briefing in this case was stayed pending decisions by the Fourth District in Department of Central Management Services/The Illinois Commerce Comm'n v. Illinois Labor Relations Board, State Panel, 2015 IL App (4th) 131022, and by this district in American Federation of State, County, & Municipal Employees (AFSCME), Council 31 v. State, 2016 IL App (1st) 133866-U. The stay was lifted in January 2017.

         ¶ 8 II. JURISDICTION

         ¶ 9 The Board entered its final order, dismissing the Union's petition in this matter on February 14, 2014, and the Union timely filed its petition for review on March 10, 2014. Orders of the Board dismissing representation petitions are final orders and may, in accordance with provisions of the Administrative Review Law (735 ILCS 5/3-101 et seq. (West 2012)), be appealed directly to the appellate court for the district in which the aggrieved party resides or transacts business. 5 ILCS 315/9(i) (West 2010). We have jurisdiction over this matter pursuant to section 9(i) of the Labor Relations Act (id.), section 3-113 of the Code of Civil Procedure (735 ILCS 5/3-113 (West 2012)), and Illinois Supreme Court Rule 335 (Ill. S.Ct. R. 335 (eff. Feb. 1, 1994)).

         ¶ 10 III. ANALYSIS

         ¶ 11 The issue before us is whether the Board properly classified each of these six Commission directors as managerial. By law, an employee's classification determines his or her right to engage in collective bargaining. The Labor Relations Act, which allows public employees to bargain collectively (5 ILCS 315/2.5(1) (West 2010)), specifically excludes "managerial employees" from the definition of a "[p]ublic employee" (id. § 3(n)). As our supreme court has explained, "[t]he exclusion is intended to maintain the distinction between management and labor and to provide the employer with undivided loyalty from its representatives in management." Chief Judge of the Sixteenth Judicial Circuit v. Illinois State Labor Relations Board, 178 Ill.2d 333, 339 (1997). In accordance with these goals, "managerial status is not limited to those at the very highest level of the governmental entity." (Internal quotation marks omitted.) Office of the Cook County State's Attorney v. Illinois Local Labor Relations Board, 166 Ill.2d 296, 301 (1995). Rather, "it is enough if the functions performed by the employee[s] sufficiently align [them] with management such that the employees should not be in a position requiring them to divide their loyalty to the administration *** with their loyalty to an exclusive collective-bargaining representative." (Internal quotation marks omitted.) Id.

         ¶ 12 On review from this final order by the Board, we apply different levels of deference depending on the nature of the question presented. Although we consider an agency's ruling on issues of law de novo, we deem its findings on issues of fact to be prima facie correct unless they are against the manifest weight of the evidence. Speed District 802 v. Warning, 242 Ill.2d 92, 111-12 (2011); 735 ILCS 5/3-110 (West 2012). We also defer to an agency's experience and subject-matter expertise when considering mixed questions of law and fact and will reverse the agency's findings on mixed questions only if they are clearly erroneous. City of Belvidere v. Illinois State Labor Relations Board, 181 Ill.2d 191, 205 (1998). A finding is clearly erroneous when "the reviewing court, on the entire record, is 'left with the definite and firm conviction that a mistake has been committed.' " AFM Messenger Service, Inc. v. Department of Employment Security, 198 Ill.2d 380, 395 (2001) (quoting United States v. United States Gypsum Co., 333 U.S. 364, 395 (1948)).

         ¶ 13 Here, the Union does not challenge the Board's findings of fact, but contends both that the Board applied incorrect legal standards and that its ultimate conclusions-that each of the six directors were managerial employees-were clearly erroneous. We first consider the proper legal standards.

         ¶ 14 A. Whether the Board Applied the Correct Legal Standards

         ¶ 15 The Union contends that the Board applied an improper legal standard in two respects. It first argues that the Board should not have relied on this court's recent interpretation in AFSCME, 2014 IL App (1st) 130655, ¶ 29, of the word "predominantly" in section 3(j) of the Labor Relations Act to mean "superiority in importance or numbers." According to the Union, AFSCME improperly introduced an alternative, qualitative, definition of predominance that contradicts other decisions of this court, which the Union contends look only to whether the employee spends most of his or her time on managerial activities. According to the Union, this interpretation "threatens to make [the predominance] requirement a nullity."

         ¶ 16 The Union also argues-this time relying on our decision in AFSCME-that the Board applied an improper legal standard when it concluded that two of the directors, Torsten Clausen and Harry Stoller, were managerial employees based solely on their function as informational "gatekeepers." In making this determination, the Union argues that the Board improperly relied on one of its own prior decisions, which was subsequently reversed by this court in AFSCME, 2014 IL App (1st) 130655, ¶¶ 42-43. We consider each of these arguments in turn, in the context of the legal framework for determining whether a particular employee is managerial.

         ¶ 17 Section 3(j) of the Labor Relations Act establishes a two-part test to determine if an individual is a "[m]anagerial employee." 5 ILCS 315/3(j) (West 2010). The person must be both (1) "engaged predominantly in executive and management functions" and (2) "charged with the responsibility of directing the effectuation of management policies and practices." Id.

