For more than 20 years, the Union has been the exclusive bargaining representative of production and maintenance employees of the Company. The most recent of a series of collective-bargaining agreements expired on February 28, 2006. The union representative requested certain information from the company by letter in anticipation of upcoming negotiations, which the company provided. For the company the high cost of health insurance was, from the first negotiation session, a major issue. The Union presented a comprehensive contract proposal that dealt with most terms and conditions of the expired contract, including its proposal to eliminate the “right to change'' provision under the "Medical-Hospital-Physician” clause of the expiring contract. The Union's position was that this change was necessary to prevent the company from reducing its health care plan benefits during the term of the contract. 

The Company gave the Union information on the costs incurred by the Company for the employee's health insurance and brought two representatives from a new insurance carrier to present their plans at a negotiation session. The Company's position was clear: current health care costs were excessive, and the negotiations depended on reaching agreement on an acceptable insurance policy. At the third negotiating session, the Company presented additional and detailed information on health care costs, a contract proposal for the renewal of the current agreement, and a new comprehensive medical plan offered by the new provider. At their fourth session, the parties continued to discuss the alternatives to the employees medical insurance. The Union adhered to its position that the current plan/provider be retained, and the Company submitted more information to the Union about the new plan. In the meantime, the Company had presented the Union, in advance of the session, with detailed information about the two health insurance plans, sending comparative charts showing monthly costs under the old and proposed plans, detailed charts showing covered medical services, deductible expenses, and prescription drugs. The Union acknowledged that the benefits offered by the new plan were similar to those under the existing plan, but again stated that the proposal was unacceptable. The Union proposed again that the "right-to-change" language be taken out of the contract. When the parties next met, the Company agreed not to make substantial changes in the level of health benefits and to discuss any changes with the Union before implementing them, provided the Company retained the right to change insurance carriers. The Company's proposal also reflected improvements on other terms, such as wages and grievance procedures. The Union insisted again on eliminating the "right-to-change" provision contained in the expired contract.

At the next session, the Union finally expressed acceptance of the new insurance plan, provided that the current benefits be retained. To ensure this, the Union insisted that the

"right-to-change" language of the old contract be deleted. The Company presented its final offer for renewal of the labor agreement, which contained better and enhanced terms, especially an increase in wages and an improved split on health care premium costs between the Company and the employees. The Company expressed hope that the Union would submit the package to its membership for approval. Instead the Union requested additional information on the Company's cost of the final proposal and promised to examine the Company's final offer and submit a counteroffer. The Company showed the Union another monthly cost comparison for each employee under the two health insurance plans but also stated that any counterproposal by the Union greater than the Company's final offer would underscore the current impasse in the negotiations. It advised the Union that the new provider had offered a reduction in rates, effective May 1, 2006, which would not be extended to June 2006 and requested for the Union’s approval of the implementation of the new health care plan as a substitute for the current plan. 

In response, the Union informed the Company by letter it was not interested in agreeing to the implementation of the new health care plan and that the Union needed additional information for further negotiations. In addition, the Union charged that the Company’s position to retain "the right-to-change" insurance benefits during the life of the contract amounted to an unfair labor practice.

The Company provided the Union with the additional information, but informed the Union that in light of the existing impasse in the negotiations, it would implement the new health care plan from May 1. The Company stated that one reason for the "impasse in the negotiations" was the Union's insistence on deleting "the right-to-change language" and to condition its acceptance of the health plan on that proposal. The Union filed an unfair labor practice charge against the Company.

Discussion

An employer's unilateral change to a mandatory subject of collective bargaining, such as health insurance, during the course of a collective-bargaining relationship is unlawful. A recognized exception to this rule is when an impasse is reached. The issue in this case is whether the parties have reached a lawful impasse. A party that prematurely declares an impasse and makes unilateral changes in, for example, health care coverage violates the act. Whether or not an impasse is reached is a question of various factors including (1) the background and relationship of the parties, (2) their willingness to negotiate, (3) the extent and frequency of bargaining, (4) the integrity of the bargaining, and (5) the good or bad faith of the parties. Here, the parties had a well-established and successful bargaining relationship, as exemplified by a series of collective-bargaining agreements. The parties' willingness to negotiate is shown by the Company's cooperation in agreeing to set dates and in attending meetings. Both parties presented proposals based on the expired contract and made concessions. The Company furnished detailed information, especially on the health insurance plan, and gave serious consideration to the Union's proposals. The integrity of the bargaining was shown by the sincerity of the parties in attempting to arrive at an agreeable solution to their differences. There is no dispute that the Company was faced with increasing costs of the existing health plan and tried to involve the Union from the outset in the negotiations, by supplying financial information, by presenting insurance representatives, and by making significant concessions.

Finally, as to the good faith of the parties, it is clear that the parties were deadlocked on two issues and unable to overcome their differences. At one point the Union had indicated its acceptance of the new health plan after the Company had agreed to substantially identical benefits with those of the existing plan, but the Union changed its position and rejected the Company's request to accept the proposal. The record suggests that the Union conditioned its acceptance on the elimination of "the right-to-change" language. That issue was never resolved, although the parties had come close to an agreement at one point on the health plan. The parties resumed negotiations with revised proposals on two occasions but were unable to overcome their fundamental differences and remained deadlocked. A deadlock on certain issues does not free an employer to implement changes to the terms of an agreement, unless an overall impasse is reached. An overall impasse is reached if it is clear that further meetings would not be productive.

 

3. What would be the effect on the bargaining relationship between these two parties if the board finds that a legal impasse had occurred? If the board finds that a legal impasse has not occured?

Answer rating: 100% (QA)

If the board finds that a legal impasse had occurred Effect on the bargaining relationship The relat... View the full answer