17 CIR 203 (2011)

NEBRASKA COMMISSION OF INDUSTRIAL RELATIONS

Entered August 2, 2011

APPEARANCES:

Before:  Commissioners McGinn,  Orr, and  Blake

MCGINN, Commissioner

NATURE OF THE PROCEEDINGS:

South Sioux City Education Association (hereinafter, “Petitioner” or “Association”) filed a wage petition on March 22, 2011, seeking resolution of an industrial dispute for the 2010-2011 contract year. The Association is a labor organization formed by teachers employed by Dakota County School District No. 22-0011, a/k/a South Sioux City Public Schools (hereinafter, “Respondent” or “District”) for the purpose of representation in matters of employment relations. The District is a political subdivision of the State of Nebraska and a Class III school district. The Respondent filed an Answer and Cross-Petition on April 12, 2011. The Commission bifurcated the Respondent’s Cross-Petition on the 2011-2012 contract year on May 12, 2011.  On June 1, 2011 the Commission held a Pretrial. On June 15, the Commission held Trial on the issues contained within the Order Nunc Pro Tunc on Report of Pretrial filed on June 3, 2011. The Respondent filed its Post-Trial Brief on July 12, 2011 and its Reply Brief on July 19, 2011. The Petitioner filed its Post-Trial Brief on July 13, 2011 and its Reply Brief on July 21, 2011. After the briefs were filed, the Commission deemed the case submitted.

JURISDICTION: 

The Commission has jurisdiction over the parties and subject matter of this action pursuant to Neb. Rev. Stat. § 48-818 (Reissue 1998) which provides in part:

                        …the Commission of Industrial Relations shall establish rates of pay and conditions of employment which are comparable to the prevalent wage rates paid and conditions of employment maintained for the same or similar work of workers exhibiting like or similar skills under the same or similar working conditions…

ARRAY: 

The Association proposes nine school districts for their array. The District proposes that six school districts, all six of which are proposed by the Association, are appropriate for the array. The common array members are Blair, Columbus, Elkhorn, Fremont, Norfolk, and Ralston. The contested array members proposed by the Association are Gretna, Norris, and Beatrice. In determining a proper array, the parties agree that the work, skill, and working conditions of South Sioux City Community School’s teachers are sufficiently similar for comparison under Neb. Rev. Stat. § 48-818 (Reissue 2004) to the following array members: Beatrice, Blair, Columbus, Elkhorn, Fremont, Norfolk, and Ralston. With regard to Gretna and Norris, the Respondent stipulates that the work and skills of the bargaining unit employees of Grenta and Norris are sufficiently similar to the Petitioner’s bargaining unit to satisfy the standards set forth under NEB. Rev. Stat. § 48-818; however, the Respondent does not agree that the “working conditions” governing the bargaining unit employees of Gretna and Norris are sufficiently similar to that provided to Petitioner’s bargaining unit.

The Association’s Proposed Array

The Association proposes an array of nine school districts: Beatrice, Blair, Columbus, Elkhorn, Fremont, Gretna, Norfolk, Norris and Ralston. The issue before the Commission is whether Beatrice, Gretna, and Norris should be included in the Commission’s array with the six other common array members.

The District’s Proposed Array

The District proposes an array of six school districts which include Blair, Columbus, Elkhorn, Fremont, Norfolk, and Ralston. These six common members used by both the District and the Association meet the Commission’s size and geographic proximity guidelines. The Commission has held that arrays consisting of six to eight members are appropriate. O’Neill Education Ass’n v. Holt County School District No. 7, 11 CIR 11 (1990); Red Cloud Education Ass’n v. School District of Red Cloud, 10 CIR 120 (1989); Logan County Education Ass’n v. School District of Stapleton, 10 CIR 1 (1988); Trenton Education Ass’n v. School District of Trenton, 9 CIR 201 (1987).

The Commission’s Array

When choosing an array of comparable employers, the Commission applies a well-established size guideline of one-half to twice as large. See Scotts Bluff County School District No. 79-0064 v. Lake Minatare Education Ass’n, 13 CIR 256 (1999); Yutan Education Ass’n v. Saunders County School District No. 0009, 12 CIR 68 (1994); Crawford Teachers Ass’n v. Dawes County School District No. 0071, 11 CIR 254 (1991); Red Cloud Educ. Ass’n v. School Dist. of Red Cloud, 10 CIR 120 (1989). Employers falling outside this guideline are often excluded from arrays; however, the size criteria used by the Commission is a general guideline and not a rigid rule. Nebraska Public Employees Local Union 251 v. Sarpy County, 13 CIR 50 (1998); Nebraska Public Employees Local Union 251 v. County of York, 13 CIR 128 (1998); 13 CIR 157 (1998); 12 CIR 309 (1997); 12 CIR 248 (1997). Nonetheless, since the size guideline is based on objective criteria, it provides predictability and should not be lightly disregarded when a sufficient number of comparables, which meet the guidelines, exist. See School District of West Point v. West Point Education Ass’n, 8 CIR 315 (1986); Richland Teachers Education Ass’n v. Colfax County School District No. 0001, 11 CIR 286 (1992). The common array members are Blair, Columbus, Elkhorn, Fremont, Norfolk, and Ralston. The contested array members proposed by the Association are Beatrice, Gretna, and Norris. The parties also stipulated that the district of South Sioux City and the district of Beatrice are comparable under Neb. Rev. Stat. § 48-818 with respect to work, skill and working conditions. Since the parties do not disagree as to the work, skill and working conditions of Beatrice, the Commission finds that Beatrice is sufficiently similar as to warrant its inclusion in the array.

