The City points out that this remedy would hurt everyone, and the City's flexibility would be thwarted and premiums would increase. The City asks that the grievance be denied. T'his grievance is about the interpretation, application or enforcement of Section 18.03 of the contract, as well as the application of Sections 18.01 and 18.04 to Section 18.03. Section 18.03 states that employees who retire may participate in the City's group health insurance plan at their own expense. Therefore, Section 18.03, which applies specifically to retirees, is a term of the contract, and the Union may seek to interpret or enforce this term as well as any other tertn of the contract.
Case law provides some guidance regarding the status of retirees.
This does not mean that when a union bargains for retireeswhich nothing in this opinion precludes if the employer agreesthe retirees are without protection. Under established contract principles, vested retirement rights may not be altered without the pensioners' consent. Other federal courts, relying on the principles set out in Allied Chemical , found that once a company binds itself by contract to provide benefits for retirees, the company could violate their contractual rights by failing to provide for those contracted benefits. Thus, while retirees are not employees and an employer has no duty to bargain with them, a union may arbitrate contractual provisions that apply to retirees. Accordingly, the Union has standing in this grievance to seek an interpretation of the benefits for retirees under Article 18, and the grievance is arbitrable.