A New York State Court judge has backed the Transport Workers Union of American, Local 100 in its fight against the MTA to secure its binding arbitration award. In a ruling issued late Friday, Judge O. Peter Sherwood declined to grant the MTA an injunction against the arbitration award that guaranteed TWU workers 11 percent in wage raises over the next three years.
Noting that the court has “limited authority in this case,” Sherwood upheld the arbitration award on the grounds the arbitrators’ decision was “plausible or had a plausible basis” in reality. As long as the award criteria were “considered in good faith” and not unconscionable, the judge could not vacate the TWU’s victory. In plain English, basically, Sherwood noted that unless the arbitrators did not follow the rule of the law and were not unreasonable in explaining their decision, he would have to uphold the ruling.
As Sherwood noted, the arbitration panel followed the Taylor Law’s six criteria in determining the arbitration award. Since the arbitration decision was not “affected by misconduct, bias or procedural defects,” Sherwood upheld the award. “Although the [MTA] disagrees with the [arbitration panel] Majority’s analysis of MTA finances, it has not shown that the findings of the Majority are not supported by substantial evidence and do not have a plausible basis,” he wrote. (The full decision is embedded after the jump and available here as a PDF.)
In response to this decision, the MTA, which will soon announce a salary reduction for all non-union employees and substantial cuts to transit service across the city, decried the economic impact of this ruling. According to the authority, this court-mandated pay increase will add $100 million to the agency’s bottom line in 2010 and another $200 million in 2011.
“Last night the MTA learned that our appeal of the TWU Local 100 arbitration award was unsuccessful. We are extremely disappointed by this decision, which will force the MTA to pay wage increases that are inconsistent with the economic crisis in New York,” the authority said in a statement issued Saturday. “The ruling will have severe financial impacts on the MTA budget, coming on the heels of a State budget cut and reduction in payroll tax proceeds.”
The agency also fired the first salvo in what promises to be a bitter war of words between them and the TWU workers. In no uncertain terms, the MTA noted that the arbitration award may guarantee more money for union workers but will come at a high public cost. “We are working through the weekend to incorporate this news into the balanced 2010 budget that must be presented on Monday to the Finance Committee of the MTA Board,” the statement said. “Unfortunately, the magnitude of these changes makes it increasingly difficult to limit the impact this budget will have on the MTA, our employees and customers.”
For its part, the TWU offered up a more conciliatory tone. “The MTA has had their day in court and the judge ruled against them,” John Samuelsen, the new head of Local 100, said. “Now it’s time for them to stop wasting more of the taxpayers’ hard-earned dollars on lawyers’ fees and honor our lawfully obtained contract. I cannot think of a better way for the MTA to start this new labor/management relationship off on the right foot then to release our wage increases.”
Interestingly, Judge Sherwood himself questioned the economic wisdom of the arbitration award, but he was bound by law to uphold the decision. “In the current economic environment, the award of wage and benefits increases over three years of approximately 11.5 percent is a rich package but it is not unique. Were the court assigned direct responsibility for applying the criteria set forth in the Taylor Law to the package of economic benefits demanded by the union, the court might weigh them differently than did the Majority in this instance,” he said.
In the end, the MTA will have to find another $100 million it doesn’t have to institute a four-percent wage increase for thousands of TWU members across the city. Although the agency continues to maintain that it will not raise fares in 2010, the sweeping service cuts needed to cover this even greater gap would utterly cripple the system. I don’t see how, with the appropriations cutbacks, the payroll tax short fall and this arbitration ruling, a fare hike can be avoided.
As of now, the authority does not know if it will appeal the state court’s ruling.
Click through for the full opinion from Judge Sherwood or access it here as a PDF.
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