17 CIR 114 (2011)
NEBRASKA COMMISSION OF INDUSTRIAL RELATIONS
Entered May 31, 2011
Before: Commissioners Orr, Blake, and McGinn
NATURE OF THE PROCEEDINGS:
The Washington County Police Officers Association, F.O.P. Lodge 36, (“Petitioner” or “Union”) filed a Petition on December 20, 2010 pursuant to Neb. Rev. Stat. § 48-824(1), (2)(a), (2)(c), (2)(e), and (2)(f), claiming that the County of Washington (“Respondent” or “County”) committed a prohibited practice when it failed to negotiate material changes in the premium structure of the basic Health Insurance Benefits. The Petitioner seeks an order enjoining and restraining the Respondent from implementing unilateral changes in the premium structure for the PPO program applicable to the bargaining unit employees. The Respondent filed an Answer denying the Petitioner’s allegations and stating that the Commission lacks subject matter jurisdiction to interpret the existing collective bargaining agreement between the parties as to what is “basic Health Insurance Benefits.”
In lieu of a formal pretrial, each party submitted a witness list and each submitted a statement of issues on February 28, 2011 and March 1, 2011. The following issues were presented.
Petitioner’s Statement of Issues:
1. Whether the Respondent’s conduct as alleged and admitted to in the pleadings or established at the time of trial with respect to its unilateral amendment of the premium structure of the health plan covering Petitioner’s bargaining unit members constitutes a breach of the Respondent’s duty to bargain pursuant to Neb. Rev. Stat. § 48-824(1)(2)(a)(c)(e)(f).
2. Whether the Respondent’s conduct as alleged and admitted to and/or established at trial in taking action to unilaterally implement changes to applicable group health care benefits without negotiations or agreement of the Petitioner effective January 1, 2011 [sic] constitutes a breach of the duty to bargain pursuant to Neb. Rev. Stat. § 48-824(1)(2)(a)(c)(e)(f).
3. Whether the Respondent’s conduct as alleged and admitted to and/or established at the time of trial of this matter demonstrates an intentional breach of the duty to bargain under the Industrial Relations Act or represented a willful pattern or practice undermining the status of the Petitioner, entitling the Petitioner to an award of reasonable attorney fees pursuant to Rule 42 of the Rules of the Commission of Industrial Relations.
4. Whether the Petitioner is entitled to be made whole by returning the parties to their status prior to the unilateral actions challenged herein until such time as the parties negotiate in good faith to reach terms and conditions of employment consistent with good faith negotiations.
Respondent’s Statement of Issues:
1. Whether Petitioner is entitled to the relief sought in its Petition.
2. Whether the Petition fails to state a claim upon which relief can be granted.
3. Whether Petitioner is improperly seeking to bring a case in this Commission which it does not have subject matter jurisdiction to interpret the existing collective bargaining agreement between the parties as to what is “basic Health Insurance Benefits”.
4. Whether Respondent lawfully implemented changes in its health insurance plan for its employees after Petitioner was on notice of the changes and failed to make any request to Respondent to negotiate on the proposed changes to its health insurance plan.
The Petitioner and the Respondent entered into a collective bargaining agreement covering the contract years July 1, 2005 through June 30, 2009. This contract has been extended twice and is in effect until June 30, 2011.
Section 1: Health Insurance Benefits in that contract states:
(a) Washington County agrees to pay for 100% of the basic Health Insurance Benefits for the employees enrolled in the Single Plan.
(b) Washington County agrees to pay for 60% and the employees agree to pay 40% of the basic Health Insurance Benefits for employees enrolled in the Employee + 1 Plan.
(c) Washington County agrees to pay for 60% and the employees agree to pay 40% of the basic Health Insurance Benefits for employees enrolled in the Family Plan.
From July 1, 2005 through June 30, 2010, the Respondent provided PPO coverage as the “basic Health Insurance Benefit.” In addition to the PPO coverage the Respondent offered an alternative insurance option beginning around January 1, 2006. This insurance option was a High deductible health plan/health savings account (“HSA”) which carried with it a $2,000 deductible that was increased to $2,500 commencing January 1, 2010.
The parties entered into negotiations for the upcoming contract year on June 10, 2010. The parties again participated in another negotiation session on August 26, 2010. On September 16, 2010 the County failed to attend the meeting with the Petitioner and on September 23, 2010 the Union requested meeting for negotiations.
