As contract negotiations between the Metropolitan Sewer District and employees continue to drag on at an impasse, James Craig — chairman of their board of directors — tells Insider Louisville he has been asked to recuse himself from the negotiations because other board members think he is “contaminated” by his interaction with union members.

MSD meets in closed session in September after voting to exclude board member from labor contract discussion
MSD meets in closed session in September after voting to exclude board member from labor contract discussion

As Insider Louisville reported at the September MSD board meeting, the board voted to exclude member Lonnie Calvert against his will from their closed session to discuss contract negotiations because they say he is a member of MSD employees’ union, LIUNA, a claim Calvert disputed. We noted that board chair Craig was not present at the beginning of the meeting, which he says was because the board had told him to recuse himself at the previous August board meeting.

Craig says members of the board took issue with him speaking about the contract negotiations with LIUNA members and Calvert, as well as his law firm representing several labor unions, even though LIUNA is not one of them. Craig says he believes it is the prerogative of any board member to speak with any member of the public on issues affecting MSD, but chose not to fight members of the board who felt this “contaminated” his participation in the negotiations by creating the appearance of a conflict of interest.

MSD board chair James Craig
MSD board chair James Craig

“This has been an incredibly frustrating process, and it’s being managed through a negotiating team at MSD,” says Craig. “The board was frustrated and viewed my speaking directly with labor leaders as stepping outside of the negotiating process.”

The MSD contract negotiations have stalled over LIUNA’s request for binding arbitration, in which an impartial mediator — the cost of which is split by the city and the union — settles grievances with a decision that must be followed. This differs from “mediator-advised arbitration” — what most city workers have — where the city-paid mediator makes a ruling that the city is allowed to disregard. At MSD’s September board meeting, Calvert protested the board’s aversion to binding arbitration, saying it is standard practice for city workers in most progressive cities and often used in the private sector as well.

Craig tells Insider Louisville the MSD board has been advised by their legal counsel that binding arbitration is illegal for city workers in Kentucky, and the board voted last year that it would be bad management to allow it. Like Calvert, Craig disagrees with those claims, saying that over the past few decades more city workers around the country have received binding arbitration as a trade of for their inability to go on strike.

“Very early in the process in 2012 I agreed with (the board being against binding arbitration),” says Craig. “But I’ve done a lot of research on this issue, I’ve talked to a lot of people who represent management, I’ve talked to a lot of people who represent labor unions. One of my closest friends of 20 years manages labor contracts for a private company here in the city of Louisville and has a binding arbitration provision in that contract and swears by it.”

Where the matter stands now is that the only two members of the MSD board who aren’t opposed to binding arbitration are now excluded from the contract negotiations. Asked if this makes him pessimistic for a resolution, Craig says, “Negotiations require parties on both sides to give a little. I hope that we will.”

Last week, Insider asked Mayor Greg Fischer — who appoints the MSD executive director and its board members — what was holding up the MSD contract negotiations. He said he hopes both sides give ground, but came out fully against binding arbitration for MSD workers and any city workers.

“We continue to encourage both sides — the board and the union — to come to some final agreement,” says Fischer. “The MSD workers should have the same rights toward arbitration as the rest of the city workers should have. And that’s what we call a mediator-advised arbitration, not binding. And that’s worked out fine for the city, and I think it would work out fine at MSD.”

Fischer says his administration wants a resolution to the dispute, “But I don’t want to tell the board what to do, otherwise the board member would say ‘why do you need us?’ … We’ve been involved with discussions on both sides, trying to bring them to the table to settle it.”

Insider followed up with Mayor Fischer’s office this week to find out why he is opposed to binding arbitration, but his spokesman Chris Poynter declined to elaborate.

David Suetholz — an attorney who works for several unions, including LIUNA — says the MSD board and Fischer have received incorrect information on the legality of binding arbitration for city workers in Kentucky. In fact, Suetholz says some workers at Metro Corrections currently have binding arbitration in their contract from before Fischer came into office, and he listed five other cities in Kentucky where city workers have the same.

