Opinion ID: 2679987
Heading Depth: 2
Heading Rank: 2

Heading: Retiree Health Insurance Benefits

Text: [¶13] The City argues that maintaining the static status quo in this situation means that the City need not provide health insurance coverage to any employee who retired after the expiration of the collective bargaining agreement. According to the City, qualified employees had the right to elect to retire during the term of the agreement if they wished to receive the retiree health insurance benefit.
[¶14] In an appeal from a Superior Court judgment entered upon intermediate appellate review of a Board decision, we “review the Board’s decision directly for error of law, abuse of discretion, or clear error.” COLT, 659 A.2d at 844 (citation omitted). In that review, we will “defer to the agency’s interpretation and application of the statute” when the administration of that statute has been entrusted to the agency by the Legislature. AFSCME Council 93 v. Me. Labor Rels. Bd., 678 A.2d 591, 593 (Me. 1996). 5 See also Comm. Amend. A to L.D. 1123, No. H-492, Summary (122d Legis. 2005) (stating, in adopting the current version of 26 M.R.S. § 964-A, the intention to “give[] the Maine Labor Relations Board authority over disputes concerning the application of the static status quo doctrine, as well as rulemaking authority to implement the amendment’s purposes”). 9 2. “Static Status Quo” and the Prohibition of Unilateral Changes to Collective Bargaining Agreements [¶15] In Maine, as part of the statutory duty to bargain collectively in good faith, a public employer and the employees’ representative may not make unilateral changes to certain contractual provisions during post-contract negotiation while bargaining is underway and before impasse is reached. Mtn. Valley Educ. Ass’n, 655 A.2d at 351-52; Lane, 447 A.2d at 809-10; see 26 M.R.S. § 965 (describing municipal public employers’ and employee bargaining agents’ obligation to bargain collectively); see also 26 M.R.S. § 964(1)(E), (2)(B) (2012) (prohibiting municipal public employers and employee bargaining agents from refusing to bargain collectively as required by section 965); Allied Chem. & Alkali Workers of Am. v. Pittsburgh Plate Glass Co., 404 U.S. 157, 180 (1971) (“[T]he future retirement benefits of active workers are part and parcel of their overall compensation and hence a well-established statutory subject of bargaining.”). [¶16] To prevent unilateral changes from being made, when a collective bargaining agreement has expired and the negotiation of a new contract is underway, “[t]he parties are required to maintain the status quo while bargaining.” Mtn. Valley Educ. Ass’n, 655 A.2d at 352. This status quo must be maintained until a new agreement is ratified or the parties reach a bona fide impasse. See id.; 10 Teamsters Union Local #340 v. Portland Water Dist., 651 A.2d 339, 342 (Me. 1994).6 [¶17] In interpreting the meaning and reach of the “status quo” in 1995, we held that the Maine Labor Relations Act required the University of Maine to maintain a “static status quo,” not a “dynamic status quo,” when the parties were negotiating a collective bargaining agreement after the existing agreement had expired. COLT, 659 A.2d at 845-46. The “dynamic status quo” advocated by the clerical, office, laboratory, and technical staff of the University would have required the University to continue paying annual step increases on the terms set forth in the expired agreement. See id. at 843 & n.1, 845. We held that implementing such a dynamic status quo was contrary to the legislative intent expressed in the plain language and history of the labor statutes, and would obligate public employers to pay substantial wage increases that were not approved by their governing bodies. Id. at 846. In short, we held that step increases would “change[], rather than maintain[], the status quo,” which would undermine the legislative purpose to “protect municipal and state agency budgets from increases in wages imposed without agreement by the governing body.” Id. at 845-46; see also AFSCME Council 93 v. State of Maine, Dep’t of Admin. & Fin. 6 There is no assertion that impasse was reached in this matter. 