                         Revised April 5, 2002

                IN THE UNITED STATES COURT OF APPEALS
                         FOR THE FIFTH CIRCUIT
                      __________________________

                             No. 00-60794
                      __________________________


MISSISSIPPI POWER COMPANY,
                                         Petitioner-Cross-Respondent,

                                versus

NATIONAL LABOR RELATIONS BOARD,
                                        Respondent-Cross-Petitioner.
          ___________________________________________________

         Petition for Review & Cross Petition for Enforcement
           of an Order of the National Labor Relations Board
          ___________________________________________________

                            March 14, 2002

Before GARWOOD and WIENER, Circuit Judges, and VANCE*, District

Judge.

WIENER, Circuit Judge:

     In 1997, an Administrative Law Judge (“ALJ”) ruled that the

Petitioner, Mississippi Power Company (the “Company”), had violated

Sections 8(a)(5) and (1) of the National Labor Relations Act (the

“Act”)1 when it refused to bargain collectively over currently

announced but prospectively effective changes in some of the

medical and life insurance benefits to be offered to some of the

Company’s future retirees.     In 2000, the National Labor Relations


     *
       District Judge of the Eastern District of Louisiana,
sitting by designation.
     1
         29 U.S.C. §§ 151 et seq.
Board (the “Board”) affirmed the ALJ’s rulings, findings, and

conclusions,      and   adopted    his    recommended     order,      with

modifications.2     The Company has petitioned for review of the

Board’s order, and the Board has cross-petitioned for enforcement

of its order.

     We affirm those aspects of the Board’s order grounded in the

determination that the Company’s announced prospective changes to

future retirees’ life insurance benefits constituted a violation of

the Act. We therefore deny the Company’s petition, and enforce the

Board’s order insofar as it pertains to life insurance.

     We   conclude,     however,   that   the   four    locals   of   the

International Brotherhood of Electrical Workers that represent

approximately 600 of the Company’s 1,400 employees (collectively

“the Unions”) had expressly waived any right they might have had to

bargain over this matter, so the Company did not violate the Act

when it declined the Unions’ request to bargain over the announced

medical insurance changes. Therefore, insofar as the Board’s order

pertains to medical insurance, we grant the Company’s petition,

deny the Board’s cross-petition for enforcement, set aside the

order, and remand to the Board for entry of appropriate orders.




                        I. Facts and Proceedings

     2
       Mississippi Power Company, 332 NLRB No. 52 (2000), 2000 WL
1504672 (N.L.R.B.).

                                   2
A. The Documents

       Before describing the events that gave rise to the instant

petition for review, a summary of three documents that are central

to this controversy, and the interrelationship of those documents,

is in order.

       1. The Memorandum of Agreement (“MOA”)

       The MOA, which was signed by the Company and the Unions,

became effective on August 16, 1992 for an initial term of three

years.    As the bargained-for agreement between those parties, the

MOA is a collective bargaining agreement, or, in the vernacular, a

CBA.     The MOA covers a wide but non-exhaustive range of topics

pertinent to the terms and conditions of employment of those

employees    who    belong    to   the   Unions    (including,   for       example,

Seniority, Promotion, Layoff, and             Discharge; Vacations, Leave of

Absence, and Sick Leave; and provisions addressing Grievances and

Arbitrations).        The MOA does not address traditional employee

benefits,    such    as    pension   plans,    life   insurance,      or    medical

insurance, at all.

       Following     its     initial     three-year     term,    the       MOA   is

automatically renewed for one-year extension terms from one August

16 to the next, unless either party notifies the other in writing

of non-renewal, at least sixty days prior to the expiration of the

then-current term of the agreement.               When, in 1995, the Company

announced    prospective      changes    in    life   and   medical    insurance

benefits for some of its future retirees, the MOA was still in its

                                         3
initial three-year term.

     2. The Medical Benefits Plan

     The Mississippi Power Company Medical Benefits Plan (the

“Medical Benefits Plan”) that was in effect in 1995 when the

subject changes were announced had become effective on March 1,

1993.     It   is   a   Company-drafted   document   that   was   executed

unilaterally by the Company but by no representatives of the

Unions.    The Medical Benefits Plan’s articles cover numerous

topics, such as “Benefit Provisions,” “Eligibility for Benefits,”

and “Plan Administration.” Among these articles are two that are

pertinent to this controversy:      Article IX (Reservations of Rights

by the Company and Limitations of Rights of Covered Persons), and

Article X (Amendment and Termination of the Plan).

     Section 9.1 of Article IX provides:

           9.1 Plan Voluntary on Part of Company. While
           it is the intention of the Company that the
           Plan shall be continued indefinitely and that
           the Company contributions required hereunder
           shall be made in each year that the Plan
           remains in effect, the Plan is entirely
           voluntary on the part of the Company.
           [Emphasis ours.]


     Article X provides, in relevant part:

           10.1 Amendment of Plan. The Company...shall
           have the right at any time by instrument of
           writing, duly executed, to modify, alter or
           amend, in whole or in part, the Plan.... The
           Company makes no promise to continue these
           benefits in the future and rights to future
           benefits will never vest.     In particular,
           retirement   or   the  fulfillment   of  the
           prerequisites for retirement pursuant to the

                                    4
           terms of any employee benefit plan maintained
           by the Company shall not confer upon any
           Employee, Retired Employee or Dependent any
           right to continued benefits under the Plan.
           [Emphasis ours.]

           10.2    Termination of Plan.     The Company
           intends that the Plan shall be permanent.
           However, the Company...has the right to
           terminate the Plan at any time.... After the
           termination of the Plan..., the Company and
           the Covered Employees shall have no further
           obligations to make additional contributions
           to the Plan.

Thus, the plain and unambiguous language of these sections of the

Medical Benefits Plan make clear that the Company has the right to

alter, at will and unilaterally, any terms of the Medical Benefits

Plan, including the unfettered right to terminate it altogether.

      3. The Group Medical Insurance Agreement (“Insurance Side

Letter”)

      The Insurance Side Letter is styled as a two-page offer and

acceptance that pre-dated the Medical Benefits Plan and that was

signed by the Company on August 15, 1992, the day before the MOA

became effective, but that did not become effective itself until it

was signed for acceptance by the Unions on December 18, 1992.            It

is one of several attachments to the MOA.              Like the MOA, the

Insurance Side Letter is the product of negotiations between the

Company and the Unions and is presented as the Company’s “offer

[that] shall become an agreement when the Union indicates its

acceptance hereof.” Following the portion describing the offer and

the   Company’s   signature,   and       above   the   Unions’   acceptance


                                     5
signatures,   is   the   boldface   title,   “Group   Medical   Insurance

Agreement.”   The Insurance Side Letter does not expressly refer by

title to the Company’s medical benefits plan that was in place when

the Side Letter was executed; it could not refer to the Medical

Benefits Plan because it was not yet in existence.              Thus the

Insurance Side Letter is a generic agreement applicable to any

group medical insurance that might be in place from time to time

during the term of the MOA.         None contest, however, that the

Insurance Side Letter was applicable to the Medical Benefits Plan

at the time in April 1995 when the prospective changes to that plan

were announced.

