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WASHINGTON METROPOLITAN TRANSIT AUTHORITY and
January 13, 2012
THE OFFICE AND PROFESSIONAL EMPLOYEES INTERNATIONAL UNION LOCAL NO.2 AFL-CIO
This is a statutory interest arbitration proceeding between WMA TA (The Authority) and the Office and Professional Authority was created Employees International Union, Local 2 (The Union). The between the Federal
in 1967 by an Interstate
Government, the State of Maryland, The Commonwealth
of Virginia and the District of
Columbia to plan, develop, build, finance and operate a balanced regional transportation system in the National Capital area. This matter is convened under Article XIV, Section 66 (c) of that Compact. The decisional standards for resolving this dispute are set forth in the National Capital Area Interest Arbitration The dispute in this Interest Arbitration terms and conditions of employment Standards Act, 40 U. S. C. 18301-18304.
arises out of the inability of the parties to agree on the for a successor contract covering the
bargaining unit. The bargaining unit covered by the agreement at issue in this
proceeding consists of approximately 700 employees who collectively represent approximately The collective 7% of the Authority's workforce. bargaining agreement was amendable on July 1, 2008. After bargaining
for several months, the parties exchanged final proposals on May 27,2010 (the Authority revised its proposals on July 13, 2010 and October 26, 2010). When the parties were unable to resolve their differences, the issues in dispute were processed to
Interest Arbitration. (Article XX section 7 of the CBA) In accordance with the procedures contained in the Agreement, the parties established a
Board of Arbitration.
The Board was composed of the following members.
MR. THOMAS R. ROTH OPEIU LOCAL 2 MEMBER MR. ROBERT AMES ESQ. WMATA MEMBER MR. KENNETH E. MOFFETT NEUTRAL CHAIRMAN Hearings on the merits of the matter were conducted and November on July 8,9,12,13,15, sessions and 16;
October 25, 26,27; Arbitrators
8 and 9, 2010. Executive
with the partisan
and the Chairman
were held on June 21; August 4; October 24; and
November 14, 2011. During the hearings, the parties were afforded a full and complete opportunity to present testimony and documentary evidence in support of their proposals. A broad range of
cross-examination was permitted. At the conclusion of the evidentiary stage of the proceedings, Counsel filed post-hearing briefs in which they raised points and contentions in support of their respective positions regarding proposals involving
economics, wages and benefits, and proposed changes in contract language regarding subcontracting, pay bands, and multiple work rules. On June 21; August 4; October 24, and November 14, 2011 the Board met in executive
sessions for additional argument and additional evidence. At the last executive session the parties were furnished an outline of the neutral Chairman's decision
regarding all open matters except two: subcontracting and the creation of new pay grades. The neutral Chairman informed the Partisan members of his decision on these
items after reviewing their subsequent response. The Board has given full consideration 2,386 pages of transcript to the record in this case, a record that exceeds more than 400 exhibits.
plus several CD's, and includes
It should be noted that this Arbitration July 8, 2010 and the final executive 2011. The parties to this Arbitration
Board was convened for the first time on session was not concluded delayed completing until November 14,
until a final
decision was rendered in the Federal court case with ATU Local 689 and WMATA. The case brought by WMATA concerned three-person Board in that Arbitration. the validity of the arbitration award issued by the Both parties rightly felt that court case impacted Capital
as it related to the validity of the rules set forth in the National
Area Interest Arbitration Standards Act. Section 1803, Standards for Arbitrators of the National Capital Area interest Arbitration
Standards Act provides in subsection (b) that an Arbitrator in a case of this type "may not make a finding or a decision for inclusion in a bargaining agreement governing conditions of employment without considering the following factors".
(1) The existing terms and conditions of employment of the employees in the bargaining unit. (2) All available financial resources of the interstate compact agency. (3) The annual increase or decrease in consumer prices for goods and services as reflected in the most recent consumer price index for the Washington metropolitan published by the Bureau of Labor Statistics. (4) The wages, benefits, and terms and conditions of the employment of other employees who perform, in other jurisdictions in the Washington standard metropolitan statistical area, services similar to those in the bargaining unit. (5) The special nature of the work performed by the employees in the bargaining unit, including any hazards or the relative ease of employment, physical requirements, educational qualifications, job training and skills, shift assignments, and the demands placed upon the employees as compared to other employees of the interstate compact. (6) The interests and welfare of the employees in the bargaining unit, including: (A) The overall compensation presently received by the employees, having regard not only for wage rates but also for wages for time not worked, including, vacations, holidays, and other excused absences; (8) All benefits received by the employees, including previous bonuses, Insurance, and pensions; The continuity and stability of employment. (7) The public welfare.
