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Interest Arbitration Sample Articles:BELLEVUE FIREFIGHTERS AWARDED LARGE INCREASES SHERIFF'S DEPUTIES RECEIVE MODEST WAGE INCREASE AND PARTIAL DEPENDENT MEDICAL COVERAGE SPOKANE CORRECTIONS OFFICERS RANKED NEAR BOTTOM OF PAY LIST CITY OF BURLINGTON, POLICE OFFICERS GIVE AND TAKEON BENEFITS FOR FIRST CONTRACT PORT
ANGELES POLICE RECEIVE SIX PERCENT INCREASE
The award in the 1998-2000 interest arbitration between the
City of Bellevue and Firefighters Union Local 1604 heavily favored the union.
Arbitrator Michael H. Beck granted most of the union's requested increases
including base wages, longevity pay, and vacation accrual to nudge the
bargaining unit closer, but not up to, the average of the comparables.
However, he refused to reduce the number of hours in a workweek even though
the union's request was close to the average. The arbitrator's awards for the
various categories resulted in an increase in the total hourly compensation
of a 13-year employee by 6.7% in the first year of the new contract. This
increase did not raise the Bellevue bargaining unit up to the comparables'
average, but did place the unit in the top half of the comparables.
Local Labor Market Most Influential When Choosing Comparables Arbitrator Beck noted that the Bellevue Fire Department is a thoroughly professional, elite organization. Its achievements include a Class II Insurance Service rating and accreditation by the Commission on Fire Accreditation International, a status awarded to only a handful of departments worldwide. The Bellevue Fire Department covers an area with the second largest assessed valuation in the state. The parties have had a contentious bargaining history, requiring arbitration to settle three out of four contracts executed in the 1980's. Arbitrator Beck noted that two of the three arbitrators chose jurisdictions exclusively from the Puget Sound area, while the third arbitrator did not use comparables. While noting that the employer's list was statutorily sound, he adopted the union's list of 11 comparables, concluding that in selecting a list of comparators, it is important to be consistent with the parties' bargaining history. Further, a local labor market is the best determination of the cost of goods and services. The 11 comparators chosen were Everett, Kent, King County #4 (Shoreline), King County #39 (Federal Way), King County #10 (Issaquah), Kirkland, Pierce County #2 (Lakewood), Redmond, Renton, Snohomish County #1 (Alderwood), and Tacoma. 100% CPI-W and 13-Year Benchmark Selected Arbitrator Beck noted the merit of the employer's argument that the CPI-W has allegedly overstated the cost of goods and services, but decided to use it anyway in calculating base wages. He reasoned that the final report on the accuracy of the CPI-W, along with recommendations for corrections, had yet to be published. The application of a trailing CPI adjustment, at 100%, produced 3.7%, 2.5% and 3% increases for each year of the contract. This award placed the Bellevue unit below, but within one percent of, the comparables' average, using the wage for the firefighter with the average length of service – 13 years -- as the benchmark. The arbitrator rejected the employer's argument that the bargaining unit should be viewed as a group of "firefighter-plus" because over 53 percent of the unit held positions higher than basic firefighter. He opined that base wages for firefighter units historically have been calculated for basic firefighters, with premiums paid for special positions, such as lieutenant, captain, paramedic, or engineer, and that the parties themselves had used this method. The arbitrator also rejected the employer's request for a delayed wage increase, citing the need to remain consistent with the parties' bargaining history. New Longevity Pay Program Awarded Despite its rejection by all three past interest arbitrators, Arbitrator Beck granted the union its longevity pay schedule of 1%-5% for five, 10, 15, 20 and 25 years of service, respectively. First, he pointed to the union's argument that 10 of the 11 comparators have longevity pay schedules and that three also offer educational incentive pay. Second, he explained that this new program would still leave Bellevue firefighters behind the comparables' average. Finally, he noted that calculations in earlier negotiations regarding total compensation included both education and longevity pay. Vacation Accrual Award Doesn't Match Union's Request The union requested substantial increases in vacation accrual, arguing that such increases were needed to bring Bellevue close to the comparables' average. The employer pointed out that the union failed to consider vacation pay in conjunction with holiday pay, for which Bellevue outstrips its comparators by 13.2%. The arbitrator agreed with the employer's reasoning and granted an increase in vacation accrual that when considered with holiday pay, approached the comparables' average. Workweek Reduction Inappropriate The arbitrator refused to grant the union's requested reduction in the workweek from 49.10 hours to 47.95 hours, which would have been accomplished by granting additional "Kelly" days. The arbitrator explained that under the union's reasoning, the reduction in work hours for four-year period preceding the new contract would have been 5.01%. He considered this percentage inappropriately large and noted that substantial workweek reductions were granted in the last two collective bargaining agreements. City of Bellevue and IAFF Local 1604, PERC No. 14037-I-98-309 (Arb. M.