     In the Insurance Side Letter, the Company agrees to pay

“seventy percent of the cost of group medical insurance coverage”

for each participating employee and either one dependent or the

employee’s family, or $92.80 for a single employee’s coverage; and

the Company further agrees to pay seventy percent of any increase

in premium costs “in the event of any increase in premiums for the

above insurance.”        As consideration for this commitment, the

Company extracts an offsetting commitment —— called a “condition”

—— from the Unions:

          [1] the matter of insurance coverage or [2]
          change in the Company’s contribution toward
          the premium for insurance coverage of its
          employees shall not be subject to bargaining
          or a request for bargaining by the Union until
          the expiration of the Memorandum of Agreement,
          except by mutual consent. [Emphasis and


                                    6
            enumeration ours.]3

     The mutual agreements in the Insurance Side Letter —— the

Company’s payment obligation and the Unions’ agreement that neither

coverage nor premium payments would be the subject of bargaining ——

are specified to run co-extensively with the MOA’s initial term and

all annual renewals, unless modified or terminated according to

procedures identical to those specified in the MOA, as outlined

above.     And, just as does the MOA, the Insurance Side Letter

stipulates that “[u]ntil the parties have agreed upon such changes

the provisions of the agreement shall remain in full force and

effect.”

4.   Interrelationship of the Documents

     As noted, the bilateral MOA does not address traditional

employee benefits, such as pensions, life insurance, or health

insurance.    On the opposite end of the contractual spectrum, the


     3
       The Unions’ agreement regarding bargaining about medical
insurance during the original term of the MOA and all extensions
extends to only two aspects of such insurance: (1) anything to
do with coverage, and (2) the Company’s financial commitment to
pay portions of the premiums on any such insurance. As the
Company bound itself to pay a specified percentage or dollar
amount of all medical insurance premiums as well as a percentage
of increases in premiums occurring during the initial term of the
MOA and all extensions, the negating of bargaining over any
“change in the Company’s contribution” must pretermit only the
Unions’ right to seek to bargain for greater premium
contributions by the Company during that term. In contrast, the
Insurance Side Letter’s negating of bargaining over “the matter
of insurance coverage” is unrestricted as to the type and extent
of coverage, or, indeed, to coverage vel non; the clause
pretermits the Unions’ seeking to bargain about anything to do
with coverage during the term of this agreement.

                                  7
Company’s unilateral Medical Benefits Plan is an ERISA welfare

benefit plan which provides an employee benefit that, by the plan’s

own terms, can be changed from time to time or even terminated

altogether by the Company, acting alone.     The third document, the

Insurance Side Letter, has features of both:       Like the MOA, the

Insurance Side Letter is a bilateral agreement executed by both the

Company and the Unions; like the Medical Benefits Plan, however, it

relates only to the Company’s unilaterally granted employee benefit

of medical insurance, and then only to (1) premium payments and (2)

coverage.   In essence, this third document links the first two by

specifying a quid pro quo between the parties on elements of the

two otherwise-unrelated documents.       On the one hand, the Unions

obtain the Company’s commitment to maintain a specified level of

financial support not otherwise provided for in either the MOA or

any medical insurance plan, binding the Company throughout the term

of the MOA and all extensions to pay designated percentages or

dollar portions of the premiums for medical insurance coverage, as

well as designated percentages of any increases in premiums that

occur during that period.   On the other hand, as consideration for

the Company’s assumption of such premium payment obligations, the

Unions expressly acknowledge that throughout the term of the MOA

and any annual renewals, the Unions cannot seek to bargain about

either increasing the Company’s premium payment commitments or any

changes in medical insurance coverage, whether Company-instituted

or   Unions-requested,   those   being   matters   that   the   Company

                                  8
explicitly reserved to itself under that plan. Stated differently,

the Company committed to a financial obligation it did not have

under the MOA regarding partial payments of medical insurance

premiums and emphasized a right that it presumably has always

enjoyed under its medical insurance plans to change or terminate

coverage4; in consideration for the Unions’ express acknowledgment

that they    can   neither   seek   to       bargain    for   increased    medical

insurance    premium   contributions         by   the   Company   nor   challenge

through bargaining any unilateral changes in coverage of such

insurance that the Company might make.                This third document thus

serves to bridge the gap between the other two documents —— one

bilateral and the other unilateral —— regarding medical insurance

coverage and the Company’s contributions to the payment of premiums

for   such   insurance.       It    is       within     the   context     of   this

interrelationship of the three documents that we now consider the

Company’s petition and the Board’s cross-petition.

B. The Events

      In April 1995, while the MOA and the Insurance Side Letter

were still in their initial three-year terms and the Medical

Benefits Plan was in effect, the Company called a meeting with the


      4
       It is likely, of course, that absent the Insurance Side
Letter, the Unions would have had a right to seek to bargain over
the Company’s unilateral changes, even though the Medical
Benefits Plan granted to the Company the right to make unilateral
changes. The Insurance Side Letter operates, therefore, to
remove any right to seek to bargain about unilateral changes to
medical benefits that the Unions might have held.

                                         9
presidents of the four locals to announce changes in Company-

sponsored insurance coverage, both medical and life, provided to

retirees (also called Other Post-Retirement Benefits, or OPRBs).

The changes were not to become effective until January 1, 2002.   In

addition, the changes would not affect any current or future

employees who, as of January 1, 2002, shall have either retired or

served the Company for 30 years or more (15 years or more if the

employee is age 55 or older on January 1, 2002).   In other words,

the changes would affect only those current and future employees of

the Company who, on January 1, 2002, are still working for the

Company but shall have been working there for less than 30 years

or, if 55 years old or older on that date, shall have been working

there for less than 15 years.     For each employee who would be

affected, the changes linked the Company’s premium contribution

level to the employee’s years of service and placed caps on the

Company’s contribution to subsequent retirees’ medical insurance

premiums.   Retirees’ life insurance benefits were also changed, by

replacing the flat $12,500 coverage with a variable amount of life

insurance that also was linked to each covered employee’s years of

employment.   In addition, the Company eliminated its policy of

subsidizing supplemental life insurance for retirees.

     In June 1995, the Unions responded to the Company in writing,

requesting bargaining over the OPRB changes in medical benefits.

The letter stated, “[W]e feel [these changes] will be a hardship on

all current employees in the retirement plan[, and that] this is a

                                 10
subject for bargaining, and the company has failed to bargain on

these issues.” The Company declined this request in a letter dated

July 18, 1995, saying, “[We] do not feel that the OPRB changes are

a mandatory subject of bargaining,” whereupon the Unions filed an

unfair labor practice charge with the Board, alleging unilateral

changes in retirement benefits.        Following an investigation of the

matter, the Board issued a complaint against the Company, asserting

that its refusal to bargain over the OPRB changes constituted a

violation of sections 8(a)(5) and (1) of the Act.

     An ALJ held a hearing on the complaint and concluded that the

Company had violated the Act as charged.            Specifically, the ALJ

determined that the unilateral OPRB changes did involve a mandatory

subject   of   bargaining;    that    the   prospective   changes   affected

current employees of the Company; and that the Unions had not

waived their right to bargain over the OPRBs either by acquiescing

in unilateral changes to OPRBs in the past or by accepting the

“condition”    in   the   Insurance   Side   Letter,   and   thus   were   not

precluded from requesting bargaining by those provisions of the

Medical Benefits Plan that acknowledge the Company’s capacity to

institute unilateral amendment and termination of rights.

     The Company filed exceptions to the ALJ’s opinion, after which

the Board affirmed the ALJ’s ruling, albeit for slightly different

reasons on some points.5      The Board agreed with the ALJ’s findings

     5
       Mississippi Power Company, 332 NLRB No. 52 (2000), 2000 WL
1504672 (N.L.R.B.).

                                      11
that (1) a mandatory bargaining subject and current employees were

involved, and (2) the Unions’ earlier acquiescence in unilateral

changes did not constitute waivers.        As for the Medical Benefit

Plan’s unilateral amendment and termination of benefits provisions,

the Board corrected the ALJ’s factual finding about the location of

the clause,6 but agreed with the ALJ that these provisions do not

reflect an explicit waiver of any right to bargain over the OPRBs.

