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IA-14-05
In the matter of the arbitration of interest disputes between: CITY OF PENDLETON, Employer, and INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS, LOCAL 2296, Union.
 
JURISDICTION
 
On October 14, 2005, the undersigned arbitrator was notified that she had been selected to determine issues in an interest arbitration resulting from an impasse in bargaining between the City of Pendleton (employer) and the International Association of Fire Fighters, Local 2296 (union). The selection of the Arbitrator, and the interest arbitration proceedings which followed, were conducted pursuant to Chapter 243.746 ORS.
 
The interest arbitration hearing was originally scheduled for February 16, 2006. Two days prior to the hearing, the parties advised the Arbitrator that the bargaining unit members were voting on a entire contract offer from the employer. Thus, the hearing date was set over. The bargaining unit members failed to ratify the employer's offer. The interest arbitration was then held on April 18, 2006, in Pendleton, Oregon.
 
The record was completed when the parties filed post hearing briefs with the Arbitrator by May 30, 2006.
 
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 abilityof 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 determinedby 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 personnelat the wage and benefit levels provided.
(d) The overall compensationpresently 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. ...
(f) The CPI-All Cities Index, commonly known as the cost of living.
(g) The stipulationsof 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 underlineadded.]
 
STATEMENT OF THE ISSUE
 
The parties did not submit a stipulated statement of the issue at the hearing. However, given the dictates of ORS 243.746, it is appropriate to frame the issue as:
Does the employer’s, or the union’s, last best offer package better meet the criteria of ORS 243.746?
After evaluating both package offers against the criteria of "the interest and welfare of the public" first, and then against the secondary criteria in the statute, your Arbitrator finds that the union’s package should be awarded.
 
THE PARTIES' LAST BEST OFFER PACKAGES
 
The employer is proposing changes to eight articles in the collective bargaining agreement. The union is seeking to maintain the status quo in all the contract articles, except wages.
Employer’s final package offer:
 
Article V – Successor and Assigns
The employer proposes removing the entire successor and assigns article from the collective bargaining agreement.
 
Article VI – Recognition
The employer is proposing to change the term "permanent employee" to "regular employee" in this article. In fact, the employer is proposing this change in terminology throughout the contract, for example in Article XIV Vacations. There is one exception in the employer’s proposal. In the clause that gives union members the right to challenge whether discipline was based on just cause through the grievance procedure the employer maintains the term "permanent employee".
 
The employer is also proposing to delete language in this article that gives it the right to hire employees in the fire fighter/paramedic classifications who are assigned to 40-hour per week positions. It wants to add language that provides for "alternative schedules" and delete language that "these employees [40-hour per week] shall be members of the union and will not, without agreement from the union, be used to reduce the number of positions working a schedule of 24 hours on duty; 48 hours off duty."
 
Article XI – Wages and Salaries
The employer proposes wages increases for all ranks in the bargaining unit as follows:
     July 1, 2005     4%;
     July 1, 2006     2.5%;
     July 1, 2007     2.5%.
 
Union’s final package offer (included here for ease of comparison):
The union proposes wages increases for all ranks in the bargaining unit as follows:
     July 1, 2005        2%,
     January 1, 2006  2%;
     July 1, 2006        2%,
     January 1, 2007  2%;
     July 1, 2007        2%,
     January 1, 2008 2%.
 
Additionally, the employer proposes three changes to language in the wage article. It seeks to eliminate the definition of the work week; to eliminate the requirement that new hires have a paramedic certification; and to eliminate the career development plan as criteria for step increases.
 
Article XV – Insurance
The employer wants to move the fire fighters to the same plan that all other city employees are on. This is a preferred provider plan.
 
The employer also proposes eliminating the "kicker". The kicker is the term that the parties use to describe the incentive for encouraging employees to elect not to have double coverage. Union members who are eligible for family coverage but do not participate in the employer’s plan because their families are covered under a different plan, split the cost savings equally with the employer.
 
The employer also proposes to delete language that would require it to find an insurance plan of equal value, or make members whole, in the event that there is any lapse in coverage or discontinuation of the current insurance plan.
 
Article XXI – Prevailing Rights and Past Practice
The employer proposes eliminating this entire article.
 
