BEFORE THE ARBITRATOR
In the Matter of the Arbitration of a Dispute Between
PEMBINE EDUCATION ASSOCIATION
SCHOOL DISTRICT OF
Ms. Carol J. Nelson, Executive Director, Northern Tier
UniServ-East, appearing on behalf of the Association.
Godfrey & Kahn, S.C., by Attorney Robert W. Burns,
appearing on behalf of the District.
Pembine Education Association, hereinafter referred to as the Association, and the
District of Beecher-Dunbar-Pembine, hereinafter referred to as the District, are parties to a
bargaining agreement which provides for the final and binding arbitration of disputes arising
thereunder. The Association made a request, with the concurrence of the District, that the
Employment Relations Commission designate a member of its staff to act as an arbitrator to
decide a grievance over the meaning and application of the terms of the agreement. The
was so designated. Hearing was held in Pembine, Wisconsin, on April 13, 1999. The
transcribed and the parties filed post-hearing briefs and reply briefs, the last of which were
on July 6, 1999.
The basic facts giving rise to the grievance are not in dispute. The District provides
insurance to its teachers and retired teachers which provides a $100 deductible. After
the first $50 of the deductible, the District reimburses the teachers for the next
$50. The District has refused to reimburse retired teachers the second $50 deductible
teachers pay the entire $100 deductible. The Association grieved this denial and the matter
proceeded to the instant arbitration.
The parties were unable to agree on a statement of the issue. The Association stated
Did the District violate the collective bargaining agreement
when it refused to pay the $50
deductible to the retired teachers where it does pay it to the current teaching staff?
If so, what is the appropriate remedy?
The District stated the issue as follows:
Is this grievance applicable to members of
the current collective bargaining unit?
If so, did the District violate the
in its administration of the early retirement benefit?
If so, what is the appropriate remedy?
The undersigned frames the issues as
Is the grievance arbitrable?
If so, did the District violate the parties'
collective bargaining agreement when it refused to
reimburse the second $50 deductible to retired teachers?
If so, what is the appropriate remedy?
. . .
B. The Board shall provide, without the cost to the employee,
health care protection, including
hospital-surgical and $50 deductible major medical insurance, for a twelve (12) month period
employee's entire family. The deductible insurance plan will be self insured for the
family. The $50 deductible insurance plan will be self insured by the District. A teacher
who has paid
over $50 and up to $100 toward his/her medical expense, excluding drugs and dental
be reimbursed no later than the second payday after submitting the voucher. The 1993-94
will be the base year to establish a dollar amount for the 1994-95 teacher insurance
teacher contribution will be based on the formula: 50% of the increase over 15% from the
to the 1994-95 school year.
. . .
. . .
C. The District shall make the same contributions to health and
dental insurance to retired
teachers as it does to active members of the teaching staff until such time as the retired
reaches the age of sixty-five (65). At that time the District's responsibility for medical and
benefits shall terminate.
The Association contends that the language of Article XIII-B, C was negotiated
1987-90 negotiations and is clear and unambiguous in that the benefit for retirees was the
current employes. With respect to the issue of standing raised by the District, the
that current employes have an expectation that the benefits negotiated and set forth in Article
will apply to them and the District has a legal and moral responsibility to honor the collective
bargaining agreement and the Association has standing to raise the issue even where the
retiree, is no longer a current employe. It insists that if the District had any other intent, it
incumbent on the District to change the language or to bring it forth in the negotiation
The Association observes that the District has a long standing practice of paying the
to current represented employes. It submits that when early retirement was bargained, if the
did not intend to continue the benefit, the District would have acted to place language clearly
that this benefit would no longer be offered. It cites the rules on custom and past practice
enforced by arbitrators and argues that the intent of this clear and unambiguous language was
retirees would get the same medical and dental benefits as active employes. The Association
that contributions to health and dental insurance include the $50 deductible reimbursement.
maintains that the retiree, on behalf of whom the grievance was brought, was entitled to the
deductible reimbursement, the same as active employers.
