Office
& Professional Employees; International
Law
& Justice Division for Sheriffs Department Uniformed Employees &
Supervisory
Uniformed Employees
And
Interest
Arbitration
Arbitrator: Paul P. Tinning
Date
Issued:
Arbitrator:
Tinning; Paul P.
Case #: 06183-I-86-00138
Employer:
Date Issued:
In the Matter of Arbitration )
between )
)
Employer, ) Interest
Aribtration
and )
OFFICE & PROFESSIONAL
EMPLOYEES' ) PERC No. 06183-1-86-00138
INTERNATIONAL
NO. 11, LAW & JUSTICE
DIVISION )
FOR SRERIFF'S DEPARTMENT )
UNIFORMED EMPLOYEES & )
SUPERVISORY UNIFORMED
EMPLOYEES, )
)
_____________________________________ )
OPINION
& AWARD
OF
ARBITRATOR
Arbitrator: PAUL P. TINNING
(503) 223-9719
227-1101
Dated:
INTRODUCTION
By letter of
for
the Employer herein, advised the undersigned Arbitrator that
he
had been selected by the parties herein to arbitrate an
interest
dispute identified by the
Relations
Commission as PERC No. 06183-1-86-00138. The parties
to
this dispute are
and
the OFFICE & PROFESSIONAL EMPLOYEES' INTERNATIONAL
LOCAL
NO. 11, LAW & JUSTICE DIVISION FOR
SHERIFF'S DEPARTMENT
UNIFORMED EMPLOYEES & SUPERVISORY
UNIFORMED EMPLOYEES (herein-
after
the "
A hearing on this matter was held on
in a
conference room in the Department of Personnel and Human
Resources,
parties
were afforded a full and complete opportunity to be
heard,
to call witnesses, to introduce evidence and present
argument. Upon conclusion of the hearing, the parties
agreed to
submit
post-hearing briefs three weeks after receipt of the
transcript. The Employer's brief was received on November
22,
1986, and the
1986.
By letter of
the
Employer, advised the Arbitrator to decide the subject
dispute
since the
pursuant
to the parties' agreement at the hearing that such
briefs
would be submitted, with simultaneous service on each
party,
three weeks after receipt of the transcript.
The Arbitrator received the transcript on November 3,
1986, and the Employer's
post-hearing brief was received on
By letter of
Counsel for the
this
matter.
By letter of
Messrs. Hansen and Franz that
the
not
be considered.
The hearing was recorded by Kathryn M. Todd, RPR, CSR
of
Port Orchard,
The Employer called the following witnesses: John
Horsley,
Department of Internal
Management; Penny Starkey, Personnel
Division Supervisor; Lee
Thorson, an attorney with the
law
firm of Lane, Powell, Moss & Miller; Cabot Dow, Labor
Relations Professional; and
Charles A. Wheeler, Undersheriff in
the
Sheriff's Department. The Employer
called Messrs. Thorson
and
Dow as rebuttal witnesses.
The
Zalutsky,
attorney; Wayne Shelton, Union Business Representative;
Smed
Wagner, Detective and member of the Union bargaining team;
and
Gary Kirkland, Union Executive Officer and Secretary-
Treasurer.
APPEARANCES
For the Employer:
RONALD A. FRANZ, Chief Civil
Deputy
BERT FURUTA, Director, Department
of Personnel
&
Human Resources
For the
MARK B. HANSEN, Attorney at Law
Horenstein & Horenstein P.S.
&
Secretary-Treasurer
ISSUE
The issue involves interest arbitration under the terms
of
RCW 41.56.450 et. seq.
The parties previously agreed in
mediation
to submit the following issue to arbitration:
Shall the County be required to concede to
the attached proposal of the
[sic]1/ Trust) or shall it be
required [to]
be as the County proposed as
hazard duty pay
in its letter of
Ex. 1)
_____
1/ Employee Retirement Income Security Act of 1974 commonly
known as ERISA.
_____
STATUTORY FACTORS
Under the State of
lective Bargaining Act, the following statutory
factors shall be
considered
in determining interest arbitration matters involving
uniformed
personnel:
(a) The constitutional and statutory au-
thority
of the employer;
(b) Stipulations of the parties;
(c) Comparison of the wages, hours and
conditions of
employment of personnel
involved in the
proceedings with the wages,
hours, and conditions of employment of like
personnel
of like employers of similar size
on
the west coast of the
(d) The average consumer prices for goods
and
services, commonly known as the cost of
living;
(e) Changes in any of the foregoing
circumstances
during the pendency of the
proceedings;
and
(f) Such other factors, not confined to
the
foregoing, which are normally or tradi-
tionally
taken into consideration in the
determination
of wages, hours and conditions
of
employment. (RCW 41.56.460)
STATEMENT OF FACTS
A. Background
The Employer is a political subdivision of the State of
Washinqton. The Employer provides various services to inhabi-
tants within its jurisdiction.
