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IA-03-00
 
In the matter of the arbitration of an interest dispute between: TILLAMOOK COUNTY and TEAMSTERS, LOCAL 223 (Overtime Issue). IA-03-00.
 
JURISDICTION
On January 20, 2000, the undersigned arbitrator was notified that she had been selected to hear an issue in interest arbitration resulting from an impasse in bargaining. The selection of the arbitrator, and the interest arbitration proceedings which followed, were conducted pursuant to the ORS 243.742 et seq.
 
The arbitration hearing was held May 25, 2000, in Portland, Oregon. The union submitted its legal argument orally at the close of the hearing. The record was completed when the employer filed a post hearing brief with the arbitrator on June 22, 2000.
 
PERTINENT STATUTORY LANGUAGE
The State of Oregon regulates interest arbitration procedures through the Oregon Revised Statutes (ORS). ORS 243.746 provides, in part:
 
(4) Where there is no agreement between the parties, or *where there is an agreement but the parties have begun negotiations or discussions looking to a* new agreement or *amendment of the existing agreement, unresolved mandatory subjects submitted to the arbitrator in the parties' last best offer packages shall be decided by the arbitrator. Arbitrators shall base their findings and opinions on these criteria giving first priority to paragraph (a) of this subsection and secondary priority to subsections (b) to (h) of this subsection as follows:*
 
(A) *The interest and welfare of the public.*
 
(b) *The reasonable financial ability of the unit of government to meet the costs of the proposed contract giving due consideration and weight to the other services, provided by, and other priorities of, the unit of government as determined by the governing body.* A reasonable operating reserve against future contingencies, which does not include funds in contemplation of settlement of the labor dispute, shall not be considered as available toward a settlement.
 
(c) The ability of the unit of government to attract and retain qualified personnel at the wage and benefit levels provided.
 
(d) *The overall compensation presently received by the employees,* including direct wage compensation, vacations, holidays and other paid excused time, pensions, insurance benefits and all other direct or indirect monetary benefits received.
 
(e) *Comparison of the overall compensation of other employees performing similar services with the same or other employees in comparable communities.* As used in this paragraph, "comparable" is limited to communities of the same or nearest population range within Oregon. Notwithstanding the provisions of this paragraph, the following additional definitions of "comparable" apply in the situations described as follows:
 
(A) For any city with a population of more than 325,000, "comparable" includes comparison to out-of-state cities of the same or similar size;
 
(B) For counties with a population of more than 400,000, "comparable" includes comparison to out-of-state counties of the same or similar size; and
 
(C) For the State of Oregon, "comparable" includes comparison to other states.
 
(f) The CPI-All Cities Index, commonly known as the cost of living.
 
(g) The stipulations of the parties.
 
(h) Such other factors, consistent with paragraphs (a) to (g) of this subsection as are traditionally taken into consideration in the determination of wages, hours, and other terms and conditions of employment. However, the arbitrator shall not use such other factors, if in the judgment of the arbitrator, the factors in paragraphs (a) to (g) of this subsection provide sufficient evidence for an award.
 
(5) Not more than 30 days after the conclusion of the hearings or such further additional periods to which the parties may agree, *the arbitrator shall select only one of the last best offer packages submitted by the parties* and shall promulgate written findings along with an opinion and order. The opinion and order shall be served on the parties and the board. Service may be personal or by registered or certified mail. The findings, opinion and order shall be based on the criteria prescribed in subsection (4) of this section.
 
(6) *The cost of arbitration shall be borne equally by the parties involved in the dispute.*
[Emphasis by underline (here indicated between **) added.]
 
STATEMENT OF THE ISSUE
The subject of this interest arbitration proceeding is how overtime should be calculated for employees covered by the parties' labor agreement. The parties concluded bargaining regarding the entire labor agreement in December, 1999, except for the overtime issue. The parties mutually agreed to implement the labor agreement and reserve the overtime issue to be decided through interest arbitration.
 
The parties' framed the issue in Article 10 of their current collective bargaining agreement:
 
{ARTICLE 10 -- OVERTIME}
 
{10.1 Rate}
 
Current contract language reflects pre-Senate Bill 750 overtime over eight rules which no longer is required by Oregon law.
 
