Title: Fergus County, Montana and Montana Public Employees Assoc
Date: July, 1997
Arbitrator: Jack H. Calhoun
Citation: 1997 NAC 115

BACKGROUND

            The Montana Public Employees Association (the union) and Fergus County, Montana (the employer), began negotiations in July of 1996 for a successor agreement to their 1995 collective bargaining agreement, which expired June 30, 1996.  Attempts at settlement during negotiations and during mediation were unsuccessful.  The Montana Board of Personnel Appeals was petitioned to initiate fact finding pursuant to ARM 25.26.697.  A fact finding hearing was held on May 30, 1997.  An opportunity to file post-hearing briefs was extended to the parties.

ISSUE

            The parties agreed at hearing that the only issue before the fact finder is wages.  Specifically, the parties agreed that the focus of their dispute is whether the employer’s wage increase proposal amounted to three percent. 

POSITION OF THE UNION, SUMMARIZED

            The union contends that the employer formulated a three percent pay increase for its employees, including bargaining unit employees represented by the union.  Since conveying the increase to the union in the form of a proposal, the employer has rejected all proposals from the

union that amount to a three-percent overall increase for employees it represents.  The union agreed to accept the three-percent increase in pay and devised a proposal to implement it, but the employer refused to accept it.  The wage issue is somewhat complicated because deputy sheriffs are entitled, by statute to longevity increases.

            The union maintains that the purpose of the fact finding process, in the instant case, is not to examine economic data, which is usually offered in fact finding proceedings, but to decide what happened during negotiations and come to a fair determination on the wage question.  The parties are beyond the rationale-for-position stage in their bargaining.  They have made proposals and counter proposals.  The union accepted the employer’s last and best offer of three-percent, came up with a scheme to implement it, which saved the employer money as compared to the employer’s offer, but the employer refused the union’s offer.   None of the proposals  subsequently made by the employer amount to three-percent because longevity is not calculated from July 1, 1996, but rather on an employee’s anniversary date.  The use of any anniversary date beyond July 1^st causes the gross percentage increase to be less than the three-percent.

POSITION OF EMPLOYER, SUMMARIZED

            The employer contends that the Fergus County Board of Commissioners made a priority of giving an overall three-percent wage increase to all its employees, including those employees  represented by the union.  The employer offered a total of three-percent to the union on the same basis as other employees.  The longevity increases of bargaining unit employees is an annual and ongoing expense amounting to one percent of salary.

            Despite asking the union for assistance with the longevity problem when the employer made its proposed three-percent increase in wages, the union declined.  The employer then made other proposals.

            The employer examined the union’s proffered model to implement a wage increase for its bargaining unit members and found it to be the first clear three-percent proposal made two months after the employer made its initial proposal on August 5^th.  The model was rejected because the percentages proposed would continue to be at a higher base rate when the new fiscal year began.  Such higher base was not acceptable to the employer.

            The union did not accept the initial three-percent wage package offered by the employer.  It was not accepted by the union until October.  The union’s model which made increases effective October 1, 1996, was not submitted to the employer until after October 4^th, two months after August 5^th.

            The title of the union’s model indicates it is to be retroactive to October 1, 1996.  It shows total cost for both the union’s and employer’s plans and shows the employer’s plan to cost $247.00 more than the union’s plan.  If the model does, in fact, reflect three-percent, then the employer offered initially, and has continued to offer, three-percent overall to the union’s bargaining unit.  If the employer’s proposal was greater than the union’s three-percent proposal with a union effective date of October 1^st, then it surely reflects a three-percent increase effective July 1^st.

            Although the commissioners could not testify to specific dollar amounts calculated for the bargaining unit, they did allocate specific amounts in the budget and identified those amounts by department.  The budget was adopted prior to the completion of negotiations and showed budgeted amounts larger than the three-percent in the salary and wage account to assure funds were available for overtime, special assignments and part-time employees.

FINDINGS OF FACT

            Based on the evidence on the record in this matter, including the sworn testimony of witnesses at the hearing, and pursuant to ARM 24.26.697, I make the following findings of fact.

            The union’s bargaining unit comprises all employees of the Fergus County Sheriff’s Department, including deputies, detention officers, cooks, janitors, communications officers, civil officers and clerical workers.  Under past collective bargaining agreements deputies received either 90 percent, 87 percent or 80 percent of the sheriff’s salary depending on the number of years deputy had in service.  The 80 percent amount stated in the 1995 agreement was less then the minimum amount set forth in the state law.  It was subsequently changed to 85 percent when the mistake was discovered.  The amount is not at issue here.  Deputies receive a one-percent longevity increase by statute.  Non-deputies, i.e., all other bargaining unit employees, have traditionally received wage adjustments based on the Sheriff’s wage adjustment.  Historically, all base wages of employees in the Sheriff’s office have been tied to the percentage increase received by the Sheriff on his base wage, as determined by the commissioners.

