UPS Supply Chain Solutions, Inc.

National Labor Relations Board - Administrative Judge Opinions

Dec 24, 2015

12-CA-144578 (N.L.R.B. Dec. 24, 2015)

JD(ATL)–23–15
Doral, FL
UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES
ATLANTA BRANCH OFFICE
UPS SUPPLY CHAIN SOLUTIONS, INC.
and Case 12–CA–144578
INTERNATIONAL BROTHERHOOD OF
TEAMSTERS, LOCAL UNION NO. 769
Marnelly Maldonado, Esq.,
for the General Counsel.
Jonathan L. Sulds, Esq. and
Angela F. Ramson, Esq.,
for the Respondent.
Noah Scott Warman, Esq.,
for the Charging Party.
DECISION
STATEMENT OF THE CASE
DONNA DAWSON, Administrative Law Judge. This case was tried in Miami, Florida, on
August 10 and 11, 2015. The Charging Party, International Brotherhood of Teamsters, Local
Union No. 769 (the Union), filed the charge in this case on January 16, 2015. The General
Counsel issued the complaint on May 28, 2015, against UPS Supply Chain Solutions, Inc.
(Respondent/SCS). The complaint alleges that on January 1, 2015, Respondent unilaterally
implemented and maintained changes to bargaining unit employees’ health benefits without
bargaining to a good-faith impasse with the Union in violation of Section 8(a)(5) and (1) of the
National Labor Relations Act (the Act). Respondent in its answer denied having violated the
Act in any way alleged in the complaint.
On the entire record, including my observation of the demeanor of the witnesses, and
JD(ATL)–23–15
2
after fully considering the briefs filed by the General Counsel and the Union,1 I make the
following
FINDINGS OF FACT
5
I. JURISDICTION
At all times material, Respondent, a subsidiary of United Parcel Service (UPS), has been
a Delaware corporation, with a principal office and place of business in Atlanta, Georgia, and
other places of business located throughout the Unites States, including its facility in Doral, 10
Florida (the facility), where it engages in the business of providing transportation and freight
services. Respondent admits, and I find, that it is an employer engaged in commerce within the
meaning of Section 2(2), (6), and (7) of the Act.
The parties admit, and I also find, that the Union has been a labor organization within the 15
meaning of Section 2(5) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
A. The Union’s Certification and Lack of an Initial Collective-Bargaining Agreement20
On April 29, 2013, the National Labor Relations Board (the Board) certified the Union as
the exclusive collective-bargaining representative of the following unit at its Doral, Florida
facility (the facility):
25
All regular full-time and part-time warehouse operations employees employed in
the following job classifications: warehouse II and III; senior warehouse;
inventory control representatives; inventory control associates II; customer
support representatives I; customer support representatives II; order processing
representatives II and III; customer care representatives III; and administrative 30
assistant II employed at Respondent’s facility located at 3450 NW 115th Avenue
in Doral, Florida; excluding all other employees, guards and supervisors as
defined in the Act.
35

1 On November 2, 2015, I issued an order granting Respondent’s October 16, 2015 motion for leave to file
reply brief. In the interim, on October 20, I issued an Order to Show Cause to the General Counsel to show
why I should not allow the reply brief. The General Counsel responded on October 29. In its motion and
reply brief, Respondent claimed the General Counsel briefed a theory of violation based on prior
unremedied unfair labor practices and not addressed in the trial in this case. The General Counsel contends
that its allegation that Respondent did not remedy unfair labor practices found by Administrative Law
Judge Ira Sandron in a prior case now pending before the Board (discussed further in this decision) was
alleged in and/or flowed from the complaint at issue here. I agree that it does, and that it is a legal issue
appropriately addressed in the parties’ briefs. However, I accepted the reply brief due to some ambiguity
around the purpose of the allegation (background information versus alleged violation). I have considered
all submissions, including the reply brief in making this decision. In doing so, I have provided Respondent
the opportunity to address this legal issue raised in the General Counsel’s brief.
JD(ATL)–23–15
3
SCS has approximately 10,000 employees, of whom about 37–40 are members of the
unit. Respondent and the Union began negotiating towards an initial collective-bargaining
agreement in about May 2013, but to date, have not reached one. They have, however,
continuously engaged in bargaining sessions with some regularity, and have reached tentative
agreements on at least some noneconomic issues. 5
B. Respondent’s History Regarding Health Care Benefits
Prior to the Union’s certification, and thereafter, UPS has provided its Flexible Benefits
Plan (flex plan) to about 70,000 to 80,000 of its employees nationwide, including those 10
employed by SCS.2 Each year, with the assistance of an outside expert consultant, UPS has
reviewed its benefits program against the backdrop of health care benefits offered in the industry.
(Tr. 153).3 Through 2013, Respondent sent out to its employees “an announcement of changes
in health care benefits, called summary of material modifications (SMMs).” SMMs were
typically issued in the September or October prior to the following January when the changes 15
were to be implemented.4 UPS has also issued a summary plan description (SPD) for major
changes. (See e.g., R. Exh. 1). The flex plan is an employer insured plan; the company Aon
Hewitt administers eligibility and enrollment for the plan. Insurers Aetna and United Healthcare
administer UPS’ flex plan benefits on a state-by-state basis, with United Healthcare doing so for
its businesses in the state of Florida. (R. Exh. 1; Tr. 154, 158). 20
In 2013, after the Union’s certification, UPS implemented two changes to its flexible
benefits program: excluding spousal coverage if a spouse had health insurance coverage through
his/her own employer and a smoker’s surcharge. UPS notified its employees, including those in
the unit here, and implemented the new changes on January 1, 2014. Respondent’s actions 25
resulted in issuance of a charge and subsequent complaint, which was heard by Administrative
Law Judge Ira Sandron. He issued a decision, dated November 28, 2014, in which he found that
Respondent violated Section 8(a)(1) of the Act by implementing the 2014 changes to the flexible
benefits plan without providing the Union any notice or an opportunity to bargain. That decision
is now pending before the Board, and in the interim, Respondent has not provided the remedies 30
recommended by Judge Sandron5
C. Proposed 2015 Changes to Health Care Benefits
On September 19, 2014,6 in the midst of the on-going negotiations for an initial 35
collective-bargaining agreement, Erik S. Rodriguez (Rodriguez), outside counsel and chief
negotiating agent for Respondent, notified Eduardo Valero (Valero), the Union’s business agent
and chief negotiator, that Respondent’s flex plan sponsor had recommended plan modifications