The
for
all regular full-time and part-time uniformed employees,
excluding
specified personnel, including another bargaining unit
of
supervisory uniformed Sergeants and Corporals, excluding
specified
personnel (Jt. Ex. 4). 2/
_____
2/ Reference to the exhibits will be designated as follows:
"Jt. Ex." (Joint Exhibit); "Er. Ex." (Employer Exhibit); and
"Un. Ex."
(Union Exhibit).
Reference to the transcript will
be designated "Tr."
followed by the page number(s).
Reference to the Employer's post-hearing brief will be
designated "Er.
_____
There are approximately 53
uniformed employees repre-
sented by the
by
this dispute. Of that total, all of whom
are provided medical
insurance
coverage by the Employer,3/ approximately 21 employees
pay
$170.65 per month for medical insurance coverage for their
dependents
(Tr. 59).
_____
3/ The
Employer also assumes the cost of dental, vision and life
insurance
coverage for employees only (Tr. 54).
Such
coverage
is provided through the Washington Counties
Insurance Fund.
_____
Approximately 41 non-uniformed employees in the
Sheriff's department are also
represented by the
separate
bargaining unit not affected by the subject dispute.
Many of the other employees are represented by five (5)
or
six (6) other labor organizations (Tr. 20).
B. History of Bargaining
The three (3) bargaining units represented by the
began
negotiations for a new collective bargaining agreement on
involved
in the instant dispute, reached a settlement and a new
agreement
was executed on
The two (2) uniformed bargaining units, who also vote
separately
on contract proposals affecting their units, rejected
two (2)
different proposals submitted by the Employer primarily
on
the grounds that they provided for longevity pay rather than
medical
coverage for their dependents. According
to the uncon-
troverted testimony of Union witness Wayne Shelton, a
representative
who participated in the negotiations, the parties
engaged
in over 15 bargaining sessions, including several
mediation
sessions under the auspices of the State of
Public Employment Relations
Commission (PERC) (Tr. 163).
At one point in those negotiations, the Employer,
according
to Mr. Shelton, suggested that:
... we could submit some
language to
show
how we could have relief on dependent
coverage
without the word dependent coverage
being
mentioned. And that's when we sub-
mitted a
proposal that they contribute x
dollars amount to Local 11 trust. (Tr. 163)
According to Mr. Shelton, one of the prime objectives
of
the uniformed bargaining units was to negotiate some relief
from
the cost of medical insurance coverage for their dependents
(Tr.
163). In
this regard, Employer witness Charles A. Wheeler,
Undersheriff,
acknowledged under cross-examination that dependent
medical
coverage was a "big issue" in negotiations eight (8) to
10
years ago (Tr. 117).
(1) Union Proposal
In
response to the Employer's suggestion,
representative
Furuta, Director, Personnel &
Human Resources, submitted the
following
language for consideration:
ARTICLE -- DEPUTY TRUST FUND
Effective
the bargaining unit
the Employer agrees to
pay twenty-five
dollars ($25.00) a month into
the Office Employees
Local #11 Trust Fund,
Ex. 1)
Employer witness John Horsley, a County commissioner
who
participated in the negotiations, acknowledged that the issue
of
dependent medical coverage was discussed in a number of
bargaining
sessions prior to and during mediation.
In this
regard,
he stated that:
..
they [
could
not give dependent medical. It's just
against
our policies. We are very leery of
the
financial impact of granting all of our
bargaining
units and all of our employees
dependent
medical, so as an alternative what
was
suggested is there's a way to give it but
hide
it, in essence, disguise it by calling
it a
contribution to a trust fund, and then
the
trust could pass out those dollars as
they please, but it wouldn't be the County
that
was paying dependent medical. In
essence,
back door. (Tr. 29-30)
According to Mr. Horsley, dependent medical coverage is
not a
practice that the Employer believes in or can afford (Tr.
27). He stated that the Employer:
...
refuse[d] to accept the disguised trust
fund,
because it's back door. That's why we
offered instead, we're willing to pay and
right
on the table is the $25 a month
hazardous duty pay
which is unique to the
hazards that deputies face.
No other unit
could
ask for that. (Tr. 31)
(2) Employer
Proposal
By letter of
Horsley responded to the
Union representative
[W]e
have reviewed your proposal, wherein
($25.00) a month in the Office Employees
Local #11 Trust Fund,
Sheriff's Account, with our legal
staff. We
have
been advised that there are significant
concerns
relating to our participation in a
Trust, a major area being the applicability
of
the Employee Retirement Income Security
Act of 1974 (ERISA) and its impact upon
as
employees.
