5 CIR 425 (1982)


an unincorporated Association |
Plaintiff, |
in the County of Douglas, State of |
Nebraska, a Political Subdivision, |
Defendant. |


For the Plaintiff:Theodore L. Kessner

Crosby, Guenzel, Davis,

Kessner & Kuester

For the Defendant: Malcolm Young, White & Young

Before: Judges Berkheimer, Orr and Davis.


This matter came on to be heard upon the Plaintiff Association's Petition seeking a determination of wages and conditions of employment under Section 48-818 R.R.S. 1943 and on the Answer of the Defendant District which also seeks a determination pursuant to that Section.

The specific terms and conditions of employment which are in dispute are as follows:

1.Paid health insurance benefits

2.Paid long-term disability benefits

3.Salary schedule structure (additional steps on the BA + 24, MA, MA + 15 and Doctor columns; designation of MA column-BA+ 36MA Doctor, column - MA + 36Doctor)

4. Salary schedule administration (being the placement of teachers on the schedule if the salary schedule is changed)

5. Base Salary.


The Association proposes comparisons with the public schools of Bellevue, Omaha, Papillion-LaVista (Papillion), Ralston and Douglas County District 66 (Westside). The District proposes Bellevue, Lincoln, Fremont, Omaha, Papillion and Ralston. The Commission finds from the evidence that the teachers at all of the proposed schools perform like or similar work and exhibit like or similar skills for the purpose of comparison with Millard pursuant to Section 48-818.

In selecting an array of schools for comparison the Commission has considered factors indicating a community of interest such as similarity of student enrollment, geographic proximity, athletic conference membership, and athletic, scholastic and academic contacts. See Rosalie Faculty Association v. School District No. 11 , 5 CIR 82, 85, (1980); Crete Education Association v. School District of Crete , 193 Neb. 245, 255, 226 NW 2d 752, 758 (1975). Omaha has an enrollment more than twice as large as Millard and Ralston has an enrollment of less than half that of Millard; however, the parties agree on these schools and the other factors listed above warrant their inclusion in an array for comparison with MiIlard.

Westside proposed by the Association meets all of the above criteria. Fremont's enrollment is less than half that of Millard but exceeds that of Ralston proposed by both parties. Lincoln's enrollment is approximately twice that of Millard but is less than that of Omaha. Fremont and Lincoln are located farther from Millard than the other schools are in different athletic conferences but have more athletic contacts than some of the other schools, and both have substantial other contacts with Millard.

Considering the parties' agreement on some of the schools and the above criteria, all of the above schools, absent other evidentiary factors, would qualify for inclusion in a proper array. The problem in using Westside and Lincoln is in the placement of Millard teachers on the salary schedules of Westside and Lincoln.

Salary schedules are used by all of the proposed schools as well as Millard. Salary schedules normally give credit for experience and educational attainment, resulting in a grid with columns displayed horizontally representing increments for educational attainment and vertical steps in each column for longevity. Under the usual schedules the salary of a particular teacher is determined from the base salary for a particular year. Given the base, each teacher's salary is measured from the base by using percentage increments. In a case such as this, the subject school teachers are placed on the grids of the other schools and a staff index factor computed. The index factor is that number which multiplied by the base salary produces total salaries which would be paid the teachers if employed by the other districts. The District contends that Millard teachers cannot be placed on the Westside schedule without assumptions not supported by the evidence. The Association makes the same contention with respect to Lincoln.

A portion of the Westside schedule is similar to a normal schedule but Westside departs from the normal with respect to certain categories using salary ranges within the same levels of experience and education. The Association endeavors to place the Millard teachers on the lowest level as a conservative approach. Westside however has an incentive pay fund of $75,000 which the Association adds to total salaries. The Westside Administration has wide discretion in disbursing this fund, and there is evidence that some of it is used as extra duty pay which under past decisions of the Commission should not be added to total compensation for comparison purposes. Fremont Education Association vs. School District of Fremont , 3 CIR 492, 500-501 (1978). Moreover, the salaries of some Westside teachers are not determined with reference to the base salary established for a particular year but rather upon a percentage and dollar amount increase over the previous year. Both parties offered calculations looking toward translation of Westside's schedule to a form arguably permitting comparison and each disputes the assumptions used by the other. The Commission determined in District 15 Education Association

School District No. 15 of Adams County, Nebraska , Case No. 417, January 4, 1982, affirmed on rehearing en banc (with modification not material here), March 2, 1982, that in determining teacher compensation the Commission will not include a school in an array of other schools used for comparison unless the criteria applied by that school in determining its teacher's salaries are shown in a manner that will permit the Commission from evidence in the record to apply such criteria to the teachers at the subject school. See General Drivers and Helpers Union v. City of West Point , 204 Neb. 238, 281 NW2d 772 (1979). The Commission is not satisfied that the evidence in this case permits sufficiently accurate placement of Millard Teachers on the Westside schedule. Lincoln's salary schedule is of the traditional type; however, for the 1981-1982 year the agreement between the teachers and the Lincoln District provides for mid-year increases for some teachers and not for others. As to Lincoln also the Commission is not entirely convinced that the evidence permits a valid translation of these variables to Millard. Moreover, a satisfactory number of other schools is available for comparison.