2 This includes a variety of different business units, including SCS, within the UPS corporate network.
3 Abbreviations used in this decision: “Tr.” for transcript; “GC Exh.” for General Counsel’s Exhibit; “C.
Exh. for Company’s Exhibit; “Jt. Exh. for Joint Exhibit; “GC Br.” for General Counsel’s Brief; “R Br.” for
Respondent’s Brief; and “RR Br.” for Respondent’s Reply Brief.
4 See factual findings in case 12-CA-113671, JD (ATL)–32–14 at 3; also see e.g., R. Exh. 1.
5 Case 12–CA–113671, JD (ATL)–32–14).
6 All dates hereinafter occurred in 2014, unless otherwise indicated.
JD(ATL)–23–15
4
to take effect on January 1, 2015.7 Rodriguez wrote that “[w]ithout prejudice to our position that
the plan’s modifications are a continuation of the status quo, we are, in the spirit of good faith
and cooperation, prepared to bargain with you over the contemplated 2015 changes.” He made
Respondent’s negotiating team available to bargain on September 25, 27, 28, 30, and/or any day
during the first 2 weeks of October. (GC Exhs. 2, 3.) 5
By letter dated October 8, Rodriguez wrote Valero a follow-up notice setting forth the
following proposed changes to the flex health plan under which all SCS employees (unit and
non-unit) would be covered:
10
1. Premiums The employees' medical premium costs will increase by
approximately one percent. There also will be increases in the cost of their vision and
dental premiums. Employee contributions in Dental Option I will increase
approximately 2% which equates to $0.33 to $1.00 per month depending on their
family coverage tier. The DMO employee contribution will increase $2.25 to $5.25 per15
month depending on the family coverage tier.
2. Health Savings Account The $200 health care spending account seed
previously available to anyone that opened or maintained a Health Savings
Account (HSA) through Optum Bank will only be offered to those who are new20
to the Healthy Savings option or switching from the Traditional PPO option AND
open an HSA through Optum Bank.
3. Health Savings Account (HSA) Annual Contribution The maximum allowable
annual contribution to a HSA for 2015 is $3,350 for individual coverage or25
$6,650·for family coverage. The maximum allowable HSA catch-up contribution
for individuals age 55 and older remains an additional $1,000 per year.
4. CVS Caremark Formulary Changes Beginning January 1, 2015, the Plan will
adopt the standard CVS Caremark formulary, the list of approved medicines30
available under SCS's benefits plan. Drugs determined as excluded from the
formulary will not be covered by the Plan. Preferred and non-preferred drugs will
continue to be paid accordingly. Lower-cost generic alternatives will be available
for many. CVS will communicate directly to those affected and their physicians,
explaining the changes and advising of next steps.35
5. Reasonable and Customary (R&C) Limit Change The R&C limit, the amount
our health plan reimburses for health care services when you use an out-of- network
provider will be set at 175 percent of Medicare.
40
6. Limitation on use of Health Coaches Weight management and nutritional
guidance previously offered, but not significantly utilized, will no longer be
available from Aetna or United Healthcare. Health Coaches will only be available
for disease management.
45

7 Rodriguez, along with Angela Ramson, outside cocounsel for Respondent, and Barbara Jill (B.J.) Dorfman,
UPS’ director of U.S. benefits, testified on Respondent’s behalf. Valero testified for the General Counsel.
JD(ATL)–23–15
5
7. Wellness Incentives Changes Participants will receive a $150 gift card when
both the health assessment and the exercise or Weight Watchers program are
completed. There will no longer be separate incentives for completing each one
individually.
5
8. Critical Illness Insurance During annual enrollment, employees may elect the
critical illness insurance (CII) plan on the Your Benefits Resources (YBR) website.
9. New Hires Medical Option All employees hired on or after January 1, 2015,
except those living in Hawaii, will be eligible for the Healthy Savings medical plan 10
option only. [GC Exh. 4.]
On about October 9, the Union sent information requests to Respondent. Those requests
were not submitted into evidence by either party, but there is no dispute that the Union requested
SPDs and rate information for the 2015 flex plan changes, as well as the employer and employees’ 15
costs and contributions on a weekly and/or monthly basis.
D. Bargaining Sessions
The parties ultimately agreed to meet to negotiate Respondent’s 2015 recommended 20
modifications to the flex health plan on October 12, 17, 20, 21, and 22. Unfortunately, the
parties were unable to reach an agreement regarding the proposed changes after only three
sessions, each of which lasted 2–3 hours. The Union’s bargaining committee included Valero
and two bargaining unit employees, Juan Nunez (Nunez) and Eddie Valdez (Valdez).
Rodriguez, Angela Ramson, Esq. (Rodriguez’ co-counsel), Darren Jones, Esq. (UPS in-house 25
counsel), and Jenny Schaffer, Esq. (UPS in-house counsel) represented Respondent at one or
more sessions. Ramson took notes during the first two sessions, which were submitted into
evidence. However, the notes for the third session, taken by Schaffer, were not. Rodriguez and
Valero were the sole spokespersons for the parties, as well as the only ones present for all three
bargaining sessions. 30
1. First bargaining session on October 12
On October 12, Rodriguez and Ramson met with Valero at Rodriguez’ firm in Miami,
Florida. Ramson took notes on her laptop. Valero, the only Union team member present, took 35
shorter, handwritten notes. (GC Exh. 10; R. Exh. 2.) There is not much dispute over most of the
facts, but where there is conflict, I credit Respondent’s bargaining notes over those of Valero.
According to Ramson, she recorded the meeting almost verbatim on her laptop, indicating with
initials whether it was Rodriguez (ER) or Valero (EV) who was speaking. She credibly testified
that grammatical and not substantive changes were made. Further, Respondent’s notes are more 40
detailed, and more accurately reflect the length of discussion one would expect to have taken
JD(ATL)–23–15
6
place within the timeframes that the parties met. 8 They were also corroborated by Rodriguez’
testimony.
Rodriguez began the meeting by repeating Respondent’s belief that it was not obligated
to bargain over its proposed 2015 healthcare changes because of past practices. He indicated, 5
however, that Respondent wanted to discuss them because of the charges filed over the 2014
changes. (R. Exh. 2, p. 1). 9 He asked the Union to allow Respondent to make the changes and
keep its members in the flex plan, and explained that whenever there is a new bargaining unit,
the unit employees usually stay in the flex plan until a new healthcare plan is negotiated.
Rodriguez assured Valero that Respondent was “not trying to target anyone,” as the plan 10
“extends across thousands of UPS employees across many lines.” (Id.).
Valero made it clear from the onset that the Union wanted to move its employees out of
the flex plan to another plan, or to return to the same flex plan terms in place prior to the 2014
changes. (R. Exh. 2). He admitted, and Respondent’s notes reflect, that he expressed the 15
Union’s desire to bargain the entire contract “not separate bargaining. . . . We do not want
changes and want it to stay the same until we bargain for new insurance. Depending on
negotiations back and forth we are looking to take Union out of the current plan.” (Tr. 76-78; R.
Exh. 2).
20
Rodriguez pointed out the impossibility of the parties agreeing on health insurance for the
initial contract before January 2015, when the 2015 healthcare modifications were to be
implemented). (Id.).
Rodriguez also spent a good amount of time explaining and discussing with Valero the 25
substance of the 2015 changes as set forth in his October 8 letter to Valero, including but not
limited to, the overall 6-percent increase in costs to employees. (GC Exh. 4; R. Exh. 2). There is
no dispute that Valero admitted that the 6-percent increase in overall health benefits premium
was a “good deal,” given that other health plan increases that he had seen were much higher,
from 9–11 percent. But, he also voiced the Union’s main concern that the flex plan changes 30
every year, and that he wanted more of a plan with fixed costs for 3–5 years. He ultimately
promised that he would provide Respondent with a counterproposal for an entirely different
health plan—Team Care under Central States Health and Welfare Fund. According to Valero,
union employees in other of its UPS subsidiaries had been put into Team Care. This transition
for unionized employees at other UPS business units occurred, however, after those companies 35

