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City of Cranston v. International Brotherhood of Police Officers2/11/2005
ed that " ince retirees are not members of the bargaining unit, the bargaining agent is under no statutory duty to represent them in negotiations with the employer." Id. at 182 n20, 399 n20, 359 n20. Despite this finding, however, the Court went on to state,
"This does not mean that when a union bargains for retirees -- which nothing in this opinion precludes if the employer agrees -- the retirees are without protection. Under established contract principles, vested retirement rights may not be altered without the pensioner's consent. Id.
Based on the Supreme Court's decision in Allied, it is clear to this Court that parties to a labor contract are free to bargain over the rights and/or benefits of retirees. Furthermore, under Allied, once the parties have made the active decision to bargain over the rights and/or benefits of retirees, the parties cannot circumvent the contractual obligations they have incurred as a result of their collective bargaining.
Since the Supreme Court's decision in Allied, the Federal Circuit courts have been consistent in holding that the right of a union to bargain with an employer over the benefits of its retirees is a permissive bargaining issue subject to arbitration. In United Steelworkers of America, AFL-CIO v. Canron, Inc., & Warren Pipe & Foundry Division, 580 F.2d 77, 80-81 (3rd Cir. 1978), the Third Circuit held that the plaintiff union had standing to represent retirees in seeking arbitration under a labor contract. The Court reasoned that if the employer contractually agrees in a labor contract to afford certain benefits to the union's retirees, "then the union has a legitimate interest in protecting the rights of the retirees and is entitled to seek enforcement of the applicable contract provisions." Id. The Court observed,
"Even though retirement benefits of former employees already retired are not a mandatory subject of collective bargaining, 'it does not naturally follow, as the company implies, that a union loses all interest in the fate of its members once they retire.'" Id. at 81.
Similarly, in Local 589, International Ladies' Garment Workers' Union v. Kellwood Company, 592 F.2d 1008 (8th Cir. 1979), the Eighth Circuit held that a dispute over pension benefits for two former employees, brought by the Union, was an arbitrable dispute subject to the labor contract's arbitration clause. The Court noted that, "whether a dispute arises or rights accrued during the effective period of a labor contract does not necessarily determine arbitrability. Rather, where the parties have agreed to arbitrate all disputes requiring interpretation of a collective bargaining agreement, the question of arbitrability focuses upon whether the disputed obligation was arguably created by that agreement." Id. at 1011-12 (citing Nolde Brothers, Inc. v. Bakery & Confectionary Workers' Union, 430 U.S. 243, 97 A. Ct. 1067, 51 L.Ed. 2d 300 (1977))
Because the employing company in Local 589 assumed certain obligations in its collective bargaining agreement with respect to the pension benefits of these former employees, the Court found that arbitration was appropriate in order to determine the scope of the company's obligations created by the agreements. Id. at 1012.
Moreover, the Rhode Island Supreme Court's decision in Fraternal Order of Police v. Town of Westerly, 659 A.2d 1104 (R.I. 1995), recognizes that collective bargaining over an escalator clause for all retirees is permissible under Rhode Island law. That case pertained to a municipal union and a dispute with the Town as to the inclusion of a cost of living adjustment in a private pension plan. Id. at 1105. The arbitration panel in that matter
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