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As courts consider Anchorage labor law rewrite, city uses it to negotiate with unions

  • Author: Sean Doogan
  • Updated: May 31, 2016
  • Published January 8, 2014

The Alaska Supreme Court heard oral arguments Wednesday afternoon over a proposed citizen referendum that would roll back Anchorage municipal labor law changes proposed by Mayor Dan Sullivan and passed by the Anchorage Assembly in March. The ordinance, called the Responsible Labor Act, is currently suspended pending the outcome of the court's decision, expected next month. But the municipality has used the main tenets of the law while negotiating seven union contracts last year and early in 2014. Three of those unions have already ratified new contracts.

The effort to overturn the labor law rewrite began almost immediately after it was passed in March 2013 by a 6-5 Anchorage Assembly vote. Municipal unions and labor supporters quickly began collecting the 7,124 signatures needed to get their repeal effort on the ballot. But last April, the municipal clerk rejected the petition, supporting the municipality's claims that the changes are technical and administrative and thus not subject to a voter petition. The unions sued, and in August a state Superior Court judge ruled the referendum could move ahead. The municipality appealed, and now the matter sits before the state's six Supreme Court justices. The law has been officially suspended pending the outcome of the ruling, which is expected in February.

The law, known as AO-37, would limit municipal employee raises to 1 percent per year above inflation, prevent public employee unions from striking, eliminate seniority bonuses, set the Anchorage Assembly as the arbiter in the event of a labor dispute and limit union contracts to three-year terms. It would allow non-union competition for municipal contracts and eliminate performance bonuses for employees. It would also require all nine Anchorage municipal unions to offer the same holidays and health plans. Anchorage Mayor Dan Sullivan contends it would save the city money. Unions see it as an attack on collective bargaining.

But even though the law is suspended, the city is negotiating as if it were in effect. Sullivan said the fact that the city came to agreements with many of its unions while using the requirements set forth in AO-37 proves the measure is not as bad as union representatives contend.

"None of the provisions are so onerous that we haven't been able to come to agreement," Sullivan said.

Since AO-37's passage in April 2013, the city has begun contract negotiations with seven of its nine unions. It has completed agreements with three: International Brotherhood of Electrical Workers-represented mechanics, Public Employees Local 71 parks maintenance workers, and Operating Engineers Local 302. The IBEW and Local 71 contracts are finalized. The operating engineers contract is up for final Assembly approval next week. The municipality is in negotiations with four other unions. Police and fire department contract talks are set to begin later this year.

Despite the mayor's assertions about the labor law change, local union representatives say it's poorly written and draconian.

"It has created a lot of distrust between the employees and the administration," said Derek Hsieh, president of the Anchorage Police Department Employees Association, the union representing the police force.

Public Employees Local 71 represents 30 full-time and 70 seasonal parks maintenance workers in Anchorage. Its labor contract was renegotiated last year and ratified by the Anchorage Assembly in December. But according to union officials, the negotiation process was muddled by the specter of AO-37.

"We were stalled in negotiations until AO-37 was suspended. After that, we were able to get things done," said Dennis Moen, Local 71's business manager.

Among the sticking points, Moen said, was the requirement allowing managed competition -- potentially hiring non-union workers to do municipal work -- and eliminating performance bonuses.

That contract ultimately included a prohibition of performance-incentive pay for new employees even though current workers continue to be eligible to receive it. It also included a managed-competition clause, but the union said it was able to get severance pay up to 400 hours -- 40 hours per year of service, with a maximum of 10 years -- for employees who lose their jobs because of the non-union competition.

"You can't negotiate with hard and fast rules," Moen said.

Performance-incentive pay -- including bonuses for meeting certain criteria -- was among the things Sullivan wanted to eliminate from municipal union contracts.

"Example of performance incentive pay -- you can get up to a 13 percent raise, that's 6.5 percent a year for two years -- if you go to your safety meetings, show up to work on time, don't get in an accident; all the things that in the private sector, that's how you keep a job," Sullivan said. "You don't get a 13 percent raise for showing up to work."

But the fact that unions are agreeing to contracts may not mean they agree with the specifics of the mayor's labor law. The contract for some IBEW members is just a one-year deal. Sullivan said his administration is trying to space out contract negotiations so there are no more than three per year. But union representatives said their members had their own reasons for accepting a short-term deal -- reasons that include AO-37.

"With all this uncertainty, a little bit of security was good for them," said Mike Hodsdon, IBEW Local 1547 business manager.

Hodsdon also said the union agreed to the deal to allow the labor law to work its way through the courts, so that, at the end of 2014, it would know exactly what the negotiating rules might be.

If the Alaska Supreme Court rules in favor of labor supporters, the recall referendum will go on a municipal ballot and be decided by voters. When that may happen is also a matter of debate that's likely to be decided by a judge. The municipality is suing the Anchorage Assembly because Sullivan vetoed setting the ballot referendum for the April 2014 election. The mayor wants the matter decided in the fall, or perhaps in 2015. A Superior Court judge heard arguments in that case last month.

Contact Sean Doogan at sean(at)