The City Council is being asked to approve a settlement agreement negotiated with the Montana Public Employees Association (MPEA), Billings Police Unit (the Association) before the agreement is presented to individual officers to sign voluntarily.  This item originally was considered by the Council at its January 11, 2010, meeting, but was postponed at the staff's request to allow additional review of the agreement by the Association.

The agreement would be a full and final release of all pay claims for each officer who signs it, and the Association would agree not to pursue any grievance or claim in any forum against the City for any pay issue that occurred prior to the signing of the agreement.  In exchange, officers would receive back pay, overtime, longevity, holiday and other types of pay as calculated under the Fair Labor Standards Act (FLSA) for a period from January 1, 2007, through June 30, 2009.  The City also would waive its right to recover back longevity pay from those who sign the agreement.  The City may have overpaid longevity beginning July 1, 2003, under contract terms that were revised at that time and in effect until a new contract was approved effective July 1, 2009. 

The City Council may:

• Approve the settlement agreement;
• Modify the settlement agreement; or
• Not approve the settlement agreement, likely leading to additional arbitration or litigation with the Association and/or its members.   However, the City believes that interpretation of the longevity language may lead to recovery of back longevity pay of about $1.2 million from current and former police officers.

The cost of the back pay under FLSA would be approximately $123,000.  The estimated value of the back longevity pay that the City would waive is estimated at $1.2 million.

The City believes that the interpretation of longevity language set out in two previous collective bargaining agreements (July 1, 2003-June 30, 2006 and July 1, 2006-June 30, 2009) between the City and the Association leads to the conclusion that the City overpaid longevity during the terms of those contracts.  In the alternative,  longevity was paid correctly.  However, 27 current and former members of the Association have filed suit in District Court to recover what they claim is underpayment of the longevity prior to July 1, 2009. 

During negotiations on the contract that went into effect July 1, 2009, questions were raised regarding long-time methods of calculating back pay, overtime, holiday and other types of pay.  The Association and City sought technical assistance from outside authorities, including the U.S. Department of Labor, to aid in clarifying the proper payment methods.  Corrections to both the longevity pay and the other pays were made effective with the July 1, 2009, contract.  The Association is satisfied that the calculation of pay has been accurate since that date. 

To resolve all these issues, the attached settlement agreement has been negotiated by City staff and the Association's leadership.  If it is approved by the Council, each officer will be given the opportunity to voluntarily sign the agreement as a full and final release of all claims of any nature relating to pay.  In exchange, each officer who signs would be given his or her appropriate amount of back pay for from January 1, 2007, through June 30, 2009, and, in return, the City would waive its right to seek back longevity pay from that officer under the two previous contracts (July 1, 2003, through June 30, 2009).  Costs of the settlement would come from the Police Department's personnel funds; the department has held open a Deputy Chief's position for 2009, as it has for several years.  Any dispute regarding the terms of the agreement would be resolved through the grievance and arbitration procedures set out in the current collective bargaining agreement. 

The Association negotiated the terms of the settlement.  If it is approved by the Council, participation will be up to individual members.