ATTORNEY FOR APPELLANTS: ATTORNEYS FOR APPELLEES:
BRENDA FRANKLIN RODEHEFFER Marion Community Schools
Monday, Rodeheffer Jones & Albright Board of Trustees
Indianapolis, Indiana MICHAEL J. KILEY
CRAIG R. PERSINGER
Kiley, Kiley, Harker Michael
Marion Teachers Association
RICHARD J. DARKO
ERIC M. HYLTON
Lowe Gray Steele & Darko, LLP
KAREN M. FREEMAN WILSON
Attorney General of Indiana
Deputy Attorney General
SUPREME COURT OF INDIANA
TERESA FRATUS, SHARON A. WILSON, )
and WILMA B. HIGDON,
) Supreme Court Cause Number
Appellants-Plaintiffs, ) 27S02-0005-CV-295
MARION COMMUNITY SCHOOLS )
BOARD OF TRUSTEES, and MARION ) Court of Appeals Cause Number
TEACHERS ASSOCIATION, ) 27A02-9901-CV-12
APPEAL FROM THE GRANT CIRCUIT COURT
The Honorable Thomas R. Hunt, Judge
Cause No. 27C01-9802-CP-59
ON PETITION TO TRANSFER
June 6, 2001
In a two-count complaint three former teachers sued their union and their school
board over a dispute concerning a reduction in retirement benefits. The complaint
alleged that the union breached its duty of fair representation and that the
school board breached the terms of a collective bargaining agreement. On grounds
that the teachers failed to exhaust their administrative remedies, the trial court dismissed
the complaint for lack of subject matter jurisdiction. In a split decision,
the Court of Appeals reversed the trial courts judgment concluding that exhaustion of
remedies was unnecessary. Fratus v. Marion Cmty. Schs. Bd., 721 N.E.2d. 280
(Ind. Ct. App. 1999). We grant transfer and affirm in part and
reverse in part the judgment of the trial court.
Facts and Procedural History
Teresa Fratus, Sharon Wilson, and Wilma Higdon (Teachers) were employed as classroom teachers
in the Marion public school system. In 1997, Teachers gave formal notice
to the Marion Community Schools Board of Trustees (School Board) of their intent
to accept early retirement the following year. Teachers anticipated that their retirement
benefits would be calculated under the terms of a then existing collective bargaining
agreement known as the 1995-1997 Master Contract. Teachers were members of the
Marion Teachers Association (Union), the exclusive bargaining unit for teachers in the Marion
public school system. Shortly after Teachers gave written notice of their intent,
the Union and the School Board renegotiated the agreement and produced a 1997-2000
Master Contract. When Teachers retired, the School Board paid them benefits according
to the new agreement under which their early retirement benefits were dramatically reduced.
Teachers filed a complaint alleging that the Union renegotiated the collective bargaining agreement
to reduce retirement benefits and thus breached its duty of fair representation.
The complaint also alleged that the School Board breached its contract with Teachers
by failing to pay retirement benefits as outlined in the original Master Contract.
On motion by the School Board and the Union, the trial court
dismissed Teachers complaint under Indiana Trial Rule 12(B)(1) for lack of subject matter
jurisdiction. On review, a divided Court of Appeals reversed the judgment of
the trial court.
Standard of Review
In ruling on a motion to dismiss for lack of subject matter jurisdiction,
the trial court may consider not only the complaint and motion, but also
any affidavits or evidence submitted in support. Perry v. Stitzer Buick GMC,
Inc., 637 N.E.2d 1282, 1287 (Ind. 1994). In addition, the trial court may
weigh the evidence to determine the existence of requisite jurisdictional facts. Id.
Our standard for reviewing the trial courts ruling on a motion to
dismiss for lack of subject matter jurisdiction is dependent upon whether the trial
court resolved disputed facts and if the trial court resolved disputed facts, whether
it conducted an evidentiary hearing or ruled on a paper record. GKN
Co. v. Magness, 744 N.E.2d 397, 401
(Ind. 2001). Where as here, the facts before the trial court are
undisputed we review the trial courts ruling de novo. Id.
