BEFORE THE ARBITRATOR
In the Matter of the Arbitration of a Dispute Between
LOCAL UNION 3938, WISCONSIN COUNCIL 40,
WAUKESHA WATER UTILITY
(Vacation Bonus Period Grievance)
Mr. John Maglio, Staff Representative, Wisconsin Council 40,
AFSCME, AFL-CIO, P.O. Box 624,
Racine, WI 53401, appearing on behalf of AFSCME Local 3938.
Davis & Kuelthau, S.C., by Attorney Joel Aziere, 111 East
Kilbourn Avenue, Suite 1400,
Milwaukee, WI 53202, appearing on behalf of the Waukesha Water Utility.
Pursuant to the provisions of the collective bargaining agreement between the parties,
AFSCME Local 3938 (hereinafter referred to as the Union) and the Waukesha Water Utility
(hereinafter referred to as either the Utility or the Employer) requested that the Wisconsin
Employment Relations Commission designate Daniel Nielsen to serve as arbitrator of a
the Utility's decision to change the available vacation bonus periods for Pat Waite. The
was so designated. A hearing was held on April 30, 2003, at the Utility offices in
Wisconsin, at which time the parties were afforded full opportunity to present such
exhibits, other evidence and arguments as were relevant to the dispute. The parties
case on oral arguments at the close of the hearing. A stenographic record was made of the
and the arguments, and a transcript was received on May 16th, whereupon
the record was closed.
Now, having considered the evidence, the arguments of the parties, the relevant contract
and the record as a whole, the undersigned makes the following Arbitration Award.
To maximize the ability of the parties we serve to utilize the Internet and
software to research decisions and arbitration awards issued by the Commission and its staff,
footnote text is found in the body of this decision.
The parties stipulated that the matter was properly before the Arbitrator and that the
presented by this grievance are:
1. Did the Utility violate the collective bargaining
agreement and/or long established past
practice when it established Pat Waite's vacation bonus period in January of 2002?
2. If so, what is the appropriate
ARTICLE II - MANAGEMENT
1. The Employer has all management
rights it possesses by law except as modified by this
2. Management rights are prerogatives
and functions which encompass those aspects of Utility
operations which do not require discussion with or concurrence by the Union or rights
management which are not subject to collective bargaining.
3. Except as modified by this
Agreement, it is agreed that the rights, functions and authority to
manage all operations and functions of the Waukesha Water Utility are vested in management
include, but are not limited to, the following:
administer reasonable rules and regulations.
B. To manage, evaluate
and otherwise supervise all employees.
C. To hire, promote,
transfer, assign and retain employees.
D. To suspend, demote,
dismiss or take other disciplinary action against employees
for just cause.
E. To layoff employees.
F. To relieve employees
G. To determine the
services to be provided, the duties to be performed, the number
of positions and classifications and to reclassify employees.
H. To maintain the
efficiency and economy of the Utility operations.
I. To subcontract work.
J. To take whatever
action is necessary to comply with the law.
K. To determine the
methods, means and personnel by which Utility operations are
to be conducted.
L. To take whatever
action may be necessary to carry out the objectives of the
Utility in emergency situations.
M. To exercise
discretion in the operation of the Utility, the budget, organization,
assignment of personnel and the technology of work performance.
N. All other rights of
management which are not enumerated above.
. . .
ARTICLE XXVI -
1. Non-Peak Periods. To
encourage vacationing during off peak periods, extra vacation days
will be granted to employees who take time off between annually specific bonus periods.
pay is provided at the employee's current base rate. Each week of vacation taken during the
period entitles an employee to one (1) extra vacation day (the week must be taken in full or
up by day within the period). The bonus days must also be taken during the bonus period of
2. Vacation Schedule.
Employees are entitled to vacation on the anniversary date of
employment according to the following schedule:
Years Employed Weeks Granted
each 1 - 8 2 @ 5 days
each 9 15 3 @ 5
each 16 - 22 4 @ 5 days
each 23 - 29 5 @ 5 days
each 30 and over 6 @ 5 days
. . .
6. Supervisory Approval.
Department supervisors are to approve vacation schedules and
changes to assure minimum acceptable staffing is available so the departments remain
normal business days. Employees are permitted to schedule vacation time in days or
department supervisor approval.
