11 CIR 38 (1990)


An Unincorporated Association, |
Petitioner, |
0075, a/k/a SCHOOL DISTRICT OF |
GENEVA, A Political Subdivision |
of the State of Nebraska, |
Respondent. |


For the Petitioner: Mark D. McGuire

Crosby, Guenzel, Davis,

Kessner & Kuester

400 Lincoln Benefit Building

Lincoln, Nebraska 68508

For the Respondent: Kelley Baker

Harding & Ogborn

500 The Atrium, 1200 N Street

P.O. Box 82028

Lincoln, Nebraska 68501-2028


Before: Judges Kratz, Cope, and Dawson


A petition was filed by the Geneva Education Association (Petitioner) on September 20, 1989, seeking to have the Commission establish wages and other terms, tenure and conditions of employment for the 1989-90 contract year. The Petitioner also sought to have the Commission issue a Temporary Order requiring the School District of Geneva (Respondent) to vacate the unilateral imposition of certain terms and conditions of employment following impasse in the collective bargaining negotiations. The Commission declined to issue a temporary order and the parties then jointly requested a continuance pending the issuance of a Department of Insurance ruling concerning the Respondent's health insurance plan. The Department of Insurance issued Findings of Fact, Conclusions of Law and a Declaratory Ruling on May 3, 1990, and this matter was then set for trial on June 9, 1990. The trial was held, as

scheduled, and the transcript of the hearing was filed on July 24, 1990.


The Commission has jurisdiction over the parties and the subject matter of this dispute pursuant to Section 48-818 (R.R.S.1943, Reissue 1988) which, in part, provides that:

The findings and order or orders may establish or alter the scale of wages, hours of labor, or conditions of employment, or any one or more of the same. In making such findings and order or orders, the Commission of Industrial Relations shall establish rates of pay and conditions of employment which are comparable to the prevalent wage rates paid and conditions of employment maintained for the same or similar work of workers exhibiting like or similar skills under the same or similar working conditions. In establishing wage rates the commission shall take into consideration the overall compensation presently received by the employees, having regard not only to wages for time actually worked but also to wages for time not worked, including vacations, holidays, and other excused time, and all benefits received, including insurance and pensions, and the continuity and stability of employment enjoyed by the employees.


Each of the parties in this case has presented a 10-member array. Eight of the schools proposed by the parties as comparables are common to both arrays. Respondent offers two additional schools, Southern and Friend. Since there was no evidence presented with regard to Southern, it cannot be used. Petitioner's additional schools were Superior and Central City. The parties stipulated that the work, skills, and working conditions of all of the schools in both arrays are similar.

In recent cases the Commission has held that where the parties have stipulated or proved similarity of work, skills, and working conditions we will include all of the schools submitted in the array unless there is specific evidence that this is otherwise inappropriate or unless the array becomes unmanageable. Lynch Education Association v. Boyd Co. School District , Case No. 779 (Findings and Order entered June 12, 1990). In the instant case, all of the districts offered as comparables by both parties fit the Commission's traditional size and proximity guidelines, are Class 3 districts, and have teachers who perform similar work and have similar skills and working conditions. Table 1 sets out the relevant data on the proposed array members. Although Petitioner argues that Friend should not be included because it offsets the balance of the Petitioner's proposed array, the inclusion of Friend does not skew the array so as to require its exclusion. While Friend is considerably smaller than the other districts proposed, there is no evidence that it is not similar and we therefore include it in the array. The selected array is as follows: Centennial, Central City, Friend, Hebron, Henderson, Milford, Sandy Creek, Superior, Sutton, Tri-County, and Wilber-Clatonia.


