## Facts

- Matthew Kennedy was employed for about ten years as a band teacher in the Hinsdale public school system and was represented by the Hinsdale Federation of Teachers under a collective bargaining agreement (CBA).
- Over time, student participation in the band program dropped substantially; the program eventually relied on graduate students and community members to supplement performances.
- The school district notified Kennedy that his teaching position would not be renewed due to declining enrollment in the band program.
- An earlier nonrenewal attempt for the 2008–2009 school year was set aside by the State Board of Education because the district’s notice was not timely.
- On March 26, 2009, the district again issued a nonrenewal notice, citing the same enrollment-based reasons.
- After deciding not to renew Kennedy, the district did not continue operating its own band program; instead, it offered interested students the option to participate in another area school’s band program or to take online band lessons.
- The CBA provided a grievance process culminating in binding arbitration for certain disputes, but excluded matters categorized as district management prerogatives and excluded teacher nonrenewals.
- The CBA treated some disputes as arbitrable, including those involving a “reduction in force” (RIF) and subcontracting of a teacher’s position.
- Kennedy and the union filed unfair labor practice charges with the New Hampshire Public Employee Labor Relations Board (PELRB), alleging the district’s conduct amounted to (1) impermissible subcontracting of bargaining-unit work and (2) a violation of the district’s RIF policy.
- The PELRB dismissed the charges, concluding the dispute was a nonrenewal tied to a decision to discontinue the band program, and therefore was not an arbitrable subcontracting or RIF matter under the CBA.
- Lower courts affirmed, and Kennedy and the union appealed to the New Hampshire Supreme Court.

## Issues

1. Whether the district’s post-nonrenewal arrangement—sending interested students to another district’s band program or to online instruction—constituted subcontracting of bargaining-unit work requiring arbitration under the CBA.
2. Whether the district’s action should be treated as a reduction in force triggering the CBA’s RIF provisions and arbitration, rather than a nonrenewal excluded from arbitration.

## Decision

- The New Hampshire Supreme Court affirmed the PELRB’s dismissal of the unfair labor practice charges.
- The court accepted the PELRB’s characterization of the district’s conduct as a management decision to discontinue its band program and not renew Kennedy, rather than a transfer of continuing bargaining-unit work to outside providers.
- Because the district ended its own band program, the court agreed there was no subcontracting within the meaning of the CBA that would require arbitration.
- The court also upheld the PELRB’s conclusion that the district’s action was not a RIF within the CBA’s arbitrable category, but instead a teacher nonrenewal tied to program elimination—an area the CBA excluded from arbitration.
- Applying a deferential review to the PELRB’s fact finding and its application of law to the record, the court found the agency’s conclusions reasonable and supported by the evidence.

## Legal Principles

- Under New Hampshire public-sector labor law, “terms and conditions of employment” subject to bargaining exclude managerial policy that is reserved to the public employer.
- Decisions about whether to offer, discontinue, or restructure educational programs are generally managerial policy, even when those decisions affect staffing.
- Whether a dispute must proceed to arbitration depends on the CBA’s scope: parties may exclude categories such as management prerogatives and teacher nonrenewals while making other categories (such as subcontracting or RIF disputes) arbitrable.
- A subcontracting claim typically requires that the employer maintain the work and assign it to non-unit personnel or outside providers; ending the program so the work no longer exists within the employer’s operations is not the same as subcontracting.
- A reduction in force clause generally applies to layoffs or position reductions within a continuing operation; a nonrenewal tied to discontinuing the underlying program may fall outside the RIF category when the CBA treats nonrenewals as non-arbitrable.
- On appeal from the PELRB, courts defer to the agency’s factual findings and uphold its application of law to fact unless it is unreasonable or contrary to law.

## Conclusion

The New Hampshire Supreme Court held that the Hinsdale School District’s decision not to renew its band teacher and to discontinue its in-district band program—offering students other options instead—was a management policy decision and a nonrenewal under the CBA, not arbitrable subcontracting or a reduction in force, and it therefore affirmed the PELRB’s dismissal of the unfair labor practice charges.


In re Kennedy, 27 A.3d 844 (2011)