Suffolk Child Development Center, Inc.

National Labor Relations Board - Board Decisions

Dec 30, 1985

277 N.L.R.B. 1345 (N.L.R.B. 1985)

SUFFOLK CHILD DEVELOPMENT CENTER 1345
Suffolk Child Development Center , Inc. and Suffolk
Child Development Center , Teacherss . 'Associa-
tion , New York State United Teachers , Ameri-
can Federation of Teachers, AFL-CIO. Case
29-CA-11694
On the entire record, including my observation of the
demeanor of the witnesses, and after consideration of the
briefs filed by the parties, I make the following
FINDINGS OF FACT
30 December 1985
DECISION AND ORDER
BY CHAIRMAN DOTSON AND MEMBERS
JOHANSEN AND BABSON
On 12 September 1985 Administrative Law
Judge Winifred D. Morio issued the attached deci-
sion. The Respondent filed exceptions and a sup-
porting brief.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the decision ,and the
record in light of the exceptions and brief and has
decided to affirm the judge's rulings, findings,' and
conclusions and to adopt the recommended Order.
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge and orders that the Respondent, Suffolk
Child Development Center, Inc., Smithtown, New
York, its officers, agents, successors, and assigns,
shall take the action set forth in the Order.
' The judge incorrectly stated in her decision that the Respondent op-
erated a facility at Glen Meadow, New York, and was party to a collec-
tive-bargaining agreement with the Union with effective dates from 1
January to 30 June 1985. The facility is in Meadow Glen, New York, and
the effective dates of the agreement are from 1 January 1982 to 30 June
1985
Amy S. Krieger, Esq ., for the General Counsel.
Fred Braid, Esq. (Rains & Pogrebin , P.C.), of Mineola,
New York, for the Respondent.
Sy Horowitz , of Hauppauge , New York, for the Charging
Party.
DECISION
STATEMENT OF THE CASE
Winifred D. Morio, Administrative Law Judge. This
case, heard on 17 June 1985 at Brooklyn, New York,
was based on a complaint issued on 5 April 1985 by the
Regional Director for Region 29. The complaint alleges,
in substance, that Suffolk Child Development Center,
Inc. (the Center), without prior notice to Suffolk Child
Development Center Teachers Association (the Associa-
tion), unilaterally changed existing health care benefits
which were contained in a collective-bargaining agree-
ment in existence between the parties. The Center, in its
answer, denies that it had committed the unfair labor
practice, as alleged. Briefs were filed by the parties.
1. JURISDICTION
At all times relevant, the, Center has maintained its
principal office and place of business in Smithtown, New
York, where it is, and has been, engaged in providing
educational and medical/therapeutic services to children
and adults. During the period ending December 1984,
which period is representative of its annual operations,
the Center derived gross, revenues in excess of $1 million
and during the same period the Center purchased and
caused to be delivered to its place of business school sup-
plies and other goods and materials valued in excess of
$50,000 of which supplies valued at in excess of $50,000
were shipped directly to the Center's place of business in
interstate commerce directly from States of the United
States other than the State in which it is located. The
parties, admit, and I find, that the Center, is an employer
engaged in commerce within the meaning of Section
2(2), (6), and (7) of the Act. The parties admit, and I,
find, that the Association is a labor organization within
the meaning of Section 2(5) of the Act.
It. THE ALLEGED UNFAIR LABOR PRACTICES
The Center and the Association, from the early 1970s,
have been parties to a series of collective-bargaining
agreements.' The most,recent agreement covers all in-
structional employees employed by the Center at its
Smithtown, Stony Brook, and Glen Meadow facilities
and it was effective from 1 January to 30 June 1985. This
agreement contains several clauses which are pertinent to
the issue in the instant case. Article V of the agreement
contains a management-rights clause which states, basi-
cally, that the educational policy, operation, and manage-
ment of the school and the control, supervision, and di-
rection of the staff are within the province of the board
of directors of the Center. Article XXII provides for a
grievance procedure to resolve claims or disputes con-
cerning the interpretation of the agreement. Article
XXIII provides that, the agreement contains the full sub-
stance of all agreements by the parties and is the entire
agreement of the parties terminating all prior agreements
and concluding all collective negotiations for the term of
the agreement except as modified by paragraph "B" of
the clause. Paragraph B states that the Center shall de-
velop a written policy manual but the Center is required
to negotiate with the Association if the development of
the manual causes changes in terms and conditions of
employment, not previously considered by the parties.
Finally, article X, which is entitled "Employee Benefits,"
provides, inter alia, that the Center shall maintain a
group 21-180 Blue Cross plan and a Blue Shield equiva-
i The General Counsel objected to the introduction into evidence of
the prior agreements on the ground of relevancy However, counsel did
not object to the documents on the ground of authenticity and the prior
agreements have been offered and received as Jt Exhs 1 to 4
277 NLRB No. 158
1346 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
lent plan for which the Center pays 90 percent of the
cost for either the individual or family option or an 80-
percent major medical group insurance plan with the
Center paying 100 percent of the cost for an individual
and 85 percent for the family plan . In addition , the con-
tract provides that the Center shall make available, as an
option to the above plans, the Community Health of Suf-
folk County with contributions by the Center similar to
those stated for the other two plans.2 Article X does not
outline the specific benefits which the employees are en-
titled to receive but the specific benefits are set forth in
the agreement in existence between the Center and the
insurance carrier, which is negotiated on a yearly basis.