Beck, 1999)
Comparables Similar in Size, Proximity Given More Weight
Arbitrator Gary L. Axon ruled on three issues for a 1999-2001
collective bargaining agreement between Spokane County and its bargaining
unit of corrections officers represented by the Washington State Council of
County and City Employees, Council 2, AFSCME Local 492. While the wage award
placed the employer toward the bottom of the list of comparators, he reasoned
that in a group where four out of five cities are located in Western
Washington, Spokane County is appropriately placed. As to other issues, he
declined to expand shared leave or install a quartermaster program.
Comparables List Adopted From Former Arbitration Award The arbitrator found no Eastern Washington jurisdiction remotely comparable to Spokane County except for Yakima County which has only half the population. He looked west of the Cascades to round out the list, which in addition to Yakima County included Clark, Kitsap, Pierce and Snohomish counties. The parties agreed to use these five comparators, and this list is the same one adopted in a recent arbitration award involving the Spokane County Deputy Sheriffs Association. He was not convinced by the employer's argument that such a small list would damage the predictability of future bargaining. While agreeing that a list of five is on the low side, he noted that a small list makes it easier to collect and manipulate reliable data and draw accurate conclusions. Eastern Washington "Discount Factor" Weighs Heavily in Wage Award The union proposed salary increases of 4%, 4% and 3% for each of the three years of the new contract. The employer proposed yearly increases of 2%, 2% and 3%, with the 3% split so that 1.5% would be effective January 2001 and the other 1.5% effective July 1, 2001. The arbitrator found that the CPI did not justify the union's proposal and that the employer's meager increases would place it too far below the comparators. His award took into account the lucrative insurance package enjoyed by the bargaining unit and the fact that members have to pay for and maintain their own uniforms, unlike the comparable jurisdictions. He awarded increases of 3.5%, 3.5% and 3% for 1999, 2000 and 2001, respectively. These awards placed the bargaining unit second-to-last on the list for 1999 and last for 2000. "Spokane County correction officers certainly should not be placed in the category of a wage leader" when the comparables list is heavy with Western Washington counties, he wrote. Arbitrator Axon relied most heavily on Yakima County for comparison because of its Eastern Washington location. His wage award placed the bargaining unit $34 below Yakima County for 2000: It is a fact that on any list of comparators one jurisdiction will have to be ranked first and another last. ... The important fact is to maintain a wage and benefit package that is competitive and not so distanced from the comparators as to be considered substandard. The arbitrator decided that because of Spokane County's low rank on the list, a split increase for 2001 was inappropriate. Besides, he added that the employer could afford the entire 3% increase. Donating Sick Leave No Longer an Option The parties' most recent contract was silent on the subject of shared leave. However, Spokane County historically allowed employees to donate unused vacation time to fellow employees who were sick and had exhausted their leave banks. The employer expanded this program to include sick leave but later removed this option when sick leave usage spiraled out of control. The employer agreed to insert new contract language covering shared leave only with the option of donating vacation time to the program. It pointed out that vacation time is budgeted but sick time is not. The union proposed that bargaining unit members be allowed to donate compensatory time to the program and donate sick leave individually to fellow employees. The arbitrator concurred with the employer's reasoning and adopted its proposed language. He was concerned that allowing the donation of compensatory time, whose use is largely unregulated, "would place the County at risk of violating the Fair Labor Standards Act." Moreover, none of the comparators allow comp time or sick time as part of a shared leave program. Quartermaster System Good Idea But Language Too Vague The union argued that a quartermaster system should be implemented because it is the standard among the comparators. The employer was open to a system as long as it was cost-neutral. It pointed out that a monthly $35 uniform allowance was rolled into base pay in a previous contract. While he disagreed with the employer that it should be cost-neutral, the arbitrator found the union failed to provide sufficient information on exactly how much a quartermaster system would cost and rejected its proposed language as too vague, noting that contract language in the other jurisdictions is very detailed regarding maintenance and replacement of uniforms. Spokane County and AFSCME Local 492, PERC No. 14916-I-99-329 (Arb. G.
