2009 Annual Convention Labor Arbitration

3.0 General CLE Hours

May 13-15, 2009 ♦ Cleveland

CONTRIBUTORS Marvin J. Feldman Attorney at Law Cleveland, Ohio

B.B.A., Case Western Reserve University; J.D., Case Western Reserve University School of Law. Professional Memberships: American Arbitration Association; National Academy of Arbitrators; National Mediation Board; Ohio State Bar Association; Cleveland Metropolitan Bar Association; National Association of Railroad Referees; American Bar Association (Labor Committee); Federal Mediation and Conciliation Service. Mr. Feldman practices in the area of labor arbitration. His practice consists of hearing and deciding labor disputes. Mr. Feldman has arbitrated over 3200 labor disputes in both the public and private sectors, including interest arbitration and rights arbitration. He has taught labor arbitration (interests and rights) at Case Western Reserve School of Law in its continuing legal education program. Mr. Feldman was a recipient of the 30-Year Award from the National Academy of Arbitrators in 2003 and received 50-year citations from the Ohio State Bar Association and the County Commissioners of Cuyahoga County in 2005.

Mitchell B. Goldberg Mitchell B. Goldberg, Attorney at Law Northfield, Ohio

B.A., University of Cincinnati; J.D., University of Cincinnati College of Law. Mr. Goldberg has more than 30 years of experience as a trial attorney specializing in various types of litigation, including corporate-business, real estate, personal injury, wrongful death, product liability, insurance, domestic relations, banking, commercial, bankruptcy, antitrust, building and construction, employment, and securities. He is also a civil and commercial arbitrator for the American Arbitration Association, the Center for Resolution Disputes, the National Association of Securities Dealers, and the National Arbitration Forum. Mr. Goldberg is a privately selected arbitrator and mediator in civil, employment, commercial, and domestic relations matters. He is a frequent speaker on topics related to his areas of practice.

Professor Nels E. Nelson Cleveland State University Cleveland, Ohio

B.A., M.A., Ph.D., University of Connecticut. Professional Memberships: National Academy of Arbitrators (Membership Committee; Research and Educational Foundation (Board of Directors)); American Arbitration Association; Federal Mediation Conciliation Service. Professor Nelson began teaching at Cleveland State University in 1977, founded the LaborManagement Relations Center, and served as its Director for four years. While at the center, he established a year-long certificate program, which has over 300 graduates, and created a sponsorship program, which attracted contributions from many companies and unions in Northeast Ohio. Professor Nelson is currently part of the faculty for the Masters of Labor Relations and Human Resources Program in the Department of Management and Labor Relations at Cleveland State University. He teaches collective bargaining and labor law, though his teaching interests also include labor economics. Professor Nelson also has over 30 years of experience as an arbitrator, factfinder, and mediator. He is on arbitration panels of the American Arbitration Association, the Federal Mediation and Conciliation Service, and the State Employment Relations Board. Professor Nelson also serves on numerous permanent arbitration panels in the private and public sectors. His primary interests in this area are in the grievance procedure and arbitral decision making. Professor Nelson’s research has been published in many leading journals, including ACADEMY OF MANAGEMENT JOURNAL, INDUSTRIAL RELATIONS, JOURNAL OF MANAGEMENT, and LABOR STUDIES JOURNAL. His current research projects include a model of arbitral decision making, a review of empirical research on arbitral decision making, and an examination of final offer arbitration as an application of game theory.

Professor Alan Miles Ruben Cleveland State University Cleveland-Marshall College of Law Cleveland, Ohio

Professor Ruben received his law and graduate degrees from the University of Pennsylvania. Professional Memberships: College of Labor and Employment Lawyers (Fellow); National Academy of Arbitrators; American Arbitration Association (National Panel); Federal Mediation and Conciliation Service (National Panel); Ohio State Employment Relations Board (Mediation Panel; Factfinding Panel; Conciliation Panel); Union Internationale Des Avocats; International Bar Association; American Society of International Law; International Industrial Relations Association; International Society for Labor Law and Social Security. He is Emeritus Professor of Law at the Cleveland State University Cleveland-Marshall College of Law and Advisory Professor of Law at Fudan University in Shanghai, China, an honor conferred upon him in 1993 for his contributions to the development of Chinese Law while he was serving as a Fulbright Scholar and Visiting Profess of Law at that institution. Professor Ruben has held a variety of public offices, including corporate counsel positions with Aetna Life and Casualty and Lubrizol Corporation and special counsel to the U.S. Senate Armed Forces Committee and several other municipalities. He is the Editor-in-Chief of the standard treatise, HOW ARBITRATION WORKS.

