Tuesday, August 12, 2014

Dollars, Distinction, and Dissent

In re Spear, 2014 VT 57

By Nicole Killoran

Today’s case addresses a rather obscure question about the collective-bargaining agreement between the State and its employees: when an employee temporarily performs a higher-level job, does he get paid for those days at a flat-rate salary increase or is his pay slotted up to a potentially higher rate as if he was temporarily promoted for those days? Apparently this is a question that the Vermont State Employees Association (VSEA) should have raised twenty years ago, according to the SCOV.

Since at least the 1980s, the salary provision of the collective bargaining agreement between the State and its employees has assigned Vermont state employees a “pay grade,” a compensation level. When a state employee takes a position, he is “slotted in” to a “step” within that pay grade to determine his wages. State employees can also cover for a higher-level employee’s temporary absence, and they are entitled to more money when they do so. In the 80s this was called “alternate rate pay,” and employees temporarily doing someone else’s higher-paying job were entitled to 108% of their ordinary salary for the days they were covering for someone higher up the work food chain.

In 1990, “alternate-rate pay” turned into “higher-assignment pay,” but kept the same increase in salary (8%). In 1992, “higher-assignment pay” was defined as a “differential rate equal to the same ‘rate on promotion’” as in the salary provision of the agreement. The salary provision in turn said that an employee should be slotted up to the higher salary and paid “at least five percent” more, or 8% if the employee moves up three pay grades.

Some twenty-odd years later, after very little had changed about these two provisions, our grievant entered the stage—a fire fighter with a level twenty position. For four days in August 2011, he did someone else’s level twenty-two job. The State added a flat five percent to grievant’s ordinary salary for these four days. It did not “slot” grievant up to level twenty two and add between five- and eight-percent to grievant’s salary. The VSEA filed a grievance with the Labor Relations Board claiming this violated the collective bargaining agreement, and that grievant was entitled to be slotted on to right step for the job, not just given a flat 5% raise. The Board disagreed. Grievant appealed.

On appeal, the SCOV finds itself interpreting a relatively simple contract to answer the rather complicated question of what “rate on promotion” means for a temporarily up-jumped employee in relation to the promotion salary provision in the agreement. Grievant and employer obviously disagree about the answer to this question, and the SCOV notes that their arguments here are pretty much identical to those made before the Board.

Grievant thinks the only reasonable interpretation of “rate on promotion” is the rate he would have received if he had been temporarily “slotted” in to the promotion and the pay grade step, which comes with at least a 5% salary increase. After all, that’s how the State did it before formalizing everything in the 1992 agreement.

Employer thinks that the structure of the salary provision, which explains the slotting process and describes how to decide whether an 5% or 8% increase is appropriate, means that “rate on promotion” only refers to the latter part—whether there will be a flat 5% or 8% salary increase for the days the employee covers for a higher-up.

The Board, with the exception of a lone dissenter, went with employer’s interpretation. It decided that the language in the agreement on higher-assignment pay was capable of more than one interpretation and therefore ambiguous, and looked outside the agreement at the parties’ bargaining history and past practices. The Board found pretty significant the fact that the parties hadn’t discussed the particular method of calculating higher-assignment pay, and that employer had gone with the flat-rate increase for over twenty years. It decided that the original intent had been to calculate higher-assignment pay by applying a flat-rate increase, and not slotting the employee.

On appeal the SCOV has to give a lot of deference to the Board’s interpretation of the collective bargaining agreement, and it will agree if the facts support the Board’s conclusions. The SCOV’s ultimate purpose in this case is to figure out what the parties to the collective bargaining agreement really had in mind when they drafted the contract. It also has to use common sense and try to smooth out the minute wrinkles that are exposed when arguments arise about how to interpret a document its drafts thought was pretty well self-explanatory.

The first question, though, is whether the higher-assignment pay part of the contract actually is ambiguous, whether it’s capable of multiple reasonable interpretations. The SCOV looks at both grievant’s position and employer’s, and decides that, yup, both interpretations are possible and reasonable. Grievant’s plain-language option isn’t bad. Neither is employer’s version in light of the evolution of the contract language to include the “rate on promotion” provision, and the fact that people on both sides of the bargaining table in 1992 don’t recall discussing slotting for higher-assignment pay, but do remember the addition of the “rate on promotion” language as being only to distinguish between 5% and 8% increases.