The Authority submits that, unlike other major metropolitan Authority WMATA's does not have a dedicated
transit agencies, the
source of tax revenue. As a result, 42% of and grants from Federal significant revenue
funding comes from the Compact jurisdictions
funding. The compact jurisdictions
are currently experiencing
shortfalls which have necessitated the need for budget cuts. The substantial annual fiscal burden which is shouldered by the Compact jurisdictions from their respective in
general revenues to sustain WMAT A's provision economic Arbitration times such as these. The Authority
of transit services is heightened the necessity of the
Board following the guidelines set in the Judge Messitte decisions
case. "A fair reading of the language of the statute can only signify that
the Act imposes more stringent requirements - both on Arbitrators and on reviewing courts - than would ordinarily apply under the common law of Arbitration." The Authority federally in their post-hearing application brief states, "Consistent (Jt. Exh. 6)
with its position that the
of the National Capital Area Interest
Arbitration Standards Act's comparability principles dictate that the parties pursue a course of restraint respect structure in order to correct the market imbalance unit's wage levels, the Authority that currently proposes exists with the salary unit."
to the bargaining
in effect as of July 1, 2008 until June 30, 2012 for the Local 2 bargaining to salary structure during this period, WMATA's proposal
In lieu of any adjustment
provides for a lump sum payment 2012. As far as other benefits benefits in both the pension
of 1% of base annual pay for FY 2009,2010,2011, the Authority proposes decreases in
and health care areas. of the ATU bargains first at WMATA, completion of that settlement Local in bargaining.
Because Local 689 (7,400 members) 2 (700 members) have historically
As a result of a dispute between WMATA and Local 689 in this round of bargaining, completion of that agreement did not occur until recently. The Interest Arbitration until completion of the Local 689
between WMATA and Local 2 was held in abeyance agreement. Union Exhibit 23 provides a side-by-side wage agreements chronology
of the Local 689 and Local 2 (Tr.
for the past 25 years covering
the last 6 rounds of bargaining.
107) Two critical facts emerge from this material: first, in each instance, agreements were reached after Local 689 settled; secondly,
the Local 2
while timing often varied,
the overall wage change for Local 2 has been identical to Local 689. Over the period
from September increased
1987 to July 2008 -- spanning
all 6 rounds of bargaining
76.3 percent for Local 2 and 76.7 for Local 689. (UX 24; Tr. 112) It is obvious to the Authority in negotiating with
that the Local 689 wage pattern has been important Local 2. (Union post hearing brief, p. 23)
The Union has proposed a 4% general wage increase in each year of this contract plus changes interested in the pay band structure in maintaining and subcontracting languages. They are also The
the status quo with pensions
and health and welfare.
Union has proposed multiple work rule changes and also upgrades in certain job classifications.
2. AWARD AND OPINION OF THE CHAIRMAN
A. THE GENERAL Insofar as a general
WAGE ADJUSTMENT wage adjustment is concerned, the Board awards the following:
Effective July 1, 2008- 2% lump sum payment** Effective July 1, 2009- 3% general wage increase Effective July 1,20103% general wage increase general wage increase
Effective July 1,2011-3%
** To receive the 2% lump sum payment as provided above, the employee must have
been on the employment rolls as of the date of this Award. The lump sum payment shall be based upon the total straight-time hourly wage earnings between July 1, 2008 and June 30, 2009.The lump sum payment shall also be payable on the same basis to any employee who retired on or after July 1, 2008.
Factor 1 - The existing terms and conditions of employment of the employees in the bargaining unit.
encompass all elements of compensation as well as specific work
Terms and conditions
rules. This factor requires foundation
the Board to examine
based upon a agreement.
of the "existing terms" as set forth in the collective
The existing agreement - including the structure of compensation - is the product of years of collective bargaining and a reflection of terms and conditions acceptable to the parties. Factor 1 requires change. As Factor 1 suggests, collective bargaining the starting point for any interest Arbitration agreement and the terms and conditions incompatible is the current therein. the Board to respect this "foundation" in awarding substantive
change, or any change
with the parties'
bargaining history, need to prove that special circumstances or intervening events warrant the change. That is not to say that the burden has not been met to my satisfaction coverage significant on certain issues in this case. I have awarded for new hires and the addition departures from long-standing of two pay grades practices the elimination of retiree - both
to the TA pay schedule
in this contract.
2. Factor 2 • all financial resources of the interstate compact agency. Factor 7 The Public Welfare defined as: (1) the financial ability of the individual Jurisdictions participating in the compact to pay the costs of providing public transit services; and (2) the average per capita tax burden, during the term of the CBA to which the Arbitration relates, of the residents of the Washington metropolitan area, and the effect of an Arbitration award rendered under that arbitration on the respective income or property tax rates of the jurisdictions that provide subsidy payments to the interstate compact agency established under the Compact.
Factor 2 together with Factor 7, The Public Welfare argument typically referred to as ability-to-pay
or "fiscal capacity".
The ability of
the employer to pay the cost of proposed changes is a relevant consideration in nearly
all Interest Arbitration
cases, with or without direction of statutory factors. The parties
devoted a great deal of evidence to this factor which the Board is compelled to weigh. (a) The Authority's
Position: The Authority
states that proposals financial
must be evaluated of the Agency
light of the Act's requirement and the "Public Welfare."
