Bangor Fire Fighters' Association, Local 772, IAFF v. City of Bangor, 
MLRB No. 93-20 (Aug. 9, 1993), rev'd sub nom, City of Bangor v. Maine 
Labor Relations Board, No. CV-93-316 (Me. Super. Ct., Pen. Cty., Apr. 21, 
1994), Board decision and order on remand, MLRB No. 93-20 (July 27, 1994),
original Board decision aff'd sub nom, City of Bangor v. Maine Labor Relations
Board, 658 A.2d 669 (Me. 1995)

MAINE SUPREME JUDICIAL COURT                Reporter of Decisions
					    Decision No. 7264
					    Law Docket No. PEN-94-496




			 Argued January 25, 1995
			 Decided May 25, 1995
       DANA, and LIPEZ, JJ.

     The Maine Labor Relations Board and the Bangor Firefighters
Association appeal from a judgment entered in the Superior Court
(Penobscot County, Browne, A.R.J.) vacating an order of the Board.  The
Board found that the City of Bangor engaged in a prohibited practice
pursuant to 26 M.R.S.A.  965 (1988) by failing to provide notice and an
opportunity to bargain over the impact of a change in the composition of the
group covered by the health insurance plan provided by the City to members
of the Association.  The Board ordered the City to reimburse association
members for increased health insurance costs caused by the change.  We
vacate the judgment.

     Between July 1, 1990, and June 30, 1993, the City and the Association
were parties to the collective bargaining agreement at issue in this case.
Pursuant to article 26 of the agreement, association members could choose


to participate in a health maintenance organization (HMO) or to remain in
the traditional Blue Cross/Blue Shield plan.  The agreement froze the
employees' contributions to the Blue Cross plan at the July 1, 1991, level.
The City agreed to bear the burden of any increase in the Blue Cross rates.
The City's contribution to the HMO plan, on the other hand, was capped at
the amount contributed by the City to the Blue Cross plan.  The City
gratuitously allowed city retirees to belong to the Blue Cross plan, although
the retirees had to pay the full amount of the plan.

     In February 1992, Blue Cross officials informed the City that the plan
in which city retirees participated did not comply with new federal
requirements governing insurance plans for persons eligible for Medicare.
Blue Cross offered the City a number of options for complying with the new
requirements.  The option ultimately selected by the City included placing
the retirees in a separate health plan, effective July 1, 1992.

     As a result of the removal of the retirees from the Blue Cross plan, the
cost of the plan decreased by 2%, a total of $73,000.  The City shared that
decrease in costs with the city employees who participated in the Blue Cross
plan.  The City reduced its proportionate contribution to the HMO plan,
however, in accord with the cap contained in article 26 of the agreement.
In September 1992, Blue Cross informed the City that the new federal rules
did not require any change in the health plan covering city retirees after all.
The City restored the retirees to their original Blue Cross plan, but Blue
Cross did not restore the original rates for the remainder of the 1992 policy


     The Association filed a grievance concerning the changes in the health
plan.  The Association argued that the agreement required the City to pass
all of the cost savings to the firefighters.  On December 22, 1992, the
arbitrator denied the grievance.  Although the language of the grievance did
not specifically target the effect of the City's decision on the premiums paid
by HMO subscribers, the parties argued that issue to the arbitrator and he
addressed it in his decision.  On December 23, 1992, the Association filed a
prohibited practice complaint against the City.  The complaint charged that
the City's decision to remove the retirees from the insurance pool and the
effect of that decision on the rates paid by HMO participants were unilateral
changes to mandatory subjects of collective bargaining.  According to the
Association, the City's act constituted a refusal to bargain in good faith
pursuant to 26 M.R.S.A.  965(1)(c).

     The City requested that the Board defer to the arbitrator's decision on
the July grievance, but the prehearing officer denied that request.  The
matter proceeded to an evidentiary hearing before the Board.  The Board
found that the removal of the retirees from the health plan was not a
mandatory subject of bargaining.  It also found, however, that the City's
action had an effect that the agreement did not allow on the cost of health
insurance, a mandatory subject of collective bargaining.  It ordered the City
to reimburse association members who had paid more in HMO premiums as
a result of the City's action.

     The City filed a complaint for direct judicial review pursuant to 5
M.R.S.A.  11008 (1989). It argued that the Board improperly failed to


defer to the arbitrator's interpretation of the agreement and that the Board
erred in concluding that the agreement did not allow the change in the
City's contributions to the HMO.  The court vacated the Board's order,
concluding that the City was not required to bargain over the effects of its
decision because the decision itself was not a mandatory subject of collective
bargaining, and all three parties appeal.  The Board and the Association
attack the court's stated basis for its ruling.  The City on cross-appeal
presses those arguments that it made originally before the Board that the
Superior Court failed to address.

     We review directly the decision of the Board.  City of Bangor v. Council
74, A.F.S.C.M.E., 449 A.2d 1129, 1133-34 (Me. 1982).  We will reverse the
agency decision only if the record demonstrates that the agency abused its
discretion, committed an error of law, or made findings not supported by
substantial evidence.  Hilly v. City of Portland. 582 A.2d 1213, 1216 (Me.

     It is well established that 26 M.R.S.A.  965 requires public employers
to bargain over the impact of even non-negotiable changes on mandatory
subjects of collective bargaining.  See Superintending Sch. Comm. v. Bangor
Educ. Ass'n, 433 A.2d 383, 385 (Me. 1981).  In this case, the City's decision
affected the amount paid by association members for health insurance,
clearly a term or condition of employment subject to mandatory collective
bargaining.  Easton Teachers Ass'n v. Easton Sch. Comm., No. 79-14, slip op.
at 6 (M.L.R.B. Mar. 13, 1979).  Therefore, if not authorized by the collective
bargaining agreement, the change made by the City without proper notice


and an opportunity to bargain constitutes an unlawful refusal to bargain.[fn]1  26
M.R.S.A.  965.