To
facilitate the conclusion of our negotia-
tions,
I would propose that the agreed upon
payment of twenty-five dollars ($25.00),
thirty
dollars ($30.00), and thirty-five
dollars
($35.00) per month for 1985, 1986 and
1987
be added to the adjusted monthly base
wage OR
we would be willing to discuss
establishing
it under a separate section of
the
contract as longevity bonuses or hazard-
Ious duty pay.
*** (Jt.
Ex. 1)
Thereafter, the parties reached agreement on the terms
of a
new contract, which was ratified by the subject employees,
Iwhich
included a new section under the salary schedules set forth
in
Appendix 'A' as follows:
Section 2. Other Salaries
The parties have agreed to the following
additional wage
adjustments as part of the
total economic
package set forth in this
Agreement:
1985 - Twenty five dollars ($25.00 per
month
to all job classifications.
1986 - An additional five dollars
($5.00) per month to
all job
classifications.
1987 - An additional five dollars
($5.00) per month to
all job
classifications.
However, since the parties are unable to
reach agreement as
to the allocation of this
Section 2 monies, the Public Employees
Relations Commission (PERC) has certified the
following issue for
interest arbitration
under RCW 41.56
(Case No. 6138-1-86-138):
Shall the County be required to
concede
to the attached proposal
of the
1985 (Appendix A-1, Insurance
Trust), or shall it be required
as the
County proposed, i.e.
hazardous
duty pay, in its letter
of
A-2) to the
POSITIONS OF THE PARTIES
A. Employer
The Employer contends that the
provide
dependent medical coverage is not a viable program by
virtue
of the fact that the Union failed to show what benefits
that
deputy sheriffs would receive in the event the Employer were
to
pay specified contributions into the Union's trust fund. In
this
regard, the Employer pointed out that Union witness
Zalutsky,
the attorney who drafted the Union's trust plan, did
not
know what type of medical insurance coverage could be
obtained
for $25.00 per month, nor did he know whether such
insurance
was available to dependents only (Er. Br. 3; Tr. 138,
146-147).
The Employer also pointed out that Union representative
Shelton, who participated in
the subject negotiations, did not
know
what deputy sheriffs would receive based upon contribu-
tions from the Employer (Er.
Br. 3; Tr. 208).
Moreover, the Employer further pointed out that Union
witness
Kirkland, Executive Officer of the Union, testified that
the
mechanics of providing dependent medical coverage had not
been
worked out, but that the Union would, based upon the
Employer's contributions,
provide "... some type of supplementary
dependent
medical coverage or attempt to offset it in some
manner...." (Er. Br. 4;Tr. 240). The
Employer also noted that
Mr. Kirkland did not know if
such insurance could be obtained for
dependents
only.
In trying to ascertain the viability of the Union's
proposal,
the Employer elicited testimony from Lee Thorson, an
attorney
who specializes in tax law and employee benefits, who
stated
that the Union could provide dependent medical insurance
coverage
as follows: (1) self-insurance; (2) buy
such insurance;
or
(3) channel the Employer's contributions through the Union's
trust
fund and thereafter remit such monies to the Employer to
purchase
coverage through its present insurance carrier.
According to the Employer, Mr.
Thorson claimed that the first
alternative
was economically prohibitive. With
respect to the
second
alternative, Mr. Thorson stated that he knew of no
insurance
carriers, after consulting with representatives from
four
(4) of the larger benefits administration and insurance
brokerage
groups in Seattle, that would provide dependent medical
coverage
separate from employee coverage. The
third alternative,
according
to Mr. Thorson, is viable to the extent that such
insurance
could be obtained on a cost-effective basis.
The
Employer, however, is
unwilling to participate in this alter-
native (Er. Br. 5-6; Tr. 86-87).
The Employer submits that several of the statutory
factors
enumerated in RCW 41.56.460 for determining interest
arbitration
cases involving uniformed personnel, such as the
instant
case, are not impacted by the subject dispute, namely,
Sections (a) (constitutional
and statutory authority of the
employer);
(d) (cost of living); and (e) (changes in any of the
foregoing
circumstances) (Er. Br. 7-10).
With respect to RCW 41.56.460 (b) (stipulations), the
Employer submits that the
parties stipulated to the issue for
determination
herein. With respect to the statutory
factor of
comparing
wages, hours and conditions of employment (Section
(c)), the Employer claimed
that such comparisons must be of "like
employers"
as noted by Arbitrator Thomas F. Levak in City of
Tukwila and International
Association of Firefighters, Local
2008
(1985), wherein he stated, in relevant part, that:
[I]t is readily apparant
[sic] that 'like
personnel' are
commonly employed by unlike
employers. For example, cities, counties and
fire districts all
employ firefighters.
