NYSSBA Summer Law Conference COLLE CTI VE B AR GAI N I N G U P D - - PDF document

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COLLE CTI VE B AR GAI N I N G U P D ATE – N E W I S S U E S AN D TR E N D S

J U L Y 12 , 2 0 16

NYSSBA Summer Law Conference

Jeffrey F. Swiatek, Esq. Hodgson Russ, LLC Edward A. Trevvett, Esq. Harris Beach, PLLC

Today’s Agenda

 Approaches to Meeting Changing Expectations at the

Bargaining Table

 Knowing your Local Settlement Data  The Rules are Still the Rules  ACA Landmines  APPR Update

Approaches to Meeting Changing Expectations at the Bargaining Table

 According to the Unions:

“Happy Days are Here Again!”

 Unions are trying to claw back concessions that have

been made in recent years

 NYSUT is saying in various negotiations that average

wage increases should be 3% with no health or other concessions

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Five m ost com m on bargaining objectives sought by districts during their latest round of collective bargaining

Increase health insurance contribution for active teachers 90.0% Freeze salary schedule in at least one year of contract 68.0% Increase health insurance contributions for retirees 59.5% Increase deductibles/co- payments toward health insurance 59.2% Negotiate an early retirement incentive 58.6% Increase health insurance contribution for active teachers 54.5% Freeze salary schedule in at least one year of contract 29.2% Negotiate an early retirement incentive 25.9% Increase deductibles/co-payments toward health insurance 22.6% Increase health insurance contributions for retirees 16.5% Top 5 bargaining objectives achieved during latest round of collective bargaining

Concessions and Cost Savings

Category % of all concessions Health insurance 63.5% Salary/ pay 29.0% Leave 1.6% Work day 0.3% Work year 0.6% Other 4.8%

• Avg. $ savings per

district $133,275 $407,047 n/ a n/ a n/ a $153,522 Total $ savings $16,259,522 $17,910,055 n/ a n/ a n/ a $1,381,700

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Fiscal Negotiating Environm ent

 State aid 2009-10 $1.0 b. cut (stimulus) 2010-11 $1.4 b. cut (stimulus and EduJobs) 2011-12 $1.3 b. cut (EduJobs) 2012-13 $805 m. increase 2013-14 $944 m. increase 2014-15 $1.1 b. increase 2015-16 $1.2 b. increase

*37 percent of districts below 2008-09 funding levels (Data courtesy of Senior Research Analyst Paul Heiser at NYSSBA)

Yearly change in state aid (in billions)

• $1.0
• $1.4
• $1.3

$0.805 $0.944 $1.1 $1.2 ($1.5) ($1.0) ($0.5) $0.0 $0.5 $1.0 $1.5 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

Average length of contract

3.4 3.5 3.6 3.7 3.8 3.9 2010 2011 2012 2013 2015

Length in Years Year Length in Years 2015 3.70 2013 3.57 2012 3.65 2011 3.69 2010 3.84

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Longer negotiating tim es

258 253 283 294 317 100 200 300 400 2010 2011 2012 2013 2015

Average # of days from start

• f contract to contract

signing Year # of days 2015 317 2013 294 2012 283 2011 253 2010 258

What are Our Big Challenges?

 Who Are We Working For?  Tax Cap  Health Insurance Costs  Our Old Friend/ Nemesis Triborough

Who Are We Working For?

 NYSUT actively campaigns to put teachers on school boards  In 2015 NYSUT starts its “Pipeline Project” to develop

union-friendly candidates

 “In William sville this year it w as a case of trying to elect

people w ho w ould resolve the problem s betw een staff and the adm inistration” – Michelle M. Leicth, WTA President

(Quote from Buffalo News article – Teacher unions put imprints on suburban school boards by Joseph Popiolkowski; June 5, 2016)

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Dealing with the Tax Cap – The Guiding Principles

 The Board of Education is legally responsible for the fiscal management

• f a school district (Education Law §§ 1604, 1709, 1804, 2503).

 This includes an overriding fiduciary responsibility on behalf of the

district and its taxpayers (Matter of Ross, 308 N.Y. 605 [1995]; Appeal

• f Citizens for Responsible Fiscal and Educational Policy, 40 Ed. Dept.
• Rep. 189 [2000]).