8 Valero admitted that his notes did not reflect all that was said during the bargaining. In fact, he did not
remember many of the details discussed; he recalled that Rodriguez offered only one reason for not
accepting any of the Union’s proposals, and flat out rejected all other proposals without any explanation. It
is implausible that Respondent did not provide reasons or explanations for rejecting all but one of the
Union’s proposals. This is supported by Respondent’s credited bargaining notes, the length of the
meetings, and Valero’s sometimes inconsistent and evasive responses (discussed further in this decision).
9 Rodriguez testified that the first thing he wanted to do “was make sure I didn’t waive any arguments from
the previous case. So I told them that our position was we weren’t obligated to bargain over these changes
because it’s part of the longstanding past practice status quo, but that we were very much there in good
faith and—and looking forward to try to reach some kind of compromise.” (Tr. 165–166).
JD(ATL)–23–15
7
and the union executed an initial contract.10
Rodriguez advised that a commitment to the 2015 changes would not waive the Union’s
rights regarding any future changes, and they would be able to bargain over any 2016 changes, as
well as the overall initial contract healthcare. 5
During this meeting, Respondent also provided documentation in response to the Union’s
information request referred to above. (R. Exh. 1). He confirmed that other than the 2014
changes and the recommended 2015 changes, the flex plan SPD remained as it was in 2013.
Valero asked for a breakdown of the employer’s contributions, the employees’ contributions, and 10
whether these contributions were biweekly or bimonthly. Rodriguez pointed out that this
information could be ascertained from the documentation, which showed the annual 100 percent
COBRA prices for the flex plan’s 2014 and 2015 medical, dental, and vision benefits; the
employer’s annual contributions for those benefits for 2014 and 2015; and the employee
contribution for those benefits for the 2 years.11 He explained that by dividing the employer’s 15
and employees’ annual contributions by 12, the Union would have the monthly contributions.
(Id.). A review of those documents shows that they do reflect the annual employer and employee
contributions. However, Valero testified that he did not understand Respondent’s calculations,
and wanted Respondent to do the math. He did not, however, make an additional information
request or file a charge regarding any failure on Respondent’s part to produce information. Nor 20
did he reflect in his own notes the need to get additional information from Respondent. In fact,
Valero testified that he did not do so because he orally received all of the information that he
needed. (Tr. 83, GC Exh. 10).
Respondent’s bargaining notes show that Rodriguez asked Valero if the Union would be 25
agreeable if the bargaining unit was put into TeamCare, and Valero replied, “maybe.” During
the break, Respondent’s representatives caucused. On return, Rodriguez expressed Respondent’s
concern that carving out the 30 or so unit employees from the flex plan which covered thousands
of UPS and putting them in another plan would result in “astronomical” premium and
administrative costs for Respondent, and require “a manual piece for claims and there is not a 30
viable [option] available in doing that.” He said that if the Union took the 2013 SPD, in addition
to the 2014 changes, which would remain, and the proposed 2015 modifications, the Union could
shop around for the same benefits, but would not get “anywhere close to the same prices.”
Valero reiterated his main concern was that the flex plan changed every year. Rodriguez
responded that “[w]e are racing against the clock there has to be an open enrollment period so we 35
would like to go through that process with you.” In addition, he later noted that he wished the
parties had reached an initial agreement, but that overall “[h]ealth insurance is a hard thing to
bargain. It’s not going to happen overnight.” (R. Exh. 2). In turn, Valero said that he was
“going to try and submit everything to the insurance to shop around the prices. Then if they have

10 According to witness Barbara Jill (B.J.) Dorfman, UPS’ director, U.S. Benefits, only nonunion employees
at UPS Small Package and Freight subsidiaries are covered by the flex plan. She verified that in the past,
when employees covered by the flex plan became unionized, they negotiate for a different health plan (such
as TeamCare under Central States) through their collective-bargaining agreements. Dorfman manages
UPS’ healthcare group, and assists in developing healthcare strategies, plan designs, and employee
contributions (Tr. 149, 152–155; R. Exh. 2).
11 Here, the Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”) rates reflect the total cost
of the flex plan’s costs for medical, dental, and vision benefits. (R. Exh. 1, pp. 1-2).
JD(ATL)–23–15
8
questions I will send to you and you can give an answer.” He also said that he would “send all
this information. If Aetna or somebody else we can get the same plan and . . . we can get a plan
to avoid changes year by year.” Rodriguez promised to give Valero any relevant information,
claiming that he was “glad we got the process started and this is a good first step.” (Id. at 5-6).12
Valero also asked about the employer paying the full premium for employees, but the parties 5
concluded for the day.
There is no dispute that during bargaining for these 2015 modifications, the parties
continued to bargain (e.g., on October 14 and 15) on some of the noneconomic issues in the
overall initial contract, and reached tentative agreements on at least a few of them. (Tr. 91- 93, 10
95).
2. Second Bargaining session on October 17
On October 17, Rodriguez, Ramson, and Darren Jones met with Valero at Rodriguez’ 15
Doral, Florida firm at about 3:16 p.m. Union team member Eddy Valdez joined about an hour
later. (R. Exh. 3). Rodriguez began by telling Valero that Respondent was trying to work with
him. He reiterated that Respondent did not think it was legally obligated to bargain “based upon
status quo,” and stated that the “changes will go into effect in January 2015. This is a time
sensitive matter and we look forward to hearing from you today.” (R. Exh. 3.) 20
According to Respondent’s bargaining notes and Valero’s testimony, Valero stated that
the Union viewed the flex plan as a “management plan,” that no other bargaining units in the
country were under. He repeated the Union’s position that it wanted to either negotiate the entire
health package, with a 3–5 year fixed plan, or revert back to the 2013 plan until the parties 25
negotiated an initial contract. Rodriguez reminded Valero that they were only negotiating the
proposed 2015 changes, and that Respondent would not accept returning to the 2013 plan, which
no longer existed. (R. Exh. 3).
Valero presented Respondent with UPS’ Team Care plan rates over 3 years: $363.82 30
currently; not to exceed $421.12 on August 1, 2016; and not to exceed $461.92 on August 1,
2017. Valero characterizes the TeamCare plan as being 3 years fixed with no changes; however,
it increases up to a fixed amount each year. Rodriguez responded that the Central States required
the parties to have a ratified contract in place. He explained that although Respondent would
consider the proposal, 35
if we were going to agree to them the changes under the flex plan would be moot.
What we are focusing on was the changes to 2015 to shop if there was a cheaper
way to do it. What i[t] sounds like you shopped for a new plan I think you are
right there is no bargaining unit besides SCS in the Flex Plan but we think that the 40

12
I credit Rodriguez’ testimony that Valero said that he would shop around for a different plan, as it is
supported by Respondent’s bargaining notes. Although Valero only recalled promising to submit a
counteroffer regarding TeamCare insurance, he initially admitted telling Rodriguez that he would “shop”
around. (Tr. 63, 68; R. Exh. 2).
JD(ATL)–23–15
9
bargaining unit should be in [their] own plan. Right now we are only looking for
2015 changes.
(Id.). Valero accused Respondent of not previously explaining that the flex plan changes every
year, and said that he would “consider, but not saying I will not agree, that the plan would stay as 5
status quo since the day of the election and take out the smokers program for $150 and put back
working spouse.”13 At that point, Valero unequivocally stated that the Union was rejecting
Respondent’s plan changes, and did not want any increases in the plan unless the employer paid
for all of them. He also advised that “[l]et me put on the record I am not interested in staying in
the Flex benefits plan. No interest at all.” (Id.). 10
Rodriguez said that “[w]e are not going to jump to another plan before January 2015.
Economically we can’t jump to that because practically we don’t think it will work. We will
discuss if the employer [eats] the costs.” Valero questioned why Respondent had not made
increases in unit employees’ wages like it did with health care, to which Rodriguez explained 15
that pay increases were not an automatic or recurring event. Rodriguez said that he hoped the
parties could reach an agreement, but admitted he could not guarantee the costs would remain the
same. (Id.)
Before taking a break, the parties clarified the two proposals for Respondent to consider: 20
putting unit employees into the TeamCare plan or keeping them in the precertification plan and
trying to reach a tentative agreement in 2015. (Id.). After the hour break, Rodriguez explained
again that the unit employees were not eligible to be moved into Central States’ TeamCare plan
at the time because the parties had not executed a collective-bargaining agreement. He also told
Valero that Respondent rejected TeamCare in favor of the flex plan because the flex plan was 25
easier to administer, and saved money by spreading the risk among so many more employees. In
addition, Respondent rejected returning to the 2013 plan because it would also mean creating a
similar, separate plan with huge costs for a few unit employees. Rodriguez recommended the
“best thing to do is to let the changes happen. Let’s get a deal on healthcare. We can start with
healthcare first when we discuss economics [during the initial contract talks].” (Id.) 30
Valero voiced his concern that putting the flex plan modifications on the table and
suggesting they make the changes “without negotiations” was “not bargaining” to him. He
complained that the employer wanted more changes, but had not increased wages in 2 years. He
did not understand why it would be unreasonable or a problem to carve out the 30–40 unit 35
employees as the Union had done with a similar number of employees at the airport (air cargo).
Rodriguez responded that Respondent did not take a position that putting the unit employees into
another plan was unreasonable and that “we may very well end up where you want.” (Id.)14

