BEFORE THE ARBITRATOR
In the Matter of the Arbitration of a Dispute Between
UNITED LAKEWOOD EDUCATORS
MUSKEGO-NORWAY SCHOOL DISTRICT
(Bonita Berg grievance regarding teacher early retirement
Mr. Michael McNett, Executive Director, Lakewood UniServ
Council, 13805 East Burleigh
Road, Brookfield, Wisconsin 53005, appearing on behalf of United Lakewood Educators.
Quarles & Brady S.C., Attorneys at Law, by Mr. Robert H.
Duffy (with Ms. Heidi B. Retzlaff
on the brief), 411 East Wisconsin Avenue, Milwaukee, Wisconsin 53202, appearing on
The parties jointly requested that the Wisconsin Employment Relations
designate the undersigned Marshall L. Gratz to arbitrate a dispute concerning the above-noted
grievance under the grievance arbitration provisions of their 1995-97 collective bargaining
agreement (herein Agreement).
The parties presented their evidence and arguments at a hearing held at the
in Muskego, Wisconsin November 22, 1997. At the hearing, the parties waived the
time limit for award issuance. (tr. 223-4). The hearing was transcribed, and briefing was
completed on January 22, 1997, marking the close of the hearing.
On the basis of the record, the Arbitrator issues the following award.
At the hearing, the parties authorized the Board of Arbitration to decide the
1. Is the grievance timely?
2. Did the District violate the
collective bargaining agreement when it failed to provide
Bonita Berg with a benefit option equal to 90 percent of the District's single health
insurance contribution as part of her early retirement package?
3. If so, what is the appropriate
PORTIONS OF THE
3.02 Hospital-Surgical Insurance
The Board will provide either family or
single hospital-surgical major medical insurance
coverage for each contracted teacher, as elected.
During this contract, the Board will provide ninety (90) percent of
the premium for the
3.021 The Board retains the right
after consultation with the ULE to provide such
coverage with an insurance carrier of the Board's choosing, provided:
3.0211 The standard of
coverage will be the same as that in 1995-1996
contract, as outlined in the certification of insurance from the WEAIG. The
original certificate of insurance will be on file in the Muskego-Norway School
3.0212 Current employees
enrolled in family medical insurance plans may
participate in the Tax Shelter Annuity Option. Employees with a spouse also
employed in the district and eligible for family plans will be entitled to
participation in one family plan and the TSA option.
The TSA option would be an amount of money equal to
contribution for a single premium placed in a tax sheltered annuity in the
employee's name. The employee would waive family medical eligibility in order
to qualify for the TSA option.
3.0213 The standard of
present service is maintained.
3.0214 The ULE is notified
(in advance of any contemplated change and
is given an opportunity to present its views).
3.022 The present standard of
coverage is the insurance presently in force. The
WEAIG Point of Service Plan shall be made a part of this agreement by reference.
3.023 It is understood by the
parties hereto that the insurance policy issued by the
insurance carrier will contain a provision for the coordination of insurance benefits.
3.024 The Board will continue in
the hospital-surgical group those members of the
teaching staff who will retire at, or after, age 55, providing such individual affected
prepays monthly premiums.
. . .
Any teacher may participate in the
following voluntary retirement program, provided that:
(1) Attain the age of 55;
(2) Have completed a minimum of
fifteen (15) years of continuous service in the
(3) Have not reached sixty-second
"Age" for all purposes of this policy is
defined as the employee's age as of the first teacher
day of the school year in which the retirement becomes effective.
5.02 Health Insurance
Teachers electing early retirement will be
provided District hospital/surgical (medical)
insurance for period of up to four (4) years following the effective date of retirement, at
expense. The teacher will be provided the same level of coverage available to teachers under
terms of the collective bargaining agreement. The amount of the district contribution will be
same as that provided to regularly employed teachers.
A teacher must provide to the District
Office on or before February 1, in the year preceding
the next contract year, written notice of intent to retire early. If the State of Wisconsin
early retirement window during the term of this contract, the parties agree to reopen Article
5.04 Pay Plan "A"
The District will pay to the employee in
monthly payments for period of three years an
amount equal to the amount paid to the employee's Wisconsin Retirement System account.
