Labor & Employment Law

D.C. Circuit Issues Major Decision Holding Health Benefits For Future Retirees Is A Mandatory Subject

D.C. Circuit Issues Major Decision Holding Health Benefits For Future Retirees Is A Mandatory Subject
Source: Adjunct Law Prof Blog; http://lawprofessors.typepad.com/adjunctprofs/
Reproduced with permission. Copyright © 2008, Mitchell H. Rubinstein, Esq., Adjunct Professor of Law, St. Johns Law School and New York Law School, All rights reserved.

As we all know, the cost of health insurance is sky rocking. It is therefore, not surprising that some employers will attempt to make unilateral changes. If a company is unionized, however, as Southern Nuclear Operating Co. v. NLRB ___F.3d___ (D.C. Cir. May 6, 2008), demonstrates, they cannot do so without first bargaining in good faith with the union to impasse.

In this case the employer made unilateral changes to FUTURE retiree health-care and life insurance benefits [emphasis supplied].

The employer claimed that retirees were not employees and therefore, it had no duty to bargain. The D.C. Circuit had little trouble in rejecting that argument reasoning that future retirees are all current employees and therefore, the unilateral change was a unfair labor practice [emphasis supplied].

The court also rejected the employer's public policy argument that if the court did not rule in the company's favor, employers would have to wait until the employees actually retired to make the unilateral change.

As the court stated:

The Companies suggest that our decision will create a perverse incentive for employers to spring unilateral changes on workers only after they retire, thereby avoiding Pittsburgh Plate Glass?s prohibition on unilateral changes to the retirement benefits of future retirees. We are without authority to consider this policy argument, which should be directed to Congress or the Board, not to us.

There was other important aspects to this decision concerning the waiver of bargaining rights which space does not permit me to discuss. This case also is an excellent primer on basic NLRB duty to bargain jurisprudence.

Mitchell H. Rubinstein

Full post as published by New York Public Personnel Law on May 07, 2008 (boomark / email).