Watertown Firefighters, Local 1347, I.A.F.F., AFL-CIO v. Town of Watertown

• Decision Date: 27 November 1978
• Docket Number: AFL-CIO
• Citation: 376 Mass. 706,383 N.E.2d 494
• Parties: , 100 L.R.R.M. (BNA) 2375 WATERTOWN FIREFIGHTERS, LOCAL 1347, I.A.F.F.,v. TOWN OF WATERTOWN.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 494

383 N.E.2d 494

376 Mass. 706, 100 L.R.R.M. (BNA) 2375

WATERTOWN FIREFIGHTERS, LOCAL 1347, I.A.F.F., AFL-CIO v. TOWN OF WATERTOWN.

Supreme Judicial Court of Massachusetts, Middlesex.

Argued Sept. 14, 1978.

Decided Nov. 27, 1978.

Brian T. Callahan, for defendant.

Jonathan P. Hiatt, Boston, for plaintiff.

Before HENNESSEY, C. J., and QUIRICO, BRAUCHER, KAPLAN and LIACOS, JJ.

KAPLAN, Justice.

On this appeal we return to that form of "interest" arbitration called "last and best offer," a subject discussed recently in Marlborough Firefighters, Local 1714 v. Marlborough, --- Mass. --- ^A , 378 N.E.2D 437 (1978)¹. In the present case the town of Watertown, defendant, appeals from a judgment of the Superior Court directing enforcement of a last and best offer arbitral award. The town claims that the award includes an invalid provision as to group insurance. ² We agree with the town. We shall also deal with other questions, including the effect of the invalidity on the rest of the award.

The town and the plaintiff, Local 1347, International Association of Firefighters, AFL-CIO (hereafter called the union), were parties to a collective bargaining agreement running to June 30, 1976, and for succeeding years until superseded. As authorized by the contract, the parties began negotiations for a successor agreement in October, 1975, but that failed of result, as did subsequent mediation. Therefore fact finding took place under G.L. c. 150E, § 9, eventuating in a report on November 12, 1976. This, too, failed to move the parties to a settlement, and on the union's petition to the Board of Conciliation and Arbitration, last and best offer arbitration was initiated on April 26, 1977, before a panel of three arbitrators under St.1973, c. 1078, § 4. ³

The panel conducted hearings on six dates from April 27 to May 26, 1977. On some points of a new contract, agreement had been reached previously, and on a few others agreement was attained at the hearings. Notable among the still disputed topics was wages. ⁴ This was considered in terms of the statutory criteria. ⁵ Thus there was analysis of the town's economic standing and ability to pay in comparison with other municipalities; of the firefighters' compensation, also in a comparative sense; and of the need for maintaining employees' purchasing power.

As to group insurance (including medical coverage), the union had proposed during fact finding that the town increase its contribution to premiums by 25% To be added to the 50% It had theretofore obligated itself to contribute under G.L. c. 32B, § 7. ⁶ The union put its proposal on the ground that the particular employment carried special health hazards, and it noted that some comparable communities were already contributing more than 50%. The fact finder had supported the union's position. At the arbitration hearings the town pointed out, first, that the allowance of any increase of the town's contribution to group insurance would require legislative action by the town under G.L. c. 32B, § 7A, because it would constitute an additional rate, ⁷ and, second, that no such increase could be allowed for firefighters alone: by force of a 1973 amendment of that section, the increase would have to be provided for all the town's employees under group insurance. ⁸ The

question whether the town was willing to accept § 7A and contribute more than 50% Across the board was actually put to the annual Watertown town meeting on May 16, 1977, in the form of an article on the agenda for the meeting. The vote was negative ("to postpone indefinitely").

Last and best offers were submitted by the parties on May 26. With respect to wages, the union proposed an increase of 10% In the first year (commencing July 1, 1976) and 5% In the second; the town proposed 8% And 5%. As to any additional contribution by the town to group insurance premiums, the town, as might be expected, made no proposal; the union attempted one, which we paraphrase as follows. There was to be written into the new contract covering the firefighters a provision entitled "Insurance," by which the town was to continue to pay 50% Of the premium to the insurer. Starting on July 1, 1977, this contribution was to be supplemented by a lump sum payment to the firefighters during the ensuing year equal to 25% Of the premiums due for the year. But if the town should increase its across-the-board contribution paid to the insurer above 50% (presumably by reversing the town vote), the lump sum payment would be scaled down accordingly. ⁹

On June 3, 1977, a majority of the panel approved the union's offer, and on July 3 they filed a statement explaining their choice of the "package." On July 11 the union commenced the Superior Court action to enforce the award. On an agreed record (whose content in material part we have recounted herein), the judge, without opinion, held for the union and directed compliance with the award, with interest from the date of the award. We granted direct appellate review on the application of both parties.

