12 CIR 59 (1994)


LODGE NO. 21, |
Petitioner, |
A Municipal Corporation, |
Respondent. |


For the Petitioner: Bruce G. Mason

1505 So. 108th St.

Omaha, Nebraska 68144

For the Respondent: Mark A. Klinker

8515 Park Drive

Omaha, Nebraska 68127

Before: Judges Flowers, Kratz and Orr



On August 26, 1993, Fraternal Order of Police Lodge No. 21 ("FOP") filed a Petition alleging that the City of Ralston ("City") failed or refused to bargain in good faith when it unilaterally selected a new health insurance provider, whose coverage was to take effect September 1, 1993. FOP requested a temporary injunction barring the City from implementing any insurance changes in benefits or costs, and further requested that a bargaining order be entered requiring the City to bargain in good faith with regard to the insurance coverage, carrier and costs to the FOP members.

On August 30, 1993, FOP filed an Application for Temporary Restraining Order or Temporary Injunction requesting that the Commission enjoin the City from switching insurance carriers until after the trial in this case. A hearing was held on FOP's application on August 31, 1993. The Commission denied the application based upon its belief that no irreparable harm to the members of FOP would occur were the change in insurance carrier to take place.


FOP and the City of Ralston entered into a collective bargaining agreement effective August 1, 1991 through January 31, 1994. The agreement of the parties concerning health insurance is set out in Article XXII of the collective bargaining agreement. Section 22.2 of Article XXII provides that "[i]n the event it becomes necessary to change insurance carriers or level of benefits, the City and the F.O.P. shall meet and discuss alternative ways the City can maintain the level of benefits fundamentally equal to what is currently in effect."

At the time the Petition was filed, Blue Cross Blue Shield ("BCBS") was the provider of health insurance for the members of FOP. The BCBS contract with the City was effective through August 31, 1993. BCBS notified the City in May or June of 1993 that a rate increase would occur effective September 1, 1993. The parties' collective bargaining agreement provides that the City shall pay 100 percent of the health insurance premiums for the members of FOP and their families. Consequently, the City hired COMReP, Inc., to assist it in developing and analyzing its options. In early July, the City held a meeting to address the insurance issue. By letter dated July 2, 1993, the Mayor of Ralston invited the members of FOP to attend this meeting. The letter states as follows:

The City of Ralston is investigating possible changes to the insurance benefits currently offered to employees. As you are aware, the cost of premiums is extremely high, and we have been notified to expect around a 20% increase for the coming year. Some of the options available are to change health insurance carriers and/or change the plan structure.

We are scheduling a meeting with the insurance people for Wednesday, July 7th, at 1:00 P.M. at City Hall, and invite the FOP to attend this informal meeting to see what is available.

The meeting was held as scheduled, at which time the health insurance plans of Share, Standard, PPO, HMO and BCBS were compared. Barbara Murray, an employee of COMReP, compared the benefits received under BCBS and Share to those attending the meeting. Members of the FOP attending the meeting included Robert Osterman, President of the FOP, Al Girsch, Mike Retzlaff, Dave Bell and Rosemary Frank. Others who attended were City Council members Jerry Kraus and Bob Taylor, Mary Bach-Ingels, Police Chief Bill White and City Clerk/Treasurer Alice Morrison.

Those in attendance were encourage to ask any questions they had and were invited to contact Barbara Murray directly if questions came up after the meeting. The FOP participated in this meeting and made further contact with Ms. Murray following the meeting.

On July 27, 1993 at 5:00 p.m., the City Council held a special session. Around July 24, 1993, Morrison posted a notice of this meeting at City Hall, the Ralston Police Department and the Ralston Recorder. The notice indicates the meeting was to start at 5:00 p.m. and identifies health and dental insurance as one of two items on the agenda. Retzlaff was unable to attend because he was working that evening. Osterman did not attend the meeting because he was under the mistaken belief that the meeting was to begin at 7:00 p.m. When he arrived at City Hall at that time, the meeting was finished.

