Fact Finding Recommendations of 2013

Fact Finding is the third phase of the collective bargaining process. If the parties are unable to reach an agreement after negotiating directly with each other and usually after using a mediator, either party may file a petition for fact finding with the Michigan Employment Relations Commission (MERC).  MERC will then appoint a neutral third party to hold a hearing at which the parties present their proposals with supporting evidence.  After the hearing, the fact finder releases a public finding of facts and a non-binding recommendation to assist the parties in reaching an agreement for a new contract.

Although the fact finder's recommendation is not binding on the parties and does not set a precedent, it provides an unbiased suggestion for how they may settle their unresolved issues.  By reviewing past fact-finding recommendations, a school district may discover creative ideas for how to settle its own negotiations.  Here are some trends that developed in 2013:

• There was an increased number of fact-findings that occurred last year, with ten recommendations released in 2013 compared to only three in 2012.  Many more fact-finding petitions were filed, but the hearing was not held because the parties resolved their remaining issues beforehand.
• Faced with this increased caseload, MERC is working hard to expedite the fact-finding process to allow the parties to quickly resolve their issues, settle their contracts, and establish some level of labor stability.
• Another way in which fact finders are trying to foster stability is by recommending multi-year agreements.  In eight of the ten fact-finding reports issued in 2013, the fact finder recommended a two-year agreement.
• In six of the ten fact-findings last year, the district either was in deficit or would be in deficit unless it received the concessions it sought from its employees.  Currently there are 50 school districts in Michigan with a deficit fund balance and another 50 that have a fund balance of less than 5%.
• Unions are emphasizing the variance between a district's budget and its audit as a way to undermine the credibility of the district's business manager and to create distrust of the district's budgeting process.  Most fact finders understand that initial budgets will vary from a final audit, but at least one fact finder in 2013 found this union argument persuasive and used it as a basis for recommending a salary freeze instead of the concession the district sought.
• Faced with school districts in severe financial difficulty, fact finders are struggling to find ways to maintain employees' wages.  In an effort to lessen the blow to employees during these difficult financial times, some fact finders are recommending half step increases instead of full step increases, while others are recommending that employees take furlough days instead of on-schedule salary reductions.
• In the majority of the fact-findings in 2013, health insurance was not as contentious of an issue as it once was between the parties.  This was due in large part to Public Act 152, which sets the maximum percentage or dollar amount that a school district may contribute to the cost of its employees' medical benefits.

It is important to keep tract of fact-finding trends, as they may be beneficial to a school district's collective bargaining negotiations.  If you have any questions regarding fact-finding or collective bargaining in general, please contact an attorney in our Educational Practice Group, who will be happy to assist you.