3 CIR 164 (1976).


Petitioner, |
municipal corporation, |
Respondents. |

Appearances: For Petitioner, David D. Weinberg

For Respondent, Board of Public Works, George Svoboda, Fo Respondent, City of Fremont, Lyle D. Gill.

Before: Judges Wall. Debacker and Green.


This case brings before us a dispute between the petitioner union, representing certain employees of the Board of Public Works of the City of Fremont, and that Board and City concerning wages, hours and conditions of employment of those employees during the period from August 1, 1975 to August 1, 1976. In other words, the period covered by the dispute is now locked in, having expired on August 1, 1976. The opinion which we enter herein is primarily directed to that locked in period. However, certain of the directives entered herein, as will be apparent from the opinion, are intended to have a continuing effect.

The first issue with which we deal is wages. The parties attempted to negotiate with regard to wages. However, no settlement was reached. Therefore, on August 1, 1975, the City of Fremont implemented its own wage proposal, which was a five percent increase in wages. The union argues that this increase was insufficient, and it seeks our aid in achieving a higher salary level.

The union contends that the wages paid in Fremont are inadequate because they are substantially below wages paid by the Omaha Public Power District (OPPD) and the Lincoln Electric System. These two public employers are the only comparables offered by the union.

In Omaha Association of Firefighters, Local 385 v. City of Omaha , 2 CIR 117 (1975), we observed that, "until the moving party in a 48-818 case has demonstrated that existing wages are not comparable to the prevalent, we have no occasion to enter an order changing existing wages,...". pp. 117-14, 117-15. We do not believe that a difference, however substantial, between Fremont and OPPD and Lincoln Electric is adequate to demonstrate that wages paid in Fremont by the Board of Public Works are not in fact comparable to the prevalent. Firstly, both OPPD and Lincoln Electric are substantially larger operations than that conducted by the Fremont Board of Public Works. Secondly, both of these employers are primarily based in cities of substantially larger size than the City of Fremont. Where such substantial disparities in size exist, our cases have regularly refused to consider wages of an employer operating in a community of substantially larger size as relevant in determining comparability under 48-818. See, Tecumseh Education Association v. The School District of Tecumseh , 2 CIR 119 (1975), p. 119-4. Thirdly, as the witness Jensen, who testified on behalf of the Board of Public Works, noted in his testimony and in his exhibit 5, wages paid in Omaha tend to be higher than wages paid in Fremont. This is true in a number of occupations, and is true in utility occupations. Thus, while Jensen conceded that OPPD and Fremont were in the same market area, he demonstrated that wage rates for utilities employees in Fremont should be lower than those in Omaha, since that is the typical pattern among all occupations. Thus, a difference between Fremont and Omaha is to be expected. Fourthly, even if we regarded OPPD and Lincoln Electric System as comparable employers, a pool of only two employers is not adequate to establish a prevalent wage rate. The entire thrust of our cases has been that the moving party should display an array of practice evidenced by multiple employers, since a wage rate is not prevalent merely because some one employer pays it. In other words the prevalent is neither the highest nor the lowest wage paid by any one employer in geographic proximity to the litigating employer for comparable work skills. Rather the prevalent is represented by a range of wages paid by a substantial group of other employers in the same geographic area for comparable work skills. Generally our cases have focused on the mid-point of such a range as the comparable wage. Crete Education Association v. School District of Crete , 193 Neb. 245, 258, 229 N.W.2d 752 (1975). The use of only two employers for purposes of comparison is fundamentally inconsistent with our traditional techniques in 48-818 cases.

We do not hold that OPPD and Lincoln Electric have so few characteristics in common with Fremont that they cannot be treated as comparables. See, Crete Education Association v. School District of Crete , supra, 193 Neb. 252-253; Omaha Association of Firefighters v. City of Omaha , 194 Neb. 436, 440-441, 231 N.W.2d 710 (1975). These two employers might be appropriate members of an array utilized to evidence prevalent wages. Indeed, the witness Jensen concedes as much since he utilizes these two employers in his Exhibit 5. We do hold, however, that because of the dissimilarities between these two employers and Fremont, the two employers standing alone are not adequate to demonstrate that wages paid by the Board of Public Works are not in fact comparable to prevalent wages. Since the union has the burden of proof, and since the union offered only these two employers, it fails in its burden of proof on wages.

