“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 ? Who, What and When

? Outsourced as of January 1, 2014

? Substitutes

? Outsourced as of February 14, 2014 (as vacancies occurred)

? Paraprofessionals ? Job Coaches ? COTAs ? ESY Staff

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BLaST IU 17 Experience - Why

? Cost Savings ? Need to consider Markups when comparing costs and projecting savings ? Affordable Health Care Implications ? Retirement ? Health Care ? Unemployment ? Worker's Compensation ? Access to AESOP

? Management ? No advertising ? No interviewing ? No paperwork

? Cost Competitive ? Other vendors to not retirement costs and different health care costs

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BLaST IU 17 Experience ? Who Not

? Current Staff ? Office Staff ? Technology Staff

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BLaST IU 17 Experiences ? Issues/Concerns

? Attracting Staff ? Geographical Challenges ? Clearances ? Marketing ? Guest Teachers ? Emergency Certifications ? Poor Performance ? Interactions with IU Employees

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BLaST IU 17 Experience

? It takes time!!

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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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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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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". e) It is not clear, if the collective bargaining agreemen13t 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 ? 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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