In another 2-1 decision split along party lines, the National Labor Relations Board (“NLRB” or “Board”) held that E.I. DuPont de Nemours (“DuPont”) did not violate the National Labor Relations Act (“Act”) when it made unilateral changes to healthcare benefit plans because the unions representing its employees had waived their right to bargain over the changes.  E.I. DuPont de Nemours and Co., 368 NLRB No. 48 (September 4, 2019).

Background

DuPont maintained company-wide healthcare benefit plans for all its employees and retirees, which included both non-union workers and union workers covered by three different unions (“Unions”).  DuPont created a Dental Assistance Program (“DAP”) and a Medical Care Assistance Program (“MCAP”) in 1976 and 1983, respectively.  Both plans contained “reservation-of-rights” language stating that DuPont reserved the right to amend or discontinue the plans at its discretion.  DuPont offered employees the opportunity to participate in these plans, subject to the reservation of rights, and the Unions agreed.

In 1991, DuPont created a new cafeteria-style benefits plan for active employees called the BeneFlex Flexible Benefits Plan (“BeneFlex”), which included dental and medical benefit plans.  After the Unions agreed to participate in BeneFlex, all references to DAP and MEDCAP were deleted from the collective bargaining agreements.  However, DAP and MEDCAP continued to cover all current and future retirees.

From 1976 to 2012, DuPont made more than 50 company-wide changes to DAP and MEDCAP without bargaining over the changes.  The Unions did not file any grievances or unfair labor practice charges.  In 2012, however, when DuPont decided to make changes to the benefit plans, each Union objected.  After DuPont refused to bargain over the changes, the Unions filed unfair labor practice charges.

Clear and Unmistakable Waiver

Generally, an employer’s unilateral changes to healthcare benefits constitute a violation of the Act.  A union, however, can waive its right to bargain over the changes if the waiver is “clear and unmistakable,” which may be established based on an “amalgam” of factors.  Here, the Board found that the Unions had clearly and unmistakably waived their right to bargain over the changes based on the following:

1. The reservation-of-rights language in the parties’ agreements;
2. The bargaining history of the parties indicated the Unions sought to bargain over previous changes and the reservation-of-rights language, but ultimately yielded their position and accepted the plans on DuPont’s terms; and
3. Past practice indicated that for decades, DuPont unilaterally made numerous changes to the plans without objection from the Unions.

Of Note

According to the dissent, “finding waiver in this case is a misapplication and erosion of the ‘clear and unmistakable’ waiver standard.”  The dissent maintained that DuPont had not carried its heavy burden to demonstrate a “clear and unmistakable” waiver.  Rather, the majority relied on “long-abandoned contractual and extra-contractual language, stale bargaining history, and irrelevant past changes to find waiver.”

It should also be noted that shortly after this case was decided, the Board decided another case in which the Board adopted a new “contract coverage” standard to determine whether an employer had an obligation to bargain before implementing a change.  MV Transportation, Inc., 368 NLRB No. 66 (Sept. 10, 2019).  That case, which will be the subject of a future news digest article, does not overrule this decision.  Rather, it provides an additional argument for employers to justify a unilateral change.  In any event, employers should consult competent legal counsel or HR/LR professionals before making any unilateral changes.