The Art of Negotiations: Keeping the Eye on the Prize – Staying Focused in a World of Conflict

This has been a bad week for Bill de Blasio.

After opposing co-location of charter schools in public school buildings de Blasio only reverses a handful of Bloomberg co-location decisions, and is sharply criticized by his supporters. Eva and company spend half a million to plaster TV ads shredding the new mayor, and, his “friend” in Albany, Governor Cuomo, after blocking his universal pre-K plan shows up at the charter school rally praising his new-found allies, who , BTW, contributed hundreds of thousands to his campaign chest. Chancellor Farina “misspeaks” a few times over finding space for the “un-co-located” new charter schools.

Whispers about a one-term mayor ….

Teachers howl, “Where is the union? Why aren’t they buying ad time to counter Eva? Why don’t they attack the Governor?”

The answer is simple: The goal of the union is to negotiate the best possible contract, not be sidetracked by other issues, not picking new fights.

Mayor de Blasio and the union will benefit greatly by a contract, however, that said; it has to be the “right” contract. The specter of David Dinkins hangs over the process. With the strong support of the union Dinkins defeated three-time incumbent Koch in the primary and a hard-charging Rudy Giuliani in the general election. Negotiations with the UFT, the teacher union dragged on and on – eighteen months beyond the expiration of the contract – the UFT ran radio and TV ads chiding Dinkins, a contract was finally reached a few months before the election. The union membership was hostile to Dinkins, the union made no endorsement, and twenty years of Republican mayors followed.

Both union president Mulgrew and the Mayor have made it clear – they want a contract for the end of the fiscal year – June 30th.

Dean Fuleihan, the new Budget Director, clearly signaled one direction for the negotiations,

“We’re going to treat the workforce with the respect that they have not been treated with, but at the same time protect the taxpayers and do something that’s affordable,” Dean Fuleihan said at the first hearing on de Blasio’s proposed $74 billion budget.

“There have to be offsetting savings. And (de Blasio) specifically mentioned and has repeatedly mentioned health savings.”

All 300,000 city employees have been working under expired labor contracts, some for more than five years. The unions are demanding more than $7 billion in retroactive pay hikes.

Fuleihan repeatedly stressed that saving money on the skyrocketing cost of health benefits would have to be part of any deal with the unions.

We’re looking to sit down and see if we can come up with some ideas that can save everybody money,” said Harry Nespoli of the Municipal Labor Committee.

But he said he would resist making workers pay more for premiums, noting they already are responsible for co-pays.

“That’s going to be a problem. … We want to make sure that whatever changes; the quality of the health care stays the same.”

Are health plans part of the teacher contract negotiations?

No and Yes.

The UFT does not negotiate health plans, the Municipal Labor Committee (MLC), a coalition representing the 300,000 city employees negotiates, however, health plan costs are part of the size of the package. “Savings” in health coverage adds potential dollars to the retroactive pay/salary rate increase pool.

The cost of city employee health plans have been skyrocketing and the Affordable Care Act complicates an already thorny issue.

For teachers a major item is retroactive pay, the teacher contract expired on 11/1/09 – over four years ago. The union retroactive pay claims, for all city employees, reportedly would cost the city $7 billion: well beyond what is possible in one budget cycle (7/1 until 6/30).

Unions argue that “pattern bargaining” requires retroactive pay at a rate of 4% – the last raises prior to the mayoral decision not to negotiate with any union. Clearly the city will point to the fall 2008 fiscal crisis and use an “ability to pay” claim. The long overdue fact-finders report will probably address the issues, the report is not binding.

Much of the “negotiations” involve the number crunchers from both sides, gaining an agreement on a wide range of statistical projections.

An example: If the city and the union had negotiated a union what would have been the rate? What are projected tax revenues over the next year(s)?

Once the city and the union agree upon a dollar package, how will it be paid? Pensionable? Nonpensionable? A combination? Paid over one, two or three budget cycles?

After dealing with the past, the retroactive – what is the rate going forward – the increase in the new contract and the length of the contract?

The union wants a “going-out” rate as high as possible; the rate on the day before the new contract begins, the new rate, and the “going-forward” rate is built on the “going-out rate.”

While the budgetary issues are the core of the negotiations there are a range of non-budgetary issues.

* Should the ATR pool be eliminated, and, if so, what is the dollar savings for the city? A win-win issue, both sides would benefit.

* If both sides want to increase “collaboration” at the school level, can you “mandate” collaboration through contract language?

* Can the grievance process/dispute resolution process be streamlined? Instead of disputes taking months, or a year to resolve can disputes be resolved in weeks?

* Can the teacher discipline procedures also be streamlined? The current time frames have been reduced on paper; however, too many cases drag out, partially due to the former administration’s reticence to go before an arbitrator.

In each set of negotiations the parties have discussed a simpler contract, sometimes referred to as a “thin contract.” Some schools use the School-Based Option section of the contract to “amend” contract provisions while others modify the contract quietly below the radar.

Charter school advocates aver that rigid contract provisions impede innovation – a “thin contract” zone would counter that assertion.

At the end of weeks of long intense sessions the sides will move closer and closer, and, one side says, “We need a “sweetener,” something to make the contract more acceptable, more saleable to their side.

