Torrington Co.

National Labor Relations Board - Board Decisions

Dec 23, 1991

305 N.L.R.B. 938 (N.L.R.B. 1991)

938
305 NLRB No. 140
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 The husband’s reimbursement of his wife’s medical expenses
was referred to as ‘‘secondary coverage.’’ In reality, secondary cov-
erage paid nearly, but not quite all, the remainder of the spouse’s
medical expenses. It should be noted that the judge misstated the
way this process worked in that he erroneously concluded that the
employees who received treatment filed for secondary as well as pri-
mary coverage. Each spouse, depending on his or her role as patient
or nonpatient, filed for the portion of coverage that was applicable
to his or her situation.
2 Except where otherwise indicated, all dates are in 1989.
3 No party contends that the ‘‘Healthline’’ program, which re-
quired precertification of hospital confinements, and the increase in
sickness and accident benefits have any bearing on internal coordina-
tion of benefits.
4 The collective-bargaining agreement goes on to specify benefits,
such as hospitalization, surgical, maternity, and laboratory services.
The Torrington Company, a subsidiary of the In-
gersoll Rand Company and Metal Products
Workers Union Local 1645, International
Union, United Automobile, Aerospace and Ag-
ricultural Implement Workers of America,
UAW. Case 34–CA–4566
December 23, 1991
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS OVIATT
AND RAUDABAUGH
On April 25, 1991, Administrative Law Judge Joel
P. Biblowitz issued the attached decision. The General
Counsel and the Union filed exceptions and supporting
briefs. The Respondent filed cross-exceptions with a
supporting brief and an answering brief, and the Gen-
eral Counsel filed an answering brief.
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 exceptions and briefs and has de-
cided to affirm the judge’s rulings, findings, and con-
clusions to the extent described below and to adopt the
recommended Order.
The issue before us is whether the Respondent vio-
lated Section 8(a)(5) and (1) by unilaterally changing
the health insurance plan of nonbargaining unit em-
ployees in a way that affected spouses of those em-
ployees who were in the bargaining unit represented by
the Charging Party Union. We agree with the judge
that the change was not a mandatory subject of bar-
gaining and that therefore the complaint should be dis-
missed. As explained in section III, below, however,
our reasons for concluding that the change was not a
mandatory subject are somewhat different from those
of the judge.
I. RELEVANT FACTUAL FINDINGS
Prior to January 1, 1990, the Respondent made
available to its unit and nonunit employees a health in-
surance benefit plan that paid 80 percent of the em-
ployee’s reasonable medical costs. The plan also per-
mitted internal coordination of benefits between
spouses who were both employed by the Respondent.
For example, 80 percent of a married female employ-
ee’s medical expenses were paid through her direct
participation in the plan. This was referred to as ‘‘pri-
mary coverage.’’ With internal coordination of bene-
fits, the employee’s husband—who himself was an em-
ployee participant in the plan—could apply to have the
remaining 20 percent of his wife’s medical expenses
paid through his coverage by claiming her as a de-
pendent. This two-step process saved the couple almost
the entire cost of the wife’s medical expenses.1
In 1989,2 during negotiations for a new collective-
bargaining agreement, the Respondent proposed a new
health insurance plan that it said its parent, Ingersoll
Rand, was implementing at all subsidiaries. Although
the information furnished concerning the new plan
mentioned that internal coordination of benefits would
be eliminated, according to the Union’s witnesses, the
elimination itself was not discussed. The Union re-
jected the proposed plan because the Respondent could
not provide sufficient information about other aspects
of it and, on September 9, the parties executed a
memorandum of agreement, stating:
The [Respondent] agrees to continue all existing
insurance coverage and to pay increased cost re-
quired to maintain these benefits for the term of
the agreement subject to the [institution of a
‘‘Healthline’’ program and increase in sickness
and accident benefits].3
In addition the newly negotiated collective-bar-
gaining agreement, executed the same day, states:
The [Respondent] will continue to purchase from
an insurance carrier of its selection for its employ-
ees and their dependents the following insurance
benefits with Coordination of Benefits and Inter-
nal Coordination of Benefits.4
In October, the Union became aware that the Re-
spondent intended to implement the new plan, without
internal coordination of benefits, for all nonunit em-
ployees. Although the Union repeatedly inquired about
the effective date of the plan and the impact of the
elimination of benefit coordination on unit employees,
the Respondent either was unable or unwilling to an-
swer the Union’s questions. On December 28, the Re-
spondent informed the Union that the new plan for
nonunit employees would become effective on January
1, 1990.
