Bangor Fire Fighters' Association, Local 772, IAFF v. City of Bangor, MLRB No. 93-20 (Aug. 9, 1993), rev'd sub nom, City of Bangor v. Maine Labor Relations Board, No. CV-93-316 (Me. Super. Ct., Pen. Cty., Apr. 21, 1994), Board decision and order on remand, MLRB No. 93-20 (July 27, 1994), original Board decision aff'd sub nom, City of Bangor v. Maine Labor Relations Board, 658 A.2d 669 (Me. 1995) STATE OF MAINE MAINE LABOR RELATIONS BOARD Case No. 93-20 Issued: August 9, 1993 ___________________________________ ) BANGOR FIRE FIGHTERS' ASSOCIATION, ) LOCAL 772, IAFF, AFL-CIO-CLC, ) ) Complainant, ) ) DECISION AND ORDER v. ) ) CITY OF BANGOR, ) ) Respondent. ) ___________________________________) This case was commenced on December 30, 1992, by the filing of a prohibited practice complaint with the Maine Labor Relations Board (Board) in which the Bangor Firefighters' Association, Local 772, IAFF, AFL-CIO-CLC (Association) alleges that the City of Bangor (City) has failed to bargain in good faith as required by 26 M.R.S.A. 965(1)(C) (1988), in violation of 26 M.R.S.A. 964(1)(E) (1988). More specifically, the complaint alleges that the City unilaterally withdrew and then unilaterally restored the membership of City retirees in the City's health insurance group, and that during the contract's term these unilateral actions resulted impermissibly in shifting to Firefighters a greater proportion of the premium costs for health-maintenance- organization (HMO)-provided benefits. The complaint also alleges that an unanticipated windfall in traditional health insurance premium costs resulted from the City's unilateral actions and that Firefighters have been denied a rightful share therein. Finally, the complaint alleges that as a result of the City's unilateral actions an increased proportion of the premium costs of post-expiration health care will be shifted to Firefighters, a result not contemplated by the parties in negotiations although facially required by the terms of their collective bargaining -1- agreement.1 The Association asks for an award of costs. On January 21, 1993, the City filed a response in which it answers that the deletion of retirees from the group was accomplished upon its having been notified that new federal regulations would require its health insurer2 to make a change in the traditional group health insurance plan which covers, in addition to present employees, retirees aged 65 and older. The response also states that on the basis of information issued by the Maine Bureau of Insurance its "health insurer consolidated retirees and employees back into a single group." The answer admits that health insurance is a mandatory subject but denies that any of the actions complained of by the Association constitute a failure to bargain in good faith. By way of affirmative defense the City states that the complaint is barred by the six-month limitations period contained in 26 M.R.S.A. 968(5)(B) (1988). Alternatively, the City urges that the Board should defer to a pre-existing arbitration award which ostensibly resolves the "unfair labor practice issues, by interpreting the terms of the current contract between the parties and find[s] that the City of Bangor has complied in all respects with the terms of the agreement." The City asks for costs and attorney fees. On January 26, 1993, the Association filed a request for deferral to a pending arbitration proceeding. A prehearing conference was conducted on February 1, 1993, by Board Chair Peter T. Dawson. The Association's prearbitral deferral request was withdrawn at prehearing. Pursuant to Board Rule 4.07(A), oral argument was taken on the matter of the City's request for _________________________ 1The complaint was amended on December 30, 1992. 2The City provides traditional health insurance coverage through Blue Cross Blue Shield of Maine. -2- postarbitral deferral. Chair Dawson's February 4, 1993, Prehearing Conference Memorandum and Order is hereby incorporated in and made a part hereof. The last of the parties' briefs respecting the issue of postarbitral deferral was filed March 9, 1993. On March 15, deferral was denied. A full evidentiary hearing was conducted in this matter on Wednesday, April 14, 1993, by a Board panel consisting of Chair Dawson, Employee Representative George W. Lambertson, and Alternate Employer Representative Eben B. Marsh. All parties were afforded the opportunity to present evidence and oral argument. The parties submitted posthearing briefs in lieu of oral argument, the last of which was filed on May 18, 1993. The Board deliberated the case on June 3, 1993. The Association is represented in this matter by Labor Relations Consultant Mark Kamen and the City by Thomas C. Johnston, Esq. JURISDICTION The Board has jurisdiction over this matter pursuant to 26 M.R.S.A. 968(5) (1988 & Supp. 1992). The complaint alleges a violation of the obligation to bargain in good faith prescribed in 26 M.R.S.A. 965(1)(C) (1988), which violations are specifically proscribed in 26 M.R.S.A. 964(1)(E) (1988). The parties' contract does not appear to confer upon the arbitrator the authority to resolve issues of statutorily- prohibited refusals to bargain. Even if it did, the power of the Board to resolve the issues in this matter would not be displaced. The Municipal Public Employees Labor Relations Law (MPELRL) clearly states that the power of the Board to prevent prohibited acts "shall not be affected by any other means of adjustment or prevention that has or may be established by agreement, law or otherwise." 