However, cities, counties and fire districts
are most certainly
not 'like employers'; and
the statute makes it
very clear that the like
personnel utilized
in any comparability
analysis must be
like employers. (Er.
Ex.
18, p. 11).
Moreover, the Employer submits that any comparability
analysis
must include like employers on the "west coast" of the
United States as required by
the statute as so noted by Arbi-
trator John H. Abernathy in Everett Police
Officers Association
and
City of Everett (1981), wherein he stated, in relevant
part,
that:
[T]his language [RCW 41.56.450 (c)] requires
comparisons of
cities and counties respec-
tively
of similar size on the 'west coast of
the United States',
and as normally used, the
term 'west coast of
the United States' does
not require the
strained interpretation of
being on coastal
waters as the Association so
argued, but applies
to cities of comparable
size in Washington,
Oregon, California and
Alaska.
(Emphasis in the original; Er.
Br.
9)
In view of these statutory guidelines, the Employer
submits
that the Union's comparative analysis of various other
counties
in the State of Washington, including cities in Kitsap
County, is flawed to the
extent that the comparison does not
indicate
whether the counties and the cities surveyed are of
"similar
size" as required by the statute (Er. Br. 7-8; Un. Ex.
5). Moreover, the Employer submits that
the Union's reliance on
Washington
counties as comparables falls short of the statutory
requirement
that such comparison be made of like employers on the
"west
coast of the United States".
The Employer submits that the comparative analysis
prepared
by its consultant, Cabot Dow, conforms to the statutory
requirements
in that like employers, namely, counties, of similar
size
in terms of population throughout the west coast of the
United States were selected
for comparison. Since the State of
Alaska has no boroughs, rather
than counties, of similar size to
the
Employer, Mr. Dow stated that none was included in the
analysis (Er. Br. 8-9; Er.
Exs.
4, 8). The
results of that
analysis
are as follows:
__________
Has the County agreed Does the County
to such
a proposal provide
medical
as made
by OPEIU #11 benefits
for
deputies and not
for other County
COUNTY employees?
Washington State _____________________ _____________________
Kitsap No No
Benton No No
Clark No No
Thurston No @ Yes
Whatcom No No
Yakima No * Yes
Oregon State
Clackamas ** Yes No
Douglas No No
Jackson No No
Linn No No
Marion No No
Washington No No
California State
Butte No No
Merced No No
Placer No No
San Luis Obispo No *** Yes
Santa Cruz No No
Shasta No No
@ County contributes $30.00 per month towards dependent
coverage for deputies.
* County contributes more per month towards medical
coverage.
** In lieu of increased wages, 1% of salary is placed in
Trust to offset expense of retiree medical benefits
(co-administred
[sic] by Clackamus [sic] County and the
Union)
*** County
contributes $15.00 more per month towards
dependent coverage for
deputies. (Er.
Ex. 6)
___________
Based upon the foregoing analysis, the Employer submits
that
there is only one (1) county of the 18 county comparables
that
makes a "... contribution to a union trust fund ... similar
to
that proposed by Union" (Er. Br. 14).
With respect to the statutory guideline
of RCW 41.56.
460 (f), which requires that
other factors normally considered in
determining
wages, hours and conditions of employment must be
taken
into account, the Employer submits that the following
factors
must be taken into consideration:
1. Equity of Other Employee Groups
With regard to equity, the Employer submits that if it
were
required to accede to the Union's proposal that it would
face
considerable pressure from other employee organizations in
light
of its policy to treat all employees, union and non-union,
equally. In this regard, the Employer noted that its
expert
witness,
Cabot Dow, testified that such proposal would have a
de-stabilizing
effect on labor relations until the disparity were
equalized (Er. Br. 10-11).
2. Financial Impact
Although the Employer acknowledged that the parties'
respective
proposals are, from a financial standpoint, "equiva-
lent",
it nevertheless registered concern about the financial
impact
of future Union demands for increased contributions to
defray
employee costs for dependent medical coverage.
Moreover, the Employer submits that such financial
concerns
would be heightened by pressures from other employee
groups
to also obtain dependent medical coverage for the em-
ployees they represent. Under the Union s proposal, the Employer
pointed
out that it would initially cost $15,900.00 to fund
dependent
medical coverage for 53 uniformed employees.
If all
County employees were provided
such coverage, the Employer
submits
that it would cost $171,600.00 per year (Er. Br. 12; Er.
Ex.
3). If
such coverage were fully funded by the Employer for
all
employees, the Employer claims that it would cost approxi-
mately $370,000.00 4/ per year.
_____
4/ The Arbitrator notes that Employer witness Penny Starkey,
Personnel Division Supervisor, acknowledged that if
dependent
medical coverage were fully
funded for all employees that it
would approximately double the
amount of $164,950.00
currently paid by some 142
employees for dependent medical
coverage. Doubling that figure amounts to $329,000 per
year
(Tr. 64).