Department supervisors shall use seniority
to determine scheduling priority when more than
one (1) employee chooses the same vacation period between January 1st and March 15th of
. . .
There is very little dispute about the facts giving rise to this grievance. The Utility
water to the citizens in Waukesha, Wisconsin, and the Union is the exclusive bargaining
representative for the Utility's non-supervisory employees. Pat Waite has worked for the
1990 and handles the Utility's customer billing. In addition to preparing the information to
billings, she is responsible for other tasks such as entering new account information,
recording meter changes and inventories, and the like. The preparation of billing
generally occupies the latter portion of each month, and the other duties are performed when
not working on billings.
For over 25 years, the Utility has had a system of vacation bonus periods. In an
encourage employees to take vacations at times other than peak demand for their services,
are allowed to earn one extra day of vacation for each five days taken in specified non-peak
The bonus vacation day or days must also be taken within the non-peak periods. Employees
entitled to use their vacation at other times, but they do not earn the bonus days. This
incorporated to the collective bargaining agreement with the Union when the initial contract
bargained in the early 1990s. The language has been carried forward unchanged since then,
appears in the current contract as subsection 1 of Article XXVI.
Prior to 2002, Waite's specified bonus period consisted of 105 consecutive days -- the
months of June, July,
August, and the first 13 days of September. This is the same bonus period as the outside
crews have. In 2002, the
Utility changed her bonus period to the first 15 calendar days of March, April, May, June,
August, September and
November. While still adding up to 105 days, this eliminated the longer contiguous period
she had previously enjoyed,
and in many months includes only 1 full work week. In 2002, only 11 full work weeks fell
within the half month bonus
period schedule. She filed the instant grievance, challenging the modification of her bonus
At the arbitration hearing, in addition to the facts recited above, Waite testified that
the new bonus period was
not as useful a block of time as the former period, and that it denied her the flexibility to
take several weeks off at a
time when she could be earning bonus vacation days. She noted that her bonus period was
the only one among
represented employees that did not include entire calendar months. Waite testified that she is
a member of the Union's
bargaining team, and that the Utility has never made any proposal to change the vacation
bonus provisions of the
contract. While she agreed that her billing work was concentrated in the last two weeks of
each month, she said that
she was equally busy in the first two weeks of each month with her other duties. She also
noted that she had a trained
backup who could do the billing work if she was gone.
Peggy Steeno testified on behalf of the Utility. Steeno has been the Administrative
Services Manager since
1999, and she supervises Pat Waite. She was the person who decided to change the
designated bonus period for
Waite's position. After observing the administrative operations of the Utility for several
years, Steeno decided it made
no sense to designate the summer months as a non-peak time for Waite, since the peak
demands for her position
recurred monthly -- specifically, the need to get the billings out by the last work day of each
month -- and were no
different in the summer. Steeno said that Waite was working productively at all times during
the month, but that the
work in the first half was not time sensitive, while the billing work was time sensitive.
Steeno reviewed the history of the vacation bonus system, and said that there have
numerous adjustments of bonus periods over the years, though she conceded many of them
minor. She did not know how many of the changes had been discussed with the Union.
reviewed the history of the bonus system language in Article XXVI. She noted that the
pre-dated the Union's certification, and that the Union had proposed the original language for
provision. That proposal said the bonus periods would be "annually specified" and was
agreed to by
management. However, in the drafting of the agreement, the Utility's former attorney made
and wrote the term as "annually specific." That term has been carried forward unchanged.
Additional facts, as necessary, will be set forth below.
ARGUMENTS OF THE PARTIES
The Position of the Union
The Union takes the position that the Grievant is the victim of disparate treatment, in
that she is the only
represented employee at the Utility who does not have a bonus period which includes months
of contiguous time. The
result of the change is to make the bonus period useless for any extended vacation she might
wish to take. In many
months, the 15-day period encompasses only a single full work week. Clearly, the Grievant
is disadvantaged relative
to other employees.
