When cities and towns use self-funded health insurance plans, they have been able to cheat on their required contributions.  We have already found a number of cases where municipalities have failed to make their required contributions, thereby forcing employees to pay a greater share then they had agreed to.

This cheating is possible because of the way premiums are established for self-funded plans.  In such plans the premiums are set by estimating a number which will cover the projected cost of claims and expenses.  The premium payments must also maintain a cushion in the fund sufficient to cover regular variation in claims plus enough to cover claims which will come in after the end of a plan period.  We have found that when there is such a cushion in the fund, employers can be tempted to skip their payments and allow claims to be paid from the cushion and from employee contributions.

To prevent this cheating, union representatives acting under their collective bargaining agreement or working through a Public Employee Committee, where the PEC has a health insurance agreement, must carefully monitor the financial records of the insurance plan.  They should insist on monthly records to be presented quarterly for review.  The records must include the following:

1. The monthly claims paid.
2. The monthly expenses of the plan including the fee paid to the plan administrator and the fees for consultants, actuaries, and accountants.
3. The monthly revenue, showing both the revenue from employee contributions and from employer contributions and income from any other source, like interest on funds.
4. The monthly fund balance.

Looking at this data the unions should be able to confirm that the total contribution rate is appropriate to cover the claims and expenses of the plan and that the employer is paying its agreed upon share.  Finally, there should be an annual audit report on the plan confirming that the monthly data has been correct.

McDonald’s isn’t “loving it” anymore.  In a ruling made public on July 28, 2014, the National Labor Relations Board’s General Counsel, Richard F. Griffin, Jr., found that McDonald’s is a joint employer under the law with its franchisees and therefore liable for the franchisees’ anti-worker behavior.  Over the last two years, 181 McDonald’s employees filed unfair labor practices against the company and its franchisees alleging that they were illegally fired, disciplined and/or threatened for their union organizing activity.  Mr. Griffin found merit in forty-three of the complaints and authorized them to go forward against McDonald’s as a joint employer.  Sixty-four complaints are still under investigation.

At least ninety percent of McDonald’s restaurants in the United States are franchises.  McDonald’s, and presumably other fast-food restaurants with similar business models, will no longer be able to hide behind their franchisees and blame them when workers challenge their working conditions before the NLRB.  Fast-food workers, who make an average of $8.90 per hour, have been pushing for a wage floor of $15.00 per hour in a nation-wide movement for several years.  Many of the workers, with the help of the Service Employees International Union, are trying to unionize their restaurants.  Advocates hope that this latest NLRB ruling will help empower more fast-food workers to stand up for their rights and improve their working conditions.

All MASSC.O.P. members who have worked as a reserve officer or a call firefighter need to read this article. In Massachusetts, retirement system members who worked as call firefighters or reserve police officers can be credited with a maximum of five years of service for the time they held those positions. This has not changed. However, now the State is requiring members to buy back those five years of service in order to use them to calculate their pension. This is a significant change because, during the last forty years, this type of service was automatically credited to members without any contributions.

This change began last summer when the Contributory Retirement Appeal Board (“CRAB”) issued a decision in Brenton MacAloney v. Worcester Regional System and Public Employee Retirement Administration Commission CR No. 11-19 (2013). That case involved a retired Fire Chief who was required to make payments for his service as a call fire fighter in order for that service to be credited in the calculation of his pension. Since CRAB’s decision, the State (through its agency PERAC) has issued guidance to the Retirement Boards advising them that officers now need to provide make up payments for any reserve/call service for it to be considered creditable in calculating their pension.

This guidance applies only to officers retiring after June 21, 2013. For officers who actually worked as reserves or call firefighters in regular service each of the relevant five years, they will have to remit make up payments based upon the income they earned with interest accruing after June 21, 2013. Though the new change might not stand, officers should err on the side of making any such buy back payments if their board gives them that opportunity. Better to over pay and be reimbursed then to underpay and lose years of creditable service.

Things get more complicated for officers who did not work in regular service when they were on a list or possibly for officers who only worked details when on a reserve list. Previously, this time on the list was credited regardless of whether a reserve officer had worked. However, PERAC has now issued guidance to the boards stating that if an officer did not perform any reserve service in one or more of the relevant five years that the member should be required to remit contributions as if they earned three thousand dollars of regular compensation for each year.