Moreover, if we were required to make a comparison and determine whether or not to adjust the wages paid by the Board of Public Works, the evidence offered by the Board persuades us that such an adjustment is not required. The Board's witness Launer prepared Exhibit 6A in which he compared wages paid by the board of Public Works with wages paid by electric systems operated by other cities of the first class, except Bellevue. Since cities of the first class are of roughly comparable size, the requirement of comparability of size we have usually utilized is satisfied by this exhibit. Some of the cities are distant from Fremont, and, therefore, raise difficulties under our usual standards of geographic proximity. See, Tecumseh Education Association v. school District of Tecumseh , supra. Nevertheless, the exhibit, when weighed against the very weak showing which the union made, indicates that wage rates in Fremont are satisfactory. In most of the classifications shown Fremont has the highest rates of pay for utility workers of any first class city. In addition, the witness Jensen offers an array of cities and utilities employing electric utility workers in close geographic proximity to Fremont. Among these employers, in six separate classifications, Fremont is above the median wage rate in two and is below the median wage rate in three classes. Taking the six classes as a group, the wages in Fremont approximate the mid-point. Thus, not only has the union failed in its burden of proof on wages, but the employer has affirmatively demonstrated comparability.

The union also seeks certain changes in the computation of vacation and one additional holiday as a floating holiday. In support of such a change, the union offers only the practices at OPPD and Lincoln Electric Systems. We have already held that these two employers, standing alone, are not adequate to demonstrate prevalent practice. Since the pool is inadequate, our holding in Nebraska City Education Association v. School District of Nebraska City , 2 CIR 116 (1974), is controlling. In that case we held that:

"...The statutory standard of 'comparable to the prevalent' applies to conditions of employment. In fixing conditions of employment we are required to utilize 'the standards set by the "peers" of the parties before the court.'...If the norm in the trade is not proved by the party seeking an order, we are not positioned to grant him relief. Here, the union has not presented us with a pool of comparable practice. Hence a finding for the defendant is appropriate on the issue." p. 116-13.

The union seeks an equal voice with management in the administration of the pension fund for employees of the Board of Public Works. The Board's pension fund is insurance policy purchased from an insurance company. Such plans differ in many respects from trust fund type plans in which union participation in management is common. If the plan involved was a trust fund type plan, we might be willing to accede to the union's position, even in the absence of proof of comparable practice among other employers. However, where an insurance plan is involved, we have a difficult time seeing what role the employees could play in management of the fund, since the management of any investments is part of the insurance company's ordinary pattern of investments over which even the employer has no control. Because of the difficulty in determining what role, if any, the employees could play, and because no comparable practice is demonstrated, we reject the union's position that employee participation is required.

The union requests holding that work rules are subject to negotiation between the union and the employer. The Board of Public Works, on the other hand, asks us to hold that all work rules involved reserved management rights under the decision in School District of Seward Education Association v. School District of Seward , 188 Neb. 772, 199 N.W. 2d 752 (1972). The parties present the dispute to us in this abstract form, since there is apparently no current dispute with regard to any specific work rule. In the form in which the parties present the issue to us, the dispute is unresolvable. Some work rules may involve conditions of employment, while others may involve reserved management rights. We do not propose to make an abstract decision as to which class any particular work rule in Fremont falls in the absence of an existing dispute concerning that work rule. Nevertheless, we believe that we can give the parties appropriate guidelines consistent with the statutory pattern of bargaining over conditions of employment and reservation of management rights in freedom from collective bargaining.

