A Case in the Middle

By Labor Arbitration Institute | Jan 6, 2015

A Case in the Middle

Does the contract language give you a green light or stand in the way? Occasionally, a case comes along where you aren't sure and you'd rather not negotiate. Besides, there's a 50-50 chance of winning at arbitration. 

We presented such a case to the faculty (4 experienced labor arbitrators) at the Seattle conference.  Here is the case and the outcome.

The Case
The language reads: "Company shall maintain its medical and dental plans during the life of this Agreement on the same basis as provided to its salaried employees in the future."

The company sent out a questionnaire to all employees asking whether they smoke (cigarettes, pipes, snuff, etc.). Those who do (going back 3 months) must pay a monthly $50 surcharge. The company did not offer to pay for smoking cessation classes, but once an employee attended and was certified, the surcharge would end. The surcharge extended to spouses, but not children. The survey included an electronic affidavit. Falsification of the record, just as other company records, would subject the employee to discipline, up to discharge. A user is defined as anyone who uses at least once per week. The $50 or $100 surcharge appears on the employee's monthly pay stub.

The union argued that the company claims to be changing the plan, but it is just imposing a surcharge. The company never raised this possibility in negotiations. Previous contracts addressed the sharing of cost increases, but this contract is silent. 

The company argued that, since the surcharge applied to all, including salaried employees, there is no contract violation. The arbitrator is to apply the plain meaning of the language.

Our panel of 4 labor arbitrators split 2-2. Here is an edited summary of what each would have done, had the case been presented to them.

For Management
Arb. #1:
The company came to levy this fee upon the managerial employees. The union specifically agreed that if something came to affect the managerial employees, it would affect them equally.

Arb. #2:
I have seen such clauses before and it is mystifying why the union would agree to such a clause. Maybe they got a million dollar wage increase in the bargain. The union essentially gave management a blank check. Management now wants to cash it. The bargaining history is not helpful because there's nothing there to hold onto. At most, the history supports each party's position 50/50.

Just because I rule for management does not mean I like it. It is a terrible idea to impose things on people that are as draconian as this, just because the company thinks smoking is not good. It's not good, but the company is saying here: Do it our way or you will be charged with falsification of a company record.