26 M.R.S.A. 968(5) (1988). -3- FINDINGS OF FACT Blue Cross Blue Shield of Maine/BAMICO of Maine, and HMO Maine, were at all times material to this matter the health insurance carriers for members of a group of City of Bangor employees and retirees totalling approximately 500-550. Blue Cross Blue Shield (BCBS) has one master health insurance contract with the City of Bangor. The health insurance group, in which firefighters represented by the Association are included, also includes public works, Bass Park and airport employees represented by AFSCME, Bangor City Nursing Facility employees represented by the Federation of Nurses and Health Care Professionals, AFT, AFL-CIO, police department employees represented by the Teamsters, library employees independent of the City's governance, housing authority employees and employees who have retired from all aspects of city-related employment. City retirees may secure health insurance upon payment of 100 percent of the premium costs. The City extends health insurance group coverage to City retirees gratuitously; there is no contractual requirement to make group health insurance available to retirees. Health insurance was discussed during negotiations for the parties' 1990-93 contract. Neither party anticipated during negotiations that there might be a decrease in premium rates. Article 26, Health Insurance, of the parties' resultant July 1, 1990, to June 30, 1993, collective bargaining agreement provides: 1. Effective July 1, 1990, the City and the employees will pay for BC/BS plan 100% UCR - $200 Major Medical and CM and FSSO (traditional health insurance plan) or the HMO the following weekly costs: City Employee BC/BS Total Cost Contribution Contribution Family $76.67 $59.55 $17.12 Single Parent 52.07 41.13 10.94 Single 30.92 24.65 6.27 -4- HMO Family $88.71 $59.55 $29.16 Single Parent 58.58 41.13 17.45 Single 33.48 24.65 8.83 2. The employee contribution for the traditional BC/BS will not increase through June 30, 1993. The City contribution for the HMO will be limited to the same amount contributed to the traditional BC/BS. 3. The City's contribution to the health insurance increase effective 7-1-93 and thereafter will be limited to an amount equal to one-half (1/2) of the increased cost of the traditional health insurance plan unless otherwise negotiated. 4. Any employee who [sic] spouse receives either two person or full family coverage as an employee of any Bangor City Department, including the School Department, is not eligible for dual health insurance coverage. 5. The City maintains the right to change insurance companies or to self insure provided the coverage/ benefits is not decreased by such action. Employees may change their election of HMO or traditional health insurance coverage. About 150 of the 500-550 City group participants have elected HMO plan coverage. HMO and traditional coverage are rated separately. Although initially HMO coverage was cheaper, it is now more expensive than traditional insurance coverage. During the period July 1, 1991, to July 1, 1992, HMO total weekly premium costs increased on average approximately 4.5 percent, without regard to any issue respecting retirees. In February of 1992 Blue Cross Blue Shield (BCBS) met with representatives of the City and gave "notice that there was a possibility that the then-existing Companion Plan 1 in Major Medical for retirees might not meet new federal [Medigap] legislation."3 BCBS explained to the City that due to the _________________________ 3Health insurance coverage for retirees is not provided by HMO-Maine. -5- legislation the City's plan would have to "pick up a gap or a void in certain coverage levels" and "that the existing Companion Plan 1 that the City offered to its retirees did not meet the new requirement in terms of totally fulfilling the Medigap legislation." In May of 1992 BCBS met with the City Manager, the Finance Director, the Director of Administration and the Human Resources Manager "to explain in much greater detail the new product lines that they would be offering that would meet the so- called requirements of the Medigap legislation." BCBS offered the City several coverage/premium options, only one of which would have allowed retirees to remain in the group. The Council chose not to select that option. The various companion plan options differed in both level of benefits and cost to the retirees. The City officials referred to above conferred with the City's Finance and Municipal operations committees "on several occasions throughout May and into early June." Separate rates established by BCBS for the City group, with and without +65 retirees, were received prior to the Council's decision to remove the retirees from the group and were considered by the Finance Committee and the Council. The rate estimates, for rates effective July 1, 1992, indicated an approximate 3 percent increase for rates including group medical coverage for +65 retirees and an approximately 2 percent decrease in rates reflecting removal of group medical coverage for +65 retirees. In May the City Council changed the health insurance group by removing retirees aged 65 or older from it, effective July 1, 1992, the City health insurance renewal date. This resulted in a decrease of the group's rate by approximately 2 percent. The City Council chose Companion Plan I which "essentially retained the same level of benefits provided to the retirees as they had enjoyed under Companion Plan 1" but at a 48 percent increase in their monthly premium costs. -6- On June 12, 1992, the City notified its non-unionized employees and its organized Police and Fire Department employees covered by collective bargaining agreements that effective July 1, 1992, health insurance rates would change. The City's memorandum to non-unionized employees explains that "due to favorable claims experience and certain policy decisions regarding retirees, rates are decreasing very slightly this year" and that the "City Council has directed that 30% of the cost savings be shared with employees." (emphasis added) Accordingly, employees with BC-BS coverage will pay slightly less for health insurance in 1992-93 as compared to 1991-92. For employees in the HMO plan, the City will contribute the same amount toward that option plan as it contributes to the traditional BCBS plan. Under HMO, employees will experience a small premium increase." Also, on June 12, 1992, Administrator Farrar by memorandum addressed to organized Firefighters and Police outlined generally what the new individual insurance rates for them would be. The City's letter to its organized employees states in this regard: The City of Bangor recently received its new health care rates regarding the traditional Blue Cross-Blue Shield Plan and the Health Maintenance Organization (HMO) option. Commencing July 1, 1992, the Blue Cross Plan is decreasing an average approximately 2% while the HMO plan is increasing an average approximately 4%. Specific percentages will vary depending upon the type of coverage selected under either plan. Current collective bargaining contracts covering unionized employees in both departments specify that: 1. The employee contribution for the traditional BC/BS plan will remain the same through June 30, 1993; and 2. The City's contribution for the HMO will be limited to the same amount contributed by the City to the traditional BC-BC. Given these contractual requirements, please find below the cost summaries concerning rates for both Blue -7- Cross-Blue Shield and HMO for the year commencing July 1, 1992. On July 9, 1992, the Association's grievance committee filed a grievance, which states, in pertinent part: Local 772 contends that the City of Bangor is not entitled to the savings in the health insurance cost. The decrease in cost should be solely the firefighters. Since the City of Bangor has obligated its self to pay out a total in wages and benefits to the firefighters. The city's obligation should not be reduced and therefore the savings are solely the firefighters. This action violates and is not limited to Article 26 of the current labor contract. Suggested Correction: The city should change the cost savings to the firefighters. A refund of any savings the firefighters should have received shall be given. BCBS subsequently informed the City that the historical Companion Plan 1 coverage did not violate the legislative Medigap requirements. In September of 1992 the City Council restored the retirees to the larger health insurance group. The City did not notify the Association beforehand of either its decision to delete or its decision to restore retirees to the group. The additional amounts which retirees had been paying for premiums for four months were refunded by BCBS to retirees. When the City restored the retirees to the insurance group, BCBS and the City discussed "the issue of how [they] were going to handle a change in rates or a proposed change in rates." The result of that discussion was that for the last year of the contract "the rates remained the same as if the retirees had not been added back into the group." The frozen rates in effect immediately after July 1, 1992, were slightly greater than those for the prior year's coverage. HMO-plan total premium rates have not been affected by -8- either change in retiree group placement. The Association never requested to bargain either of the changes in the composition of the group, or the impact of either change in the composition of the group upon mandatorily negotiable subjects. The premium costs of health insurance may be affected by changes in the level of coverage elected by employees (i.e., full family coverage costs more than single parent coverage), major illness