State Afscme 7111 Increase Award - Benn

BEFORE
EDWIN H. BENN
ARBITRATOR

____________________________________

In the Matter of the Arbitration

between

STATE OF ILLINOIS
CASE NO.: Arb. Ref. 10.251
and July 1, 2011 Increases

AFSCME COUNCIL 31
____________________________________

OPINION AND AWARD

APPEARANCES (on the Briefs):

For the State: Joseph M. Gagliardo, Esq.
Thomas S. Bradley, Esq.
Lawrence Jay Weiner, Esq.
Heather R. M. Becker, Esq.
Matthew P. Kellam, Esq.

For the Union: Stephen A. Yokich, Esq.

Dates Briefs Received: July 16, 2011

Date of Award: July 19, 2011

State of Illinois and AFSCME Council 31
July 1, 2011 Increases
Page 2

CONTENTS

I. BACKGROUND AND FACTS...................................................................... 3
II. DISCUSSION ........................................................................................... 8
A. Did The State Violate The Agreement And The Cost Savings Agreements
When It Declined To Pay The 2% Increase Effective July 1, 2011 For All
Bargaining Unit Classifications And Steps?............................................... 8

B. What Effect Does Section 21 Of The IPLRA Have On This Dispute? ....... 10

C. The States Constitutional Arguments................................................... 14

D. The States Other Contractual Arguments............................................. 15

E. The States Other Arguments ................................................................ 17

F. The Remedy.......................................................................................... 19

III. CONCLUSION......................................................................................... 20
IV. AWARD................................................................................................... 25

Page 3

I. BACKGROUND AND FACTS
This is a dispute over the refusal
by the State of Illinois (State or
Employer) to pay a 2% wage in-
crease effective July 1, 2011.
1

AFSCME Council 31 (Union or
AFSCME) represents employees
employed by the State in a number
of bargaining units working in the
States departments, boards,
authorities and commissions. The
parties collective bargaining rela-
tionship spans over approximately
35 years and 19 multi-year collec-
tive bargaining agreements in vari-
ous bargaining units.
2
The relation-
ship and the parties early collective
bargaining agreements pre-date the
passage of the Illinois Public Labor
Relations Act, 5 ILCS 315/21
(IPLRA).
3
The current collective
bargaining agreement between the
State and the Union is for the period
September 5, 2008 through June

1
As discussed infra at II, pursuant to a
Scheduling Order dated July 7, 2011, the
parties submitted briefs on certain issues
along with offers of proof and exhibits. For
clarity, although there are some duplicate
exhibits, reference to both sets of exhibits is
not always made.
2
Joint Exh. 1; Union Exhs. 1-18.
3
The IPLRA became effective July 1,
1984.
30, 2012 (Agreement, 2008-2012
Agreement or CBA).
4

As originally negotiated in 2008,
the multi-year Agreement provided
at Article XXXII, Section 6 for wage
increases of 15.25% to be distrib-
uted as follows:
5

Effective Date Increase
1/1/09 1.50%
7/1/09 2.50%
1/1/10 2.00%
7/1/10 2.00%
1/1/11 2.00%
7/1/11 4.00%
1/1/12 1.25%
The contract language in Article
XXXII, Section 6 of the Agreement
for each of the periodic increases
provides:
6

Effective [date], the pay rates for all
bargaining unit classifications and
steps shall be increased by
[amount]%, which rates are set out
in Schedule A.
Under the Agreement, covered
employees also are entitled to step
and longevity increases.
7

The September 5, 2008 effective
date of the Agreement is significant.
At the time, the country and the
State were experiencing a recession.
However, within weeks after the par-

4
Joint Exh. 1.
5
Id.
6
Id.
7
See e.g., id. at Article XXXII, Sections 1,
4, 6(h)-(j), 7 and Schedule A.
Page 4

ties completed their negotiations
and the Agreement was ratified and
signed, the stock market crashed
and what was a recession became
The Great Recession whose effects
reared up and wreaked havoc on so
many aspects of the economy.
8

Skyrocketing unemployment rates,
mass layoffs, foreclosures, financial
bailouts and, from the States per-
spective, severe losses of revenue
streams and resulting increased
immense budget deficits soon fol-
lowed.
9

The Union responded to the
States fiscal crisis. Faced with the
real prospect of layoffs of potentially
thousands of employees covered by
the Agreement, in 2010 the Union
and the State entered into a series

8
On October 8, 2007, the Dow Jones In-
dustrial Average (DJI) stood at 14,093.
On the effective date of the Agreement
September 5, 2008 the DJI stood at
11,221. By October 10, 2008, the DJI
dropped to 8,451 and by March 9, 2009,
the DJI dropped to 6,547 a decline of
42% in first six months of the Agreement
and a 53% drop since the high point in Oc-
tober 2007.
See http://finance.yahoo.com/q?s=%5EDJI
9
... [T]he current recession has been
characterized as the greatest recession ex-
perienced by this country since the Great
Depression of 1929. Willis, U.S. Reces-
sion Worst Since Great Depression, Revised
Data Show, Bloomberg.com (August 1,
2009).
www.bloomberg.com/apps/news?pid=2060
1087&sid=aNivTjr852TI
of concession agreements including
a Mediated Resolution Memoran-
dum and two Cost Savings Agree-
ments (collectively referred to as the
Cost Savings Agreements or
CSA).
10
While containing a num-
ber of cost savings items, relevant to
the present dispute the Union
agreed to defer certain wage in-
creases negotiated in the 2008-2012
Agreement.
11
In exchange, the
State guaranteed not to lay off em-
ployees through FY12.
As agreed by the parties, the total
savings to the State as a result of
the concessions agreed to by the
Union exceeded $300,000,000 for
FY11 and the parties sought to save
the State an additional
$100,000,000 in FY12.
12
Given the

10
Union Exh. 19; Joint Exhs. 2(a), (b).
The Mediated Resolution was signed on
January 26, 2010. Union Exh. 19. The
First Cost Savings Agreement was signed
on September 24, 2010. Joint Exh. 2(a).
The Second Cost Savings Agreement was
signed by the Union on October 28, 2010
and by the State on November 3, 2010.
Joint Exh. 2(b).
11
Id. Other cost savings items included a
voluntary furlough program, curbing over-
time expenditures, reviewing personal serv-
ice contracts and making changes in the
States health insurance program as well as
the Unions agreeing to work with the State
to find other areas for cost savings for the
State. Id.
12
The Second Cost Savings Agreement
memorializes the savings to the State
achieved by the concessions agreed to by
[footnote continued]
Page 5

realities of The Great Recession and
the States fiscal crisis, had the Un-
ion not agreed to these concessions,
there would have been massive lay-
offs of employees.
13

