IN THE MATTER OF THE INTEREST      )
                                   )
ARBITRATION                        )    ARBITRATOR‘S
                                   )
BETWEEN                            )    OPINION
                                   )
SEIU LOCAL 775                     )    AND
                                   )
“THE UNION                        )    INTEREST AWARD
                                   )
AND                                )
                                   )
STATE OF WASHINGTON                )
                                   )
“THE STATE” OR “THE EMPLOYER”      )
___________________________________)
 
HEARING :           October 28, 2004
                    Olympia, Washington
                    October 29, 2004
                    Seattle, Washington
 
HEARING CLOSED:     October 29, 2004
 
ARBITRATOR:         Timothy D.W. Williams
                    2700 Fourth Avenue, Suite 305
                    Seattle, WA 98121
 
REPRESENTING THE UNION:
                    Robert H. Lavitt, Attorney
                    David Rolf, President, SEIU 775
 
REPRESENTING THE STATE:
                    Stewart A. Johnston, Assistant Attorney General
                    Rick Hall, Labor Negotiator
 
APPEARING AS WITNESS FOR THE UNION:
                    David Rolf, President, SEIU 775
                    Adam Glickman, Director,SEIU 775
 
APPEARING AS WITNESSES FOR THE STATE:
                    Rick Hall, Labor Negotiator
                    Fran Wilson-Maudsley, Manager
                    Bonnie Moonchild, Manager
                    Charles Hunter, Director 
 
 
 


 
 
 
 
                         EXHIBITS
 
                          Union
 
1.   Side Letter on Dues Deduction 2003-2004
2.   SEIU Local 775 Current Contract
3.   Contract for Collection of Union Dues between the State of
     Washington, acting by and through the Department of Social
     and Health Services, and Service Employees International
     Union Local 775, Contract No. 0369-40784
4.   RCW 41.56.113, Individual providers - Deductions from
     payments for dues - State is payor, not employer
5.   Letter, September 13, 2002, to Secretary Dennis Braddock
     and Marty Brown from David Rolf
6.   Engrossed Substitute House Bill 2459
7.   Memorandum, March 6, 2003, Re: Follow up to meeting with
     DSHS
8.   Letter, April 1, 2003, to David Rolf from Kennith Harden
9.   SEIU Local 775 Counterproposal to SSPS proposal to collect
     Union dues
10.  Letter, May 1, 2003, to David Rolf from Kennith Harden
11.  E-mail, July 2, 2003, Re: In Home Personal Care Providers
     Union Dues
12.  E-Mail, July 7, 2003, Re: In Home Personal Care Providers
     Union Dues
13   E-mail, July 8, 2003, Re: In Home Personal Care Providers
     Union Dues
14.  Statement of Work
15.  Letter, October 2, 2003, Re: Dues Collection
16.  E-mail, October 27, 2004, to Robert Lavitt from Kathy
     Barnard
17.  E-mail, October 8, 2003, to Charles Hunter from Adam
     Glickman, re: Negotiations
18.  Table, Estimated Union Losses Caused by DSHS failure to
     implement HB 2662 on a timely basis     
 
 
 


 
 
 
     
