Area Power Administration and International Brotherhood of Electrical
HEARING SITE: WAPA Office, Folsom, California
HEARING DATE: February 16, 2000
Duane M. Buckmaster
APPEARING FOR THE AGENCY: Douglas N. Harness, Esq.
APPEARING FOR THE UNION:
Tom Dalzell, Esq.
Western Area Power Administration (WAPA or "the Agency") is a part of the U.S. Department of Energy. The Agency sells federal hydroelectric power to customers in 15 western states, operating and maintaining transmission lines, substations and other electrical facilities. The Agency consists of four regions (Rocky Mountain, Upper Great Plains, Desert Southwest, and Sierra Nevada) and certain headquarters functions.
Several classifications of workers employed by the Agency are represented by the International Brotherhood of Electrical Workers (IBEW). Five Locals of the IBEW represent Agency employees at various locations, all of which are covered by a common Collective Bargaining Agreement (CBA). To negotiate the common agreement, the five Locals have formed the IBEW's Government Coordinating Council No.1. All of these represented employees are covered by the prevailing rate provisions of 5 U.S.C.5341-5349.
Throughout their history of bargaining up to and including the 1966-1999 agreement, the parties have surveyed the same ten utilities to provide data on which to base prevailing rates. These ten utilities are specified in Supplementary Labor Agreement No. 3, an attachment to the 1966-1999 CBA. This supplementary agreement also specifies that "There will be equal pay for substantially equal work for all unit employees within the Western Area Power Administration (Western)".
At the start of the bargaining history, WAPA's operations were organized under five regions. The ten utilities surveyed for pay comparisons included two in each of the five regions. Later, WAPA reorganized, eliminating one of the five regions. Nevertheless the parties have continued to survey ten utilities. The Agency now proposes that wage comparisons be confined to eight utilities; two in each of the remaining four regions.
The parties negotiated two Memoranda of Understanding on December 19, 1996 which make pay exceptions for workers employed in the Sierra Nevada Region and the Desert Southwest Region. Testimony in the hearing described the circumstances behind these Memoranda of Understanding, as follows.
Over the span of time 1980 to 1996 rates of pay among the surveyed utilities increased, and the differences between rates changed from region to region. In negotiations in 1996 the Union asserted that the practice of paying all employees at a common average rate would provide less than prevailing rates in certain regions. The Agency agreed, and the parties negotiated a tentative agreement providing for a "regional rate" in the Sierra Nevada and Desert Southwest Regions and a "Western-wide rate" in the other Regions. This tentative agreement was voted down by the Union membership, apparently failing ratification because of the distribution of represented employees among the Regions. Following rejection of the agreement IBEW Local 1245 (California) indicated its intent to withdraw from Government Coordinating Council No.1. It was to resolve this difficulty and get a new contract in place that the two Memoranda of Understanding were negotiated. The agreement, effective from 10/1/96 to 10/1/99, was then ratified.
Negotiations for a new agreement took place in 1999, and the parties were successful in reaching mutual agreement on all issues except for wage rates, on which issue they reached impasse.
The parties having agreed to submit the unresolved issue to final and binding arbitration, and having jointly agreed to the selection of an arbitrator, a hearing was held on February 16, 2000. At the conclusion of the hearing both parties stated that they wished to submit post hearing briefs, and it was agreed that briefs would be mailed on March 27, 2000. Subsequently the parties requested a time extension due to difficulties caused by inaccuracies in the transcript. The briefs were actually received by the arbitrator on April 20, 2000, at which time the record was closed.
POSITION OF THE AGENCY
Due to deregulation in the electric industry to promote competition, cost containment measures have become prevalent, and WAPA must keep its power rates competitively priced. Wages are a component of the pricing formula, as are other costs. The competitive situation makes it necessary for the Agency to apply prudent control measures to all costs, including wages.
This dispute must be settled in accordance with the law; specifically with the Prevailing Rate Systems Act (5 U.S.C., 5341-5349), which provides that the level of rates of pay will be maintained in line with prevailing levels for comparable work within a local wage area. Comparable work exists in each of WAPA's regions.