[continuation of footnote]
the Union and provides (Joint Exh. 2(b) at
1):
WHEREAS, the parties recognize the
State of Illinois is faced with a sig-
nificant and unprecedented fiscal
deficit.
WHEREAS, the parties entered into
a mediated resolution of an out-
standing grievance regarding
planned layoffs on January 26,
2010, that saved jobs and saved the
State over $300 million dollars in
FY11.
WHEREAS, the parties have contin-
ued to seek cost savings measures
by entering into a Cost Savings
Agreement that established a goal of
saving the State of Illinois an addi-
tional $100 million dollars in FY12.
* * *
13
Some economists tell us that the reces-
sion commenced in December 2007. See
e.g., The National Bureau of Economic Re-
search (September 2010).
www.nber.org/cycles/sept2010.html
According to the Bureau of Labor Statis-
tics and the Illinois Department of Em-
ployment Security, the unemployment rates
at the national level and in Illinois in De-
cember 2007 (when the recession began),
September 2008 (when the negotiations for
the 2008-2012 Agreement were completed
and the Agreement was signed), January
2010 (when the Mediated Resolution was
signed) September 2010 (when the First
Cost Savings Agreement was signed), No-
vember 2010 (when the Second Cost Sav-
ings Agreement was completely signed) and
currently (as of May, 2011 as currently re-
ported for the State and June 2011 as cur-
rently reported nationally) show the follow-
ing:
www.bls.gov/news.release/archives/empsit
_01042008.pdf

_10032008.pdf
_02052010.pdf
_10082010.pdf
_12032010.pdf
_07082011.pdf
See also, http://data.bls.gov/cgi-
bin/surveymost?la+17 for Illinois rates (se-
lecting Illinois not seasonally adjusted from
the tables and retrieving data) and
http://lmi.ides.state.il.us/download/LAUS
_CURRENT_STATE.pdf
UNEMPLOYMENT RATES
Date Event National Illinois
12/07 Recession be-
gins
5.0% 5.4%
9/08 2008-20012
Agreement
signed
6.1% 6.3%
1/10 Mediated Reso-
lution signed
9.7% 12.1%
9/10 First Cost Sav-
ings Agreement
signed
9.6% 9.3%
11/10 Second Cost
Savings Agree-
ment Com-
pletely signed
9.8% 9.1%
5/11 Current (5/11) - 9.0%
6/11 Current (6/11) 9.2% -
Some economists now say that The
Great Recession is over. See The National
Bureau of Economic Research, supra as-
serting that the recession ended as of June
2009 (... a trough in business activity oc-
curred in the U.S. economy in June 2009.
The trough marks the end of the recession
that began in December 2007 and the be-
ginning of an expansion. The recession
lasted 18 months, which makes it the long-
est of any recession since World War II.).
However, the unemployment rates which
have skyrocketed since the recession began
and have remained at high levels tell a dif-
ferent story on the ground.
The point of all of this is that through-
out 2010 when unemployment rates in Illi-
nois were at remarkably high levels (as high
as 12.1% on the dates the various Cost
Page 6

Relevant to this specific dispute,
as set forth above, the originally ne-
gotiated Agreement called for a 4%
wage increase effective July 1, 2011.
The concessions from the Cost Sav-
ings Agreements reduced that in-
crease to 2% effective July 1, 2011
and deferred the remaining 2% to
February 1, 2012.
14

Although the Union agreed to de-
fer 2% of the 4% wage increase due
on July 1, 2011, on that date the
State declined to implement the 2%
increase in 14 departments, boards,
authorities and commissions.
15
Ac-
cording to a July 1, 2011 memo

Savings Agreements were reached) and the
State was facing an extraordinary fiscal cri-
sis, the Union responded to the States fis-
cal crisis and negotiated approximately
$400,000,000 in concessions from the
2008-2012 Agreement, including deferral of
wage increases as reflected in the Cost Sav-
ings Agreements. See Union Exh. 19; Joint
Exhs. 2(a), (b) ($300,000,000 actual savings
in FY11 and targeting an additional
$100,000,000 in savings in FY12).
14
The specific deferral of the 2% increase
from the originally negotiated 4% increase
in the 2008-2012 Agreement is found in the
Second Cost Savings Agreement signed by
the Union on October 28, 2010 and by the
State on November 3, 2010. Joint Exh. 2(b)
at p. 3, par. 1:
* * *
1. 2% of the July 1, 2011 general
increase set forth in Article
XXXII, Section 6(f) [of the
Agreement] shall be deferred un-
til February 1, 2012. ...
15
Not all employees covered by the
Agreement were affected.
from Central Management Services
[emphasis in original]:
16

Pursuant to the Illinois Constitution,
the General Assembly possesses the
sole authority to make appropriations
for all expenditures of public funds by
the State. Additionally, the Illinois Pub-
lic Labor Relations Act (5 ILCS 315/21)
states, [s]ubject to the appropriation
power of the employer, employers and
exclusive representatives may negotiate
multi-year collective bargaining agree-
ments pursuant to the provisions of this
Act.
The Governors proposed budget to the
General Assembly sought to fully fund
all collective bargaining contracts.
However, the budget that was passed by
the General Assembly and sent to the
Governor DOES NOT contain appro-
priation authority to implement cost of
living adjustments, longevity adjust-
ments or step increases for employees
covered by a collective bargaining
agreement in the following fourteen (14)
departments, boards, authorities
and/or commissions:
Criminal Justice Information Authority
Corrections
Deaf and Hard of Hearing Commission
Guardianship & Advocacy Commission
Historic Preservation
Human Rights Commission
Human Rights (Department of)
Human Services
Juvenile Justice
Labor (Department of)
Natural Resources
Prisoner Review Board
Public Health
Revenue
Accordingly, due to the absence of suffi-
cient appropriations by the General As-
sembly, the above listed agencies can-
not implement the FY12 increases.
Agencies not listed above were granted
sufficient appropriation authority by the
General Assembly to implement the

16
Union Exh. 26.
Page 7

FY12 increases and shall proceed to
implement the FY12 increases.
* * *
Approximately 30,000 employees
represented by the Union were af-
fected by the July 1, 2011 pay
freeze. The cost of the 2% increase
is estimated by the Union at
$75,000,000.
17
According to the
State, although the Governor origi-
nally submitted a budget to fund the
2% increases, based upon appro-
priations made by the General As-
sembly and notwithstanding exist-
ing deficits without the 2% increase,
the budget deficits caused by the 2%
increase for the 14 departments,
boards, authorities and commis-
sions were:
18

17
Union Brief at 4.
18
See State Brief at 9-10, 12, 16-27; State
Exhs. 7, 8, 10.
The Union may not agree with the accu-
racy of the States deficit numbers or may
contend that allocations of existing funding
could have been made on a different basis.
In the end and because the States obliga-
tion to pay the 2% increase effective July 1,
2011 has been found, any disagreement by
the Union is not material to the outcome of
the dispute before me. The amounts set
forth above are just the States contentions.
I make no findings of fact concerning their
accuracy.