Article XXII – Rules and Regulations
The employer proposes eliminating the article in its entirety.
 
Article XXV – Duty Shift and Work Period
The employer proposes to insert language that "generally" a fire fighter’s shift would be 24 hours on and 48 hours off, but that "alternative schedules may include shift personnel working less than a full 24 hour shift on a regular scheduled basis." The employer also adds language that it could assign an employee to a 40 hour week upon 60 days notice to the employee.
 
Article XXVI – Professional Career Development Committee
The employer proposes eliminating this entire article.
 
POSITIONS OF THE PARTIES
 
The employer contends that this case does not turn on the tradition comparability analysis of how Pendleton ranks against similar sized employers in wages, hours, and working conditions. It asserts that this interest arbitration is driven by three components: Declining revenues, increased personnel costs; and inflexible prevailing rights/past practice provisions in the collective bargaining agreement. The employer maintains that it has consistently told the union that it can no longer provide a level of service and employee staffing model based on the traditional 56 hour work week of 24 hours on and 48 hours off.
 
The union argues that it is proposing to maintain status quo in all the articles of the collective bargaining agreement, except wages. It claims that its wage proposal is very similar to the employer’s in costs over the life of the contract. It asserts that the employer has not shown how the status quo is unworkable; has not offered any quid pro quo to justify its changes; and has not presented any compelling need for its changes.
 
The statute calls for an entire package to be awarded. It does not allow for selecting individual articles from each offer. Nevertheless, your Arbitrator will look at each parties’s rationale for its changes, and each parties’s reaction to the proposals, to evaluate the total package offers.
 
Successor and Assigns
The employer proposes removing this article. The union believes that if the article was gone, it would allow the contract to be voided if there would be a merger or transfer in the fire service.
 
The employer contends that it is unlikely that Pendleton would contract with another public employer to provide current services. If this were to occur, it points to Oregon’s statutory scheme regarding mergers and intergovernmental transfers between public employees. It sees these statutes as providing adequate protection for fire fighters to maintain wage rates and benefits.
 
The employer does acknowledge that if it had to contract out any services it currently provides, it would probably be the ambulance services. Ambulance service constitutes 90% of the department’s call volume. It would probably contract with a private, not public, sector provider. Currently, the employer believes that the fire fighter compensation package is so high that no private operation could assume the current employee wage and benefit package. Thus, it seeks relief from this article.
 
Recognition
The employer proposes changing the term "permanent employee" to "regular employee". During negotiations, the employer did not define what "permanent employee" meant. The employer did not explain the anomaly of leaving "regular employee" in the grievance procedure. This raises speculation by the union that the employer is attempting to prevent union members from accessing the just cause provision of the contract.
 
The union views the employer’s proposal about "alternative schedules" as evidence that the employer intends to reduce hours, eliminate permanent schedules and remove positions from the bargaining unit.
 
The union points out that other language which the employer is proposing to delete in this article was just negotiated into the contract during the last round of bargaining. The union filed a grievance over its claimed violation of the language by the employer. The union prevailed in the grievance arbitration. The union extrapolates that the employer wants to remove the language so that it could place new hires (including temporary or part-time employees) in the fire fighter/paramedic classification. Thereafter, the union reads the proposal as allowing the employer to place the new positions outside of the bargaining unit. It also believes that the employer would then use new hires to reduce the number of positions working the set schedule of 24 hours on duty and 48 hours off duty.
 
Wages
Both parties agree that wages are not the ultimate factor in this case.
 
Fire Chief Fowler testified at the hearing that the union’s wage proposal in the first year was similar to the employer’s wage proposal. He noted that the difference between the wage proposals in the second and third years was "relatively small". He advanced that it was fair to assume that no matter which package the Arbitrator awards, the economic impact on the employer would not be particularly great. The chief testified, "I don’t believe money’s the issue."
 
Insurance
The employer claims moving the fire fighters to the same plan that all other city employees are on would have minimal effect on their out of pocket expenses when viewed in the context of the overall wage compensation package the fire fighters receive. The union reads the preferred provider plan as eliminating current coverage employees have for physical examinations, well baby care and vision care. The union also calculates that the plan increases employees co-payments.
 