The Association claims that the District made a unilateral change in the language
notifying the Association. The Association points out that the District's own witness clearly
identified the intent of the language and that was to make the same contributions to retirees
as it does
to current employes.
The Association concludes that the District violated the clear and unambiguous
the collective bargaining agreement when it refused to reimburse retirees the $50 deductible
they reached the $100 deductible. It alleges that retirees spent many years in the District and
contract would be honored and it has not been and the Association has brought the grievance
behalf. It asks that the grievance be sustained and for an order requiring the District to pay
the $50 deductible.
The District contends that the grievance is not arbitrable and is untimely. It asserts
retirees are not parties to the current agreement and have no ability to arbitrate disputes and
in the record authorizes the Association to proceed on their behalf.
As to the District's claims that the grievance is untimely, it alleges that the
sufficient knowledge of the non-payment of the retirees' deductibles starting with Sandra Bale
1997, and in August, 1998, the retiree whose deductible denial resulted in the grievance
wrote a letter
alleging the District was violating the contract, yet it wasn't until November 3, 1998, that a
was filed, almost three months after the Association was aware of the dispute. It points out
grievance must be filed within ten (10) days after the grievant became aware of the problem
Association failed to comply with this requirement, so the grievance is not timely.
As to the merits, the District contends that the language of the agreement does not
that retirees receive the same deductibles as the current employes. It alleges that the
history proves that the District was never required to pay the deductible for retirees. It states
in 1980-82, a retiree could remain a member of the insurance group by assuming payment,
1981, employes were required to pay a $50 deductible. In 1983-84, the District notes the
was changed to provide a reimbursement for the amount over
the $50 deductible up to $100, but the retirees provision remained unchanged and in
1988 the early
retirement language of Article XIII-B, C was adopted. The District points out that it has
the retirees' deductible. It claims the Association's contention that retirees were to receive
reimbursement of the deductible goes against the clear meaning of the contract as well as
history and past practice.
The District argues that the provisions related to insurance benefits for current
retirees are separate and distinct. It asserts that it is not required to pay the deductible on
retirees. The District observes that the contract language with respect to insurance is located
sections, Article XI for employes and Article XIII-B for retirees. It points out that Article
that the District will pay the premiums for each "employee" and will provide a $50
major medical insurance for the "employee's" family. It notes that the term "teacher" is also
identifying that term with current employes. The District, referring to Article XIII-B,
it is required to make the same contributions to health and dental insurance to "retirees" as it
to active members of the teaching staff but it does not say anything with respect to
points out any payment required is to insurance and not to an individual retiree. It insists
are entitled to payment for insurance premiums, not the deductible, and if that were part of
package for retirees, specific language should have been included in the article that deals
It contends that it was never the District's intent to provide retirees both paid
deductibles. It argues that if the Association believed deductibles were to apply to retirees, it
have negotiated that item and the fact it did not should not fall on the shoulders of the
The District alleges that past practice supports its position. It observes that
past practice to give meaning to ambiguous language. The District maintains that no retiree
received reimbursement for the deductible after the first six months of retirement and the
never objected to the non-payment which indicates acceptance of the District's interpretation
In conclusion, the District seeks denial of the grievance because it is not arbitrable
untimely and is without merit because Article XIII-B, C is silent on deductibles and retirees
not get in arbitration what was not bargained for at the table. The District also relies on past
over the last ten (10) years as supporting its position.
In response to the District's procedural arguments, the Association asserts that the
was timely filed. The Association cites court and arbitral authority for the proposition that
purpose of the grievance procedure is to effectively resolve disputes so the work place is not
disrupted. It also contends that undue legalisms based on narrow technical grounds should
the process the parties agreed to resolve disputes and the
Association has not purposely ignored nor abused the contractual time limits. It argues
grievance was filed to protect the integrity of the contract as to the deductible for retirees and
well within the time limits. It alleges that the District did not comply with the grievance
in that the Superintendent claimed the principal and grievance committee could not waive
It notes that where both parties commit procedural irregularities, a decision on the merits
be foreclosed. It also observes that the District raised this defense at the "final hour" and it
an attempt to avoid the obvious merits of the grievance. It objects to the District's reference
letter which was not admitted into the record. It states that the timeliness objection by the
is wholly without merit.
