Midwest Power Systems

National Labor Relations Board - Board Decisions

Aug 27, 2001

335 N.L.R.B. 237 (N.L.R.B. 2001)

MIDWEST POWER SYSTEMS 237
Midwest Power Systems, Inc. and International
Brotherhood of Electrical Workers, Local Union
499. Case 18–CA–12545
August 27, 2001
SUPPLEMENTAL DECISION AND ORDER
BY CHAIRMAN HURTGEN AND MEMBERS
LIEBMAN
AND TRUESDALE
On April 4, 1997, the National Labor Relations Board
issued its Decision and Order in this proceeding,1 finding
that the Respondent violated Section 8(a)(5) and (1) of
the Act by announcing and implementing changes to the
future retirement medical and life insurance benefits of
current bargaining unit employees without giving the
Union notice and an opportunity to bargain about these
changes and their effects.
On April 22, 1997, the Respondent filed a petition for
review of the Board’s Order with the United States Court
of Appeals for the District of Columbia Circuit and the
Board filed a cross-application for enforcement on June
12, 1997.
On February 18, 1998, the court issued its decision
granting the Respondent’s petition for review, denying
enforcement of the Board’s Order and remanding the
case to the Board for further proceedings in accordance
with the court’s opinion.2 The court remanded the matter
for the Board to determine whether the collective-
bargaining agreements incorporated the retiree plan
documents.
On October 27, 1998, the Board informed the parties
that it had accepted the remand and invited the parties to
submit statements of position with respect to the issue on
remand. Thereafter, the Respondent, the General Coun-
sel and the Charging Party each filed statements of posi-
tion.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the decision and the record
in light of the court’s remand and the parties’ statements
of position, and finds, as explained below, that the retiree
plan documents were not incorporated into the collec-
tive-bargaining agreements.3

1 323 NLRB 404 (1997).
2 The court issued an unpublished memorandum decision, 159 F.3d
636 (1998).
3 Contrary to our dissenting colleague, we would not remand this
case for a hearing. The parties originally stipulated that there was no
need for a hearing in this case. In the statements of position to the
Board following the remand, no party argues that a hearing is necessary
to resolve the issue of whether the relevant plans were incorporated into
the collective-bargaining agreement. The fact that the parties have
differing views on the issue before us does not require a hearing where
the stipulation of facts and exhibits are sufficient to resolve the issue
raised by the remand.
The relevant facts are set forth fully in the prior deci-
sion. Briefly, they are as follows. In late 1991, the Re-
spondent announced that it intended to raise the costs of
health insurance for retirees and notified active employ-
ees of the changes which would be applicable to those
active employees who retired after a specified future
date. The Respondent informed the Union that it would
listen to the Union’s concerns with the caveat that it con-
sidered the issue a nonmandatory subject of bargaining.
Thereafter, the Respondent implemented the changes,
albeit as modified over the course of the parties’ discus-
sions.
The Board found that the Union had not waived its
right to bargain over the future retirement benefits of
active employees by agreeing to clauses in the retiree
benefit plans, which reserved to Respondent the right to
change or eliminate the benefit plan at any time. The
Board assumed arguendo that the collective-bargaining
agreements at issue incorporated the retiree plan docu-
ments, including the reservation clauses. The Board
concluded, however, that the reservation clauses reserved
only the Respondent’s right to change or terminate bene-
fits of retirees and did not give the Respondent the right
unilaterally to change the future retirement benefits of
active employees.
The court remanded the case to the Board solely for a
determination of whether the collective-bargaining
agreements actually incorporate the retiree plan docu-
ments. The court noted that, contrary to the Board’s as-
sumption, counsel for the Respondent appeared to con-
cede at oral argument that the so-called incorporation
clauses did not incorporate the retiree plan documents,
and that references in the incorporation clauses to ‘em-
ployee insurance plans’ pertained solely to the separate
set of insurance policies applicable to active employees.4
We find, in agreement with the Respondent’s apparent
concession to the court, that the facts do not establish
that the retiree plan documents were incorporated into
the collective-bargaining agreements. The relevant con-
tract clauses refer specifically to the provision of em-
ployee insurance plans by separate agreement and make
no reference to retirement benefit or pension plans.5 In

