E.I. Dupont De Nemours & Co., (2010)

E.I. DuPont de Nemours and Company and United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (USW) and its Local 4–786. Case 4–CA–33620

August 27, 2010

DECISION AND ORDER

By Chairman Liebman and Members Schaumber and Becker

On December 23, 2005, Administrative Law Judge Paul Bogas issued the attached decision. The Respondent filed exceptions and a supporting brief, the General Counsel and the Charging Party filed answering briefs, and the Respondent filed a reply brief.[1]

The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel.

The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge’s rulings, findings, and conclusions and to adopt his recommended Order as modified.

In finding that the Respondent’s unilateral changes to its benefits plan violated Section 8(a)(5) and (1), the judge properly rejected the Respondent’s argument that the changes were simply a continuation of its past practice. The Respondent relied on the Courier-Journal cases, 342 NLRB 1093 (2004), and 342 NLRB 1148 (2004).[2] In those cases, the Board found that the employer’s unilateral changes to employees’ health care premiums during a hiatus between contracts were lawful because the employer demonstrated a past practice of making such changes both when a contract was in effect and during hiatus periods. As the judge explained, however, the Respondent’s asserted past practice in the instant case was limited to changes made at times when the parties’ contract and its management-rights provision, which authorized the changes, were in effect. As a result, the judge properly found that the Courier Journal cases were inapposite. Here, because the Respondent’s prior changes do not establish a past practice of changes implemented during a hiatus, the unilateral changes at issue violated the Act.

Our dissenting colleague reiterates the arguments he advances in the companion case, Louisville Works, supra. We reject his view here, for the reasons explained in Louisville Works.

ORDER

The National Labor Relations Board adopts the recommended Order of the administrative law judge and orders that the Respondent, E.I. DuPont de Nemours and Company, Edge Moor, Delaware, its officers, agents, successors, and assigns, shall take the action set forth in the Order as modified.

  1. Substitute the following for paragraph 2(a).

    “(a) On request of the Union, restore the unit employees’ benefits under the Beneflex package of benefit plans to the terms that existed prior to the unlawful unilateral changes that were implemented on January 1, 2005, and maintain those terms in effect until the parties have bargained to a new agreement or a valid impasse, or until the Union has agreed to changes.”

  2. Substitute the attached notice for that of the administrative law judge.

    Dated, Washington, D.C. August 27, 2010

    Wilma B.Liebman, Chairman

    Craig Becker, Member

    (seal) National Labor Relations Board

    Member Schaumber, dissenting.

    In a companion decision issued today, E.I.du Pont de Nemours, Louisville Works, 355 NLRB No. 176 (2010), (Louisville Works), I set out at length my reasoning why I would dismiss the complaint in that proceeding alleging that the Respondent violated Section 8(a)(5) and (1) by unilaterally changing certain aspects of unit employees’ benefits. For the reasons expressed there, and here, I would likewise dismiss the complaint in this case alleging that the Respondent violated Section 8(a)(5) and (1) of the Act by making unilateral changes to the benefits of unit employees on January 1, 2005, following the expiration of the parties’ collective-bargaining agreement.

    Facts

    The Union has represented the production and maintenance employees at the Respondent’s Edge Moor, Delaware facility for many decades. Over the years, the Respondent and the Union were parties to various collective-bargaining agreements, the most recent of which ran from June 1, 2000, until May 31, 2003, and was extended for an additional year until May 31, 2004. At the time of the hearing, in September 2005, the parties had not entered into a successor agreement.

    The Respondent’s Beneflex Flexible Benefits Plan (Beneflex Plan) is a comprehensive, corporatewide welfare benefit plan that provides a variety of benefit options, including healthcare, dental, and vision coverage, and life insurance. The Respondent provides these benefits to employees at all of its domestic locations, including to the unit employees at the Edge Moor facility. Approximately 60,000 employees—both union and nonunion—receive benefits under the Beneflex Plan. The Beneflex Medical Care Plan is a self-insured medical care option encompassed within the Beneflex Plan.1 Since the Plans’ inceptions, both the Beneflex Plan and the Beneflex Medical Care Plan documents have contained an express and specific reservation of the Respondent’s right to change either program in its sole discretion. The “reservation of rights” provision in the Beneflex Plan documents states:

    The Company reserves the sole right to change or discontinue this Plan in its discretion provided, however, that any change in price or level of coverage shall be announced at the time of annual enrollment and shall not be changed during a Plan Year unless coverage provided by an independent, third-party provider is significantly curtailed or decreased during the Plan Year.

