14 CIR 1 (2002) See also 14 CIR 33 (2002); 14 CIR 34 (2002

NEBRASKA COMMISSION OF INDUSTRIAL RELATIONS

Pursuant to Neb. Rev. Stat. § 48-818 (Reissue 1998), Educational Service Unit No. 13 Education Association (hereinafter the "Association" or "Petitioner"), filed a wage petition seeking resolution of an industrial dispute for the 2000-2001 contract year. The Association is a labor organization formed by all of the non-administrative staff of Educational Service Unit No. 13 (hereinafter, "ESU #13" or "Respondent") for the purpose of representing the staff in collective bargaining. ESU #13 is an Educational Service Unit that is organized and exists by virtue of Neb. Rev. Stat. §§ 79-1201 to 79-1239 (Reissue 1996).

After several continuances during which the parties unsuccessfully worked to reach settlement, the case ultimately went to trial. The issues at trial were the array composition for purposes of wage comparison, the methodology used by the Commission in determining fringe benefits/health insurance elections, and the methodology used by the Commission in determining total compensation.

ARRAY:

When the Commission is requested to do so, it must "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." Neb. Rev. Stat. § 48-818 (Reissue 1998). In determining the employment units for purposes of comparison, the Nebraska Supreme Court has outlined the following:

In selecting employment units in reasonably similar labor markets for the purpose of comparison as to wage rates and other benefits, the question is whether, as a matter of fact, the units selected for comparison are sufficiently similar and have enough like characteristics or qualities to make a comparison appropriate.

Lincoln Firefighters Ass’n v. City of Lincoln, 253 Neb. 837, 842, 572 N.W.2d 369, 373 (1998) (citing Lincoln Co. Sheriff’s Emp. Ass’n v. County of Lincoln, 216 Neb. 274, 343 N.W.2d 735 (1984)).

The Supreme Court in Lincoln Firefighters set out the factors that should be considered when determining comparability. "As a general rule, it may be said that the factors most often used to determine comparability are geographic proximity, population, job descriptions, job skills, and job conditions." Lincoln Firefighters, 253 Neb. at 842, 572 N.W.2d at 373.

The parties agreed that six (6) Nebraska Educational Service Units (hereinafter, "ESUs") are sufficiently similar to ESU #13, so that they may be used for comparison purposes in determining the prevalent wage rates and conditions of employment for the subject bargaining unit. These common ESUs are ESU #1 – Wakefield, ESU #2 – Fremont, ESU #5 – Beatrice, ESU #8 – Neligh, ESU #9 – Hastings, and ESU #16 – Ogallala. In addition, Petitioner urged that ESU #4 – Auburn and ESU #17 – Ainsworth should be included in the array for comparison purposes. Respondent proposed that ESU #7 – Columbus, and ESU #11 – Holdrege be included in the array for comparison purposes. Both parties stipulated that Columbus and Holdrege have similar work, skills, and working conditions as compared to ESU #13 – Scottsbluff. However, similarity of work, skills, and working conditions of ESU #4 – Auburn and ESU #17 – Ainsworth were not agreed to by the Respondent. After careful review of the evidence, the Commission’s array for ESU #13 should consist of the following schools: ESU #1 – Wakefield; ESU #2 – Fremont; ESU #5 – Beatrice; ESU #8 – Neligh; ESU #9 – Hastings; ESU #16 – Ogallala; and ESU #11 – Holdrege. The array shall not include ESU #7 – Columbus, ESU #17 – Ainsworth, and ESU #4 – Auburn.

The six common members used by the District meet the Commission’s general comparability guidelines. The Commission has previously found that larger arrays are more statistically sound than smaller arrays. Adams Co. Dist. No. 0060 Educ. Ass’n v. Adams Co. School Dist. No. 0060, 10 CIR 242 (1990). The Commission has also expressed that it would prefer arrays containing more than four (4) or five (5) members whenever possible. Grand Island Educ. Ass’n v. Hall Co. School Dist. No. 0020, 11 CIR 237 (1992); Douglas Co. Health Dept. Employees Ass’n v. County of Douglas, 9 CIR 219 (1987). The Commission has held that arrays consisting of six (6) to eight (8) members are appropriate. Coleridge Educ. Ass’n v. Cedar Co. School Dist. No. 14-0541 a/k/a Coleridge Community Schools, 13 CIR 376 (2001); O’Neill Educ. Ass’n v. School Dist. of Red Cloud, 10 CIR 120 (1989); Logan Co. Educ. Ass’n v. School Dist. of Stapleton, 10 CIR 1 (1988); Trenton Educ. Ass’n v. School Dist. of Trenton, 9 CIR 201 (1987). The Commission will generally include all proposed array members where the parties have stipulated or proved similarity of work, skills, and working conditions unless there is specific evidence that this is otherwise inappropriate or unless the array becomes unmanageable. Lynch Educ. Ass’n v. Boyd Co. School Dist., 11 CIR 25 (1990).