or births among members of the group, the identity of the carrier, changes in available treatment and technology, the types of occupations and ages of employees who are included within the group, and its claims in any given year. Similarly, the deletion and restoration of retirees from the larger group caused changes in the rates for retirees and non-retirees each time their relationship to the larger group changed. When the City opted to remove the +65 retirees from the group it effected for itself an overall approximate 5 percent reduction in premium liability or a total net savings of $73,073. On October 5, 1992, the Association's grievance committee filed a grievance alleging that the City's removal of retirees resulted in increasing employee contributions to HMO coverage in violation of the contract. The grievance also states that, "by taking out this group [the City] has changed the coverage that subscribers had before." This grievance, referred to as the "Grievance on Medical Cost Sharing (2nd)," was amended on October 6 to state, solely: Local 772 contends that the city made a unilateral change in health insurance without negotiating the decision and its effect. Local 772 contends these actions are in violation and not limited to Articles 26 & 34 para. 2(D) of the current labor contract. -9- This grievance was denied by the Fire Chief on October 16 and appealed to Director of Administration Farrar on October 30, 1992. The issue raised in the July 9, 1992 grievance, whether the Association was entitled to share in the savings in health insurance costs, was rephrased by the Arbitrator as, "[w]as the City obligated under the 1990-93 contract with Local 0772 to reduce the employee weekly contribution toward the cost of health insurance as of July 1, 1992." The Arbitrator's December 22, 1992, award states, in pertinent part: It is a fundamental tenet in arbitration that to express one thing is to exclude another; to expressly include some guarantees in an agreement is to exclude other guarantees (Elkouri and Elkouri quoting Scheiber). The present Agreement limits employee contribution to the traditional BC/BS. Conversely, the Agreement limits City contribution to the HMO plan. The City has observed these limits. Other limits are excluded by the language of the Agreement. The parties negotiated for the City to gamble on annual adjustments of premium rates for the traditional plan. This has been accomplished. The unfortunate effect upon the employee contribution required of members of HMO is a consequence of the terms of the Agreement. Premium rates remain substantially above those of the start of the Agreement so there has been no dividend. The Association proposal would establish fictitious rates for the City contribution to the traditional BC/BS plan, contrary to the language of the Agreement. The language of the Agreement is clear and unambiguous. The Arbitrator has no authority to change the meaning thereof. The grievance must be denied. The issues of whether there was a duty to bargain changes in the method of the setting of traditional insurance premium rates or to bargain any impact flowing from the City's decision on retiree group placement were not presented to or decided by the Arbitrator. -10- DISCUSSION The Board has been called upon to determine the negotiability of various aspects of health insurance. Over the years the Board has determined that the provision of health insurance, see Easton Teachers Association v. Easton School Committee, No. 79-14, 1 NPER 20-10004 (Me.L.R.B. Mar. 13, 1979), its continuation after contract expiration as a component of the status quo, see Bangor Education Association v. Bangor School Committee, No. 83-11, 5 NPER 20-14015 (Me.L.R.B. Mar. 29, 1983), the level of health insurance benefits, see Medway Teachers Association v. Medway School Committee, No. 80-10, 2 NPER 20- 11009 (Me.L.R.B. Jan. 10, 1980), and the method of determining contribution to the costs of health insurance (percentage versus dollar amount), see Council 74, AFSCME v. Ellsworth School Committee, No. 81-41, 4 NPER 20-12034 (Me.L.R.B. July 23, 1981), are mandatory subjects of bargaining. The Board has never considered and the parties have pointed to no case in any other jurisdiction dealing with the issue of the negotiability of the composition of health insurance groups. We are not required to determine here whether the removal or addition of unorganized or organized but differently represented City employees to a health insurance group is mandatorily negotiable. It is sufficient for the purposes of this controversy to state that we conclude that decisions of the City at issue here respecting the deletion and restoration of already- retired employees to the health insurance group are not mandatorily negotiable with the Association. To resolve the issues presented in this case we must determine what the parties contemplated that the health insurance article would accomplish, whether the city has caused an uncontemplated change in a mandatorily negotiable aspect of health insurance, and, finally, whether