Finally, the Board disagreed with the ALJ’s finding that the

“condition”   expressly   accepted   by   the   Unions   in   signing   the

Insurance Side Letter was, at most, “ambiguous”; but the Board went

on to hold that this condition addressed only changes in benefits

that would go into effect during the term of the Insurance Side

Letter.    Thus, reasoned the Board, the condition was inapplicable

to the proposed January 2002 OPRB changes, and therefore was not a

waiver of the Unions’ right to bargain over those prospective

changes.

     The Company filed a petition for review of the Board’s order,

pursuant to 29 U.S.C. § 160(f), after which the Board filed a

cross-application for enforcement of the order, pursuant to 29

U.S.C. § 160(e).

                            II. Analysis

A. Standard of Review


     6
       The ALJ stated that these provisions were in the OPRB
changes document, when in fact they are in the Medical Benefits
Plan.

                                 12
     The Act provides that the Board’s findings of fact shall be

conclusive, “if supported by substantial evidence on the record

considered as a whole.”7     As to construction of the parties’ duty

to bargain under section 8(d) of the Act, the United States Supreme

Court has said: “Construing and applying the duty to bargain and

the language of § 8(d), ‘other terms and conditions of employment,’

are tasks lying at the heart of the Board's function,”8 so that “if

[the Board’s] construction of the statute is reasonably defensible,

it should not be rejected merely because the courts might prefer

another view of the statute.”9          Last, we review the Board’s

construction of labor contracts de novo.10

B. Merits

     1. The Duty to Bargain

     Under the Act, it is an unfair labor practice for an employer

“to refuse to bargain collectively with the representatives of his

employees.”11    Employers and the employees’ representatives have a



     7
       29 U.S.C. § 160(e); see also NLRB v. Pinkston-Hollar
Construction Services, Inc., 954 F.2d 306, 309 (5th Cir. 1992).
     8
          Ford Motor Co. v. NLRB, 441 U.S. 488, 497 (1979).
     9
       Id. (emphasis added) (citing NLRB v. Iron Workers, 434
U.S. 335, 350 (1978) (“The Board's resolution of the conflicting
claims in this case represents a defensible construction of the
statute and is entitled to considerable deference.”)).
     10
       BP Amoco Corp. v. NLRB, 217 F.3d 869, 873 (D.C. Cir.
2000); NLRB v. United States Postal Service, 8 F.3d 832, 837
(D.C. Cir. 1993).
     11
          29 U.S.C. § 158(a)(5).

                                   13
mutual obligation to bargain collectively over “wages, hours, and

other terms and conditions of employment.”12             Subjects that fall

within the statutory category of “wages, hours, and other terms and

conditions of employment” are commonly referred to as “mandatory

bargaining subjects.”13    The United States Supreme Court has noted

that, “[i]n general terms, the [category of mandatory bargaining

subjects]    includes   only   issues    that   settle   an   aspect   of   the

relationship between the employer and employees.”14             This general

statement in turn highlights one last feature of a mandatory

bargaining subject:     It must affect “employees.”

     With respect to this requirement, the Supreme Court noted with

apparent approval the general definition of “employee” as “someone

who works for another for hire,” in holding that current retirees

were not employees under the Act, because “retired employees have

ceased to work for another for hire,” and it would “utterly destroy

the function of language to read [the Act’s terms] as embracing

those whose work has ceased with no expectation of return.”15



     12
          29 U.S.C. § 158(d).
     13
       See, e.g., Allied Chemical & Alkali Workers of America,
Local Union No. 1 v. Pittsburgh Plate Glass Co., 404 U.S. 157,
176 (1971) (inquiring whether pensioners’ benefits were “a
mandatory subject of collective bargaining as ‘terms and
conditions of employment’ of the active employees who remain in
the unit”); NLRB v. Columbus Printing Pressmen & Assistants’
Union No. 252, 543 F.2d 1161, 1164 (5th Cir. 1976).
     14
          Allied Chemical, 404 U.S. at 178.
     15
          Id. at 167-69, 172.

                                    14
Synthesizing all of these observations, then, a refusal to bargain,

or a unilateral change or modification, with respect to a mandatory

bargaining subject constitutes an unfair labor practice.

     As the D.C. Circuit noted, however, “‘the duty to bargain

under the [Act] does not prevent parties from negotiating contract

terms that make it unnecessary to bargain over subsequent changes

in terms or conditions of employment.’”16 In addition, a party may,

by means of a “clear and unmistakable” waiver, relinquish its

statutory right to bargain.17

     The Company advances two core reasons why it had no obligation

to bargain over its announced prospective changes to the OPRBs.

The first is that the OPRBs —— and changes to them —— were not

mandatory bargaining subjects.        In support of this point, the

Company offers four affirmative defenses: (1) Future retirees are

not “employees” under the Act, (2) the announced changes in life

insurance benefits were not material, substantial, or significant;

(3) the announced changes did not vitally affect a mandatory

subject of bargaining for current employees; and (4) the announced

changes did not have a tangible effect on a mandatory subject of

bargaining.

     The Company argues in the alternative that even if changes in

     16
       B.P. Amoco Corp. v. NLRB, 217 F.3d 869, 872-73 (D.C. Cir.
2000) (quoting NLRB v. United States Postal Service, 8 F.3d 832,
836 (D.C. Cir. 1993)).
     17
       See, e.g., Timken Roller Bearing Co. v. NLRB, 325 F.2d
746, 751 (6th Cir. 1963).

                                 15
retirees’ medical insurance are properly classified as mandatory

bargaining   subjects,      the   Unions   expressly       and    unconditionally

waived or relinquished their right to bargain over them.

     We    agree     with   the   Board    that    the     Company’s      announced

unilateral changes affected mandatory bargaining subjects.                         We

agree with the Company, however, that the Unions expressly and

unconditionally      waived   their   right   to    demand       bargaining      over

changes in medical insurance benefits.             Accordingly, we conclude

that when the Company announced unilateral changes to future

retirees’ life insurance benefits —— concerning which the Unions

had not waived their right to bargain —— the Company violated the

Act and the Board’s order must be enforced.                  As to the medical

benefits, however, we conclude that the Company had the right to

change those benefits unilaterally and that the Unions’ express

waiver of their right to demand bargaining shields the Company from

liability:    In announcing unilateral changes to medical benefits,

the Company did not violate the Act, and we therefore set aside the

Board’s order insofar as it relates to medical benefits.

     2. Changes Affecting Mandatory Bargaining Subjects

     In defending its acts, the Company advances four reasons why

its announced unilateral changes did not violate the Act: (1)

Future    retirees    are   not   “employees”      under    the    Act,    (2)   the

announced changes in life insurance benefits were not material,

substantial, or significant; (3) the announced changes did not

vitally affect a mandatory subject of bargaining for current

                                      16
employees; and (4) the announced changes did not have a tangible

effect on a mandatory subject of bargaining.               The Company’s first

defense seeks to limit the meaning of “employee” under the Act18;

the remaining three seek to show that the changes did not reach or

affect a mandatory bargaining subject, or, in the words of the Act,

“wages, hours, and other terms and conditions of employment.”19

     As noted above, the Supreme Court has instructed us to accord

special    deference    to    the   Board’s     interpretation       of     the   Act:

“Construing and applying the duty to bargain and the language of §

8(d), ‘other terms and conditions of employment,’ are tasks lying

at the heart of the Board’s function,” so that “if [the Board’s]

construction of the statute is reasonably defensible, it should not

be rejected merely because the courts might prefer another view of

the statute.”20        Heeding this admonition, we turn now to the

Company’s four arguments.

