Panel finds more cons than pros to binding arbitration

Warwick Beacon ·

Is the use of binding arbitration, which can be used as a measure to settle particularly difficult municipal negotiations, a broken process in Rhode Island? Panelists and attendees at the 18th annual Rhode Island League of Cities and Towns Convention at the Crowne Plaza Thursday in Warwick sought to make the case that, at the very least, the process is flawed.

Attorney Vincent Ragosta – who has represented numerous municipalities during contract negotiations with police, fire and other labor unions, and recently mediated negotiations between the Warwick School Committee and the Warwick Teachers Union – repeatedly gave his opinion on the matter bluntly.

“I don’t like the process,” he said, saying that it was a “surrendering” of good negotiating values. He said that arbitrators have too wide of a discretion over the final result of the deal, which can have serious consequences, since – at least in fire and police negotiations – the decision of an arbitrator is binding in all respects, both financially and in the language.

Ragosta said that the process gives unions too much power, using the International Association of Fire Fighters (IAFF) union – of which all fire departments in the state belong to – as an example.

“The IAFF is a virtual cartel of labor organizations. They represent the entire state,” he said. “The provisions that they've been able to get, either through bargaining or an arbitration award in the interest arbitration process, they essentially have built up a bank of comparability evidence that many arbitrators find persuasive.”

“It's problematic because more progressive officials are trying to break away from that chokehold of comparability, and how do you do that if another municipality has made a bad deal or has been victim to a bad arbitration decision,” he continued. “It is very, very difficult if not impossible.”

Additionally, Ragosta asserted that arbitrators – which can come from states outside of Rhode Island – have a vested interest to make decisions agreeable to unions.

“Mayors come and go, town administrators come and go, town managers come and go, but unions have a continuity in leadership and institutional organizations,” he said. “So the arbitrators that are paid $2,000 or $2,500 a day, they have an interest in making decisions that are not going to alienate them from organized labor. It's a horrible process.”

Ragosta said binding arbitration should be “avoided at all costs.” He said that sometimes municipalities will be forced to agree to an unfavorable deal with a union simply to avoid taking the issue to arbitration. At the same time, Ragosta said that unions will often refuse to negotiate and insist that the matter be taken to arbitration, where they know they may have a better chance of getting a favorable outcome.

Ragosta and fellow panelist and attorney Timothy Bliss described certain unsavory tactics labor unions will use during the arbitration process, including preparing dozens of potential proposals – which the attorneys must prepare a defense against – only to drop all but a handful of them, wasting enormous amounts of time.

Additionally, union representatives do not need to be versed in practicing law, which can result in more wasted time, Ragosta argued, pointing to an example where he represented Providence during the closing of a fire station. Ragosta introduced an expert witness who had been a firefighter since 1966 and had received a recommendation from a superior court judge for his knowledge on fire departments. The union representative challenged whether or not he was really an expert, anyways.

“Think about that for one second,” Ragosta said. “A judge in the Superior Court has issued a decision accepting this man as an expert, and we had to spend an hour and a half debating whether or not he could testify. If there was a lawyer on the other side of that case, it never would have happened.”

However critical the panel was of labor union negotiations, and despite the panelists agreeing that unions often benefit from binding arbitration decisions more than municipalities, not all union representatives are a fan of arbitration.

“I am not in favor of interest arbitration,” said Darlene Netcoh, president of the Warwick Teachers’ Union. “I think the parties should be able to negotiate a contract. I think both sides should negotiate in good faith and come to an agreement. It's always better when the parties can sit down and figure out things together with a little give and take here and there.”

Netcoh said that the arbitrator might have zero background knowledge into the area of negotiations they are being asked to make a determination on, which is obviously not conducive towards crafting the most fair and informed decision.

Conversely, Mayor Scott Avedisian – who sat in as a mediator, with Vincent Ragosta fittingly enough, during the final stages of the contract negotiations between the Warwick Teachers Union and the Warwick School Committee – said on Monday that arbitration can be a beneficial process when the traditional negotiating process stalls.

“In all honesty we'd probably still be in mediation if it wasn't for the interest arbitration and the work they were doing on that,” he said in regards to the teachers contract. “That narrowed down the number of issues dramatically...When used in conjunction with negotiation and mediating, interest arbitration can have a positive effect.”

Consequences if process not changed?

Most troubling to Ragosta is the notion that arbitrators can usurp a municipality’s finalized budget with his or her decision, causing long-term consequences on the financial health of a city or town.

“Despite all the financial evidence that can be put in front of an arbitrator, they will cite that and they will pay lip service to that, but in a sentence they essentially nullify it and impose their subjective judgment about what they think should be done,” he said. “An arbitrator shouldn't be able to wreak havoc on a responsible budget, but they do.”

As a result, Ragosta said that it is important for municipalities to prepare for the likely instance where they have to go into arbitration at some point, and that keeping fastidious records on bargaining decisions throughout the municipality’s history was a necessary precaution.

Bliss said that cities and towns should always refer to their individual charters, as charter law will trump contract law should a new administration try to correct a collective bargaining agreement that resulted in an imbalance of power to the benefit of a labor union.

Vijay Kappor, an attorney with a financial background who was also on the panel, gave a quick presentation to the audience with methods on how to adequately display the financial situation of a city and town to an arbitrator so that they make a more informed decision – and agreed that the process was “stacked” against municipalities, so the onus was on administrators to be as prepared as possible heading into negotiations.

Ragosta said that harmful arbitration awards should be used as a learning experience.

“If you receive an adverse arbitration award, then you need to learn from that,” he said. “Because often times it will represent a mistake that was made by the municipality.”

Ragosta argued that statutory changes must to be made to the arbitration process, a notion that Johnston Mayor Joseph Polisena – who was in the audience, sitting next to Cumberland Mayor William Murray – strongly agreed with.

Polisena said that only retired Rhode Island judges and magistrates – or currently practicing Rhode Island lawyers, should no one from those two categories be available –  should be allowed to act as arbitrators.

Polisena – a former firefighter – told a story about how, after showing that he wouldn’t back down and give the fire union whatever provisions and equipment they requested when he became mayor, he received a sanction from the IAFF that said he wouldn’t be allowed to be buried in his uniform.

“My uniform hasn't fit me in 20 years since I've been retired,” he said. “We have to change the process...if we don't change it, we're in trouble.”


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