5 CIR 103 (1981). Appeal dismissed October 6, 1981.


CITY OF OMAHA, A Municipal | CASE NO. 388
Corporation, |
v. |
LOCAL NO. 101, |
Respondent. |


For the Petitioner: Kent N. Whinnery

For the Respondent: M. H. Weinberg.

Before: Judges Kratz, Gradwohl, Berkheimer.


Because of issues raised through Respondent's Answer and several motions, a hearing was conducted in this matter for the purpose of considering all issues raised by the pleadings, except the Section 48-818 determination of wages and conditions.

Written arguments were submitted, and evidence adduced, on the following issues: (1) whether petitioner engaged in bad faith bargaining, or a refusal to bargain, in connection with various actions taken during the negotiations; (2) whether petitioner's 7% package offer constituted an improper proposal, or bad faith bargaining; (3) whether petitioner's proposal for "parity", i.e., agreement to grant the civilian unit any raise granted to the police unit, constituted improper, or bad faith, bargaining; (4) whether an increase in pension benefits is a mandatory subject of bargaining; (5) whether police captains and lieutenants should be included in the respondent bargaining unit; and (6) whether or not a residency requirement is a mandatory subject of bargaining.

These issues are discussed and determined as follows:

(1) Alleged Incidents of Bad Faith Bargaining.

Respondent claims that various actions taken by Petitioner during the period of the negotiations constitute "bad faith bargaining". These allegations include the following: changing the negotiated sick leave procedure during the lifetime of the contract; attempting to change contractual seniority rights for job bidding during the term of the contract; spreading rumors of demoting 40 commanding officers; attempting to solicit members of the bargaining unit to join a second bargaining unit for commanding officers without any representation hearings; and harassing a member of the respondent bargaining team by claiming he was bargaining on time charged to the city. Some of these claims are not supported by the evidence, and the others involve isolated disputes which have been resolved. Consequently, we find that none of these incidents constitute bad faith bargaining.

Respondent also claims that the petitioner refused to bargain with regard to 35 of the 45 [footnote 1] demands presented by the respondent at the bargaining table. Section 48-816(1) includes the following:

To bargain in good faith shall mean the performance of the mutual obligation of the employer and the labor organization to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment, or any question arising thereunder, and the execution of a written contract incorporating any agreement reached if requested by either party, but such obligation does not compel either party to agree to a proposal or require the making of a concession.

The evidence indicates that all issues were discussed and that most of them had some reference at the bargaining table at least three times, however brief. Good faith bargaining, of course, does not require a party to continue to discuss, ad infinitum , an item that has been unalterably refused. It furthermore doesn't preclude an immediate negative response, and it doesn't require you to give as much, or as little, this time as you did last time.

Section 8(d) of the National Labor Relations Act contains the same language as is quoted above from Section 48-816(1). Referring to this Section, the Fifth U. S. Circuit Court says:

Thus it is now apparent from the statute itself that the Act does not encourage a party to engage in fruitless marathon discussions at the expense of frank statement and support of his position. And it is equally clear that the Board may not, either directly or indirectly, compel concessions or otherwise sit in judgment upon the substantive terms of collective bargaining agreements. NLRB v. American National Insurance , 343 U.S. 395, 21 LC 66, 980.

We find that all of the respondent's demands were adequately discussed and considered, and that the petitioner's position on these items does not constitute bargaining in bad faith.

(2) The 7% Package

We also find nothing improper in petitioner's 7% package proposal. The evidence shows that the parties met for long periods on at least 8 or 9 occasions and frequently discussed the economic package. Eventually, the petitioner made a final proposal of 7%. It was understood that this 7%, proposal included wages and fringe benefits, [footnote 2] with the understanding, also, that the specific distribution of the total amount must be submitted back to the petitioner for approval. While there are some obvious disadvantages to the respondent in this type of an offer, it was nevertheless submitted in good faith and is a proper proposal. The remedy for a proposal which one of the parties considers unacceptable for economic reasons is not a claim of bad faith bargaining.

(3) The "Parity" Proposal

Respondent also claims that the petitioner engaged in bad faith bargaining when it took the position that if it "voluntarily grants a wage and fringe benefit increase greater than 7% to any other city bargaining unit, for the contract year 1981, the civilian union bargaining unit would receive the same wage and fringe benefit percentage increase." This type of bargaining procedure offers a possible solution to the problem of " 'invidious comparison', a designation given to the practice of whipsaw bar-

gaining tactics where several unions bargain with the same employer and thus compete with each other, at least in the view of their respective memberships, for the best collective agreement.'" [footnote 3].

Petitioner says this parity proposal has no "legal efficacy" and is "nothing more than a statement of intent." It was not included in any enforceable contract. Under the circumstances of this particular case, we do not consider that this tie-in proposal constitutes improper, or bad faith, bargaining.

(4) Pension Increase

Respondent argues that the "city of Omaha refused to bargain on the issue of pension increases, claiming that the item was solely within the purview of the city council and the charter." The petitioner says an increase in pension could have been included in the response to its 7% proposal.

The amount of an employee's pension is clearly a condition of employment and a mandatory subject of bargaining. Gary Troutman, Assistant City Personnel Director, testified that the city charter covers the pension retirement age and contribution distribution, but any "other areas of the pension" could have been included in the 7% proposal [footnote 4]. We find that the issue of pension increases is a bargainable subject, and that the petitioner did not refuse to bargain on this subject.

(5) Captains and Lieutenants

Section 48-816(3) says as follows:

All firemen and policemen employed in the fire department or police department of any municipal corporation in a position or classification subordinate to the chief of the department and his immediate assistant or assistants holding authority subordinate only to the chief, shall be presumed to have a community of interest and may be included in a single negotiating unit represented by an employee organization for the purposes of this act ...

