ARBITRATION CITY OF TAYLOR -andGrievance No.

11-05

TAYLOR PROFESSIONAL FIRE FIGHTERS ASSOCIATION, LOCAL 1252, IAFF, AFL-CIO ________________________________________________________________________

SUBJECT Violation of mandatory staffing provisions of 2007-11 agreement; alleged impossibility of performance due to financial duress. ISSUE Has the City violated Articles 24 and 25 and Appendix A in the 2007-11 agreement by laying off bargaining unit members and thus failing to maintain the suppression staffing levels required in Article 24 while providing advanced life support transport? If so, what is the proper remedy? CHRONOLOGY Notice of layoffs: June 1, 2011 Grievance submitted: June 9, 2011 Implementation of layoffs: July 1, 2011 Arbitration hearing: October 26, 2011 Briefs received: November 23, 2011 Decision issued: December 30, 2011 APPEARANCES For the Employer: Kerry L. Morgan, Attorney For the Union: Duane F. Ice, Attorney SUMMARY OF FINDINGS As the City conceded, failure to maintain staffing levels mandated in Article 24 while providing advance life support transport violates that article as well as the full force and effect provisions of Article 25. Such violations are not justified by purported financial impossibility of performance, because the contract does not recognize such a defense and even if it did, the City did not prove compliance with Article 24 is impossible.

BACKGROUND The parties 2007-11 collective bargaining agreement was to expire June 30, 2011, but Article 25.3 extended it past that date if, as was the case, a new agreement was not in place by then, as follows:
Extension: In the event that negotiations extend beyond the said expiration date of this Agreement, the terms and provisions of this Agreement in effect on June 30, 2011 shall remain in full force and effect pending Agreement upon a new contract. No new and/or additional wages, benefits, hours or conditions of employment shall be applicable to members of the bargaining unit on or after July 1, 2011 in the absence of mutual Agreement between the City and the Union or an Act 312 award.

Terms and conditions of the 2007-11 contract that remain in full force and effect pending adoption of a new one or issuance of an Act 312 award (for which neither party has petitioned) include these:
ARTICLE 24 STAFFING The parties agree that the Fire Department will maintain the current suppression staffing level of fifty-three (53) members and the daily shift staffing of fourteen (14) members, so long as the City provides advanced life support transport. However, and notwithstanding anything to the contrary herein, the parties understand, acknowledge and agree that the City has no obligation to continue to provide advanced life support transport. Effective October 1, 2008, twelve (12) positions of the classification of Sergeant shall be established . . . [balance of this paragraph irrelevant to this dispute]. Attached as Appendix A is the Organizational Rank Chart, which is incorporated into this Collective Bargaining Agreement by reference.

The City continued providing advanced life support transport (ALST) after June 30 but did not maintain total suppression staffing of fifty-three bargaining unit members or daily shift staffing of fourteen. On June 1 it sent layoff notices to nineteen members, one of whom was not laid off but promoted to Chief. Total suppression staffing did not drop to thirty-four, however, because two suppression positions were filled by reassignment of forty-hour employees. On June 9 the Union filed a grievance claiming the layoffs would violate Article 24, Appendix A, and Article 8.4, in which the City agreed to maintain the current noncontractual 40 hour positions . . . unless a contractual layoff occurs. It requested that the City reinstate improperly laid off and removed employees to their positions with a make-whole remedy for lost pay and benefits.

