15 CIR 37 (2004) (See also 15 CIR 23)


ASSOCIATION, an Unincorporated )
Association, )
                                  Petitioner, )
         vs. ) FINAL ORDER
NO. 22-011, a/k/a SOUTH SIOUX CITY )
Subdivision of the State of Nebraska, )
                                  Respondent. )


For Petitioner: Mark D. McGuire
McGuire and Norby
605 South 14th Street
Suite 100
Lincoln, NE  68508
For Respondent: Kelley Baker
Harding, Shultz & Downs
800 Lincoln Square
121 S. 13th Street
P. O. Box 82028
Lincoln, NE  68509-2028

Before: Judges Blake, Orr,  and Burger.


After the trial of this matter, the Commission entered a Findings and Order on September 15, 2004. The Respondent timely filed a Request for Post-Trial Conference as provided for in Neb. Rev. Stat. § 48-816(7)(d), which allows the Commission to hear from the parties on those portions of the recommended findings and order which are not based upon or which mischaracterize evidence in the record. A Post-Trial Conference was held October 5, 2004. The Petitioner was represented by its attorney, Mark D. McGuire. The Respondent was represented by its attorney, Kelley Baker. The parties waived the time requirement for issuing Final Order.

The Respondent’s Request for Post-Trial Conference raised three areas of objection to the Commission’s Order of September 15, 2004. Those areas are dealt with as follows:

    1. Calculating Fringe Benefits. The objection regarding the method of calculating fringe benefits claims that the Commission disregarded the evidence pertaining to the option to take cash-in-lieu of health insurance at certain array school districts. The Respondent urged the Commission to take into account the South Sioux City Teachers’ actual choices to take cash and the economic value of the cash option at the array schools which do not offer a cash option equal to the cost of health insurance. The resulting placement decisions urged by Respondent were based primarily upon the judgment of the Respondent’s business manager as to rational choice. We declined to decide this recurring issue on such questionable evidence.
    2. The Respondent’s objection to our Order of September 15, 2004 is that if the Commission disregards the cash-in-lieu of health insurance options and uses the maximum benefit at the array schools, then the Commission should likewise assume that the teachers would have taken the maximum allowable benefit at South Sioux City.

      This issue of comparing benefits has been problematic due to the lack of uniformity of health insurance/cash option benefits, and the resulting lack of ability to make direct comparisons. The education associations typically argue that the teachers must all be placed in our computations according to the benefit, which is the most expensive, regardless of whether the teachers have actually chosen that benefit. The school districts respond that the teachers who have actually selected the lesser benefit must be placed as if they would take that lesser benefit at the array school, regardless of the differences in the levels of health insurance and the differences in the amounts of cash offered.

      In Educational Service Unit No.13 Educ. Ass’n v. Educational Service Unit No.13, 14 CIR 1 (2002) and 14 CIR 34 (2002) ("ESU 13"), the Commission was faced with comparing an election at the subject school district to take the health insurance benefit as either family coverage, individual coverage plus cash, or all cash. The total benefit cost remained the same. The question, as to those teachers who had taken a cash option, was how to compute their benefit at an array school which did not offer a cash option. The Commission was asked to calculate the cost of health insurance benefits by using the same elections the employees in question had actually made, and further, where there was no comparable election in the array school, to calculate the benefit received as zero. In concluding in ESU 13 that each employee would make an economically rational choice to accept the maximum fringe benefits available to him or her, we were basing such conclusion on an inference from the competent evidence in the case.

      The inference of greatest economic benefit promotes predictability. Predictability is one of the important goals in the area of public labor relations and negotiations. However, we must not adhere to that worthy standard to the point of sacrificing logic and fairness as disclosed by the evidence.

      In the case now before us, South Sioux City teachers who chose the cash option were placed in the Blair, Elkhorn, Hastings, and Ralston schedules as if they had all taken the maximum health insurance benefits. A cash option is offered at each of those schools, but in each such school that cash option is less than the cash option offered at South Sioux City. The cash option at South Sioux City is $5,077.00. At Blair that option is $5,000.00. The cash option is $3,200.00 Elkhorn, and $2,940.00 at Hastings. The cash option is $1,000.00 at Ralston. Our Order of September 15, 2004 disregarded the cash options at each of these four schools.

      We conclude that the inference of economically rational choice of the greatest benefit should not be followed in placing those teachers who selected a cash option at the subject school when the cash option is sufficiently similar to the option offered at the subject school. In this case, we find that the cash options offered at Blair, Elkhorn, and Hastings are sufficiently similar to the cash option at South Sioux City, while the cash option at Ralston is not sufficiently similar. Table 2 has been revised and is included with this Order as Table 2A, to reflect the amendments made by this Final Order.

      This determination is not an abandonment of ESU 13. We continue to believe the case was decided correctly, but conclude that our discussion simply went further than was necessary. The evidence in this case requires a refinement of the process in comparing total compensation to recognize cash options at the array schools as legitimate placements if they are sufficiently similar. Mindful always that we are dealing with a mathematical model, we believe the decision to utilize those cash option benefits which we determine to be sufficiently similar to the subject schools will result in a more accurate comparison of total compensation.

    3. Mootness in Continuation Statement. Only the 2003-2004 school year is before the Commission in this case, and we have entered no Order regarding the 2004-2005 school year. The Respondent’s request in this respect has not shown any portion of the Commission’s Findings and Order of September 15, 2004 which is not based upon or which mischaracterizes evidence in the record.
    4. Movement on Schedule. At the Post-Trial Conference on October 5, counsel for Petitioner and Respondent stated that they are in agreement as to their understanding and that there is no further issue regarding the previously established agreement of the parties in this regard.

The matter of Petitioner’s request for assessment of fees and costs pursuant to Commission Rule 29(c) was also heard on October 5, 2004, with counsel for Petitioner and Respondent. Having considered the arguments by counsel for the parties, the Commission finds that the request for attorney fees should be and hereby is denied.

IT IS THEREFORE ORDERED that Respondent’s request to amend the order of September 15, 2004 is sustained in part and overruled in part and such Order shall be as stated herein. It is the final order of the Commission that:

1. After recalculation of the benefits as stated above for the employees who selected the cash option, Respondent shall pay a base salary of $26,574.00 for the 2003-2004 school year.

2. Table 2A reflects the corrections made in this Final Order.

3. All other terms and conditions of employment for the 2003-2004 school year shall be as previously established by the agreement of the parties and by orders and findings of the Commission.

4. Adjustments and compensation resulting from this Order shall be paid in a single lump sum payable within thirty (30) days of this Final Order, if possible.

All judges join in the entry of this order.

Dated this 17th day of November 2004.

A copy of Table 2A may be obtained by calling the Commission of Industrial Relations, (402) 471-2934