Labor Relations Report
As the year comes to an end, it’s usually appropriate to review what transpired in 2022 to track our progress and get a better idea of where we are headed in 2023.
Fortunately, the NJ League of Municipalities conference is held in November, and the sessions held during the conference offer a perspective from the other side of the table of the most important topics in labor relations. In terms of cooperative negotiations, it’s imperative to understand the needs and challenges that your adversary faces in order to get to an agreement that is satisfactory to both sides.
In January, I noted that the Consumer Price Index for All Urban Consumers in 2021 was up 7 percent over the previous year. At that time, I was interested in the effect that would have on arbitration awards. The Consumer Price Index (CPI) is a measure of the average change, over time, in the prices paid by consumers for a market basket of consumer goods and services. Goods and services measured by the CPI include food and beverages, housing, apparel, transportation, recreation, education and communication, and all other goods and services. The CPI is the most widely used measure of inflation.
Remarkably, only two arbitration awards were published in 2022. Arbitrator Ira Cure stated, “The nation is experiencing increased inflation, and I conclude that a departure from the State’s proposal is justified.” Arbitrator Brian Kronick similarly denied a town’s proposal stating that the award will help PBA members “keep pace with the cost of living,” although the award did not grant the wage increases sought by the PBA. Several other Locals have filed for arbitration in 2022, but most have already settled voluntarily after mediation. Some of those discussions included the arbitrators’ obligation to consider the cost of living. Addressing inflation in negotiations was discussed at the NJLM conference because employers are also paying increased prices for running the municipality. I got the impression that many employer representatives present understood the raises that were requested.
Pattern bargaining, as used in public employment, is significantly different from the pattern bargaining that was established in the early part of the last century with railroad unions and subsequently adopted by the auto industry following WWII. It was a collective bargaining technique in which contract terms in one settlement are used as models to be imposed on other negotiating parties within an industry. The trade unions favored it because it maintained conditions of employment as essentially equal, which kept competing employers from paying less to increase profits and produce goods. In public sector work today, employers favor it with the different negotiating units in their towns because it seems fair to all in the unions, and the percentage raise is generally extended to non-union employees in the town as well. It keeps budgeting simple, but there are challenges to negotiating raises, because the type of work done by a particular unit may distinguish them from other units. That is considered in interest arbitration, and generally comparisons between law enforcement and non-law enforcement units are given little to no weight based on the very nature of our jobs. Moreover, it is the basis for limiting interest arbitration in NJ to police and fire negotiating units.
One session at the NJLM conference focused on interest arbitration and negotiations. The speakers were attorneys Jim Mets, Joseph Hannon and Matt Watkins, who is the labor consultant for the League. Matt half-jokingly lamented the expiration of the 2 percent interest arbitration cap. As a retired town administrator, he was responsible for negotiating hundreds of contracts for different employers and now looks fondly upon the days when he had the ultimate tool of destruction, which was capped arbitration.
In truth, Watkins is very knowledgeable and a skilled but fair negotiator. I certainly can’t blame him for taking full advantage of the statutory mandate that made his job easier. On the other hand, I am always struck by the employers negotiating teams that deny breakage as a cost savings. Matt mentioned the “hidden” costs of replacing a retired police officer with a lower-paid rookie, including continued pension payments after retirement and retiree health benefits that continue to be paid long after retirement. He refuses to recognize that the pension payments are not made for the same period of the new officer’s career, and that most contracts dictate that health benefits payments are generally ended when the retiree becomes eligible for Medicare or dies, whichever comes first. Depending on the size of the police department, there is commonly a correlation between the number of new retirees and the number of old retirees that pass away. This can be viewed as a harsh reality, but the only things that are certain are death and taxes; both must be considered in negotiations.
In another session of great interest to our members, Watkins and Hannon were joined by Mayor Francis Womack and Personnel Officer Jessica Jackson to discuss the comptroller’s report on sick and vacation leave. What struck me most about the discussion is that everyone in the room seemed to be in favor of the sick leave incentives, commonly known as buy-backs, as a means to reduce the number of sick days taken by their employees. They recognize the cost of paying overtime to cover the shifts of their essential workers. The questions that came from the audience sounded as if there was a genuine desire by many municipalities to maintain the contractual provisions that they have negotiated. They were very concerned about the bills that have been introduced in the Assembly to penalize employers for having these types of clauses in the contracts. While there was much talk, there were no definitive answers that satisfied the audience. I suggested that perhaps the League could join the PBA in putting pressure on the legislature to repeal this law and allow negotiability on the subject. Since the law was intended to help municipalities save money, but is truly having the opposite effect, the legislators may listen.