In re City of Hillsboro, Ohio
Fraternal Order of Police,
Ohio Labor Council, Inc.
FMCS Case No. 02/07448-6
March 14, 2003
Louis V. Imundo, Jr., Arbitrator*
This case pertains to a dispute regarding the interpretation and application of language in the Agreement. The event that gave rise to the instant grievance occurred in January 2002 when the City gave non-union employees checks for $600.00 for pension contribution reimbursement and refused to give bargaining unit employees an additional $600.00 over and above the $600.00 that they had received for their pension plan contribution.
It was the Union’s position that Management violated Article 16, Section 16.2 of the Agreement because the $600.00 given to non-union employees constituted a raise and whenever any non-union City employee receives a raise they are entitled to an identical percentage raise less the four and one half percent provided for in the Agreement.
It was Management’s position that the $600.00 at issue was not a raise or wage increase. Rather, it was a lump sum reimbursement for their retirement plan contribution. It was Management’s position that the sole purpose for giving non-union City employees the $600.00 per person lump sum reimbursement payment was to match what FOP members had already been receiving and to keep all departments equal. It was Management’s position that no City non-union employee received anything more than what had been given to bargaining unit employees. It was Management’s position that the Union’s members have not lost anything, they are not being treated differently or unfairly, and they have not been prejudiced in any way, shape, manner or form.
Article 1—Agreement, Section 1.1 (in part)
It is understood and agreed that the use of headings before Articles is for convenience only and that no heading shall be used in the interpretation of neither said article nor affect an interpretation of any such Article.
Article 8—Grievance Procedure, Section 8.5, Step 3 (in part)
The arbitrator shall not have the power or authority to add to, subtract from, or in any manner, alter the specific terms of this Agreement or to make any award requiring the commission of any act prohibited by law or to make any award that itself is contrary to law or violates any of the terms and conditions of this Agreement.
Article 16—Wages, Section 16.2
It is agreed that the above schedule represents (a) a four and one half (4.5%) percent increase for each year of the contract for all employees, (b) additional wage increases for dispatchers due to performing additional duties and responsibilities, and (c) additional increases for all employees due to completion of educational or certification requirements. It is further agreed that if any employee of the City shall receive a higher raise during the life of this contract the members covered by this contract shall receive an identical percentage raise less the four and one half (4.5%) percent included herein.
Article 16—Wages, Section 16.4
Effective January 1, 1997, and continuing through the duration of this Agreement, the Employer shall pay on behalf of the employee 100% of the amount of the employee’s contribution to the Public Employee’s Retirement System (PERS) or Police and Fire Disability Pension Fund (PFDPF) up to six hundred dollars ($600.00) per year.
The Parties did not agree to a joint stipulation of the Issues to be decided by the Arbitrator. The Arbitrator has determined the Issues to be as follows:
• Did Management violate Article 16, Section 16.2 of the Agreement when they elected to give non-union City employees $600.00 per year for pension contribution reimbursement and not give bargaining unit employees an additional $600.00 raise?
• If Article 16 of the Agreement was violated what is the appropriate remedy?
The following has been taken from the Arbitrator’s notes, recording of the Hearing, testimony of witnesses, documentary evidence, and the briefs.
In his opening statement Mr. Behringer made the following points to support the Union’s position:
•In January 2001 and again in January 2002 the City paid a $600.00 wage increase to its non-union employees. The City has refused to give the same wage increase to bargaining unit employees.
• The Union views the $600.00 as a raise, and in accordance with the “Me Too” clause, bargaining unit employees should be paid the same.
• The matter before the Arbitrator is res judicata. A year ago this exact same issue was put before arbitrator Mitchell Goldberg and on December 4, 2001 he ruled in favor of the Union. Now, we are back in year two of the same two year ordinance.
In her opening statement Ms. Hapner made the following points to support the City’s position:
• The Union continually refers to the $600.00 as a wage increase. It is not!
• Article 16, Section 16.4 of the Agreement provides that the employer shall pay on behalf of the employee 100% of the amount contributed to the PERS or PFDPF up to $600.00 per year. The City has been paying this $600.00 to all Union employees every year.
• The Union would have the Arbitrator believe that Union employees have not been paid the $600.00. This is simply not true. The $600.00 is for reimbursement of their retirement.
• Two years ago City Council passed an ordinance that gave non-union employees the same $600.00 that Union employees receive. It was not, and is not a wage increase. Every City employee received $600.00. Non-union employees did not get any more than Union employees.