to consider the available
The latter term is defined to include the financial ability of the
individual jurisdictions participating in the Compact to pay for the cost of providing public transit services. standards (Auth. Brief, p. 68) The Authority argues that applying proposal those statutory in
makes it obvious
that the Union's economic
should be rejected
favor of WMATA's. principally
(Auth. Brief, p. 69) In reaching this conclusion the Authority relies of Dr. Stephen WMATA's S. Fuller from Center for Regional Chief Financial Officer, Carol Kissal, Peter Benjamin. Outlook for
on the presentations
Analysis at George Mason University, and former First Vice Chairman
of the Board of Directors, Economic
Dr. Fuller sponsored
a study on "Recent
Trends and Near-Term
the WMATA Jurisdictions." WMATA jurisdictions their respective
(AX 8) Among his findings were the following: (a) the their peak rates of economic have slowed growth in 2004 and
rates of growth
each year since then with 2009 projected of 1991; (b) the ability of the
to have the slowest growth rate since the recession
jurisdictions to support increased expenditures for all public services will lag their economies' sources property); performance by at least one year and often by two years as revenue years' performance (personal and corporate increased income, service levels,
reflect the previous
and (c) the ability of the jurisdiction improvements,
merit salary increases,
new services revenue
and capital flows in FY 2010 and
in FY 2009, will be constrained
2011. (Tr. 795) Dr. Fuller concluded
that " ... the ability of Local Jurisdictions
to take on new
spending requirements of any sort is dependent on their ability to find other places to cut services. expenditures There's no surplus money. There's no expected increase in revenues over
until at least fiscal [year 2012] at the earliest." (Auth. Brief, p.72)
Ms. Kissal explained how the balancing of WMATA's operating budgets for FY 2009 and FY 2010 required a wide range of "stringent management controls." (Auth. Brief, p. 72; AX 68; Tr. 1157-1165) These included: a hiring freeze, eliminating 313 positions, restricting accounts use of overtime, and making across-the-board reductions in discretionary
(e.g., travel, material, supplies).
(AX 68; Tr. 1158) These actions were
necessary in addition to fare increases effective January 1, 2009 to achieve a balanced budget for FY 2009 and reset its baseline costs for the FY budget. (Auth. Brief, p. 73; Tr. 1162) With regard to FY2010, WMATA initially estimated it would experience a $154
million deficit - the largest gap in history. (Tr. 1162-1163) The Authority stated that the projected deficit was principally driven by a decline and expense increases in energy, paratransit services, pension contributions and expected wage adjustments. (Auth. Brief. p. 73) After accounting for the FY 2009 initiatives (eliminating 313 budgeted
positions, cutting overtime, and reducing departmental budgets), WMATA was able to generate $85 million in savings plus $19 million in reduced funding (for retiree health which together with a transfer of 10 million from
care and potential wage increases),
the capital budget left an initial budget gap of $40 million for FY 2010. (AX 68, p.14; Tr. 1165-1177) According to Authority witnesses, the FY 2012 gap was ultimately reduced
to $25 million before additional subsidies from the jurisdictions.
(Auth. Brief, p. 74)
The FY 2011 budget projected a $189 million shortfall, which according to the Authority,
was caused by lower "sluggish which adversely were increased Additionally,
growth and stubbornly
(Auth. Brief, p. 74) In order to close this gap fares
by 18% on rail and 20% on bus (AX 68, p. 21; Tr.1180) budget. Ms. Kissal
$30 million was moved from the capital to operating
testified that the FY 2012 budget would again contain a budget deficit of $87 million. (AX 68,
p. 23; Tr. 1182-1183)
of Mr. Benjamin who concluded higher operating that (1) fare
The Authority offered the testimony revenue has doubled ridership; increases
since 1999 and funding (2) the supporting
costs by raising fares will
are not in a position to fund
for Metro operations;
and (3) shifting funds from capital to
operating budgets will impair WMATA's 1240-1261 ). The authority consequences adjustments
ability to meet new demand. (AX 69; Tr.
argued that "in the face of such documented
adverse that the wage of
of the continuing
fiscal crisis, this Board can only conclude
sought by the Union would further compromise
the fiscal condition
WMATA and its funding jurisdictions and this would have an adverse affect on the public welfare." (Auth. Brief, p. 83) (b) The Union's position: consider "all the financial The Union notes that Factor 2 requires of the interstate compact the Board to in developing
an award. According to the Union, quantifying available resources in this case is simplified amendable by the long delay in finalizing July 1, 2008, WMATA's a contract. The collective bargaining agreement is
2009 fiscal year. The Authority's
been determined through FY 2011, the first 3 years of the proposed agreement. Citing
the testimony the expense
of CFO Carol Kissal, the Union testified that the Authority of the Kasher award for Local 689 and assumed
has fully funded process (Tr. of
in the budget employees.
that the wage cost of this award would be extended 1213,1219; UX 143) Additionally,
to all unionized
the budgets contemplate
the cost of the Local 2 retirement programs and health and welfare programs at present levels, i.e. without any savings attributable that "under factual circumstances to Authority proposals. The Union states resources is
of this case, the question
limited to the difference without any employee
between the Union's proposal and the Local 689 pattern, concessions on pensions or health and welfare" (Union Brief, p. 23)
With regard to the Public Welfare,
the Union argues that the costs of its proposals
are miniscule in the financial picture of the supporting jurisdictions and therefore cannot possibly supporting subsidies have an adverse jurisdictions is extremely impact on the tax burden, tax rates or fiscal capacity of the
(UX 166; Tr. 962) The Union notes that the source of tax broad and diverse. While there are 8 governmental jurisdictions and
supporting WMATA, 57 % of the subsidy
comes from the States of Maryland,
Virginia; another 38% from the District of Columbia. comes from the other 5 counties estate tax, which is regarded and cities whose
(UX 166, p.3; Tr. 962) A scant 5% main source of revenue is the real
and difficult to increase that Maryland,
in this environment.
