Employers subject to collective bargaining agreements should consider how to address changes to health insurance and other plans and that arise during the term of the agreement. It is well established that no unlawful unilateral change occurs under Section 8(a)(5) of the National Labor Relations Act where an employer has a practice of sharing premium costs with employees according to a particular percentage, and simply allocates the carrier's premium increase in a manner that maintains that percentage. Maple Grove Health Care Center, 330 NLRB 775 (2000).
Other changes to health insurance plans may entail something different than merely passing along increased costs on an agreed percentage basis. In those situations, the Board applies a different standard to allegations of unilateral changes.
For example, in one case submitted to the Division of Advice, an employer announced that it was changing its short-term disability plan for all employees and would require all employees to pay 100% whereas previously the employer had paid 70%. During the course of collective bargaining, the employer and the union had agreed to a “me-too” arrangement whereby the employer could unilaterally change the provisions as long as the changes applied equally to all non-unit and unit employees as well. APL Limited, 2015 WL 2156793 (N.L.R.B.G.C.) (April 22, 2015). The union challenged the change on the ground that the employer had unilaterally changed terms and conditions of employment without bargaining (which it had). The Division of Advice directed that no complaint issue because the employer had “a sound arguable basis” for its position that the parties collective bargaining agreement permitted it to make the unilateral changes at issue. In other words, the basic issue was not whether there had been a unilateral change, but whether the employer’s position was defensible under the applicable agreement.
The “sound arguable basis” standard means that changes to health insurance plans as well as other benefit plans will be found unlawful only if an employer cannot plausibly assert that its actions are permissible under the parties’ collective bargaining agreement. In practical terms, this means that when negotiating agreements employers should: 1) seek language that affords flexibility and allows modifications to benefit plans; 2) avoid provisions that require union approval for any changes or only after bargaining with the union or that state that any changes to be “equal or better” than those presently offered; 3) attempt to limit the employer’s obligation to one of notification only.