City of Somerville v. Commonwealth Emp't Relations Bd.
| Decision Date | 03 February 2015 |
| Docket Number | SJC–11620. |
| Parties | CITY OF SOMERVILLE & another, v. COMMONWEALTH EMPLOYMENT RELATIONS BOARD & others. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Matthew J. Buckley, Assistant City Solicitor, for the plaintiffs.
T. Jane Gabriel, Boston, for the defendant.
Laurie R. Houle, Boston, Ira Fader, Colin R. Confoey, Boston, & Jason Powalisz for the interveners, submitted a brief.
Present: GANTS, C.J., SPINA, CORDY, BOTSFORD, DUFFLY, LENK, & HINES, JJ.
At issue in this case is whether the city of Somerville (city) and the school committee of Somerville (school committee) violated G.L. c. 150E, § 10 (a ) (5), and, derivatively, G.L. c. 150E, § 10 (a ) (1), when the city unilaterally reduced its percentage contribution to retired employees' health insurance premiums without engaging in collective bargaining over the matter with current employees.3 We conclude that the city and the school committee did not violate these statutory provisions. Accordingly,
we reverse the decision of the Commonwealth Employment Relations Board (board), which reached a contrary conclusion.
1. Statutory framework. Our resolution of the present dispute is based on the interplay between G.L. c. 150E and G.L. c. 32B. General Laws c. 150E, § 2, protects the rights of public employees to self-organization and collective bargaining. Pursuant to G.L. c. 150E, § 6, “[t]he employer and the exclusive representative ... shall negotiate in good faith with respect to wages, hours, standards [of] productivity and performance, and any other terms and conditions of employment....” General Laws c. 150E, § 10, states, in relevant part:
“Under the Home Rule Amendment, art. 89, § 6, of the Amendments to the Massachusetts Constitution, municipalities of the Commonwealth may choose to provide health insurance coverage to their employees.” Twomey v. Middleborough, 468 Mass. 260, 261, 10 N.E.3d 618 (2014). See Cioch v. Treasurer of Ludlow, 449 Mass. 690, 695, 871 N.E.2d 469 (2007). General Laws c. 32B is a so-called “local option” statute that governs the provision of health insurance to active and retired employees of a municipality once that entity has voted to accept the terms of the statute.4 See Twomey v. Middleborough, supra; Yeretsky v. Attleboro, 424 Mass. 315, 316, 676 N.E.2d 1118 (1997). See generally D.A. Randall & D.E. Franklin, Municipal Law and Practice § 10.25 (5th ed. 2006 & Supp. 2014). When enacted, see St. 1956, c. 730, § 1, G.L. c. 32B, §§ 1 and 3, authorized municipalities to offer certain eligible persons and their dependents group indemnity health insurance coverage. Beginning in 1971, municipalities were given the option of making available to such individuals the services of a health maintenance organization (HMO) by accepting G.L. c. 32B, § 16, inserted by St. 1971, c. 946, § 5.
Pursuant to G.L. c. 32B, § 9, retirees bear the full cost of their health insurance premiums unless a municipality has accepted the more generous provisions of G.L. c. 32B, § 9A or § 9E. If a municipality accepts G.L. c. 32B, § 9A, then it may elect to pay fifty per cent of a retiree's premium for health insurance coverage. If a municipality accepts G.L. c. 32B, § 9E, then it may elect to pay “a subsidiary or additional rate” greater than fifty per cent of a retiree's health insurance premium.
2. Factual and procedural background. We summarize the relevant facts as stipulated by the parties in lieu of a hearing before the board. The city is a public employer within the meaning of G.L. c. 150E, § 1. The school committee is the collective bargaining agent of the city for the purpose of dealing with school employees. The Somerville Teachers Association, Somerville Police Superior Officers Association, Somerville Administrators Association, and Somerville Municipal Employees Association (collectively, the unions) are employee organizations within the meaning of G.L. c. 150E, § 1,5 and they are the exclusive bargaining representatives for various individuals employed by the school committee and the city.
