HomeMy WebLinkAbout06. Receive update on MS/CG arbitrationE'a
Central Contra Costa Sanitary District
January 22, 2014
TO: HUMAN RESOURCES COMMITTEE
VIA: ROGER S. BAILEY, GENERAL MANAGER
FROM: TEJI O'MALLEY, HUMAN RESOURCES MANAGE j \�P
SUBJECT: ARBITRATION DECISION ON MS /CG CONTRACT DISPUTE
The purpose of this memo is to provide the Board with an update regarding the
arbitration between the District and Management Support/Confidential Group
(MS /CG) bargaining unit.
In summary, during the 2009 negotiations, the District had created a Tier III for
retiree health benefits. Those employees hired after June 30, 2009 were responsible
for paying 50% of the cost of the retiree medical benefits immediately upon
retirement. However, during the 2012 negotiations, a typographical error had been
made that inadvertently changed the date of June 30, 2009 to April 18, 2012. This
error had not been caught until after the tentative agreements had been approved by
the MS /CG membership and the Board of Directors.
The District and the MS /CG bargaining unit agreed to binding arbitration in order to
bring resolution to this discrepancy. The Arbitrator has rendered his decision and
has ruled in favor of the District. He determined that the District demonstrated that a
mutual mistake of fact had occurred and that date will remain June 30, 2009 in the
MS /CG Memorandum of Understanding.
Attached is the decision, in its entirety, and I will be available to answer any
questions during the meeting.
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Arbitrator and Mediator
1999 Harrison Street, Suite 1400
Oakland, CA 94612
(510) 465 -5000
IN ARBITRATION PROCEEDINGS PURSUANT TO
AGREEMENT BETWEEN THE PARTIES
In the Matter of a Controversy Between: )
)
)
CONTRA COSTA COUNTY MANAGEMENT )
SUPPORT /CONFIDENTIA,L GROUP }
)
and, )
CONTRA COSTA COUNTY SANITARY DISTRICT }
(Re: Tier III Contract Dispute] )
Arbitrator's
File No. 13- 185 -LA
ARBITRATION
OPT ION_ AND AWARD
(January 14, 2014)
Appearan l; Andrew H. Baker (Beeson, Tayer & Bodine), attorney
for the Contra Costa County Management Support /Confidential
Group; W. Daniel Clinton (Hanson Bridgett), attorney for Contra
Costa County Sanitary District.
INTRODUCTION
This arbitration between the Contra Costa County Sanitary
District and its Management Support /Confidential Group, an
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employee association, arises under a submission agreement. At
issue is a dispute that emerged from successor negotiations in
2012 for a new Memorandum of Understanding (MOU). The dispute
involves the applicable hire date under the MOU for Tier III
employees to pay 50 percent of the premium cost for retiree
medical coverage. The District maintains that the applicable
date should be after June 30, 2009. In contrast, the Association
maintains -that the applicable date should be April 18, 2012.
The undersigned was selected by the parties to conduct a
hearing, and to render a final. and binding award. A hearing was
held on October 4 and 14, 2013 in Concord and Oakland,
California. At the hearing, the parties were afforded an
opportunity to examine and cross- examine witnesses, and to
introduce relevant documentary evidence. The dispute was deemed
submitted for decision upon receipt of the final posthearing
brief on December 17, 2013.
ISSUES
The parties agreed upon the following statement of the
issues to be resolved:
Whether there has been a mistake of fact in the
negotiation of the applicable hire date for the
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requirement that employees in Tier III pay fifty
percent (50 %) of the premium cost for the retiree
medical plan.
The parties have agreed to submit this issue to
arbitration. In making his or her decision, the
Arbitrator will be asked to consider all relevant facts
and any applicable case law on the legal issue of
mutual mistake of fact and /or unilateral mistake of
fact in the context of collective bargaining
(hereinafter referred to "mistake of fact ").
Should the Arbitrator determine that the District has
met the burden of establishing that a mistake of fact
occurred with respect to this issue, the parties agree
that the remedy will be that the date of June 30, 2009,
will be inserted into ,Article V of the MOU as the
applicable hire date for the requirement for Tier III
employees to pay fifty percent (50%) of the cost for
retiree medical coverage.