Axon, 2000)
In a dispute between the City of Port Angeles and Teamsters
Local 589, representing a unit of sworn police offers and sergeants, the sole
issue before Interest Arbitrator Jane R. Wilkinson was wages. The employer
had proposed a wage freeze for 1998, a six percent raise for 1999, and a
CPI-based increase for the contract's final year. The union had proposed a
retroactive 12% raise for 1998, followed by two successive CPI-based
increases.
Population, Assessed Valuation and Proximity for Comparators Regarding the selection of comparators, the arbitrator observed that: Although not all cases lend themselves to a simple population, proximity and valuation screen, utilizing those screens in this proceeding produces no significant distortions. Therefore, the Arbitrator will utilize the generally accepted approach in this case. In her final list of comparators, the arbitrator first selected five jurisdictions which both parties had included in their list of comparators: Aberdeen, Marysville, Mount Vernon, Mountlake Terrace and Mukilteo. She found that Oak Harbor was comparable demographically and noted the parties' history of using Oak Harbor, but found the employer's proposed use of Centralia more problematic. Although Centralia passed the basic population and assessed valuation screens, it had a relatively smaller population and was a greater distance from Port Angeles. She decided to include Centralia because no 1999 data was available for Aberdeen and Oak Harbor because those jurisdictions had not yet settled their contracts. The arbitrator found it inappropriate to add comparators from the central Puget Sound metropolitan area, citing the disparity in economic conditions between that area and Clallam County. She eschewed the use of three eastern Washington comparators as being unnecessary to devising a satisfactory list. She also found it unnecessary to perform a total revenue analysis, opining that this secondary indicator is appropriate only when the primary indicators of population, assessed valuation and location are unsatisfactory for the jurisdiction in question. Based on an analysis of the comparators, the arbitrator found that Port Angeles ranked fourth in population and assessed valuation and third in assessed valuation per capita. Benchmark: Top Step Base Plus Longevity The arbitrator agreed with the union that the traditional benchmark classification is top step base wage. Nevertheless, a longevity consideration is appropriate because it "acts as an additional step in wages and because comparisons can be easily made." She noted that 21 of the 27 bargaining unit members had been with the employer more than 10 years. Although the employer offered an educational incentive, its sporadic distribution made its use as a benchmark inappropriate. Moreover, making a suitable comparison with other jurisdictions was difficult. Significant Pay Lag Found, but Fiscal Climate Problematic After performing a pay analysis of Port Angeles' comparators, the arbitrator found its pay to lag significantly, noting that a "6% increase, even if offered for 1998, would not bring the majority of the bargaining unit up to the average of the comparators." On the other hand, the City's financial health was an important factor militating against a large pay increase: Regarding budgeting and surpluses, there is a fine line between excess caution and fiscal responsibility. While the City may have and continue to maintain enough of a cushion to pay a sizeable wage increase, such an increase, nevertheless, would impose a strain on its diminishing resources, in this Arbitrator's opinion. The arbitrator noted that assessed valuations were stagnant and the closure of a paper mill resulted in a significant revenue loss to the city. The arbitrator noted the evidence of lower labor market wages, higher unemployment, flat per capita and median household income in Port Angeles. Cost of living considerations likewise favored a conservative approach to wages, the arbitrator opined. On the subject of internal equity, responding to the union's plea for parity with the firefighters, the arbitrator found she should not delve in questions of "comparable worth." She also noted the employer's contention that when one considers the differing pay structures between its police and firefighters, the difference in wages was not significant. She found the fact that other municipal employees accepted a wage freeze in 1998 to be a significant but not necessarily controlling factor. Considerations pertaining to turnover favored the employer because of evidence that it has had no difficulty attracting qualified candidates based on existing pay and no difficulty in retaining them once hired. Six Percent Plus CPI Appropriate The arbitrator found the most important consideration favoring the union was that the employer's police wages trailed those of its comparators relative to its standing in assessed valuation and population. If the employer's rank were at the bottom, it might be reasonable to consider a pay rate that also would occupy that position. However, the employer ranked fourth in assessed valuation overall and third in per capita assessed valuation. "By comparison, the city ranks dead last for 1998 police officer wages at the entry, five, ten and fifteen-year marks," the arbitrator wrote. A six percent increase "would place it at a more respectable fifth spot at the ten and fifteen-year marks." A larger increase could not be justified in the uncertain economic climate. The arbitrator awarded the six percent increase to be split between the first and second year of the new contract and awarded a cost of living increase for the second and third contract years. City of Port Angeles and Teamsters Local 589, AAA 75 390 00215 98 (Arb. J.