13
Based on the evidence, the hearing on the 2014 changes, and Valero’s subsequent statement that “you guys
have made changes year to year in healthcare plan,” Valero and the Union knew there might be changes in
the flex plan each year.
14
Throughout bargaining, Rodriguez emphasized that Respondent was there to negotiate the 2015 plan
changes. (Id.) Although Rodriguez had repeated that Respondent believed they did not have to bargain,
Respondent never, as Valero described, said that they refused or would not bargain. (R. Exh. 3.)
JD(ATL)–23–15
10
In this meeting, Valero also proposed the following: trade wage increases for the flex
plan changes; prepare a “side letter” to get to healthcare in 2015, and continue to negotiate while
“[reserving] the right” to reject the changes; and place unit employees in another plan such as
Aetna that might not change every year. After a short break (17 minutes), Valero went into
Respondent’s conference room, and proposed that Respondent reduce the amount of the unit 5
employees’ out-of-pocket payments for health care. Rodriguez related back Respondent’s
responses to the three proposals. Regarding wage increases, he stated that wages “were a
significant economic consideration,” and that “[e]conomics at the 116th street location [Doral
facility] is not pretty and we anticipate that wages and health insurance [is] going to be more
than it is now and we can’t agree now.” He explained that they also considered Aetna and 10
Cigna, but discovered that they also change every year. Finally, he indicated that lowering the
unit employees’ contributions would require putting them into a separate structure because the
flex plan did not allow for them to have different contributions. Rodriguez summarized that any
change to reimbursements, transition to another plan, or going back to the precertification
benefits would require removing the unit employees from the flex plan and putting them into a 15
new one. (Id.). Valero testified that he did not recall Rodriguez offering these explanations at
the bargaining table, but I believe that Rodriguez gave reasons for rejecting the proposals as his
testimony is supported by Respondent’s bargaining notes for the first two sessions.
Valero expressed hope that the parties would reach an agreement, but advised that if 20
Respondent implemented changes, the Union would have to file a charge. To that, Rodriguez
asked if they were at a “dead end,” and Valero responded, “[n]ot on my part.” Rodriguez
promised to check further into having the employer pay a portion of the unit employees’
healthcare premium contributions, and Valero said that he would ask Central States to be
available by telephone at the next session. Valero also promised to send Rodriguez a copy of the 25
TeamCare plan later that evening, which he did. (Tr. 46.)
3. Third bargaining session on October 20
On October 20, the parties’ representatives met at the same facility for their third 30
scheduled bargaining session. Rodriguez and Jenny Schaffer (and possibly Jones) were present
for Respondent. Schaffer took notes, but those notes were not submitted. Valero and Juan
Nunez were present for the Union.15 According to Rodriguez, he laid out for the Union the
reasons why Respondent could not accept moving unit employees into a different plan. They
included the huge amount ($100,000 to $150,000) that the administrator, Aon, would charge to 35
set up and administer a separate plan or contribution structure, the challenges and risks of having
to manually handle claims, and other associated costs of doing so. I credit this testimony for the
reasons set forth below.
Valero requested that the employer pay about half of the unit employees’ portion of 40
health insurance. According to Valero’s notes, Respondent was not willing to pay additional
costs for health insurance. (GC Exh. 12). However, Rodriguez testified that he also reiterated
Respondent’s economic concerns about the Doral facility, and how Respondent was reluctant to

15
Valero recalled that Tom O’Malley was also present, but his notes did not reflect his presence. Rodriguez
did not recall O’Malley’s presence, only that of Schaffer and possibly Darren Jones. Nevertheless, only
Rodriguez and Valero spoke at this and the first two sessions.
JD(ATL)–23–15
11
commit to paying all or a greater portion of healthcare premiums at that time. He previously
testified that such increases would have been equivalent to about a 10 percent wage increase, and
recalled explaining this to Valero at some point during negotiations. (Tr. 183-185). Rodriguez
did not, however, make any counteroffers on behalf of Respondent, and instead, asked the Union
to allow the 2015 health care changes to take place.5
Valero became frustrated and pointed out that the Union had put six proposals on the
table, but that Respondent had rejected them all without putting forth any counterproposals. He
admitted that he told Respondent’s team that if Respondent was going to maintain its only
position to move forward with the proposed 2015 flex plan changes, they might as well just 10
cancel the next bargaining session scheduled for October 21. Rodriguez agreed, and the parties
canceled the next session.
In this last session, Valero also stated his belief that by its actions, Respondent had not
bargained in good faith, and reiterated his intent to file a charge with the Board if Respondent 15
went forward with the 2015 flex plan changes. (GC Exh. 12).
E. Post Bargaining Correspondence
By letter to Valero dated October 22 , Rodriguez confirmed his understanding of Valero’s 20
statement on October 20 that they had reached a deadlock, and his (Rodriguez’) agreement, that
the parties had reached an impasse over the proposed 2015 modifications to the flexible benefits
plan. He reminded him that although the Company believed that it had no obligation to bargain
over these changes “(because the modifications were a part of a longstanding past practice), the
Company was willing and available to bargain with Local 769 over the modifications.” 25
Rodriguez went on to summarize his recollection of each of the three bargaining sessions. (GC
Exh. 6.) He stated that if Valero “[disagreed] with any of the facts stated in this letter, please let
us know no later than Monday, October 27, 2014. Otherwise, we will conclude that the facts
stated in this letter are true and correct.” Rodriguez ended the letter by advising that since the
parties were at impasse over the 2015 modifications, Respondent would begin open season on 30
October 27, and that prior to enrollment, it would provide Valero with the enrollment materials.
(Id.).
On the same day, Valero emailed Rodriguez that due to the weekend and travel, he
needed more time to respond to the October 22 letter, and that he would “probably respond” no 35
later than the close of business on October 29, “or before if possible.” (GC Exh. 7.)
Rodriguez replied, via email, on October 23, that he just wanted Valero to let him know
by October 24 what, if anything, he disagreed with in his October 22 summary of events. He
stated that there was no dispute that they had reached an impasse at the bargaining table. 40
Further, he said that Valero knew that “time is of essence because the open enrollment must take
place soon. Consequently, we expect to proceed as stated in the letter.” (GC Exh. 8.)
By an October 28 email response to Rodriguez’ October 22 letter, Valero wrote that
“[t]he Union is in disagreement as to your position that the company has no obligation to 45
negotiate the health insurance. I can agree we are at an impasse in regards to the health
JD(ATL)–23–15
12
insurance.” (GC Exh. 9.) He set forth some of the proposals that the Union made during
bargaining, and stated that Respondent had rejected each one. The Union’s position was that
“[o]n account of your actions through these negotiations in regards to the health insurance there
is no good faith on your part to negotiate. Basically, regardless of any proposal on the table in
regard to the health insurance the answer from the employer will be no.” Valero reiterated his 5
promise that if Respondent implemented any of “these non-negotiated changes towards health
insurance,” he would file charges with the Board. (Id.). Otherwise, Valero did not dispute or
disagree with Rodriguez’ rendition of the bargaining table discussions, nor did he deny that
Respondent provided the reasons for rejecting the Union’s proposals during negotiating sessions.
10
F. Respondent Implements Proposed Healthcare Changes
In October 2014, Respondent sent its employees, including the unit, an annual enrollment
notice regarding the flexible benefits plan. The notice announced its employees’ “annual
opportunity to make changes to [their] coverage under The Flexible Benefits Plan,” and enclosed 15
the summary of material modifications (SMM) “outlining changes to the Plan, effective January
1, 2015.” The active annual enrollment period for the 2015 benefits ran from October 27-
November 7, 2014. The notice also warned that if employees failed to enroll in benefits within
the specified period, their spouses would not be eligible for benefits and employees would be
deemed tobacco users and charged the tobacco premium increase. (GC Exh. 13.) 20
As of about January 1, 2015, Respondent implemented (and has maintained) the 2015
changes to unit employees’ health care benefits as proposed and described above.
G. Credibility1625
The only factual dispute here is whether Respondent, during the three bargaining
sessions, explained why it rejected each of the Union’s proposals. There is no dispute that the
Union offered several proposals and that Respondent rejected them. Rodriguez testified that he
listened to, sought advice from Dorfman and others at UPS, considered, responded to, and 30
provided an explanation for rejecting each of the Union’s proposals. Valero claimed that other
than telling him the parties were not eligible for TeamCare, Respondent rejected the Union’s
proposals without explanation.
As previously stated, where Rodriguez and Valero differ regarding the substance of the 35
bargaining sessions, I have credited Respondent’s version of events based on Respondent’s
detailed bargaining notes. Valero testified that Respondent only provided explanations in
Rodriguez’ October 22 letter, and not at the bargaining table on October 12, 17, and 20. This is
doubtful, however, since credited bargaining notes show otherwise. And contrary to his
testimony, Valero eventually admitted that Rodriguez told him that the Aetna and Cigna plans 40
changed every year as did the flex plan. (Tr. 84, 113). Further, Valero did not dispute (in his

