When cities and towns use self-funded health insurance plans, they have been able to cheat on their required contributions.  We have already found a number of cases where municipalities have failed to make their required contributions, thereby forcing employees to pay a greater share then they had agreed to.

This cheating is possible because of the way premiums are established for self-funded plans.  In such plans the premiums are set by estimating a number which will cover the projected cost of claims and expenses.  The premium payments must also maintain a cushion in the fund sufficient to cover regular variation in claims plus enough to cover claims which will come in after the end of a plan period.  We have found that when there is such a cushion in the fund, employers can be tempted to skip their payments and allow claims to be paid from the cushion and from employee contributions.

To prevent this cheating, union representatives acting under their collective bargaining agreement or working through a Public Employee Committee, where the PEC has a health insurance agreement, must carefully monitor the financial records of the insurance plan.  They should insist on monthly records to be presented quarterly for review.  The records must include the following:

1. The monthly claims paid.
2. The monthly expenses of the plan including the fee paid to the plan administrator and the fees for consultants, actuaries, and accountants.
3. The monthly revenue, showing both the revenue from employee contributions and from employer contributions and income from any other source, like interest on funds.
4. The monthly fund balance.

Looking at this data the unions should be able to confirm that the total contribution rate is appropriate to cover the claims and expenses of the plan and that the employer is paying its agreed upon share.  Finally, there should be an annual audit report on the plan confirming that the monthly data has been correct.

McDonald’s isn’t “loving it” anymore.  In a ruling made public on July 28, 2014, the National Labor Relations Board’s General Counsel, Richard F. Griffin, Jr., found that McDonald’s is a joint employer under the law with its franchisees and therefore liable for the franchisees’ anti-worker behavior.  Over the last two years, 181 McDonald’s employees filed unfair labor practices against the company and its franchisees alleging that they were illegally fired, disciplined and/or threatened for their union organizing activity.  Mr. Griffin found merit in forty-three of the complaints and authorized them to go forward against McDonald’s as a joint employer.  Sixty-four complaints are still under investigation.

At least ninety percent of McDonald’s restaurants in the United States are franchises.  McDonald’s, and presumably other fast-food restaurants with similar business models, will no longer be able to hide behind their franchisees and blame them when workers challenge their working conditions before the NLRB.  Fast-food workers, who make an average of $8.90 per hour, have been pushing for a wage floor of $15.00 per hour in a nation-wide movement for several years.  Many of the workers, with the help of the Service Employees International Union, are trying to unionize their restaurants.  Advocates hope that this latest NLRB ruling will help empower more fast-food workers to stand up for their rights and improve their working conditions.

All MASSC.O.P. members who have worked as a reserve officer or a call firefighter need to read this article. In Massachusetts, retirement system members who worked as call firefighters or reserve police officers can be credited with a maximum of five years of service for the time they held those positions. This has not changed. However, now the State is requiring members to buy back those five years of service in order to use them to calculate their pension. This is a significant change because, during the last forty years, this type of service was automatically credited to members without any contributions.

This change began last summer when the Contributory Retirement Appeal Board (“CRAB”) issued a decision in Brenton MacAloney v. Worcester Regional System and Public Employee Retirement Administration Commission CR No. 11-19 (2013). That case involved a retired Fire Chief who was required to make payments for his service as a call fire fighter in order for that service to be credited in the calculation of his pension. Since CRAB’s decision, the State (through its agency PERAC) has issued guidance to the Retirement Boards advising them that officers now need to provide make up payments for any reserve/call service for it to be considered creditable in calculating their pension.

This guidance applies only to officers retiring after June 21, 2013. For officers who actually worked as reserves or call firefighters in regular service each of the relevant five years, they will have to remit make up payments based upon the income they earned with interest accruing after June 21, 2013. Though the new change might not stand, officers should err on the side of making any such buy back payments if their board gives them that opportunity. Better to over pay and be reimbursed then to underpay and lose years of creditable service.

Things get more complicated for officers who did not work in regular service when they were on a list or possibly for officers who only worked details when on a reserve list. Previously, this time on the list was credited regardless of whether a reserve officer had worked. However, PERAC has now issued guidance to the boards stating that if an officer did not perform any reserve service in one or more of the relevant five years that the member should be required to remit contributions as if they earned three thousand dollars of regular compensation for each year.

PERAC chose three thousand dollars because it is the amount used to calculate disability pensions for reserve officers and call firefighters when there is no other comparable amount available. As the two relevant sections of the statute are not directly linked, this guidance could be flawed. Indeed, some boards are not following that portion of PERAC’s guidance and it is currently the subject of litigation.