Should the Arbitrator determine that the District has
not met its burden of establishing that a mistake of
fact occurred with respect to this issue, the parties
agree that the remedy shall be that the date of .April
18, 2012, will be inserted into Article V of the MOU as
the applicable hire date for the requirement for Fier
IIZ employees to pay fifty percent (50%) of the cost
for retiree medical coverage. (Jt. Exh. 1; Tr. 6 -8.)
FACTUAL ANALYSIS
1. tmaloyment Setting
This case concerns negotiations for a successor MOU for
200912. The District's negotiating team included Eric
Kreisberg, an attorney, serving as its chief negotiator. (Tr.
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97 -98.) The bargaining team also included Christopher Ko, then
the labor relations director for the District, and Teji O'Malley,
who took over for Mr. Ko when he left the District in summer
2012. (Tr. 160 -161.) While with the District, Mr. Ko had
responsibility as the notetaker for the management team.
The Association's negotiating team included Tim potter, its
chief negotiator. (Tr. 195 -196.) Dana Lawson, the Association's
president, also was on the team. (Tr. 255.) No single
individual was responsible for notes for the Association,
although Mr. Potter took some notes as negotiations proceeded.
(Tr. 2o9 -210.)
Negotiations between the District and the Association apply
to 80 or so employees in the bargaining unit. (Tr. 183 -184.)
Historically, bargaining often has tracked key terms that have
been negotiated with the District's largest bargaining; that is,
for Public Employee Union Local One, with about 150 employees.
(Also see Tr. 51, 79 -80, 186.)
2. Negotiations in 2QQ2
Xn 2009, bargaining for a successor to the MOU for 2003 -09
included adoption by the parties of a Tier III for retiree
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medical and dental benefits.
(it. Exh. 3; Tx. 51 -52, 57 -58.)
Previously, the District and the Association had developed two
other tiers for retiree benefits: Tier I for employees hired
prior to 1985, and Tier II for employees hired after 1985,
In the 2009 negotiations, prompted by the District's major
focus on reducing unfunded liability for retire benefits, the
parties agreed on a new Tier 111, effective in 2009. (Tr. 62-
64.) Toward the end of this round of bargaining, the District
offered to improve wages in exchange for Association concessions
on medical and dental benefits. (Tr. 78 -81, 89 -90; Dist. Exhs.
17 -18.) Among other provisions, the agreement stated that the
District would pay 50 percent for the lowest cost medical. and
dental plans for the new Tier III employees hared after June 30,
2009. The agreement took effect April 18, 2009, with a three -
year duration.
Although the parties in 2009 agreed on the 50 percent
payment provision, after negotiations with Local One were
completed, the District advised the Association that, as part of
the concession package with Local One, the District intended to
apply to the Association the outcome it reached with Local. one as
to retiree dental benefits; that is, a 100 percent rate for
dental benefits rather than the 50 percent rate that had been
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negotiated with the Association. (Tr. 91 -93.)
Medical benefits
at the new 50 percent rate for Tier III employees were unaffected
for both bargaining units, and the final MOU language for the
Association was not changed. This result is set forth in a
benefits booklet available to employees. (Tr. 101 -103; Dist.
Exh. 24, p. 15.)
,According to the District, it expected to restore the 50
percent rate for dental benefits in 2012 upon expiration of the
just - negotiated MOU. A letter in July 2009 from the District's
general manager, James Kelly, sent to the Association's
president, Paul Louis, memorialized this intent, as follows:
As part of the recent negotiations for a new Memorandum
of Understanding for the Management Support/
Confidential Group, the District and MS /CG agreed on a
new "Tier III" for retiree health benefits covering
employees hired on or after July 1, 2009. One aspect
of the Tier III program is that the District will
contribute 50% of the premiums of the lowest cost
dental plan for the eligible retiree and his or her
spouse from the time of retirement. This is reflected
in the MOU at Article XXII - Employee Benefits, in the
section called "Continuance of Benefit Plan."
As a result of the negotiations process with the Local
One bargaining unit, Local One's "Tier III" benefits
will be slightly different for the next three years.