                         Employer
 
1.   SEIU Local 775 Current Contract
2.   Contract for Collection of Union Dues between the State of
     Washington, acting by and through the Department of Social
     and Health Services, and Services Employees International
     Union Local 775, Contract No. 0369-40784
3.   RCW 41.56.113 Individual providers - Deductions from
     payments for dues - State is payor, not employer
4.   Union Proposal, August 12, 2004, Side Letter on Dues
     Deduction 2003-2004
5.   DSHS Organization Chart
6.   2003 Due Deduction Activity Log
7.   E-mail, August 27, 2004, Re: Dues Deduction Activity and
     Union Dues Deduction Project Staff Costs
8.   2003-2004 DSHS/SSPS Timeline
9.   E-mail, December 27, 2002, Re: Dues Options
10.  E-mail, March 24, 2003, Re: Union Dues Project
11.  Letter, April 1, 2003, Re: Collection of Union Dues
12.  Letter, April 17, 2003, Re: Proposal to Collect Union Dues
13.  Fax cover sheet, April 24, 2003, to Charles Hunter from
     Kennith Harden
14.  Letter, May 1, 2003, Re: Counterproposal for Union Dues
     Collection project with enclosure
15.  E-mail, May 6, 2003, Re: Proposal to Collect Union Dues
16.  E-mail, June 23, 2003, Re: In Home Personal Care Providers
     Union Dues
17.  E-mail, July 18, 2003, Re: In Home Personal Care Providers
     Union Dues and a Draft Counterproposal
18.  E-mail, July 16, 2003, Re: Draft contract, and E-mail, July
     15, 2003, Re: Confusion over draft pre-agreement
19.  E-Mail chain, August 6, 2003, Re: SEIU Contract
20.  E-mail chain, August 20, 2003, Re: SEIU Local 775 proposed
     contract language with attachment
21.  E-mail chain, September 2, 2003, Re: SEIU draft with
     attachment
22.  E-mail chain, September 5, 2003, Re: SEIU draft with
     attachment
23.  E-mail, September 19, 2003, Re: SEIU revised contract and
     response with attachments
24.  E-mail chain, September 26, 2003, Re: Conference call on
     SEIU
25.  E-mail chain, September 30, 2003, Re: Exhibit B
26.  E-mail chain, October 7, 2003, Response to October 2 letter
27.  E-mail chain, October 13, 2003, Re: Negotiations
28.  Letter, May 1, 2003, Subject: Response to SEIU Suggestions for
     Collection of Union Dues from Provider Wages through SSPS
     Counterproposal
 
 
 


 
 
 
 
                         BACKGROUND
 
     SEIU Local 775 represents a Statewide bargaining unit made
up of home healthcare workers identified as Individual Providers
(IPS). RCW 74.39A (2,c&d) provides the home healthcare workers
bargaining unit the right of interest arbitration and prohibits
IPS from striking. By letter dated August 19, 2004, the
Executive Director of the Public Employment Relations Commission
(PERC), in compliance with RCW 41.56.45A, certified a set of
issues to be submitted to interest arbitration. Timothy
Williams was selected as the interest arbitrator and hearing
dates were set beginning on September 9, 2004.
 
     On September 2, 2004 PERC issued a preliminary ruling with
regard to an unfair labor practice case which had been filed by
the Employer on August 31, 2004. The Employer contended that
the Union had breached its obligations to bargain in good faith
by negotiating to impasse six issues which the State believed to
be non-mandatory subjects of bargaining. The Executive Director
of PERC, in the preliminary ruling, indicated that he was
"exercising discretion to suspend the interest arbitration
proceedings under WAC 391-55-265 for six issues currently before
the interest arbitrator."
 
     The hearing on the remaining issues commenced on the 9th of
September and concluded on the 20th. The Arbitrator, at the
request of the parties, set aside the dates of October 28 and
October 29, 2004 for additional hearing if the issues that
constitute the unfair labor practices case pending before PERC
are found to be mandatory and thus subject to the Arbitrator‘s
jurisdiction.
 
     PERC’s decision on the unfair labor practice’s case was
issued on October 22, 2004 . In that decision the Hearing
Officer noted that the Union had withdrawn the services
contracts issue thus eliminating one of the issues under
consideration. Additionally, the Hearing Officer noted that the
two issues related to the referral registration had been settled
between the parties and thus the employer had withdrawn its
claim of an unfair labor practice as it related to those two
issues. This left three issues for consideration by the PERC
Hearing Officer. The Hearing Officer set forth “conclusions of
law” regarding these three issues as follows:
 
     1.   The Public Employment Relations Commission has 
          jurisdiction in this matter under Chapter 41.56 and 391-
          45 WAC, as well as 74.39A .270 (1) and (2).
 
     2.   The Union proposals on the “shared living rule” at WAC’
          338-71-0460 is a permissive and illegal topic for
          bargaining, and insistence to impasse and interest
          arbitration is an unfair labor practice under RCW
          41.56.040 (1)-(4).
 
