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Iowa Court Limits Mandatory Bargaining Items

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The Iowa Supreme Court has ruled that school boards may offer teachers cash incentives for early retirement without negotiating the issue.

In a 6-2 decision handed down on May 19, the court reversed a ruling by the state Public Employment Relations Board, which had held that the bonuses constituted "supplemental pay" and were thus subject to negotiation under the state's collective-bargaining law for public employees. The Iowa State Education Association (isea) contended that the bonuses fit the definitions of both "supplemental pay" and "wages," which are specifically covered by the collective-bargaining law.

To the great disappointment of leaders of the isea, however, the Supreme Court found that only the regular salary schedule and extra-duty pay must be negotiated between school districts and local teachers' associations. The legislature, in enacting the collective-bargaining statute, specifically omitted such items as early-retirement bonuses and travel expenses, the justices found.

"If [the legislature] had intended to include all wage-related remunerations of all species within the term 'wages,' it would have been unnecessary to include in the list of mandatory subjects so many wage-related items such as insurance, vacations, over-time, compensation, and supplemental pay," the court said.

The justices added that the bonuses did not appear to fall into the category of "supplemental pay" because that term applies to money received for rendering a service. "It does not appear to be intended as payment for not working," the court noted.

"The significance of it is that this is the first time the Supreme Court has spelled out what wages mean," said L.D. Simonson, a spokesman for the Fort Dodge Community School District, which was involved in the case. "It means that many items are now not mandatory--things like unused sick leave, moving expenses, and travel expenses.

"The belief is that the balance of power has shifted from the teachers to boards of education," Mr. Simonson added. "The boards can now say, 'We're not going to negotiate those items."'

Cash Incentives Offered

The dispute arose in 1979, when the Fort Dodge district unilaterally adopted a policy offering one-time cash incentives to teachers 60 years old or older who elected to retire early.

The bonuses that year consisted of $2,000 plus a fixed percentage, depending on the teacher's age, of the portion of the teacher's salary over $10,000.

Eight to 10 teachers took advantage of the policy in the first year, Mr. Simonson said, saving the district approximately $1,200; savings were expected to exceed $30,000 during the second year of the plan, he said, since more young teachers at relatively low salaries would have remained on the payroll.

But the practice was halted after the 1979-80 school year because the state and local teachers' associations took the issue to the state employee-relations board, which found that the plan should have been negotiated.

Mr. Simonson said the Fort Dodge board did not want to bargain the early-retirement bonuses because it wanted enough flexibility to use the bonuses only when needed--to avert layoffs, for example--and to vary the amount of the payments.

Several other school districts in Iowa have attempted to enact similar policies, and some have included retirement incentives in their contracts with teachers, he added.

While the Iowa School Boards Association supported the Fort Dodge board in the case, the state department of public instruction has taken no position, according to James E. Mitchell, deputy state superintendent.

"Local school districts do it according to their own board's policy," Mr. Mitchell said. "We have no authority over it."

Generally speaking, Mr. Mitchell said, he considers the early-retirement incentive idea "good for education because it allows people another alternative. If they want to get out early, they ought to be able to." The state's teacher-retirement system, although fiscally sound, does not pay high enough pensions to encourage early retirement, he noted--so supplements or lump-sum payments from local school districts are the only available incentives.

Negotiation Favored

Fred R. Comer, executive director of the isea, said that the 30,000-member teachers' group is not opposed to early-retirement bonuses, but adamantly maintains they should be negotiated.

"We're left with no alternative but to go into the legislature" to press for changes in the statute, he said. Mr. Comer and other leaders of the association met with their lawyers and lobbyists last week to discuss strategies for the 1983 legislative session.

"I think the thing that really concerns us is that school boards and administrators are now free to unilaterally implement compensation outside the salary schedule and extra-duty pay," he said. "If there's a shortage in, say, industrial arts, there's nothing to prevent a school board from enticing a teacher into the district by paying a bonus off the salary schedule. There's nothing to prevent a school board from putting money into the pockets of teachers they choose."

Another major concern of the association, Mr. Comer said, is that the court's decision strongly indicates that only those items specified in the state collective-bargaining law are subject to the grievance procedure. "That means that if we go in and successfully negotiate 'permissive' items [not included in the statute but agreed upon by the local association and the district], we can't enforce it through the grievance procedure," Mr. Comer said.

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