{UNTIL AN INTEREST ARBITRATOR'S DECISION IS RECEIVED, THE LANGUAGE IN THE PRIOR AGREEMENT WHICH IS THE SAME AS THE UNION PROPOSAL SHALL APPLY AND SHALL BE DEEMED THE UNION'S LAST BEST OFFER AND FINAL OFFER IN 1999 NEGOTIATIONS DURING WHICH ALL OTHER ISSUES WERE RESOLVED.}
 
{A. UNION PROPOSAL REJECTED BY THE COUNTY:} [I.E. CURRENT CONTRACT LANGUAGE]
 
Employees shall be compensated at the rate of one and one-half (1 ½) times their regular rate of pay in either case or compensatory time off for overtime work, but in no event shall such compensation be received twice for the same hours:
 
A) All assigned work in excess of eight (8) hours on any scheduled eight (8) hour work day, or ten (10) if on a 4/10 schedule.
 
B) All assigned work in excess of 40 hours in any one (1) week. Overtime shall be computed to the nearest one-quarter (1/4) hour.
Overtime is a premium pay and the Union and the County agree such premium pay will provided [sic] only as scheduled and/or approved by the County and subject to the conditions provided herein.
 
{B. COUNTY PROPOSAL REJECTED BY THE UNION:}
Employees shall be compensated at the rate of one and one-half (1 ½ ) times their regular rate of pay in either case or compensatory time off for overtime work, but in no event shall such compensation be received twice for the same hours. Overtime constitutes all assigned work in excess of 40 hours in any one (1) week, and shall be computed to the nearest one-quarter (1/4) hour.
 
Overtime is a premium pay and the Union and the County agree such premium pay will provided [sic] only as scheduled and/or approved by the County and subject to the conditions provided herein. Overtime shall be paid in accordance with the FLSA based on hours worked.
 
{C. THE PARTIES AGREE TO SUBMIT THE SINGLE ISSUE OF WHICH PROPOSAL SET FORTH ABOVE SHALL BE IN EFFECT UNDER THIS AGREEMENT TO INTEREST ARBITRATION. MEDIATION IS WAIVED. THE DECISION OF THE ARBITRATOR SHALL TAKE EFFECT ON THE FIRST DAY OF
THE PAY ROLL PERIOD IN WHICH THE DECISION IS RECEIVED.}
((All emphasis by {BOLD AND ITALICS} (indicated by {}) is in the parties contract language. Information [bracketed] is supplied.))
 
BACKGROUND
Tillamook county is a small coastal community with agriculture, lumber, fishing, and recreation as its primary industries. The population of the county is approximately 24,100. The county government is led by a three-member Board of Commissioners. It is composed of several departments, including: Sheriff; justice court; district attorney; county clerk; assessor; treasurer; and surveyor, among others.
 
The county has two union relationships. AFSCME represents an overall bargaining unit of eligible employees in most of the county's departments. The Teamsters, Local 223, represents the following unit:
 
The County recognizes the Union as the sole and exclusive bargaining representative for all employees of the Sheriff's Department, including those in parole and probation classifications, excluding job classifications represented by another labor organization, and excluding supervisors and confidential employees. It is further agreed that positions which are irregular, seasonal, part-time or CETA are excluded from the bargaining unit.
 
Sergeants shall be excluded from the bargaining unit effective February 1, 2000. Any sergeant electing to do so have [sic] the right to voluntarily demote to the Deputy classification without loss of seniority if this election is made before January 1.
 
The bargaining unit includes both strike-permitted and strike-prohibited classifications: Criminal deputy; parole and probation deputy; corrections deputy; law enforcement technician; parole and probation technician; corrections technician; cook; and records clerk. The sheriff's department has a criminal-deputies division, a corrections-jail division, and a parole and probation division.
 
The sherif's department is on a seven day work cycle. The patrol deputies work four 10-hour days.
 
Change in Overtime Statute
 
ORS 279.340 had required that overtime generally be paid for work in excess of 8 hours per day to most public sector employees in Oregon. The pre-1995 daily overtime statute had permitted, for union represented employees, a collective bargaining agreement to "expressly waiv[e] application of ORS 279.340."(1) However, a perception of unfairness existed if a public employer wanted a waiver from its union represented employees, yet still paid the statutory daily overtime to its non-represented employees. Such a waiver, therefore, was rare in public sector labor agreements.
 
