Court Opinion

ID: 9661195
Source: CourtListenerOpinion
Date Created: 2023-08-23 22:31:56.939842+00
Date Added: 2024-06-11T18:14:26.150847
License: Public Domain

Clinton, J.,
concurring in part, and dissenting in part.
The majority opinion acknowledges that the evidence “was sufficient for the court to find that wages received by Lincoln firefighters were not comparable to prevalent wage rates” and expressly approves the selection of cities used in making comparison to determine the “prevalent wage.” It goes on, however, to hold that the Court of Industrial Relations erred in its determination of the wage rate increase to which Lincoln firefighters were entitled, because the “court did not comply with statutory requirements.” In so saying, this court relies upon our opinion in Omaha Assn. of Firefighters v. City of Omaha, 194 Neb. 436, 231 N. W. 2d 710. I am unable, however, to determine from the opinion with what “statutory requirements” the Court of Industrial Relations did not comply. An even more serious matter perhaps is the fact that the majority opinion offers no concrete guidance as to how the Court of Industrial Relations should go about making its wage determinations in this case on the remand. The majority opinion says: “... it was error for the court *183to utilize directly the mean wage rate of those cities in determining the prevalent wage rate.”
Section 48-818, R. R. S. 1943, prescribes the statutory standard. In Orleans Education Assn. v. School Dist. of Orleans, 193 Neb. 675, 229 N. W. 2d 172, we held that the statutory standard was constitutionally adequate. The statute says that the Court of Industrial Relations ‘‘shall establish rates of pay and conditions of employment which are comparable to the prevalent wage rates paid and conditions of employment maintained for the same or similar work of workers exhibiting like or similar skills under the same or similar working conditions.” (Emphasis supplied.) It also requires that overall compensation and benefits be considered. It seems apparent to me that as applied to this case the statute requires comparison of the wages of firefighters, not a comparison of the income of persons in all other parts of the economy. Yet if one looks behind the words of the majority opinion to the record upon which it is based, that appears to be what this court would require.
The statement that the ‘‘comparison . . . did not comply with the statutory requirements” is, in my judgment, incorrect and apparently arises from three things, to wit, (1) a misunderstanding of what was being compared in Omaha Assn. of Firefighters v. City of Omaha, supra; (2) a failure to apply the provisions of section 48-818, R. R. S. 1943, which establishes the appropriate standard; and (3) perhaps a misunderstanding of the evidence in the case before us.
In Omaha Assn. of Firefighters v. City of Omaha, supra, the Court of Industrial Relations and we on appeal compared firemen’s wages with firemen’s wages, and everything that was said in that case was premised upon that fact. In the case now before us the majority opinion would require not a comparison of firemen’s wages with firemen’s *184wages under comparable conditions, but holds as a matter of law that such comparison must be adjusted by a factor which compares income of other than firemen in Lincoln with income of other than firemen in the comparable cities. We will demonstrate this in a little more detail later.
The findings of the Court of Industrial Relations in this case was founded upon the City’s evidence, not that presented by the Union. The Court of Industrial Relations simply did not buy the theory of the City’s economist that after the comparison is made there must be a further adjusting factor arrived at by comparing nonfiremen’s income in Lincoln with non-firemen’s income in other cities.
All this is contained in a relatively small portion of the bill of exceptions: Exhibit 27, pages 5 and 6, and pages 138, 139, 140, 141, 142, and 143 of the testimony of Dr. Sherman. Columns one and two (not numbered) of page 6 of exhibit 27 compares firemen’s wages with firemen’s wages in the various comparable cities and shows that a 9 percent increase in Lincoln firemen’s minimum pay is needed for Lincoln firemen to reach the mean or average minimum wage of that in the other cities and that a 5.3 percent increase is needed to reach the maximum (or top of the pay scale) in Lincoln to reach the mean maximum in the comparable cities. This is the figure the Court of Industrial Relations used, disregarding for the moment the 3.3 percent additional increase which the Court of Industrial Relations added because of possible pay increases in other cities occurring after the date. This clearly conforms with the statutory standard for it compares firemen’s salaries with firemen’s salaries.