As a result of the Respondent’s implementation of
the new plan, nonunit employees could not apply for
secondary coverage of the unpaid balance of their
939TORRINGTON CO.
5 Because of the retention of the existing coverage for unit em-
ployees, however, unit employees were permitted to apply for sec-
ondary coverage of the unpaid balance of their nonunit (or unit)
spouses’ medical expenses. The practical effect of the change was
that while unit-unit couples could have all of their medical expenses
paid no matter which spouse received treatment, nonunit-unit couples
had all medical expenses paid only if the nonunit spouse was the
one receiving treatment.
6 In this connection, the judge noted that of the Respondent’s ap-
proximately 1600 employees, the change in health plans adversely
affected 20 unit employees.
7 Given our theory of the case, we do not, like the judge, place
any reliance on the small number of employees affected by the
change. (See fn. 6 supra.) We also note that if the change in ques-
tion did involve the employment terms and conditions of unit em-
ployees, the mere fact that only a small number were affected would
not dictate a finding that the change was not a mandatory subject
of bargaining. See Van Dorn Plastics Machinery Co., 286 NLRB
1233, 1234 fn. 4 (1987).
8 We find no merit in the Union’s statement that, ‘‘The Unit em-
ployee is disqualified from receiving coverage under the non-Unit
plan because he is an employee of Respondent.’’ As far as the
record shows, no nonunit employee retained ‘‘coordination of bene-
fits’’ coverage under the Respondent’s medical benefits plan which
could cover as a dependent a spouse otherwise covered by his or her
own separate plan; and that is so regardless of the place of employ-
ment of the spouse of the nonunit employee. For the nonunit em-
ployee the absence of coordinated benefits coverage appears to be
universal under the Respondent’s nonunit employee medical plans.
Accordingly, the unit employees’ status as such had no apparent
bearing on their exclusion from coordination of benefits coverage
under the nonunit employees’ medical benefits plan.
9 The instant case is distinguishable from Beitler-McKee Optical
Co., 287 NLRB 1311, 1312 (1988), in which the Board found that
the employer unlawfully unilaterally eliminated family coverage
from the unit employees’ existing health insurance plan, notwith-
standing that all of the unit employees were single and did not use
family coverage. There, the unilateral change was made in the unit
employees’ plan. In the instant case, the unilateral change was ef-
fected only in the plan made available to nonunit employees.
spouses’ medical expenses, whether their spouses were
nonunit or unit employees. Thus, nonunit-unit couples
received only 80 percent coverage of the unit spouse’s
medical treatment and could not apply for reimburse-
ment of the remaining 20 percent.5
II. THE PARTIES’ POSITIONS AND THE
JUDGE’S DECISION
The General Counsel and the Union have asserted
that the internal coordination of benefits between unit
and nonunit employees is a mandatory subject of bar-
gaining, and that the Respondent was required to bar-
gain about its elimination of the benefit for nonunit
employees because the elimination substantially
changed the benefits of unit employees who are mar-
ried to nonunit employees. In particular, the Union
contends that, even though the change was made in the
health plan of nonunit employees, it ‘‘vitally affects’’
all bargaining unit spouses of those employees, and is
therefore a mandatory subject under the test set out in
Chemical Workers Local 1 v. Pittsburgh Plate Glass
Co., 404 U.S. 157, 179 (1971). The General Counsel
agrees that the ‘‘vitally affects’’ test is met here, but
argues principally that the change should be viewed as
one made in the benefits of the unit members them-
selves. The judge agreed that Pittsburgh Plate Glass,
supra, applied, but concluded, in reliance on United
Technologies Corp., 274 NLRB 1069 (1985), that the
‘‘vitally affects’’ test was not met because the benefit
coordination in the nonunit health plan provided only
an ‘‘indirect and remote’’ benefit to the unit employ-
ees.6
III. ANALYSIS
We agree with the judge that the Respondent was
not obligated to bargain about the elimination of inter-
nal coordination of benefits for nonunit employees. We
do not rely, however, on the remoteness or indirectness
of the effect on the financial interests of unit employ-
ees. We rely instead on the fact that the change in the
medical plan for nonunit employees did not affect the
‘‘terms and conditions of employment’’ of the unit em-
ployees. In this regard, we note that the ‘‘vitally af-
fects’’ test of Chemical Workers Local 1 v. Pittsburgh
Plate Glass Co., supra, was linked only to unit em-
ployees’ ‘‘terms and conditions of employment’’ and
