Ohio’s Economy Making Union Negotiations Easier Than Ever

Ohio’s economic and political climate has made it tougher for local government unions to barter for the job benefits once considered standard in their employment contracts.

Both unions and government managers agree: negotiating employee contracts is easier than it’s ever been.

That’s because as the recession lingered and governments faced dwindling tax revenues, many local unions were willing to scrap wage increases that were routine for union contracts.

But experts also warn that as the economy rebounds, government employers will walk a fine line between cost-savings on salaries and offering salaries as well as benefits that retain top-performing workers.

“You run this balance between, how much do you pay them versus how much can you afford to pay them versus the ability to recruit and retain competent people,” said Jonathan Downes, a Columbus attorney who represents government management across Ohio.

On average, Butler County’s 26 school, county, city and township unions have negotiated an average 0.8 percent annual pay increase in their most recent contracts, according to state data. The county’s percentage increase average is so low because the bulk of the county’s 14 unions only got lump-sum payments as opposed to a percentage on their base salary. The highest wage increase recorded with the state was written into Lakota Local Schools’ contracts, which gave teachers a 5.5 percent increase in 2014.

Unions in other Ohio counties have fared better.

Unions operating in Warren County made out with a nearly 2 percent average wage increase for employees in recent years. In Montgomery County, unions averaged a 1.65 percent increase annually. Of the state’s six biggest counties, Hamilton County’s local government unions — which averaged a 1.3 percent wage increase for union contracts — came close to local government unions in Butler County.

Last year, local union leaders here also requested state help to save contract negotiations more than most Ohio counties. Unions asked for a fact-finder report seven times between July 2014 and April of this year, the second-most requests of any county in the state.

Butler County has tussled with several of its unions, most notably the Butler County Children Services Independent Union. The case workers hit the picket line for three weeks last summer, and the two sides took almost two years to come to an accord.

The four-year deal will cost the county about $360,000 over four years, and it includes a combination of retroactive $500 and $550 lump-sum payments for the past two years and merit pay going forward.

Human Resources Director Jim Davis, who was the lead negotiator for the county, said he has been negotiating labor contracts throughout his career and he has never before experienced a more contentious atmosphere in which to try to strike a deal.

“All my other dealings with management and labor relation were predicated on good relationships and that just didn’t exist at Children Services,” he said. “It was very challenging to work in that kind of contentious environment that was unlike any that I’ve experienced.”

The county agreed to a 2 percent increase to the minimum and maximum salaries on their pay ranges, and in July, the social workers will receive one- to three-percent pay hikes based on their performance. A 2 percent pool of money is available for raises. The salary ranges will get another 2 percent boost in 2016, and workers will be eligible for merit pay.

Union President Becky Palmer said she believes striking a deal was made more difficult for a number of reasons but not the least of which is the county has gone to centralized human resources system, and they don’t understand that the agency is unique.

“I think the disconnect and the lack of value for the work has made all the difference. We used to have an HR team housed at the agency that valued the work, but when you are negotiating with a team that generalizes all county employees as the same, we became just numbers and salaries,” she said. “They didn’t care who they were negotiating with, which made it very difficult to understand the needs of this agency.”

This contract is a milestone for the county, which has negotiated lump-sum payments with most of its unions as they try to ease them into accepting merit-based pay.

The Job and Family Services union contract was another tough nut to crack. A fact-finder suggested a 1.5 percent pay hike for JFS union workers was warranted. The union wanted a 2.5 percent pay increase, and the commissioners offered the $500/$550 lump-sum payments it has negotiated with several unions recently.

“We are disappointed that the commissioners would reject the recommendation of the fact-finder, after they recently awarded a 2.5 percent increase for management,” former union leader Kelly Suit said last summer. “We believe it’s a shame that during that economic downturn in 2009 the bargaining unit did make concessions. Which at that time was a reduction in hours, reduction in wages and a pay freeze.”

County Administrator Charlie Young at the time explained the 2.5 percent bump Suit mentioned was not just for management and it wasn’t across the board. Last summer, the commissioners gave a lump sum 1.5 percent stipend to most non-union employees, according to Young. The 2.5 percent pay increase approved in January differed among employees, based on where they are in their pay range. If they were near or over the top of their pay range they got less than 2.5 percent or nothing. By law the county can’t give raises to union workers while contracts are under negotiation.