         ¶ 18 Courts have construed the phrase "executive and management functions" in the first part of the test to mean those functions that "relate to running a department, " including "formulating department policy, preparing the budget, and assuring efficient and effective operations of the department." Village of Elk Grove Village v. Illinois State Labor Relations Board, 245 Ill.App.3d 109, 121-22 (1993). An employee is not managerial simply because he or she "exercise[s] *** professional discretion and technical expertise" (County of Cook v. Illinois Labor Relations Board-Local Panel, 351 Ill.App.3d 379, 386 (2004)) or performs duties that are "essential to the employer's ability to accomplish its mission" (Department of Central Management Services/The Department of Healthcare & Family Services v. Illinois Labor Relations Board, State Panel, 388 Ill.App.3d 319, 331 (2009)). And an employee whose policymaking role is merely "advisory and subordinate" will generally not be considered managerial (Village of Elk Grove Village, 245 Ill.App.3d at 122) unless he or she makes "effective recommendations" (internal quotation marks omitted), i.e., recommendations that are almost always adopted by management (Department of Central Management Services/Illinois Commerce Comm'n v. Illinois Labor Relations Board, State Panel, 406 Ill.App.3d 766, 775-77 (2010) (hereinafter CMS/ICC)). Managerial employees "possess and exercise authority and discretion which broadly effects [sic] a department's goals and means of achieving its goals." (Internal quotation marks omitted.) County of Cook, 351 Ill.App.3d at 386.

         ¶ 19 The second part of the statutory test emphasizes that a managerial employee's authority "extends beyond the realm of theorizing and into the realm of practice." CMS/ICC, 406 Ill.App.3d at 774. In other words, "[a] managerial employee not only has the authority to make policy but also bears the responsibility of making that policy happen." Id. at 774-75. Such an individual "oversees or coordinates policy implementation through [the] development of means and methods of achieving policy objectives, determines the extent to which the objectives will be achieved, and is empowered with a substantial amount of discretion to determine how policies will be effected." Department of Central Management Services v. Illinois State Labor Relations Board, 278 Ill.App.3d 79, 87 (1996).

         ¶ 20 We reject the Union's first argument that it was improper for the Board to construe the word "predominantly" in section 3(j) of the Labor Relations Act to mean either "superiority in importance or numbers." As the Union acknowledges, that construction was recently articulated by this court in AFSCME, 2014 IL App (1st) 130655, ¶¶ 28-29, where we were asked to consider the managerial status of three attorneys working in the Commission's solicitor section. Noting that the "strict numerical approach" had been rejected in similar cases (see Secretary of State v. Illinois Labor Relations Board, State Panel, 2012 IL App (4th) 111075, ¶ 110; Department of Central Management Services, 278 Ill.App.3d at 86) and that the word "predominant" can mean "superiority in importance or numbers, " we concluded that the amount of time an employee spends on managerial tasks is not determinative of the employee's managerial status. (Internal quotation marks omitted.) Id. ¶¶ 29, 31.

         ¶ 21 The Union insists that this definition of "predominantly" is at odds with statements in certain of our prior opinions. In CMS/ICC, 406 Ill.App.3d at 774, for example, we noted that the first part of section 3(j) of the Labor Relations Act "describes the nature of the work to which the individual devotes most of his or her time." (Emphasis added.) However, the focus of that case was whether the Commission's ALJs were effective decision-makers because their recommendations were accepted by the Commission almost all of the time, not what percentage of the time the ALJs were engaged in any particular activities. Id. at 779.

         ¶ 22 The Union has failed to persuade us that a few apparently contradictory words in an earlier case require us to reject the well-reasoned construction of the word "predominantly" presented in AFSCME. And the Union's reference to section 3(r) of the Labor Relations Act, defining a "supervisor" as someone who, among other things, "devote[s] a preponderance of their employment time to exercising [supervisory] authority" (emphasis added) (5 ILCS 315/3(r) (West 2010)), merely highlights language that could have, but was not, included in section 3(j)'s definition of a managerial employee. Thus, we reject the Union's first complaint about the Board's legal analysis.

         ¶ 23 In reference to its second legal argument, we agree with the Union that it would have been incorrect for the Board to conclude that an employee who functions as an informational gatekeeper must necessarily be a managerial employee. In AFSCME, 2014 IL App (1st) 130655, ¶¶ 42-43, we held that a Commission lawyer who merely flagged issues for her supervisors to review was not a managerial employee, absent other responsibilities bringing her within the statutory definition. We rejected the Board's argument in that case that the employee effectively decided whether the Commission would act on a particular issue because issues not flagged by her would not be considered by the Commission. We concluded that such policy-making "through omission, " by an employee who did not "even recommend a particular course of action, " was a "limited" and "tenuous" form of influence that could only result from the employee's inadequate performance of her duties, i.e., her failure to identify issues of import to the Commission.

         ¶ 24 In this case, however, as discussed in more detail later in this opinion, we conclude that the Board's findings that Torsten Clausen and Harry Stoller were managerial employees should be upheld. Although the Board relied on Mr. Clausen's role as an informational gatekeeper, its conclusion that he was a managerial employee can be upheld on the alternative basis that the statute that created his job makes it clear that he is a manager as a matter of law. And this court may affirm the decision of an administrative agency when justified in law "for any reason disclosed by the record." Pedersen v. Village of Hoffman Estates, 2014 IL App (1st) 123402, ΒΆ 48. Although the Board also cited Mr. Stoller's "gatekeeping" functions, its determination that he was a managerial employee was based on the fact that Mr. Stoller has ultimate responsibility for making certain Commission decisions and is furthermore supported by other evidence of his managerial ...

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