The remaining four columns (unnumbered) of page 6 of exhibit 27 compares nonfiremen’s income with nonfiremen’s income. This is explained on page 139 of the testimony where Dr. Sherman says: “. . . you have to make everything relative. So, *185therefore, a wage should be relative to the income in the prevailing city.” (Emphasis supplied.) The witness is here comparing nonfiremen’s income, including that of bank presidents, businessmen, professionals such as doctors and lawyers, salesmen, factory workers, government workers including judges, capitalists, and all other segments of society. Of course the statute requires no such thing, but by this means the witness arrives at required increases of 4.4 percent and 1.1 percent. See the appropriate line on columns 3 and 4. How ludicrous this is is highlighted by the fact that it is apparently undisputed that Lincoln offered a 10 percent increase to firefighters. I would suggest that doctors, lawyers, bank presidents, judges, etc., form no part of the market from which the firefighters come.
As already noted, the majority opinion relies upon Omaha Assn. of Firefighters v. City of Omaha, supra, and quotes that case as follows: “ ‘A prevalent wage rate to be determined by the Court of Industrial Relations must almost invariably be determined after consideration of a combination of factors. * * * It must be noted also that in this case the Court of Industrial Relations did not determine the prevalent wage rates for firemen by any direct computation or application of average or mean rates from seven cities, nor from ten cities. Instead, it weighed, compared, and adjusted all the factors involved in each of the cities which resulted in a determination of prevalent wages paid for comparable services in reasonably similar labor markets.’ ” As I read the Omaha case we were there speaking of the statutory standard, i.e., that as applied to that case firefighters’ wages in similar labor markets.
A comparison of the opinion of the Court of Industrial Relations in the case now before us and its opinion in the Omaha firefighters case shows that in each that body did essentially the same thing.
In the Omaha case the seventh syllabus of the *186Court of Industrial Relations opinion was as follows: “Section 48-818 does not fix any single formula or combination of formulas whereby the prevalent wage rate is to be determined. Rather the Court must make the pragmatic adjustments which may be called for by particular circumstances.” In the Omaha case we approved what the Court of Industrial Relations did and its opinion was before us for review. An examination of that opinion shows that the Court of Industrial Relations was establishing a “hypothetical market,” because no actual comparable market existed. In that case the Court of Industrial Relations had before it the testimony and statistics provided by two economists, one Kilgallon for the firefighters, and one Connell for the City of Omaha. In the case before us, just as it did in the Omaha case, the Court of Industrial Relations did not accept in their entirety theories and evidence of either side. Kilgallon’s premises were in part rejected because his figures were bottomed solely on similarity of economic conditions. The Court of Industrial Relations said: “. . . it is clear that his testimony is bottomed on the premise that economic circumstances in the communities compared are irrelevant to wage determinations under Section 48-818. He, therefore, makes no effort to demonstrate any comparability of the communities he utilized with Omaha, other than his demonstration of comparability of firefighting circumstances.” Connell testified that some adjustment for economic circumstances is required. The Court of Industrial Relations pointed out that there were weaknesses in Connell’s testimony also, but said: “The problem raised by Connell’s testimony is one which we have not previously been required to face. The great bulk of our 48-818 determinations have involved public school teachers in the State of Nebraska. None of these cases have required us to depart from Nebraska information in order to make a determina*187tion. The relative homogeneity of the Nebraska economy has largely prevented the type of variables which concern Connell from influencing our teacher pay cases. In addition, we have imposed certain control on the evidence we utilize, which prevent factors other than value of service from influencing our determination. Thus, in the teacher pay cases, we have either utilized the athletic conference to which the school district belongs, ... or, where an appropriate athletic conference was not available, we have required the information upon which we base our wage determination to come from school districts in close geographic proximity to the litigating district and of comparable size to the litigating district, .... [T]his case poses for the first time the question of what controls we will impose upon data submitted in 48-818 cases in which information from the State of Nebraska is either not available or severely limited. . . . What the statute does not tell us is where we are to find ‘the prevalent wage rates.’ . . . We believe that the appropriate standards for selection are implicit in the statutory scheme.