Labor Arbitration Session # 801

Chapter 1 The Impact of the Economic Environment on Collective Bargaining Professor Nels E. Nelson The State of the Economy Will Have a Significant Impact on Collective Bargaining in the Private and Public Sectors ................................................................................................... 1.1 The Current Economic Situation Should Be Placed in Historical Context.................................... 1.1 There Are a Variety of Sources of Economic Data That May Be Useful in Bargaining or in Preparing for Bargaining in the Current Economic Environment .................................... 1.2 The News Has Been Filled with Reports of Wage Cuts, Layoffs, and Furloughs ......................... 1.2 The Economic Situation Has an Impact on the Criteria for Factfinding and Conciliation Contained in the Ohio Rev. Code and the Ohio Admin. Code, Including the Ability to Pay ......................................................................................................................... 1.3 Comparisons to Other Public Employees Are Another Statutory Criterion .................................. 1.3 The Parties Have Responded to the Current Situation in a Number of Ways .............................. 1.4 The Economic Situation May Affect the Relationship Between the Factfinding and Conciliation Processes .......................................................................................................... 1.4 The Use of Economic Data in Bargaining Will Increase ................................................................. 1.5 Conclusions ......................................................................................................................................... 1.5 Chapter 2 Arbitration and the “Employee Free Choice” Act Mitchell B. Goldberg Status .................................................................................................................................................. 2.1 Summary ............................................................................................................................................ 2.1 Special Interest Positions .................................................................................................................. 2.2 Mandatory Interest Arbitration ........................................................................................................ 2.4

1 The Impact of the Economic Environment on Collective Bargaining Professor Nels E. Nelson National Academy of Arbitrators Novelty, Ohio

1 The Impact of the Economic Environment on Collective Bargaining Professor Nels E. Nelson National Academy of Arbitrators Novelty, Ohio

THE STATE OF THE ECONOMY WILL HAVE A SIGNIFICANT IMPACT ON COLLECTIVE BARGAINING IN THE PRIVATE AND PUBLIC SECTORS A.

The economic situation will lead to an increased use of economic data in bargaining.

B.

The real role of economic arguments in bargaining is the subject of some debate.

C.

Some advocates will have to come to grips with new factors in bargaining.

THE CURRENT ECONOMIC SITUATION SHOULD BE PLACED IN HISTORICAL CONTEXT A.

The latest economic indicators suggest that we face a serious economic situation.

B.

The current situation must be placed in context of previous economic downturns. 1.

The Great Depression of the 1930s represents the most severe in modern history.

2.

It is not yet clear how the current recession will compare to other post-WWII recessions.

The Impact of the Economic Environment • 1.1

THERE ARE A VARIETY OF SOURCES OF ECONOMIC DATA THAT MAY BE USEFUL IN BARGAINING OR IN PREPARING FOR BARGAINING IN THE CURRENT ECONOMIC ENVIRONMENT A.

The federal government provides a substantial amount of economic data. 1.

Data on employment, unemployment, hours, and hourly wages come from two Bureau of Labor Statistics surveys. a.

Current Population Survey is a monthly survey of a large sample of households.

b.

The Current Employment Statistics is a monthly survey of a large sample of establishments.

2.

The BLS also publishes data on consumer prices.

3.

The BLS publishes or has published other data useful in bargaining.

B.

The Ohio Department of Job and Family Services also provides widely cited data on employment and unemployment for Ohio.

C.

The Ohio State Employment Relations Board makes available data on wages and other forms of compensation.

D.

1.