If the union desires any particular change in the work rules, it should request from management the opportunity to bargain over such change. If, at that point, management believes that reserved rights are involved, it can decline to negotiate upon that basis. The union is then free to bring the case to us for resolution of the dispute as to whether or not the particular rule is a proper subject of bargaining. If, on the other hand, management desires to make a particular change in the existing work rules, it should give the union notice of the proposed change and an opportunity to make comment on the change or to request a chance to bargain. If the union makes comment, or requests an opportunity to bargain, then management must decide for itself whether or not reserved rights are involved. If it believes reserved rights are not involved, then it has an obligation to bargain. If it believes the particular work rule falls within its reserved rights, then it may decline to bargain. At that point, if management declines to bargain, then the union can come here seeking a judicial determination as to whether or not the particular work rule falls within the reserved management rights or involves a condition of employment subject to collective bargaining.

The union seeks a check off. A voluntary check off is authorized by sec. 48-224. The Board of Public Works has refused voluntary check off. It does so on the basis that the statute says that the employee "may execute the order" for check off, but contains no compulsory wording. However, check offs are common practice in employer-employee relations. The Board of Public Works has offered no strong reason why this customary practice should not be applied at Fremont. The inconvenience in placing the check off in the computer program is not an adequate ground. Even if check off is discretionary with the employer, the discretion must be reasonably exercised. Here, the exercise of discretion has not been reasonable. In the future the union is entitled to a voluntary check off.

Finally, the parties ask us to determine who the employer is in this case, the City of Fremont or the Board of Public Works. In the abstract form in which the controversy is presented to us, the answer is obvious. The Board of Public Works does not have an independent legal existence. It is an operating division of the City of Fremont, which is the existing municipal corporation. Only the City of Fremont exists as a legal entity, and the Board of Public Works is but a collection of individuals performing functions of the City of Fremont. Sec. 16-325. Thus, for example, sec. 16-325(3) authorizes the Board of Public Works to "make contracts on behalf of the City..." If the Board of Public Works had an independent legal existence, then it would make contracts on its own behalf.

The determination that the City of Fremont is the employer, however, does not resolve the real controversy between the parties. The controversy between the parties is as to who shall conduct negotiations with the employees of the Board of Public Works, the Board or the City Council. The conduct of labor relations is not specifically included among the duties of the Board of Public Works. Sec. 16-325, however, does provide that the Board shall "perform such other duties as may be conferred upon such Board by ordinance." In the absence of an expressed delegation, it would appear the Board does not have the authority to conduct negotiations.

However, we do not believe that this is a matter to be settled solely by construction of the statutes governing cities of the first class. Under sec. 48-816, the City of Fremont has an obligation to bargain in good faith with the certified representative of the employees of the Board of Public Works. Until the contract negotiations for the contract year August, 1975 to August 1976, negotiations with the employees of the Board of Public Works had always been conducted by the Board. In that year, however, the City Council withdrew from the Board authority to enter into negotiations with regard to wages. It reserved the issue of wages to itself. However, it made no provision for negotiations with employees of the Board of Public Works. Rather, the Council set a uniform standard for wage increases, and then presented it to the employees of the Board of Public Works on a take it or leave it basis. No opportunity for negotiation was presented, other than the opportunity to appear at Council meetings. The pattern of behavior by the Council is not consistent with the concept of good faith bargaining as it has developed in the law of industrial relations. See, NLRB v. Reed and Prince Mfg. Co., 205 F.2d 131 (1st Cir. 1953); Cox, The Duty to Bargain in Good Faith , 71 Harv. L.Rev. 82. If the Council in the future desires to withdraw from the Board of Public Works the authority to bargain, then it must undertake to establish arrangements whereby the union can enter into meaningful negotiations with the members of the Council. Pre-established decisions as to raises which will be given, where these decisions are offered on a take it or leave it basis, and public appearances at formal council meetings do not satisfy the City Council's obligations to bargain in good faith.

The foregoing opinion resolves the issues in dispute between the parties. It is, therefore, ordered that the existing industrial dispute between the parties is hereby settled on the terms set forth in this opinion.

Entered October 5, 1976.