In 1979, the city accepted G.L. c. 32B, § 9E, by a vote of the board of aldermen, thereby authorizing the city to pay more than fifty per cent of a retired employee's monthly premium for an indemnity health insurance plan. From that point forward until August 1, 2009, the city contributed ninety-nine per cent of the premium for a retired employee's health insurance coverage under the indemnity plan offered by the city. Retired employees contributed the remaining one per cent of the premium. In addition, the city offered active and retired employees health insurance coverage through several HMOs. The city paid fixed percentages of the total premium costs, which varied between eighty and ninety per cent, depending on the particular plan. Employees and retirees paid the remainder of the premium costs.
On or about July 1, 2009, the city had approximately 1,262 retirees who were participating in the city's group health insurance plans. The majority of these individuals had retired from positions in the unions' bargaining units. Effective August 1, 2009, the city decreased the percentage of its contribution for
retired employees' health insurance coverage under the indemnity plan from ninety-nine per cent to sixty per cent, and it decreased the percentage of its contribution for retired employees' health insurance coverage under all other insurance plans to seventy-five per cent. These changes were approved by the board of aldermen after a properly noticed public hearing at which the new rates were proposed by the mayor.6
Neither the city nor the school committee provided the unions with notice of or an opportunity to bargain over the decision to change contribution rates. None of the collective bargaining agreements between the city and the various bargaining units addressed the contribution rates for retired employees' health insurance coverage, and such rates had never been a subject of negotiation between the city and the bargaining units. At all material times, the city has maintained that the authority to set the contribution rates for retirees' health insurance coverage is vested exclusively with the board of aldermen and the mayor, and that such contribution rates are not a mandatory subject of bargaining with current employees.
On September 10, 2009, the Somerville Teachers Association filed two prohibited practice charges with the division of labor relations (division).7 It alleged that the city and, separately, the school committee had violated G.L. c. 150E, § 10 (a ) (5), and, derivatively, G.L. c. 150E, § 10 (a ) (1), by “failing to provide notice and an opportunity to bargain over the future benefits [on retirement] of active employees when the City announced at the meeting of the Board of Aldermen, on May 28, 2009 that effective August 1, 2009 the percentage contribution rate for all retirees would be increased.”8 Based on essentially the same grounds, the Somerville Police Superior Officers Association filed a prohibited practice charge with the division on December 21, 2009; the Somerville Administrators Association filed two prohibited practice charges with the division on January 26,
2010;9 and the Somerville Municipal Employees Association filed a prohibited practice charge with the division on April 13, 2010. The division investigated the allegations and found probable cause to believe that statutory violations had occurred. The division issued complaints with respect to all six matters, and, on July 30, 2010, they were consolidated for hearing. Pursuant to G.L. c. 150E, § 11 (f ), the parties petitioned to have the consolidated complaints heard by the board in the first instance (rather than by a hearing officer),10 and the request was granted. The parties then stipulated to the facts.
By decision dated October 19, 2011, the board concluded that the city and the school committee had failed to satisfy their statutory bargaining obligations before unilaterally reducing contributions for retired employees' health insurance premiums. In the board's view, health insurance contributions for municipal retirees are a mandatory subject of bargaining. The board rejected the city's claims that current employees have no right to bargain over such contributions made on behalf of retirees, and that, pursuant to G.L. c. 32B, health insurance rates for retirees must be established through the local governmental process, not the collective bargaining process.
The board ordered the city and the school committee to cease and desist from failing and refusing to bargain collectively in good faith with the unions over changes to future retirees' health insurance contribution rates. Further, the board ordered the city and the school committee to restore the terms of the retirement health insurance benefit that was in effect prior to August 1, 2009, for the unions' bargaining unit members who were active employees before that date and retired thereafter. In addition, the board ordered the city and the school committee to make whole those bargaining unit members who retired after August 1, 2009, for any losses they may have suffered as a result of the unilateral change in retirement health insurance contribution rates, plus interest. The city and the school committee appealed the board's decision, the case was entered in the Appeals Court, and we transferred it to this court on our own motion.
3. Standard of review. We review the board's decision in accordance
with the standards set forth in G.L. c. 30A, § 14(7), governing appeals from final administrative agency decisions. Se...
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