With regard to the index salary schedule, the chosen array includes five schools with a 4 x 4 salary schedule index, three with a 5 x 4 salary schedule index, and three with a 4 x 5 salary schedule index. See Table 2. Thus, while there are more 4 x 4 indexes than any other single index, there are a total of six with some other index than the 4 x 4. In Valentine Education Association v. School District No. 6 , 8 CIR 271, at page 276 and thereafter, Judge Thom K. Cope reviews the past Commission decisions regarding the application of the word prevalent. He says, "from these cases it is clear that the standard inherit in the word 'prevalent' is one of general practice, occurrence or acceptance (see Webster's New World Dictionary ), but the extent of such generality is left in each case to the judgment or feeling of the judges." Webster's New World Dictionary defines prevalent as "predominant" and "widely existing." The plurality of 5 to 3 to 3 that we have in the instant case is not, in this Judge's opinion, predominant or widely existing. Thus, there is no clear prevalent index salary schedule. Under this circumstance, Petitioner contends that the Commission should order that the Respondent use the 5 x 4 schedule which was in effect until it was unilaterally altered for the 1989-1990 school year. This unilateral alteration resulted from an impasse in bargaining and Respondent's implementation of its final offer which changed the 5 x 4 schedule to 4 x 4. There is nothing in the record in this case to indicate that the implemented final offer was improper or illegal and the Commission, in an Order entered October 17, 1989, denied Petitioner's Application for a Temporary Order vacating the implemented final offer, Geneva Education Ass'n. v. Fillmore Co. School District , 10 CIR 238 (1989.

The Commission has refused to alter the salary index schedule where "such a change would result in a material disturbance in the internal balance of the schedule." Schuyler Education Association v. School District No. 123 , 8 CIR 331 (1986). To change from a 4 x 4 to a 5 x 4 at this time would materially alter the distribution of monies to the teachers and cause a significant disturbance in the internal balance of the schedule now in place. This Commission has also ruled that it is an important industrial policy to maintain existing wage relationships within a unit, if it is otherwise appropriate to do so, when the contract year is almost over. Franklin Teachers Association v. School District of Franklin , 8 CIR 90 (1985). In the instant matter, of course, the contract year is over. In Genoa Education Association v. School District No. 0003 , 10 CIR 179 (1990), this Commission held that it was reluctant to alter the existing salary schedule in the absence of a clear prevalent, and in Franklin Teachers Association v. School District of Franklin, supra , we held that changes in salary schedule are best effected through the collective bargaining process. Rulings in these afore-described cases illustrate that in the instant case we should leave the salary schedule as is, at 4 x 4.


There is a dispute with regard to the insurance coverage and its application to total compensation. The Respondent purchased its health insurance policy from Woodman Accident with a deductible of $1,000. Respondent agreed, however, to self-insure 80% of the first $1,000 of any claim above $100. Under this arrangement, Respondent paid a total of $22,158 to its teachers during the period from September 1, 1989, through May 15, 1990. On May 15, the co-insurance payments stopped because the Nebraska State Department of Insurance ruled that Section 44-1615, Neb. Rev. Stat., requires that insurance coverages provided to subdivisions of the state shall be purchased from a corporation "authorized and licensed by the Department of Insurance." Since Respondent was not licensed it was prohibited from providing the self-funded insurance portion of the plan. Thus, from the date of that decision until the end of the school year (May 15 to August 31), the teachers had to pay for the first $1,000 of any health or accident claim.

The annual premium for Respondent's health and dental and life insurance is $70,103.81. Petitioner argues therefore that this figure, together with the premiums paid for long term disability insurance, should be the amount used for fringe benefits in determining the teachers base salary. It contends that the co-insurance arrangement was illegal and that the amount paid was not "extra money" received by the school teachers, but instead was reimbursement for medical bills. Respondent argues that the $22,158 should be added to the amount of the premium in determining the total amount of fringe benefits. Respondent claims this self-funding arrangement was discussed with the Petitioner before it was placed into effect and that Section 48-818, R.R.S. 1943, says that the Commission should "take into consideration...all benefits received." Therefore, the total fringe benefits in this case should not be based solely on the amount of the premium paid by Respondent for its fringe benefits. Respondent points out that it was able to get a lower premium for its insurance because of the $1,000 deductible.1

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1 No evidence was submitted to show the premium cost for the Woodman Accident policy if it had the same deductible as the NSEA Blue Cross policy.

