16 CIR 374 (2009)

NEBRASKA COMMISSION OF INDUSTRIAL RELATIONS

 Entered June 23, 2009.

APPEARANCES:

Before:  Commissioners Orr, Lindahl, and McGinn 

ORR, C. 

NATURE OF THE PROCEEDINGS:

            Omaha Police Union Local 101, IUPA AFL-CIO (hereinafter, “Union” or “Petitioner”) filed a petition alleging that the City of Omaha (hereinafter, “Respondent”) committed a prohibited practice by unilaterally changing the minimum pay step for the classification of Sergeant. The Union asserted that these acts constituted a per se violation of Neb. Rev. Stat. § 48-824(1). The Respondent asserts that it changed the minimum pay step for Respondent in order to follow the Findings and Order and Final Order of the Commission, dated December 18, 2008 and January 20, 2009 respectively. 

The issue presented at trial was whether the City violated Neb. Rev. Stat. § 48-824(1) by unilaterally increasing the wage of a Step A Sergeant by .05 (five cents) per hour and if so, is this an appropriate case for the awarding of attorney fees pursuant to Rule 42 of the Rules of the Commission of Industrial Relations.

FACTS:

            The Union is the duly recognized collective bargaining representative for the unit consisting of officers, sergeants, lieutenants, and captains employed by the police department of the City of Omaha.  This alleged prohibited practice case is a result of a previously disposed of wage case (Case 1175). On April 11, 2008, the City filed Case 1175 with the Commission seeking a determination of an industrial dispute over wages and other terms and conditions of employment for the contract year of December 31, 2007 to December 30, 2008. The Commission heard evidence on September 8 and September 9 of 2008, and entered a Findings and Order on December 18, 2008. The parties then requested that the Commission clarify portions of that Findings and Order. The Commission heard additional arguments, and then issued a Final Order in Case 1175 on January 20, 2009. The Final Order in Case 1175 was not appealed by either party.  The Commission’s Final Order required the City to implement all of the new wages and benefits for the 2007-2008 contract year by April 20, 2009.

            Following the Commission’s decision in Case 1175, the parties met several times to discuss the implementation of the Commission’s order. At the first meeting, the City and Union attempted to narrow the issues as to how the parties interpreted the implementation of the Commission’s order.  In narrowing the issues at the initial meeting, the parties discussed whether there were disagreements as to implementation, and if they had disagreements, could those disagreements be worked through. The City claims they were not negotiating but “doing something real similar” at these meetings. The City, at the initial meetings, presented the Union with Exhibit 2, a preliminary pay scale. This pay scale reflects the Commission’s original Findings and Order on pay scales.  Exhibit 2 illustrates the pay scale including the first step (Step A) of the Police Sergeant position, which indicated an hourly rate of $31.71. The City’s Step A is identical to the Commission’s Findings and Order Table 3, which reveals a midpoint rate of $31.71. At the second meeting between the parties, on approximately February 23 or 24 of 2009, the City gave the Union Exhibit 3, which reflects the additional one-tenth percent credit for the pension contributions, which was ordered in the Commission’s Final Order.  At the second meeting the parties also discussed the City’s Ordinance § 23-148 which states:

When a uniformed member of the fire or police department is paid at a rate which exceeds that at which such member’s senior rank, grade, or class is being paid, such senior officer or officers shall be increased to the next higher step within the assigned pay range irrespective of the date of the last increase. The effective date of such increase shall become the anniversary date for pay purposes each year thereafter until promoted or demoted. This provision shall not apply when a member has been reduced in pay, grade or class for disciplinary reasons or when he has not been granted a pay increase due to unsatisfactory performance; neither shall it apply when such condition is the result of use of the two-step salary increase provision.

The parties then met a third time on March 6, 2009 and discussed the newest pay plan, which changed only the Step A Sergeants’ pay scale.  See Exhibit 4.  The Respondent increased the pay by five cents an hour in the minimum step of the Sergeant, from what was contained in the previous pay plan, because the Step I of Police Officer was  four cents an hour higher than the minimum (Step A) of the Sergeants’ pay scale.  

The parties agree that they did not negotiate this change in the pay plan. The union never agreed to accept the five –cents-an-hour increase the City implemented with respect to Step A of the Sergeant classification.  The City stated that it changed Step A in an effort to follow the placement mechanism set forth in the Final Order of Case 1175.  The City was advised by counsel that the Commission has the power to set wages, irrespective of the City’s ordinance. The City was also advised that they could not decrease the pay that the Commission ordered, but that it was within the prerogative of the City to increase the pay. The pay raise evidenced in Exhibit 4 has been implemented by the Respondent and will be effective within the next two pay periods.

Also the testimony at trial indicated that there is a pending lawsuit in the District Court of Douglas County, which seeks declaratory judgment on the application of the City’s Ordinance to the Commission’s Findings and Order and Final Order in Case 1175. This suit has not yet been resolved. 