     The    Company    first    asserts     that    the   Board     erred    when    it

categorized the “future retirees” affected by the OPRB changes as

“employees”    under    the    Act,   leading      in   turn   to   the     erroneous

conclusion that the OPRBs were mandatory bargaining subjects.                       The



     18
          29 U.S.C. § 152(3).
     19
          29 U.S.C. § 158(d).
     20
       Ford Motor Co. v. NLRB, 441 U.S. 488, 497 (1979) (citing
NLRB v. Iron Workers, 434 U.S. 335, 350 (1978) (“The Board’s
resolution of the conflicting claims in this case represents a
defensible construction of the statute and is entitled to
considerable deference.”)).

                                       17
Company      appears   to    argue,   in    essence,    that   the    Board    has

misinterpreted the seminal case on this issue, Allied Chemical &

Alkali Workers of America v. Pittsburgh Plate Glass Co.21                    It is

well settled, however, that Pittsburgh Plate Glass stands for the

proposition that the retirement benefits of a company’s current

retirees are not mandatory bargaining subjects but that “future

retirement benefits of active workers are part and parcel of their

overall compensation and hence a well-established statutory subject

of bargaining.”22           Even if there were merit to the Company’s

argument that Pittsburgh Plate Glass has been misconstrued and in

fact    establishes     a    distinction    between    non-vested     retirement

benefits      and   contractually     enforceable      ones,   we    would   still

conclude that the Board’s interpretation of Pittsburgh Plate Glass,

and the resulting construction of the statutory term “employee,” is

“reasonably defensible,”23 at least as applied to materially adverse

       21
            404 U.S. 157 (1971).
       22
            Pittsburgh Plate Glass, 404 U.S. at 180 (emphasis added).
       23
       Neither is the instant case the only one in which the
Board has determined that changes affecting future retirees
constitute mandatory subjects of bargaining under the Act. See,
e.g., Georgia Power Co., 325 NLRB 420, 420 (1998) (“[T]he
prospectively announced changes in retirement benefits will
affect currently active unit employees who will retire on or
after the announced implementation date, and therefore were
mandatory bargaining subjects.”); Midwest Power Systems, Inc.,
323 NLRB 404, 406 (1997) (“The Supreme Court has clearly stated
that the future retirement benefits of current active employees
are a mandatory subject of collective bargaining under the Act.
Unilateral modification of such benefits constitutes an unfair
labor practice.”); Titmus Optical Co., Inc., 205 NLRB 974, 981
(1973) (“Changes in retirement benefits that affect current

                                       18
changes in a subsisting retirement benefit.                   Thus, this initial

challenge to the Board’s ruling fails.

     For its second defense, the Company contends that the life

insurance    OPRB   changes    were       not   “material,     substantial,    and

significant,” asserting in its appellate brief:

            Not one single member of the bargaining unit covered by
            the present Agreement is presently affected by this
            announcement. Since there is neither a present injury to
            the individuals in the bargaining unit, nor an
            infringement on the Unions’ right to bargain over this
            announcement of a future change when it becomes a present
            change, the Company’s announcement did not give rise to
            a legally cognizable injury under § 8(a)(5).

Whether we construe the Company’s objection as centering on the

prospective nature of the changes, or on the degree of the change,

it fails.     As we have already observed, retirement benefits,

although    prospective,      are     considered    part      of   an   employee’s

compensation package, and changes in the computation of such

benefits do constitute significant changes.24                  Moreover, as the

Board points out, the changes that have been held not to be

“material,    substantial,      and     significant,”      and     therefore   not

meriting    protection   under      the    Act,   did   not    alter    employees’




employees are a mandatory subject of collective bargaining, and a
unilateral modification of such benefits, during the term of an
agreement is in derogation of the bargaining obligation and
constitutes an unfair labor practice.”).
     24
       See Georgia Power Co., 325 NLRB 420, 420 n.5 (1998)
(“[I]f a change involves the terms and condition of employment of
unit employees, it is a mandatory bargaining subject even if only
a relatively few employees are affected.”).

                                          19
entitlements or expectations at all.25      Last, we remain mindful of

our deference to the Board’s construction of the Act, and echo the

United States Supreme Court’s response to a similar argument:

            As for the argument that in-plant food prices and
            services are too trivial to qualify as mandatory
            subjects, the Board has a contrary view, and we have no
            basis for rejecting it.     It is also clear that the
            bargaining–unit employees in this case considered the
            matter far from trivial.... In any event, we accept the
            Board’s view that in-plant food prices and service are
            conditions of employment and are subject to the duty to
            bargain.26

We   therefore    reject   this   second   challenge      to   the   Board’s

determination.

     For its third defense, the Company argues that the announced

prospective changes did not “vitally affect” a mandatory bargaining

subject.    This argument fails because the words, “vitally affect,”

hearken to a test that is inapplicable in this context.                   In

Pittsburgh Plate Glass, the Supreme Court noted that, “[a]lthough

normally matters     involving    individuals   outside    the   employment

relationship do not fall within [the mandatory bargaining subject]




     25
       See, e.g., Civil Service Employees Ass’n, Inc., 311 NLRB
6, 7-8 (1993) (employees who were already required to remain in
constant touch with the office were now required to carry
beepers); Litton Microwave Cooking Products, 300 NLRB 324, 331-32
(1990), enforced, 949 F.2d 249 (8th Cir. 1991), cert. denied, 503
U.S. 985 (1992) (employer installed buzzers to signal the
beginning and end of breaks, but did not alter the time allotted
for breaks).
     26
          Ford Motor Co. v. NLRB, 441 U.S. 488, 501 (1979).

                                    20
category, they are not wholly excluded.”27          The Court went on to

describe cases in which the subject matter of negotiations between

a company and a non-employee third party had an impact on the terms

and conditions of the company’s employees.28         The Court concluded

that, when determining whether a company’s negotiations with a

third party were a mandatory bargaining subject, “the question is

not   whether    the   third-party   concern   is   antagonistic   to   or

compatible with the interests of the bargaining-unit employee, but

whether it vitally affects the ‘terms and conditions’ of their

employment.”29

      In Keystone Steel & Wire v. NLRB,30 the D.C. Circuit reviewed

the Board’s attempt to apply the “vitally affects” test, and

observed that “[t]he ‘vitally affects’ test is relevant...only when

a union seeks to bargain over a matter that would not normally be




      27
       Pittsburgh Plate Glass, 404 U.S. 157, 178 (1971)
(emphasis added).
      28
       Id. at 178-79 (1971) (emphasis added) (citing Local 24,
Inter. Teamsters, etc., Union v. Oliver, 358 U.S. 283 (1959)
(minimum rental that carriers would pay to truck owners who drove
their own vehicles in carrier’s service, in place of carrier’s
employees, was integral to the establishment of a stable wage
structure for employee-drivers) and Fibreboard Paper Products
Corp. v. NLRB, 379 U.S. 203 (1964) (company’s contracting labor
out to independent contractors is a statutory subject of
collective bargaining).
      29
           Pittsburgh Plate Glass, 404 U.S. at 179 (emphasis added).
      30
           41 F.3d 746 (D.C. Cir. 1994).

                                     21
viewed as within the scope of mandatory bargaining.”31              That is to

say, when a company’s negotiations with its own employees are at

issue, the vitally affects test is inapplicable32; it only comes

into play when some decision-making is at issue that does not at

first glance appear to be within the scope of the mandatory

bargaining provisions. The only bargaining issue presented here is

one directly between the Company and current employees, who are

potential    future   retirees;      the   Company’s    assertion    that   the

announced changes do not “vitally affect” current employees is

simply wrong.

