16 CIR 356 (2009) Affirmed, 280 Neb. 477

Before: Commissioners McGinn, Blake, Burger Lindahl and Orr (EN BANC). Burger concurring. Blake dissenting.

This matter comes before the Commission upon an appeal from the Special Master’s ruling dated February 27, 2009. This appeal was filed on March 16, 2009, by the Board of Trustees of the Nebraska State Colleges (hereinafter, “Petitioner” or “Board”). On April 3, 2009 the State College Education Association (hereinafter, “Respondent”, “SCEA” or “Union”), filed an Answer. The Respondent is the bargaining agent for a faculty bargaining unit established under NEB. REV. STAT. § 81-1379(2) and § 81-1373(3) of the Act.

This is an appeal case from the Special Master, which occurred concurrently with the filing of three other State Employees Collective Bargaining Act cases. On April 27, 2009, the Respondent filed a Motion in Limine and a brief in support of its Motion. The purpose of the Motion in Limine was to limit evidence which was proposed by the Petitioner, and intended for submission, at the Commission’s hearing on appeal. On May 6, 2009, the Respondent filed a response and brief to Petitioner’s Motion in Limine, stating that past case law of the Commission allowed such new evidence not presented by the parties to the Special Master. On May 6, in conjunction with a Pretrial, the Commission heard oral argument on the Respondent’s Motion in Limine.

At the conference, the parties discussed whether the Petitioner may offer additional evidence at the hearing in this matter brought pursuant to Neb. Rev. Stat. § 81-1383. The Respondent argued that the hearing was an appeal hearing rather than a new trial. The Petitioner argued that the Commission’s previous decisions recognize that additional evidence is necessary in appeals from the Special Master.

Currently on the Commission’s docket, there are three other cases that fall under the State Employees Collective Bargaining Act. Motions in Limine were filed in all of the cases. In all four of the “State Cases” (including the instant case), the Commission sustained the Respondents’ Motions in Limine. See Orders on Motion in Limine in Cases 1207, 1208, 1209 and 1210. In all four cases, the Commission held that it could find no basis in any Nebraska statute of legislative intent to deviate from basic appellate procedure by allowing additional evidence to the record made before the Special Master. To allow such additional evidence, the Commission reasoned, would permit the parties to bolster any defects now apparently existing in the evidence. The Commission held that this case should be conducted as an appeal on the record, as made at the hearing before the Special Master.

The Commission held a hearing on the appeal on Wednesday, May 20, 2009. The Petitioner made an Offer of Proof at the hearing, regarding exhibits and testimony that would have been presented if the Commission had not sustained the Motion in Limine. This Offer of Proof was presented in the form of a written offer (See Exhibit 25). The Commission overruled the Offer of Proof; however, the Exhibit is maintained as part of the record.

The Commission received Petitioner’s Pre Hearing Brief on May 20, 2009 and Respondent’s Pre Trial Brief on May 19, 2009. On May 19, 2009, the Petitioner filed a Motion to Preclude Respondent’s Challenge to the Special Master’s Award Regarding Non-Economic Items and a brief in support of the motion. On May 19, 2009, the Respondent also filed a response to Petitioner’s motion. The Petitioner and Respondent jointly stipulated as to the issues to be presented at the hearing on appeal. The parties requested the Commission to enter an order on the following issues: whether the decision of the Special Master with respect to wages is significantly disparate from prevalent rates of pay as determined by the Commission pursuant to Neb. Rev. Stat. § 48-818 and supported by competent evidence; whether the Respondent may challenge the Special Master’s findings regarding non-economic items since it did not appeal from the Award or perfect any Cross-Appeal; and whether the Special Master erred in treating the four (4) job classifications as a single job classification. The Petitioner did not dispute the issue of array at the appeal hearing in front of the Commission.

In the current case, the Commission must determine whether to sustain or overrule the Special Master’s ruling. In doing so, the Commission must review the State Employees Collective Bargaining Act Neb. Rev. Stat. § 81-1369 to § 81-1390 and Neb. Rev. Stat. § 48-818.

The Commission finds that it has limited jurisdiction to decide the above issue. This jurisdiction is distinguishable from the Commission’s general jurisdiction under Neb. Rev. Stat. § 48-818. Under the State Employees Collective Bargaining Act the Special Master’s powers are made clear in § 81-1382(2) and (3) as follows:

(2) No later than January 15, the parties in labor contract negotiations shall submit all unresolved issues that resulted in impasse to the Special Master. The Special Master shall conduct a prehearing conference. He or she shall have the authority to:

(f) Take any other actions which may aid in the disposal of the action. The Special Master may consult with the parties ex parte only with the concurrence of both parties.