Agency Deficit
Amount
Criminal Justice Infor-
mation Authority
$50,140
Corrections $56,586,700
Deaf and Hard of Hearing
Commission
$26,800
Guardianship & Advo-
cacy Commission
$684,600
Historic Preservation $610,800
Human Rights Commis-
sion
$289,900
Human Rights (Depart-
ment of)
$2,800,000
Human Services $89,972,100
Juvenile Justice $12,229,500
Labor (Department of) $138,100
Natural Resources $8,757,500
Prisoner Review Board $131,300
Public Health $1,050,217
Revenue (Department of) $23,001,400

In the Cost Savings Agreements,
the parties agreed that I have juris-
diction to resolve disputes which
may arise.
19
On July 5, 2011, the
Union invoked that jurisdiction and
requested that I order the State to
pay the 2% increase effective July 1,
2011 to those employees who did
not receive the scheduled in-
crease.
20

19
The parties agreed that I should retain
jurisdiction over disputes arising out of the
Mediated Resolution (Union Exh. 19 at
pars. 8, 11); the First Cost Savings Agree-
ment (Joint Exh. 2(a) and par. 6); and the
Second Cost Savings Agreement (Joint Exh.
2(b) at p. 2, which incorporated the Second
Cost Savings Agreement into the First Cost
Savings Agreement).
20
See State Exh. 1.
Page 8

II. DISCUSSION
After conferring with parties on
July 6, 2011, it was apparent to me
that there are three issues involved
in this dispute: (1) whether the State
violated the 2008-2012 Agreement
as amended by the Cost Savings
Agreements when it did not pay the
2% increase for all bargaining unit
classifications and steps effective
July 1, 2011?; (2) whether Section
21 of the IPLRA permits the State to
not pay the increase? and (3)
whether the Constitution permits
the State to not to pay the increase?
By Scheduling Order dated July 7,
2011, I directed the parties to brief
three questions:
21

A. Excluding those issues set forth
in 1(B) and (C) below, under the
strict terms of the Collective
Bargaining Agreement (and
modifications made through the
Mediated Resolution and the
Cost Savings Agreements), can
the State decline to pay the in-
creases called for effective July
1, 2011?
B. What effect does Section 21 of
the Illinois Public Labor Rela-
tions Act, 5 ILCS 315/21 (Act)
(Subject to the appropriation
power of the employer, employ-
ers and exclusive representatives
may negotiate multi-year collec-
tive bargaining agreements pur-
suant to the provisions of this

21
July 7, 2011 Scheduling Order at par.
1(A).
Act) have on the dispute before
me as stated in 1(A) above? In
particular, the parties are to ad-
dress Ligenza v. Round Lake
Beach, 133 Ill.App.3d 286, 478
N.E.2d 1187, 88 Ill.Dec. 579
(2nd Dist., 1985); any legislative
history for Section 21; and any
court interpretations concerning
Section 21 as they might be
relevant to the dispute in this
case. With respect to the legisla-
tive history for Section 21, when
was Section 21 added to the
Act?
C. The State has raised Constitu-
tional issues concerning the
propriety of its declining to pay
the increases called for effective
July 1, 2011. Can I consider
those issues in this forum?
The parties have filed their briefs
in response to those questions.
A. Did The State Violate The
Agreement And The Cost
Savings Agreements When It
Declined To Pay The 2% In-
crease Effective July 1,
2011 For All Bargaining Unit
Classifications And Steps?
As originally negotiated in Sep-
tember 2008, the 2008-2012
Agreement provided in Article XXXII,
Section 6(f) that [e]ffective July 1,
2011, the pay rates for all bargain-
ing unit classifications and steps
shall be increased by 4.00%, which
rates are set out in Schedule A. Af-
ter the concessions were negotiated
in the Cost Savings Agreements,
that language therefore read
[e]ffective July 1, 2011, the pay
rates for all bargaining unit classifi-
cations and steps shall be increased
Page 9

by 2.00%, which rates are set out in
Schedule A.
The words ... shall be increased
by 2.00% ... leave nothing to imagi-
nation. [S]hall is not discretion-
ary. In simple dictionary terms,
shall means must; ... obliged
to.
22
Under the mandatory, clear
and simple terms of the negotiated
language, the State must pay the
2% wage increase effective July 1,
2011. As a matter of contract, the
State has no choice.
Article V, Section 2, Step 4(c) of
the Agreement provides that [t]he
arbitrator shall neither amend, mod-
ify, nullify, ignore, add or subtract
from the provisions of this Agree-
ment. Under the strict terms of the
Agreement, I simply have no author-
ity to find that the State can avoid
paying the 2% increase to all the
employees who were entitled to that
increase effective July 1, 2011. For
me to find that the State can avoid
its obligation to pay that 2% in-
crease, I would have to amend the
language of the Agreement and
change the words shall be in-
creased by 2.00% to may be in-
creased by 2.00% [emphasis
added]. Or, if I were to accept the

22
The Random House Dictionary of the
English Language (2nd ed.).
argument of the State that ... the
Wage Increases can be paid only if
there are sufficient appropriations
by the General Assembly
23
, I would
have to add that phrase to the
Agreement. The parties agreed in
Article V, Section 2, Step 4(c) of the
Agreement that, as an arbitrator, I
do not have that authority. As the
parties agreed in that section, I sim-
ply cannot ... amend, modify, nul-
lify, ignore, add or subtract from the
provisions of this Agreement. And
that is precisely what the State is
asking me to do by allowing it not to
pay the 2% increase effective July 1,
2011.
24

In sum, the Agreement and the
Cost Savings Agreements require
that [e]ffective July 1, 2011, the pay
Schedule A. The State therefore
violated the Agreement and the
Costs Savings Agreements when it
did not pay the 2% increase effective

23
State Brief at 39.
24
When parties to collective bargaining
agreements agree that wage increases are
contingent upon the existence of sufficient
appropriations, they say so. There is no
language here to that effect.
Page 10

July 1, 2011 as required by those
Agreements.
25

25
According to the State, ... as a result of
failure by the General Assembly to provide
sufficient funding to the 14 Affected Agen-
cies, CMS submitted an emergency Pay
Plan on July 1, 2011 that eliminated pay-
ment of the Wage Increase in the 14 Af-
fected Agencies. State Brief at 15. As
pointed out by the Union, under Article
XXXIV, Section 2 of the Agreement, the ac-
tions for an emergency Pay Plan do not
change the States obligation to pay the 2%
increase. Union Brief at 5. Article XXXIV,
Section 2 of the Agreement provides [em-
phasis added]:
ARTICLE XXXIV
Authority of the Contract
* * *
Section 2. Effect of Department of
Central Management
Services Rules and Pay
Plan
Unless specifically covered by
this Agreement, the Rules of the De-
partment of Central Management
Services and its Pay Plan shall con-
trol. However, the parties agree that
the provisions of this Agreement shall
supersede any provisions of the
Rules and Pay Plan of the Director of
Central Management Services relat-
ing to any subjects of collective bar-
gaining contained herein when the
provisions of such Rules or Pay Plan
differ with this Agreement. ...
Under Article XXXIV, Section 2 of the
Agreement, the changing of the Pay Plan
therefore does not allow the State to avoid
its obligations to pay the 2% increase.
The Union also points out that in the
past when the parties desired to make wage
increases contingent upon the existence of
revenues, they explicitly provided for that
contingency in their collective bargaining
agreements. Union Brief at 6, citing four
separate 1977-1979, contracts in different
bargaining units. Union Exhs. 3-6. The
Union also points out that in the past the
parties have negotiated wage re-openers for
additional years beyond the first year of a
contract. Union Brief at 6, citing two con-
tracts from 1975-1977. Union Exhs. 1-2.
B. What Effect Does Section
21 Of The IPLRA Have On
This Dispute?
When the State refused to pay
the 2% increase effective July 1,
2011 to the employees in the 14 de-
partments, boards, authorities and
commissions, the State specifically
referenced Section 21 of the
IPLRA:
26

... Additionally, the Illinois Public
Labor Relations Act (5 ILCS 315/21)
states, [s]ubject to the appropria-
tion power of the employer, employ-
may negotiate multi-year collective
bargaining agreements pursuant to
the provisions of this Act ...

