Labor commission compromise reached

Lawmakers amended and advanced a proposal May 20 that would make changes to the Nebraska Commission on Industrial Relations (CIR), the state’s arbiter of labor disputes between public sector employees and government employers.

Omaha Sen. Steve Lathrop introduced LB397, which he described as an attempt to bring greater predictability and consistency to the process of resolving labor disputes.

During general file debate May 4, Lincoln Sen. Tony Fulton offered an amendment that would have replaced the bill with a proposal that he said better met the need of public employers to contain costs. Lathrop agreed to further negotiations and Fulton withdrew his amendment.

On select file, Lathrop offered an amendment, adopted 42-0, that he said reflected the product of those continued negotiations.

“We have treated this fairly … and we have preserved in a meaningful way collective bargaining for public employees,” he said.

The amendment replaced the bill and would make a number of substantive changes to the previous version of LB397.

The most significant changes relate to cost containment, Lathrop said, an issue of great importance to political subdivisions attempting to balance budgets with limited resources.

Under the previous proposal, the CIR would freeze wages of Nebraska public sector employees found to be receiving compensation higher than the average wage of comparators in an array using an hourly rate value calculation. Wages would be frozen for twice as long as the time it takes the other employees in the array to achieve a comparable hourly rate value.

Employees would be able to negotiate decreases in their retirement or health insurance plans to reduce their hourly rate value and end a wage freeze.

The amendment removed the wage-freeze provision and replaced it with a formula that would allow wages to be adjusted over a three-year period to bring them within an accepted range. Lathrop said replacing the true average with a range of between 98 percent and 102 percent of the average – and between 95 percent and 100 percent during periods of recession – would give public employers the flexibility they need.

A recession would be defined as two consecutive quarters in which net state sales and use tax, individual income tax and corporate income tax receipts are less than the same quarters for the prior year.

Sen. Brad Ashford of Omaha supported the inclusion of the range, saying it demonstrates recognition on the part of labor negotiators that difficult economic times require sacrifice and accommodation.

The amendment also would:

• remove provisions allowing for public and private wage comparisons;
• remove consideration of ability to pay from provisions governing schools; and
• lower the preferred array size from between seven and 13 to between seven and nine.

Hastings Sen. Dennis Utter supported the amendment, saying he originally supported abolishing the CIR.

“When I see something that isn’t working, my first reaction is to get rid of it,” he said. “And I admit that this was my first reaction [to the CIR].”

Utter said he came to believe that an arbiter in labor disputes is needed to determine fair wages and benefits for public employees and that reform, rather than abolition, was the solution.

“This bill that you’re looking at today meets my definition, anyway, of meaningful, comprehensive and significant [reform],” he said.

Sen. Mike Flood of Norfolk also praised the amendment, saying it resulted from a difficult negotiation process and reflected willingness on the part of all parties to compromise. He said other states have not been able to do what was necessary to resolve disputes about the role of collective bargaining.

“We didn’t have drums beating in the rotunda,” Flood said. “We didn’t engage in hysteria. We sat across the table … and had good faith efforts to make the right public policy happen. [This amendment] represents the Nebraska approach to solving problems like this.”

Lathrop offered a second amendment, adopted 38-0, which made additional changes.

Under the amendment, a public vote would be required on the last, best offer of either a union or a public employer before a dispute could be taken to the CIR. Lathrop said the provision would create accountability among elected officials who may be reluctant to vote on a proposal for political reasons.

“It is our hope that this will result in fewer cases being decided by the CIR,” he said.

The amendment also would require that three CIR commissioners be involved in cases regarding wage disputes and would make other technical changes.

Among other provisions, LB397 as amended would:

• remove the rule of evidence requirement;
• provide a preference for geographic proximity;
• eliminate use of a special master in education labor disputes;
• authorize appeals directly from the CIR to the Nebraska Supreme Court;
• incorporate health insurance and pension benefits into an hourly rate value;
• require that wage information be adjusted to reflect Nebraska’s cost of living;
• specify a 70 percent match of duties performed and time spent performing those duties; and
• set criteria for the size of comparable out-of-state cities and metropolitan statistical areas.

Following adoption of two technical amendments offered by Sen. Bob Krist of Omaha and Sen. Lavon Heidemann of Elk Creek, lawmakers advanced LB397 to final reading by voice vote.