Act 111

Why Tredyffrin’s Arbitration Award Wasn’t ‘In the Middle’

In the addendum to my previous post, “Tredyffrin Township Police Union Favored in Act 111 Arbitration Award”, I remarked that I had assumed that the independent arbitrator would make his award in the police contract arbitration ‘somewhere in the middle’.  During the arbitration process, John Petersen had assured me that the arbitrator would favor the police union in his decision, and  … we now know that my assumption was incorrect.

In response to my  statement that a “further explanation of the arbitration process would be helpful”, John provided the following opinion for Community Matters:

We are where we are because of what was agreed upon in the past. An arbitrator’s role is to find the most “equitable” solution absent the parties agreeing to such. Normally, there is at least some level of negotiation prior to arbitration. It’s always best if the parties themselves can come to an amicable resolution. While there may be disagreement, when parties can mutually agree, it implies a certain level of functionality as to the working relationship. That doesn’t mean that arbitration itself implies dysfunction. Often, there are some points parties cannot resolve. Again, an arbitrator’s role is to resolve those points in contention – in the most equitable fashion possible.

When I learned that the township refused to negotiate, instead opting for arbitration, in hindsight, I was not surprised. It indicates a level of dysfunction that has become the hallmark of this government. As I have said before, the municipal government, like the school board, sought to claw back everything it has negotiated in the past 20-25 years.

There’s a legal concept in commercial law known as “Course of dealing.” In the absence of a written agreement, courts and arbitrators will look to how the parties dealt with one another in the past. In collective bargaining scenarios, there is of course, a written agreement and there is a clear record of past dealings. Going back to my first sentence – we are where we are because of what was agreed upon in the past. It may be, and actually is quite likely, the municipal government, like the school board, has buyer’s remorse.

Given current circumstances, the benefits conferred upon the union appear to be “too good.” Some will attempt to claim victim status by either blaming Harrisburg or by saying that their hands were tied.

Some here trot out the phrase “Labor peace” in terms of the cost. I like that phrase and I think in Tredyffrin, it applies. Once upon a time, there was a premium on labor peace. There was time that those in charge thought it unseemly that Tredyffrin would be the subject of a strike. Once upon a time, there was at the very least, a cordial working relationship with unions. That however, was a different time and the people were very different.

Other municipalities like Lower Merion apparently had the foresight to negotiate these things in a different way. This means that what is in the “Middle” for one group may not represent the middle for another group. The middle, relative to the facts and circumstances of each situation, is the same for all in that it represents the equitable mid-point for that agreement. When compared to other groups however, the specific data point that represents the mid-point, assuming there could be a normalized scale amongst disparate contracts, would be very different as between Radnor, Lower Merion and Tredyffrin. Nevertheless, arbitrators will look at those other situations as a barometer for what is reasonable.

This gets into another commercial legal concept known as “Trade usage.”  All of this tends to put boundaries on where the result will end up.

When I heard about the time it was taking for this arbitration, the answer was very clear to me. It was interesting to note that some had questioned why the arbitrator in the police matter had not made a decision. I had posed to Pattye the following: “Perhaps the arbitrator is making a decision, by not making a decision.” Pattye asked me to clarify. I said, “It may be that the arbitrator sees as the most equitable resolution something that more closely matches the status quo.” Arbitrators, like judges, would prefer to have the parties themselves arrive at a resolution. In this case, there were two fundamental problems. 1 – The parties were miles apart and 2 – the township government, as I understand it, refused to negotiate and instead, leave its fate to an arbitrator.

Given the experience of the school board and given the general role of what arbitration is, the township’s stance in this matter was rather foolish and a bit disheartening. There’s a bigger problem here – one that cannot be solved with money. I have commented for years how this government does not work together, either as a board, or as to the entities, it has to deal with. We are now seeing this problem expand to other things like the Planning Commission. Governments are top-down organizations. They lead from the top and the top is what sets the example and moral tone for how the rest of the township government operates. The day isn’t long enough to count the problems incident to the staff, volunteer boards and elected officials. The only thing the township government excels at is dysfunction. If that is the “Gold standard” – then Tredyffrin is second to none.

At the end of the day, it was my contention that the Arbitrator was likely, a bit miffed at the township for what was a wholly unreasonable stance – both not willing to negotiate and its desire to end all post-retirement benefits. As sure as I was about the outcome of the negotiations between the school board and the teachers, I as more sure about the police matter. Why? Because of the facts and circumstances here made it clear where the most equitable solution was. Further, Tredyffrin’s situation is not that far out of whack with other jurisdictions.  And where things may be better for the union in Tredyffrin, it’s only because the government agreed to such.

You don’t get t0 wipe away your bad business decisions at the expense of the other party. That’s not how the real world works. It’s not how judges and arbitrators will decide. Unless of course, it finds there was an unfair bargaining position – which in this matter was not the case. It is for those reasons I concluded as such. As to whether Michelle and the board already knew that or not, I don’t know. Speaking as a lawyer, I would have to think that any competent lawyer would know that refusing to negotiate is itself, an unreasonable thing and that an arbitrator may well find that such a position offends the system. I did see the meeting where she said to Pattye that she didn’t know why it was taking so long. Candidly, I chuckled at that response.

In this case, I think Tredyffrin was taken to the woodshed and made an example of. Other municipalities will or at least should think carefully about, following Tredyffrin’s folly strategy in a negotiating strategy that involves not negotiating.

As to the contention that the township’s unfunded liability should have anything to do with the arbitrator’s decision, that is pure nonsense. One has nothing to do with the other. That unfunded liability was an unfunded liability of choice. Those benefits were what were agreed to in the past.  This is more evidence that the township sought to claw everything back in one shot – an unrealistic scenario. I’ve said it before and I’ll say it again, the township’s and school board’s legal guidance leaves a lot to be desired.

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