City of Tukwila, Decision 9691 (PECB, 2007)
STATE OF WASHINGTON
BEFORE THE PUBLIC EMPLOYMENT RELATIONS COMMISSION
TUKWILA POLICE OFFICERS GUILD, )
)
Complainant, ) CASE 19989-U-05-5072
)
vs. ) DECISION 9691 - PECB
)
CITY OF TUKWILA, ) FINDINGS OF FACT,
) CONCLUSIONS OF LAW,
Respondent. ) AND ORDER
___________________________________)
Aitchison & Vick, by Jeffrey Julius, Attorney at Law, for the
union.
Kenyon Disend, by Kari L. Sand, Attorney at Law, for the employer.
On December 8, 2005, the Tukwila Police Officers Guild (union) filed
an unfair labor practice complaint with the Public Employment
Relations Commission (Commission). The union's complaint named the
City of Tukwila (employer) as respondent. Commission staff issued a
preliminary ruling that the union's complaint stated a cause of
action under RCW 41.56.140(4) for refusal to bargain and RCW
41.56.140(1) for interference with employee rights. The employer
filed an answer to the complaint. Examiner Joel Greene held a
hearing on August 17 and 18, and October 18, 2006. Each party filed
a post-hearing brief.
ISSUES PRESENTED
1. Did the City of Tukwila unlawfully refuse to bargain
before it implemented medical insurance premium sharing?
2. Did the affirmative defense of business necessity relieve the
City of Tukwila from its obligation to bargain before it
implemented premium sharing?
Based upon the record, I hold the City of Tukwila committed an
unfair labor practice when it refused to bargain and unilaterally
implemented medical insurance premium sharing. I also hold the
employer did not prove its affirmative defense of business necessity.
ANALYSIS
Issue 1: Refusal To Bargain Before Implementing Premium Sharing
Legal Standards
The Public Employees' Collective Bargaining Act, Chapter 41.56 RCW,
governs the relationship between the union and the employer. RCW
41.56.030(4) defines collective bargaining and requires the parties
engage in good faith negotiations over mandatory subjects of
bargaining:
"Collective bargaining" means the performance of the
mutual obligations of the public employer and the exclusive
bargaining representative to meet at reasonable times, to
confer and negotiate in good faith, and to execute a written
agreement with respect to . . . collective negotiations on
personnel matters, including wages, hours and working
conditions . . . .
The duty to engage in good faith negotiations over mandatory
subjects of bargaining is enforced through the unfair labor practice
provisions in RCW 41.56.140 and .150, and Chapter 391-45 WAC. The
complaining party who alleges an unfair labor practice has the
burden of proving by a preponderance of the evidence that the
responding party committed an unfair labor practice. Whatcom
County, Decision 7244-B (PECB, 2004); City of Tacoma, Decision
6793-A (PECB, 2000); WAC 391-45-270(1)(a).
Health insurance benefits are a form of wages and are a mandatory
subject of bargaining. Yakima County, Decision 9338 (PECB, 2006);
City of Edmonds, Decision 8798-A (PECB 2005).
An employer commits an unfair labor practice if it implements a
unilateral change to a mandatory subject of bargaining of its
union-represented employees, without having exhausted its
obligations under the collective bargaining statute. Grays Harbor
County, Decision 8043-A (PECB, 2004); Lake Washington Technical
College, Decision 4721-A (PECB, 1995).
The obligation to bargain does not compel either party to agree or
to make concessions:
[A]n employer's obligation to bargain does not include the
obligation to agree, but solely to engage in a full and frank
discussion with the collective bargaining representative in
which a bona fide effort will be made to explore possible
alternatives, if any, that may achieve a mutually satisfactory
accommodation of the interests of both the employer and the
employees. If such efforts fail, the employer is wholly free
to make and effectuate his decision. Hence, to compel an
employer to bargain is not to deprive him of the freedom to
manage his business.
Port of Seattle, Decision 7271-B (PECB, 2003), citing Awrey
Bakeries, Inc., 217 NLRB 730 (1975); Stone & Thomas, 221 NLRB 567
(1975); Dixie Ohio Express Co., 167 NLRB 573 (1967). See also RCW
41.56.030(4) ("neither party shall be compelled to agree to a
proposal or be required to make a concession unless otherwise
provided in this chapter").