(3) The Special Master shall choose the most reasonable final offer on each issue in dispute. In making such choice, he or she shall consider factors relevant to collective bargaining between public employers and public employees, including comparable rates of pay and conditions of employment as described in Section 48-818. The Special Master shall not apply strict rules of evidence. Persons who are not attorneys may present cases to the Special Master. The Special Master shall issue his or her ruling on or before February 15.

The Special Master is directed to choose the “most reasonable” final offer and not the “most comparable.” On the other hand, the Commission’s authority to review is very narrow. The Commission’s only authority is set forth in § 81-1383(2) and (3) as follows:

(2) The commission shall show significant deference to the Special Master’s ruling and shall only set the ruling aside upon a finding that the ruling is significantly disparate from prevalent rates of pay or conditions of employment as determined by the commission pursuant to section 48-818. The commission shall not find the Special Master’s ruling to be significantly disparate from prevalent rates of pay or conditions of employment in any instance when the prevalent rates of pay or conditions of employment, as determined by the commission pursuant to section 48-818, fall between the final offers of the parties. (Emphasis added).

(3) If the commission does not defer to the Special Master’s ruling, it shall enter an order implementing the final offer on each issue appealed which would result in rates of pay and conditions of employment most comparable with the prevalent rates of pay and conditions of employment determined by it pursuant to section 48-818. Under no circumstances shall the commission enter an order on an issue which does not implement one of the final offers of the parties. Nothing in this section shall prohibit the commission from deferring to the Special Master’s ruling if it finds that the ruling would not result in significant disparity with the prevalent rates of pay and conditions of employment as it has determined pursuant to section 48-818. (Emphasis added).

Simply put, the State Employees Collective Bargaining Act extremely limits the action the Commission can take after determining comparability. This statute incorporates both a reasonableness standard and a comparability standard. The Bargaining Act states that the Commission shall show significant deference to the Special Master’s ruling unless the Commission determines that the ruling is significantly disparate.

The Legislature purposely chose to establish a completely new method of resolving industrial disputes for state employees. The Bargaining Act gave the Special Master a broad spectrum of authority and gave the Commission limited review authority. Neb. Rev. Stat. § 81-1372. The Act also states, “The State Employees Collective Bargaining Act shall be deemed cumulative to the Industrial Relations Act except when otherwise specifically provided or when inconsistent with the Industrial Relations Act, in which case, the State Employees Collective Bargaining Act shall prevail.” Through this legislative mandate, state employees in Nebraska are treated separately and distinctly under the Act from all other public employees in the State of Nebraska. In light of our other legislative mandate under § 81-1383(2) and (3), which requires us to analyze the Special Master’s decision pursuant to Section 48-818, we note in all instances where 48-818 conflicts with the State Employees Collective Bargaining Act, the State Collective Bargaining Act controls. See Neb. Rev. Stat. § 81-1372.

The Board timely filed its appeal with the Commission on March 16, 2009. The case arises from contract negotiations between the Board and the Nebraska State College Education Association (“SCEA”). The bargaining unit consists of faculty members in the ranks of professor, associate professor, assistant professor, and instructor who work at the three State colleges in Nebraska – Chadron State College, Peru State College, and Wayne State College. SCEA and the Board reached an impasse during negotiations for a new collective bargaining agreement for the contract years of July 1, 2009 through June 30, 2011. The parties exchanged final offers with each other by January 12, 2009 and submitted those final offers to the Special Master by January 15, 2009. On January 20, 2009, the Special Master held a hearing and both sides had the opportunity to present all the evidence they deemed appropriate. The parties then filed post-hearing briefs with the Special Master. The Special Master received the hearing transcript on February 9, 2009. On the record, the parties agreed to an extension to allow the Special Master to issue his ruling after February 15, 2009. On February 27, 2009 the Special Master issued his ruling. The Board then filed its appeal with the Commission. SCEA then filed its Answer and Affirmative Defenses and/or Counterclaims. The Commission held an appeal hearing on May 20, 2009 and the parties submitted the case to the Commission upon the filing of their post-hearing briefs on June 3, 2009.

