After a week of significant media attention and almost unprecedented levels of protest at the Ohio Statehouse, the Ohio Senate passed Senate Bill 5 by a one-vote margin – 17 to 16. The Bill will now go to the House of Representatives where it is expected to pass quickly, paving the way for the Governor to sign it into law. A number of significant amendments were made from the Bill as originally proposed, but in its final form, the Bill still makes major changes to the law of collective bargaining in the public sector.
The Major Changes
- S.B. 5 places significant restrictions on the subjects that can be brought to the bargaining table for public employees. Specifically, bargaining will not be permitted about health insurance benefits, employer assistance towards the employee share of pension contributions, privatization of public services, staffing levels, and certain other management rights.
- S.B. 5 prohibits strikes by all public employees. Previously, Ohio collective bargaining law prohibited strikes only by police officers, firefighters, and other specified employees whose jobs have a direct impact on public safety. S.B. 5 makes it illegal for all public employees to strike and imposes extraordinary penalties if public employees do strike. Striking employees can be terminated, and can be subjected to substantial financial penalties.
- S.B. 5 establishes a new procedure for dispute resolution in bargaining. Under existing law, if contract negotiations reach a stalemate, the parties typically first have a hearing before a neutral "fact-finder." The fact-finder issues recommendations for resolving the dispute, but either the union or the employer can reject those recommendations. In the case of police, firefighters, and other specified safety employees who are prohibited from striking, the dispute then goes to a hearing before another neutral person whose decision is binding. The theory is that since those employees do not have the leverage of the threat of a strike, there has to be a neutral person to break the deadlock in the bargaining. S.B. 5 eliminates the binding arbitration step and prohibits all employees from striking. In cases where bargaining reaches a stalemate, the fact-finding proceeding will be followed first. If either party rejects the fact-finder's report, the employer's last best offer and the union's last best offer will be presented to the legislative body (i.e., City Council in the case of a municipality) which will conduct a public hearing and then vote to accept either the last best offer of the union or the last best offer of the employer.
S.B. 5 places in the hands of public employers substantial leverage and control in collective bargaining. Supporters of the Bill say this is necessary to address what they consider to have been a system slanted in favor of unions, which has resulted in over-generous pay and benefits and unreasonable restrictions on employer rights. Opponents of the Bill claim that it places all leverage and control in the hands of the employer and thereby eliminates true collective bargaining. Opponents also claim that the true underlying agenda for supporters of the Bill is to weaken union influence and political power.
Our firm has represented municipal and other government employers in the collective bargaining process under existing law, and we certainly understand the argument that the current system is broken. Whether the dramatic changes in Senate Bill 5 will prove to be a fair and reasonable fix remains to be seen. It will be interesting to observe the ongoing expected opposition and any possible legal challenges to the law on constitutional grounds.