1. Invalidity of the insurance provision of the union's offer. In 1955 the Legislature enacted G.L. c. 32B, a comprehensive statute empowering municipalities to provide group insurance (medical and certain other coverages) to their employees and their employees' dependents. Upon its acceptance of the provisions of c. 32B on March 4, 1957, Watertown undertook to provide such insurance and to contribute to the premiums at the required level of 50%, the balance being furnished by employees through deduction from their wages (or, if no wages were forthcoming for the period in question, by direct payment to the employer). In 1968 a new § 7A was added to c. 32B, authorizing municipalities accepting that section to take action to provide an additional rate supplementing the 50% Contribution. Under § 7A as it read until 1973, the possibility was not expressly foreclosed that the town might undertake to contribute at a higher rate for one employee-group, say fire fighters or police officers, than for another, say schoolteachers. This might occur in fulfilment of differing collective agreements with various employee-groups. See Brooks v. School Comm. of Gloucester, --- Mass.App. --- ^B, 360 N.E.2d 647 (1977). But that possibility was ruled out through the enactment in 1973 (St.1973, c. 789, § 1) of an addendum to § 7A (first paragraph) as follows: "No governmental unit, however, shall provide different subsidiary or additional rates to any group or class within that unit." See Broderick v. Mayor of Boston, --- Mass. --- ^C, 374 N.E.2d 1347 (1978) (Boston ordered to equalize contributions among its employees as required by the 1973 amendment of § 7A).

The reasons for the 1973 amendment can be readily discerned. A single rate of deduction for all employees of a municipality, joined with a single rate of contribution by the municipality, presents a simpler and hence a less expensive picture for practical management than the fragmented structure that would result from rates varying among the several employee-groups. The more significant consideration, however, is the inexpedience (as a Legislature could view it) of encouraging a competitive scramble in collective bargaining among employee-groups to procure increased municipal contributions to the insurance premiums. This could well lead in the end to a drive for a system to allow bargaining as to the kinds of casualties to be covered. Besides setting up a pressure from contract to contract to escalate the municipal contributions, the process described might result in serious impairment of the basic advantages of the group insurance program which derive from wide distribution of risks and uniform administration. We may note that the foregoing view of the purposes of the 1973 amendment is confirmed by statements of the Group Insurance Commission ¹⁰ when that amendment was being offered for enactment, and again in 1974 when there was an abortive effort to repeal the amendment and allow increases of municipal contributions for the benefit particularly of firefighters and police officers or (in another version) for any chosen employee-group. ¹¹

Thus we see that the insurance provision of the union's offer, embodied in the award, offended against the statutory scheme (rendered exclusive by G.L. c. 32B, § 15 ¹² ). The town would be required to make an increased contribution, although it had not legislated the increase, and indeed had expressed itself legislatively against it. Moreover, the town would be put in the position of singling out one employee-group for special treatment as to premium contributions when the controlling statute required that all town employees under group insurance be dealt with alike.

The arbitration panel sought to defend the insurance provision as a "salary supplement" justified by a special health hazard, ¹³ analogous to a "night differential" that might be granted to compensate for peculiar characteristics of a job. The panel also suggested that the employees would be subject to tax on the 25% Payment they would receive which they might spend for other purposes. ¹⁴ However, as indicated in our narrative, in fact salaries were considered on their merits during the hearings; the question of insurance was an issue apart. The proposed contract provision was labeled "Insurance." The 25% Added payment was denominated a supplemental contribution to be made by the town, and as such was to be reduced or to cease altogether if the town should later make an increased contribution to the premiums by the prescribed method of voting it across the board. The trouble with the supposed analogy to a "night differential" is that in the present case there is a statutory prohibition on the particular differential involved unless contributed in accordance with the statute. The possibility that the transaction would not be held a mere form for tax purposes hardly avoids a collision with the statutory...