Court Opinion

ID: 185230
Source: CourtListenerOpinion
Date Created: 2011-02-05 02:29:15+00
Date Added: 2024-06-11T17:26:14.130081
License: Public Domain

217 F.3d 869 (D.C. Cir. 2000)
BP Amoco Corpration, successor by merger of Amoco Corporation, et al.,Petitionersv.National Labor Relations Board, RespondentOil, Chemical and Atomic Workers International Union, AFL-CIO, et al.,Intervenors
No. 99-1368
United States Court of AppealsFOR THE DISRTICT OF COLUMBIA CIRCUIT
Argued May 15, 2000Decided July 11, 2000

On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board
Jeffrey S. Heller argued the cause for the petitioners. Stephen D. Erf and Thomas J. Piskorski were on brief.
David Habenstreit, Attorney, National Labor Relations  Board, argued the cause for the respondents.  Leonard R.  Page, General Counsel, Linda Sher, Associate General Counsel, Aileen A. Armstrong, Deputy Associate General Counsel,  and David A. Seid, Attorney, National Labor Relations  Board, were on brief for the respondents.  Anne M. Lofaso,  Attorney, entered an appearance.
Patrick M. Flynn entered an appearance for the intervenors.
Daniel V. Yager and Heather L. MacDougall were on brief  for the amicus curiae.
Before:  Williams, Henderson and Rogers, Circuit Judges.
Opinion for the court filed by Circuit Judge Henderson.
Karen LeCraft Henderson, Circuit Judge:

1
The petitioners, BP Amoco Corp., successor by merger to Amoco Corporation, and its subsidiaries (collectively BP Amoco)1 seek  review of a decision and order of the National Labor Relations Board (NLRB, Board) holding that BP Amoco committed an unfair labor practice by unilaterally altering its employee medical benefit plan in violation of the collective  bargaining agreements between Amoco Corporation and five  locals of Intervenor Paper, Allied Chemical and Energy  Workers International Union, successor to the Oil, Chemical  and Atomic Workers International Union (collectively identified as Union).  Because the collective bargaining agreements  expressly incorporated the company benefit plan, which in  turn expressly reserved to BP Amoco the right to amend the  plan at any time, we conclude BP Amoco did not commit an  unfair labor practice.  Accordingly, we grant BP Amoco's  petition for review and deny the Board's cross-application for  enforcement.

I.

2
This dispute involves the medical benefit coverage BP  Amoco provides to employees at its facilities in Texas City,  Texas, Wood River, Illinois and Yorktown, Virginia.  From  1984 until 1989 BP Amoco provided these employees medical  benefit coverage under its "Comprehensive Medical Expense  Plan" (CMEP), a traditional indemnity plan under which  participants chose their own medical providers and received  specific benefits subject to fixed deductibles.  The CMEP  expressly reserved to BP Amoco the "right to amend[,]  modify, suspend or terminate" the plan "at any time."  Joint  Appendix (JA) 489, 494.

3
During contract negotiation in 1989 and 1990, BP Amoco  and the Union agreed to replace the CMEP with the "Amoco  Medical Plan" (AMP), a similar indemnity plan.The AMP  contained the following reservation of rights provision:

4
The company expects and intends to continue these plans indefinitely.  However, the company reserves the right to amend or terminate these plans at any time and forany reason. If any of these plans are amended or terminated, you and other active employees may not receive benefits as desribed [sic] in other sections of this book. You may be entitled to receive different benefits, or benefits under different conditions.  However, it is possible that you will lose all benefit coverage. This may happen at any time, even after you retire, if the company decides to terminate a plan or your coverage under a plan.  In no event will you become entitled to any vested rights under these plans.

5
JA 654.  Pursuant to this provision, BP Amoco amended the  plan in 1991 and 1992 by distributing amending documents to  employees but the amendments did not affect the reservation  of rights provision.

6
During contract negotiation in 1992 and 1993, BP Amoco  announced its intent to adopt some form of managed care  health plan to replace the indemnity plan.  In January 1993  BP Amoco issued a bulletin to plan participants informing  them of the planned change.  Additional bulletins were issued  later in the spring providing details of the proposed managed  care features and of two other changes affecting retiree  benefits.

7
After the Union demanded bargaining on the plan changes,  BP Amoco met with the various locals to discuss the matter  throughout the summer.  The Union, however, offered no  proposals and in September 1993 BP Amoco declared an  impasse.  BP Amoco implemented the modified plan effective  October 1, 1993.

8
The Union filed charges on behalf of its locals2 and the  NLRB issued four complaints based thereon, which were  consolidated.  In October and November 1994 the administrative law judge (ALJ) conducted a four-day hearing.  In a  decision issued March 17, 1995 the ALJ concluded there was  no unfair labor practice because the Union was "bound" by  the AMP's reservation of rights clauses which had been  "adopt[ed]" in the collective bargaining agreements.  1999  WL 871774, at *12 et seq.

