City of Inver Grove Heights

The Law Enforcement Labor Services, Inc. Local No. 84 (union) (plaintiff) was the bargaining representative for 26 police officers employed by the City of Inver Grove Heights (city) (defendant). In 2010, the union and the city successfully negotiated all parts of a new collective-bargaining agreement, with two exceptions: (1) wage increases and (2) health insurance plans. Accordingly, consistent with Minnesota law, the commissioner of the Minnesota Bureau of Mediation Services appointed an arbitrator to resolve the two issues. Regarding wage increases, the union claimed that a 1.5 percent increase was appropriate, but the city claimed that no increase was appropriate. Regarding health insurance plans, there were several different plans at issue. The main dispute was over whether the city should continue to pay the entire premium costs of the most expensive plans or whether employees would be required to begin paying for some of the premiums. At the time of the negotiations, the 2008 recession had affected the city’s revenue, but the city would be able to cover the wage increases. Moreover, the Consumer Price Index showed inflationary rises in the cost of living. Additionally, health insurance costs had risen dramatically throughout the country. The rise in costs was driven in part by utilization of health insurance. Where employees were required to pay for part of the premiums, use of the insurance was generally lower.