4 In its statement of position the Respondent does not dispute its ap-
parent concession to the court, but argues that the plans were incorpo-
rated into the agreements.
5 The Southern Agreement and its successor agreement, provide in
relevant part that:
By separate understandings, the parties have provided for cer-
tain employee insurance plans. These plans provide for hospital,
dental, surgical and medical insurance, group life insurance, and
335 NLRB No. 23
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 238
the Southern, Gas and Clerical agreements, the relevant
contract clause states that separate understandings be-
tween the parties provide “certain employee insurance
plans” and that these plans include health, life and dis-
ability insurance plans. These contract provisions do not
mention retiree plans. Thus the plain language of the
Southern, Gas and Clerical collective-bargaining agree-
ments incorporates, if at all, solely the insurance plans of
current active employees.6 In contrast, in Amoco Chemi-
cal Co., 328 NLRB 1220 (1999), enf. denied sub nom.
BP Amoco Corp. v. NLRB, 217 F.3d 869 (D.C. Cir.
2000), the relevant provision in the collective-bargaining
agreement stated that “the following Employee Benefit
Plans are generally set forth in the current Benefits Plan
Booklets,” and listed eight named plans including a sav-
ings, group life insurance, retirement, dental, and health
benefit plan at issue in the case, the terms of which ap-
plied to both current and retired employees. In contrast,
the Respondent’s various plans covering active employ-
ees are separate from those covering retired employees.7

long-term disability insurance. The [Respondent] agrees to con-
tinue these plans for the term of this Wage Working Contract.
The Gas Agreement, and its successor agreement, provide in perti-
nent part that:
By separate understandings, the parties have provided certain
employee insurance programs. Their plans are embodied in sepa-
rate agreements and include a Comprehensive Medical Insurance
Plan, Dental Plan, Vision Plan, Long-Term Disability Plan, and
Group Life Insurance Plan. The [Respondent] agrees to continue
them in accordance with separate understandings. It will be the
[Respondent’s] responsibility to determine which carriers admin-
ister these benefit programs.
The Clerical Agreement provides in relevant part:
By separate understanding, the parties have provided for cer-
tain employee insurance plans. These plans provide for hospital,
surgical and medical insurance, group dental insurance, group life
insurance and long-term disability insurance.
The Northern Agreement provides, in relevant part, that “the Union
has negotiated fringe benefits which are not contained in this Agree-
ment for Union personnel.”
6 Accordingly, we find Mary Thompson Hospital, 296 NLRB 1245
(1989) distinguishable. At issue in that case, was the unilateral discon-
tinuance of a contractually mandated pension plan. However, the plain
language of the collective-bargaining agreement specifically incorpo-
rated the entire pension benefit plan document, including a clause re-
serving the respondent’s right to terminate the pension plan at any time.
7 Contrary to the contention of the dissent, we do not view the Un-
ion’s position on remand to be “equivocal on the issue of incorpora-
tion.” The Union only argues that the retirement benefits are “incorpo-
rated” to the extent that there is a requirement that all existing benefits,
contractual or noncontractual, be maintained during the term of the
contract, absent a mutually agreed-upon change.
Nor do we find that the Union’s attempt to bring the issue under the
grievance procedure supports a conclusion that the contract incorpo-
rated the plan documents. Indeed, the Respondent denied the griev-
ance, asserting that “it was not obligated by contract or Federal law to
negotiate retiree medical benefits and, even if it were, that matter was
not subject to the grievance or arbitration provisions of the contract.”
The Respondent also informed the Union that it had “reserved the right
to change or terminate retiree medical benefits at any time.”
Nor do we view the Northern Agreement’s provision
referring simply to “negotiated fringe benefits” as war-
ranting a different result.8 This provision mentions no
benefit plans or programs, nor does it specifically refer to
retiree benefits of any sort. Without any description of
the nature and form of the fringe benefits, referred to in
the agreement, there is insufficient basis to conclude that
the retirement benefit plans are included.
We therefore find that the retiree plan documents were
not incorporated into the collective-bargaining agree-
ments. Since the retiree plan documents are not incorpo-
rated, the reservation of rights provision on which the
Respondent relies to justify its actions is also not incor-
porated into the contracts. Accordingly, for the reasons
offered here and in the Board’s original decision, we
reaffirm our previous finding that the Union did not
waive its right to bargain over changes in the retiree plan,
and that the Respondent violated Section 8(a)(5) of the
Act by making unilateral changes in the retirement health
insurance benefits of the current employees.
ORDER
The National Labor Relations Board reaffirms its
original Order, reported at 323 NLRB 404 (1997), and
orders that the Respondent, Midwest Power Systems,
Inc., Des Moines, Iowa, its officers, agents, successors,
and assigns, shall take the action set forth in that Order.