I. Teachers claim against the Union
At the heart of the parties argument is the question of whether Teachers
were required to file their complaint with the Indiana Education Employment Relations Board
(IEERB) before they were entitled to judicial review. As the Court of
Appeals noted, [i]f the Teachers were required to file their claims with
the IEERB, the trial courts order was correct as [a] partys failure to
exhaust its administrative remedies creates a jurisdictional defect and makes a T.R. 12(B)(1)
motion to dismiss for lack of subject matter jurisdiction appropriate. Fratus, 721
N.E.2d at 285 (quotation omitted).
The Certificated Educational Employee Bargaining Act (Act) recognizes the right of school employees
to organize and collectively bargain through school employee associations. Ind. Code § 20-7.5-1-1(b).
The Act creates a method to resolve unfair practices by both school
employers and school employee organizations. To obtain relief from unfair practices, a
school employee may file a complaint with the IEERB,
See footnote which then hears and
decides the claim. I.C. § 20-7.5-1-11;
Evansville-Vanderburgh Sch. Corp. v. Roberts, 464
N.E.2d 1315, 1317 (Ind. Ct. App. 1984). Once the IEERB takes final
action, a school employee may petition for judicial review. I.C. § 4-21.5-5-4,
5. In sum, a person may file a petition for judicial review
only after exhausting all administrative remedies available within the agency authorized to exercise
judicial review. I.C. § 4-21.5-5-4; Town Council of New Harmony v. Parker,
726 N.E.2d 1217, 1224 (Ind. 2000), amended on rehg in part by 737
N.E.2d 719 (Ind. 2000); State Bd. of Tax Commrs v. Mixmill Mfg. Co.,
702 N.E.2d 701, 704 (Ind. 1998) (Administrative agencies have technical expertise in areas
that the courts do not. [I]n nearly all circumstances their rulings are
required before resort to a court is available.).
Teachers contend they are not required to pursue this matter through the IEERB
because the agency has no authority to adjudicate claims of a unions breach
of duty of fair representation. In support, Teachers point out that the
Act defines unfair practice and the definition does not include the breach of
duty of fair representation.
Teachers are correct that the Act does not specifically list the duty of
fair representation as an unfair practice. If this were the end of
the analysis, then we would be compelled to conclude that Teachers were not
required first to pursue administrative remedies through the IEERB. However, the question
of whether the breach of the duty of fair representation is an unfair
practice is a case of first impression in Indiana. When interpreting an
Indiana statute for the first time, it is appropriate to look to the
decisions of other jurisdictions that construe identical statutory provisions. Bd. of Commrs
of County of Knox v. Wyant, 672 N.E.2d 77, 79-80 (Ind. Ct. App.
1996). The National Labor Relations Act (NLRA) is the federal counterpart to
the Act. The two are nearly identical with many parallel provisions and
See footnote We therefore look to federal case law for guidance.
See Indiana Civ. Rights Commn v. County Line Park, 738 N.E.2d
1044, 1048 (Ind. 2000) (relying on federal case authority interpreting the federal Fair
Housing Act as a guide to interpreting Indianas Fair Housing Act).
In 1935, Congress enacted the NLRA, which allows employees to bargain collectively through
representatives of their own choosing. 29 U.S.C.A. § 157 (1998). Through
its enactment, Congress intended to exercise whatever constitutional power given to it to
regulate commerce by adopting measures to prevent or control specified unfair labor practices
that provoke or tend to provoke strikes or labor disturbances affecting interstate commerce.
NLRB v. Fainblatt, 306 U.S. 601, 607 (1939). Congress defined what
it meant by unfair labor practices and gave the National Labor Relations Board
(NLRB) authority to hear and decide such claims. 29 U.S.C.A. §§ 158(b),
160 (1998). Any person aggrieved by the NLRBs final order may seek
judicial review. 29 U.S.C.A. § 160(f) (1998).
