Payout of retirement, benefits disputed in union grievances
By Kevin Boneske
ASHWAUBENON – A ruling on two grievances filed against the village by the Ashwaubenon Public Safety Officers’ Association (APSOA) is pending before the Wisconsin Employment Relations Commission (WERC).
The grievances involve the paid time off (PTO) payout to Shawn Wright, who retired last year as a village public safety officer (PSO), and the sick leave payout to union members in January.
The APSOA filed a grievance to dispute the amount Wright received for accrued but unused PTO benefits upon his retirement Aug. 2, 2019.
That grievance alleges the village miscalculated the hourly rates based on which it made the payout.
According to records related to the grievance, the payout to Wright was based upon his actual hourly rate of pay, which was based upon his salary divided by the number of hours required for his respective shift (i.e. 2,920 annual hours for a 24-hour shift) and not the overtime rate.
The grievance was denied by the village board, which found it doesn’t explain with specificity how the village allegedly miscalculated the hourly rates for the payout and how this violated the collective bargaining agreement (CBA).
“Additionally, the grievance does not explain with detail how the village has historically paid out such PTO benefits to retiring PSOs,” stated a letter from Village President Mary Kardoskee to APSOA attorney Aaron Halstead. “As a result, the village is unable to properly or adequately respond in specific detail to the grievance’s general allegations.”
The grievance related to the payout of unused sick leave accrued during 2019 alleged the village “improperly and incorrectly calculated the amounts owed to the PSOs for said sick time payouts.”
To resolve both grievances, an arbitration hearing before the WERC was sought by the APSOA as the final step in the union’s CBA with the village.
The union and the village agreed to have one hearing on both grievances, which took place remotely last month.
WERC arbitrator Raleigh Jones said he expects to issue a ruling about three months after both parties submit briefs, with the initial ones due Dec. 11 and any response due Dec. 23.
Halstead asked Jones to rule on whether the village violated the CBA and past practice when it changed the hourly rate used to pay out retirement benefits to Wright and then again changed the payout rate of sick time hours for PSOs in January.
Halstead said there is a maximum amount of sick hours a PSO can accrue, depending on whether he or she is a line or day officer, with the former allowed to accrue 2,160 hours and the latter allowed up to 1,530 or 1,542.8 hours, depending on the specific assigned day position.
“At least as far back as 1999, when a PSO retires, the village has paid out the officer’s accrued and unused PTO benefits, whether sick time, comp time or vacation time, at the same hourly rate,” he said “That rate was determined by dividing the retiring officer’s annual salary by 2,080 hours, regardless whether he or she was serving as a day or line officer at the time of retirement.”
Halstead said the CBA also includes a potential payout each year for accrued sick time.
“Specifically, if an officer has not used all of his or her available sick time in a given calendar year, the officer is credited for a certain number of hours of that unused sick time, according to a chart in the collective bargaining agreement,” he said. “In December of each year, those unused sick hours are totaled and then paid out as vacation pay in January of the following year, again, according to that chart.”
Halstead said the village sought to change the practice of a day officer being able to become a line officer at or near the time of retirement, thereby increasing the cap on sick hours paid out at retirement from 1,542 to 2,160.
Ultimately, Halstead said the union agreed to a new sick time accrual system, where the number of sick hours credited to a retiring officer would be proportionate to the number of hours worked in the respective line and day officer capacities, as of the 2012-13 CBA.
“At no time during the parties’ negotiations for 2012-13 CBA did the village propose a change to the hourly rate, at which sick time, compensatory time or vacation time benefits would be paid out, and the 2012-13 CBA did not implement such change,” he said.
Halstead said Allison Swanson, then the village manager who bargained the 2012-13 agreement with the public safety union, was aware of the hourly rates used for those payouts.
When Wright retired, Halstead said it marked the first time the village made a change to the payout calculation for a union member.
“Specifically, instead of deriving the hourly rate of those benefits by dividing PSO Wright’s annual salary by 2,080 hours, it derived a new figure, calculated by dividing his annual salary by 2,920 hours,” he said. “This change was a 100 percent unilateral change on the village’s part, without any bargaining or discussions with the association.”
Halstead said the village made the change when a dispute arose last year after Swanson directed the finance department to change the hourly rates for a retiring public safety department supervisor, Lt. Luke Pasterski, who has a civil lawsuit pending against Ashwaubenon in Brown County Circuit Court.
“Lt. Pasterski’s dispute with Ms. Swanson made its way to the (village) board level, and on March 26, 2019, the board… voted in closed session to deny Lt. Pasterski’s objection to Ms. Swanson’s actions,” he said. “The board vote was 3-2 against Lt. Pasterski with two of the board members (Allison Williams and Mark Williams) arguing that CBA and past practices prevented such a change.”
Halstead said the village carried forward this same change to the hourly rates in paying out benefits to retiring union members.
Village Attorney Tony Wachewicz asked Jones to determine whether the village violated the agreement when it calculated Wright’s retirement payout and the officers’ sick leave accrual for 2019, based upon their annual salaries’ hourly rate.
He characterized the APSOA’s grievances as “the union’s view of their entitlements.”