At the Special Master hearing, the Union based its final offer from an array selected in 1997 by the Nebraska Coordinating Commission on Postsecondary Education. The array established ten peer schools for the Chadron campus and the Peru campus, and nine peer schools for the Wayne Campus. The Union’s final offer proposed a 7% across the board increase for 2009-2010 and a 4% across the board increase for 2010-2011. The Union also proposed a $3,000 increase to faculty members who are promoted to a new academic rank. Also, the Union proposed a 6% increase in the “minimum” base salary of each rank for 2009-2010 and a 3% increase in “minimum” base salary of each rank for 2010-2011.

At the Special Master hearing, the Board used a different group of comparable employers than the Union. The Board elected to use nine colleges and universities for its comparability analysis. All nine of these institutions were included in the Union’s array and all nine were within 500 air miles of the nearest Nebraska state college. The Board argued that all of its array schools were more similar because they were located in rural, nonmetropolitan areas like its own three campuses. The Board, at the Special Master hearing, also suggested that its array was generally similar in size to each of the Nebraska state colleges, measured by student enrollment.

The Special Master wrote a very well-crafted opinion, basing his decision upon the testimony presented and the exhibits received at trial. The Special Master noted that he was required to choose between two decidedly unattractive final offers, stating that each party had submitted an “in your face” wage offer that was highly unpalatable to the other party. The Special Master found that the last best offer of the Union was the most reasonable with regard to Article X (wages) and Article XVII (Dismissal), and found that the last best offer of the Board with regard to Article I through Article IX and Article XI through Article XXI, was the most reasonable. With regard to the Union’s offer of wages, in addition to finding the Union’s offer as the most reasonable, the Special Master found the Union’s offer was the more comparable of the two offers. In his findings, the Special Master acknowledged that he was charged with choosing the most reasonable offer under the State Employees Collective Bargaining Act, yet ultimately he found that because Nebraska is a comparability state, comparability was the most important selection criterion in choosing between the two final wage offers. The Special Master, faced with the direction of Section 81-1382(3), determined that he must select the “most reasonable” final offer. Faced with this choice, he determined that performing a selection of the most reasonable final offer required him to give a very elastic meaning to “most reasonable.” Basing his decision on comparability, the Special Master stated that the Union’s final offer did a better job of moving all unit members toward comparability and keeping them there through the life of the next contract than did the Board’s offer. The Special Master noted that the goal of this proceeding was not to achieve comparability for 2007-2008 but to move unit members toward comparability for 2009-2010 and 2010-2011. While the Special Master deemed that the Union’s offer was overreaching and very expensive, outstripping the Board’s budget during the next biennium, the Special Master selected the Union’s offer because it preserved the parties negotiating history of awarding wage increases on an across-the-board basis and more equitably achieved comparability for the entire bargaining unit.

At the outset of our analysis of this appeal case, we note that the Special Master was required to choose between two decidedly unattractive final offers. The Commission agrees with the Special Master that each party submitted an “in your face” wage offer that was highly unpalatable to the other party. The Commission, like the Special Master, is also of the opinion that the Legislature purposefully designed the State Employees Collective Bargaining Act to give each party a strong incentive to submit a reasonable final offer, in order to avoid the risk of having the other party’s final offer selected; however, the Act does not force the parties to be reasonable.

The Board argues the Special Master erred in finding that the four faculty job classifications of professor, associate professor, assistant professor and instructor, constitute a single job classification. The Board performed its comparability analysis by faculty rank. The Board proposed that the different faculty ranks should receive different raises as follows: the professors, no increase in their base salary; associate professors, a 3.39% increase in each year; assistant professors, a 5.87% increase for 2009-2010 and a 5.86% increase for 2010-2011; and, instructors, a 2.18% increase for both years. The Board performed a system-wide comparability analysis, rather than campus-specific analysis.

The Union presented a final offer of an across-the-board salary increase, not separated by rank between the four faculty positions. The Union, citing a number of past Commission cases, argues that the Special Master correctly determined that the Commission has in the past found a single job classification comparable for the purposes of conducting a Section 48-818 analysis. While the Special Master recognized differences among the faculty ranks, he felt that parties negotiating history of distributing faculty wage increases across the board was persuasive. The Special Master also noted that the Petitioner failed to present evidence that a majority of the other array colleges awarded wage increases by rank. The Special Master noted that the Commission clearly favors having parties negotiate salary structure changes at the bargaining table.