9
The NLRB General Counsel and the Union filed exceptions.  In a decision dated August 18, 1999, the Board reversed the ALJ and held that BP Amoco had violated section  8(a)(1) and (5) of the National Labor Relations Act (Act).Amoco Chem. Co., 328 N.L.R.B. No. 174, 1999 WL 671774  (1999).  BP Amoco petitioned for review of the Board's  decision and the Board cross-applied for enforcement.

II.

10
Section 8(a)(1) of the Act makes it generally an unfair labor  practice for an employer "to interfere with, restrain, or coerce  employees in the exercise of the rights guaranteed in the  [Act]."  29 U.S.C. § 158(a)(1).  Section 8(a)(5) more specifically makes it an unfair labor practice for an employer "to  refuse to bargain collectively with the representatives of his  employees."  Id. § 158(a)(5).  "An employer violates sections  8(a)(5) and 8(a)(1) of the Act if it makes a unilateral change in  a term or condition of employment--so-called 'mandatory  subjects'--without first bargaining to impasse."  NLRB v. United States Postal Serv., 8 F.3d 832, 836 (D.C. Cir. 1993)  (citing Litton Fin. Printing Div. v. NLRB, 501 U.S. 190  (1991)).  "However, the duty to bargain under the [Act] does  not prevent parties from negotiating contract terms that  make it unnecessary to bargain over subsequent changes in  terms or conditions of employment."  Id.  Thus, the parties  may negotiate " 'a provision in a collective bargaining contract  that fixes the parties' rights and forecloses further mandatory  bargaining as to that subject.' "  Id. (quoting Local Union  No. 47, Int'l Bhd. of Elec. Workers v. NLRB, 927 F.2d 635,  640 (D.C. Cir. 1991);  other citations omitted).  " '[T]o the  extent that a bargain resolves any issue, it removes that issue  pro tanto from the range of bargaining.' "  Id. (quoting  Connors v. Link Coal Co., 970 F.2d 902, 905 (D.C. Cir. 1992))."This court has referred to this inquiry as an analysis of  whether an issue is 'covered by' a collective bargaining agreement."  Id. (citing Connors, 970 F.2d at 906;  Department of  Navy v. Federal Labor Relations Auth., 962 F.2d 48, 57 (D.C.  Cir. 1992)).

11
In this case BP Amoco contends the terms of the AMP  were "covered by" the collective bargaining agreements between BP Amoco and the locals because each agreement  incorporated the AMP by reference, including its reservation  of rights provision.  This incorporation, BP Amoco maintains,  removed the AMP's terms from the range of mandatory  bargaining so that BP Amoco's unilateral modification of the  plan's terms was not an unfair labor practice.

12
Below, as in past decisions, the Board incorrectly applied a  "waiver analysis," concluding that the Union had not made a  "clear and unmistakable waiver" of its right to bargain over  health benefits. 1999 WL 671774, at *3-4.  As this court  explained in United States Postal Serv.:

13
[T]he "covered by" and "waiver" inquiries are analytically  distinct:

14
A waiver occurs when a union knowingly and voluntari-ly relinquishes its right to bargain about a matter;  but where the matter is covered by the collective bargaining agreement, the union has exercised its bargaining right and the question of waiver is irrelevant.

15
8 F.3d at 836 (quoting Department of Navy v. Federal Labor  Relations Auth., 962 F.2d 48, 57 (D.C. Cir. 1992);  emphasis in  original).  Here, the Board acknowledges the force of the  "covered by" principle but contends it does not apply because  the Board's decision expressly found that the collective bargaining agreements did not incorporate the reservation of  rights clauses.  For the reasons set out below, we agree with  BP Amoco that the reservation of rights provision was incorporated into the five collective bargaining agreements and  that therefore BP Amoco's authority to modify the AMP  without mandatory bargaining was "covered by" the agreements.

16
Courts generally "accord a very high degree of deference  to administrative adjudications by the NLRB," United Steelworkers Local 14534 v. NLRB, 983 F.2d 240, 244 (D.C. Cir.  1993), but "[b]ecause the courts are charged with developing  a uniform federal law of labor contracts under section 301 of  the Labor Management Relations Act, 29 U.S.C. § 185 (1988),  we accord no deference to the Board's interpretation of labor  contracts."  United States Postal Serv., 8 F.3d at 836 (citing  Litton Fin. Printing, 501 U.S. at 203 (citing Local Union  1395, Int'l Bhd. of Elec. Workers v. NLRB, 797 F.2d 1027,  1030 (D.C. Cir. 1986))).  Accordingly, we construe de novo the  language of the collective bargaining agreements here to  determine whether they incorporate by reference the AMP's  reservation of rights provision.  See id.  We conclude that  they do.

