An Open Letter to Our Members

Co-op Board of Directors responds to a Member petition and announces their decision regarding a proposed referendum. Interim Board President, Susan Munkres responds with an open letter to all Co-op Members.

January 25th, 2010

Recently a group of members brought a petition for a referendum — a request that an item be put to the full Co-op membership for a vote — to the Co-op for consideration.  This proposed referendum asked the membership to require the Co-op to provide payment to a specific employee for a particular medical treatment not currently authorized for coverage under the Co-op’s health insurance plan.  The referendum proposes that this payment would last as long as the employee worked at the Co-op, regardless of any future changes in insurance for the entire staff.  

Because the Board of Directors represents the membership — the member-owners of the Coop — we saw it as our job to educate ourselves about the situation and its broader context before making a decision.  We consulted with the Co-op’s lawyer and benefits administrator.  We learned more about the health care coverage the Co-op offers.  We reviewed the bargaining agreement between the Co-op and the UE, the union which represents about 140 of the Coop’s employees.  Finally, we re-read the Co-op’s By-Laws and Articles of Incorporation, which specify who has what kind of authority regarding the various aspects of the Co-op’s operation. 

Ultimately, we decided not to accept this petition, and we will therefore not be putting this referendum up for a vote by the membership.  Because this is an important issue, and because the roles and rights of members are central to the purpose and the functioning of the Co-op, we are offering a more detailed explanation below.   If you have any questions or concerns after reading the information below, please feel free to contact  Susan Munkres, the current Board President, or Clem Nilan, the General Manager. 

The referendum was not appropriate to place on a ballot to the membership for three primary reasons.  First, the referendum sought to address a personnel matter, whereas referenda by Co-op members are explicitly restricted to major policy issues.  Second, the referendum, if passed, would have undermined the Co-op’s collective bargaining agreement with the union, which governs the terms and conditions of employment for approximately 140 employees, and therefore might have resulted in the breach of applicable labor laws.  And finally, since the referendum referenced a specific medical condition of a specific employee, putting this referendum out to vote might have violated federal confidentiality laws that protect Co-op employees from the disclosure of information about the employee’s health.   

The Rights & Duties of Members and the Board
The rights, responsibilities and obligations of members of our Co-op and of the Co-op’s Board are guided by four basic sources:  the law, our articles of incorporation, our By-laws and our Policy Register.  Together, these documents make it clear that members can indeed place referenda on a ballot to the general membership.  However, referenda must be concerned with “major policy changes,” such as relocation, changes in membership rights, merger, consolidation, or dissolution of the Co-op.  Personnel issues by definition cannot be addressed via a referendum, as such issues are not under the authority of the membership.  Such “operational” matters, including employment and labor relations issues and fiscal issues, are the responsibility of the Board of Directors.  

Delegation to the General Manager
For a number of years, the Board of Directors of this Co-op has chosen to delegate its authority over operational matters such as those listed above to the General Manager, who is required by our Policies to provide  “compensation and benefits that are internally and externally” equitable.  The benefits offered by the Co-op are the result of the negotiation of a collective bargaining agreement with the UE, and they are excellent.  For example, a comparison conducted recently revealed that the deductibles and co-pays are among the lowest among area businesses.  The out-of pocket maximums are also quite low. 

But most significant is the fact that the Co-op covers the entire premium for all its full-time employees.  That’s right, full-time employees contribute nothing towards their health care premiums.  No other area business offers this level of benefit.  Thus, the coverage clearly exceeds the requirement that it be “externally equitable.”  Just as important, it is also “internally” equitable, as the same benefits are offered to all employees in the collective bargaining unit (more about this below). 

If the General Manager had violated our Policies by providing inequitable or unfair coverage, the Board would absolutely intervene.  However, the coverage offered is exceptionally generous and available to all on equal terms.  The referendum, by contrast, would make our benefits inequitable in that it would result in special benefits being offered to one particular employee.

Relations with Our Employees and the UE
As I explained above, benefits are negotiated in a collective bargaining agreement with the UE.  The General Manager and the UE are the sole representatives of the Co-op and the employees, respectively.  The membership does not have the right to interfere in these negotiations, nor does the Board. 

In 2008, the health care plan was changed by management, as allowed by the union contract.  Those changes improved benefits for the employees as a whole.   This change was in the best interests of the Co-op, and of the employees as a group.  The employee in question has some increased costs under the new plan, but this effect is unique to this employee’s treatment.  The Co-op is not and should not be in the position of making decisions about specific treatments. These decisions are clearly in the purview of the patient, their physician and the insurer.  After the change, the employee in question followed a formal grievance process through the insurance company and also through the union.  In the end, a legally binding agreement was reached between the Co-op and the UE, resolving the issue as it related to this particular employee and this particular situation. 

The proposed referendum would both violate this legally binding agreement and would interfere with the rights of the union as the representative of this employee, as well as with the operation of the collective bargaining agreement.  The Board concluded that the Co-op could not allow a petition that adversely affects the co-op’s legal and contractual obligations to go forward.

Employee Privacy Rights
A last area of important consideration is the fact that the referendum was specific to one employee.  It identified the employee by name and it discussed this employee’s use of a particular benefit program.  Disclosure of such information may violate federal laws dealing with protected health information and employee privacy rights regarding health matters.  We could not allow such violations, as they would create significant liability for the Co-op.

Summary
This situation is a difficult one, for the employee in question and for the Co-op.  Our job as directors is to serve the interests of the membership as a whole. After much research and deliberation, we concluded that the membership’s interest is best served by continuing to direct the General Manager to treat all employees equitably and well, by honoring our agreements with the union, and by respecting the privacy of our employees.  Allowing the petition to go to the membership for a vote would violate all three of these important principles.   

We are proud that the Co-op has a long history of providing generous benefits for its employees and of treating all employees fairly and equitably.  We are proud of our good working relationship with the UE, and of the fact that we have honored every commitment we have made to the UE’s membership through the various contracts we have negotiated with them.  Finally, we are proud of the fact that the General Manager and the Co-op’s administration have consistently acted with integrity in how they handle individual employee concerns and broader labor relations issues.   

The health care system in our country is clearly broken, and everyone knows someone who has suffered from its inadequacies.  But the Co-op cannot be responsible for fixing all that is wrong with the health care system.  The best the Co-op can do is to provide high quality coverage at the lowest possible cost to our employees.  This it does, and it does so better than almost anyone.  And that is something we can all be proud of.  

Sincerely,

Susan Munkres, Interim Board President