Employees hired on or after July 1, 2009 who meet
eligibility requirements for retiree health benefits
will be eligible for 100% District paid dental benefits
from the time of retirement until age 65, at which
point they will contribute 50% of premiums. This will
remain in effect until negotiations for the next MOU
with Local One, which will occur in 2012.
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To be consistent, the District intends to treat any new
employees hired into the MS /CG bargaining unit between
3uly 1, 2009 and April 17, 2012 the same as Local One
new hires as it relates to retiree dental benefits. A
person hired between July 1, 2009 and April 17, 2012
who retires from the District and is eligible for
retiree health benefits will be eligible for 100%
District paid dental benefits from the time of
retirement until age 65, at which point they will
contribute 50% of premiums. Beginning on April 18,
2012, for new ,hires on ox after that date, the District
will follow the Tier III language in the MS /CC MOU,
which provides for 50% dental premium contributions
from the time of retirement. (Dist. Exh. 3.)
3. Negotiations in 2012
In bargaining for a successor agreement in 2012, the first
significant meeting on substantive proposals took place on
February 23, 2012. At that session, Mr. Kreisberg introduced the
general approach the District hoped to take, which included a
number of proposals to save funds and to reduce the District's
unfunded liability for retiree benefits. (Tr. 110 -113; Dist.
Exh. 25.)
Mr. Kreisberg's initial comments were followed by the
District's presentation of documents, offered in a single packet.
(Tr. 148 -149, 197 -198.) One of the documents summarized in
abbreviated fashion various proposals, characterized as major and
minor, that were advanced by the District. (Dist. Exh. 4.) A
second document, attached to and referenced by the first, set
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forth in a red -lined fashion the language that would carry out
the intended changes stated in the summary of proposals. For the
minor proposals, the summary supposedly included the same, actual
text as found in the red -lined document.
Witnesses for the parties disagree about whether Mr.
Kreisberg read his summary word -for -word. (Compare, e.g., Tr.
327 with 332.) This difference, however, is not material to a
decision given the relevant documents and other evidence of
bargaining history. In the District's summary, it provided as
follows:
.retiree Dental (Article V)- Apply /effectuate the
language added to the prior MQU for Tier IIi that
states, "For employees hired on or after April 18,
2012, tThe District shall only pay fifty (50 %) of the
premium cost of the lowest cost medical plan
for the retiree and spouse. For Tier III employees
hired on or after Agril 188 -2.QI-,?4 the istrict shall
only-pay-fifty (50 %) percent of the premiuLn cost for
the lowest cos dental. plan:" (Dist. Exh. 4; deletion
and emphasis in original.)
In contrast to the language in the summary, the District's
red -lined text of language it sought for the actual MOU departed
from the summary. (Dist. Exh. 5.) This language was consistent
with the terms stated by the general manager in his 2009 letter
on the subject of dental benefits. (Dist. Exh. 3.) In relevant
part, the red -lined version stated:
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Tier III: Employees hired after June 30, 2009 shall be
covered by medical and dental plans when they retire
from District employment provided that they meet the
"Rule of 70." Under the "Rule of 70," an employee's
age plus years of service with the District at the time
of retirement must total 70, with a minimum requirement
that the employee must be at least age 55 and have at
least ten (10) years of continuous service with the
District at the time of retirement. The District shall
only pay fifty (50 %) percent of the premium cost for
the lowest cost medical acrd— dmt-a -1 plan for the retiree
and spouse. Four Tier III employees hired on or after
Apr9.1 18,2012,.-the District shall ozaly pay fifty (50 %)
percent of the premium cast for the lowest cast dental
plarL. Eligible employees qualified dependents (as
defined by the plan providex) other than the employee's
spouse or domestic partner who were covered as
dependents at the time of retirement also shall be
covered by medical and dental plans with the exception
that the employee shall pay the full cost of medical
coverage for those dependents. Tier III retirees and
dependents ware ineligible for life insurance. (Dist.
Exh, 5, p. 4; deletion and emphasis in original)
in the District's view, the red -lined version accurately
reflects what the District intended in negotiations, and the
summary of the proposal is erroneous. The District urges that an
inadvertent clerical error is at the xoot of the present dispute.