16
I have made specific credibility determinations based upon a review of the entire record and all exhibits in
this case. I have also utilized witness demeanor and inherent probability of the testimony to assess
credibility. Testimony contrary to my findings has been discredited in some instances because it was in
conflict with credited testimony or documents or because it was inherently incredible or unworthy of belief.
JD(ATL)–23–15
13
October 28 response) Rodriguez’ October 22 summary of the negotiating session discussions,
which included Respondent’s reasons for rejecting each of the Union’s proposals.
I do not expect the parties to recall everything discussed several months before; however,
I find it unbelievable that Valero did not recall so much of what was said. In addition, he 5
sometimes failed to answer the questions asked, or appeared to evade doing so. For example, at
first he did not recall any exchange about COBRA rates and payments by the Company and
employees under the flex plan documents provided by Respondent. But on further questioning,
he admitted and recounted details of such discussion. (Tr. 63–65; R. Exh. 1). Further, Valero’s
testimony that Rodriguez never mentioned the huge administrative costs associated with moving 10
unit employees into TeamCare or another plan is not supported by Dorfman’s testimony.
Dorfman confirmed that Respondent’s bargaining team consulted with her during the bargaining
sessions at issue here. She testified that she advised them that either putting unit employees into
a new plan or changing their contribution payments would require UPS’ eligibility and
enrollment healthcare plan administrator, AON, to set up a new structure at a cost upwards of 15
$100,000 to $120,000 or more. According to Dorfman, this did not include similar costs for the
benefits administrator (insurance company) to set up a new structure or contribution plan for unit
employees. (Tr. 156–157; 225–228). Valero even recalled Rodriguez admitting that he was “not
an expert in the plan,” and having to “step out, make calls and come back.” (Tr. 59.) It is
unbelievable that Rodriguez would have asked for and received this information from Dorfman, 20
and returned to bargaining without sharing any of it with the Union.
Valero testified that Rodriguez could have “contacted Central States and asked them for a
participation agreement because we don’t have a CBA in place.” When asked by me if he
mentioned this alternative to Central States’ eligibility rule during bargaining, he indicated that 25
he had. When asked by Respondent’s counsel, he admitted that he had not. Next, Valero did not
recall Rodriguez telling him that the economic situation at the Doral facility “wasn’t pretty.” He
then tried to explain that he was not denying that Rodriguez might have raised economics as an
issue with any of the Union’s proposals. Rather, he did not believe that the facility was having
financial difficulties since Respondent had returned some previously laid-off employees to work. 30
(Tr. 118–120.) Nevertheless, Valero knew there had been layoffs at the Doral facility due to a
decline in work. Therefore, I credit Rodriguez’ recollection that Respondent considered all of
the Union’s proposals, and communicated reasons during the bargaining sessions for not
accepting them.
35
III. ANALYSIS AND CONCLUSIONS
The General Counsel contends that Respondent approached bargaining predetermined to
implement its proposed 2015 modifications to the flex plan, without making an honest, good-
faith effort to reach agreement on those changes. In other words, the General Counsel argues 40
that Respondent “went through the motions of bargaining,” and that while the parties were at
impasse on October 20, impasse was reached in bad faith on Respondent’s part. The General
Counsel believes that its position is evidenced by Respondent’s past unremedied unfair labor
practices involving its 2014 unilateral changes as set forth in Judge Sandron’s decision;
Respondent’s belief that it has no obligation to bargain over its longstanding practice of 45
healthcare changes; Respondent’s rejection of the Union’s proposals during bargaining over the
2015 changes; and Respondent’s failure to make any counterproposals. (GC. Br., p. 19.) In its
JD(ATL)–23–15
14
defense, Respondent contends that it made a genuine effort to bargain in good faith by giving
adequate notice; meeting with the Union; seriously considering and responding to all of the
Union’s proposals; agreeing with the Union that the parties had reached impasse; and overall
bargaining with the Union in good faith.
5
A. Legal Standards
1. Unilateral change exception
Generally, an employer violates Section 8(a)(5) of the Act by changing a mandatory term 10
or condition of employment without first giving the representatives of its employees notice of the
proposed change and an opportunity to bargain to a valid impasse. NLRB v. Katz, 369 U.S. 736
(1962).17 It is also a general rule that when parties negotiate towards a collective-bargaining
agreement, the employer must not implement changes, or even discontinue an established
practice, until an impasse has been reached on the entire agreement. In other words, the employer 15
is typically precluded from implementing proposals on certain subjects carved out of the overall
contract such as health and welfare programs. See Bottom Line Enterprises, 302 NLRB 373, 374
(1991), enfd. 15 F.3d 1087 (9th Cir. 1994).18
In certain cases involving a first contract, however, the Board has permitted an 20
employer’s implementation of such a proposed change in the absence of an overall impasse on
the entire agreement if the proposal concerns a discrete annually recurring event that
coincidentally occurs during contract negotiations. Stone Container, 313 NLRB 336, 336
(1993); St. Mary's Hospital of Blue Springs, 346 NLRB 776, 776, fn. 2 (2006). In Stone
Container, the Board found lawful the employer’s notice to the union, during first contract 25
negotiations, that it would be discontinuing an annual wage increase due to economic conditions.
In that case, the Board determined that the notice allowed enough time to bargain, the union
made no counterproposal, and the union failed to raise the matter at issue during future contract
negotiations. Since Stone Container, the Board has extended its principles where proposed
changes involve healthcare benefits, terms, premiums, and overall coverage. St. Mary's Hospital 30
of Blue Springs, above; Saint-Gobain Abrasives, 343 NLRB 542 (2004); Brannan Sand &
Gravel, 314 NLRB 282 (1994) (found no duty to refrain from implementing proposed healthcare
changes, similar to annual wage increases in Stone Container, until impasse reached on overall
contract negotiations).
35
Most recently, the Board rejected the administrative law judge’s “fait accompli” finding,
and affirmed its application of Stone Container and Brannan Sand “as the governing law” where
parties are engaged in first contract negotiations, and there is evidence of the employer’s “past
practice of annually reviewing and modifying its healthcare and wellness program.” Sutter

