E.I. Du Pont De Nemours & Co. v. National Labor Relations Board

682 F.3d 65, 401 U.S. App. D.C. 172, 2012 WL 2053577, 193 L.R.R.M. (BNA) 2513, 2012 U.S. App. LEXIS 11604
CourtCourt of Appeals for the D.C. Circuit
DecidedJune 8, 2012
Docket10-1300, 10-1301, 10-1353, 10-1355
StatusPublished
Cited by25 cases

This text of 682 F.3d 65 (E.I. Du Pont De Nemours & Co. v. National Labor Relations Board) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
E.I. Du Pont De Nemours & Co. v. National Labor Relations Board, 682 F.3d 65, 401 U.S. App. D.C. 172, 2012 WL 2053577, 193 L.R.R.M. (BNA) 2513, 2012 U.S. App. LEXIS 11604 (D.C. Cir. 2012).

Opinions

Opinion for the Court filed by Circuit Judge GINSBURG.

Opinion concurring in part and concurring in the judgment filed by Senior Circuit Judge RANDOLPH.

GINSBURG, Circuit Judge:

The National Labor Relations Board held E.I. Du Pont de Nemours & Co. engaged in an unfair labor practice by unilaterally implementing changes to its employee benefits program while it was between collective bargaining agreements with two local unions. Because the Board departed, without giving a reasoned justification, from its precedent allowing an employer unilaterally to change wages, hours, or working conditions when doing so is in keeping with the employer’s past practice, we grant Du Pont’s petitions for review of the Board’s order and deny the Board’s cross-applications for enforcement.

I. Background

Du Pont offers its employees a package of benefits it calls Beneflex, of which the Beneflex Medical component has an open enrollment period each Autumn. The plan documents for Beneflex and for Beneflex Medical contain the following reservation of rights clause:

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.

Du Pont has made changes to Beneflex at the time of enrollment each year since at least 1996. Changes to the program have included increases in the premiums for medical, life, vision, and dental insurance, changes in coverage, and the addition and elimination of plan options. These changes to Beneflex applied to em[67]*67ployees at all Du Pont facilities, to union and non-union employees alike.

Du Pont had collective bargaining agreements (CBAs) with the local unions at the Company’s production facilities in Louisville, Kentucky and Edgemoor, Delaware. Each CBA provided for employees to participate in Beneflex “subject to all terms and conditions” of the plan. The Beneflex plan documents, in turn, contained the reservation of rights clause. Until the CBAs at the two locations expired in 2002 and 2004 respectively, Du Pont had made annual changes to Beneflex without bargaining and without objection from the unions. When the CBAs expired, Du Pont and the unions were negotiating successor labor contracts but had not reached an agreement at either facility. Du Pont then implemented changes to Beneflex in anticipation of the annual enrollment period, as it had done in previous years.

The Board held Du Pont violated Sections 8(a)(1) and 8(a)(5) of the National Labor Relations Act by making unilateral changes to Beneflex during ongoing negotiations with the unions. It found Du Pont had never before made changes to Beneflex between the expiration of one and the negotiation of another CBA, and therefore had not established a past practice justifying its unilateral changes to Beneflex during such a hiatus. Du Pont petitioned for review of the Order and the Board cross-applied for enforcement.

II. Analysis

We will uphold a decision of the Board unless it relied upon findings that are not supported by substantial evidence, failed to apply the proper legal standard, or departed from its precedent without providing a reasoned justification for doing so. S & F Mkt. St. Healthcare LLC v. NLRB, 570 F.3d 354, 358 (D.C.Cir.2009). Section 8(a)(5) of the Act makes it an unfair labor practice for an employer to “refuse to bargain collectively with the representatives of his employees,” 29 U.S.C. § 158(a)(5). An “employer’s unilateral change in conditions of employment under negotiation is ... a violation of § 8(a)(5), for it is a circumvention of the duty to negotiate which frustrates the objectives of § 8(a)(5) much as does a flat refusal” to bargain. NLRB v. Katz, 369 U.S. 736, 743, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962); see Litton Fin. Printing Div. v. NLRB, 501 U.S. 190, 198, 111 S.Ct. 2215, 115 L.Ed.2d 177 (1991) (“it is difficult to bargain if, during negotiations, an employer is free to alter the very terms and conditions that are the subject of those negotiations”).

Under Katz, an employer unilaterally may implement changes “in line with [its] long-standing practice” because such changes amount to “a mere continuation of the status quo.” 369 U.S. at 746, 82 S.Ct. 1107; see Courier-Journal, 342 N.L.R.B. 1093, 1094 (2004) (“a unilateral change made pursuant to a longstanding practice is essentially a continuation of the status quo — not a violation of Section (a)(5)”). The purpose of prohibiting unilateral changes is not advanced by freezing in place the terms of employment when doing so disrupts the established practice for making changes. For this reason, an employer may lawfully change the terms of employment pursuant to such an established practice. There are, however, limits to the scope of the unilateral changes an employer may lawfully make during negotiations. More specifically, the Act does not permit a unilateral change “informed by a large measure of discretion” because “[t]here simply is no way in such [a] case ... to know whether or not there has been a substantial departure from past practice.” Katz, 369 U.S. at 746, 82 S.Ct. 1107.

[68]*68The Board has previously approved extensive unilateral changes to health care benefit programs during a hiatus between CBAs when doing so was the established practice and the changes were within an acceptable degree of discretion. Thus, in Post-Tribune Co., the Board held it was not unlawful for an employer unilaterally to increase employees’ required contributions to health care premiums because the employer “had a consistent, established past practice of allocating health insurance premiums” between itself and its employees at a fixed ratio. 337 N.L.R.B. 1279, 1280 (2002). In Courier-Journal, the Board again approved an increase in the health insurance premium to be paid by employees together with “a number of more far-reaching changes in the healthcare insurance benefits.” 342 N.L.R.B. at 1093. There the expired CBA contained a clause providing the employer “reserves the right to modify or terminate any (or all) benefits ... at any time.”. Id. at 1093. After the CBA expired, the employer

changed the amount of employee contributions to healthcare premiums; modified the framework for determining employee contribution levels; switched from an insurance ‘plan year’ starting on July 1 to a plan year starting on January 1; introduced separate vision and dental coverage plans; terminated the bonuses paid to employees who chose to waive the [employer’s] healthcare insurance; and substituted two plans with [one insurer] for the plans the [employer] had previously offered with [other insurers].

Id, at 1099.

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682 F.3d 65, 401 U.S. App. D.C. 172, 2012 WL 2053577, 193 L.R.R.M. (BNA) 2513, 2012 U.S. App. LEXIS 11604, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ei-du-pont-de-nemours-co-v-national-labor-relations-board-cadc-2012.