DEPARTMENT OF DEFENSE, DOMESTIC DEPENDENTS ELEMENTARY AND SECONDARY SCHOOLS, LAUREL BAY DEPENDENTS SCHOOLS, LAUREL BAY, SOUTH CAROLINA and LAUREL BAY TEACHERS ASSOCIATION, FEDERAL EDUCATION ASSOCIATION, NEA

In the Matter of:



DEPARTMENT OF DEFENSE,

DOMESTIC DEPENDENTS ELEMENTARY AND

SECONDARY SCHOOLS,

LAUREL BAY DEPENDENTS SCHOOLS,

LAUREL BAY, SOUTH CAROLINA



and



LAUREL BAY TEACHERS' ASSOCIATION,

FEDERAL EDUCATION ASSOCIATION, NEA





Case No. 96 FSIP 66





ARBITRATOR'S OPINION AND DECISION





BACKGROUND



The Laurel Bay Teachers' Association, Federal Education Association (FEA), NEA (hereafter "LBTA" or ''Union'')1, filed a request for assistance with the Federal Service Impasses Panel (hereafter "Panel") to consider a negotiation impasse under the Federal Service Labor-Management Relations Statute (hereafter "Statute"), 5 U.S.C. § 7119, between it and the Department of Defense (DOD), Domestic Dependents Elementary and Secondary Schools, Laurel Bay Dependents Schools, Laurel Bay, South Carolina

(hereafter "DDESS" or "Employer").2 Following investigation of the

request for assistance, the Panel determined that the impasse should be resolved through the mediation-arbitration process and delegated the undersigned to engage in such process.



Accordingly, on July 16, 1996, commencing at 9 a.m., representatives from the LBTA3 and the DDESS, 4 alonq with the Union represents approximately 78 employees, who work in such classifications as teachers, guidance counselors, psychologists, speech pathologists, and librarians/media specialists.



The Employer operates two elementary schools for the purpose

of educating the dependent children of military personnel stationed

at Laurel Bay. The local collective bargaining agreement (hereafter

"CBA") between the parties is scheduled to expire in April 1997.



Appearances on behalf of the LBTA were made by: Ronald R. Austin, General Counsel, FEA; James Darrell Evans, President, LBTA;

and Fran Siler, Vice undersigned, met at the Laurel Bay Dependents

Schools' main offices in Laurel Bay, South Carolina. Thereafter, the parties engaged in extensive mediation efforts/arbitration

proceedings (hereafter"MED-ARB"), in which each side presented oral

arguments and exhibits, and each had the opportunity to raise

objections and contest the evidence presented by the other party.

The mediation efforts were unsuccessful.



THE ISSUE IN DISPUTE:



The issue to be decided is whether all employees should receive a 1.5 percent (Employer proposal) pay increase, effective at the commencement of the fiscal year ("FY") 1996, which started

on October 1, 1995; or a 4.7 percent (Union proposal) pay increase, effective at the commencement of the 1995-96 school year ("SY"), which started on Auqust 13, 1995.



A. The Employer's Position:



The Employer's justification for its proposal is founded upon

10 U.S.C. § 2164(e), titled "Department of Defense Domestic Dependents Elementary and Secondary Schools", and reading in Pertinent Part, as follows:



(e) Administration and staff.--(1) The Secretary of Defense may

enter into such arrangements as may be necessary to provide educational programs at the school.



(2) The Secretary may, without regard to the provisions of any

other President, LBTA.



(3)(a) Appearances on behalf of the DDESS were made by: Mark Lewis, Attorney, Domestic Dependents Elementary and Secondary Schools, Office of Counsel; Jeff Carpenter, Labor Relations Specialist; and Danny Robles, Human Resources Site Manager.



As clarified and articulated by the parties at the commencement of the MED-ARB. It is significant to note that the parties stipulated that the Employer had implemented a 2 percent step increase for all eligible employees in the unit as of August

13, 1995.



On January 11, 1996, the DDESS and the FEA entered into a memorandum of understanding wherein they agreed to: 1) consolidate

all professional and nonprofessional bargaining units represented

by the FEA; 2) continue all local CBAs until one is negotiated nationally; and 3) continue to negotiate pay locally every year until a national pay schedule is negotiated. law relating to the number, classification, or compensation of employees--



(c) fix the compensation of such individuals for service in such

positions.