The mayor is an enormous advocate of affordable housing – his platform included building 200,000 new units. How do you pay for the housing? Developers want to build high income housing – there is a much higher return on investment. One suggestion: unions allow pension fund dollars to be invested in bonds to pay for affordable housing and that units are carved out for union members. Currently affordable housing uses AMI (Area Median Income) – an amount which would bar new teachers, they earn too much money – a “carve out” for teachers would achieve both purposes – pension fund dollars for affordable housing and units for teachers. Not part of a contract, however, an agreement that would gain support for the contract among the cognoscenti.

For the union, members have to vote to accept the agreement and for the city the agreement has to have the support of the influence makers – the New York Times, the Citizen’s Budget Commission, the City Council, the range of advocacy organizations, and, the public at large, Governor and candidate Andrew Cuomo announcing “This contract agreement is fair to teachers and a win for the City of New York” would be a wonderful plus.

Teacher opinions range from, “I’m retiring soon, I only care about money,” to “I have a long way to go – I’m mostly concerned with professionalism, with working conditions.”

In the final days negotiations move from a science, parsing numbers, to an art, the crafting of a settlement.

Michael Mulgrew and Bill de Blasio, hopefully, will become the best of friends

See pages 20-23 of the NYS Comptroller February 2014 Report on NYC finances re labor negotiations, health plans and pensions: http://www.osc.state.ny.us/osdc/rpt12-2014.pdf

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3 responses to “The Art of Negotiations: Keeping the Eye on the Prize – Staying Focused in a World of Conflict

  1. What has transpired early on in this administration,is a message that “tale of two cities” is what it was meant to be, to wit: Inflammatory, misleading and to be sure counter-productive. DeBlasios insistence to raise taxes on the wealthy, referencing a slur at these same wealthy tax payers,’that it wouuld equate to the cost of some exotic latte” is getting back to him in the only way it could, REACTIONARY.The question has been asked, but bares repeating..If The Gov and Legislature are willing to guarantee budgeting for Un K, why does the Mayor keep insisting on taxing the wealthy. Doesnt he realize that The wealthy have multiple real estate holdings and could easily swicth out their residency to anywhere they want and thus be removed from residency tax roles? No , its got to be something else. Oh, here’s a thought, use the windfall from that tax to pay for a large portion of impending union contract settlements. Talk about Reactionary, what has his Public Advocate gotten into? While she operates her office in a way that she deems fit, the voters in the next mayoral election will not make a distinction between the stupidity, ruthlessness and calousness of her policies from the fact that she was one of DaBlasio’s chosen. After all, they both will be well remembered for their tasteless remarks on inaugeration day. As for The Teachers contract, I hope they get one. One that recognizes the dignity that our profession is deserving of. One that recognizes the accomplishments of Charter School teachers and seeks to network with them rather then seperate from them. One that insures quicker and lasting house keeping maintenence procedures. And one that every vested interest group can point to with pride as a model of financial reponsibility and a professional negotiating standard going forward.

  2. Unfortunately Bill Sandinista deBlasio, the great divider aka one term mayor is the best that NYC can hope for at this date. As for the teachers’ union, stay away from the charter schools. The education of NYC’s children, in particular, those excelling in charter schools depends on it.

  3. The craft in negotiations is staying focused on what is most important, and thinking flexibly about how to achieve it so both sides can say they walked away with something.

    Right now the UFT is staying focused on negotiations and out of a costly and distracting shouting match with Moskowitz and her friends who want to dismantle public education. That fight will have to wait for the contract to be settled.

    The “right contract” will have money in it. Certainly going forward and out. The retroactivity problem that Bloomberg left for DeBlasio will have to finessed. There needs to be something for active teachers and something for those who retired during the first two years that should have been covered by the pattern. There is an internal union problem in ignoring those retirees who will vote in the next UFT election. I previously suggested using any retroactivity they might have earned to fund TRS to pay a recalculated pension based on those earnings going forward.

    There have to be working conditions changes along the lines that Ed suggests to immediately benefit the active members. Start by restoring the Step 2 hearing to someone supervising the principals for grievances. My experience says this will help knock out the ones that the DOE knows should not go forward. it is counter-intuitive that adding a step may streamline the process, but if DeBlasio and the Chancellor keep their promise to be collaborative, then administrators at a level above the principal will act to resolve (or uphold) real grievances and eliminate the bottleneck at Step 3.

    There has to be movement on paperwork. Clear language that makes requiring meaningless paperwork for networks or superintendents to look at must be written and enforced (no more binders). There is a model for it in the language on lesson plans. Strengthen and expand that language.

    Language that is enforceable which mandates School Based Leadership Teams that operate on consensus and cannot be dictated to by the principal will bring teacher and parent voice into the system in meaningful ways.

    Ed’s suggestion about affordable housing is a good one. I’m sure he remembers that the Union tried to do this before but was stymied when the developer insisted on using non-union labor for the project. That should not be as big an obstacle with a DeBlasio administration if it keeps its promise to support labor and fair wages.

    Ending the ATR pool and returning to placing teachers where they are needed is a no-brainer. It will save money and prevent the scandal of uncovered classrooms that regularly occurs as principals refuse to fill vacancies.

    I suspect that ending the networks and replacing them with geographic superintendencies with limited administrative overhead will also save money and provide better management and oversight of the schools than we currently have. The DOE can also probably reduce central staff dealing with data in favor of school based staff dealing with students.

    To reach the “right contract,” one that includes these elements as a baseline and others that I may not have thought of, both sides have to be flexible, refrain from locking themselves into positions through public statements, and ignore the distractions that the educational deformers want to become the central argument.

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