any unilateral changes which have occurred in mandatorily -11- negotiable aspects of health insurance are legally excusable.4 As is more fully explained below, we conclude that the parties never contemplated either a decrease in total health insurance costs or action by the City having the effect of decreasing rates and effectuating a shift in proportional insurance cost allocations. Second, there is no dispute that proportional contribution to health insurance premiums is mandatorily negotiable. Finally, the City has not alleged defenses of either impasse or exigent circumstances and has not sufficiently proven a defense based on traditional practice or waiver. See Gordon Littlefield and Sanford Police Association v. Town of Sanford, No. 91-02, slip op. at 21 (Me.L.R.B. Mar. 12, 1991). Nothing in the record supports a finding of waiver of the right to negotiate the impact of the City's decisions respecting _________________________ 4In Monmouth School Bus Drivers & Custodians/Maintenance Association/MTA/NEA v. Monmouth School Committee, No. 91-09, slip op. at 55 (Me.L.R.B. Feb. 27, 1992), we recently stated that: An employer's unilateral change in a mandatory subject of bargaining circumvents the statutory duty to bargain in the same way as does a flat refusal to negotiate over such topics. NLRB v. Katz, 369 U.S. 736, 743, 82 S.Ct. 1107, 1111, 8 L.Ed. 2d 230 (1962); Lane v. Board of Directors of M.S.A.D. No. 8, 447 A.2d at 809-10 (Me. 1982). In order to constitute an unlawful unilateral change, an employer's action must: be unilateral, be a departure from a well-established practice, and involve one or more of the mandatory subjects of bargaining. An action is unilateral if it is undertaken without prior notice to the bargaining agent sufficient to allow the latter a reasonable opportunity to demand negotiations thereon. Coulombe v. City of South Portland, No. 86-11, slip op. at 11, 9 NPER ME-18008 (Me.L.R.B. Dec. 29, 1986). Otherwise unlawful unilateral changes may be excused on the basis of one of four exceptions to the unilateral change rule: a bona fide impasse in negotiations on the subject; business exigency; waiver; and past practice. Maine State Employees Association v. State of Maine, No. 78-23, slip op. at 4 (Me.L.R.B. July 15, 1978, aff'd sum nom, State of Maine v. Maine Labor Relations Board, 413 A.2d 510, 2 NPER 20-11024 (Me. 1980). -12- the movement of retirees.5 There is no evidence on how or when the group upon which BCBS traditional coverage rates are based was originally formed and there is no evidence that the Association and the City have ever negotiated over the composition of the group. The Association has never demanded that the health insurance rates of firefighters be based on firefighters alone as a separate group and there is no evidence of any previous changes in the composition of the group. The evidence does not establish that the City has traditionally participated in the setting of the rates assessed by BCBS, or that commencement of such a practice was agreed to or acquiesced in by the Association. In light of this and the City's admission that it contemplated only "an increase in insurance premiums before the medigap issue" came up, it cannot reasonably be argued that the parties contemplated that the contractually-established method of allocating the costs of health insurance might effectuate the redistribution of premium liability which has occurred here. While the City correctly points to a number of events which could impact insurance rates6, with the exception of "change in carrier" and "opting for self-insurance," which are _________________________ 5The parties' agreement does not contain a "zipper" clause, see generally Teamsters Local Union 340 v. Aroostook County Sheriff's Department, No. 92-28, slip op at 13 (Me.L.R.B. Nov. 5, 1992), and there is no evidence otherwise establishing a clear and unmistakable waiver of the right to negotiate impact on mandatory subjects. Id at 15. 6The City gives as examples: "Employees and families who suffer long-term, acute healthcare problems such as heart ailments, AIDS and cancer; Changes of demographics within the group caused by birth, death, hiring, layoffs and age; Change in health insurance carriers or adopting a self-insurance program. Withdrawal from the group of bargaining units looking for their own insurance, such as the Teamsters' Northern New England Benefit Trust. Shifts in employee choice of traditional and HMO coverage; Changes in government regulations and laws; The advance of technology and medical discoveries; New diseases and conditions and Choices made by employees in the extent of coverage (single, single parent or family)." -13- contractually permitted, none of the other events pointed to by the City is significantly capable of unilateral control by the City. With regard to the setting of proportional HMO contributions the parties' agreement provides only one fixed amount--the fixed contribution of employees to traditional health insurance costs. Employee HMO contribution is ascertained by subtracting that fixed amount