The benefits are also outlined in an employee handbook
entitled, "Your Benefits Under Our Insurance Plan, Suf-
folk Child Development Center." It is unclear from the
record whether the policy manual referred to in article
XXIII encompasses this employee handbook . The dis-
pute in the instant case relates to a reduction in benefits
which employees were entitled to receive under the vari-
ous medical insurance plans.
Linda Hayward , a special education teacher at the
Center who is also president of the Association , testified
that she first became aware that there was a reduction of
benefits when a member of the bargaining unit notified
her, in early October 1984, that a claim that she had filed
had been returned . On 5 October 1984 Hayward spoke
with Joseph Finklestein , business manager for the
Center, about the rejected claim and Finklestein in-
formed her that the amount of the deductible had been
changed under the various medical plans and that, there-
after, the deductible for any individual claim would be
$200 rather than $ 100 and that the deductible for a
family claim would be $400 rather than $200.3 Finkle-
stein explained to Hayward that the changes had been
necessitated by the number of costly claims filed during
the prior year . In addition to the change in the amount
of the deductible, changes also had been made with re-
spect to the amount of moneys for which an employee
would be reimbursed for psychiatric or psychotherapy
treatments . Prior to October 1984, employees were reim-
bursed for such treatments in the amount of $30 for each
visit with a ceiling of $ 1500. However, after October
1984 employees were to be reimbursed in the amount of
$20 for each visit with a ceiling of $ 1000. This was the
first time that there had been a change in the deductible
and the first time that there had been a decrease in the
amount of moneys an employee would be reimbursed for
psychiatric or psychotherapy treatment. Finklestein ad-
mitted to Hayward that the Center had been in negotia-
tions with the carrier throughout the summer about these
changes and he advised her that the changes were then
in effect . When Hayward protested the failure by the
Center to notify the Association , Finklestein replied that
the Center had planned to give notification to the em-
ployees about the changes in their paychecks on 16 Oc-
2 The medical insurance provision , basically , has remained the same
across the years The only changes which were made was a change in
the insurance carrier and in the percentage contribution costs paid by the
Center and the employees
S The deductible was to be applied only to the first claim filed and was
not to be applied to claims filed thereafter by the employee
tober 1984 . Hayward responded that the Association
should have been notified and there should have been ne-
gotiations before the changes were put into effect. On 9
October 1984 the employees received a memorandum in
their individual mailboxes about the changes in the,medi-
cal benefits . On 16 October 1984 Hayward forwarded a
letter to Finklestein in which stated that the Association
had not given permission to the Center to make deduc-
tions which would result in a diminution of insurance
benefits. On that same day, Hayward also forwarded a
letter to Hamburg in which she stated that the Associa-
tion, on 9 October 1984, had become aware of the
changes made in the medical insurance coverage, and
that the changes were major changes in terms and condi-
tions of employment and she demanded that the Center
cease from implementing the changes and negotiate with
the Association . Hayward did not receive a reply to her
letters.
According to Dr. Hamburg, in 1983 there had been a
dramatic increase in the amounts charged by the insur-
ance carrier for premiums and the amount of this in-
crease had affected not only the moneys paid by the
Center to the insurance carrier, but also affected the
moneys which the employees were required to pay for
their share of the premium costs . In 1984 , Hamburg was
advised by the carrier that there would be another dras-
tic increase and faced with this possibility Hamburg dis-
cussed with the carrier methods by which the increases
could be controlled . These discussions were conducted
from April through September 1984 and at the carrier's
suggestion Hamburg decided that the amount of the de-
ductible, which had not changed in over 10 years, would
be increased and that the moneys allowed for mental
health treatment would be reduced. Hamburg testified
that he agreed to these changes because he believed that
they would have the least impact on the employees and
would assist in efforts to reduce the cost of the premium
payment for all employees.4 Hamburg admitted that
throughout these discussions he did not notify the Asso-
ciation nor the employees about the proposed changes,
although the changes were to be effective retroactively
to May 1984.5 Hamburg claimed that because the negoti-
ations with the carrier were not complete until Septem-
ber or October 1984 and because the employees had not
been made aware of these changes, which he deemed to
be significant , he insisted that any employee who had ex-
perienced a loss because of these changes from May
through October 1984 would be "made whole." Ham-
burg testified that he decided to make the employees
whole, not because he had an obligation to negotiate
with the Association but because he believed that he had
a moral obligation to inform the employees of the
changes, which had not been done. Hamburg also testi-
fied that the memorandum of 9 October 1984 was sent to
the employees after Hayward told him that the employ-
ees were unaware that there had been changes in the
medical benefits . It appears that three employees, Arthur
4 Notwithstanding these changes , the premium cost increased to some
degree but not to the anticipated increase of 38 percent
5 The contracts with the insurance carrier are on a yearly basis from
May to May
SUFFOLK CHILD DEVELOPMENT CENTER
Brom, Roseanne Murphy, and Carol Esposito , did suffer
monetary loss because of these changes but, apparently,
the Center had not reimbursed the employees for these
losses at the time of the hearing.