The Respondent argues that ESU #11 – Holdrege should be included in the array because the similarity of work, skills, and working conditions have been stipulated to by the Petitioner and the size and the geographical proximity criteria are comparable between the two ESUs. At trial, the Petitioner did not present any evidence for the exclusion of Holdrege from the array. Holdrege will be included in the Commission’s array.

The Petitioner argues that ESU #7 – Columbus should not be included in the array because less than 80% of the staff at ESU #13 – Scottsbluff can be placed on the ESU #7 salary schedule utilized by the Respondent in calculating base salary. The Respondent concedes this fact and agrees with the Petitioner that ESU #7 should not be included in the array.

Respondent argues that ESU #4 – Auburn should be excluded from the array because Auburn has discretion to determine how much credit to give new teachers for prior employment and because Auburn is not "geographically proximate" to ESU #13 – Scottsbluff. Petitioner has conceded to the exclusion of Auburn.

Respondent believes that Ainsworth should not be in the Commission’s array because it does not conform to the Commission’s size criteria, and the Petitioner has not met the burden of proof with respect to work, skills, and working conditions. Petitioner believes that Ainsworth should be included in the array because the Commission has held in the past that the work, skills, and working conditions of Nebraska’s ESUs are all sufficiently similar as a matter of law.

In selecting an appropriate array used to determine comparability, the Commission has generally held to a guideline that array members should generally range from one-half to twice as large as the size of the employer in question. Although the Commission’s guidelines are useful for guidance, the Supreme Court recognized in Lincoln Firefighters, that they do not carry the import of the statute. "We must not lose sight that the ‘guidelines’ used by the [Commission] are not statutory requirements, and the failure of the evidence to strictly comply with the guidelines does not require us to find that the action of the [Commission]… was arbitrary and capricious. Guidelines are nothing more than… a framework…" AFSCME Local 2088 v. County of Douglas, 208 Neb. 511, 523, 304 N.W.2d 368, 375 (1981).

The evidence concerning size presented by the parties was the size of the total student population of each school district, which was served by each proposed array ESU. An ESU is a specialized statutory creature authorized to contract with local school districts to provide professional services. Typically, these are specialized services that the district can more efficiently contract out. The bargaining unit in question consists of teachers, speech pathologists, a nurse, psychologists, and special education instructors. These employees often provide services to only a small portion of the total student population, and for varying lengths of time. The total student population of the districts served by an ESU does not, by itself, have the same relevance on the issue of comparability as it does in the context of school districts, or municipalities. We do not feel that the size of the total student population served should be used to distinguish whether Ainsworth should be in the array. Instead, for comparability, the Commission must look towards the work, skills and working conditions of the various ESUs.

The Petitioner argues that the Commission in Educational Service Unit No. 15 Educ. Ass’n v. Education Service Unit No. 15 of the State of Nebraska, 9 CIR 1 (1986), held that ESUs share a similarity in work, skills and working conditions as a matter of law because of their peculiar employment arrangement. As a result, Petitioner did not present evidence with regard to the similarity of work, skills, and working conditions between ESU #17 – Ainsworth and ESU #13 – Scottsbluff.

After careful examination of Educational Service Unit No. 15 Educ. Ass’n, we conclude the holding is only that an ESU differs from a school district, and the array should likewise consist of other ESUs and not school districts. It does not state that all ESUs share the same work, skills, and working conditions as a matter of law. The Commission has repeatedly held that this issue is one of fact. Fraternal Order of Police Sarpy Lodge No. 3 v. County of Sarpy, 10 CIR 61 (1988); Lincoln Firefighters Ass’n Local 644 v. City of Lincoln, 12 CIR 211 (1996). Affirmed 253 Neb. 837, 572 N.W.2d 369 (1998); Douglas County Health Dep't Employees Ass'n v. County of Douglas, 229 Neb. 301, 308, 427 N.W.2d 28, 35 (1988) (citation omitted); Grand Island Educ. Ass’n v. Hall County School Dist. a/k/a School Dist. of Grand Island, 11 CIR 237 (1992). As in any case, the determination of the appropriate array depends upon the evidence presented in that particular case. We will exclude Ainsworth from the array as the Petitioner has not met its burden of proof.

