International Union, United Automobile, Aerospace & Agricultural Implement Workers v. Ring Screw Works

741 F. Supp. 660, 1990 WL 109930
CourtDistrict Court, E.D. Michigan
DecidedJuly 25, 1990
DocketCiv. A. No. 89-72701-DT
StatusPublished
Cited by3 cases

This text of 741 F. Supp. 660 (International Union, United Automobile, Aerospace & Agricultural Implement Workers v. Ring Screw Works) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
International Union, United Automobile, Aerospace & Agricultural Implement Workers v. Ring Screw Works, 741 F. Supp. 660, 1990 WL 109930 (E.D. Mich. 1990).

Opinion

MEMORANDUM OPINION AND ORDER

FEIKENS, District Judge.

Plaintiffs are a labor union and its local (collectively, “the UAW”). Defendant (“Ring Screw”) employs UAW members (“employees”). The UAW seeks damages on behalf of employees who were made to choose between contributing to their nonunion-negotiated health maintenance organization (“HMO”) insurance plans, previously provided by Ring Screw at no cost, and reverting to a free, union-negotiated plan that does not cover pre-existing conditions. The UAW alleges that Ring Screw breached the Collective Bargaining Agreement (“CBA”), which allegedly requires Ring Screw to pay in full for health coverage, and violated 42 U.S.C. § 300e-9(a)(2)(B), which requires an employer to present the HMO to the union before offering HMO coverage to represented employees. The dispute is here on cross motions for summary judgment. I grant Ring Screw’s motion and deny the UAW’s motion.

I. Background

In 1983, the UAW and Ring Screw negotiated health coverage. Under that agreement, Ring Screw retained the right to select the insurance carrier, so long as the coverage was comparable to that being provided at the time by Blue-Cross/Blue-Shield of Michigan (“BCBS”). The relevant feature of BCBS’s plan was that employees need not contribute. A new plan was chosen.

The CBA specifically provides, in Article XV § 5, that health plan provisions, except for issues of whether substitute plans are comparable to the old BCBS plan, are not subject to the grievance procedure.1

That same year, Ring Screw also permitted various HMO’s to enter its facilities and solicit employee participation. Ring Screw says it believed that federal and state law required it to do so. The UAW was not involved. Ring Screw covered the full cost of the HMO coverage.

In 1988, the 1983 health benefits plan was renewed in a renegotiation of the CBA. In August 1988, Ring Screw advised employee members of the HMO’s that the employees would have to contribute, or revert to the negotiated plan. The problem is, those choosing to revert are not covered for pre-existing conditions. The UAW alleges that 100 employees are adversely affected.

Initially, the UAW grieved. Later, it abandoned that process, choosing instead [662]*662to bring suit in this court. The UAW’s causes of action are: (1) Ring Screw breached the CBA when it required a contribution from HMO enrollees; and (2) Ring Screw violated 42 U.S.C. § 300e-9 when it permitted the HMO to enroll employees without bargaining first with the UAW, since there was a CBA in place. The UAW requests that all employees be made whole and that they be provided with free health coverage.

The parties filed cross motions for summary judgment, each of which contains two principal arguments. A hearing was held on June 5, 1990.

II. Analysis

When there is no genuine issue of material fact, and judgment may be had as a matter of law, summary judgment will issue. Fed.R.Civ.P. 56(c).

First, Ring Screw’s motion contends that the comparability of the HMO to the BCBS plan is at issue, and thus subject to the CBA’s grievance procedure. Consequently, Ring Screw maintains that the court lacks jurisdiction because the UAW failed to exhaust the CBA’s grievance procedure and failed to strike, as required by CBA Art. IV § 4 and Art. XVI § 7.

The UAW asserts that this is not a comparability issue, and that therefore this court has jurisdiction. The UAW says it need not strike, because it had no obligation to grieve. At the hearing, the UAW argued that Ring Screw is exaggerating the meaning of “comparability.” The UAW contends that comparability issues have to do with whether benefits are comparable, not with whether the cost to the employees is, since a major impetus for negotiating the plan was to preserve free health coverage.

The plain language of the CBA’s Article XV § 5 and a joint reading of Article XV §§ 4-5 clearly show that I have jurisdiction.2

Article XV § 5 says, “The Company may at its option change insurance carriers to one with comparable coverage. A change in the health insurance carrier is subject to the grievance procedure prior to any change on the basis of comparability only.” (Emphasis added.) The juxtaposition of these sentences clearly indicates that “comparability” refers to “coverage.” I find that in this context, there can be no disputing the conclusion that “coverage” means “benefits,” not “cost.”

Further, the mere presence of Article XV § 4, providing that Ring Screw shall fully pay for health insurance3, shows that cost was not included in the term “coverage.” Benefits, not cost, were the UAW’s concern in Article XV § 5. When the CBA was written to provide that comparability issues would be subject to the grievance procedure, the parties could not have intended that the question of whether or not Ring Screw would pay for the health program would be a comparability dispute, since to pay was Ring Screw’s obligation.

Moreover, if cost were contemplated by the term “coverage,” and therefore subject to a comparability dispute, Article XV § 4’s no-cost-to-employees provision would be renegotiable every time the plan were changed, since the plan could be changed at Ring Screw’s option under Article XV § 5. The result would vitiate Ring Screw’s obligation to pay fully for health coverage.

Hence, I find that comparability means comparable benefits, not cost. Therefore, this is not a comparability dispute, and the grievance procedure need not be exhausted. I have jurisdiction.

Next, the UAW contends that Ring Screw required a contribution from employees for the HMO, and that therefore it breached the CBA.

[663]*663Ring Screw argues that even if this court has jurisdiction, Ring Screw did not choose to offer an HMO, and so is not obligated to pay for it all under the CBA, which mandates only that Ring Screw pay in full for health insurance programs that Ring Screw establishes. See CBA Art. XV §§ 1, 4. While Ring Screw concedes that it would be obligated to pay had it chosen to offer the HMO, and admits that it now is requiring a contribution, it denies breach.

Since well before 1983, federal and state statutes have required employers to offer HMO coverage to union-represented employees. Hence, Ring Screw did not choose the HMO.

Under 42 U.S.C. §§ 300e-9(a)(l) and (a)(2), an employer has an obligation to offer HMO coverage to all employees under subsection (a)(1), even those represented by a union. If the employees are represented, subsection (a)(2)(A) states that the employer must first present the HMO to the union. 42 U.S.C. § 300e-9(a)(2)(B) describes the procedure of presenting the plan to the employees for individual rejection.

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741 F. Supp. 660, 1990 WL 109930, Counsel Stack Legal Research, https://law.counselstack.com/opinion/international-union-united-automobile-aerospace-agricultural-implement-mied-1990.