In 1995, the statute was revised to eliminate the daily overtime requirement for public sector employees in Oregon. The Local Government Personnel Institute (LGPI) worked to change ORS 279.340. The LGPI supported the change to provide more flexibility for public managers. It claimed that the change would achieve parity with state employees, who had been exempted from the daily overtime rule. The revision was also lobbied as being closer to the federal Fair Labor Standards Act (FLSA) rule for private sector employees. The LGPI advanced that the revision allowed more flexibility for employees. For example, an employee could work late one day to leave early the next day without subjecting the employer to paying overtime and without having the employee use personal or vacation leave.
 
When the daily overtime rule was eliminated in 1995, ORS 279.340(2) was added which permits union represented employees to negotiate for "additional overtime pay requirements with a public employer."
 
Budget Committee
 
The county has a budget committee which is comprised of the three county commissioners and three private citizens. In 1996, the committee issued two edicts: that county employees could receive cost of living allowances (COLA's) that would maintain salaries with the rate of inflation, but would not be pay raises; and that all departments must manage overtime prudently. That year, the county had to lay off 11 employees. The budget committee was concerned that the sheriff's department was paying overtime to department employees while other departments were suffering layoffs.
 
The committee instructed the county's human resources director that its number one goal in negotiations with its unions was parity with the county's private sector community.
 
Negotiations Regarding Overtime
 
For the criminal deputy side of the sherif's department, $40,000 was budgeted for overtime for fiscal year 1999. In ten months, the department spent $58,14 on overtime. For the jail operations, $56,000 was budgeted for overtime and $37,361 was spent in ten months.(2) The employer believed that it had little ability to manage overtime and that there was a perceived abuse. The employer attributed the problem of high overtime costs to the contract language that calls for overtime to be paid for all work in excess of a ten hour day or an assigned forty hour week.
 
The county runs with a minimum staff in the patrol division. Additionally, the employer fills all patrol vacancies so that a deputy is not on patrol alone. Therefore it is usually covering vacancies by calling a patrol deputy in on overtime. The patrol division was one employee under staffed for half of 1999; the vacancy also put a burden on the overtime budget.
Although the parties exchanged opening proposals earlier in 1999, the actual negotiations began in September. The county sought two changes in its overtime proposal: 1) elimination of "daily overtime" after 8 (or 10) hours in one day; and 2) calculating "weekly overtime" only after 40 hours actually worked by an employee, thus excluding sick or vacation time. Under the employer's language, if a deputy was ill, he or she could use flex time, and not use a sick day, making up the work later in the week.
 
The employer did not give, nor did the union request, any cost analysis regarding overtime during bargaining of the proposal. The union rejected the county's proposal.
Since the overtime issue was preventing a signed agreement, the parties mutually agreed to implement the remainder of the agreement and submit the overtime issue to an interest arbitrator. Both parties ratified the agreement with the express reservation of the overtime language, quoted earlier in this decision, to be decided by an interest arbitrator.
 
Consequently, the agreement was signed in December 1999; the bargaining unit employees received a wage increase.
 
POSITIONS OF THE PARTIES
The union argues that the employer cannot be awarded its position on an economic item when it did not submit any cost analysis. The union asserts that the real savings under the employer's proposal is limited. It contends that the employer is actually seeking to not pay police officers for overtime worked beyond the bounds of their normal shift. This approach, the union argues, is virtually unheard of in the public employment of police officers as evidenced by its comparables.
 
The employer contends that the interest and the welfare of the public is best served by awarding its proposal, since it provides for consistency between the public and private sectors. It claims that its proposal is consistent with both state and federal law. The employer concludes that its proposal addresses an issue that is unique to the sheriff's department.
 
DISCUSSION
Since 1995, Oregon law has required interest arbitrators to give first priority to the interest and welfare of the public when considering which parties' package proposal to award.(3) Since the term "interest and welfare of the public" is not defined in the statute, it has been discussed in several post-1995 interest arbitration awards. In City of Grants Pass and Grants Pass Police Association (Boedecker, 1997), I used a balancing test of what is "reasonable to the taxpayer" and "fair to the employee." In City of Bend and Bend Police Officers' Association (Wilkinson, 1998), the arbitrator advanced that the interest and welfare of the public would be served by "an award of a fair and competitive wage that also allows the unit of government to spread its resources elsewhere in order to meet public needs."
 