not to their financial or other interests generally. Id. at
179. Obviously a unit spouse’s interests may be af-
fected by improvements or impairments of the wages
and benefits of the nonunit spouse, but this does not
mean that those wages and benefits are the terms and
conditions under which both of them work.7
The Respondent eliminated internal benefits coordi-
nation only from the nonunit employees’ new health
plan. It was the nonunit employees’ right to seek this
coordinated benefits coverage, and theirs alone, that
was foreclosed by the change. Although the elimi-
nation affected unit employees because the nonunit
spouse of the unit spouse no longer received coordi-
nated benefits, the increase in medical expenses flowed
from the change in nonunit employment benefits rather
then from any change in benefits available to unit em-
ployees, who were still entitled to secondary coverage
of their nonunit spouses.8 Because unit employees re-
tained the right to apply for secondary coveage reim-
bursement of their nonunit or unit spouses’ medical ex-
penses, the Respondent’s policies were consistent with
its agreement to purchase health insurance for unit em-
ployees that permitted internal coordination of benefits.
The Respondent had no obligation to bargain with the
Union about changes in the terms and conditions of
employment for employees who were not in the unit.9
The fact that these changes had an impact on the over-
all financial concerns of the unit employees does not
make them a bargainable subject.
Accordingly, we find that despite its incidental, ad-
verse impact on unit employees, the elimination of in-
ternal coordination of benefits in the nonunit employ-
940 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 Unless indicated otherwise, all dates referred to herein relate to
the year 1990.
2 Actually, the change also affects nonunit employees married to
each other who can no longer take advantage of the spouse’s cov-
erage for secondary reimbursement, but that is not relevant herein.
ees’ health plan was not a mandatory subject of bar-
gaining. The Respondent therefore had no duty to bar-
gain with the Union before implementing the new plan
for those nonunit employees.
ORDER
The National Labor Relations Board adopts the
judge’s recommended Order and orders that the com-
plaint is dismissed.
Thomas W. Doerr, Esq., for the General Counsel.
Burton Kainen, Esq. (Segal, O’Connor, Schiff, Zangari &
Kainen), for the Respondent.
DECISION
STATEMENT OF THE CASE
JOEL P. BIBLOWITZ, Administative Law Judge. This case
was heard by me on January 30, 1991, in Hartford, Con-
necticut. The complaint, which issued on May 16, 1990,1 and
was based on an unfair labor practice charge filed on January
8 by Metal Products Workers Union Local 1645, Inter-
national Union, United Automobile, Aerospace and Agricul-
tural Implement Workers of America, UAW (the Union), al-
leges that the Torrington Company, a subsidiary of the Inger-
soll Rand Company (Respondent), violated Section 8(a)(1)
and (5) of the Act by altering the health insurance benefits
of its employees without previously affording the Union an
opportunity to bargain about the subject.
On the entire record, including the briefs received from the
parties, I make the following
FINDINGS OF FACT
I. JURISDICTION
Respondent, a Delaware corporation with its principal of-
fice located in Torrington, Connecticut (the facility), is en-
gaged in the manufacture and nonretail sale of antifriction
bearings. During the 12-month period ending April 30, Re-
spondent sold and shipped from its facility products, goods,
and materials valued in excess of $50,000 directly to points
outside the State of Connecticut. Respondent admits, and I
find, that it is an employer engaged in commerce within the
meaning of Section 2(2), (6), and (7) of the Act.
II. LABOR ORGANIZATION STATUS
Respondent admits, and I find, that the Union is a labor
organization within the meaning of Section 2(5) of the Act.
III. THE FACTS
Respondent employs approximately 1600 employees at the
facility; of these, about 1000 are salaried nonunit employees.
The remaining 600 employees are represented by the Union.
The Union has represented these employees since about 1950
and the most recent collective-bargaining agreement between
the parties is effective for the period September 9, 1989,
through September 12, 1992. Of the employees at the facil-
ity, there are 29 married couples where both are employed
in the unit involved herein and there are 46 married couples
employed at the facility where both are employed in nonunit
positions. More important to the instant matter, there are 20
or 21 bargaining unit employees at the facility who have
spouses at the facility employed in nonbargaining unit posi-
tions. This matter involves medical insurance coverage pro-
vided by Respondent to its employees—unit and nonunit.