The record reveals that prior to October 1984 changes
were made in the medical insurance plans and in some
instances the Center notified the Association about the
changes before they were made and in other instances it
did not.
On 28 January 1977 Hamburg forwarded a letter to a
vice president of the Association in which he referred to
the Center's prior recommendation to the Association
that the Blue Shield coverage be replaced and the Blue
Cross coverage be modified with an expanded policy
from Home Life . In this letter, Hamburg urged acce-
tance of the changes because they would be beneficial
and would provide more coverage with no additional
costs to the employees . However, Hamburg also stated,
in the letter, that if the Association did not agree to the
changes the policies would remain the same. The Asso-
ciation replied , by letter, that it agreed'to the changes
provided that the new plan would not increase the em-
ployees' monetary contributions . These changes were im-
plemented . It is the Center's position that it was obligat-
ed to notify the Association about this proposed change
because the collective -bargaining agreement referred to a
specific carrier and, therefore, the named carrier could
not be changed without the approval of the Association
The contract which was entered into the Association
said that it agreed to the suggested change stated that the
Center would provide a Blue Cross equivalent plan.
On 6 May 1983 Finklestein, by letter, advised the As-
sociation that the major medical insurance carrier had in-
creased its premiums , on 1 May 1983, because claims had
exceeded the premiums . The increase would require em-
ployees to contribute more moneys towards their share
of the premium cost . The collective-bargaining agree-
ment in effect did specify the percentage which would
be paid by the Center for the cost of the premium, the
remainder was to be paid by the employee . The Associa-
tion did not voice any objection to this increase , nor did
the Association request the Center to bargain about this
increase . Hayward testified that across the years the
Center has informed employees about the increases in
premium rates, charged by the carrier, which caused an
increase in the amount of moneys the employees would
be required to pay, but , that the notification was given
after the increased rates were in effect . The Association,
however, did not raise any objection about the Center's
failure to notify it about premium increases before they
became effective , nor did the Association request bar-
gaining about these increases . According to Hayward, in
1984, the Center , on two occasions, did inform the Asso-
ciation before the increased rates became effective about
the impending rate increase . The Association did not
object to these increases or request the Center to bargain
about these increases.
Hamburg testified that there were other changes in the
medical plans during the years, which were not the sub-
ject of negotiations with the Association and about
which the Association did not seek to bargain. Thus, ac-
cording to Hamburg, prior to 1976 the lifetime benefits
1347
for a single injury was $25 ,000 and in that year the
amount of the lifetime benefit was increased to $1 million
and in 1984 this benefit again was increased to $2 mil-
lion. Prior to 1976, under the medical insurance plans, an
employee received a maximum benefit of $50 for a
second opinion for surgical matters but after 1976 the
amount for a second opinion was increased to $75 per
visit and two visits were permitted . The medical insur-
ance plans, in the mental therapy program before 1976,
provided that an employee would be reimbursed 50 per-
cent up to $25 for one visit with a ceiling of 50 visits, in
1981 the coverage was extended to enlarge the category
of individuals for whose services the employee would be
reimbursed , and in 1983 the coverage was increased and
an employee was reimbursed up to 50 percent of $30 per
visit for up to 50 visits . In 1977, there was also a reduc-
tion in the cost for the life insurance accident and acci-
dental death policies . It does not appear that the Associa-
tion was notified about these changes before they were
instituted , nor does it appear that the Association sought
to bargain about the charges.
The collective-bargaining agreement between the par-
ties contains a grievance and arbitration provision but
this provision was not utilized with respect to any of
these changes , including those changes involved in the
instant proceeding . Hayward testified that the Associa-
tion did not file a grievance about the present changes
because the amount of the "actual deductible" was not
addressed in the article on grievances . Hayward stated,
"We can only file grievances on those , that which is ad-
dressed in the article." In sum, it was the position of the
Association that the changes in the deductible and the
change in the reimbursement for the mental therapy
visits were not subject to the provisions of the collective-
bargaining agreement . Moreover , the Association con-
tended that even if it had filed a grievance the Center
would not waive the time limitations set forth in the con-
tract. The Center agreed that it would not waive the
time limitations , however, it was the Center's position
that whether the grievance was filed timely , "is a proce-
dural arbitrability issue which is generally reserved for
the arbitrator."
Discussion
It is the position of the General Counsel that the
Center violated Section 8(a)(5) and (1) of the Act by re-
ducing existing employee benefits under the medical in-
surance plans without prior notification to the Associa-
tion and without affording the Association a meaningful
opportunity to bargain about such changes. The General
Counsel also contends that the fact that there may have
been prior changes made by the Center with respect to
the medical insurance plans, which the Association knew
about but failed to object to, does not establish that the
Association waived its right to demand bargaining about
the present changes.