• The $600.00 in question does not represent a wage increase. The matter before the Arbitrator is not res judicata. It is not a percentage wage increase. The grievance at issue is not the one that was presented before arbitrator Goldberg.
• The instant grievance lacks merit and should be denied in its entirety.
Mr. Behringer called Mr. Barry Gray as the Union’s only witness. Mr. Gray testified that he participated in the negotiations for the past three agreements. Mr. Gray testified that the Agreement, at Article 16, Section 16.2, contains what is known as a “Me Too” clause. The witness said this language dates back to at least the 1996 agreement, and was likely first negotiated into the 1993 or 1994 agreement. Mr. Gray testified that the “Me Too” clause means that anytime someone outside of the bargaining unit receives a higher increase in money than what bargaining unit employees had received that amount of money would be given to them.
Mr. Behringer directed Mr. Gray to the City’s January 8, 2001 ordinance wherein at Item No. 7 it provides: “PERS Reimbursement—The Police Dept. now receives a $600.00 per year reimbursement for PERS deduction from their pay. In order to keep all departments equal, non-union employees should receive an equal benefit (Section 16.4 of the Police Union Contract)”. Mr. Gray testified that these employees, for that year received the same pay increase of four and one half percent (4.5%) plus the extra $600.00. Mr. Gray testified that the matter was grieved in 2001 and again in 2002. The grievance filed in 2001 was arbitrated before arbitrator Goldberg.
Mr. Gray testified that from 1997 to the date the ordinance was passed in 2001 nonunion City employees did not receive the $600.00 that bargaining unit employees had been receiving. Mr. Behringer asked Mr. Gray if the $600.00 given to nonunion employees in 2001 had any restrictions on it with respect to how the money was to be used? The witness answered no. Mr. Gray testified that he understands the $600.00 given to bargaining unit employees is a form of wages particularly because it is provided for under Article 16 of the Agreement.
Ms. Hapner cross-examined. Ms. Hapner pointed out to Mr. Gray that in January of the years 1997, 1998, 1999, 2000, and 2001 he received a check for $600.00. The witness agreed and said $600.00 was the gross amount of the checks. Ms. Hapner said to the witness that in January 2002 he received either two checks for $600.00 or one check for $1,200.00. The witness agreed. Ms. Hapner said to the witness that in January 2003 he received a check for $600.00. The witness agreed, and added that he may have been given the check in December 2002. Ms. Hapner pointed out to the witness that the same ordinance gave non-union employees an education incentive and longevity pay in addition to a four and one half percent wage increase. Ms. Hapner pointed out that the Union has not objected to longevity and education payments.
Mr. Behringer redirected. Mr. Gray testified that the $600.00 per year that he has been receiving is listed on his W-2 as additional income and taxes are taken out of it. The witness said the $600.00 is compensation. Mr. Behringer asked the witness if, before the ordinance was passed, non-union City employees were receiving the $600.00 in question? The witness answered no. Mr. Behringer asked Mr. Gray if, when the non-union employees began receiving the $600.00 their wages increased beyond the four and one half percent wage increase? The witness answered yes. Mr. Gray testified that the second $600.00 he received in 2001 was a result of the arbitration decision and award where the Union prevailed. Mr. Behringer submitted into the record, a copy of arbitrator Mitchell Goldberg’s December 4, 2001 decision and award. Mr. Behringer pointed out that the decision and award addressed the very same issue under the very same Agreement that is before this Arbitrator.
The Arbitrator questioned Mr. Gray. Mr. Gray testified about what he believes is the purpose and intent of Article 16, Section 16.2’s language. Mr. Gray testified that except for the occasions in 2001 and 2002 regarding the $600.00 payment Management has consistently complied with Article 16, Section 16.2’s language.
Mr. Behringer redirected and Ms. Hapner recross-examined. The witness’s testimony did not add to, or subtract from what was already in the record.
The Union rested.
Ms. Hapner did not call any witnesses and instead elected to make arguments on behalf of the City. Ms. Hapner testified that the $600.00 paid to non-union City employees is not a raise and the percentage of each employee’s income that it represents varies. Ms. Hapner said that the $600.00 represents a retirement reimbursement benefit. It was not intended to give non-union employees anything that Union employees were not already receiving.
Mr. Behringer cross-examined. The witness’s testimony was not materially significant with respect to the disposition of the matter at issue.
The Parties rested and presented closing argument in their respective written briefs.