Just as the Act does not include fair representation claims in its catalog
of unfair practices by school employee organizations, the NLRA also does not specifically
list it as an unfair practice by labor organizations. See 29 U.S.C.A.
§ 158(b) (1998). Nonetheless, federal case authority identifies such a breach by
labor organizations as an unfair labor practice under NLRA. See Vaca v.
Sipes, 386 U.S. 171, 177 (1967) (It is now well established that, as
the exclusive bargaining representative of the employees in [complainants] bargaining unit, the Union
had a statutory duty fairly to represent all of those employees, both in
its collective bargaining with [employer] and in its enforcement of the resulting bargaining
agreement. (citations omitted) (emphasis added)). As one court explained:
This fiduciary duty of fair representation in the negotiation, administration and enforcement of
collective bargaining agreements has been imposed upon unions by federal law as an
obligation correlative to the right of a union to represent all the employees
in a bargaining unit as their exclusive bargaining agent despite the contrary wishes
of a minority. . . . It has since been expanded as
a principle of general application to collective bargaining representatives, who are required to
serve the interest of all members without hostility or discrimination toward any, to
exercise [their] discretion with complete good faith and honesty, and to avoid arbitrary
Bazarte v. United Transp. Union, 429 F.2d 868, 871 (3d Cir. 1970) (emphasis
added). We agree with the rationale of the federal courts and conclude
that a breach of the duty of fair representation by a school employee
organization is an unfair labor practice under the Act.
See footnote Accordingly, Teachers claim
against the Union is a matter for exclusive IEERB determination. However, this
does not mean that the trial court lacks jurisdiction over the entire case.
Because another of Teachers claims is within the trial courts jurisdiction, as
explained in greater detail below, although the trial court must refer to the
IEERB that portion of Teachers complaint asserting claims against the Union, the trial
court nonetheless retains jurisdiction over the entire case until the IEERB reaches a
final decision. Thereafter the trial court may address all claims properly before
II. Teachers claim against the School Board
Asserting that the School Board failed to pay them according to the terms
of the collective bargaining agreement in place at the time the retirement notices
were given, Teachers complain the School Board breached its contract. As such,
according to Teachers, [t]his case is and was a proper matter of jurisdiction
for the trial court. Br. of Appellant at 15. The construction
of contracts and actions for their breach are matters of judicial determination.
Austin Lakes Joint Venture v. Avon Utils., Inc., 648 N.E.2d 641, 649 (Ind.
1995); Suyemasa v. Myers, 420 N.E.2d 1334, 1339 (Ind. Ct. App. 1981).
This is not a matter over which administrative bodies generally assume jurisdiction, at
least with respect to a freestanding claim. See Austin Lakes, 648 N.E.2d
at 650 (finding no legal or factual questions reserved for agency decision making
in a breach of contract claim). By dismissing Teachers complaint in total,
the trial court effectively denied Teachers the only forum before which their breach
of contract claim against the School Board could be heard and decided.
Indeed, sometime after the trial court entered its judgment, Teachers presented their claim
to the IEERB, which dismissed it asserting the Complainants have alleged a purely
contractual issue that is, pursuant to which contract is the School Corporation
obligated to pay retirement benefits to Complainants over which IEERB has no
jurisdiction. App. to Reply Br. of Appellant at 6 (quoting Order of
IEERB Hearing Examiner). We conclude therefore that the trial court erred in
dismissing Teachers claim against the School Board. Rather, this is a claim over
which the trial court has jurisdiction.
Having determined that Teachers claim against the Union is a matter for
the exclusive jurisdiction of the IEERB, we are confronted here with a case
where one of the issues is a matter for administrative determination while the
other is a matter for the court to decide. In that instance
we invoke the doctrine of primary jurisdiction which:
comes into play when a claim is cognizable in a court but adjudication
of the claim requires the resolution of issues which, under a regulatory scheme,
have been placed within the special competence of [an] administrative body; in such
a case, the judicial process is suspended pending referral of such issues to
the administrative body for its views.