It publishes annual wage increases for different occupational groups and for different regions in the state.

2.

SERB also has a Clearing House that responds to request for customized data.

The Bureau of National Affairs’ COLLECTIVE BARGAINING— NEGOTIATIONS AND CONTRACTS is another potentially useful source.

THE NEWS HAS BEEN FILLED WITH REPORTS OF WAGE CUTS, LAYOFFS, AND FURLOUGHS A.

Private sector unions have agreed to significant concessions.

B.

A major development was the agreement between the State of Ohio and the Ohio Civil Service Employees Association.

C.

Many cities and other public employers have laid off employees and sought concession in negotiations.

1.2 • Labor Arbitration

THE ECONOMIC SITUATION HAS AN IMPACT ON THE CRITERIA FOR FACTFINDING AND CONCILIATION CONTAINED IN THE OHIO REV. CODE AND THE OHIO ADMIN. CODE, INCLUDING THE ABILITY TO PAY A.

While the recession has affected nearly every public employer, they face significantly different economic and financial situations.

B.

The ability to pay means different things to different people. 1.

Does it mean that an employer must rearrange spending priorities to pay a union’s wage demands?

2.

Should a neutral suggest that taxes need to be increased?

3.

Can money be transferred from one fund to another to pay for a wage increase?

COMPARISONS TO OTHER PUBLIC EMPLOYEES ARE ANOTHER STATUTORY CRITERION A.

B.

External comparisons offered by the parties may be impacted by the economic situation. 1.

In the past, advocates have most often provided comparisons to nearby or similar-sized employers.

2.

The current economic situation may make comparisons to other employers facing similar economic and financial challenges increasingly relevant.

Internal comparisons are frequently relied upon by the parties. 1.

Neutrals typically comparisons.

give

significant

weight

to

internal

2.

The current economic situation may make internal comparisons more complex. a.

Conciliation is available to fire and police units.

b.

The safety forces have been immune to layoffs until recently.

c.

Bargaining units that are permitted to strike have a very difficult time in mounting a credible strike threat.

The Impact of the Economic Environment • 1.3

THE PARTIES HAVE RESPONDED TO THE CURRENT SITUATION IN A NUMBER OF WAYS A.

B.

The employers and unions have a number of options with respect to wages. 1.

The number of wage reopeners agreed to by the parties and recommended by neutrals is likely to increase.

2.

Some employers may succeed in negotiating wage cuts.

3.

A growing number of employers are proposing and winning furloughs.

4.

Another possible approach is to make future wage increases contingent on the availability of sufficient funds.

5.

The parties may negotiate one- or two-year agreements rather than the customary three-year contracts.

6.

Bonuses may replace increases to the base rate.

7.

Wage increases may be back-loaded.

In some cases, benefits have been cut. 1.

Employees may be asked to pay a larger share of health care costs either through higher premium contributions or changes in plan design.

2.

Employers may seek a reduction in the number of paid days off.

THE ECONOMIC SITUATION MAY AFFECT THE RELATIONSHIP BETWEEN THE FACTFINDING AND CONCILIATION PROCESSES A.

There is a wide range of view about the weight that should be attached to a factfinder’s recommendations by the conciliator. 1.

Some believe that the conciliator should follow the factfinder’s recommendations, unless there is a clear error.

2.

Others believe that substantial weight should be attached to the factfinder’s recommendations by the conciliator.

1.4 • Labor Arbitration

3.

B.

At least one conciliator has said that the weight that should be attached to the factfinder’s recommendations depends on the factfinder and the quality of the report.

The current economic situation may change the weight attached to the factfinder’s report. 1.

A change in the economic situation between factfinding and conciliation gives advocates a basis to argue that the conciliator should ignore the factfinder’s recommendations.

2.

The challenging environment and varying experiences and expertise of neutrals may make it more difficult for a conciliator to simply adopt a factfinder’s recommendation.

THE USE OF ECONOMIC DATA IN BARGAINING WILL INCREASE A.

One of the statutory criteria is factors normally and traditionally considered in factfinding and arbitration.

B.

The use of economic data is directly related to the economic stress.