“In an unregulated labor market, labor and management test their relative market power through bargaining. This testing may include resort to the strike or the lockout. However, the Legislature decided that the services provided by employees subject to our jurisdiction were too vital to allow interruption while employer and employees tested the merits of their claims by trial by battle. When discussion is barren, employers and employees in the public sector are routed here. Judicial mandate replaces economic power as the determinate of wages.
“However, the Legislature in providing for a judicial determination of wages did not deprive either management or labor of its market power. Rather, it commanded that we so set wages and conditions of *188employment that employers are required to pay the market price of labor. In other words, we are to set wages at the level on which the parties ultimately would have settled if they were free to exert the range of leverage available in an unregulated labor market.
"The ‘prevalent’ then is to be found in the market where the employer before the Court hires labor and in which the employees before the court offer their services. However, in many instances, and this case is one of them, the only employer of a particular service in a relevant market area is the employer before the court. Because of the statutory limitation on the employees’ right to strike, the wages paid by such an employer cannot be treated as determinative of the prevalent free market wage rate. In such a situation, we must structure a hypothetical market in order to determine wages. ” (Emphasis supplied.)
The court went on to discuss the testimony of the expert witnesses for each side and to point out that the evidence did not show that firemen’s salaries in the cities in the array varied in direct proportion to the amount of manufacture and unionization and that in fact in some instances the opposite was true.
The court then said: "We have already noted that Connell utilized state by state figures in his critique of Kilgallon’s evidence. However, Kilgallon’s evidence involves a comparison of cities. The evidence in this case demonstrates that the presence of higher levels of unionization or higher wages in one state than in another do not directly lead to higher wages for firemen in cities in the higher state over those paid firemen in cities in the lower state. Connell’s testimony indicates that both levels of unionization and wage rates are higher in Ohio than in Minnesota. However, as Table 2 of plaintiff’s Exhibit 2 demonstrates, wages paid to firemen in Minneapolis *189and Saint Paul are higher than those paid to firemen in any of the four arrayed Ohio cities.
“Connell’s testimony demonstrates that a direct determination of wages for Omaha firemen cannot be made from plaintiff’s Exhibit 2, Table 2. Nevertheless, his testimony does not destroy the central point made by that exhibit. Even making due allowance for the variables of unionization and presence of manufacture, nevertheless, Exhibit 2, Table 2, demonstrates that Omaha firemen are entitled to a substantial wage increase.” (Emphasis supplied. )
The Court of Industrial Relations then pointed out that: ‘‘While the Union may have presented us an array which is skewed upward, the City’s array is skewed downward from the appropriate level. . . . The evidence presented by the parties gives us a range within which we may act. Clearly, the evidence presented by the City sets a bottom line. The City’s proposed 8.2% wage increase is too low. Even accepting the City’s theory that a differential with Lincoln should be maintained, at least 9% would be justified. On the other hand, the 12% requested by the Union is too high. It finds its base in an array of cities where wages should be higher than Omaha’s because of economic circumstances not present in Omaha. Thus, somewhere between 9% and 12% lies an appropriate figure at which to find the prevalent. ... In the teacher pay cases, we have traditionally used the mid-point of arrayed data as the basis of decision. ...” (Emphasis supplied.)
The Court of Industrial Relations then went on to compare the salaries of firefighters in the various cities in the array and determined the Omaha firefighters’ percentage of wage increase in the following language: ‘‘The differential which we believe to be justified lies in the range from 9% to 12%. The mid-point of this range is 10.5%. If we utilize the *190City’s 8.2% figure as the bottom line, the mid-point of the range from 8.2% to 12% is still 10.1%. We, therefore, believe that a wage increase of 10.2% over existing Omaha wages represents a conservative judgment as to a wage level comparable to the prevalent.”
It is thus demonstrated that the Court of Industrial Relations in the Omaha case did not use any factoring method such as appears in exhibit 27, pages 5 and 6, and the results of which are shown in the columns on page 6 under the heading ‘‘To Lincoln Minimum Maximum.” Yet that is apparently what the proposed opinion would require in the case before us.
