BEFORE THE ARBITRATOR
In the Matter of the Arbitration of a Dispute Between
BUFFALO COUNTY HEALTH & HUMAN
EMPLOYEES, LOCAL 1625-A, WISCONSIN
OF COUNTY AND MUNICIPAL EMPLOYEES,
COUNTY OF BUFFALO
(Auto Insurance Grievance)
Mr. Daniel R. Pfeifer, Staff Representative, Wisconsin Council
40, AFSCME, AFL-CIO, 18990 Ibsen Road, Sparta, Wisconsin 54656-3755, appearing on
behalf of Buffalo County Health & Human Services Employees, Local 1625-A, Wisconsin
Council of County and Municipal Employees, AFSCME, AFL-CIO, referred to below as the
Weld, Riley, Prenn & Ricci, S.C., by Attorney Richard J.
Ricci, 4330 Golf Terrace, Suite 205, P.O. Box 1030, Eau Claire, Wisconsin
54702-1030, appearing on behalf of County of Buffalo, referred to below as the County.
The Union and the County are parties to a collective bargaining agreement which was
at all times relevant to this proceeding and which provides for the final and binding
certain disputes. The parties jointly requested that the Wisconsin Employment Relations
appoint an Arbitrator to resolve a grievance filed on behalf of the Professional and the
Paraprofessional/Clerical bargaining units which constitute Local 1625-A.
The Commission appointed Richard B. McLaughlin, a member of its staff. Hearing on
the matter was
held on January 6, 1999, in Alma, Wisconsin. The hearing was not transcribed. The parties
briefs by February 22, 1999.
The parties stipulated the following issues for decision:
Did the County violate the collective bargaining agreement by
the implementation of the
Evidence of Insurability Policy?
If so, what is the appropriate remedy?
ARTICLE 4 MANAGEMENT
Section 1 The County possesses the sole right to
operate the County and all management
rights repose in it, subject only to the provisions of this contract and applicable law. These
rights include, but are not limited to, the following:
A. To direct all operations of the County;
B. To establish
reasonable work rules and schedules of work . . .
ARTICLE 24 ENTIRE
MEMORANDUM OF AGREEMENT
This Agreement constitutes the entire agreement between the
parties and no verbal statement
shall supercede any of its provisions. Any amendment supplemental hereto shall not be
either party unless executed in writing by the parties hereto. The parties further
during the negotiations which resulted in this Agreement, each had the unlimited right and
opportunity to make proposals not removed by law from collective bargaining and that the
agreements arrived at are set forth in this Agreement. Therefore, the County and the Union
life of this Agreement agree that the other shall not be obligated to bargain further with the
to any subject.
Waiver of any breach of this Agreement by either party shall not
constitute a waiver of any future
breach of this Agreement. Nothing contained in this provision shall be interpreted as granting
party hereto authority (sic) unilaterally implement changes in wages, hours, or conditions of
employment or as a waiver by the Union to bargain the impact of management decisions
wages, hours, or conditions of employment. . . .
APPENDIX "A" WAGE
. . .
TRAVEL, MEALS, AND LODGING
The County shall reimburse employees for the use of their
automobile on County business at the
rate of twenty-six cents . . . per mile or County policy, whichever is greater, effective
1996. . . .
The Union originally prepared the grievance for filing in late February of 1998. The
agreed, however, to delay formal processing of the grievance until the matter had been
the County's insurer. Those discussions produced no resolution, and the grievance was
on April 28, 1998. The grievance form states the "Circumstances of Facts" thus: "The
unilaterally establishing requirements regarding personal vehicle insurance and safety issues."
grievance form states the "corrective action required" thus: "Cease & Desist . . . Any
changes to be
submitted for contract negotiations."
