Binding Arbitration Reform (Act 111)

The League is a strong advocate for public-safety binding arbitration reform. Act 111 of 1968 is the current state law that allows for binding arbitration when a collective bargaining agreement cannot be reached between a municipality and its police and firefighters. Arbitration is offered in exchange for a prohibition against striking. Act 111, binding arbitration should remain part of the municipal/labor toolkit. However, Act 111 is a 50-year-old law that is outdated and inflexible. In order to encourage sound, fiscal stability, Act 111 needs to include policies which reflect today’s realities.

The reforms outlined below keep collective bargaining intact and will lead to stronger, more fiscally secure municipalities which, in turn, protect present and future public safety jobs and benefits.

Representative Russ Diamond has circulated a co-sponsorship memo (HCO 513) asking for support of his legislation addressing inequities in the binding arbitration process for public safety personnel and their employers. In order to get the bill introduced, Representative Diamond needs more co-sponsors. Currently, there are only two House members that have signed on. 

As you know, binding arbitration is used when there is an impasse in public safety contract negotiations. For over 50 years, Act 111 and its corresponding case law have set the tone for public safety binding arbitration and it has weighed heavily against the employer.   

The significant fiscal impact of Act 111 on municipal budgets, as well as the fact that it has not been updated in 50 years, warrants changes to make Act 111 a more balanced and fair process. Representative Diamond’s bill proposes several modest changes:

  • requires the cost of the third (neutral) arbitrator to be shared equally by both sides, rather than being paid by the employer; 
  • requires the arbitrator to justify the award he or she giving based on the facts and evidence presented;
  • requires the evidentiary hearings to be open to the public;
  • prohibits future pension and post-retirement healthcare benefits from being subjects of collective bargaining;
  • expands the list of arbitrators to choose from and provides an equal chance at being the first side to start the selection process;
  • codifies the appeal process of an award for either side;
  • caps salary increases at 2% of current contract;
  • prohibits retroactive awards; and
  • starts the collective bargaining process earlier and requires a request for arbitration earlier.  

These changes allow Act 111 to remain intact for public safety personnel while making fiscally sound updates to the Law. As the cost of public safety continues to take more and more of the municipal budget, these modest changes will have a positive impact for the employer/taxpayer, as well as the public safety personnel whose jobs Act 111 was put in place to protect.

Fifty years is a long time to hold on to the status quo. Please support Representative Diamond’s efforts to make Act 111 better for all parties, but especially taxpayers. Please ask your House Member to sign on as a co-sponsor.