     3.   The Union’s proposal on training is a permissive topic
          for bargaining, and insistence to impasse and interest
          arbitration is an unfair labor practice under RCW
          41.56.040 (1) (4).
 
     4.   The Union‘s proposal on a side letter to collect union
          dues is a mandatory topic for bargaining under RCW 41.5 6
          and said issue will be remanded to the interest
          arbitration panel as per chapter 74.39A RCW.
                                        Case 18805-U-04-4777
                                        Decision 8761 - PECB
 
As a result of PERC’s decision that the issue related to the
collection of union dues is a mandatory topic and properly
before the interest arbitration, hearing was reconvened on
October 28th for purposes of taking evidence and argument related
to this issue. The hearing was closed following final oral
arguments on Friday, October 29, 2004.
 
                              HISTORY
 
     In April of 2002 the governor signed into law RCW
41.56.113. This statute called for the deductions of union dues
so long as there is a valid collective bargaining agreement that
provides for such a deduction and so long as :
 
          (3)(a) The initial additional costs to the State in
     making deductions from the payments to individual providers
     under this section shall be negotiated, agreed upon in
     advance, and reimbursed to the State by the exclusive
     bargaining representative.
                                        Union Exhibit #4
 
By the end of August, 2002 SEIU Local 6 (now Local 775) had been
certified by PERC as the exclusive bargaining representative for
the individual providers (IPS). By letter dated September,
2002, David Roth, president of SEIU Local 6, informed Dennis
Braddock (DSHS) and Marty Brown (OFM) of the Union’s desire to
begin the work needed to deduct union dues from payments to the
IPs.
 
     Meanwhile, during the fall of 2002 negotiations began for
the first collective bargaining agreement between SEIU and the
HCQA. That agreement was completed and ratified by the end of
December, 2002. Formal signing occurred on January 13, 2003
(Tr. Page 948). The collective bargaining agreement contained
in Article 4 a union membership provision that provided in part:
 
     The HCQA shall cause the State as payor, but not as
     Employer to enforce this Union security provision under the
     provisions of RCW 41.56.113 by causing deduction from the
     payments to bargaining unit members the dues required for
     membership and the exclusive bargaining representative, or,
     for nonmembers thereof, a fee equivalent to the dues.
                                        Union Exhibit #2, Page 4
 
     Testimonial evidence indicates that work on the part of
DSHS necessary to begin deducting union dues from the warrant
payments made to IPS began in September of 2002 (Tr., Page
1153). A contract for the collections of union dues between the
State of Washington (DSHS) and SEIU Local 775 was signed and
implemented as of December 3, 2003 (Union Exhibit #3), some
fifteen months later. The computer programming work needed to
begin deducting union dues began shortly after the contract was
executed. The first dues deductions began in August of 2004
(Tr., Page 973).
 
     During the negotiations for the 2005-06 collective
bargaining agreement SEIU Local 775 proposed language, in the
form of a side letter, that provided compensation to the Union
for the financial harm that had been caused by what it
considered the inappropriate delays by DSHS in implementing the
program changes that were needed to begin collecting union dues.
The State sees the matter totally different than the Union and
This contends that no money whatsoever is owing the Union.
issue has been found by PERC to be properly before the
Arbitrator and is the sole subject of this supplemental interest
arbitration award.
 
 
 


 
 
 
 
                              ISSUE 11
 
               Side Letter on Dues Deduction 2003-2004
 
Current Contract Language
        
        No contract language
 
Union’s Proposed Language
 
In consideration of DSHS’ failure to implement the dues and fee
deduction provisions of RCW 41.56.113 and the existing contract
between SEIU and the HCQA in a timely manner, the Employer shall
reimburse the Union the sum of $6,954,750 on July 1, 2005, and
the Union shall waive any claim, cause of action, or right to
pursue other action against the State as a result of its failure
to deduction Union dues between October 2003 and September 2004.
 
The Union agrees to forgive the Employer the amount of
$3,210,240 that the Union lost due to DSHS’s failure to
implement dues and fee deductions between February 2003 and
September 2003.
 
Employer’s Proposed Language
 
The Employer proposed no language and throughout negotiations
maintained that. no money should be paid the Union as a result of
the delay in the start-up time for deduction union dues.
 