We have an ambiguous contract provision here, folks, says the SCOV, and a winner must be picked. Lucky for employer, today is its day.

The SCOV finds the Board’s conclusions in favor of employer to be well-supported by the evidence, in particular the recollections of the folks who were at the bargaining table in 1992. They didn’t discuss slotting for higher-assignment pay when they added the “rate on promotion” provision, and they remember only adding “rate on promotion” to distinguish between 5% or 8% salary increases for employees temporarily doing someone else’s job.

The SCOV also thinks the Board was reasonable to consider employer’s past practices. Since 1992, and before even, employer had used the flat-rate increase, without slotting. While the Board paid lip service to the need to protect employees’ rights and enforce the contract as written, it also basically told VSEA that it had snoozed, and lost. The SCOV doesn’t have a problem with this either, and thinks the Board was reasonable to consider employer’s past practices and the failure to raise the slotting interpretation for twenty years indicative of the parties’ original intent to apply the flat-rate increase, without slotting. The SCOV upholds the Board’s decision.

Justice Dooley gets a last word in before the conclusion of the opinion. He pens a dissent, joined by Justice Crawford, scolding the majority for “finding ambiguity where none exists.” According to Justice Dooley, it’s ridiculous to squeeze more than one interpretation from an otherwise simple contract.

The dissent reminds the majority that the SCOV is supposed to enforce the contract as written if the language is clear. Well, says Justice Dooley, the “language here is clear.” Higher-assignment pay is the same rate as the “rate on promotion” in the salary provision. The salary provision says thou shalt slot. An employee entitled to higher-assignment pay should be temporarily slotted on to the higher step, and paid at least 5% more. End of story.

Justice Dooley disagrees with the majority’s emphasis on the latter part of the salary article talking about either 5% or 8% increases, and its belief that the evolution of the contract and the circumstances of its making support the flat-rate increase interpretation. The dissent finds zero support for the majority’s interpretation, and tells the SCOV it’s basically rewriting the contract to set up an “artificial distinction” for a number of reasons.

First, the flat-rate language the majority finds so compelling states that salary shall increase by a rate of 5% “as outlined above.” Justice Dooley draws the dotted line for the majority with an arrow to the language “outlined above,” which refers to the slotting process.

Second, because the language of the contract is clear, Justice Dooley thinks the SCOV should have avoided the evolution of the contract period. Without looking outside the contract, there’s no support for the interpretation the SCOV adopts, regardless of the evolution.

Third, even if you do look at the evolution of the contract, it supports grievant’s interpretation, and not the majority’s. Before 1992, higher-assignment pay increases were set at a flat 8%. After 1992, this became “at least” 5% after slotting. Higher-assignment pay has always been identical to promotional pay, says the dissent. The majority got it dead wrong.

Fourth, the dissent reasons the majority screwed up by relying on the testimony today of the folks sitting at the bargaining table in 1992. Whatever the original bargainers believed doesn’t matter, and their beliefs don’t make the actual contract language ambiguous. If they intended to make higher-assignment pay based on flat-rate increase, and not slotting, they could have done it twenty years ago when they wrote the darnthing.

Finally, Justice Dooley facepalms at the majority’s treatment of employer’s past practice of flat-rate increases. The Board in its decision noted that its own precedent says incorrect interpretation for a length of time does not make the contract provision invalid, but decided to invalidate it anyway. Way to uphold the wrong decision, says the dissent. Justice Dooley would enforce the contract as written, and see grievant slotted up to the appropriate pay grade for the four days he covered a higher-up’s absence.

Despite Justice Dooley’s admonition of the majority, the end result is that grievant is stuck with a measly 5% flat-rate increase, instead of a potentially 8% increase for the four days he covered someone else’s butt. You have to wonder what the actual dollar amount difference was, and whether this case was really more of an opportunity to get the SCOV’s opinion on how to interpret the higher-assignment pay provision. Either way, grievant is out a few dollars, and VSEA is left feeling like it probably should have picked this fight two decades ago.

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