Mid-Year Interest Arbitration Update

As we approach the middle of 2021, many public employers are ramping up for negotiations with their respective bargaining units.  This year, perhaps more than any year past, it will be incredibly important to pay attention to both local settlements and decisions in interest arbitration.  The good news is that so far, there doesn’t appear to be a trend of any large wage increases reported through negotiations or coming out of interest arbitrations.  However, there are only three reported interest arbitration awards on the BMS website.  Here’s a rundown of all three.

In MNPEA and City of Minneapolis, 911 dispatchers brought four issues to interest arbitration: wages for 2020 and 2021; Longevity pay; and certification premium.  For wages, the Union sought a 2.25% increase for 2020 and a 2% increase for 2021, while the city offered 0% for both years.  The union argued that the impact of the COVID-19 pandemic was not as bad as had been feared, and that several other units in the city received higher increases than what they were proposing.  The city had a tough argument to make, as it had settled with other groups for 2020, so it had to show how those internal settlements should not control the matter, and that the city was actually in worse financial condition that it was prior to the pandemic.

In the end, Arbitrator Befort found the city’s argument persuasive, but noted that while 2020 was obviously a bad financial year for everyone, economic conditions were likely to improve in 2021.  With that, he awarded a 1% wage increase for 2020 and a 1.5% wage increase for 2021.

On the other issues, both city and union were looking to do away with “certification pay” for employees.  However, the union proposed replacing the premium with increased longevity pay, while the city wanted to do away with it altogether, as it was no longer used.

In finding for the City, Arbitrator Befort stated the Union failed to provide any offer of a quid pro quo for the increased longevity premium (since the removal of the certification premium cost the employees nothing), so it did not meet its burden of showing the increased longevity was warranted.

St. Louis County and its LELS deputy unit went to interest arbitration over a number of issues during a hearing heard by Arbitrator Altman.  Those issues included wages for 2020, 2021 and 2022, and retroactivity, overtime, duration, election of remedies, and a new shift arrangement.

Arbitrator Altman considered the issues of wages and duration to be “inextricably related,” as the parties had agreed on a three-year duration for the contract at the beginning of the hearing.  On wages, the parties agreed to a 2%, 2.25%, and 2.25% increase for 2020, 2021 and 2022.  However, in addition to its proposal, LELS proposed a 10% wage increase effective the first pay period of the year for 2020.  Not surprisingly, Arbitrator Altman did not award the union’s position.  The arbitrator did not find the union’s argument that a change in pay structure to reflect an increase in sergeant supervisory duties necessitated an increase to deputy pay in the same fashion.  Arbitrator Altman also ignored the union’s pay equity argument, noting that pay equity “is an effective tool in addressing pay inconsistencies or deficiencies…of female dominated classifications in the workplace.”  He found that the deputy bargaining unit had no such issue, as it was clearly a male-dominated group.

In something of a surprise, Arbitrator Altman awarded the county’s position on employee placement on a new wage schedule.  He found that although the county’s proposal to place employees on a lower step of the new wage schedule, the employees were actually being paid more than they had been in the past.  Because of this, he allowed the County’s position to place employees at a lower longevity step than they’d actually achieved based on their duration of employment.

For all other issues, Arbitrator Altman failed to award the county’s requested changes, as it failed to show any compelling reasons or quid pro quo that would have warranted a change in the established language of the contract.

In City of Crystal and LELS, Crystal’s police officers went to arbitration over wages, insurance contributions, insurance opt-out payments, and duration.  The insurance contribution amount issue was settled prior to the hearing, so that left only three issues for resolution.  While the City proposed only a one-year agreement, the Arbitrator O’Donnell found that 2021 was almost half-way over, and a one-year agreement would have brought the parties right back to the table, and awarded a two-year deal.  In regard to the opt out payment for insurance, the arbitrator found that the union’s requested 350% increase in the pay was a too substantial, but did note a pattern of higher payments of opt-outs in the city, and awarded a modest increase to the payment.

For wages, the city proposed a 1% increase in both 2021 and 2022, while the union proposed 3% both years.  In finding that 42% of city staff had received a 2% increase in 2021, the arbitrator awarded a 2% increase for the unit.  While Arbitrator O’Donnell noted there were very few jurisdictions had settled for 2022, he noted that in previous years, the city had implemented identical wage increases annually over the course of three separate contracts, and awarded 2% for 2022.

There is still a lot of uncertainty out there for employers, and because of this, few are willing to make huge leaps beyond 2021 for settling labor agreements.  However, based on these three awards, it is safe to say that arbitrators understand the fiscal uncertainties that government entities are facing, and will likely reject arguments for large wage awards.  We will continue to monitor the local contract negotiating environment to keep you up to date on any changes in negotiating trends.  If you, or your organization, need assistance in negotiating your next contract in these uncertain times, contact the Wiley Law Office, for negotiating experience that works.

If your organization has a recent settlement or arbitration award you’d like us to know about, contact us at Wiley-law.com.