Since the statute directs that arbitrators give "first priority" to the interest and the welfare of the pubic criteria, I will analyze that preliminarily.
 
The Interest and Welfare of the Public
 
The employer contends that granting the union's proposal to continue current overtime language is not in the interest and welfare of the public because it allows the union to benefit from an outdated policy in favor of daily overtime for public sector employees after the statute mandating it no longer exists. The employer claims that since 1995 unrepresented employees in the public sector no longer are statutorily entitled to daily overtime, thus the perception of fairness no longer mitigates in favor of daily overtime for union represented public sector employees. The employer advances that it is actually unfair for unionized employees to continue to receive a benefit under these circumstances now that it is no longer required for unrepresented co-workers or in the private sector.
 
The change in the overtime statute, however, did not eliminate bargaining rights for public sector employees. It is noteworthy that the revised statute also added a new sub-section (2) which entitles unions to negotiate additional overtime pay requirements. I find that the legislature, when addressing the revision of the daily overtime statute, continued the public policy of allowing collective bargaining between public employers and their unions. It is in the best interest of the public for both parties to adopt a "come let us reason together" attitude over wages, hours and working conditions. The welfare of the public is protected by having mutually agreed to working conditions.
 
At one time the parties mutually agreed to the overtime provision that was in their collective bargaining agreement. The employer claimed that the union completely refused to discuss its overtime issues during the last negotiations. However, there is no record of any proposals from the employer for different approaches to solving its perceived overtime problem. The burden is on the party seeking the change to an agreement to show the most creativity and flexibility to achieve the desired change. There is no evidence that the employer proposed changing the work cycle, restricting the number of deputies off at any one time or other approaches to curbing overtime expenses.
 
I do not read the revision of the daily overtime statute as mandating a change in all collective bargaining agreements. Interestingly, the employer did not produce any personnel policies adopting the revised statute for its non-represented employees.
 
Where both parties have reasonable proposals, they may both be within the public interest. Oregon State Police Officers Association and State of Oregon. (Bethke, 1996). In the instant case, the union admits that the county's proposal is consistent with the law: "In that sense, it, like the Union's proposal is within the general scope of the public interest." The union urges that I consider the secondary criteria to resolve this matter. Since the union concedes that both parties' proposals are within the general scope of the public's interest and welfare, I will consider the secondary criteria to determine which proposal to award.(4)
 
Secondary criteria
 
The reasonable financial ability of the employer to pay considering overall priorities --
The employer claims that it needs relief in the amount of overtime compensation paid to employees in the criminal deputy and jail divisions. It asserts that the sheriff's department pays more overtime than other county departments. The employer contends that its proposal would provide the department with tools to address scheduling and overtime problems.
Several elements appear to caused the employer to incur overtime expenses. Certainly, the overtime language in the contract was one. Having one unfilled position in the patrol division contributed to the matter, as did the old jail facility and the actual move into the new jail. The employer put in evidence time sheets where employees, in the jail operations, did not work his/her scheduled 40 hours in one week, yet still received overtime for unscheduled work. There were 3 in May, 1999; 2 in June, 1999; 4 in July, 1999; 1 in August, 1999; 2 in September, 1999; 4 in December, 1999; and 2 in April, 2000. This number of examples, over a 12 month period, does not establish an overwhelming burden.
 
It is critical, under this criteria, that the employer did not produce any projected cost savings from its proposal. The employer claimed it did not have the formula for the cost savings because it "has been stuck under these rules for so long." That is not persuasive. Under the employer's proposal the maximum employer savings depends on the number of hours an employee is on sick or vacation leave in a work cycle. The employer could have used records, such as those cited in the proceeding paragraph, to establish the amount that was paid and under what circumstances it was required.
 
The employer defends that the union never requested the cost analysis. Again, the party proposing a change has the burden of coming forth with its rationale.
 
