Labor Board: Unions Waived Right to Bargain Over Changes to Retiree Medical Benefits
The National Labor Relations Board (NLRB) has held that an employer did not violate the National Labor Relations Act (NLRA) when it unilaterally changed retirees’ medical benefits without first negotiating with the unions that represented its employees. E.I. Du Pont De Nemours and Co., 368 NLRB No. 48 (Sept. 4, 2019).
The NLRB found the unions waived their right to bargain over those changes. Chairman John Ring and Member Marvin Kaplan were in the majority, while Member Lauren McFerran dissented.
E.I. Du Pont De Nemours and Company manufactures synthetic fibers and related products at facilities throughout the United States. DuPont maintained company-wide employee benefit plans for all its employees and retirees. Although DuPont informed the unions it would negotiate separate plans for union-represented employees, the unions consistently agreed to participate in the company-wide plans.
DuPont’s company-wide benefit plans contained “reservation-of-rights” provisions, which allowed the company to retain the right to suspend, modify, or terminate the benefit plan at its discretion. The unions accepted DuPont’s plans with the reservation-of-right provisions. The collective bargaining agreements (CBAs) with each union also contained similar reservation-of-rights provisions, which recognized DuPont’s right to make unilateral changes to the benefit plans, subject to certain restrictions in the CBAs and the benefit plan documents.
In 2013, DuPont made unilateral changes to its company-wide Dental Assistance Program and Medical Care Assistance Program retirement benefit plans that affected coverage for some of DuPont’s retirees and their covered dependents. One of the conditions on which the company had offered, and the unions had accepted, the unit employees’ participation in dental and medical care assistance programs was that DuPont reserved the right to make changes to the plans or to terminate the programs entirely. Exercising that right, DuPont had made numerous unilateral changes to the programs, without objection by the unions. This time, however, the unions objected and filed unfair labor practice charges with the NLRB alleging the changes were unlawful. DuPont defended against the charges, arguing that the union had “clearly and unmistakably” waived its right to bargain over the changes. An unfair labor practice complaint was issued and sent to trial before an NLRB Administrative Law Judge (ALJ).
Administrative Law Judge Decision
After a trial, ALJ Michael A. Rosas held the unions did not clearly and unmistakably waive their bargaining rights because nothing in the CBAs shows they gave up their rights to bargain over benefit changes. He also noted that the CBAs did not reference the plans.
The Board found that, while retiree healthcare benefits for active bargaining-unit employees is a mandatory subject of bargaining under the NLRA, the unions waived their right to bargain over these changes. Contrary to the ALJ, the Board found the contract language and the parties’ bargaining history and past practice, taken together, demonstrated the unions clearly and unmistakably waived their right to bargain over the changes.
Regarding contract language, the Board found that contractual references to a benefit plan that contains reservation-of-rights language, like those here, can support a finding of waiver, even if the reference would be insufficient, standing alone, to establish waiver.
The Board also found that bargaining history supported a finding that the unions waived their right to bargain over the changes. The unions had agreed to participate in the various plans without bargaining after opposing the plans during collective bargaining and, therefore, “consciously yielded” its position that bargaining should occur. Finally, past practice — numerous unilateral changes made to the old plans without bargaining and without objection from the unions — supported the waiver finding.
Based on these factors, the Board found that the unions had clearly and unmistakably waived their right to bargain over the changes. Accordingly, the Board dismissed the unfair labor practice charges.
Since this case was decided, in MV Transportation, Inc., 368 NLRB No. 66 (Sept. 10, 2019), the NLRB adopted a new contract coverage standard as the primary standard for determining whether an employer had an obligation to bargain before implementing a change (see our article, Labor Board Adopts ‘Contract Coverage’ Standard in Unilateral Change Cases, Overturns Precedent). Nevertheless, if appropriate, employers should still argue that an obligation to bargain over a change did not exist because the union clearly and unmistakably waived its right to bargain over the change. Under MV Transportation, the clear and unmistakable waiver test applies if the Board does not find the unilateral changes are allowed under its new contract coverage standard.