Oakland Unified School District v. Public Employment Relations Board

Opinion

The Oakland Education Association (Association) complained that petitioner Oakland Unified School District (District) had committed an unfair practice when it unilaterally terminated Blue Cross as the administrator of employee medical claims and substituted Western Administration Company as the district’s medical claims processor. The Association contended that the change of administrators was a meet and confer item requiring collective bargaining negotiations. In particular they contend that the change in claims processor resulted in the loss of the Blue Cross identification card which is nationally recognized and provides guaranteed payment for admission to any of Blue Cross’ 7,000 member hospitals and in the loss of the right on termination from employment with the District to convert to Blue Cross Health Insurance. Neither of those benefits were available to members of the Association with Western Administration administering the self-insured health plan of the District. A hearing officer found in favor of the Association. Upon review the Public Employment Relations Board (PERB) affirmed the hearing officer’s findings and ordered certain remedies. In its petition for a writ of review of the PERB order the District contends that PERB erred in finding that the District erred in unilaterally changing its medical plan administrator and further contends that the remedies ordered constitute an abuse of discretion. We issued a writ of review upon application of the District. We conclude that the board’s decision should be affirmed.

The petitioner initially contends that the unfair practices charge is moot because after the hearing on the Association’s charges a collective bargaining agreement was entered into by the parties and that the agreement constituted a waiver of the previous unfair practices charge. Petitioner concedes that the identity of a claims administrator was never negotiated nor was it included expressly in the 1978 agreement. The board concluded that the present issue had not been mooted by the subsequent agreement. We agree. The mere fact that the parties entered into a collective bargaining agreement subsequent to the hearing order in this case certainly does not lead to a conclusion that the parties intended in that agreement to resolve this dispute.

The facts indicate that throughout the negotiations between the District and the Association the District firmly resisted negotiations on the subject of the health plan administrator change and the Association’s contention that related benefits would be affected. The District now makes the incongruous argument that the 1978 collective bargaining agreement resolved the health plan administrator issue. This argument is made despite the fact that the District had never in fact negotiated the issue and despite the fact that the contract was silent on the issue. Petitioner goes on to argue that the complete absence of any bargaining and the refusal to even discuss the issue should be construed as a waiver by the Association of its right to a determination by the board on the subject of the unfair practices charge. We miss the logic of this argument.

The question is whether the change in administrators had a “material and significant effect or impact upon the terms and conditions of employment.” (See Keystone Steel & Wire, etc. v. N. L. R. B. (7th Cir. 1979) 606 F.2d 171 , 179.)

Initially we observe that the relationship of a reviewing court to an agency such as PERB, whose primary responsibility is to determine the scope of the statutory duty to bargain and resolve charges of unfair refusal to bargain, is generally one of deference (Ford Motor Co. v. NLRB (1979) 441 U.S. 488 , 495 [ 60 L.Ed.2d 420 , 426-427, 99 S.Ct. 1842 ]). The Supreme Court stated in Ford that the delegation of those duties to agencies such as the NLRB was the intent of Congress, and thus deference to their findings is entirely appropriate since they are “tasks lying at the heart of the Board’s function” (id., at p. 497 [60 L.Ed.2d at p. 428]). The court noted that the board’s view should be accepted if it is “not an unreasonable or unprincipled construction of the statute” (id.). Even though the board’s judgment is “subject to judicial review ... if its construction of the statute is reasonably defensible, it should not be rejected merely because the courts might prefer another view of the statute” (id.).

A. Conversion Privileges

The conversion privileges insured continuity of coverage and eliminated any question that an employee would be found uninsurable. The Blue Cross plan provided in writing “a member who terminates employment and thereby leaves the group may continue Blue Cross protection by applying for a Blue Cross Group Conversion Program.” No such written conversion privilege attached to the contract with Western Administration Company. The District makes two arguments regarding this benefit. The first argument is that there is no loss of the benefit because the District has agreed to continue medical coverage for terminated employees pending an agreement for conversion with some other health plan carrier. They point out that no terminated employee has yet been denied some continuity of coverage. At oral argument,

B. Blue Cross Card

The Blue Cross card provides guaranteed admission to any one of Blue Cross’ 7,000 member hospitals in areas of the country outside of northern California, with inpatient services being billed directly to the Blue Cross plan rather than to the patient. The identification cards are part of the Blue Cross interplan bank system which facilitates the admission of any card holder. The system also assures payment by the health plan so that the patient possessing a Blue Cross card need never be concerned that she/he will be billed and required to pay for services and then have to seek reimbursement from the plan. Western Administration Company is part of no similar system outside of northern California. With the change from Blue Cross to Western Administration Company, employees of the District were issued a card by the District; however that card does not provide the same assurance that admission to a hospital outside of northern California will be quick and relatively problem free. Since teachers often travel outside of northern California during the summer months, and since a hospital admission during such vacation travel is likely to be of an emergency nature, this is an affected benefit which assumes greater importance to the certificated teachers.

Petitioner contends that the record contains extensive testimony to the effect that the identity of the claims processor has no impact on hospital admissions. Yet only one individual, Clifford Wiesner, vice president of Western Administration Company, testified that from his experience, he knows of no instances where admission to a hospital was denied upon a patient’s showing his/her identification card. When the

We conclude that there is substantial evidence to support the board’s conclusion that while the change in administrators did not affect the coverage provided by the District’s self-insurance plan, Blue Cross administration resulted in certain benefits which were lost when the District switched to Western Administration Company. These lost benefits had a material impact on the terms and conditions of employment of the Association members. Since these benefits are linked to the identity of the administrator, the District’s change in administrators should have been negotiated pursuant to section 3543.2. Therefore, the District, in refusing to negotiate this issue with OEA, violated Government Code section 3543.5, subdivisions (a), (b) and (c).

I

t appears that the board fashioned an appropriate remedy for the District’s unlawful conduct. Government Code section 3541.5, subdivision (c), gives PERB broad powers to remedy unfair practices. It provides: “The board shall have the power to issue a decision and order directing an offending party to cease and desist from the unfair practice and to take such affirmative action, including but not limited to the reinstatement of employees with or without back pay, as will effectuate the policies of this chapter.”

Since the District was found to violate Government Code section 3543.5, subdivisions (a), (b) and (c), by unilaterally terminating Blue Cross as its administrator, a proper remedy would be to order the District to return to the status quo by reinstating Blue Cross. This is a common and accepted remedial approach in unilateral change cases (see, e.g. Fibreboard Corp. v. Labor Board (1964) 379 U.S. 203 [ 13 L.Ed.2d 233 , 85 S.Ct. 398 , 6 A.L.R.3d 1130 ] [order reinstating bargaining unit work subcontracted by the employer]; Office and Professional Emp. Int. U., Local 425 v. N. L. R. B. (D.C. Cir. 1969) 419 F.2d 314 [restoration of job classification changes]).

In addition the board ordered the District to reimburse employees’ expenses incurred as a result of the change in administrators and to give employees written notice of the board’s action. The remedy ordered appears to be even handed and temperate. We find no abuse of discretion.

The order of the board is affirmed.

White, P. J., and Barry-Deal, J., concurred.

A petition for a rehearing was denied July 24, 1981, and petitioner’s application for a hearing by the Supreme Court was denied September 16, 1981.