 “The most important reason for managing a school district’s financial

condition is to sustain the education of students on a long-term basis” (Fiscal Fitness: A Guide to Monitoring Your School District’s Budget,

• p. 2; w w w .em sc.nysed.gov/ m gtserv/ FiscalFitnessGuide.htm )

Tax Cap

NYSUT V. State of NY App. Div., Third Dep’t., (May 5, 2016)  Appeals court upheld the lower court’s dismissal of the

NYSUT lawsuit challenging the tax cap.



 While the state is required to provide “the opportunity of a

sound basic education” it is not obligated to guarantee the same level of services in every district.

 The requirement of a “supermajority” vote by district

residents to override the tax cap is not unduly burdensome.

 Education Law 2023-a and the tax freeze legislation are

both “rationally related to the legitimate government interest of restraining crippling property tax increases … ”

Bargaining Strategies for the Post “Tax-Cap” World

 Educate the union’s negotiators on the

• peration and implications of the tax cap.

 “Begin with the end in mind” – Identify the

maximum new revenue within the cap, and then work backwards from that for purposes of bargaining.

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Bargaining Strategies for the Post “Tax-Cap” World

 Consider whether longer-term bargaining

agreements still make sense.

 Consider whether wage proposals and other

significant financial items must be “conditional” in some way.

Bargaining Strategies for the Post “Tax-Cap” World

 Consider contract “re-openers.”  Include tax cap status into assessment of whether

permissible to make “regressive” proposal.

 Consider public and/ or union member

communication approaches during bargaining.

Bargaining Strategies for the Post “Tax-Cap” World



The Triborough Am endm ent. (Civ. Serv.

• L. 209-a(1)(e)). Requires a municipality to

continue m ost terms of the collective negotiations agreement until a new agreement is reached. Watch out for “ contractual Triborough” proposals.



The Sunset Doctrine. The parties may themselves preclude the application of the Triborough Amendment by using language that causes a contractual term to “sunset” or expire at the conclusion of the agreement or at some other point in time.

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Bargaining Strategies for the Post “Tax-Cap” World



“Past Practice.” An often misapplied concept, certain past practices may be enforceable either through specific contract language protecting such practices, or through PERB’s improper practice procedures for those practices which are unequivocal, consistently long-standing and for which there is a reasonable expectation that the practice would continue.



Managem ent Rights and Current Contract

• language. Be sure to fully assess your current right to

implement changes based on current contract language. Be careful not to underestimate or overestimate your authority.

The Good News on Health Insurance – Progress is Slowly Being Made Health Contributions: Data on New Teachers

10.1% 11.0% 11.2% 11.9% 12.4% 12.1% 12.5% 12.8% 13.3% 13.5% 5% 8% 10% 13% 15% 2010 2011 2012 2013 2015 Individual Family

BUT… Health contributions still lag behind other sectors

12.4% 18% 13.5% 29% 0% 5% 10% 15% 20% 25% 30% 35% NYS teachers - new All Northeast workers 20 14 Individual Family

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Where have we been – and where are we going?

 Despite so much that has changed over the past few years,

all collective bargaining issues still generally fall within two basic categories:

 How much will employees cost (i.e., economics)?  Who gets to run the school (e.g., work rules, class size,

scheduling)?

The Negotiations Process

Effective Preparation is the key to success

 Determine the most effective bargaining team  Get the governing board “on-board” to ensure bargaining credibility  Analyze present costs and future trends

1)

Compensation (including payroll taxes and retirement contributions)

2)

Direct benefits costs (health insurance)

3)

Indirect benefits costs (workers’ compensation and disability, sick leave, vacation, personal time and holidays)

4)

Comparable to governments? Comparable private sector positions?  Prioritize desired results and strategize approach

Knowing Your Local Settlem ent Data

 Use a verifiable source to avoid fighting over the data  http:/ / seethroughny.net  Using data like this you can debunk Union pronouncements

regarding settlement trends

 Gives you a basis for compelling the Union to support its

assertions with hard data as opposed to relying on bald assertions of “fact”

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Exam ples of Recent Settlem ents

 Brockport then: 2009-2014  Health Plan:

 Eff. 4/ 1/ 12: District provides Blue Point 2 Value at 100%  Eff. 9/ 1/ 12: District provides Blue Point 2 Value at 95%  Eff. 9/ 1/ 13: District provides Blue Point 2 Value at 93%

 Salary:

 Teacher Salary Schedule

Exam ples of Recent Settlem ents (cont.)

