The Fraternal Order of Police, Fort Pitt Lodge No. 1 and the City of Pittsburgh are parties to a collective bargaining agreement which provides retiree healthcare for officers and their spouses. Healthcare coverage only terminates where the officer or their spouse has access to private medical coverage or at the time the officer or their spouse becomes eligible for Medicare. However, should such coverage terminate or cease to be available, the employee would be reinstated to their medical insurance benefits by the City.
This case stems from the death of a retired police office on March 8, 2021. The officer’s wife went for a routine mammogram appointment and was informed that she no longer had healthcare coverage. A few weeks after that appointment, she received a letter informing her that her benefits were terminated as of March 31, 2021, due to the death of her husband. Her only option was to apply for COBRA continuation coverage because she was not eligible for Medicare due to her age. The wife contacted the FOP, which was unaware of the City’s practice in terminating a spouse’s health insurance benefits after the death of a retiree. The FOP reached out to other members to determine how many others were impacted.
On April 19, 2021, the FOP filed a class action grievance seeking cessation of the City’s unilateral actions of eliminating City-sponsored healthcare coverage for the widows and widowers of retired police officers. The FOP alleged that the City violated various sections of the CBA by unilaterally terminating widow/widower and qualified spousal healthcare coverage. The FOP requested that the City provide a list of those retiree spouses who were denied coverage under similar circumstances and demanded a “make-whole remedy to compensate those widows/widowers and/or qualified domestic partners who have been affected by the City’s unilateral actions by eliminating retiree medical benefits and Medicare Part B payments.”
In response, the City contended that no violation of the CBA had occurred because it claimed to have acted in accordance with the parties’ past practice. The City referenced an October 1993 memorandum from the City’s compensation administrator to the then-president of the FOP, entitled “October 15, 1993 Retirement Meeting,” in which it asserted authorized termination coverage for surviving spouses. The October 1993 memorandum referenced a handout that the City intended to distribute at the upcoming meeting, which stated in the last paragraph on the second page that “the City will provide the retired Police Officer and his/her eligible spouse with the applicable benefits from the date of his/her retirement until the retired Police Officer becomes deceased.”
The Arbitrator found that the language of the CBA was not ambiguous, and clearly set forth the reasons for termination of the surviving spouse’s coverage and the “death of the retiree is not one of those reasons.” The Arbitrator determined that the City failed to establish that the termination of surviving spouse healthcare benefits was an established past practice between the parties. The Arbitrator concluded that the City violated the clear and unambiguous provisions of the CBA when it discontinued the healthcare coverage for the surviving spouse upon the death of the retiree.
The Arbitrator discredited the City’s claim that the October 1993 memorandum authorized the termination of such coverage because the City provided no documentation or other evidence that the attached pages were, in fact, presented at any meeting between the parties, or that the parties ever discussed or adopted the exclusion of medical coverage for surviving spouses upon the death of the retiree. The Arbitrator noted that no such language was ever included in the CBA and that the October 1993 memorandum was not incorporated into the parties’ CBA. The Arbitrator directed the City “to make restitution to the adversely affected survivors who are not otherwise excluded from coverage.”
The City appealed the Arbitration award, arguing that the Arbitrator exceeded his authority by adding a term about survivors to the retiree provisions of the CBA. The trial court entered an order denying the City’s appeal and upholding the award. The trial court reasoned that the award was a proper interpretation of the CBA rather than a reformation of it. The City then appealed to the Commonwealth Court contending that the trial court abused its discretion when it found that the Arbitrator did not exceed his authority by adding the term “surviving spouse” to the section of the CBA pertaining to healthcare.
The Commonwealth Court found that the Arbitrator relied on principles of equity in fashioning his award, that his reasoning was clearly based on his examination of different provisions of the CBA, and that he based his award on what the CBA said. The Court affirmed the decision of the trial court, holding that interpreting the health insurance provision of the CBA and its meaning in the absence of specifics regarding the death of a retiree was far from an “overt” instance of reformation.
City of Pittsburgh v. Fraternal Order of Police, Fort Pitt Lodge No. 1, 304 A.3d 816 (Pa. Cmwlth. Ct.).