The changes challenged by the grievance turn on a Safety Policy, referred to below
Policy, adopted by the County Board as of December 16, 1997. Under the Policy, the Board
promulgated an Employee Safety Handbook. Section 7.6 of that handbook reads thus:
Evidence of Insurance
When employees or elected officials operate their personal
vehicles on county business, evidence
of insurance coverage must be provided to Risk Management. Upon passage of this policy
upon each policy renewal thereafter, employees are responsible for supplying to their
copy of proof of insurance. This information should then be provided to Risk Management
cataloging. County elected officials are responsible for supplying proof of insurance directly
Management. The recommended
limits of coverage the employee should have
(per Wisconsin County Mutual) are
$100,000/per person, $300,000/per
accident, $50,000/per accident property damage or $300,000
combined single limit. The employee is also evidencing insurance coverage when signing
For volunteer workers, proof of insurance is required on the
automobile used. Proof of insurance
must include evidence that liability coverage is maintained.
The County does not maintain a fleet of vehicles for employe use. Prior to the
adoption of the Policy,
the County informed those new hires who were expected to use a vehicle to perform their
a vehicle would be required to perform their job. The County neither asked such employes
they had insurance on the vehicle, nor did the County specifically inform them what
County provided. As part of the implementation of the Policy, the County altered its
reimbursement forms to include the following sentence, which preceded the signature line
for each claimant: "I FURTHER CERTIFY BY MY SIGNATURE, THAT MY VEHICLE
AND IS, CURRENTLY INSURED WITH LIABILITY COVERAGE."
Lance Wilson is the County's Administrative Coordinator, and has served the County
capacity for eight years. He testified that the Policy grew out of a County change in its
insurance carrier. Prior to the change, the County used Wausau Insurance Company. The
implemented by the County was to purchase liability insurance through the Wisconsin County
Insurance Corporation (WCMIC). The agent for this insurance coverage was the Aegis
To obtain incentives to reduce the premium costs under the new liability insurance, the
implemented the Policy.
As part of the implementation of the Policy, Stuart Berg, the Director of the County's
Department of Health and Social Services, issued a memo, dated April 17, 1998, to "all
Attached you will find a copy of the newly passed Employee
Safety Handbook. I ask that all
employee's (sic) review this manual carefully and relay any questions and/or concerns that
to your immediate Supervisor. This handbook was written in response to the newly formed
Management Team. The objective is to reduce cost for liability and Workmen's
insurance by providing a safe work place and reducing injuries. Attached to the handbook is
acknowledgement of each employee's responsibility toward creating a safe work
sign this sheet and return it with your next record of hours worked.
Please note that page 12. section 7.6 Evidence of Insurance,
states that when employee's (sic)
use their personal vehicles on County business they must provide evidence of insurance
Employee's (sic) will not be allowed to use their personal vehicles on County business unless
of insurance has been furnished. If you have not already done so, please provide this proof
insurance . . . within the next five working days.
Thank you for your immediate attention
to this matter.
The implementation of the Policy, however, caused controversy. It was the first
many, if not all, employes that the County was not the primary insurer of vehicles used for
use. Unit employes provided the County with the proof of insurance, but many did so
I/we are supplying the county with proof of insurance under
protest as a group and under the
guidance of our Union Council 40 staff representative.
In good faith with our employers, we comply by showing proof of
insurance. In no way do we
agree that this is a matter of past practice. In no way does complying to proof of insurance
we will accept any offers not agreed to in writing by the two parties involved.
We hope this matter can be solved in a diplomatic manner which
benefits all involved.
Ann Keller is a Social Worker employed by the County. She provided the County, on
April 22, 1998,
a copy of the memo set forth above, with a copy of the "insurance identification card"
her insurer to be kept with her car. The card states no information on what the policy
does state the name and address of her insurer, together with the number and effective
her policy. This was sufficient to comply with the Policy.
As noted above, the Union formally grieved the Policy on April 28, 1998. Berg, on
of the County, formally denied the grievance the same day. As part of the processing of the
grievance, the County provided the Union a copy of a fax from Aegis concerning the
insurer" issue. That fax, dated March 3, 1998, states:
This fax is to confirm our recent phone conversation with regard
to employees/volunteers using
their personal vehicle while working for the county. The insurance follows the vehicle. In
words, the personal auto policy would apply should an accident occur while driving on behalf
The county's liability policy would provide secondary, or Excess,
coverage, above the personal
policy, should those limits be exhausted. Anyone who regularly drives a vehicle for their
with the county, should provide the county with evidence of their own insurance. . . .
