OP-ED

Binding arbitration egregious, expensive labor regulation

By OSCAR K. SHELTON
Posted 1/21/20

By OSCAR K. SHELTON As a former personnel director for the City of Warwick, I read with great interest Ken Block's commentary on the ratification and adoption of union contracts in Warwick that appeared in the Providence Journal on January 5, 2020. For

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OP-ED

Binding arbitration egregious, expensive labor regulation

Posted

As a former personnel director for the City of Warwick, I read with great interest Ken Block’s commentary on the ratification and adoption of union contracts in Warwick that appeared in the Providence Journal on January 5, 2020. For the most part, I agree with his assessment, but there are a couple of major aspects that he and many others miss – state mandated binding contract arbitration for police and fire union employees being one (a provision that is generally not applicable to teacher and municipal employee contracts). This stipulation is one of the most egregious, expensive and taxpayer unfriendly labor regulations issued by our legislature.

Because of the binding arbitration requirement, people like me who prepare initial contract proposals and who actually negotiate the contracts are likely to be less aggressive toward the unions in order to stay out of binding arbitration. This is because a municipality will most likely lose in contract arbitration. So-called “neutral arbitrators” often look at a municipality as an entity with deep pockets with the almost unlimited ability to tax its residents and will give the unions pretty much all they ask for. Furthermore, the unions are aware that contract comparability between communities is, by law, a major element in an arbitrator’s decision. If one community has a contract provision that is favorable to the union, during negotiations the union will say – we want that clause, too. The arbitrator usually agrees. The union’s statewide organizations have this ploy down to a science.

During negotiations a union might ask for a single provision, such as a large increase in the number of paid holidays, and they would be willing to sacrifice pay increases and other perks for that one contract period only. Management looks at the union’s proposal, which seems reasonable, and accepts the union’s request. This is done a few more times in a few more communities. In a couple of years that provision will be in three or four contracts in the state. Now it becomes a comparability issue and, eventually, all the contracts in the state will contain it. The provision, once considered radical and unaffordable, has now become the standard.

But, perhaps the most notable state legislation benefiting police and fire unions are the provisions under Rhode Island law, Chapter 45-19, which, coupled with certain contract clauses, require that Warwick must presume (and, in some cases, conclusively presume) that employees who contract heart disease, cancer or hypertension are job-related illnesses, whether the illness occurred on the job or not. This then entitles such employees to a mandatory tax-free disability pension at 66 percent of pay for life – as well as months, if not years of full time tax-free pay while waiting for their retirement request to be processed. Having had access to the records that supposedly supported these disability pensions, I can say that at least some were very questionable at best. However, under state law, the city’s Board of Public Safety had no choice but to grant the pension requests. These questionable “disability pensions” continue to dramatically drive up the city’s pension liabilities and are one of the causes of the large unfunded liabilities in both the police and fire pension plans.

The police and fire unions contribute generously to the state politicians who are enacting anti-taxpayer legislation like these two examples (there are more, as well). It will be very difficult to change them at this point, but an effort needs to be made.  Leaders of the large cities and towns should meet with their local state legislators and explain to them how much their legislative endeavors are costing the local taxpayers and voters (the answer is, hundreds of millions of dollars). Taxpayers need to contact their legislators and tell them how they feel about these abuses. And, if the legislators don’t act in the taxpayers’ best interest, then vote for someone else who will.

Oscar K. Shelton, former City of Warwick personnel director, retired in 2013.

Comments

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  • Thecaptain

    All this from on e of the chief architects of the demise of Warwick and the reign of the public sector unions.

    Wednesday, January 22, 2020 Report this

  • Scal1024

    I'm so happy Mr. Shelton found his voice after decades of collecting the same benefits he's now deriding. I'm sure the City will more than appreciate the personal check he'll be giving the pension system. If it's so easy for Mr. Shelton to cast doubt on other public employees, I'm sure he'll have no problem being 1st in line to give some of the $ back. I won't hold my breath! Writing an Op-Ed years later is a total fraud move.

    Friday, January 24, 2020 Report this

  • SeniorInsider

    Fed up and Scal1024 miss the entire point of Shelton's truthful assessment of the effects of binding arbitration on cities and towns. At no time does he deride earned retirement benefits for any class of municipal employees! However what he is 100% correct about is that binding arbitration has given police and firefighters an unbelievable advantage in negotiations and phenomenal increases, since 1962 and 1963, in salaries and fringe benefits over their non-public safety municipal co-workers because the arbitration system is rigged, just as Shelton points out, in favor of unions whipsawing benefits that other unions have. The best example is the firefighter's cancer statute which FORNUNATELY our Supreme court just ruled was invalid as to conclusive presumption of any type of cancer being 100% job related. Job related cancer is definitely possible but if you smoke a pack od Marlboro's a day for more than 15 years and have lung cancer--DUH--it's not a job related disability!!

    Friday, January 24, 2020 Report this