BEFORE THE ARBITRATOR
In the Matter of the Arbitration of a Dispute Between
THE LABOR ASSOCIATION OF WISCONSIN,
and THE MEQUON EMPLOYEES ASSOCIATION,
THE CITY OF MEQUON
(Grievance of Donna Perry)
Mr. Patrick J. Coraggio, Labor Consultant, Labor Association
of Wisconsin, Inc., on behalf of the Association.
Davis & Kuelthau, S.C., Attorneys at Law, by Ms. Mary L.
Hubacher, on behalf of the City.
The above-captioned parties, herein "Association" and "City", are parties to a
bargaining agreement providing for final and binding arbitration. Pursuant thereto, I heard
on July 17, 2002, in Mequon, Wisconsin. The hearing was transcribed and the parties there
that I would retain jurisdiction if the grievance is upheld. The parties subsequently filed
were received by August 22, 2002.
Based upon the arguments of the parties and the entire record, I issue the following
Since the parties did not jointly agree on the issue, I have framed it as follows:
Did the City violate Section 14.01 of the contract when it refused
to pay a retirement benefit to
grievant Donna Perry and, if so, what is the appropriate remedy?
Grievant Perry, who worked for the City for 14 years and 10 months, is 53 years of
February 12, 2002 (unless otherwise stated, all dates herein refer to 2002), she informed Fire
Cutis Witzlib by memo (Exhibit B): "Effective February 15, 2002, I am retiring from my
the Fire Department. I expect to receive all the benefits offered me under the current labor
. ." Witzlib accepted and signed her memo on that day and Perry, who was classified as an
Administrative Secretary, severed her employment.
By letter dated March 14, Labor Consultant Patrick J. Coraggio asked Human
Manager Claudetta Wright to pay Perry the retirement benefit provided for in Section 14.01
contract. Wright by letter dated March 27 (Exhibit D) informed Coraggio:
. . .
This is in response to your letter of March 14, 2002 regarding the
final payment to Donna Perry
who resigned from her position with the Fire Department effective February 28, 2002.
Based on the
information available, Ms. Perry has been paid any and all monies owed her under the MEA
A review of our records shows:
Ms. Perry worked 1045 hours in
2001 (.502 full time equivalent) and is therefore
entitled to just over one-half of the vacation and floating holiday hours provided for under
Based on her
start date of April 6, 1987, as of the date of her resignation, Ms. Perry
had been employed by the City for 14 years, 10.3 months and eligible for prorated vacation
20 days or 80.32 hours) for her current service year.
Calculation of Final Payment
Annual Vacation Allocation 80.320
Vacation Prorated (.86 of service
Vacation Used as of Resignation
Floating Holidays (1.75)
Hours to be Paid Out
The leave accounting records used to determine Ms. Perry's
payout were obtained from Payroll
and have been reviewed for accuracy and a Personnel Clearance Form detailing all payout
will be forwarded to Ms. Perry. Finally, I have confirmed with Finance Director
Douglas Bates that
the City will not require Ms. Perry to refund the $27.62 overpayment.
. . .
Labor Consultant Benjamin Barth by letter dated April 2 (Exhibit E) informed
. . .
In the last round of negotiations, the parties reached a tentative
agreement in Section 14.01,
deleting the requirement for an employee to retire under the terms and condition of the
Retirement System or have a combined age and years of service with the city of 75 years. It
intent of the Association to include any employee who "retires" from the City to be eligible
(2) full working days of pay for each year of service.
It is the Association's position that since
Donna Perry retired from City employment effective
February 28, 2002, she is entitled to the benefit in Section 14.01, in
addition to the Calculation of
Final Payment, that you stated in your March 27, 2002 letter.
. . .
The City refused to pay Perry the payment provided for in Section 14.01 on the
she was not eligible to retire under the Wisconsin Retirement System ("WRS"), hence
leading to the
instant grievance (Exhibit F) and arbitration.