From, at least, January 1, 1986, to January 1, Respondent’s
medical insurance plans have contained internal coordination
of benefit provisions; this means that if both spouses are em-
ployed by Respondent they can each take advantage of their
own as well as their spouse’s coverage to, hopefully, obtain
100-percent reimbursement for their medical expenses. As an
example, a bargaining unit member whose wife is employed
by Respondent in a nonbargaining unit position would file a
claim with the primary carrier and (theoretically) receive re-
imbursement for 80 percent of his medical expenses. He
would then file a secondary claim with his wife’s coverage
(pursuant to internal coordination of benefits) and would then
receive the remaining 20 percent of his expenses.
Respondent made no change relevant herein to the health
insurance benefits for its unit employees. However it did
change its health insurance benefits for its nonunit employ-
ees, effective January 1, by terminating internal coordination
of benefits. As a result of this change unit member spouses
could no longer take advantage of coordination of benefits
with their nonunit spouses. It works this way: commencing
January 1, unit employees, after being reimbursed for 80 per-
cent of their medical expenses by their primary carrier, can
no longer file a secondary claim under the plan of their
spouse, who is a nonunit employee. The opposite was not
true, however. A nonunit employee, after being reimbursed
by his primary coverage for 80 percent of his medical ex-
penses, could still file a claim for secondary coverage under
his spouse’s health insurance policy pursuant to internal co-
ordination of benefits, since it was not changed for the unit
employees. This case is before me because of the 20 or 21
married couples who are employed by Respondent at the fa-
cility, one in a unit position and one in a nonunit position.
It is only these individuals who were affected by the elimi-
nation of internal coordination of benefits, effective January
1, and only when the claim is by the unit member.2 In fact,
two of General Counsel’s witnesses were unit employees
who, after January 1, were no longer able to file for sec-
ondary coverage under the health insurance plan of their hus-
bands, nonunit employees of Respondent; this resulted in an
out-of-pocket loss to them of $200 to about $2000. The ini-
tial issue is whether Respondent was obligated to bargain
with the Union prior to discontinuing the internal coordina-
tion of benefits provision for its nonunit employees, and if
so, did Respondent satisfy this bargaining obligation.
Henry Fijalkowski, the shop chairman and vice president
of the Union, testified that there were extensive discussions
about health insurance during the 1989 negotiations and Re-
spondent’s chief spokesperson told him that they were going
to put a new plan in effect for the nonunit employees and
they would like to give the bargaining unit people the same
941TORRINGTON CO.
plan. Fijalkowski testified that Respondent’s representatives
were uncertain about particulars of the new plan and could
not answer some of his questions about the plan; during
these discussions Respondent gave him a document which
referred to the elimination of coordination of benefits, but he
could not recall any specifics of the document or resulting
discussions. The union representatives said that they would
prefer to stay with their existing plan. The memorandum of
agreement executed by the parties on September 9, 1989,
states: ‘‘The Company agrees to continue all existing insur-
ance coverage.’’ In addition, article 11.1 of the new agree-
ment states:
The Company will continue to purchase from an insur-
ance carrier of its selection for its employees and their
dependents the following insurance benefits with Co-
ordination of Benefits provision and Internal Coordina-
tion of Benefits:
As Fijalkowski testified: ‘‘The insurance benefits that we
had would remain intact.’’ Beginning in about October 1989
Respondent conducted meetings with its nonunit employees
to explain the changes in its health insurance plan; the only
change relevant herein is the elimination of internal coordi-
nation of benefits in the nonunit plan. When Fijalkowski
learned of these changes, he informed Respondent’s rep-
resentatives that the Union objected to the elimination of in-
ternal coordination of benefits in the nonunit plan because of
the effect it would have on his unit people who were married
to nonunit employees. When Respondent made clear that this
new plan would be instituted effective January 1, the Union
filed a grievance on the subject in about October 1989; after
the third step of the grievance, Respondent contended that
the grievance should be determined by a named factfinder as
provided in the contract for disputes involving insurance. The
Union disagreed and demanded that it ought to follow the
usual path of arbitration. The arbitration has been stalled as
a result of this disagreement.
