Posted on: Tuesday, March 30, 2004

EDITORIAL
Arbitration awards can't always be binding

There was more than a little posturing by both sides in the hours leading up to yesterday's announcement of an arbitration panel award for some 23,000 state and county workers represented by the HGEA.

Both Gov. Lingle and Mayor Harris said they are likely to recommend rejection of the award, sight unseen. This may seem odd, but experience suggests the award will be far closer to the $98 million package sought by the union than the $6.3 million package offered by the employer.

The actual award, a two-year, 5 percent package, strikes a balance between the two positions.

Union spokesmen say if Lingle and/or Harris urge their legislators to reject the settlement, they will go to court. The language of the arbitration law is crystal-clear, they say. It says the arbitrator's award is "final and binding," which leaves little room for ambiguity.

But Harris makes a good point: Yes, the award is binding on the employer, he says. If the Legislature (or in his case, the City Council) agrees to pay the contract settlement, he has no choice but to release the money.

As much as it pains the unions, there is logic to this approach. The arbitrator is bound to consider management's ability to pay an award, but it is not expected to take into account conflicting demands on the available tax dollars. Nor should she.

That's an executive decision.

To use what might be a somewhat farfetched example: Imagine an arbitrator awarded a substantial pay increase to a large union in the weeks or months just before the Sept. 11 attacks. A Legislature that might have been fully prepared to pay the contract might have had second thoughts in the wake of dramatically changed circumstances.

It makes little sense to have an arbitration panel lock a Legislature into an iron-clad spending plan without consideration of the fiscal health of the overall state or county budget.

Both sides agree there is ambiguity in the language of the law that sets up binding arbitration. Past practice and other parts of the law suggest, however, that the "binding" nature is on the employer, not on the legislative body that must authorize the money.

If it takes a court case to resolve this ambiguity, so be it. Our guess is that a court would, in the end, take the employers' side in this dispute.

That does not mean, however, that there is no moral obligation on the council or the Legislature to reject any settlement out of hand. The unions give up a powerful tool — the right to strike — in exchange for binding arbitration.

The bottom line: State and county legislators should not reject an arbitrated contract simply because they can; only if they must.