“They believe they are entitled to what is essentially a golden parachute of being paid out at an inflated hourly rate of pay, because it’s the way that things have always been done, which really, at the end of the day, satisfies the typical public sector stereotype,” he said.
Generally, Wachewicz said line officers work 2,920 annually, compared to 2,080 hours for day officers.
“All officers are paid an annual salary that is determined through the budget process and a salary schedule,” he said.
Wachewicz said the software used by the village for its payroll system only allows for the entry of one hourly rate, which is determined by taking an officer’s annual salary and dividing it by 2,080 hours, rather than 2,920.
“This essentially becomes an overtime rate, to ensure there are no underpayments in violation of any wage laws, and again, to provide them with that consistent paycheck, regardless of whether they may have worked five or six days within a pay period,” he said.
Wachewicz said “there is no direct evidence, but rather only silence in the CBA as to the rate of pay to be used for the payout of sick leave benefits.”
“The union, as part of those 2012-13 CBA negotiations, clearly conceded on the issue of sick leave accrual to prevent the switch between line and day (officers) to inflate their sick leave payout, in essence, to achieve that higher overtime rate of pay to their benefit,” he said.
Wachewicz said the village was previously unaware of the discrepancy in calculating the hourly rate when paying out the sick leave accruals.
“This discrepancy was discovered when calculating benefits related to another APS (Ashwaubenon public safety) employee in an unrelated matter,” he said. “And then through that discovery and review, practice was then changed through discussions among village administration, which included the village president, village manager, village attorney, village finance director, and thereafter approved by the village board.”
Wachewicz said the village never “agreed and accepted this practice of paying out sick leave accruals at this inflated rate.”
“It was a mistake that slipped through the cracks after this issue was negotiated and resolved during the 2012 negotiations,” he said.
Two of the three witnesses the union called to testify at the arbitration hearing were Swanson and Kardoskee.
Swanson, who resigned July 8 as village manager, currently has a defamation lawsuit pending in Brown County Circuit Court against the APSOA.
When the APSOA announced a no-confidence vote in Swanson in February, it claimed her changing of the retirement payout cost “the average officer $15,000 to $50,000 each upon retirement.”
Swanson testified at the hearing for more than 90 minutes in response to questions from Halstead and Wachewicz.
When asked about the village board discussing past payout practices while meeting in closed session March 26, 2019, Swanson said the board “had come to realize that what was happening was incorrect.”
After Swanson acknowledged there previously was no distinction between a line and day officer in calculating the hourly rate of benefits by dividing the annual salary by 2,080 hours, she said she didn’t contact the union about the change.
“I had no discussions regarding the decisions on what to pay Shawn Wright or the 2019 sick leave payouts,” she said.
Swanson said she did not participate the last few years in contract negotiations involving the APSOA to avoid a conflict of interest because of her husband, Kevin Buckley, being a PSO.
When asked by Wachewicz about discovering an error in calculating the hourly rates for PSOs, Swanson said “payroll is a complicated issue, particularly with public safety.”
“It did not appear that what we had negotiated was put in effect,” she said. “If we continued to apply it the way we were, there was no financial savings to the village, based on what was negotiated… It didn’t make sense.”
Kardoskee, who has been on the board since 2005, said the board hadn’t been involved in calculating an officer’s retirement benefits until last year.
When asked by Halstead about a letter from Pasterski stating Swanson changed the formula for how benefits are calculated, Kardoskee said Pasterski “was the first person to retire after we discovered the discrepancy.”
Kardoskee said the village was “paying out in the wrong way, and we discovered the discrepancy and the true hourly wage.”
She said she did not contact the union as to whether it believed the village was paying the wrong rate, and Wright was the first APSOA member to retire with the hourly rate reduced.
Kardoskee said her understanding of the error in the rate of pay involved the overtime rate being the annual salary divided by 2,080 hours when the actual rate was the salary divided by 2,920 hours.
“We had been in error of paying out wrong in the past, and we needed to correct it,” she said.
Closing a loophole
Michael Haines, an Ashwaubenon PSO since 1996 and past APSOA secretary and president, said Swanson wanted to end a loophole in which a day officer capped at 1,542.8 hours of sick time could be eligible for 2,160 hours upon switching to a line officer position on the last day before retiring.
However, Haines said changing the hourly rates for officer payouts were never discussed in negotiations.
“The accrued hours was actually calculated based upon your number of years or your amount of time within each position,” he said. “In essence, it was a fair way to determine the number of hours that they would be paid out.”
Village Finance Director Greg Wenholz was the only witness called by Wachewicz.
Wenholz testified about calculating retirement benefits for village employees and the hourly rate of benefits being changed last year for public safety employees.
In a court affidavit presented as an exhibit during the arbitration hearing, he stated it was brought to his attention last year the village was improperly utilizing the overtime pay rate instead of the actual hourly rate when paying public safety supervisors who are line employees.
“This mistake meant that line employees were being paid sick and vacation benefits at the overtime pay rate (dividing by 2,080 hours) instead of their actual hourly rate (dividing by 2,920 hours),” Wenholz stated. “As a result, line employees were being paid more than day employees for their retirement benefits.”
Since 2013 and every year thereafter until January 2019, Wenholz said the village also erroneously calculated the hourly rate for the annual unused sick time payout until being changed in January.