The employer did not explain its proposal to remove the "kicker" language. The union contends that removing the incentive to keep fire fighters from double covering family members, would increase the employer’s overall insurance costs.
 
The union interprets the employer’s deletion of the language that makes it have an insurance plan in place, or reimburse fire fighters for medical expenses if there was lapse or discontinuation of the insurance plan, as allowing the employer to eliminate insurance coverage entirely. Alternatively, the union believes the deletion would allow the employer to institute an insurance plan with further reduced coverage or higher deductibles, mid-contract.
 
Prevailing Rights and Past Practice
By deleting this article, the employer is trying to eliminate "unidentified" past practices. The employer asserts that ORS 243.698 requires it to participate in mandatory mid-term bargaining if it wants to change any mandatory subject of bargaining during the term of the contract. Thus, it contends, the union has a statutory safeguard to protect it from the employer making wholesale changes without first including the union in discussions.
 
Both parties agree that the past practice language has been in the collective bargaining agreement since the mid-1970's. The employer claims that this language is no longer viable in the face of today’s personnel costs. It points out that in 1975 the PERS rate was 6%, now it is 25%; that today a municipality has a set limit of 3% for revenue it can collect through property taxes; and, that in 1975, medical insurance premiums were approximately $125 a month where current rates are over $1,000 a month.
 
The union claims that the employer has not identified any specific past practice that it is trying to eliminate. The union speculates that the employer is trying to remove this article because the employer believes that the union has too many rights. Additionally, the union offers that the last grievance arbitration award cited this past practice article, in part, to hold in favor of the union. Thus, the union believes the employer wants to eliminate the past practice language because it is sulking over its lost grievance arbitration.
 
By deleting this article, the union advances that the employer would also eliminate language that puts fire captains in the bargaining unit. The employer did not contradict this interpretation of its proposal. Neither did the employer explain why it needed to take the captains out of the bargaining unit.

 
Rules and Regulations
The employer wants to do away with this article entirely because it believes that the language contains too many restraints on employer action.
 
The union views this article as allowing it to offer input in the rule making process, while prohibiting the employer from adopting rules that conflict with the contract. It also allows the union to grieve rules and regulations that affect working conditions. The union sees the employer’s proposal as allowing the employer to issue discipline for violations of rules and regulations without any union representation or appeal process. The union argues that the elimination of this article would jeopardize morale by running the risk of rules being adopted without union input to monitor their feasability and impact on safety.
 
Duty Shift and Work Period
The employer seeks the ability to have alternative schedules to allow it to staff more economically during peak usage periods.
 
The union does not see any guarantee of regular working hours in the employer’s proposal. It interprets the proposal as an attempt to avoid paying overtime by imposing 40-hour per week schedules. The union argues that during negotiations the employer did not define what proposed staffing would look like. The union contends that the staffing model the employer presented at the interest arbitration hearing was not part of the employer’s last best offer package.
 
Professional Career Development Committee
In its brief, the employer argues that it is proposing to delete the "Professional Career Development Committee" because it has not met in the last two to five years.
 
The union sees that the "career development" references here, and in the wage article of the contract, establish the criteria for attaining physical fitness and training procedures, wage increases, promotions, and salary advancements. The union claims this language has been part of the contract for many years. It argues that career development language has provided bonuses to employees who have reached the top of the pay scale. This is important to the union because all but one bargaining unit member is at the top of the pay scale and receive this bonus.
 
ANALYSIS
 
The employer appears to want a free hand to make any decisions in the future that would impact wages, hours or working conditions. The state legislature did not agree to that way of operating in the public sector when it passed the Public Employees Collective Bargaining Act (PECBA). That statute calls for the parties to negotiate their wages, hours and working conditions. In enacting the PECBA, the Oregon legislature expressed the following policy: "The Legislative Assembly finds and declares that: ...Experience in the private and public sectors of our economy has proven that unresolved disputes in the public service are injurious to the public, the governmental agencies, and public employees." ORS 243.656(2)
 
The employer expresses frustration that the union will not acknowledge the employer’s deteriorating financial condition as the driver behind its proposals to eliminate past practice and existing conditions language.1 The employer believes that it has only two choices. Either address the issue now by making adjustments in levels of service in a measured manner. Or, in the alternative, continue on with business as usual, as proposed by the union, until there is no ending fund balance and possibly a deficit. Then the parties would proceed with layoffs, of up to four fire fighters, and reductions of services.
 