from the variable traditional health insurance plan rates set independently by BCBS and subtracting the result from the independently set HMO coverage total premium rate. Although the agreement establishes a method for allocating increases in health insurance costs, it does not establish a method for determining the amount of total increases in costs to which the method of allocation is to be applied. The parties' past practice with respect to the establishment of increases in costs, therefore, "determine[s] what the employer must do (or not do) until an alternative to that practice is negotiated." Lincoln Fire Fighters Association, Local 3038, IAFF v. Town of Lincoln, No. 93-18, slip op. at 9 (Me.L.R.B. Apr. 21, 1993). We conclude that the City may not depart from past practice by effectuating a decrease in the traditional health insurance rate and demand application of a contractual method of allocation which we find to have been contemplated to be applicable only to undecreased premium rates. Absent evidence to the contrary, we conclude, in the facts of this case, that as long as the traditional health plan coverage remained with BCBS the pre- and post-expiration status quo included, in addition to the contractual method of allocation, the understanding that the BCBS rates would not be artificially reduced directly or indirectly by action of the City. Unbargained departure from this understanding impacted mandatorily negotiable subjects. Accordingly, notice and a reasonable opportunity to demand bargaining over the impact of the movement of retirees in and out -14- of the health insurance group was required. We find no such notice and opportunity in the facts of this case. The only notice to City employees was that contained in separate memos to the City's unorganized and organized fire/police employees. The notice to unorganized employees explains the BCBS traditional coverage rate increase in terms of "favorable claims experience and certain policy decisions regarding retirees." (emphasis added) The notice to Police and Fire Department employees on the other hand merely states that "[t]he City of Bangor [has] recently received its new health care rates" and sets forth approximate two and four percent increases in traditional and HMO coverages, respectively. We conclude that this memo to employees did not constitute notice to the Association. See Lincoln Firefighters' Association v. Town of Lincoln, No. 93-18 (Me.L.R.B. Apr. 21, 1993). Even if the facts established that the notice to organized employees was communicated to the Association, and they don't, we would find the explanation insufficient to put the Association even on inquiry notice. By couching the adjusted City/employee health insurance contribu- tions in terms implying benign application of the contract's requirements to rates set exclusively by BCBS without City influence, the City obviated further inquiry by the Association. Implementation of the adjustment was thus a fait accompli when the rates of contribution of represented employees went into effect on July 1, 1992. Finally, the City's September decision to restore retirees to the group was made and implemented with absolutely no notice to employees or to the Association. The Board has held that the six month limitations period "begins to run when the complainant knew, or reasonably should have known, of the occurrence of the event which allegedly violated the Act." Auburn School Administrators Association, Local 67A, AFSA v. Auburn School Committee, No. 91-19 (Me.L.R.B. Oct. 8, 1991). The Association obviously knew about the removal of the retirees on July 9, 1992, the date of the filing of its -15- grievance. The City has not established that the Association knew or should have known of the City's decision to remove retirees from the group on any previous date, more than six months prior to the date of the filing of the complaint. Moreover, the decision to restore retirees to the group falls well within the six month limitations period. Accordingly, we conclude that the filing of the complaint on December 30, 1992, satisfies the limitations requirement in 26 M.R.S.A. 968(5)(B) (1988) and Board Rule 4.01. We find that the record and reasonable inferences drawn therefrom support a conclusion that the parties contemplated that calculation of the employee contributions to HMO coverage during the contract's final premium year, and to both HMO and traditional insurance premium increases during any post- expiration status quo period, were to be predicated on BCBS premium rate projections applicable to the group as it was constituted prior to its alteration by the City. Consequently, the shifting of premium costs to employees in a manner not contemplated by the parties, made without notice and opportunity to request bargaining, constitutes an unlawful unilateral change in violation of 26 M.R.S.A. 964(1)(E) (1988). There is no evidence of animus on the part of the City against the Association, or any of its represented employees, in either the decision to remove retirees from, or the decision to restore