Since there are two officer classifications superior to the captains and three superior to the lieutenants, it is presumed that the captains and lieutenants have a community of interest with the members of the existing negotiating unit, which also includes sergeants and patrolmen.

This statutory language, of course, is permissive and may be rebutted by petitioner's evidence. Petitioner argues that the captains and lieutenants exercise sufficient supervisory and management functions to be separated from the sergeants and patrolmen, and that there is an adversary relationship between the captains and lientenants and the remainder of the bargaining unit subordinate to them.

The evidence shows that the captains and lieutenants do exercise supervisory functions, but so do the sergeants. And if there is any adversary relationship between the various classifications in the Omaha police department, it would seem to apply equally, that is, there is as much or little adversary

relationship between the captains and lieutenants as the lieutenants and sergeants and the sergeants and patrolmen. Also, the chain of command which operates in the Omaha police department seems to leave each descending link with a little less management and supervisory authority. How you apply all of this to the community of interest standard for collective bargaining units is not clear or easy. Perhaps that is why we have the statutory presumption, and we have no hesitancy in applying it here and ruling that this presumption has not been rebutted by respondent's evidence. [footnote 5]. Therefore, we hold that the captains and lieutenants and sergeants and patrolmen should be included in a single negotiating unit.

(6) Residency Requirement

This Commission has applied the residency requirement in a 48-818 case. Local Union No. 647 of International Association of Fire Fighters v. City of Grand Island , 3 CIR 43. In doing so, we said as follows:

With regard to residence requirements, we note that two of the three cities for which the parties furnished data permit residence outside the community. We note further that this is a negotiable item. Detroit Police Officers Assn. v. City of Detroit , 391 Mich. 44, 214 N. W. 2d 803 (1974). We therefore, adjust the residency requirement to the average of the three cities compared, or three miles from the city limits. (emphasis supplied)

Also, this question has been more specifically litigated in several states. The issue in those states was similar to the issue raised here: whether residency requirements constitute "wages, hours and conditions of employment." The threat of termination of income of the employee because of the nature of his residence is, of course, directly linked to the job security of the members of the bargaining unit, and thus the residency requirement has generally been held to constitute a condition of employment.

The employment relations boards or commissions, and the courts, in Massachusetts, Michigan, Pennsylvania, New York and Wisconsin [footnote 6], have all determined that a residency requirement is a condition of employment and therefore a mandatory subject of collective bargaining. In doing so, they have limited the application of this type of clause to incumbent employees. In other words, a requirement that an employee must live within the city before he will be hired, if it does not affect the incumbent employees, is a management policy consideration, and not a condition of employment. But, if the requirement affects incumbent employees, even if the requirement applies only to non-resident employees hired after the effective date of the rule or ordinance, it is a condition of employment.

The residency requirement herein does affect the incumbent employees and we therefore hold that it is a mandatory subject of bargaining.

We thus order the parties to commence bargaining immediately on the issue of residency requirements. The parties may also discuss any of the other unresolved issues, including wages. A hearing is hereby scheduled for March 4, 1981, at a time and place to be fixed hereafter by order, and if any bargainable issue, including wages and the residency requirement, is not resolved by that time, evidence will be presented in accordance with the requirements of 48-818 of the Nebraska Statutes. It is furthermore ordered that a pretrial conference, pursuant to Rule 15a of the Commission, will be held on February 19, 1981, before Honorable Dean G. Kratz, at 2:00 P.M., at the office of Judge Kratz, 300 Continental Building, Omaha, Nebraska.

All Judges assigned to the panel in this case join in the entry of this Opinion and Order.

Entered January 27, 1981.

[1] The evidence shows that originally there were 38 demands, but this number "grew" during the course of the negotiations. Nevertheless, whether it is 38, 45, or somewhere in between, the evidence shows that 7 or 8 of these demands were "agreed to" (T93 & 83). Thus, the union is apparently saying that virtually every item that wasn't agreed upon was not adequately discussed.

[2]There is some dispute in the testimony as to whether this included an increase in the pension amount.

[3] IBEW v. State of Nebraska , 3 CIR 23, where this Judge concluded that "multi-union bargaining creates labor unrest and dissatisfaction and produces significantly higher collective agreement settlements than would result from a one union - one employer bargaining relationship."

[4] Page 163 & 164 of Transcript of testimony.

[5] The evidence shows that the captains and lieutenants have been a part of the bargaining unit for many years and that they desire to remain a part of this bargaining unit. In the case of City of Grand Island v. AFSCME , 186 Neb. 711, 185 N. W. 2d 860, the Nebraska Supreme Court determined that this was a significant factor in unit determination.

[6] Boston School Committee and Boston Teachers Union, Local 66, AFT, et. al. , MUP 2503, 3 MLC 1603 (April 15, 1977); Pennsylvania Labor Relations Board v. State College Area School District, et al. , 461 Pa. 494, 337 A. 2d 262, 6PPER 92 (1975); Detroit Police Officers Association v. City of Detroit , 391 Mich 44; 214 N. W. 2d 803 (1974) 1 PBC 10, 353; Local #650, AFSCME and City of Buffalo , 9 NY PERB 3015; Auburn City Unit, Cayuga County Chapter,

SCEA, Inc., and the City of Auburn , NY PERB Case No. U-2175 (December 21, 1976); City of Brookfield v. WERC , Wis. Cir. Ct., Waukesha County, No. 31923 (1974) 1 PBC 10, 279.