________________________
1. At one point, the employer asked the union to participate in hiring a third party neutral auditor to verify the employer’s financial condition. The union declined.
 
Primary criteria
The PECBA dictates that the interest and welfare of the public be given primary consideration when deciding which final package to award.
 
Here the employer is seeking substantial changes in the terms and conditions of collective bargaining agreement covering the fire fighters. An analysis of each component of the employer’s final best offer package follows.
 
The employer advances that it would not need to eliminate the successors and assigns clause, if the union would allow it to hire future fire fighters and paramedics on a reduced work hour basis. During the negotiations, the employer justified its proposal to remove this article on the basis that it could not explore other avenues to provide ambulance services with this article in the contract. Private, for-profit, contractors have contacted the employer about taking over the ambulance service.2
 
_____________________
2. Although the employer asserts that it would probably not merger with another public employer, it should be noted that it is not out of the realm of possibilities. Mergers have occurred among Oregon fire departments. Tualatin Valley Fire and Rescue District merged with the City of Beaverton. Jackson County Fire District 3 merged with the City of Central Point. There have been annexations by the City of Gresham and the City of Salem. Other separate mergers have involved Clackamas County and Oregon City and the City of West Linn.
 
If the employer were to divest itself of its ambulance services – 90% of its calls – it would have a major impact on the bargaining unit. A successor and assignees clause allows the bargaining unit members, the employer and the subcontractor (or new employer) to know where the base line is in the terms of employment. The clause allows the contract to continue until changes have been agreed to by all the stakeholders. The article allows for predictability during a time of significant change. Such stability and knowledge advances the interest and welfare of the public.
 
During negotiations, the employer failed to explain to the union the need for changing the classification of permanent employee to regular employee in the recognition clause. There is no convincing evidence that during negotiations the employer sought to relieve the union of its suspicions of what the language would allow the employer to do. If, in fact, the proposal eliminates the union’s access to have discipline reviewed against the just cause standard, the employer has not offered a quid pro quo for this significant take away. Just cause standards insure that discipline will be meted out rationally, not from an emotional heat-of-the-moment reaction. It is in the interest of the public to have disciplinary decisions made from a reasoned, sound judgement.
 
It was uncontested at the hearing that the difference in the parties’ wage proposalsover the next three years is de minimis. In light of all the testimony at the hearing, the employer’s argument that it is unable to afford the union’s wage proposal loses weight. The employer’s own witness testified:
Question (Union attorney): No matter what this Arbitrator awards, the impact upon the City’s budget and its future projections or what it actually winds up having, really isn’t going to matter all that much, is it?
Answer (Chief Fowler): From...
Question (Union attorney): From a fiscal point of view ...
Answer (Chief Fowler): In terms of cost of the contract, I believe that’s right.
The union’s proposal would increase costs by 4.95% in the first year of the contract; the employer proposal would increase costs by 4.56%. The difference in cost between the proposals in year one is approximately $8,391.
 
For the second year, the union’s proposal would increase costs by 4.99%. The employer’s proposal would increase costs by 3.41%. The difference in costs between the proposals in year two is approximately $35,286.
 
The third year wage costs are similar to the second year costs.
 
The employer’s revenue fund balance in 2003 was 58.5%; in 2004 it was 48.4%; in 2005 it is 40.8%. The carryover is declining. The employer’s finance director predicted that the ending fund balance would be depleted with in the next 24 to 36 months.
 
The city’s auditor for the past two years is a CPA whose firm also provides and specializes in the auditing of Oregon cities. In comparison to other cities that he audits, he described the 2005 revenue fund balance as "moderate." He did not establish that the employer is in economic trouble. Both the auditor and finance director pointed out that personnel costs constitute 85% of the general fund. That percentage is not unusually high for an employer who provides services, rather than goods. This is especially true since at least two services, police protection and fire suppression, are provided on a 24 hours a day, 7 days a week basis.
 
