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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JP may have the correct interpretation in his written commentary above. Unfortunately, we don’t know really know the arbitrator’s reasoning for his decision. The arbitrator failed to complete his job. He provides NO reason for his decision. Withhold payment until he does?
From the National Academy of Arbitrators:
The third and perhaps most important quality of a persuasive decision is that the arbitrator’s reasoning must be transparent. In their reasons, arbitrators must, in a word, say why. Conclusory reasoning is not acceptable. Arbitrators should put on paper the reasoning they presumably undertook in their head. If an arbitrator disbelieves a witness, the arbitrator has an obligation to tell that person why. The losing party—whom Chancellor Megarry, in a famous line, called the most important person in the courtroom—is entitled to know why he or she lost.
Based on the NAA, is there any recourse to require Zobrak to provide reasoning behind his decision? According to the township manager, Zobrak’s bill was to accompany the decision. Can the arbitrator pay be withheld until the job is completed? Just asking …
I haven’t looked through the NAA archives to see if there are any acceptable remedies to an incomplete decision. Would refusal to pay stand the test of law? I don’t know. Maybe a polite message to the arbitrator might suffice.
I have a tendency sometimes to use a sledge hammer where a tack hammer might be appropriate.
I think that the decision in this agreement is final — all parties signed off on it. In addition to the 3 attorneys on the Board of Arbitration (impartial chair, and counsel for township and union), there are 2 attorneys on the Board of Supervisors, chair Michelle Kichline and Kristen Mayock.
It is interesting to note that for all the legal eyes that reviewed the arbitration agreement, there was an obvious ‘numbering’ problem in the document — there are 9 numbered points listed in the agreement but #6 and #7 are missing. The numbers skip from #5 to #8. Were they removed? Oversight? Who knows. I sent your comments along to John P. and if there’s a response, I’ll post on CM.
John Petersen’s response to the arbitration process question —
It pains me to admit that JP has some good points above. [smile] Let me clarify –
I have no problem with the terms of the award. As stated previously, I think it was a bit generous compared to the BLS data, but it was in-line with the LM agreement. I do have a problem in that the reasoning behind the award is not documented. There are lessons to be learned from this award, but we’re left to conjecture what those lessons are.
I unfairly placed the blame solely on the neutral arbitrator for the lack of documented reasoning when my complaint should have been directed at the panel of arbitrators. My faulty frame of reference was the Fact Finding process where there is but one arbitrator. In the Act 111 arbitration process there are 3 arbitrators (the majority rules), one of which is the township’s attorney.
The township’s attorney was one of the arbitrators and, therefore, is privy to the findings of fact and the reasoning behind the award. Perhaps he could explain the panel’s reasoning at the next township meeting.
An example of what I would consider an excellently explained Act 111 award is here:
Thanks Keith. Yes, the police contract arbitration was different from the Fact Finder process with the school district — this was a board of 3 arbitrators that included the union and the township with the independent arbitrator. And unlike the Fact Finder’s report that each side (school district & teachers union) could vote for or against, Act 111 makes the arbitration award binding for police and firefighters in PA.
I need to clarify the wording that I used in the title of this post. When I used the words ‘Why the Tredyffrin Township Arbitration Award Wasn’t ‘In the Middle” — I was referring to my incorrect assumption about what I viewed the ‘middle’ to be for the arbitrator. However, my reasoning was flawed. The township started the negotiation process in an extreme position (to remove all post-retirement health benefits) whereas the police union was asking for ‘status quo’ of their last contract as the starting point. The union’s position was not an extreme position — they were not asking for ‘more’ than was contained in their 2009-11 contract. As John points out, the arbitrator’s award was equitable based on the positions of each side and therefore, is ‘in the middle’.
Why should it pain you Keith? Good points are just that, good points. It shouldn’t matter where they come from. It’s good that you recognize they are good points. His points on the EIT are good as well. There’s a lively debate goin on. http://www.mainlinemedianews.com/articles/2012/12/26/main_line_suburban_life/opinion/doc50d4b356e7d74475672197.txt
I for one like his [John’s] direct and blunt approach. It’s straight talk with a clear roadmap as to reasoning behind the conclusions. I would never expect the township to admit the results were equitable . That does not mean we in the public have to agree with the township. I for one am offended at the notion the township didn’t want to so much as engage in negotiations.
Given where we’ve been and where we are likely to go if something does not change, I’d prefer to see people like John on the BoS than what we have today. From what I’ve read, he’s no friend to the Republicans. Could the Democrats persuade him to run?
I hope you noticed the word *smile* after I mentioned I was pained to admit JP’s good points. I suffer from that common malady of not wanting to admit I was wrong.
TR, I have said that too. Running would be interesting. Winning would also be a hoot. He probably doesn’t have the time, and we know he doesnt suffer fools lightly.
would be wild though! With his ideas and healthy cynicism I would like to see what he would do, if he didnt self destruct in the electoral process, nor in the governing process should he be elected. My fear is that he is too polarizing in a world where unlike him people are afraid to take a stand without fear of retribution, politically or legally, no matter how illegitimate those retributions would be. Run John! And win..