The Commission finds that the ESUs of ESU #1 – Wakefield, ESU #2 – Fremont, ESU #5 – Beatrice, ESU #8 –Neligh, ESU #9 – Hastings, ESU #16 – Ogallala; and ESU #11 – Holdrege are sufficiently comparable in number to constitute the array.

METHODOLOGY FOR HEATH INSURANCE/FRINGE BENEFITS:

This case also presents an issue increasingly litigated in cases coming before the Commission. The Respondent offers the ESU #13 unit employees a flexible fringe benefit plan, providing an annual sum for benefits. Each employee could select to take that amount in cash, payment of dependent insurance premiums, or payment of single health insurance premium with the balance in cash. The dispute arises when we try to place these employees accurately on the schedules of an array school that offers only insurance benefits. Unable to make a perfect match, the parties expend considerable effort and expense attempting to provide the Commission with competent evidence upon which to base a decision.

In this case, Petitioner offered the deposition testimony of eight unit employees concerning the benefit choice they would make at the proposed array schools. As discussed below, we did not consider this evidence in our decision. .

The Petitioner suggests that the Commission assume that the employees would take 100% of any fringe benefits they would be entitled to when placed on the schedule of each array school. The Respondent suggests the Commission calculate the cost of health insurance benefits by using the elections which the employees in question actually made at ESU #13 for the 2000-2001 school year and where there is no comparable election in the array used, to calculate the benefit received as zero (0).

This issue will continue to present itself, and is likely to result in unnecessary expense and effort by employers and employees unless the Commission provides some guidance.

In Crawford Teachers Ass’n v. Dawes County School Dist. a/k/a School Dist. of Crawford, 11 CIR 254 (1991), instead of paying the insurance premiums for its teachers, the District provided them with compensation in addition to their salary. The teachers received 12.5% of their salary under this cafeteria plan which they in turn could use to purchase group health or dental insurance, or they could refuse to take insurance and keep the money. This 12.5% arrangement was unlike any plan offered by the array schools chosen for the array. In Crawford, both the Petitioner and the Respondent did not want to change Crawford's method of providing these benefits.

To arrive at the percentage of the teacher's salary Respondent in Crawford should have paid its teachers, the Commission calculated the cost of health insurance of each school in the array as it applied to the Crawford teachers by giving each teacher the full benefit they could receive as if they worked at the array school. This holding was consistent with previous Commission decisions because fringe benefits must be considered in determining total compensation for both teacher and non-teacher wage cases. See Lincoln Firefighters Ass'n v. City of Lincoln, 198 Neb. 174, 252 N.W.2d 607 (1977).

In the past, the Commission has assigned health insurance benefits to teachers, when they are placed on array schools schedules, without knowledge of what election they would actually take. In Scotts Bluff County School Dist. No. 79-0064 v. Lake Minatare Educ. Ass’n, 13 CIR 256 (1999), the subject school district did not provide any benefits, and the only issue presented for determination by the CIR was base salary. Comparing Lake Minatare’s base salary to the array members’ base salaries would have been inequitable, since the array members all provided some benefits. When total compensation figures were compared, the Commission set Lake Minatare’s base salary higher than any of the array members’ bases. This allowed Lake Minatare’s teachers to be paid at a comparable total compensation level as required by Neb. Rev. Stat. § 48-818.

We believe this methodology is logical and fair. This method also allows the Commission to consistently determine "total compensation" as set forth in § 48-818. We conclude that in this case, and future cases presenting this same issue, we will conclude that each employee would make an economically rational choice to accept the maximum fringe benefits available to him or her (single or family), and will be so placed on the array. (See Table 1)

METHODOLOGY FOR BASE SALARY:

As discussed above, the employees within the unit have a wide variety of job descriptions. The wages of twenty-one of the twenty-three members of the unit are calculated through the salary schedule.

The Petitioner and the Respondent suggest two possible methods of calculating wages for ESU #13. Petitioner suggests a methodology resembling a hybrid teacher wage case by placing 20 of the 23 bargaining unit members on each of the array schools. The Petitioner does not place the two "off-scale" psychologists because the two psychologists are not paid on the salary schedule, but rather negotiate their own salaries. The Petitioner also did not place the nurse (Ms. Takuski) on any of the schedules because of the varying pay practice for nurses in the different ESUs.