In determining whether a party committed an unfair labor practice,
the examiner must analyze the "totality of the circumstances." City
of Wenatchee, Decision 8028 (PECB, 2003), citing City of Mercer
Island, Decision 1457 (PECB, 1982); Walla Walla County, Decision
2932-A (PECB, 1988).
In this case, the union alleges the employer made a unilateral
change to a mandatory subject of bargaining. In unilateral change
cases, the complaining party must prove four elements to establish
the responding party committed an unfair labor practice:
In summary, a complainant alleging a unilateral change
must establish the following: (1) the existence of a relevant
status quo or past practice; (2) that the relevant status quo
or past practice was a mandatory subject of bargaining; (3)
that notice and an opportunity to bargain the proposed change
was not given or that notice was given but an opportunity to
bargain was not afforded and/or the change was a fait accompli;
and (4) that there was a change to that status quo or past
practice.
Val Vue Sewer District, Decision 8963 (PECB, 2005).
Applicable Facts
The union represents police officers through the rank of sergeant
who work for the employer. The employer and the union were parties
to a collective bargaining agreement (CBA) for calendar years 2005,
2006, and 2007. Pursuant to Article 16 of the CBA, the employer
offered two medical plans: Group Health and the City of Tukwila
Self-Insured Plan. This case involves a higher than anticipated
increase in costs to pay for the self-insured plan.
The parties agree that Section 16.1.C of their collective bargaining
agreement controls the disposition of this case. The parties
disagree about the meaning and application of Section 16.1.C, which
addresses the cost of premiums for the self-insured plan, and reads
in relevant part as follows:
COST OF PREMIUMS. The Employer shall continue to pay the
full premium for medical coverage under the Self-Insured
Medical Plan up to a maximum increase of . . . ten percent
(10%) in 2006 and 2007. In the event the monthly premiums
increase more than the stated amount in a year, the Employer or
the Guild has the right to reopen the Agreement to negotiate
changes in the Self-Insured Medical Plan benefits so that the
increase in premium costs does not exceed the stated amount.
When cost projections for 2006 indicated premiums for the
self-insured plan would increase by more than the ten percent in CBA
Section 16.1.C, the employer convened the Tukwila Healthcare
Management Committee (HMC). The HMC is composed of representatives
from the employer's six bargaining units, the employer, and
non-represented employees. The HMC's charter indicates it functions
"in an advisory capacity" and its "recommendations are not meant to
displace the collective bargaining process." In previous years, the
HMC's recommendations have been adopted and implemented through
consensus by ratification votes from the employer's bargaining units.
Beginning in June 2005, the HMC held a series of meetings to discuss
strategies to address the premium increase. The union actively
participated in the meetings and the discussions. At the request of
the HMC, the employer sent a survey to all city employees requesting
their opinions regarding how to respond to the premium increase.
Based on the survey results, the HMC voted to recommend increased
co-pays to offset the premium increase. Members of the HMC
attempted to have a final decision ratified by the bargaining units
in early to mid November, prior to December 2005, the employer's
open enrollment period for employees to change insurance plans.
On November 22, 2005, the employer sent a memorandum to the union
informing it that three of the city's six bargaining units had voted
to reject the HMC's co-pay recommendation. The employer's memo
stated that, in reliance on CBA Section 16.1.C, the employer would
pay ten percent of the thirteen percent premium increase. This
decision meant bargaining unit members would incur a three percent
increase in medical insurance premiums, the amount in excess of the
ten percent figure in the CBA. The employer's November 22 letter
was the first time the union learned its employees would be
responsible for premium sharing, not increased co-pays as
recommended by the HMC.
On November 28, 2005, a representative for the union met with
representatives for the employer. The union informed the employer,
both orally and in writing, that the union did not accept the city's
implementation of premium sharing. The union requested to bargain
how the city addressed the increase in medical insurance premiums.
The union also gave the employer a memorandum indicating the union
had voted several days earlier to accept the HMC's co-pay
recommendation. The union's ratification of the co-pay
recommendation did not change the fact that the co-pay
recommendation had failed because several of the city's bargaining
units had rejected it.
The employer did not accept the union's request to bargain. The
employer and the union never negotiated how to respond to the higher
than anticipated costs for the self-insured plan. The union filed
its unfair labor practice complaint on December 8, 2005.