In Board of Regents of the University of Nebraska v. American Ass’n of University Professors (“AAUP”), 7 CIR 1 (1983), the Commission determined a wage increase for faculty at the University of Nebraska at Omaha. In AAUP, the Board argues that wage adjustments should be made at the institutional level, whereas, the Union preferred that wage adjustments be made on a department basis. However, in AAUP, both parties urged the Commission not to disturb the salary differential between ranks within departments. The Commission found that this differential evolved from past practice and administrative decision. The Commission reasoned that changes in salary structure are best achieved through collective bargaining, and that past practice should not be disturbed in the absence of substantial variances from the prevalent practice. The Commission cited several cases: See West Holt Faculty Association v. School District Number 25 of Holt County, Nebraska, 5 CIR 301 (1981); Omaha Association of Firefighters, Local 385 v. City of Omaha, Nebraska, 2 CIR 117,(1975), affd, 194 Neb. 436, 231 N.W.2d 710 (1975). The Commission ultimately performed a Section 48-818 analysis by increasing “each employee’s” wages by 6.6%.

In the instant case, the Petitioner suggests that the bargaining unit members’ salary increase should be distributed by rank. These proposed increases vary significantly. Past practice demonstrated that the parties routinely gave across-the-board salary increases. The Commission agrees with the Special Master’s reasoning. Effective changes in the salary structure are not achieved by having the Special Master impose substantial structural changes requested by one party over the vehement objections of the other party. We also note the lack of prevalency evidence offered by the Petitioner at the Special Master hearing, suggesting varying pay by rank is prevalent at the array colleges presented to the Special Master. The Special Master’s decision is not disparate when reviewed pursuant to Section 48-818.

At the Special Master’s hearing and on appeal, the Board raises the issue of whether setting wages for the second contract year (2010-2011) can be consistently determined because the evidence is speculative in nature for future wage increases. The Board cites Lincoln Fire Fighters Ass’n v. City of Lincoln, 198 Neb. 174 (1977), stating the Nebraska Supreme Court will not decide wages depending entirely upon speculation, surmise or conjecture. As part of its final offer however, the Board suggested an offer of no salary increase for the professors, a 3.39% salary increase for the associate professors, a 5.86% increase for the assistant professors and a 2.18% salary increase for the instructors. The Union argues that a calculation must be made for the second year under Neb. Rev. Stat. § 81-1377. The Union argues a total meltdown of the State Employees Collective Bargaining Act would occur due to the absence of a salary determination for both 2009-2010 and 2010-2011. The absence of such a determination, the Union argues, renders Sections 81-1382, 81-1383, and 48-818 totally meaningless.

In his opinion, the Special Master noted that the goal in this hearing was not to achieve comparability for 2007-2008 but to move the unit members toward comparability for 2009-2010 and 2010-2011. The Special Master reasoned that because there was no market data available for the two academic years, the Special Master must rely upon realistic and reasonable forecasts to accomplish the task under Section 81-1382, which instructs the Special Master and the parties to decide wages for “a two-year period” coinciding with the State’s biennial budget.

Moreover, the committee hearings and the floor debate regarding LB661 (the bill that created the State Employees Collective Bargaining Act), have prolific references on the importance of timing the state budget cycle with the bargaining process. On Page 25 of the Pashler Report, the study on which the Legislature based the State Employees Collective Bargaining Act, the objectives of the Act were to advance bargaining, resolve disputes without undue delay or litigation, to accommodate the budget, to encourage voluntary settlements, and to develop a speedy and simple process. The Pashler Report recommended that the Act require all contracts to be negotiated on a two-year basis concurrent with the two-year budgets.

In State Law Enforcement Bargaining Council v. State of Nebraska, 12 CIR 23 (1993) (“Law Enforcement I”), the Commission determined that under the State Employees Collective Bargaining Act, the Commission will more than likely be determining comparability for the first year only, from data which will probably not be current. The Commission noted that the reason for the lack of data was apparent in a plain reading of the Act:

It is easy to see why this is so. Since the parties must start bargaining by the second Wednesday in September and have all final offers exchanged by Jan. 10th, it is highly probable that anyone they survey will not be finished bargaining either. Therefore, as in this case, the data they are using to base FY '94 wages and fringe benefits on is really wages and benefits for FY '93 so it is already out-of-date by a year. Furthermore, many of the survey sites have only one-year contracts, and not two-year contracts. Market data for the second year is most likely not going to be known.