 Brockport now: 2015-2019  Health Plan:

 High Deductible Health Plan  2015-16: District pays 100%  2016-17: District pays 100%  2017-18: District pays 97%, unit members pay 3%  2018-19: District pays 95%, unit members pay 5%  Blue Point 2 Value  7/ 1/ 15, District provides BP2 Value at 92%, District does not bill unit member

for 1% increase for 2015-16 (members pay 7% BP2 Value)

 7/ 1/ 16, District provides BP2 Value at 91%, District does not bill unit member

for 1% increase for 2016-17 (members pay 8% BP2 Value)

 7/ 1/ 17, District provides BP2 Value at 90%, District does not bill unit member

for 1% increase for 2017-18 (members pay 9% BP2 Value)

 7/ 1/ 18, BTA members pays total 3% increase phased in over past 3 years.

Exam ples of Recent Settlem ents (cont.)

 Brockport now: 2015-2019  Salary:

 Complete Elimination of Salary Schedule!  2015-16: 3.8% increase and $130 stipend  2016-17: 3.8%  2017-18: 3.8%  2018-19: 3.8%  2019-20: 1.5% unless agreement made otherwise

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Exam ples of Recent Settlem ents (cont.)

 East Rochester 2015-2020  Health Plan:

 BP2 Value is new base plan effective 7-1-15 (was either Blue Million, BP2

Select or BP2 Value with a 90% District contribution to BP2 Select)

 2015-16: District contributes 96% of base plan  2016-17: District contributes 94% of base plan  2017-18: District contributes 92% of base plan  2018-19: District contributes 90% of base plan  2019-20: District contributes 88% of base plan

 Salary:

 2015-16: $1,000 added to prior year’s base, then 1.25% increase  2016-17: $1,000 added to prior year’s base, then 1.30% increase  2017-18: $1,000 added to prior year’s base, then 1.35% increase  2018-19: $1,000 added to prior year’s base, then 1.45% increase  2019-20: $1,000 added to prior year’s base, then 1.50% increase

Exam ples of Recent Settlem ents (cont.)

 North Tonawanda: The teachers union agreed to pay for part of

their health insurance, as a flat amount per year, which starts at $425 for singles or $850 families.

 This increases each year, up to $500 and then $1,000 in the final year.

Those who participate in Catholic Health will pay a lower rate that starts at $300 single to $600 families and raises at a lower rate to $350 and $700 in final year.

 The new four-year agreement continues through 2019, with a 1 percent

increase each year, including a retroactive increase of 1 percent for 2014-15.

 The new contract also included a retirement agreement. The incentive

is offered only through 2016 and will pay $2,000 per year of service or up to $40,000 to be paid over four years.

Exam ples of Recent Settlem ents (cont.)

 Niagara Wheatfield: Retroactive contract deal with the teachers

union that grants small salary raises over four years but requires a number of health insurance coverage concessions.

 The contract is retroactive to July 1, 2013 and covers 260 members of

the Niagara-Wheatfield Teachers Association.

 No pay hike was granted for 2013-14 but subsequent years get an

increase - .5% 2014-15, .875% for 2015-16 and 1% for 2016-17.

 Health coverage concessions include a reduction in the waiver amount

teachers who decline coverage are paid as well as an increase in the cost

• f adding coverage under the various plans.

 A significant provision was put in that requires both sides to

collaboratively review health care options in an effort to create savings to future health care costs.

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Exam ples of Recent Settlem ents (cont.)

 Kenm ore-Town of Tonawanda: The district and teachers union

approved the second of two parts to their contract, settling issues of leave time and attendance.

 Teachers agreed to give up three annual leave days in return for

flexibility on how those days may be used. Teachers also will have the

• pportunity to buy back unused leave days and have that money placed

in an account to pay for health insurance upon retirement; teachers don’t get health insurance when they retire.

 Teachers contribute 10.2% toward their health care, which is the

regional average, going to 12% by the time the contract ends in 2018

 The district and the union last year approved the first part of the

contract, which gave teachers a 1 percent raise in the second year of the deal and a 1.25 percent increase in the third year.

Com m encing Negotiations – The Rules are Still the Rules

 What approach to negotiations is most likely to

achieve desired results?

 Traditional  “Win-Win”  Informal

Remember that no matter what approach is used, it is still “negotiations” under the “Taylor Law” (Civil Service Law, Article 14) unless the parties explicitly agree otherwise.

Obligation to Bargain in Good Faith

 The Taylor Law requires that the Public Employer

and the Union at all times negotiate in “good faith”

(Civil Service Law , § 204[3])

• Meet at reasonable times and places.
• Confer in good faith on wages, hours, and other mandatory

terms and conditions of employment.

