Affirmed by City of Augusta v. Maine Labor Relations Board, et al., Superior Court No. AP-01-63 (May 3, 2002), STATE OF MAINE MAINE LABOR RELATIONS BOARD Case No. 01-09 Issued: August 20, 2001 ________________________________ ) LOCAL 1650, IAFF, AFL-CIO-CLC, ) ) Complainant, ) ) v. ) DECISION AND ORDER ) CITY OF AUGUSTA, ) ) Respondent. ) ________________________________) The Augusta Uniformed Firefighters Association Local 1650, IAFF, AFL-CIO-CLC, ("Union") filed a prohibited practice complaint against the City of Augusta ("City") on October 12, 2000. In the complaint, the Union complained that the City, on two occasions, failed to meet with the Union within the requisite ten-day period for impact negotiations concerning the effects of coverage changes by the health insurance carrier on the terms and conditions of employment of employees in the firefighter and platoon chiefs bargaining units, in violation of 26 M.R.S.A. 965 and 964(1)(E).[fn]1 The City admitted that the Union provided it with the request to meet within ten days, but denied that it had any obligation to meet with the Union because the collective bargaining agreement covered the issue and because the City had not taken any actions which required impact bargaining. A prehearing conference was conducted by Chair Peter T. Dawson on October 24, 2000. The Union was represented by ____________________ 1 The Union filed a second complaint, No. 01-03, in which the Union alleged that the City had knowledge of health insurance coverage changes prior to the ratification of the side agreement on health insurance coverage, and did not reveal this knowledge to the Union. This complaint was consolidated with the present complaint by agreement of the parties. Complaint No. 01-03 was withdrawn by the Union on May 14, 2001. [-1-] _________________________________________________________________ Robert F. Bourgault. The City was represented by Stephen E. F. Langsdorf, Esq. The Prehearing Conference Memorandum and Order issued on November 16, 2000, is incorporated herein and made part of this Decision and Order. The parties agreed that this matter could be presented to the Board on stipulated facts, exhibits and briefs. The Union filed its brief on May 30, 2001. The City filed its brief on June 29, 2001. The Board, consisting of Alternate Chair Jared S. des Rosiers, Employer Representative Karl Dornish, Jr., and Alternate Employee Representative Wayne W. Whitney, met to deliberate the matter on July 13, 2001. For the reasons stated herein, the Board concludes that the City violated 26 M.R.S.A. 965(1)(B) when it failed on two occasions to meet within the requisite ten-day period for collective bargaining purposes, and hence refused to bargain collectively with the bargaining agent of its employees within the meaning of 26 M.R.S.A. 964(1)(E). We will fashion a remedy to redress this violation. JURISDICTION The jurisdiction of the Board to hear this case and to issue a decision and order lies in 26 M.R.S.A. 968(5)(C). Neither party has raised an objection to the Board's jurisdiction. STIPULATED FACTS The parties have agreed: 1. That the Union sent a letter dated August 13, 2000 requesting negotiations in accordance with 26 MRSA, Chapter 9-A 965(B) over the effect of the City's change in health insurance carrier on the terms and conditions of employment of employees in the firefighter and platoon chiefs bargaining units and that the City received said letter. -2- __________________________________________________________________ 2. That this was a second request for impact negotiations sent by the Union and received by the City concerning this issue. 3. That the City answered in a letter dated September 13, 2000. 4. That the City has not met with the Union in response to these requests to negotiate impact. FINDINGS OF FACT The Board makes the following additional findings of fact, based upon the record as submitted by the parties: 1. In October, 1999, the City and the Union entered into a side agreement which changed the health insurance carrier from Blue Cross/Blue Shield ("BC/BS") to the Maine Municipal Employee Health Trust ("MMEHT") for the firefighters. 2. The health insurance carrier for the platoon chiefs was also changed from BC/BS to MMEHT, pursuant to a provision in their collective bargaining agreement. 3. Both the firefighters and the platoon chiefs thereafter ratified three-year contracts effective January 1, 2000. Each contract contained similar language regarding health insurance as follows: Section 1 - Health Insurance: Effective January 1, 2000, the City agrees to provide MMEHT Point of Service as the health insurance carrier. The City shall provide the health insurance benefit at the following monthly premiums for employees. For the Employee $272.19 For Adult with Children $443.24 For a Family $614.99 The above rates shall be in effect through December 31, 2000. Employees who wish to elect a higher level of coverage from the carrier may do so by paying the entire additional cost in the insurance premium. -3- _________________________________________________________________ Rate increases effective January 1, 2001 and January 1, 2002 will be split, with the City paying ninety-five percent (95%) of the increase and the employee paying five percent (5%). Those increases will be added to the figures shown above. If contract negotiations extend beyond December 31, 2002, both parties agree that the City will pay sixty percent (60%) of any increase in health insurance premiums, with the employee deduction to pay the other forty percent (40%) not to exceed five dollars ($5) per week until a new agreement has been reached. Employees who are insured by a comparable group insurance plan in addition to that provided by the City may elect to drop the coverage provided by the City. Employees who demonstrate proof of comparable coverage will receive one hundred dollars ($100) per month. Proof of coverage must be presented to the Human Resources Department. The City agrees to create and fund during the term of the agreement, a co-pay reserve fund. Employees may submit proof of payment of a medical claim co-payment, and the fund will make quarterly reimbursement to the employee for that cost. This fund will cease to exist December 31, 2002, unless agreed to in negotiations for the successor agreement to this contract. 4. Several weeks after the parties entered into the side agreement changing health insurance carriers, the MMEHT announced changes to some health plan benefits effective January 1, 2000. For instance, in the "Point of Service Plan" (managed care), the MMEHT imposed a lifetime cap on benefits and excluded the deductible when calculating certain maximum out-of-pocket expenses per calendar year. In the Indemnity Plan, the MMEHT imposed more extensive changes, including an increase in the maximum out-of-pocket expenses per calendar year and a limitation on coverage for certain types of medical services. 5. An employee from each bargaining unit filed a grievance related to the changes in health insurance coverage. The grievances were eventually taken to arbitration. 6. On March 28, 2000, the Union representative presented a -4- _________________________________________________________________ written request to the City Manager for negotiations over the effect of the City's change in health insurance carrier on the terms and conditions of employment of the firefighters, and proposed several dates for a meeting. 7. The City did not respond to this letter. 8. On August 13, 2000, the Union representative presented a similar written request to the City Manager, this time citing 26 M.R.S.A. 965(B) (sic) and stating that a failure to reply would be " . . . treated as a 964(1)(E) violation absent a mutually acceptable alternative." 9. On September 11, 2000, the arbitrator issued a decision finding that the City had not violated the contract by failing to guarantee or provide the exact health insurance coverage that the MMEHT had proposed to provide prior to the ratification of the side agreement. 10. On September 13, 2000, the City's attorney responded in a letter to the Union stating that the City declined to meet because the City had not made any decisions which required impact bargaining. DISCUSSION Pursuant to 964(1)(E), public employers, their representatives and their agents are prohibited from refusing to bargain collectively with the bargaining agent of its employees as required by section 965. Section 965 provides as follows: 1. Negotiations. It shall be the obligation of the public employer and the bargaining agent to bargain collectively. "Collective bargaining" means, for the purposes of this chapter, their mutual obligation: . . . B. To meet within 10 days after receipt of written notice from the other party requesting a meeting for collective -5- _________________________________________________________________ bargaining purposes, provided the parties have not otherwise agreed in a prior written contract; . . . The Board has long interpreted the ten-day notice to mean exactly what it states: a party is obligated to meet within ten days after receipt of a written notice from the other party requesting bargaining. A failure to meet within ten days is a per se violation of Section 964(1)(E) and is evidence of bad faith. See, e.g., Kittery Employees Ass'n v. Eric Strahl, No. 86-23, slip op. at 7 (Me.L.R.B. Jan. 27, 1987); MSAD No. 43 Teachers Ass'n v. MSAD No. 43 Board of Directors, No. 79-42, slip op. at 2-3 (Me.L.R.B. May 1, 1979). In the present matter, the Union made clear that it was proffering a "ten-day notice" to the City, particularly in its second letter of August 13, 2000, which refers specifically to the relevant provisions of the law. The City did not respond in any way within the ten-day period, but allowed nearly a month to elapse before advising the Union that it felt no legal obligation to meet with the Union because the City had not made any decision which required impact bargaining. Neither party has pointed to any provision in the contracts for either bargaining unit which would constitute a general waiver of the obligation to bargain mid-term, such as a zipper clause, management rights clause or other general waiver.