Attached to the original of this fax was a copy of Section III of the County's insurance
the WCMIC. That copy was not provided to the Union during the initial processing of the
SECTION III WHO IS AN
1. You, and . . .
3. Anyone else is an
insured while using with your permission, an
automobile you own, hire or
borrow, except this insurance shall apply excess of any insurance maintained by:
. . .
b. An owner of an automobile
you hire or borrow.
As noted above, the parties were unable to resolve the grievance informally. Wilson
County's final formal response to the grievance in a letter dated May 19, 1998, which states:
I have been in contact with Aegis Corporation, the administrator
for Wisconsin County Mutual
Insurance Corporation. They have informed us that they will not be the principle insurer for
that the county does not own. The county's liability policy would provide secondary, or
coverage above the employee's personal policy, should those limits be exhausted.
The Personnel Committee has denied this grievance and requests
that evidence of insurance be
provided by employees that drive their vehicle for their position with the county. . . .
Wilson testified that the County's insurance policy with Wausau also provided excess
the employe's personal insurance, which was taken to be the primary source of liability
The County has not generally distributed its insurance policy. Keller obtained a copy
the processing of the grievance. She discussed the primary/secondary insurer issue with her
agent, who indicated to her that her personal policy was probably good for one accident
during business use of her car. Her insurance agent felt she would probably be dropped after
occurrence of an accident occurring during her business use of her car. Beyond that, her
informed her that she could expect to pay roughly $100 annually above her personal
coverage rates to obtain business coverage for her car. Barbara Broen, who serves the
County as a
Social Worker and Juvenile Court Worker also discussed the insurance dilemma with her
agent, who concurred in the opinions Keller received. In June or July of 1998, Karen Weis
Broen that she could not receive mileage reimbursement until she had provided the County
of insurance. Keller and Broen were concerned with the wide variety of contexts in which
employes use their personal vehicles to perform County work. Broen, for example, may
transport juveniles to facilities located far from Buffalo County. Keller and Broen both
the cost of insurance could affect the willingness and ability of employes to provide needed
It is undisputed that, prior to the implementation of the Policy, the County, "bit the
on those employes who maintained no insurance coverage. It is also undisputed that some, if
employes have not informed their insurer that they use their vehicles for business use.
Further facts will be set forth in the
THE UNION'S POSITION
After a review of the evidence, the Union notes that its "main concern . . . is that
county required proof of auto insurance for employees using their personal vehicle, while on
business, it also informed the employees that the employees' personal auto insurance would
primary." The implementation of this requirement constitutes "an unreasonable work rule in
of Article 4, Section 1, Subsection B of the contract."
Beyond this, the Union contends that "the County's action changes a mandatory
bargaining." This unilateral action violates established past practice and the provisions of
The impact on unit employes is direct and apparent. Two employes testified that the change
increased their auto insurance premiums by $100 annually. Beyond this, the County, in
Appendix A, threatened to deny mileage reimbursement "if there was no proof of insurance."
mileage reimbursement increased in 1999 has no bearing on the grievance, since the increase
implemented well after the grievance was filed," and since there was no increase in mileage
reimbursement in 1998.
The Union notes that the provisions of the County's liability policy can play no role
resolution of the grievance since the Union had no notice of the terms of that policy. That
was aware that at least one unit employe had no insurance at the time the Policy was
makes it difficult to conclude the terms of the County's liability policy can, standing alone,
employes the primary source of insurance. The provisions of Sec. 895.46, Stats., underscore
County policy cannot affect its role as the primary insurer of its employes, while those
within the scope of their employment.
The Union concludes that the grievance should be sustained and states its view of the
appropriate remedy thus:
As a remedy, the Union would request that employees not be
required to show proof of auto
insurance coverage and that the County be ordered to carry the primary liability insurance
employees who use their personal vehicles for County business.
