Issues Surrounding Early Retirees' Medical Plan

The union representing 19,300 engineers and technical workers at The Boeing Company around Puget Sound is charging the aerospace giant with unfair labor practices for failing to bargain in good faith and work jointly as promised to replace early retiree medical benefits for represented employees who retire at age 55.

The unfair labor practice charge (ULP) was filed Thursday, November 30 with Region 19 of the National Labor Relations Board by the Society of Professional Engineering Employees in Aerospace (SPEEA), IFPTE Local 2001. The charge relates to an agreement in the 2005 contract negotiations to replace the early retiree medical coverage benefit.

The union tells ANN that starting January 1, employees hired into a SPEEA-bargaining unit at Boeing are not eligible to receive company-paid medical coverage when they retire before age 65. Boeing traditionally provided the coverage to employees with 10 or more years of service. Early retiree medical bridges the gap between age 55 to 65 when Medicare takes over.

Union estimates show replacing the coverage can cost more than $64,000 for a single retiree.

"At the end of our negotiations, we agreed to work together and find a solution for new employees," said Cynthia Cole, SPEEA president. "Boeing management needs to come back into alignment with the promises made at the end of our negotiations and not rest until we have a solution."

SPEEA accepted Boeing negotiators’ assurances to jointly develop a replacement for Early Retiree Medical Benefits during contract negotiations in 2005. The agreement is stated in a ‘Letter of Understanding’ (LOU). The negotiations produced three-year contracts that today cover more than 13,300 engineers and 6,000 technical workers. Union members approved the agreements by wide margins, 89 percent for the engineers and 84 percent for the technical workers. The agreements expire December 1, 2008.

Union leaders and Boeing management held several meetings to explore a replacement for the coverage. The union agreed to extend the original deadline beyond June 1, 2006 when no replacement was offered. Five plans were explored with only one labeled unacceptable by the union. During a meeting in August, Boeing proposed the single unacceptable plan -- a health savings account with a high deductible -– as the company’s only firm offer to replace the early retiree medical benefit.

On October 31, Cole and Executive Director Charles Bofferding discussed the lack of progress on early retiree medical and the need to meet the terms of the LOU with Boeing management, including CEO James McNerney, during a meeting in Chicago. A few days later, the union received a letter from Boeing’s labor relations department stating the company had concluded efforts to replace the benefit.

"We don’t like dragging Boeing into court to make the company honor promises to employees," said Bofferding. "However, it is important for our members that their union holds the company accountable for the gap between statements during negotiations and actions later. This was very disappointing and certainly bodes poorly for our next negotiations."

SPEEA represents 23,900 engineers, technical and professional employees in Washington, Kansas, Oregon, Utah and California.

FMI: www.speea.org, www.boeing.com