According to the Daily News, the MTA is giving up on part of its appeal of the TWU arbitration award while keeping another part of it — the third year of raises — alive. Pete Donohue reports that the MTA will honor two-thirds of the arbitration award, and TWU workers will now enjoy a retroactive four percent raise for 2009 and a four percent raise in 2010. The agency, however, will seek to have an appeals court overturn the third year of raises which guarantee a 3.5 percent increase in 2011. The agency will also seek to quash part of the award that lowers employee contributions to health care and raises the MTA’s obligations. According to Donohue, this decision to pay will cost the agency approximately $100 million this year.
As expected, labor union leaders were none too pleased with this development. John Samuelsen contined to bluster about this appeal and said that workers, who are getting eight percent in raises in a bad economy and at a time when few private-sector employees are enjoying raises, aren’t happy with the news. Still, if MTA Chair and CEO Jay Walder is serious about cutting costs, addressing the MTA’s rising tide of labor and pension obligations must be a part of that effort. The workers won’t like it, but the agency will continue to be hindered by those costs without some sort of compensation reform. More on that later.
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Whether you are pro labor or pro management the fact is that binding arbitration is essential to the taylor law, which already takes away any incentive for the TA to bargain in good faith. As Ben has stated many times the TA had the legal right to appeal the binding arbitration decision, but they lost that appeal. Shouldn’t this be the end of paying thousands of dollars an hour for lawyers (the TA uses outside firms to handle almost everything even though they employ hundreds of lawyers) and making a mockery of the taylor law?
They can still appeal. In fact, they can appeal up to the Supreme Court. But they’ll have to overcome some tough legal hurdles. It’s basically a math equation.
Let’s say that losing the appeal costs them $100 million in salary and that an appeal will cost $50,000 in legal fees. Let’s say they have a 10 percent chance of winning the appeal. The economics encourage them to appeal.
I’m not sure it’s the right strategy, and I doubt they’ll win. But they have to exhaust their avenues before settling to pay a raise increase that will stretch their budget even further.
I understand what you are saying, but if this is how it is going to be then the taylor law should be immediately thrown out!!!
But shouldn’t this be viewed as strengthening the Taylor Law too? As judges uphold the law, it shows the MTA that the Taylor Law is both a roadblock for them and a source of protection for unions. As this case is showing, it takes an egregious legal error for Taylor Law provisions to be thrown out, but that shouldn’t stop the MTA from trying if someone thinks they can make a case.
The lawyers’ fees are going to end up much higher than $50,000, and the chance of winning is much less than 10%. There’s a lot of optimism bias in the MTA’s belief that the chance of winning is high enough to justify spending the money.
On what basis are they going to file this appeal? The court already rejected the MTA’s previous appeal claiming “legal and factual errors.” Now they’re resorting to my three-year old son’s “I don’t wanna” defense. Further, by agreeing to 2/3 of the ruling, the agency appears to be accepting the proceedings that led to them. This appeal is simply a waste of time and money.
Also, as a clarification, this isn’t an 8% raise for union employee; it’s two consecutive 4% raises over two years. There’s a difference. (Not that 4% is bad these days!).
The actual amount of the raises is less. With the loss of 3 months of retro pay and the staggered wage increases they only were worth 8% over 3 years.
Without seeing the appeal papers (which probably aren’t filed yet), my guess is that the MTA will challenged the legal standard applied by the trial court judge to the arbitration award. The appeals court can uphold it or not. But I’m sure the MTA has done the cost-benefit analysis, and when the potential outlay in 2011 is another $100 million or more, it makes sense to spend a few thousand bucks on an appeal.
One possible solution to this mess–well, not this mess, but the next one–is to end this three-year contract nonsense. Contracts should be for one year only, as in most of the real world. To grant these generous multi-year terms while asking little or nothing in return except for the employee’s ability to stick around is a recipe for municipal disaster.
I believe Danish contracts are 2-year. Do you know how long German contracts are?
No idea. But after I posted this, I did think up numerous counter-examples, such as television stars and sports figures, who often get multi-year contracts–but only if they have a proven track record. I still think the vast majority of contract workers probably only get one year at a time. And… I seem to recall many years ago before I had a proper career, I worked several union jobs (grocery store, hotel) and the contract was always one year at a time. The multi-year contract seems to be public-sector phenomenon more so than in the private-sector. I have no idea why that is.
This cost-benefit analysis is illogical, unreasonable and it is idiotic, why – show me a law firm that will reject those few thousand bucks on appeal.
Now if we play the numbers game, i.e. law firm A will encourage & entice them and say you have 11% chance of winning, law firm B will say you have 11.25% chance of winning, law firm C will say you have 11.30% chance of winning and so forth – if this is your idea or strategy to exhaust every avenue, it will leave a sour taste for the upcoming contract negotiation 2011 which is not far away.
David, if the firms are working on even a partial-contingent fee basis, they would have a clear incentive to be up-front about odds because otherwise they’d risk wasting their time with a loser of a case. I don’t know if there is a contingency fee arrangement in this instance (I doubt it, but it’s possible).
[…] least afford it, its largest union had just been awarded a three-year raise, and the agency’s decision to appeal the arbitration result had left many at the TWU bitter toward the […]
Why doesn’t anyone on these blogs talk about the 800 Lb gorilla of bond issues? Pataki and his minions left the MTA in a deep hole. Anyone remember when the voters rejected the 1.6 billion bond issue in the 1990’s yet pataki and his coat hangers Virgil Conway and Kalikow borrowed and borrowed. The MTA is 5th in the USA in outstanding bonds after the states of California, Texas, New York State and NY City. The penchant for using outsiders like lawyers is only part of the problem. MTA skilled trades do a subway station overhall at 2/3rds the cost of outside contractors. 15 million versus 22 million on average. Remember that bondholders lineup to get their money before either passengers their service or workers get their pay. It is the law. So it is easy for you folks to ramble on about TWU contracts but remember many of these skilled, semi-skilled and otherwise trained work force moves 8 million plus with a backward management, that gets in the way more then helps. Let’s look at some of the managerial pay and where they live (mostly the suburbs) versus where transit workers live and spend their money (NYC). When you look at other skilled professionals like MTA engineers versus outside engineers let’s say for argument sake they are paid 3 to 4 times what MTA engineers make. Let’s look at the extension of the number 7 line, who needed or asked for that real estate speculators and the multi-billionaire mayor? Just like the public subsidy for Atlantic yards in Brooklyn for Bruce Ratner or the Taj Mahal fulton street project that was on the property owned by Peter Kalikow. i could go on and on but the bottom line is these are ALL costs borne by the riders and workers of the MTA and no one really ever talks about them. WHY?
Most of these projects are funded out of bond issues with interest costs and the private for profit companies getting a lot more money then transit workers will ever see. The MTA Capital Program is wasteful and inefficient yet rarely challenged by legislators or the media. We need people like Assemblymember Richard Brodsky to delve into these sweetheart deals on a regular basis. Then we need swift punishment handed out to MTA managers and corrupt contractors both. Lets submit these contracts to the light of day?