17
It is undisputed, of course, that health insurance benefits such as those at issue in this case, constitute a
mandatory term of employment. Caterpillar, Inc., 355 NLRB 521, 522 (2010) (changes in drug
prescription program).
18
The two main exceptions to this rule are that the union engaged in delay tactics or that the employer had
economic exigencies that compelled prompt action. See Bottom Line Enterprises, above at 374;
Pleasantview Nursing Home, 335 NLRB 961, 962 (2001), revd. in part on other grounds 351 F.3d 747 (6th
Cir. 2003). Respondent in this case has not claimed either of these exceptions.
JD(ATL)–23–15
15
Health Central Valley Region, 362 NLRB No. 199, slip op. at 3 (2015). The Board pointed out
that current Board law established a unilateral change as a fait accompli “when the
announcement or notification is presented as a final decision or the union was not afforded an
opportunity to bargain.” Id., citing Brannan & Gravel at 282 (fait accompli where employer
announced healthcare changes to employees, and told union negotiations would be “fruitless” 5
because it would not consider anything else) and Pontiac Osteopathic Hospital, 336 NLRB
1021, 1023–1024 (2001) (fait accompli where employer announced paid time-off policy as a
final decision, ignoring union’s bargaining request). There is no evidence of fait accompli in this
case, as Respondent did not announce its changes or implement them before giving notice and an
opportunity to bargain. 10
2. Impasse and good-faith bargaining
In Taft Broadcasting Co., 163 NLRB 475 (1967), aff'd, 395 F.2d 633 (D.C. Cir. 1968),
the Board established that impasse occurs “after good-faith negotiations have exhausted the 15
prospects of concluding an agreement.” The Board has also defined impasse as the point in time
during negotiations when the parties are warranted in assuming that further bargaining would be
futile and where both parties believe that they are “at the end of their rope.” A.M.F. Bowling
Co., 314 NLRB 969 (1994), enf. denied 63 F.3d 1293 (4th Cir. 1995). In determining when
impasse in bargaining existed, the Board considered the following factors: the bargaining 20
history, the good faith of the parties in negotiations, the length of negotiations, the importance of
the issue or issues to which there is disagreement, and the contemporaneous understanding of the
parties as to the state of negotiations. Id. at 478.
As the General Counsel points out, “a lawful impasse cannot be reached in the presence 25
of unremedied unfair labor practices.” White Oak Coal, 295 NLRB 567, 568 (1989). Further, an
employer that has actually committed unfair labor practices cannot “parlay an impasse resulting
from its own misconduct into a license to make unilateral changes.” Wayne's Dairy, 223 NLRB
260, 265 (1976).
30
But, the Board has since held that only “serious unfair labor practices,” committed before
or during negotiations “will taint the asserted impasse,” and preclude unilateral changes. In Re
Dynatron/Bondo Corp., 333 NLRB 750, 752 (2001), citing Alwin Mfg. Co., 326 NLRB 646, 688
(1998), enfd. 192 F.3d 133 (D.C. Cir. 1999). In Alwin Mfg., the Court pointed out two ways in
which an unremedied unfair labor practice can contribute to inability to reach agreement. “First, 35
an unfair labor practice can increase friction at the bargaining table. Second, by changing the
status quo, a unilateral change may move the baseline for negotiations and alter the parties’
expectations about what they can achieve, making it harder for the parties to come to an
agreement.” Alwin Mfg. at 688. The Board in Dynatron/Bondo Corp. determined that the
central question was “whether the Respondent’s unlawful conduct detrimentally affected the 40
negotiations over a new collective-bargaining agreement and contributed to the deadlock.”
Dynatron/Bondo Corp., above at 752.
Although the parties in this case disagree as to whether Respondent bargained to a good
faith impasse, the Board has not specifically set forth requirements of the bargaining to impasse 45
obligation in situations governed by Stone Container. Rather, since Stone Container, the Board
JD(ATL)–23–15
16
has found it unnecessary to decide, or otherwise did not reach, the question of whether an
employer must bargain to agreement or valid impasse over the discrete, recurring event at issue
before acting unilaterally. See, e.g., Brannan Sand & Gravel, above; St. Mary’s Hospital, above
at 776 fn. 4; Saint-Gobain Abrasives, above at 542 fn. 3; Sutter Health, above at 3. In Saint-
Gobain Abrasives, Inc., above at 542 fn. 3, the Board noted Member Walsh’s view that, 5
“impasse in bargaining [as] a prerequisite to lawful unilateral implementation of a bargaining
proposal” existed in cases governed by Stone Container, but did not rule on the matter. So we
look to Board cases to discern what factors the Board considers in determining whether an
employer has given adequate notice and meaningful opportunity to bargain before implementing
a discrete recurring event during initial contract negotiations.10
In St. Mary’s Hospital, after bargaining towards a first contract for several months,
respondent notified the union on November 4, 2003 of its recommended changes to its parent
company’s self-funded health care plan, to become effective on January 1 of the following year.
The parent company annually evaluated and determined the “plan design” for its fund, including 15
changes to design, premiums, copays, and/or deductibles in about November of each year, to
become effective in January of the next year. Between November and December 31 of each
year, respondent opened enrollment to all employees. The union rejected the recommended
changes, as well as respondent’s alternative proposal to provide the union with funds to purchase
its own health insurance for its members. When respondent advised that it would move forward 20
with its plan changes, the union offered to agree to the new plan provider lists, but would only
accept the plan’s current rate levels, without any modifications on January 1. The employer
rejected the union’s counter offer, and implemented its plan on January 1. St. Mary’s Hospital,
above at 779–781. The Board upheld the judge’s finding that respondent gave the union timely
notice and an opportunity to bargain over the changes between November 4 and January 1. In 25
doing so, the Board considered several factors in the case: respondent’s changes were consistent
with past practices which occurred before employees were represented by the union; the parties
were still negotiating their first contract, but had not reached agreement on health care “by the
time the changes at issue would normally have been implemented;” employees would have faced
potential disruption in health care coverage had respondent not made changes by January 1; and 30
respondent remained willing to bargain after implementation. Id. at 776. Further, the Board
decided that the parties, who had agreed that “time was of the essence due to the January 1, 2003
deadline, had exhausted all possibilities of reaching agreement over the healthcare issue before
the deadline.” Therefore, the Board did not “reach the issue of whether the Respondent was
required to negotiate to impasse before implementation, because it is unnecessary to the 35
disposition of this case.” Id. at fn. 4, citing Saint-Gobain Abrasives, 343 NLRB at fn. 3.
Citing Stone Container, 313 NLRB 336 (1993), the Board in Saint-Gobain Abrasives agreed with the
administrative law judge that respondent did not violate Section 8(a)(5) and (1) by implementing an interim
health insurance program in November 2002. It also adopted the judge’s ultimate finding that the parties 40
were at impasse on November 15, 2002, when the Respondent announced its intention to implement
changes to its health insurance program. The Board recognized respondent’s annual process of reviewing
and adjusting its health insurance plans, and therefore found that respondent was not obligated to refrain
from implementing its changes until an impasse had been reached on the collective-bargaining agreement
as a whole. In doing so, the Board found it was “unnecessary to the disposition of the case,” to decide 45
whether or not respondent was required to negotiate to impasse before implementation. In that case, the
union essentially rejected the employer’s interim healthcare insurance plans, and instead was only willing
to propose and bargain on healthcare and other terms of employment as a part of an agreement for a
JD(ATL)–23–15
17
multiyear contract. Saint-Gobain Abrasives, above at 555.
In The Neighborhood House Assn., 437 NLRB 553, 554–555 (2006), the employer gave the union notice of
its plan to implement a 2.2 percent COLA increase only if the union agreed to end the issue for the year.
The union would not agree to such, and the employer decided not to go forward with the increase. The 5
Board determined that respondent bargained in good faith since it did not refuse to continue to bargain over
the COLA issue during initial contract negotiations; and in fact, indicated that it would withhold the
increase, but continue to bargain over the amount of the increase during contract negotiations. Id. at 556.
In Sutter Health, the Board decided that respondent timely notified the union about proposed changes in the 10
latter part of September, immediately after it had finalized the details of the changes and sufficiently
bargained with the union. The Board took into account respondent’s offer to delay the enrollment period to
allow for additional bargaining time, as well as respondent’s offer to set aside separate negotiating sessions
to discuss the proposed changes. The Board also considered respondent’s notification to unit employees
that it would not implement 2013 healthcare changes until it gave the union a full opportunity to bargain. 15
The Board emphasized that respondent sufficiently informed the union of the details of its proposed
changes 6 weeks before the planned commencement of enrollment and over 3 months prior to
implementation. Moreover, it was significant that respondent made it clear that it would continue to
bargain over healthcare and wellness programs and an initial contract.
20
Although the Board has established the exception for making unilateral changes as set
forth in Stone Container, it has not relieved either party of its duty to bargain in good faith on the
recurring event at issue. In addition, the Board considers whether or not the parties reached
impasse prior to the deadline for the change to take place.
25
B. Respondent Did Not Violate the Act When It Implemented Its Healthcare Changes
1. Respondent provided appropriate notice and an opportunity to bargain
The parties here were in the midst of initial contract negotiations when Respondent 30
notified the Union that its plan sponsor had recommended modifications to the flex plan to take
effect in January 2015. The parties agree that Respondent had a longstanding practice of
annually reviewing and making changes to its health care plan. They also agree that Respondent
could implement such changes, absent an overall agreement, provided it gave the Union
adequate notice and an opportunity to bargain towards an interim agreement on 2015 flex plan 35
provisions.19 Therefore, I find that the Stone Container is applicable here.
Based on Sutter Health and other cases discussed above, I find that Respondent gave the
Union sufficient notice of its proposed flex plan changes. Respondent notified the Union of the
changes on September 19, 2014, indicating availability to begin negotiations as early as 40
September 25, 26, 27, 28, or 30. (GC Exh. 2). On October 8, 2014, Respondent gave the Union
written details of its recommended flex plan modifications which would take effect on January 1,
2015. (GC Exh. 4). The parties ultimately agreed on bargaining sessions for October 12, 17, 20,
21, and 22. Thus, Respondent gave notice three months prior to implementation, and provided
the opportunity to bargain, beginning on October 12, approximately 2 months prior to the 45