the retirees to, the health insurance group. The record establishes that the City's decision to remove the retirees was based on a good faith attempt to comply with a mistaken understanding of requirements of federal law interpreted and relayed by BCBS. The decision to restore retirees was based upon the City's desire to provide retirees with the opportunity to obtain health insurance at rates effective prior to their unnecessary removal from the group. Additionally, we find no collusion between BCBS and the City to reduce the City's -16- proportional health care costs. Finally, we find no basis in the contract for requiring the City to share with the Association the windfall which it received as a result of the removal of retirees from the group and the BCBS agreement not to recoup any portion of the windfall during the 1992-93 insurance year beginning July 1, 1992. Accordingly, we will not require the City to share the windfall it received while BCBS refrained from readjusting traditional insurance premium assessments. However, we shall, consistent with our analysis above, require the City to restore to employees, with interest,7 any extraordinarily increased amounts contributed to contract term HMO coverage and/or to post- expiration status quo HMO and traditional insurance coverages, which they have been required to make as a result of the uncontemplated reduction of total traditional health insurance costs and the City's contribution thereto. Although this result leaves the City better off with regard to at least one year's traditional insurance premiums than it or the Association may have anticipated under the contract, neither party has been left any worse-off than it could have expected under the contract. We find award of attorney's fees and/or costs to be unwarranted in this case. Neither party prevailed on substantially all aspects of the case. _________________________ 7Interest is to be computed in accordance with Florida Steel Corp., 231 NLRB 651 (1977), utilizing the interest rates specified in New Horizons for the Retarded Inc., 283 NLRB 1173 (1987). Thus, interest is to accrue commencing with the last day of each calendar quarter of the time period subject to reimbursement, on the total amount then due and owing at the short-term Federal rate then in effect, and continuing at such rate, as modified from time to time, until the City has complied with this order. From July 1, 1992, to September 30, 1992, the short-term Federal rate was 8 percent. From October 1, 1992, to the present, the rate has been 7 percent. Associated COLT Staff of the University of Maine System v. Board of Trustees of the University of Maine System, No. 93-21, (Me.L.R.B. July 9, 1993), Lincoln Firefighters' Association Local 3038, IAFF v. Town of Lincoln, No. 93-18 (Me.L.R.B. Apr. 21, 1993) -17- ORDER On the basis of the foregoing record considered in light of the parties' written submissions and by virtue of and pursuant to the authority of the Board set forth in 26 M.R.S.A. 968(5)(A) (1988), it is hereby ORDERED that: 1. The portion of the Association's complaint which requests a share of the windfall in traditional health insurance premiums, which resulted from the City's removal of retirees from the BCBS traditional health insurance group, is hereby DISMISSED. 2. The City must reimburse Firefighters represented by the Association, with interest, for any additional expenditures for HMO coverage during the term of the contract which employees may have made as a result of the uncontemplated reduction of total traditional health insurance costs and the City's contribution thereto. 3. The City must reimburse Firefighters represented by the Association, with interest, for any additional post-expiration expenditures for HMO or traditional insurance coverage which employees have made as a result of the uncontemplated reduction of total traditional health insurance costs and the City's contribution thereto. Issued at Augusta, Maine, this 9th day of August, 1993. The parties are hereby advised /s/__________________________ of their right, pursuant to 26 Peter T. Dawson M.R.S.A. 968(5)(F) (Supp. Chair 1992), to seek review of this decision and order by the Superior Court. To initiate /s/__________________________ such a review, an appealing George W. Lambertson party must file a complaint Employee Representative with the Superior Court within fifteen (15) days of the date of issuance of this decision /s/__________________________ and order, and otherwise Eben B. Marsh comply with the requirements Alternate Employer of Rule 80C of the Maine Rules Representative of Civil Procedure. -18- (CV-93-316 vacated Board decision) STATE OF MAINE MAINE LABOR RELATIONS BOARD Case No. 93-20 Issued: July 27, 1994 ___________________________________ ) BANGOR FIRE FIGHTERS' ASSOCIATION, ) LOCAL 772, IAFF, AFL-CIO-CLC, ) ) Complainant, ) ) DECISION AND ORDER v. ) ON REMAND ) CITY OF BANGOR, ) ) Respondent. ) ___________________________________) On August 9, 1993, we issued a decision and order in this matter, finding an unlawful refusal to bargain by the City