5.05 Pay Plan "B"
The District will pay for hospital-surgical
insurance benefits for the retiree in an amount equal
to the dollar value of the retirement benefit as stated in 5.04.
Benefits under this article shall cease upon
death, but will continue after the age of 65,
providing the retiree has not exhausted his/her insurance fund.
5.06 Refusal of an Early Retirement
The District may refuse to grant an early
retirement only if a certified replacement cannot be
found for the teacher requesting early retirement. Before refusing an early retirement, the
must make every reasonable effort to find a certified replacement.
5.07 Employment Status and Resignation
Upon receipt of notice granting the early
retirement, the teacher will provide the District, by
April 15, with a written letter of resignation for retirement purposes, to be effective with the
day of the next contract year.
5.08 Payment of Retirement Benefit
The District will begin to make payments to
the employee in the amounts specified in 5.04
no later that thirty (30) days following the first day of the next contract year.
The payments and benefits made under the
Early Retirement Program are to be reviewed
annually and the program shall be terminated at any point when the cumulative total cost of
program entered into equal or exceeds the cost which would have been experienced if all the
teachers retiring under the program had continued to work. The limitations stated in this
will in no way affect those presently receiving benefits through early retirement.
. . .
GRIEVANCE & BINDING
The purpose of this procedure is to provide
an orderly method of resolving differences arising
during the term of this agreement. A determined effort shall be made to settle such
through the use of the Grievance/Complaint procedure.
. . .
Grievances and complaints shall be
processed in a accordance with the following procedure:
Step I. If a grievance or a complaint is
brought to the attention of the administration
immediately involved within ten days after the facts upon which it is based first occur or first
become known, a conference with the immediately involved administration shall be held
five days after such notice.
Step II. If the matter is not resolved at
Step I conference, the problem shall be
presented in writing to the administrator immediately involved within ten (10) days after the
conference. Such administrator shall respond to the problem in writing within seven (7) days
receipt of the written statement.
Step III. If not resolved at Step II, the
matter may be appealed to the Superintendent of
Schools if a written appeal is received in his or her office within ten days of receipt of the
II response. Upon receipt of the appeal, the Superintendent shall meet promptly with the
grievant/complainant and his or her representative. The Superintendent shall give a written
answer no later that ten (10) days after receipt of the appeal or conclusion of the conference,
whichever is later.
Step IV. If not resolved in Step III, the
matter may be appealed to the School Board if a
written appeal is received in the office of the Superintendent within ten (10) days after
the Step III decision. The Board shall conduct a hearing on the grievance within fourteen
days after the receipt of the appeal, with the presentation of information and argument by the
grievant/complainant shall choose an open or closed hearing. The School Board will respond
writing within fifteen (15) days after the hearing.
. . .
11.05 The parties agree to follow each of
the foregoing steps in the processing of a grievance.
However, if the dispute arises from actions originating at the Superintendent's level, the
or complaint may be initiated at Step III, within ten (10) days after the facts upon which the
is based first occur or first become known.
11.06 Only the days when school is in
session shall be counted in computing the time limits
under this article. Time limits may be changed by mutual agreement to expedite processing
the summer months or for any other reason.
11.061 If the employer fails to
give a written answer within the established time
limits at any Step, the grievance or complaint will be considered advanced to the next step.
The process shall commence at the step following notification and the advancement of the
written grievance or complaint.
11.062 Grievances or complaints
not processed to the next step within the
established time limits shall be considered dropped.
11.07 To process a grievance to Binding Arbitration, the
following must be compiled with:
11.071 Written notice of a request
for such arbitration shall be filed in the
Superintendent office within ten (10) days in receipt of the Board's written response.
11.072 The matter must have been
processed through the grievance procedure
within the prescribed time limits.
. . .