Wilkinson, November 15, 1999) |
Addition of Dependent Coverage Costly, But Warranted
Arbitrator Greer ruled that the employer would pay 50% of the cost of health insurance of dependents in 2001, an entirely new benefit for the bargaining unit. He pointed out that his five preferred comparables all provide some sort of dependent coverage, the average of which is 50%. He noted that while other bargaining units employed by Walla Walla County (internal comparables) receive no dependent coverage, he considered external comparables more important. He refused to increase the life insurance coverage, pointing out that his preferred comparators did not provide it.
Wage/Salary Step Schedule Tweaked to Mirror Trend of Comparators
The parties agreed that the benchmark wage comparison figure is the five-year pay for a deputy because "At five years, a deputy has completed training, has had significant practical experience, and is in a position to be a journeyman law enforcement officer."
The current practice advances deputies through six pay steps over seven years. The arbitrator brought the parties in line with comparable jurisdictions in which deputies reach top pay after five years, by shrinking the time required for a deputy to reach each pay step. However, he retained the existing pay differentials between steps of 4.5-5%, generous when compared to comparables. He noted that few deputies will be affected by this change and the resulting cost increase to the employer was minimal.
The arbitrator created a new section for longevity pay. He eliminated Steps 7 and 8 and awarded longevity pay equal to 5% of Step 6 after 15 years and 10% of Step 6 after 25 years. He awarded the employer's proposal of 2% for 1999 and 3% each for 2000 and 2001, much less than the union's proposed increases of 7.8%, 5% and 4%. He noted that the employer's proposed increases would keep the bargaining unit's wages at or above the comparables' average even when compared to substantial catch-up increases negotiated by deputies in Whitman County.
The employer argued that wages should take effect at the time of the arbitrator's decision because the union made extreme proposals and should not be rewarded for its "intransigence" in negotiations. Arbitrator Greer disagreed, stating that "the county has, presumably, budgeted the funds necessary to pay the salary increases it proposed" and "throughout the period of negotiations and interest arbitration, it has had the use of those ... funds." While conceding that retroactive payment of actual health care costs is not appropriate, the arbitrator ruled that wages should be retroactive and ordered the employer to advance back pay to bargaining unit members by July 1, 2000.
Arbitrator is Generous Short of Awarding Education Pay
The union proposed education incentive pay ranging from 2% for an AA degree to 4% for an MA degree. The union argued that education incentives enhance job satisfaction and officers' performance. Arbitrator Greer explained that as the employer argued, the comparators do not favor establishing education incentive pay for this bargaining unit. He pointed out that half the jurisdictions have no education incentive at all, and some of the ones that do simply advance graduates through the salary steps at a faster rate. Nevertheless, he considered education pay beneficial and wanted to award it to the bargaining unit:
Every day, police personnel are required to exercise judgment and discretion on the job, sometimes with life and death consequences. Among officers of similar age and experience, those with higher education may exercise that judgment and discretion more soundly than those without that background.
