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TriMet's Labor Contract

In order to restore and maintain financial stability, we must have a sustainable labor agreement with the transit union, ATU Local 757.

TriMet no longer can afford the escalating costs of Cadillac health care benefits for union employees and retirees. We are facing nearly $1 billion in unfunded OPEB (Other Post-Employment Benefits) related to retiree health benefits that are the most generous in the nation. In order to restore financial stability and focus on our core mission of providing transit service, we must bring union benefits more in line with similar transit agencies or other Oregon public employers. On this page are facts, source documents and our perspective on TriMet's efforts to reach a financially sustainable agreement with the Amalgamated Transit Union Local 757.

Latest contract news

March 28, 2014: Mediation confirmation letter from Linda Gregg

February 5, 2014: TriMet requests mediation letter from Randy Stedman

January 31, 2014: TriMet calls on union leadership to negotiate core issues during final two sessions

January 29, 2014: Office of the Secretary of State releases audit results

January 23, 2014: TriMet submits its 3rd counter offer to the ATU

June 7, 2013: ATU ignores TriMet's offer to bargain in July letter from Bruce Hansen

June 4, 2013: TriMet's renewed request to bargain on July 22 from Randy Stedman

TriMet's union (ATU) employees have one of the best benefit packages in the country.

About 83% of our workforce belongs to the ATU. Among transit workers, ATU members receive what is perhaps the most generous total compensation package in the country.

TriMet’s operator wages are 11.5% above average

As of July 2012, a 15-year operator’s direct wages were $60,381 compared to $54,132 for peer transit agencies, or 11.5% higher.

TriMet pays 81.3% more than the average for family medical insurance

For union family medical, dental and vision care, TriMet pays $32,448 compared to $17,895 paid by peer transit agencies, or 81.3% more. TriMet health care coverage is the most generous and expensive in the public transit industry.

Total compensation for operators is 33.1% above average

As of July 2012, a 15-year operator’s total compensation per hour is $48.76 an hour compared to $36.64 for peer transit agencies, or 33.1% higher.

 

Employer Cost of Health Care Benefits

Annual Cost per Employee, 2012 - Single Coverage

 

Annual Cost per Employee, 2012 - Family

* Using 2012 PPO Rates for 90%/10% co-insurance, $150/$450 plan design (includes dental)
** John A. Dash & Associates Average July 2012 (includes dental)
*** Kaiser Health Foundation Employer Health Benefits 2012 Annual Survey (does not include dental)

 

The 2012 arbitration contract award provided TriMet a small amount of relief from unsustainable increases in active and retiree benefits. However, the ATU has filed Unfair Labor Practice charges challenging the binding arbitration award. Even after implementing a new benefit plan design, ATU employees make no contribution to premiums, have low co-pays and deductibles, and a very generous out-of-pocket maximum. As a result, health care benefits for a union employee at TriMet cost the agency $29,259 per year on average, versus $16,917 for comparable transit agencies.

It is not sustainable to continue providing health care benefits for union employees and retirees at their current levels.

Like families and businesses everywhere, TriMet has had to cut costs and find ways to do more with less, due to the worst economic slump since the Great Depression.

In addition to reducing costs by $80 million between 2001 and 2011 through various internal efficiencies, we have cut 200 staff positions, used stimulus money, and delayed new bus purchases and other investments, in order to weather budget shortfalls caused by the last two recessions.

Generally, we believe employee morale is better if union and non-union benefits packages are substantially the same. Nonetheless, our non-union employees (which include management) had their salaries frozen for 3.5 years. Non-union employees make 6% contributions to health care premiums and pay more out-of-pocket than to union employees. Non-union retirement benefits have been trimmed substantially for new hires.

More important, our riders are feeling the pain: In recent years, they have seen fare increases, the elimination of free rides downtown and reduced bus and rail service, which means longer wait times, crowded vehicles and inconvenient transfers for some riders.

The cost of active and retiree health benefits now represents 29% of our incoming revenue from payroll taxes (our primary source of funding). Costs increased 12% per year between 2001 and 2011. For 2013, rates are going up approximately 9.25% for the union PPO plan. If these trends continue, health benefits will equal about half of our underlying payroll tax revenue by 2020. This is not sustainable, and TriMet and the ATU have a responsibility to bring these costs under control.

