US SUPREME COURT DECISIONS

A labor organization that was the exclusive bargaining agent for employees "working" on hourly pay rates at one of respondent Company's facilities had negotiated with the Company an employee health insurance plan in which retired employees participated. Upon enactment of Medicare, the Union sought mid-term bargaining to renegotiate the insurance benefits for retired employees. The Company, maintaining that Medicare made the insurance program useless, and that retirees' benefits were not a mandatory subject of collective bargaining, stated that it would offer each retiree a stated monthly amount toward supplemental Medicare coverage. When, despite Union objections, the Company made the offer, the Union filed unfair labor practice charges with the National Labor Relations Board (NLRB). The NLRB concluded that the Company was guilty of unfair labor practices in violation of §§ 8(a)(5) and (1) of the National Labor Relations Act (NLRA) and issued a cease and desist order. The NLRB held that the benefits of already retired employees were a mandatory subject of bargaining as "terms and conditions of employment" of the retirees themselves and, alternatively, of the active bargaining unit employees. It also held that the Company's "establishment of a fixed, additional option, in and of itself, changed the negotiated plan of benefits" contrary to §§ 8(d) and 8(a)(5) of the Act. The Court of Appeals for the Sixth Circuit disagreed with the NLRB and refused to enforce its cease and desist order.

Held:

1. Retirees' benefits are not, within the meaning of §§ 8(a)(5) and 8(d) of the NLRA, a mandatory subject of bargaining as "terms and conditions of employment" of the retirees. Pp. 404 U. S. 163-176. chanrobles.com-red

Page 404 U. S. 158

(a) The collective bargaining obligation extends only to the "terms and conditions of employment" of the employer's "employees," and the term "employee" has its ordinary meaning, i.e., someone who works for another for hire, which excludes retirees. Pp. 404 U. S. 165-171.

(b) The collective bargaining obligation is limited to the "terms and conditions of employment" of the "employees" in the bargaining unit appropriate for the purpose of collective bargaining. Retirees were not members of the unit represented by the Union, because they were no longer "working." Nor could they be members, since they lack a substantial community of interests with the active employees in the unit. Pp. 404 U. S. 171-175.

(c) Even if an industry practice of bargaining over retirees' rights exists, which is disputed, that cannot change the law and make into bargaining unit "employees" those who are not. Pp. 404 U. S. 175-176.

2. Retirees' benefits are not a mandatory subject of bargaining as "terms and conditions of employment" of the active employees remaining in the bargaining unit, although their own future retirement plans are. Retirees' benefits do not "vitally" affect the "terms and conditions of employment" of current employees. The benefits that active workers may reap by including retired employees under the same health insurance contract as themselves are speculative and insubstantial, at best. The relationship that the NLRB asserted exists between bargaining in behalf of retirees and the negotiation of active employees' retirement plans is equally too speculative a foundation on which to base an obligation to bargain. Pp. 404 U. S. 176-182.

3. Even if the Company's offering the retirees an exchange for their withdrawal from the already negotiated health insurance plan was a unilateral mid-term "modification" of the plan within the meaning of § 8(d) of the Act, which is disputed, it did not constitute an unfair labor practice, since it related to a permissive, rather than a mandatory, subject of bargaining. Pp. 404 U. S. 183-188.

427 F.2d 936, affirmed.

BRENNAN, J., delivered the opinion of the Court, in which BURGER, C.J.,and STEWART, WHITE, MARSHALL, and BLACKMUN, JJ., joined. DOUGLAS, J., dissented. chanrobles.com-red

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