(UX 166, p.3-4; Tr. 962) The Union demonstrates
Virginia, and D.C are not
exclusively dependent on taxes imposed on their respective residents 22% of their total revenue comes from the Federal Government. The balance of revenue for the
states and D.C. comes from a broad and balanced structure of taxes (income, sales, etc. ) and user fees. (UX 166, p. 4: Tr. 962).
According to the Union, there can be no legitimate argument that a wage award at the levels sought by the Union can have an impact on the supporting jurisdictions or the "public welfare" one way or another. (c) Chairman's Discussion: I concur with Arbitrator Kasher's opinion that considerable
weight must be given to the evidence regarding impact of the 2008-2009 "great recession" and the impact of this "most dramatic (Kasher conclusion second economic downturn" on the national
and local economies. Authority's general
p. 8) I agree with the
that the agency cannot afford to absorb the wage and
benefit increases proposal
sought by the Union. The cost of the Union's wage and benefit (AX 109) The cost of the award
was over $33 million over a 4-year contract.
is more modest. The Union proposed general wage increases totaling 17% (compounded) resources no WMATA over 4 years, the award provides in these difficult 9.3%. I have concluded that available
are not unrestrained resources available
times. But, that is not to say there are (2% per year)
to award the modest wage change
granted herein. Essentially I have credited the Union's evidence regarding budgeted wage change in FY 2009, FY 2010 and FY 2011. The Authority Kasher Award covering has funded the cost of the and the vast
Local 689 which covers 7,700 employees Included in these budgets
majority of the WMATA workforce. to fund the same increases
are the sums necessary including Local 2.
for the rest of the Authority's available to finance
It follows that there are resources consistent
an award in this case these modest cost
with the Kasher increases.
I find that factor 2 supports
increases, but no more.
I must reject the argument
that no increases
in labor costs are affordable,
the awarded increases will have an adverse effect on tax burdens or tax rates. On these points I find the Union evidence persuasive that the annual cost of the award is
negligible as a percent of the operating budgets of the jurisdictions paying the subsidy. In the end, the statutory definition of "public welfare" must be honored. But there is no
evidence that the cost of the award will cause an increase in subsidies, tax rates, or tax burdens. 3. Factor 3 The annual increase or decrease in consumer prices for goods and services as reflected in the most recent Consumer Price Index for the Washington metropolitan area, published by the Bureau of Labor Statistics. Factor 3 is a commonly recognized standard for wage determination at the bargaining table and in Interest Arbitration cases. The purpose is clear, to enable arbitrating employees to maintain real pay. However, the application of the cost-of-living factor can periods
be controversial with respect to matters such as the appropriate measurement and forecasts over future change position: in the CPI.
(a) The Authority's
The annual change in the Washington-Baltimore
CPI-W by .88%
during the first contract year (July 1, 2008 - July 1, 2009) actually declined (AX 6(a); Auth. Brief, p. 22) During the second on the Congressional Budget office projections, contract
year the CPI rose 1.06%. Based to increase 1.75% in
the CPI is expected
year three and 1.9% in contract
year four. The Authority
argues that these trends do not
support the 4% annual increase in wages proposed by the Union. (Auth. Brief, p.22) The Authority submitted that in addition to general wage increases, when evaluating step increases maintenance received of real
should also be taken into account
pay. (Auth. Brief, p.23)
The Union's position: According
to the Union's analysis,
under Local 2/WMA TA agreements maintain real pay. At the expiration
over the long term have not been sufficient to of the current agreement on July 1, 2008 real pay
was 7.2% below the level on September 1987 - the beginning of the second contract between the parties. (UX 12; Tr. 82-85) According to the Union, it will take a general wage increase of 7.8% effective July 1,2008 to restore the real rate to the 1987 level. economic forecasts at the close of the
(UX 12; Tr. 8285) The Union points to consensus
record which were predicting annual increases of 2%. (UX 18; Tr. 91) The Union argues that national forecasts Metropolitan understate inflation in the "Washington CPI has far outpaced the All
area" since the Washington-Baltimore
City - US Consumer Price Index over the past decade (UX 15; Tr. 87) (c) The Chairman's Discussion: The parties factor. I conclude have drawn divergent conclusions
regarding the cost-of-living
that both are correct in part. It is true that event which cannot be
the decline of the CPI in 2008 represents
an historic economic
ignored, anymore than an historic spike could be ignored. On the other hand real pay declined over the last several contracts and this fact, under ordinary circumstances,
would justify a catch-up adjustment supported by application of factor 3. With respect to step increases I note that these are not available to 20% of the bargaining unit on the
TA schedule who have reached the maximum; moreover, step increases are designed to recognize added experience and corresponding proficiency in the job and in my experience are not normally counted in the measure of real wage progress. Factor 3 by itself, supports general wage increases both to maintain and improve living standards. In recognition of the CPI change in 2008 I find that the Kasher award which calls for a
wage freeze in the first contract Over the entire agreement
year, has properly
for this development.
