These cases come up after the Employer has implemented a new financial or payroll system. And when the accounting department enters the information from the CBA, the amounts are different than what the old system spit out. Usually, it is in the area of overtime or calculation of fringe benefits.

Such a case arose in a medium-sized city in New York. Two departments (Police and Park & Rec) had employees who worked long hours. The new payroll software caught an error in how their hours outside the normal hours (8-5) were being counted.

A key point in the case was that the contract language had stayed the same for 12 years up to the present time.  So the union argued past practice. This was a good argument. The union proved that all of the past practice elements were met:  clear, consistent, over a long period of time and mutuality.

The employer’s only argument was that the language was clear. This was also a good argument.  Many arbitrators believe that clear language prevails over a past practice.  

The employer met with the union and tried to negotiate a change in the next contract. The employer proposed “clarifying" language that would bring the two departments into the same accounting system that they used for the other departments. But the union would not agree (nor did the employer offer any concession).

So when the new contract when into effect, the Employer announced (as it did at the bargaining table) that the new accounting software was correct. The employer was inviting a grievance from the union.  

Outcome

The parties chose an arbitrator who appears on many LAI conference faculties. He belongs to the school that clear contract language prevails over a past practice. Arbitrators in the other school believe that the practice prevails, because the parties have given meaning to the contract language through their actions.

He ruled for the Employer. An audience member asked him this question.

Question: 

Assume the financial hit to the Police and Park & Rec employees was significant. It could even be thousands of dollars a year. The employees have based their household budget, their financial future, on that money. And now your decision takes it away, without giving anything that management might have given up in negotiations. As the arbitrator, you are stepping into the shoes of the employer and taking it away.

Answer: 

I look at it differently. They’re lucky they got that money for 12 years. That’s taxpayer money which (because of a payroll system) should not have been paid.

The employer is not asking for that money back. Bottom line, you’re entitled to what the contract provides, nothing more and nothing less. And I thought the contract was clear.

Postscript

Some arbitrators illustrate this outcome from the perspective of the union. If the contract provided for a wage of $21 per hour, but for a year the payroll system had calculated the number, say for part-time employees at $20.95, the union would win that case. The arbitrator’s job is to bring the parties into compliance with the clear language of the contract. The money would be retroactively awarded back to the date of the grievance.