of Bangor (City). In our order we found that the City, without notice and reasonable opportunity to bargain impact, had changed the composition of the health insurance experience rating group by terminating and restoring the group membership of retirees, thereby altering the premium assessment to which contractually- established formulas are applied to determine the proportional health insurance premium contributions of the City and of firefighters. We concluded that the unbargained impact of the City's actions respecting group placement of retirees violated 26 M.R.S.A. 964(1)(E) (1988). More specifically, we found the violation to be grounded in the City's shifting to firefighters a greater proportion of contract-term premium costs for health- maintenance-organization (HMO) provided benefits and in the City's shifting to those firefighters a greater proportion of the post-contractual premium costs of both HMO and traditional health insurance benefits. We dismissed an Association claim to a share of an unanticipated windfall savings in traditional health insurance premium costs during the contract's term. Our decision and order was appealed to the Penobscot County Superior Court. On April 21, 1994, the Superior Court issued an -1- opinion vacating our decision and order, and remanding the case to us for reconsideration in light of its opinion, which, in pertinent part, states: Here, a combination of inconsistent findings and an erroneous application of the statute require reversal of the Board's decision. The Board framed the issue as follows: we must determine what the parties contem- plated that the health insurance article would accomplish, whether the city has caused an uncontemplated change in a mandatorily negotiable aspect of health insurance, and, finally, whether any unilateral changes which have occurred in mandatorily negotiable aspects of health insurance are legally excusable. (Board decision at 11-12). On the issue of mandatorily negotiable subjects, the Board made the following finding: It is sufficient for the purposes of this controversy to state that we conclude that the decisions of the City at issue here respecting the deletion and restoration of already-retired employees to the health insurance group are not mandatorily negotiable with the Association. (Board decision at 11). However, the Board went on to conclude that the decision concerning the retired employees "impacted mandatorily negotiable subjects." Because of this impact, the City's action "constitute[d] an unlawful unilateral change in violation of 26 M.R.S.A. 964(1)(E) (1988)." It appears to this Court that the Board's analysis is seriously flawed. The only City action involved in this case is the decision to first remove and then reinstate retired employees in the health insurance group. As noted by the Board, this was not a mandatorily negotiable subject. Since it is not, it cannot constitute an unlawful unilateral change under sections 964 and 965. Thus, if the City may change the membership of the group without negotiating with the Union, then it follows that the impact of this decision cannot be a subject requiring mandatory negotiation. Simply stated, the one City action complained of either -2- is, or is not, a mandatorily negotiable subject. Since the Board characterized the action both ways, those findings are clearly erroneous. City of Bangor v. Maine Labor Relations Board, No. CV-93-316, slip op. at 2-3 (Me. Super. Ct., Pen. Cty., Apr. 21, 1994). We are constrained to accept the Superior Court's legal conclusion in this regard as the law of the case, see Raymond v. Raymond, 480 A.2d 718, 722 (Me. 1984), Blance v. Alley, 404 A.2d 587, 589 (Me. 1979), although it is in apparent conflict with well established Law Court precedent. See State v. MSEA, 499 A.2d 1228, 1230 (Me. 1985); City of Bangor v. AFSCME, 449 A.2d 1129, 1135 (Me. 1982); Superintending School Committee v. Bangor Education Association, 433 A.2d 383, 385 (Me. 1981); State v. MLRB, 413 A.2d 510, 513-516 (Me. 1980). See generally First National Maintenance Corp., 452 U.S. 666, 681-682 (1981). If, as the Superior Court holds, mandatorily negotiable impact may not result from a change in a subject which itself is not mandatorily negotiable, there can be no prohibited practice in the facts of this case. Accordingly, the Association's complaint is, hereby, DISMISSED. Dated at Augusta, Maine, this 27th day of July, 1994. MAINE LABOR RELATIONS BOARD The parties are hereby advised of their right, /s/___________________________ pursuant to 26 M.R.S.A. Peter T. Dawson 968(5)(F) (Supp. 1993), Chair to seek review of this decision and order by the Superior Court. To initiate such a review, an appealing /s/___________________________ party must file a complaint George W. Lambertson with the Superior Court Employee Representative within fifteen (15) days of the date of issuance of this decision and order, and otherwise comply with the /s/___________________________ requirements of Rule 80C of Eben B. Marsh the Maine Rules of Civil Alternate Employer Procedure. Representative -3- -1-