By Jim Cline and Troy Thornton
This is part 12 of our Annual wage series. In this portion of the series, we turn to a couple of 2020 arbitration decisions as we attempt to assess how these decisions may or may not impact overall settlement trends. In this article, we discuss a decision issued by Arbitrator Richard Ahearn involving the Clark County Deputy Sheriff’s Guild. In our next blog, we’ll discuss an arbitration involving the State Wildlife Officers.
A summary of all recent arbitrations since 2008 is available on the Premium website. While there were a few State government bargaining unit arbitration decisions the past year, the State Wildlife and Clark County decisions are the only two interest arbitration decisions under the RCW 41.56 public safety arbitration statute. These decisions provide us a view of how arbitrator’s addressed issues in the midst of the pandemic. Later in this Wage series, we’ll discuss these two cases together with a broader discussion of what this means for 2021 and 2022 contract negotiations.
It is important to evaluate these decisions in the context of the timing. Clark County was arbitrated in August and decided in December. The Wildlife Officers arbitration was arbitrated in September and (under the strict timelines of their particular state law provisions) was issued at the end of September. In both cases, pandemic economics played a pivotal role.
Next, we turn to a discussion of how the Clark County arbitrator addressed the issues before him
Comparables. The parties agreed on the use of Kitsap, Thurston, Clackamas (OR), and Washington (OR) as comparable counties. In addition to those counties, two previous interest arbitration decisions had established Spokane and Marion (OR) Counties as comparables. For this hearing, the Guild proposed the use of Multnomah County (OR), which borders Clark County, instead of Spokane County. The County proposed to replace Marion County (OR), with Lane County (OR).
Arbitrator Ahearn reasoned that due to thoroughly researched rationale established by the two previous interest arbitrators, he was electing not to adopt Multnomah County. He also explained that the presence of the City of Portland within the County tends to skew data against comparability. The Guild was actually in favor of the County’s proposed swap of Marion County, so Arbitrator Ahearn chose to accept that change.
Ability to Pay. As the parties were certified for interest arbitration in March of 2020, at the onset of the COVID-19 pandemic, the County argued that it was in the midst of a “severe recession,” with an “unprecedented” decline in employment. Clark County cited the State’s June highly negative 2020 economic and revenue forecast. Additionally, Clark County claimed it had recently implemented a hiring freeze, eliminated overtime if at all possible, and eliminated all non-essential spending due to the pandemic. The County also cited its border county status, claiming that it loses roughly 20% of its otherwise expected business to Oregon and that this would be even greater during the pandemic.
The Guild argued that the County had much greater financial flexibility than it claimed. Despite what the County described as a “hiring freeze,” 11 new road deputies were hired in 2020, with 8 of them coming on after the onset of COVID-19. In its Brief, the Guild also pointed to an email that was sent to all Clark County personnel by the County’s Deputy County Manager after the conclusion of the hearing, which stated that sales tax was “coming in better than anticipating,” and that there was cautious optimism that there would be no budget reduction recommendations for 2021.
Wages. The Guild proposed general wage increases of 5% for 2020, and 4.5% for both 2021 and 2022.
The County proposed general wage increases of 2.5% for 2020, and 2.2% for both 2021 and 2022. In doing so, it argued that its proposal was well-supported by the comparables used in the hearing, as well as “reasonably anticipated” financial circumstances. The County also grounded its argument on the fact that other internal County bargaining units received similar wage increases.
The parties argued whether factors such as various employers’ contributions to employees’ pension funds were appropriate for comparison. Ultimately, Arbitrator Ahearn determined that such factors were appropriate for comparison.
In making his wage determination, Arbitrator Ahearn acknowledged that the Guild was in fact placed near the bottom of its comparables in terms of total compensation. However, he was ultimately swayed by the County’s ability to pay arguments made at that point of the pandemic, and its argument that it must exercise extreme caution to navigate the difficult road brought forward by COVID-19. Balancing those competing factors, Arbitrator Ahearn awarded base wage increases of 2.75% in 2020, and 2.5% in both 2021 and 2022. While these decisions did not allow the Guild to make up ground on their better-paid comparables, Ahearn noted that these increases were larger than any other County bargaining unit during that timeframe.
