Pittsburgh Plate Glass Co., Chemical Div. v. NLRB

• Decision Date: 10 June 1970
• Docket Number: No. 19875.,19875.
• Citation: 427 F.2d 936
• Parties: PITTSBURGH PLATE GLASS COMPANY, CHEMICAL DIVISION, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Local Union No. 1, Allied Chemical and Alkali Workers of America, Intervenor.
• Court: U.S. Court of Appeals — Sixth Circuit

427 F.2d 936 (1970)

PITTSBURGH PLATE GLASS COMPANY, CHEMICAL DIVISION, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Local Union No. 1, Allied Chemical and Alkali Workers of America, Intervenor.

No. 19875.

United States Court of Appeals, Sixth Circuit.

June 10, 1970.

Guy Farmer, Washington, D. C., for petitioner; John A. McGuinn, Patterson, Belknap, Farmer & Shibley, Washington, D. C., Nicholas R. Criss, Jr., Hugh M. Finneran, PPG Industries, Inc., Pittsburgh, Pa., on the brief.

Nancy M. Sherman, National Labor Relations Board, Washington, D. C., for respondent; Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Hans J. Lehmann, Atty., National Labor Relations Board, Washington, D. C., on the brief.

Mortimer Riemer, Cleveland, Ohio, for intervenor, Local Union No. 1 Allied Chemical & Alkali Workers of America; Lawrence M. Oberdank, Cleveland, Ohio, on the brief.

Elliot Bredhoff, Michael H. Gottesman, George H. Cohen, Washington, D. C., for United Steelworkers of America, AFL-CIO, amicus curiae; Bernard Kleiman, Chicago, Ill., of counsel.

Stephen I. Schlossberg, Detroit, Mich., George Kaufmann, Washington, D. C., for International Union, UAW; amicus curiae.

I. J. Gromfine, Herman Sternstein, Zimring, Gromfine & Sternstein, Washington, D. C., for Amalgamated Transit Union, AFL-CIO, amicus curiae.

Lambert H. Miller, Sr. Vice President and Gen. Counsel, Fred B. Haught, Asst. Counsel, Richard D. Godown, Asst. Counsel, Washington, D. C., for National Association of Manufacturers of the United States of America, amicus curiae.

Anthony J. Obadal, Labor Relations Counsel, Chamber of Commerce of the United States of America, Washington, D. C., for Chamber of Commerce of the United States of America, amicus curiae.

William C. Treanor, John W. Whittlesey, New York City, for Union Carbide Corp., amicus curiae.

Before WEICK, CELEBREZZE, and BROOKS, Circuit Judges.

CELEBREZZE, Circuit Judge.

This cause is before the Court on the petition of the Pittsburgh Plate Glass Company, Chemical Division, hereinafter "the Company" to review, and upon the National Labor Relations Board's cross-application to enforce a Labor Board order¹ requiring the Company to cease and desist from refusing to bargain collectively with the Union about changing health insurance benefits for previously retired employees, who prior to their retirement, had been actively working for the Company in the collective bargaining unit represented by the Union, and who, upon their retirement, became covered by a Union-negotiated retirement benefit plan. The Board found that by proposing improvements in their retirement health plans to retirees individually, rather than bargaining such alterations collectively with the Union, the Company "unilaterally modified" the retirement benefits in violation of Section 8(a) (5) and (1) of the Labor Management Relations Act, 1947, as amended, 29 U.S.C. ? 158(a) (5) & (1) (1964). Local Union No. 1, Allied Chemcial and Alkali Workers of America "the Union", which filed the charges initiating these proceedings, has intervened herein, and several other interested parties have filed briefs amici curiae.² This Court has jurisdiction under Section 10(e) and (f) of the Act.

The facts, which are essentially undisputed, raise a question of first impression, so far as we are able to determine, before this or any other Court under the National Labor Relations Act, as amended.

I.

Since 1949, the Union has been the exclusive bargaining representative for Company employees in a unit composed of:

"All employees of the Employer\'s plant and limestone mine at Barberton, Ohio working on hourly rates, including group leaders who work on hourly rates of pay, but excluding salaried employees and supervisors within the meaning of the Act."

In 1950, the Union and the Company negotiated provisions for an employee group health insurance plan. An oral agreement was made that retired employees could also participate in the plan by paying a stipulated premium, which would be deducted from their pension benefits. The Company made no contribution toward retired employees' health insurance premiums under this program. Except for an improvement unilaterally instituted by the Company in 1954, and another improvement negotiated in 1959, this program remained unchanged in all relevant respects until 1962.

