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International Union of Operating Engineers, Local 139 AFL-CIO v. Wingra Stone Co.

United States District Court, W.D. Wisconsin

September 29, 2016

INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 139, AFL-CIO, Plaintiff/Counter-Defendant,
v.
WINGRA STONE COMPANY, Defendant/Counter-Plaintiff.

          OPINION AND ORDER

          WILLIAM M. CONLEY District Judge.

         In this action, plaintiff International Union of Operating Engineers, Local 319, AFL-CIO (“Local 139”) seeks an order confirming the decision, award and supplemental award of an arbitrator regarding a health care coverage dispute with defendant Wingra Stone Company. Wingra seeks an order vacating the same decision and awards. Before the court are the parties' cross motions for summary judgment. (Dkt. ##14, 18.) For the reasons that follow, the court will grant Local 139's motion and deny Wingra's motion. Accordingly, the arbitration award is confirmed.

         UNDISPUTED FACTS

         A. The Parties and Principal Actors

         Local 139 is a labor organization that represents heavy equipment operators and other employees throughout Wisconsin for the purpose of collective bargaining. Local 139 maintains an office within this district, in Madison, Wisconsin. Ryan Oehlhof is an officer and business representative of Local 139, who has worked with employees of Wingra since 2004. He is involved in handling disputes between Local 139 and employers such as Wingra.

         Wingra Stone Company is an employer based in southern Wisconsin, primarily engaged in the business of road construction, as well as processing and supplying aggregate material, including operating various quarries. Wingra does business in Wisconsin. It also maintains an office in Madison, Wisconsin. Robert Shea is an officer and employee of Wingra. He has been actively involved in negotiations with Local 139 from the late 1990s through the present.

         B. Collective Bargaining Agreements

         The parties have had a bargaining relationship for the past 40 years. Beginning in 2004, they have been bound by a series of collective bargaining agreements covering Wingra's quarry operations. The first agreement governed the parties' relationship for five years (“the 2004 Agreement”). In 2009, the parties entered into a Letter of Understanding extending the 2004 Agreement through April 30, 2010. The parties entered into a new agreement effective May 1, 2010, through April 30, 2012 (“the 2010 Agreement”). Local 139 and Wingra were subject to the 2010 Agreement at the time Local 139 filed the grievance at issue here.

         In 2012, the parties entered into yet another Letter of Understanding extending the 2010 Agreement through April 30, 2014. At the time the parties filed their respective motions for summary judgment, they were still in the process of negotiating a successor to this extended 2010 Agreement.[1]

         All of the collective bargaining agreements between the parties contain the same language regarding health insurance:

Employer agrees to maintain for all bargaining unit employees who have been employed for more than thirty (30) days a group health and hospitalization insurance plan that will contain coverage equal to or better than the plan provided by the International Union of Operating Engineers Local 139 Health Benefit Fund for the Term of the Agreement and pay the full premium.

(See, e.g., Joint Stip., Ex. B-5 (2010 Agreement) (dkt. #17-6) Art. XV.)

         The Local 139 Health Benefit Fund referenced in the language above (“Local 139 Plan”) is self-funded and provides health benefits to approximately 8, 600 participants. The Local 139 Plan was established in a Trust Agreement negotiated by Local 139 and various employer associations. The Local 139 Plan sets out the benefits it provides to participants in its Summary Plan Description (“SPD”), the most recent of which was effective in 2010.

         Finally, all of the parties' collective bargaining agreements also contain the following provision:

No grievance will be acted upon by either party unless such grievance is filed in writing with the Employer within thirty (30) day period after the alleged violation. Grievances should be null and void if filed after such period.

(Joint Stip., Exs. B-2, B.5 (dkt. ##3, 6) Art. IV § 2.)

         C. 2011 Change to Wingra's Health Insurance Plan

         Wingra's employees covered by the series of collective bargaining agreements with Local 139 receive coverage under the Wingra Stone Company Employee Health, Dental and Vision Plan (the “Wingra Plan”), rather than the Local 139 Plan. Since at least 2004, however, Local 139 did not believe that the Wingra Plan was “equal to or better than” the Local 139 Plan. During negotiations of the 2009 Letter of Understanding, Local 139 took the position that the Wingra Plan was not equal to or better than the Local 139 Plan, specifically identifying two areas that Local 139 did not view as comparable: (1) Health Reimbursement Account (“HRA”) pre-funding of retiree benefits, and (2) so-called “loss-of-time benefits.” At one point, Local 139 agent Oehlhof stated, “The last contract compared health & now our Insurance [under the Local 139 Plan] has surpassed your coverage.” (Joint Stip., Ex. 24 (dkt. #17-25) 8.)

         Despite this concern, Local 139's membership approved the 2009 decision to extend the 2004 contract one more year. Local 139 did not file a grievance on coverage at that time, nor during negotiations of the 2010 Agreement, challenging the Wingra Plan as not being “equal to or better than” the Local 139 Plan.

         In January 2011, Wingra notified its employees of changes to its Plan, including a change to spousal coverage. Specifically, the Plan would no longer provide secondary coverage to spouses eligible for health coverage through the spouse's own employer. After learning of the change to spousal coverage, a Local 139 agent spoke to one of Wingra's owners about how the change was not “equal to or better than” the benefits provided by ...


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