The Respondent argues the Commission should exclude Gretna and Norris based upon the “lack” of similarity of their benefit packages. The Petitioner argues that this would “add” another factor (i.e. similar benefits) to compare school districts, in addition to size and geographical proximity.

The Commission held in Beatrice Educ. Ass’n v. Gage County School Dist. No. 34-0015, 15 CIR 46 (2004), that it  would not exclude array schools because of their difference in benefits.  The Commission reasoned in Beatrice that it had included schools in arrays in the past cases which provided insurance benefits, as well as those providing benefits of cash-in-lieu of insurance. In sum, the Commission determined that differences between the amount of cash offered at a school district or straight insurance offered at a school district had little impact on work, skills, or working conditions. Therefore, in Beatrice the Commission included a school district with a different benefit package than the subject school district in its array.

Furthermore, in Fraternal Order of Police, Lodge No. 24 v. City of Grand Island, 14 CIR 59 (2002), the Commission held the absence of a collective bargaining agreement is not a factor to consider in array selection. The evidence presented in City of Grand Island did not prove that the absence of a collective bargaining agreement had an impact on work, skills and working conditions.

The Petitioner proved that both the Gretna and Norris school districts are regulated by the Department of Education. Both schools are governed by standardized rules and regulations set forth by the State Board of Education. Both schools are also governed by the same school accreditation and teacher certification requirements. Both schools have the same categories of benefits available through Educators Health Alliance, as does the South Sioux City School District and the seven other array members. The Respondent did not provide sufficient evidence that the benefit packages offered at Gretna or Norris affected work, skills, or working conditions of the teachers.

The Respondent also argues the application of the Louisville Rule is unnecessary. See Louisville Educ. Ass’n v. Cass County School Dist. No. 13-0082 a/k/a Louisville Public Schools,15 CIR 368 (2007). The Respondent argues that the Louisville Rule serves to artificially, substantially, and unfairly inflate the total compensation dollar amounts. The Respondent suggests that if the Louisville Rule is “only” applied to one array comparable (i.e. Ralston) the impact of the Commission’s manipulation of array figures is minimal and the Commission avoids the “significant” inflation of the total compensation figures. The Respondent states that one of the most negative consequences of the Louisville Rule is that it always results in a benefit to the teachers’ unions, to the detriment of the school district employers. The Petitioner alternatively argues the Louisville Rule creates consistent and predictable results. The Petitioner states that the Louisville Rule has been in existence for three years and the Respondent should be aware of its effect on both negotiations and the results.

Prior to Louisville, the Commission had a succession of cases dealing with how to treat benefits, specifically the benefit of cash-in-lieu of insurance. See 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”); Metropolitan Technical Community College Educ. Ass’n v. Metropolitan Community College Area, 14 CIR 127 (2003); South Sioux City Education Ass’n v. Dakota County School Dist. No. 22-011, 15 CIR 37 (2004); and Beatrice Educ. Ass’n v. Gage County School Dist. No. 34-0015, 15 CIR 46 (2004).In Louisville, the Commission refined the legal principal set forth in these previous cases. Louisville stated that if the cash offered in the array school is less than 50% of that offered in the subject school, the subject school teacher would be placed on the array school’s salary schedule as receiving the cash offered at the subject school. The Louisville Rule, alternatively found that if the cash option was 50% or greater than the subject school, the teachers would be placed as taking the array school’s cash option. After careful review of teacher wage negotiations over the past thirty years, the Commission has consistently used health insurance in its calculations of total compensation and not excluded array choices because of the lack of cash-in-lieu of insurance. Neb. Rev. Stat. § 48-818 clearly mandates that the Commission use the costs of health insurance benefits in its calculation of total compensation. As stated in South Sioux City, there is no concrete method with which to sort such choices, when all parties involved rely on a hypothetical situation to begin with. 15 CIR 37. For more than thirty years, the Commission has simplified those choices into a single mathematical formula which is based solely on dollars and cents to arrive at a dollar number which the Commission and the Nebraska Supreme Court have termed “overall compensation.”

