November 30, 2017

PERB Taps Mediator As Final Step Before PBA Goes to Arbitration

Union Insists It Won’t Be Boxed in by City, Cites Out-of-Town Deal

PATRICK J. LYNCH: Arbitration, here he comes?
ROBERT W. LINN: ‘Look what union’s seeking.’
MICHAEL BLOOMBERG: Fractious labor relations.

The Patrolmen’s Benevolent Association and the de Blasio administration moved one step closer to contract arbitration Nov. 28 when the state Public Employment Relations Board ruled that an impasse existed in their negotiations and tapped its Assistant Director of Conciliation, William Conley, to serve as a mediator.

If the mediator is unable to narrow the gap between the two sides, he would figure to recommend that the case be submitted to arbitration. It would be unprecedented for the PBA, which has taken that route six times over the last 27 years, four of them during the 18-year tenure of President Patrick J. Lynch, to take that step without a single municipal-union contract in place.

City May Not Sit Pat

And judging by less-recent city bargaining history, that vacuum might not exist by the time an arbitration reached its late stages. Back in 1985, a civilian-union bargaining coalition consisting of District Council 37, Teamsters Local 237 and the United Federation of Teachers, which had negotiated jointly dating back to the aftermath of the 1975 fiscal crisis, broke apart that April, with UFT President Albert Shanker saying he was going to try to satisfy his members’ needs in arbitration.

A short time later, the Koch administration reached contract deals with both DC 37 and Local 237. This gave the city a strategic advantage when it began arbitration proceedings with the UFT that summer by providing a bargaining pattern to serve as a framework. Mr. Shanker argued that inadequate salaries had made it difficult to attract qualified new Teachers and retain experienced ones with more than five years on the job. Mr. Koch’s chief negotiator, Robert W. Linn—who has that same role for Mayor de Blasio—conceded those points, but said that it was essential that the arbitrators limit pay raises for those who were in between those groups on the salary scale to the pattern set by the other civilian unions, and the panel agreed.

Asked about those potential complications after the mediator was named, PBA officials, who spoke conditioned on anonymity, said they were not concerned about changes in circumstances undermining an arbitration case, echoing the charge made by Mr. Lynch that the administration was “stalling.”

‘Shouldn’t Be Relevant’

One official said, “For four sessions, we basically didn’t get an economic offer from the city.”

He said the PBA president had never deliberately waited until another union reached terms that he could use as a jumping-off point before moving toward arbitration, and wasn’t concerned about the city abruptly making a deal with another union in an attempt to gain leverage.

“What happens elsewhere with those unions shouldn’t be relevant or control our bargaining,” the official said. “The city is required to bargain in good faith with us, regardless of what it’s doing with other unions.”

And while Mayors have historically looked to keep the PBA within the framework of a bargaining pattern applied to other city unions, this official argued that this is not the criterion that should guide arbitrators, according to the state Taylor Law.

“We should be compared to those performing comparable services in comparable communities,” he said. In the past, the PBA has made the case that salaries for its members trail both the Metropolitan Transportation Authority and Port Authority Police. This official said that the increased use at Governor Cuomo’s direction of State Troopers within the city has led the union to include them as well in its argument that “we’re anywhere from 20 percent to 30 percent behind those groups.”

Good Pattern Elsewhere

And, he said, police forces in other large cities throughout the nation that have reached contract terms for the time between 2017 and 2019—the period that an arbitration panel would be limited to unless both sides agreed to a longer award—had averaged 6 percent a year.

One area of contention between the two sides in discussing compensation gaps is whether the Variable Supplements Fund—a pension-related benefit that gives officers who retire after at least 20 years on the job $12,000 a year—should be part of the calculation. The two men who have done nearly all the city’s bargaining dating back to 1984, Mr. Linn and James F. Hanley, have insisted it should be. The PBA official said his union believed a more-valid comparison was pegged to pre-retirement earnings.

“We’re looking at 20-year compensation, 25-year compensation,” he said. In that context, he said, there is “a gigantic disparity between New York City and any other group.”

PERB’s declaration of an impasse came less than four months after a five-year pact that the two sides agreed to on Jan. 31 reached its expiration. There has been minimal bargaining between the parties, but Mr. Lynch in mid-October pointed to a city offer that he characterized as “42 months of net-zero raises,” with the PBA expected to produce savings to fund any wage increase, as evidence of the gap that existed.

City: ‘Reasonable Proposal’

At that time, Mr. Linn described the self-funded raises as “a reasonable proposal, in the context of the union still asking for 29-percent raises over two years.” Mr. Lynch has contended that such a raise, which would be unprecedented in the city’s collective-bargaining history, was needed to move his members closer to parity with police officers in neighboring jurisdictions.

