Hawaiian Telecom, Inc. v. International Brotherhood of Electrical Workers, Local Union 1357

• Decision Date: 23 February 2017
• Docket Number: 20-CA-069433,20-CA-069432
• Parties: Hawaiian Telecom, Inc. v. International Brotherhood of Electrical Workers, Local Union 1357.
• Court: National Labor Relations Board

Hawaiian Telecom, Inc. and International Brotherhood of Electrical Workers, Local Union 1357.

Nos. 20-CA-069432, 20-CA-069433

United States of America, National Labor Relations Board

February 23, 2017

Acting Chairman Miscimarra and Members Pearce and McFerran

DECISION AND ORDER

Philip A. Miscimarra, Acting Chairman.

On September 5, 2012, Administrative Law Judge Mary Miller Cracraft issued the attached decision. The Respondent filed exceptions and a supporting brief. The General Counsel filed an answering brief, and the Respondent filed a reply brief.

The National Labor Relations Board has considered the decision and the record in light of the exceptions and briefs ^[1] and has decided to affirm the judge's rulings, findings, ^[2] and conclusions for the reasons below and to adopt the recommended Order as modified and set forth in full below.

I. INTRODUCTION

The principal question presented here is whether the Respondent lawfully ceased providing employees accrued health-related benefits based on their commencement of a strike against the Respondent. The judge found that the Respondent's cancellation of those benefits was unlawful because, under the applicable collective-bargaining agreement, the employees' eligibility for the benefits previously had accrued and was not dependent upon their continued performance of work for the Respondent. We agree with the judge for the following reasons.

II. FACTS

The Respondent provided telecommunications services to commercial and residential customers in Honolulu, Hawaii. At all relevant times, the Union was the exclusive collective-bargaining representative of a unit comprising various classifications of the Respondent's em- ployees. The parties' most recent collective-bargaining agreement was effective from September 13, 2008 through September 12, 2011 (2008 Agreement). ^[3] During negotiations for a successor agreement, the parties mutually agreed to several extensions of the 2008 Agreement, the last of which expired on October 24.

A. Relevant provisions of the 2008 Agreement

The 2008 Agreement contained several provisions that bear on the outcome of this case. Article 5, which was a general definitional section, defined “Employee” as “any person who performs work for the Company for a regularly stated compensation and whose job duties are within the scope of the collective bargaining unit.”

Article 28 of the 2008 Agreement set forth the parties' agreement on medical benefits. In this Article, the Respondent agreed to provide medical insurance coverage to all “employees covered by this Agreement.” More specifically, the Respondent agreed to provide such coverage to all regular and probationary employees, the latter including any newly hired employee. Article 28 did not establish any time-in-service requirement for coverage. Further, Article 28 spoke directly to the Respondent's obligation to continue employees' medical coverage. Thus, Article 28.1 provided that “the benefits provided by this plan will not be discontinued or amended without the agreement of the Company and Union.” Article 28.12 provided that coverage “will end thirty (30) days after termination of employment, ” after which individuals could elect continued COBRA coverage. No other ground for termination of coverage was stated.

Similarly, Article 39 of the 2008 Agreement contained the parties' agreement on dental benefits. There, the Respondent agreed to provide dental insurance for bargaining unit employees on basically the same terms as its commitment to provide medical insurance. Thus, Article 39 did not impose any time-in-service requirement and, like Article 28, Article 39 set forth only two circumstances in which dental coverage would be changed or discontinued: by agreement of the parties or 30 days after an employee's termination of employment.

Finally, the 2008 Agreement contained a general “Duration of Agreement” clause, stating the Agreement's effective dates, September 13, 2008 through September 12, 2011, and specifying that the Agreement would renew annually unless timely notice of cancellation was given by either party.