In the short term, the bottom line is simple: We must find ways to change our cost structure and/or raise revenue. In order to bring balance to our budget and maintain our financial stability, everything must be on the table—including union employee wages and benefits.

Retiree Health Care Costs

Active and Retiree Medical Expense as a % of Underlying Payroll Tax Revenues:
Status Quo Trend Post-Arbitration

 

Cost of Union Medical/Dental Benefits

Weighted Annual Average PPO Plan, 2013 Rates

This graph assumes that Public Employees Benefit Board (PEBB) PPO rates would apply to TriMet's union employees
* TriMet's 2013 PPO Rates 90%/10% co-insurance, $150/$450 deductible plan design, 0% premium contribution by employees
** Mercer - TriMet 2014 Plan Options - Regence less 10% to determine 2013 Rates, 6% premium contribution by employees
*** TriMet's 2013 non-union PPO Rates 80%/20% co-insurance, $300/$900 deductible plan design
**** Public Employees Benefit Board (PEBB) 2013 Rates applied to TriMet

 

Union leadership refuses to acknowledge the binding arbitration award and has filed challenges to it.

In July 2012, Arbitrator David Gaba issued a binding arbitration decision awarding TriMet its contract proposal retroactive to December 1, 2009. 

The award included a health care plan design change that reduced costs modestly and a defined contribution plan that replaced the traditional pension plan for new union hires. The defined contribution plan has the same elements as the non-union defined contribution plan. 

TriMet implemented most elements of the arbitration award immediately. However, in August, the ATU filed a nine-count Unfair Labor Practice (ULP) charge challenging virtually every aspect of the arbitrator’s binding award except, of course, the 3 percent retroactive wage increase. Because of this uncertainty, we implemented the health care plan effective September 1 forward; we did not implement the plan retroactively to December 1, 2009, as we had a right to do. TriMet has informally responded to the charges, and a hearing is scheduled for January 8, 2013.

In September 2012, we filed an Unfair Labor Practice charge against the ATU for obstructing implementation of the binding arbitration award and for its bad faith bargaining behavior, seeking $6.8 million from the ATU to make the agency whole. The ATU informally responded to the charges. Thereafter, we requested mediation in an effort to settle all outstanding contract issues between the parties before the contract expires on November 30, 2012. TriMet offered to settle by forgoing the entire $6.8 million owed for the retroactive implementation of the benefits plan and withdrawing its ULP charge against the ATU, in exchange for the ATU withdrawing its ULP charge and agreeing to treat as settled another outstanding ULP, UP-030-10. The mediation failed. A hearing is scheduled before the Oregon Employment Relations Board in January 2013.

Since the arbitration award, the ATU has elected new leadership, and we remain hopeful that this change will result in good faith contract bargaining to address the difficult and complex issues that face us.

While we are optimistic, in recent days, the ATU has stubbornly demanded that our negotiations be conducted under the Public Meetings Law. The Public Meetings Law does not apply to our labor negotiations, unless conducted by TriMet’s Board. The Oregon Attorney General’s Public Records and Meetings Manual (2011) states that "Labor negotiations take place only between employee representatives, such as labor organizations, and employers. Normally, designated representatives of both parties meet at the bargaining table, in which circumstance, the meeting is not being held by the governing body, and the Public Meetings Law does not apply."

TriMet is committed to transparency and, as a part of negotiated ground rules, desires to invite members of the press to attend, even though all previous negotiations with past contracts have been closed sessions. TriMet has communicated to the ATU the agency’s desire for transparency in the negotiations, including posting proposals, exhibits and other documents on the agency internal and external website. Nonetheless, the parties have difficult and complex issues to negotiate. Indeed, TriMet’s future hangs in the balance. In order to achieve a sustainable business model and labor contract reform, negotiations deserve both transparency and an orderly negotiating atmosphere. So, while are hopeful negotiations can proceed in good faith focused on substantive matters, we are also mindful that the ATU has sought from members a substantial dues increase, telling them "we must have a war chest" in order to "launch a public relations campaign." We hope the ATU does not revert back to its style during the last contract negotiations, in which the ATU refused to engage in any face-to-face bargaining, except for two fruitless sessions.