Further complicating the talks is the uncertainty about how budget discussions in Washington, D.C., and negotiations on a tax-cut plan sought by President Trump and congressional Republicans that could hit New York particularly hard, may disrupt what has been a strong city economy.

Mr. Lynch made clear in a statement following the ruling impasse that there was no dissipation of the hard feelings incurred by the city’s proposal six weeks earlier of a 4.25-percent raise over a 42-month period that would have its costs covered by the union forsaking its annuity fund and excluding future members from being able to participate in the VSF. The union would also have to produce its share of $2.4 billion in health-care savings the city is seeking from the Municipal Labor Committee on behalf of the city workforce.

“The city has employed all the delaying tactics at its disposal only to offer a package that provided no economic benefits for NYC police officers, who continue to keep the city safe and economically viable with 5,000 fewer police officers than in 2000,” he said.

Cited ‘Uncertain Times’

In a phone interview that afternoon, Mr. Linn responded, “We’ve made an initial economic offer to the PBA that includes meaningful wage increases and reasonable savings programs. Given these very uncertain times and the numerous economic risks the city faces and everything that is taking place now in D.D., we’re asking the PBA to participate in savings programs that would help fund the compensation improvements.”

While some sizable unions have also had their contracts run out recently, including the Uniformed Firefighters Association on the same day as the PBA deal and District Council 37 in September, there was no indication either of those unions was moving toward a successor pact yet.

The January PBA deal essentially brought to conclusion the first round of bargaining during the de Blasio administration. The union had filed for arbitration on May 1, 2014, the same day that pay terms were announced with the United Federation of Teachers that ended a bargaining drought that covered Michael Bloom­berg’s entire third term as Mayor. Because he agreed to terms with the PBA in the summer of 2008 that he was unwilling to extend to the UFT when its contract expired in November 2009, the latter union’s main priority in talks with Mayor de Blasio had been matching those two 4-percent raises the ex-Mayor gave the PBA and ensuring that they would be paid with full retroactivity.

Tradeoff: Cheap Add-On

To satisfy that need without unduly straining the city’s budget, Mr. Linn had insisted that the UFT agree to a record nine-year accord that over its final seven years provided just 10 percent in raises. As soon as Mr. Lynch learned of the terms, he made clear they were unsatisfactory for his members. He did not waver when in December 2014, Mr. Linn agreed to terms with a coalition of uniformed unions, including those representing the NYPD’s higher ranks, that granted 11-percent raises over a seven-year stretch.

But the union’s subsequent bid for what its leader called a “market increase” ended badly in November 2015 when the chairman of a PERB arbitration panel, Howard Edelman, awarded a two-year deal providing annual 1-percent raises, which matched what the other uniformed unions got under the first part of their longer deals.

Extra 2% Decisive

The prospect of being limited to the same terms that the other unions had accepted over the final five years of their agreements—and having the money dribble out long after it had been paid to the members of those other unions—prompted Mr. Lynch to forsake arbitration in favor of the five-year pact reached early this year. But there was an important inducement for his incumbent members that factored into that decision: an extra 2-percent raise above the uniformed pattern whose cost to the city was offset by a stretching of the salary scale for future hires.

That proved an irritant to the other uniformed unions as their members began to grumble about Police Officers who were already on the job getting better raises than their leaders had accepted for them. The coalition filed a lawsuit this summer claiming the de Blasio administration had reneged on its pledge to limit any unions that followed to raises no better than its members had accepted. Its complaint in turn angered Mr. Lynch, who said details in it confirmed his longtime suspicion that Mayors colluded with other uniformed unions in limiting what he could gain on behalf of his members.

The PBA’s history in arbitration has been decidedly mixed. It was thwarted in separate arbitrations with Mayor David Dinkins in 1991 and his successor, Rudy Giuliani, in 1997, with the latter award’s featuring a two-year wage freeze at its outset that led it to be dubbed the “zeroes for heroes” contract. It caused enough anger among the rank and file to propel Mr. Lynch to victory in a 1999 election in which his opposition was three officials who had been part of the PBA board at the time of that arbitration.

Better for Incumbents

A change achieved through state legislation following that disappointing award, under which the union left the jurisdiction of the city Board of Collective Bargaining in favor of PERB, initially seemed to benefit union members.

In 2002, Mr. Bloomberg’s first year in office, the PBA was awarded the same raises as other uniformed unions on a contract that was six months shorter. In subsequent arbitrations in 2005 and 2008, it won raises that exceeded the negotiated patterns for those unions, but in each case that gain came at the expense of future cops, who had their pay scale and benefits significantly reduced to help pay for the higher raises for incumbents.