Issue No. 1
Did management violate Article 16, Section 16.2 of the agreement when they elected to give non-union city employees $600.00 per year for pension contribution reimbursement and not give bargaining unit employees an additional $600.00 raise?
The instant grievance reads as follows: “On December 10, 2001 and arbitrator ruled on this Section and found in favor of the Union. In January of 2002, the City once again paid non-union employees a check over and above what was paid to Union employees. It is the bargaining units members position that this payback was an increase of wages over the agreed 4.5%.”
It was the Union’s position that res judicata applies in this case. In the Arbitrator’s view if res judicata were to be applied in this instance the instant grievance would have no standing before this Arbitrator. Based on what is in the record this argument was first made at the Hearing. In the Arbitrator’s view, in order for this argument to be considered it should have been raised long before the Hearing. In the Arbitrator’s opinion it appears that if anything stare decisis applies to this case.
It was the Union’s position the $600.00 in question is a raise disguised as a pension payback. The Union argued that the $600.00 given to non-union employees is an increase in their wages over and above what they had been receiving. It was the Union’s position that the $600.00 given to bargaining unit employees is in the Agreement’s Wage Article because ever since the time it was first memorialized in an agreement it has been a wage increase. The Union further argued that if the $600.00 were some kind of reimbursement rather than a wage increase it would appear in another article in the Agreement.
It was Management’s position that Article 16, Section 16.2 of the Agreement applies only to percentage wage increases and does not apply to any lump sum benefit given to any and all other City employees. It was Management’s position that in light of the Union’s claim that the purpose of Section 16.2 is to ensure that non-union employees do not get anything over and above bargaining unit employees the instant grievance is meritless because no non-union employee received anything over and above what was given to the FOP’s members. Management argued that the $600.00 given to non-union employees is intended to keep all departments equal.
In Management brief Ms. Hapner argued that in light of what is provided for in Article 1, Section 1.1 of the Agreement the Union’s claim that retirement reimbursement is really wage compensation because it is found in Article 16 has no validity. In Management’s brief Ms. Hapner also pointed out that paragraphs 4 and 5 of the ordinance contain language that give non-union employees the same benefits received by FOP members as to educational incentives and longevity pay, but there was no claim by the Union that bargaining unit employees should get additional compensation for education or longevity.
Based on what is in the record it appears that except for the fact that the event that gave rise to the instant grievance occurred in 2002 the facts and circumstances in this case are the same as those that existed in 2001 which gave rise the grievance arbitrated before arbitrator Goldberg on October 9, 2001. In the Arbitrator’s opinion, while arbitrator Goldberg’s decision and award is not controlling in this case given that the facts and circumstances in both cases are essentially the same arbitrator Goldberg’s reasoning in arriving at his decision needs to be considered. It is important to point that consideration does not mean acceptance. Arbitrators, even the most experienced ones, can make erroneous judgments. In the Arbitrator’s opinion, even if he concurs with arbitrator Goldberg’s reasoning and decision he is still obligated to use his own independent reasoning and judgment in rendering his decision and award.
The pertinent language in Article 16, Section 16.2 is: “It is further agreed that if any employee of the City shall receive a higher raise during the life of this contract the members covered by this contract shall receive an identical percentage raise less the four and one half (4.5%) percent included herein.” The first question that needs to be answered is in deciding this Issue is: Does the $600.00 constitute a raise, or is it a lump sum benefit?
The record establishes that longevity pay, the schedule for which appears in Article 17, is not a reimbursable expense. It is part of employees’ wages subject to being taxed. Also, there is no expense to offset the amount of longevity pay each employee receives.
The City has deemed the $600.00 in question to be a “PERS Reimbursement”. There is no disputing the fact that non-union employees who contribute part of their wages to the Public Employee’s Retirement System (PERS) incur an expense. However, this expense is different from the other expenses for which the City provides for reimbursement pursuant to the provisions of the Agreement. These expense reimbursement provisions are provided for in Article 13-Training And Working Conditions; Article 22-Clothing Allowance; Article 24-Miscellaneous Economic; and Article 30-Tuition and Education Assistance. In each of these articles the City has provided for reimbursement of expenses that have been incurred with no resulting increase in employees’ wages or compensation.
In the Arbitrator’s opinion, the fact that the Union did not grieve the increase in longevity pay given to non-union employees does not mean that the grievance before the Arbitrator is meritless.