17
The two Texas City, Texas agreements recite that specified  "Employee Benefit Plans," including the "Amoco Medical  Plan," "are generally set forth in the current Benefits Plan  Booklet[s]," although "it is understood that certain provisions  in the Booklet have been superseded by negotiation between  the parties."  JA 981, 1221.3  The Wood River, Illinois, and  Yorktown, Virginia facilities' agreements provide:  "Benefit plans for the Company ... will continue in force during the  life of this Agreement with the understanding that these  Plans may be bargained upon but will not be subject to  arbitration."  Id. at 828, 874, 916.4  In each case, the quoted  language explicitly makes the plans a part of the collective  bargaining agreement, subject to specific, negotiated variations.  The Board itself acknowledged as much when it stated  "the AMP summary plan description is a primary reference  for identifying the medical insurance benefits that the Respondent has contractually agreed to provide unit employees." 1999 WL 671774, at *4 [JA 1532] (emphasis added).

18
Because the agreements incorporated the AMP generally,  they incorporated all of the plan's provisions not expressly  superseded in the agreements, including the reservation of  rights clause.  As we noted in Air Line Pilots Ass'n, Int'l v.  Delta Air Lines, 863 F.2d 87 (D.C. Cir. 1988):  "It is generally  held that '[w]hen a document incorporates outside material by  reference, the subject matter to which it refers becomes part  of the incorporating document just as if it were set out in  full.' "  863 F.2d at 94 (quoting Cunha v. Ward Foods, Inc.,  804 F.2d 1418, 1428 (9th Cir. 1986)).  In Mary Thompson  Hosp., 296 N.L.R.B. 1245, 1247 (1989), enf'd, 943 F.2d 741  (7th Cir. 1991), the Board itself noted that "[t]he word  'incorporate' means, of course, that all provisions of the plan  become part of the contract itself."  Specifically, the Board  concluded there that by incorporating the plan, "the Union  affirmatively agreed that the [employer] could terminate its  pension plan at any time," as the employer was authorized to  do under the plan's reservation of rights clause.  Id.  "[T]he  right of the [employer] to do so, free and clear of mandatory  consultation or of union objections, was contractually established." Id.  The same result obtains here.  There was no  need, as the Board suggests, for BP Amoco to separately  negotiate the reservation of rights clause before it could become a part of the agreements.  No such negotiation was  required in Mary Thompson.

19
In sum, the express incorporation of the AMP into the  collective bargaining agreements made the plan's reservation  of rights clause a part of each agreement and thereby authorized BP Amoco to unilaterally modify the AMP without the  Union's consent.  This authority was limited only by the  parties' "understanding," expressed in the agreements, that  the AMP "may be bargained upon" and "that certain provisions in the Booklet have been superseded by negotiation  between the parties."  JA 981, 1221.  The only superceding  provision in the agreements addressed the proportionate employer and employee plan contributions.  BP Amoco's reservation of the right to amend the plan was not superseded and  therefore remained a part of the plan as incorporated into the  collective bargaining agreements.5 Because BP Amoco was  contractually authorized to amend the plan unilaterally, it  committed no unfair labor practice by doing so.  Accordingly,6 the petition for review is granted and the Board's cross  application for enforcement is denied.

20
So ordered.

Notes:

1
 For convenience "BP Amoco" is used to refer to all Amoco  entities, both preand post-merger.

2
 On August 20, 1993 one of the Union's locals filed a grievance  over the benefit change.  The grievance was denied by the arbitrator on October 2, 1994.

3
 Each of the agreements set forth specific superseding provisions.  See JA 981, 1221.

4
 The Board stated below, inexplicably, that "only three of the five  local contracts even mention the summary plan as a source for  general description of the AMP's benefits." 1999 WL 671774 , at *2.

5
 BP Amoco's reserved authority to "terminate" (as opposed to its  right to "amend") seems to be circumscribed, however, under the  Wood River, Illinois, and Yorktown, Virginia collective bargaining  agreements, each of which requires that the AMP "continue in force  during the life of [the] Agreement."  JA 828, 874, 916.  BP Amoco  appears foreclosed by the quoted language (even apart from the  constraints of its own self interest and the mandates of the Employee Retirement Income Security Act) from canceling the AMP  altogether, at least for Union employees at these two facilities.

6
 In light of our disposition, we need not consider BP Amoco's  alternate argument that if there was a bargaining obligation, it was  satisfied because BP Amoco bargained to impasse.  See Pet'r Br. at  34-36;  NLRB v. McClatchy Newspapers, Inc., 964 F.2d 1153, 1165  (D.C. Cir. 1992) (in banc) ("Generally, once the parties reach a  good-faith impasse, the duty to bargain is at least temporarily  suspended, and the parties, typically the employer, may enact any  change in a mandatory subject reasonably contained within its final  proposal.").  Nor need we consider BP Amoco's additional argument regarding the unenforceability of the Board's remedy.  See  Pet'r Br. at 36-41.