The Commission therefore finds that a proper array consists of Bellevue, Fremont, Omaha, Papillion and Ralston. Information regarding Millard and the school districts in this array is shown in the following Table 1.

Paid Health Insurance

Three of the five schools in the array offer $111.30 per month Blue Cross/Blue Shield dependent with $41.40 paid for single Blue Cross/Blue Shield coverage. Bellevue offers $111.30 per month Blue Cross/Blue Shield dependent coverage with an optional cash equivalent. Fremont coverage does not appear. Millard pays $108.93 per month for coverage somewhat different than Blue Cross/ Blue Shield dependent coverage and $38.60 for single coverage.

The essential differing features of Millard's coverage and BC/BS coverage are the following. Surgical benefits under BC/BS coverage are "usual and customary" benefits which will be the amounts charged by participating physicians under certain conditions. Surgical benefits under the Millard coverage are provided according to a "relative value" schedule which could be less than actually charged by physicians. However, deficiencies between surgical benefits and amounts as actually charged would qualify as costs under the major medical coverage of both policies. Both policies provide a diagnostic and x-ray benefit. Under BC/BS this benefit is $100 per person per year and under the Millard plan is $100 for each sickness or injury. Major medical coverage provided by both types of policies pays 80% up to a "stop loss" amount. BC/BS has a stop loss amount of $4,000 while Millard coverage has a stop loss amount of $625. After the stop loss amount has been paid by the employee, the insurance carrier pays 100% of the costs incurred to the maximum benefit provided. BC/BS has a $250,000 maximum lifetime benefit while Millard coverage provides $500,000 maximum lifetime benefit. The District's expert witness testified that coverage under either plan was adequate but that he

would prefer the Millard plan primarily because of lower stop loss amount and larger maximum benefit. The Commission finds that paid health insurance provided by Millard is comparable to that provided by other districts in the array and should not be changed by the Commission.

Long-term Disability Insurance

The only material information regarding long-term disability insurance is shown in Table 2 following:

There is no showing that the level of long-term benefits provided by Millard's policy is not comparable to prevalent levels. There is some indication in the evidence that the reason for Millard's lower total cost is a younger staff. Any higher level long-term disability benefits provided under the Millard policy which could be inferred from the records is not sufficient to equate Millard's payment of 50% of cost with 100% of cost paid by the other districts. Millard argues that its annual sick leave days should be considered in determining comparability of its long-term disability benefits. Annual sick leave days paid by Millard do exceed those paid by most of the other districts; however cumulative sick leave days are unlimited in three of the schools and maximum cumulative days exceed Millard's in another.

The Commission finds that despite any more favorable long-term disability insurance coverage discernible from the record and annual sick leave more favorable than most, the District should pay 100% of the cost of longterm disability insurance now being provided in order to achieve comparability with the other schools.

Salary Schedule

The nature of salary schedules generally has been described above. The Association asks that the Commission convert Millard's MA educational column to "BA + 36 hours or MA" and Millard's DR's column to "MA + 36 hours or DR". The Association also seeks to add longevity steps to the BA + 24, MA, MA + 15, and DR columns.

The Commission recently said in West Holt Faculty Association v. School District 25 of Holt County , 5 CIR 301, 309 (1981):

It is the Commission's experience that because of varying effects of different schedules upon teachers within the bargaining group, changes in the structure of the schedule are best achieved through collective bargaining and that past practice should not be disturbed in the absence of substantial variances from prevalent practice ...

Table 3 following shows the educational columns and longevity steps for schools in the array:

The difficulty of the Commission in dealing with such schedule changes is apparent in this record. As shown in Table 3 there is a lack of consistency among the schools as to educational columns used at each school. Not shown in the Table is a lack of a prevalent pattern of percentage increments in salary resulting from a teacher's movement from column to column and from step to step within columns. Obviously salary schedules are designed as a whole and with internal balancing of various factors so that a disturbance of one part of the schedule may well affect that balance. The District introduced evidence with respect to its basis for using MA only and DR only columns, primarily involving the consideration that greater discipline is required and greater educational attainment achieved through a Master's or Doctor's degree than through mere accumulation of hours and that if a BA + 36 and MA + 36 were to carry the same compensation as the Master and Doctorate degree attainment, this change would discourage staff continuing education and decrease the professional quality of the staff.

