In supporting IBEW Local 1245’s fight to protect the vested benefits of our members at the City of Redding, IBEW 1245 Business Manager Tom Dalzell said it best when he wrote that employers expect us to keep our promises, and we expect them to keep theirs also.
With that guiding principle in mind, Local 1245 filed–and won–an important lawsuit requiring the City of Redding to keep its promises to pay retirement medical benefits. Following the California Supreme Court’s recent decision upholding the union’s position in that lawsuit, the City of Redding and Local 1245 negotiated an agreement that restores the retirement medical benefits and compensates employees for any excessive retiree medical premiums they were subjected to.
The court’s decision is precedent-setting for California, and has been closely watched by workers and their unions in other states. Here is how this important victory came about.
Last, Best, Final
On March 15, 2010, following some 18-months of contentious contract negotiations with IBEW 1245’s Electric bargaining unit, the City of Redding City Council voted 4-1 in a special council meeting to implement its Last Best and Final offer.
This offer contained a change in future retiree medical eligibility for active employees. Both at the bargaining table, and at the Council’s special meeting of March 15, 2010, IBEW 1245 representatives warned City Council and staff that future retiree medical benefits for active employees was a vested benefit by the Memorandum of Understanding, and subject to law.
During the Council’s special meeting on March 15, 2010, and with Local 1245 Union Attorney Jenny Marston present, Assistant Business Manager Ray Thomas put the City Council on notice that the illegal retiree medical formula the City was considering implementing would subject the City to a bad faith bargaining unfair practice charge through the Public Employees Relations Board, and probable litigation in the courts.
Councilwoman Mary Stegall was the lone dissenting vote against the implementation and argued prior to the Council vote that the financial benefits cited by staff would be reduced by costs to battle legal proceedings or a Public Employment Relations Board complaint brought against the City by IBEW. She asked the Council to look at the situation a little further and consider the people who work for the City.
Following all public comment and Council member input, a 4 to 1 majority of the Council implemented the illegal change in retiree medical benefits, drastically changing the future retiree medical benefit for active employees.
IBEW 1245 filed the Unfair Practice Charge and the Public Employees Relations Board filed a complaint of bad faith bargaining against the City. This complaint was settled during the subsequent set of contract negotiations, while the legal issue of vested retiree medical benefits worked its way through the courts.
The first step of the court battle began with the Shasta County Superior Court ruling against IBEW’s argument that active employee future retiree medical benefits were vested. The Superior Court judge in that case ruled that all terms and conditions of a Memorandum of Understanding are subject to change after the termination of the agreement in which they are contained.
Appellate Court Decision
IBEW 1245 appealed the State of California 3rd Appellate Court of Appeals, which has oversight over California Superior Court rulings. The 3rd Appellate Court ruled in favor of IBEW 1245, overturning the Shasta County Superior Court Judge’s ruling and allowing that IBEW 1245 was entitled to Superior Court trial in order to prove its retiree medical vesting claim. In their decision, the three judges on the 3rd Appellate Court also voted 3-0 that the retiree medical vesting language in the IBEW 1245 and City of Redding Memorandum of Understanding did guarantee vesting rights as IBEW 1245 was claiming.
Redding City Council requested that the California State Supreme Court overturn the 3rd Appellate Court’s ruling, or at the very least, de-publish the 3rd Appellate Court’s ruling so that it did not set precedent throughout the state.
In January of this year, the California State Supreme Court decided it would neither hear the appeal nor de-publish the 3rd Appellate Court’s ruling.
Over the last couple of months, following the California Supreme Court’s decision, the City and IBEW 1245 had agreed to attempt to settle the suit without going to Superior Court trial.
On March 4, 2013, the parties fully executed a settlement agreement. Subject to the settlement the vested retiree medical benefits are fully reinstated for all of those IBEW 1245 members within both the Electric and Maintenance bargaining units at the time their former agreements went into effect, March 15, 2010 for the Electric bargaining unit, and January 5, 2011 for Maintenance bargaining unit.
Further, the City and Union reviewed those employees in both bargaining units who retired subsequent to the City’s change in retiree medical benefits to determine the negative financial impact they had suffered. The City will be paying those employees for any and all excessive retiree medical premiums they were subjected to.
Lastly, all IBEW 1245 members at the City of Redding who retired subsequent to the City’s change in retiree medical benefits, and who either did not elect the City’s retiree medical, or who elected the coverage and then subsequently dropped it, will have a one-time opportunity to opt back in to the retiree medical plan with their full and vested City premium contributions moving forward.
This important victory demonstrates the union’s intent to make employers live up to their agreements, and also shows that the union’s role sometimes must extend beyond the bargaining table and into our nation’s courts.