It is well settled that an employer violates Section
8(a)(5) and (1) of the Act by unilaterally changing the
terms and conditions of employment of its employees
without first providing their collective-bargaining repre-
sentative a meaningful opportunity to bargain about
1348 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
those changes. NLRB v. Katz, 369 U.S. 736, 741-743, 747
(1962), NLRB v. Borg Warner Corp., 356 U.S. 342, 349
(1958). It is undisputed that medical insurance benefits
are terms and conditions of employment and, therefore,
they constitute a mandatory subject of bargaining. Allied
Chemical Workers v. Pittsburgh Plate Glass Co., 404 U.S.
157, 159 (1971); Arno Moccasin Co., 274 NLRB 1515
(1985); Auto Fast Freight, 272 NLRB 561 (1984); Croft
Metals, 272 NLRB 208 (1984); Lauren Mfg. Co., 270
NLRB 1307 (1984); Rose Arbor Manor, 242 NLRB 795,
798 (1979); Wisconsin Southern Gas, 173 NLRB 480
(1968).
The Center concedes that it unilaterally changed the
medical benefits of its employees but it contends that its
actions were not violative of the Act for several reasons.
The first reason advanced by the Center is that the
changes were mandated by the insurance carrier over
whom it had no control. The testimony given by Dr.
Hamburg, however, does not support that assertion. His
testimony establishes that the insurance carrier advised
the Center that there would be an increase in the cost of
the premiums but there is no evidence that the insurance
carrier had an unlimited right to increase the cost of the
premium. Dr. Hamburg, when confronted with the possi-
bility of increased premium costs, entered into negotia-
tions with the carrier concerning methods to meet the
rising costs, which would have affected, primarily, the
Center and, incidentally, the employees. It was Dr. Ham-
burg who decided what method should be used to meet
the cost of the premiums and it was he who decided to
meet the rising costs by reducing benefits. During sever-
al months of negotiations with the carrier Dr. Hamburg
failed to discuss with either the employees or the Asso-
ciation possible alternatives to a reduction of the employ-
ees' medical benefits. The employees and the Association
had accepted an increase in premium costs in the past
and it is conceivable that they would have accepted that
option rather than face a reduction in the medical bene-
fits. Dr. Hamburg did not give either the employees or
their ''representative the right to make the decision rather,
he decided, unilaterally, to reduce the benefits and then
decided, unilaterally, which benefits the employees did
not need. In these circumstances, I am not persuaded
that the loss of medical benefits was the result of actions
by the insurance carrier over which the Center had no
control. Rather, I find that the loss of benefits was attrib-
utable to decisions made solely by the Center.6
The Center also contends that the collective-bargain-
ing agreement in existence between it and the Associa-
tion refers only to the general concept of an insurance
plan but does not refer to the specifics of that plan, those
are contained in the contract in existence between the
Center and the insurance carrier, to which the Associa-
tion is not privy. Therefore, according to the Center, it
was not obligated to bargain about changes in the specif-
ic details of the plan, and is support of its position it cites
the Board's holding in McDonnell Douglas Corp., 224
6 Counsel argues that Dr Hamburg acted as he did because of his con-
cern for the employees Assuming, that Dr Hamburg was concerned
solely about the increased premium costs for the employees and not
about the increased costs for the Center, his good-faith motivation does
not eliminate the duty to bargain about changes in the medical benefits.
NLRB 881 (1976). In that case, the collective-bargaining
agreement between, the parties contained a long-term dis-
ability plan which assured employees of an income even
if an accident or illness disabled them from working. The
administrative law judge, in a supplemental decision
adopted by the Board, found that the employer did not
violate the Act when, without affording the union an op-
portunity to bargain, it increased the premiums for its
employees' long-term disability income insurance. In
reaching that conclusion, the judge relied on the fact
that during the negotiations for the collective-bargaining
agreement there had been extensive discussions concern-
ing whether the employer or the employees would pay
the premiums for this disability insurance and the specific
amounts to be paid. The judge also found that the union
and the employer had entered into a written stipulation
in which the parties recognized that increased premiums
were a possibility and in which they agreed that those
increases would be borne by, the employees. Further,
during the unfair labor practice hearing, the union's rep-
resentative testified that it was agreed by the parties that
if an increase occurred the employer was not obligated
to pay more than it was paying, nor was the employer
obligated to bargain with the union over a request that
the employer increase its share of the costs. Finally, the
judge found that the collective bargaining, specifically, '
stated the amounts which the employees would pay for
insurance and also stated that such amounts were subject
to change.? In the instant case, there is no evidence that
the Center and the Association discussed, at any point,
increases in the amount of the deductible or the decrease
in the moneys for psychiatric-psychotherapy treatments.
However, counsel for the Center, during the hearing,
sought to introduce evidence about certain proposals
made by the Association in the early 1970s which were
rejected by the Center. Counsel claimed that the fact
that these proposals did not become part of the collec-
tive-bargaining agreement demonstrates that the Center
retained the right to make the unilateral changes that it
did in October 1984.8 I.rejected that effort by counsel
but did permit counsel, by way of an offer of proof, to
state the specific language of the proposals. The lan-
guage of the proposals was as follows:
A. With respect to matters not covered by this
agreement, the Board9 agrees that it will make no
changes without appropriate good faith negotiations
and agreement with the Association.
