Connecticut Light & Power Company v. NLRB

• Decision Date: 06 April 1973
• Docket Number: 72-1816.,Dockets 72-1664,No. 339,340,339
• Citation: 476 F.2d 1079
• Parties: The CONNECTICUT LIGHT & POWER COMPANY, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — Second Circuit

476 F.2d 1079 (1973)

The CONNECTICUT LIGHT & POWER COMPANY, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

Nos. 339, 340, Dockets 72-1664, 72-1816.

United States Court of Appeals, Second Circuit.

Argued January 16, 1973.

Decided April 6, 1973.

Harold N. Mack, Boston, Mass. (Morgan, Brown, Kearns & Joy, Boston, Mass., on the brief), for petitioner.

Allison W. Brown, Jr., Atty., NLRB, Washington, D. C. (Peter G. Nash, Gen. Counsel, Patrick Hardin, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, and Steven C. Kahn, Atty., NLRB, Washington, D. C., on the brief), for respondent.

Milton A. Smith and Otto F. Wenzler, Washington, D. C., and Gerard C. Smetana and Lawrence M. Cohen, Chicago, Ill., for The Chamber of Commerce of the United States, amicus curiae.

Before FRIENDLY, Chief Judge, and OAKES and TIMBERS, Circuit Judges.

TIMBERS, Circuit Judge:

The Connecticut Light & Power Company (the Company) has petitioned to review and set aside an order of the National Labor Relations Board issued May 8, 1972, 196 N.L.R.B. No. 149 (1972), which essentially required that the Company bargain in good faith with the Union as to the selection of an insurance carrier for the Company's employee medical-surgical benefits plan. The Board has cross-petitioned for enforcement of its order. We agree with the Company that the selection of an insurance carrier under the circumstances presented here is not a mandatory subject for bargaining within Section 8(d) of the National Labor Relations Act (the Act), 29 U.S.C. § 158(d) (1970). We therefore grant the petition to review and set aside the Board's order, and we deny the cross-petition to enforce the order.

I.

The Company is a Connecticut corporation.¹ It is a public utility engaged in the production, distribution and sale of electricity and gas. It is engaged in commerce within the meaning of the Act.

System Council U-24, International Brotherhood of Electrical Workers, AFL-CIO, and its Local Unions 420, 753, 1045, 1175, 1226, 1317 and 1817 (the Union), are labor organizations within the meaning of the Act. Together they serve as the exclusive representative for all the Company's employees within the relevant bargaining unit. For many years, the Company and the Union have had a collective bargaining relationship.

The Company has long provided its employees with a non-contributory, Company-paid medical-surgical insurance plan. Since 1967 the carrier of this insurance plan, which includes major medical coverage, has been the Aetna Life Insurance Company (Aetna). For several years prior to 1967, the Company had contracted with Blue Cross-Connecticut Medical Service (Blue Cross) for the basic medical-surgical insurance, and with the Hartford Accident and Indemnity Company for major medical insurance.²

In 1969, the Union informed the Company of its dissatisfaction with Aetna's administration of the insurance plan. As a result, the Company secured various changes from Aetna. Nevertheless, during the 1971 collective bargaining negotiations, the Union again expressed its dissatisfaction with Aetna and sought to include in those negotiations the reinstatement of Blue Cross as the carrier for the employee insurance plan. The Company did bargain during the 1971 negotiations with respect to coverage, benefits and administration of the plan; but it steadfastly refused to bargain as to the selection of the carrier, maintaining that it had the right unilaterally to choose the carrier.