     In its fourth and final defense, the Company contends that

employers    need   only   bargain    over   those     changes   that   have   a

“tangible effect” on the employees’ concerns.             The Board’s answer

to this argument is concise and on target:           Keystone Steel & Wire,

from which the Company extracts the notion of a “tangible effect,”

is easily distinguishable from the instant case on two counts.

First, the unilateral changes at issue in Keystone Steel & Wire

were to managements’ retirement benefits only,33 unlike the instant

case in which the OPRB changes were to the employees’ plans.

     31
       Id. at 753 (quoting U.S. Dept. of Navy v. FLRA, 952 F.2d
1434, 1440 (D.C. Cir. 1992)) (emphasis in original).
     32
       See Georgia Power Co., 325 NLRB 420, 420 n.5 (1998) (“The
Board rejected that same argument in Midwest Power Systems,
finding the ‘vitally affects’ doctrine inapplicable to the
situation of current employees with a direct interest in their
future retirement benefits.”).
     33
          See Keystone Steel & Wire, 41 F.3d at 747-48.

                                      22
Second, the Keystone Steel & Wire court considered the scope of the

“effect” on employees’ concerns in the course of its “vitally

affects” analysis, which, again, is inapplicable to these facts.

      To summarize, all four of the Company’s defensive attempts to

cast the OPRB changes as non-mandatory bargaining subjects fail.

As we explain below, the Insurance Side Letter constituted a waiver

by the Unions of their right to demand bargaining over medical

insurance changes.       With respect to life insurance, however, the

Company can point to no document showing the Unions’ waiver of

their right to demand bargaining. Absent that, the Company is left

without a viable defense to the Board’s ruling that it has violated

the Act.      We must therefore defer to the Board’s conclusion that

the Company’s announced unilateral changes to future retirees’ life

insurance     benefits     constituted    a   violation   of   the   Act   and,

accordingly, enforce the Board’s order insofar as it pertains to

life insurance.



      3. The Unions’ Waiver

      Our conclusion that the Company’s announced unilateral changes

to   future    retirees’    insurance    benefits   affected    a    mandatory

bargaining subject holds equally true for the changes to life and

medical insurance benefits.       It is in the context of the changes to

medical insurance benefits, however, that the Company’s alternative

argument becomes relevant:        Even if changes in retirees’ medical

insurance are properly classified as mandatory bargaining subjects,

                                     23
the Unions expressly and unconditionally waived or relinquished

their right to bargain over them.         We agree with the Company that

the   Unions   did   waive   and   relinquish   their   right   to   demand

bargaining over changes in medical insurance.34

      To reiterate, the MOA does not mention insurance benefits of

any kind, but the Insurance Side Letter contains the following

language which imposes a “condition” on —— more accurately, creates

quid pro quo “consideration” for —— the Company’s agreement to

contribute a set percentage or dollar amount to insurance premiums,

including future increases:

           an agreement [by the Unions], as evidenced by
           the Union’s [sic] acceptance, that [1] the
           matter of insurance coverage or [2] change in
           the Company’s contribution toward the premium
           for insurance coverage of its employees shall
           not be subject to bargaining or a request for
           bargaining by the Union until the expiration
           of the Memorandum of Agreement, except by
           mutual consent. [Enumeration ours.]

When the ALJ reviewed this clause, he stated,

           As to the zipper clause,35 the language in that

      34
       In addition to the arguments discussed above, the Company
also advanced another, grounded in its rights under ERISA to
alter the Medical Benefits Plan at will. Because we conclude
that the Unions waived their right to demand bargaining when they
signed the Insurance Side Letter, we need not consider the
Company’s ERISA-based argument.
      35
       Although the ALJ termed this provision of the Insurance
Side Letter a “zipper clause,” and the parties have continued to
refer to it as such in their briefs and arguments, we note that
this clause, which specifically prevents bargaining over
particular topics, is quite unlike the typical zipper clause
examined in the case law. Typically, after a CBA has been
negotiated and agreed on by the parties, a zipper clause is

                                     24
          clause appears to preclude Respondent from
          unilaterally changing the OPRB. At most the
          language is ambiguous.       The Board has
          consistently refused to find waiver by unions



inserted to “zip up” the agreement. As one ALJ explained, zipper
clauses
          are often inserted in labor contracts to make sure that
          there is nothing dangling and that, during the contract
          term, one party cannot force the other back to the
          bargaining table to discuss items that they forgot to
          discuss or which they deliberately avoided during
          negotiations but which fall within the broad definition
          of “wages, hours, and terms and conditions of
          employment.”
Mary Thompson Hospital, 296 NLRB 1245, 1249 (1989). The
stereotypical zipper clause provides:
               The parties acknowledge that during the
          negotiations which resulted in this Agreement, each had
          the unlimited right and opportunity to make demands and
          proposals with respect to any subject or matter not
          removed by law from the area of collective bargaining,
          and that the understanding and agreements arrived at by
          the parties after the exercise of that right and
          opportunity are set forth in this agreement.
          Therefore, the Company and the Union, for the life of
          this Agreement, each voluntarily and unqualifiedly
          waives the right, and each agrees that the other shall
          not be obligated to bargain collectively with respect
          to any subject or matter referred to, or covered in
          this Agreement, or with respect to any subject or
          matter not specifically referred to or covered by this
          Agreement even though such subject or matter may not
          have been within the knowledge or contemplation of
          either or both of the parties at the time they
          negotiated or signed this Agreement.
GTE Automatic Electic Incorporated, 261 NLRB 1491, 1491 (1982).
When such a zipper clause is at issue, it is easy to see why one
might question whether the unions had granted a clear and
unmistakable waiver of the right to bargain over a specific
matter not covered in the CBA. Here, in stark contrast, we are
not left to wonder whether the union representatives might have
failed to think about medical insurance when they penned their
signatures. Much of the case law analyzing the unions’ waiver by
means of a typical zipper clause is therefore inapposite, for
this is no typical zipper clause, despite the parties’ calling it
one.

                               25
            in situations similar to the instant one.36

The Board, in its review of the ALJ’s ruling, disagreed with his

approach, and explained its preferred analysis:

                 Finding, in effect, that the zipper
            clause applied to the OPRB changes at issue
            here, the [ALJ] found that “the language in
            the   zipper  clause   appears   to   preclude
            Respondent from unilaterally changing OPRB.
            At most it is ambiguous.”    Accordingly, the
            judge found that the zipper clause did not
            establish that, as the Respondent contended,
            the Locals had waived their right to bargain
            over the OPRB changes.
                 Contrary to the judge, we find that the
            zipper clause does not apply to the OPRB
            changes at issue here and, on this basis, find
            that the zipper clause does not evidence the
            Locals’ waiver of their right to bargain over
            the OPRB changes. The zipper clause, by its
            terms, contains an offer by the Respondent and
            an acceptance by the Locals that covers the
            employees’ medical premiums “during the term
            of the resulting [Insurance Side Letter]
            agreement.”    The announced OPRB changes,
            however, are for changes that will not occur
            until January 1, 2002, a date outside the term
            of the side-letter agreement. Therefore, the
            announced OPRB changes are not in any way
            addressed by the zipper clause.     Since the
            announced OPRB changes will fall outside the
            term of the side-letter agreement, the zipper
            clause contained in the side-letter agreement
            cannot constitute a clear waiver of the
            Locals’ right to bargain over those changes.
            Therefore, the zipper clause does not permit
            the Respondent to make the OPRB changes at
            issue here without bargaining with the
            Locals.37


     36
       Mississippi Power, 332 NLRB No. 52 (2000), 2000 WL
1504672, at *11 (citing Exxon Research & Engineering Co., 317
NLRB 675 (1995); T.T.P. Corp., 190 NLRB 240, 244 (1971)).
     37
          Id. at *4.