wages will increase
2.2 % per year which will likely
provide a reasonable measure of real wage progress over the 4-year contract. 4. Factor 4 The wages, benefits, and terms and conditions of the employment other employees who perform, in other jurisdictions in the Washington standard metropolitan statistical area, services similar to those in the bargaining unit. As a wage determinant, wage level comparisons rest on the notion that arbitrating employees are entitled to a wage level equal to that of other workers similar jobs of comparable for equal-work. of "comparable performing, Factor 4 under of
similar circumstances, promotes revolves
skills and responsibility. The question occupations
the principle of equal-pay around the determination
before the Board performing" similar
services within the "Washington (a) The Authority's position:
area". The Authority produced testimony and evidence
comparing the pay for Local 2 occupations with employees performing "similar services" for other public sector employers. The following employers were selected for the pay
analysis: Arlington County, Baltimore MTA, City of Alexandria,
District of Columbia,
Fairfax county, Federal Government, Montgomery county, Prince Georges county, State of Maryland, analysis and the Commonwealth of Virginia. (Auth. Brief, p. 17) The Authority's wage
involved 27 "benchmark"
job titles accounting the Authority
for 65% of Local 2 employees. concludes that Local 2 pay levels 32% at the
(Auth. Brief, p. 16) Based on this analysis, are substantially minimum
above market levels. The salary "premiums"
rate; 24 % at the midpoint; and 19% at the maximum.
(AX 11, p. 29; Tr.
934; Auth. Brief, p. 17) The Authority also included an analysis of the wage adjustments 15 received by the
of the 10 governmental provided
The record established
that seven to their
out of ten jurisdictions employees
zero across the board annual wage increases
for FY 2010 (July 1, 2009 to June 30, 2010). And all ten have determined for FY 2011 will be zero. (AX 5, p. 4a; Auth. Brief, p.13-14). that Factor 4 contemplates who perform, a in other similar to of
that wage increases (b) The Union's comparison jurisdictions
Position: - The Union argues Local 2 members standard
and "other employees metropolitan statistical
in the Washington
those in the [Local 2] bargaining professional construction occupations activities,
unit", and since the Local 2 unit is composed
specialized in supporting computer and mechanical systems, and associated with the only transit railroad in Washington, there are
few other employees performing similar services. (Union brief, p. 8-10) According to the Union, the only comparable employees are the consultants and contractors retained by
WMATA to perform Local 2 work. (Union Brief, p. 12) The Authority
contracts with numerous, specialized consulting firms who provide services by the hour for specified 103-108; services projects. In FY 2008 there were at least 34 such contracting Union witnesses testified is identical that the work performed to the work performed firms. (UX, p. and the and the services
Tr. 519-527) provided
by the consultants
performed by Local 2 members. (Tr. 519-526) Yet, based on the Union's evidence, the pay rates for employees of the private consulting to annual firms are above the Local 2 levels. salary increases Region." received by
The Union also relied on data relating employees
within the "Washington-Baltimore more than 370,000
The Union Resources
cites a survey covering Association
by the Human
of the National Capital Area (HRA-NCA)
that salary increases
are in the 4.0% to 4.5% range (UX 51, p. 2; Tr. 222)
(c) The Chairman's Discussion: Based on the record before me I am not able to
conclude that the Local 2 employees are underpaid at present levels; nor am I able to market rates. I reach by the fact that
find that the Local 2 pay structure this conclusion numerous for several reasons:
above the relevant
Local 2 classifications
are peculiar to the Authority's
systems and others
outside WMATA with similar job titles do not necessarily contemplated professionals professional
perform similar services as that salary levels among with such factors as I find that analysis
by Factor 4. The Union points out correctly within the same occupation activity, responsibility, is questionable. vary considerably
and experience. the Authority's
which shows that pay is above market, fails to account management holds over the Local 2 pay structure.
for the control that
Article XII, Section (4) of the CSA
provides in part as follows: "The Authority qualifications, Authority establishes and designs all jobs, job content, classifications,
of work .... Jobs will be rated and ranked by the salary classification levels and schedules
and placed into appropriate
.... The determination of the appropriate job description rests with the Office and the Director of Human Resource Management and Services. The determination Section of the (JX 3, p. 32) that the assignment of
for salary schedule placement is the responsibility of the Classification Office of Human Resource Given the Authority's classifications Management and Service's discretion, (HMRS)."
it is obvious
to present pay grades and the resulting
pay levels is the product
unilateral assessment of the pay necessary to recruit and retain the
soecialized professional skills the Authority requires. The "competitive market" is that relevant to WMATA's Office of Human Resource Management that the Authority's and Services. pay study is not 10 em players in the local
Third, I agree with the Union's observation representative
of the local labor market. The study includes
area, all in the public sector. But, the record shows that there are over 148,000 employer establishments in the Washington-Baltimore labor market, including 2,953 in
the public sector. (UX 44) It is not possible to conclude that Local 2 pay is "substantially above the Local labor market" based on such a small sample and all in
the public sector. In the end, Factor 4 does not weigh heavily in my decision. 5. Factor 5 The special nature of the work performed by the employees in bargaining unit, including any hazards or the relative ease of employment, physical requirements, educational qualifications, job training and skills, shift assignments, and the demands placed upon the employees as compared to other employees of the interstate compact agency. f" my opinion, Factor 5 is intended to give weight to the "special nature" or unique content of the jobs performed Arbitrator's determination by the arbitrating employees in connection with the
called for by Factor 4 and others. of the interstate compact
(In this regard the phrase "compared
to other employees
Agency" as qualifying the "demands placed upon the employees" only.) As stated above, I have determined that the bulk of WMATA's Local 2 employees perform services
which are peculiar to WMATA in the local area - given their specialized skills in maintaining and constructing a railroad. With respect employees to the "demands of the interstate placed upon the employees agency"
job training and
to other This part of
- i.e., Local 689 employees.