_____
According to the Employer, these financial concerns
must
be evaluated in light of a bleak economic outlook evidenced
by
the fact that revenue sharing, which accounted for $926,000.00
in
1986, has been eliminated by the U.S. Congress.
As a result,
the
Employer claimed that it expects to lay off 20 to 30 em-
ployees sometime in 1987 (Er.
Br. 12, Tr. 47).
3. Morale in
the Sheriff's Department
The Employer submits that morale within the Sheriff's
department
would, according to Undersheriff Wheeler, be
adversely
affected
to the extent that the other bargaining unit in the
department,
namely, clerks and jailers, would not receive
dependent
medical coverage. Moreover, the Employer
submits that
only
21 of the 53 uniformed employees in the subject bargaining
units
would benefit from such coverage whereas the other 32
employees
would receive nothing (Er. Br. 12-13).
In view of the foregoing, the Employer requests that
its
proposal should be adopted because it is preferable to the
one
proposed by the Union.
B. Union
The Union contends that the monies agreed upon by the
parties
in Section 2, Appendix 'A' of their 1985-87 collective
bargaining
agreement, namely, $25.00 per month for all job
classifications
in 1985; an additional $5.00 per month in 1986;
and
another $5.00 per month in 1987, "... be paid to a trust fund
for
the purpose of obtaining dependent medical coverage" (Tr.
13). According to the Union, the specified
monies were "...
negotiated
in terms of a benefit, and the intent of the parties
was
to provide for an employer contribution to family or depend-
ent benefits" (Tr. 16).
The Union contends that it is a "... prevailing ...
and
common
practice for similarly situated organizations and agencies
in
the State of Washington to pay dependent medical coverage"
(Tr.
15). In
this regard, Union representative Shelton testified
that
his survey, with respect to dependent medical coverage for
law
enforcement personnel, of 39 counties in the State of
Washington revealed that
"... 72 percent of the counties ... paid
from
100 percent to ... a minimum ... [of] $50 - some a month"
(Tr.
178).
Based upon data compiled by the Attorney General of the
State of Washington in a 1986
report entitled, "Washington State
Law Enforcement Survey" (Un. Ex. 4), the Union extracted data
therefrom in preparing the following comparative
analyses:
__________
WASHINGTON COUNTIES ***
Full-Time Does Department
General Contribute to Percent/Amount
Enforcement Dependent Medical Paid by Dept
County Personnel Coverage? for
Dependents
KING 513 Yes
100%5/ ***
PIERCE 174 Yes 100% ***
SNOHOMISH 131 Yes 100% ***
SPOKANE 143 Yes $82.13/mo ***
CLARK 96 Yes 100% ***
YAKIMA 69 Yes $173-248/mo ***
THURSTON 62 Yes $ 65/mo ***
KITSAP 60 No 0% ***
WHATCOM 38 Yes 100% ***
BENTON 30 No 0% ***
COWLITZ 41 Yes 100% ***
CITIES
IN KITSAP COUNTY
Full-Time Does Department
General Contribute to Percent/Amount
Enforcement Dependent Medical Paid by Dept
City Personnel Coverage? for
Dependents
BREMERTON 56 Yes 100% ***
POULSBO 10 Yes 75% ***
PORT ORCHARD 11 Yes 100% ***
WINSLOW ? Yes 100% ***
KITSAP 60 No 0% ***
_____
5/ The Arbitrator notes that the Attorney General's survey
report designates a question
mark (?) as to the percentage
amount paid by King County for
dependent medical coverage
(Un. Ex. 4, p. 47).
COUNTIES ADJACENT TO KITSAP COUNTY
Does
Department
Contribute
to Percent/Amount
Dependent
Medical Paid by Dept
County Coverage? for
Dependents
KING Yes 100%
PIERCE Yes 100%
JEFFERSON Yes 100%
MASON Yes $55/mo
KITSAP No 0%
(Un. Ex. 5)
__________
Based upon the foregoing analyses, the Union pointed
out
that two counties (Kitsap, Benton) of the 11 counties
surveyed
by the Union for comparative purposes do not contribute
to
medical insurance coverage for dependents of uniformed
personnel
(Un. Exs.
4, 5; Tr. 191).
The other nine (9) counties
contribute
to such coverage ranging from a low of $65.00 per
month
(Thurston) to full coverage (100 percent).
With respect to the Union's comparative analysis of
city
law enforcement jurisdictions, the Union pointed out that
four
(4) cities contribute to dependent medical coverage ranging
from a
low of 75 percent to full coverage (100 percent) (Un. Exs.
4,
5; Tr. 193).