• No obligation compelling either party to agree to a proposal
• r to make a concession.

Components of the duty to negotiate in good faith:

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Obligation to Bargain in Good Faith

 “Hard bargaining” is acceptable and, arguably, encouraged

by the Taylor Law. On the other hand, “surface bargaining,” i.e., going through the motions without actually intending to reach a final agreement, constitutes an improper practice.

 “Regressive bargaining” may be permissible if explained by

intervening circumstances, e.g., decline of budget and/ or economic situation, loss of benefit of health insurance cost reductions, etc. Cannot be used to retaliate, or to “teach a lesson”

Obligation to Bargain in Good Faith

 Summary of “good faith” bargaining – A sincere

desire to reach agreement

a) must present comprehensible proposals b) must be able to explain the objectives of the

proposals,

c)

and may have to provide information to substantiate the basis for the proposals

Bargaining Tools: Educating the Other Side

• Continue to educate Unions on the realities of the tax levy cap, and the

new era of limits

• In 2016 the CPI (which is the biggest component of the tax cap

formula) was only .12%

• 95 Districts had negative tax levy caps in 2016
• 36 Districts sought to override their tax cap in 2016
• Despite fiscal challenges voters in all but 10 districts approved their

budgets in 2016 (one adopted a contingency budget, six passed on revote, and three were defeated after a revote) (source: NYSSBA 2016 release)

• Explain the limited immediate utility of “pension reform” and the

continued problem of rate unpredictability

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ACA Landm ines: Major Changes in 20 16

 Compliance standards are much tighter.

 Employers must offer to 95% in 2016 as opposed to 70% in

2015.

 Reporting was “good faith” standard in 2015; precision

required in 2016.  Penalties are increasing

What Is Yet to Be Im plem ented

Cadillac Tax

 Starting in 2020, employers will be subject to an excise tax

• n their sponsored health insurance coverage if the value of

that coverage exceeds $10,200 for individual coverage and $27,500 for family coverage.

 The tax is equal to 40% of the aggregate value of coverage

in excess of these threshold amounts

Potential Contract Landm ines to Address

 Complex Provisions and Lack of Flexibility  Waiting Periods  Extending Benefits to Retirees/ Actively Employed Retirees  Opt-Outs  HRAs  Self-Insurance  Complex benefit eligibility and multiple offerings  Rehires

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Specific Contract Considerations

Lack of flexibility in CBAs creates issues:

• Contractual rules regarding overtime
• Inability to alter terms and conditions to meet 95% threshold safe

harbor

• Inability to alter terms and conditions to meet affordability safe harbor
• Potential worst case scenario – Required to pay for health insurance

and pay penalties

• Complex provisions re: eligibility that are contrary to ACA

requirements

• Retiree exclusions

Specific Considerations - Unionized Em ployees

Bargain re-opener language

• Needs to provide employer with the flexibility to make immediate

changes to benefits in order to avoid ACA penalties.

Other Health Insurance Bargaining Approaches

 Consider language to address future ACA

requirements/ interpretations/ changes/ impacts

 Retain flexibility to change carriers, method of funding

health insurance, etc.

 Reinforce the relationship between health insurance cost

containment and willingness to consider compensation increases

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Other Health Insurance Bargaining Approaches

 Consider the usefulness of the “neutral” role of the health

insurance consultant

 Have a transparent process: educate the union on the

• peration, cost and implications of the district’s health

insurance program

APPR and the Im pact of Section 30 12-d

 The good news: the final end of session deal passed by both

houses included language that delays the deadline for approved APPR plans under section 30 12-d until Decem ber 31, 20 16. (S.8159, Flanagan/ A.10741, Rules (Farrell)

 Although NYSSBA sought changes that would allow

districts to operate under either an approved 3012-c or 3012-d plan, unfortunately that change was not enacted (but NYSSBA’s advocacy helped keep this issue on the table and provide districts with additional time to reach agreement)

APPR and the Im pact of Section 30 12-d

 The new SED subm ission deadline is now October 31,

2016 instead of July 1, 2016.

 Note: all 3012-c plans are over as of June 30, 2016 and

cannot be implemented for the 2016-17 school year.

 The legislature failed, however, to de-couple plan approval

from the receipt of increases in State aid.

 The “Hammer” is still in place – failure to meet the

submission deadline results in loss of state aid increases for both 2015-16 and 2016-17.

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PERB AND THE NEGOTIABILITY OF EVALUATION PROCEDURE VS. CRITERIA

 ELWOOD UFSD 10 PERB 3107, (1977): “The criteria and

standards for teacher evaluation are a management prerogative.”