(3)(A) Except as provided in subparagraph (B), in fixing the compensation of employees appointed for a school pursuant to paragraph (2), the Secretary shall consider--



(I) the compensation of comparable employees of the local educational agency in the capital of the State where the military installation is located;



(ii) the compensation of comparable employees in the local educational agency that provides public education to students who

reside adjacent to the military installation; and (iii) the average compensation for similar positions in not more than three other local educational agencies in the State in which the military installation is located. (Emphasis added).



In presenting its proposal, the DDESS submitted charts 7 and salary compilations showing the average salaries for five school districts within the State of South Carolina, to wit: Hampton 2, Beaufort, Richland 1, York 2, and Spartanburg 7, for comparable employees to those at Laurel Bay. In doing so, the DDESS indicated

that the charts and compilations spoke for themselves and reflected

that the Laurel Bay employees' average salaries were well above those of the other school districts, and further, that the Laurel

Bay educators were among the highest paid teachers in the State of

South Carolina.



In addition, the DDESS acknowledged that the State of South Carolina had approved a 4.2% wage increase for its educators for the 95-96 school year. However, even when factoring that increase

to the school districts reflected on the charts, the Laurel Bay educators were still clearly above their comparable peers; and the

DDESS, in setting forth its wage proposal, was simply attempting to

come into compliance with its statutory mandate under 10 U.S.C. §2164, to establish compensation based upon the applicable comparability guidelines.

7 See DDESS Exhibits 4 and 5. As was agreed by the parties at

the MED- ARB, DDESS Exh. 4 was grafted incorrectly in terms of reflecting where the average salaries for the school districts topped out on the chart. The parties also agreed that while the average salaries depicted on DDESS Exh. 5 were accurate, the school

year reflected was 94-95, rather than 95-96 as described on the chart.



Finally, the DDESS also acknowledged that the per pupil cost

budget for the Laurel Bay 95-96 SY was increased by 4 percent.9 In

that regard the DDESS noted that it had already implemented a 2 percent step increase at the commencement of the 95-96 SY, and that

it was willing to raise its 1.5 percent proposal to a 2 percent across-the-board increase, conditional upon the parties' agreement

to a formula that would establish the wage rate increase, if any,

for the next SY.10



B. The Union's Position:



The Union presented a number of arguments1 in support of its

proposal for a wage rate increase in the range of 4.7 percent, over

and above the 2 ]percent step increase that had been implemented by

the DDESS at the beginning of the 95-96 SY. First, it argued that

the Fort Jackson DDESS school2 in South Carolina was the most comparable school district to Laurel Bay and, accordingly, should

serve as the basis for determining the appropriate wage rate increase.13 As reflected on LBTA Exh. 1 ("Position #1"), FortJackson averaged a 2.75 percent wage increase over the past 5

SYs while Laurel Bay averaged a 2.60 percent increase for the same

period. Fort Jackson received a 4.2 percent wage increase for the

95-96 SY while the DDESS was offering a 1.5 percent increase for the same school year. Therefore, according to the Union, considering the pay history over the past 5 years and the increase that had been received by Fort Jackson teachers in the current school year, it was more than justified in requesting a 4.7 percent



Second 14, since Fort Jackson; Columbia, South Carolina schools (the State Capitol), and the State of South Carolina employees had 9 Factored into such budget are teachers' salaries.



While the Union acknowledged the 9 percent per pupil budget

increase, it rejected the DDESS's conditional offer.

All of which have been considered and most of which are

summarized here.



2 With a similar 2 percent range between steps in their wage

rate schedule.



See LBTA composite Exhibit 1.



See LBTA Exh. 1 ("Position #2").



Second, received a 4.2 percent increase, the Laurel Bay teachers should receive a minimum of 4.2 percent over and above the 2 percent already implemented by the DDESS.



Third, the Consumer Price Index ("CPI") for the previous 5 years commencing in 1990, reflect an average CPI increase of 3.64

percent, as compared to an average wage increase for the Laurel Bay

teachers for the same period of 2.6 percent per year. Accordingly,

the Laurel Bay teachers had lost in real buying power more than 5.2

percent over the 5 year period, which further justifies their request for a 4.7 percent wage increase.