As a practical matter, the county's proposal seems to give it just limited relief. The following
two examples calculate the same under either the union's or the employer's proposal. If a road deputy worked his or her regular shift Monday through Thursday and four hours of overtime on Friday the salary would be calculated as: 40 hours at straight time and 4 hours at 1 ½ time, equaling 46 hours of pay. The same would be true if the deputy worked 14 hours on Monday and finished the rest of the scheduled work: 10 hours straight time and 4 hours of overtime for Monday, 30 hours of straight time for the rest of the week, totaling 46 hours of pay.
 
Under the union's proposal, if the deputy was sick on Monday, and worked the rest of the week and four hours of overtime on Friday, the salary would be 10 hours of sick time, 30 hours at straight time and 4 hours at 1 ½ time, equaling 46 hours of pay. Under the employer's proposal, the salary would be 10 hours of sick time, 30 hours at straight time and 4 hours at straight time, equaling 44 hours of pay. A difference of two hours.
Given the seven day work cycle, the very grossest mathematical example of the difference between the two positions is 15 hours of pay. If the deputy was off each day of the scheduled 4/10's and worked 10 hours of each of the three remaining days in the work cycle, the employer's proposal would pay for 70 hours (40 hours of sick leave and 30 hours of straight time). The current practice/union proposal would pay for 85 hours (40 hours of sick leave and 30 hours at 1½ time). There was no evidence that such a schedule had ever occurred.
The record does not establish that the employer has a pressing financial need to alter the overtime calculation in order to fund other county services.
 
C. Ability to attract and maintain qualified personnel --
The parties agreed that this criteria did not enter into the evaluation of the overtime proposals.
 
D. Overall Compensation Presently Received by Employees --
 
The county's proposal would result in a reduction of compensation to employees in some unspecified amount.
 
E. Comparable jurisdictions --
 
The union asserts that selecting the appropriate comparable jurisdictions is the critical factor in this case. The statute requires comparing "... employees performing similar services with the same or other employees in comparable communities. As used in this paragraph, 'comparable' is limited to communities of the same or nearest population range within Oregon..." Thus, there are two factors relevant to choosing comparables: 1) employees performing similar services; and 2) in communities of the same or nearest population range.
The first factor is easy to apply. The employees concerned here are law enforcement officers. They perform essentially the same duties as other deputy sheriffs or police officers in other departments throughout the state. The statute requires comparisons to employees doing similar, not identical, work.
 
The second factor is also simple to determine. The union submitted, without contest from the employer, a table of police departments in the State of Oregon serving populations between 21, 000 and 29,000.(5) That table listed eight other jurisdictions.(6) All the other jurisdictions use the union's proposal (i.e. Tillamook's past practice) for overtime calculations.
Additionally, the union submitted into evidence 20 other contracts from employers in which the union represents the law enforcement employees.(7) The contracts are universal in adopting the approach to overtime compensation that the union proposes for Tillamook.
The employer argues that this is not a case to be decided on comparability.(8) The employer contends that in 1995 Oregon reversed its public policy regarding overtime for public employees, in order to follow the general FLSA rule of weekly overtime for actual hours worked in excess of 40 hours. The employer discounts comparability because it claims that the policy that existed at the time that the comparable parties included the overtime language in their agreements is no longer in effect. As discussed above, the change in the overtime provision included a specific allowance for unions to negotiate additional overtime pay requirements.
 
I find no reason to discount or ignore this statutory criteria of comparables. The union has established that similar employees in similar communities enjoy the overtime benefits that the union is proposing in this case.
 
F. The CPI-all cities index --
The parties agreed that this criteria did not enter into the evaluation of the overtime proposals.
 
G. The stipulations of the parties --
There were no stipulations entered by the parties, under this criteria.
 
H. Other factors --
 
The employer claims that the secondary factors do not resolve the issue presented. It would have me use the "other factors" test to consider three arguments. Some arbitrators have used the other factors test in atypical interest arbitration cases.(9) I will consider the employer's arguments here.
 
The employer contends that the 1995 revisions to the public sector overtime statute represents a shift in the public policy on the State of Oregon. It claims that since 1995, daily overtime constitutes a departure from the general rule, seeing it now as a benefit which a union must negotiate in order to be gained. However, I do not find anything in the revision to the statute that mandates bargaining "from scratch" in the overtime area.
 