‘We want to be very careful’

Statewide, however, unions have been less apt to seek State Employment Relations Board services in recent years. Union requests for fact-finding have steadily dipped from 133 reports in fiscal year 2009 to 81 reports in the first 10 months of the current fiscal year. SERB has a total 3,249 union contracts on file.

“I think this process works well when you’ve got people who are reasonable on both sides,” Steve Lazarus, the attorney handling union talks for the Butler County Sheriff’s Office said. “Statewide with how many union there are, to say there were only 80 of these in a years’ time, that’s pretty significant to me. People are in general working out their contracts at the negotiating table.”

The statistics are a sign that unions and their employers are at odds less frequently over contracts, some of which may not include wages increases at all — a move that was once unheard of in union contracts, said Marc Fishel, a Columbus-based attorney’s who’s represented management in government union contracts around the state.

The change is in part thanks to local governments’ economic woes from the recession. He also suggests that although the union-restricting Senate Bill 5 (Issue 2) was repealed, it put unions, and their contracts, under a closer microscope.

“The parties realize there’s not a lot to fight about,” Fishel said. “Unions are recognizing the new paradigm for wages.”

Fishel added that a three percent annual raise was once considered the standard for most contracts. Now that sits closer to two percent for many contracts.

Lazarus said he has seen a definite drop in the need to go the expensive fact finding route to make a deal. He said his office has negotiated at least 15 contracts in the past year and only maybe one has gone to fact finding.

“I think there is an understanding in the post Issue 2 world that the parties need to be reasonable and that’s on both sides,” he said. “I’m finding almost across the board the parties are coming in with reasonable demands and the understanding there is going to be a give and take in the negotiation.”

There are four sheriff’s contract re-openers on wages and health insurance that will likely go to fact finding and possibly conciliation. He said if they are forced to do each contract and issue separately they could have eight fact findings and eight conciliations which he estimated could cost $120,000 — a cost split by the parties.

He based his figure on a recent conciliation bill for $7,500, he said the norm is about $3,500. SERB rules cap costs at $950 per day for eight hours.

Creative contract bargaining

And, some cities and counties are becoming even more creative with what they offer up.

The most unique contract deal was the one that was the hardest to seal and that was with the county children services union. Davis said getting a union to accept merit pay instead of the traditional steps or across the board increases was a feat.

“There is really nothing more unique than the merit pay that we got in our children services contract,” Davis said. “That really something.”

Fishel said he’s seeing more cities offer up lump sum payments in exchange for salary increases, which costs governments more in the long run because salaries are compounded every year.

West Chester police, for example, last year agreed to a 1.5 percent lump sum payment. The department had initially asked for a three percent across-the-board increase annually and township officials countered with zero percent increases. The union sought input from a fact finder last year and the negotiations went to an arbitrator.

“It was a compromise,” said Tim Mintkenbaugh, the president of the Fraternal Order of Police Lodge 186, which represents the township’s police. “

“The public sector has been very challenged,” Mintkenbaugh said. “They’re trying to do away with a lot of things we’ve come accustomed to.”

In Middletown, police also agreed to a zero-percent increase in their contract earlier this year after a fact-finding report was issued. The last time officers there got a raise was in 2012, when salaries increased by .5 percent.

City Law Director Les Landen said the city offered up to a $1,000 merit-based payment to employees last year, when revenues were up and Middletown’s spent less from their budget than they had anticipated. The city paid a total of $267,692 to 285 of its 365 employees.

The move, which will be offered up again this year to employees if the city meets revenue targets, allowed the city to reward employees but didn’t make any guarantees for extra pay if the money wasn’t available at the end of the year. This year’s fact-finding report recommended the city also extend those payments to the police department.

“We thought this was a way to balance as we move from, ‘we don’t have any money to pay you,’ to ‘we have some but we want to be very careful about how big of a commitment we make,’” Landen said.

County Commissioner Don Dixon said they appreciate all the concessions their unions made during the Great Recession.

“The people that were paying the bills for the public sector, they were feeling the same thing,” he said. “The collective bargaining people recognized the fact that it was tough for everybody and the taxpayers needed some relief as well.”

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