     The Board found that the agreement did not on its face permit the
City unilaterally to manipulate its required HMO contribution by jettisoning
the retirees from the traditional Blue Cross plan.  The language of the
agreement is certainly consistent with that interpretation.  The Board
therefore proceeded to determine the intent of the parties with respect to
the cost-sharing provision.  It found that the parties agreed to the cost-
sharing arrangement on the assumption that insurance costs would only
increase.  That determination is a factual finding that we will not overturn
unless it is clearly erroneous.  Maine State Employees Ass'n v. State Dev.
Office, 499 A.2d 165, 168 (Me. 1985).

     The Board heard evidence that the parties had contemplated only
increases in insurance costs.  In addition, the structure of the cost-sharing
arrangement itself supports that conclusion.  The agreement capped the
City's contribution to the HMO plan at the level of its Blue Cross
contribution, with the understanding that increases in the cost of that plan
would fall on the employees.  In return, the agreement capped the
employees' contributions to the Blue Cross plan, with the City bearing any
increase in costs.  Unilateral action by the City to reduce its Blue Cross
contribution upset the symmetry of this contractual arrangement.  The
Board's conclusion that the parties did not bargain for an agreement that

1.  The City contends that it did provide notice of the change.  The Board concluded otherwise
and its finding is supported by substantial evidence in the record.


permitted the City unilaterally to effect a change in the cost-sharing
arrangement is therefore supported by competent evidence in the record.

     As the City points out, the arbitrator reached a different conclusion
about the meaning of the collective bargaining agreement, specifically
rejecting the arguments embraced by the Board.  It argues that the Board
should have deferred to the arbitrator's decision because the arbitrator's
resolution of the contractual issue disposes of the statutory issue as well.[fn]2

     The City first raised the deferral question before the prehearing
officer, who is empowered by rule to "cause a record to be made of
argument respecting any request for deferral" and to "grant or deny the
deferral request."  M.L.R.B. Rule 4.07(D).  The prehearing officer denied the
City's deferral request.  Although Rule 4.07(D) provides a procedure for
challenging the prehearing officer's deferral decision before the full Board,
the City did not do so, revisiting the matter only before the court.  The City
has failed therefore to preserve its challenge to the deferral decision.

     Moreover, even if we were to consider the City's deferral argument on
the merits, the City acknowledges that the decision to defer is largely a

2.  The Board has partially incorporated into its deferral policy the standards set forth in a
series of National Labor Relations Board decisions, beginning with Spielberg Mfg. Co., 112
N.L.R.B. 1080 (1955).  See Council 74, A.F.S.C,M.E. v. City of Bangor, No. 80-50, slip op. at 3
(M.L.R.B. Sept. 22, 1980).  The basic Speilberg test calls for NLRB deferral to an arbitration
award if (1) the arbitration proceedings were fair and regular; (2) all parties agreed to be bound;
and (3) the arbitration decision is consistent with the policies embodied in the act.  Spielberg
Mfg. Co., 112 N.L.R.B. at 1082.  In addition, the Board has required identity of issue between the
prohibited practice complaint and the grievance.  In this case, the prohibited practice
complaint required the Board ultimately to determine whether the impact of the City's action
on the HMO subscribers was consistent with the agreement.  The Association presented that
question to the arbitrator and he considered it.  The arbitrator expressly found that the effect
on HMO participants of the City's action in removing the retirees from the health insurance
pool was contemplated and approved by the agreement.  It appears therefore that the
contractual question at the heart of the prohibited practice complaint was presented to the


matter within the discretion of the Board.  The Board's deferral policy is
designed to "give full effect to the parties' agreement to submit contract
disputes to arbitration."  Maine State Emp. Ass'n v. State, No. 86-09, slip op.
at 5 (M.L.R.B. Apr. 23, 1986).  For that reason, the Board has often deferred
to a pending arbitration when, as in this case, "the bargaining agreements
and their meaning are at the center of the dispute."  Id., slip op. at 6.

     The Board nevertheless must balance that important policy goal
against its statutory duty "to prevent any person, any public employer, any
public employee, any public employee organization or any bargaining agent
from engaging in ... prohibited acts."  26 M.R.S.A.  968(5)(A) (1988).  The
Board's authority to prevent prohibited practices "shall not be affected by
any other means of adjustment or prevention that has been or may be
established by agreement, law or otherwise."  Id.  The Board has stated that
it does not defer indiscriminately to arbitration proceedings and that it
frequently has declined to defer when it determines that deferral would not
be consistent with its statutory mission.  Maine State Emp. Ass'n v. State,
No. 86-09, slip op at 6.  We cannot say that the Board exceeded its
discretion in declining to defer to the arbitration decision in this case.

     The entry is:

		    Judgment vacated.

		    Remanded for the entry of a judgment
		    affiming the decision of the Maine Labor
		    Relations Board dated August 9, 1993.
All concurring.



Sitting as the Law Court                            Docket No. Pen-94-496

CITY OF BANGOR             )
	   v.              )                  MANDATE
BOARD et al.               )

     The above-captioned cause having been brought before this Court, 
sitting as the Law Court, from the Superior Court in the County of Penobscot; 
and it having been heard and maturely considered;

     It is ORDERED that the Clerk of the Law Court enter upon the Law 
Court docket and certify to the Clerk of the Superior Court in the County of
Penobscot the following mandate therein:

	  Judgment vacated.

	  Remanded for the entry of a judgment
	  affirming the decision of the Maine Labor
	  Relations Board dated August 9, 1993.

     Dated:  May 25, 1995

				 For the Court

				      David G. Roberts
				      Associate Justice