By D&K’s School and Higher Education Law Team
School Officials Are Right To Be Wary Of QEO Lobbying Efforts
The Governor’s budget proposal for 2009-11 has again proposed abolishing the Qualified Economic Offer (“QEO”) in teacher negotiations. To be sure, there’s plenty to be said about a budget that would remove the QEO limits on teacher salary increases, without reforming school financing, against the backdrop of an estimated 5.7 billion dollar state deficit, at a time when economic recession has taxpayers pressed to their limits. But while public debate is often focused on whether the QEO should stay or go, an equally compelling and perhaps more immediate issue is winding its way through the state capitol: if the QEO is repealed and teachers’ access to interest arbitration is restored, how will the state’s binding interest arbitration law be structured?
Currently, Wisconsin law provides county, municipal, and non-professional school employees with access to interest arbitration as a means of settling labor contracts. As a result, if these employees cannot reach an agreement with their employer, they are entitled to have an arbitrator break the deadlock by choosing one of the parties’ final offers. The Governor’s proposed budget would repeal the QEO and provide teachers’ unions with access to interest arbitration as well. While this aspect of the budget proposal represents an important issue to school districts, it isn’t exactly surprising news, since the Governor has supported similar proposals in the past.
But there is more. Under current law, an arbitrator is required to give the “greatest weight” to state limits on expenditures that a local government employer can make or revenues that it can collect. An arbitrator is also required by current law to give “greater weight” to local economic conditions than to a series of other factors that appear in the statute, such as wages paid to employees performing similar services, wages paid to public employees in the same or comparable communities, and the government’s ability to pay the costs of any proposed settlement. Arbitrators’ decisions are based on how they weigh these and other factors.
The Governor’s proposal would eliminate the “greatest weight” and “greater weight” factors, but only in cases that involve “school district employees.” Moreover, the term “school district employees” covers both school teachers and school district support personnel, meaning that these factors would be eliminated in any arbitration case involving school employees. School boards and administrators—already bracing for the possible return of interest arbitration for teachers without any corresponding reforms to the state’s school finance scheme—have expressed concern that these structural changes may add insult to injury by preserving revenue limits, while compromising school districts’ ability to identify and prove their impact in arbitration.
Lobbyists for these changes to the arbitration law dismiss school boards’ and administrators’ concerns as inconsequential. They maintain that, even under these modifications to the law, school districts can still argue that revenue limits and economic conditions should be considered by arbitrators under the statutory factor concerning districts’ ability to pay the cost of the union’s proposed settlement. And they’re at least partially correct, since revenue limits and local economic conditions undeniably influence school districts’ ability to pay employee wages and benefits and, in any event, arbitrators’ discretion to apply the statutory factors as the see fit is quite broad, to the point of being virtually unreviewable. As a result, if arbitrators were asked to consider these matters — even under the newly-proposed law — they probably could if they chose to.
The implication that this means school officials have no real cause for concern, however, is a misleading half-truth.
For openers, the proposed changes don’t eliminate the “greatest weight” and “greater weight” factors for everyone: these factors would be specifically retained for cases that don’t involve school district employees. Since the proposed statute would make an express distinction between cases where revenue limits and economic conditions can be considered and cases where they cannot, unions representing school employees will undoubtedly maintain that these factors cannot be accounted for in arbitration decisions involving their members.
In addition, the history of a statute can be important to how it is applied. The Wisconsin Supreme Court recently pointed out that “’A review of statutory history is part of a plain meaning analysis’ because it is part of the context in which we interpret statutory terms.” Dane County v. LIRC, 2009 WI 9. It seems unlikely that advocates for school employees in arbitration would concede that such deliberate changes to the statute mean nothing to how their cases should be decided. Certainly this assurance would not be given as readily in arbitration as it has been given to encourage legislators to adopt these changes to the law in the first place.
The issue of how much weight arbitrators can give factors such as revenue limits would also be joined if the proposed changes to the arbitration law are adopted. In fairness, arbitrators do not always give equal weight to the remaining statutory factors in arbitration decisions and are probably well within their authority to find some factors more compelling than others in specific cases. That said, even if the proposed changes to the law were adopted and, as school employee advocates maintain, arbitrators then did consider revenue limits under an “ability to pay” analysis, there would no longer be a statutory mandate that arbitrators give “greatest” or “greater” weight to school districts’ ability to pay. As a result, even if concerns such as revenue limits could still be advanced in arbitration by school districts, these realities would not have to be given the weight in arbitration decisions that they actually have in the day-to-day operation of Wisconsin school districts.
If the Governor’s proposed budget is adopted, will arbitration counterparts still be able to debate whether and to what extent school district revenue limits and local economic conditions should be considered by arbitrators? Certainly; they can and they will.
But if the Governor’s proposed budget is adopted, will unions claim that arbitrators’ legal authority to consider revenue limits and local economic conditions in cases involving school employees has been repealed by the legislature?
Count on it.
For additional information, please contact James M. Kalny or your Davis & Kuelthau, s.c. attorney.