In this case the Court of Industrial Relations did not so elaborately discuss the evidence, but it is clear that it was applying the same standards as it did in the Omaha case. Beginning on page 28 of the transcript, the Court of Industrial Relations’ opinion is in part as follows: ‘‘The second issue for the Court to determine is the appropriate universe to consider in determining prevalent wages and working conditions. As the Court said in Verdigre Education Association v. The School District of Verdigre, at 111-4:
“ ‘* * * The purpose of groupings (e.g. conference, locality, size) is basically to find a representative sample of manageable size within which comparable work, skills and working conditions exist. * * *’
‘‘Before determining what the appropriate groupings are, the Court rejects the Plaintiff’s contention that the grouping be limited to Grand Island, Lincoln, and Omaha for several reasons.
‘‘First, there is no testimony that there is any similarity in working conditions between the firemen in all three cities. In fact, the testimony is quite the opposite. Second, this Court in both Grand Island Firefighters v. City of Grand Island and Omaha Firefighters v. City of Omaha essentially rejected *191the comparability of Lincoln to either of the other cities; and third, and most important, the pay scales of each of the cities have already been set by this Court for Grand Island for 1976 and for Omaha for 1975. The essential standard set in Jj.8-818 relates to prevalent wages for similar work. The underpinning of this concept is the market. If this Court looks to its own decisions as to what are the prevalent wages instead of market, its findings will become essentially circular and the standard will become simply what this Court thinks is fair, as such a standard was never contemplated in 48-818. The standard of pay in the act is what other employees similarly situated as to work and skills received. The Court can receive evidence on this point and apply this evidence to this standard.
“The Court also rejects the contention of the Plaintiff’s that the cost of living is relevant. The fact that the cost of living has either gone up or down does not in any way affect what the firefighters should receive. There is no guarantee that a standard requiring that firefighters receive the prevalent wages for similar work insures that such workers maintain a particular standard of living. In fact, the law is just the opposite. If the market rate for such work being considered increases faster than the cost of living, then the workers are entitled to the market rate; the reciprocal, of course, is just as true.
“This Court recognizes that in labor negotiations that cost of living considerations are always present and probably more so in public employment than in the private sector. However, cost of living considerations will reflect themselves in wage determinations made in contracts of firefighters in the other cities and thus be indirectly considered.’’ (Emphasis supplied.)
The court then went on to discuss similarity of working conditions and then said: “Turning then to *192the salaries on Page 6, the pay raise necessary for Lincoln to reach mean (average) of minimum salaries of the array is 9% and the pay raise necessary to reach the mean (average) of the maximum salaries of the array is 5.3%.”
Thus I think it is demonstrated that the Court of Industrial Relations applied essentially the same methods and standards in the case now before us that it did in the Omaha firefighters case. It determined the market price for similar labor under similar conditions. I do not see how we can say that the statutory standard contained in section 48-818, R. R. S. 1943, requires that the factoring method advocated by Lincoln’s witness in this case must be applied. In both these cases the Court of Industrial Relations simply made a judgment based on a similar hypothetical market and on working conditions and arrived at a prevalent wage. This is all that the statute requires.
It is important to observe that: (a) The Court of Industrial Relations exercises a legislative function and we have said so in no uncertain terms. See Orleans Education Assn. v. School Dist. of Orleans, supra, pages 682, 685, and that despite what the statute says about review de novo in this court we cannot constitutionally review de novo legislative functions. Scott v. State ex rel. Board of Nursing, 196 Neb. 681, 244 N. W. 2d 683.
In any event, de novo review does not mean that we may disregard the provisions of section 48-818, R. R. S. 1943. That statute provides the principle which is applicable to wage determinations. It requires comparison of teachers’ wages with teachers' wages, firefighters’ wages with firefighters’ wages, etc. We can determine only whether the Court of Industrial Relations applied the proper standard and whether there was evidence to support that it did.
I am at a complete loss to understand the significance of the concurring opinion of McCown, J. If *193that opinion means that firefighters’ wages are to be fixed directly in the proportion that the population of Lincoln bears to the population of the other cities in the array, then again such a principle finds no support in the statutory standard. One need not be an economist to know and the evidence here demonstrates that firefighters’ salaries are not scaled in direct proportion to the population of the cities.
I would affirm the order of the Court of Industrial Relations insofar as the basic wage rate increase is concerned. In other respects I concur in the majority opinion.