                                 26
Thus the Board construed the Insurance Side Letter in such a way

that its “term” —— which is coextensive with the term of the MOA,

comprises both the initial three-year term and all annual renewals,

which clearly could have (and, for all we know, might have)

prolonged the term of the MOA, and thus the Insurance Side Letter,

beyond January 1, 2002 —— defines not only the time during which

bargaining is foreclosed on the enumerated topics, but also the

time during which the Company’s unilateral changes must take effect

if the Unions’ relinquishment of bargaining rights is to apply.

     Nothing in the language of the Insurance Side Letter supports

the Board’s construction.        As a temporal element, the term of the

Insurance Side Letter addresses two things, and two things only:

It states first that “during the term of the resulting agreement

[the Company] will continue to pay seventy percent of the cost of

group medical insurance coverage...,” and second, that, as we have

emphasized, the “matter[s] of insurance coverage or change in the

Company’s contribution toward the premium” will not be subject to

bargaining or a request for bargaining by the Unions “until the

expiration    of   the   [MOA].”       (Emphasis      added.)      Plainly,    the

Company’s contribution commitment, on the one hand, and the Unions’

relinquishment      of   any   right   to    insist   on   bargaining    for   (1)

increases    in    the   Company’s     contributions       and   (2)   unilateral

coverage changes by the Company, on the other hand, are the only

matters that are cabined within the term of the Insurance Side

Letter.     The Board impermissibly stretches the language of the

                                        27
Insurance Side Letter to construe the express term of the agreement

as containing not only a temporal moratorium on bargaining, but

also a temporal limit on the effective date of the changes over

which bargaining is foreclosed. Yet the date on which any Company-

declared change is to take effect is simply irrelevant.            The Board

misconstrued the contract when, from the whole cloth, it created a

an effective-date temporal element in the Insurance Side Letter.

If allowed to stand, such an interpretation would produce the

anomalous result of telling the Company, “If you want to make a

change in coverage that negatively affects employees who are union

members, you must make such changes effective now (i.e., start the

pain immediately) rather than postponing it for seven years.”

       Differing with the Board’s contractual interpretation, we hold

that    the   Unions    expressly,     clearly    and   unmistakably   waived

bargaining on the changes in the Medical Benefits Plan that are

here at issue.         In essence, the Unions agreed that the Company

could modify coverage or terminate that plan altogether, but

neither     expressly    nor   implicitly   limited     that   concession   to

modifications     or    terminations     with    current   effective   dates.

Rather, the Company was free to make such changes effective as of

any time during the continued existence of this particular CBA

which, through a series of automatic renewals, could extend past

January 1, 2002.38

       38
       Again, the question is not before us, but the converse of
this proposition is that if the CBA should terminate before the

                                       28
     We are aware, as the Board reminds us, that as a general rule,

appellate courts are constrained to give considerable deference to

the Board’s determinations on the issue of waiver. Our disapproval

of the Board’s waiver determination here is premised, however, on

basic principles of labor contract construction, over which we

conduct de novo review39 and with respect to which we need accord

no deference to the Board’s determination.40                In reaching a

conclusion different from the Board’s with respect to waiver, we

get there by correcting the Board’s misconstruction of the plain

language     of   these   labor   contracts,   which   is    our   special

prerogative, not the Board’s.



prospective effective date of the changes, then perforce, they
would be of no effect unless incorporated in the successor CBA or
group medical insurance plan, or both.
     39
       BP Amoco Corp. v NLRB, 217 F.3d 869, 873 (D.C. Cir. 2000)
(“Because the courts are charged with developing a uniform
federal law of labor contracts under section 301 of the Labor
Management Relations Act...., we accord no deference to the
Board’s interpretation of labor contracts.”) (quoting NLRB v.
United States Postal Service, 8 F.3d 832, 836 (D.C. Cir. 1993));
United States Postal Service, 8 F.3d at 837 (“In a case such as
this one,...the resolution of the refusal to bargain charge rests
on an interpretation of the contract at issue.... Normally,
under federal labor laws, arbitrators and the courts, rather than
the Board, are the primary sources of contract interpretation.”).
We acknowledge, of course, that our review is for clear error
only when a contract is ambiguous, because such review implicates
questions of fact. Determination of whether a contract is
ambiguous is a question of law, however, which we review de novo.
Likewise, interpretations of unambiguous contracts, such as the
one presently before us, also present questions of law, subject
to de novo review. See Stinnett v. Colorado Interstate Gas Co.,
227 F.3d 247, 254 (5th Cir. 2000).
     40
           BP Amoco, 217 F.3d at 873.

                                    29
      Neither     does    our    construction    require     an   impermissibly

“expansive” reading of the contracts, which is how the Board

classified the Company’s like reading.                None disputes that the

parties reached the Insurance Side Letter agreement following

negotiations, so that any argument suggesting that the Unions’

waiver of a statutory bargaining right was unwitting is foreclosed

by the facts.      Neither do we need to infer any terms to reach our

conclusion; rather, we simply correct the Board’s own erroneous

inference of provisions (the limit mistakenly imposed on the

effective date of changes about which bargaining was foreclosed)

and rely on the clear and unambiguous language of the contract,

which uses the co-extensive time spans of the MOA and the Insurance

Side Letter to define only the term of (1) the Company’s agreement

to   maintain    the     level   of   premium   contribution      while   health

insurance coverage continues, and (2) the Unions’ surrender of any

bargaining right over premiums and coverage. We discern nothing in

the agreements, either explicit or implicit, about when otherwise

permissible Company changes can or cannot take effect.

      The thrust of our conclusion that the “condition” in the

Insurance Side Letter constituted a waiver should be obvious:                 The

right to bargain over the “matter of insurance” was the right

explicitly      relinquished     by   the    Unions   when   they   signed    the

Insurance Side Letter in exchange for a guaranteed level of premium

contributions from the Company for as long as the MOA and Company-

sponsored group medical insurance continued in existence.                    When

                                        30
viewed in the light of the pellucid language of the Insurance Side

Letter, therefore, the Unions’ “request for bargaining” over the

changes in retirees’ medical insurance benefits —— indisputably a

“matter of insurance” —— before “the expiration of the [MOA],”

flies in the face of the parties’ express agreement.             As a result,

the Company was justified in refusing to heed the Unions’ request

to bargain over those prospective OPRB changes affecting health

insurance, declared by the Company during the term of the Insurance

Side Letter and the MOA.

     Of course, the Insurance Side Letter did give the Unions an

alternative course of action which they did not take.               Like the

MOA, the Insurance Side Letter, states that “[t]he party desiring

to change or terminate the agreement after the expiration of the

[MOA], must notify the other party in writing at least sixty (60)

days prior to August 16 of the year in which such termination or

changes are desired, stating in the notice the nature of the

changes desired.”       The Company announced the prospective OPRB

changes on April 21, 1995, and the then-current term of the MOA was

scheduled to expire on August 16, 1995.              Nothing prevented the

Unions from notifying the Company, in writing, by or before June

15, 1995 —— or, for that matter, June 15 of any subsequent plan

year before the one commencing August 16, 2001 —— of their desire

not to have the MOA and the Insurance Side Letter agreement renew

automatically.     But the Unions cannot have it both ways:              They

cannot   allow   the   MOA   ——   and   thus   the   Insurance   Side   Letter

                                        31
Agreement —— to continue being extended from each August 16 to the

next and, at the same time, seek to bargain about that which they

have waived the right to bargain over for the duration of those

agreements.

