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Unions Pressure Employers for Higher Wages

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With the introduction of House Bill 96 on March 28, 2017, this could be a watershed year for Delaware state employees. Despite structural revenue and budget challenges, unions that represent state employees for collective bargaining are seeking to substantially amend the Public Employment Relations Act (PERA), the law that grants state, county and municipal employees the right to bargain for certain terms and conditions of employment. The purpose of this initiative is to grant the state’s Merit employees the general right to bargain for their wages. While, if successful, the initiative may not produce an immediate organizational impact on other government employers in Delaware, it does indicate a strengthening resolve to secure wage increases for represented employees regardless of current economic conditions. This resolve and its spillover effects should command the attention of public and private employers.

Public employees in Delaware, including most county and municipal employees, teachers, police officers and firefighters, have long held the right to bargain for their wages. However, Delaware court decisions dating back to the early 1970s established that Merit employees—the majority of employees in the state’s Executive Branch, with some also located in the judicial and legislative branches—were restricted by law from wage bargaining, though they can and have bargained for a wide scope of other terms.

State Merit employees long sought the right to bargain for wages, and in 2007 they were successful with passage of the most significant amendments to the PERA since it was adopted into its current form in 1994. Senate Bill 36 created a new section in the PERA exclusive to Merit employees. The new standards gave Merit employees that right to bargain for wages on the condition that they must be grouped together into specific wage bargaining units based on their job classifications. The organizational structures and bargaining procedures are complex, and the amendments prompted significant litigation to define the scope and structure of the new bargaining requirements. After almost ten years of sometimes contentious wage bargaining, the Merit-specific bargaining procedures have not produced the results the unions expected.

House Bill 96 is designed to eliminate the integrated Merit wage bargaining requirements. It will fully repeal the 2007 PERA amendments, and other related statutory changes that were enacted to integrate Merit wage bargaining into the state’s budgeting and management processes. Instead of the uniform bargaining process intended by Senate Bill 36, the proposed legislation seeks to directly modify the existing Merit System law to confirm that Merit employees may generally bargain for their wages. If successful, House Bill 96 will authorize all of the represented Merit employees to immediately begin bargaining for wages with no integration of similar groups of employees or bargaining units, and in overall numbers that the state has never seen before. Given the moderate wage increases state employees have received over the past several years, the state can expect thousands of employees to begin demanding higher wages literally overnight, with the right to arbitrate their wage demands.

Although this legislation does not directly apply to private employers or employees, and does not change the current bargaining rights of non-state public employees, it will cause a momentous shift in state employee bargaining and could significantly increase the state’s wage expenditures. And, given Delaware’s small size, all employers should be mindful of the impact that thousands of employees newly bargaining for their wages could have on their workforces and business. As representatives and advocates, unions do not—as a rule—moderate their wage demands because of an employer’s economic challenges. Their sole concern is to secure the increases their members demand, and to implement an effective strategy towards that end. This current legislative effort is a key part of just such a strategy: one that will certainly have impacts outside of state employment because of the sheer number of employees involved. Whether those effects will be an increase in budgeting and revenue challenges (increased taxes?) for the state, a generalized increase in union confidence and hardening of bargaining positions, or even a new found energy for employees to seek representation for the first time, employers at all levels in Delaware should be prepared for how this effort may impact their operations and bottom line.

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