Perry, who worked about 20 hours a week as a part-time employee, has not worked
leaving City employment and she is not looking for work. She said that Human Resource
Wright had previously told her that she was not entitled to the Section 14.01
because she was under 55 years of age and because she was ineligible to receive any WRS
Michele Corrao, employed since 1994 as a part-time employee, took over Perry's job
Administrative Secretary I when Perry left. Corrao testified that the Association in the last
contract negotiations insisted on having part-time employees receive pro-rated benefits and
Association in negotiations succeeded in making wholesale changes to the language
contained in Section 14.01 which earlier stated that in order to receive the benefit, employees
be eligible for retirement under WRS, or have a combined age and years of service with the
75 years, or suffer death or a serious injury. She also said that the City in negotiations
never said that
employees either had to be 55 years of age to receive the retirement benefit provided for in
14.01 or that they must be eligible to retire under WRS.
On cross-examination, Corrao testified that the Association in negotiations may have
to drop its retirement proposal in favor of its severance proposal; that the Association
dropped its severance proposal; that the City finally agreed to the same retirement language
in the City's contract with the DPW employees who also are represented by the Association;
the language in Section 14.01 is "an honor system. If you say you are retiring, you are
Association President Dennis Hoffman testified that the Association in negotiations
get pro-rata benefits for part-time employees; that the parties in negotiations never agreed to
restriction or WRS eligibility in order to receive the benefit spelled out in
Section 14.01; and that the
Association wanted this benefit whenever anyone retires.
On cross-examination, he testified that the City in negotiations flatly rejected the
severance pay proposal; that the Association in negotiations "implied" that employees could
at any age; and that employees are entitled to the Section 14.01 payment only if they in fact
He added you have to "go on the integrity of the person"; that employees should not receive
payment if they do not retire; that, "The intent was to retire at any age"; and that he did not
the City's DPW employees need to meet the WRS criteria for retirement before they can
retirement provided for in their contract with the City.
Human Resource Manager Wright testified that resignations are treated differently
retirements under the contract; that the City does not pay the Section 14.01 benefit if a
employee is under 55 years of age and is ineligible for WRS benefits; that she does not look
employees do after they retire at age 55; and that, "I use the WRS specific guidelines." She
that the Association in negotiations never stated that employees can receive the Section 14.01
if they are under 58 years of age; that the word "retirement" is not defined in the contract;
told Perry she was not entitled to the Section 14.01 payment; and that Fire Chief
Witzlib does not
have the authority to determine whether someone qualifies for retirement. She also said that
Association in negotiations twice presented a severance proposal which the City rejected; that
Association there asked for the same language contained in the City's DPW contract; that
employees get this benefit only if they are over 55 years of age; and that the word
never defined in negotiations because it was "superfluous".
She further stated that the longevity and sick leave conversion benefits provided for
contract always have been pegged to a 55 age requirement; that the Association in
stated that the Section 14.01 benefit would be paid to employees who retire before they are
that under the Association's claim, the Section 14.01 benefit would be treated differently than
other retirement benefits provided for in the contract.
On cross-examination, Wright testified that no DPW employees have retired before
she cannot recall ever telling DPW employees they must be 55 to retire; that before Perry's
she never told the Association that the term "retirement" as used in the contract is tied to
years of age; and that, "I never had an inquiry addressing that issue." She also said that
negotiations, there was an "interest" on the Association's part in making "benefits" more
to part-time employees.
POSITIONS OF THE PARTIES
The Association asserts that by not paying grievant Perry the retirement benefit
the City has violated Section 14.01 of the contract because, in the Association's words, it
"clear and unambiguous" language that retirement pay must be paid to all employees who
without qualification; because the plain meaning of the word "retirement" supports its
because the "qualifiers" surrounding retirement found in the prior contract "have been
the current agreement; because the City does not apply the WRS requirements to longevity
paid to retirees; and because "the benefits of Section 14.01 are not WRS provision benefits."
Association further claims that bargaining history supports its position because the City has
successfully rebutted the testimony of its witnesses who testified about bargaining history and
furthermore: "The intent of the parties in changing the language of Section 14.01 must
be given great
weight by the Arbitrator."
The City contends that the Association is "attempting to use the grievance process to
the severance payment. . ." it failed to get in negotiations; that the Association's
'retire' is not reasonable; and that past practice surrounding the WRS payments supports its
It also maintains that the "Association's interpretation is contrary to contract interpretation
it results in internal inconsistencies. . ." within the contract and because the Association's
if adopted, would put the City in an impossible position because eligibility would have to be
determined "on the sole basis that the employee says he or she is retiring. . ."