As to the District's arguments regarding the merits, the Association maintains that the
and unambiguous language was understood by the parties that the intent was retirees would
the same benefit as current employes. It observes that the question of standing is not
employes who have the right to retire early and expect the benefits the District has the legal
responsibility to honor by the contract language. The Association reiterates the arguments in
brief that the language of Article XIII-B, C was to give the retirees the same benefits as the
including the same contributions regarding health and dental. It asserts that the clear and
language means the retirees will receive the $50 deductible as that was the parties' intent. It
the grievance be granted and the District be ordered to pay the deductible to retirees just as it
to active members of the teaching staff.
The District contends that the Association's claim that the intent of the parties and the
and ambiguous language is to provide retirees payment of the deductible, cannot be supported
record. It insists that the District must prevail based on the Association's witness' testimony,
practice, and contract language. It refers to the testimony of Association witness Zeeb as to
intent of Article XIII-B, noting he refers to "benefit" and "benefits", but the language does
address the level of benefits and says "contributions to . . . insurance." It
claims this is done by way
of insurance payments, whereas the deductibles are not contributions to insurance. It argues
benefits referred to by Zeeb are insurance premium contributions and not a secondary
existing employes under a different article.
The District maintains that Article XIII-B, C clearly states the benefits to be provided
retirees. It argues that the word "contribution" is defined as the premiums paid to an
pension plan and the term does not include separate deductible reimbursement plans. It notes
there is no dispute that the District has paid the premiums toward health and dental insurance
has not violated the contract.
The District reiterates its arguments that bargaining history supports its position that
the retiree language came in, it did not include reimbursement of the deductibles and the
never paid it to retirees.
The District, contrary to the Association's claim, denies that it unilaterally changed
contract language when it failed to reimburse retirees for the $50 deductible. It insists the
does not require it to reimburse the $50 deductible to retirees and the past practice supports
again states that the Association was aware of the non-reimbursement as early as 1997 and
clearly notified of it in August, 1998, and did not file until November 3, 1998. It maintains
that it is
the Association's responsibility to add language to clarify its position. It concludes that the
Association did not prove that the District failed to include language identifying the intent of
parties with respect to benefits to be provided to retirees, and thus the grievance must be
The District has raised two procedural issues; standing and timeliness. As to
District claims retirees are not parties to the collective bargaining agreement and citing
Pabst Brewing Co., 128 F.3d 538 (7th Cir., 1997) asserts there is no
authorization to proceed on
their behalf. The District's reliance on Rosetto, supra, is misplaced. Rosetto stands for the
proposition that a Union has no duty to represent retirees, but retirees can make the Union
if they so choose. Roth v. City of Glendale, 224 Wis.2d 800 (CtApp, 1999). A review of
grievance filed on November 3, 1998, does not list a retiree as the grievant, but is generic in
was filed by the grievance committee on behalf of Association members (Jt. Ex.-2).
represents current employes who may retire during the term of the contract and as such may
issue as to their early retirement benefits under the collective bargaining agreement.
present employes covered by the collective bargaining agreement have the right to challenge
District's interpretation of the benefits they will receive upon retirement particularly where
retirement occurs during the term of the contract. Thus, the Association has standing on
employes to proceed on the grievance. The issue of a remedy for retirees who retired some
may be defended on the basis of a lack of standing, however, issues of standing as to the
applicable to certain individuals does not mean that the Association lacks standing to
grievance. Therefore, the defense of lack of standing does not preclude a decision on the
As to the District's assertion of untimeliness, it suffers the same infirmity as the
defense. The issue presented involves an alleged continuing violation of the agreement
which is that
whenever a teacher retires, the issue is again raised as to reimbursement for the $50
grievance over a continuing violation may be filed at anytime and any lack of timeliness
would go to
the remedy, which may be prospective rather than retroactive. Thus, the defense of
defeat a decision on the merits but may be invoked should a remedy be directed.