In its wage proposal, the employer is also seeking certain language changes. The union interprets the employer’s proposal that deletes the reference to the 56 and 40 hour work week as not guaranteeing any hours of work for bargaining unit employees. At the same time, the employer is proposing to have undefined "alternative schedules" language. The employer advances, in its closing brief, that this interest arbitration is not about changing the 56 hour work week of current Pendleton fire fighters. It claims that all 18 fire fighters have been assured in the proposed staffing model submitted at the interest arbitration hearing, that they would remain on the traditional 56 hour work week. It sees this interest arbitration as being about allowing the employer to hire new fire fighters on a reduced work schedule in order to provide coverage during peak volume periods. The union established that the employer did not offer any assurances during bargaining that it would not change current employees’ work schedules. There could have been language in the proposed model that would have guaranteed the current fire fighters a 56 hour week; there was none. The undefined alternative schedules creates too nebulous an environment. It is better for the public to have employees on an established work schedule so that the public knows when services will be offered.
 
The employer also eliminates the requirement, in its wage proposal, that a new hire must have an Advanced Life Support certification. The elimination of the paramedic certification for new hires decreases the level of emergency care that can be provided by the fire fighters to the public. The fire chief testified that calls for emergency medical response have increased. He also testified that emergency response care is critical. It is in the best welfare of the public that fire fighters responding to emergency medical situations have Advanced Life Support certifications.
 
The employer is seeking several language changes in its insurance proposal. The employer is proposing the union move to a preferred provider plan. The union sees this as a significant decease in coverage. It interprets the plan as eliminating routine physical examinations, which it believes are vital in the fire fighters line of work. It estimates that the loss in vision benefits alone would total $13,660 for its members. The union also analyses the plan as almost doubling the co-payments for doctor office calls and prescriptions.
 
The employer claims that it is overly burdened by the union’s refusal to work with it on meaningful insurance changes. The record shows that three years ago, however, during the negotiations for the expiring contract, the union already accepted a reduction in its health insurance coverage.
The employer’s argument, to award its insurance proposal for internal labor consistency since all its other employees are on the preferred provider plan, merits consideration. However, the argument gets lost in light of all the other changes the employer is seeking in its final package.
Additionally, the impact of the employee portion of the insurance cost increase could be lessen for employees who qualify for the "kicker". But without adequate explanation, the employer is proposing to remove the kicker incentive program from the health insurance article. It was uncontroverted that the employer shared in the savings that the kicker provided.
 
The employer’s final change in ths insurance article is to strike language about what to do if there is a lapse or discontinuation of the health plan. The employer appears to be seeking a waiver from the union in bargaining about insurance coverage. A waiver of a mandatory subject of bargaining is serious. It should not be granted without giving something in return. The dictates of the statute that require adopting an entire package do not allow a result to be fashioned that would balance out this take away. Thus, the employer’s proposal here also taints its package.
 
The employer proposes eliminating unidentified past practices. Generally, arbitrators define a past practice as a working condition that both parties know about and agree to, but is not specified in the contract.
 
In the 2002 - 2005 contract, the employer believed that it had negotiated language that allowed it to hire 40 hour per week personnel as opposed to the traditional 56 hour week (24 hour on / 48 hour off) scheduled employee. The parties disagreed about the effects of the new language. They proceeded to arbitrate it. The grievance arbitrator found that the employer could not use the 40 hour position to supplement or replace a 24 hour fire fighter, in part due to this article. Now, instead of crafting language that would focus on the specific work schedule the employer seeks, and the protection that the union wants, and the concerns of the grievance arbitrator, the employer proposes to eliminate the entire article.
 
Telling the union that if the working condition is not in the contract, then it does not exist, is a sweeping change. It also causes uncertainty, which is contrary to the interest and welfare of the public.
 
By eliminating this article, the employer would also delete language that puts fire captains in the bargaining unit. There was no justification given to remove captains from the unit. The employer did not explain how changing the status quo of the make up of the bargaining unit is in the interest of the public.
 