This case mainly turns on the application of Section 14.01 of the contract which
Section 14.01 Upon
retirement, each regular permanent employee shall receive two (2) full
working days of pay for each year of continuous full-time service in a position with the City.
of pay is to be determined by the employee's current hourly base rate, or the highest hourly
during the preceding three (3) years preceding the date of retirement, whichever is greater.
determination of a full working day for regular permanent part-time employees shall be based
the average number of hours worked per day during the previous year. (Emphasis added).
The key phrase here is "Upon retirement". Does it refer to
any retirement as contended by
the Association, or instead, does it refer only to those retirements under the WRS which
does not grant retirement benefits to general employees unless they have reached 55 years of
contended by the City. Section 14.01 does not state at what age this retirement benefit kicks
Article XV, entitled "Wisconsin Retirement System" states:
Section 15.01 Wisconsin Retirement
System: In addition to the payment of the
Employer's required contribution to the Wisconsin Retirement System, the Employer shall
pay up to
seven percent (7%) of the employee's earnings as defined in the Statutes toward an
contribution to the Wisconsin Retirement System. Eligibility requirements and pension
be as provided by Statutes and the rules and regulations of the Wisconsin Retirement System.
If we assume, as does the City, that the retirement provided under this language is
retirement referenced in Section 14.01, then no retirement benefits need be paid out under
14.01 unless all of the eligibility requirements of Article XV have been met, including the
requiring general employees to be 55 years of age or older. Ordinarily, this would be a
construction of the contract because it is generally assumed that the same words here
"retirement" have the same meaning throughout a contract.
But here, the parties bargained over Article XIV of the former contract which stated:
ARTICLE XIV RETIREMENT
Section 14.01: Employees
shall be eligible for this benefit if they are eligible for retirement
under the Wisconsin Retirement System at the time they retire or have a combined age and
service with the city of seventy-five (75) years, upon an employee's death or if an
due to injuries or illness which prevents the employee from physically or mentally
duties. A regular full-time employee shall receive two (2) full working day's pay for each
continuous service with the City. The rate of pay shall be determined by the employee's
straight-time rate in existence at the time of retirement or death, or highest regular
hourly rate during the preceding three (3) years preceding the date of separation, whichever
greater. Regular part-time employees shall receive two (2) full working days pay for each
continuous service. In the event that the part-time employee becomes a full-time employee,
determination of the part-time benefit (hours per day) will be calculated at that time. The
determination of a full working day of pay shall be based upon the average number of hours
per day during the previous year. The rate of pay for part-time employees shall be
determined in the
same manner as for full-time employees. No additional days shall be accumulated after the
reaches sixty-five (65) years of age. Continuous service shall not accrue during any period
or unpaid leave of absence which exceeds thirty (30) continuous calendar days. (Emphasis
Newly-revised Section 14.01 thus drops the requirements in the prior contract that
are to receive this benefit only if "they are eligible for retirement under the Wisconsin
System. . .or have a combined age and years of service with the City of seventy-five (75)
years. . ."
If the City wanted to limit the Section 14.01 retirement benefit to those employees
eligible for retirement under the Wisconsin Retirement System. . ." - which is the
advances here - it therefore should have insisted in negotiations that
Section 14.01 now contain words to the effect: "Eligibility requirements and
pension benefits shall
be as provided by Statutes and Rules and Regulations of the Wisconsin Retirement System."
City, though, failed to even propose such language.
It is true, as the City points out, that no Association representative ever expressly
in negotiations that the definition of retirement under Section 14.01 would be different from
used in Article XV which pegs retirement to the WRS' 55-year age requirement. It also may
as contended by the City, that it "had no knowledge that the Association would interpret
14.01 as providing retirement benefits to any employee, regardless of age, who states that
she or he
On the other hand, Carrao and Association President Hoffman's testified that the City
negotiations never once suggested that the Section 14.01 retirement benefit was in any way
to either the WRS benefit provided for in Article XV or to any of the eligibility
to qualify for WRS pension benefits. The City in negotiations also never told the
the City has a policy of not paying out the Section 14.01 retirement benefit to the City's
employees unless they are 55 or older. Having failed to give such notice then, it is too late
claim that the Association somehow or another either knew, or should have known, of that
There thus was a lack of clarity in negotiations over this issue, which is why this case
on which party had the burden in negotiations to clear up this issue. The subjective views
Wright, Carrao and Hoffman cannot be given much weight because all of them had a good
reasonable basis for believing that the ultimate language reached in Section 14.01
respective positions. This case thus must turn on objective criteria since that is the best way
determining what transpired in contract negotiations.
