Though the dispute in the following case did not specifically involve a public safety union, the implications for public sector bargaining of any kind are plainly apparent.
AFSCME Council 25 and Wayne County, Michigan were party to a CBA which provided, in relevant part:
“Unless otherwise specified, regardless of the Retirement Plan all employees hired on or after December 1, 1990 shall not be eligible for insurance and healthcare benefits upon retirement unless they retire with 30 or more years of service; however, effective November 16, 2001 employees in Plan No. 2, Plan No. 3, Plan No. 4, and Plan 5, shall be eligible to retire with insurance and healthcare benefits provided he or she has 15 or more years of service and is age 60 or older.”
Prior to 2008, an employee qualifying for a duty or non-duty disability pension was also paid healthcare benefits alongside the pension, whether the employee met the requirements to receive healthcare benefits. Even after the parties entered in new CBAs with new bargaining units in 2008, at least four employees retired and were granted disability pensions and were provided retirement healthcare benefits, despite not having met the age and years of service requirements.
In 2010, the County determined that it would restrict the payment of healthcare benefits to those who met the contractual requirements for such benefits. This prompted a ULP charge from the Union with the Michigan Employment Relations Commission (MERC), alleging that the County’s newfound orthodoxy with the requirements of the CBA contradicted the past practice of the parties. This, per the Union, required bargaining.
The ALJ determined that the relevant CBAs were silent with regard to healthcare benefits for disability retirees, and that the County’s past practice of paying its disability retirees healthcare benefits obligated the County to bargain with the Union before changing that practice. MERC affirmed the decision.
The County appealed to the Court of Appeals of Michigan, which reversed MERC and remanded, ordering the parties to arbitrate. The Arbitrator found for the Union, concluding that “nothing in the parties’ 2008 agreements evidenced an intent to repudiate or change the long-standing past practice of providing healthcare benefits to disability retirees so long as they met the service requirements for disability retirement pension benefits.” The Union then filed an action with the circuit court to enforce the award, where it once again prevailed. The County appealed once more, arguing that the Arbitrator’s decision conflicted with this previous decision in the matter, because they found that the CBA was ambiguous regarding the matter in dispute.
The Court of Appeals of Michigan, reviewing the matter for a second time, disagreed. “This Court concluded that the CBAs unambiguously included the subject matter of the parties’ dispute, which was disability retirees’ entitlement to healthcare benefits. This Court did not determine, however, whether the CBAs were unambiguous in setting forth the requirements for disability retirees to receive healthcare benefits. Rather, the Arbitrator was tasked with determining the underlying dispute whether disability retirees were entitled to healthcare benefits under the parties’ CBAs. On remand, the Arbitrator correctly observed that the only question that this Court resolved was whether the CBAs encompassed the dispute, and otherwise ‘left to the Arbitrator to make the final determination on the issue.’ The Arbitrator therefore did not violate the law of the case doctrine by finding ambiguity in certain provisions of the CBAs with respect to the underlying dispute.” The Court found for the Union on an issue related to the scope of remand as well.
Most relevant to readers of this newsletter, the Court rejected the County’s arguments that “the zipper clause prevents enforcement of the award.”
With respect to the zipper clause, the Court found that the Arbitrator had lawfully concluded that the zipper clause was not determinative on the issue, because in the Arbitrator’s view, the savings clause provision more specifically addressed the benefits in dispute. Because a specific contract provision prevails over a general one, and the savings clause more clearly protected rights granted by past practice, it was not an error of law for the Arbitrator to conclude that the past practice of the parties controlled the issue of health benefits.
Michigan AFSCME Council 25 v. Cnty. of Wayne, 2024 WL 3738176 (Mich. Ct. App. 2024).