PERAC chose three thousand dollars because it is the amount used to calculate disability pensions for reserve officers and call firefighters when there is no other comparable amount available. As the two relevant sections of the statute are not directly linked, this guidance could be flawed. Indeed, some boards are not following that portion of PERAC’s guidance and it is currently the subject of litigation.

This article is a starting point. Everyone who worked as a reserve officer or a call fire fighter needs to be aware of this change and what position their board is taking with respect to it. This is necessary to be able to properly plan for retirement. If a member encounters a problem, he or she should notify his or her local MASS C.O.P. leadership.

Yesterday, the Chicago regional office of the National Labor Relations Board, the federal agency which regulates private sector employees and labor unions, ordered that a union election be held among the scholarship college football players at Northwestern University.  The 24-page decision chronicles the life of a Division I college football player.  Essentially, they are paid (in the form of scholarships worth over $60,000 per year) to play football.  As anyone who has played a college sport knows, the time requirements to maintain these scholarships are enormous.  During much of the year, players are expected to spend 40-50 hours per week on football-related activities.  The decision goes into great depth in analyzing the daily, weekly, and seasonal commitments required of players.

While scholarships at Northwestern are four-year arrangements, other NCAA schools are permitted to offer one-year scholarships renewable at the college’s discretion.  But the fundamental point is that the scholarship is a quid pro quo for abiding by the rules and continuing to play football:

But the fact remains that the Head Coach of the football team, in consultation with the athletic department, can immediately reduce or cancel the players’ scholarship for a variety of reasons. Indeed, the scholarship is clearly tied to the player’s performance of athletic services as evidenced by the fact that scholarships can be immediately canceled if the player voluntarily withdraws from the team or abuses team rules. Although only two players have had the misfortune of losing their scholarships during the past five years, the threat nevertheless hangs over the entire team and provides a powerful incentive for them to attend practices and games, as well as abide by all the rules they are subject to.

Decision at 15.

It is this fundamental fee for service relationship that caused the Board to define the scholarship players as “employees,” and therefore subject to the federal labor laws.

Technically, the decision applies only to athletes receiving scholarships to play football at Northwestern.  “Walk-ons,” those without scholarships, are ineligible to be part of the bargaining unit (the group the union represents), since they receive no scholarships and hence no compensation to justify being classified as employees.  By extension, it would seem to apply to any other Division I college football program, as well as other similar programs, such as college basketball.  For public universities, which comprise the bulk of Division I schools, unionization rights would depend on the law of the jurisdiction where that school is located.  If, for instance, U. Mass. basketball players operated under a regimen similar to Northwestern’s, I see no reason why they could not petition the Commonwealth Department of Labor Relations for union recognition.

What will happen with this ruling depends on the extent that Northwestern wants to contest it.  As the decision of the Board’s Chicago region, it can be appealed to the 5-member NLRB in Washington, which, currently staffed with Obama appointees, would seem much more receptive than previous Boards.  If affirmed in Washington, the university could only appeal by refusing to bargain with the union (the “College Athletes Players Association”), thereby generating a “technical refusal to bargain,” which would eventually reach a federal appeals court, a less union-friendly environment than the current NLRB.

While the decision obviously does little for the millions of unrepresented workers toiling without bands or cheerleaders in far less glamorous jobs, perhaps it sends a fundamental message that too many people have either forgotten or never known:  If you want to improve your job, get a union.

Alan Shapiro, Esq.

Sandulli Grace, P.C.

Based on the diligence of MASS C.O.P. locals in Salem, the Salem City Council took a stand for public safety this week.  Recently, Salem Mayor Kim Driscoll proposed to the City Council that the Police Chief and Fire Chief positions be removed from Civil Service.  This proposal was timed closely with the decision by Police Chief Paul F. Tucker to vacate his position.  Realizing the damage to autonomous public safety operations that could be wrought by this unnecessary and ill conceived change, the Salem Police Patrolmen’s Association, MASS C.O.P. Local 426 and the Salem Superior Officers’ Association, MASS C.O.P. Local 425 joined with their brothers and sisters in Fire to fight against the Mayor’s proposal.   Recognizing good sense, the City Council voted 10 to 0 to send the matter to a full City Council meeting with a negative recommendation.
 
Congratulations to MASSC.O.P. Local 426 and MASS C.O.P. Local 425, and, respectively, President Rob Phelan and President James Walker for working so diligently together.  When locals in the Massachusetts Coalition of Police work together to agitate and organize – good things follow!   
 
http://www.salemnews.com/local/x1387860848/civil-service-PROPOSAL-defeated