The evidence here however is that four of the five schools in the array compensate teachers with 36 hours over the BA degree the same as teachers with Master's degrees and that in three schools a Doctor's degree carries no greater compensation benefit than a Master's degree plus 36 hours education. The District's evidence shows that for the 1981-1982 year there are only ten teachers who would qualify for movement into a BA + 36 column and only seven teachers would qualify for movement to an MA + 36 equivalent to Doctor. Th*is the esta-blishment of BA + 36 equal to MA and MA + 36 equal to DR columns should not result in a materially large disturbance of the internal balance in Millard's present schedule.

It was noted by the Commission in District 15 Education Association v. School District 15 of Adams County , supra , that whatever the future impact of an agreed upon salary schedule may be a Commission Order determines salaries and conditions of employment for a single school year and the Order does not persist beyond that year. The Commission finds that to achieve comparability of

compensation with other schools in the array Millard's

educational columns of MA and DR be changed, respectively, to BA +36 or MA and MA + 36 or DR columns for the 1981-1982 contract year.

Consistent with the Commission's reasoning in West Holt, supra , the Commission finds that the evidence in this case does not establish that other parts of Millard's schedule or Millard's schedule administration depart so substantially from prevalent practice that a change is warranted. The Commission therefore finds that, except for the changes required above, Millard's salary schedule and its administration shall remain the same.


As noted above it is a staff index factor which facilitates comparing the total salaries which would be paid Millard teachers if they were employed by the schools in the array. The parties do not agree on Millard's staff index factor and consequently each party used different index factors in placing Millard teachers on the schedules of the other schools proposed by that party with resulting variations in total salaries. Basic to the differences between the parties is a difference in the number of teachers at Millard. The Association used 692 teachers derived from information furnished by the District in October 1981. The District's Assistant Superintendent who provided the information testified that the number of teachers and their placement furnished to the Association in October was true and correct when furnished. He also testified that on December 18, the District updated its computer information thereby changing the index and verifying the number of teachers on that date as 684 and that the Association's expert witness was advised of the change in number about December 22. No stipulation was entered into at the pretrial conference held on December 29, 1981 with respect to numbers of teachers or as to index factors to be used in exhibits. Since the Association did not propose Fremont for comparison it did not place its 692 teacher figure on the Fremont schedule. Therefore, to make a valid comparison with Fremont it is necessary to use the District's 684 figure and placement throughout the array. Minor variations in the number of staff during the period involved here would not be unusual, and any variations resulting from the choice of the District figures should not be significant. As pointed out by the Association in its brief, a pro forma comparison with the four schools where both index factors are available produces a de minimus difference regardless of which party's index factors are used. Accordingly, the Commission finds that the District's teacher count and placement and staff index factors should be used for comparison with other schools.

The Commission's usual method of determining and using total teacher compensation in schools in an array for comparison purposes is to add total salaries which would be paid the subject teachers by schools in the array to the cost of fringe benefits which would be furnished the subject teachers by the schools in the array, and a comparable total compensation amount is determined for those teachers. Once this figure is determined the Commission determines comparable fringe benefits for the subject school and the cost of such benefits. This fringe benefit cost is subtracted from the total compensation determined to be comparable leaving the amount of total salaries to be paid. The total salary amount is then divided by the school staff index factor to determine base salary. This method produces a proper result where the cost of comparable fringe benefits is substantially the same for the subject school as for the schools in the array.

The evidence in this case is that the Millard District is providing levels of insurance benefits comparable to those of the other schools but at a materially lower cost. The Association contends that the Commission in this case should follow its usual procedure. The District however points out that if the Commission determines total compensation including cost of insurance benefits by comparison with such an inclusive total compensation at other schools and then subtracts Millard's insurance costs to arrive at Millard's total salary compensation, the amount Millard saves on insurance will be added to its salary costs resulting in its receiving no consideration for its efforts in negotiating a lesser insurance cost.

Section 48-818 R.R.S. 1943 requires that the Commission "take into consideration the overall compensation presently received by the employees having regard to ... all benefits received including insurance . . ." It is clear from the statute that in arriving at overall compensation regard must be given to benefits rather than the cost of the benefits. Where there is an equation between benefits and cost by which benefits can be translated to dollar amounts for the purpose of computing overall compensation this has been done. Here the evidence is that such translation is not possible. If the Commission were to follow its prior methodology, Millard teachers who are receiving comparable insurance benefits would receive higher salaries because the District provided those benefits at a lesser cost to itself. It is not in the public interest for the Commission to destroy the incentive for public employers to seek the best bargain. The Commission's past measurement of benefits in terms of dollar cost in arriving at a dollar amount of "overall compensation" and computing salaries with reference thereto has not been for the purpose of imposing a budget but rather for the purpose of measuring comparability of compensation.