On May 14, 1971, the Union filed a charge with the Board, alleging a refusal by the Company to bargain, in violation of Section 8(a)(1) and (5) of the Act, 29 U.S.C. § 158(a)(1) and (5) (1970). That charge resulted in the issuance of a complaint by the General Counsel on July 19, 1971.³ A hearing was held before a trial examiner on October 18, 1971. On February 2, 1972, the examiner filed a decision, in which he found that the Company had unlawfully refused to bargain as to the selection of an insurance carrier for the employee medical benefits plan. On May 8, 1972, the Board affirmed the trial examiner's decision and adopted his recommended order. It ordered the Company to cease and desist from refusing to bargain collectively as to the selection of an insurance carrier, to bargain in good faith on that subject upon request of the union, and to take certain other affirmative action to comply with the order.

The sole issue before us on the Company's petition to review and the Board's cross-petition to enforce is whether the Board correctly concluded that the selection of an insurance carrier under the circumstances presented here is a mandatory subject for bargaining within the meaning of Section 8(d) of the Act.

II.

The requirement that an employer bargain collectively with the representatives of its employees, pursuant to Section 8(a)(5) of the Act, is limited by Section 8(d) to an obligation to confer as to "wages, hours, and other terms and conditions of employment ...." 29 U.S.C. § 158(d) (1970). It is well established that included within that language are such "non-wage" benefits as the group health insurance here involved. E. g., W. W. Cross & Co. v. NLRB, 174 F.2d 875, 878 (1 Cir. 1949); Inland Steel Co. v. NLRB, 170 F.2d 247, 251 (7 Cir. 1948), cert. denied, 336 U.S. 960 (1949) (accepting the Board's conclusion that "the term `wages' ... must be construed to include emoluments of value, like pension and insurance benefits, which may accrue to employees out of their employment relationship .... Realistically viewed, this type of wage enhancement or increase, no less than any other, becomes an integral part of the entire wage structure ...."). The Company here does not dispute the inclusion of the instant group insurance plan within the term "wages". Indeed, it has at all times freely negotiated with regard to the benefit levels and administration of the plan. Further, as noted above, it successfully obtained various changes from Aetna following notification from the Union of the latter's dissatisfaction with certain aspects of the plan.

In Chemical Workers, Local 1 v. Pittsburgh Plate Glass Co., 404 U.S. 157 (1971), the Court was asked to decide whether retirees' benefits—i. e., benefits for former employees already retired—is a mandatory subject for bargaining under Section 8(d). In holding that, because retirees are not "employees" under Section 2(3) of the Act, 29 U.S.C. § 152(3) (1970), the refusal to bargain was proper, the Court observed that it was required also to consider whether such benefits nevertheless were within the ambit of compulsory negotiation topics: "Section 8(d) of the Act, of course, does not immutably fix a list of subjects for mandatory bargaining .... But it does establish a limitation against which proposed topics must be measured. In general terms, the limitation includes only issues that settle an aspect of the relationship between the employer and employees." 404 U.S. at 178. This, as the Court observed, depends on whether the matter "vitally affects the `terms and conditions' oftheemployment." 404 U.S. at 179. (emphasis added).

A recent Sixth Circuit decision examined the applicability of that standard to the selection of a carrier for an employee medical-surgical insurance plan. In Bastian-Blessing, Division of Golconda Corp. v. NLRB, 474 F.2d 49 (6 Cir. 1973), the court held that under the specific facts of that case the naming of an insurance carrier for an employee group benefit plan was a mandatory subject for bargaining. We find Bastian distinguishable from the instant case in significant respects. There, Aetna had been the carrier of the group plan since World War II. The plan was contributory in nature, the employees paying approximately 40% of the cost. In 1970, the company unilaterally cancelled the Aetna policy and began a self-insurance plan. The Board found that the change adversely affected the employees in important respects: (1) the new plan "omitted entirely two significant employee benefits: a conversion privilege without evidence of insurability, and the certainty of coverage of new-born babies under the $20,000 major medical benefit"; (2) it deprived the employees of "enforceability of the prior master contract and of Aetna's administration of that contract"; and (3) a degree of uncertainty was created as to the funding of the new plan which the Board considered to have "an adverse impact on the employees' previously...