[fn]2 The burden therefore rests upon the City to show what other cause allowed it to ignore a ten-day notice. The City has essentially offered two arguments why it was not required to respond to the Union's request to meet. First, the City argues that health insurance coverage changes were _______________ 2 A party may waive its right to demand negotiations during the term of a collective bargaining agreement over unilateral changes which affect the mandatory subjects of bargaining by agreeing to a "zipper clause" which covers such unilateral changes. For such a waiver to be effective as a bar to negotiations, the evidence of waiver must be clear and unmistakable. Council No. 74 AFSCME v. City of Bangor, No.80-41, slip op. at 9-10 (Me.L.R.B. Sept. 24, 1980), aff'd, 449 A.2d 1129 (Me. 1982). -6- _________________________________________________________________ already negotiated between the parties and covered in the resulting contracts; therefore, mid-term impact bargaining was not required. Second, the City argues that since MMEHT, not the City, acted to change the health insurance coverage, the City was under no obligation to meet regarding changes over which it had no control. These arguments will be addressed in turn, below. Even absent a waiver, parties are not always required to engage in mid-term negotiations. In East Millinocket Teachers Ass'n v. East Millinocket School Committee, No. 79-24 (Me.L.R.B. April 9, 1979), the Board considered whether the duty to meet for collective bargaining purposes continues during the term of a collective bargaining agreement. The Board found that such a duty exists: If, as in the instant case, there is a collective bargaining agreement in effect which does not contain a so-called "zipper clause," the obligation to bargain continues with respect to new issues which arise during the course of the administration of the collective bargaining agreement when those new issues are neither contained in the terms of the contract nor negotiated away during bargaining for that contract or a successor contract. East Millinocket, slip op. at 3-4, citing Cape Elizabeth Teachers Ass'n v. Cape Elizabeth School Board, No. 75-24, slip op. at 4 (Me.L.R.B. Oct. 16, 1975)(emphasis supplied). The City urges in its brief that specific coverage changes were "contained in" or "covered by" the present contracts, thereby relieving the City of the requirement to bargain over any mid-term coverage changes. In the relevant collective bargaining agreements, the parties agreed only to the identity of the insurance company, the amount of the premium to be paid by the City, the division of future premium increases, the compensation for employees with comparable coverage, and the creation of a co- pay reserve fund. The agreements did not define coverage at all. The issues that were the subject of the grievances filed by the Union (changes in out-of-pocket limits, lifetime caps in -7- __________________________________________________________________ coverage, etc.) were simply not in the agreements. It is true that matters need not be specifically mentioned in a collective bargaining agreement in order to be "covered by" the agreement; subjects "inseparably bound up with and thus plainly an aspect of" provisions in the contract may be considered covered by the contract. C & S Industries, Inc., 158 N.L.R.B. 454, 459 (1966). This argument applies with equal force to the arguments presented by both the City and the Union, however. The City argues that the coverage details are "inseparably bound" to the aspects of the health insurance coverage already negotiated, and they need not negotiate over issues covered by the contract. The Union could likewise argue that if specific coverage details are "inseparably bound" to the aspects of health insurance coverage already negotiated, then the City guaranteed the specific plan of coverage offered by MMEHT and presented to the Union prior to the ratifying of the side agreement. The City would obviously be obligated to at least meet with the Union regarding changes in the plan if this were this case.[fn]3 The City also argues that even if the coverage details were not contained in the specific terms of the contract, the details were, in effect, contained in the contract due to the "inherent volatility and changing nature of health insurance." City's brief at 3. The arbitrator rested her decision that there was no contract violation at least in part on this fact, suggesting that unions and employers rarely bargain over such level of coverage detail. Accepting the arbitrator's rationale does not resolve the issue presented here because the Union requested a ten-day meeting to negotiate the effect or impact of the coverage changes _______________ 3 The arbitrator ruled that the collective bargaining agreement did not require the City to determine and guarantee an exact level of benefits. R-1 at 10. However, the arbitrator's decision was issued after both of the Union's requests to meet with the City. The City responded to the second Union request