With respect to the Union's comparative analysis of
counties
adjacent to Kitsap County, the Union pointed out that
all
four (4) adjacent counties (King, Pierce, Jefferson, Mason)
contribute
to dependent medical coverage ranging from a low of
$55.00 per month (Mason) to
full coverage (100 percent) (Un. Exs.
4,
5; Tr. 193).
The Union also submitted copies of collective bargain-
ing agreements containing dependent medical
coverage provisions
in
some of the jurisdictions surveyed for comparative purposes,
namely,
Thurston County (Un. Ex. 6); Spokane County (Un. Ex.
7);
Cowlitz County (Un. Ex. 8); and Clark County (Un. Ex. 9). The
Union also introduced the
collective bargaining agreement for the
City of Bremerton which
provides dependent medical coverage for
police
officers through the Association of Washington Cities
Group Medical Plan (Un. Ex. 10; Tr. 221).
The Union rejects the Employer's assertion that
dependent
medical coverage would create a serious morale problem
among
employees in all three (3) bargaining units.
Rather, the
Union submits that, according
to Union representative Shelton's
testimony,
the "... morale issue is that they [employees] have
got
to pay 170 bucks out of their pocket to get dependent
coverage"
(Tr. 168). Similarly, the Union claims
that Union
witness Smed Wagner, a detective in one of the subject bargaining
units
who participated in the negotiations which resulted in the
current
agreement, testified that he did not think that dependent
medical
coverage would create a morale problem (Tr. 225).
The Union also elicited testimony from Union witness
Morton Zalutsky,
an attorney specializing in tax and employee
benefits
who drafted the subject Union trust document,
concerning
the legality of the Union's trust plan, noting that
the
plan itself assumes, through its employer and union trustees,
including
professional staff, the statutory responsibilities and
obligations
under ERISA (Tr. 128-140). Therefore,
the Union
submits
that the Employer would not be subject to liability under
the
plan, except, of course, for the specified contributions into
the
trust fund (Tr. 135).
The Union also noted that one of the significant
features
of such a trust plan is, according to Mr. Zalutsky,
that
"... contributions
are deductible to the employer, they are not
taxable
to the trust, and they are not taxable to the employees"
(Tr.
129).
The Union also rejects the Employer's concern that
ERISA and administrative
obligations would erode the contribution
monies
available for dependent medical coverage.
In this regard,
the
Union noted that Mr. Zalutsky testified that the
'"...
percentage
of employer contributions used to provide benefits is
in
the upper 90 percent, 94, 95 and even 100 percent of the
dollars
contributed" (Tr. 140).
In view of the foregoing, the Union requests that its
proposal
is "... just and right and is fair and should be
granted"
(Tr. 17).
DETERMINATION & AWARD
This interest arbitration case
involving law enforce-
ment personnel under the State of Washington's
public sector
collective
bargaining act (RCW 41.56.450) is somewhat unique and
distinguishable
from other interest arbitration cases by virtue
of
the fact that the parties herein reached and ratified a
settlement
on wages, hours and conditions of employment on a
total
economic package basis, except for the "allocation" of
certain
monies specified in Section 2, Appendix 'A' of their
1985-87
collective bargaining agreement. As noted earlier
herein,
that section reads as follows:
Section 2. Other Salaries
The parties have agreed to the following
additional wage
adjustments as part of the
total economic
package set forth in this
Agreement:
1985 - Twenty five dollars ($25.00 per
month
to all job classifications.
1986 - An additional five dollars
($5.00) per month to
all job
classifications.
1987 - An additional five dollars
($5.00) per month to
all job
classifications.
However, since the parties are unable to
reach agreement as
to the allocation of this
Section 2 monies, the Public Employees
Relations Commission (PERC) has certified the
following issue for
interest arbitration
under RCW 41.56
(Case No. 6138-1-86-138):
Shall the County be required to
concede
to the attached proposal
of the
Union, dated August 9,
1985 (Appendix A-1, Insurance
Trust), or shall it be required
as the
County proposed, i.e.
hazardous
duty pay, in its letter
of
September 10, 1985 (Appendix
A-2) to the
Union. (Jt.
Ex. 4)
Simply stated, the instant case involves a determina-
tion whether the monies agreed upon should be
allocated for
dependent
medical coverage provided by the Union trust plan under
the
Union's proposal or whether they should be allocated for
hazardous duty
pay as proposed by the Employer. In
light of that
specific
mandate, coupled with the fact that the parties reached
agreement
on a total economic package basis, the Arbitrator finds
that
the statutory factors provided in RCW 41.56.460 (a) through
(f) to
determine interest arbitration cases have limited applica-
tion to the instant dispute.
Even assuming arguendo
the applicability of RCW
41.56.460 (c), the statutory
factor which deals with a comparison
of
wages, hours and conditions of employment of "... like
personnel
of like employers of similar size on the west coast of
the
United States", the Arbitrator finds the comparative analyses
submitted
by both parties deficient in most respects.