In the instant case, the Louisville Rule is being applied to all six of the common array members agreed to and presented by the Respondent. The Rule places teachers based on a percentage calculation of whether the cash option is sufficiently similar to the option offered at the subject school. The Louisville Rule, and the litany of cases preceding it, places teachers of subject schools on the array schools schedules as a method to promote predictability, logic, and fairness. By applying this Rule, the Commission treats each cash option as either sufficiently similar (i.e. Blair, Columbus, Elkhorn, Fremont, and Norfolk) or not sufficiently similar (i.e. Ralston). The Commission can likewise apply these Rules to Beatrice, as discussed below (i.e. sufficiently similar) and to Gretna and Norris where the Commission places the employees as taking the insurance option, which was determined to be the economically rational choice in Metropolitan Tech., 14 CIR 127 (2003). The Commission will not “avoid” the application of the Louisville Rule, simply by choosing the common array members.

Furthermore, the Commission finds, the Petitioner has proven that the array school districts of Gretna and Beatrice are under the same rules and regulations, along with the same working conditions at South Sioux City. Without convincing evidence to exclude the school districts of Gretna and Norris because their health insurance benefits are “different”, the Commission finds the array shall consist of all nine array members proposed: Beatrice, Blair, Columbus, Elkhorn, Fremont, Gretna, Norfolk, Norris and Ralston. 

FRINGE BENEFITS:

Beatrice Cash Amount

            The Petitioner argues that the Commission should not round Beatrice’s cash-in-lieu of insurance up from 49.58% to 50%. The Petitioner argues that the Commission should round the cash-in-lieu of insurance amount to four decimals like the Commission rounds the staff index factor, which would not result in Beatrice reaching 50%. The Respondent argues that if the Commission feels that it is necessary to preserve the Louisville Rule regarding the similarity of cash options, then the Commission should in equity and fairness, round the cash-lieu of insurance percentage up to 50% for Beatrice .

            The Commission has consistently rounded numbers up in numerous cases in the past. See International Brotherhood of Elec. Workers Local Union 1597 v. City of Gering, 15 CIR 140 (2005) and International Ass’n of Firefighters Local Union No.  647 v. City of Grand Island, 15 CIR 324 (2007). While we do allow staff index factors to go out to four decimals, staff index factors relate directly to placement of the teachers on the salary schedule.  In the instant case, we find that cash-in-lieu of insurance is more akin to benefits as seen in other cases where the Commission rounds up to a whole number. Therefore, we find that Beatrice’s cash-in-lieu of insurance at $3,600 is sufficiently comparable to South Sioux City’s cash-in-lieu of insurance at $7,260.  The South Sioux City teachers will be placed as taking the cash-in-lieu benefit in Beatrice. See Table 1 regarding placement of subject school teachers on the Beatrice array schedules. The placement of the subject teachers on the other array schools selected by the Commission are found at Exhibits 11, 15, 19, 23, 27, 31, 34, and 38.

Dental Insurance

            The issue of dental insurance premiums figured into total health and accident costs was at issue between the parties in this case. Specifically, the parties disagreed as to the application of the Louisville Rule to the school districts of Gretna and Norris and whether the parties should count premiums actually taken for dental insurance versus premiums that the South Sioux City Employees are qualified for whether or not those benefits were actually elected at South Sioux City. The Petitioner placed all of the South Sioux City teachers taking the maximum benefit available to them, which includes dental insurance costs. Whereas, the Respondent argues that the Commission should only count premiums actually taken for dental insurance.

Under the application of the Louisville Rule, the parties must place the employees taking the economically rational choice available to them. Likewise, the Commission finds that the employees should be placed taking the maximum benefit available to them in the instant case because that benefit would be economically rational for the employees to take. Therefore, we will use the Petitioner’s number in calculating total health/accident costs.

BASE SALARY:

Table 2 sets forth the relevant information for determining the appropriate base salary. The midpoint of the total compensation $18,483,694 minus the cost of fringe benefits of $2,357,002 equals $16,126,692 which, when divided by the new total staff index factor of 507.6668, equals a base salary of $31,766 for the 2010-2011 school year.

IT IS THEREFORE ORDERED THAT:

1.      The Respondent shall pay the teachers a base salary of $31,766 for the 2010-2011 school year.

2.      All other terms and conditions of employment for the 2010-2011 school year shall be as previously established by the agreement of the parties and by the Findings and Order of the Commission.

3.      Adjustments in compensation resulting from this order shall be paid in a single lump sum payable within thirty (30) days of this final order, if such a payment is practical in light of the bookkeeping and payment practices of the Respondent.  

All commissioners join in the entry of this order.

To request copies of the Tables, call (402) 471-2934 or e-mail your request to industrial.relations@nebraska.gov