As noted, the language relevant to the disposition of this matter appears in Article 16-Wages. In the Arbitrator’s view this fact suggest that the $600.00 given to bargaining unit employees is wages and by the same reasoning the $600.00 given to non-union employees for the very same purpose proves the Union’s argument. The Arbitrator would be inclined to agree with this rationale if it were not for the fact that longevity pay, which is not provided for in Article 16, is also wages. However, notwithstanding this fact, it is the Arbitrator’s opinion that while not dispositive the fact the $600.00 is provided for in Section 16.4 militates in favor of the Union’s position.
As stated, it was Management’s position that Section 16.2’s relevant language pertains solely to percentage raises like those provided for in Section 16.1 and does not include broader forms of compensation like lump sum payments. The Arbitrator notes the absence of any language in Article 16 that delimits the meaning of the terms “raise”and “percentage raise” to apply only to hourly wage rates or annual salary. The Arbitrator also notes that the second paragraph in Section 16.2 speaks to compensation. Specifically, it exempts the application of the language in the first paragraph to elective positions, the tax commissioner, the deputy tax commissioner, the safety-service director, and the deputy City auditor. In the Arbitrator’s opinion, the term “compensation” is broader than the term “salary”. Compensation is generally interpreted to include wages or salary, other forms of remuneration, such as bonuses, profit sharing, commissions, and taxable perquisites. While profit sharing and commissions do not apply in the public sector, bonuses and taxable perquisites most certainly do apply. In the Arbitrator’s opinion, the use of the term “compensation” in the second paragraph of Section 16.2 serves to undermine the strength of Management’s contention that the words “raise”and “percentage raise” should be narrowly interpreted and applied.
In the Arbitrator’s opinion the clear intent and purpose of Article 16, Section 16.2 of the Agreement is to insure that non bargaining unit employees do not receive raises, irrespective of how they are couched or labeled, that exceed the raises the Union negotiated for its members. When the Parties first created the language that currently appears in Section 16.4 the purpose was to reimburse bargaining unit employees up to $600.00 per year for the pension contribution expense they incurred. This language was memorialized in the Wages article because, although it was a reimbursement, it was clearly part of their compensation. In effect, it was a raise. From January 1, 1997 to January 8, 2001 bargaining unit employees were the sole beneficiaries of this defacto raise. In the Arbitrator’s opinion, when the City decided to give the pension reimbursement to non-union employees they, in effect, gave them a raise.
In conclusion, for all the aforementioned reasons the answer to the earlier posed question is that the $600.00 given to non-union employees constituted a raise.
The next question that needs to be answered in deciding this Issue is: Does Article 16, Section 16.2’s language limit additional payments to bargaining unit employees only in instances where non-union employees receive a percentage increase in their wages as opposed to a lump sum payment? Article 16, Section 16.4’s language has a percentage component because employees contribute a certain percentage of their wages to the PERS or the PFDPF. The City has agreed to pay 100 percent of the employee’s contribution up to a maximum of $600.00 per year. Clearly, because employees’ wages vary and the percentage of income contributed varies, the contribution reimbursement made by the City is a different percentage of each employee’s wages with a cap of $600.00. Obviously, the percentage would be identical for two individuals who earned the same amount of wages and made the same percentage contributions. In all other instances the percentage of the increase in wages reflected by the reimbursement would vary. In the Arbitrator’s opinion, given that the lump sum payment of up to $600.00 is a percent of each Union and non-union employees’ wages the $600.00 is a percentage increase in wages.
In conclusion, for the above stated reasons it is the Arbitrator’s opinion that the $600.00 given to non-union employees was a raise in wages over and above the four and one half percent across the board increase which was given to non-union employees by way of the January 8, 2001 ordinance. As noted by arbitrator Goldberg in his December 4, 2001 decision and award: “Before the ordinance was enacted, the FOP had received wage increases in two forms, a 4.5% across the board increase, and the continued contribution for pensions up to $600.00 per year. The non-union employees received the same 4.5% across the board increase, but they were given a new increase for the pension contribution something they had not received before. This additional increase or raise in their wages must also be provided to the FOP.” The Arbitrator concurs with the above quoted.
In conclusion, for all of the aforementioned reasons it is the Arbitrator’s opinion that Management violated Article 16 of the Agreement when they elected not to give bargaining unit employees an additional $600.00 raise.
Issue No. 2
If Article 16 of the agreement was violated what is the appropriate remedy?
As stated, Article 16 was violated. The appropriate remedy is for the City to pay all of the bargaining unit members an additional $600.00.
The instant grievance is sustained. Management is hereby directed to pay all bargaining unit employees $600.00.
* Selected by parties through procedures of the Federal Mediation and Conciliation Service