The Respondent, on the other hand, calculates the base salary on the methodology used by the Commission in Board of Regents of the University of Nebraska v. American Association of University Professors, 7 CIR 1 (1983). The Respondent concludes that the base must be determined by a methodology which permits the total available dollars to be allocated among all 23 affected staff members in the bargaining unit. The Respondent argues that the "total compensation" method cannot be used in an ESU case because the ESU does not pay all of its employees on the salary schedule. The Respondent argues that this ESU is more like all other governmental employee wage cases, rather than like a teacher wage case. The issue presented to the Commission in the instant case is whether ESU #13 should be treated as a teacher wage case, or more like other governmental employee wage cases.

In Educational Service Unit No. 15 Educ. Ass’n v. Educational Service Unit No. 15, 9 CIR 1 (1986), the Commission stated that the role of the ESU teacher varies substantially from that of the public school teacher. ESU teachers are called upon to provide special teaching skills in areas where the school district faculty does not have the necessary expertise. The Commission concluded that the ESU teachers did not share a community of interest with the "regular" teachers in a school district. However, in ESU #15 the Commission did determine the wages from a modified version of a regular school wage case methodology. The Commission made a salary determination just like a teacher wage case, except that it excluded the non-degree (RN nurses) from the BA salary schedule. While the teachers at ESUs do not share a sufficient community of interest with teachers at school districts, for purposes of salary determination the Commission generally employs the teacher wage case methodology.

In Educational Service Unit No. 12 Educ. Ass’n v. Educational Service Unit No. 12, 9 CIR 108 (1987), the Commission found that the prevalent method for determining compensation in the Commission’s array involved application of an index salary schedule, which rewarded educational attainment and compensated for years of service.

In Service Employees International Union, Local No. 226 v. Westside Community School Dist. No. 66, 11 CIR (1991), the Commission determined that the total compensation method was inappropriate for a group of paraprofessionals. The Commission concluded that in order to use a total compensation model the Commission must find that the party advocating its use has accurately and precisely determined the placement of each individual in the bargaining unit. Due to the nature of the two-dimensional index salary schedule used by almost all of the school districts in the state, this process is exact and requires no independent assumptions for the Commission. Teachers in all districts were rewarded for longevity and education beyond their degree, which was reflected in their placement on the given salary schedule. The Commission found that there was no similar corollary in other employee groups. In non-school cases, the Commission reasoned that one employer may reward previous experience by bypassing the initial hiring rate; whereas, another employer will not – which equals no set policy in the non-school employee group. Furthermore, the Commission held that using a total compensation model did not allow the Commission to actually set the minimum and maximum wage rates of the one-dimensional wage scale. In Westside, the employee group received few - if any - fringe benefits and it was unnecessary for the Commission to look beyond wages to determine comparability.

Another decision in the arena of non-school wage cases was Board of Regents of the University of Nebraska v. University Ass’n of University Professors, 7 CIR 1 (1983). In Board of Regents, the Commission chose to match the UNO departments with the same subject areas that were being taught only at those peer institutions, which had similar matches. The Commission used a methodology which first computed the total compensation which the matched faculty would have received at each of the peer institutions and the total compensation which those matched faculty were actually paid at UNO for the year in question. The Commission then aggregated those comparative salaries to determine the aggregate total compensation that the matched staff would have made at all of the compared-to institutions and the aggregated total compensation all the matched staff were actually paid by the University. Finally, the Commission determined the aggregate percentage differential. The Commission used an aggregate percentage calculation because the difference in the work between UNO and the compared to institutions did not allow the Commission to do a one-on-one match of faculty, but, instead allowed the Commission to aggregate only the faculty in common classes of discipline, degree, and rank.

In the instant case, the ESU employees are more like teachers, and less like non-school employees. At least 10 of the 23 members of the bargaining unit have job titles including the term "teacher". Another 11 of the employees fit under the conventional salary schedule, where employees are rewarded for experience and educational attainment. In fact, the past practice of ESU #13 has been to pay all 21 of these employees on the salary schedule. Only two employees (the psychologists) seem not to fit the conventional teacher salary schedule.

The ESU currently has a salary schedule that is almost an identical version of a "teacher" salary schedule. In fact, all of the ESUs in the Commission’s possible array have a salary schedule that is comparable to a teacher salary schedule. The weight of the evidence points clearly to the fact that the ESU #13 unit employees should be compared on the basis that the Commission uses to compare teachers, not to other governmental employees.

