Minnesota Interest Arbitration Update

Here we sit at the end of August, and as of now, there have been a total of seven interest arbitration awards posted to the Bureau of Mediation Services website.  While this is equal to the total number of interest arbitrations held in the State for all of 2017, it is still quite a low number, considering the number of essential bargaining unit contracts that come up for renegotiation every year.  What this tells us is employers and unions are doing a better job of understanding where there are shortcomings in their wage schedules, and negotiating the appropriate increases to accommodate a tight market.

However, as you’ll see in the awards from this year, employers are not necessarily required to throw a ton of money at their employees in order to maintain labor peace, at least in the eyes of arbitrators.  Of the five awards for 2018 which awarded an across-the-board percentage increase, the average award was 1.9%, with the outlier Hennepin County award of 5% making up the bulk of the total amount.  The awards covered a variety of different essential units, including Work Release employees, Deputies, Licensed Supervisors, Police Officers, and Sergeants.  As for now, as long as employers are willing to throw a little money at their employees in order to stay competitive, arbitrators have not shown a desire to provide anything above what is negotiated internally.

In Teamsters, Local 320 and City of Brooklyn Park, the pay issue was a request by the union to increase their pay across the board by one dollar per hour to increase the differential between Sergeants and Police Officers.  According to the union, the pay differential had shrunk to untenable levels, with only a nine percent difference between Sergeant top pay and Police Officer top pay with a Field Training Officer premium.  The City, however, produced evidence that the differential was 16.29% without the premium on top of officer pay.  In the end, the way the differential was calculated did not matter, as Arbitrator found that in the previous contract the Union had voluntarily agreed to a settlement that reduced the differential between police officer top pay and sergeant top pay.  As such, the arbitrator awarded the City’s position and did not grant the increase.

In Teamsters, Local 320 and Itasca County, the employees were non-essential, but the parties had so much acrimony over certain legal issues, that they volunteered to take their issues to interest arbitration for resolution of their first contract.  The first issue to be determined was whether the county was the actual employer for the probation officers – which could warrant an update all unto itself (the issue of who has control over the employees – the County or the Courts – and thus should be considered the appropriate employer under PELRA, required multiple venues and administrative decisions before the BMS decided the probation officers were employees of the County).

On wages, the question was whether the parties should adopt the MAPE pay plan they had previously been paying employees off of prior to negotiation of their first agreement, or whether the employees should be on the county wage plan, with the same number of steps as all other employees.  In the end, Arbitrator Jacobs found no overwhelming reason to depart from the MAPE plan that was previously employed by the parties, and awarded that issue to the Union.

Carver County had a bit more success in its arbitration with MNPEA, with most of the employer positions being awarded, based on internal consistency and the employer’s plan to provide increases where it felt necessary, including a 10.3% increase at its starting rate.  This award is also helpful because Arbitrator Jacobs found the union’s comparisons to cities’ police departments to be irrelevant, stating, “In Minnesota there has long been a difference between county deputies and local police in terms of their wages and other conditions employment that should not be disturbed in this setting.”

In Maplewood and LELS, the arbitrator again looked at internal consistency rather than the desires for more pay from the union.  This appeared to be more of a reach by the employees to get more and depart from a well-established internal pattern.  Arbitrator O’Toole failed to find any compelling reason to do so, and awarded employer positions.

Hennepin County and LELS is a difficult award for the employer, with a number of things contributing to an unfavorable award in favor of the licensed supervisors.  In short, the arbitrator awarded a larger increase to the supervisors (5%) based on an internal comparisons, including a large increase for higher level supervisors in the department.

Both Crow Wing County and Anoka County had interest arbitrations with LELS for the years 2017, 2018 and 2019, and both utilized their attractive “performance-based pay” system proposals to garner favorable awards from both Arbitrator Abselsen (Crow Wing) and Arbitrator Kapsch (Anoka).  Crow Wing County was able to implement its performance-based pay system with what the arbitrator called a quid pro quo of awarding shift bid, vacation bid, court cancellation and Christmas Eve holiday language.  On the other hand, Anoka was able to implement a 0% general adjustment and avoid a market adjustment based on its merit pay plan.

For those interested in an arbitrator’s thoughts on when different forms of increases are appropriate, Arbitrator Kapsch does an excellent job of going over what he looks at when considering cost-of-living adjustments, market adjustments, general adjustments and wage range adjustments.  This award can serve as a very effective guide in what employers should be looking at when formulating possible wage increases.

Overall, this has been a very productive year for employers who venture into the interest arbitration arena.  If you have done your research and know where you stand, you should feel confident standing your ground and sticking to your internal pattern.

If you need any help analyzing your current standing with your employees, feel free to give us a call at the Wiley Law Office, PC.