New bill would give arbitrators too much power

A new bill proposed in Illinois, House Bill 5485, would allow arbitrators to impose “minimum staffing requirements” on local fire departments. While this might seem like a minor, technical matter, it has the potential to impose major costs on taxpayers, as elected officials from communities such as Rockford and Oak Lawn are warning in a...

A new bill proposed in Illinois, House Bill 5485, would allow arbitrators to impose “minimum staffing requirements” on local fire departments. While this might seem like a minor, technical matter, it has the potential to impose major costs on taxpayers, as elected officials from communities such as Rockford and Oak Lawn are warning in a video from the Illinois Municipal League.

When negotiations with police and fire unions break down, state law calls for an arbitration panel to step in and basically write a contract for the two sides. Because two members of the panel are appointed by the union and the government, the “neutral chairman” has to make all the difficult decisions.

It sounds like a fair way to settle disputes and prevent strikes, but there are major problems. The neutral chairman is not accountable for decisions he or she makes – arbitrators don’t have to live with increased taxes or service cutbacks if they write up bad contracts.

The incentives for arbitrators lead to bad decisions: The neutral chairman knows that if he angers either side, he’ll never be chosen for another arbitration. That gives him an incentive to split differences, even when one side clearly has the better argument for its terms. That means it’s harder for a community in financial distress to get relief from unaffordable wages or restrictive work rules.

Unions and local officials know this, and they bargain with this in the back of their minds – union officials know that an arbitrator might give them more than local officials are willing to offer, and act accordingly. So even if there’s never an arbitrator appointed, arbitration influences what’s in a contract.

HB 5485 would give arbitrators even more power, allowing them the ability to decide how many firefighters local fire departments must have on duty at any given time. Illinois should be going in the other direction, limiting the number of issues that arbitrators can decide.

In this video, Rockford Alderman Venita Hervey and Oak Lawn Mayor Sandra Bury tell us how firefighter staffing rules imposed by arbitrators have led them to cut back on lighting and sidewalk maintenance, garbage pickup and even police. According to Bury, minimum staffing costs Oak Law $2 million in overtime.

Arbitration is useful for resolving many disputes, but outside of government it is hardly ever used to settle collective bargaining impasses. Local governments shouldn’t be forced to go through a process that private employers – or unions – have rejected.

Bad arbitration decisions are imposing heavy costs on local governments and taxpayers. Arbitration of bargaining impasses should be abolished. At the very least, the Illinois General Assembly should not be increasing arbitrators’ authority.