The City selected Share/United Health & Life ("Share") as the new provider of health insurance for City of Ralston employees. Both BCBS and Share have a list of doctors and hospitals that insureds may use to receive preferred benefits/coverage. If an insured chooses to go to a doctor not on this list, then he receives the standard benefits, which is a lower level of coverage. The chief complaint among members of the FOP is that Share's list of doctors and hospitals under which one can receive preferred benefits is much smaller than under BCBS. Robert Osterman testified that none of his wife's or child's doctors are on Share's preferred provider list. To keep his current doctors, he would receive reduced insurance benefits under Share and thus incur higher out of pocket costs. For example, BCBS pays 80% of the cost of the specialists for Osterman's child; Share would pay 60% of this cost. For prescriptions, under BCBS's preferred benefits Osterman pays the first $5.00; under Share's standard benefits, Osterman would be required to pay 20%. FOP members Rosemary Franks, Mark Leonardo and Mike Retzlaff are similarly affected by the change from BCBS to Share in that their doctors are not on Share's preferred provider list.

A final meeting was held on August 5, 1993 at which time employees received insurance packets with registration cards to enroll in the Share health insurance plan. Members of the FOP were notified of the meeting via a memo placed in their mail box at the Ralston City Police Department. FOP members in attendance included Retzlaff, Rosemary Franks, Davis Abel and John Gross. Osterman and several others did not attend because the notification occurred during their normally scheduled days off and when they returned to work, the meeting had already taken place.

While the City was dealing with the health insurance problem, negotiating sessions began between the City and FOP for the purpose of entering into a new contract to be effective February 1, 1994 after the current contract expired. The change in insurance during the existing contract term was not a subject of negotiation during these sessions. Osterman testified that the City did not offer to bargain with FOP over this issue. Retzlaff testified that FOP did not make a formal request to bargain with the City. He testified that at the July 13th negotiating session, he "may have stated something like I think you need to bargain for that" but did not otherwise follow it up either with the FOP or the City.

Very little information was made available to the Commission on the bargaining history behind Section 22.2 of Article XXII. Retzlaff, who was a member of the bargaining team when the parties' current contract was negotiated, testified that Section 22.2 was contained in prior contracts between the parties. When the current contract was negotiated, the City wanted to change language which required that if a change in insurance became necessary the City and the FOP would meet and discuss alternative ways to maintain benefits equal to those in effect. The City proposed language that might have resulted in a diminution of benefits. The parties compromised and agreed to add the word "fundamentally" between "benefits" and "equal". Retzlaff further testified that under the former language, the City was required to "meet and discuss" with FOP if the City wanted to implement a better health insurance policy (because it was better than "equal" instead of "equal") and this made no sense to FOP.

FOP's witnesses offered differing views on the requirement of "meet and discuss." Retzlaff testified that he thought there would be no need for the City and FOP to meet and discuss a change in the level of benefits if the change resulted in an increase of benefits. Osterman testified that he thought the parties should meet and discuss any change in the level of benefits, even if the benefits increased. Gary Troutman, FOP's expert witness, testified that "shall meet" means the parties must sit down and discuss the issue, but they don't have to reach an agreement. Troutman stated that "meet and discuss" is sometimes, but not always, synonymous with "bargain." If the contract is "open" (no collective bargaining agreement has been reached), then "meet and discuss" means "bargain." If the issue is an economic one, which would affect a working condition, then "meet and discuss" means "bargain." Troutman defined "good faith" as coming to the bargaining table without a preconceived idea, but with an open mind.

There was also differing testimony regarding previous benefit changes by BCBS. Retzlaff testified that BCBS has been the provider of health insurance for the City of Ralston for the past 10 years. The only change he could recall occurred within the last three years when BCBS provided the insureds with a $5.00 prescription card. He viewed this change as an increase in benefits. Morrison stated that, although benefit changes were not common with BCBS, another change occurred in 1991 when BCBS changed from a conventional policy to a PPO. Morrison also stated that any time BCBS made a change in its benefits, an employee meeting was held to notify and inform the employees. No employee meeting is held when BCBS increases its rates, which normally occurs on an annual basis.