In brief, if the District's perspective is adopted, the effect
would be to restore the terms of the 2009 negotiated agreement,
including the language on Tier III medical premiums, except that
Tier III retiree dental benefits would be paid at the 50 percent
rate for those hired on or after April 18, 2012.
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The Association's team went into a caucus after Mr.
Kreisberg offered his introductory comments for the District.
(Tr. 203, 263 -264,) According to Association witnesses,
following the caucus, its negotiators objected to the broad range
of financial concessions sought by the District. Mx. Potter was
aware of concessions sought in 2009, although he had not been on
the Association's bargaining team that year, and he objected to
further concessions sought by the District in 2012, (Tr. 123-
124, 212, 239 --240; also see Dist. Exh. 27, No. 3.) In Mr.
Potter's words, the Association's negotiators were "shell
shocked." (Tr.. 204,)
As recalled by Mr.. Potter and Ms. Lawson, after the caucus,
the Association also raised a question about the portion of the
summary proposal titled "Retiree Dental" by inquiring why the
District was saying in two sentences what could be said in one.
(Tr. 203 -204, 223, 228, 263 -265.) They testified that Mr.
Kreisberg, or perhaps Mr. Ko, responded that the sentence
structure was intended to align the Association with the outcome
for Local One. Ms. Lawson took this to mean that the District
was providing a "sweetener" to get a deal with Local One. (Tr.
271 -272.)
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On the documents at issue, the Association's witnesses
concede that they did not notice the difference with the red-
lined text of actual, proposed contract language put forward in
District Exh. 5. (Tr. 222 -223.) Mr. Potter recalled only
noticing the difference in March 2013, after the District alerted
the Association. (Tr. 270 -271.) Mr. Potter was aware, however,
that the contract language for the Association on retiree dental
differed from the language agreed to by Local One in 2009. (Tr.
218 -219.)
District witnesses dispute that any questions were raised by
the Association on the subject of retiree dental payments,
whether concerning two sentences or any other aspect of the
proposal. (Tr. 311 -312, 328 -329.) Similarly, Association
witnesses do not recall Mr. Kreisberg or Mr. Ko explaining that
it was the District's intent to restore the dental benefit
language from 2009. (Tr. 114 -115, 149 -152, 298.) The
differences in witness recollection on whether limited
questioning took place or explanations were provided do not need
'to be resolved in deciding this case because more probative
evidence is decisive.
Several subsequent meetings were held by the parties
throughout the spring, summer, and fall of 2012. During these
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meetings, although the District continued to press for
concessions, no further mention was made about retiree medical or
dental benefits, except for the Association seeking to clarify
that spousal dental coverage would be included. (Tr. 129 -1301
158 -159.) The District agreed and added spousal coverage. (See,
e.g., Dist. Exh. 29, p. 4.) In doing so, the District continued
to use the summarizing text and the title "Retiree Dental," then
and latex, that is at issue in this proceeding referring to
medical coverage. (Also see Dist. Exhs. 31, 33.)
At no point in 2012 did the parties discuss any intention to
change the terms of the 2009 agreement on retiree medical
payments. (Tr. 115.) Other concessions, however, were
identified in communications. (Dist. Exh. 43; Tr. 243 -245.) Mr.
Potter knew that a District Tier III payment to April 2012 of 100
percent for retiree medical, as stated in the summary, would have
been a major concession. (Tr. 224.)
Eventually, in spring and summer 2012, tentative agreements
were prepared and signed. The tentative agreement for Tier III
benefits contains the language that was in the proposed summary
offered in February, along with the added spouse coverage, but
without reference to the previous red -lined document containing
the actual text proposed for the MOU. (Assn. Exh. 1.) The
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tentative
agreement, as before,
was titled "Retiree
Dental," and
retained the introductory phrasing "Apply /effectuate the language
added to the prior MOU for Tier ITT retiree dental...." The
District acknowledges that the text of the tentative agreement
perpetuates the mistake that the District maintains initially was
made in its February 2012 proposal summary.
