Kerrigan v. City of Boston

• Decision Date: 27 January 1972
• Parties: , 67 Lab.Cas. P 52,723 John J. KERRIGAN et al., trustees, et al., v. CITY OF BOSTON.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 387

278 N.E.2d 387

361 Mass. 24, 67 Lab.Cas. P 52,723

John J. KERRIGAN et al., trustees, et al., v. CITY OF BOSTON.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued Nov. 4, 1971.

Decided Jan. 27, 1972.

Albert L. Goldman, Boston (John McMahon, Boston, with him) for plaintiffs.

William H. Kerr, Asst. Corp. Counsel, for defendant.

Before TAURO, C.J., and CUTTER, REARDON, BRAUCHER and HENNESSEY, JJ.

BRAUCHER, Justice.

The plaintiffs are the trustees of the Boston Teachers Union Health and Welfare Fund (the Fund), the president and executive secretary of the Boston Teachers Union, Local 66, American Federation of Teachers, AFL-CIO (the union), and an individual teacher who is a beneficiary of the Fund. They sought a decree under G.L. c. 231A declaring that the defendant city of Boston (the city) is empowered to make certain payments to the Fund as agreed in a collective bargaining agreement made between the union and the city, acting through the Boston School Committee (the school committee), and that such payments are not subject to G.L. c. 32B, § 15.

The city admitted the facts alleged in the plaintiffs' bill, and the matter was submitted to a judge of the Superior Court as a case stated. The judge made findings of fact, declaration of law and order for decree, and a final decree was entered providing that (1) the agreement obligated the school committee to make certain payments to the Fund, (2) the trustees could validly provide certain benefits from the Fund, by insurance or otherwise, (3) payment for certain other benefits was forbidden, and (4) the payments agreed to be made to the Fund should instead be paid forthwith to each 'Covered Teacher.' All parties have appealed.

We summarize the facts. On August 14, 1968, pursuant to G.L. c. 149, §§ 178G--178N, the union had been duly recognized as the exclusive bargaining agent for some 4,500 teachers in the public schools of the city. On that date the union and the school committee entered into a collective bargaining agreement concerning wages, hours and other conditions of employment during the school year, September 1, 1968, through August 31, 1969. As part of the collective bargaining agreement the parties agreed to establish the Fund in accordance with a Health and Welfare Fund Agreement (the Fund Agreement) signed contemporaneously, and the school committee agreed to pay into the Fund $50 a teacher in September, 1968, and $100 a teacher in September, 1969.

On December 23, 1968, the school committee and the union executed an Agreement and Declaration of Trust--Boston Teachers Union Health and Welfare Fund (the Trust Agreement), and the school committee voted to expend out of the unexpended balance of a valid appropriation the amounts necessary to make the agreed payments to the Fund for 1968. The city then took the position that such an expenditure would not be for a permissible municipal purpose. On March 20, 1969, the Trustees of the Fund (the five members of the school committee and five persons appointed by the union) voted to adopt an insurance program. An insurance carrier agreed to issue a policy to carry out that program, but it was not issued because the city refused to make the expenditure. This suit followed. ¹

1. The judge ruled that the power given to the school committee to fix the compensation of the teachers and to elect and contract with teachers empowered the city to make the agreed payments to the Fund out of funds appropriated for school purposes. The city concedes that St.1875, c. 241, § 5, empowers the school committee to 'fix the compensation of the teachers.' See Collins v. Boston, 338 Mass. 704, 707--709, 157 N.E.2d 399, 404. But it contends that this power is limited to the payment of money directly to the teacher and hence does not include payments to third persons for the teacher's benefit.

We think there is no such limitation. 'The power of school committees to 'contract with the teachers of the public schools' and to engage in collective bargaining for the purpose of setting 'wages, hours and other conditions of employment' is fixed by statute. G.L. c. 71, § 38, as amended through St.1965, c. 164. G.L. c. 149, § 178I, as amended through St.1969, c. 341. The complete and exclusive nature of the authority to contract has been long established in our case law. Watt v. Chelmsford, 323 Mass. 697, 700, 84 N.E.2d 28, and cases cited. Attorney Gen. v. Ware, 328 Mass. 18, 20, 101 N.E.2d 365. Lynch v. Fall River, 336 Mass. 558, 559, 147 N.E.2d 152. Collins v. Boston, 338 Mass. 704, 707, 157 N.E.2d 399.' FITCHBURG TEACHERS ASS'N V. SCHOOL COMM. OF FITCHBURG, MASS. , 271 N.E.2D 646.^A In the Fitchburg case we held that a salary adjustment for the final year of service before retirement, 'part of the over-all package of services and benefits worked out by the parties pursuant to collective bargaining and embodied in the contract, was a valid exercise by the committee of its power to set wages.' Compare Averell v. Newburyport, 241 Mass. 333, 335, 135 N.E. 463 (paid sick leave); Attorney Gen. v. Woburn, 317 Mass. 465, 467, 58 N.E.2d 746 (bonus); Matter of Teachers Ass'n v. Board of Educ., 34 A.D.2d 351, 312 N.Y.S.2d 252 (death benefits based on unused sick leave); Providence Teachers Union v. School Comm. of Providence, R.I., 276 A.2d 762 (retirement benefit based on unused sick leave).