B. The Respondent's Cessation of Benefits

As the parties were attempting to negotiate a successor agreement, the Respondent, anticipating a work stoppage, contacted its dental insurance agents in July and August in order to add a rider to the employees' dental plan stating that, effective September 1, an employee's dental benefits would terminate if he or she ceased to actively work due to a strike. The Respondent initiated this change without notifying the Union, much less obtaining the Union's agreement as required by Article 39 of the 2008 Agreement. In the Respondent's view, its action was permitted by language in Article 39.1, stating that the “selection of the Plan Administrator, the administration of the Plan and all the terms and conditions relating thereto, and the resolution of any disputes involving the terms, conditions, interpretation, administration, or benefits payable shall be determined by and at the sole discretion of the Company.” The Respondent did not make any similar unilateral modifications to the employees' medical plan.

As described, the parties' last extension of the 2008 Agreement expired on October 24. With no successor agreement having been reached, the Union informally told the Respondent that it was considering a work stoppage. Several days later, the Respondent advised its medical and dental insurance providers that the Union was “planning for a walkout at any time which means we will be stopping benefits for our active Union employees (approx. 700 employees) immediately once a strike is called (benefits will continue for Union retirees).”

The Union formally notified the Respondent by letter dated November 10 that a strike would begin at 10:30 a.m. that day, and that strikers would return to work on November 11 at 8 p.m. The strike began as scheduled and, at 10:31 a.m. on November 10, the Respondent emailed its insurance providers informing them of the strike and giving official notice that it “was beginning the process for cancelling all benefits for striking union employees effective immediately.” The Respondent instructed the insurance providers to stop benefits for all employees “that have a Union status code, ” and benefits were cancelled accordingly.

Also on November 10, the Respondent prepared and mailed COBRA packets to the strikers with a notice of cancellation of benefits, an explanation of optional continued COBRA coverage, and an application form. It did not send COBRA packets to unit employees who remained at work, to employees on approved military leave, or to those employees on approved leave under the Family and Medical Leave Act.

As planned, striking employees returned to work on Friday, November 11, at 8 p.m. The Respondent then instructed its providers to re-enroll the strikers in the insurance plans. By Tuesday, November 15, employees could submit claims, including retroactive claims for expenses incurred during the strike. There is no evidence that any employee experienced out-of-pocket costs or other financial losses as a result of the Respondent's actions.

Analysis

A. The Respondent unlawfully cancelled striking employees' benefits

The judge found that the Respondent violated Section 8(a)(1), (3), and (5) of the Act by cancelling striking employees' medical and dental benefits because of their participation in the strike. As explained below, we agree with those findings based on the particular facts and circumstances of this case.

Although it is well established that an employer is not required to finance a strike against itself, it is equally well established that it may not withhold accrued benefits from strikers based on their participation in the strike. In Texaco, Inc., 285 NLRB 241 (1987), the Board determined that the appropriate analytical framework for deciding whether an employer's withholding of benefits in a particular case is unlawful is the framework established in NLRB v. Great Dane Trailers, 388 U.S. 26 (1967):

Under this test, the General Counsel bears the prima facie burden of proving at least some adverse effect of the benefit denial on employee rights. The General Counsel can meet this burden by showing that (1) the benefit was accrued and (2) the benefit was withheld on the apparent basis of a strike We emphasize the need for proof that the . . . benefit is accrued, that is, “due and payable on the date on which the employer denied [it].” Absent such proof, there is no basis for finding an adverse effect on employee rights because an employer is not required to finance a strike against itself by paying wages or similar expenses dependent on the continuing performance of services for the employer . . Proof of accrual on a case-by-case basis will most often turn on interpretation of the relevant collective-bargaining agreement, benefit plan, or past practice

Once the General Counsel makes a prima facie showing of at least some adverse effect on employee rights the burden under Great Dane then shifts to the employer to come forward with proof of a legitimate and substantial business justification for its cessation of benefits. The employer may meet this burden by proving that a collective-bargaining representative has clearly and unmistakably waived its employees' statutory right to be free of such discrimination or coercion. Waiver will not be inferred, but must be explicit. If the employer does not seek to prove waiver, it may still contest the . . . employee's continued entitlement to benefits by demonstrating reliance on a nondiscriminatory contract interpretation that is “reasonable and . . . arguably correct, ” and thus sufficient to constitute a legitimate and substantial business justification for its conduct. Moreover, as under Great Dane, even if the employer proves business

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