The Utility's change in the bonus period is inconsistent with the practice it has
to bonus periods in
the past, in that it denies this employee the right to use consecutive weeks of vacation during
the bonus period. It is
undisputed that all other represented employees, and the Grievant herself before this change,
have been allowed access
to consecutive weeks of bonus time. This is an employee benefit, and the Utility is not free
to simply diminish the
benefit on a whim. It is well established that practices concerning employee benefits must be
honored, unless changed
through mutual agreement. The Union warns that accepting the Utility's theory of the case
would allow it to designate
every Tuesday and Thursday as the bonus periods, and thereby completely deny this
negotiated benefit to an employee.
That would be an absurd and unjust result, but it is not far removed from the result in this
case. Just as that attempt
to undermine the established benefit would have to be rejected by an arbitrator, so too must
this less onerous example.
The Position of the Utility
The Utility takes the position that the contract vests in management the right to
constitutes a peak period for an employee and that the Arbitrator cannot usurp that right.
evidence is clear that management acted reasonably in designating a bonus period for the
operation that avoided the monthly peaks of the job. While that may be inconvenient for the
Grievant, the contract language itself ties the bonus period to the demands of the specific job,
the desires of the specific employee. Since the difference in the benefit is the direct result of
difference in her job, there can be no argument that the Grievant has in some way been
Nor can the Union prove any type of binding past practice. The fact is that changes
made in the designated peak periods many times, both before and since the certification of
To the extent that there is a practice, it is that the peak periods of a job can be reviewed and
can be made to the bonus period. The original tentative agreement on this Article said that
periods would annually specified, and that clearly means that they can be changed each year
be. The typographical error that led to using the term "annually specific" does not change
of the parties, and does not affect the Utility's history of making changes in the bonus
it felt that changes were justified.
The contract language plainly allows the Utility to identify the non-peak periods for
and to designate those as bonus periods. Inasmuch as management's decision that the
had monthly peaks is reasonable, and since there is no evidence of any mutual agreement to
management's rights in this area, the grievance must be denied.
This is a contract interpretation case, and the outcome of any such case hinges on the
language used in the
collective bargaining agreement. Section 1 of Article XXVI defines the bonus vacation
1. Non-Peak Periods. To
encourage vacationing during off peak periods, extra vacation days will be granted to
employees who take time off between annually specific bonus periods. Vacation pay is
provided at the employee's
current base rate. Each week of vacation taken during the bonus period entitles an employee
to one (1) extra vacation
day (the week must be taken in full or broken up by day within the period). The bonus days
must also be taken during
the bonus period of the affected employee.
The dispute here is over what is meant by "annually specific bonus periods." The
Utility reads this provision to mean
that it can annually change the bonus periods to match its judgment of what are non-peak
periods. The Union takes
the position that the periods cannot be unilaterally changed, and that even if there is some
ability to change the periods,
the change must preserve the overall value of the benefit to the employee.
A fair reading of this language leaves little doubt that the bonus period is more than
just a specified grouping
of 105 calendar days in the course of the year. By definition, bonus periods are off peak
periods. What constitutes a
peak period necessarily requires a judgment as to the demands of the employee's position.
The initial question is who
makes that judgment and by what standards.
Contrary to the Union's interpretation, I conclude that the judgment as to what is and
is not a peak period rests
with management, and is not something that must be bargained during the term of the
contract. This conclusion rests
on the nature of the decision -- which in some respects goes to the heart of management's
function -- and the
reservation to management in Article II of the rights to "determine the services to be
provided, the duties to be
performed" . . . "maintain the efficiency and economy of the Utility operations"
and to "exercise discretion in the . .
. assignment of personnel." The decision as to what is and is not a peak period implicates
the exercise of each of these
rights, and absent clear language or well established practice to the contrary, I cannot
conclude that Article XXVI
compels the Utility to share that decision with the Union.
The Union does assert that a past practice exists, in that the Grievant has had the
same bonus period for a
dozen years and because, before this, no bargaining unit employee has ever had a bonus
period that did not guarantee
contiguous months. With respect to the Grievant's previous bonus period, this cannot be
said to be a binding past
practice of the parties. It is more properly characterized as a "present way" of doing things.