In 1962, the parties entered into a memorandum agreement by which the Company agreed to contribute $2.00 per month toward the cost of the monthly premium for medical benefits, but only for persons who retired from the Company's employ after June 27, 1962. Persons already retired prior to that date received no such contribution. In these negotiations the parties also agreed to make age 65 the mandatory retirement age.

During negotiations for a new labor contract in 1964, the parties again bargained about insurance benefits for retired employees. The Company agreed to increase its contribution to medical benefits for persons retired after June 27, 1962 from $2.00 per month to $4.00 per month. However, anticipating the enactment of Medicare legislation, the agreement provided that if a government health program were enacted, th? Company could reduce its contribution by the amount of the 1964 increase, i.e., $2.00 per month.

On November 23, 1965, following the enactment of Medicare and during the term of their outstanding collective bargaining agreement, the Union asked the Company to engage in mid-term bargaining for the purpose of re-negotiating insurance benefits for retired employees of a type not available under Medicare. The Company took the Union's request under advisement and responded at a meeting held on March 21, 1966. First, the Company announced its intention to reclaim its contribution of the extra $2.00 per month beginning July 1, 1966, the effective date of Medicare. The Company's right to do this under the 1964 contract is not in dispute. Second, the Company said it intended to cancel the negotiated health insurance plan for retired employees because, in its opinion, the enactment of Medicare made this insurance useless, and to substitute therefor a $3.00 monthly contribution for supplemental Medicare benefits for each employee who retired after July 27, 1962. Third, the Company rejected the Union's request to bargain for a supplemental insurance plan, and challenged the Union's right to bargain for retired employees at all.

The Union conceded the Company's contract right to reduce its contribution, but challenged the Company's right to unilaterally substitute supplemental Medicare for the negotiated health program.

Two days later, on March 23, 1966, the Company told the Union that, having reconsidered its position the Company would not unilaterally substitute Medicare for the negotiated health insurance. Instead, the Company said it intended to mail letters to retired employees announcing that they could choose to withdraw individually from the negotiated health insurance plan and, in lieu thereof, the Company would contribute $3.00 per month towards supplemental Medicare premiums.

The Union objected to this proposed action, asserting the right to bargain about any change in the contract affecting the health insurance plan. Nevertheless, the Company refused to bargain with the Union, and on March 24, 1966, mailed the aforementioned letters to retired employees with the result that 15 out of 190 retirees elected the $3.00 contribution to Medicare instead of the negotiated $2.00 contribution to the private health insurance program.³ In response to the Company's action, the Union filed the instant charges.

The Board's Trial Examiner conducted hearings into the complaint, found the foregoing to be the facts, and concluded that pensioners and retirees are not employees as defined by Section 2(3) of the Act, are not employees within the meaning of Section 8(a) (5), and are not within the bargaining unit; that a Company has no statutory duty to re-negotiate benefits for previously retired employees; that the letter from the Company to the retirees did not constitute a "unilateral change" of any provisions of the negotiated contract or a mid-term change within the intendment of section 8(d). He did not find that the Company's action had the purpose or effect of undermining employees' section 7 rights. Finding violations of neither section 8(a) (5) nor section 8(a) (1), the Examiner recommended dismissal of the complaint.

The Board adopted the Examiner's findings of fact, but disagreed with his construction of the Act. The Board held: that retired employees are "employees" within the meaning of the statute for the purposes of bargaining about changes in their retirement benefits; that, in the alternative, re-negotiating retirement benefits for retirees is within the contemplation of the statute because it "vitally affects active bargaining unit employees"; that the Company had "unilaterally changed" retirees' health benefits in violation of Section 8(a) (1) and (5) of the Act.⁴ Accordingly, the Board ordered the Company to cease and desist from refusing to bargain collectively with the Union about adjustments in health insurance plans for retired employees, and otherwise "interfering with, restraining, or coercing employees in the exercise of" their section 7 rights. In addition, the Board ordered the Company to rescind any "unilaterally instituted" adjustment in retirees' health benefits upon request of the Union.

The sole issue in this case is whether an employer may bargain individually with retired employees about alterations in their negotiated retirement benefits, or whether alterations in retirees' retirement benefits are mandatory subjects of bargaining with respect to which an employer must bargain collectively at the request of the Union.

The Labor Management Relations Act enjoins employers to bargain collectively⁵ and in good faith...