Paid Family Leave. In 2017, Washington enacted its new Paid Family and Medical Leave (PFML) program, which provides paid leave for many events such as the birth and care of a new child. Under the law, both employees and employers make contributions to this program, however the law provides room for bargaining over employers paying some, or all, of the employees’ share of the contributions. By default, employers must pay 37% of the premium, leaving 63% to be paid by employees.
The Guild proposed that the County should cover the entire employee share of the premium, pointing to the gap between it and its comparables. The County’s proposal included the default 37/63 split currently in place. Arbitrator Ahearn, recognizing that there likely would have been some give from the County in the event that collective bargaining played out entirely, awarded a 50/50 split for PFML premium.
Longevity. The Guild proposed longevity pay of 5% at 20 years of service with the Department. It noted that of all comparables, Clark County deputies were the only employees not receiving some form of longevity at the 20-year mark. The County opposed any sort of longevity pay at the 20-year mark, arguing that the amounts and benchmarks used for longevity pay for various comparables were not consistent.
In making his decision, Arbitrator Ahearn again weighed the competing factors of the Guild lagging behind its comparables, while also recognizing the economic reality of bargaining at the onset of a pandemic. Recognizing the Guild’s argument that all other comparables had some form of longevity after 20 years, and even some in-county groups, Arbitrator Ahearn awarded a 2% increase at the 20-year mark because he felt that it would not place an undue burden on the County, even in times of limited resources.
Special Pays. The Guild proposed an increase to the premium pay given to FTOs, from 5% to 10%, and additionally proposed that the premium be applied at all times instead of just hours worked as an FTO. Additionally, the Guild proposed an overhaul of the specialty premium benefit system. As it stood, any deputy who had worked in a specialty position for at least one year would receive a 1.5% pay increase for the duration of their employment with the County. The Guild proposed allowing deputies the choice of keeping that future benefit or forfeiting that future benefit and receiving a 5% pay increase only when employed in a specialty position.
The County argued that the FTO premium currently provided by the County placed it near, or ahead of, most comparables. The County also argued that the current specialty payment structure allowed it to move deputies from specialty positions depending on County needs, without negatively impacting the pockets of Guild members.
Arbitrator Ahearn concluded that there was insufficient comparable support for an increase in FTO premium pay. Additionally, he reasoned that although the specialty rate for most positions was lower than comparable counties, roughly 80% of the Guild was entitled to lifetime payments at the time of his decision. He declined to alter the benefit already in place because of this, and because the Guild failed to show a significant need to amend the long-standing practice.
What are the lessons learned from this decision?
Arbitrators tend to avoid revising prior sets of arbitrator ordered “comparables,” especially when the decisions are recent, and the demographics haven’t fundamentally shifted. Arbitrators have on occasion revised recently adopted comparables but only when there was a strong argument that the rationale was defective.
Ability to pay still remains a strong employer argument when you are arbitrating in the midst of a recession. Arbitrator perceptions that an employer may lack adequate revenues arising from sketchy or incomplete revenue projections may be more powerful than actual concrete revenue data. While quality evidence still matters, arbitrators can be influenced by the “unknowns.”
Arbitrating for wage increases in the midst of a recession is tough. Just keeping pace with other settlements can even be hard, depending on the local situation. If you are behind your comparables, you need to identify the right time to make the case for a catch up.
Arbitrators show a surprising openness to transfer some PFML payroll taxes over to the employer, even when not supported by comparability. We’ve found severe employer resistance to this pickup but given two recent arbitration awards imposing a shift, this payroll tax shift could be a viable subject of bargaining. And it offers a way to add “hidden money” into the contract.
Improving special pays and premiums in the midst of a recession is tough but this arbitrator used the open longevity issue as a way of improving the contract. In this case, the Guild had compelling comparability evidence on longevity that the arbitrator decided not to overlook. But he rejected the proposed FTO premium that had mixed comparability support. One strategy for arbitrating in bad times is to be sure the proposal you present on special pays and premiums isn’t just supported by the comparables, but strongly supported by the comparables.
Note: Cline and Associates maintains a summary of all Washington interest arbitration decisions on the premium website. This includes numerous awards discussing economic and fiscal factors and how they impact wage awards.
**Visit our Premium Website for more information on Base Wage Determination, Contribution Rates, Geographic Proximity to Comparables, Proximity to Metropolitan Areas, Internal Equity Generally, Other Health Insurance Benefits, Specialty Position Pay, and Special Premium and Proficiency Pay.**
