Mississippi Power Co. v. N.L.R.B.
| Decision Date | 14 March 2002 |
| Docket Number | No. 00-60794.,00-60794. |
| Citation | 284 F.3d 605 |
| Parties | MISSISSIPPI POWER COMPANY, Petitioner-Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent-Cross-Petitioner. |
| Court | U.S. Court of Appeals — Fifth Circuit |
David C. Hagaman (argued), Ford & Harrison, Laura Helene Kriteman, Troutman Sanders, Atlanta, GA, for Mississippi Power Co.
Aileen A. Armstrong, Deputy Associate Gen. Counsel, Robert J. Englehart, Fred Barry Jacob (argued), NLRB, Washington, DC, Mark Kaplan, NLRB, New Orleans, LA, for NLRB.
Petition for Review & Cross Petition for Enforcement of an Order of the National Labor Relations Board.
Before GARWOOD and WIENER, Circuit Judges, and VANCE*, District Judge.
In 1997, an Administrative Law Judge ("ALJ") ruled that the Petitioner, Mississippi Power Company (the "Company"), had violated Sections 8(a)(5) and (1) of the National Labor Relations Act (the "Act")1 when it refused to bargain collectively over currently announced but prospectively effective changes in some of the medical and life insurance benefits to be offered to some of the Company's future retirees. In 2000, the National Labor Relations Board (the "Board") affirmed the ALJ's rulings, findings, and conclusions, and adopted his recommended order, with modifications.2 The Company has petitioned for review of the Board's order, and the Board has cross-petitioned for enforcement of its order.
We affirm those aspects of the Board's order grounded in the determination that the Company's announced prospective changes to future retirees' life insurance benefits constituted a violation of the Act. We therefore deny the Company's petition, and enforce the Board's order insofar as it pertains to life insurance.
We conclude, however, that the four locals of the International Brotherhood of Electrical Workers that represent approximately 600 of the Company's 1,400 employees (collectively "the Unions") had expressly waived any right they might have had to bargain over this matter, so the Company did not violate the Act when it declined the Unions' request to bargain over the announced medical insurance changes. Therefore, insofar as the Board's order pertains to medical insurance, we grant the Company's petition, deny the Board's cross-petition for enforcement, set aside the order, and remand to the Board for entry of appropriate orders.
Before describing the events that gave rise to the instant petition for review, a summary of three documents that are central to this controversy, and the interrelationship of those documents, is in order.
The MOA, which was signed by the Company and the Unions, became effective on August 16, 1992 for an initial term of three years. As the bargained-for agreement between those parties, the MOA is a collective bargaining agreement, or, in the vernacular, a CBA. The MOA covers a wide but non-exhaustive range of topics pertinent to the terms and conditions of employment of those employees who belong to the Unions (including, for example, Seniority, Promotion, Layoff, and Discharge; Vacations, Leave of Absence, and Sick Leave; and provisions addressing Grievances and Arbitrations). The MOA does not address traditional employee benefits, such as pension plans, life insurance, or medical insurance, at all.
Following its initial three-year term, the MOA is automatically renewed for one-year extension terms from one August 16 to the next, unless either party notifies the other in writing of non-renewal, at least sixty days prior to the expiration of the then-current term of the agreement. When, in 1995, the Company announced prospective changes in life and medical insurance benefits for some of its future retirees, the MOA was still in its initial three-year term.
The Mississippi Power Company Medical Benefits Plan (the "Medical Benefits Plan") that was in effect in 1995 when the subject changes were announced had become effective on March 1, 1993. It is a Company-drafted document that was executed unilaterally by the Company but by no representatives of the Unions. The Medical Benefits Plan's articles cover numerous topics, such as "Benefit Provisions," "Eligibility for Benefits," and "Plan Administration." Among these articles are two that are pertinent to this controversy: Article IX (), and Article X ().
Section 9.1 of Article IX provides:
9.1 Plan Voluntary on Part of Company. While it is the intention of the Company that the Plan shall be continued indefinitely and that the Company contributions required hereunder shall be made in each year that the Plan remains in effect, the Plan is entirely voluntary on the part of the Company. [Emphasis ours.]
