Employment Law Daily NLRB nixes annual change to healthcare benefits for 40-member unit of UPS subsidiary with 10,000 employees
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Friday, May 27, 2016

NLRB nixes annual change to healthcare benefits for 40-member unit of UPS subsidiary with 10,000 employees

By Dave Strausfeld, J.D. A UPS subsidiary unlawfully refused to bargain when it modified its healthcare insurance plan without first notifying a union representing approximately 40 employees and bargaining over the proposed changes, ruled a divided three-member panel of the NLRB. As a remedy, the employer was ordered to restore the bargaining-unit employees’ previous level of benefits while the parties bargained over the proposed change. Member Miscimarra, concurring in part and dissenting in part, found it unrealistic to expect a company with 10,000 employees to change benefits for only 40 of them, and he also argued that the Stone Container rule for “discrete recurring events” (such as changes to healthcare plans) should apply (UPS Supply Chain Solutions, Inc., May 24, 2016). Didn’t bargain over change with union. Four months after the Teamsters union was certified in April 2013 to represent a bargaining unit of about 40 employees in Miami, Florida, the company announced changes to its nationwide healthcare plan to take effect on January 1, 2014; more specifically, smokers would be charged an additional premium, and health insurance benefits would no longer be offered to employed spouses with alternative health insurance coverage. At a bargaining session shortly after the changes were announced, the newly certified union’s business agent brought up the health insurance benefit changes. Management representatives asked to caucus and then came back with the response that the company was not obligated to bargain over these changes because it had a long history of making annual modifications to its healthcare plan. That is, for at least a decade, the company had annually modified its healthcare plan and implemented the modifications effective on the first of January; therefore, the upcoming changes represented a continuation of the status quo. Objecting to the unilateral change to healthcare benefits, the union filed an unfair labor practice charge. Unilateral change unlawful. The Board, agreeing with an administrative law judge, ruled that the company committed an unfair labor practice when it modified its healthcare plan without first giving the union notice and the opportunity to bargain over the planned changes. Healthcare benefits are considered mandatory subjects of bargaining, and it is an unfair labor practice if an employer implements changes unilaterally. Restoring prior level of benefits. To remedy this violation, the Board ordered the company to rescind its changes to the plan, if the union so requested. After all, the Board explained, rescission is the standard affirmative remedy when an employer makes unilateral changes instead of bargaining over them. Consequently, the Board ordered the company, if the union should so request, to restore the previous health insurance benefits for the members of the bargaining unit and maintain those benefits until either the union agreed to the changes, the parties bargained to a collective-bargaining agreement, or they reached an overall valid impasse. Partial dissent. Member Miscimarra, concurring in part and dissenting in part, found it unreasonable to expect a company with 10,000 employees to rescind benefit changes for approximately 40 of them. Also, in his view, Stone Container Corp., a 1993 Board decision, applied to this case because modifying the healthcare plan was a “discrete recurring event.” Under the Stone Container rule, an employer is not required to refrain from implementing a proposed change even though an overall impasse has not been reached in contract negotiations, where the employer had a past practice involving a recurring “discrete event,” such as an “annually scheduled” change in wages or benefits. In these circumstances, the employer’s only obligation is to provide the union notice and the opportunity for bargaining; the Act does not require the employer to refrain from implementing the change in the meantime. Majority’s response to dissent. Responding to Member Miscimarra’s discussion of Stone Container, the majority decided it need not address the issue because the argument was not properly before the Board, having not been raised before, or considered by, the ALJ. As to the concern that restoring prior benefit levels for a mere 40 employees was unrealistic, the majority went on to note, the company would have an opportunity at the compliance phase of this proceeding to present evidence (not available at the time of the unfair labor practice hearing) to demonstrate that it would be an undue burden to restore the status quo ante.

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