On December 19, 2005, the Mayor of the City of Tukwila wrote to the
city's bargaining units and gave them one more chance to implement
the HMC's co-pay recommendation. The mayor stated the city would
pay the increased premium costs for January 2006 and delay
implementing co-pays until February 2006 - if the bargaining units
could ratify the co-pay recommendation by December 30, 2005. The
bargaining units took no actions in response to the mayor's letter.
The employer implemented premium sharing effective January 1, 2006.
Discussion - Application of Law to Facts
In this case, the union alleges the employer made a unilateral
change to a mandatory subject of bargaining, the amount bargaining
unit members paid to receive health insurance benefits under the
city's self-insured medical plan. In cases alleging an improper
unilateral change, the complaining party must prove the four
elements listed above in Val Vue Sewer District. I will next
examine whether the union proved each of these four elements.
Element 1: Did a relevant status quo exist?
Collective bargaining obligations prohibit the employer from
unilaterally changing a mandatory subject of bargaining, except when
a change is made in conformity with collective bargaining
obligations or the terms of a collective bargaining agreement. King
County Library System, Decision 9039 (PECB, 2005); City of Yakima,
Decision 3503-A (PECB, 1990), aff'd, 117 Wn.2d 655 (1991).
The status quo in this case is established by the first phrase in
CBA Section 16.1.C. That provision indicates the employer "shall
continue to pay the full premium for medical coverage under the
Self-Insured Medical Plan."
The employer argues the status quo is established by the provision
in CBA Section 16.1.C indicating the employer is responsible for a
"maximum increase of . . . ten percent (10%) in 2006." This
argument misinterprets the section as a whole and fails to take into
account the next sentence in the section, which authorizes either
party to request negotiations if the maximum increase exceeds ten
percent:
In the event the monthly premiums increase more than the stated
amount in a year, the Employer or the Guild has the right to
reopen the Agreement to negotiate changes in the Self-Insured
Medical Plan benefits so that the increase in premium costs
does not exceed the stated amount.
The ten percent limitation language in CBA Section 16.1.C authorized
the union to request bargaining, which it did. The ten percent
limitation language in CBA Section 16.1.C does not establish the
status quo, as the employer argues.
Therefore, a relevant status quo existed: the employer's duty to
pay "the full premium."
Element 2: Was the relevant status quo a mandatory subject?
This case involves increased costs for medical insurance. As
discussed above in Yakima County and City of Edmonds, health
insurance benefits are a form of wages and are a mandatory subject
of bargaining. Therefore, the relevant status quo was a mandatory
subject.
Element 3: Did the employer give notice and was the union afforded
an opportunity to bargain?
On November 22, 2005, the employer sent a memorandum to the union
informing it that the employer was implementing premium sharing.
This memorandum explained that the employer would begin charging
bargaining unit members three percent more to purchase or remain
members of the employer's self-insured medical plan.
On November 28, 2005, the union informed the employer, both orally
and in writing, that the union requested to bargain the issue of
increased medical insurance premiums. The parties agree, and the
record proves, that bargaining never occurred. Therefore, the
employer gave notice of the proposed change but did not afford the
union an opportunity to bargain.
Element 4: Did the employer change the status quo?
The employer wrote to the union on November 22, 2005, and wrote to
all city employees on November 30, 2005, that the city was
implementing premium sharing for the self-insured medical plan for
plan year 2006. The record proves the employer implemented premium
sharing effective January 1, 2006. Therefore, the employer changed
the status quo on January 1, 2006, when it required bargaining unit
members to pay an additional three percent for their self-insured
medical insurance premiums.
Conclusion
The union proved each of the four elements in Val Vue Sewer
District. The union proved: (1) a relevant status quo existed (the
employer's duty to pay the full medical insurance premiums); (2) the
status quo (employer payment of health insurance premiums) was a
mandatory subject; (3) the union requested bargaining (the union's
November 22 oral and written requests) but the employer did not
afford the union an opportunity to bargain; and (4) and the employer
changed the status quo (implementation of premium sharing effective
January 1, 2006).
Analyzing the totality of the circumstances, as described above in
City of Wenatchee, I find the employer's decision to unilaterally
implement premium sharing without bargaining constitutes an unfair
labor practice in violation RCW 41.56.140(4).
