6 CIR 431 (1983)


An Unincorporated Association, |
Petitioner, |
Subdivision, |
Respondent. |


For the Petitioner: Mark D. McGuire

Crosby, Guenzel, Davis, Kessner & Kuester

400 Lincoln Benefit Building

Lincoln, Nebraska

For the Respondent: Kelley Baker

Nelson & Harding

P.O. Box 82028

Lincoln, Nebraska

Before: Judges Kratz, Berkheimer and Davis.


The Clarks Education Association (Association) requests the Commission of Industrial Relations to determine wages and conditions of employment for the Clarks Public School teachers for the 1982-83 school contract year. The Respondent, School District Number 11 of Merrick County (District), is a Class II school district employing 21 teachers (19,566 full-time equivalent) and had a student enrollment for the 1981-82 school year of 218 students.

The parties agreed in their pre-trial stipulation that "[e]xcept for base salary, the terms and conditions of employment for the teachers employed by the School District for the 1982-83 contract year shall be as previously established by the agreements made by the parties." [1] The Commission has jurisdiction of the parties and of the subject matter.

1. Statute.

The controlling statute is Section 48-818, which states:

"The findings and order or orders may establish or alter the scale of wages, hours of labor, or conditions of employment, or any one or more of the same. In making such findings and order or orders, 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. In establishing wage rates the Commission shall take into consideration the overall compensation presently received by the employees, having regard not only to wages for time actually worked but also to wages for time not worked, including vacations, holidays, and other excused time, and all benefits received, including insurance and pensions, and the continuity and stability of employment enjoyed by the employees. Any order or orders entered may be modified on the commission's own motion or on application by any of the parties affected, but only upon a showing of a change in the conditions from those prevailing at the time the original order was entered."

2. Comparable School Districts.

The Association and the School District both presented comparisons with the following five school districts: Palmer, Polk, Rising City, St. Edward, and Silver Creek. The Association also presented comparisons with the school districts of Exeter, Fullerton, Genoa, Osceola, and Stromsburg. The District, in addition, presented comparisons with the school districts of Humphrey, Cedar Rapids, Marquette, Wolbach, and Greeley.

The parties pre-trial stipulations included the following: [2]

"The work skill and working conditions of the teachers employed by the school District and the teachers employed at the compared to School Districts on Association's Exhibit 4 and School Districts Exhibit 8 are similar, and satisfy the standards set forth in Section 48-818 to permit a comparison of terms and conditions of employment if included in the array of compared to School Districts by the CIR. The CIR can, in selecting the School Districts to which comparisons will be made for the purpose of determining prevalency in terms and conditions of employment, apply its previously announced criteria for limiting the number of comparisons to be made."

The evidence in this case as to the compared to school districts - in addition to the afore-quoted stipulation as to work, skill, and working conditions - consists of size and ranking of the districts by student enrollment, the miles distance from Clarks, athletic conference membership, and contacts athletically and non-athletically with Clarks. Table 1 sets out most of the above information about the school districts proposed by the parties.

In selecting an array of school districts for the purpose of comparison in arriving at comparable and prevalent wage rates and conditions of employment, the Commission has considered, among other factors, the following: student enrollment, geographic proximity, athletic conference membership, and community of interest demonstrated by athletic, scholastic and administrative contacts. In considering the evidence as to these factors, the Commission determines that a suitable array for the purposes of Section 48-818 should consist of the following school districts: Fullerton, Genoa, Marquette, Osceola, Palmer, Polk, Rising City, St. Edward, Silver Creek, and Stromsburg. The schools selected are similar to Clarks in student enrollment, are all within 33 highway miles of Clarks, and they have a significant community of interest with Clarks, as demonstrated by their athletic and nonathletic contacts. Only Marquette and Rising City are non-conference array members, but the evidence shows that their community of interest with Clarks is comparable to the conference members.

We decline to include the non-conference schools of Cedar Rapids, Exeter, Greeley, Humphrey and Wolbach for the reason that the evidence shows that their community of interest with Clarks, demonstrated by athletic as well as non-athletic contacts, is not as significant as the community of interest demonstrated by those school districts selected for comparison by the Commission.

3. Base Salary Determination.

The parties agreed that the only issue for resolution by the Commission is the base salary amount for Clarks' teachers. In establishing a base salary amount, Section 48-818 requires that the Commission "take into consideration the overall compensation presently received by the employees having regard to...all benefits received including insurance..." The parties are in dispute as to the application of health insurance to"overall compensation." Clarks insurance carrier is Guardian Insurance, while the compared to districts use Blue Cross/Blue Shield. The District argues that the Clarks insurance carrier provides more than comparable insurance coverage at less cost, and the Commission, therefore, should disregard the Association's computations regarding fringe benefits because that would penalize Clarks for obtaining comparable insurance coverage at a reduced cost. The District furthermore proposes that the Commission adjust the total salary figures so as to take into account those districts that contribute less than the full premium for health insurance and those districts that contribute the full premium for health insurance and to other insurance benefits, i.e., life, long term disability, and dental.

The Association, however, contends that the District has not shown its insurance coverage is comparable to the prevalent. In this regard, it points to the District's insurance expert who testified that his insurance comparison was not based on an actual comparison of the contracts from each insurer. The Association further contends that even if the Commission finds the insurance coverage comparable, the District's approach of offsetting the differences in employer contributions to fringe benefits from total salary is "illogical."

The Commission recently considered this same insurance issue in the case of Millard Education Association v. School District of Millard , 5 CIR 425, 436-438 (1982), and concluded as follows:

"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."

The Commission finds that the paid health insurance provided by Clarks is comparable to that provided by the other districts in the array. Our finding is based on the District's exhibits and expert testimony as to the comparability of the various insurance benefits, and it is the comparability of benefits and not of premium cost which is controlling.

The Commission, in determining the base salary amount for Clarks teachers, is considering only the total salary figures arrived at when placing Clarks teachers on the compared to school districts' index salary schedules. The Commission finds that the fringe benefits received at the selected schools are very similar to those at Clarks and any cost variances have an insignificant impact in the determination of base salary. The following Table 2 compares the base salary figures of the compared to school districts and the total salary figures when Clarks teachers are placed on their index salary schedules.

The Commission finds the total standard salary schedule compensation for the Clarks Public Schools teachers for the 1982-1983 contract year should be $295,940.31 which equals a base salary of $11,880 multiplied by the total staff index factor of 24.9108.


1. That the base salary amount for teachers at Clarks Public Schools shall be $11,880, effective at the beginning of the 1982-1983 school contract year.

2. That this Order shall be effective for wages and conditions of employment with respect to the 1982-1983 school contract year. The adjustments resulting from this Order shall be made ratably over the twelve months of the school contract year. The amount due for the portion of the school year already elapsed shall be paid as soon as feasible following the entry of this Order.

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

Filed February 23, 1983

[1] Paragraph (3) of Proposed Stipulations in Report of Pre-Trial Conference.

[2] Paragraph (4) of Proposed Stipulations in Report of Pre-Trial Conference.