NIU Financial Forecast Forum January 25, Benjamin E. Gehrt Clark Baird Smith LLP

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1 NIU Financial Forecast Forum January 25, 2019 Benjamin E. Gehrt Clark Baird Smith LLP

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3 RIP Public Sector Unions

4 The Rumors of My Death Are Greatly Exaggerated

5 There have been over 200 lawsuits filed in the wake of the Janus decision. Employees suing to recover fair share fees deducted pre-janus Some employees who signed cards suing to claim they had no free choice

6 Bargaining Responses: Paid time to meet with non-members and new employees Contact information for non-members Employer neutrality on union membership Notification of open records request, and restrictions on response to third parties Restrictions on revocation of dues check-off cards Voluntary Fair Share Payments Donations to charity in lieu of dues Blacklisting non-members

7 Legislative responses California Gov. Code Each public employer... shall provide the exclusive representative mandatory access to its new employee orientations Also limits employer mass communications. New York Civ. Serv. Law 208(4). Requires employers to notify unions within 30 days of employees being hired, rehired, or promoted and provide name and address. Union must be permitted to meet with new employees within 30 days with no loss of leave time. New York Civ. Serv. Law 209-a(2). Unions do not have to represent non-members during disciplinary proceedings or in any stage of the grievance-arbitration process.

8 Legislative responses, cont. New Jersey Workplace Democracy Enhancement Act. Unions are allowed to meet with employees on the employer s premises during the workday to investigate grievance, complaints, etc. Unions are also allowed to meet individually with new employees at individual or group meetings within 30 days of hire. Florida Public Employee Relations Act Sec Unions are not required to process grievances for non-members. Washington Proposed SB 6229/HB Would require employers to provide unions with reasonable access to new employees. Rhode Island Proposed Bill Unions would not be required to process grievances for non-members.

9 House: 74 Democrats, 44 Republicans Senate: 40 Democrats, 19 Republicans Illinois Labor Relations Board 2 vacancies 3 recess appointments John Samolis appointed by Bruce Rauner Keith Snyder appointed by Bruce Rauner Christopher Glynn appointed by Bruce Rauner

10 Executive Order Labor unions are vital partners in Illinois effort to build a strong middle class IDOL ordered to review all pending cases under IWPCA, IMWL, and the Day and Temporary Labor Services Act within 60 days Increase workplace equity in state government Reinforces Project Labor Agreements Act Governor un-freezes union wage rates for state employees

11 As of Day 3 of the Current Legislative Session: HB 9: 6 Weeks of Paid Family Leave for birth or adoption of a child HB 21: eliminating the requirement of an affidavit under UPODA; HB 152: CBA provisions that limit the ability to investigate the conduct of a public employee are unenforceable HB 252: Employer includes any person employing 1 person (instead of 15) HB 253: Broadening the definition of an employee under IELRA to include research assistants at public universities SB 30: Workplace Transparency Act would forbid nondisclosure agreements related to disclosure of sexual misconduct, retaliation, or unlawful discrimination

12 YEAR WEIGHTED AVERAGE AVERAGE MEDIAN % 1.3% 1.0% % 0.9% 0.0% % 1.1% 1.0% % 1.6% 1.8% % 1.8% 2.0% % 2.2% 2.0% % 2.4% 2.3% % 2.1% 2.0% % 2.8% 2.3% Source: Bloomberg BNA

13 Government All Employees Difference Weighted Avg. 2.6% 3.4% +0.8% Average 2.8% 3.9% +1.1% Median 2.3% 3.0% +0.7% Source: Bloomberg BNA

14 YTD* Interest Arbitration Cases * excludes supplemental awards

15 No. of Decisions Avg. Award 2.42% 2.46% 2.30% 2.54% Highest Award 2.50% 3.00% 3.00% 3.00% Lowest Award 2.25% 2.00% 2.00% 2.00%

16 City of Streator and FOP, No. S-MA , p. 7(Nov. 26, 2018)

17 Police 2.47% (68 contracts) Fire 2.31% (51 contracts) 2.45% (33 contracts) 2.28% (29 contracts) 2.60% (12 contracts) 2.28% (16 contracts)

18 City s Proposal PPO: increase contributions from 13% to 15% HMO: increase contributions from 20% to 25% Extra 0.75% wage increase as a quid pro quo Eliminate reopener that would allow union to propose changing to a union-sponsored insurance plan Union Proposal: status quo

19 Adopted Union s Proposal: status quo Changes should be achieved through collective bargaining, not through arbitration Any quid pro quo should be the result of a negotiated agreement, and that proposed would not cover increased employee insurance costs Current insurance costs had decreased No internal comparability data External comparability irrelevant City of Elmhurst and IAFF, No. S-MA (Meyers, Nov. 26, 2018)