The union alleges the employer violated two separate provisions in
the statute that prohibits unfair labor practices. Under RCW
41.56.140(4), employers may not refuse to engage in collective
bargaining; under RCW 41.56.140(1), employers may not interfere
with, restrain, or coerce public employees in the exercise of their
collective bargaining rights. If the union proves a refusal to
bargain violation of RCW 41.56.140(4), which it has, Commission
decisions automatically find a derivative interference violation of
RCW 41.56.140(1). Skagit County, Decision 8746-A (PECB, 2006);
Washington State Patrol, Decision 4757-A (PECB, 1995). Therefore, I
also find the employer's decision to unilaterally implement premium
sharing without bargaining constitutes a derivative interference
unfair labor practice violation of RCW 41.56.140(1).
Issue 2: The Employer's Affirmative Defense of Business Necessity
Legal Standards
Commission precedent establishes that the employer is not required
to bargain a change to a mandatory subject of bargaining when the
employer is faced with an emergency, a compelling legal or practical
need:
[T]he business necessity defense is apt where a party to a
collective bargaining relationship is faced with a compelling
legal or practical need to make a change affecting a mandatory
subject of bargaining. It may then be relieved of its
bargaining obligation to the extent necessary to deal with the
emergency.
Yakima County, citing Cowlitz County, Decision 7007-A (PECB, 2000)
(footnote omitted).
Business Necessity is an affirmative defense. After the complaining
party proves the responding party committed an unfair labor
practice, the responding party has the burden of proving affirmative
defenses. Skagit County, Decision 8886-A (PECB, 2007); Cowlitz County.
Applicable Facts
In previous years, the HMC's recommendations to reduce higher than
anticipated medical insurance costs had been ratified by all of the
city's bargaining units. The record in this case supports the
conclusion that the union and the employer assumed the HMC's
recommendations would once again be adopted and implemented, this
time for the 2006 plan year. For the first time, the city's
bargaining units did not ratify the HMC's recommendations.
Unfortunately, the parties had not discussed what would happen if
the HMC recommendations were not ratified and implemented. The
union was surprised and shocked when it received the city's November
22 memorandum and learned for the first time that the employer
intended to implement premium sharing rather than co-pays as
recommended by the HMC.
When the bargaining units did not ratify the HMC's recommendations,
the employer found itself in an extremely difficult situation. The
HMC had numerous meetings and agreements on timelines, some of which
were extended at the last minute, with the goal to enable the plan
administrator and the employer to be prepared for the December 1
start of the employer's open enrollment period. Most city employees
did not work during the Thanksgiving holiday vacation, which further
slowed and complicated the final decision and implementation
process. The employer had historically maintained a single
schedule of benefits for all city employees who choose to be covered
by the self-insured plan. The employer understandably wanted to
minimize costs and maintain a single schedule of benefits. The
employer also wanted to implement the decision immediately so its
plan administrator could prepare accurate information in time for
the December open enrollment period.
Discussion - Application of Law to Facts
Although the employer was in an extremely difficult situation, the
employer could have negotiated with the union and discussed
alternative solutions to solve the problem. The employer and the
union each presented testimony at the hearing regarding whether
various potential alternative solutions were, or were not, viable
options. I make no decision regarding what the parties could have
decided and whether that alternative would have been viable. When
two parties sit down to discuss solving a problem, one can rarely
predict the solution that may result. Although the employer faced
the time pressure imposed by the December open enrollment period and
its goal of a January 1 implementation date, those dates do not
represent the "compelling legal or practical need" described above
in Yakima County and Cowlitz County.
The mayor's December 19, 2005, memorandum to the employer's
bargaining units reinforces the conclusion that the employer had
time or could have made time to negotiate with the union. On
December 19 three weeks after the union's November 28 request to
bargain the mayor offered to delay making changes to the
self-insured plan by over six more weeks to February 2006 if certain
conditions were met. The mayor's memorandum supports the conclusion
that the employer had the ability to be flexible with time; the
employer could have used the time extension in the mayor's
memorandum or made time to negotiate with the union.
Conclusion
I find the employer did not prove the "compelling legal or practical
need" required by Yakima County and Cowlitz County. The employer
did not prove the affirmative defense of business necessity relieved
it from its obligation to bargain before implementing premium sharing.
Any facts or arguments presented at the hearing that are not cited
within this decision are immaterial or not persuasive.