For
example,
the Arbitrator finds merit in the Employer's argument
that
the comparators relied upon by the Union, namely, select
county
and city jurisdictions providing law enforcement services
in
the State of Washington, do not accord with that statutory
guideline
to the extent that no information was provided whether
such
jurisdictions were of "similar size" to the Employer in
terms
of population, coupled with the fact that they were limited
to
one (1) state and did not include other comparable jurisdic-
tions on the west coast of the United States.
The Arbitrator also finds merit in the Employer's
argument
that the Union's reliance on select cities as
comparators
likewise does not accord with this statutory factor
to
the extent that they are not like "employers" within the
context
of the statute. In this regard, the
Arbitrator concurs
with
the reasoning of Arbitrator Levak in City of
Tukwila and
International Association
of Firefighters, Local 2008 (1985),
wherein
he stated, in relevant part, that:
[I]t is readily apparant
[sic] that 'like
personnel' are
commonly employed by unlike
employers. For example, cities, counties and
fire districts all
employ firefighters.
However, cities, counties and fire districts
are most certainly
not 'like employers'; and
the statute makes it
very clear that the like
personnel utilized
in any comparability
analysis must be
like employers. (Er.
Ex.
18, p. 11).
In contrast, the Arbitrator notes that the Employer
selected
five (5) counties, including Kitsap, in the State of
Washington, six (6) counties
in the State of Oregon and six (6)
counties
in the State of California, all of which are like
employers
providing law enforcement services and all of which are
of
comparable size in population to Kitsap County, as comparators
in
its analysis. While such comparisons more
closely conform to
the
subject statutory guideline, the Arbitrator finds that such
comparative
data are significantly limited and, hence, deficient
to
the extent that the information obtained was in response to
the
narrow question, "Has the County agreed to such a proposal as
made
by OPEIU 11?", namely, providing dependent medical coverage
through
employer contributions to a union trust plan.
The foregoing conclusion is buttressed by the testimony
of
Employer witness Cabot Dow who testified under cross-examin-
ation that the Employer's inquiry was
specifically limited to
employer
contributions into a union trust without inquiring
whether
or not the comparator counties provide medical insurance
coverage
for employee dependents (Tr. 109). The
latter inquiry,
whether
such comparators provide dependent medical coverage, is,
in
my opinion, equally, if not more, essential in analyzing
comparative
data on the existence of such benefit. A
mere
comparison
of employer contributions into a union trust does not,
in my
opinion, satisfy the subject statutory guideline.
This deficiency in the Employer's comparative data is
best
illustrated by comparing that data with that of the Union.
For example, the Employer's
data reveals that Clark County does
not
make contributions into a union trust, as proposed by the
Union, for dependent medical
coverage whereas the Union's data
reveals
that Clark County fully funds (100 percent) such coverage
for
dependents (Er. Ex. 6; Un. Ex. 5). While it is
true that
both
comparisons are accurate in response to the specific
inquiries
posited, the Arbitrator finds that the comparative
data
relied upon by the Employer for that jurisdiction, as well
as
its other 16 comparators, are not particularly useful in
making a
determination in this matter.
Thus, the Arbitrator is compelled to analyze other
factors,
including those within the scope of RCW 41.56.460 (f),
for
guidance in determining the subject dispute.
In this regard,
the
morale factor cited by both parties -- the Employer claiming
that dependent
medical coverage would pose a serious morale
problem
among non-uniformed employees represented by the
another
bargaining unit in the Sheriff's department, including
employees
in the affected bargaining units who do not have
dependents,
as well as for other County employees, and the
claiming
that a morale problem currently exists insofar that
approximately
21 of the 53 employees in the two (2) bargaining
units
affected by this dispute pay $170.00 per month for depend-
ent medical insurance coverage -- weighs in my
opinion, in favor
of
the
Apart from the testimony of
most
that
dependent medical coverage was one of the principal objec-
tives of both bargaining units in the
negotiations, as evidenced
by
the fact that such employees twice rejected Employer proposals
for
longevity pay, the record further reveals that Undersheriff
Wheeler also acknowledged that
such coverage was a "big issue"
with
the employees eight (8) to 10 years ago.
Another relevant factor to be considered is the
financial
impact of the parties' proposals. In
this connection,
the
Arbitrator notes that the Employer acknowledged that the
dent
medical coverage, or the "equivalent" amount to fund hazard-
ous duty pay under the Employer's
proposal. As noted earlier
herein,
the parties agreed upon certain monies, except for their
allocation,
specifying $25.00 per month for 1985 with additional
increments
of $5.00 each for 1986 and 1987 as provided in Section
2,
Appendix 'A' of their 1985-87 collective bargaining agreement.