' Counsel for the Center contends that one of the reasons that the
Board did not find a violation was because the collective-bargaining
agreement "mentioned no obligation by the employer to bargain with the
union over an increase in premiums." However, in concluding that the
employer had not violated the Act the judge, whose opinion was adopted
by the Board, relied on the fact that the issue of premium increases had
been discussed at length and the union had "waived or consciously yield-
ed its interest in the matters "
fi It should be noted that at the time that counsel sought to introduce
the language of those early proposals, he did not have a witness present
in the hearing room to testify about them or about those early negotia-
tions
9 The board referred to in the two proposals was the board of the
Center
SUFFOLK CHILD DEVELOPMENT CENTER
B. The Board agrees that any past practice, exist-
ing policy or employee benefits not modified, elimi-
nated or superseded by any provision of this con-
tract shall remain in full force and effect for the life
of this contract.
Assuming that the Association, years ago, did make such
proposals, which were rejected by the Center, I do not
see the relation between that situation and the situation
which existed in McDonnell Douglas. In the latter case,
the parties had extensive and detailed discussions during
negotiations about whether the employer or the employ-
ees would bear the cost of increased premiums and the
parties agreed that the employees would pay the in-
creased cost. Thereafter, when premiums were increased,
the increases were passed on to the employees in accord-
ance with the agreement of the parties. In this case, there
were no discussions between the parties about increases
in the deductible or decreases in moneys for mental
health therapy and no agreement was reached concern-
ing such changes.
The Center also maintains that the lack of specificity
in article X with respect to the details of the plan indi-
cated that the Association assented to the Center's right
to negotiate directly with the carrier about changes in
the plan. It is well established that even if a collective-
bargaining agreement does not refer to a particular set of
employment conditions, in a unit represented by a union,
an employer may not unilaterally change existing terms
and conditions of employment. The right to be consulted
about changes in existing terms,and conditions of em-
ployment is a right given by statute and not one obtained
by a contract. NLRB v. C & C Plywood Corp., 385 U.S.
421, 423, 428, 430-431 (1967). In the instant case, the
record establishes that the amount of the deductible and
the moneys allocated for mental therapy have not been
decreased in all the years that the Association has repre-
sented the employees and these conditions of employ-
ment are set forth in the handbooks given to employees
by the Employer. These conditions, therefore, are exist-
ing terms and conditions of employment protected by
the statute and they cannot be changed, unilaterally, by
an employer.
The Center further contends that "in order for a uni-
lateral change to be a violation of Section 8(a)(5) and (1)
it must have a vital effect on the wages, hours and work-
ing conditions of employees." In support of that position
counsel cites Keystone Steel & Wire, 237 NLRB 763, 766
(1978). At issue in Keystone was whether the unilateral
change of administrators of various insurance plans by an
employer was violative of the Act. The Board concluded
that with respects to some of the plans the change of the
administrator did make a difference and, therefore, the
parties had to bargain. Thus, the Board stated, "The dis-
parity in the fee or reimbursement schedules, in itself, is
sufficient evidence of the impact on wages, hours, and
working conditions." However, with respect to the
dental plan the Board concluded that the General Coun-
sel had failed to prove that the change in the administra-
tor had "any effect" on wages, hours, and conditions of
employment. Counsel for the Center contends that Key-
stone stands for the proposition that an employer can uni-
1349
laterally change existing terms and conditions of employ-
ment, unless the change has a "vital effect" on those
terms and conditions of employment. I do not consider
the holding in Keystone to be subject to such a broad in-
terpretation. In that case, the Board distinguished be-
tween a situation where the unilateral changes had some
effect and where the changes had no effect. Thus, the
Board stated, "If the choice of an administrator makes a
difference the parties must bargain about the choice."
However, assuming that the holding in Keystone can be
interpreted as counsel for the Center contends, I find
that the changes in the plans by the Center in this case
does have a vital effect on employee terms and condi-
tions of employment. As a result of the unilateral
changes by the Center there was an increase of $100 in
the deductible for a single claim by an employee and a
$200 increase in the deductible for a family claim. Fur-
ther, the moneys allowed for mental therapy treatments
were reduced by $500 in the overall amount and were
reduced from $30 a visit to $20 a visit. These changes
are significant and do affect terms and conditions of em-
ployment. Harvard Folding Box Co., 273 NLRB 841
(1984); Lauren Mfg., supra. It is the Center's position that
this case is distinguishable from the situations present in
Harvard and Lauren. I do not agree. In Harvard the
Board found that the employer had violated the Act, al-
though the unilateral change did not result in a reduction
of benefits but resulted only in an increase in the cost the
employees would pay for their share of the medical cov-
erage costs. In this case, the unilateral change directly
impacted on the employees' medical benefits, it reduced
those benefits. In Lauren the unilateral change also re-
sulted in a loss of benefits for those employees and an in-
crease in the amount of the deductible employees would
have to pay. In these circumstances, I find that the hold-
ings in Harvard and Lauren are binding, absent a waiver
by the Association of its statutory right to bargain about
the changes.