DISCUSSION:

            The Petitioner argues that the City’s unilateral wage increase for Step A Sergeants constitutes a per se violation of its duty to bargain. The Respondent argues that while its decision to increase Step A of the Sergeant rank was a unilateral decision, that decision was not a per se violation of the duty to bargain. The Respondent cites several National Labor Relations Board decisions and the Findings and Order and Final Order of the Commission in Case 1175 to support its argument.

            Neb. Rev. Stat. § 48-824(1) declares that it is a prohibited labor practice for any employer … to refuse to negotiate in good faith with respect to mandatory topics of bargaining. Decisions of the N.L.R.B., and federal decisions interpreting the N.L.R.A.  are helpful, but not binding precedent when the statutory provisions are similar. Nebraska Public Employee Local Union 251 v. Otoe County, 257 Neb. 50, 595 N.W.2d 237 (1999).  See also International Union of Operating Engineers, Local 571 v. City of Plattsmouth, 265 Neb. 817, 660 N.W.2d 480 (2003). In past cases we have concluded that Neb. Rev. Stat.  § 48-824(1) is sufficiently similar to Section 8(A)(5) of the National Labor Relations Act and for that reason we can use federal decisions for guidance in interpreting the scope and application of our statutes.

            The Petitioner cites two cases, (N.L.R.B. v. Crompton-Highland Mills, 337 U.S. 217 (1949) and N.L.R.B. v. Katz, 369 U.S. 736 (1962)) in support of its position that the Respondent committed a per se violation. The Respondent argues that the Petitioner’s reliance on Crompton-Highland Mills and Katz are misplaced.

            In N.L.R.B. v. Crompton Highland Mills, the U.S. Supreme Court held that the unilateral increase in wages constituted an unfair labor practice and that a decree should be entered enforcing an order prohibiting such conduct.  337 U.S. at 219. In Crompton-Highland Mills, the employer and the employee reached impasse; then two weeks later the employers without prior consultation with the bargaining representative, increased the rates of pay applicable to most of the employees who had been represented in negotiations. Id.  This increase was substantially greater than any increase which the employer had offered during the negotiations.  The Supreme Court reasoned that without the opportunity to bargain about (or even reject) a complete new offer, the employer thwarted any opportunity for the bargaining representative to negotiate. Crompton-Highland Mills, 337 U.S. at 224.

            The U.S. Supreme Court issued Katz 17 years later, holding that unilateral changes to mandatory terms and conditions of employment made before impasse are per se violations of the party's duty to bargain in good faith. Katz, 369 US at 737. The United States Supreme Court found in Katz that an employer negotiating with a newly certified bargaining agent was barred from unilaterally granting wage or merit increases unless they are fixed and automatic in nature. Discretionary wage increases are prohibited, the Court held, because, "[t]here simply is no way in such case for a union to know whether or not there has been a substantial departure from past practice.  “ Id. at 746. Likewise, if a discretionary wage increase were given during an organizing campaign, determining whether the increase was consistent with past practice, or if it was given to influence the election, would be impossible. Since the potential for employer abuse is profound with discretionary wage increases, the employer's unilateral granting of such an increase is "tantamount to an outright refusal to negotiate on that subject, and therefore [] a violation of § 8(a)(5)." Id at 746. The United States Supreme Court concluded in Katz that the parties must refrain not only from behavior “which reflects a cast of mind against reaching agreement,” but from behavior “which is in effect a refusal to negotiate or which directly obstructs or inhibits the actual process of discussion.” Id at 747.

            With regard to Crompton-Highland Mills, the Respondent argues that the Supreme Court was concerned with the employer taking broad action which effectively undermined the ability of the Union to negotiate. The Respondent further argues that the Respondent only changed the pay upon attempts to resolve the orders in Case 1175, which the Respondent concludes is a show of good faith. With regard to both Crompton-Highland Mills and Katz, the Respondent asserts the factual scenarios are not present in this case.

            The Petitioner’s argument that Crompton-Highland Mills and Katz apply, is not misplaced.  Wages are mandatory subject of bargaining. See Neb. Rev. Stat. § 48-816(1). Mandatory subjects of bargaining are not just topics for discussion during negotiations sessions. Unless clearly waived, mandatory subjects must be bargained for before, during, and after the expiration of collective bargaining agreements.  See Omaha Police Union Local 101 v. City of Omaha, et. al., 15 CIR 292 (2007). The argument that the Respondent did not have to negotiate Step A of the Sergeant’s wages because they were simply attempting to comply with the Commission’s order goes astray from the intent of the Industrial Relations Act. Mandatory subjects of bargaining must be negotiated by both parties even where those parties are attempting to comply with a Commission order. By implementing Exhibit 4, the City has unilaterally changed Step A of the Sergeant’s wages.