The Union argues that neither re-openers
or revenue contingency provisions were
provided here and thus none can be im-
plied. Union Brief at 6. The Union there-
fore relies upon bargaining history. How-
ever, bargaining history is irrelevant in the
face of clear contract language. See Elkouri
and Elkouri, How Arbitration Works, (BNA,
5th ed.), 501 (Precontract negotiations fre-
quently provide a valuable aid in the inter-
pretation of ambiguous provisions). There
is nothing ambiguous or unclear about
[e]ffective July 1, 2011, the pay rates for all
bargaining unit classifications and steps
shall be increased by 2.00%. Results of
bargaining in the past therefore do not add
to this case.
The Union has also cited a number of
arbitrations one Illinois case in Office of
the Secretary of State and SEIU Local 73,
Grv. No. 91-37 (Feuille, 1992) as well as
awards from other jurisdictions. Union
Brief at 7-8. These are disputes arising
under different contracts and do not
change the result that the clear language of
this Agreement and the Cost Savings
Agreements require the State to pay the 2%
increase.
26
Union Exh. 26 [emphasis in original].
Page 11

Section 21 of the IPLRA provides:
Sec. 21. Subject to the appropria-
tion power of the employer, employ-
may negotiate multi-year collective
bargaining agreements pursuant to
the provisions of this Act.
In the July 7, 2011 Scheduling
Order and with respect to Section
21, I directed the parties to address
... Ligenza v. Round Lake Beach, ...
478 N.E.2d 1187 ...; any legislative
history for Section 21; and any
court interpretations concerning
Section 21 as they might be relevant
to the dispute in this case.
27
As I
explained to the parties on July 6,
2011, my request that Ligenza be
addressed was because prior to my
becoming an arbitrator and when I
was still an advocate, I was counsel
of record in that case in the Second
District Appellate Court and that
case addressed the validity of public
sector multi-year collective bargain-
ing agreements that were negotiated
prior to the passage of the IPLRA.
The facts in Ligenza were similar
to the facts in this case. The Village
of Round Lake Beach negotiated a
multi-year collective bargaining
agreement with the Fraternal Order
of Police which was executed on No-

27
July 7, 2011 Scheduling Order at par.
1(B).
vember 3, 1982 and was effective
through April 30, 1984; the contract
called for wage increases on May 1
and November 1, 1983 and the Vil-
lage refused to pay the first wage in-
crease.
28
Reversing the Circuit
Court, the Second District held that
[citations omitted]:
29

... Under [Ill.Rev.Stat.1981, ch 24
par.] section 8-1-7 ... any contract
made without a full prior appropria-
tion is null and void. ... Section 8-1-
7 (and its statutory predecessors)
has consistently been construed as
denying a municipality the power to
contract, and thereby incur indebt-
edness, for a period longer than one
year, at least in the absence of an
enabling statute authorizing such a
contract. ... Further, a party con-
tracting with a city is presumed to
know whether the city is prohibited
from making a contract, and a con-
tract made in violation of section 8-
1-7 is void ab initio and cannot be
enforced by estoppel or ratification.
...
Although the Second Districts
decision issued on May 21, 1985
after the IPLRA became effective
July 1, 1984 the dispute involved
events before the passage of the Act.
Thus, according to the Second Dis-
trict in Ligenza, multi-year collective
bargaining agreements were, in
many cases, void ab initio. Be-
cause multi-year collective bargain-
ing agreements have been a major

28
478 N.E.2d at 1187-1188,
29
478 N.E.2d at 1189-1190.
Page 12

component of stable collective bar-
gaining relationships, the Ligenza
litigation, as I explained to the par-
ties on July 6, 2011 and as I re-
called, was a concern of both man-
agement and labor as the IPLRA was
being cobbled together. Given that
so many multi-year collective bar-
gaining agreements have been nego-
tiated since the passage of the
IPLRA (probably in the thousands
state-wide and nine master multi-
year agreements between the par-
ties
30
), I asked the parties to brief
the question of whether Section 21
of the IPLRA was designed to put to
rest any questions concerning the
validity of multi-year collective bar-
gaining agreements.
In response to my question, ac-
cording to the State:
31

The language of Section 21 is clear
and unambiguous. The plain mean-
ing of Section 21 confirms that pro-
visions in the CBA/CSA that require
State expenditures are subject to
appropriation. ...
* * *
Under the Constitution, only the
General Assembly has the authority
to make appropriations for the ex-
penditure of public funds, and ex-
penditures made by the Executive
Branch are contingent on the exis-
tence of corresponding appropria-
tions established by the General As-
sembly. The clear and unambigu-

30
Joint Exh. 1; Union Exhs. 11-18.
31
State Brief at 34-35, 39, 42.
ous language of Section 21 restates
this Constitutional mandate, with-
out embellishment, and further sub-
jects all multi-year collective bar-
gaining agreements entered into by
the State to the same Constitutional
appropriations restrictions. ...
* * *
... The only plausible interpretation
of Section 21 is that expenditures
contemplated by all multi-year col-
lective bargaining agreements are
subject to sufficient appropriations
having been established by the Gen-
eral Assembly.
* * *
... There is only one conclusion, i.e.,
that Wage Increases can be paid
only if there are sufficient appro-
priations by the General Assembly.
* * *
Ligenza ... supports the proposition
that expenditures under contracts
entered into by government entities
remain subject to appropriations es-
tablished by the legislature. ....
In response to my question, ac-
cording to the Union [emphasis in
original, footnotes omitted]:
32

Section 21 of the act authorizes
public employers and public em-
ployees to enter into multi-year con-
tracts. This authority is subject to
the appropriations power of the em-
ployer. The best reading of this
statutory language is that it was not
intended to impact whatever appro-
priations authority exists under
State and local law. In other words,
where State or local law sets an an-
nual appropriations cycle, the nego-
tiation of a multi-year collective bar-
gaining agreement would not, in and
of itself, change that annual cycle.
Section 21 does not say that collec-
tive bargaining agreements are sub-
ject to appropriations or that multi-

32
Union Brief at 9-11.
Page 13

year agreements are invalid unless
they are subject to appropriations.
Nor does it say that State collective
bargaining agreements are subject
to the approval of the General As-
sembly. In fact, the Senate rejected
an amendment offered by Senator
Keats that would have added such
approval into the IPLRA. ...
It is much more likely that Section
21 was a response to court deci-
sions which seemingly limited the
right of employers to make multi-
year contracts. [citing Ligenza and]
Libertyville Education Association v.
Board of Education, 56 Ill. App. 3d
503 (2d Dist. 1977) (upholding
School Boards power to enter into
agreement).
The dispute in Ligenza arose in May
1983, as the General Assembly was
considering Senate Bill 536. The
Senate version of the Act, which was
debated and passed out of the Sen-
ate on May 25, 1983, did not con-
tain Section 21. Section 21 was
part of comprehensive amendment
proposed by Representative Gre-
iman when the house debated the
bill on June 23 and June 24, 1983.
There was no separate discussion of
the impact of Section 21. It is very
likely, though, that the litigation in
Ligenza was in full swing by that
date and that Section 21 was added
to respond to the claim of the Village
in that litigation. ...
The parties agree that since the
passage of the IPLRA in 1984, there
have been no reported court cases
addressing Section 21.
33

