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Arbitrator: WFD Pension Ordinance Invalid, City Owes $2.6M

[CREDIT: Rob Borkowski] Mayor Joseph J. Solomon, with Warwick Fire Chief Peter McMichael, announces the decision of an arbitration ruling that a 2011 ordinance altering WFD pensions is invalid.

WARWICK, RI — On Tuesday, Warwick City officials learned that an ordinance doesn’t supersede a negotiated contract, and they paid an estimated $2.6 million for the lesson.

Arbitrator Michael C. Ryan ruled Warwick violated its contract with firefighters union Local 2748 IAFF by giving firefighters hired after July 1, 2012 a less generous pension plan, without negotiating it, and must compensate them an estimated $2.6 million.

The decision, filed March 18, concerns 45 firefighters placed in the Tier II pension plan, said Mayor Joseph J. Solomon, who faulted former Mayor Scott Avedisian for failing to negotiate the pension plan change after the Warwick City Council unanimously approved it in May 2011.

Solomon said the impact to the coming year’s budget would be absorbed by a combination of cuts and a second year of increasing the City’s tax rate to the state mandated maximum 4 percent property tax increase. Last year, he said, that resulted in a .56 cent increase to the tax rate.

Solomon said it was disheartening that, following the Council’s approval of the pension change, that Avedisian did not “follow through” by negotiating the change in the firefighter’s contract. He noted that such changes had been achieved with the police union contract and the municipal employees contract.

According to the decision, filed and signed by Ryan, attorney Vincent Ragosta, representing Warwick, and Joseph A. Andriole, president of the RI State Association of Firefighters, Avedisian and members of his administration refused to negotiate the issue, arguing that the Union had waited past the deadline to make a legitimate grievance.

Avedisian had his first meeting on the dispute with then Local 2748 President William Lloyd July 3, 2014, who raised the issue at that time.

Following that meeting, Lloyd filed a grievance July 31, 2014, to meet the contractual deadline for filing disputes. He also sent Armstrong a letter asking that the grievance procedure be held in abeyance until either party notified the

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other in writing that an impasse had been reached. Armstrong countersigned the letter under the word, ‘Agreed,” according to the facts outlined in the decision.

Shortly after, in September of that year, Warwick Fire Chief Edmund Armstrong began negotiating the 2015-2018 contract, according to the account in the decision. Between September and August, the parties attempted to resolve the pension issue but remained at an impasse.

The union sent a letter to then City Solicitor Peter Ruggierio Aug. 2, 2016 asking to go into arbitration for the pension dispute, but a City lawyer responded, telling the union that the grievance had expired, apparently contradicting Armstong’s earlier written agreement.

The union re-submitted the grievance Feb. 23, 2017, but the new Fire Chief, James McLaughlin, denied it, stating the time had expired, that Armstrong had no authority to stay the grievance deadline, and that the union never invoked interest arbitration on the pension issue while negotiating the 2015-2018 contract.

Avedisian also denied the grievance on April 7, 2017, repeating McLaughlin’s reasons.

When reached Tuesday afternoon, Union attorney Joseph Penza Jr., of Olen & Penza LLP, noted the City had several opportunities to negotiate the pension disagreement with Local 2748, which might have resulted in the City paying less than the ultimate ruling.

“They thought that ordinance would supersede the collective bargaining agreement [contract] which is does not,” Penza said.

Avedisian did not respond to an email seeking his comment on the dispute. Bill Depasquale, Avedisian’s Chief of Staff at the time, and Solomon’s current chief of staff, replied to an inquiry about the issue, stating that he had not been part of the team working with the firefighter’s union at the time. Ruggierio has since left his position with the City.

While Penza said Avedisian did not seem serious about negotiating the dispute, the City Council was also aware the issue was in question, because Lloyd warned them at an April 11, 2011 hearing that the

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ordinance to make the pension change would not affect the contract.

“So they were warned. The Council was warned about this,” Penza said.

In Ryan’s decision Tuesday, he wrote, “In general, arbitrators find it acceptable for a union to refrain from filing a grievance until the employer actually implements the announced change.” It would waste time for a union to file a grievance whenever a change was announced, he reasoned, before it takes effect, if at all.

Also, he wrote, Armstrong’s agreement to forgo the time limit on the grievance was an exercise of discretion by a management official that is both standard and common.

“Since the two-tier [pension] plan under the CBA [contract] violates the CBA, we find for the union on the merits of the issue,” the ruling reads. The remedy, the ruling states, requires ceasing the two-tier pension system and to “make whole all affected members of the bargaining unit.”

“This issue has spanned over the course of 8 years, and we are happy to have a definitive resolution in order to move forward. It would have been our preference to have had a harmonious, mutually beneficial agreed upon resolve,” according to a statement from Local 2748 Treasurer Brandon Ingegneri.

Ragosta noted in his dissent that the union’s failure to act promptly after the 2011 amendment vote, which Lloyd witnessed. “In all events, the Union was well aware that the City adopted the pension funds amendments and must be deemed to have consented to such adoption by virtue of its inaction.”

Ragosta warned that the consequences of the win will prove a pyrrhic victory.

“Ironically, the financial fallout of the panel’s decision will not help the union, as the City’s ability to pay for salaries, health care and various other direct and indirect components of firefighters total compensation will be subsequently impaired by the estimated $2.4 million impact of the cease-and-desist and make-whole awards.”

A full copy of the ruling, as well as the full statement from Local 2748, are embedded below:

Union-Statement-on-WFD-Pension-Ordinance-Ruling

WFD-pension-ruling-3.18.19