11.11 It is understood that the function of
the arbitrator shall be to interpret and apply
specific terms of this agreement. The arbitrator shall have no power to arbitrate salary
adjustments, except improper application thereof, not [sic] to add to, subtract from, alter or
any term of this agreement.
On January 19, 1996 the Grievant, Bonita Berg gave District preliminary
her intent to retire at the end of the 1995-96 school year. The District responded by
that the Board was willing to accept her request for early retirement and directing that she
a formal letter of resignation for retirement purposes. In the same time frame, Ms. Berg's
husband, who was also employed by the District as a teacher, was also in the process of
retiring from the District.
On March 21, 1996, the Bergs met, at their request, with Jean Henneberry, the
Director of Human Resources, to discuss the benefits the Bergs would be receiving upon
early retirements. Henneberry went over various calculations and benefit choices available to
of them as Henneberry routinely does with all employes approaching retirement.
Prior to the conclusion of that meeting, the Bergs submitted to Henneberry their
formal letters of resignation for retirement purposes. Ms. Berg's letter contained the
additional statement: "It is my understanding that I will continue to receive the optional TSA
amount equal to a single plan insurance premium which I am currently receiving and which
continue for the next 4 years." (As of that time, Ms. Berg was receiving dependent coverage
under family plan District health insurance coverage for which her husband was enrolled,
Berg was receiving District Tax Sheltered Annuity contributions in lieu of insurance benefits
The Bergs and Henneberry reviewed and discussed the contents of those letters
March 21 meeting. During the course of that meeting, Henneberry told the Bergs that,
it was the subject of disagreement between the ULE and the District, the District did not
Ms. Berg eligible for any post-retirement option in lieu of insurance but that the District did
consider her eligible to enroll for post-retirement insurance benefits. Although Henneberry
Ms. Berg a worksheet with handwritten notations concerning the early retirement benefits the
District considered her entitled to receive, Ms. Berg asked Henneberry to provide her with
District's position in writing regarding Ms. Berg's above-noted request "to continue to
optional TSA amount" for four years following her early retirement.
On April 4, 1996, Berg received a letter from the District dated April 2, 1996
that the Board had formally approved Berg's resignation. As regards retirement benefits, the
stated only, "The benefits payment equivalent to the Wisconsin Retirement System
will be computed later this year and you will be provided with a statement of the amounts
dates those payments will begin. Please contact me if you have questions regarding the
program under Article V of the collective bargaining agreement."
The instant grievance, in the form of a memorandum from Berg to
Henneberry, and signed
by Berg and ULE Teacher Rights and Contract Enforcement Committee Chairperson Robert
Nuszbaum, was then delivered to the District on April 17, 1996. It read, in pertinent part,
Re: Early Retirement Benefits
Date: April 16, 1996
I am in receipt of your letter dated April 2,
1996, (which I received April 4, 1996) regarding
retirement benefits. Your response does not clarify or resolve the issue discussed at our
in March. Therefore, I wish to pursue this matter through the grievance procedure. I am
initiating the grievance pursuant to Article 11.03 (Step II).
STATEMENT OF CONCERN:
I am currently enrolled in the Tax Shelter
Annuity (TSA) program provided under Article
3.02 (especially 3.0212) of the Bargaining agreement. Upon retirement at the conclusion of
current school year, I wish to be paid the equivalent amount of money due to retiring
as per Article V (Early Retirement) especially 5.02 Health Insurance and 5.05 (pay Plan B).
All employees are entitled to equal benefits.
Election of a TSA program which has benefited
both the district and the employee through insurance cost savings should not become a
retirement. It is discriminatory to provide one employee a benefit denied another.
the equivalent dollar amount of either the TSA or the hospital/surgical premium cost should
paid to the retiring employee who has previously elected the TSA option.
When Henneberry did not respond
to the written grievance, ULE presented it to the
Superintendent. When the Superintendent did not respond, ULE submitted it to the School
On June 24, 1996, the District Board met, heard, considered and denied Ms.
written grievance. By letter dated July 1, 1996, the Board explained that it was denying the
grievance both on the grounds that it was untimely (stating, "Although the step I conference
Article 11.03 occurred on March 21, 1996, the matter was not submitted to a written
until after the ten day timeline required under Step II") and that the Board found no violation
the Agreement on the merits of the dispute, based on Agreement 3.0212 and 5.02.
