By Jim Cline
A long-delayed Island County Interest Arbitration has resulted in the Corrections Guild prevailing with a six-year wage award that, with year to year compounding, increased wages by 19.7%. The contract was delayed not just by lengthy arbitration and mediation, but also by a County Unfair Labor Practice that had resulted in canceling a scheduled 2019 hearing date. The Award covers contract years 2017 through 2022.
Besides a dispute over comparability, the main issues addressed by Arbitrator Michael Cavanaugh included base wages, retroactivity, education pay, shift differential, and discipline grievances. The County had also carried into arbitration a proposal that would have capped insurance contributions and shifted those costs to the employees, but withdrew that proposal in a package agreement during the hearing. The package also involved the Guild compromising on special premium pay, adding some premiums while withdrawing others.
Comparables
The backdrop of the comparability issue is a 2013 Arbitration decision by Katrina Boedecker. In 2013, the Guild had proposed including Whatcom County as a comparable, even though it was significantly outside the common, union favored 2-1 size band. The Guild then, and again in this arbitration, argued that Whatcom’s relative proximity to Island County justified disregarding the size differences. In 2013, Boedeker had also found Grays Harbor County to be a comparable. In this hearing, the Guild noted that Grays Harbor’s population and assessed valuation no longer was in the 2-1 size band.
Cavanaugh acknowledged that Whatcom County’s nearby location made it “relevant” for “labor market considerations,” he could not overlook the size disparity. While it was not controlling, Cavanaugh renewed his position, in agreement with the Guild, that the normal “2 to 1” range (up 100%, down 50%) was the correct band for comparability selection. He called the employer preferred 150%/50 band “illogical” resulting in “one way comparability.” It was indisputable, though, that Whatcom County was above the high end of this band.
Cavanaugh noted that Grays Harbor’s inclusion in 2013 entitled it to some continued consideration, noting the value of “historic comparables.” Ultimately, though, he agreed with the Guild that the demographics had “shifted” in the intervening time, and Grays Harbor’s relatively diminished tax base rendered it no longer “comparable.” He also added that labor market factors were a consideration against the use of Grays Harbor County as it was the most remote of the proposed comparables.
Wage Comparison Models
The Guild presented the traditional base wage analysis that compares wages at the 5/10/15/20/25 years of service with education pay. The County, by contrast, used a “total compensation” model that included various aspects of monthly compensation and benefits and turned the numbers into a “net hourly” calculation.
Cavanaugh recognized that total compensation might be a valid approach in certain circumstances, he rejected the County’s proposed method. First, he noted that there was no agreement about what elements to include or exclude in any “total compensation” analysis. He questioned the County’s failure to include non-medical health benefits and retirement benefits in its calculations. He also agreed with the Guild’s claim that the County’s calculations contained several errors.
Cavanaugh added, though, that the wage comparison method was not dispositive. He stated that the wage calculations were just one “element” of everything an arbitrator should consider in rendering an award. He also observed that it was not unusual for parties to consider all aspects of compensation in constructing labor agreements.
Ability to Pay
The Guild presented a forceful argument that the County’s Assessed Valuation per Capital was among the highest in the State. The County attempted to deflect that by asserting that its “levy rate” was low and that voters had previously opposed levy lifts.
Cavanaugh omitted in his discussion Guild exhibits which showed that the County was spending far less than the comparable counties on correction services, and by a wide margin. Instead, he focused on the County’s claim that taxpayer spending preferences controlled, rejecting that claim. All told, Cavanaugh provided a brief discussion on a topic in which the record contained extensive data. For example, the Guild noted that the County held 3-4 times normal financial reserves, something not discussed in his Award.
Internal Equity
While the differentials among Corrections and Patrol Deputy staff have received limited attention in previous county arbitrations, Cavanaugh provided it special consideration in this hearing. The Guild argued forcefully that in the years since the 2008 recessions, the Patrol Deputies had landed substantially larger wage increases, and that the 2013 Boedeker decision had widened the relative wage gap.
Cavanaugh noted that the Guild was not arguing for absolute wage parity but citing the historic wage differentials had expanded over the past decade. He also noted that the County’s proposal would widen it further. The Guild had also cited data that the differential was out of line with the differentials among the comparables and the “industry” as a whole.
Settlement Trends
The Guild presented data that the comparable county settlements over the course of the contract averaged around 2.5%, annual, higher than the County’s proposal for any given year. The Guild was proposing 3.5% for most years which it argued, although about a point higher than the average settlements, was necessary to close the market gap.
Complicating the Guild’s argument was that the average settlements were lower at the end of the contract – when CPI was highest. Cavanaugh noted this anomaly and indicated that “the pandemic has decreased the usefulness of this factor for recent years.” Without identifying what weight to provide this usually important factor, Cavanaugh noted as a defect in the County proposal lagged behind the average settlements.
