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FirstEnergy Generation, LLC v. National Labor Relations Board

United States Court of Appeals, Sixth Circuit

July 2, 2019

FirstEnergy Generation, LLC, a wholly owned subsidiary of FirstEnergy Corporation, Petitioner/Cross-Respondent,
v.
National Labor Relations Board, Respondent/Cross-Petitioner.

          Argued: May 9, 2019

          On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board; Nos. 06-CA-163303; 06-CA-170901.

         ARGUED:

          Peter N. Kirsanow, BENESCH, FRIEDLANDER, COPLAN & ARONOFF LLP, Cleveland, Ohio, for Petitioner/Cross-Respondent.

          Barbara Ann Sheehy, NATIONAL LABOR RELATIONS BOARD, Washington, D.C., for Respondent/Cross-Petitioner.

         ON BRIEF:

          Peter N. Kirsanow, Richard E. Hepp, BENESCH, FRIEDLANDER, COPLAN & ARONOFF LLP, Cleveland, Ohio, for Petitioner/Cross-Respondent.

          Barbara Ann Sheehy, Usha Dheenan, David Habenstreit, NATIONAL LABOR RELATIONS BOARD, Washington, D.C., for Respondent/Cross-Petitioner.

          Before: SUHRHEINRICH, BUSH and READLER, Circuit Judges.

          OPINION

          SUHRHEINRICH, Circuit Judge.

         An employer violates the National Labor Relations Act when it takes unilateral action relative to any mandatory subject of collective bargaining. See NLRB v. Katz, 369 U.S. 736, 743 (1962). In this case the International Brotherhood of Electrical Workers, Local 272, AFL-CIO (Union) accused the employer FirstEnergy Generation, LLC (Company) of two such infractions: implementing terms and conditions of employment that were inconsistent with the Company's final impasse offer during collective bargaining negotiations; and unilaterally subcontracting out periodic maintenance work historically performed by union employees. The National Labor Relations Board (Board) affirmed an administrative law judge's findings in favor of the Union on both charges. The Company filed this petition for review, and the Board has filed a cross-application to enforce the Board Order issued against the Company. For the reasons to follow, we AFFIRM in PART and REVERSE in PART.

         I. BACKGROUND

         A. The Parties

         The Company operates coal-fired power generation facilities throughout Ohio and Pennsylvania, including the Bruce Mansfield Plant in Shippingport, Pennsylvania. The Bruce Mansfield facility is home to three identical power generating units, referred to as Unit 1, Unit 2, and Unit 3. Each unit consists of a turbine, a generator, a boiler, valves, and other auxiliary equipment.

         The Union represents a bargaining unit of 230 production and maintenance employees at the Bruce Mansfield Plant. The parties' most recent collective bargaining agreement was effective from December 5, 2009, to February 15, 2013. On August 16, 2012, the parties extended the agreement to February 14, 2014.

         B. Negotiating a New Agreement

         December 19, 2013.

         he parties began negotiations for a successor collective bargaining agreement. A central concern was the Company's desire to eliminate retiree health care benefits for employees who retired during the term of the agreement, known as "in-the box" retirement benefits.[1] The Union objected to the elimination of the in-the-box retiree benefits and sought additional compensation as recompense. The Union also sought wage parity between the Bruce Mansfield plant and the Sammis facility, another Company power plant in Stratton, Ohio. They met numerous times until they reached an impasse in October 2015.

         September 25, 2014.

         The Company presented the Union with a Comprehensive Offer of Settlement. The Company's offer proposed eliminating health benefits for "in-the-box" retirees as of December 31, 2014. The offer also proposed the following annual wage increases, referred to as General Wage Increases (GWIs): 1.5% GWI effective the date of ratification; an additional 1% GWI effective one year following the date of ratification; and an additional 1% GWI effective two years following the date of ratification. This offer also proposed increasing the shift differentials paid to employees for hours worked during the afternoon and evening shifts, and on Sundays, all effective upon ratification.

         The Union rejected the offer.

         December 8, 2014.

         Charles Cookson, Executive Director of Labor Relations and Safety for the Company, verbally modified the Company's September 25, 2014 offer in response to Union President Herman Marshman's concerns that the proposed equity adjustment "was not near enough." Cookson offered an HSA [employee health savings account] or 401(k) contribution and two options for increased wages:

1. A contribution of $500 for those with individual health care coverage and $1000 for EE/Spouse, EE/Child and family coverage to the HSAs [employee health savings accounts]. If they do not participate in a FirstEnergy HSA, the money would be placed in their 401k account. This would be in each year of the contract. In addition, you can choose one of the options from below:
2. If you end the new retiree health care box 12/31/14 we would provide a general wage increase in each year of the contract as follows:
a. 3.0% at ratification
b. 2.5% one year after ratification
c. 2.5% two years after ratification
d. In addition we would provide a $.75 equity adjustment to all classifications at the time of ratification
3. If you end the new retiree health care box 12/31/15 we would provide a general wage increase in each year of the contract as follows:
a. 2.5% at ratification
b. 2.0% one year after ratification
c. 2.0% two years after ...

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