Grievance Challenging Reduction Of Retiree Health Benefits Not Arbitrable

Public safety employers seeking financial relief have more than occasionally sought to reduce retiree health care benefits. Those reductions have in turn resulted in grievances, which in turn have prompted responses by employers that since retirees are not covered by the collective bargaining agreement, the grievances are not arbitrable.

Most courts have required employers to arbitrate grievances over changes in retiree health care benefits. The usual reasoning is that the party filing the grievance is the union, not the retirees themselves, and that the union has the right to seek the enforcement of its collective bargaining agreement. The Rhode Island Supreme Court recently bucked this trend, and found non-arbitrable a retiree health care grievance.

The case arose out of the contract between the City of Newport and Local 1080 of the International Association of Fire Fighters. The contract requires the City to provide health insurance coverage to active firefighters, and states that this coverage “shall also be available to retired members of the Newport Fire Department.”

In 2008, Local 1080 filed grievances challenging the City’s reduction in retiree health care benefits. The City then filed a complaint in court against Local 1080, asking the Court to issue a judgment declaring that the grievances were not arbitrable. The dispute eventually ended up in the Rhode Island Supreme Court.

The Court upheld the City’s position, and concluded that the grievances were not subject to arbitration. The Court acknowledged that the contract “allows only the union itself to submit grievances to arbitration; individual firefighters (let alone retired firefighters) may not do so.” However, the Court found, the case turned on other language in the grievance procedure, language providing that “the purpose of the grievance procedure is to settle firefighter grievances arising as defined above as quickly as possible to assure efficiency and high morale.”

The Court then turned to the “definitions” section of the contract and noted that the contract stated that “whenever used in this agreement, the terms ‘member,’ ‘employee’ or ‘fire fighter’ shall have the same meaning, which is: active, full-time, permanent, paid firefighters * * *.” In the Court’s judgment, “retired firefighters are not included in this definition.”

The Court also found support for its decision in other language from the contract’s grievance procedure: “There is further support in Article 18 for the conclusion that the union may not arbitrate disputes regarding retired firefighters. Article 18 lists certain steps that the union must follow before initiating a grievance. As the first step of that grievance procedure, ‘the firefighter or firefighters involved would meet with the Supervisor, Officers or Deputy Chief, immediately to attempt to resolve the grievance.’ This provision limits grievances to those involving ‘firefighters’ which, as noted above, the CBA defines as active, full-time, permanent, paid firefighters. It thus confirms our conclusion that grievances involving retired firefighters are not arbitrable under the CBA.”

The conclusion that the grievances were not arbitrable left the Court with a bit of a problem. After all, the contract did impose on the City an affirmative obligation to provide retiree health care. If disputes concerning retiree health care could not be arbitrated, did that mean that the retiree health care article had no legal effect? The Court ended up noting the existence of the issue, but did not resolve it, commenting only that “because our review of the CBA convinces us that the parties did not intend to arbitrate disputes regarding retiree healthcare, we hold that such disputes must be resolved, if at all, judicially rather than through arbitration.”

City of Newport v. Local 1080, Intern. Ass’n of Firefighters, AFL-CIO, 54 A.3d 976 (R.I. 2012).