Employer Required To Maintain Firefighters’ Health Benefits Even Though Change Initiated By Insurance Company

The Town of Hampton, New Hampshire has collective bargaining agreements with two locals of the International Association of Fire Fighters; one local represents rank-and-file personnel, while the other represents supervisors. Both contracts expired at the end of March 2006.

In November 2006, both locals filed grievances challenging a change in the wellness benefit known as “slice of life” that would require employees to fill out a “personal health analysis” in order to receive wellness reimbursements. The change was initiated by the health insurance company with which the Town contracted.

The locals challenged the change in the arbitration process. An arbitrator upheld the grievances. There were two core issues before the Arbitrator. The first was whether the Town had any obligations under the contracts once they had expired. The Arbitrator concluded that under New Hampshire law, both employers and labor organizations were required to comply with the terms of an expired collective bargaining agreement until a new contract could be negotiated. This obligation, the Arbitrator observed, included the obligation to process any disputes through the grievance procedures in the expired contracts.

On the merits of the case, the Arbitrator rejected the Town’s argument that it had no liability because it was the insurance carrier, and not the Town, that insisted on the change. In the Arbitrator’s eyes, the locals’ contract was with the Town, which was then free to meet the obligations of the contract either by contracting with a particular health insurance company or in another manner. If the insurance carrier was no longer willing to provide a particular benefit, the Arbitrator held, the Town would have to find another way to ensure that the benefit was provided.

By way of remedy, the Arbitrator ordered the Town to make all employees whole and to ask that the insurance carrier restore the preexisting wellness program. If the insurance carrier refused to do so, the Arbitrator ordered the Town to obtain a different carrier to provide the wellness benefits.

Town of Hampton and Hampton Professional Firefighters Association, Local 2664, LAIG 6545 (Drachman, 2007).

This article appears in the January 2008 issue