Notwithstanding the financial equivalency of both
proposals,
the Employer raised, in light of its stated policy to
treat
all County employees equally by providing the same
fits,
objection to the
were
required to accede to such proposal that it would be
confronted
by pressures from other employee groups to likewise
obtain
such benefit. These anticipated
pressures, according to
the
Employer, potentially pose a substantial financial impact on
already
diminishing revenues as a result of federal revenue-
sharing
funds being eliminated. This concern, in
my opinion,
must
be analyzed in light of the
represent
bargaining unit employees in reasonably achieving their
stated
interests, noting that the
premise
its bargaining objectives out of concern for other
employees
that it does not represent. Achieving a
reasonable
balance
between such competing interests is virtually an impos-
sible task.
The weight of the record evidence, however, albeit
largely
conjectural in terms of the financial impact anticipated
by
demands from other employee groups for dependent medical
coverage,
tips slightly in favor of the Employer's position.
The record in this case reveals that the
plan,
which was established pursuant to the Taft-Hartley Act,
duly
complies with all statutory and reporting requirements of
ERISA. While the legality and administration of the
trust is not
in
question, the record reveals that the matter of providing
medical
insurance for dependents only through the
remains
somewhat of an open question in light of the fact that
bargaining
unit employees already have medical coverage under a
plan
fully funded by the Employer.
Notwithstanding assurances by the
could
provide such dependent medical coverage, the record in this
case
raises, in my opinion, sufficient doubt to cloud the issue.
One of those doubts was raised
by the uncontroverted testimony of
Employer witness Lee Thorson,
an attorney specializing in tax law
and
employee benefits, who claimed that he was not aware of any
insurance
carrier that would "... sell dependent medical care
separate
from employee medical care" (Tr. 86).
He further stated
that
this observation was supported by recent discussions with
representatives
from four (4) of the larger benefits and insur-
ance brokerage groups in
believe
it was possible to obtain dependent medical coverage
separate
from employee medical coverage.
Another uncertainty over this issue of dependent
medical
coverage surfaced from the testimony of Gary Kirkland,
Union Executive Officer and
one of the trustees of the Union's
trust
plan, who testified under cross examination that he didn't
know
that such coverage could not be obtained if the employees
were
not covered by the same insurer (Tr. 241). He further
stated,
in response to an inquiry whether the Union could deliver
such
coverage, that:
I think that we can provide that in one man-
ner
or form, either offsetting the existent
dependent premium to
the existing carrier or
in fact providing
some other type of deal.
But again, we have not done all of the
homework on that
because we do not know where
that issue is until
the Arbitrator rules on
it. (Tr. 242)
A significant drawback surrounding the offset option
described
above, namely, that the Union trust would receive the
monies
agreed upon and thereafter remit them to the existing
insurance
carrier to offset the employees cost for
dependent
medical
insurance premiums, stems from the fact that the trust
would
not, in my opinion, be acting in the capacity of a pur-
chaser
of such insurance. Rather, the trust
presumably would
serve
merely as a conduit for such monies with limited, if any,
ability
to negotiate changes or improvements in existing bene-
fits. While such option is presumably permissible,
it cannot
reasonably
be said that the Union trust would be substantively
providing
dependent medical coverage.
Even assuming that the trust were to purchase dependent
medical
insurance, the rather small group of 21 employees with
dependents
presumably would not, based upon the record in this
matter,
be able to obtain much coverage or benefits for the
specified
amounts of monies involved, notwithstanding that the
trust
would also have a cushion of funds by virtue of the fact
that
it would be receiving contributions on the other 32
employees
who have no dependents.
While the Arbitrator is fully cognizant that the issue
of
dependent medical coverage is a big issue with employees in
the
subject bargaining units, the Arbitrator is nevertheless
compelled
to conclude that, based upon the entire record in this
case
analyzed in light of the various factors considered herein,
the
Arbitrator adopts the
Employer's proposal herein and awards that
the
specific monies agreed upon by the parties in Section 2,
Appendix 'A' of their 1985-87
collective bargaining agreement be
allocated
to hazardous duty pay.
AWARD
Based upon the entire record in this case and the
findings
contained herein, the Arbitrator determines that the
issue
presented for determination must be decided in favor of the
Employer's
proposal.
Accordingly, the Arbitrator hereby adopts the Employ-
er's proposal contained herein and awards that
the specific
monies
agreed upon by the parties in Section 2, Appendix 'A' of
their
1985-87 collective bargaining agreement be allocated to
hazardous
duty pay.
Signed this 15th day of December, 1986.
Respectfully
submitted,
/s/
PAUL
P. TINNING
Arbitrator
PPT: cjt
Parties served by mailing
certified copies to representatives of
record
at addresses of record. A copy also
served on the State
of