“All organized city workers in Covington, Ft. Thomas and Newport have it,” says Suetholz. “And that would basically be the three big units. The formal city workers, the police and firefighters.”

Suetholz says that while Kentucky’s court system has found that “interest” arbitration — where the arbitrator settles binding contracts — for city workers is not permitted, they have repeatedly held up the legality of “grievance” arbitration, where the arbitrator settles disputes that are binding. He also notes MSD is receiving such legal counsel from John Sheller, the same attorney who works for Greater Louisville Inc. and has publicly argued that Metro Government cannot legally increase its minimum wage, contrary to the opinion of Jefferson County Attorney Mike O’Connell.

Told last week about Suetholz’s claim that some city workers have binding arbitration, Fischer told Insider, “You might want to check your source on that. They know that’s not the case.” Wesley Stover — the president of AFSCME Local 2629, which represents some Corrections workers — confirmed to us that some of their workers there do have binding arbitration.

What Suetholz and others in Louisville’s labor movement find especially disturbing is that Mayor Fischer promised them he was in favor of binding arbitration when he ran for office in 2010, which was a key factor in winning the endorsement of a large majority of city unions.

“Most bargaining units of city workers, from AFSCME to firefighters, have all pushed for binding arbitration and had it rejected by Mayor Fischer,” says Suetholz. “Who is this guy? He’s not the same guy who ran for mayor in 2010. Fischer has done a complete 180 on binding arbitration. He was for it when I was an adviser for his campaign that year.”

Leaders of the local LIUNA, AFSCME and Teamsters all confirmed to Insider Louisville that Fischer did make such a promise when vying for their endorsement in the competitive Democratic primary in 2010. As we reported last month, a letter from last year signed by over 20 local unions under the Louisville Central Labor Council of the AFL-CIO chastised Fischer for going back on his 2010 commitment to them on binding arbitration and now opposing it for MSD workers.

Poynter declined to answer our question about whether Fischer told union members in 2010 that he was for binding arbitration.

msd-metropolitan-sewer-district-85559978Suetholz says that LIUNA is pushing especially hard for binding arbitration for several reasons: They were one of the earliest and most prominent backers of Fischer in 2010 and feel betrayed; MSD is often thought of as belonging to the “gray area” of quasi-governmental organizations; and MSD is pushing for the “one water” initiative of joining forces in several respects with Louisville Water Company, whose workers Suetholz says have binding arbitration and are paid more than MSD workers, even though MSD workers have a tougher job.

“There’s no respect for these workers,” says Suetholz. “Its’ sad. They do very hard work for the city. You’re dealing with raw sewage. It’s a thankless and dangerous process they do every day.”

Board chairman Craig had very positive things to say about MSD executive director Greg Heitzman, saying he has done an outstanding job turning the organization around over the past two years after its past scandals and failures. But Craig says MSD still needs to win over its everyday workers, and a contract resolution will go a long ways toward that.

“What has been accomplished in two years is remarkable,” says Craig. “But we have not completed the process of restoring faith with the lower-tiered employees of the organization, and I very much hope that this union negotiation process — getting them into a labor contract that they are satisfied with — would be the first step in getting that accomplished. But we’re not there yet.”

Craig declined to criticize Fischer’s current stance on binding arbitration for MSD, saying, “I’m on the board at the pleasure of the mayor. And I’m a big supporter of his.”

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Joe Sonka
Joe Sonka is a staff writer at Insider Louisville focusing on government, politics, education and public safety. He is a former news editor and staff writer at LEO Weekly and has also freelanced for The Nation and ThinkProgress. He has won first place awards from the Louisville Metro chapter of the Society of Professional Journalists in the categories of Health Reporting, Enterprise Reporting, Government/Politics, Minority/Women’s Affairs Reporting, Continuing Coverage and Best Blog. Email him at [email protected]