THE COUNTY'S POSITION
After a review of the evidence, the County contends that Article 4 grants it the
establish reasonable work rules. In this case, the County reasonably acted by "changing its
insurance carrier, increasing its maximum coverage, and responding to the carrier's
with respect to implementation of safety standards." Since the contract does not limit these
the County's requiring proof of insurance coverage must be considered a reasonable work
Noting that "(e)mployees are not required to maintain any specific level of coverage,
nor . .
. evidence of the level of coverage," the County concludes that the Policy cannot be
unreasonable. More specifically, the County urges that the Policy can be considered
under arbitral precedent only if it fails to reasonably relate to a legitimate management
"legitimate interest in limiting potential liability against the County and therefore in
drive their personal vehicles in the course of their work for the County" is, according to the
obvious. The development of the Policy was itself "a legitimate response by the County to
recommendations made by and incentives offered by the liability carrier to improve safety
Nor can the implementation of the Policy be considered a violation of Article 24.
agreement does not cover proof of insurance cannot obscure that it authorizes the County to
promulgate reasonable work rules. Presuming that employe displeasure reflects their need to
business coverage for their personal vehicle, the County argues that "it is common
insurance companies may charge higher premium rates for insureds who drive their personal
for business purposes" and that "it is not the County's responsibility to
inform employees with respect to their personal automobile coverage." Beyond this,
argues it is speculative to assume that insurers would not require business coverage even if
County's liability insurer elected to be a primary insurer.
The County then argues that the requirement that employe insurance be primary "is
not a new
policy." Noting that "the County's liability insurance carrier . . . determines who shall be
insurer," the County concludes that the "change" asserted by the Union rests only on unit
Nor can the Union's assertion that the change is unilateral be accepted. The County
"the Union has already bargained over the issue by agreeing to language which provides a
reimbursement for miles driven on County business." IRS regulations establish that
"is intended to cover more than the cost of gasoline." Nor can there be any finding that the
has violated Appendix A. That employes may not have been truthful with their insurers
establish County misconduct.
The County concludes that "(t)here clearly has been no violation of the collective
agreement." Even if there had been, the County concludes that the sole real remedy
available to the
Union "is to address the issue at the bargaining table and attempt to seek a higher mileage
reimbursement rate." In any event, the County contends that the grievance should be
The issue is stipulated, and questions the County's implementation of the Policy. The
advance a series of arguments putting Articles 4, 24 and Appendix A at issue. Ultimately,
4 and 24 govern the grievance.
Appendix A can play no direct role in the resolution of the Policy. Addressing its
role in the
grievance does, however, preface the more difficult issue concerning the application of
Articles 4 and
24. The parties do not dispute that Appendix A establishes a specific rate for the
employe expenses in providing a personal vehicle for use on County business. By the clear
the provision, a debt is created. More specifically, the "County shall" pay the "greater" of
cents per mile" or "County policy." It is apparent that the reference to "County policy" is to
only. Thus, the County policy governs only if the rate set by that policy is greater than
cents per mile. The language of the provision and its placement in an Appendix which
payment of various benefits to employes underscores that it creates a debt from the County to
employe upon the employe's provision of a service.
Standing alone, Appendix A does not make the debt owed conditional. Thus,
of their personal vehicle triggers the reimbursement obligation. The reference to "County
to a rate only. Thus, the conditioning of the reimbursement on compliance with the Policy
be rooted in Appendix A. The reference to "County policy" does not, for example, give the
the authority to condition the payment on anything other than the provision of a personal
County business. If it did, the County could, by policy, revoke the reimbursement or so
condition its issuance to eliminate the reimbursement obligation. To exemplify the point, the
cannot, under the terms of Appendix A, condition the payment of reimbursement on a
statement of satisfaction with the job performance of an employe. Such a policy reads the
mandate of Appendix A out of existence. County concern with the quality of employe
rests, then, on other agreement provisions. The same is true of the link between liability
and mileage reimbursement.
