County budget debate appears muddled by difference between 'status quo' & 'evergreen'

LACONIA — Several members of the Belknap County Convention have challenged the insistence of the Belknap County Commission that despite the expiration of collective bargaining agreements, the county is bound to fund benefits employees enjoyed prior to the expiration of the contracts.

Last year, the convention stripped funding for bonuses for unused sick days and longevity of service as well as the employer's share of the increased cost of health insurance premiums from the county budget. The commission shuffled funds within the departmental budgets approved by the convention to restore the funding for both bonuses and health insurance premiums. Last week, the convention resolved to withhold any appropriation to increase compensation or benefits from the 2014 county budget until the employees' share of health insurance premiums is substantially raised and compensation and benefits are thoroughly reviewed.

The disagreement between between the convention and commission seems to come from confusion on the part of members of the convention about the difference between "the doctrine of status quo" and "automatic renewal," better known as "evergreen," clauses.

The statute governing relations between public employers and public employees (RSA 273-A) anticipated that the two parties might fail to reach agreement on a new contract before the existing agreement expires. It prohibits strikes by employees and lockouts by employers and provides for a mediation process to overcome the impasse. But, the statute fails to address the rights of employees and obligations of the employers in the interim.

Instead, through a series of decisions, the Public Employee Labor Relations Board (PELRB) and New Hampshire Supreme Court have ruled that the employer is required to maintain the "status quo" until a new agreement is ratified and funded. Taken together these decisions have defined "status quo" as requiring employers to fund existing wages and benefits, but not so-called "step" and cost-of-living increases.

Collective bargaining agreements, negotiated by public employers like the county commission remain unenforceable until the legislative body — the county convention — ratifies the cost items or those benefits requiring an appropriation by the legislative body.

Some, but not many, collective bargaining agreements contain so-called evergreen clauses, which specifically continue the terms of the contract, including pay raises, indefinitely until a new contract is negotiated. These are cost items that must be ratified by the legislative body.

Without an evergreen clause, once a contract expires, relations between the employer and employees are governed by the doctrine of status quo, which prescribes that all the terms and conditions of employment remain in place while negotiations continue.

In 1993, the Supreme Court ruled that the doctrine of status quo did not require the district to pay step increases, which absent an "evergreen" clause are considered cost items. The court stressed that maintaining the status quo is essential to ensuring "a balance of power" between employers and employees that ensures both have equal incentives to negotiate a new contract. Moreover, the justices noted that the PELRB had consistently defined status quo to refer to the compensation level of the past year.

Two years later the Supreme Court again addressed the doctrine of status quo in cases from Alton, Rochester and Conway. In Conway, four collective bargaining agreements included health insurance plans, which the employer agreed to fund. When the cost of the plans increased and the legislative body had not appropriated the necessary funds, the employers contended they had no authority to pay the higher premiums. The PELRB ruled that the doctrine of status quo required the employers to maintain the contracted benefits, regardless of cost.

The court upheld the decision of PELRB, finding that the employer's obligation to maintain the status quo rests on its duty to negotiate the terms and conditions of employment in good faith and explaining that "a unilateral change in conditions of employment is, in effect, a refusal to negotiate those terms. We hold," the justices continued, "that the health insurance benefits received by the bargaining unit members ... are conditions of employment" and the employer "must continue to provide these benefits during the status quo period regardless of the cost." In effect, the doctrine of status quo requires both parties to negotiate in good faith while ensuring that neither has an incentive not to do so.

In 2008, the Legislature codified and expanded the scope of status quo by providing that "the terms of the collective bargaining agreement shall continue in force and effect, including but not limited to the continuation of any pay plan included in the agreement, until a new agreement shall be executed." In other words, with the inclusion of the words "pay plan", evergreen clauses became part of all collective bargaining agreements, assuring public employees step increases instead of freezing their compensation until a subsequent contract was approved.

The effect of the law was to ensure the payment step increases, which employers charged tipped the balance of power between employers and employees by eliminating a significant incentive for unions to make concessions at the bargaining table. Both the New Hampshire Municipal Association and New Hampshire Association of Counties opposed the bill and joined other public employers in calling for its repeal.

In 2011 the law was repealed. However, the doctrine of status quo, together with the legal underpinnings it rests on remained intact. While spokesmen for the public employee unions were disappointed by the repeal, their reaction was mild compared to how they would have reacted to an attempt to do away with the doctrine of status quo, which would effectively reduce public employees to employees at will.