     4.    The   Company’s   Unilateral   Change   of   Retirees’   Medical

Benefits

     The Board advances that even if, through the Insurance Side

Letter, the Unions did waive their right to bargain, that waiver

did not give the Company carte blanche to make unilateral changes

to future retirees’ medical benefits.         In its brief, the Board

argues:

            Accordingly, even if the Company were correct
            in asserting that the zipper clause precluded
            a union request to bargain over medical
            insurance matters, the zipper clause also
            would, as a threshold matter, have precluded
            the Company from unilaterally altering the
            terms of medical insurance in the first place.

Not only does this non-sequitur voice flawed logic, it is directly

contradicted by the clear wording of that agreement.

     We acknowledge that a waiver of bargaining must be clear and

unmistakable before it can be used to defend against an unfair

labor practice charge of refusing to bargain; and, too, we are

aware that there must be ample evidence showing that the waiver

actually covers the matter at issue.           Here, there is express

waiver, clearly and unmistakably articulating that the identified

topics —— coverage and premiums on medical insurance —— “shall not



                                    32
be subject to bargaining or a request for bargaining by the Union.”

Moreover, the agreement in which the waiver is found is titled

“Group Medical Insurance Agreement,” and the waiver expressly

precludes bargaining on the “matter of insurance.”          This supports

incontrovertibly the factual determination that the specific topic

at issue (the Company’s future contributions to medical insurance

benefits of future retirees and the extent and existence of their

coverage) is within the topic covered by the instant waiver.

     That there has been a waiver, and that the waiver covers the

contested matter, must therefore be accepted.          It is the effect of

the waiver that the Board would put at issue in its alternative

argument.     The Board appears to perceive that the only effect a

waiver can have is to remove the Unions’ right affirmatively to

propose changes to medical insurance.         That is only one side of the

coin, however; the other, inseparable side of that same coin is the

employer’s right to make unilateral changes without being obligated

to bargain with the Unions first.             In its review of the ALJ’s

ruling   in    the   instant   case,    the    Board   betrayed   its   own

understanding that these would be concomitant results of a finding

of waiver:

            Since the announced OPRB changes will fall outside
            the term of the side-letter agreement, the zipper
            clause contained in the side-letter agreement
            cannot constitute a clear waiver of the Locals’
            right to bargain over those changes.     Therefore,
            the zipper clause does not permit the Respondent to
            make the OPRB changes at issue here without



                                   33
            bargaining with the Locals.41

The unspoken assumption, of course, is that if the Board had found

waiver, it, too, would have concluded that the Company was free “to

make the OPRB changes at issue here without bargaining with the

Locals.”    Similarly, Pepsi-Cola Distributing Co., a case on which

the Board relies, repeatedly bespeaks the understanding that a

party, through waiver, relinquishes “the right to be consulted

concerning unilateral changes.”42      Thus, we understand that once a

clear and unmistakable waiver concerning the matter at issue is

found, the effect of that waiver is not only to foreclose the

Unions’ right to request changes and demand bargaining, but also to

eschew any obligation of the employer to bargain before making

unilateral changes of the kind reserved.

     This conclusion is further supported by the facts of the

instant case, in which the unilateral change at issue was made with

respect to a benefit that the Company furnishes gratuitously and

which, by its own terms (and consistent with ERISA), never vests.

As emphasized at the outset of this opinion, the Medical Benefits

Plan expressly provides that neither employees’ nor retirees’

medical benefits ever vest and that the Company reserves the right

unilaterally to amend coverage or terminate it altogether.       This

comports with ERISA’s provision that exempts employee welfare

     41
       Mississippi Power Co., 332 NLRB No. 52 (2000), 2000 WL
1504672, at *4 (emphasis added).
     42
          241 NLRB 869, 869 (1979).

                                  34
benefit plans from that law’s vesting requirements.43              Thus, if

anything were to obligate the Company to continue the retirees’

medical insurance coverage or to maintain the type or terms of the

coverage (thereby negating the Company’s unilateral power to do so

despite the express reservation in the Medical Benefits Plan

itself), it would have to be found in some other document.

     The MOA, as we have noted, does not mention medical benefits

at all and therefore cannot conceivably be the source of any

countervailing obligation on the Company’s part not to change

medical insurance benefits unilaterally. That leaves the Insurance

Side Letter as the only possible source of such a countervailing

Company obligation.     The Insurance Side Letter, however, locks the

Company into only one obligation with respect to group medical

insurance:     the level of the Company’s contribution to premiums

incurred during the term of the Side Letter Agreement.            Therefore,

by deductive reasoning (inclusio unus est exclusio alterius), all

other aspects of the Medical Plan —— from the furnishing of medical

insurance vel non to the adjustment of discrete terms of the

selected    insurance   plan   ——   remain   subject   to   the   Company’s

unfettered, unilateral control. In sum, under the Medical Benefits

Plan, the Company had the right to make the changes to retirees’

medical insurance benefits unilaterally and to make them effective

on any current or future date that it chose; and no other document,


     43
          See 29 U.S.C. § 1051(1).

                                     35
including    the   Insurance   Side   Letter,   diminished    or   otherwise

affected this right.

      Despite such reasoning, which gives effect to the reservation

of rights language in the Medical Benefits Plan, the Board has

taken the position that this clause should not be read to validate

the Company’s unilateral changes because the Unions did not accede

to   those   provisions,   the   Medical   Benefits    Plan   having   been

“unilaterally promulgated” by the Company.            In support of this

contention, the Board asserts that the Medical Benefits Plan would

need to have been incorporated into the MOA, such that the parties

clearly bargained with respect to it, before the reservation of

rights clauses could be given effect.           Not only is this sort of

reasoning unsound, it is at least arguable that when the Medical

Benefits Plan was adopted by the Company it was indeed incorporated

into the MOA ipso facto by the provisions of the pre-existing

Insurance Side Letter.         More to the point, we find internally

inconsistent the Board’s statement that the medical insurance

benefits are mandatory subjects of bargaining but that the Unions

are free to disregard some of the express terms of the very

document that grants and defines those very benefits.

      First, it is quite conceivable that the Insurance Side Letter

served to incorporate the Medical Benefits Plan into the MOA.            The

Board asserts, citing Jeniso v. Ozark Airlines, Inc. Retirement




                                      36
Plan for Agent and Clerical Employees,44 that a “mere mentioning”

of medical insurance does not suffice to incorporate a medical

benefits plan.      We do not dispute this proposition; we do take

serious exception, however, with the Board’s characterization of

the   Insurance    Side   Letter,   which   (1)   addresses   only   medical

insurance matters, (2) results in an agreement entitled “Group

Medical Insurance Agreement,” and (3) is physically appended to and

printed with the MOA, as a “mere mentioning” of medical insurance.

Any objective reading of that contract refutes such trivializing.

      Additionally, the Board’s assertion that the Insurance Side

Letter “fails even to mention the [Medical Benefits] Plan” is, on

these facts, scant support for the Board’s further argument against

incorporation —— that “there is no evidence that the Unions have

voluntarily ‘exercised their bargaining right.’”45            First, except

in the most hypertechnical sense, that statement is just plain

wrong: The Insurance Side Letter contains the words “Group Medical

Insurance Agreement” in boldface print immediately before the

signatures of the Unions’ representatives.           Moreover, it unduly

stretches credence to imagine that in the course of bargaining over

the Company’s contribution to medical insurance premiums, the

Unions were somehow precluded from bargaining over the matter of

medical insurance generally. Regardless of whether they might have

      44
           187 F.3d 970, 973 (8th Cir. 1999).
      45
       Respondent’s Brief at 36, citing Department of Navy v.
FLRA, 962 F.2d 48, 57 (D.C. Cir. 1992).