The distinction was
explained by Arbitrator Harry Shulman over 50 years ago:
But there are other practices which are not the result of joint
determination at all. They may be mere
happenstance, that is, methods that developed without design or deliberation. Or they may
be choices by Management
in the exercise of managerial discretion as to the convenient methods at the time. In such
cases, there is no thought
of obligation or commitment for the future. Such practices are merely present ways, not
prescribed ways, of doing
things. The relevant item of significance is not the nature of the particular method but the
managerial freedom with
respect to it. Being the product of managerial determination in its permitted
discretion such practices are, in the
absence of contractual provision to the contrary, subject to change in the same
discretion. . . Ford Motor
Company, 19 LA 237, at 241-42 (Shulman, 1952), emphasis added.
Here, there is not just "the absence of a contractual provision to the contrary," there is
language that makes it clear that
changes may be made. The designation of bonus periods is not static. By the terms of
Article XXVI, they are
"annually specific." Even making allowances for the awkward phrasing, which apparently is
the result of a
typographical error in the early days of this bargaining relationship, the language can only be
read to mean that the
bonus periods are determined on a yearly basis. This necessarily means that there can be
changes in them. 1/
1/ The Utility presented
evidence of past changes in the bonus periods. Most of these were minor, such as the
addition of new positions to the schedules, and many predated the certification of the Union.
These examples would
not be sufficient to show agreement by the Union that the Utility could make unilateral
changes in bonus periods,
but they do demonstrate the Utility's belief that it had that right.
The decision as to what is an off peak period is management's and it may be revisited
year. Management's discretion in making and reviewing this decision is not completely
As with any exercise of management rights, it may not be arbitrary or capricious. In the
face of a
challenge to the decision, it falls to management to provide objective evidence that the
the a position is subject to variations, and that the times it designates legitimately represent
periods of lower demand for the position's services.
The Union suggests that management's decision as to a bonus period for the Grievant
be arbitrary, in that it subjects her to disparate treatment. Disparate treatment is a concept
commonly used in analyzing acts of discipline under a just cause standard, but it can also be
of arbitrariness. That is, if one employee is treated differently and less favorably than other
situated employees, there can be a reasonable question about the grounds for the decision.
by definition, disparate treatment, requires more than just different treatment of employees.
requires that the employees be similarly situated. That is, the difference in treatment must
on something other than a difference in the work records, skills or other job related attributes
workers or their jobs. In this case, the Grievant is the only bargaining unit employee whose
periods have been designated as portions of months, but she is also the only bargaining unit
whose primary responsible is in billing, which is a monthly activity. The Grievant concedes
billing work is concentrated in the last two weeks of the month, and that is a reasonable basis
which management could determine that those are peak periods for her job. 2/
2/ This distinction
between the cycle of activity in the Grievant's job and the jobs of others also answers the
Union's assertion of a practice of granting bonus periods containing contiguous months.
Assuming that the
administration of this Article gives rise to a binding practice, it bears remembering that while
a practice can
supplement or clarify ambiguous language, it cannot read the language out of the contract. If
there is a practice
here, it is more plausibly seen as a practice of granting the longest contiguous bonus periods
possible, so long as
those bonus periods are consistent with Article XXVI's clear requirement that they
mirror the non-peak periods for
the job. For most of the Utility's jobs, a bonus period of the June through mid-September is
the longest contiguous
period consistent with the seasonal demands of the positions. Given the peculiar demands of
the Grievant's billing
position, the Utility could rationally judge the first 15 days of the month as the longest
contiguous bonus period
The Utility's decision to designate the first 15 days in seven
calendar months as the Grievant's
bonus period does impair her enjoyment of the benefit, compared with her former schedule.
be that the Utility's decision could have more reasonably been structured in a way that
Grievant access to consecutive work weeks as her bonus period, while still encouraging her
vacation outside of the peak periods of bill preparation activity. However, the standard
to the decision is not whether it is the most reasonable balance between her interests and the
The standard is whether the decision was arbitrary or capricious. As discussed above, there
reasonable basis for the difference in the bonus period for the Grievant and those of other
employees, and the bonus periods selected reflect that difference.
On the basis of the foregoing, and the record as a whole, I have made the following
1. The Utility did not violate the collective bargaining agreement and/or long
past practice when it established Pat Waite's vacation bonus period in January of 2002;
2. The grievance is denied.
Dated at Racine, Wisconsin, this 10th day of June, 2003.
Daniel Nielsen, Arbitrator