Award
 
In consideration of DSHS’ failure to implement the dues and fee
deduction provisions of RCW 41.56.113 and the existing contract
between SEIU and the HCQA in a timely manner, the Employer shall
reimburse the Union the sum of $1,605,000 on July 1, 2005, and
the Union shall waive any claim, cause of action, or right to
pursue other action against the State as a result of its failure
to deduct union dues prior to August, 2004.
 
ANALYSIS ON DUES DEDUCTION
 
     The Arbitrator begins his analysis by emphasizing his
conclusion that this dues deduction issue is highly unusual for
an interest arbitration proceeding. This conclusion is based on
a number of different factors related to the substance of the
issue. To begin, as noted by Union President David Rolf at page
925 of the transcript, union dues deductions are common place to
the vast majority of public sector labor contracts. Later in
the hearing, Mr. Rolf reemphasized this point when he stated:
 
     You know, Union members pay dues, they do it through
     payroll deduction and probably 99% of all United State
     labor contracts, it’s just what happens. It’s part of what
     has to occur under the -- I mean, technically it’s a
     negotiated, but it really in practice it’s just true all
     the time. You know, I’ve worked in public sector labor
     settings for a dozen years and I‘ve never known it not to
     be true in a true collective bargaining setting.
                                             Tr. Page 932
 
     In this Arbitrator’s experience, commonplace issues rarely
make it to interest arbitration.
 
     Additionally, what is particularly unusual about this issue
is that there was never a substantive dispute. Very early on
DSHS indicated how much it would cost to implement dues
deduction and the Union, consistent with the statute, indicated
that it would pay that amount. While there was some dickering
back and forth, the record is very clear that there were never
any difficulties negotiating the cost which is the one item
required by the statute. In other words, the statutory hurdle
was easily jumped leaving matters not covered by statute as the
hang-ups.
 
     Finally, what also makes this issue unusual is that
interest arbitration awards are typically proactive; setting
forth matters that should happen in the future. Clear evidence
of this fact can be seen in the Arbitrator’s initial award which
sets forth terms and condition of employment for a contract that
commences on July 1, 2005. This is the normal role for the
interest arbitrator. In the instant issue over dues deduction,
however, the interest arbitrator is being asked to remedy what
the Union considers a failure of DSHS to implement, consistent
with statute, the dues deduction provision that had been placed
in the current contract and that could have been in place as
early as the spring of 2003. The Union seeks, through the
collective bargaining process and, thus, ultimately through
interest arbitration to address the financial harm created by
what it considers to be the delaying tactics of DSHS.
 
     Ultimately, however, characterizing the issue as unique
doesn’t change the fact that PERC has found the subject to be
mandatory and thus the interest arbitrator is required to
consider the matter on its merits and issue an appropriate
award. The Union requests $6,954,750 in lieu of dues that it
would have collected but for what it believes is DSHS’s bad
faith actions. This award grants the Union $1,605,000 in lieu
of dues that would have been collected had DSHS proceeded in a
timelier and good faith manner. The Arbitrator finds that the
evidence, while not supporting the full amount requested by the
Union, does clearly support the lesser amount that he has
awarded. The Arbitrator‘s reasoning is as follows.
 
     First, the evidence indicates that each month dues were not
collected the Union lost $535,000. The Arbitrator finds that
the State’s inappropriate actions fully justify compensation to
the Union for three months, thus the award of $1,605,000.
 
     Second, individual providers are not paid through a payroll
system but rather by warrant through a vendor system contained
within DSHS’s “antique”, mainframe computer using COBOL as the
language. There is no dispute that this system did not lend
itself to doing “payroll deduction.” The evidence clearly
indicates that the programming work needed to implement the dues
deduction program, while lengthy, was approached in a timely
manner. The Arbitrator finds no reason to conclude that the
programming work, when it finally occurred, was not good faith
and fully justifiable, thus there is no basis to assess
financial compensation in lieu of dues deductions for the period
of time it took to complete the programming work.
 