The City answered the grievance on June 16, denying it with this Rationale: The Citys decision to lay-off nineteen (19) Fire Department employees is based on serious declining economic conditions. The lay-offs are part of an overall long-term deficit reduction plan, which may include other budgetary cuts and lay-offs. It then proceeded to implement the layoffs on July 1, although six of the affected fire fighters were briefly temporarily recalled on July 8 and three of those employees were recalled again (apparently permanently) on October 10 and still actively employed on the date of hearing. Thus total suppression staffing then was thirty-eight, fifteen below the level required in Article 24 so long as the City provides advanced life support transport and still in full force and effect pursuant to Article 25 and the parties Ground Rules for Negotiations, in which they also agreed the 2007-11 contract shall remain in full force and effect until a new Agreement has been reached and ratified. Lt. Stanley Pochron testified about these undisputed facts and explained that the City has provided ALST without interruption since January 2000, having provided only basic life support service before then. The Union also presented correspondence between the parties concerning the protested layoffs and negotiations for a new agreement, including a July 29 letter from Mayor Jeffrey Lamarand to the Union's attorney stating that the City declines to bargain . . . minimum staffing levels because they are permissive subjects of bargaining and asserting that Art. 24 staffing levels are unenforceable and inapplicable as of July 1, 2011. Attorney Duane Ice responded in a letter to the mayor on August 2 stating that such assertion was wrong because those staffing requirements remained in full force and effect pursuant to Article 25 and the maintenance of conditions clause in Article 14 of the 2007-11 contract. The only evidence the City presented at hearing was testimony by Amanda Banas, its Director of Executive Affairs, who said that ALST services historically generated about $1.5 million in annual revenue to the City but such revenue fell to $1.2 million in fiscal year 2010-11 and was estimated at $850,000 for FY 2011-12. She also said the Citys all-in annual employment cost per bargaining unit fire fighter is $100,000 and cessation of ALST services could lead to additional layoffs. With its post-hearing brief, the City submitted a September 2011 award and opinion by Stanley Dobry in Act 312 arbitration between the City and the POAM, representing its

patrol officers, as purported evidence of its financial distress. Arbitrator Dobry identified numerous financial issues that were said to impose hardships on its budget, chief among them (in the Union's view) that property tax and state revenue sharing income have declined significantly and there is a structural deficit in the Citys general fund, whose unrestricted balance barely would cover one days operating expenses. Dobrys opinion was received, over Union objection and even though not presented or even mentioned at hearing in this proceeding, but only as a general picture of the Citys financial condition as presented in that arbitration, not as evidence bearing directly on the issues in this one, which it does not provide. The Union contends the staffing mandate in Article 24 is clear and unambiguous and the Citys violation of that mandate since July 1 is equally clear and undisputed, and that should be the end of the arbitrators inquiry since he has no power to alter or modify the terms of the Agreement (Article 16.1.C.). It argues there is no contractual basis for a financial hardship exception to the Citys obligation to maintain mandated staffing levels while providing ALST, and lack of such an exception is particularly significant in light of the Union's acknowledgment in Article 8.4 that efforts to accomplish a fair and industry comparable rate of compensation . . . may result in further contractual layoffs of Local 1252 members due to declining economic conditions. In the Union's view, the arbitrator should not even consider the Citys claim that its admitted breach of Article 24 is justified by impossibility of performance, but if the claim is considered it should be rejected because the City presented no specific evidence that its economic circumstances actually make the required staffing impossible. The City essentially concedes it has violated Article 24 continually since July 1 but contends (in its post-hearing brief) the present financial crisis . . . results in a legal justification for breach of the collective bargaining agreement. Citing a 2010 Ohio Court of Appeals decision, it argues a defense of supervening impossibility is within the scope of the arbitrators authority, whether or not the collective bargaining agreement says so, because the CBA is an agreement to which a contract defense that would potentially discharge performance applies as it would to any other contract dispute in any forum. The City argues its purported inability to maintain contractually mandated staffing levels even while providing ALST and receiving the significant revenues those services produce