The courts and the Board will not assume a waiver by
a union of its statutory right to bargain over changes in
terms and conditions of employment, such a waiver must
be clear and unmistakable Metropolitan Edison v. NLRB,
460 U.S. 693 (1983). Timken Roller Bearing Co. v. NLRB,
325 F.2d 746, 751 (6th Cir. 1963), cert. denied 376 U.S.
971 (1964); Technicolor Government Services v. NLRB, 739
F.2d 323, 327 (8th Cir. 1984); A-1 Fire Protection, 273
NLRB 964 (1984); Columbus Electric Co., 270 NLRB 686
(1984). "National labor policy disfavors waivers of statu-
tory rights by a union and thus a union's intention to
waive a right must be clear before a waiver can suc-
ceed." C & P Telephone Co. v. NLRB, 687 F.2d 633, 636
(2d Cir. 1982). In C & P the court also stated that wheth-
er it is contended that the waiver was contained in the
language of the agreement in existence between the par-
ties or arose by certain conduct by the union or form a
combination of both, the contract and the conduct, a
waiver of the right to bargain about a statutory term and
condition of employment can only be found when the
union's intent to waive is clear and unmistakable from all
the evidence presented. In Columbus Electric Co., supra,
although the Board found that there had been a waiver
1350 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
of the statutory right to bargain by the union, it did state
that in considering whether a union waived its statutory
right to bargain about mandatory subjects of bargaining,
it would consider all the -surrounding circumstances, in-
cluding not only the contract language but the bargain-
ing history of the parties. The circumstances in the in-
stant case establish that for many years there had been
no increase in the amount of deductible and that the only
change with respect to the moneys provided for mental
health treatment was an increase in those benefits. There
is no indication that the Center requested or sought a re-
duction in the benefits provided to the employees during
that period of time. In fact, as noted, the employees'
handbook prepared by the Center and distributed by it to
the employees does state the specific level of benefits to
which the employees are entitled and those benefits, with
respect to the deductible and moneys allowed for mental
health therapy, were those which existed prior to Octo-
ber 1984, when the Center made the changes. Thus, al-
though the contractual language did not specify the level
of benefits to be provided to the employees there is no
question that the Center, the Association, and the em-
ployees were aware of the amount of those benefits
The Center contends, however, that the Association
did waive its right to bargain about changes in the medi-
cal benefits as evidenced by the fact that the Center rou-
tinely made changes in the contract with the insurance
carrier without notifying the Association and even in
those instances where the Association was informed "it
failed to take issue with the Center's authority to imple-
ment them unilaterally" and failed to demand bargaining
about the changes. The evidence does establish that the
Association was notified about the change of the insur-
ance carrier before that change was instituted, but coun-
sel's assertion that the Association failed to request bar-
gaining about this change is not an accurate statement of
the Association's position. The Association stated that it
did not object to the change of carriers provided that
such a change did not increase premium costs for the
employees. That statement clearly indicated that the As-
sociation did not agree to the change if it would have an
impact on the moneys employees would have to pay and
that if such an impact occurred the change could not be
made. The Association was advised of premium increases
on two occasions before the increases were instituted and
the Association did not request bargaining about those
increases. However, with respect to other premium in-
creases and other changes, the record fails to establish
that the Association was aware of the changes before
they were implemented. In fact, counsel concedes that
the Association was given "subsequent notice" of
changes by way of the employee handbook. A union
cannot be held to have waived its right to bargain over a
change in working conditions unless it has received
timely notice of the employer's proposed change Soule
Glass & Glazing Co. v. NLRB, 652 F.2d 1055 (1981). In
support of its position that the Association waived its
right to demand bargaining about the changes in the
medical benefits counsel cites NLRB v. Island Typogra-
phers, 705 F.2d 44 (2d Cir. 1983). However, the facts in
that case also are distinguishable from those in the
present case. Thus, in Island Typographers the court
found that for over 2 years the union was aware that the
employer was, changing to "cold type" machinery and
that during negotiations the union representative stated
that he did not care about the change, that if the employ-
er wanted to change to that type of operation the union
would agree to contract modifications in order to make
the employer, more competitive with nonunion employ-
ers. This is certainly not the situation in the instant case
where the Association became aware of the change in
the medical benefits only after an employee's claim was
rejected by the carrier. Further, the fact that the Asso-
ciation did not request bargaining about two recent pre-
mium increases does not establish that the Association
waived its right to bargain about a reduction in medical
benefits.