CHAIRMAN HURTGEN, dissenting.
The District of Columbia Court of Appeals remanded
this case to the Board to resolve the issue of whether
retiree benefit plan documents are incorporated by refer-
ence in the parties’ collective-bargaining agreements.
My colleagues conclude that they are not. They rely on
the absence of the phrase “retiree plans,” and on the
presence of the word “employee,” in the contractual pro-
visions that specify that certain benefit plans, not ap-
pended to the contracts, are incorporated by reference
into those agreements.1 In my colleagues’ view, it fol-

8 See fn. 4, supra.
1 These provisions are as follows:
A. Southern Agreement
Art. 1, Sec. 2
It is agreed by the Company and the Union that all mat-
ters subject to negotiations and collective bargaining, in-
cluding but not limited to wages, hours, schedules, working
conditions, job content, safety rules, and other terms of em-
ployment are in effect at the time of signing of the new
Contract shall remain in force and effect as they exist or as
they are covered in the Contract, during the term of the
Contract except as provided in Section 3 of this Article.
Art. XIV, Sec. 1.1
By separate understandings the parties have provided for
certain employee insurance plans. These plans provide for

MIDWEST POWER SYSTEMS 239
lows from the above that the retiree plan documents are
not incorporated into the agreements. Contrary to my
colleagues, I do not find that these factors are wholly
dispositive of the issue. Further, I note that this case was
presented to the Board on a stipulated record, without a
hearing before an administrative law judge. Nowhere in
the stipulation do the parties address, let alone resolve,
the issue of whether retiree benefit plan documents are
incorporated by reference into the collective-bargaining
agreements.
To the extent that the stipulation is suggestive of the
result, the stipulation arguably supports a claim of incor-
poration. Thus, the stipulation states that, in 1992, the
Union filed a grievance over the Respondent’s proposed
changes to retiree medical benefits applicable to the
Southern and Gas bargaining units. Similarly, after the
Respondent informed the Union in 1994 of prospective