The employer characterizes the rules and regulationsprovision as another restriction on it. It is true that this article curbs unilateral action by the employer in propagating rules that would impact bargaining unit members. It calls for the parties to bargain about changes. Collective bargaining respects the on-going nature of the relationship between employers and employees. Collective bargaining, by its nature, in is the public’s interest. The Legislative Assembly acknowledged as much when it wrote "...unresolved disputes are injurious to the public..." in the declaration of the purpose of the PECBA. This article allows for both parties to monitor the feasibility of changes in regulations. Such balanced evaluation is in the public’s interest.
 
The employer proposes in the duty shift and work periodsarticle that it be allowed to determine undefined "alternative schedules". The 24 hour on/48 hour off work schedule is a practice that has been in place for many years. There is no guarantee of regular working hours in the employer’s proposal.
 
The union established that the employer proposed a "staffing model" for the first time at the interest arbitration hearing. The staffing model was not part of the employer final offer package. It was never presented to the union during bargaining. It was created by the employer the day before the interest arbitration hearing. The employer admits that the model had not been provided to the union in its exact totality, but contends that it has been a working document for months. It claims that the union had knowledge that alternatives were being considered. It perceives that the exact format of the model is irrelevant because the union is not interested.
 
The chief testified that the department needs three new firefighters hired for 12 hours per day in order to provide seven day per week coverage at Station 2. This would be a reduction from the current 24 hour shifts at Station 2. The 12 hour employees would be assigned during the peak call volumes when most of the responses take place. Coverage during lower call volume periods (nights) would be provided out of Station 1. The chief testified that using an 8 or 12 hour employee would reduce call-back and overtime costs, as well as allowing for more daytime fire prevention activities.
 
The employer claims that the selection of its package offer will provide a certain range of predictability with respect to how Station 2 will be staffed in the future given reduced revenues and increased personnel costs. It argues if the union’s package offer is selected, the strict adherence to the statute with respect to all contract provisions will result in major reductions in service and three to four layoffs of current personnel with little, if any, predictability as to the consequences to the fire service. It claims it needs the right to modify its service levels in accordance with declining revenues and increased costs.
 
The employer seeks to be able to have a staffing level in tune with call volumes and customer needs. It argues that a fast food restaurant does not have the same number of staff working at 3:00 a.m. as it does during the lunch hour.
 
Overall consideration, though, shows that a 24 hour shift is the norm in the fire suppression service. To allow the employer a free hand in scheduling an 8, 10 or 12 hour shift – or even some other number of hours – is a extraordinary change in hours for the bargaining unit. Even if current members were exempted, it would have an impact on future bargaining unit members and future bargaining unit work. The employer’s proposals on duty shifts should have been more detailed and specific. The employer is seeking too broad a waiver to be able to act unilaterally.
 
In its brief, the employer argues that it is proposing to delete the professional career development committeebecause it has not met in the last two to five years. It does not reference the financial aspects of career development stated in the wage article. The employer’s action begs the question, if the employer really just wants to clean up language that has not been operating the past few years, why pick this round of bargaining to do so? If the language is innocuous, the employer would be well advised to leave it alone so that it could focus the union’s attention on where the employer really believes it needs relief. To eliminate this provision, which the employer argues "is of no benefit to the city and clearly of no interest to the union", in its final package offer invites suspicion, given the major changes the employer is seeking.
 
The employer’s proposal to eliminate the career development language could give management complete control for determining who is eligible for a step increase. The employer proposes no replacement language for determining step increase criteria. The union thus surmises that the fire chief would determine all step increases which would be opening the door to bias and favoritism.
 
Objective standards treat employees more equally than subjective standards. As evidenced by the passage of statutes prohibiting discrimination in employment at both the federal and state level, equal treatment of employees is in the public’s interest. The employer has failed to explain what will replace the language to determine criteria for step increases. This leaves a hole in the contract and jeopardizes the current unbiased system for increases and promotions.
 
Secondary criteria
The PECBA lists seven secondary criteria for the interest arbitrator to consider when deciding which final package to award.
 
The record, based on the overall testimony from both parties and argument from both parties, establishes that this interest arbitration is not about the employer’s financial abilityto fund either package.
 
The employer has established that it does not have an attraction or retentionproblem in the fire fighter bargaining unit. The employer showed that in the last five years, only two fire fighters have left the City of Pendleton for reasons other than retirement. Both of those departures were for personal reasons.
 