This article is a starting point. Everyone who worked as a reserve officer or a call fire fighter needs to be aware of this change and what position their board is taking with respect to it. This is necessary to be able to properly plan for retirement. If a member encounters a problem, he or she should notify his or her local MASS C.O.P. leadership.

Based on the diligence of MASS C.O.P. locals in Salem, the Salem City Council took a stand for public safety this week.  Recently, Salem Mayor Kim Driscoll proposed to the City Council that the Police Chief and Fire Chief positions be removed from Civil Service.  This proposal was timed closely with the decision by Police Chief Paul F. Tucker to vacate his position.  Realizing the damage to autonomous public safety operations that could be wrought by this unnecessary and ill conceived change, the Salem Police Patrolmen’s Association, MASS C.O.P. Local 426 and the Salem Superior Officers’ Association, MASS C.O.P. Local 425 joined with their brothers and sisters in Fire to fight against the Mayor’s proposal.   Recognizing good sense, the City Council voted 10 to 0 to send the matter to a full City Council meeting with a negative recommendation.
 
Congratulations to MASSC.O.P. Local 426 and MASS C.O.P. Local 425, and, respectively, President Rob Phelan and President James Walker for working so diligently together.  When locals in the Massachusetts Coalition of Police work together to agitate and organize – good things follow!   
 
http://www.salemnews.com/local/x1387860848/civil-service-PROPOSAL-defeated   
 

In a case brought by the Waltham Police Union, Local 161, Massachusetts Coalition of Police, and argued by Sandulli Grace Attorney Bryan Decker, Middlesex Superior Court judge S. Jane Haggerty has upheld the decision of an arbitrator overturning the suspension of a Waltham Police Officer. (Read the full decision HERE). In a November 2012 decision Arbitrator Michael Stutz converted Waltham Police Officer Paul Tracey’s 15 day suspension to a written reprimand, and ordered the Waltham Police Department to pay Officer Tracey for lost detail and overtime opportunities (based on earnings from the prior year). Officer Tracey was placed on administrative leave while the City investigated the allegation that he had assisted a Mayoral Candidate and City Council President in intimidating one of the politician’s tenants. The allegation was advanced by a witness who was not even believed by the City’s hired hearing officer. As a result, the Arbitrator concluded that Officer Tracey had not committed misconduct, overturned the suspension and also ordered that Officer Tracey should be compensated for having been inappropriately kept on administrative leave.

Rather than comply with the contractually “final and binding” decision of the arbitrator, the City instead appealed the decision to superior court.  Following briefing and a hearing, Judge Haggerty rejected this attempt, and ordered the Award upheld.  Judge Haggerty’s decision is an exemplification of the deference that courts are to pay to the decisions of arbitrators.  Judge Haggerty first points out that “the court is confined to accept the factual findings of the Arbitrator.”  Given that the Arbitrator had found that Officer Tracey did not violate the complainant’s rights, the Judge rejected the City’s claims that the decision violated public policy:

Here, the Arbitrator found that Tracy did not engage in any type of conduct that could potentially corrode the public trust, as he did not find Gonzalez’s complaint against Tracy credible.  Given that the court must accept this factual finding, the Arbitrator’s award did not require the Chief or the City to break the law.

The City also complained that the Arbitrator had infringed on the Waltham Police Chief’s “inherent authority” when he ordered that Officer Tracey be compensated for having been improperly kept on administrative leave.  Again, the Judge rejected the claim, finding that the arbitrator’s decision was proper:

Here, the Arbitrator’s decision did not infringe on the Chief’s authority.  The Arbitrator never ordered the Chief to remove Tracey from administrative leave…  The Arbitrator found that Tracy did not commit any serious misconduct.  Thus, the Arbitrator used the overtime pay award to sanction the Chief for extending the administrative leave after September 1, 2011 because the Arbitrator found that this extension was without any basis.

In this case, the City of Waltham spent almost a year investigating the claims of a patently unbelievable “victim” in an effort to discredit a long serving police office.  The City then imposed a lengthy suspension, which was properly overturned by a respected Arbitrator.  Rather than accept this factually based decision, the City then appealed, citing a myriad of far-fetched claims in an “everything and the kitchen sink” attempt to overturn the decision.  Fortunately, Superior Court Judge Haggerty faithfully applied the proper standard in reviewing the award.  She considered each and every argument advanced by the City, and she then concluded:

The award is logically based on the facts as found by the Arbitrator.  Given the broad discretion afforded arbitrators, there is simply no basis for this court to vacate the Arbitrator’s award.

We thought our police union clients and their friends and families would enjoy this column by Joe Fitzgerald of The Boston Herald.  With so much police bashing in the press these days, it’s nice to see a tribute to the hard work they do.