Although there was a three person panel, I think it’s clear that there was only one arbitrator. I’d be surprised if the township arbitrator could provide any explanation, given the language in his dissent : (“Inexplicably, however, without any explanation, the neutral arbitrator completely failed to address this issue [post-retirement benefits] in the award”.)
The Philadelphia document that Keith references is indeed a well-reasoned document, but perhaps that is because it is legally required to be so, because it “was conducted under the dictates of the Pennsylvania Intergovernmental Authorities Act …. The PICA Act requires the Panel … must make a written record of the factors it considered when making its determination, according substantial weight to the Five Year Plan and the City’s ability to pay”. Is there a similar requirement for Tredyffrin as for Philadelphia?
A second careful reading of the dissent reinforces explanations for the award being suggested here on CM.
First, the focus on the unfunded liability is a complete red herring. We have chosen, up to now, to “Pay As We Go”. It would have been so much more compelling to document the expected trajectory of those payments under the ‘status quo’ (which of course is not equal to ‘no increase in costs’).
Second there is the issue of: “…..terminating such benefits. It attempted to do so in this matter. …. The Township’s proposals at the arbitration provided him with numerous lawful methods to do so.”
Did the township really draw a red line on this? No middle ground? Really? I don’t think that there are many residents that would support complete elimination of retirement healthcare benefits for those in a line of work where the retirement age is 52.
What a contrast with the dissent in the Philadelphia award:
“The Panel appropriately recognizes the significant burden that pension and health care costs for City employees …..impose on the City …….The Panel, with this award, properly takes significant and meaningful steps towards reigning in those costs by making long-term reductions …. This award also makes fundamental changes in the funding of health benefits”
Clearly a major failure of leadership in the Township.
Ray, Based on discussion with police union reps, I was told that the township’s position going into the contract negotiations was no post-retirement healthcare benefits in the new contract. My impression from the budget meeting (which we both attended) with a couple of supervisors in attendance, seemed to support that position, wouldn’t you agree?
You know, Pattye, I don’t recall any specifics about the negotiations at that budget meeting. Maybe if I heard anything about eliminating post-retirement healthcare completely right now I discounted the idea as an impossible objective.
I am persuaded, though, by the dissent language that discusses only “lawful methods to do so” rather than, say, “options to share the cost”.
Ray, The supervisors did not directly discuss the police negotiations — absolutely not. Gosh, I don’t want to get myself in trouble! What Michelle Kichline and Mike Heaberg (supervisors in attendance) did speak of was the “lifelong healthcare benefits of the police retirees”. The healthcare discussion was in conjunction with the $40M unfunded liability and the increase from $250K to $500K in yearly contributions to reduce the debt. If you go to this Nov 16th Community Matters post, I summarized the meeting and there’s detail of the police healthcare benefits. I recalled this budget discussion when the police union representative later explained to me that the township’s stance entering the negotiations was ‘no’ post-retirement healthcare benefits.
In reading the comments on the above-referenced post, there were several comments made by what appears to be a police officer or at a minimum someone with firsthand information. Reviewing ‘Rob’s’ comments, here’s a comment he made that is parallels what I was told myself by more than one officer. Quite telling in light of the arbitration award —
Pattye has been told the police’s side of the negotiation and seems to accept that as fact. The township likely has a different story. The truth is probably somewhere in the middle.
CW, interesting comment — if the township has a different story, the community has yet to hear it. Are you suggesting that the township did not take the police contract negotiations to arbitration after one meeting as I have been told? How are residents to get this ‘different story’ that you suggest? The arbitrator agreement goes on the township website but there is no commentary from the BoS — will that happen at the next meeting on BoS meeting on Monday night?? Last night I emailed a right-to-know request to Bill Martin, township manager asking for all associated police contract costs. There has not yet been a response — I will assume it was received although there is no mechanism in place that automatically lets a resident know that their email is received.
Speaking of communication, in Ray Hoffman’s column today in the MLMN, he looks back at his 2012 predictions. I was amused by Hoffman’s #7 prediction for 2012:
“…depends on who you ask” — I wonder how ‘community responsive’ the Daylesford residents feel that the BoS were on the C-1 zoning change or the Glenhardie folks over their storm water issues.
The township attorneys goal was to gut the police contract. It was his way or nothing. He is so arrogant, that Delco police associations will not work with him due to some alleged ethics issues. Tredyffrin Police have received much lower raises than their counter parts over the last decade. If you look at total compensation, Tredyffrin Police are very far from the top. I guess the townships response at this point will be to cut the department even further. This use to be a great place to live.