     Third, RCW 41.56.113 is very clear in establishing that
Union dues for the individual provider bargaining unit will be
deducted so long as there is a collective bargaining agreement
that calls for the deduction of union dues and so long as the
Union and DSHS has agreed in advance on the initial cost that
will be incurred by the State to implement the dues deduction
program - cost that are to be reimbursed by the Union. The
State and SEIU completed its negotiations over the collective
bargaining agreement including the union dues portion two months
after they began; the agreement was fully ratified in an
additional two months and signed two weeks later. Thus the only
issue that needed to be dealt with regarding union dues
deduction as of January 13, 2003 was agreement on the cost to
implement the program. These negotiations did drag on for a
time that on its face does not reflect the simple agreement that
needed to be reached in order to initiate the programming work.
 
     Fourth, the Union’s basic position is that DSHS
inappropriately and in bad faith resisted, from the very
beginning, the efforts to quickly and appropriately implement
the dues deduction program. In the Union’s view, this
resistance brought on the protracted negotiations which
ultimately produced the final agreement which is in evidence as
Union Exhibit #3.
 
     After a full and comprehensive review of the transcripts
and the documentary evidence, the Arbitrator finds that the
evidence supports only a part of the Union’s position. Some of
the delay reflects negotiations where the Union contributed as
much as the State towards the slow down.
 
     Turning first to that part of the delay that the Arbitrator
does not feel is attributable in bad faith to the State, the
record clearly indicates that from January of 2003 through July
7, 2003 the parties were engaged in an ongoing exchange of
proposals. While the Arbitrator is convinced that these
negotiations should have been much shorter, I do not find
evidence that the blame can be laid solely at the feet of the
State. There are indications that the State made a genuine
effort to get the matter moving. For example, on May lst, 2003
DSHS sent to the Union a fully developed counterproposal which
Mr. Hunter had sign-off on. Ultimately the provisions laid out
in that document became the foundation for the final settlement
with regard to scope of work and cost. The evidence indicates
that the Union's response to this document was simply another
counterproposal.
        
     The big hang-up, it appears to the Arbitrator, during the
spring of 2003 was the fact that all of the State proposals
required an eight or nine month period of time during which
reprogramming would be completed to the warrant/vendor computer
program. The Union, for obvious good reasons, was constantly
looking for a way to short cut this eight or nine month period
of time (see for example Union Exhibit #7). Ultimately, it was
not able to find a method that was reasonably acceptable to the
Employer and work proceeded as the State had proposed. The
bottom line is that the Arbitrator cannot find evidence of bad
faith in the State's determination that Union proposed short
cuts were not an overall good idea. In hindsight it is clear
that had the Union either signed off on the State's May 1
proposal or tweaked it a little for sign off, actual dues
deductions could have started six or seven months earlier then
what actually occurred. In the Arbitrator's view, the Union has
to share some of the responsibility for this delay.
 
     In summary, the Arbitrator finds that the evidence fully
supports the conclusion that the parties must share joint
responsibility for the length of the negotiations that occurred
prior to July 7, 2003. On July 7, the Union provided an
unfortunate counterproposal to the State. Unfortunate to the
extent that it was poorly drafted, containing two paragraphs
covering items never before seen by the State, and it was
presented in such a way as to not make it clear that these are
new proposals - the State saw it as deceptive.
 
     This proposal was sent to Charles Hunter who was heading up
DSHS's negotiations related to the dues deduction program. In
his testimony, Mr. Hunter admits that he "perhaps" overreacted
to this proposal (Tr. Page 1181). Mr. Hunter goes on to
indicate that his reactions were based on his surprise over the
new proposals, and the fact that they were not properly
identified as being additions. Moreover, he admitted that he
was receiving legislative pressure because of the delay in
implementing the dues deduction and was frustrated by this fact.
 
     As a result of his reactions, Mr. Hunter turned the process
from one of reaching a simple letter of agreement about scope
and cost into formal contract negotiations and the matter was
given over to a DSHS attorney. For two reasons, the Arbitrator
concludes that the negotiations that went forth from this point
until the Attorney General’s office intervened were not in good
faith.
 