only after the arbitrator had issued her decision. -8- __________________________________________________________________ on the terms and conditions of employment, not to negotiate the changes themselves. The arbitrator specifically concluded that the contract did not authorize her to order the City to bargain the impact of changes; she reserved this issue for the Board to determine under the MPELRL. R-1 at 12. Because the City refused to meet with the Union regarding impact, it is not in the position to argue that the impact of the coverage changes are "covered by" the terms of the contract. The City relied upon Department of Navy v. Federal Labor Relations Authority, 962 F.2d 48 (D.C. Cir. 1992), for the proposition that parties can negotiate terms in a contract which encompass impact. Under the Federal Service Labor-Management Relations Statute (FSLMRS), certain "management rights" are excluded from the statutory duty to bargain, though the employer is required to negotiate about the "impact and implementation" of those rights. In Department of Navy, the employer and union bargained about impact and implementation of detailing employees. The Court found that when the employer fully complied with the contract in detailing certain employees, the employer had no further duty to negotiate over their actions. In the present matter, the union had no opportunity to articulate the impact resulting from the coverage changes because the City refused to meet with the Union. In this posture, the City simply has no basis to argue that the impact to be raised by the Union is covered by the contracts.[fn]4 The City's assumption that the Union can articulate no impact of the coverage changes on the terms and conditions of employment which requires impact bargaining may ultimately prove correct. The Board has been called on, for instance, to evaluate ______________ 4 Federal precedent, under either the FSLMRS or the National Labor Relations Act, is not always useful in evaluating violations of 26 M.R.S.A. 965(1)(C) because neither of these federal acts contain a ten-day notice provision like the MPELRL. The Board has recognized that this distinction requires the Board to diverge at times from federal precedent when evaluating this provision of our law. MSEA v. State of Maine, No. 80-09, slip op. at 8 (Me.L.R.B. Dec. 5, 1979). -9- __________________________________________________________________ whether parties must bargain over a decision that has no impact, or a de minimis level of impact, upon the terms and conditions of employment. Cf. Saco-Valley Teachers Ass'n v. MSAD No. 6 Board of Directors, No. 79-56 (Me.L.R.B. Aug. 9, 1979)(impact of new evaluation program on hours and terms and conditions of employment sufficiently substantial to require negotiations); Teamsters Local Union No. 48 v. University of Maine, No. 79-37 (Me.L.R.B. Oct. 17, 1979)(employer's decision to limit off-campus assistance by university police had no tangible effect on working conditions, therefore employer had no obligation to bargain over effect). However, by not meeting with the Union, the City failed to avail itself of the opportunity to learn the specifics of the Union's arguments and proposals regarding impact. This was in clear contravention of the Board's warnings that an employer should err on the side of caution when presented with a ten-day notice: It should be clear that a bargaining agent may not use the duty to negotiate the subject of impact on working conditions as a guise for making demands concerning the propriety of the decision itself. However, the bargaining agent may have many valid concerns about the effect of such decisions on the conditions or duties of the employees, as in the instant case. The employer should be interested in them. Since the Act is intended to foster harmonious relations between public employers and their employees, we think it would be safer and wiser for a party to meet when requested even if it has doubts about the duty to meet. Since a misunderstanding of the law or of the facts of a clear request such as this one will not excuse the duty to meet, a party should therefore not lightly undertake the decision to refuse to meet when requested by a 10 day letter. East Millinocket Teachers Ass'n, supra at 5. The City's second argument is that it was relieved of the obligation to meet because it was the MMEHT, not the City, which made the decision to change aspects of the health insurance coverage. The City is correct that many cases addressing the refusal to bargain, and specifically addressing the failure to -10- __________________________________________________________________ respond to a ten-day request to meet for purposes of collective bargaining, involve a unilateral action on the part of the employer. See e.g., MSAD No. 43 Teachers Ass'n v. MSAD No. 43 Board of Directors, No. 79-42 (Me.L.R.B. May 1, 1979)(failure to meet and consult within ten days of request regarding open house policy implemented by employer); East Millinocket Teachers Ass'n, supra (failure to meet within ten days of request regarding impact