The Center also cannot rely on the management-rights
clause in the contract to support its unilateral action. Ar-
ticle V, the management-rights clause, "states only that
the Center shall have the authority to determine educa-
tional policies and to control, supervise, and direct the
employees. There is nothing contained in that language
which refers to employee medical benefits or other terms
of employment. The clause is directed to two areas only,
management's right to formulate the educational policies
for the Center and its right to supervise and control the
employees. This is not the type of situation which was
present in Emery Industries, 268 NLRB 824, (1984),
where the Board found that an employer had retained
the right to discipline employees because of the broad
language contained in the management-rights clause. In
Emery, the management-rights clause specifically stated
that the employer retained all rights, powers, and author-
ity with respect to the direction of the work force, in-
cluding the right to discipline employees.
The fact that a collective-bargaining agreement con-
tains a zipper clause also does not mean that a union has
clearly and unmistakably relinquished its right to bargain
over all mandatory subjects of bargaining. Rather, the
courts and the Board have interpreted such- a clause as a
curb on the union's right to demand bargaining during
the life of a collective-bargaining agreement about the
terms and conditions of employment which are contained
in the agreement. The Board and the courts have not in-
terpreted the presence of a zipper clause in a collective-
bargaining agreement as a grant to an employer to
change, unilaterally, existing terms and conditions of em-
ployment. GTE Automatic, Inc., 261 NLRB 1491, 1492
(1982). In Angelus Block Co., 250 NLRB 868, 877 (1980),
the Board stated the following:
A zipper clause must meet the standard of any
other alleged waiver. It is -well established that in
order to establish waiver of the statutory right to
bargain in regard to mandatory subjects of bargain-
ing, such as is involved here, there must be a^clear
and unequivocal relinquishment of such right. Even
where a zipper clause is couched in broad terms,,it
must appear from an evaluation of the negotiations
that the particular matter in issue was fully dis-
cussed or consciously explored and the Union con-
sciously yielded or clearly and unmistakably waived
its interest in the matter. This is particularly true
SUFFOLK CHILD DEVELOPMENT CENTER
where, as here, an employer relies on the zipper
clause to establish its freedom to unilaterally
change, or institute new, terms and conditions of
employment not contained in the contract.
Although the Board in Columbus Electric, supra, did
find that the union had waived its right to bargain by
virtue of the language contained in the zipper clause in
the contract between the parties, it noted that zipper
clause stated that it was the intent of the parties that the
new contract would supersede "all prior agreements and
understandings, oral or written, expressed or implied."
The Board also found that prior to the execution of the
agreement, which contained this broad zipper clause, the
union had requested the employer to provide it with a
list of all the agreements which would be terminated
pursuant to the provisions of the zipper clause, and al-
though the employer had refused to do so, it did notify
the union that the clause applied to "all agreements and
the purpose of the provision was to wipe the slate
clean." Thus, the Board concluded in the circumstances
of that case that the union "was fully aware that all pre-
vious agreements were subject to the zipper clause."
There is no evidence in this case that the Employer noti-
fied the Association prior to the execution of the con-
tract that it intended, by the zipper clause, to terminate
all agreements, written or oral. In fact, the benefits at
issue in this case continued for almost 1-1/2 years after
the contract became effective. It is clear by these actions
of the, Center that the zipper clause was not intended to
wipe the "slate clean." Furthermore, the zipper clause in
the instant case, unlike the clause in Columbus Electric
contains a subparagraph B, which provides that the
Center may develop a policy manual, but such a manual
could not result in a change in terms and conditions of
employment of the employees without the approval of
the Association. In sum, I do not find in the circum-
stances of this case that the Association clearly and un-
mistakably waived its rights to bargain over existing
terms and conditions of employment.10
Based on the above analysis, I find and conclude that
the Center unilaterally changed the medical benefits of
its employees by increasing the amount of the deductible
and decreasing the amount of moneys to be paid for psy-
chiatric-psychotherapy treatment, without notifying or
bargaining about such changes with the Association. Ac-
cordingly, I find that by such conduct the Center has
violated Section 8(a)(5) and (1) of the Act.
CONCLUSIONS OF LAW
1. Suffolk Child Development Center, Inc. is an em-
ployer engaged in commerce within the meaning of Sec-
tion 2(2), (6), and (7) of the Act.
10 The Center contends that the Association's failure to use the griev-
ance machinery of the contract establishes that the benefits are not cov-
ered by the contract. It is true that it is the position of the Association
that the issue is not subject to the grievance machinery However, this
does not mean that the benefits are not existing conditions of employment
which cannot be changed unilaterally Neither party contended that the
issue should be Collyerized and in these circumstances the Board has de-
clined to apply the principles of Collyer _NCR Corp, 271 NLRB 1212
(1984)
1351
2: Suffolk Child Development' Center Teachers Asso-
ciation, New York State United Teachers, American
Federation of Teachers, AFL-CIO (the Association) is a
labor organization within the meaning -of Section 2(5) of
the Act.
3. At all times material herein, the Association has
been and continues to be the exclusive representative of
the Center's employees in the following bargaining unit
found appropriate for collective-bargaining purposes
within the meaning of Section 9(b) of the Act:
All regular full-time instructional employees em-
ployed by the Center at its Smithtown, Stony
Brook and Meadow Glenn premises.