I am an arbitrator whose author-
ity flows strictly from the terms of
the collective bargaining agreement.
I am not a judge with authority to

33
Union Brief at 11, note 6; State Brief at
35, note 7.
interpret statutory provisions. See
Alexander v. Gardner-Denver, Co.,
415 U.S. 36, 53-54, 57 (1974) [quot-
ing United Steelworkers of America
v. Enterprise Wheel & Car Corp., 363
U.S. 593, 597 (1960), emphasis
added]:
[A]n arbitrator is confined to
interpretation and applica-
tion of the collective bargain-
ing agreement ...
* * *
... Thus the arbitrator has authority
to resolve only questions of contrac-
tual rights ....
* * *
... [T]he specialized competence of
arbitrators pertains primarily to the
law of the shop, not the law of the
land .... [T]he resolution of statutory
or constitutional issues is a primary
responsibility of courts ....
Section 21 of the IPLRA is a
statutory provision. The parties did
not specifically make Section 21
part of the Agreement or the Cost
Savings Agreements. As an arbitra-
tor, I therefore have no authority to
interpret that statutory provision.
Statutory interpretations must be
made by the courts and not by arbi-
trators.
34

34
The States argument that ... the Arbi-
trator not only has the authority, he has
the legal obligation to look beyond the four
corners of the CBA/CSA and consider ex-
ternal law ... in making his decision and
rendering his award ... (State Brief at 58) is
wrong particularly for this arbitrator. As
I have consistently held over the past 25
Page 14

The parties completely different
views of the meaning and intent of
Section 21 of the IPLRA, the lack of
any real specific legislative history
cited and the lack of court decisions
concerning Section 21 reinforce my
view that the courts and not an ar-
bitrator should interpret Section 21.
However, even if I could interpret
Section 21, for me to do so in any
fashion which changes the language
of the Agreement and the Cost Sav-
ings Agreements to allow the State
to avoid the mandatory requirement

plus years as an arbitrator, unless statutes
are specifically incorporated into a collective
bargaining agreement, my role as an arbi-
trator is to only interpret the contract. The
courts address external law.
The States reliance upon Keeley &
Sons, Inc. v. Zurich American Insurance
Company, 409 Ill.App.3d 315 (5th Dist.
2011) (State Brief at 59) for support to the
contrary is not persuasive. Keeley was a
dispute under an insurance policy. The
defendant insurance company moved to
dismiss the complaint and compel arbitra-
tion, which the court denied, finding that
there was no obligation to arbitrate the par-
ticular insurance policy dispute. Keeley did
not involve a collective bargaining agree-
ment. There was no language in Keeley
such as that found in Article V, Section 2,
Step 4(c) of the Agreement which provides
that [t]he arbitrator shall neither amend,
modify, nullify, ignore, add or subtract from
the provisions of this Agreement. And
there certainly was no authority such as
that found in Gardner-Denver and Enter-
prise Wheel & Car, supra, which so clearly
delineates the role of arbitrators to interpret
contracts and the courts to interpret stat-
utes.
Schedule A would again violate the
limitations on my authority agreed
to by the parties in Article V, Section
2, Step 4(c) of the Agreement which
provides that [t]he arbitrator shall
neither amend, modify, nullify, ig-
nore, add or subtract from the pro-
visions of this Agreement.
As an arbitrator, I cannot ad-
dress the States Section 21 argu-
ment.
C. The States Constitu-
tional Arguments
The State makes a series of Con-
stitutional arguments that although
the Agreement and the Cost Savings
Agreements provide for the 2% in-
crease effective July 1, 2011, the Il-
linois Constitution requires an ap-
propriation for all expenditures and
because the July 1, 2011 increases
were not appropriated by the Gen-
eral Assembly, the increases there-
fore cannot be paid.
35

For similar reasons discussed at
II(B) supra, I cannot consider the
States Constitutional arguments.
Again, my authority is limited by
agreement of the parties in Article V,

35
State Brief at 31-33, 39, 46, 60.
Page 15

Section 2, Step 4(c) of the Agree-
ment which provides that [t]he ar-
bitrator shall neither amend, mod-
ment. And as stated in Alexander
v. Gardner Denver, supra, 415 U.S.
at 53-54, 57, ... the arbitrator has
authority to resolve only questions
of contractual rights ... the special-
ized competence of arbitrators per-
tains primarily to the law of the
shop, not the law of the land .... the
resolution of statutory or constitu-
tional issues is a primary responsi-
bility of courts .... [emphasis
added]. Like the States statutory
arguments, in my capacity as an ar-
bitrator under the Agreement, the
States Constitutional arguments
are therefore not for me to decide.
D. The States Other Con-
tractual Arguments
The State makes a series of con-
tractual arguments citing portions
of the Agreement which it contends
support its position. I disagree.
First, the State relies upon Arti-
cle XXXIV, Section 1 of the Agree-
ment asserting that language ... in-
corporates the Constitutional and
statutory mandates ... which dem-
onstrate that without the General
Assembly appropriating sufficient
funds, the State cannot legally pay
the Wage Increases set forth in the
CBA/CSA.
36
That section provides:
ARTICLE XXXIV
Authority of Contract
Section 1. Partial Invalidity
Should any part of this Agree-
ment or any provisions contained
herein be Judicially determined to
be contrary to law, such invalidation
of such part or provision shall not
invalidate the remaining portions
hereof and they shall remain in full
force and effect. The parties shall
attempt to renegotiate the invali-
dated part or provisions. The parties
recognize that the provisions of this
contract cannot supersede law.
This provision is the standard
partial invalidity or savings lan-
guage found in most collective bar-
gaining agreements. This type of
language simply keeps other provi-
sions of a collective bargaining
agreement in force in the event a
section is found to be unlawful. For
example, under such a clause a ju-
dicial determination that a seniority
provision for bidding on vacancies
violates Title VII of the Civil Rights
Act would not automatically invali-
date employees entitlements to va-
cation based on years of service
found elsewhere in the contract.
In any event, in this case it has
not been Judicially determined

36
State Brief at 44.
Page 16

that the 2% increase is contrary to
law. That is what the State is ask-
ing me to do. But I am not a judge.
I am an arbitrator bound by the ne-
gotiated terms of the Agreement and
the Cost Savings Agreements which
require the State to pay the 2% in-
crease and prohibit me as an arbi-
trator from changing that obligation.
Putting aside, however, that it
has not been Judicially deter-
mined that the 2% wage increase is
unlawful, the States focus on the
last sentence in Article XXXIV, Sec-
tion 1 [t]he parties recognize that
the provisions of this contract can-
not supersede law is upon very
general language. There is a fun-
damental rule of contract construc-
tion that specific language governs
general language.
37
The specific
language found in Article V, Section
2, Step 4(c) of the Agreement which
provides that [t]he arbitrator shall
neither amend, modify, nullify, ig-
nore, add or subtract from the pro-
visions of this Agreement governs
the general language in Article
XXXIV, Section 1 relied upon by the
State.

