Union Busting Contra Costa BART Board Of Director Zakhary Mallett Covers Up His Criminal Role In Murders With Use of Replacement Workers (scabs)

Union Busting Contra Costa BART Board Of Director Zakhary Mallett Covers Up His Criminal Role In Murders With Use of Replacement Workers (scabs)
http://zakharymallettbartdistrict7director.createsend5.com/t/ViewEmail/j...

Labor Negotiations:
The Major Players are Done and Some Benefits Gained,
But at What Cost?

November 03, 2013

Yesterday morning, BART’s Communications team put out the District’s own response to the results of our 2013 labor negotiations with our two largest unions, ATU 1555 and SEIU 1021. Both unions’ memberships ratified the contract by an 85% and 88% margin, respectively, on Friday. The new contract includes a gross 15.4% wage increase, employees beginning to contribute to pension costs (1% in Year One, escalating to 4% in Year Four), employees accepting a bigger share of medical costs (9.2% of premiums, cumulatively), and several improvements to work rules.

The District’s news release, which highlights most of the contract details, puts a positive spin to the outcome of negotiations. Among the ideas highlighted is that we managed to save significantly because, although our workforce will have a gross wage increase of more than 15%, we were able to limit the net wage increase we gave to our employees to only a 2% net wage increase per year (8% over life of contract). In addition, we made huge strides that are historically unheard of at the District by reining in the costs of deficient work rules. Examples include implementing most of our forty hour work week goals and addressing a deficiency in beneficial past practice contract language that forbade us from moving forward technologically in how we engage with our workforce.

In addition to reviewing the written news release linked to above, you may acquaint yourself with the new contract by watching the press conference that BART management held yesterday, reviewing a chart that shows the economic package of the new contract, or reviewing a chart that shows the work rule improvements of the new contract.

My Own Reaction/Perspective

If you’ve read my numerous e-news updates about labor negotiations, you probably already know that my perspectives are a bit different from – and more fiscally conservative than – that of District staff. In short, I feel we implemented a poor negotiation strategy that ultimately got us less than we could have gotten – all at the expense of riders and taxpayers. I also feel that we betrayed the majority public’s support of us holding a tough line and violated the standard practice of strikes by giving in after the unions went on strike. Finally, I adamantly disagree with the notion that, because the costs to the district over the next four years will be similar to the cost of providing our workforce a net 2% wage increase per year, it means that our workforce only received the equivalent of a net 2% wage increase per year. This is an Affirming the Consequent logical fallacy (Wikipedia definition).

The Real Net Effect to Our Workers
Taking up the last point first, I want to underscore that this new contract *is not* the equivalent of a net 2% wage increase per year to our workforce. That is an understatement. It is merely a net cost to the District that is equivalent to the cost of giving our workforce a 2% annual wage increase with all other things remaining equal. In actuality, employees will still experience a net wage increase of more than 15% over the next four years. Put in plain English, their hourly salary will increase by 15.4% over four years. What will not increase by quite that much is their net take home pay. However, that pay will still increase by a bit more than 2% annually.

The $67M figure that BART staff has put out is artificially deflated because it gives as a “credit” in the negotiation process supposed savings from normalizing some of our cost sharing practices. Recall that our employees have historically paid nothing into pensions, were guaranteed medical after retirement after just five years of work with the District, and pay severally lower medical costs than most working people…? Well, for every 1% contribution in pensions, our employees were given a 0.72% wage increase to offset their pension contributions. Similarly, the long-term cost savings from changing our medical after retirement vesting period from five years to fifteen years was formulated into a net present value, which was then credited as a savings in the contract negotiations. These and other examples of financial credits in this negotiation effectively voided many of our claimed cost savings efforts because they fail to take into account the fact that we were not seeking to “make employees pay more,” but were working to end subsidies.

In your opinion, should normalizing employee cost sharing practices come with a price tag? Most constituents and members of the public I have heard from say no. When you subsidize someone or a group of people with millions of dollars annually and finally catch on to the need to end that subsidy, you do not owe them those millions of dollars in some other decorative format. All that does is continue the subsidy in different and more permanent ways. As the San Francisco Chronicle’s Debra Saunders puts it, although “the deal for the first time makes BART workers pay toward their pensions, and it boosts employee health care contributions, … the bigger raises effectively reimburse labor for these increases.” In other words, these raises effectively negate the whole point of normalizing our cost sharing practices and instead make permanent the subsidies we stated wanting to end. All we have done is converted the subsidies from being pension, medical, and retirement medical subsidies into wage subsidies that we will never be able to get back.

So, once again, although this new contract will cost the District about the same as a contract that provides our workforce a 2% annual raise over four years, our employees are getting much more than a 2% annual raise over four years.

Bad Negotiation Strategies (Increasing Offer Too Quickly):
From the beginning of this negotiation process, the District’s negotiation team moved too far too quickly. By the time we came from offering no wage increases to offering an 8% wage increase, the unions’ negotiating teams were still stuck over and above a 23% wage increase. The problem with moving too fast too quickly is that it forced us to slow down too abruptly. We floored the accelerator early on only to force ourselves to slam the brakes later. This is never a situation one should force themselves into during negotiations. A key principle in negotiations is to always maintain some form of fluidity so that a middle ground can be reached. As such, the quicker moving side should make a point to slow down to the pace of the slower moving side. Abruptly coming to a halt forces the other side to do the same and, in my opinion, our moving too fast too quickly and later slamming the brakes prematurely brought us to an impasse sooner than necessary and also made our offer richer than necessary.