Thanks for this Pattye. Clearly the BOS did not understand the premise behind arbitration either. While he knows I object to his global condemnation of the past (vis a vis the school board — because he knows nothing about the past 20 years except for the past two contracts, which were unrelated), the BOS gave up the right to everything when they handed over the decision to a 3rd party. The school board does fact finding — in my opinion only — to buy time and to try to shine light on some of the issues. But there is no way any elected board in this community has any business going into binding arbitration. Fight the fight. Debate the debate. Be angry at what you are stuck with…but don’t look for a cover story as to why your budget and your expenses are where they are. It seems to me that the BOS must have known this would be the outcome, but may have been “taking a shot” at getting something back.
While I have not particularly agreed with anything done in the past two TESD contracts, I will again disagree with John’s assumption that the positons were trying to claw back anything. Each contract for the school district is a new beginning. The economics of this community have clearly changed, and the employees are part of a program that has basically restricted costs. A school board negotiaton is about how to deploy those restricted costs. The board was/is faced with where/how to spend the money. They wanted a reduction in benefits and a slow down in salary escalation to allow them to retain programs. How is that “clawing back?” …and in fact, the teachers clearly understood and chose a middle ground.
This is NOT in defense of anything on either side. The BOS is a very autonomous group, responding only to what they view is taxpayer expectations. They choose to allow a retirement liability to increase. The school board pays the bill the state sends them. The school board is a taxing authority with a maximum on the taxes they can levy. The school board may not levy an EIT without a referendum. The school board does not approve subdivisions that result in additional population for the schools to educate.
So — this is apples and oranges. All fruit, but not of the same tree.
How do yoiu know what he know’s Andrea? It always seems like you have an ax to grind with him. Everything with you always goes back to you and your time on the School Board. Andrea, whether you want to admit it or not, you do tend to stand in place of the school board and either defend them or say what you did do during your time or what you would have done. Could you please stop doing that? I’ve concluded that you simply have a problem with some people and if they express an opinion, you will go after them.
Supposedly, this place is about a free exchange of ideas. Can you once just comment on the matter itself without getting into personal issues? We have the blog owner here in Pattye being honest here about a disgreement she had with John and where John turned out to be right. Looking at the facts, I do not see how you can say, with a straight face, the BoS wasn’t trying to claw back things that were given in previous contracts. When you start from a positon of not wanting to negotiate and stating that you wish to get rid of all post retirement benefits, what else is one to believe. What it a bluff? Did the BoS really think that if they asked for 100% relief, they may get 50% relief? That’s not how negotiations work. If this was “taking a shot” as you call it, then it was a shot that never had a chance of landing on its inteneded target.
You say that each contract for the school district is a “new beginning.” How is that? The old contract is always used as a starting point.
The old contract is not a starting point. “always” is not accurate. I did not say the BoS was not trying to claw back….
I won’t burden you any further with information. You clearly prefer conjecture and second guessing with some criticism and acrimony topping it off. I certainly was not defending the BoS….but unless you accept the premise that they did not understand arbitration, then”taking a shot” is just another way of having political cover.
I know how negotiations work, and not because I have a degree where I took courses…but again, no one here seems to read anything but what they think they read. When I said the BoS operates autonomously (keeping taxes low as perhaps their only goal), you ask when I have seen this? WHAT? Find out what the expectation is? Didn’t I say what they VIEW as the expectation??? When have you seen them operate any other way? Even the development decisions of the past few months are clearly driven by revenue wishes.
I feel like Emily Litella is doing the reading, so I’ll close with
Happy 2013…fiscal cliff locally, nationally, and globally.
You wrote “The BOS is a very autonomous group, responding only to what they view is taxpayer expectations. ”
When have you ever seen this in the last decade? I have only seen them do things that advance their own political career. If there is anything done for the taxpayer expectation they should try to find out what they expectation is. With exception of JD and Michele, I find the remainder of the board to be completely disconnected. I’m not excusing JD and Michele, because they are still part of the collective group, but at least some times they try.
The police department is a massive portion of the services the township provides. I for one am embarrassed that the township failed to properly negotiate the contract. Perhaps next time around with Superintendent Giaimo things will go smoother. But the reality is that Police jobs are not easy and are among the more dangerous jobs out there. Penny wise is dollar smart. I have no doubt that if negotiations continued, there would be more cops on the street, and they would be well compensated. No one really won here.
A final remark on this post from John Petersen —
I was curious about how a panel of arbitrators should operate with regard to explaining their reasoning for an award. I found Rules of Procedure for the Conduct of Fee Arbitrations for a few jurisdictions.
Nevada: The Panel is encouraged to write a narrative award setting forth their findings and conclusions as to each question submitted to the Panel, the decision of which is necessary to determine the controversy. However, they are not required to do so.
CA: Arbitrators are encouraged, where appropriate, to include findings of fact in their awards.
Oregon: The award shall state the basis for the panel’s jurisdiction, the nature of the dispute, the amount of the award, if any, the terms of payment, if applicable, and an opinion regarding the reasons for the award.
Arbitration Association: The award shall be in writing and shall be signed by a majority of the arbitrators and shall provide the written reasons for the award unless the parties agree otherwise. It shall be executed in the manner required by law.