37
How Arbitration Works, supra at 498
(Where two contract clauses bear on the
same subject, the more specific should be
given precedence.).
Second, the State relies upon Ar-
ticle II, Section 2 of the Agreement,
arguing that language incorporates
the requirement of a legislative ap-
propriation for the July 1, 2011 in-
creases into the Agreement.
38

Again, I disagree.
Article II, Section 2 provides:
ARTICLE II
Management Rights
* * *
Section 2. Statutory Obligations
Nothing in this Agreement shall
be construed to modify, eliminate or
detract from the statutory responsi-
bilities and obligations of the Em-
ployer except that the exercise of its
rights in the furtherance of such
statutory obligations shall not be in
conflict with the provisions of this
Agreement.
If anything, Article II, Section 2 of
the Agreement works against the
States position. The key phrase is
... the exercise of its [the States]
rights in the furtherance of such
statutory obligations shall not be in
conflict with the provisions of this
Agreement.
According to the State, [o]n Feb-
ruary 16, 2011, the Governor sub-
mitted a budget to the General As-
sembly that requested sufficient ap-
propriations for each of the 14 Af-
fected Agencies to pay the FY12

38
State Brief at 44-45.
Page 17

Wage Increases provided for in the
CBA/CSA ...[a]nd within a few days
after the Governor presented his
proposed budget, legislation was in-
troduced into the General Assembly
that requested sufficient appropria-
tions for each of the 14 Affected
Agencies to pay the Wage In-
creases.
39
However, according to
the State, [i]n May 2011, the Gen-
eral Assembly passed a series of
pieces of legislation that did not
make a sufficient appropriation from
the GRF for any of the 14 Affected
Agencies to pay the Wage Increases
in FY12.
40
Further, according to
the State, while [t]he original Pay
Plan provided for Wage Increases for
all of the AFSCME employees ... as a
result of failure by the General As-
sembly to provide sufficient funding
to the 14 Affected Agencies, CMS
submitted an emergency Pay Plan
on July 1, 2011 that eliminated
payment of the Wage Increases in
the 14 Affected Agencies.
41

Thus, according to the State, the
Governor sent a budget to the Gen-
eral Assembly sufficient to fund the
increases, but in the exercise of its
rights, the General Assembly did not

39
40
State Brief at 12.
41
State Brief at 11, 15.
appropriate funds for the increases.
But Article II, Section 2 of the
Agreement provides that ... the ex-
ercise of its [the States] rights in the
furtherance of such statutory obli-
gations shall not be in conflict with
the provisions of this Agreement
[emphasis added]. As I read that
provision of the Agreement, by not
funding the 2% increases specifi-
cally required by the Agreement and
the Cost Savings Agreements, the
State clearly violated Article II, Sec-
tion 2 of the Agreement. Simply
put, the State exercised a right (i.e.,
to appropriate) which was in con-
flict with the requirement in the
Agreement and the Cost Savings
Agreements that [e]ffective July 1,
2011, the pay rates for all bargain-
shall be increased by 2.00%, which
rates are set out in Schedule A. Ar-
ticle II, Section 2 of the Agreement
clearly prohibits the State from do-
ing so.
E. The States Other Argu-
ments
The State advances other argu-
ments which also do not change the
result.
Citing American Federation of
State, County and Municipal Em-
ployees, AFL-CIO v. Department of
Page 18

Central Management Services, 173
Ill.2d 299, 219 Ill. Dec. 501, 671
N.E.2d 668 (1996), the State argues
that if I do not agree with its posi-
tion concerning the Constitution
and statutes, my award violates
public policy.
42
Central Manage-
ment Services, supports my finding
that I cannot address the external
law issues concerning interpreting
Section 21 and the Constitution
which the State wants me to con-
sider.
I was the arbitrator in Central
Management Services. Because the
language of the collective bargaining
agreement required that [d]iscipline
shall be imposed as soon as possible
after the Employer is aware of the
event or action giving rise to the dis-
cipline, I was compelled to reinstate
a discharged employee because the
State took approximately one year to
discipline that employee and be-
cause other arbitration awards un-
der that contract (which were final
and binding) interpreting the as
soon as possible language found
that waiting 99, 71, or 124 days to
discipline an employee was too long.
The Illinois Supreme Court noted
that my contractual interpretation

42
was not contested. ... DCFS does
not dispute the arbitrators contrac-
tual interpretation and even con-
cedes that it violated the agree-
ments time provision [emphasis in
original].
43
The remedy of rein-
statement was, however, set aside
by the Court on public policy
grounds. But in doing so, the Court
noted that [q]uestions of public pol-
icy, of course, are ultimately left for
resolution by the courts ... [and e]ven
if the arbitrator had considered is-
sues of public policy, we may not
abdicate to him our responsibility to
protect the public interest at stake
[emphasis added].
44
It is therefore
clear that [q]uestions of public pol-
icy, of course, are ultimately left for
resolution by the courts [emphasis
added].
45

Therefore, as an arbitrator, I do
not decide public policy issues.

43
671 N.E.2d at 673.
44
671 N.E.2d at 678.
45
Id. In holding that public policy deci-
sions are for the courts and not for arbitra-
tors, the Illinois Supreme Court (671 N.E.
2d at 678) cited W. R. Grace & Co. v. Rubber
Workers, 461 U.S. 757, 766 (1983) (... the
question of public policy is ultimately one
for resolution by the courts) and stated
that (671 N.E.2d at 674) [t]he seminal case
involving the [public policy] exception is
United Paperworkers International Union v.
Misco, Inc., 484 U.S. 29 ... (1987) which
also held that the question of public policy
is ultimately one for resolution by the
courts. 484 U.S. at 43.
Page 19

Questions of public policy like
statutory and Constitutional inter-
pretations are for the courts and
not arbitrators. And that makes
sense. As an arbitrator, I am a pri-
vate citizen who holds no elected or
appointed authority by the citizens
of this state. Our elected and ap-
pointed officials including lawmak-
ers, administrators and judges
and not me should make public
policy decisions.
46

46
Central Management Services, supra,
was a discipline case involving reinstate-
ment of a public employee who may have
engaged in serious misconduct but was an
individual I had to reinstate because of the
clear procedural contract violation concern-
ing untimely discipline again, a finding
which was not contested. 671 N.E.2d at
673. The holding in Central Management
Services is that in discipline cases, before
an arbitrator can reinstate a public employ-
ees who engages in misconduct, the arbi-
trator must make a rational finding that the
employee can be trusted to not engage in
similar misconduct in the future (671
N.E.2d at 680):
... [A]s long as the arbitrator makes
a rational finding that the employee
can be trusted to refrain from the of-
fending conduct, the arbitrator may
reinstate the employee to his or her
former job, and we would be obliged
to affirm the award.
This is not a discipline case but is a
contract dispute. I therefore do not have to
make that rational finding. But the im-
portance of this part of the discussion is
that notwithstanding the States efforts to
get me to decide external law questions
here, public policy questions it is well
and long-established that arbitrators do not
perform that function. That function is for
the courts.
The State makes other argu-
ments which I just have no author-
ity to decide or are not relevant to
this dispute. Specifically, the State
argues that the judicial branch can-
not order the State to expend funds
absent an appropriation by the Gen-
eral Assembly
47
; the State did not
impair the Agreement
48
; the non-
payment of the wage increase does
not violate the Equal Protection
Clause of the United States or Illi-
nois Constitution
49
; and any un-
spent appropriations from the FY11
cannot be used to pay for the wage
increases.
50
Those are just not is-
sues for an arbitrator to decide or
are not relevant to this contractual
dispute before me.
F. The Remedy
I have found that the State vio-
lated the Agreement and the Cost
Savings Agreements when it failed to
pay the 2% increase for all bargain-
ing unit classifications and steps ef-
fective July 1, 2011 as required by
those Agreements. A remedy is
therefore required.