CPI
Inflation was a bit of a “wild card” factor in this arbitration, given that it was low in the early years and much higher by the very end of the contract. Complicating the factor further was that settlements before, during, and after the March 2020 covid related shutdown did not closely track then existing CPI trends.
Cavanaugh discussed the recent CPI data in detail, including its impacts on rising costs for shelter, gas, and heat. While most negotiations focus on wages the year following CPI data, Cavanaugh took a different approach, applying the year-end CPI data as relevant to the existing contract. He also noted that the current inflation trends were unpredictable. Ultimately in 2022, the year following the highest spike in inflation in June 2021, Cavanaugh awarded 4%.
While this 2022 award is lower than what is observed in other, more recent 2022 contract settlements, the Guild had weak settlement data to present at the October 2021 hearing when many 2022 contracts remained unsettled. As Cavanaugh observed, the comparables that had settled early for 2022 settled low, and the other comparables remained unsettled.
Wage Award
After discussing all the above factors, Cavanaugh concluded that wages should be increased across the board as follows:
Year Wage Increase
2017 2.75%
2018 2.75%
2019 2.75%
2020 2.75%
2021 3.25%
2022 4.00%
He presented this as an 18.25% increase. But in actuality, because wage increases “compound” year over year, the end wage scale increased by nearly 19.7%.
Although Arbitrator Cavanaugh was unaware of the parties’ previous what if proposals, this Award closely patterned the Guild’s final what if proposal. By contrast, the County had offered increases between 2 to 2.25% for each of the years. And those increases were without retroactivity or the shift differential, which were additionally awarded (see below).
Retroactivity
A hotly contested issue was retroactivity for departed employees. In the five years since the prior CBA, the County had faced tremendous turnover. Employees had quit, in addition to “normal” service retirements and transfers to Road Deputy positions. The prior CBA had limited retroactivity to only current employees. The Guild offered testimony that retroactivity had been a recurring divisive issue in contract negotiations, with the County seemingly using it as a point of leverage in negotiations. The Guild had locked in on a bargaining position that insisted that employees that had departed over the long impasse would not be denied retroactivity.
Cavanaugh noted that the limitation on retroactivity was contained in the expired contract. As a result, he determined that the Guild bore the burden of proof on its removal. But ultimately, he concluded that the Guild had met that burden.
After considering the delays that had occurred, he declined to attribute “fault.” Instead, he concluded that paying retroactivity to all employees that had provided “services” was “a matter of simple fairness.” He credited evidence presented by the Guild that the denial of retroactivity has lifelong impacts on pension. He also noted that the County’s denial of retroactivity to those deputies that had transferred to the road bargaining unit had “no rational justification” apart from simply saving the County money.
Despite Arbitrator Cavanaugh’s non-attribution of fault, it was hard to ignore that the County’s staffing and lack of competitive pay had compelled many employees to resign. Even harder to overlook was that the County’s refusal to produce relevant discovery resulted in the cancellation of the scheduled 2019 hearing, extending the time for an award by a year and a half.
Education Premium
The Guild proposed a new education premium that had some support albeit mixed support among the comparables. The County countered that the previous CBA had inserted 1% into the base in recognition of “education and training.”
Despite witness testimony on the value of education to corrections work, Cavanaugh concluded that the record left the justification “unproven.” He implied that a more targeted benefit for degrees in criminal justice might be something that the parties could negotiate in the future. He cited his previous decision in Cowlitz County that “a fundamental change in compensation philosophy…should be negotiated by the parties, not imposed by an interest arbitrator.”
Shift Differential
The Guild proposed a new shift differential premium, 1.25% for swing and 2.5% for graveyard shifts. During the presentation of its hearing, recognizing that all but one of the comparables had shift differential, the County acknowledged that a .50 per hour differential might be acceptable.
Cavanaugh noted the hardship that these shifts have on the employees. Interestingly, he also noted the impact shift work has on employee families. He reviewed the comparability data, determined that .60 an hour was the “median” amount, and made his Award both shifts.
Just Cause/Due process issues
The Guild had two separate proposals relating to discipline and discharge appeals. It sought to change the existing language that gave management unfettered transfer rights by making “disciplinary transfers” grievable. Cavanaugh agreed with the Guild’s citations to prior arbitration decisions that transfers that are a product of disciplinary action should be appealable.
The second due process issue involved a complicated question of fitness discharges. The Guild wanted the word “discharge” expressly added to the Contract due to a prior Patrol Guild arbitration which questioned the appealability of fitness discharges. Cavanaugh noted that recently added bill of rights language implied that fitness discharges were grievable. He also stated he believed that “discharge” is inherently included in the term “discipline” for purposes of just cause appeals. Concluding that the language was unnecessary, he concluded that language was unnecessary and that a future grievance arbitrator could resolve what the applicable standard of review for such grievances should be based on “the specific fact pattern.”