19
Respondent ultimately took the position in this case that it had an obligation to bargain with the Union
“without prejudice to it[s] position in the 12–CA–13671 [case] that a unilateral change made pursuant to a
long-standing practice constitutes a continuation of the status quo and is not a violation of the Act.” (R.
Br., fn. 13, citing Courier-Journal, 342 NLRB 1093 (2004).
JD(ATL)–23–15
18
planned implementation. This notice timeframe was similar to, and greater in some cases, than
that given in some of the Board cases cited above. See e.g., St. Mary’s Hospital, above
(proposed changes implemented within 2 months of notice to union) and Sutter Health, above
(notice to union within 6 weeks of planned enrollment and 3 months of planned implementation).
Moreover, it was Respondent’s past practice to send to all of its employees an announcement of 5
changes in its healthcare benefits, or summary of material modifications (SMMs), in September
or October of each year for the changes to be implemented the following January. There is no
evidence, as the General Counsel implies in its brief, that Respondent could or should have
notified the Union and initiated bargaining earlier than it did on September 19.
10
Next, Respondent met with the Union on October 12, 17, and 20, presented its plan in
detail and listened to all of the Union’s proposals. The General Counsel did not present any
evidence that Respondent’s bargaining representatives did not actually discuss and consider
among themselves each of the Union’s proposals. Rather, the evidence shows that Respondent’s
bargaining representatives caucused an hour or more during each negotiation session, and 15
returned to the table with information and explanations for why it would not accept the Union’s
recommendations. I have discredited Valero’s testimony that Rodriguez provided virtually no
explanations for not accepting any of the Union’s proposals, and found it unbelievable that
Respondent did not do so. If it did not do so, there is no evidence that the Union representatives
sought Respondent’s reasons for rejecting the proposals. Respondent in this case even provided 20
the Union with responses to its information requests. Therefore, I find that Respondent provided
the requisite notice and opportunity to bargain.
2. Respondent did not fail to bargain in good faith
25
The General Counsel first argues that Respondent’s failure to remedy past unfair labor
practices in connection with its 2014 flex plan changes, pursuant to Judge Sandron’s decision,
precludes a lawful impasse. It is established Board law that an administrative law judge decision
that is pending before the Board on exceptions is not binding authority and should not be cited as
such. See Healthbridge Management, LLC, 362 NLRB No. 33, slip op. at 1 fn. 3, citing St. 30
Vincent Medical Center, 338 NLRB 888 (2003). Therefore, Judge Sandron’s decision and
recommended remedies are not binding in this case.
Notwithstanding that pending decision, I find that if Respondent did violate the Act by
unilaterally implementing the 2014 changes to the flex plan, such violation was not serious 35
enough nor did it taint the bargaining process such that it would preclude lawful impasse. See
Alwin Mfg., above. The General Counsel mostly relies on Dynatron/Bondo Corp., above, to
support its position. In that case, the parties had been bargaining on an initial contract for about 3
years when respondent declared an impasse. The Board applied Alwin Mfg., above, and
concluded that in light of “ample evidence that the Respondent’s conduct made it harder for the 40
parties to come to an agreement,” respondent “could not, and did not, reach a good-faith
impasse.” Those rather extreme unremedied unfair labor practices included respondent’s refusal
to bargain after the union’s certification in June 1991; respondent’s failure to meet with the
union until July 1993; numerous unilateral changes to terms of employment, including but not
limited to, amending the smoking policy to begin the day after bargaining; and respondent’s 45
continued discrimination against employees who supported the union. They were affirmed by
JD(ATL)–23–15
19
the Board, and some, if not all, were enforced by the Eleventh Circuit Court of Appeals. Further,
respondent continued to implement additional unilateral changes such as increasing employees’
health care contributions. Dynatron/Bondo Corp. at 752–753. Therefore, the Board found that
respondent was not “entitled to implement its final contract proposals.” Id. Unlike
Dynatron/Bondo Corp., there is no evidence in this case that Respondent violated the Act on 5
numerous occasions, or that Respondent defied numerous Board and Court orders and continued
to present and make unilateral changes in wages, health coverage, and other terms of
employment without notice and bargaining opportunity.20 Respondent opted not to remedy
Judge Sandron’s recommended findings regarding its 2014 health plan changes, and preserved
its defense in that case pending before the Board. Although Respondent prefaced bargaining 10
with its belief that it did not have a duty to bargain due to past practices, Respondent also
advised that it was ready and willing to discuss and bargain over the 2015 proposed changes.
Moreover, I find that Respondent engaged in bargaining with the Union, and did not shut down
bargaining over healthcare after January 1.
15
Further, the evidence does not show that failure to comply with Judge Sandron’s
recommended order interfered with the parties reaching an agreement. One of the Union’s
proposals was to return the flex plan to what it was in 2013, thereby removing the smoker’s
penalty and spousal limitation changes implemented in 2014. And, at one point, Valero
indicated that the Union would not agree to any new changes until Respondent did so. However, 20
Valero continued to present additional proposals that did not involve returning to the flex plan as
it was in 2013 (e.g., moving unit employees to a new plan or having Respondent pay all or half
of the unit employees’ 2015 contributions). The main point of contention appears to have been
the flex plan itself, which the Union viewed as a management plan versus the TeamCare plan
which included unionized employees from UPS’s other companies who had previously reached 25
collective-bargaining agreements. Respondent wanted to implement the 2015 health care
changes to the flex plan, which it believed was the best plan, with better benefits at lower costs
for both the employer and employees. I am not making a determination as to whether that was
the case or not, but the record does not reflect that the Union challenged those assertions during
bargaining. Additionally, based on the Union’s admission that it primarily wanted its SCS 30
members out of the flex plan, there is no evidence that remedying the 2014 unilateral changes
would have increased the parties’ chances of reaching agreement on the 2015 changes. Nor is
there evidence that the 2014 unilateral change moved the baseline for negotiations such that the
parties’ expectations were detrimentally altered. The 2014 modifications required that spouses
utilize their own employers’ health insurance plans and $150 smokers’ penalty, while the 2015 35
proposed flex plan involved an overall 6-percent increase in costs to the employees. I find that
Respondent’s implementation of its 2015 changes, even in the face of its pending Board case
over its 2014 changes, is not enough to find that Respondent did not bargain in good faith such
as to preclude impasse.
40