On October 12, 2010 the Respondent voted to approve a change in the “basic Health Insurance Benefits” for the Petitioner’s bargaining unit members effective January 1, 2011, switching the HSA alternative plan, to the “basic plan” and switching the PPO “basic plan” to the “alternative plan”. Through this change, the Respondent would pay 100% for single coverage, and 60% for Employee + 1 and Family coverage for the “HSA" plan, and alternatively with the PPO plan, the bargaining unit members would now be required to pay approximately 27% of the single plan and 56% for Employee + 1 and for Family coverage. The Respondent did not negotiate this change with the Petitioner. Prior to the October 12, 2010 meeting and reported at the October 12, 2010 meeting, the Respondent contacted the County Attorney’s office inquiring about switching the plans. The Respondent’s insurance advisor stated that the County Attorney advised them that switching the plans “satisfied the language of the FOP contract.” The decision of the Respondent was to take effect January 1, 2011.
Additionally, the HSA plan for the 2011 calendar year has a large up-front deductible. The deductible for a single employee is $2,500. The Respondent elected to contribute $2,000 to each single employee’s deductible. This contribution from the Respondent is paid to the employee over the plan year. At the beginning of the contract year, the employee is allocated approximately $540 dollars of the $2,000 dollar deductible in the initial month. Then each month during the calendar year of which the employee remains employed, the employer provides the employee an additional $136 each month to reimburse them for up-front medical expenses. The County has elected not to front-end load $2,000 of the $2,500 out-of-pocket deductible.
On November 18, 2010, the Petitioner and the Respondent met to discuss the upcoming changes to the health insurance plan. The Respondent stated that the plan was a non-negotiable matter. The Petitioner then proceeded to file a case with the Commission on December 20, 2010.
The Respondent argues the Commission lacks jurisdiction to hear and determine the instant case, as the Respondent states the case amounts to a breach of contract claim. The Respondent also states that the Commission cannot “interpret” what the words “basic Health Insurance Benefits” mean in the collective bargaining agreement. The Petitioner argues that 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. Furthermore, the Petitioner argues that previous case law states that even with required premium increases due to health insurance rate increases, employers are required to negotiate over the substance, impact and implementation of its decision to change its health plan.
In the Fraternal Order of Police, Lodge No. 21 v. City of Ralston, 12 CIR 59 (1994) the Commission stated:
“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 FDIC v. FLRA, 977 F.2d 1493 (1992), the FDIC sought to appeal a decision from the Federal Labor Relations Authority. The FLRA held the FDIC violated its duty to bargain under the Federal Service Labor Management Relations Statute, 5 U.S.C. §§ 7101-7135 (1988), by unilaterally changing conditions of employment relating to (1) bi-weekly premiums paid by FDIC employees enrolled in the employer’s family health insurance plan, and (2) the month during which the “open season” for the election of health insurance would be held. On appeal, the Court of Appeals found that the issue in any unilateral change unfair labor practice case is whether the employer changed the status quo with respect to a mandatory subject of bargaining without first negotiating with the union. The Court of Appeals held that a change in the employees’ premium charges can be a change in a condition of employment. The Court of Appeals noted that the FLRA has consistently found that matters relating to health insurance are conditions of employment and are within the employer’s duty to bargain. Finally, the Court found that its remedy to rescind the unlawful changes, reinstitute the previous practices, and make whole affected employees, including reimbursing employees who paid the increased family option health insurance plan premium was within the FLRA’s discretion.
Past practice clearly establishes that the parties determined that “basic Health Insurance Benefits” were the PPO plan rather than the alternative HSA plan. The evidence in the instant case before the Commission does not support a finding that a change in health insurance is "contained in" the parties' contract. The Commission concludes that based on this past practice along with the above cited case-law, that this dispute is not a breach of contract issue, but instead an issue of whether health insurance is a mandatory subject of bargaining and if so, should the Respondent have bargained about this issue. The Commission therefore has jurisdiction over the dispute. Since the Commission has jurisdiction over this issue, we must next determine whether the change in health insurance was in fact a mandatory subject of bargaining.
There are three categories of collective bargaining subjects: mandatory, permissive, and prohibited. The Nebraska Industrial Relations Act only requires parties to bargain over mandatory subjects. Neb. Rev. Stat. § 48-816(1). "Whether an issue is one for bargaining under the Court of Industrial Relations Act depends upon whether it is primarily related to wages, hours and conditions of employment of the employees, or whether it is primarily related to formulation or management of public policy." See Coleridge Educ. Ass’n v. Cedar County School Dist. No. 14-0541, a/k/a Coleridge Community Schools, 13 CIR 376 (2001).