Differences in the various local area wage levels
from region to region have increased over time.
At the time the Agency-wide concept was adopted the difference between
the highest and lowest paid utility surveyed was about two dollars per hour.
This difference is now almost eight dollars;
$32.56 in Los Angeles and $24.64 in Montana. It is not feasible to
establish a common pay rate for areas so widely disparate as these and remain
within the letter and spirit of the law.
If a Western-wide pay rate were to be adopted now, the result would be that employees in three regions (Upper Great Plains, Rocky Mountain and Desert Southwest) would be overpaid while those in the Sierra Nevada Region would be underpaid. These variations in pay would range from $0.38 per hour to $1.56 per hour.
The Agency proposes that the new pay rates be established on a regional basis using averages of rates at comparable utilities in each region, and further, that any resulting adverse effect on employees be mitigated by freezing any existing rates of pay which are above the rates so determined.
The parties have jointly agreed on the current rates of pay for work comparable to that performed by WAPA employees in eight of the ten utilities traditionally used in determining rates of pay under the WAPA-IBEW agreements. They disagree about the appropriate rates for Northern States Power and for Arizona Public Service.
The Arbitrator should award the following pay rates:
POSITION OF THE UNION
Three questions must be answered in this arbitration: (1) What is the appropriate survey rate from Arizona Public Service?, (2) What is the appropriate survey rate from Northern States Power? and (3) Is the Agency's proposal for a wage freeze based on the rationale of regional pay appropriate?
Arizona Public Service.
In 1999 negotiations the parties agreed that the appropriate survey rate from APS was $27.40. This agreement was intact when impasse was reached on August 19, 1999.
Agency testimony in the hearing was that its first opportunity to see the APS collective bargaining agreement was the day before the arbitration hearing, and that it was then recognized that APS has separate rates for linemen that use insulated line tools known as "hot sticks" and for those who do not. WAPA pays a premium for hot stick work performed, and this is the reason given for the Agency's change in position from the prior agreed to rate to the lower rate now proposed.
The Union opposes the APS rate proposed by the Agency. First, because the Agency should not be allowed to agree to one survey rate in the collective bargaining context and then come to arbitration arguing a completely new rate. Furthermore, there is a factual flaw in the Agency's position. Although the Agency's negotiator believes that the hot stick lineman rate was used in the wage survey, the actual rate used was that of Transmission Troubleman, because this classification works on transmission lines, as do WAPA's employees.
Northern States Power
In past negotiations the parties have used the wage rates from the CBA between this utility and IBEW Local 160 in the joint wage survey. This has been the case for the past twenty years. In the 1999 negotiations the Agency proposed a different (lower) rate be used, on the basis that Local 160 employees were allegedly located in Minneapolis. The Union objected to the change in survey rates, and, in its final offer on August 19, 1999, the Agency listed the rate for NSP as $27.38. This is the rate which the Union now proposes for survey purposes.
Based on both factual and policy considerations, the Agency's attempt to repudiate the survey match that it agreed to implicitly in the collective bargaining process is inappropriate and unfounded. The survey rate of $27.38 should be used.
A wage freeze based on regional pay.
Bargaining history between the parties shows a consistent practice of paying all WAPA prevailing rate employees a single rate based on the national survey average. The only deviation from this occurred when Memoranda of Understanding were negotiated in 1996 to provide rates over the national average in two regions. Nevertheless, the collective bargaining agreement signed in 1996 contained provision for pay based on a national average.
Testimony by the Agency's chief negotiator was that the Agency "felt very strongly" in 1999 negotiations that regional pay was appropriate, but actual proposals by the Agency in negotiations are not supportive of this view. The Agency made six wage proposals, only one of which would have provided regional pay.
In justification for the emphasis on constraining wages, Agency witnesses emphasized the need to control costs in a competitive market. However, these witnesses were unable to state the relationship between labor costs and total operating costs, or to show evidence of any analysis of labor costs.