Your Arbitrator agrees with the employer that this is not a traditional interest arbitration that hinges on overall compensationof the employees and where this employer relates against comparable communities.
 
The employer advances that over the last five years the fire fighters have received a 24% increase in compensation, while the consumer price index(CPI) has only increased 12.1%. The union contends that the CPI for the past years has fluctuated between 2.5% and 4.7%. It claims that its proposal for a 2% increase every six months is closer to the current CPI than the employer’s wage proposal.
 
The union offered evidence that the CPI has not kept pace wh overall fire fighter wage increases statewide. This evidence is persuasive. Since fire fighter increases have consistency exceeded the CPI, this suggests that the CPI has played a less significant role in setting fire fighter wages than the other statutory factors.
 
The parties offered no special stipulationsfor consideration.
 
The parties did not direct that any other factorsbe considered. Evidence submitted under ORS 243.746 (a) through (g) builds sufficient record for this Award.
 
In Oregon, when determining what is in the best interest and welfare of the public, interest arbitrators tend to favor the maintenance of the status quo of the existing terms and conditions of the agreement. If the parties have lived under the language of the collective bargaining agreement, there should be a compelling reason to change. Thus, the party seeking to change the terms of the expiring bargaining agreement has the burden of proof to justify the change. "Absent persuasive evidence to justify some significant change, the proposal that most nearly continues the existing terms and conditions of the agreement is preferred." City of Tigard and Tigard Police Officers’ Association, (Levak, 2002).
 
CONCLUSION
 
Since the employer is proposing changes to the contract language, has the burden of persuasion to prove that the changes are in the interest and welfare of the public, and, secondarily, meet the other criteria of the statute.
 
The employer has shown how some of the changes it is proposing in the status quo are reasonable and necessary. It has not shown how all of the changes are reasonable and necessary. There is not enough quid pro quo presented by the employer that would justify the enormous loss of job security and contract protections to the union.
 
Collective bargaining acknowledges that employment is an on-going relationship. It levels the playing field and evens the power between the parties. The employer’s package creates a prejudicial effect on the status and integrity of the union. The harmful effects of the proposal will be felt in the future, leading to erosion of bargaining unit work, promotional opportunities and job security.
 
Both parties need to take negotiations and mediation seriously. It is a time for honest communications between the parties. It behooves the parties to fully explain their proposals during negotiations, long before interest arbitration. The rational for, the need for, and the justification of, each proposal should be fully detailed to the other party.
 
The employer is seeking too much change, all at once. If it could not convince the union at the negotiations table that the overhaul was necessary, it should not expect to turn to an interest arbitrator for such massive changes without more detail or explanation. If it really wanted relief in scheduling, it should have focused the union’s attention at that one item. It is curious how many changes the employer is seeking in non-scheduling related areas. The employer’s insinuation that the union has caused this impasse by not allowing the employer’s scheduling proposals, is undermined when the employer’s final offer package includes removing the insurance "kicker’ language, takes the captains out of the bargaining unit, prevents union access to just cause, and eliminates the career development committee, among other things. The employer’s package lacks credibility vis-a-vis its expressed needs.

 
The union’s proposal increases wages modestly and incrementally. It is not out of line with the consumer price index. It preserves the statu quo in all other areas of the contract. On balance, the union’ s proposal accomplishes the goals of the statute.
 
The union’s final package proposal is awarded to the parties.
 
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 the City of Pendleton and the Pendleton Fire Fighters Association, Local 2296.
 
AWARD
 
Based on the sworn testimony of the witnesses, the documents admitted into evidence, the arguments of the parties and the record as a whole, it is the AWARD of your Arbitrator that:
The parties shall incorporate the union's last best offer on wages into their collective bargaining agreement.
 
Issued at Chehalis, Washington, on this 7th day of July, 2006.
 
Katrina I. Boedecker, Arbitrator
 
Law Offices of Bruce Bischof, by Bruce Bischof, Attorney at Law, appeared on behalf of the employer.
 
Law Offices of Michael J. Tedesco, by Michael J. Tedesco and Sarah K. Drescher, Attorneys at Law, appeared on behalf of the union.