                                     37
succeeded, the Unions could have sought —— bargained for —— a

commitment from the Company not to terminate or amend the then-

current or any future medical benefits during the term of the MOA,

thereby limiting the unilateral reservation of rights clauses.

That they failed to do so or were unsuccessful, as the case may be,

does not mean that the Insurance Side Letter (which deals only with

medical insurance benefits) did not incorporate generically the

then-present and all future medical insurance plans that define the

scope of those benefits.    Finally, the Insurance Side Letter could

not possibly have referred to the Medical Benefits Plan by name:

As the Board knows only too well, that particular plan did not even

go into effect until March 1, 1993, the calendar year following the

one in which the MOA and Insurance Side Letter were formed.               In

sum, because medical benefits were substantially more than “merely

mentioned” in the Insurance Side Letter, and because the Medical

Benefits Plan   defines    those   benefits,   it   is   only   logical   to

conclude that the Company’s medical insurance plan was incorporated

by reference into the MOA by the Insurance Side Letter.

     But even if the Medical Benefits Plan were not incorporated by

reference, we cannot disregard the fact that the Board premises its

entire unfair labor practice charge, as it must, on the contention

that future retirees’ medical insurance benefits are a mandatory

subject of bargaining because they fall within the category of

“wages, hours, and other terms and conditions of employment.”             As

our earlier general discussion of OPRB changes demonstrates, we

                                   38
accept this proposition.46      If medical insurance benefits are

mandatory   subjects   of   bargaining,   however,   these   terms   and

conditions of employment must be defined by the Medical Benefits

Plan, the only document that describes them; and it is none other

than the Medical Benefits Plan that gives the Company the power

unilaterally to amend or terminate the benefits specified in it.47

It is irreconcilably inconsistent to argue that medical insurance

benefits, which are identified and delimited solely by the Medical

Benefits Plan, are a mandatory bargaining subject when such an

argument suits the Unions or the Board, but to insist that specific

provisions of the document defining these very benefits need not be

enforced when the Company is the one attempting to do so.            The




     46
       See also W.W. Cross & Co., Inc., 174 F.2d 875, 878 (1st
Cir. 1949) (establishing that “the word ‘wages’ in...the Act
embraces within its meaning direct and immediate economic
benefits flowing from the employment relationship[, and] covers a
group insurance program”); Shane Felter Industries, 314 NLRB 339,
346 (asserting that “[a] health insurance plan is a benefit
constituting a term and condition of employment whether
established pursuant to a collective-bargaining agreement or
not”).
     47
       As noted above, see supra note 4, we do not mean to
suggest that, absent the Insurance Side Letter, the Unions would
not have had the right to seek to bargain over any unilateral
changes in medical benefits made by the Company pursuant to the
provisions in the Medical Benefits Plan. We only emphasize that
the Medical Benefits Plan describes all of the attributes of the
“term of condition of employment” of medical benefits. Having
waived the right to seek to bargain over the “matter of
insurance,” in the Insurance Side Letter, the Unions may not pick
and choose which attributes of the medical benefits their waiver
reaches.

                                  39
dissent in T.T.P. Corp.48 addressed this incongruity succinctly:

             The Trial Examiner correctly found that the
             Retirement Income Plan was not physically part
             of the collective-bargaining agreement[, and]
             further stated that, “The Plan had been in
             existence for years and had become an integral
             part of the existing conditions of employment
             on which the employees had a right to rely.”
             The Respondent convincingly argues, however,
             that it is impossible legally to justify the
             Trial Examiner’s reasoning that, on one hand,
             the clauses of the Plan providing benefits for
             employees are a vested and expected right
             governed by those provisions in the Plan,
             while on the other hand disavowing the
             “troublesome” termination clause found in
             article IX which is as much a part of the Plan
             as are any of the benefit clauses.49

We too reject the Board’s attempt to “cherry pick” the particular

provisions of the Medical Benefits Plan, choosing to advert to

those that work for it while ignoring those that do not, as

evidenced by the Board’s effort to cast medical insurance benefits

as   mandatory    subjects     of   bargaining,   on    the    one   hand,    while

denying, on the other hand, that the Unions had acquiesced in the

Company’s      reservation     of    rights   clauses     in    the     selfsame,

gratuitously-offered Plan.

      To summarize, then, our response to the Board’s assertion that

any waiver by the Unions of their right to bargain over the “matter

of   insurance”    did   not    give   the    Company    free    rein    to   make

prospectively effective unilateral changes in future retirees’

      48
           190 NLRB 240 (1971).
      49
           Id. at 241 (Chairman Miller, dissenting) (emphasis
added).

                                       40
medical benefits is this:             It is accepted, even by the Board

itself, that there are two concomitant effects of waiver.                         One

effect   is   that    the    Unions   relinquish     their   right       to   demand

bargaining on premium contributions and coverage changes by the

Company, which are the express subjects of the waiver.                   The second

effect of waiver is that the Company can make unilateral changes

(other than reducing its premium contributions) relating to those

subjects without any obligation to bargain with the Unions before

making   them.       Next,    the   Company   had    the   right    to    make   the

unilateral changes at issue because such changes affect benefits

furnished gratuitously by the Company under a plan that is subject

to no limitations except those spelled out in the Insurance Side

Letter, and then only as to the level of the Company’s contribution

to premiums.     And last, in answer to any contention that the Unions

must have acceded to the reservation of rights language in the

Medical Insurance Plan before that reservation could be given

effect, we answer first that it is entirely possible that the

Insurance     Side   Letter    incorporated    the    Medical      Benefits      Plan

(including its reservation of rights clause) into the MOA, and

second, that the Board, which argues so strenuously in favor of

these benefits being mandatory bargaining subjects, is poorly

positioned to take issue with particular provisions of the Medical

Benefits Plan that define these very benefits.

                                III. Conclusion

     The Company’s challenge to the Board’s order, insofar as it

                                        41
pertains to announced unilateral changes to future retirees’ life

insurance benefits, fails.        The Board’s determination that future

retirees’ life insurance benefits constitute a mandatory subject of

bargaining is a reasonably defensible construction of the Act, and

the Company can point to no defenses, contractual or otherwise, for

its violation of the Act.      The Company’s petition with respect to

life insurance benefits is therefore denied, and enforcement of the

Board’s order,     insofar   as   it   pertains   to    life   insurance,   is

granted.

     As    for   medical   insurance    coverage,      however,   the   Unions

expressly and unambiguously waived their right to bargain over any

changes. That waiver by its nature includes (or, at least fails to

exclude) prospective changes to medical insurance benefits of

future retirees, including at least potentially some currently

active employees of the Company.        As the Company was thus justified

in refusing to bargain over the matter, the Company’s petition with

respect to medical insurance benefits is granted, that portion of

the Board’s order is set aside, enforcement of the Board’s order

insofar as it pertains to medical insurance is denied, and the case

is remanded to the Board for entry of appropriate orders consistent

with this portion of our opinion.

PETITION GRANTED IN PART AND DENIED IN PART; CROSS-PETITION DENIED

IN PART AND GRANTED IN PART; ORDER PARTIALLY SET ASIDE; and CASE

REMANDED with instructions.



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