For its part, Local One negotiated a change with the
District to adjust the retiree dental date in the labor agreement
to April 18, 2012, consistent with the change described in Mr.
Kelly's letter in July 2009. (Dist. Exhs. 3, 6.)
4. The Present Dispute
Following the tentative agreements and further efforts to
resolve differences between the parties, in fall 2012 the parties
reached what they believed was a new labor agreement. Although
there was a delay in approval and ratification of the final
agreement, it was presented to the respective governing bodies in
the form of the tentative agreements, and both sides ultimately
approved it. (Tr. 119 -180.) Apart from a packet of tentative
agreements presented to Association members, which included the
disputed language on Tier III benefits, the Association has not
offered any other evidence of Association communications or
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discussion with its membership in the ratification process.
207 -208.)
(Tr.
In early December 20120 as Ms. O'Malley was preparing the
final, complete MOU document, she realized, at least in the
District's view, that there was a language error regarding Tier
III benefits. (Tr. 180 -181.) At that point, the District sought
the Association's cooperation to correct what it saw as a mistake
in the tentative agreement on the subject, but the Association
disagreed and stood firm on the existing language. (Dist. Exh.
45; Tr. 182 -183.) The District's position responding to the
Association's objection was spelled out by Mr. Kreisberg in an
email communication on the subject:
As you'll notice, the point of editing what had been a
single sentence in the prior MOU into two sentences was
that there was going to be no change in retiree medical
but we were agreeing to a separate sentence with a
later effective date (April 18, 2012) for retiree
dental. There was no reason to move retiree dental to
a separate sentence if a new April 18, 2012 date was
going to apply to both. As we stated at the table, the
District's intent was not to make any changes on
retiree medical. Rather it was to effectuate the
provision on retiree dental that already existed but,
as we stated at the table, make the retiree dental
effective date April 18, 2012. (Again, I acknowledge
the drafting error that uses the April 18, 2012 date
twice and then was just repeated during the course of
the negotiations.)
As for your statement that you do not see how you were
expected to perceive the mistake, I would think it
would have been because the wording was contrary to
what we discussed at the table, and contrary to all of
the philosophical statements and District proposals on
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retiree health during the negotiations which were
attempting to reduce the District's obligation, not
increase it. Plus, there never was a word from the
District on what would have been a quite odd offer, an
offer to increase retiree health for some without
comment and contrary to our prior statements. And, of
course, there was no comment or question from MS /CG as
to the reason for what must have been very surprising
language - language indicating that the District, out
of the blue and without explanation, was proposing to
retroactively enhance the retiree medical benefit the
District had tried so hard in the prior negotiations to
constrain. (Dist. Exh. 45.)
At the arbitration, Association witnesses stated that they
were unaware of the July 2009 letter from Mr. Kelly to Mr. Louis
until it was brought to their attention in early 2013, following
the District's discovery of the reported error. (Tr. 196, 257-
258.) Upon notice of the correspondence, Ms. Lawson checked the
Associations office records, but could not locate the letter.
(Tr. 259 -260.) However, the Association has not followed up with
Mr. Louis, now retired, to discuss the matter. (Tr. 217 -218,
278-279.)
The District estimates that its fiscal exposure for retiree
medical payments for 11 employees hired between 2009 and 2012 who
later retire is a cumulative amount of about $1.2 million, not
including the potential benefits for Local One employees who
might in the future transfer into the Association bargaining
unit. (Tx. 185 -187, 189 -190, 276 -278.) The District seeks to
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reform the tentative MOU language to eliminate this financial
exposure.
DISCUSSION
The District contends that the 2012 successor contract
negotiations involved a mutual mistake of fact by both parties,
or, alternatively, a unilateral mistake on its part, as to the
applicable hire date for requiring Tier III employees to pay 50
percent of the premium cost for retiree medical benefits. For
the District, the proper date should be on or after July 1, 2009,
rather than April 18, 2012. The District argues that neither
party intended to adopt a 2012 hire date for retiree medical
benefits, and neither was aware of the mistake. Further, even if
the Association was conscious of the 2012 date in the original.
summary proposal, and after in the tentative agreement, the
Association should have known of the error based on the past
bargaining history and the documents relied upon in 2009 and
2012. The District argues that these documents, when viewed as a
whole, demonstrate the distinction carried over from the 2009 MOU
between retiree medical benefits and dental benefits.