The employer also argues that the 1995 changes, moves Oregon closer to the overtime rules of the FLSA. Section 7(e) of the FLSA excludes "payment made for occasional periods when no work is performed due to vacation, holiday, illness, failure of the employer to provide sufficient work, or similar cause" from the definition of an employee's regular rate of pay. I note that while the FLSA establishes a base line for compensation, it terms are commonly exceeded in labor agreements. The minimum wage is part of the FLSA, yet a competitive wage for law enforcement officers is in excess of the minimum wage established by the FLSA. While the employer discounts this analogy because there was not a statutory requirement that public sector employees be paid only the minimum wage, I do find the analogy appropriate.
 
Finally, the employer claims the employees would benefit from more flexibility allowed in its proposal. If increased flexibility resulting from the elimination of the daily overtime requirement is so desirable, then the employer should be able to convince the union team of that at the bargaining table.
 
CONCLUSION
ORS 243.746(5) requires that the Arbitrator select one of the parties' last best offer proposals in its entirety. My role is to choose which last best offer more appropriately meets the statutory criteria of ORS 243.746(4).
 
Since both parties' proposals arguably support the interest and welfare of the public, I turn to the secondary criteria to make my determination. The union has proven overwhelmingly that comparable employees of comparable employers all enjoy the overtime benefit it is proposing. The record is not persuasive that the employer has no reasonable financial ability to fund the union's proposal, and still fund other county services and priorities.
 
The revisions in the daily overtime statute must be blended with the public policy indorsing collective bargaining for public employees. Nothing in the revisions mandates granting the employer its proposal in this area. The other factors that the employer argued do not overcome the persuasive record made by the union regarding the criteria in ORS 243.746 (b) and (e).
 
ARBITRATION EXPENSES
Since ORS 243.746(6) provides "The cost of arbitration shall be borne equally by the parties involved in the dispute", the arbitration expenses will be equally divided between Tillamook County and Teamster, Local 223.
 
ORDER
Based on the sworn testimony of the witnesses, the documents admitted into evidence, and the record as a whole, it is the Order of your arbitrator that:
 
The parties shall incorporate the union's proposal on overtime into their collective bargaining agreement.
 
Issued at Chehalis, Washington, on this 21st day of July, 2000.
 
Katrina I. Boedecker, Arbitrator
 
Barbara A. Bloom, and C. Akin Blitz, Attorneys at Law, appeared on behalf of the employer.
 
Michael J. Tedesco, Attorney at Law, appeared on behalf of the union.
 
1. ORS 279.342(5)(b).
 
2. In 1997, the jail moved into a new facility. The efficiency of the new building causes the jail
to be run with fewer people now than in 1996.
 
3. ORS 243.746(4)(a).
 
4. One interest arbitrator has "blended" the criteria. In City of North Bend and IAFF 2406, (Lankford, 1999), the arbitrator wrote that the interest and welfare of the public could not be "meaningfully discussed before considering comparability, ability to pay, recruitment and retention ...".
 
5. Tillamook County has approximately 24,100 residents.
 
6. The jurisdictions are: McMinnville; Oregon City; West Linn; Tualatin; Wasco County; Union County; Malheur County; and Curry County.
 
7. These employers are: Albany; Ashland; Brookings; Central Point; Coos County; Corvallis; Eagle Point; Forest Grove; Gold Beach; Hillsboro; Klamath Falls; Lake County; Lakeview; Lebanon; Medford; Morrow County; Phoenix; Rouge River; Shady Cove; and Talent.
 
8. The employer submitted collective bargaining excerpts that appear not to require daily overtime, from three other counties: Douglas, population 100,850; Wallowa, population 7,200 and Gilliam, population 2,100. It offered contracts from two cities: City of Milwaukie, population 20,075; and City of Newberg, population 17,650. These employers are not comparable to Tillamook under the statutory criteria of "same or nearest population range."
 
9. See: City of Gresham and Gresham Police offices Association, (Logan, 1996), lieutenants were not entitled to callback pay under the "other factors" criteria; Marion County Fire District No. 1 and IAFF, Local 2557, (Lehleitner, 1998) "other factors" considered in determining a seniority-based layoff issue.