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On December 5, 2008 the U.S. Court of Appeals for the
Ninth Circuit, in
IBEW Local 1245 v. Citizens
Telecommunications Co. of California, Case No. 06-06189,
affirmed the decision of the U.S. District Court for the
Eastern District of California ordering expedited arbitration
regarding retiree medical benefits. In 2005, Citizens
Telecommunications Co. of California unilaterally implemented
changes to its retiree medical plan, notwithstanding
provisions in the CBA between it and the IBEW Local 1245,
which prohibit reductions in the “overall level of benefits.”
The Company’s unilateral changes to its retiree health
benefits affected both active employees and current retirees
alike. The Union sought to have the matter submitted to
expedited arbitration. The Company refused, and the Union
sought, and was granted, an Order compelling arbitration. The
Union argued that the future retirement benefits of active
employees are a mandatory subject of bargaining and any
alteration in such benefits was plainly arbitrable. However,
in the District Court, and continuing in its opening brief on
appeal, the Company attempted to justify its refusal to
arbitrate by invoking a fictitious requirement of retiree
consent. Both the District Court and the Ninth Circuit
ultimately rejected this position.
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