20
The General Counsel, in its statement of facts (but not in its brief), mentions that the Board found
Respondent SCS violated the Act in 2009 in connection with its efforts to oppose union organizing in one
of its Miami, FL facilities. UPS Supply Chain Solutions, Inc., 357 NLRB No. 106, slip op. (2011). There
was no evidence, however, that Respondent failed to remedy those actions. Despite this history, I still find
that Respondent did not act in bad faith. (GC Br. at 2).
JD(ATL)–23–15
20
Moreover, while Dynatron/Bondo involved parties’ attempts (or lack thereof) to reach an
initial agreement, it is inapposite to the case at hand because the parties were negotiating towards
an overall agreement, and not a discrete, recurring event. Thus, the circumstances were not
similar to those here or in Stone Container and its progeny.
5
Next, the General Counsel argues that Respondent’s failure to bargain in good faith is
evidenced by its rejection of the Union’s proposals, refusal to explain why it rejected proposals,
and failure to present even one counteroffer. The General Counsel contends that these attempts
by Respondent’s to circumvent its bargaining obligation caused the Union to abandon further
negotiations after October 20. I disagree. 10
I reject the General Counsel’s argument that Respondent engaged in bad faith by
preserving its position that it did not have to bargain on flex plan changes that were a
continuation of the status quo. Nor do I find that articulation of its belief in this case was at odds
with its assertion that it was present, prepared, and willing to bargain “in the spirit of good faith 15
and cooperation.” Despite its belief and pending exceptions before the Board, Respondent
bargained with the Union on three occasions during which it presented its position, listened to
the Union, and responded to the Union’s proposals. Respondent even expressed its willingness
to continue bargaining over healthcare after January 1, and acknowledged that a new plan such
as TeamCare was not out of the question for healthcare under the initial contract. 20
Respondent in this case also advised the Union that time was of the essence because the
changes were scheduled to be implemented by the plan sponsor on January 1, 2015, in order to
prevent any lapse in coverage. The Union essentially proposed that Respondent place unit
employees in an entirely different plan such as TeamCare or Aetna; put them into the same or
similar plan with the same rates and provisions as in the 2013 precertification flex plan; increase 25
wages in exchange for acceptance of the flex plan because Respondent had not done so in 2
years; or pay all or about half of the unit employees’ health insurance premium contributions.
Like the employer in Sutter Health, Respondent also rejected the Union’s proposals and gave
reasons for doing so. As previously stated, those reasons included the high costs and
administrative barriers associated with either transferring employees into a new plan or changing 30
the contribution scheme for some employees and not others. Overall, Respondent asserted that
the flex plan was a better plan for the cost and benefits provided. In fact Valero conceded that an
overall 6-percent increase in plan costs for employees was a good deal compared to most plan
changes that he had seen.
35
The General Counsel’s argument that the totality of the circumstances here are in sharp
contrast to those in Sutter Health, is without merit. The General Counsel argues that unlike the
employer in Sutter Health, Respondent showed no flexibility in its timeline for bargaining. I
disagree. The employer in that case extended the deadline to begin enrollment; it did not offer to
extend or extend the timetable for implementation of its 2015 change to a new health plan. Here, 40
it was the Union who first determined that the parties had reached the end of their bargaining
rope, and that further meetings would be a waste of time. In addition, the General Counsel
asserted that Respondent conditioned bargaining on economic issues on resolution of
noneconomic matters. I dismiss this assertion in that the parties were in fact bargaining over an
economic issue—healthcare insurance to include premium increases. Further, in the cases on 45
which the General Counsel relied, the respondents had refused to discuss any economic issues at
JD(ATL)–23–15
21
all during negotiations on the overall contract until the union had agreed to certain noneconomic
matters. See Erie Brush & Mfg. Corp. , 357 NLRB No. 46 (2011) (employer refused to bargain
on economic issues until the union changed its position on union security); John Wanamaker
Philadelphia, 279 NLRB 1034, 1034–1035 (1986) (employer unlawfully refused to discuss
economic items until the union agreed to no-strike and binding arbitration provisions). Here, the 5
parties previously agreed to first address noneconomic issues for the overall initial contract, and
had not yet reached economic provisions such as wages. Nonetheless, Respondent considered
and rejected with explanation all of the Union’s offers.
The Board has established that the duty to bargain in good faith does not require an 10
employer to make major concessions or withdraw from its initial bargaining position. Atlanta
Hilton Tower, 271 NLRB 1600, 1603 (1984). Atlanta Hilton Tower does not involve a discrete
recurring event arising during initial contract negotiations; however, the Board set forth several
examples of bad faith conduct during bargaining such as “delaying tactics, unreasonable
bargaining demands, unilateral changes in mandatory subjects of bargaining, efforts to bypass 15
the union, failure to designate an agent with sufficient bargaining authority, withdrawal of
already agreed-upon provisions, and arbitrary scheduling of meeting.” I agree with Respondent
that the General Counsel has not shown that its reasons for rejecting the Union’s proposals were
harsh or unreasonable, nor has it shown that during bargaining for the 2015 changes Respondent
engaged in any of these other types of conduct. Both parties have a duty to negotiate with a 20
‘sincere purpose to find a basis of agreement,’ but ‘the Board cannot force an employer . . . to
adopt any particular position.’ Id. citing NLRB v. Herman Sausage Co., 275 F.2d 229, 231 (5th
Cir. 1960); NLRB v. Reed & Prince Mfg. Co., 205 F.2d 131, 134 (1st Cir. 1953). Therefore, I
find that Respondent did not fail to bargain in good faith.
25
3. The parties bargained to a valid impasse
Since I have found that Respondent bargained in good faith, I also find that the parties
bargained to a valid impasse on or by the October 20 session, and that there is no evidence that
had they continued to bargain, they would have reached an agreement before the January 2015 30
flex plan changes were due to go into effect. Thus, the parties in this case exhausted all
possibilities for reaching an agreement prior to the January 1 deadline for implementation.
Regarding the factors set forth above for determining if parties bargained to impasse, I
find that although the parties litigated the 2014 unilateral changes, they have continued to meet 35
and bargain towards a first contract on a regular basis since 2013. In fact, they continued to meet
and even reach tentative agreements on noneconomic issues while negotiating the 2015 flex plan
changes. A review of cases adopting the Stone Container exception shows that the length of
negotiations is not determinative as to whether the parties reached impasse. The 2015 healthcare
changes were certainly important, and promptly dealt with as such. Finally, the parties clearly 40
understood they reached impasse. The Union believed that further bargaining was futile, and
recommended that the parties cancel all future meetings, and Respondent agreed as evidenced by
Respondent’s credited bargaining notes, Valero’s testimony, and the parties’ post interim
healthcare bargaining correspondence.
45
In this case, there is no doubt that both parties began bargaining with age
each had strong philosophical and economic
Respondent and the Union stayed with their
bargaining, though the Union showed movement
employee contributions. However, 5
negotiating healthcare for the overall collective
consideration of a plan other than
conclusion that a valid impasse
healthcare changes.
10
Because the 2015 changes to the flex plan constituted a
scheduled to recur during negoti
implement its proposal so long
notice and an opportunity to bargain.
Accordingly, I find that Respondent did not violate 15
dismissal of this complaint.
On these findings of fact and conclusions of law and on the entire record, I issue the
following recommended21
20
The complaint is dismissed in its entirety.
Dated, Washington, D.C.25
30

21
If no exceptions are filed as provided by Sec. 102.4
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 purposes.
JD(ATL)–23–15
22
beliefs. Further, there is little doubt that both
respective opposing positions throughout
regarding the employer paying some or all of
as discussed, Respondent remained open to not only
-bargaining agreement, but also to
its flex plan. In conclusion, I find that the evidence supports
existed prior to the planned implementation date for the 2015
discrete event that
ations for an initial contract, Respondent was free to
as Respondent provided the Union with reasonable
The Respondent met its obligation in this case.
Section 8(a)(5) and (1), and
ORDER
December 24, 2015
6 of the Board’s Rules and Regulations, the findings,
ndas for which
future
a
was
advance
I recommend