The Petitioner argues that the nurse cannot be placed on any of the array schools because the placement of nurses at the array ESUs vary. The Respondent places the nurse on those schools with like placement and does not place the nurse on those array schools that do not have similar placement.

In Educational Service Unit No. 12 Educ. Ass’n vs. Educational Service Unit No. 12, 9 CIR 97 (1987), the Commission placed the nurses with a BA on the salary schedule with the other ESU teachers and did not place the "RN" nurses on the schedule because they had less than a Bachelor’s degree. The staff index factor did not include those two individuals employed at ESU #12 who held less than bachelor’s degrees. The Commission arrived at a staff index factor by placing all of the degreed staff on a 4x4 salary schedule. The Commission has in the past placed BA nurses on the salary schedule of array schools without a separate nurse’s salary schedule.

In the instant case, Ms. Takuski has a bachelor’s degree in nursing with five years of experience at the current ESU #13 and seven years of prior experience before coming to ESU #13. Ms. Takuski can be placed on all of the array schools’ schedules under the BA degree column and the current practice of ESU #13 is to pay Ms. Takuski on the salary schedule under the BA column. These facts are comparable to the result reached in the ESU #12 case. We will place Ms. Takuski on all of the array schools as having a BA degree (1^st step) and with five years of experience, with prior experience calculated at the array schools as they would calculate a BA degreed employee.

The last issue before the Commission is the placement of the two psychologists. The Petitioner advocates not placing the psychologists on any of the array schools (nor placing them on the salary schedule) and applying the same percentage increase to them as determined appropriate for the adjustment of base salary for the schedule employees. The Respondent agrees that the Commission should not place the psychologists directly on the salary schedule. The Respondent, however, argues that the Commission should take the "total available dollars" of the Unit and allocate them among all 23 members of the bargaining unit, by subtracting out the psychologists salaries.

For approximately the past ten years, the two psychologists at ESU #13 have negotiated their own salaries, which were not within the confines of the current salary schedule. The testimony indicated that it has been difficult in the past to attract school psychologists, and this method developed to allow the ESU to keep quality psychologists. Neither party at trial wished to change the practice of paying the psychologists off the salary schedule.

When calculating comparable wages and fringe benefits under the "total compensation" model utilized in teacher wages cases, the Nebraska Supreme Court has stated that the Commission of Industrial Relations could not consider an employer's ability to pay. Nebraska City Educ. Ass'n v. School Dist. of Neb. City, 201 Neb. 303, 267 N.W.2d 530 (1978). "Section 48-818 . . . states specifically those factors which the Court of Industrial Relations shall look to when establishing wage rates and conditions of employment in disputes before it. Section 48-818 . . . makes no mention of or reference to the school district's ‘ability to pay.’" Nebraska City, 201 Neb. at 305-306, 267 N.W.2d at 532. "Had the Legislature wanted the Court of Industrial Relations to consider factors such as ‘ability to pay,’ when setting wage rates and conditions of employment it would have specifically provided therefore." Id. at 306, 267 N.W.2d at 532. In determining "total compensation" for ESU #13, we may not consider ESU #13’s ability to pay.

In the present case, should the Commission accept Respondent’s argument that we consider "total available dollars" when determining compensation for the Petitioner, by subtracting out long term disability pay, incentive pay, and psychologists’ pay based on a 185 day pay scale, we would effectively be revisiting ability to pay. The Commission will not consider the Respondent’s total available dollars.

The Petitioner requests that the Commission order the Respondent to pay the psychologists the same percentage increase as the on-schedule employees will receive from this order. While this may be the current practice of the ESU #13, the Commission declines to determine the wages for the two psychologists based on a percentage increase. The Commission must 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. In this case, neither party desired a reduction in compensation to these employees. The evidence in the record cannot support an increase in the psychologists pay by comparison to their peers in the array. Simply applying a percentage increase to their salaries would not be consistent with our duties under § 48-818. We will make no adjustment to the pay of the psychologists. Likewise, the Commission will not consider long term disability or incentive pay, as neither party asked the Commission to determine the prevalence of those issues and there was no evidence relating to those issues presented at trial. (See Tables 2-9).

IT IS THEREFORE ORDERED THAT:

1. Respondent shall pay the teachers a base salary of $22,630 for the 2000-2001 school year. (See Table 10).
2. All other terms and conditions of employment for the 2000-2001 school year shall be as previously established by the agreement of the parties and by Orders and Findings of the Commission.
3. Adjustments in compensation resulting from this order shall be paid in a single lump sum with the payroll checks issued next following issuance of this final order.

All judges join in the entry of this order.