In the Commission’s finding in Law Enforcement I, the Commission found that it could only look at the last offers and compare them to the comparability data given for the first year. After reviewing the comparability data, if the Commission then found the Special Master's decision to be significantly disparate, the Commission only had the jurisdiction to pick the last offer that is closest to comparability. Ultimately in Law Enforcement I, the Commission held that based on the evidence presented there was little evidence to consider concerning the second year and the Commission ordered the parties to enter the final offer in its entirety, even though the offer’s second year data regarding actual comparability was not available.

At the Special Master hearing, no actual comparability figures were presented by either party. We are persuaded by the Respondent’s reasoning. A total meltdown of the State Employees Collective Bargaining Act would occur if the Commission did not analyze the second year of the contract. By legislative mandate, the Commission is required to consider the second year, even though under a regular Section 48-818 wage case such evidence would be speculative for the first and second contract years. The Legislature clearly distinguishes State employees from other public employees through the creation of this Act. We agree with the Special Master that the Act requires the parties to negotiate a two-year contract even though accurate data for Section 48-818 does not exist. The Special Master’s decision is not disparate pursuant to a Section 48-818 analysis.

On May 19, 2009, the Petitioner filed a Motion to Preclude Respondent’s Challenge to Special Master’s Award regarding non-economic items. The Petitioner argues that the Respondent is required to appeal simultaneously under the State Employees Collective Bargaining Act. The Respondent in its responsive pleading asserts that in a Special Master appeal case, the Respondent should have the option of deciding to appeal or not to appeal and to be able to assert its position in its responsive pleading. The Commission heard oral arguments on the Petitioner’s Motion to Preclude during the Commission’s hearing on May 20, 2009. The Commission informed the parties it would rule on their Motion as part of the Commission’s Opinion and Order. The Petitioner argues that Section 81-1383(1), prohibits any appeal of the Special Master’s decision after March 15. The Petitioner further argues that because the Union did not appeal the Special Master’s Award, the Commission cannot render a decision on the issue not properly before it. In order to determine whether or not the non-economic items are appropriately in front of the Commission for review, the Commission must examine the legislative intent of the Nebraska State Employees Collective Bargaining Act.

The Commission has reviewed the legislative history of this Act, consisting of committee hearings, floor debate, the report upon which this legislation was based, and committee resolution hearings, as well as the statutes themselves and related case law. The following is a history of this Act. In 1985, the Supreme Court affirmed the Commission's setting of wages and conditions of employment for State employees. See State Code Agencies Educ. Ass'n v. Dept. of Public Institutions, State of Nebraska, et al , 219 Neb. 555, 364 N.W.2d 44 (1985). This decision prompted the Business and Labor Committee and the Appropriations Committee to hold a joint interim study to look at how the CIR resolved wage disputes after impasse. This study was conducted by Peter Pashler. He produced a document presented to the Legislature entitled Nebraska State Government and Collective Bargaining, or termed the Pashler Report. The Bargaining Act legislation did several things: 1) established horizontal bargaining units; 2) created the position of chief negotiator; 3) defined the State of Nebraska as the employer; 4) defined prohibited practices; and 5) created impasse resolution procedures. We are concerned with the objectives of item #5.

On page 25 of the Pashler Report, Peter Pashler states that the objectives of the Act were to advance bargaining, resolve disputes without undue delay or litigations, to accommodate the budget, to encourage voluntary settlements, and to develop a speedy and simple process. If as suggested by the Petitioner, the Act intends both parties to appeal, we do not see how such a result would encourage settlement or avoid further litigation. In this case, the Respondent cannot be required to appeal simultaneously.

This case is an appeal and not a typical or regular wage case. This case is analogous to a first-round appeal to the Court of Appeals, wherein parties are allowed to define the issues or assert positions in their briefs. Supreme Court Rule 2-101(E) provides, “The proper filing of an appeal shall vest in the appellee the right to a cross-appeal against any other party to the appeal. The cross-appeal need only be asserted in the appellee’s brief as provided by section 2-109(D) (4). Supreme Court Rule 2-109(D) (4) provides: “Where the brief of appellee presents a cross-appeal, it shall be noted on the cover of the brief and it shall set forth the separate division of the brief.”