Against this background, the County's conditioning of the payment of Appendix A
reimbursement on employe compliance with the Policy must be seen as a violation of the
Appendix A, unless the condition can be founded on other agreement provisions. Contractual
for this aspect of the Policy must be located under Articles 4 or 24, if such support exists.
to preface the more fundamental dispute of the parties on the implementation of the Policy.
A, standing alone, will not support either the Union's broad assertion that the contract bars
implementation of the Policy or the County's broad assertion that the contract permits the
implementation of the Policy. Rather, Appendix A prefaces the dispute. In the absence of
contractual support, the County cannot condition Appendix A reimbursement on employe
with the Policy. In the absence of other contractual support, Appendix A provides no
that the County bargain reimbursement rates with the Union. That the parties may not have
the same understanding of the extent of employe insurance liability when they agreed to
A provides no basis to question its clear terms. To conclude otherwise would open any
provision to bargaining based on no more than one party's dissatisfaction with its terms.
the stability a written agreement brings to a bargaining relationship.
The strength of the County's case lies in its assertion that the Policy constitutes a
work rule authorized by Article 4, Section 1, B. The strength of the County's assertion of
reasonableness of the work rule should not be understated. The County forcefully notes that
a legitimate interest in limiting exposure of public funds to lawsuits; in promulgating safety
and in securing premium discounts through its policies. Beyond this, the County accurately
Policy has a limited scope. It recommends, but does not require, specific coverage levels.
alone, the County's interests cannot be dismissed as unreasonable, and its attempt to assert
through the Policy appears to fall within the scope of Article 4, Section 1, B.
The work rule does not, however, stand alone and its relationship to other agreement
provisions precludes accepting the County's view. A series of difficulties arise in attempting
reconcile the Policy, as a work rule, with other agreement provisions. That reconciliation is
contractually essential, since Section 1 of Article 4 requires a work rule to be "subject . . .
provisions of this contract." Immediately apparent is conflict between the Policy and
Through the Policy, the County has asserted the unconditional reimbursement of Appendix A
made conditional. This rewrites the clear language of Appendix A, which creates a debt
employe request for reimbursement for mileage already provided to offer a County service.
Attorney General addressed an issue analogous to that posed here in 59 OAG 47 (1970).]
B of Article 4, Section 1, cannot pit one agreement provision against another under the
of Section 1.
More significantly, if the Policy constitutes a reasonable work rule, it can be
condition of employment. Conditions of employment are governed by Article 24. The terms
Policy, however, are not reconcilable to the final sentence of that article. The final sentence
interpreting Article 4, Section 1, B, as a grant of County "authority unilaterally (to)
changes in . . . conditions of employment." This reference is followed by a reference
interpretation of the agreement as a Union waiver of impact bargaining rights. The two
respectively address mandatory, then permissive subjects of bargaining.
The Policy addresses mandatory subjects of bargaining. At the broadest level,
subjects of bargaining are matters which primarily relate to wages, hours and conditions of
employment, while permissive subjects of bargaining are matters which primarily relate to
formulation or management of public policy. See, Beloit Education Association v. Wisconsin
Employment Relations Commission, 73 Wis.2d 43 (1976), United School District No. 1 of
Racine County v. Wisconsin Employment Relations Commission, 81 Wis.2d 89 (1977), and
City of Brookfield v. Wisconsin Employment Relations Commission, 87 Wis.2d 819 (1979).
More specifically, mileage reimbursement is a mandatory subject of bargaining. See
dodgeland school district, dec. no. 29490 (werc, 1/99) citing Brown County Attorneys
Association v. Brown County, 169 Wis. 2d 737 (Ct. App. 1992). Beyond this, there is no
apparent basis to warrant concluding that County requirement of employe proof of liability
impacts public policy more fundamentally than it impacts employes. Wisconsin statutes
liability for employe acts within the scope of their employment on the County. See Sec.