of absorbing duties of extracurricular job into another and posting of job openings implemented by the employer). However, the Union is also correct that forces outside the scope of the immediate bargaining relationship (such as a change in laws or regulations) may impact the terms and conditions of employment and trigger the requirement to negotiate over the impact upon request of either party. For instance in MSEA v. State of Maine, No. 85-19 (Me.L.R.B. Dec. 2, 1985), the employer and the union engaged in numerous meetings to discuss the impact upon wages and hours of certain employees of a U.S. Supreme Court decision which overruled a previous decision and subjected state and local governments to the provisions of the Fair Labor Standards Act (the employer eventually acted unilaterally to limit its overtime liability when no resolution was reached at these meetings). Moreover, the Board has long held that the impact of a decision or an event must be negotiated even when the decision itself need not be negotiated, because it is a matter of educational policy (Westbrook Teachers Ass'n v. School Committee of Westbrook, No. 74-17 (Me.L.R.B. Aug. 21, 1974) or because the parties have waived the subject of the decision through prior negotiations (Teamsters Local No. 48 v. City of Augusta, No. 78- 04 (Me.L.R.B. June 7, 1978). The Supreme Judicial Court recognized in City of Bangor v. AFSCME, Council 74, 449 A.2d 1129 (1982) the distinction between "impact bargaining" and bargaining over the change which resulted in the impact. In that case, the Court found that while the union had waived the right to negotiate over discharges and over changes in the size of the -11- __________________________________________________________________ group of employees, this waiver did not encompass the effects or impact of discharges which the parties were required to negotiate. City of Bangor at 1134-1135. Each of these cases support the proposition that, even where the parties are foreclosed from negotiating about the decision or event itself, they are still required to negotiate about the impact of such decision or event upon the mandatory subjects of bargaining. The parties may be foreclosed from negotiating because a third party makes the decision or brings about the event; the impact may still be negotiable. In the present matter, negotiations over MMEHT coverage changes may be precluded, but the parties may still be required to negotiate about the impact resulting from such changes.[fn]5 ORDER On the basis of the stipulated facts, findings of fact and discussion, and pursuant to 968 of the Municipal Public Employees Labor Relations Act ("Act"), it is hereby ORDERED: Respondent City of Augusta and its representatives and agents shall: 1. Cease and desist from refusing to bargain collectively with the Augusta Uniformed Firefighters Association by failing to meet within ten days after receipt of a written notice requesting a meeting for collective bargaining purposes where they have not otherwise agreed in writing; and _______________ 5 This is in keeping with federal law. In Allied Chemical & Alkali Works Local 1 v. Pittsburgh Glass Co., 404 U.S. 157 (1971), the U.S. Supreme Court found that matters involving individuals outside the employment relationship are not wholly excluded from the subjects of mandatory bargaining. In this case, the Court found that retirees are not employees within the meaning of the Wagner Act and that changes in their health benefits are not a mandatory subject. However, if a change in their benefits "vitally affects" the terms and conditions of active employees, the impact would be a mandatory subject. Allied Chemical at 179. -12- __________________________________________________________________ 2. Take the affirmative action designed to effectuate the purposes of the Act of meeting with the Association for the purposes of negotiating impact, if any, of health insurance coverage changes on the terms and conditions of employment of employees in the firefighter and platoon chiefs bargaining units within ten days of receipt of this order, unless such impact was inherent in the changes permitted by the parties' collective bargaining agreements. The parties may meet beyond the ten-day period if mutually agreeable. The City must propose reasonable and appropriate meeting alternatives to the Association. Dated at Augusta, Maine, this 20th day of August, 2001. The parties are advised of MAINE LABOR RELATIONS BOARD their right pursuant to 26 M.R.S.A. 968(5)(F) (Supp. 2000) to seek a review of this decision and order by the /s/______________________________ Superior Court. To initiate Jared S. des Rosiers such a review, an appealing Alternate Chair party must file a complaint with the Superior Court within fifteen (15) days of the date of issuance of this decision /s/______________________________ and order, and otherwise Karl Dornish, Jr. comply with the requirements Employer Representative of Rule 80(C) of the Rules of Civil Procedure. /s/______________________________ Wayne W. Whitney Alternate Employee Representative -13-