State Employment Relations Board. v. State
State Employment Relations Board. v. State
Opinion of the Court
In 1986, the state of Ohio, Office of Collective Bargaining (“OCB”) and Ohio Health Care Employees Union District 1199 (“union”) entered into a three-year labor contract which provided for an employee health care plan. Article 15 provided in part:
“ARTICLE 15 — GROUP HEALTH INSURANCE
“The employer shall provide health insurance to the employees of the bargaining units * * *. The employer’s maximum contribution for all health plans offered by this section is set at the following rates:
“A. For fiscal year 1988, single coverage under age 70, $80.70; single coverage over age 70, $33.90; family coverage under age 70, $193.52; and family coverage over age 70, $107.41;
“B. For fiscal year 1989, single coverage under age 70, $85.58; single coverage over age 70, $35.95; family coverage under age 70, $205.22; and family coverage over age 70, $113.90.”
The state offered two health care plans, a traditional plan and an optional plan. The traditional plan provided a broad range of coverage for a higher premium, while the optional plan offered more limited coverage with deductibles and co-payments. Both plans were administered by a Blue Cross company but the premium rates and amount of coverage were set by the state and the state was, for all purposes, a self-insurer. At the time of the contract negotiations in 1986, the health care fund appeared to be actuarially sound but problems surfaced in 1987, necessitating an increase in rates. The financial problems were caused, in large part, by the number of state employees with fewer health problems who chose to participate in an optional plan with lower premiums, as well as the effect of two “rate holidays” whereby neither the employer nor the employees paid a premium but, rather, the premium was paid by the fund itself.
In late 1986 or early 1987, Ed Seidler, then director of OCB, contacted all the unions
“Mr. Ed Seidler, Director
“Office of Collective Bargaining
“375 S. High Street
“Columbus, Ohio 43215
“Dear Mr. Seidler:
“I have received the attached agreement on health insurance, and agree that the changes are necessary, given the financial shape of the plan.
“Sincerely,
“Tom Woodruff
“President
“District 1119 WV/KY/OH”
Among the items agreed upon by the unions and OCB in 1987 was to put an employee premium cost onto the optional plan in an attempt to stop flight from the traditional plan, impose a penalty on employees who failed to get preadmission certification for non-emergency hospital stays or, in case of urgent admissions, to require a physician to contact the plan first unless the emergency was life-threatening. There was also agreement to provide for a penalty to providers who failed to comply with the 1987 agreement.
The 1987 agreement also provided for the creation of a task force to determine what further means were necessary to control health care costs. To enable the task force to accomplish its goal, as well as to determine the financial soundness of the fund, the state entered into a contract with Touche-Ross to do a study of the state health care plan which was completed in March 1988. The report recommended several alternative options to deal with funding problems. OCB sent copies of the Touche-Ross report to all unions involved and, without further discussion, announced a sixteen percent rate increase in April 1988.
On April 27, 1988, the union filed a complaint of an unfair labor practice, pursuant to R.C. 4117.11(A)(1) and (A)(5), alleging OCB bargained in bad faith and made material misrepresentations during bargaining. SERB found probable cause that there was an unfair labor practice and1 set the matter for a hearing.
The union appealed to SERB, which found that the 1987 and 1988 increases in health care premium rates were subject to collective bargaining pursuant to R.C. 4117.08(A). SERB reasoned that the contract language was not clear as to the authority of OCB to impose a unilateral increase and that, even if the contract had so provided, OCB voluntarily reopened negotiations pertaining to health care when it came to an agreement with the union in 1987 and, having negotiated a change in premium increases for the year 1987 to 1988, OCB had an obligation to negotiate before imposing a similar increase for 1988 to 1989.
OCB appealed to the Franklin County Court of Common Pleas, which concluded that, based solely on the language in the 1986 contract, there was no cap on employee contributions to premium payments and OCB could pass along the entire increase to employees and, hence, there was no requirement for further negotiation. The union appealed to this court and, in State Emp. Relations Bd. v. State of Ohio, Office of Collective Bargaining (June 11, 1992), Franklin App. No. 91AP-939, unreported, 1992 WL 132463, this court reversed and remanded the matter to the court of common pleas. The trial court again reversed the order of SERB and the union has again appealed, setting forth the following assignments of error:
“First Assignment of Error
“The Trial Court On Remand Erred In Failing To Decide The Case In Accordance With This Court’s Prior Opinion In The Case.
“Second Assignment of Error
“The Trial Court Erred In Disregarding The Findings Of SERB.
“Third Assignment of Error
“The Trial Court Erred In Vacating And Reversing SERB’S Decision In This Matter.”
Appellant’s assignments of error are related and will be addressed together.
“Any person aggrieved by any final order of the board granting or denying, in whole or in part, the relief sought may appeal to the court of common pleas of any county where the unfair labor practice in question was alleged to have been engaged in * * *.
“The court has exclusive jurisdiction * * * to make and enter a decree of enforcing, modifying, and enforcing as so modified, or setting aside in whole or in part the order of the board. The findings of the board as to the facts, if supported by substantial evidence on the record as a whole, are conclusive.”
In Lorain City Bd. of Edn. v. State Emp. Relations Bd. (1988), 40 Ohio St.3d 257, 533 N.E.2d 264, the court held, at the syllabus:
“1. The standard of review of a decision of the State Employment Relations Board on an unfair labor practice charge is whether there is substantial evidence to support that decision.