CONCLUSIONS

The Impact of the Economic Environment • 1.5

2 Arbitration and the “Employee Free Choice” Act Mitchell B. Goldberg Attorney at Law Northfield Center, Ohio

2 Arbitration and the “Employee Free Choice” Act Mitchell B. Goldberg Attorney at Law Northfield Center, Ohio

STATUS A version of this proposed legislation was introduced in the House and passed. A Senate version fell short by a few necessary votes in the last Congress. President Bush would have vetoed it if it had passed. The Democrats insisted on pushing it through knowing this fact. They will try again in this Congress and believe the major elements of the proposed bill will pass.

SUMMARY The legislation contains major changes in U.S. labor-relations policy. A.

Secret ballot elections will remain, but only if they are voluntarily agreed upon.

B.

Absent such an agreement, a card check procedure will replace secret ballot elections.

C.

A union or representative may petition the Board to be certified as the exclusive representative of a group of employees for purposes of collective bargaining by alleging that the majority of the employees in the appropriate unit wish to be represented by the petitioner as evidenced by card signatures.

D.

The Board investigates the petition, and if it finds majority status based upon signed valid authorizations, it will certify the labor organization as the exclusive representative for purposes of collective bargaining.

E.

Within 10 days after certification, the parties must begin bargaining.

F.

Failure to reach agreement after 90 days requires mediation by FMCS. Arbitration and the "Employee Free Choice" Act • 2.1

G.

After a 30-day mediation period and no agreed upon contract, the dispute is referred to an arbitration board established in accordance with such regulations as may be prescribed by FMCS.

H.

The arbitration panel shall render a decision settling the dispute and such decision shall be binding upon the parties for a period of two years, unless amended during such period by written consent of the parties.

I.

Increased penalties will be awarded for unfair labor practices in violation of the Act. 1.

Liquidated damages of two times back pay.

2.

Civil penalty of maximum of $20,000 for each violation.

3.

Increased injunctive relief for the Board.

SPECIAL INTEREST POSITIONS The generation of much heat, but little light. A.

Employer groups’ political points. 1.

The EFCA will exaggerate employee support for union representation, eliminate employee opposition, and abolish employer free speech rights by requiring card check recognition in place of current, fair, democratic, government supervised secret-ballot election process for determining union representation.

2.

Card check recognition is unreliable and will expose employees to overt union misrepresentation, harassment, intimidation, and retaliation.

3.

Up to 50% of the employees affected will be denied a voice and a vote.

4.

Free speech is restrained by denying employees the opportunity to receive relevant information from the employer and balanced viewpoints.

5.

The EFCA offends the basic free-market notions of American commerce by injecting the government into the bargaining process to impose wages, benefits, work rules, and contract terms on private parties.

6.

The constitutional right for the freedom to contract will be infringed upon.

2.2 • Labor Arbitration

B.

7.

Government views of desirable policy bargaining results will be imposed upon private parities.

8.

Mandatory arbitration will invite posturing between the parties to the detriment of constructive, cooperative bargaining.

9.

Government regulation of capital management will create disincentives for investment, entrepreneurialism, and job creation.

10.

The deck will be stacked against employers due to increased financial exposure to onerous penalties.

11.

Government by injunction will return through court action dismissing 70 years of NLRB expertise. NLRB discretion is replaced by language requiring the Board to pursue mandatory injunctions for charges of discrimination for protected activity, threats of discharge, or interference with organizing efforts, restraining protected activity or coercion.

12.

Employees will receive financial windfalls from liquidated damage awards and civil penalties will serve to further silence opposition to union representation.

Union positions. 1.

The present system is obsolete and unfairly favors employers.

2.

Forty-four percent of newly certified unions fail to obtain a first contract, even after workers surmount all of the existing obstacles and succeed in forming a union.

3.

Workers are denied substantial economic and non-economic benefits, such as grievance and arbitration, job-bidding rights, seniority, anti-discrimination provisions, and health and safety protections.

4.

The present penalties are inadequate for the employer’s failure to bargain in good faith. Even if it is proven that the employer is bargaining in bad faith, the current remedies merely involve an order to resume bargaining and posting a notice in the workplace.