Upon the filing of the Petitioner’s appeal, the Respondent filed its Answer and Affirmative Defenses and/or Counterclaim. This pleading complied with Rule 18 of the Commission of Industrial Relations. The Respondent also asserted the non-economic issues at the pretrial conference and in its brief. Under the intent of the State Employees Collective Bargaining Act, the Commission finds that it has jurisdiction and the Respondent properly asserted a cross-appeal. The Commission is convinced in the instant case that the parties have disregarded or gone away from the intent of the Special Master procedure and may be refraining from submitting complete information to the Special Master. The Commission, as determined in our Order on the Respondent’s Motion in Limine, is not statutorily charged to allow the parties a “second bite of the apple” under Section 81-1383. Accordingly, the Commission will consider the issue of whether the non-economic items were significantly disparate to Section 48-818 as decided by the Special Master under the reasonableness standard. Therefore, a review of the Special Master Opinion and Order is appropriate.

At the Special Master hearing, the Board proposed to delete Sections 10.4, 10.8, 10.9 and 10.12 (of the 2007-2009 SCEA Agreement) in their entirety. The Board also proposed to revise current Sections 10.5, 10.6, 10.7, 10.10 and 10.11 (of the 2007-2009 SCEA Agreement). The Special Master upheld the Board’s proposed revisions and deletions on a reasonableness standard on all of the above sections listed, with the exception of Section 10.7. For the most part, the Union proposed in its final offer to renew all the provisions as written in the current contract agreement between the parties. The Special Master did not use (or have available to him as part of the record) any of the array colleges’ or universities’ contracts. The Special Master did not conduct a prevalency analysis of any of the non-economic items in his Opinion and Order.

The Respondent argues that the Commission on appeal is to apply the prevalency standards of Section 48-818. The Respondent further states that there was no evidence of comparability for any of the disputed contract language issues presented to the Special Master and the Special Master did not find that any of the Board’s proposals were accepted on a prevalency basis. Instead, the Respondent concludes, that without such supporting evidence of prevalency as required by Section 81-1383(2), each of the Special Master’s rulings must be set aside. The Respondent cites Fraternal Order of Police Lodge No. 17 v. County of Dodge, Neb., and Richard G. Wennstedt, Dodge County Sheriff, 8 CIR 156 (1986). In County of Dodge, the Commission held that the terms and conditions requested were not prevalent because no evidence was offered to establish the status of any of these non-economic items. In County of Dodge, the Commission left all the non-economic items as they were established by the previous contract.

In Hyannis Education Association v. Grant County School District No. 38-0011, 269 Neb. 956 (2005), the Nebraska Supreme Court discussed the Commission’s authority, acknowledging that "[a] prevalent wage rate to be determined by the [CIR] must almost invariably be determined after consideration of a combination of factors." Citing Omaha Assn. of Firefighters v. City of Omaha, 194 Neb. 436, 440, 231 N.W.2d 710, 713 (1975). The Nebraska Supreme Court held in Hyannis that the use of the word "prevalent" does not require that the employment terms in array contracts be completely identical to the provision at issue. The Nebraska Supreme Court agreed with the Commission that a prevalence determination is a subjective determination. The Supreme Court reasoned that the standard inherent in the word "prevalent" is one of general practice, occurrence, or acceptance, and determinations regarding "prevalent" practices are within the field of expertise of the Commission.

Using Hyannis as clear authority, the Commission is charged under NEB. REV. STAT. § 48-818, with determining the prevalancy of various contract provisions, between an array college or university, and the subject Nebraska state college. The parties agreed to submit these non-economic items without giving the Special Master the benefit of the array colleges’ and universities’ contracts, giving him no means to do a Section 48-818 comparability analysis. Without sufficient evidence to compare the array contracts to the parties’ final offers, the Commission can only affirm the Special Master’s award. This reasoning is also cited under State of Nebraska v. Nebraska Ass’n of Public Employees, (“NAPE”) 15 CIR 366 (2007). In NAPE we stated that without any additional evidence to prove the Special Master was incorrect in his analysis that a parties’ offer was not the more comparable, the Commission cannot overrule his decision. In the instant case, we affirm the Special Master’s ruling on non-economic issues. The Petitioner’s Motion to Preclude the Respondent’s challenge to the non-economic items is overruled.

The Board contends that the Special Master’s decision is not comparable and is significantly disparate from the prevalent rates of pay pursuant to Section 48-818. The Petitioner argues that the Special Master’s award departed from comparability when he pronounced the Union’s offer the most reasonable. The Board also argues that the Special Master’s Award contains numerous mathematical errors. The Union argues that the Special Master correctly determined overall comparability.