Bad Negotiation Strategies (Bad Response to Strike):
While it is up to the unions to call a strike, it is up to management and the Board to accept or not accept a strike. Whether or not we accept a strike is determined based on a point in negotiations at which we cannot bear to move further. That’s what a “Last, Best, and Final” offer defines. If you are prepared to give more, you do not inconvenience the public by providing a Last, Best, and Final offer and accepting a strike. That makes the strike avoidable from the management side and not worth it. But, it’s exactly what we did. Upon our workers going on strike, the District’s negotiating team gave them much more than our Last, Best, and Final offer.

What disturbs me most is that we did not listen to the supermajority public. When we were offering a 10% wage increase, a supermajority of the public indicated that the offer we made was generous and should be accepted by the unions. And when the strike was happening, a vast majority of the public told us to continue to hold the line. They were prepared to accept the inconvenience of the strike in the interest of us getting to a real point of long-term financial sustainability. But we betrayed those pleas of the supermajority public and caved in anyhow. This was the first time in a long time that the public stood behind BART and gave us the chance to really rein in costs through normalizing our cost sharing practices, and we, in my opinion, failed to fully capitalize on this opportunity due in part to how we handled and responded to the strike.

The Contract Details:
Obviously, not everything can be achieved in a single contract negotiation. Trust me; I get this and there is still A LOT more in the way of work rules and cost sharing that I hope to see addressed in future negotiations. But in this negotiation alone, there were a few key things (besides ending certain subsidies instead of converting them) that I feel we had available to us and let go of…

• Percentage-based Medical: Although we were able to negotiate a cumulative medical contribution across the workforce that increased workers’ share of medical expenses from 5% to 9.2%, it was done in a way that is unfair to 50% of our workforce. Under the new plan, all workers will continue to pay the same price regardless of the plan they choose and regardless of their family size. As a result, singles and small families will continue to subsidize larger families in the same way that subscribers to lower-cost health plans will continue to subsidize subscribers to higher-cost health plans. Furthermore, because we simply increased the flat rate, this means that the cross-subsidy amongst workers is even higher now than in the old contract.
• Many Negotiated Changes Will Default Back to the Old Standard: Once this new contract expires, the medical standard will default back to the standard associated with the now-expired contract. That standard is for employees to pay a little more than $92 per month through 2013 and 3% more per year thereafter (i.e., a little more than $103 per month in 2017). Similarly, one of the two Money Pension Purchase Plans (MPPP) that the District pays to employees and routinely negotiates out of the contract only to have it brought back in later, will indeed be brought back in after this contract expires. One train of thought is that this doesn’t matter because everything is negotiable every four years anyhow. But I argue that it does matter. Consider that you can only bargain for so much every negotiation. Because of this, by negotiating something out only for it to come back again, we force the negotiated item to artificially work against the District’s bargaining allowance in future negotiations.
• The 40-Hour Work Week Changes are Less Than Ideal: Until the ratification of this new contract, employees were afforded a great deal of flexibility in terms of sick time. As you know, our workers were allowed to call in sick on an on-day and then still receive overtime pay if they came in on their off-day even though they did not work a full forty hours. It turns out that this practice did not only apply to the use of sick day allowances, but even employees without any sick or vacation time allowances were able to engage in this practice. We were able to amend the contract so that only employees with sick and vacation time allowances had this option (i.e., it is no longer allowed for employees without allowances), but this was less than we sought and could have achieved, in my opinion.
• Wage Increase Formulas Focused on 4-Year Costs Instead of Long-Term Costs: As theeconomic package chart shows, the 15.4% wage increase over the four-year contract period will be staggered. One of the purposes of this is to save the district costs. The problem is that this approach only looks at a four-year period. By going through this hassle of saving the district money over a four-year period, it will actually cost the district more after the four years are over. In other words, it helps us in the short-term at the expense of long-term financial sustainability.
Conclusion

In conclusion, while I understand this to be a major and positive milestone in the history of BART negotiations, I still feel we fell short of where we could have gotten and did wrong to the public because of that. I acknowledge that as a new BART Director, I may not be able to appreciate how much of a shift and improvement in negotiation practices this particular negotiation turned out to be. It still is too difficult for me to overlook what I feel to be hiccups in some of the District’s negotiating team’s strategies that may have led to a less-than-possible outcome.

In any event, although I personally will be voting “no” on this contract for the aforementioned reasons and will make similar statements at that time, my guess is that a majority will support it. Assuming that to be the case, I will at least be grateful to have these many months of chaos over with. I have been anxious to move on to other initiatives I have as a BART Director and look forward to pursing those. Also, while BART’s unions and I clearly do not and likely will not be able to agree on economics, after nerves settle down a bit, I am eager to hear them out on their safety and workforce efficiency concerns and potentially serve as an advocate for those concerns in the future.

Sincerely yours,

Zakhary Mallett, MCP
Director, District 7
San Francisco Bay Area Rapid Transit District (BART)

PS: I will be appearing once again on CBS 5 (KPIX) this morning at 8:00AM. If you miss it, it will also be available online a little bit after the morning show.

PPS: There's a petition out to ban transit worker strikes in the State of California. View it at this link. The Contra Costa Times' Dan Borenstein offers some cautionary thoughts, while theSan Francisco Chronicle's John Diaz asks the thought-provoking question of why transit strikes are legal in a region where transit use is so greatly promoted.

Zakhary Mallett, MCP
Director, District 7
San Francisco Bay Area Rapid Transit District (BART)