Good Advice for BWD Board Members

What follows is an analysis of the BWD General Manager’s Employment Agreement proposed by BWD General Manager (GM) Richard Williamson done by a retired labor analyst.

The following areas will create significant liability for the District if they are accepted by the Board of Directors:

1.      The contract can not be terminated without triggering severance.  As the District’s Counsel pointed out, there is no termination to the agreement.  If the District seeks to terminate the agreement or simply fails to renew it, the severance provisions are triggered.  That means the GM is the only one who can terminate the contract without triggering severance.  This provision reverses the roles of the parties in a normal business model.  Usually, the employer offers the contract to the employee and controls how and when the agreement will terminate.  Here, the employee controls how and when the contract will end.

2.      There are no provisions for terminating the GM for cause.  As BWD’s Counsel pointed out, the contract lacks power for the Board to remove the GM for any reason.  The normal business model provides for removal for “just cause” which includes a broad spectrum of misconduct routinely reviewed in arbitration.  For example, sexual misconduct, slander, drug and alcohol issues, incompetence, excessive tardiness would be defensible causes for termination under “just cause”.  The same standards of conduct should apply to the GM as are applied to other employees of the District so the policies are consistent.  It may also be illegal to offer different contracts to different classifications of employees; e.g., the District may be required to offer the same contract to all contractual employees.  Clearly, once BWD offers the GM a favorable contract, others will seek the same.

3.      The benefits of the severance provisions are excessive putting the District at a significant disadvantage.  Public employees often do not receive severance and if they do, 3 to 6 months is more traditional.  It would cost the District more than $230,000 in salary severance alone if it failed to renew or terminated the agreement.

4.      As to the other benefit provisions of the contract, the District is being asked to “guarantee” benefit levels for as long as the GM remains employed.  The traditional business model provides the Employer with the ability to adjust employee benefits at its discretion, setting a ceiling for benefits, not a floor.  Binding the District to these levels without the flexibility to change or reduce them harms the District.  For example, the District’s current pension provider is forecast to significantly raise pension contribution rates beginning in 2011 to cover lost investments.  The District may find it can’t afford that level and want to reduce the pension benefits.  Under current law, all employees must receive the same level of benefit, so the agreement with the GM would bind the District for all employees.  The District would be similarly hamstrung if it wanted to alter the kind of pension benefit offered to a different style benefit. Because of the terms of the GM’s contract, it would be unable to do so without his specific agreement.  Additionally, there is no provision for changing his benefits if his duties change, are reduced or increased. 

5.      The general language of the entire agreement is written to the advantage of the employee, not the Employer.  Normally, the Employer drafts the terms of the contract, including provisions that insure its right to manage, oversee and direct the employee.  Here the employee has drafted the contract in such a manner that he now controls the management and direction of his employment. Many of the provisions are open ended leaving the employee in control without any obligation to account for his actions to the Employer.   For example, the GM seeks an unlimited allowance for business expenses without an obligation to document that they are legitimate work related expenses.  He also seeks to make permanent his current work schedule of 3 days in Borrego and 2 days in Tucson in as much as there is no date certain when he would commence a 5 day work week in Borrego.  Further, he seeks compensatory time off, taken at his discretion, for extra hours worked without an accounting to the Employer.  Finally, he seeks vacation and sick leave benefits for the 16 years he worked for other employers.  The Agreement should be rewritten to insure the Employer’s right to manage, oversee and direct the employee and the employee’s obligation to be accountable to the Employer.

6.      The closed session termination provisions appear overly broad and contrary to law since the Brown act requires that certain aspects of an employee’s termination be noticed in public.  Counsel’s legal analysis of the termination provisions vis a vis the Brown Act should be obtained before going forward. 

While there are other provisions that adversely affect the District’s control of its employee, these are the major issues which disadvantage the District.