The Agency's testimony about the wage gap among regions (about $2 per hour in 1980 as compared to about $8 per hour in 1999) exaggerates the difference. If this is viewed from the standpoint of relative rather than absolute levels, the change is not nearly so dramatic.
The Union's settlement proposal is as follows: A 3 per cent increase applied both to the national average and to the locality pay agreements in two regions. This is consistent with one of the four pay options included in the Agency's final offer.
In 1996 negotiations the parties arrived at the mutually beneficial approach to wages, a floor wage set by the national average with a premium paid to employees in areas where the cost of labor is higher than the national average. This approach should be maintained, with the possibility of a modified approach preserved for future collective bargaining.
With specific reference to the dispute as to whether or not the establishment of regional rates of pay is appropriate, as opposed to so-called "national rates" or system-wide rates, the applicable provisions of the law are contained in 5 U.S.C. 5343(d): " A Lead agency, in making a wage survey, shall determine whether there exists in the local wage area a number of comparable positions in private industry sufficient to establish wage schedules and rates for the principal types of positions for which the survey is conducted. The determination shall be in writing and shall take into consideration all relevant evidence, including evidence submitted by employee organizations recognized as representatives of prevailing rate employees in that area." (Emphasis added)
To consider all four regions of WAPA combined as a local wage area, encompassing as they do a major part of the western United States, is not reasonable, especially when wage rates for comparable work vary to the extent that they do in this case. Rates established by region would be, in my view, much more in keeping with the intent and meaning of the law than rates based on more extensive geographical boundaries. Although the parties have, in the past, set wages according to averages of utility wages throughout WAPA's entire service area, custom and past practice cannot justify conflict with the law.
Inasmuch as the record contains much evidence and testimony (and significant disagreement) with regard to facts on which regional pay standards might be set, commentary on each of the four regions follows.
The parties agree on the comparable rates of pay applicable to the Sierra Nevada Region: Pacific Gas & Electric at $28.50 and Sacramento Municipal Utility District at $26.83. Averaging the two, a new rate for SNR becomes $27.67.
The parties agree on the comparable rates of pay applicable to the Rocky Mountain Region: PacifiCorp at $24.96 and New Century Energy at 26.00. Averaging the two, a new rate for RMR becomes $25.48.
The parties disagree on comparable rates for the Upper Great Plains Region. The Union proposes that the rate of $27.38 per hour, paid under the CBA between Northern States Power and IBEW Local 160, be used in calculating the WAPA rate. The Agency disagrees, holding that Local 160 represents workers based in Minneapolis, a large urban location where costs and rates of pay are higher than in locations where WAPA workers are based (citing as examples Devils Lake, North Dakota and Sidney, Nebraska). A Union witness testified that Local 160 workers do some (unquantified) amount of the work in the Dakotas and that local 160 represented workers do "not necessarily" live in Minneapolis, but that they "live all over". A witness for the Agency testified that "they are a construction roving crew all stationed out of Minneapolis, and they move them out" (referring to Local 160 represented workers)..
The Agency proposes a pay rate of $25.06 for Upper Great Plains employees (with actual pay frozen at present levels) based on an average of the Montana Power Company rate and the rate for Northern States Power/IBEW Local 1426. The Union objects to this proposal because 1) It is inconsistent with the Agency's final offer in negotiations which included a Northern States Power rate of $27.38, and 2) It goes outside the bounds of the ten utilities traditionally used in pay comparisons.
Although it is my opinion that the parties need not confine themselves, in their negotiations, to pay comparisons identical to those used in the past, it is significant that they did so in the negotiations leading up to this arbitration. The Agency's new proposal at arbitration for a Northern States Power rate is a change from the rate the Agency proposed in negotiations and which it was prepared to accept in its final offer. Where the parties have been in agreement in negotiations, a conflicting arbitral decision should require compelling justification. I find no such justification here.