Another consideration in this determination is the amount paid by the teachers for health benefits after May 15 when Respondent could no longer pay on the first $1,000. At the hearing, Respondent estimated these payments at $9,123, based on the calculation that if $22,158 was paid for .70833 of the school year, then $31,281 would have been paid for the full year ($31,281 - $22,158 = $9,123). We needn't, however, use this estimated figure because by the time this Decision is issued, the May 15 to August 31 payments can be accurately determined.

Respondent's first contention with regard to the insurance is that the Petitioner has not proved that the Woodman Accident policy is not comparable to the prevalent, which is the NSEA Blue Cross policy. We disagree with this contention and find that Respondent's Woodman Accident policy with a $1,000 deductible is not comparable to the NSEA Blue Cross policy which is prevalent among the compared to school districts.

The Petitioner also contends that the $22,158 figure was not admissible into evidence because it is hearsay testimony, is irrelevant, and was presented without proper foundation. This figure was submitted through the testimony of the Respondent's superintendent, Ken Anderson, who is the chief financial officer for the School District. Petitioner furthermore claims that this self-insured figure should have been provided to it prior to the trial, either at the pre-trial conference or through answers to interrogatories. Petitioner, of course, was aware, or should have been aware, that something was being paid to the teachers under this self-funding arrangement and we do not see where its lack of information on this total figure for this period has prejudiced it in any way. We find that the evidence regarding the total self funded payments is admissible.

While it apparently was an illegal arrangement, and it is clearly reimbursement for medical bills, rather than "extra money," we nevertheless conclude that the $22,158 should be included in the total fringe benefit amount. It constitutes fringe benefits to the teachers. In Millard Education Association v. School District of Millard , 5 CIR 425 (1982), Judge Richard Berkheimer ruled that "it is clear from the statute that in arriving at overall compensation regard must be given to benefits rather than the cost of the benefits. Where there is an equation between benefits and costs by which benefits can be translated to dollar amounts for the purpose of computing overall compensation this has been done."

However, if the Respondent is going to receive credit for these self-funded payments in the determination of total fringe benefits, it must somehow recompense the teachers for the amounts they were required to pay for medical benefits after the self-funding arrangement was terminated on May 15 1990. While this figure couldn't be determined at the time of the hearing, it can now. Therefore, we rule that Respondent shall reimburse the teachers for 80% of their medical payments above $100 for the first $1,000 during the period from May 15 to August 31, 1990. That total reimbursed amount shall then be added to the Respondent's total fringe benefits in determining the base salary from the total teacher compensation set out on Table 3.

To the extent that the record does not reflect the exact amount the Respondent will reimburse to the teachers for medical costs incurred from May 15 to August 31, the Commission will require the Respondent to submit, within ten days, and serve on the Petitioner, a post-hearing exhibit showing this amount. The Petitioner may object to this exhibit by filing and serving such objection not later than seven days following receipt of the Respondent's exhibit. If no objection is made, or if the objection can be resolved from the data furnished, the Commission will issue a Supplemental Order setting the base salary. If the objection cannot be resolved from the data furnished, the unresolved issue will be scheduled for hearing.


1. For the 1989-1990 contract year the Respondent shall reimburse the teachers, at 80%, covered medical costs over $100 and under $1,000 which were paid by the teachers since May 15, 1990.

2. The teachers base salary for the 1989-1990 contract year shall be determined by further order of this Commission on the basis of a total compensation figure of $1,143,080.50 and data which shall be submitted to the Commission in accordance with the foregoing Findings and Order.

3. All other terms and conditions of employment for the 1989-1990 contract year shall be as previously established or agreed to by the parties.

All judges assigned to the panel in this case join in the entry of these Findings and Order.

Entered September 18, 1990.