Fourth, as agreed to by both parties at the MED-ARB, the per

pupil cost budget for the 95-96 SY has been approved and increased

by 4 percent. Accordingly, the DDESS's proposal of 1.5 percent is

well below the budgeted dollars that have been approved and are available to fund the Union's proposed wage increase.



Fifth, the mean test scores on math and reading for Laurel Bay

students are significantly higher than those for the State of South

Carolina and the comparable school districts used by the DDESS. The

test scores have a direct correlation to the Laurel Bay teachers'

ability, education, and professionalism -- which should be recognized by the DDESS and warrant the wage increase requested by

the Union.



Sixth, the LBTA also indicated that the DDESS salaries for

civilian employees at the Marine Corp complex serviced by the Laurel Bay schools are significantly higher than the average salaries for employees within Beaufort County (the county in which

the Laurel Bay schools are located); while the Laurel Bay teachers'

salaries are only slightly higher than those of teachers of the local Beaufort County School District. As such, the teaching profession within DOD is not being appropriately compensated in comparison to other DOD jobs and this discrepancy should be rectified so that the highly qualified Laurel Bay teachers can be

paid in accordance with and on the same level as other DOD salaried

positions.



See LBTA Exh. 1 ("Position #3").

6 See LBTA Exh. 1 ("Position #4").

7 See LBTA Exh. 1 ("Position #5").

8 See LBTA Exh. 1 ("Position #6").



Analysis and Conclusions:



Having considered all the arguments and evidence presented on

this issue, I conclude that a modification of both parties' proposals is justified. The charts and salary compilations clearly

establish that the Laurel Bay teachers are higher paid than any of

the comparable school districts furnished by the DDESS. Upon further review, the differential in pay at the low and high ends of

the wage scale, and generally throughout the step pay structure for

the five categories, to wit: 1) Bachelor's Degree level; 2)Bachelor's Degree plus 18 hours; 3) Master's Degree level; 4) Master's Degree plus 30 hours; and 5) Doctoral Degree, range from

around 10 percent to 20 percent or more in some cases in favor of

the Laurel Bay teachers. In addition, upon review of the DDESS 1.5

percent wage proposal in comparison with the Fort Jackson 19 95-96

SY wage structure already in place, it appears that the pay range

differential is generally between 5 and 10 percent higher for the

Laurel Bay teachers. Accordingly, except as modified below, I find

the DDESS's comparability data to have substantial merit.



Turning then to the LBTA's arguments, while I generally found their data persuasive as to the pay history between Laurel Bay and

Fort Jackson, along with the wage percentage increases received by

Fort Jackson and other educators within the State of South Carolina

for the 95-96 SY, I find the raw percentage increases to be outweighed by the comparability data of the DDESS. In addition, in analyzing the LBTA's proposals, I also thought it significant that the DDESS had implemented a "2 percent''21 wage step increase at the commencement of the school year, a factor which did not appear to be fully considered by the LBTA. In relation to the LBTA's other arguments, including its presentation of data on the CPI history over the past 5 years, and the fact that the per pupil cost budget for Laurel Bay had been approved for a 4 percent increase in the 95-96 SY -- I found them to be legitimate factors that warranted consideration in arriving at a decision in this case. Accordingly Fort Jackson being the school district that the LBTA indicated was most comparable to the Laurel Bay schools.



20 Which includes a 4.2 percent wage increase for the 95-96 SY

along with a 2 percent differential between steps.



In arriving at a wage rate increase in this case, the Arbitrator notes that he considered the "2 percent" wage step increase to be somewhat less than a true 2 percent in view of the

fact, as was brought out at the MED-ARB, that employees in the bargaining unit would be eligible to receive the 2 percent increase

at different times during the 95-96 SY upon reaching their anniversary date in terms of years of experience. I find that the

equitable wage increase to be received by all employees in the bargaining unit shall be a 2.5 percent pay increase, effective at

the commencement of the 1996 FY, to wait: October 1, 1995.



DECISION:



The parties shall adopt the following compromise proposal:



All bargaining-unit employees shall receive a 2.5 percent pay increase effective as of the beginning of the 1996 FY, to wit:

October 1, 1995.