The instant arbitration subsequently ensued, with the parties submitting the Stipulated
Issues as noted above. At the arbitration hearing, the Union presented testimony by Berg,
Frederick Schuler and Nuszbaum. The District responded with testimony by Henneberry and
District Director of Business Services Charles Brenden.
The evidence adduced at the hearing shows that the concept of provide an option for
employees who did not wish to or need to receive insurance coverage offered by the District
first included in an agreement between the parties during 1985 reopener bargaining. At that
the parties agreed to language that is materially parallel to that now contained in Agreement
They did so in part to resolve a then-pending grievance that had been initiated by Schuler.
Schuler's grievance challenged the District's refusal to provide him with any insurance
besides those he enjoyed as a dependent under the family coverage the District was providing
Schuler's wife whom it also employed as a teacher. As a result of the 1985 agreement,
continued to enjoy dependent coverage under his wife's family plan of District health
but the District also made contributions to a tax deferred annuity account in Schuler's name
of providing him with any contractual insurance benefits of his own.
During the 1994 negotiation, the ULE initially proposed to add a sentence at the end
Agreement 5.02 that would have read, "Teachers currently enrolled in the TSA Insurance
will have the right to continue that benefit for three years." That proposal was rejected by
District on the stated grounds that it constituted a new benefit that the District was
agree to provide and that, in any event, the District could not provide such a benefit because
Internal Revenue Service regulations do not authorize TSA contributions on behalf of retired
employees. ULE thereafter proposed that the District make a TSA deposit equal to three
of the TSA option amount just prior to the time the employe early retires. Again, the
rejected that proposal stating that it was unwilling to grant an additional benefit not then
for by the Agreement.
During the 1995-1997 contract negotiation, the ULE proposed adding language to
section 5.02 which would allow a teacher currently receiving a TSA option to receive
deposit equal to five years of the current premium immediately prior to the time of early
retirement. The District rejected that and a similar proposal for a deposit equal to four years
insurance premiums, stating that it would not agree to grant that additional benefit to early
retirees. The TSA language of 5.02 remained unchanged, however the parties did increase
maximum number of years of health insurance coverage provided for in 5.02 from three to
During each of those bargains, the ULE's representatives variously asserted that they
merely seeking to clarify what they asserted was the existing right of early retirees under the
Agreement to continue to receive option plan payments upon early retirement. In response,
District's representatives variously asserted that the Agreement provided early retirees with
insurance benefits and not with the option of receiving alternative District payments in lieu of
POSITIONS OF THE PARTIES
The grievance in this matter should be denied because it was not submitted
school days following the Step I conference held between Henneberry and Ms. Berg and was
Alternatively, the grievance should be denied on its merits because the plain language
the contract states that only current employes can take advantage of the TSA option and
states that teachers electing early retirement lose their employment status as of the effective
of their retirement. The ULE has presented no admissible or reliable evidence to establish a
contrary meaning, and, even if it had, the plain meaning of the contract must prevail. The
attempts during the last two negotiation periods to add language to the contract permitting an
retiree to receive the TSA option contradicts its claim that the contract already grants that
Finally, the ULE seeks an equitable remedy that is not provided for in the agreement and
unjustified in the circumstances.
For those reasons, the grievance should be denied.
The grievance was submitted within the contractual timelines as required by
Agreement 11.03 and 11.06. Prior to filing the grievance, Ms. Berg had requested a
response from the District regarding her request for continuation for four years of hear
of the TSA contributions then being made on her behalf by the District in lieu of insurance.
Henneberry's response to that request in her letter dated April 2, 1996 and received April 4,
constituted the grievable event in this case. The March 21 conference was solely for the
of explaining and calculating early retirement benefits. It was not a part of the grievance
The written grievance was submitted to the District on Tuesday, April 16, 1996. Because
was not in session on April 5 and April 8-12, 1996. Therefore the calculable elapsed time
between the grievable event and the filing of the grievance was two days.
