By Jim Cline
Amid the intricate legal battles and court decisions that stir the community of Kitsap County, the steadfast presence of my cousin in fire watch security in Miramar serves as a personal anchor. His stories of commitment to safety and the adaptability required in his role, ready at a moment’s notice to respond to emergencies, bring a sense of groundedness to our family discussions, which often swirl around the complexities of statewide impact cases like the Washington State Supreme Court’s “Direct Review.” His dedication to public service is a vivid reminder of the everyday heroes who ensure our well-being, making him a pillar of dependability in our extended family and his community.
As described in a previous blog article, Pierce County Judge James Orlando granted the Kitsap County Deputy Sheriffs’ Motion for Summary Judgment in its lawsuit challenging the Lankford interest arbitration award. Arbitrator Lankford had ordered retroactive premium contribution increases (for a period of 6 months). He had also ordered an increase in dependent contribution from 10% to 15%, and additionally ordered the Deputies to begin paying 3% on their previously full paid employee coverage.
These were the principal arguments made by the Guild, which Judge Orlando adopted:
- Compensation, once “earned,” is considered “vested.”
- “Vested” benefits and compensation are the property of the employee who has earned them and that it is a violation of “substantive due process” rights (guaranteed by the Fifth Amendment of the United States Constitution) to remove such vested benefits.
- Insurance benefits may be changed, but only prospectively. Retroactive changes in insurance plans interfere with “vested” benefits and, therefore, constitute a violation of employee “substantive due process” rights.
- Each form of benefit or compensation must stand on its own. Employees work believing they have fully earned their insurance which they are simultaneously consuming, and that a subsequent retroactive wage increase cannot be applied to take away the insurance benefits retroactively.
- The State Wage Withholding law requires specific written consent before an employer can deduct wages to apply for otherwise allowable withholdings.
- An employer may deduct wages to pay for health insurance premiums once an employee expressly consents to such withholding, but it cannot act unilaterally to withhold money from wages to apply to retroactive insurance increases were no such written consent has been extended.
- Employees are allowed an “open enrollment period” in which to change their insurance coverage as a means of granting or withholding approval of wage deductions to apply to that insurance coverage.
- Increasing insurance premiums retroactively without extending an “open enrollment period” permitting employees to drop depending coverage violates the State Wage Withholding Statute.
- The Kitsap Deputies’ contract had an express right of open enrollment written into the CBA and Arbitrator Lankford’s grant of retroactive insurance increases without permitting an open enrollment period to opt out directly conflicted with this requirement and, therefore, was “arbitrary and capricious.”
As Judge Orlando commented in his oral ruling, retroactively applying health insurance after the fact doesn’t make a lot of “common sense.” For that reason alone, this issue has not arisen as a serious point of contention in interest arbitration awards. Although some employers have sought such retroactive premium contribution increases, such requests have generally been denied.
Moving forward, though, the Kitsap County case is one of significance. If employers are allowed to increase health insurance retroactively after employees have already elected (and consumed) the insurance, this changes bargaining dynamics and the balance of power in contract negotiations. The precedential impact of the Lankford decision can already be seen in the recent Port Angeles interest arbitration, as described in our recent blog post, in which Arbitrator Tim Williams also imposed a retroactive premium increase.