The first issue for consideration is whether the Commission has jurisdiction over the parties' dispute. If the change in health insurance is "contained in" the parties' collective bargaining agreement ("contract"), then the dispute is a breach of contract issue and the Commission lacks jurisdiction. If this is not a breach of contract dispute, then the next issue is whether the City has a duty to bargain over the change in health insurance, including whether FOP waived any duty that might exist. If FOP did not waive its right to bargaining, the final issue for consideration is whether the City failed to bargain in good faith.

If the contract "fully defines" or "fixes" the parties' rights regarding the change in health insurance, then that change is "contained in" the contract. If it is contained in the contract, then the parties fulfilled their bargaining obligations at the time the contract was entered into and the result of that bargaining is set out in their contract and cannot be changed without an agreement of the parties to change it. "When parties bargain about a subject and memorialize the results of their negotiation in a collective bargaining agreement, they create a set of enforceable rules -- a new code of conduct for themselves -- on that subject. Because of the fundamental policy of freedom of contract, the parties are generally free to agree to whatever specific rules they like. . . ." Department of the Navy v. FLRA, 962 F.2d 48, 57 (D.C. Cir. 1992).

In United Mine Workers, Dist. 31 v. NLRB, 879 F.2d 939 (D.C. Cir. 1989), the court of appeals affirmed an NLRB finding that a dispute over subleasing a coal mine was fully defined in the parties' contract. The relevant portions of the contract state as follows:

(1) The Employers agree that they will not lease, sublease or license out any coal lands, coal producing or coal preparation facilities where the purpose thereof is to avoid the application of this Agreement or any section, paragraph or clause thereof.

Licensing out of coal mining operations . . . or sublease by any signatory operator hereto shall not be permitted unless the licensing out does not cause or result in the layoff of Employees of the Employer.

(2) . . . Employer agrees that it will not lease, sublease, or license out coal mining operations . . . covered by this Agreement, unless the conditions set forth in the following paragraph are satisfied:

Leasing, subleasing or licensing out of coal mining operations covered by this Agreement shall be permitted where the lessee-licensee agrees that all offers of employment . . . shall first be made . . . to the Employer's classified and laid-off Employees. . . .

Id. at 943 (emphasis in original).

The above language relieved the employer of the duty to bargain further on the subject of subcontracting, including the terms and manner on which subcontracting could be done. The contract fully defined the circumstances under which subcontracting was permitted.

Another example of contract language that fully defines or fixes the parties' rights is set out in Local Union No. 47, IBEW v. NLRB, 927 F.2d 635 (D. C. Cir. 1991). The issue was whether the employer committed an unfair labor practice when it refused to bargain over the retroactivity of a wage increase during midcontract wage reopener negotiations. The relevant part of the parties' contract provides:

D. Either party, by a notice in writing sixty (60) days prior to December 31, 1985, may reopen Article XII, Wages, only for the purpose of negotiating general across-the-board changes in the basic straight time rate of pay for the job classifications set forth in Exhibit A. Agreement reached as a result of such reopening shall become effective as of January 1, 1986, providing such retroactivity does not exceed sixty (60) days.

Id. at 637 (emphasis in original).

The appeals court concluded that the parties fully exercised their right to bargain over the retroactivity period when they agreed to Section D and thus, the employer had no duty to bargain over this issue. "If the parties have agreed to a contractual provision that limits their rights with regard to a term or condition of employment, we will give full effect to the plain meaning of such provision." Id. at 641.

Unlike the above two examples, the contract between FOP and the City of Ralston is less clear. It states, in relevant part, that "[i]n the event it becomes necessary to change insurance carriers or level of benefits, the City and the F.O.P. shall meet and discuss alternative ways the City can maintain the level of benefits fundamentally equal to what is currently in effect." What does "necessary" mean? Does "meet and discuss" mean "negotiate" or "bargain"? What happens if the parties meet and talk about the issue, but don't reach an agreement? Was this language intended to usurp the parties' bargaining rights or to supplement those rights? It is difficult to conclude that the parties fully exercised their bargaining rights at the time this language was placed into their contract. The evidence before the Commission does not support a finding that a change in health insurance is "contained in" the parties' contract.

Since the Commission has concluded that this dispute is not a breach of contract issue, we have jurisdiction over the dispute.