The Commission here finds that the cost of insurance should be excluded from total compensation in computing the total compensation which would be paid Millard teachers at the other schools and in determining what Millard's total compensation should be. Bellevue teachers have the option of taking cash equivalent of the cost of BC/BS insurance however there is no evidence as to the extent, if any, in practice that such payment results in additions to cash compensation; therefore any cost of the option feature at Bellevue will be disregarded. One school does have a cash fringe benefit that deserves consideration. Ralston will contribute $25 to the cost of an annual physical examination and $20 to the cost of a biennial eye examination. The Association's computation of the cost of such benefits assumed that all teachers would take advantage of these payments. An assistant superintendent at Ralston testified that in the 1980-1981 school year 33.58% of the Ralston teachers claimed reimbursement for physical examinations and 13.58% for eye examinations, and that over past years this percentage has been relatively constant within a tolerance of plus or minus 2%. The Commission therefore finds that in determining total compensation for Millard teachers at Ralston the costs of examinations which should be included are $5,814.00 (684 teachers x 34% x $25) for physical examinations and $1,915 (684 teachers x 14% x $20) for eye examinations totalling $7,729. For the other schools in the array only total salary costs will be used.

Ralston has a lesser number of contract days than Millard and the other schools in the array. The Association contends that the Ralston salary schedule should be adjusted upward for comparison purposes. The Commission declined to adjust annual teacher compensation for contract days in Columbus Education Association v. School District , 3 CIR 385, 391-392 (1978), but did make such adjustments in West Holt Faculty Association v. School District 25 of Holt County , 5 CIR 301, 313-314 (1981). The two cases are distinguishable on their facts. As stated in West Holt :

In the Columbus case, the Commission said: 'The teachers enter into a contract for a school term, without particular regard to the number of days involved in that term.' 3 CIR 385 at 391. The undisputed evidence in this case requires a departure from that finding. Here, the Association's expert witness testified that teaching employees should expect additional compensation if additional contract days are required and testified as to methods of adjustment generally based on a daily measurement. . . . The evidence shows that the number of contract days were unilaterally established by the Board to accommodate farm families, but as noted above the evidence also shows that teachers' salary expectations are related to the number of contract days. The Commission finds on

the evidence in this case that an adjustment in basic salary should be made for a lesser number of contract days ...

The Association did not present any evidence relating to the need for or propriety of adjusting teacher compensation because of difference in contract days. The Association having the burden of proof and the Commission in two prior cases having made different factual findings basic to resolution of the adjustment issue, the absence of evidence precludes its resolution in favor of the Association in this case.

Table 4 below shows a comparison of 1981-1982 standard salary schedules for schools in the array and mean and median of these total salary schedules, adjusted as to Ralston for physical and eye examinations.

The Commission finds the total standard salary schedule compensation for the Millard District teachers for the 1981-1982contract year should be $11,436,942.00.

The Commission's next step would be to apply a staff index factor to this figure to determine base salary. The Commission has determined above that for the 1981-1982 contract year the MA column in the District's present schedule shall become a BA + 36 or MA column and that the DR become an MA + 36 or DR column. The record as now before the Commission does not show the placement of teachers on a schedule giving effect to this change nor the resulting staff index factor. The Commission will therefore require that within seven days following the entry of this Order the Defendant submit, as a post-hearing exhibit for receipt into evidence, and serve on the Plaintiff, a salary schedule showing the placement of teachers after giving effect to the substitutions of BA + 36 or MA column and the MA + 36 column together with the resulting staff index factor which according to the evidence will affect 17 teachers. The data shall be furnished as of December 18, 1981. Any objections by the Plaintiff to matters reflected in the Defendant's exhibit shall be submitted to the Commission and served not later than seven days following service of the Defendant's exhibit together with any exhibits offered by the Plaintiff in refutation or amplification of Defendant's exhibit. If no such objection is made or if the objection can be resolved from data furnished, the Commission will by supplemental Order fix a base salary. If objection is made which cannot be resolved from the data furnished, a further hearing will be held.


1. That for the 1981-1982 school contract year the Defendant District shall pay 100% of the cost of its teacher's present long term disability coverage and to the extent that a teacher has paid 50% of such cost, the District shall reimburse the teacher for such payment.

2. That on the Defendant District's salary schedule for the 1981-1982 school contract year, the MA educational column shall become a BA + 36 hours or MA column and the DR educational column shall become a MA + 36 hours or DR column. Otherwise all features of the District's schedule and its administration shall remain the same.

3. That the teachers' base salary for the 1981-1982 school contract year shall be determined by further Order of the Commission on the basis of a total standard salary schedule compensation of $11,436,942 and data which shall be furnished to the Commission in accordance with the foregoing Opinion.

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

Filed March 26, 1982