“Pros & Cons” of Outsourcing Employees

PASBO 2015 Conference

¡°Pros & Cons¡± of

Outsourcing Employees

Kirsten Bagley; PIMS Coordinator;

BLaST IU 17

Ellis Katz; Sweet, Stevens, Katz &

Williams LLP

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BLaST IU 17 Experience ¨C Who, What

and When

? Outsourced as of January 1, 2014

¨C Substitutes

? Outsourced as of February 14, 2014 (as

vacancies occurred)

¨C Paraprofessionals

¨C Job Coaches

¨C COTAs

¨C ESY Staff

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BLaST IU 17 Experience - Why

? Cost Savings

¨C Need to consider Markups when comparing costs and projecting

savings

¨C Affordable Health Care Implications

¨C Retirement

¨C Health Care

¨C Unemployment

¨C Worker¡¯s Compensation

¨C Access to AESOP

? Management

¨C No advertising

¨C No interviewing

¨C No paperwork

? Cost Competitive

¨C Other vendors to not retirement costs and different health care costs

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Pros & Cons of Outsourcing Employees

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PASBO 2015 Conference

BLaST IU 17 Experience ¨C Who

Not

? Current Staff

? Office Staff

? Technology Staff

4

BLaST IU 17 Experiences ¨C

Issues/Concerns

?

?

?

?

?

?

?

?

Attracting Staff

Geographical Challenges

Clearances

Marketing

Guest Teachers

Emergency Certifications

Poor Performance

Interactions with IU Employees

5

BLaST IU 17 Experience

? It takes time!!

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Pros & Cons of Outsourcing Employees

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PASBO 2015 Conference

Legal Issues Concerning

Subcontracting

Ellis H. Katz, Esquire

Sweet, Stevens, Katz & Williams LLP

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SUBCONTRACTING

General Rule:

Subcontracting bargaining unit work is considered a

mandatory subject of bargaining. That designation, in

turn, means that the employer cannot unilaterally

implement a subcontract and that it must bargain in good

faith with the union before it implements a subcontract.

Conversely, if a subcontract has not taken place, no

bargaining is required.

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I.

What is not subcontracting?

A. Subcontracting is not the situation where the employer

completely

and

permanently

eliminates

the

performance of duties that were being performed by

bargaining unit members.

B. It is not the situation where the employer eliminates

positions and reassigns the work to other bargaining

unit members.

C. It also is not the situation where work that is not

exclusively bargaining unit work is reassigned outside

the bargaining unit.

D. It is not the situation where new technology is utilized

but work is not removed from the bargaining unit.

II. What is subcontracting?

Subcontracting is any time work that is exclusively

performed by bargaining unit members is transferred or

reassigned to non-bargaining unit members or outside

contractors.

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Pros & Cons of Outsourcing Employees

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PASBO 2015 Conference

III.Subcontracting (and, thus, the

duty to bargain) encompasses

the following:

A. Use of volunteers to perform work that had been

exclusively performed by bargaining unit members, even

if no bargaining unit members were laid off, or if no

employees lose hours, or the position is vacant.

B. Alteration of past practices related to assignment of

bargaining unit work to non-unit members or the

alteration of the extent to which bargaining unit members

or non-bargaining unit members shared work.

C. Mutual-Aide Agreements - This would include a

consortium of school districts.

D. Transferring the work of teaching and assessing students

to an E-Learning Pilot Program.

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IV.Once it has been determined that

a subcontract is at issue, there are

two scenarios to consider.

A. Subcontracting mid-contract:

Scenario:

Employer decides in the middle of a collective

bargaining agreement

that it wishes to subcontract

bargaining unit work.

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Analysis:

1. Does the collective bargaining agreement expressly

permit or prohibit it?

(a)If the collective bargaining agreement prohibits

subcontracting, the employer cannot do it. Language

such as the following would prevent it:

¡°No one who is not a member of the bargaining unit

represented by the (insert name of union) shall

perform work in the School Entity, which has been

usually performed solely by bargaining unit members

of (insert name of union). Such persons shall not be

used to displace any bargaining unit member. For

purposes of preserving work and job opportunities for

the bargaining unit, the School Entity agrees that no

work or services of the kind, nature or type presently

performed solely by bargaining unit members will be

subcontracted, transferred, leased, assigned or

conveyed in whole or in part to any other group,

person or non-bargaining unit employee.¡±

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Pros & Cons of Outsourcing Employees

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PASBO 2015 Conference

1. The question not clearly answered is whether language

such as the above becomes part of the ¡°status quo¡±

after the agreement expires.

If so, then no

subcontracting would be permitted after the agreement

expires, even though absent such language,

subcontracting is permitted during the period after a

collective bargaining agreement expires.

b) If the collective bargaining agreement permits

subcontracting or the employer articulates a ¡°sound

arguable basis for its interpretation of the agreement¡±

that it does, then the employer has met its bargaining

obligation.

c) A broadly worded management rights clause does

not constitute a basis to argue that the collective

bargaining agreement permits subcontracting.

d) Bargaining history can support an argument that

subcontracting is allowed provided that the history

shows that the issue was ¡°fully discussed¡± and

¡°consciously yielded¡±.

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e) It is not clear, if the collective bargaining agreement

is silent, whether it can be done.

B. Subcontracting after contract expires. This is the

usual scenario. In this situation, the employer is able

to subcontract provided it has engaged in good-faith

bargaining to impasse before deciding to subcontract.

C. What constitutes good-faith bargaining?

1. Test ¨C An objective examination of the totality of

the circumstances surrounding the bargaining

process to determine whether the offending party

came to the bargaining table with a sincere desire

to reach agreement. A party will be found to have

bargained in bad faith where it can reasonably be

concluded that ¡°the party never intended to achieve

agreement, demonstrated unreasonableness or

displayed a single minded purpose to thwart the

public policy.¡±

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D. Specific issues that have been litigated to be considered in

making the decision if the employer has met its obligation to

bargain in good faith:

1. An employer has an affirmative duty to seek out the

union, announce its intentions and provide the union

with relevant information necessary for it to fulfill its

bargaining obligation and request the union to make a

counter-proposal.

2. The employer must supply the union with the results of

the bids which the district has received.

3. The employer must set forth a position or a target

which, if met by the union, will save bargaining unit

member positions.

4. The employer is not required to make a counterproposal, however, its failure to do so may constitute

some evidence of an overall failure to make a serious

effort to reach agreement.

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