Factor 5 is discussed below under "internal patterns." 6. Factor 6 The interests and welfare of the employees in the bargaining unit, including(A) The overall compensation presently received by the employees, having regard not only for wage rates but also for wages for time not worked, including vacations, holidays, and other excused absences; (8) All benefits received by the employees, including previous bonuses, insurance, and pensions; and (e) The continuity and stability of employment. This factor calls upon the Board to consider the "interests and welfare of the employees" as judged by facts including, but not limited to, (a) their total compensation security. (Overall compensation and (b) their job
referred to in (A) includes the terms referred to in (8) I find and the adequacy of total compensation, employees. My review of the record does not reveal a respect to the - the below. may be judged
that the welfare of the employees,
in the abstract or against other comparable (a) The Authority's and Union's position:
specific reference to Factor 6 in either parties' case before the Board.With principle elements of total compensation parties have offered substantial (b) The Chairman's discussion:
- wages, pensions and health insurance
evidence and argument which will be addressed unlike other statutory factors,
Factor 6 is broadly interests and
stated. I believe the language
permits the consideration
of the employees'
welfare compared to employees in the local labor market and within WMATA. The evidence suggests that the employees' interests are adequately served by the
current level of compensation
and stability of employment.
It appears that total
compensation has been established through voluntary agreement in recognition of mutual interests. My award reflects the conclusions insurance and relative wages compared that pension benefits, health in
to Local 689 should be preserved
consideration of the "welfare of employees" required by Factor 6.
7. Internal Patterns The National Capital Area Interest Arbitration Standards Act requires the Board of
Arbitration to consider the seven explicit statutory factors of the Standards Act. However, there is nothing in language of the Act, or in the Court's opinion in the case enforcing the Kasher award, that suggests that the statutory factors are exclusive, or
that other unnamed considerations are barred from contributing to the award's foundation. example, There are several which are typically "other factors" such as internal patterns or productivity for
pursued in interest arbitration
cases. On this point I concur
with Arbitrator Kasher who said the following: "In addition to the statutory factors which the Board was required to consider, boards, considered several other factors, including
the Board, as all interest Arbitration a comparison employees
of the wages and benefits paid to other Unionized (Kasher second supplemental
and non-unionized opinion, p.20)
of the same employer."
There are approximately represented represents bargaining operators
at WMAT A. Seventy
percent of the total is group. Local 2
by Local 689; another 700 employees,
15 percent are in the non-union
or 6% of the total. The balance
are in one of three other
units: Transit police (FOP), Security and bus mechanics at the Landover arbitration decisions
guards (IBT Local 639) and bus Division (IBT Local 922). to be based upon pattern settlements
It is not unusual for interest
or contract terms applicable to other Union groups of the same employer. It is often determined that common terms provide fair treatment "leap-fragging." of all employees and promotes
labor relations stability by preventing must be accompanied
However a pattern application the pattern principle in
by clear evidence
that the parties followed
the past. In this case there is solid evidence general wage change. It is not surprising
of this historical
that Local 689, by far the numerically
Union, has set the wage pattern for several smaller Unions on the property including Local 2. In fact the record establishes that for 25 years covering all rounds of bargaining between WMATA and Local 2, the overall wage change for Local 2 has been identical to were typically reached after Local 689 settled. (UX 24; to the
Local 689. The Local 2 agreements
Tr. 112) It is obvious that the Local 689 wage pattern has been important Authority in negotiating with Local 2. As evident from my wage award, the long standing practice of following
the Local 689
wage pattem has been given considerable weight in my decision.
B. THE PENSION ISSUE
WMATA proposed several changes to the Local 2 defined benefit pension plan. (b) limit post-
WMATA proposed to (a) reinstate employee contributions
retirement cost-of-living adjustments, and (c) increase the age for unreduced benefits. According to the Authority, all of these proposals employers. produced focus on areas where the Local 2 plan (Auth. Brief, p. 51) pension expert Ronald DeStefano. Plan to the retirement Government, County, The
is out of line with plans of comparable In support of its position the Authority compared
Mr. DeStefano plans sponsored
the key features
of the Local 2 Pension namely:
local public employers
The Federal Arlington
State of Maryland, Commonwealth
of Virginia, City of Alexandria,
District of Columbia, Fairfax County, Montgomery Authority. He determined that for an "Average"
County, and the Maryland Transit employee retiring at age 60 with 25 years benefit having a value of
of service, the Local 2 plan provided an employer-funded
by all comparative
plans. (AX 73 and 110)
The Authority argues that its proposed "measured adjustments" are necessary to bring the benefit Brief, p. 46) The Authority asked the Board to view its proposals in "the context of the staggering contribution that severely increases impacted WMATA faces as a result of the 2008 capitol market meltdown" the Local 2 Plan. (Auth. Brief, p.43) The Authority's evidence levels, and related employer costs, more in line with its comparators. (Auth.