            The City then argues that to prove a unilateral action occurred, the Union must present evidence that the City’s ordinance is not a long-established practice. The Respondent cites both Hyatt Corporation v. N.L.R.B., 939 F.2d 361 (1991) and N.L.R.B. v. Newton Corporation, 705 F.2d 873 (6^th Cir. 1983) as evidence that if an employer’s policy is to grant regular, periodic wage increases, to honor that policy by granting the raise, is not an unfair labor practice. The Respondent argues that the City’s long-established practice of the following Municipal Code § 23-148, allows this increase in Step A.  This ordinance, the City argues, is similar to the long established raise given in Newton.  In Newton, the corporation argued that its pay raise was justified because (1) the union consented to the raise; (2) the raise was one given at regular six-month intervals and therefore was non-discretionary; and (3) it was granted only after it had been discussed with the union. The Board found that the evidence presented indicated that it was the employer’s policy to grant regular, periodic wage increases. The Board held that honoring that policy by granting the raise was not an unfair labor practice because the record as a whole does not support a representation that such a policy was a unilateral change in an existing employment policy. See N.L.R.B.  v. Allied Products Corp., 548 F.2d 644 (6^th Cir. 1977).

            In the instant case, the union did not consent to changing Step A. There was no evidence presented, on behalf of the City that stated the change of Step A occurred at regular intervals. The existence of the City’s ordinance, as agreed upon by even the Respondent, does not bear any weight on the Commission’s determination nor does it thwart the bargaining process in Neb. Rev. Stat. § 48-818 and is clearly not evidence of a “long-established” practice of increasing wages of the Sergeants. The ordinance is not relevant to the issue of whether the City engaged in a prohibited practice.

            The Commission’s array in Case 1175 resulted in the Step A of the Sergeants’ pay range being less than Step I of the Police Officer’s pay range.  Typically, the minimum of the next highest rank results in a raise to “award” pay to an employee for their promotion. While the result may be nonsensical, the Commission determines wages based upon the array and the wages simply are a result of arithmetic.  The arithmetic proved that the midpoint results in Step A of the Sergeant rank was four cents per hour less than Step I of the Police Officer rank.  By unilaterally changing Step A, the Respondent has committed a prohibited practice, which constitutes a per se violation of Neb. Rev. Stat. § 48-824(1).

REMEDY:

            The Commission must craft an appropriate remedy in light of the Respondent’s violation of Neb. Rev. Stat. § 48-824(1). The Petitioner urges reimbursement of attorney fees as a component of the remedy. The Petitioner sites the recent series of prohibited practice cases involving these same parties.  The rules of the Commission provide for such a remedy when the conduct of the party found to have committed a prohibited practice reflects a pattern of repetitive, egregious, or willful prohibited conduct.

            We note the decisions regarding these same parties. See Omaha Police Union Local 101 v. City of Omaha, 7 CIR 179 (1984) (Respondent breached its duty by unilateral changing a condition of employment—parking stalls.); Omaha Police Union Local 101 v. City of Omaha, et al., 15 CIR 281 (2007) (engaged in a prohibited practice through the interference with Union speech); Omaha Police Union Local 101 v. City of Omaha, et. al., 15 CIR 292 (2007) (unilateral change in terms of conditions of employment—take-home vehicles and reallocating parking stalls); and Omaha Police Union Local 101 IUPA, AFL-CIO v. City of Omaha, et. al., 15 CIR 339 (2007) (bad faith refusing to furnish Union with information concerning the processing of grievances). We note that the Petitioner makes a very persuasive argument regarding the rich history of the parties’ litigated prohibited practices. The Respondent, on the other hand, suggests  that Rule 42 does not contemplate an award of attorney fees in close contested cases where there are reasonable disputes.  Instead the Respondent argues that the City’s action was not taken in bad faith, but rather to avoid a potential inequity in the pay between the most senior officers and first step of the sergeants. To support this argument, the Respondent cites testimony from the City’s human resource director, Mr. Thomas Marfisi, stating that he relied on the City’s outside counsel’s suggestion to increase Step A of the Sergeants to avoid potential wage inequities.

            To support an award of fees, under CIR Rule 42 (b) (2a), it must be found that the party in violation has undertaken a pattern of repetitive, egregious, or willful prohibitive practice. While this is a close question under the facts of this case, we find that the Respondent’s actions do not meet that standard. The Respondent fully admits it did not negotiate with the Union over a mandatory subject of bargaining. While we are not persuaded that this case is simply a result of the City seeking to in good faith prevent a pay inequity, as urged by Respondent, the evidence does establish that the Respondent’s counsel correctly concluded that the City’s ordinance would not bear on the Commission’s Section 48-818 determination.  The Respondent was attempting to follow the Commission’s Findings and Order and Final Order in Case 1175.  Under these facts, we are not convinced that the administration’s actions were egregious or willful.  Petitioner’s request for attorney fees is denied.  

IT IS THEREFORE ORDERED, ADJUDGED AND DECREED THAT:

1.  The Respondents shall cease and desist from unilaterally changing the Step A of the Sergeants’ pay range.  

2.  The Respondent shall restore Step A of the Sergeants’ pay range as set forth in Exhibit 3 and shall be restrained from making any changes unless negotiated.  

All panel Commissioners join in the entry of this order.