The Commission is required by the Industrial Relations Act to hear and determine charges of prohibited practices, and to craft an appropriate remedy if a prohibited practice is found. Failure to bargain over a mandatory subject of bargaining is a per se violation. In an effort to establish working guidelines as to what constitutes mandatory subjects of bargaining, the Nebraska Supreme Court in Metro Technical Community College Educ. Ass’n, set forth the following test:
A matter which is of fundamental, basic, or essential concern to an employee’s financial and personal concern may be considered as involving working conditions and is mandatory bargainable even though there may be some minor influence on educational policy or management prerogative. However, those matters which involve foundational value judgments, which strike at the very heart of the educational philosophy of the particular institution, are management prerogatives and are not a proper subject for negotiations even though such decisions may have some impact on working conditions. However, the impact of whatever decision management may make in this or any other case on the economic welfare of employees is a proper subject of mandatory bargaining.
The Commission in Service Employees International Union, Local No. 226 v. School District No. 66, 3 CIR 514 (1978), used a relationship test in determining bargaining issues. “Whether an issue is one for bargaining under the Court of Industrial Relations Act depends upon whether it is primarily related to wages, hours and conditions of employment of the employees, or whether it is primarily related to formulation or management of public policy.” Id. at 515. Conditions of employment have an economic impact on the employee’s job assignment. Omaha Police Union, Local 101 v. City of Omaha, 7 CIR 179 (1984). This does not include management prerogatives. Several negotiation terms and conditions that would seem to be management prerogatives have been included under the umbrella of mandatory subjects of bargaining, such as parking stall assignments. Id.
Mandatory subjects of bargaining are not just topics for discussion during negotiations sessions. Unless clearly waived, mandatory subjects must be bargained for before, during, and after the expiration of collective bargaining agreements. In Rockwell Int’l Corp., 260 N.L.R.B. 1346, 109 L.R.R.M. 1366 (1982), the National Labor Relations Board found that 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. In Rockwell, the Board found that the Respondent had a continuous duty to bargain over the matter of increases in the in-plant food prices. The Board concluded that the Respondent’s refusal to bargain over the price increases violated 8(a)(5) and (1) of the Act.
Neb. Rev. Stat. § 48-824(1) declares that it is a prohibited labor practice for any employer … to refuse to negotiate in good faith with respect to mandatory topics of bargaining. The Commission has previously held that health insurance is a mandatory subject of bargaining. See Communication Workers of America, AFL-CIO v. County of Hall, 15 CIR 95 (2005). In County of Hall, the Commission found that health insurance is a mandatory subject of bargaining and the County cannot usurp the Union’s authority as the sole bargaining representative for its employees. The Commission determined that the parties were not at impasse and that the County’s premature declaration of impasse was a per se failure to bargain in good faith and a prohibited practice. The Commission ordered the County to reimburse health insurance premiums improperly withheld, plus interest.
In Fraternal Order of Police Lodge 21 v. City of Ralston, 12 CIR 59 (1994), the Commission also stated that health insurance is a mandatory topic of bargaining, and as such, an employer had a duty to bargain with the union over changes in mandatory topics of bargaining. The Commission clearly determined that the 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. Quoting Rockwell Int'l Corp., 260 N.L.R.B. 1346, 1347, 109 L.R.R.M. 1366, 1367 (1982), the Commission found that: “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.” Additionally, the Commission recently held in August of 2010, in Scotts Bluff Police Officers Ass’n Inc./ F.O.P Lodge 38, v. City of Scottsbluff, Case 1233, that the City’s health plan design as well as negotiating of co-pays, deductibles and maximum out-of-pockets are all mandatory subjects of collective bargaining.
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. In the instant case, the economic impact is apparent. Any employee desiring to stay on the PPO plan would be required to pay additional portions of the premium. The HSA plan also has a large up-front deductible. An employee is only allocated approximately $540 of the $2,000 deductible in the initial month. Then each month during the calendar year of which the employee remains employed, the employer provides the employee an additional $136 each month to reimburse them for up-front medical expenses. The County has elected not to front-end load $2,000 of the $2,500 out-of-pocket deductible. This unilateral decision clearly presents an economic impact on the employees, especially those employees who testified to having large monthly co-pays for medication. The County was under the mistaken belief that it alone, could change the past practice of defining “basic Health Insurance Benefits”. We find that health insurance in the instant case is indeed a mandatory subject of bargaining under the Nebraska Industrial Relations Act.
The Respondent also argues that the Union failed to request negotiations pursuant, to the grievance procedure, after the Petitioner was put on notice that the health insurance changes were going to occur. The Petitioner argues that it never waived its duty to bargain over the health insurance “basic” definition.