As to that, it is undisputed that the City in negotiations never told the Association that
City has a policy of not paying this benefit to anyone under 55 years of age and that the City
wanted that policy reflected in Section 14.01. The City had the burden of communicating
fact to the Association if it wanted Section 14.01 to have the qualifying language it argues
failing to meet that burden, Section 14.01 must be applied according to its clear and
terms which means that employees who legitimately retire are entitled to this benefit even if
not 55 years of age since Section 14.01 on its face has no such age restriction.
The City also asserts that that past practice should control over how
Section 14.01 is now
applied. If there were proof that this practice were ever communicated to the Association at
time, this would be a valid point. But, Human Resource Manager Wright acknowledged
that she never relayed this fact to Association representatives. Hence, there is no basis
that any Association representatives were ever made aware of this practice, which is
why it does not constitute a binding past practice since a past practice by definition:
"must be (1)
unequivocal; (2) clearly enunciated and acted upon; (3) readily ascertainable over a
of time as a fixed, and established practice accepted by both parties." Elkouri and Elkouri,
Arbitration Works, (BNA, 5th Ed., 1997), p. 632. Here,
since the practice was never communicated
to the Association, it was not "accepted by both parties." That is why this case differs from
various cases cited by the City in support of its contrary claim. See City of Tulsa, 90 LA
(Baroni, 1988); School District of Beloit, 73 LA 1146 (Greco, 1979); Webster Tobacco Co.,
5 LA 164 (Brandschein, 1946).
It is true that the Association in negotiations failed to obtain severance payments for
employees who leave City employment. Given that failure, it is understandable why the City
want to make any severance payments through any back door device that requires the City to
severance pay under the guise of calling it "retirement" pay.
While the City's concern is certainly understandable, this benefit is available
only to those
employees nearing retirement age and who say that they, in fact, will retire. Here, since
Perry is 53
years of age, she is near the WRS's normal 55 age requirement. She therefore can
that she wishes to retire, as opposed to merely severing her employment.
The City asserts that granting this benefit to someone who is not yet 55 years of age
present administrative problems in determining whether such employees, in fact, will retire
workforce and that, "Under the Association's definition, a thirty-five (35) year-old employee
receive a retirement benefit because he/she says he/she is retiring."
I disagree. A thirty-five (35) or even a forty-five (45) year-old employee
cannot receive this
benefit, as he/she does not even come close to the normal retirement age. Hence, this
be paid only if the employee is near the 55 retirement age, which is the situation
here since Perry is
53 years old.
In this connection, Carrao acknowledged this is "an honor system. If you say you
you are retiring." Association President Hoffman similarly stated you have to "go on the
of the person" and that employees should not receive that payment if they do not retire.
testimony is important because it shows that the Association does not want employees to rip
City by falsely claiming they are retiring, when in fact they are not. Hence, if the parties
avoid future disputes over this issue, they may want to agree on a minimum age that is
qualify for this benefit even though the current contract does not provide for that.
It is true, as contended by the City, that sustaining the grievance will result in having
retirement ages for receiving the retirement benefit in Section 14.01 and the WRS
retirement benefit provided for in Article XV. That difference, however, is not
since the one-time retirement benefit paid by the City under Section 14.01 is different from
pension benefit provided for under Article XV and which is payable over a retiree's lifetime.
Different benefits therefore can kick in at different times, depending on what the parties
Moreover, total consistency is not achieved even under the City's view of the case since the
Perry a longevity payment under Section 13.04 of the contract which states that such
to be based "up to the date of retirement."
In light of the above, it is my
1. That the City violated Section 14.01 of the contract when it refused to pay
benefits to grievant Donna Perry.
2. That to rectify that contract violation, the City shall immediately pay grievant
Perry the retirement benefit provided for in Section 14.01.
3. That to resolve any remedial questions that may arise over application of this
I shall retain my jurisdiction for at least sixty (60) days, and I shall extend it if necessary.
Dated at Madison, Wisconsin, this 3rd day of September, 2002.