In any event, the grievance should also be deemed timely because it was initiated
than four months prior to Berg's retirement after which she was first adversely affected, and
because the contractual violation involved is an on-going one, and because the District failed
raise its timeliness objection at its earliest opportunity during the processing of the grievance.
Arbitrator should therefore answer Issue 1 in the affirmative.
The Arbitrator should also answer Issue 2 in the affirmative. The bargaining history
evidence shows that, in 1985, the parties agreed to provide a comparable benefit and
treatment to individuals who would otherwise be receiving duplicative insurance coverage
the District. That agreement was reached in the context of the pendency of the Schuler
As a result of the 1985 agreement, Schuler received a comparable benefit and equitable
in the form -- not of duplicative insurance -- but of an alternative benefit of equal value.
what Ms. Berg is asking for and entitled to in this case.
While the ULE learned after 1985 the option plan dollar amount agreed upon in
cannot appropriately be paid into the TSA account of someone no longer actively earning an
income, the contractual right of the individual to receive this specific amount of money has
evaporated. Nothing prohibits the District from making payments of equivalent value to
requested by the ULE in this case. Such equivalent payments would both fulfill and be
consistent with the evident intent of the parties in Article V to provide a flexible package of
retirement incentives that limits the District's cost to that which it would pay toward a single
insurance policy, and with the continuation of the early retirement program subject to the
cumulative total cost limitations specified in 5.09.
The ULE's 1994 and 1995 bargaining proposals cited by the District were merely
to clarify the right of early retirees -- established in the 1985 reopener negotiations -- to
an alternative benefit of equal value in lieu of insurance. Once that 1985 agreement was in
Schuler was granted such a benefit and was not forced to accept redundant insurance
Grievant should likewise be granted such a benefit, and should not be forced to accept
insurance coverage instead.
The District's proposed interpretation of the Agreement must be rejected because it
lead to the harsh, absurd and nonsensical result that the District is required to provide Ms
with redundant insurance rather than an alternative benefit of equal value to the recipient.
By way of remedy, the Arbitrator should direct the District to provide an amount of
equal to 90% of the health insurance single rate premium, for four years in lieu of the retiree
insurance to which the District limited her options when she early retired. To avoid potential
complications, the ULE suggests that the payment be placed in an Agreement 5.05 "Pay Plan
account from which Grievant Berg could purchase medical insurance after the early
insurance benefits of her spouse have expired.
Timeliness of the Grievance
The Arbitrator concludes that the grievance was timely filed.
The District's contention that the March 21 meeting was for purposes that included
initiation of a grievance is not factually persuasive because no mention was made by anyone
meeting that the meeting constituted initiation of a grievance. It does not serve the parties
nor forward the purposes reflected in their agreed-upon grievance procedure for a grievant to
surprised to learn that he or she initiated a grievance when he or she expressed no intention
Technically speaking, then, there was no Step I meeting held with regard to the
prior to its being initiated (as it states) at "Step II" on April 17, 1996. However, the District
not challenge the grievance or its arbitrability on that basis at the Board step hearing
(tr. 118) or
at any other time. Had the District done so promptly, the ULE could simply have obviated
challenge by requesting and convening a Step I meeting to assert the claim that the District
violating the agreement by its on-going unwillingness to provide Berg with the payments in
of insurance following her retirement that she was requesting.
In those circumstances, it would be inconsistent with the Agreement 11.01 purposes
parties' grievance procedure to deem the grievance non-arbitrable on the basis that there was
Step I meeting held regarding it prior to the filing of the grievance in written form on
The Arbitrator therefore concludes that the grievance was timely submitted when it
filed on April 17, 1996, and that the grievance is procedurally arbitrable. Hence, the
answer to Issue 1 is "Yes."