 IN THE MATTER OF THE APPLICATION OF THE

BOARD OF EDUCATION OF THE NEWBURGH ENLARGED CITY SCHOOL DISTRICT 22 PERB 7009, (1989) “If he [the Commissioner] wishes to remove the procedures for the annual evaluation of teacher performance from mandated collective bargaining, his remedy is to convince the Legislature and the Governor of this State that amendment of the statute is in the best interests of our educational system.” Section 30 12-c Incorporated a Broad Overall Statutory Duty to Bargain Evaluative Procedure

Furtherm ore, nothing in this section or in any rule

• r regulation prom ulgated hereunder shall in any

w ay, alter, im pair or dim inish the rights of a local collective bargaining representative to negotiate evaluation procedures in accordance w ith. . . [the Taylor Law ] sic . . . w ith the school district or board of cooperative educational services. Education law Sec. 3012-c (8) NOT Repealed by Section 3012-d

Keep APPR Negotiations Separate from Collective Bargaining Negotiations

 Some groups are still trying to use the need to negotiate

APPR plans as a chip in negotiations

 Make it clear that APPR negotiations are not connected to

CBA negotiations

 This seems for the most part to be easier this time around

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Don’t Forget the Other Bargaining Tools - Effective Use of The Im passe Process

 The Taylor Law specifies that “an impasse may be deemed

to exist if the parties fail to achieve agreement at least one hundred twenty days prior to the end of the fiscal year of the public employer.” Civil Service Law § 209[a].

 A perhaps more meaningful definition is that impasse

exists when there is no reasonable expectation that further negotiations would be productive without the assistance of a third party. City of New burgh, 15 PERB ¶ 3116; affd., 97 A.D.2d 258; affd., 63 N.Y.2d 793.

Effective Use of The Im passe Process

 Who should declare impasse?  The role of the mediator - PERB has described a mediator

as “a liaison between the parties [who] seeks to effect a settlement through persuasion and compromise.” What is the Taylor Law, and How Does It Work?, PERB (2004).

 Be prepared, be persuasive, and strategically use the

• pportunities that mediation provides.

Effective Use of The Im passe Process

 Fact finding – If the District does not accept the Fact

finding report, the Civil Service Law requires that that the Superintendent forward the report and recommendations to the School Board, provides the union the same

• pportunity, and permits the Board to hold a hearing on

the report and the impasse (Civil Service Law § 209[3][e,f]).

 Remember, there is no end to the negotiations process for

school districts until the parties reach voluntary agreement. The only constant is the requirement to negotiate in good faith.

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Effectively Managing the Public Debate

 Anticipate and prepare for union pressure tactics, such as

armbands and unity clothing, public statements, picketing, direct approaches to board members and even conduct which may constitute a “strike.”

 A school district may communicate directly with union members

and/ or the general public to explain its bargaining positions and/ or to respond to inaccurate statements by the union. Brentw ood UFSD, 14 PERB ¶ 4630. However, any such communications which are deemed to constitute “direct-dealing” with employees, or which threaten reprisals for protected activity, may be improper under the Taylor Law. e.g., City of Rochester, 9 PERB ¶ 4542; County of Onondaga, 14 PERB ¶ 4503.

Confidentiality

 The New York Open Meetings Law (Public Officers Law §§ 100-

111) permits a board to move to executive session to discuss contract negotiations (see, § 105, id).

 Section 805-a(1)(b) of the General Municipal Law states that no

municipal officer (a term which includes school board members) may “disclose confidential information acquired by him in the course of his official duties or use such information to further his personal interests,” which includes disclosure of confidential information obtained at an executive session. Appeal of Board

• f Education of Middle Country Central School District, 33
• Educ. Dept. Rep. 511 (1994).

Concluding Thoughts: The Most Effective Approach to Bargaining

 Preparation  Identify Priorities  Strategize best approach  Educate  Persuade  Be flexible  Identify opportunities

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Developing Param eters

 Breakdown of all cost items  Breakdown of health insurance costs  Know breakdown of members and health insurance  plan selection  Cost of retiree health insurance (last year, this year, next year - if

available)

 Know how much the union paid in dues each year  Understand how team has prioritized economic items  Understand how team has prioritized non-economic items  Identify in advance all the economic factors/ challenges for the district

(e.g., proposed property tax cap, economic climate, declining enrollment, state aid, fuel costs, etc.)

 Know how contract proposals will impact tax levy