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BREAKING NEWS: MEA Reaches Tentative Agreement With City On a New One-Year Labor Contract

Author: MEA Staff | Date published: 05/6/2020

In a special closed session meeting earlier today, the City Council approved a Tentative Agreement (TA) with MEA’s Negotiating Team for a new one-year Memorandum of Understanding (MOU) for Fiscal Year 2021.  The TA represents a good outcome under the COVID-19-related circumstances which have dramatically reduced City’s tax revenues.  Your MEA Negotiating Team strongly recommends that you vote to accept this TA when it comes before you for ratification next week.  If ratified by MEA members, the new contract would go into effect on July 1st and expire next year on June 30, 2021.  Meanwhile, MEA will be back to the bargaining table in November to pick up the pay increase fight we began pre-COVID.

 

The Good News – MEA’s TA includes substantial increases in Flex Benefit allotments for employees who buy medical insurance to cover a spouse/domestic partner, children or the entire family:

This TA has two core features related to Flex: (1) the current $11,705 annual allotment — and the ability to take that allotment in cash or contribute to your 401(k) — remains in effect without reduction for all those who select Waiver or Employee-Only coverage; and, (2) for all those who cover themselves plus a spouse/domestic partner, children or the whole family (“Employee-Plus Tiers”), the flex allowance will increase as follows:

For those who cover a spouse/domestic partner, children or the whole family, these increased amounts will translate into take-home pay increases by reducing the employee’s payroll deductions to cover big insurance premiums.   Access to these bigger allowances does, however, come with the condition that any unused portion cannot be taken in cash or allocated to a 401(k) account.  But the full dollar value of these Employee-Plus Tiers can be used for medical, dental, vision and life insurance, or allocated to a flexible spending account for dental/medical/vision reimbursements or for child/dependent care costs.

Importantly, MEA’s bargaining success in achieving these increases for the Employee-Plus Tiers did not come at the expense of all those existing employees who take the Waiver or the Employee-Only medical coverage with the objective of having the rest of their $11,705 allowance to take as cash over 24 pay periods.  In past negotiations – and even at the start of these negotiations — the City’s goal has been to reduce the amount of cash available to employees from the City’s Flex plan and to use the “cash” taken from employees who select Waiver or Employee-Only to “pay for” increased coverages in the Employee-Plus Tiers.   This is exactly what has happened to other City Unions in the past but MEA did NOT let this happen.  In this sense, this proposed agreement also represents a “victory” for employees who waive health coverage or only cover themselves even though the Flex allotment is not increasing for those levels.

This TA does, however, achieve the City’s goal of reducing cash-back opportunities from Flex for future employees hired on or after July 1, 2020.  But no current employee will be affected by that “new hire only” Flex Plan.

 

More Good News – This TA has no pay cuts, mandatory unpaid furlough days or other “take-aways”:

Despite the City’s undeniable COVID-19 budget challenges, MEA’s advocacy stopped the City from solving these challenges on the backs of employees.  Unlike the news from other jurisdictions —  including a proposed 26-day unpaid furlough (= 10% pay cut) for 15,000 City of Los Angeles employees — MEA’s TA contains no pay cuts, mandatory furloughs or other “take-aways.”

(Unrelated to our labor contract negotiations, the Mayor’s current proposed budget, to be revised on May 18th, eliminates a number of positions filled by MEA-represented employees.  MEA will continue the fight to stop these proposed layoffs based on City’s receipt of federal “CARES Act” stimulus money which should enable the City Council to reverse many of these proposed cuts.  And the Council itself has proposed alternatives to these cuts which should ultimately save jobs remaining at risk as the budget process continues into June.)

 

The Disappointing News – This TA includes no general or special salary increases:

As we updated you by e-blast last week, the City Council formally voted against any salary increases in FY2021 for any employee represented by any of the City’s six Unions.  That vote was certainly a disappointment based on our pre-COVID negotiation goals and legitimate expectations, but it was not a surprise given all the circumstances.  Simply put, the COVID-induced economic crisis effectively stripped away any opportunity to get general and special salary increases in this contract.

MEA has spent the last few years compiling and organizing data to demonstrate the pay disparity between City of San Diego employees and those who work for other jurisdictions in our region, and the calamitous effect of that disparity on the City’s ability to hire and retain a qualified workforce to deliver quality essential services to the public.  Pre-COVID, the City and MEA were trading proposals that included multi-year contract structures, across-the-board salary increases and special salary adjustments.  Then came this 100-year global pandemic to entirely change the conversation.  The focus swiftly shifted away from the pressing need to improve pay to the pressing need to survive COVID-19’s health and economic consequences and fill a quarter-billion-dollar City budget hole.

With that new reality in place, MEA’s Negotiating Team focused on what could be accomplished now – leaving our legitimate pay aspirations for our next round of bargaining.  When MEA returns to the bargaining table in November, there will be a new Mayor, five new City Councilmembers and a new economic reality that is difficult to predict right now.  But we will be ready to navigate whatever the situation is and get the City to focus once again on investing in its human capital.

Summary — Your MEA Negotiating Team strongly recommends this TA:

The bargained-for increases in Flex allowance for employees needing medical insurance to cover dependents, while also protecting the Flex cash back feature for others who waive or cover only themselves, is the proverbial “lemonade from lemons” which is the cornerstone of this TA.  These increases will be a game-changer for a large group of MEA-represented employees, and this fact helps alleviate the disappointment we share over the lack of salary increases.  And it surely helps that no existing employee is losing anything – not their Flex cash-back for those who waive or take employee only coverage, and not any portion of any employee’s current pay and benefits.  This TA also makes a number of positive changes to the language of various articles of MEA’s MOU, including Bereavement Leave, and the new MOU will still include everything in our current MOU — such as 24 hours of discretionary leave to be used in the new Fiscal Year.

Your MEA Negotiating Team urges a “yes” vote when this TA comes before you next week for ratification.  Since the City Council approved this TA in closed session today and has rejected calls and efforts to do “more,” it is highly unlikely that voting “no” to reject this TA will lead to a better deal.  And once the May 19th open session comes and goes, the deadline for any Flex Benefit plan improvements before open enrollment will have passed.  In the judgment of your MEA Negotiating Team, this TA is not only the best deal attainable for fiscal year 2021, but the alternative would likely be no deal at all – meaning MEA-represented employees would go into the new fiscal year without the protection of an MOU in effect, and their wages and Flex benefits would be no better!

The bottom line is that this TA is a good deal under all the circumstances, and MEA’s Negotiating Team urges you to cast a “yes” vote to approve it.

Next Steps — Ratification vote by MEA members next week:

MEA will be conducting an on-line contract ratification vote next week.  Only MEA members are eligible to vote.  Information regarding this process will reach you within the next few days.  MEA will also present a video to provide an overview of this TA and more perspective on the negotiations process leading to it.  Voting will likely be open on Tuesday, Wednesday and Thursday next week.  MEA is obligated to provide the City with the result of the ratification vote (“yes” to approve the contract or “no” to reject it) by Friday, May 15, in advance of Council’s open session approval of the TA and new Flexible Benefits Plan terms on May 19th.

Please watch your Inbox for additional information in the coming days.  In the meantime, and as always, don’t hesitate to reach out to MEA with questions.