Earning High Marks for Privatization in Pinckney

In 1991, the Pinckney School District in Pinckney, Michigan, attempted to outsource noninstructional services—such as student busing—to private firms. The school board battled for outsourcing of noninstructional services with the intention of investing the expected savings back into the schools. The MEA and its local operatives had no intention of letting that happen (despite the fact that the MEA has contracted out at its headquarters—and with nonunion labor).

Until recently, Michigan law affecting the privatization of noninstructional services in K-12 public schools made outsourcing in school districts nearly impossible. As late as 1994, a school board’s decision to contract out was still a mandatory subject of collective bargaining. This meant that a teachers’ union could demand that a school district refrain from outsourcing noninstructional services as part of its agreement. Tying up teacher contract negotiations with collateral issues like noninstructional outsourcing was commonplace.

The legal minefield that had thwarted the efforts of some well-intentioned districts, or in other cases had slowed privatization progress to a snail's pace, was swept clean.

The experience of a few dedicated school boards that nonetheless tried to privatize may have persuaded legislators to change then-current law. With a small provision in Public Act (PA) 112 of 1994, the legislature and governor were able to facilitate outsourcing in Michigan public schools. The legal minefield that had thwarted the efforts of some well-intentioned districts, or in other cases had slowed privatization progress to a snail’s pace, was swept clean.

In June 1991, the Pinckney School Board voted unanimously to authorize an independent study of contracting for transportation services, including management, fleet and labor components. After the study, the board solicited bids from selected providers. The bids suggested that privatization would save 18% to 20% annually.

These savings were to be combined with $500,000 in proceeds from the sale of Pinckney’s deteriorating bus fleet, and reinvested in capital items, books, lab equipment, and a "mini-grant" fund for teachers to draw from when they wanted to attend professional development courses.

The Pinckney District bus drivers were working without a contract when the school board decided to pursue the option of contracting out. In the fall of 1991, the board hired a new negotiator, and reopened bargaining with a proposal that would allow the district to outsource. The MEA’s response, through its chief bargaining representative was reported in the press as saying, "No, hell, no!"

Negotiations were thereafter difficult. The union’s opposition to privatization at the bargaining table spilled over into acrimonious verbal attacks on trustees at board meetings. Still, the district negotiated in good faith as the union obfuscated issues and delayed decision making.

By July, 1993, it was clear that the negotiating positions were so entrenched that further discussions would be futile. The single issue of contracting out made an agreement seem very unlikely. Finally, the board declared the obvious—an impasse—and voted to contract with a private vendor that had vast experience in partnerships with public schools across the country.

The next day, the Pinckney School Board was sued by the union. The board was enjoined by the court order from moving forward with its intent to privatize. The judge evidently thought more negotiations would result in agreement.

The union representing Pinckney school employees in this case was able to stall board privatization efforts in court with what is called "impact bargaining." Before PA 112, the teachers’ unions would block many efforts to privatize services by arguing the effect that such a contract would have on the bargaining unit. This type of bargaining, also known as "impact bargaining," would halt contracting out measures without directly addressing the issue of whether a proposal was good for the school district. Instead, a negative impact on any person currently working under the union’s contract, whether that would include displacement, transfers or decreased workload, would be sufficient to block implementation of the school’s plan.

Not until June 1994, did the circuit court modify its preliminary injunction to allow the district to sell its fleet and enter into a management contract for transportation. The court further ordered that the district continue bargaining with the union regarding the labor component. During the year of court required bargaining, the parties remained intransigent, each equally adamant and immovable. But the legal obligations remained unchanged because the union negotiator swore in court that no impasse existed and agreement on privatization was possible.

Finally, in January 1995, the court lifted its preliminary injunction and allowed the district to contract with the party of its choice, as the board had voted to do a year and a half earlier in a lawful vote in open session. After filing twelve counts against the board, opponents of privatization in Pinckney were turned back.

In the interim, the legislature had taken action which would preclude the kind of legal stonewalling the MEA had used in Pinckney. Public Act 112 of 1994 was passed by the legislature, signed by the governor, and took effect statewide in 1995.

The board’s privatization efforts were temporarily halted again while various unions argued in court that their members’ First Amendment rights of association and free speech were violated. The unions also argued that its members were denied equal protection under the law. The Michigan Supreme Court disagreed. The new law is constitutional. It reads, in part:

(3) Collective bargaining between a public employer and a bargaining representative of its employees shall not include the decision of whether or not to contract with a third party for one or more noninstructional support services, or the procedures for obtaining the contract, or the identity of the third party; or the impact of the contract on individual employees of the bargaining unit.

(4) The matters described in subsection (3) are prohibited subjects of bargaining between a public school employer and a bargaining representative of its employees, and, for the purposes of this act, are within the sole authority of the public school employer to decide.

Outsourcing for noninstructional services are now considered to be illegal subjects of bargaining. This prohibits any kind of agreement over the subject matter, and contract provisions that address an illegal subject are unenforceable. Along with tougher anti-strike provisions contained in PA 112, teacher unions are no longer able to foist inflated costs on districts by using the contracting of noninstructional services as a bargaining topic.

Should a school board wish to contract for transportation or any other support service, they are no longer required to prove that an impasse exists before unilateral implementation. Transition from in-house services to contract service is, thanks to PA 112, as smooth as the school wishes.

Editor’s Note: As this edition of MPR went to print, the current superintendent of the Pinckney School District, Michael Couchman, recommended converting custodial, maintenance, and grounds keeping services back to an "in-house" function.