4. By unilaterally and without the consent of the Asso-
ciation changing the medical benefits of its employees,
who are represented by the Association, the Center has
engaged in and is engaging in unfair labor practices
within the meaning of Section 8(a)(5) and (1) of the Act.
5. The aforesaid are unfair labor practices affecting
commerce within the meaning of Section 2(6) and (7) of
the Act.
THE REMEDY
It having been found that the Center has engaged in
unfair labor practices in violation of Section 8(a)(5) and
(1) of the Act, it will be recommended that the Center
be ordered to cease'and desist therefrom and take certain
affirmative action designed to effectuate the policies of
the Act.
It having been found that the Center violated the Act
by changing the medical benefits of its employees, I shall
recommend that the Center, on the written request of the
Association, be ordered to return the amount of the de-,
ductible and the amount of moneys allowed for psychiat-
ric and psychotherapy treatment to the levels which ex-
isted prior to the unilateral action by the Center in Octo-
ber 1984. However, because the return of the medical
benefits to that level may result in increased premium
costs for the employees represented by the Association, I
will recommend that the Association be given an oppor-
tunity, not to exceed 30 days from the date of this deci-
sion, to determine whether, the employees desire the
medical benefits to be returned to the levels which exist-
ed prior to the unilateral action by the Center.
I shall also recommend that the Center be required to
make whole any employees for expenses incurred be-
cause of the unilateral actions by the Center, with the in-
terest as computed in Florida Steel Corp., 231 NLRB 651
(1977).
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
ed'I
11 If no exceptions are filed as provided by Sec 102 46 of the Board's
Rules and Regulations , the findings , conclusions , and recommended
Order shall, as provided in Sec 102 48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses
1352 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ORDER APPENDIX
The Respondent, Suffolk Child Development Center,
Inc., Smithtown , New York, its officers, agents , succes-
sors, and assigns, shall
1. Cease and desist from
(a) Unilaterally changing the medical benefits of its
employees represented by Suffolk Child Development
Center Teachers Association, New York State United
Teachers, American Federation of Teachers, AFL-CIO
(Association) in the appropriate bargaining unit consist-
ing of all full-time instructional employees employed by
the Center at its Smithtown, Stony Brook, and Meadow
Glenn premises.
(b) In any like or related manner interfering with, re-
straining , or coercing employees in the exercise of the
rights guaranteed them by Section 7 of the Act.
2. Take the following - affirmative action necessary to
effectuate the policies of the Act.
(a) On written request from the Association, return the
amount of the deductible and the moneys allowed for
psychiatric-psychotherapy treatments to the levels which
existed prior to the unilateral action by the Center in Oc-
tober 1984.
(b) Make employees whole, in the manner set forth in
the remedy section of this decision , for any additional ex-
penses which they may have incurred as a result of the
unilateral action by the Center.
(c) Preserve and, on request , make available to the
Board or its agents for examination and copying , all pay-
roll records, social security payment records, timecards,
personnel records and reports , and all other records nec-
essary to analyze the amount of moneys due under the
terms of this Order.
(d) Post at its premises at Smithtown , Stony Brook,
and-Meadow Glenn premises, Long Island, copies of the
attached notice marked "Appendix."12 Copies of the
notice , on forms provided by the Regional Director,
Region 29, after being signed by the Center's authorized
representative , shall be posted by the Center immediately
upon receipt and maintained for 60 consecutive days in
conspicuous places including all places where notices to
employees are customarily posted . Reasonable steps shall
be taken by the Respondent to ensure that the notices
are not altered, defaced, or covered by any other materi-
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we
violated the National Labor Relations Act and has or-
dered us to post and abide by this notice.
WE WILL NOT refuse to bargain collectively regarding
wages, hours, and other terms and conditions of employ-
ment with Suffolk Child Development Center Teachers
Association, New York State United Teachers, American
Federation of Teachers, AFL-CIO as the exclusive rep-
resentative of the employees in the following appropriate
unit:
All regular full-time instructional employees em-
ployed by the Center at its Smithtown, Stony
Brook and Meadow Glenn premises.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce you in the exercise of rights
guaranteed you by Section 7 of the Act.
WE WILL, on request, bargain with the Association as
the exclusive representative of our employees in the ap-
propriate unit described above about changes in the med-
ical benefits of the employees represented by the Asso-
ciation.
WE WILL, on request by the Association, rescind the
unilateral changes made in the medical benefits of our
employees represented by the Association, with respect
to the amount of the deductible and the moneys paid for
psychiatric and psychotherapy treatments.
WE WILL make our employees whole for any losses
suffered by virtue of the unilateral changes in medical
benefits instituted by us in October 1984, with interest as
described in the remedy section of this decision.
SUFFOLK CHILD DEVELOPMENT CENTER,
INC.
al.
(e) Notify the Regional Director in writing within 20
days from the date of this Order what steps the Re-
spondent has taken to comply.
12 If this Order is enforced by a judgment of a United States court of
appeals, the words in the notice reading "Posted by Order of the Nation-
al Labor Relations Board" shall read "Posted Pursuant to a Judgment of
the United States Court of Appeals Enforcing an Order of the National
Labor Relations Board "