Turning to the merits, the Association claims the language of Article XIII-B, C is
unambiguous and the intent was established from the testimony of Mr. Zeeb, which was as
By Ms. Nelson
Q What was the intent of the language?
A This was negotiated at the time as a
benefit to the retirees. And what we did at that time is we
asked that the board consider the retirees as if they were active members of the union in such
as insurance benefits. As we said that we would like to have language that would give the
same medical and dental benefits as the active employees. So when it says here--so this is
we--the wording that we came up with is what's in this language where it says the same
contributions to health and dental insurance to retired people as it does to active members.
And we referenced that back to--we
reference it back to the other article which had to do with
insurance. In our most recent contract it was under Article XI here, section B, because
when it says
that the health and the contributions to health and dental insurance to retirees should
be the same
as to active members, the active members receive this benefit under Article XI, section B
"The board shall provide, without cost to the employee, health care protection including
hospital-surgical and $50 deductible major insurance."
Mr. Zeeb's testimony refers to a benefit to retirees and
insurance benefits. The word
"benefits" does not appear in Article XIII-B, C. The word "contributions" is used and
District to make the same contributions to health and dental insurance to retirees as to active
employes. The term "benefits" can have several meanings. For example, with each
or dental, there is usually a schedule of benefits that the insurance provides. It is possible
could have a different schedule of benefits under one insurance policy and active employes
another. Additionally, the prior agreement did not provide for the District to pay for
retirees. An agreement that the District would pay for insurance would obviously be a
retirees. Thus, benefit and benefits can have more than one meaning. Benefits could be
contributions as asserted by Mr. Zeeb and could include the $50 deductible; however, the
"contributions", which was used in lieu of benefits, can also have more than one plausible
The District uses the dictionary definition of contribution and asserts that it means
only. It argues that the clear and unambiguous language means premiums. Furthermore, the
has a ten (10) year past practice of not making deductible reimbursements to retirees. This
indicates another plausible meaning for "contributions".
The undersigned finds that the word "contributions" used in Article XIII-B, C is not
rather it is ambiguous. It is susceptable to two separate meanings. To determine the
ambiguous terms, reference may be made to bargaining history, past practice, the normal
the term, the context in which it is used or even the dictionary. Some of these may favor the
Association and others the District, so these aids are not deemed to be definitive in this case.
The parties have used the term "contribution(s)" in both Articles XI and XIII-B, C
reference to insurance. In each of the last two sentences of Article XI, the term
appears as follows:
The 1993-94 school year will be the base year to establish a dollar
amount for the 1994-95
teacher insurance contribution. The teacher contribution will be based on the formula: 50%
increase over 15% from the 1993-94 to the 1994-95 school year.
The first sentence states that the 93-94 school year will establish the base dollar
the 1994-95 teacher insurance contribution. Clearly, the term "contribution" here refers to
premium paid. The second sentence states that the 1994-95 teacher contribution will be
50% of the increase over 15% above the base amount established in 93-94. If the insurance
up 21%, the District would have absorbed 18% and employes would pay 3%. Again, the
agreeing to the respective premium contributions toward the insurance. They cannot be
the $50 deductible because it would not increase. Thus, it is concluded that "contribution"
premiums. In Article XIII-B, C, it states that the District shall make the same contributions
and dental insurance as it does to active members of the teaching staff. The record fails to
that the parties intended the word "contribution" to have a different meaning or connotation
used in Article XI and thus, it means contribution towards premiums only. Had the parties
to pick up the $50 deductible, they could have easily said so in Article XIII or adopted
Article XI by
reference and included premium payments including the payment of the deductible. They did
Inasmuch as the language of Article XIII-B, C only refers to contributions which by
Article XI means the premiums required of the District, the District had no obligation to pay
deductible to retirees.
Based on the above and foregoing, the record as a whole and the arguments of
undersigned issues the following:
The grievance is arbitrable. The District did not violate the parties' collective
agreement when it refused to reimburse the second $50 deductible to retired teachers, and
the grievance is denied.
Dated at Madison, Wisconsin, this 23rd day of July 1999.
Lionel L. Crowley, Arbitrator