FINDINGS OF FACT
1. The City of Tukwila (employer) is a public employer within the
meaning of RCW 41.56.030(1).
2. The Tukwila Police Officers Guild (union) is a bargaining
representative within the meaning of RCW 41.56.030(3). The
union represents police officers through the rank of sergeant
who work for the employer.
3. The employer and the union were parties to a collective
bargaining agreement for calendar years 2005, 2006, and 2007.
4. The employer maintained and offered a self-insured medical plan
to all city employees, including bargaining unit members.
5. Section 16.1.C of the collective bargaining agreement between
the parties required the employer to continue to pay the full
premium for the self-insured plan. In the event premiums
increased more than ten percent for calendar year 2006, the
employer or the union could reopen the agreement to negotiate
changes in the plan benefits so the premium increase would not
exceed ten percent. For calendar year 2006, the anticipated
increased cost of the self-insured plan was thirteen percent.
6. The employer convened the Tukwila Healthcare Management
Committee (HMC) to address the anticipated cost increase of the
self-insured plan. The HMC is composed of representatives from
the employer's six bargaining units, the employer, and
non-represented employees. The HMC's charter indicates it
functions "in an advisory capacity" and its "recommendations
are not meant to displace the collective bargaining process."
7. In previous years, the HMC's recommendations had been adopted
and implemented through ratification votes from the employer's
bargaining units. The union and the employer assumed the HMC's
recommendations would once again be adopted and implemented for
the 2006 plan year.
8. After surveying all city employees, the HMC recommended
employees pay higher co-pays to offset the anticipated
increased cost of the self-insured plan.
9. The employer wanted any changes to the self-insured plan
adopted in advance of the city's December 2005 open enrollment
period. The employer intended to implement any changes
effective January 1, 2006.
10. Three of the employer's six bargaining units did not ratify the
HMC's recommendations. The parties had not discussed what
would happen if the bargaining units did not ratify the HMC's
recommendations.
11. On November 22, 2005, the employer notified the union that
three of the employer's bargaining units had voted to reject
the HMC's recommendation to increase co-pays, and the employer
was implementing premium sharing effective January 1, 2006. As
a result of this decision, bargaining unit members would be
required to pay a three percent increase in premiums to
purchase or remain members of the self-insured medical plan.
This was the first time the union learned its bargaining unit
members would be responsible for premium sharing, not increased
co-pays as recommended by the HMC.
12. On November 28, 2005, the union informed the employer, both
orally and in writing, that the union did not accept the
employer's implementation of premium sharing. The union
requested to bargain. The employer did not agree to the
union's request to bargain, and the parties never bargained the
issue.
13. The union filed its unfair labor practice complaint on December
8, 2005.
14. On December 19, 2005, the Mayor of the City of Tukwila wrote to
the employer's bargaining units and offered to delay making
changes to the self-insured plan until February 2006 if certain
conditions were met. The bargaining units took no actions in
response to the mayor's letter. The employer implemented
premium sharing effective January 1, 2006.
CONCLUSIONS OF LAW
1. The Public Employment Relations Commission has jurisdiction in
this case pursuant to Chapter 41.56 RCW and Chapter 391-45 WAC.
2. By its unilateral change in a mandatory subject of bargaining
as described above in findings of fact 11, 12, and 14, the City
of Tukwila refused to bargain in good faith under RCW
41.56.140(4) and (1) when it unilaterally implemented medical
insurance premium sharing without bargaining.
3. By the events described in the above in findings of fact 11,
12, and 14, the City of Tukwila did not prove, as required by
WAC 391-45-270(1)(b), that a business necessity relieved it
from its obligation to bargain under RCW 41.56.030(4) before it
implemented premium sharing.
ORDER
The City of Tukwila, its officers and agents, shall immediately take
the following actions to remedy its unfair labor practices:
1. CEASE AND DESIST from:
a. Refusing to bargain in good faith with the Tukwila Police
Officers Guild regarding medical insurance premiums.
b. Refusing to pay 100 percent of the premiums for the
self-insured medical plan for employees in the Tukwila
Police Officers Guild.
c. In any other manner interfering with, restraining, or
coercing its employees in the exercise of their collective
bargaining rights under the laws of the state of Washington.