IV. ANALYSIS
The issue here is whether Respondent violated Section
8(a)(1) and (5) of the Act by discontinuing internal coordina-
tion of benefits in its health insurance plans for its nonunit
employees. The first question is whether this was a subject
that Respondent was obligated to bargain about with the
Union; if it was, the final question is whether Respondent
satisfied that obligation. I find that the answer to the first
question is no and that it is therefore unnecessary to answer
the second question.
Internal coordination of benefits was unchanged in the
new agreement between Respondent and the Union; there
was a change, however, for the nonunit employees in that
they were given a new health insurance plan which, among
other changes, eliminated internal coordination of benefits.
Whereas this would appear to be beyond the Union’s con-
cern, the General Counsel alleges that the Union has the
right to object, and Respondent was obligated to bargain on
the subject prior to the elimination of this provision, because
20 or 21 of the Union’s members are married to nonunit em-
ployees and, because of the elimination of internal coordina-
tion of benefits, lost the right to apply for, and collect under,
their nonunit spouses’ coverage for secondary reimburse-
ment. It is not every change in conditions of employment
that must first be bargained about; in Chemical Workers
Local 1 v. Pittsburgh Plate Glass Co., 404 U.S. 157 (1971),
the Supreme Court held that to be a mandatory subject of
bargaining, the subject had to ‘‘vitally affect’’ the terms and
conditions of their employment. In United Technologies
Corp., 274 NLRB 1069, 1070 (1985), after referring to the
Supreme Court’s ‘‘vitally affect’’ standard, the Board stated:
An indirect or incidental impact on unit employees is
not sufficient to establish a matter as a mandatory sub-
ject. Rather, mandatory subjects include only those mat-
ters that materially or significantly affect unit employ-
ees’ terms and conditions of employment.
In that case the employer had maintained a program for
about 20 years under which it employed college-aged chil-
dren of both its unit and nonunit employees on a temporary
basis during the summer months. Although the union did not
represent these summer employees, it demanded that the
company bargain with it over this summer help program; the
company refused to do so. In dismissing this allegation, the
Board stated:
we view the availability of temporary summer employ-
ment at the Respondent’s facility as a benefit flowing
solely to the nonunit employees hired under the pro-
gram, not to their unit and nonunit employee-parents.
Any ‘‘benefit’’ to the latter is at most indirect and re-
mote.
I find that under Pittsburgh Plate Glass, supra, United
Technologies, supra, and Seattle First National Bank v.
NLRB, 444 F.2d 30 (9th Cir. 1971), Respondent was not ob-
ligated to bargain with the Union regarding elimination of in-
ternal coordination of benefits for the health insurance plan
for its nonunit employees. The facts herein are very similar
to those present in United Technologies, supra, where the
Board found that the effect and benefit to the unit-parents
was ‘‘at most indirect and remote.’’ The same is true here.
Out of about 1600 employees at the facility, about 20 unit
employees have lost their secondary coverage by the elimi-
nation of internal coordination of benefits for the nonunit
employees at the facility. Without minimizing the additional
out-of-pocket loss suffered by some of the Union’s members,
such as Poniatowski and Dragan, the change does not ‘‘vi-
tally affect’’ the unit employees, nor does it ‘‘materially or
significantly’’ affect their terms and conditions of employ-
ment. As stated in the brief of counsel for Respondent, if I
were to accept General Counsel’s position herein, Respond-
ent could make no change in the terms and conditions of em-
ployment of its nonunit employees without first bargaining
with the Union, since it would have some effect on the unit
spouses.
I therefore recommend that the complaint be dismissed in
its entirety.
CONCLUSIONS OF LAW
1. Respondent is an employer engaged in commerce within
the meaning of Section 2(2), (6), and (7) of the Act.
2. The Union is a labor organization within the meaning
of Section 2(5) of the Act.
942 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
3 If no exceptions are filed as provided by Sec. 102.46 of the
Board’s Rules and Regulations, the findings, conclusions, and rec-
ommended Order shall, as provided in Sec. 102.48 of the Rules, be
adopted by the Board and all objections to them shall be deemed
waived for all purposes.
3. Respondent did not violate Section 8(a)(1) and (5) of
the Act as alleged in the complaint.
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended3
ORDER
It having been found and concluded that Respondent has
not engaged in the unfair labor practices alleged in the com-
plaint, the complaint is dismissed in its entirety.