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SB 288

Arbitration Reform for State Employees Act of 2025

2025 Regular Session Introduced by Cory McCray

Requires neutral arbitration for state employee bargaining, with mandated impasse arbitration and final awards funded by the Governor’s budget.

Hearing 1/22 at 10:30 a.m. (Budget and Taxation)
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Bill Summary · SB 288

SB 288 — Arbitration Reform for State Employees Act of 2025

Status: Hearing 1/22 at 10:30 a.m. (Budget & Taxation). Introduced Jan 10, 2025. Statutory provisions take effect July 1, 2025. The bill also proposes a constitutional amendment (voter ratification required).

Main purpose

To overhaul collective bargaining for State employees by (1) requiring selection of a neutral arbitrator to oversee negotiations in many circumstances, (2) establishing a mandatory arbitration process to resolve impasses, (3) expanding negotiable subjects to explicitly include fringe and health benefits, and (4) requiring the Governor’s annual budget bill to include the appropriations necessary to implement terms of memoranda of understanding (MOUs) or binding arbitration awards (constitutional amendment).

Key provisions

  • Neutral arbitrator selection

    • For each bargaining unit, either party may request a neutral arbitrator on/after July 1 whenever an MOU is negotiated, reopened, or amended.
    • If negotiations remain open by Sept 1, parties must select an arbitrator by Sept 15 from a 15-name list (AAA labor panel) by alternate striking; FMCS list may be used by agreement.
    • Arbitrator must be available for in-person and remote hearings and accept appointment promptly (by Sept 30 or within 15 days of request).

  • Negotiation schedule and information exchange

    • Parties must meet at reasonable times between July 1 and Sept 30 and make a reasonable effort to start near July 1 and conclude negotiations by Sept 30, including exchanging necessary information.

  • Impasse/arbitration procedures

    • If either party declares an impasse on/after Oct 1, each party must submit a “last, best, and final offer” (LBFO) within five business days.
    • The neutral arbitrator first attempts mediation; if unsuccessful, a formal hearing must occur (hearing within 30 days; conclude within 45 days absent agreement).
    • Arbitrator issues a preliminary written award by Dec 5; parties may request limited adjustments within five business days; final written award due by Dec 15.
    • The arbitrator’s final award generally must adopt in its entirety one party’s LBFO. Upon final award, the State, State institutions of higher education, the Maryland Environmental Service (MES), and the Governor must implement and fund the award/MOU.

  • Scope and limits

    • Collective bargaining expressly includes fringe benefits and health benefits in addition to wages/hours/terms.
    • Arbitrator opinions/guidance in negotiation phase are advisory, but the final arbitration award is final and binding as described.
    • Deadlines may be modified for good cause by mutual agreement or by order of the arbitrator.

  • Constitutional amendment

    • Proposes adding a requirement that the Governor include in each budget bill the appropriations necessary to implement all terms of MOUs or binding arbitration awards affecting the State, State higher education institutions, and MES. (Will require voter ratification.)

Fiscal impact (per Department of Legislative Services / fiscal note)

  • State contractual expenditures increase annually for arbitration services — likely at least $100,000 beginning FY 2026, and potentially significantly more.
  • State personnel and other expenditures may be materially affected as early as FY 2028 (because awards/MOUs could require recurring appropriations); the bill may create a mandated appropriation beginning as early as FY 2028.
  • Revenues are not directly affected. The bill could affect MES’s nonbudgeted status (not reflected in FY 2026 budget).
  • Local governments and small businesses: no direct fiscal effect reported.

Who is affected

  • State of Maryland (executive branch budgets)
  • State institutions of higher education (including University System and specified institutions)
  • Maryland Environmental Service (MES)
  • Exclusive representatives (unions) and State employees in covered bargaining units
  • Neutral arbitrators, mediators, and associated arbitration service providers

Procedural/timeline notes

  • Statutory changes effective July 1, 2025.
  • Constitutional amendment component would require placement on the ballot and voter ratification before becoming effective.
  • The bill centralizes and accelerates an arbitration-driven resolution timeline tied to the State’s fiscal-year budget cycle (key dates: July 1 negotiation window; Sept 1/15 arbitrator selection; Oct 1 impasse trigger; Dec 5 preliminary award; Dec 15 final award).

Prepared to assist further with a section-by-section breakdown, comparison with current law, or an analysis of likely budget scenarios if requested.

Compiled from official sources — confirm details with the bill’s official record.

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