New Bargaining Law: New Opportunities

Overview

Governor Doyle signed the 2009-11 state budget (2009 Wis. Act 28) into law on June 29, 2009, which included several changes to Wisconsin’s Collective Bargaining Law for school districts.

Most significantly, the bill repealed the 16-year old Qualified Economic Offer (QEO) Law and reinstated final-offer, binding arbitration as the way to resolve collective bargaining disputes between school districts and teachers.

Highlights of the New Collective Bargaining Law Include

1. Repeals the QEO law immediately. (Effective June 30, 2009).
2. Eliminates the greatest weight factor of revenue controls and greater weight factor of local economic conditions from consideration by arbitrators in school district arbitration cases.
3. Permits contracts covering school district employees to have a duration of up to four years.
4. Allows two or more collective bargaining units of one district, or more than one district, to combine into a single unit if a majority of employees voting in each unit vote to combine.

Binding Arbitration Déjà Vu

In essence, the new collective bargaining law restores the previous final offer arbitration law that existed from 1978 to 1993. Many districts found themselves in arbitration if they did not match the comparable settlement pattern. Settlements rarely fell below 7 percent annually during that time period.

Districts have now received their state aid projections from the Department of Public Instruction. Most districts are coping with a significant decline in state aid and revenue under state revenue controls. At a time when we are experiencing the worst recession in many years, the 2009-11 negotiations take on additional importance for school districts’ efforts to avoid budget deficits and retain the existing number of employees and programs.

1. If your district has already filed an arbitration petition for the 2009-11 teacher contract prior to June 30, 2009, an argument, at least technically, can be made that the Qualified Economic Offer (QEO) law still applies based on the effective date of the new law. This argument is by no means a certainty, so review your situation with your legal counsel before pursuing.
2. “School District Employee” is defined as a municipal employee who is employed to perform services for a school district.

   This means that the changes noted above, including the elimination of the greatest and greater weight factors, duration of contracts and combining of bargaining units, applies to school district support staff employees as well as teachers.

3. Now that the QEO law has been repealed, arbitration is the means to resolve disputes. Districts may wish to assess the merits of proceeding with arbitration to secure changes to post-retirement benefits or fringe benefits affecting active employees. The QEO has largely prevented substantial changes to fringe benefits. Districts may be seeking significant changes to fringe benefit programs to sustain their long-term financial viability. Given the fact that revenue controls are still in place, districts generally will not have the money necessary to meet unions’ wage demands.
4. Comparability is likely to rise to the forefront in the union’s strategy. This means that the union is likely to target “weak” employers to secure a relatively high settlement and then seek to expand that level to all other comparable employers. Under the previous arbitration law, unions were extremely effective in establishing bargaining goals and not settling unless they achieved them. In some instances, unions have also banded together and refuse to let one local settle unless it meets the predetermined goals.
5. A district’s financial condition is likely to be the district’s main reason for resisting the union’s wage and benefit demands. An arbitrator will have to decide the weight to give a district’s financial condition versus the prevailing settlement trend. School districts can expect vigorous debate on its ability to pay since legislative efforts to prevent arbitrators from considering a district’s fund balance failed to be included in the final version of the law.
6. The removal of the greatest and greater weight factors does not preclude argument over revenue limits and local economic conditions since the parties have historically debated those issues under the traditional arbitral factors.
7. Districts should continue to use “cast-forward” costing as embodied in the QEO. Both parties used this same methodology under the previous arbitration law. One QEO costing rule that was not used in the past is the requirement that any fringe benefit increase in any part of the year is presumed to be in effect from the previous July 1. An argument can be made for costing movement into new educational lanes.
8. The duration of contracts from one to four years may become problematic when settlement comparisons are made. A key point will be to ascertain if the settlement occurred in the same time period under the same general economic conditions. If not , arbitrators have distinguished and discounted settlements that did not occur under the same economic conditions. The potential for “whipsawing” employers into higher than normal settlements exists with different contract durations. If the parties are unable to agree as to the term or duration of the agreement, the default two-year duration applies in arbitration unless both sides agree otherwise.
9. One unknown and little discussed change in the law states:
   111.70(4)(d) 2.a. Under the expiration of any collective bargaining agreement in force, the commission [WERC] shall combine into a single collective bargaining unit two or more collective bargaining units consisting of school district employees if a majority of the employees voting in each collective bargaining unit vote to combine.

   This means that a teacher unit could combine with a support staff unit in the same district. This has also been described as meaning that a teacher unit in one district could combine with a teacher unit(s) in another district(s). It is up to a secret ballot vote of members in the bargaining units involved.

   The WERC is not sure how it will administer this provision yet. Many questions emerge such as: How will two or more separate school districts organize and respond to two or more combined bargaining units? Where is the “community of Interest” in such a combined unit? Is such a joint effort even legal or authorized by this legislation?

   It may be that WEAC has targeted K-8 districts in the state and wishes to consolidate these elementary “feeder” school districts into one unit. WEAC may also combine smaller units into larger ones for economy of scale efficiencies.

   Governor Doyle, in discussions with the Appleton Post-Crescent Editorial Board on July 8, 2009, stated:

   …districts can have a route to get out from under the revenue caps. But to do it, they have to [do] three or four very basic things. One of them is that they have to bargain in bigger groups, so you have to come to the table with at least 500 employees. We have 425 school districts, or something like that. We have 425 different contracts.

   So now it becomes a big issue. If you had much more regional contracts that you were bargaining, I don’t think you’d see the disparity between this community and that community to be the kind of problem it is.

   In other words, consolidation of school districts or regional bargaining units or both. Stay tuned for further developments this fall.

10. The statutory limits on salary and fringe benefit increases covering non-represented professional employees such as school administrators have also been repealed.

Summary

School Districts will now be able to use arbitration as the means to secure changes to fringe benefit programs that have drastically increased in cost. In light of cuts in state aid and revenue per pupil, many districts will be forced to choose between program cuts, layoffs and increased class sizes or a salary increase to the remaining teachers.

It promises to be a very challenging year at the bargaining table.