The Petitioner suggests that the data cited by the Special Master shows that the unit as a whole was 4.17% below comparability. The Special Master found that using the Union’s revised wage comparison using Integrated Postsecondary Education Data System (“IPEDS”) data for its array schools and for the three State Colleges, was preferable to using a mix of IPEDS and Board of Trustees wage data. The Special Master listed the Union’s comparability data for 2007-2008 at 4.17%, the Board’s data at 4.91%, and the Special Master array at 4.56% . The Special Master then calculated the salary increase for the 2008-2009 wage year at the midpoint of 3.88 percent. In arriving at this figure, the Special Master used actual faculty salary increase figures from the array schools. As stated in the evidence, the State College Bargaining unit members received a 4% increase in 2008-2009, allowing them to essentially stay even with the market during 2008-2009. The Special Master then figured a reasonable forecast of the average faculty wages for 2009-2010 and 2010-2011, estimating that in light of the current economy, a two-year market increase would result in a figure of 5.5%. The Special Master cited the 2009-2011 increase for other Nebraska state government employees being comparable to this figure. The Special Master then stated that the bargaining members were still behind for the 2007-2008 data by 4.5 percent (without losing ground in 2008-2009), combined his projected increases for 2009-2010 and 2010-2011 at the figure of 5.5% with the 4.5% of 2007-2008, which equaled a figure of 10% to maintain comparability during the next contract term (2009-2011). The Union’s total final offer was 11% and the Board’s final offer was 4.33%. The 10% figure falls between the offers of the parties.

The Petitioner argues that the Special Master incorrectly calculated his comparability analysis using numbers which were incorrectly transferred. The Commission has thoroughly reviewed these contentions of incorrectly transferred numbers and calculations. The Commission is not persuaded by this argument and we find that the Special Master’s transferred numbers and calculations are correct. The Special Master’s comparability ruling falls between the final offers on the parties and is therefore, not significantly disparate and the Commission shall show significant deference to the Special Master’s ruling. See Neb. Rev. Stat. § 81-1383(2). The evidence used by the Special Master contains all of the wage summaries at the various proposed array colleges and universities.

The Board argues that the Commission and the Nebraska Supreme Court follow a well-established principle regarding not setting wage rates without sufficient data available, citing Lincoln Fire Fighters Ass’n v. City of Lincoln, 198 Neb. 174 (1977). The Nebraska Supreme Court, under a regular Section 48-818 wage case, stated in Lincoln Fire Fighters Ass’n, that : “It is evident this figure was arrived at by speculation, surmise, or conjecture. An issue depending entirely upon speculation, surmise, or conjecture is never sufficient to sustain a judgment, and one so based must be set aside”. Mitchell v. Eyre, 190 Neb. 182, 206 N.W.2d 839 (1973).

The Commission does not disagree with the Petitioner’s contention that, in a standard Section 48-818 case, the Commission and the Nebraska Supreme Court decline to make decisions based upon speculation. However, this case is decided under the State Employees Collective Bargaining Act, and the Legislature clearly chose to treat state employees differently from any other public employee in Nebraska. Here, if we were to apply the logic in standard Section 48-818 cases to the State Employees Collective Bargaining Act, it would be impossible for either party to set wages for either 2009-2010 or 2010-2011 because both sides’ final offers are based entirely upon speculations, surmise, or conjecture. Surely, the Legislature did not intend such a result. Such a result would create a scenario in which the Commission would never be able to conduct a Section 48-818 analysis, as the figures would rarely (if ever) be based upon actual comparability data. The time requirements of the Act do not allow the parties sufficient time to collect actual wage evidence. Nevertheless, the statute clearly directs the parties to bargain for both years of the two-year budget cycle.

The Commission’s legislative charge states that the Commission shall show “significant deference to the Special Master's ruling and shall only set the ruling aside upon a finding that the ruling is significantly disparate from prevalent rates of pay or conditions of employment as determined by the Commission pursuant to Section 48-818.” Neb. Rev. Stat. § 81-1383(2). The Special Master’s ruling fits well within the intent and spirit of Neb. Rev. Stat. § 48-818. His decision is clearly between the offers of the parties. Since the Special Master’s decision was not significantly disparate, we shall affirm his ruling. See Table 1, which lists the Special Master’s comparability results.

