More than ever before, municipalities in Pennsylvania and across the country are faced with the difficult but necessary challenge of holding the line on labor costs. Ballard Spahr attorney Kenneth M. Jarin led a team that secured exceptional labor cost relief and restored management rights for the City of Bethlehem in a historic Fire Department Act 111 award.

Bethlehem’s success was due largely to its Act 111 case presentation. The City presented a compelling case about the severe fiscal challenges facing Third Class cities due to legacy costs and the economic downturn, while emphasizing the need to eliminate inflated manning and flawed mutual aid provisions in its firefighter contract.

The award came on the heels of staggering increases in the City’s overtime costs, which skyrocketed by nearly $540,000 over three years due largely to increases in minimum manning requirements. The arbitration panel recognized the City’s fiscal challenges and the structural defects of the fire contract by eliminating minimum manning requirements as well as restrictive mutual aid language.

Other notable provisions of the award include a two-year wage freeze, removal of sick leave from consideration when calculating overtime, increases in health benefit co-pays and contributions, and restoration of the Fire Commissioner’s right to assign fire safety inspection duties to firefighters. For new hires, the award also provides for elimination of post-retirement health benefits, decreased pension benefits, and award of spousal health coordination.

The Bethlehem arbitration was hailed as a model for how municipalities can build a case the old-fashioned way—with solid evidence, studies, and statistics—to show that dire economic times are ample justification for altering a municipality’s agreements with its unions.

We bring the same strategy to the table in all of our work for clients with unionized workforces. In the process, we are confident that we are not only helping our clients to survive the Great Recession, but also forging a smarter, more sustainable approach to staffing.