points to the market value of the Plan assets of $115 million in FY 2007. (AX 73, 77) Just two years later, that value had fallen to $88 million - a decline of $27 million or 23%. (Auth. Brief, p. 43) The Authority losses suffered are shouldered contribution increased According states that since the Local 2 plan is a defined by the plan do not affect the benefits benefit plan, the investment but instead required
of Local 2 members, WMATA's
by WMATA in the form of additional contributions.
has more than tripled in absolute
dollars over the last 6 years and has
more than fourfold as a percent of payroll over that period. (AX 73, p.15, 18) to the Union, the pension proposals of the Authority represents radical
change which ignores bargaining
history. The existing features
of the plan are the
products of deliberate quid-pro-quo bargaining between the parties which should not be disturbed by a board of Arbitration. The Union paints to the elimination of employee
under the Arnold Zack award in 1994 and the freeze on partlcipation
in the defined benefit plan in 1999 are perfect examples. (Union Brief, p. 29) The Union maintains that the conversion to a defined contribution plan for employees hired after
1999 was in exchange for a promise to maintain the existing
Local 2 defined benefit
plan. (Union Brief, p. 29) With regard to the pension comparisons, case on comparisons the Union notes that the Authority's entire
is devoted to the frozen defined benefit plan which covers only in the bargaining unit. The vast majority of the members are
177 of the 700 employees
in the defined contribution plan which, according to the Authority's own evidence, produces pension values well below the local Public sector standard. status quo on pensions issues and by implication rejected WMATA's with the wage issue, I of the existing
I have awarded argument
which calls for change.
As stated above in connection
find that factor 1 requires the Board to respect the "foundation"
agreement including the design of compensation - which is the product of years of co- determination and a reflection of terms and conditions provisions acceptable to the parties. in bargaining benefit was
While the genesis
of the current contract
is often obscured
history, this is not the case with the trade-off plan. I find the trade-off the conversion to be clear, exacting
in 1999 which froze the defined and deliberate. Central
to the bargain the OBP for
system to a cheaper
OCP while protecting
I agree with the Union's assessment to a retroactive
that cutting the value of the of the 1999 agreement. related to pension It is true that It is
defined benefit plan is tantamount
with Factor 4 I have considered between
the Local 2 plans and others cited by the Authority. benefits generally superior
the Local 2 OBP provides
to the Local comparators.
equally true that the Local 2 OCP provides the same comparison group. Since the superior
benefits which are considerably
plan covers only 25 percent of the Local 2 membership,
that the Authority
with respect to overall pension
and pension costs. with the pension subject is consistent Local 2 plans are with
My reading of Factors 2 and 7 in connection that stated above in reference
to wages. The cost of the existing
accounted for in the current budgets and thus are paid with available resources without directly impacting subsidies paid by supporting jurisdictions, increasing tax rates, or tax burdens. There is no substantive evidence upon which to draw a contrary conclusion.
C. THE HEALTH INSURANCE ISSUE
The Authority has proposed several health insurance concessions including increases in
drug co-pays, out-of-pocket maximums, increases in employee contributions, and the elimination of retiree coverage for new hires. In support of its position, the Authority of Mr. Rand, who concluded that the value of the Local 2
relied on the expert testimony
health Insurance package for active employees is greater than the health plans covering local public sector employees surveys. (AX 87; Tr. 1606-1644; as well as benefit levels revealed Brief p. 55) contributions already exceed that paid by the other by a series of national
The Union points out that employee
principle Unions on property. And with respect to retiree coverage, the Union notes that Local 2 benefits are tied to the non-represented changes had merit, the Authority group (Union Brief, p. 30) If the proposed which would automatically be
could make changes
passed along to Local 2. So far, they have declined My decision reflects the weight applied workforce.
to do so. set in the Kasher Award for the contributions or
to the precedent
majority of WMATA's
I decline to increase employees of the already larger contributions
worsen co-pays in recognition
paid by Local 2
to Local 689. (Kasher Award P. 14) But as the award indicates, for new-hire retirees as awarded
I am adopting
the same concession
by Kasher. I note that both
parties have acknowledged
of the Kasher award in this case. - the union
on wages and the Authority on retiree health insurance. My award is consistent with these views.
During the course of the previous contract, the issue of "contracting out" bargaining unit work became contentious between the parties. The Union grieved several times and as
went to Arbitration the Authority
twice in an attempt to resolve the problem out bargaining
of what they perceived
unit work. Since 2007 about 116 Local 2
positions were eliminated. employees customarily any outside reasonable In testimony was contracted performed
(Tr. 300; Union Exh. 79) Much of the work of the laid-off out. (Tr. 302) In the CBA on page 3, it says "Work which is unit shall not be subcontracted by the Authority to
by the bargaining except
source or agency
with the Union and after
efforts to minimize the impact or necessity of any layoff". (Tr. 304) the Union established that the Authority never consulted with the
Union prior to granting any outside contracts. (Tr. 304) The Union witness where the Authority The Authority cited numerous had consultants occasions over the past four years
doing work that was similar to that done by Local 2. as they saw fit to do work that Local 2 employees could
used the contractors
have done. (Tr. 49B-509) The Union presented language in their initial proposals and in their post-
hearing brief to resolve the ongoing be done in-house
problem of outside contractors
doing work that can
by Local 2 employees.