Stats. Thus, the Policy addresses how the impact of this liability is allocated between the
its employes. This is more a "dollars and cents" issue affecting employes than one of public
affecting the public generally.
Thus, the aspects of the Policy questioned by the grievance constitute a mandatory
of bargaining. There is no dispute that the requirement that employes submit proof of
insurance and the requirement that such proof precede County payment of mileage
changes County practice preceding the move to WCMIC insurance. Those changes were
sought by WCMIC and the point of the premium discounts offered the County. These
unilateral, and thus prohibited by the final sentence of Article 24. To read the Policy as a
permitting the County to unilaterally alter a condition of employment thus flies in the face of
1 of Article 4 and of the final sentence of Article 24.
In sum, whether or not the Policy could stand alone as a reasonable work rule under
4, Section 1, B, it cannot do so in light of the provisions of Article 24 and of Appendix A.
the changes noted above are not reconcilable to those provisions, the Policy cannot be
reasonable work rule. Thus, the implementation of the Policy on the points noted above, in
absence of bargaining, must be considered a violation of the labor agreement.
Before addressing the issue of remedy, however, the scope of this conclusion must be
examined. More specifically, the Union contends that the Policy sought to change the
the primary to the secondary insurer of employe vehicles. The evidence does not support
assertion. Initially, it must be noted that the Policy is silent on whether the County or the
carries primary liability coverage for a vehicle. Section 7.6 of the Safety Handbook
under the Policy would appear to assume that the primary insurance is the employe's policy,
Policy is silent on the point. More significantly, Wilson testified, without contradiction, that
Wausau insurance policy considered the County's insurance secondary to the employe's.
is no evidence to support the Union's assertion that the Policy changed County liability
from primary to secondary coverage.
This conclusion does not mean the employe's insurance is primary. Rather, it
this issue cannot be resolved under the labor agreement. At least three contracts and the
statutes bear on the resolution of whether the County's or the employe's insurance is
only one of those agreements enforceable here is the labor agreement, which is silent on the
There is, as noted above, no reliable evidence that the employes ever received the benefit of
liability policy which, by its terms, provided primary coverage. The other two agreements
on the issue are the County's liability policy with WCMIC and the contract, if any, between
employes and their insurer. Neither of these agreements is enforceable here. This poses a
significant issue for both the County and the Union. The County's contract with WCMIC
is secondary to other insurance. Individual employes may or may not carry auto insurance.
carry insurance, their policy may or may not cover business use of the vehicle. Beyond this,
be that the insurers of individual
employes provide policies which themselves assert secondary coverage for business
policy governs; how those policies relate if both claim to be secondary; and how Wisconsin
bear on either cannot be reached on this record. There is no apparent authority to extend an
arbitrator's reach under the labor agreement that far. Even if it was authorized, there is no
to support such a reach.
This poses the issue of remedy. Against the background sketched above, it is
order the County to provide "primary" insurance. Such insurance never existed and thus
restored. Thus, the remedy ordered below restores the situation preceding the
implementation of the
Policy to the extent that is possible. The Award states the County's violation of the labor
then requires that the County stop enforcing the Policy until the parties have collectively
At best, the grievance sets the stage for the parties' collective bargaining for a
agreement to that in effect at the time of the grievance. As the County argues, this is where
remedy lies. The uncertainty regarding the primary/secondary insurance issue poses a risk
County nor its employes can take lightly. This risk is best addressed in bargaining. Costs
to insuring the risk of liability for employe business use of personal vehicles must, in any
addressed in bargaining before they can be awarded in arbitration.
The County did violate the collective bargaining agreement by the implementation of
Evidence of Insurability Policy.
As the remedy appropriate to the County's violation of Articles 4, 24 and Appendix
until the County has complied with its contractual duty to bargain with the Union, it shall not
employes to demonstrate proof of liability insurance, nor shall it condition the payment of
reimbursement on employe compliance with the Policy.
Dated at Madison, Wisconsin, this 15th day of March, 1999.
Richard B. McLaughlin, Arbitrator