    The Beneflex Plan was implemented at the Edge Moor plant on January 1, 1994. Prior to that, the parties executed a memorandum of understanding superseding the benefits language in the existing collective-bargaining agreement and memorializing the Union’s agreement to be bound by the terms stated in the Beneflex documents. During the 1993 negotiations over the implementation of the Beneflex Plan, the Union agreed that, consistent with the terms of the Beneflex Plan, the Respondent reserved the right to modify the Plan without bargaining with the Union, with the understanding that any such modifications would be made on a U.S. region-wide basis. The 2000–2004 collective-bargaining agreement indicated that the employees’ benefits were being provided pursuant to “all terms and conditions” of the Beneflex Plan.

    From 1995 to 2004, the Respondent made annual changes to the Beneflex Plan. These changes were implemented uniformly at all of the Respondent’s U.S. sites on January 1 each year, and, in each of these years, the changes took place while a collective-bargaining agreement covering the bargaining unit was in effect. Some changes occurred almost every year, while others were made only once or periodically during this time. The Respondent did not offer to negotiate over the annual changes, nor did the Union seek to bargain over them or raise any other objection.

    In the spring of 2004, the parties commenced negotiations for a successor collective-bargaining agreement. In the fall of 2004, the Respondent—consistent with its practice in prior years—presented the Union with a summary of the changes for the Beneflex Plan for 2005. The Union objected to the proposed changes and requested bargaining, which the parties did. On January 1, 2005, the Respondent implemented changes to the Beneflex Plan.

    Judge’s Decision

    The judge found a violation in the Respondent’s January 1, 2005 changes and rejected the Respondent’s defense that it was privileged to make the changes to the Beneflex Plan. The judge reasoned, among other things, that the 2000–2004 collective-bargaining agreement incorporated the Beneflex Plan, and the “reservation of rights” provision in the Beneflex Plan was a management-rights provision. Thus, the judge found that the Union waived its right to bargain over changes to the Beneflex Plan during the contract’s term, but that there was no evidence that the parties had intended the contractual waiver to survive the expiration of the collective-bargaining agreement. Thus, he concluded that the January 1, 2005 unilateral changes to the Beneflex Plan were not permitted by the “reservation of rights” clause and were unlawful.

    Analysis

    For the reasons discussed below and in Louisville Works, supra, I find that the Respondent’s modifications to the Beneflex Plan on January 1, 2005, did not alter the status quo, and thus the Respondent did not violate Section 8(a)(5). During the 1993 negotiations over the implementation of the Beneflex Plan at Edge Moor, the Union expressly accepted the Beneflex Plan in its entirety, and it did so on the understanding that the Respondent reserved the discretion to change the price or level of benefits under the Beneflex Plan on an annual basis. The 2000–2004 collective-bargaining agreement specifically indicated that the employees’ benefits were being provided pursuant to “all terms and conditions” of the Beneflex Plan. From 1995 to 2004, the Respondent unilaterally implemented changes to the Beneflex Plan on an annual basis. In each instance, the Union did not oppose the Respondent’s changes. These changes were implemented nationwide for tens of thousands of employees.

    Following the expiration of the parties’ contract in 2004, as explained in Louisville Works, the Respondent was required to continue to provide unit employees with benefits under the Beneflex Plan. The Respondent’s obligation to continue the status quo included the obligation to continue to implement the Beneflex Plan in the same manner that it had been implemented in the preceding years, including its annual changes to the Plan, which it implemented nationwide for unit and nonunit employees alike.

    As I explained in Louisville Works, supra, and contrary to the majority there and here, the “reservation of rights” clause in the Beneflex Plan is not a management-rights provision, which is typically a negotiated clause giving management sole discretion over a broad range of otherwise bargainable matters....

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