The next issue is whether the City had a duty to bargain over the change in health insurance. Health insurance is clearly a mandatory topic of bargaining, and as such, an employer has a duty to bargain with the union over changes in mandatory topics of bargaining. This duty continues even though the parties have a labor contract since the term or condition sought to be changed is not "contained in" that contract. "The duty to bargain continues during the existence of a bargaining agreement concerning any mandatory subject of bargaining which has not been specifically covered in the contract and regarding which the union has not clearly and unmistakably waived its right to bargain." Rockwell Int'l Corp., 260 NLRB 1346, 1347, 109 LRRM 1366, 1367 (1982).

As stated above, a duty to bargain can be waived by a union. The burden of proving whether FOP waived its right to bargaining is upon the City. "[T]he well-settled rule [is] that the burden is on the party asserting waiver. . . ." Pertec Computer Corp., 284 NLRB810, 810 n.2, 126 LRRM 1134, 1135 n.2 (1987). See also United Automobile Workers Local 449 v. NLRB, 802 F.2d 969 (7th Cir. 1986). The NLRB standard of proving waiver of a statutorily protected right, such as a right to bargaining, is "clear and unmistakable." Metropolitan Edison Co. v. NLRB, 460 U.S. 693 (1983). The Commission adopted this standard in Bullis v. School District of Columbus, 4 CIR 27 (1979). Thus, the City must prove that FOP "clearly and unmistakably" waived its right to bargain the change in health insurance.

Based upon the testimony in the case at bar, it appears some FOP members are under the impression that when an employer wants to change a mandatory bargaining subject, it must make a request to bargain with the union. The employer, however, is under no such obligation. Once a union has notice of a proposed change in a mandatory bargaining subject, it must make a timely request to bargain. "A union cannot charge an employer with refusal to negotiate when it has made no attempts to bring the employer to the bargaining table." NLRB v. Alva Allen Indus., Inc., 369 F.2d 310, 321 (8th Cir. 1966). "It is settled Board law that `[W]hen an employer notifies a union of proposed changes in terms and conditions of employment, it is incumbent upon the union to act with due diligence in requesting bargaining.' " Haddon Craftsmen, Inc., 300 NLRB 789, 790, 136 LRRM 1190, 1192 (1990) (citing Clarkwood Corp., 233 NLRB 1172, 97 LRRM 1034 (1977)). See also W. W. Grainger, Inc. v. NLRB, 860 F.2d 244 (7th Cir. 1988); ; NLRB v. Island Typographers, 705 F.2d 44 (2nd Cir. 1983).

Notice of the proposed change does not have to be formally given from the employer. W. W. Grainger, 860 F.2d 244 (7th Cir. 1988). See also U.S. Lingerie Corp., 170 NLRB 750, 67 LRRM 1482 (1968). Furthermore, it is not unlawful for an employer to present a proposed change as a fully developed plan. Haddon Craftsmen, 300 NLRB 789, 136 LRRM 1190 (1990).

Members of the FOP were notified of the City's desire to change insurance carriers when the Mayor of Ralston invited them to attend the July 7, 1993 meeting. Although a variety of health insurance plans were discussed at the July 7 meeting, a handout was provided by Murray comparing the benefits received under the BCBS plan in effect at that time to the Share plan. Retzlaff and Osterman discussed the matter and called Gary Troutman to ask that he study the issue. In addition, although the record does not indicate whether any members of FOP attended the July 27 City Council meeting, the meeting notice disclosed that health insurance was on the agenda. Finally, since the BCBS contract expired on August 31, 1993, FOP was aware that a decision had to made prior to this date. Other than Retzlaff's off-hand comment during the July 13 negotiating session, there is no evidence to indicate the City knew or had reason to know that the FOP opposed the change or wanted to bargain over it.

The Commission finds that FOP waived its right to bargain over the health insurance changes by failing to make any attempt to bring the City to the bargaining table over this issue. In light of the above finding, FOP's petition shall be and hereby is dismissed.

All judges assigned to the panel in this case join in the entry of this Findings and Order.

Entered January 12, 1994.