The Agency's proposal for the Desert Southwest Region is a rate of $26.24. .The Union disputes the appropriate pay rate at Arizona Public Service, arguing that this rate should be $27.40, that this was the APS rate mutually agreed to in negotiations, and further that there were inconsistencies in Agency testimony about which APS rate (Lineman-Journeyman or Transmission Troubleman) is the more appropriate to be used in the wage survey. The Agency stated that the lower of the two rates (Lineman-Journeyman) should be used; that the APS Transmission Troubleman receives no hot-stick premium, while the WAPA linemen do receive a premium for hot-stick work. The Agency concludes from this that using the Transmission Troubleman rate would result in double compensation for certain work. No evidence was presented concerning the hours actually spent by either WAPA's DSWR employees or by APS's Transmission Troublemen in the performance of hot-stick work. The Arbitrator takes note of the fact that the Transmission Troubleman receives his rate of pay without regard to the nature of the work performed, whereas the Agency's workers receive a premium only for hot-stick work performed. Given all of the circumstances, and giving weight to the proposal of the agency in its final offer prior to impasse, it is my opinion that the rate of pay at Arizona Public Service to be used in calculating the appropriate rate for Western's Desert Southwest Region should be 27.40. Averaging that rate with $26.15 for Salt River Project produces a regional rate of $26.78.
For the Collective Bargaining Agreement under consideration:
1. Prevailing rate calculations for each region shall be based on rates of pay for comparable positions within that region.
2. The rate for the Sierra Nevada Region shall be $27.67.
3. The rate for the Rocky Mountain Region shall be $25.48.
4. The rate for the Desert Southwest Region shall be $26.78.
5. The rate for the Upper Great Plains Region shall be $26.01.
6. In any instance where the new regional rate of pay is lower than the current rate, pay shall be frozen at the existing rate.
Duane M. Buckmaster
Dated this 30th day of May, 2000 at Lake Oswego, Oregon.
Duane M. Buckmaster 'The Arbitrator"
THE HISTORY OF THIS ARBITRATION
Negotiations for a new collective bargaining agreement to replace the agreement expiring on 10/1/99 took place in 1999. The parties were successful in reaching agreement on all issues except for rates of pay, on which issue they bargained to impasse. The parties submitted the unresolved issue to final and binding arbitration, and a hearing was held in Folsom, California on February 16, 2000. After the filing of post-hearing briefs, the record was closed on April 20, 2000. The arbitrator's Opinion and Award was rendered on May 30, 2000.
On June 29, 2000 the Union filed exceptions to the Arbitrator's award with the Federal Labor Relations Authority (FLRA). The Authority docketed the case as O-AR-3331, issuing a notice to that effect on July 12, 2000.
In its exception the Union asserted that the award was contrary to law in that it was based on Subchapter IV of Chapter 53 of Title 5, and that the Arbitrator should have recognized that the bargaining unit is covered by Section 704 of the Civill Service Reform Act of 1978.
After considering the Union's exception and the brief filed in opposition by the Agency, the FLRA remanded the case to the parties for resubmission to the Arbitrator "in order for him to clarify whether his award was based on § 5343(d) or whether, as required by Section 704, the award is based on current prevailing rates and pay practices in the industry."
Western Area Power Administration ("the Agency") is a part of the U.S. Department of Energy. The Agency sells federal hydroelectric power to customers in 15 western states, operating and maintaining transmission lines, substations and other electrical facilities. The Agency consists of four regions (Rocky Mountain, Upper Great Plains, Desert Southwest, and Sierra Nevada) and certain headquarters functions.
Several classifications of workers employed by the Agency are represented by the International Brotherhood of Electrical Workers (IBEW). Five Locals of the IBEW represent Agency employees at various locations, all of which are covered by a common Collective Bargaining Agreement (CBA). To negotiate the common agreement, the five Locals have formed the IBEW's Government Coordinating Council No.1. All of these represented employees are covered by the prevailing rate provisions of Federal law.
Throughout their history of bargaining up to and including the 1996-1999 agreement, the parties have surveyed the same ten utilities to provide data on which to base prevailing rates. These ten utilities are specified in Supplementary Labor Agreement No. 3, an attachment to the 1996-1999 CBA. This supplementary agreement also specifies that "There will be equal pay for substantially equal work for all unit employees within the Western Area Power Administration (Western)".