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The Association counters that the District has not sustained
its burden of showing either a. mutual mistake of fact or a
justification to be excused from its own unilateral mistake. As
viewed by the Association, the District bears responsibility for
preparing the disputed document, and, ultimately, for signing off
on a tentative agreement ,months later, and then approving it.
The District did so, as the Association emphasizes, despite
multiple opportunities to see and correct the reported error, and
despite its own legal duty to be accurate in a matter involving
substantial financial. cost. Given the absence of evidence to
show that the Association knew or should have known of the error,
and the importance of preserving the integrity of the give -and-
take of a collective bargaining process that lasted for several
months, the ,Association argues that a 2012 hire date for Tier III
medical premium payments should be adopted.
In advancing the positions of the parties, they have cited
several decisions, including labor law precedent under federal
and California law -' This body of law, by any measure, places a
heavy burden on the party seeking relief for a mistake to
'See, e.g. Donovan v. RRL Corp. (2001) 26 Cal.4th 261;
Windward Teachers Assn. (2006) 346 NLRB 1148; North Hills Office
Services (2005) 344 NLRB 523; Health Care Workers Local 250
(Trinity House) (2004) 341 NLRB 1034; Apache Powder Company
(1976) 223 NLRB 191; San Diegro Unieled .School Dist. (2007) PERB
Dec. No. 1883.
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demonstrate an error in negotiations leading to an approved
contract. This is particularly so in cases involving unilateral
mistakes. As the California Supreme Court stated in Donovan v.
RRL Corp.:
Where the plaintiff has no reason to know of and does
not cause the defendant's unilateral mistake of fact,
the defendant must establish the following facts to
obtain rescission of the contract: (1) the defendant
made a mistake regarding a basic assumption upon which
the defendant made the contract; (2) the mistake has a
material effect upon the agreed exchange of
performances that is adverse to the defendant; (3) the
defendant does not bear the risk of mistake; and (4)
the effect of the mistake is such that enforcement of
the contract would be unconscionable. (Donovan v. RRL
Corp., supra, 26 Ca1.4th at 282.)
In reviewing mistake cases, California's Public Employment
Relations Board in the San Diego Unified decision emphasized that
the alleged mistake cannot be caused by the neglect of a legal
duty, and that, unlike a commercial transaction, this must be
understood in the context of the good faith duties each side
bears in a collective bargaining relationship. This means, in
the PERB's view, that the failure to exercise ordinary diligence
in preparing for and participating in negotiations can be a
factor weighing again equitable relief in a specific case.2
After considering this precedent, for the reasons that follow, it
2San Diego Unified, supra, PERB Dec. No. 1883, pp. 5 -6.
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is concluded that the language proposed by the District should be
adopted for the successor MOU.
First, the Association's construction of the language,
applying the tentative agreement as written, is contrary to the
stated goals of the District in the context of the parties'
bargaining and past negotiating history. This background was
understood by the ,Association as shown by its objection from the
outset in talks in 2012 to broad take -away proposals designed to
reduce the District's unfunded retiree liability. In this
context, as was pointed out by Mr. Kreisberg in December 2012,
the Association's position in this proceeding would have the
undersigned adopt a major concession by the District without
either party mentioning that fact, and contrary to the trade -off
for a wage increase that was important in bargaining in 2009.
Since this "give back" departed from the express terms of the
prior contract, bore a substantial potential cost to the
District, and was never identified as a concession, the
Association's silence on this change, and its failure to identify
anything it gave up to get it, supports a conclusion contrary to
its claim.
Second, the conflict between the original proposal summary,
and the later tentative agreement, and the District's red -lined
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text, reflects a difference that the Association knew or should
have known based on the documents that were presented. On this
difference, there is a clear inconsistency between the documents,
with the red -lined text representing language in keeping with the
previous agreement from 2009. Any doubt about this conclusion is
answered by the relevant text in the summary, which is titled,
"Retiree Dental," not medical, and by words that express its
intent to "'Apply /effectuate language added 'to the prior MOU."