47
State Brief at 46.
48
49
50
Page 20

It has long been held that arbi-
trators have a broad degree of dis-
cretion in the formulation of reme-
dies.
51
Further, the purpose of a
remedy is to restore the status quo
ante and make whole those who

51
See United Steelworkers of America v.
Enterprise Wheel & Car Corp., supra. 363
U.S. at 597:
When an arbitrator is commissioned
to interpret and apply the collective
bargaining agreement, he is to bring
his informed judgment to bear in
order to reach a fair solution of a
problem. This is especially true
when it comes to formulating reme-
dies. There the need is for flexibility
in meeting a wide variety of situa-
tions. The draftsmen may never
have thought of what specific rem-
edy should be awarded to meet a
particular contingency.
See also, Local 369 Bakery and Confec-
tionery Workers International Union of Amer-
ica v. Cotton Baking Company, Inc., 514
F.2d 1235, 1237, reh. denied, 520 F.2d 943
(5th Cir. 1975), cert. denied, 423 U.S. 1055
and cases cited therein:
In view of the variety and novelty of
many labor-management disputes,
reviewing courts must not unduly
restrain an arbitrators flexibility.
Additionally, see Eastern Associated
Coal Corp. v. United Mine Workers of Amer-
ica, 531 U.S. 57, 62, 67 (2000) [citations
omitted]:
... [C]ourts will set aside the arbitra-
tors interpretation of what their
agreement means only in rare in-
stances. ....
* * *
... [B]oth employer and union have
agreed to entrust this remedial deci-
sion to an arbitrator. ....
Finally, see Hill and Sinicropi, Remedies
in Arbitration (BNA, 2nd ed.), 62 (... [M]ost
arbitrators take the view that broad remedy
power is implied ....).
have been harmed by a demon-
strated contract violation.
52

In the exercise of my remedial
discretion and to restore the status
quo ante and make the adversely
impacted employees whole for the
States clear violation of the Agree-
ment and the Cost Savings Agree-
ments, the State is directed to pay
the 2% increase to all bargaining
unit classifications and steps and
continue to pay that increase and,
within 30 days from the date of this
award, to make whole those employ-
ees who did not receive those in-
creases effective July 1, 2011.
III. CONCLUSION
I am cognizant of the enormity of
this dispute and the attention it has
received. However, one must stand
back and objectively look at what is
going on and what the ramifications
will be.
The State is in serious financial
straits. Given its financial prob-

52
See e.g., Wicker v. Hoppock, 73 U.S. (6
Wall.) 94, 99 (1867)]:
The general rule is, that when a
wrong has been done and the law
gives a remedy, the compensation
shall be equal to the injury. The lat-
ter is the standard by which the
former is to be measured. The in-
jured party is to be placed, as near
as may be, in the situation he would
have occupied if the wrong had not
been committed. ...
Page 21

lems, the State therefore felt it had
to do something to lessen the impact
of those conditions on the taxpay-
ers. What the State did was to uni-
laterally freeze a 2% wage increase
which, according to the negotiated
Agreement and Cost Savings Agree-
ments, was to take effect July 1,
2011.
However, as they have been do-
ing since 1975, the parties negoti-
ated a multi-year collective bargain-
ing agreement for 2008-2012 and
came to terms literally weeks before
what was a recession turned into
The Great Recession. Recognizing
the serious financial circumstances
facing the State and in order to
avoid layoffs of potentially thou-
sands of employees, the Union re-
sponded to the States fiscal prob-
lems and agreed to concessions
from the 2008-2012 Agreement
one of which was to defer 2% of a
4% increase due July 1, 2011. The
total concessions agreed to by the
Union were in the vicinity of
$400,000,000. Now, with respect to
the negotiated reduced increase due
July 1, 2011 of 2%, the State argues
that it does not have to pay that re-
duced amount effective July 1, 2011
even though it agreed to pay that
reduced amount in the Cost Savings
Agreements.
As discussed in this award, un-
der the Agreement and the Cost
Savings Agreements and as a matter
of contract, the States position that
it is not obligated to pay the reduced
negotiated increase is clearly incor-
rect. The contractual requirement
by 2.00% ... [emphasis added] is, as
a matter of contract, mandatory,
clear and simple. Under Article V,
Section 2, Step 4(c) of the Agree-
ment, the parties agreed that [t]he
arbitrator shall neither amend, mod-
ment. As an arbitrator, I therefore
have absolutely no authority to
change the States obligation to pay
the 2% increase effective July 1,
2011 for all bargaining unit classifi-
cations and steps. The State must
therefore pay that increase and
make whole those employees who
did not receive those increases.
Because I am an arbitrator func-
tioning solely under the terms of the
Agreement and the Cost Savings
Agreement, I have not considered
the States statutory or Constitu-
tional arguments. However, if the
State is correct in its statutory or
Constitutional arguments that al-
Page 22

though it has negotiated multi-year
collective bargaining agreements
with the Union since 1975 (and, I
note, has also long negotiated multi-
year collective bargaining agree-
ments with other unions), it now
does not have to pay negotiated and
agreed-upon wage increases in
those multi-year collective bargain-
ing agreements because wage in-
creases agreed to by the State in
those agreements are, in effect, un-
enforceable or are contingent upon
sufficient appropriations from the
General Assembly and that such po-
sitions find support in Section 21 of
the IPLRA and the Constitution,
then a major foundation of the col-
lective bargaining process the
agreement has been upended.
Multi-year collective bargaining
agreements bring stability to the
parties and the public. Multi-year
collective bargaining agreements set
forth the parties obligations and re-
sponsibilities over a period of years.
It is mostly employers who seek
agreements (typically longer agree-
ments than those sought by unions)
so that the employers can have a
clear idea of costs associated with
labor and so that they can plan and
budget accordingly. Because em-
ployers in the public sector basically
provide services to the public, labor
costs (wages and benefits) constitute
most of the costs public employers
incur.
If the State is correct that negoti-
ated wage increases in multi-year
collective bargaining agreements are
unenforceable or are contingent
upon action by the General Assem-
bly (or, for other public entities, the
various county, city, village, district
councils, boards of trustees, etc.), it
is quite likely that very few unions,
if any, will now ever agree to multi-
year collective bargaining agree-
ments. If the State is correct in its
position, I highly doubt that any in-
terest arbitrator setting terms and
conditions of collective bargaining
agreements in security employee,
peace officer and fire fighter dis-
putes under Section 14 of the IPLRA
will choose to impose anything more
than a contract for one years dura-
tion because final economic offers
made by a public sector employer
will, for all purposes, be illusory if
those offers are contingent upon
subsequent appropriations being
passed by the public employer.
If the State is correct in its statu-
tory and Constitutional arguments,
the result will be that public sector
employers and unions will have to
Page 23

