Negotiations for our latest agreement began with some degree of trepidation. Our last negotiations concluded in 1998 with a six-year deal, which at that time was a ground-breaking achievement. As most orchestras now know all too well, the economic climate has changed substantially during the intervening years, especially since 9/11. All the other top orchestras had negotiated since 1998, so we were no longer in the lead financially. The Society was facing a $4 million deficit, and, like many other pension plans around the country, ours was substantially underfunded due to the drop in the stock market. Both our management and music director had changed since 1998, and we had little sense of our new leadership’s negotiating style.
We assembled the strongest and most experienced committee possible. Fiona Simon, Ken Mirkin, Newton Mansfield, and I had all worked on previous contract committees, and Jim Markey proved to be an invaluable new addition. Also on our team were David Lennon, the new president of Local 802; Bruce Simon, a brilliant attorney; and Bill Moriarity, the Local’s former president and AFM official, who temporarily came out of retirement to assist.
We were determined from the start to keep the bargaining as simple, straightforward, and cooperative as possible. After polling the orchestra, we decided to begin with touring conditions. This was a neglected area of our contract, and we felt that we could all work together on it with minimal acrimony in order to get a sense of how things were likely to go later in the process.
Our initial set of proposals was submitted in February of 2004. It was the end of May before we received a response. Despite the delay, we quickly reached a successful conclusion to the touring issues, with improvements in run-out language, per diems, maximum days of touring, and days of break after tours, to give a few examples. This success was encouraging, but due to a busy out-of-town summer schedule we were unable to tackle the more substantive and problematic areas until after our return to New York in September—a mere two weeks before the expiration of our agreement.
As we had anticipated, the pension was the most difficult issue. There was an underfunding of $8 million caused both by the downturn in the market and by a failure of the previous management to make adequate contributions (contrary to the urging of the actuaries). Further, there was a projected shortfall of an additional $10 million during the term of the contract. We were informed in August 2004 that, although the board had approved a transfer of $10 million from the endowment to stabilize the fund, we would need additional contributions of approximately $8 million during the term of the contract simply to maintain current benefit levels. Our professionals, after reviewing the fund, agreed with management’s assessment.
While we did not receive the same volume of draconian proposals faced by our colleagues in Chicago, Philadelphia, and Cleveland, our management and board of directors were adamant in their determination to freeze the pension benefit and to implement a wage freeze in the first year of the contract. As in 1998, they also proposed contributions from the musicians toward health-care costs—this time despite 3% premium reductions in each of the past two years. While it was a relief that we were not facing actual cuts, we were determined that we would not recommend a package without salary and pension benefits that would keep us competitive in the years to come.
Over a period of weeks we had numerous meetings at which the atmosphere was professional but unproductive. More progress was made in off-the-record meetings; then, with a timely strike-authorization vote from the orchestra, we finally began to edge towards an agreement. A deadline for an October tour to Asia also gave us needed leverage to get things moving.
A crucial breakthrough was a creative and innovative idea from Bill Moriarity and Bruce Simon, which we all agreed upon. We proposed not only that any pension increase during this contract (anticipated in the third year) be fully retroactive, but also that whatever increases are negotiated in the next contract be retroactive for everyone retiring during this contract. Barring any unforeseen changes to IRS regulations, the pension plan will be fully stabilized by then, enabling us to focus on negotiating higher benefit levels.
Savings in health-care costs were accomplished through relatively small changes in co-payments and out-of-pocket contributions. We avoided major contributions to our health plan by convincing management to bank those savings toward future increases. We just received the good news that the increase in premiums will be much less than projected, making it virtually certain that enough funds will be banked to avoid any need for musician contributions during this contract.
The impasse over the proposed wage freeze was resolved by dividing the increases into six-month increments. This saved the Society money while still providing modest raises. We also negotiated long-overdue improvements in benefits such as instrument, life, and long-term disability insurance.
The orchestra approved the new agreement nearly unanimously just before our Asian tour. While the final product is far short of what we might have wished for, we feel grateful that in the current climate we were able to hold steady at the forefront of American orchestras. We hope that our moderate success in staving off major cuts will be of assistance to our colleagues around the country, and we were distressed to learn of the current situation in St. Louis. We wish everyone well, and hope that we can all work together for a return to peace and prosperity for the entire arts community.
Dawn Hannay has been a violist in the New York Philharmonic since 1979. She has served on numerous committees for the past 20 years and has led the musicians’ negotiating committees for the past three negotiations.