2. TAKE THE FOLLOWING AFFIRMATIVE ACTION to effectuate the
purposes and policies of Chapter 41.56 RCW:
a. Reimburse the employees represented by the Tukwila Police
Officers Guild for their portion of premiums paid to
purchase the self-insured medical plan as a consequence of
the employer not paying 100 percent of the premiums
beginning on January 1, 2006, including interest as
authorized by WAC 391-45-410(3).
b. Restore the status quo ante by reinstating the wages,
hours, and working conditions which existed for employees
in the Tukwila Police Officers Guild prior to the
employer's implementation of medical insurance premium
sharing, which was found unlawful in this order.
c. Give notice to and, upon request, negotiate in good faith
with the Tukwila Police Officers Guild before implementing
changes to medical insurance premiums.
d. Post copies of the notice attached to this order in
conspicuous places on the employer's premises where
notices to all bargaining unit members are usually posted.
These notices shall be duly signed by an authorized
representative of the employer, and shall remain posted
for 60 consecutive days from the date of initial posting.
The employer shall take reasonable steps to ensure that
these notices are not removed, altered, defaced, or
covered by other material.
e. Read the notice attached to this order into the record at
a regular public meeting of the City Council of the City
of Tukwila, and permanently append a copy of the notice to
the official minutes of the meeting when the notice is
read as required by this paragraph.
f. Notify the Tukwila Police Officers Guild, in writing,
within 20 days following the date of this order, as to
what steps the employer has taken to comply with this
order, and at the same time provide the union with a
signed copy of the notice attached to this order.
g. Notify the Compliance Officer of the Public Employment
Relations Commission, in writing, within 20 days following
the date of this order, as to what steps the employer has
taken to comply with this order, and at the same time
provide the Compliance Officer with a signed copy of the
notice attached to this order.
Issued at Olympia, Washington, on this 23rd day of May, 2007.
PUBLIC EMPLOYMENT RELATIONS COMMISSION
JOEL GREENE, Examiner
This order will be the final order of the
agency unless a notice of appeal is filed
with the Commission under WAC 391-45-350.
Case 19989-U-05-5072
PUBLIC EMPLOYMENT RELATIONS COMMISSION
NOTICE
THE WASHINGTON PUBLIC EMPLOYMENT RELATIONS COMMISSION CONDUCTED A LEGAL
PROCEEDING IN WHICH ALL PARTIES HAD THE OPPORTUNITY TO PRESENT EVIDENCE AND
ARGUMENT. THE COMMISSION RULED THAT WE COMMITTED UNFAIR LABOR PRACTICES IN
VIOLATION OF STATE COLLECTIVE BARGAINING LAWS, AND ORDERED US TO POST THIS
NOTICE TO EMPLOYEES:
WE UNLAWFULLY refused to bargain with the Tukwila Police Officers Guild
before we implemented medical insurance premium sharing to pay for the
city's self-insured medical plan.
TO REMEDY OUR UNFAIR LABOR PRACTICES:
WE WILL reimburse employees represented by the Tukwila Police Officers Guild
for their portion of premiums paid to purchase the self-insured medical plan
as a consequence of the city not paying 100 percent of the premiums
beginning on January 1, 2006, including interest as authorized by WAC
391-45-410(3).
WE WILL restore the status quo ante by reinstating the wages, hours, and
working conditions which existed for employees in the Tukwila Police
Officers Guild prior to the city's implementation of medical insurance
premium sharing.
WE WILL give notice to and, upon request, negotiate in good faith with the
Tukwila Police Officers Guild before implementing changes to medical
insurance premiums.
WE WILL NOT, in any other manner, interfere with, restrain, or coerce our
employees in the exercise of their collective bargaining rights under the
laws of the State of Washington.
DATED: _________________ CITY OF TUKWILA:
BY: ______________________________
Authorized Representative
THIS IS AN OFFICIAL NOTICE AND MUST NOT BE DEFACED BY ANYONE.
This notice must remain posted for 60 consecutive days, and must not be
altered or covered by any other material. Questions about this notice or
compliance with the Commission's order may be directed to the Public
Employment Relations Commission (PERC), 112 Henry Street NE, Suite 300, PO
Box 40919, Olympia, Washington 98504-0919. Telephone: (360) 570-7300.
The full decision will be published on PERC's web site, www.perc.wa.gov.