Simply stated, there was no document or testimony offered by
either party that the subject of retiree medical benefits was
being reopened in the 2012 negotiations. In this setting, the
parties mistakenly approved a tentative agreement on an outcome
never discussed or agreed upon, but one that was based on a
clerical error.
To counter this point, the Association's witnesses stated
that a question was asked-after a caucus about the sentence
structure of the District's summary proposal, and assurances were
given by the District that it was drafted to align with the
agreement with Local One. This reported explanation, however,
does not answer why two sentences were used rather than one,
especially in the absence of any "sweetener" to the Association,
as Ms. Lawson assumed was the rationale for Local One. Instead,
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by reviewing the document carefully enough to have a question
about the sentence structure, the Association could have explored
the subject further by reviewing or by asking about the attached
document, or by probing to understand what alignment meant. By
failing to do any of these things, the Association's reliance on
the latex tentative agreement is weakened.
This conclusion is reinforced by the Association's failure
to reach out to Mr. Louis once the July 2009 correspondence was
brought to the attention of the Association's 2012 bargaining
team after the District's discovery of the reported error. Mr.
Louis, as a former Association president and its agent at the
time, accepted a contract modification in practice for the 2009-
X2 MOU, and presumably knew exactly what to expect in terms of a
dental cost correction to be made in 2012. The Association
objects to relying on the 2009 letter as evidence of the intent
of the parties in 2012, but this argument is misplaced. A change
in the composition of the Association bargaining team three years
later cannot overcome the legal significance of the 2009 letter
as a negotiating roadmap. Moreover, as a practical matter, the
Association's failure to address the issue with Ms. Louis once
advised of the 2009 letter is tantamount to disregarding relevant
bargaining history.
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Assessing these circumstances together, the facts in this
proceeding are similar to those in the Apache Powder case. In
that case, the National Labor Relations Board decided that there
was insufficient evidence showing an intent by the parties to
change the "break date" when they were negotiating a modification
of the formula multiplier used for pensions. As the Board
observed, the mistake in identifying the break year was obvious
and should have put the other party on notice of the error.
Third, the financial impact of the District's error is
significant, in the likely range of $1.2 million or more going
forward, yet there is no evidence that such an extensive benefit
in the Association's favor was preceded by any discussion about
the value of the concession supposedly made by the Distract.
Understandably, the District asks why the employer would provide
the least senior employees in the bargaining unit this enhanced
retirement benefit while still seeking concessions from more
senior employees?
Adding weight to this conclusion, there is no evidence from
the Association's ratification process that, apart from
transmitting a tentative agreement, one of several, it made any
reference to or relied upon a 50 percent medical payment for Tier
AApache Powder, supra, n. 2.
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rJ1 114 12b14 11 :20 5102738746 BARRY WINOGRAD PAGE 26/27
III retirees beginning in 2012- Indeed, the impact of the
Association's view is to increase ufifunded liability, not to
reduce it. Presumably, if the Association understood that the
District was increasing benefits previously taken away, this
point would have been emphasized to the membership to demonstrate.
the success of the Association's bargaining effort.
In sum, the District has demonstrated that there was a
mutual mistake as to a shared intent to change the Tier IIT
medical cost provision from 2009 as stated in the 2012 summary
proposal and tentative agreement. rurthex, even if the mistake
was solely unilateral on the District's part, it should be
relieved of an error that the Association should have known
about, and on which it cannot justifiably rely.
AWARD
Based on the testimony and documentary evidence, and the
findings and conclusions set forth above, the undersigned renders
the following Award: The District's proposed language for the
successor bargaining agreement will be adopted for the MOU
13- 185.CCSD- MSCG.oecision 23
01/14/2014 13:12 5102738746 BARRY WINOGRAD PAGE 03103
requiring Tier III employees to pay 50 percent of the premium
cost for retiree medical coverage for employees hired after June
50, 2009.
Date: January 14, 2014
13- 185.CCSD- MSCG.neeision 24
AA� "",Y"/
BARRY W1 OGRAD
Arbitrator