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A Better Partnership
March 19, 2015

COA holds public employers have no duty to bargain over choice of healthcare contribution limit under new law

In Decatur Public Schools v Van Buren County Education Association, No. 320272, the Van Buren County Education Association and the Decatur Educational Support Personnel Association brought unfair labor practice charges against the Decatur Public Schools for failing to bargain over limits imposed on its contributions to employees’ health care costs under the Publicly Funded Health Insurance Contribution Act, 2011 PA 152, MCL 15.561 et seq.  The Court of Appeals affirmed a dismissal of the unfair labor practice charges and found that there is no duty for a public employer to bargain with each of its labor groups with regard to which choice of contribution limits it will select as provided for under the Act. 
The Van Buren County Education Association and the Decatur Educational Support Personnel Association are bargaining units for employees within the Decatur Public Schools.  Under the Publicly Funded Health Insurance Contribution Act, public employers, like Decatur Public Schools, are provided with limits on the maximum amount that they may contribute to medical benefit plans for their employees.  The Act contains two options for employers to select between for making contributions to these plans: a hard cap option based upon the number of employees with single-person or family coverage, as set forth in Section 3 of the Act, or an option in which the employer will pay not more than 80% of the total annual costs of all of the medical benefit plans to which it contributes, as described in Section 4 of the Act.
Decatur Public Schools sent a memo to members of both charging unions, indicating that the day after the current CBA expired, the school intended to implement a hard cap on its contributions to employee health plans.  The unions filed unfair labor practice charges against school arguing that health insurance benefits were a mandatory part of collective bargaining under the Public Employee Relations Act.  The unions also alleged that the school had a duty to maintain the terms and conditions of the existing CBA until the parties either reached a successor agreement or an impasse.  
The parties presented their arguments to an administrative law judge who issued a decision and recommended an order dismissing the unfair labor practice charges.  Both parties filed exceptions to the ALJ’s findings, and the matter was reviewed by the Michigan Employment Relations Commission.  The Commission concurred with the ALJ and issued a decision and order in which it dismissed the charges.  The Van Buren County Education Association and the Decatur Educational Support Personnel Association appealed this decision, and the Court of Appeals affirmed.  The Court found that employers have no duty to bargain with regard to the choice between hard caps and the 80/20 plan, rather, the choice is left to the governing body of the public employer to decide, by majority vote, if it will deviate from the default position of the hard caps.  The Court further held that the act should be interpreted as mandating an employer choose one type of plan for all of its employees, but that the choice of contribution limits for all groups of employees is left solely to the public employer. 

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