However, the arbitrator opined that he "should not impose a change in compensation unless that change is warranted by the prevailing practice of the jurisdictions that are the most significant comparators." He instead wrote contract language "that creates a committee to consider the possibility of adopting an education incentive program." He predicted that education pay would become more important in the future and primed the parties to think about how such compensation could benefit both sides in future agreements.
Walla Walla County and Walla Walla Commissioned Deputies Association (Arb.
W. Greer, 2000)
Overwhelming Daytime Population Not Legitimate Factor
The City of Burlington is small, with a resident population of 5635. However, because of its numerous shopping malls and stores, its daytime population swells to over 40,000. The union used this fact to support many of its proposals, including a substantial wage increase and its choice of comparables. The arbitrator declined to use the large daytime population as a major factor and instead focused on more traditional parameters such as resident population and assessed valuation.
Arbitrator Axon considered the union's list of 15 comparators unmanageable. His final list contained 10 jurisdictions, including two from the Puget Sound labor market, Milton and Fife. He declined to use Eastern Washington cities, which the employer proposed, reasoning that there were enough suitable jurisdictions in Western Washington.
The arbitrator rejected the union's proposal that Skagit County, with a population of 100,600 be included as a comparable jurisdiction. Apart from its inappropriately large size, "county sheriffs typically operate under a different system of government and provide a distinct type of law enforcement services." The arbitrator did not like the union's choice of Medina which "is a totally dissimilar community in terms of wealth and demographics" although similar in size to Burlington. He declined to use Anacortes (pop. 14,370) because of its larger size and assessed valuation.
The arbitrator's final list of comparators included Port Townsend, Sedro Woolley, Ferndale, Arlington, Chehalis, Poulsbo, Lake Stevens, Milton, East Wenatchee and Fife. All have populations between 5000 and 8500 and assessed valuations between $400 million and $700 million, as compared to Burlington's valuation of $506 million.
Wage Award Closer to City's Proposal, But Shift Differential Remains Separate
The arbitrator awarded pay increases of 3.25%, 3% and 3% respectively for each of the three years of the contract. This award was closer to the employer's proposed 2% per year than to the union's 6%. The result would make the employer third-ranked out of 11 jurisdictions for the first two years of the contract and slightly lower for the third year. The arbitrator disagreed with the union's argument that a larger wage increase was due because officers' workloads have drastically increased due to shoplifting in the malls.
Police officers work on a rotating shift schedule for which are compensated $40 per month. The employer offered to increase it to $50 and roll it into base wages to compensate for its low wage proposal. However, the arbitrator kept shift differential pay separate. The premium was not a financial hardship on the employer and rewards officers whose lives are disrupted by rotating through three shifts, he explained. He refused to add specialty pay for DARE officers or Field Training Officers (FTOs) who are not actively training new officers, noting that most comparators do not offer DARE premiums.
Too Little Time to Warrant Use of CPI or Change in Insurance Benefits
The arbitrator sought to keep his award simple, noting that not much time remained in the contract period. He declined to "burden this contract with a complex CPI formula" when determining wages for 2000 and 2001 because where a CPI factor has been used, "the effective date of the increase is at least two to three years in the future."
Arbitrator Axon also refused to tamper with the insurance plan for the same reasons. The employer sought to add a co-pay requirement to help with increasing health costs. While noting that the employer's plan had merit, he reiterated that the parties would soon be back at the bargaining table. He warned, however, that the status quo of 100% employer-paid insurance "is not the standard in the comparator group," and that the union could expect to give up this perk in the future.
Small Police Department Precludes Addition of Comp Time
The union proposed to add the option of compensatory time, but the arbitrator considered this a bad idea for such a small department. He explained that the general wording of the union's proposed language "would compound an already serious problem of officer availability and maintenance of appropriate staffing levels." This benefit might be appropriate at a future date with carefully crafted language detailing exactly how such a system would be applied. He was unwilling to create his own language for a benefit that would be so burdensome on the employer.
City of Burlington and SEIU Local 120, PERC No. 14894-I-99-328 (Arb. G.
Axon, 2000)