Article X provides, in relevant part:
10.1 Amendment of Plan. The Company ... shall have the right at any time by instrument of writing, duly executed, to modify, alter or amend, in whole or in part, the Plan.... The Company makes no promise to continue these benefits in the future and rights to future benefits will never vest. In particular, retirement or the fulfillment of the prerequisites for retirement pursuant to the terms of any employee benefit plan maintained by the Company shall not confer upon any Employee, Retired Employee or Dependent any right to continued benefits under the Plan. [Emphasis ours.]
10.2 Termination of Plan. The Company intends that the Plan shall be permanent. However, the Company ... has the right to terminate the Plan at any time.... After the termination of the Plan ..., the Company and the Covered Employees shall have no further obligations to make additional contributions to the Plan.
Thus, the plain and unambiguous language of these sections of the Medical Benefits Plan make clear that the Company has the right to alter, at will and unilaterally, any terms of the Medical Benefits Plan, including the unfettered right to terminate it altogether.
The Insurance Side Letter is styled as a two-page offer and acceptance that pre-dated the Medical Benefits Plan and that was signed by the Company on August 15, 1992, the day before the MOA became effective, but that did not become effective itself until it was signed for acceptance by the Unions on December 18, 1992. It is one of several attachments to the MOA. Like the MOA, the Insurance Side Letter is the product of negotiations between the Company and the Unions and is presented as the Company's "offer [that] shall become an agreement when the Union indicates its acceptance hereof." Following the portion describing the offer and the Company's signature, and above the Unions' acceptance signatures, is the boldface title, "Group Medical Insurance Agreement." The Insurance Side Letter does not expressly refer by title to the Company's medical benefits plan that was in place when the Side Letter was executed; it could not refer to the Medical Benefits Plan because it was not yet in existence. Thus the Insurance Side Letter is a generic agreement applicable to any group medical insurance that might be in place from time to time during the term of the MOA. None contest, however, that the Insurance Side Letter was applicable to the Medical Benefits Plan at the time in April 1995 when the prospective changes to that plan were announced.
In the Insurance Side Letter, the Company agrees to pay "seventy percent of the cost of group medical insurance coverage" for each participating employee and either one dependent or the employee's family, or $92.80 for a single employee's coverage; and the Company further agrees to pay seventy percent of any increase in premium costs "in the event of any increase in premiums for the above insurance." As consideration for this commitment, the Company extracts an offsetting commitment — called a "condition" — from the Unions:
[1] the matter of insurance coverage or [2] change in the Company's contribution toward the premium for insurance coverage of its employees shall not be subject to bargaining or a request for bargaining by the Union until the expiration of the Memorandum of Agreement, except by mutual consent. [Emphasis and enumeration ours.]3
The mutual agreements in the Insurance Side Letter — the Company's payment obligation and the Unions' agreement that neither coverage nor premium payments would be the subject of bargaining — are specified to run co-extensively with the MOA's initial term and all annual renewals, unless modified or terminated according to procedures identical to those specified in the MOA, as outlined above. And, just as does the MOA, the Insurance Side Letter stipulates that "[u]ntil the parties have agreed upon such changes the provisions of the agreement shall remain in full force and effect."
As noted, the bilateral MOA does not address traditional employee benefits, such as pensions, life insurance, or health insurance. On the opposite end of the contractual spectrum, the Company's unilateral Medical Benefits Plan is an ERISA welfare benefit plan which provides an employee benefit that, by the plan's own terms, can be changed from time to time or even terminated altogether by the Company, acting alone. The third document, the Insurance Side Letter, has features of both: Like the MOA, the Insurance Side Letter is a bilateral agreement executed by both the Company and the Unions; like the Medical Benefits Plan, however, it relates only to the Company's unilaterally granted employee benefit of medical insurance, and then only to (1) premium payments and (2) coverage. In essence, this third document links the first two by specifying a quid pro quo between the parties on elements of the two otherwise-unrelated documents. On the one hand, the Unions obtain the...
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