At the start of the bargaining history, WAPA's operations were organized under five regions. The ten utilities surveyed for pay comparisons included two in each of the five regions. Later, WAPA reorganized, eliminating one of the five regions. The parties have continued to survey ten utilities for pay comparisons.
The parties negotiated two Memoranda of Understanding (MOUs) on December 19, 1996 which make pay exceptions for workers employed in the Sierra Nevada Region and the Desert Southwest Region. Testimony in the hearing described the circumstances behind these MOUs as follows.
Over the span of time 1980 to 1996, rates of pay among the surveyed utilities increased and the differences between rates changed from region to region. In negotiations in 1996 the Union asserted that the practice of paying all employees at a common average rate would provide less than prevailing rates in certain regions. The Agency agreed, and the parties negotiated a tentative agreement providing for a "regional rate" in the Sierra Nevada and Desert Southwest Regions and a "Western-wide rate" in the other Regions. This tentative agreement was voted down by the Union membership, apparently failing ratification because of the distribution of represented employees among the Regions. Following rejection of the agreement IBEW Local 1245 (California) indicated its intent to withdraw from Government Coordinating Council No.1. It was to resolve this difficulty and get a new contract in place that the two MOUs were negotiated. These MOUs provided higher rates in the Sierra Nevada and Desert Southwest Regions than the systemwide rates of pay specified in the negotiated CBA.
COMMENTARY ON ARBITRATOR'S OPINION AND AWARD
In the arbitration hearing, the Agency proposed that separate regional rates of pay be established, based upon prevailing rates within each region. The
Agency's representative argued that this would be consistent with Federal law, citing 5 U.S.C.§§ 5341-5349 as applicable. The Union did not object to this citation nor did it cite any other statute as opposed to that cited by the Agency.
The Arbitrator, in the absence of any reference (in evidence) to other law governing pay for these prevailing rate employees., rendered his decision based, in part, on that part of 5 U.S.C .§5343 which refers to wage schedules and rates in the local wage area.
It is significant that the Agency's reliance on Chapter 5 was not a side issue or an insignificant point in the arguments put forward by the parties in the arbitration hearing. The concept of regional pay was strongly supported by the Agency and just as strongly resisted by the Union. Had the Union believed that a different provision of law applied, or that the law cited by the Agency did not apply, it is reasonable to believe that it would have been presented in evidence. The Arbitrator, consistent with the principle that it is not his function to seek out, on his own initiative, supportive or non-supportive evidence for or against either party's case, did not research the law beyond that provision of law cited in evidence.
Obviously, as the Union has argued, the parties were free to arrive at wage rates through bargaining. They attempted, unsuccessfully, to do so. The parties having turned to arbitration, it was incumbent upon the Arbitrator to take into consideration the status of the represented employees as "prevailing rate employees". To arrive at the prevailing rate of pay and pay practices for electrical workers requires the application of judgment. For example the term "local wage area" could be interpreted so narrowly as to require a different wage for each and every location at which employees work or are based. On the other hand, the phrase "in the industry" could be interpreted to require that the prevailing rate take into consideration every location where electrical power is generated or distributed and where United States Federal laws are applicable without any other geographical limit. In this case, neither of these interpretations is reasonable, practical nor consistent with proposals presented at the hearing or in negotiations by either party. Instead, some form of regional pay scheme was contained in proposals by each of the parties, albeit in distinctly different forms.
If it is deemed by the Authority that the Arbitrator erred in referring to Title 5, §5343(d) in this case, rather than referring to §704 of the Civil Service Reform Act, it is nevertheless apparent that the outcome as described in the Award would have been the same under §704. The Award contains equity and practicality for both parties, does not unreasonably inflate or deflate employee compensation, conforms to requirements of law and does no violence to the integrity of the arbitral process. The Award should stand.
Duane M. Buckmaster, Arbitrator