(Joint Exh. 5; Union Brief, p. 34) The Authority
rejected every proposal presented by the Union to resolve their differences. An attempt was made in Executive persuaded session to work out the parties differences, post-hearlnq but it failed. I am to resolve
by the Union's testimony, issue.
brief and their last proposal
New Subcontracting language is awarded as follows: Delete Article I section 4(c) and SUbstitute the following. "1. Work which is normally and customarily performed by the bargaining unit shall not be subcontracted by the Authority to any outside source or agency which results in the lay-off, or reduction in salary or benefits, of a bargaining unit member." "2. Prior to subcontracting bargaining unit work, laid-off employees who are qualified to do the work shall be recalled. Qualifications will be established by applicable formal training, education and background." "3. Within 30 days of the date of this Award, a permanent joint Labor/Management Contracting Committee shall be established to review existing and proposed subcontracting practices at the Authority, with the goal of bringing work in-house on a cost saving or cost neutral basis. The committee shall have the authority to appoint subcommittees as necessary to review specific contracts and/or categories of work." E. HOURS OF SERVICE With respect to of the maximum hours of service question, The Board awards the following: "Within 30 days of the date of the Award, the parties shall establish a joint Labor! Management committee to identify safety sensitive positions within the bargaining unit and determine the maximum permissible number of on-duty hours and related rules. The committee shall report to the principle parties to the agreement with their findings for the purpose of making contract changes." F. MEDICAL DOCUMENTATION The Board grants the Authority proposal to adopt language requiring medical documentation in case of illness which exceeds (3) consecutive work days. This modification would conform WMAT A's ability to request such documentation for Local 2
unit members to that which is currently applied to non-represented authorized under the terms of the Local 689 CBA.
G. LOCAL 2 USE OF WMAT A COMPUTERS
The Board Awards the terms of the grievance settlement which shall be incorporated side letter. (Copy to Company by the 3PM the day before it is sent out.) H. NEW HIGHER PAY BANDS Local 2 proposed the creation of new higher pay bands above the present top grade (Union Brief, p. 36) to TA 24 in the Local 2 pay scale, in order to allow the parties, or subsequent panels, to seek agreement on placement of increasingly expert and skilled specialized professional employees that are needed to operate, maintain and improve a major and complex transit system of the nature of the Authority. The proposed new pay scales are based on the existing percentage differential between the present pay grades. (Tr. 324-326) The internal movement of misclassified staff into the Local 2 unit is not the only basis that justifies creation of new higher pay grades on the Local 2 CBA. Recruitment and retention are also factors that can benefit from the availability of higher pay grades for new, and on occasion, existing positions. See e.g. accounts of failed hiring accounts of needed skilled individuals. (Tr. 327~28) Likewise, experienced Local 2 unit professional staff have been observed leaving the Authority to perform similar duties for increased compensation. (id, Tr. 534~37; Union Exh. 113) This question was resolved in part in Arbitration by Arbitrator Wolf who ruled that misplaced work should be placed in the Local 2 unit and the employees performing the work ~ who were compensated above the TA Grade 24 - should be "Red Circled" at their higher salaries. The Wolf case demonstrates that the bargaining unit includes work which is appropriately compensated above Grade 24. Without updating the salary scales, there is no basis for paying proper rates of pay. (Union memo 11 /14/11 Exec. session) The Chairman is persuaded by the Union's argument and awards the following language. Amend the agreement as necessary to add pay grades L2TA-25 and LPTA-26. The difference between Grades 24, 25, and 26 shall be the same percent as between the existing grades 23-24. The difference between steps 1 through 10, and the longevity step, shall be the same as grade 23 with respect to percent between steps and time-instep. Incumbents subject to paragraph 3 of the "Wolf' award dated June 29, 2011 shall be placed at the pay grade immediately above hi/her current pay, unless such individual's current pay exceeds the newly created Grades 25 and 26 in which case the individual shall continue to be red-circled in accordance with the Wolf award. I. FLEXIBLE SPENDING ACCOUNT The Board awards the adoption of a Flexible Spending Account for Local 2 as a
members under the terms as applicable to non-represented 27
The Board awards that the language attached to Local 2 EX 82 (Letter of Understanding Re: Mutual Agreement be incorporated into the collective bargaining agreement.
SPECIAL LAYOFF PROCEDURES
The Board grants the Authority's proposal to eliminate the special layoff procedures applicable to the office of Procurement and Materials.
RETIREE HEALTH INSURANCE
The Board awards that employees hired on or after January 1, 2010 will not be entitled to retiree health insurance coverage.
All remaining proposals which were not addressed are denied and the status quo with regard to those matters shall be left undisturbed.
The term of the agreement will be July 1,2008 through June 30,2012.
/ -/3 - 0-01 ~
Robert Ames Esq., WMATA Member
Thomas R. Roth, OPEIU Local 2 (concurring/di88e~ti~g)
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