hospital, dental, surgical and medical insurance, group life
insurance, and long-term disability insurance. The Com-
pany agrees to continue these plans for the term of this
Wage Working Contract.
B. Gas Agreement
Art. I, Sec. 2
It is agreed by the Company and the Union that all mat-
ters subject to negotiations and collective bargaining, in-
cluding but not limited to wages, hours, schedules, working
conditions, job content, safety rules, and other terms of em-
ployment which are in effect at the time of signing of the
new Agreement, and likewise, all of those covered by the
Agreement shall remain in force and effect as they exist or
as they are covered in the Agreement, during the term of the
Agreement except as provided in Section 3 of this Article.
Art. XIV, Sec. 1.1
By separate understanding, the parties have provided
certain employee insurance programs. Their plans are
embodied in separate agreements and include a Compre-
hensive Medical Insurance Plan, Dental Plan, Vision Plan,
Long-Term Disability Plan, and Group Life Insurance
Plan. The Company agrees to continue them in accor-
dance with separate understandings. It will be the Com-
pany’s responsibility to determine which carriers adminis-
ter these benefit programs.
C. Clerical Agreement
Art. XII
By separate understanding, the parties have provided
for certain employee insurance plans. These plans pro-
vide for hospital, surgical and medical insurance, group
dental insurance, group life insurance and long-term dis-
ability insurance.
D. Northern
Scope of Agreement, Sec. 6
All rules, schedules, and benefits heretofore existing
and affecting regular employees which are not definitely
referred to as changed by this Agreement with the Local
Union shall remain unchanged unless changed by mutual
agreement.
Art. 6, Sec. 4
The Union has negotiated fringe benefits which are not
contained in this Agreement for Union personnel.
changes to retiree medical insurance for individuals cov-
ered by the Northern contract, the Union filed a griev-
ance. Such grievances suggest that even the Union con-
sidered the retiree benefit plan to be incorporated into the
collective-bargaining agreements.2
I also note that the issue of incorporation is not re-
solved by the positions of the parties on remand. Thus,
we have the Respondent’s contention, on remand, that
the retiree plan documents are incorporated, and that the
parties have never previously contended otherwise.
Next, we have the position of the Union, on remand,
which is equivocal on the issue of incorporation. The
Union argues that, based on the provisions of the collec-
tive-bargaining agreements set forth above (see fn. 1),
“retiree benefits, as well as other benefits, as they existed
and were in effect for active employees at the times of
the execution of the agreements, could not be unilaterally
changed by the Respondent . . . To the extent this basic
agreement involves “incorporation” of the plan docu-
ments into the contract, if at all, they could be viewed as
incorporated.”
My colleagues suggest that the Union’s position has a
noncontractual base. I disagree. But, even if that were
so, the Union’s position is, at least in part, based on the
contract. In addition, as noted above, the Union filed
contractual grievances.
Further, I note that the General Counsel, on remand,
does not even make the argument that my colleagues find
persuasive. Rather, the General Counsel argues that the
retiree plan documents are not incorporated in the
agreements because the parties never negotiated the
plan.3
My colleagues say that the Respondent appeared to
concede at oral argument before the D.C. Circuit that
retiree plan documents are not incorporated into the col-
lective-bargaining agreements. In its brief on remand to
the Board, the Respondent previously argues otherwise.
Further, as noted above, the Union has not been consis-
tent on the issue of incorporation. In these circum-
stances, the case cries out for a hearing on the facts.
My colleagues argue that there is no need for a hearing
because (1) the parties originally stipulated the case to
the Board; (2) neither party now seeks a hearing. As to
point (1), the case has taken a significant turn, i.e., the
court has remanded for findings of fact. The Board must
2 As noted infra, the Union’s statement of position seeks to permit
the Union to have its cake and eat it too. The Union appears to say that
the retirement benefits are incorporated into the contracts (hence the
grievances) and to also say that the Respondent’s privileges to make
changes are not incorporated.
3 As to this issue, I conclude that the absence of bargaining as to in-
corporation is a relevant factor, but not a dispositive one.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 240
respond to the court and, as discussed supra, the stipula-
tion does not dispose of the factual issues. As to point
(2), it is not uncommon to have cases where both parties
seek to avoid a hearing (cross-motions for summary
judgment) and for the Board to nonetheless decide that a
hearing is necessary (deny both cross motions). Simi-
larly, in the instant case, the Board needs to hear the facts
so as to respond to the court.
Accordingly, because I find that the language in the
collective-bargaining agreements, the stipulations of the
parties, and the parties’ arguments on remand do not re-
solve the issue raised by the court, I would remand this
case for a hearing before an administrative law judge. I
would direct the administrative law judge to take evi-
dence, make findings of fact, conclusions of law, and
recommendations as to whether the retiree plan docu-
ments were incorporated in the collective-bargaining
agreements.

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