The phrase 'wages, hours and other conditions of employment' in G.L. c. 149, § 178I, inserted by St.1965, c. 763, § 2, was taken from § 8(d) of the National Labor Relations Act, inserted in 1947, where the phrase is 'wages, hours and other terms and conditions of employment.' 61 Stat. 140, 142, as amended, 29 U.S.C. § 158(d) (1970). See also the State Labor Relations Law, G.L. c. 150A, § 1, inserted by St.1938, c. 345, § 2, where the phrase is 'wages, hours or other working conditions.' 'The adjudged construction by the Federal courts is to be given to the subsequent enactment by the Legislature. Thibault v. Lalumiere, 318 Mass. 72, 75, 60 N.E.2d 349, and cases cited.' Poirier v. Superior Court, 337 Mass. 522, 527, 150 N.E.2d 558, 561. See Wheaton College v. Labor Relations Com'n., 352 Mass. 731, 738, 227 N.E.2d 735; City Manager of Medford v. State Labor Relations Com'n., 353 Mass. 519, 522, 233 N.E.2d 310. Federal decisions prior to the enactment of G.L. c. 149, § 178I, had established that for collective bargaining purposes 'wages' may include payments to third parties. Inland Steel Co. v. National Labor Relations Bd., 170 F.2d 247, 253--255 (7th Cir.), cert. den. 336 U.S. 960, 69 S.Ct. 887, 93 L.Ed. 1112 (retirement and pension plan); W. W. Cross Co. Inc. v. National Labor Relations Bd., 174 F.2d 875, 878 (1st Cir.) (group health and accident insurance program); National Labor Relations Bd. v. General Motors Corp., 179 F.2d 221 (2d Cir.) (group insurance); Potlatch Forests, Inc. v. International Woodworkers of Am., 108 F.Supp. 906, 907--908 (D.Idaho), affd. per cur. Olsen v. Potlatch, 200 F.2d 700 (9th Cir.) (group insurance). See National Labor Relations Bd. v. Scam Instrument Corp., 394 F.2d 884, 886--887 (7th Cir.). Compare decisions that such payments are not 'wages . . . due to workmen' under the Bankruptcy Act. United States v. Embassy Restaurant, Inc., 359 U.S. 29, 33, 79 S.Ct. 554, 3 L.Ed.2d 601; Joint Indus Bd. of Elec. Indus. v. United States, 391 U.S. 224, 88 S.Ct. 1491, 20 L.Ed.2d 546. But cf. Matter of E. V. Moore of Cal. Inc., 447 F.2d 1106 (9th Cir.), cert. den. sub. nom. Bowman v. Bay Area Painters' Trust Fund, 404 U.S. 995, 92 S.Ct. 535, 30 L.Ed.2d 547, (December 14, 1971) (fund for vacation and holiday pay).

Payments to the Fund have no different impact on the city from direct payments to the teachers. But provisions for payment to third persons may be very much in the teachers' interest. This is not a case of payment of wages in scrip redeemable only at the company store. Compare G.L. c. 149, § 148. Direct payment may result in substantial tax burdens which can be avoided if the teachers cannot receive the money. The theory of G.L. c. 149, §§ 178G--178N, is that the interests of the municipal employees are adequately safeguarded by collective bargaining through representatives of their own choosing. No objection is made to the reasonableness of the provisions of the collective bargaining agreement, the Fund Agreement, or the Trust Agreement. The agreed payments appear to be modest in amount and intelligent in purpose. we conclude that the agreed payments to thE fund are within the powers of the school committee.

2. Appendix A to the Fund Agreement authorizes the trustees of the Fund to provide health and welfare benefits including 'weekly accident and sickness benefits.' The insurance program adopted by the trustees included sickness and accident benefits of $150 a week for as long as fifty-one weeks for each hospital stay. The city argues that such benefits violate G.L. c. 32B, § 15, inserted by St.1967, c. 373, § 2, ² since they constitute 'other health insurance.' The judge accepted the plaintiffs' contrary contention that the Fund's proposed 'income protection insurance' did not come within the phrase 'hospital, surgical, medical, dental, and other health insurance' as used in c. 32B.

We think the judge was right. Insurance providing weekly sickness benefits is undoubtedly 'insurance upon the health of individuals' under G.L. c. 175, § 47, Sixth (d). Weekly accident benefits during a hospital stay may conceivably fall in the same category, although they are more naturally treated as insurance 'against bodily injury . . . by accident' under G.L. c. 175, § 47, Sixth (a). See Mutual Benefit Health & Acc. Ass'n v. United Cas. Co., 142 F.2d 390, 394 (1st Cir.), cert. den. 323 U.S. 729, 65 S.Ct. 65, 89 L.Ed. 585. But the phrase 'and other health insurance' as used in c. 32B appears to have a specialized meaning limited to an 'optional medicare extension' supplementing the Federal Health Insurance...