negotiate collective bargaining
agreements every year instead of
having mufti-year agreements (typi-
cally three to five years and some-
times longer) which bring labor
peace and stability. Some public
sector contracts in this state have
taken years to negotiate or settle
through the interest arbitration
process under Section 14 of the
IPLRA.
53
Having been involved in
the collective bargaining process as
a mediator and interest arbitrator
for over 25 years, I estimate that
thousands of multi-year collective
bargaining agreements have been
settled in this state. If the State is
correct that economic provisions of
agreements are not enforceable or
are contingent upon subsequent
appropriations for the out years of
the agreements, then the collective
bargaining process will be, to say
the least, severely undermined. If
the State is correct, the result will
be most chaotic and costly as public
sector employers and unions will
now have to drudge through the of-
ten laborious, time-consuming and

53
See e.g., the interest arbitration awards
cited at the Illinois State Labor Relations
Boards interest arbitration website,
www.state.il.us/ilrb/subsections/arbitratio
n/IntArbAwardSummary.htm
costly collective bargaining process
on a yearly basis. Unions will do
that. Public sector employers will be
loathe to have to engage in that
costly and time consuming endeavor
on a yearly basis. If the State is cor-
rect in its statutory and Constitu-
tional arguments, the multi-year
collective bargaining agreement is,
for all purposes, probably dead.
54

A contract is a promise, or set of
promises, for breach of which the
law gives a remedy, or the perform-
ance of which the law in some way
recognizes as a duty.
55
But [t]he
collective bargaining agreement
states the rights and duties of the
parties ... [i]t is more than a con-
tract; it is a generalized code to gov-
ern a myriad of cases which the
draftsmen cannot wholly anticipate
... [t]he collective bargaining agree-

54
This is a very serious dispute with pro-
found ramifications on the collective bar-
gaining process in this state. But some-
times lyrics to music succinctly express a
condition. That is the case here with re-
spect to multi-year agreements should the
State prevail in its statutory and Constitu-
tional arguments. Bruce Springsteen,
With Every Wish (Human Touch, Colum-
bia, 1992):
Before you choose your wish you
better think first. With every wish
there comes a curse.
55
Calamari and Perillo, Contracts (West,
3rd ed. 1987), 1-1 at p. 1-2 [quoting 1.
Williston, Contracts 1 (3rd ed. 1957) and
Restatement, Contracts 1 (1932)].
Page 24

ment covers the whole employment
relationship [emphasis added].
56

After the State has entered into
many similar multi-year agreements
with the Union since 1975, for the
State to now argue that economic
provisions of multi-year collective
bargaining agreements are somehow
unenforceable or contingent upon
appropriations actions by the Gen-
eral Assembly, the promise the
State made even after the Union
gave concessions to reduce the
States 4% promise to a 2% prom-
ise will certainly have the effect
of severely undermining something
that ... is more than a contract ...
[but] is a generalized code to govern
a myriad of cases ... [and] covers the
whole employment relationship. As
an arbitrator, I have no authority
under the Agreement to allow the
State to avoid its promise.
Under the 2008-2012 Agreement
and the Cost Savings Agreements,
as a matter of contract, I find the
State cannot avoid its obligations to
pay the 2% increase required effec-
tive July 1, 2011. As a matter of
contract, the only way the State can

56
United Steelworkers of America v. War-
rior & Gulf, Co., 363 U.S. 574, 578-579
(1960) [citing Schulman, Reason, Contract,
and the Law in Labor Relations, 68
Harv.L.Rev. 999, 1004-1005].
avoid that promise to pay that 2%
increase for all bargaining unit clas-
sifications and steps is to return to
the bargaining table with the Union
to see if there is a way that it can
further modify that promise.
57

However, as a matter of contract,
the State cannot simply refuse to
pay the increase. If the State can-
not obtain an agreement to modify
its promise to pay the increase, then
it may well be forced to take other
actions that are not inconsistent
with the Agreement and the Cost
Savings Agreements. Whether the
courts will allow the State to avoid
its promise to pay the 2% increase
for all bargaining unit classifications
and steps effective July 1, 2011 on a
statutory or Constitutional basis is
up to the courts and not me.
The July 7, 2011 Scheduling Or-
der provides at paragraph 4:
4. If, after reading the parties
briefs, I determine that evidentiary
hearings, further briefs and/or ar-
gument are necessary, I will notify
the parties and those will be sched-
uled on an expedited basis.
Given that I have found that
based upon what has been pre-
sented in the parties submissions

57
Should the parties desire to meet to at-
tempt further modifications and as I have
done before, I will make myself available to
the parties to mediate those attempts.
Page 25

and that the contract issue is dispo-
sitive in the Unions favor and that I
cannot reach the States statutory
and Constitutional arguments, no
further proceedings are necessary
before me on the merits of this dis-
pute. The Unions position has
merit and will therefore be sus-
tained.
58

In sum, and notwithstanding all
of the arguments presented, this is a
very simple case with a very simple
bottom line. In the 2008-2012
Agreement, the State promised to
pay a 4% increase for all bargaining
unit classifications and steps effec-
tive July 1, 2011. In the Cost Sav-
ings Agreements and because of the
financial condition of the State, the
Union agreed to reduce that pay-
ment obligation to 2% effective July
1, 2011. The State did not pay the
2% increase effective July 1, 2011.
These are hard fiscal times for the
State no doubt. However, when
the State did not pay the increase

58
Offers of proofs have been made by the
parties concerning facts supportive of vari-
ous arguments. To the extent those offers
have not been considered or given weight as
part of the discussion in this matter, those
offers are rejected as not being material to
the issues to resolve this particular dispute
under the 2008-2012 Agreement and the
Cost Savings Agreements. The parties
complete submissions, however, remain
part of this record.
effective July 1, 2011 for all bargain-
(i.e., to the employees in the 14 de-
partments, boards, authorities and
commissions), the State did not
keep its promise. The State must
now keep its promise.
IV. AWARD
The State violated the 2008-2012
Collective Bargaining Agreement
and the Cost Savings Agreements
between the State and AFSCME
when, effective July 1, 2011, the
State did not pay the 2% increase
for all bargaining unit classifications
and steps. As a remedy, the State is
directed to immediately pay that 2%
increase for all bargaining unit clas-
sifications and steps and continue
to pay that increase. Within 30
days from the date of this award,
the State shall make whole those
employees who did not receive the
increases effective July 1, 2011.
59

Edwin H. Benn
Arbitrator

Dated: July 19, 2011

59
Pursuant to Article V, Section 2, Step
4(c) of the Agreement ([t]he expenses and
fees of the arbitrator shall be paid by the
losing party ...), arbitral fees have been as-
sessed against the State.

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