Arbitrator Re-Writes Union Contract to Make Certain Employees Eligible for a Bonus

Seven different unions were negotiating a collective bargaining agreement with a single employer. While bargaining for the 2011 agreement, everyone agreed to exclude newly hired workers from an established pension plan, but did not discuss the “Copper Price Bonus” or workers’ eligibility for it. The bonus was kept in place in the 2011 version of the agreement. After the agreement was ratified, an HR manager “became aware that there could be an issue with eligibility for the Copper Price Bonus for new hires…because of the link between receiving the Copper Price Bonus and eligibility for the pension plan.” The HR manager “was concerned that this might be a problem for new hires since they were no longer eligible for the pension plan.” Ultimately, the company announced that workers hired after July 1, 2011, would not be eligible for the quarterly bonus; the unions grieved this decision.

According to the arbitrator, the unions and the employer made a mutual mistake during negotiations by “failing to change the bonus eligibility language to ensure that new hires remained eligible for the bonus” and that neither party made an effort during bargaining to change the eligibility requirements for the bonus despite doing so for the pension. Further, “there was no evidence that by removing new hires from participation in the pension plan that the new hires would then also not be eligible for participation in the Copper Price Bonus.” This ruling was made despite the Company’s objection and argument that no mistake existed and even if one did exist, the arbitrator lacked authority “to rewrite the contract to make new hires eligible for the bonus.”

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

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