Who is a "Participating Member" in the PERS Pick-up?

Under Article 71, Section 7 of the Collective Bargaining Agreement (cba), seasonal employees "who are not participating members" of PERS receive a 6% differential, equal to the PERS pick-up. 

The employer interpreted "participating member" to mean retirees taking benefits out of PERS and employees paying into PERS. The PERS statute does not use the term "participating member" but instead refers to "active" members paying into the system and "retired" members taking out of the system.

The Union equated "participating member" with "active" members.

Neither side could present bargaining notes from 1979, when the contract language came into existence. Instead the Union presented Mort Shapiro as a witness, the Executive Director of the Union at the time.

We also had Paul McKenna testify about Sizemore's attack on the pick-up in 1994-1995 and how the pick-up is considered salary in joint compensation surveys.

He also noted that the employer presented no contrary evidence. He concluded that the 6% pick-up was never about improving retirement benefits, but about a way to improve take-home pay at a cost acceptable to the State (there were tax advantages to the employee and the State and the State benefited by giving a salary increase that did not increase base pay for purposes of calculating overtime and differentials).

The arbitrator then concluded that Article 71 was written to address the problem of getting a wage increase to those who may never be active members of PERS.

Seasonal employees often do not work six months in a twelve-month period, a requirement to become a member of PERS. After the adoption of the pick-up, they would be paid 6% less than other employees doing the same job, without the 6% differential that was adopted along with the pick-up in 1979.

The arbitrator stated that the issue in the case is not whether the grievant had access to PERS, but whether he is receiving the negotiated wage increase (the pick-up) or the 6% differential.

The arbitrator concluded that the cba requires that an employee receive one or the other. Put another way, Article 71, Section 7 is not about receiving a PERS benefit, but about receiving the proper amount of wages.

The other basis for the arbitrator's decision was the contract language itself. Another sentence in Article 71, Section 7 states that "such special differential shall terminate immediately prior to the first full pay period after the employee becomes a participating member of [PERS] and becomes eligible for the State pick up. . ."

The only possible interpretation of that sentence is the Union's interpretation that "participating member" means an "active" member, not a retiree, because you don't have a pay period after you retire.

The arbitrator applied the rule of contract interpretation that you can't have two different meanings for a term in the same contract clause.

The grievant will have the 6% differential restored and, under threat of a group grievance, the State has agreed to start paying the 6% differential to all seasonal employees who are PERS retirees at all agencies.

Discussion
This case illustrates that arbitrators look for consistent meanings of the same terms in contracts. If you want to establish a certain interpretation, look for how the same term is used in other parts of the contract (or even better, in the same section or article).

The other lesson lies in the importance of bargaining history. We could not establish the bargaining history through the usual means, bargaining notes and proposals, but because the issue was the PERS pick-up, we were able to establish the intent of the bargainers by recreating the history of the pick-up.

The arbitrator credited their testimony because the PERS pick-up has had a "high public profile." The arbitrator noted that the Union had introduced substantial evidence of the mutual purpose of the parties through the legislative record and the 1994 ballot measure that tried to eliminate the PERS pick-up.