Verizon ordered to arbitrate benefits claim

A District Court in Pennsylvania has ordered Verizon to arbitrate a grievance filed by Communications Workers of America claiming that the Company breached a contractual prohibition on "Making any changes in the Verizon Pension Plan or the Verizon Sickness and Accident Disability Benefit Plan which would reduce or diminish he benefits or privileges provided by the Plans for employees within the bargaining unit without agreement of the Union." Communications Workers of America, AFL-CIO, District 2-13 v. Verizon Pennsylvania, LLC

The Union asserted that Verizon had discontinued a practice of providing healthcare and life insurance benefits to terminated employees who were receiving accident disability benefits. According to the Union, per the applicable plan an employee terminated while receiving benefits is eligible to continue to receive benefits until the employee is no longer certified as disabled or has been paid the maximum amount of benefits under the plan.

The cba provides:

16.01 During the life of this Agreement the Company will not:

16.011 Make any change in the Verizon Pension Plan or the Verizon Sickness and Accident Disability Benefit Plan which would reduce or diminish the benefits or privileges provided by the Plans for employees within the bargaining unit without the agreement of the Union.

* * *

16.02 A claim that this Article has been violated may be submitted to arbitration under Article 10. A claim of an employee within the bargaining unit that they have been deprived of any benefits or privileges to which they are entitled under the Plans may be processed as a grievance under the provisions of Article 10, but shall not be subject to arbitration. However, nothing in this Agreement shall be construed to subject the provisions of the Plans or their administration or the terms of a proposed change to arbitration.

The Union's grievance claimed a violation of Article 16.011. Verizon refused to arbitrate, claiming that the grievance was a claim for benefits, expressly excluded from arbitration by the last sentence of Article 16.02. The Union filed a Petition to Compel Arbitration. The Court summarized the dispute before it:

At issue between the Union and Verizon is § 16.02 of the CBA. Verizon claims the Union's grievance is excluded from arbitration under the second and third sentences of § 16.02 because the grievance is merely a claim for benefits, which would require plan interpretation. ... Thus, Verizon argues that the remedy for former Verizon employees who claim to be denied benefits is the claims and appeals procedure outlined in SADBP § 9.1. ... In contrast, the Union contends that its grievance is arbitrable under the first sentence of § 16.02. ... The Union further takes issue with Verizon's construction and interpretation of § 16.02, claiming that Verizon's interpretation fails to take in account the distinction between claims being made by the Union on behalf of its members, and claims by individual members that they have been denied benefits.

Agreeing with the Union, the Court concluded that the dispute, as framed by the Union, was properly subject to arbitration. It noted:

...§ 16.02 makes a distinction between claims brought by the Union on a unit-wide basis, and claims by an individual that he or she has been denied benefits. The latter is not arbitrable because the second sentence of § 16.02 expressly carves it out of arbitration, stating that "[a] claim of an employee within the bargaining unit that they have been deprived of any benefits or privileges to which they are entitled under the Plans . . . shall not be subject to arbitration." (CBA § 16.02) (emphasis added). The second sentence of § 16.02 specifically states that a claim of an employee that he or she has been denied benefits is not subject to arbitration. Contrary to Verizon's interpretation, however, it does not necessarily follow that a claim by the Union on behalf of its bargaining members that there has been a reduction or diminishment in benefits is excluded from arbitration. If that were the case, then any claimed reduction in benefits would be excluded from arbitration and the second sentence of § 16.02 would swallow the first. In this case, we have a labor union that has made a claim of a violation of § 16.011 on behalf of all of its members. No other provision in the CBA or Article 16 forecloses that type of subject matter from arbitration. Accordingly, the Union's grievance is not excluded from the scope of the arbitration clause. [Footnotes omitted]

Finding no other "forceful evidence" that the parties intended to exclude grievances of this type from arbitration, and noting that it was making no decision on the merits of the Union's claim, the Court granted the Union's request to compel arbitration.