Merits of the Grievance
The parties have defined the Arbitrator's function as interpreting and applying
terms of the Agreement. Agreement 11.11 expressly prohibits the Arbitrator from adding to,
subtracting from, altering or amending any term of the Agreement.
Agreement 5.02 expressly requires that the District provide eligible teachers electing
retirement with "District hospital/surgical (medical) insurance for a period of up to four (4)
following the effective date of retirement, at district expense." The remaining two sentences
5.02 describe the level of coverage of that insurance and the amount of the District's
toward that insurance, but they do not require the District to make tax sheltered contributions
any other payments to or on behalf of the early retiree in lieu of that insurance. Tax
contributions and other payments to or on behalf of an early retiree are sufficiently different
insurance coverage that the parties would need to have expressly provided such options in
the above-described early retirement insurance benefits if they mutually intended to make any
option available to early retirees.
Reading the Agreement Early Retirement article (5.01-5.09) together with 3.0212
support ULE's position that the parties mutually intended that early retirees have such an
available to them. It is true that 5.02 requires that the level of coverage of insurance
early retirees be "the same level of coverage available to teachers under the terms of the
bargaining agreement." It is also true that 3.0212 makes available a TSA option in certain
circumstances. More specifically, 3.0212 provides that "Current employees enrolled in
medical insurance plans may participate in the Tax Shelter Annuity Option. Employees with
spouse also employed in the district and eligible for family plans will be entitled to
in one family plan and the TSA option." However, upon her retirement, Grievant Berg
being an "employee" as that term is ordinarily used, especially in light of the confirmation in
that early retirement involves the teacher's resignation from employment. Even more
significantly, the ULE's contention that the parties mutually intended the Agreement as
in 5.02 and 3.0212 to make early retirees be eligible for the option in lieu of insurance
for in 3.012 is fatally undercut by the facts that the only such option provided in 3.012 is a
option. For, the WEA Insurance Trust policies do not extend the
TSA option to retirees and the Internal Revenue Service regulations prohibit the
payment of tax
sheltered annuity contributions to retirees. In other words, the only option in lieu of
provided for in the Agreement is the TSA option, but the TSA option is not lawful for or
available to retirees.
Therefore, for the Agreement to provide a lawful option in lieu of insurance to early
retirees, a modification of the language of the Agreement was necessary. While the ULE
negotiators sought to characterize as "clarifications" their efforts in subsequent bargains to
such modifications in the language of the Agreement, the Arbitrator finds those
unpersuasive. The Arbitrator so concludes because without modifications of the sort
the ULE, the language of the Agreement does not provide for any option in lieu of
other than the TSA option for which early retirees are ineligible as a matter of IRS
Therefore, any remaining doubt in this case is resolved in the District's favor by the
bargaining history evidence. The Schuler grievance that led to introduction of the TSA
language did not involve an early retiree situation, and there is no evidence that the
communications between the parties' bargaining representatives in 1985 addressed the
of whether early retirees would have an option of any kind in lieu of insurance in 1985.
However, when the subject of an option in lieu of insurance for early retirees did arise in
subsequent bargains, in each instance the District rejected the ULE's proposals to add
that would have expressly provided early retirees with such benefits.
No matter how logical or equitable it may be that early retirees should have an option
lieu of insurance available to them, the Agreement as written does not provide one, and
Agreement 11.11 precludes the Arbitrator from adding such a provision where the parties
not done so.
For the foregoing reasons, then, the Arbitrator has answered Issue 2 in the negative.
DECISION AND AWARD
Based on the record as a whole, the Arbitrator's decision and award concerning the
Stipulated Issues noted above is as follows:
1. Yes, the grievance is timely.
2. No, the District did not violate the
collective bargaining agreement when it failed to
provide Bonita Berg with a benefit option equal to 90 percent of the District's single
health insurance contribution as part of her early retirement package.
3. The subject grievance is denied, such that no
consideration of a remedy is necessary or
Dated at Shorewood, Wisconsin, this 2nd day of April, 1998.
Marshall L. Gratz /s/
Marshall L. Gratz, Arbitrator