11 Servs., M.L.R.B. Nos. 03-13 & 04-03 at 22 (Apr. 21, 2004) (following the holding of COLT). [¶18] Following our ruling in COLT, the Legislature incorporated the concept of the “static status quo” into the municipal employee collective bargaining statutes. See 26 M.R.S. § 964-A(2). In applying the holding of COLT, the Board has held that, if a collective bargaining agreement requires the employer to pay a certain percentage of the annual cost of a health insurance premium, the employer continues to be responsible for paying that percentage if the costs increase during negotiations following the expiration of the agreement. See Me. State Employees Ass’n v. Lewiston Sch. Dep’t, M.L.R.B. No. 09-05 at 3, 11-12 (Jan. 15, 2009). The static status quo is also maintained, as the Board held before our decision in COLT, when a government employer continues to pay the specific dollar amount for active employees’ health insurance set forth in an expired collective bargaining agreement that defines the benefit in specific dollar amounts rather than a percentage. See Teamsters Union Local 340 v. City of Augusta, M.L.R.B. No. 93-28 at 24-26 (Jan. 13, 1994). [¶19] Here, the health insurance premium contribution for retired employees was set at 100% by the contract. That retiree benefit, established by the collective bargaining agreement as a future benefit for current employees, cannot be reduced by the City, here to 0%, without constituting a unilateral modification. 12 In other words, to preserve the status quo, an employee whose status changed from active to retired would be entitled to receive benefits in place for retirees as set forth in the expired agreement. Cf. Appeal of Town of Rye, 666 A.2d 948, 950, 952-53 (N.H. 1995) (holding that, unlike step-increase provisions, a provision for the buyback of accumulated sick leave upon leaving employment must be maintained during the status quo period); Appeal of Alton Sch. Dist., 666 A.2d 937, 942 (N.H. 1995) (holding that, to maintain the status quo, pay increases based on increased education, unlike step increases, must continue). [¶20] If the parties had negotiated an agreement that explicitly restricted the payment of retiree health insurance benefits to the term of the agreement, the City’s argument would have traction. Similarly, if the contract required the City to pay an amount certain, rather than 100%, the City’s expenses would not increase with rising insurance costs. Because of the broad language of the agreement here, however, and given our deference to the Board in the construction of a statute entrusted to it by the Legislature, see AFSCME Council 93, 678 A.2d at 593, the Board did not err in concluding that the City must continue to pay the identified class of retirees 100% of retiree health insurance benefits during negotiations in order to maintain the static status quo.7 7 The City urges us to analogize the present case to Winnett v. Caterpillar, Inc., 553 F.3d 1000, 1008-11 (6th Cir. 2009), in which the United States Court of Appeals for the Sixth Circuit held that retiree medical benefits had not “vested” during the term of the collective bargaining agreement for those 13 The entry is: Judgment affirmed. ___________________________ On the briefs: Stephen E. F. Langsdorf, Esq., and Jonathan G. Mermin, Esq., Preti Flaherty, LLP, Augusta, for appellant City of Augusta Lisa Copenhaver, Esq., Maine Labor Relations Board, Augusta, for appellee Maine Labor Relations Board Douglas L. Steele, Esq., Woodley & McGillivary, Washington, DC, and Howard T. Reben, Esq., Reben Benjamin & March, Portland, for appellee IAFF Local 1650 Susanne F. Pilgrim, Esq., Maine Municipal Association, Augusta, for amicus curiae Maine Municipal Association At oral argument: Stephen E. F. Langsdorf, Esq., for appellant City of Augusta Lisa Copenhaver, Esq., for appellee Maine Labor Relations Board Douglas L. Steele, Esq., for appellee, IAFF local 1650 Kennebec County Superior Court docket number AP-11-64 FOR CLERK REFERENCE ONLY private employees who had not retired before the agreement expired. For several reasons, this case is inapposite. The employer in Winnett was a private employer, not a public employer, so its employees could—and did—strike, and the employer could—and did—implement its last best offer upon that strike. Id. at 1003. The court was therefore determining not whether the expired agreement’s terms persisted to maintain a static status quo but instead whether, under federal labor law, the employee’s retiree benefits had “vested” as soon as he became eligible to retire. Cf. Appeal of Town of Rye, 666 A.2d 948, 950, 953 (N.H. 1995) (holding that an accumulated sick leave buyback provision, applicable when police officers left the town police department, “vested when the CBA was in effect and must be maintained, without change in substance or effect, during the status quo period”).