BEWARE THE RETROACTIVE CONTRACT CLAUSE
It does not happen often, but every few years we hear about an interest arbitrator or fact-finder imposing a contract clause that has retroactive effect. For example, suppose the parties went to the FSIP in 2007 and had imposed on them a contract clause that required the agency to fund the incentive awards pool for bargaining unit employees at the same percentage of total salary level it funds the pool for non-unit employees. Then, when the contract reopened into 2011 the union proposed that the awards funding formula be adjusted retroactively to sweeten the amount of money that should have been distributed for the last two years of the 2007-11 contract? If the 2011 negotiations go to impasse could the Panel or a private arbitrator acting in its place order the union’s proposal that effectively requires the agency to send out back pay checks to unit employees covering the last two award years? We doubt it and here’s why. Continue reading