constitutes such a supervening impossibility, so the grievance should be denied. It also argues that even if it is sustained no damages should be awarded because the Union presented no specific evidence of wage or benefit loss by any laid-off employee. It also renews the argument that staffing is a permissive subject of bargaining and notes that the Union presented no evidence in these proceedings that the staffing mandates sought to be enforced herein are so intertwined with safety issues as to convert them into mandatory subjects of bargaining. DISCUSSION AND FINDINGS Apparently the City made the last point in belated response to an aside in the Union attorneys August 2 letter that staffing intertwined with safety is a mandatory subject. The Union did not pursue that theory in arbitration, however, and had no reason (or need) to do so, since this case concerns enforcement of existing contract terms and provisions [that] remain in full force and effect pending adoption of a new one, as stated in Article 25, which the City also conceded. It also must be remembered that the primary point of that letter, consistent with the Union's position in arbitration, was that contractual staffing mandates were not unenforceable and inapplicable as of July 1, 2011 as incorrectly asserted in the mayors July 29 letter. The permissive subject argument and that assertion are mere diversions from the central issue in this dispute, however, given the Citys admitted continuing breach of the collective bargaining agreement regarding Article 24 staffing mandates. The real issue is not whether it violated Article 24, but whether the undisputed violation is excused by financial impossibility of performance. It is not, for two reasons. First, it is clear that the parties contemplated the possibility of layoffs due to declining economic conditions, as stated in Article 8.4, and that the City has the sole right to lay off employees, as stated in Article 5, but in accordance with the provisions of this Agreement and except as specifically abridged therein. The ALST-related staffing mandate in Article 24 is such a specific abridgement, to which no tacit exception can be found in Article 5 or 8. Despite the acknowledged possibility of layoffs due to declining economic conditions, the parties did not agree that mandate could be altered or ignored even in the event of such decline. Therefore it would be an abuse of arbitral authority to

countenance the Citys unilateral attempt to alter or modify the contract by refusing to comply with Article 24, notwithstanding any dicta by the Ohio Court of Appeals concerning the applicability of general contractual defenses to arbitration of disputes arising under collective bargaining agreements. Second, even if the arbitrator properly could consider and uphold a factually substantiated defense of impossibility of performance due to financial distress, the City fell far short of proving that compliance with the Article 24 staffing mandate actually was or is financially impossible. Accepting as true its assertion that it is in dire financial straits, with or without benefit of arbitrator Dobrys opinion in the Act 312 police arbitration, the City presented no specific evidence that its general financial situation, dire though it may be, makes continued employment of the contractually mandated complement of Fire Department suppression personnel impossible. To the contrary, the little bit of evidence it did present showed that those employees services enhance the revenues of the City and to some extent therefore may be said to pay for themselves. The City made a choice to preserve that revenue stream by continuing to have the Fire Department provide ALST services but renege on its contractual promise to maintain the suppression staffing level that the parties agreed in 2007 was necessary for provision of such services. According to Banas, such revenue fell $300,000 below the historical average in 2010-11, but layoffs implemented in admitted breach of Article 24 would reduce employment expenses by more than $1.5 million in 2011-12. Thus it is clear those layoffs were not a matter of unavoidable necessity, but a strategic deployment of resources away from the Fire Department (and literally out of the pockets of the fire fighters) to other uses. For all these reasons, the Citys admitted breach of Article 24 in failing to maintain suppression staffing levels mandated therein so long as the City provides advanced life support transport was not justified by impossibility of performance due to financial duress or any other excuse or rationale, and the grievance must be sustained. It is true that the Union did not present detailed evidence documenting the wages and benefits lost by fire fighters laid off in violation of Article 24, but that was not necessary given that the affected employees were identified and relevant information about their wages and benefits is not only known to but officially maintained by the City. The only

additional information they may need to provide will be documentation of any costs they incurred due to loss of health insurance while they were improperly laid off, which is better dealt with post-hearing (as set forth in the following award) than it would have been by extending the hearing for presentation of such information by all the employees. AWARD Grievance No. 11-05 is sustained. The City shall forthwith reinstate all employees who were laid off on June 30, 2011 and remain on layoff, with credit for continuous service for seniority and all other contractual purposes, and pay them all wages they would have earned from June 30, 2011 until reinstatement if continuously employed during that period, minus their income during the same period from any other employment that they did not already have as of June 30, 2011; and it shall reimburse them for documented outof-pocket costs that would have been covered by contractual benefits if they had not been improperly laid off. As to the three employees improperly laid off but recalled to active employment on October 10, 2011 (Scott Barry, Ronald Evina, Charles Krzciuk) the City shall pay them all wages they lost while on layoff plus reimbursement for documented out-of-pocket costs they incurred due to loss of contractual benefits during those periods. The arbitrator retains jurisdiction until April 6, 2012 for the limited purpose of resolving disputes between the parties about computation of monetary remedies ordered herein.

Paul E. Glendon, Arbitrator December 30, 2011