     First of all, RCW 41.56.113 requires that the initial
additional cost of implementing a dues deduction program be
agreed upon and reimbursed. In the Arbitrator’s view you cannot
agree on the cost if you have not agreed on the scope. Thus,
all that was necessary to start on the programming changes was
to specify scope and put an acceptable price to it. The
Arbitrator’s review of the proposed contract sent to the Union
by DSHS clearly indicates that the items cover go far, far
beyond scope and cost. While many of the items included in this
proposed contract may have been important to DSHS, DSHS was
holding hostage the dues deduction program to items not
specified in the statute.
 
     Specifically troubling to the Arbitrator is the termination
language found in Article 18. What is most concerning about
this provision is that there appears to be no recognition
whatsoever that DSHS is under a statutory obligation to
implement a dues deduction program. The Union called this a
poison pill article meaning that it was language written in such
a way that the Union could not possibly accept it. The
Arbitrator agrees. For example, 18.2 allows DSHS to terminate
the contract if SEIU violates any applicable law or regulation.
Nowhere is there any mention of the States obligation under the
law. Moreover, the law requires the dues deduction program.
Thus, terminating the program would in effect violate the law.
 
     Ultimately, the Arbitrator has concluded that there was
approximately three months time where DSHS’s actions were not in
good faith and in compliance with the statute. This three month
period of time caused specific and measurable financial harm to
the Union (Union Exhibit #18). Ultimately the best way to
remedy this financial harm is to assign financial compensation
to the Union in the amount equal to three months of union dues.
 
     Finally, as outlined in the full award, the Arbitrator is
required by statute to consider comparability. The only
evidence on comparability was provided by David Rolf who stated:
 
     Now, we paid for dues deduction in two other states. This
     was not without precedent. In California we went to the
     State Controller in, I believe, it was 1993. We said, 
     would you be - there are members out there who want to join
     the Union, would you agree to change your payment systems
     so that they can pay dues? And the State Controller said,
     yes, I would be happy to. It will take me about a year to
     get done and it will cost you about $150,000. And a year
     later, $150,000 later, home care workers began paying dues
     in California years before many of them had a collective
     bargaining agreement. The State allowed the voluntary
     payment of dues years in advance of collective bargaining
     agreement.
                                        Tr. Page 936
 
     In Oregon, a similar thing happened. The Union went to the
     Governor and said, you know, we’d love to be able to have
     home care workers join, if they would like to join, even
     though there’s no bargaining law. And the Governor spent,
     I think, nine months and $62,000 changing the system there,
     billed the Union for the $62,000 and Union members began to
     pay dues even before they had a bargaining agreement.
                                        Tr. Page 937
 
     Charles Hunter did testify that his research indicated that
Oregon’s computer was better setup to make the programming
changes needed to collect dues (Tr. Page 1169). However that
fact has no bearing on the Arbitrator’s determination of bad
faith because the length of time needed to do the actual
programming was dismissed by the Arbitrator. It was not the
programming work but the protracted negotiations that leads the
Arbitrator to make an award for the Union.
 
     Most importantly, having reviewed the entire record, the
Arbitrator is convinced that it was the positive approach taken
in California and Oregon that lead to simple agreements by which
financial costs associated with programming changes could be
reimbursed to those states. Had the State of Washington
proceeded similarly in good faith, the dues deduction program
would have been implemented far sooner. Moreover, the
Arbitrator concludes that this was precisely what the
legislature intended when it enacted RCW 41.56.113.
 
     Thus, while the comparability data does not specifically
address the main point in dispute under this issue, it does
indirectly support the conclusion that an agreement on scope and
cost could have been reached much more quickly with a simpler,
good faith approach.
 
     Thus, based on this conclusion and the other analysis
previously provided, the Arbitrator makes an award for the
Union.
 
        This supplemental award is respectfully submitted on this
the l0th day of October, 2004. It is intended as the final
element in the interest arbitration proceedings involving the
2005-06 collective bargaining agreement between the parties.
This supplemental award, when combined with the initial award
given to the parties on October 1, 2004 constitutes the full and
complete work of the Arbitrator.
 
 
Timothy D. W. Williams
Arbitrator