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December 2008: Ninth Circuit Affirms Unions' Right to Arbitrate Regarding Reitree Medical Benefit Changes
On December 5, 2008 the U.S. Court of Appeals for the Ninth Circuit, in IBEW Local 1245 v. Citizens Telecommunications Co. of California, Case No. 06-06189, affirmed the decision of the U.S. District Court for the Eastern District of California ordering expedited arbitration regarding retiree medical benefits. In 2005, Citizens Telecommunications Co. of California unilaterally implemented changes to its retiree medical plan, notwithstanding provisions in the CBA between it and the IBEW Local 1245, which prohibit reductions in the “overall level of benefits.” The Company’s unilateral changes to its retiree health benefits affected both active employees and current retirees alike. The Union sought to have the matter submitted to expedited arbitration. The Company refused, and the Union sought, and was granted, an Order compelling arbitration. The Union argued that the future retirement benefits of active employees are a mandatory subject of bargaining and any alteration in such benefits was plainly arbitrable. However, in the District Court, and continuing in its opening brief on appeal, the Company attempted to justify its refusal to arbitrate by invoking a fictitious requirement of retiree consent. Both the District Court and the Ninth Circuit ultimately rejected this position.