In past cases, the Commission has determined that the above duty to bargain could be waived. The Commission found that the burden of proving waiver was on the party asserting the waiver. Citing Pertec Computer Corp., 284 N.L.R.B. 810, 126 L.R.R.M. 1134 (1987). The Commission in Fraternal Order of Police Lodge 21 v. City of Ralston, 12 CIR 59 (1987) commented on its previous adopted standard, stating that the standard of proving waiver of a statutorily protected right must be clear and unmistakable. See also Bullis v. School Dist. of Columbus, 4 CIR 27 (1979). The Commission found that facts based upon the testimony in the case, indicated the union did not request to bargain over health insurance and that in order to bargain over a mandatory subject of bargaining, the union must make a timely request to bargain. Ultimately the Commission held that the union 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 the instant case, once the Commission determines that health insurance is a mandatory subject of bargaining, it is for the party which did not bargain to establish a claim of waiver by evidence. The series of emails between the Union president and its membership show health insurance as a topic for negotiations and the results of those attempted negotiations. These emails clearly establish a desire to negotiate the health insurance issue on the part of the Union. The Respondent’s exhibits, relating to the minutes of the County Board Meeting, also do not establish a waiver. The testimony elicited from the parties also does not meet the burden of proof regarding waiver. See above Fraternal Order of Police v. The City of Ralston, 12 CIR 59 (1994) (the burden of proof is on respondent regarding the union’s waiver of the right to bargain over mandatory subjects. The burden must be established clearly and unmistakably that the union waived its right, including notice of a proposed change in the mandatory bargaining subject.) The Union’s past practice however, does not establish a waiver or a failure to bargain on the health insurance issue. We find that the Respondent violated Neb. Rev. Stat. § 48-824(1) , (2)(a), (2)(c), (2)(e), and (2)(f), by not bargaining over whether the HSA plan could be substituted for the PPO plan as the “basic Health Insurance Benefits” for the County and how such a substitution would impact the bargaining unit members.
The Petitioner seeks an order returning the Petitioner to the status quo until the parties negotiate in good faith to reach terms and conditions of employment consistent with good faith negotiations. The Petitioner, in its brief, also requests attorney fees.
Neb. Rev. Stat. § 48-825 states: “If the commission finds that the party accused has committed a prohibited practice, the commission, within thirty days after its decision, shall order an appropriate remedy.” The Commission has the authority to order an appropriate remedy, which will promote public policy, adequately provide relief to the injured party, and lead to the resolution of the industrial dispute.
It is clear that the Commission has the authority to issue bargaining orders following findings of prohibited practices and has done so in the past. See United Food and Commercial Workers, Local Union No. 22 v. County of Hall, 15 CIR 55 (2005). Having found that the Respondent has engaged in a prohibited labor practice, we find that the Respondent is required to negotiate with the Petitioner in good faith.
In County of Hall, the employees were reimbursed such health insurance premiums improperly withheld since July 1, 2004 plus interest at the rate of 4.63%, which was the Nebraska judgment rate in effect. Furthermore, a review of F.D.I.C. v. F.L.R.A. indicates that the appropriate remedy in a plan design change case returns the parties to the status quo ante. In that case, the FLRA found that the remedy was perfectly appropriate: ‘because when an agency makes unilateral changes and refuses to bargain over them, the typical remedy is for the FLRA to order a “make whole” or status quo ante remedy.’ While the Respondent’s conduct in the instant case was not flagrant, aggravated, persistent and pervasive, it was a clear violation of its duty to bargain in good faith. Therefore, the Commission finds the Respondent should make all employees whole for any and all losses incurred as a result of the Respondent’s unlawful unilateral implementation of its final offer. The Respondent shall return the parties to the status quo ante and the parties shall recommence good faith negotiations over these issues within thirty (30) days.
Not every prohibited practice will result in an award of attorney fees. To support an award of fees, under CIR Rule 42(b)(2a), it must be found that the party in violation has undertaken a pattern of repetitive, egregious, or willful prohibitive practice. We did not find any evidence that the Respondent has been willfully refusing to bargain over health insurance. Instead, the Respondent was under the mistaken belief that it was not required to because it just changed the definition of what constituted “basic Health Insurance Benefits”. Therefore, since no evidence of repetitive, egregious, or willful behavior exists, we do not award attorney fees in the instant case.
IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED :
1. Respondent shall cease and desist from implementing changes in the members’ basic Health Insurance Benefits.
2. The Respondent shall reimburse the bargaining unit members for any health insurance benefits improperly withheld, plus interest as set by § 45-103, which is the Nebraska judgment rate of 2.132% now in effect. Adjustments resulting from this order shall be paid in a single lump sum payable within thirty (30) days.
3. The parties shall recommence good faith negotiations over these issues within thirty (30) days and shall negotiate in good faith until an agreement has been reached or by further order of the Commission.
All commissioners assigned to the panel in this case join in the entry of this Order.