1) The Special Master’s ruling is affirmed and the Petitioner shall implement the Special Master’s ruling in its entirety.

Commissioners McGinn, Orr, and Lindahl join in the entry of this Opinion and Order on Appeal. Commissioner Burger concurs. Commissioner Blake dissents.

I concur in the Opinion and Order on Appeal. The Commission has a long-standing practice that the assigned hearing commissioner rules on evidentiary issues without the involvement of the panel. I respect that practice, and do not wish to change it, but I do not agree with the decision to decline to receive evidence in this Appeal.

The State Employees collective Bargaining Act imposes a duty on the Commission to review the findings of the Special Master on Appeal. Yet, it provides the parties no guidance on the proper procedure to resolve an appeal, simply a standard of review that almost compels affirmance. I believe the procedure followed in State Law Enforcement Bargaining Council v. State of Nebraska, 13 CIR 104 (1998), and State of Nebraska v. Nebraska Association of Public Employees/AFSCME Local 61, 15 CIR 366 (2007) should have been followed.

This is one of four State Employees Collective Bargaining Act appeals before the Commission. In all four cases the Commission has determined that additional evidence is not appropriate under Neb. Rev. Stat. § 81-1383, despite the prior interpretation and practice of the Commission. The Respondent’s Motion in Limine was sustained in this case, and the Respondent made a detailed Offer of Proof, at Exhibit 25. For the reasons stated in Case No. 1209, I must dissent from the majority’s decision in this case.

The offered evidence in this case appears to be fairly well limited to the issues which are relevant to the Commission’s determination. The Offer of Proof shows that the additional evidence would specifically relate to the array selected by the Special Master, looking at pay rates and increases for the relevant job classifications. Limited relevant evidence is specifically allowed by the Commission’s prior interpretation of § 81-1383, in State Law Enforcement Bargaining Council vs. State of Nebraska, 13 CIR 104 (1998) (“Law Enforcement II”). We followed this interpretation in 2007 in the case of State of Nebraska vs. Nebraska Association of Public Employees Local 61, 15 CIR 383 (2007).

The allowance of such additional evidence and the delay caused by it would make it extremely difficult to meet the time requirement of July 1 for the Commission’s decision (Neb. Rev. Stat. § 81-1383 (6)), but the parties in this case have wisely waived that requirement. The rush to justice should not now take priority over a well-informed decision, particularly when the proceeding before the Special Master was under our prior interpretation regarding the appeal process. In my opinion, we should receive the additional evidence on the limited issues of relevance to the Commission, and then make a comparability analysis prior to deciding whether to defer to the Special Master’s determination.

I must also indicate that I believe the Commission is going down the wrong path in the amount of deference to the Special Master. As noted in the majority opinion, the Special Master wrote a very well–crafted opinion.[1] However, the craftsmanship of the Special Master should not dissuade us from following the mandate which we are given in the State Employees Collective Bargaining Act Neb. Rev. Stat. § 81-1383) (2). The Commission shall “show significant deference to the Special Master’s ruling and shall only set the ruling aside upon finding that the ruling is significantly disparate from prevalent rates of pay or conditions of employment as determined by the Commission pursuant to Section 48-818”. (Emphasis added)

The determination of prevalent rates of pay (comparability) requires a number of steps, as follows:

3. Decide which job classifications best match those classifications in the Bargaining Unit.

4. Find the correct salary numbers for each classification in each array members.

Of course, there are numerous tasks and sub-steps. The charge given to the Commission in SECBA is to make an analysis of Comparability and then decide whether the Special Master’s ruling is entitled to “Significant Deference”. In my view the Commission’s significant deference to the Special Master’s determinations at each stage of the Comparability analysis, combined with the refusal to receive additional evidence relevant to those determinations, renders an appeal to the Commission meaningless.

[1] This is reminiscent of the footnote by Justice Scalia in Lucas vs. South Carolina Coastal Council (505 US 1003 (1992), wherein he wrote, at footnote 12 , that looking at whether a state regulatory agency’s regulation is well-crafted in reciting a harm-preventing justification for the regulation would amount to a test of whether the agency has a stupid staff.

To obtain a copy of Table 1, please contact the Commission of Industrial Relations at (402) 471-2934 or at industrial.relations@nebraska.gov

16 CIR 356 (2009) Appealed July 28, 2009. Affirmed, 280 Neb. 477

NEBRASKA COMMISSION OF INDUSTRIAL RELATIONS