5.

Newly formed unions now lose their presumption of majority status after one year without reaching a contract. This provides an incentive for employers to delay bargaining and force workers to vote again, leading to possible decertification.

Arbitration and the "Employee Free Choice" Act • 2.3

6.

Studies show that employees, for the most part, have favorable views of unions. They would readily join unions but for the fear of employer reprisals.

7.

This is not 1935. Employees have unlimited access to information about employers and unions. They can determine for themselves what is in their best interests based upon all of the available information and communication sources.

MANDATORY INTEREST ARBITRATION A.

The Role of FMCS. 1.

Arbitration boards have not been established, nor are there any drafted or proposed regulations. The FMCS does not understand its role at this point in time.

2.

The FMCS has historically viewed itself as completely neutral in terms of labor-management disputes. It is a mediator called in to attempt to settle disputes.

3.

Its present arbitration function is to train grievance arbitrators, create panels of experienced and trained grievance arbitrators, and issue proposed panels to the parties upon request. They do not administer grievance arbitrations.

4.

It currently provides panels to parties who voluntarily agree to interest arbitration and request interest arbitrators to settle disputes. a.

Interest arbitrators possess different skill sets than grievance arbitrators.

b.

They must be familiar with economic issues outside of the existing contract involved in a grievance.

c.

They must have mediation skills so that they may become involved in narrowing outstanding impasse issues. They are more a part of the collective bargaining process.

d.

Will there be a panel, or merely one arbitrator assigned by FMCS?

e.

Will the arbitrators be government employees or private arbitrators approved by FMCS, like grievance arbitrators?

f.

How will arbitrators be selected?

2.4 • Labor Arbitration

g.

Will a panel contain all representatives be on them?

neutrals,

or

will

party

h.

What standard will be used to decide the first contract? i.

There are established standards that are required for interest arbitrators to consider in the public sector. Chapter 4117 of the Ohio Rev. Code states that a conciliator (the legislature’s misnomer for a binding interest arbitrator) must consider (1) past collective bargaining agreements, if any, between the parties; (2) comparison of the issues submitted to those issues related to other public and private employees doing comparable work, giving consideration to factors peculiar to the area and classification involved; (3) the interests and welfare of the public, the ability of the public employer to finance and administer the issues proposed, and the effect of the adjustments on the normal standard of public service; (4) the lawful authority of the public employer; (5) the stipulations of the parties; and (6) such other factors, not confined to those listed in this section, which are normally or traditionally taken into consideration in the determination or the issues submitted to final offer settlement through voluntary collective bargaining, mediation, factfinding, or other impasse resolution procedures in the public service or in private employment.

ii.

What evidence guidelines, if any, will apply? For example, now an employer may engage in hard economic bargaining without having to open its books and reveal its financial condition. This is required only if the employer claims an inability to pay. An employer may bargain in a manner that dares the union to strike. It may welcome a strike instead of paying what it believes to be unreasonable demands. EFCA now forces the employer to accept a two-year contract under terms fixed by the arbitrator. The arbitrator must somehow gain an understanding of the employer’s business, the industry, the status of the employer relative to its competitors, and the relative labor Arbitration and the "Employee Free Choice" Act • 2.5

markets, both in terms of various skills and the market price for those skills, and the unique characteristics of the geographic market for specific labor services. This is in addition to some knowledge of broad macro and micro economic factors that may be relevant in arriving at a reasoned decision. iii. B.

Will there be any rights of appeal, or will the FAA apply?

What about using a baseball-type procedure or a procedure similar to that in Chapter 4117 for the binding resolution of bargaining impasses in contracts involving the safety forces? The SERB final offer conciliation process involves submitting the parties’ final offer on each issue that is still at impasse after mediation has been unsuccessful and the factfinding recommendations have not been accepted. The conciliator conducts a hearing. He or she may attempt mediation at any time. After hearing, the conciliator shall resolve the dispute by selecting, on an issue-by-issue basis, from between each party’s final settlement offers.

2.6 • Labor Arbitration