Negotiations After the 2% Arbitration Cap – What Comes Next?

Negotiations After the 2% Arbitration Cap – What Comes Next?

The expiration of the two percent arbitration cap in December of 2017 has fundamentally changed how municipalities will negotiate with their first responders. Speakers from both sides of the negotiating table, representing both municipalities and the first responders, joined the spring conference to provide insight into the negotiating process, all with the goal of helping to create a better understanding of the two sides as many municipalities embark on future negotiations.

The panel of speakers were Patrick Colligan, New Jersey State Policeman’s Benevolent Association (PBA) President; Corey Gallo, Administrator for Bergenfield Borough; and Steven Glickman, a municipal attorney.

Gallo began the panel by presenting a case study for a recent arbitration in Bergenfield, NJ. The impasse between the governing body and the PBA concerned adherence to the Chapter 78 clause relating to health insurance. Chapter 78, part of the 2011 health benefits reform law, requires state employees to pay a portion of health insurance premiums. While the PBA thought that the 15 percent contribution towards medical should count as “past practice,” the Council took the approach that unless the PBA agreed to pay their fair share for health insurance in accordance with Chapter 78, like all other Borough employees, they would not negotiate any further.

The arbitration decision ultimately allowed the PBA to keep their 15 percent medical contribution, and gave them a zero percent salary increase for the next four years. Normal salary guide step increases were still provided in 2017 and 2018. As a result, the PBA will see a positive impact today, tomorrow and with their pensions and future payouts. For any future movement or salary increases, the arbitrator determined that further negotiations must occur.

Who really won? After going through arbitration for Bergenfield, Gallo said that he would not deal with arbitration again. “It seemed no one really got anything out of it. I would prefer to reach an agreement through negotiation rather than through binding arbitration,” said Gallo.

Colligan, the president of New Jersey’s PBA, has advised many first responders in their negotiations with their municipalities. He pointed out that while the arbitration cap has expired, the criteria that has been placed on arbitrators is still law and does not expire. The rules placed on arbitrators were considered to be restrictive and many experienced arbitrators resigned as a result, and something to consider before making the decision to take negotiations to arbitration.

Colligan also encouraged managers to remember that the rolling back of pensions and salary increases has made recruitment difficult for the police departments, especially in towns that need them. “Too often, municipalities go straight to arbitration, rather than sitting down at the negotiating table with their first responders to reach a reasonable compromise. As a result, there have been too many agreements decided by arbitration that leave both sides dissatisfied,” he said.  

Glickman, the last of the panelists to speak, implored the managers in attendance that if arbitration is required to reach an agreement with their first responders, they should understand the history of their municipality and present the arbitrator with all of the information that could be important to a decision. This includes any budgets that may be in play, as this information could be important to the eventual arbitration award. Glickman said that no one is certain what will happen in arbitrations now that the cap has been removed, but that he expects it to remain around the 2% number despite the lift of the cap.