Labor Contract Updates


Today I posted a revised version of the Labor Contracts page.  The updates are several:

  • MAPG-Executive Collective Bargaining Agreement from 2012
  • UAW Local 412, Unit 41 Supervisory Employees Collective Bargaining Agreement from 2012
  • MOU for MAPG-Executive group from today, 05-FEB-2013
  • MOU for UAW Local 412 Unit 41 Supervisory Employees from today.

Needless to say, I have fallen behind in updating the contracts available on this page, and this latest entry is part of an effort to catch up and get all of the contract information current again.

Today’s MOUs are interesting in that they resolve a few issues that the city has had:

  • What to do about the recent appointment of Christopher Martin to the post of Fire Chief  in light of the fact that he was already enrolled in the DROP program at the time he was hired.
  • What to do about supervisory employee retirements in general as these high-value employees head for the exits (i.e. retirement) in order to lock in their retirement benefits, thus leaving a “brain drain” in operation at the very top.

The simple fact of the matter is that the city is very concerned about employee turn-over at the very top of its various departments.   Several of the people managing various departments within the city are technically old enough to retire, yet are young enough to continue working for many years to come.  They are incentivized to retire, however, due to shorter-term Collective Bargaining Agreements, a general reduction in the retirement benefits the city has been and will be making available in the future, and the ongoing elimination of the DROP programs from the CBAs.

To combat this, the city has decided it will rehire retired supervisory employees at a reduced rate of pay and with no benefits other than non-accruing vacation days.   Of course, these employees don’t NEED other benefits, since they are already enjoying their retirement benefits, including retiree health care, a pension, etc.

Actually, this is not a new idea.  Some time ago, the city decided it would hire retirees in as part-timers.  The major change in today’s MOUs is that it is now deciding to hire in retirees on a full time basis.

In some respects, this is smart thinking on the part of the city: try to retain the leadership we currently have for as long as possible.  It helps to ensure continuity of operations, and it puts people to work who would otherwise be retired, it helps to avoid elevating or hiring new people who might not work out in their new job, and it is generally a conservative approach to retain management when things seem to be going well.

On the other side of the coin, this doesn’t really eliminate employee incentives to retire.  The result is that they are now given the incentive to retire, collect a full pension and retirement health care benefits and approximately 65-70% of their former wages doing the same job they were doing before.   It’s an expensive way to keep people around, regardless of how much money the city claims it will be saving.  

(Perhaps on paper, the city is saving money in this approach.  Of course, “on paper” the DROP program was supposedly revenue-neutral “actuarially” and you’ll notice that it is now being, er, dropped with each new CBA.)

Would the city need to go through this exercise if it had a better “farm system” for bringing people up through the ranks and grooming them for departmental management positions?

Perhaps as time goes on, the elimination of the DROP program as CBAs are renewed will reduce the high “youthful retirement rate” the city is currently experiencing.  Certainly we want to keep our newly appointed Fire Chief for as long as we are able: the revolving door in the Chief’s office needs to stop spinning.

Another interesting thing I find in the Memorandums of Understanding is the fact that the Union membership of rehired part-time employees is enshrined in the documents, even though these employees will not be technically subject to every provision in the CBAs they are party to, given that they’re already retired.   I’m not sure what the reasoning is behind that, but I suspect it might have something to do with the ‘Right to Work’ laws about to take effect.  I would appreciate your comments on that and other possibilities that simply aren’t coming to mind for me right now.

As always, my goal with the Labor Contracts page is to offer up a highly reliable source of information sans editorial comment (which I reserve for the main blog entries such as this one.)   I would appreciate any heads up with regard to missing CBAs, MOUs or other documentation if you should happen to notice them missing.

Incidentally, I am still waiting to see the revised Police contract, post-P.A. 312 arbitration.

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Posted on February 5, 2013, in Labor Contracts. Bookmark the permalink. Comments Off on Labor Contract Updates.

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