## Facts

- A union represented hourly employees at a company facility and had negotiated a group health-insurance plan covering active employees and retirees.
- After Medicare was enacted, the union sought midterm bargaining over insurance benefits for already retired employees.
- The company refused to bargain, asserting retiree benefits were not a mandatory subject of collective bargaining.
- The company contacted retirees and offered a fixed monthly payment toward supplemental Medicare coverage if they withdrew from the group plan.
- The NLRB found the company violated NLRA §§ 8(a)(5) and 8(a)(1) and ordered it to cease and desist, reasoning retiree benefits were mandatory bargaining subjects.
- The Sixth Circuit refused to enforce the NLRB’s order.
- The Supreme Court granted review in consolidated cases.

## Issues

1. Whether benefits for already retired employees are “terms and conditions of employment” and therefore mandatory subjects of bargaining under NLRA §§ 8(a)(5) and 8(d).
2. Whether retirees are “employees” within the meaning of the NLRA and part of the bargaining unit represented by the union.
3. Whether the employer’s unilateral modification or offering of alternative retiree benefits constitutes an unfair labor practice when retirees’ benefits are at issue.

## Decision

- The Supreme Court affirmed the Sixth Circuit’s refusal to enforce the NLRB’s order.
- Retiree benefits are not mandatory subjects of bargaining as “terms and conditions of employment” of retirees under §§ 8(a)(5) and 8(d).
- Retirees are not “employees” for these bargaining-duty provisions and are not members of the bargaining unit.
- Alleged industry practice of bargaining over retiree benefits cannot expand the statutory duty to bargain to cover retirees.
- Because retiree benefits are not within the mandatory bargaining obligation, the employer’s unilateral actions concerning those benefits did not violate §§ 8(a)(5) and 8(d) on the theory accepted by the NLRB.

## Legal Principles

- The NLRA duty to bargain extends only to “wages, hours, and other terms and conditions of employment” of the employer’s “employees” within the appropriate bargaining unit.
- “Employee” is given its ordinary meaning—someone who works for another for hire—excluding retirees.
- Retirees are outside the bargaining unit because they are no longer working and lack a substantial community of interests with active unit employees.
- Customary bargaining practices cannot transform nonemployees into “employees” or expand mandatory bargaining subjects beyond the statute.
- Unilateral-change unfair labor practice theories under §§ 8(a)(5) and 8(d) do not apply to subjects that are not mandatory bargaining subjects (including benefits for already retired employees).

## Conclusion

The Court held that the NLRA does not require bargaining over benefits for already retired employees because retirees are not statutory “employees” within the bargaining unit; therefore, the employer’s unilateral actions regarding retiree benefits did not support enforcement of the NLRB’s bargaining order.


Allied Chem. & Alkali Workers of Am., Loc. Union No. 1 v. Pittsburgh Plate Glass Co., 404 U.S. 157 (1971)