Even as City Hall and Philadelphia’s firefighters union embarked on new contract arbitration last week, Mayor Michael Nutter yielded ground in his administration’s prolonged legal war with firefighters over their recently expired 2009 contract.
Nutter last Wednesday announced that the city would not challenge an Aug. 7 order by Common Pleas Court Judge Idee Fox to implement a portion of the 2009 contract, pending the city’s appeal of its terms in Commonwealth Court. Fox ordered the city to pay $13.7 million into the union’s active-duty and retiree health-care funds, while increasing the city’s monthly contributions into the active-duty health-care fund by more than $400 per active-duty union member, according to a statement issued by Nutter’s office.
The Nutter administration will continue to pursue its appeal of the entire 2009 contract in Commonwealth Court and, if successful, will seek reimbursement from the union.
“While we disagree with the judge’s order, we have decided to move forward and implement it,” Nutter said. “This court order is, in effect, a split decision and only temporary in nature. We have concluded that it’s more important for the Commonwealth Court to focus on the merits of the city’s appeal than on this order, which has only temporary effect. Should the city prevail in its appeal, the city will recover the money paid to the health fund under this order.”
The administration calculated that the city would pay about $69 million in new firefighter health-care costs if maintained for the next five fiscal years.
Local 22 of the International Association of Fire Fighters, which represents about 1,900 active and 2,100 retired city firefighters and paramedics, had argued to Judge Fox that the city should be required to pay the entire 2009 contract — including wage increases and increased health-care fund contributions — pending the outcome of the city’s ongoing Commonwealth Court appeal.
“We’re happy that the city did not appeal Judge Fox’s order and are hopeful this is the first step in getting the entire 2009 [contract] honored,” said Local 22 President Joe Schulle.
The legal fight over the contract has been long and arduous. Local 22 members have gone without a raise for four years and have been working essentially without a contract since July 1, 2009.
That year, the city and union began a lengthy arbitration process. In October 2010, a three-member arbitration panel awarded the union a new four-year deal retroactively. The city appealed the award to Common Pleas Court, where the parties agreed to return to arbitration.
In July 2012, arbitrators issued a new four-year award retroactively, with terms generally viewed as more favorable to the union than the previous award. The Nutter administration appealed again to Common Pleas Court.
Last November, Judge Fox ruled in favor of the union and upheld the arbitration award. The city appealed again, to Commonwealth Court, which is one step below Pennsylvania’s Supreme Court.
The parties are scheduled to argue the case in Commonwealth Court in Harrisburg starting Sept. 11, Schulle said. According to the union president, the full court of 11 judges is expected to hear the case.
Since the outset of the city’s appeals, the union’s health fund has been depleted from a balance of $28 million to less than $2 million due to rising healthcare costs and stagnant city contributions into the fund, according to the union.
Schulle, who became Local 22 president on July 1 after defeating incumbent Bill Gault in a unionwide election, says the union will not sacrifice any provisions of the 2009 arbitration award to resolve the legal dispute.
“The most likely scenario is we’re going to go through the court system,” Schulle said. “We are willing to discuss the issues with the city, but our intention is to have the award honored.”
Any additional payments from the city will be retroactive, as the arbitration award in question — the one granted last July and commonly known as the “2009 award” — expired on June 30. In Commonwealth Court, the union will defend the arbitration process, rather than the outcome.
“We’re defending how [arbitrators] came to the determination that the city can pay for the award,” Schulle said.
The union maintains that arbitration is binding to both the union and the city in accordance with state law. The same law prevents firefighters from going on strike. The city has argued in court filings that arbitrators failed to give the required consideration to the city’s ability to pay the contract award.
The arbitration process began on a new Local 22 contract on Aug. 12. According to Schulle, a three-member arbitration panel convened three days last week and will meet three days this week to hear arguments from the Nutter administration and the union. The panel is expected to work into the fall to determine the terms and length of a new contract.
According to Schulle, the city has proposed no raises for firefighters and paramedics, with cuts in the city’s contributions to the union’s health-care and pension funds.
“That’s standard, nothing surprising or earth-shattering,” Schulle said.
The union is seeking incremental wage increases and other cost-of-living adjustments, but has not made specific demands.
“We’re asking for raises commensurate with inflation. We’re not asking for specific numbers right now,” Schulle said. “We typically look to maintain a level of parity [with police].” ••