            During the 1995 contract negotiations, the parties bargained deputies’ pay based on the formula in the extant agreement.  In July of 1996, the employer made a proposal that, on a percentage formula, was less than what had been in the expired agreement.  Bargaining unit employees became upset and refused to yield to the change.  On August 5, 1996, the employer made a written proposal to the union.  It noted that the cost of living adjustment for the sheriff was three-percent, that the maximum increase to employees could only be three-percent, and that a problem arose because of the one-percent longevity increase deputies were to receive.  The proposal also set forth a two percent increase for non-deputies, who would also get a one percent longevity increase.

            The union made a counter proposal on August 5^th that amounted to a three-percent increase plus longevity.  Later on, the union representative became convinced that the employer was not going to offer more than three-percent in gross dollars.  Because the bargaining unit employees had learned the sheriff was going to get a three-percent increase in base pay plus a longevity increase making his total increase greater than three-percent, they became upset when told they would not get more than three-percent overall.

            Later in the day on August 5^th, the employer made another proposal at 1:00 p.m. entitling it “Last, Best and Final”.  The proposal showed deputies were to receive 80 (later changed to 85), 86 or 89 percent of the sheriff’s salary, non-deputies were to receive a two-percent increase plus a one-percent longevity increase.  The longevity increase, however, was to be calculated from an employees anniversary date.  Since calculating longevity from the anniversary date rather than July 1^st, meant the proposal was less than three-percent, the union rejected the proposal.

            The union and employer exchanged proposals and counter proposals during a mediation session on August 21^st.  Settlement was not reached.  The employer’s negotiator told the union’s negotiator he should come back with a proposal that equaled a three-percent overall increase.  The union negotiator told the employer negotiator the union accepted the three-percent.

            The union negotiator prepared a proposal in September that reflected a three-percent overall increase for bargaining unit employees.  It showed deputies receiving 85, 86 and 89 percent of the sheriff’s salary depending on their years of service.  The proposal was for all employees to receive a three-percent increase on their base salary with an effective date of October 1, 1996.  It made longevity effective on the employee’s anniversary date.  The total cost of the union’s plan was $234,982.56, which was $247.00 less than the three-percent overall plan the employer had proposed at first.  The union negotiator conveyed the proposal to the employer’s negotiator through the mediator.

            The employer reviewed the union’s proposal in October and rejected it.  It increased the base by too great an amount and the employer felt that would not be fair to other county employees.

            When the commissioners were preparing for negotiations, their objective was to give bargaining unit employees an overall three-percent increase in salary.  Since they received one percent in longevity, the commissioners believed they should get a two percent increase in base pay making a total of three-percent.  The employer’s negotiator told the union’s negotiator they could break down the three-percent increase any way they wanted.  No one involved with the employer’s negotiations calculated what the total cost of a three-percent raise to the bargaining unit would be.

            Along with its post-hearing brief, the employer forwarded copies of the proposal the parties exchanged on June 4, 1997, after the hearing.  I have disregarded those proposals for the reason that the union has had no opportunity to comment on them.  Although fact finding hearings are not bound by formal legal rules of evidence, basic fairness requires at least a minimal opportunity to respond to offered evidence.

RECOMMENDATION

            Pursuant to ARM 24.26.697(5), I recommend that the employer accept the wage proposal the union offered as Exhibit A4 at the hearing.  It was offered to the employer sometime in October after the employer representative asked that the union come up with a proposal that would reflect a three-percent overall increase for bargaining unit employees.  The union’s proposal does just that.  In fact, it comes within one-tenth of one percent of being the exact amount the employer offered on August 5^th.  Out of a total cost of over $200,000, the difference in dollars is insignificant.  The employer’s wage increase proposed to the union on August 5, 1996 was three-percent overall and the union formulated a plan to implement that amount.

            The employer’s objection to increasing the base pay of bargaining unit employees disproportionally compared to other employees’ base pay is understandable.  However, the amount of difference between the employer’s increase to the base and the union’s is relatively small, about one percent.  Such an amount is too small to serve to hold up settlement of the contract.  Moreover, when the employer’s representative told the union representative to come up with a plan that fit the employer’s three-percent maximum increase, no specifications were identified as to how the money could be allocated.  The union’s approach is one that complies with the employer’s request and it is not unreasonable.

            Since the parties specifically limited my involvement in their dispute to the issue of wages, I have not considered other issues.  It is my understanding all language issues have been agreed to in principle.

            In summary, I find that the union’s proposal entered in evidence as Exhibit A4 should be accepted as a settlement of the wage issue by the employer because it is a reasonable way to implement the three-percent overall increase proposed by the employer.

            I request that the Board of Personnel Appeals make this report available to the public five days after the parties have been served with my findings.

            Dated this ____day of July 1997.

                                                                                    ______________________________

                                                                                    Jack H. Calhoun

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