Austin Lakes, 648 N.E.2d at 645 (quoting Hansen v. Norfolk & W. Ry.
Co., 689 F.2d 707, 710 (7th Cir. 1982)). In Austin Lakes, we
set forth the analysis the trial court should undertake when confronted with cases
in which its subject matter jurisdiction is contested on grounds of primary jurisdiction
or exhaustion of remedies. Id. at 646-49. We also identified various
fact patterns under which the issue might arise. Id. For example,
under one scheme, where an issue in the case is one that can
be decided by either the trial court or by an administrative agency, the
decision to invoke the doctrine of primary jurisdiction is within the trial courts
discretion. Id. at 647. However, a trial court must invoke the
doctrine of primary jurisdiction where one (but less than all) of the issues
in the case requires exhaustion of remedies before judicial review can occur.
Id. That is precisely the set of facts we have before us.
The trial court in this case must determine one of the issues
while the other must first be presented to an administrative agency before judicial
review may occur. Thus, while the trial court retains jurisdiction over
Teachers contract claim against the School Board, applying the doctrine of primary jurisdiction
requires the trial court to suspend any action on the merits until the
IEERB renders a final decision on Teachers claim against the Union.
We affirm that portion of the trial courts judgment dismissing Teachers complaint against
the Union. In all other respects, the judgment of the trial court
is reversed. We remand this cause to the trial court for further
proceedings consistent with this opinion.
SHEPARD, C.J., and DICKSON, SULLIVAN and BOEHM, JJ., concur.
The IEERB is the administrative agency created to administer the provisions
of the Act. I.C. § 20-7.5-1-9.
Footnote: For example, compare Indiana Code section 20-7.5-1-7(b) that reads: It
shall be an unfair practice for a school employee organization or its agents
to: (1) interfere with, restrain or coerce (a) school employees in the
exercise of the rights guaranteed by this chapter . . . . with
29 U.S.C.A. § 158(b) (1998) that states: It shall be
an unfair labor practice for a labor organization or its agents(1) to restrain
or coerce (A) employees in the exercise of the rights guaranteed in section
157 of this title . . . .
Also compare Indiana Code section 20-7.5-1-6(a) that reads: School employees shall have
the right to form, join, or assist employee organizations, to participate in collective
bargaining with school employers through representatives of their own choosing . . .
. with 29 U.S.C.A. § 157 (1998) that states: Employees shall have
the right to self-organization, to form, join, or assist labor organizations, to bargain
collectively through representatives of their own choosing . . . .
This conclusion is supported also by the doctrine of legislative acquiescence.
Although not binding, [a] long adhered to administrative interpretation dating from the
legislative enactment, with no subsequent change having been made in the statute involved,
raises a presumption of legislative acquiescence which is strongly persuasive upon the courts.
Ind. Bell Tel. Co., Inc. v. Indiana Utility Reg. Commn, 715 N.E.2d
351, 358 (Ind. 1999). The Certificated Educational Employee Act was first enacted
in 1973. For at least a quarter of a century the IEERB
has interpreted the Act as including the duty of fair representation as an
unfair practice and has routinely adjudicated such clams. See, e.g., Ruth Ann
Teague, U-76-5-4690, 1976-77 IEERB Ann. Rep. 593 (1976-77); Independent Educators of Fort Wayne,
Inc., U-83-3-0235, 1983 IEERB Ann. Rep. 103 (1983); Sondra G. Estep, U-92-06-4710, 1994
IEERB Ann. Rep. 111 (1994); Margaret M. Bunce, U-95-26-0235, 1996 IEERB Ann. Rep.
70 (1996); Linda C. Sharp, U-98-11-2940, 1998 IEEB Ann. Rep. 26 (1998); Carolyn
Ursey, U-98-13-5705, 1999 IEERB Ann Rep. (1999). If the General Assembly were
dissatisfied with IEERBs long-standing interpretation, we presume it would have amended the Act