Budget Discussions Do Not Equal Negotiations

In late 2012, the City of Portland, Oregon began its budget process for the 2013-14 fiscal year anticipating a shortfall. The City asked the Fire Bureau to develop its budget using a modified zero-based budget approach, requesting up to 90 percent of current appropriation levels with prioritized add-back packages for cut items. The Bureau developed its proposed budget through a budgetary advisory committee. Alan Ferschweiler, the president of the Portland Fire Fighters’ Association, served on the committee.

On May 15, 2013, the mayor submitted a proposed budget to the City Council reflecting a projected budget reduction for the Bureau of $4.4 million (4.7 percent). Ferschweiler met three times with the mayor’s budget liaison to discuss and negotiate how the Bureau would implement the budget cuts, including consideration of the availability of a federal grant that might fill budget gaps. On June 20, 2013, the City Council approved the budget.

When the City implemented the cutbacks, the Association filed an unfair labor practice charge contending that the City breached its obligation to bargain in good faith by not bargaining before implementing the cutbacks. The Oregon Court of Appeals agreed with the Association.

The City argued that the budget discussions in which Ferschweiler participated constituted collective bargaining. The Court found otherwise, concluding that “the record is undisputed that the parties were engaged in budget discussions. They did not consider themselves to be engaged in collective bargaining over employment relations. The individuals who would ordinarily sit at the bargaining table to negotiate with respect to employment relations were not even present.

“Additionally, it is undisputed that the parties’ collective bargaining agreement, which controlled, required that any side agreements to the collective bargaining agreement were not binding unless reduced to writing and signed by the Association’s president and the head of the City’s Bureau of Human Resources. There was no written and signed agreement as to the proposed changes.”

The City also argued that one of its changes – from a rank-ordered promotion list to an unranked list of candidates – was not mandatorily negotiable. The Court disagreed, holding that “the City does not seriously contend that promotion processes are not a mandatory subject of bargaining; nor could it. Indeed, the City concedes that procedures governing promotions are mandatory subjects for bargaining.

“The City would be hard-pressed to argue that the processes by which an employee seeks promotion do not concern an employee’s monetary benefits or implicate conditions of employment. Here, the City changed past procedures by promoting candidates who passed the interview with the Fire Chief but who were not ranked highest on a ranked eligibility list. By doing so without bargaining, the City committed an unfair labor practice.”

Portland Fire Fighters’ Association v. City of Portland, 302 Or. App. 395 (2020).