“2. Courts must afford due deference to the State Employment Relations Board’s interpretation of R.C. Chapter 4117.”
More recently in Univ. Hosp., Univ. of Cincinnati College of Medicine v. State Emp. Relations Bd. (1992), 63 Ohio St.3d 339, 587 N.E.2d 835, the court held, at the syllabus:
“1. The conclusion by a court of common pleas that an order of the State Employment Relations Board is not supported by substantial evidence on the record is a legal determination fully reviewable by the court of appeals.”
The court further stated, at 343-344, 587 N.E.2d at 838-839:
“In Lorain City Bd. of Edn. v. State Emp. Relations Bd. (1988), 40 Ohio St.3d 257 [260, 533 N.E.2d 264, 266], this court described the extremely deferential standard of review applied to factual determinations of SERB pursuant to R.C. 4117.13(D). We observed therein that disputes as to conflicting evidence ‘ * * * are properly determined by SERB, which was designated by the General Assembly to facilitate an amicable, comprehensive, effective labor-management relationship between public employees and employers. * * * As long as SERB’S decision on such matters is supported by substantial evidence, it must be affirmed. Courts should not be required to intervene in every factual dispute between contesting parties.’
U ‡ ‡ *
In its decision, SERB concluded that, if OCB had done nothing in 1987 and merely passed on the rate increase, based on language in the contract, there was some merit to its argument that it had no obligation to negotiate. However, SERB found that OCB voluntarily reopened contract negotiations in 1987 and, having done so, had an obligation to do so in 1988. In its decision, SERB focused on what should have occurred in 1988 rather than what, in fact, did occur. It was this finding that the trial court was to review on remand to determine whether there was substantial evidence to support SERB’S finding.
In remanding this matter, this court, in its earlier decision, stated in part:
“[T]his court must remand this matter to the trial court so that it can determine whether there is substantial evidence to support SERB’S decision that OCB had committed an unfair labor practice. * * * The trial court must determine whether the action of the OCB to unilaterally raise the employees health insurance premiums was violative of R.C. 4117.08(A). Likewise, the trial court must interpret the subsequent oral agreement between the parties and make a factual determination as to whether bargaining occurred prior to the time Touche-Ross became involved and whether OCB violated a statutory duty by not bargaining after the Touche-Ross firm released its report.”
The unilateral changes imposed by OCB in April 1988 did more than change the employee contribution rate. Joint Exhibit 3, the agenda for the April 1988 meeting when the sixtéen percent premium increase was announced, shows the state, in addition to raising rates, agreed to contribute $7.5 million to the fund only if the unions accepted certain cost containment measures, such as use of expanded second opinion and generic drug lists, and adding employee penalties for failure to notify the plan in emergency cases. Thus, while the trial court looked at the agreement, to establish a task force and contract for a study by Touche-Ross, as merely an agreement to agree as to future health care planning needs, it.was more than that. The issue presented to SERB was whether the issues relating to a premium increase and changes in coverage were issues which were required to be negotiated and whether or not such negotiations, in fact, took place. Regardless of the terms of the agreement surrounding formation of the task force and receipt of the Touche-Ross reports, the changes made in 1988 affected more than just an increase in rates and changed the terms and conditions of coverage and were items which were required to be collectively bargained pursuant to R.C. 4117.18. There was substantial evidence to support SERB’S finding that OCB had committed an unfair labor practice.
In its decision, the trial court relied on Connecticut Light & Power Co. (1984), 271 N.L.R.B. 766, 1984 WL 36668, for the proposition that there is no obligation to bargain over a midterm proposal. In Connecticut Light, the employer notified the union that it intended to give an increase in shift premium pay to non-union employees and would do the same for union employees if the union agreed. When the union requested a meeting with the employer to discuss the increase,
“[T]he duties so imposed [to bargain in good faith] shall not be construed as requiring either party to discuss or agree to any modification of the terms and conditions contained in a contract for a fixed period, if such, modification is to become effective before such terms and conditions can be reopened under the provisions of the contract.”
In discussing the applicability of Section 8(d), the National Labor Relations Board stated:
“[I]t states that no party to a collective-bargaining agreement may be compelled either to discuss contract changes or to agree to them. The section does not qualify the right to refuse to discuss or agree to contract changes * * *.”
The board did not find, as the trial court did, that a party had a right to unilaterally impose a contract change, particularly one adverse to one of the parties and Connecticut Light supports a conclusion opposite that reached by the trial court.
For the foregoing reasons, appellant’s first, second and third assignments of error are sustained, and the judgment of the trial court is reversed. This matter is remanded to the trial court with instructions to enter judgment affirming the decision and order of the State Employment Relations Board.
Judgment reversed and cause remanded with instructions.
. The American Federation of State, County and Municipal Employees, Fraternal Order of Police, Communication Workers of America and the Ohio Education Association were also parties to the contract and participated in the 1987, 1988 meetings but are not parties to this appeal.
. Because of the approaching deadline for an open enrollment period, each union signed a separate acceptance letter rather than circulating one copy among all the unions.
. The complaint filed by the union states:
. Granted, this court’s instructions on remand could have been clearer, particularly with reference to interpretation of any subsequent oral agreement between the parties for further negotiations. Nonetheless, the import of this court’s instruction on remand was for the trial court to determine whether the finding of SERB that OCB was required to enter into contract negotiations for the 1988-1989 health care premium rate increase was supported by substantial evidence.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.