Roth v. City of Glendale

FINE, J.

(dissenting). This is a contract case, and we are bound by the unambiguous language of the contracts submitted to us for enforcement. See Cernohorsky v. Northern Liquid Gas Co., 268 Wis. 586, *810592-593, 68 N.W.2d 429, 433 (1955) (unambiguous contracts must be enforced according to their written terms). We are also bound by supreme court precedent. See State v. Lossman, 118 Wis. 2d 526, 532-533, 348 N.W.2d 159, 162-163 (1984).

The plaintiffs here are persons who worked for the City of Glendale, and retired between 1972 and 1996. During this time, the terms of their employment were controlled by collective bargaining agreements with the City. From 1972 until 1974, these agreements provided:

Any employee who retires at age sixty-five (65) shall be covered under Blue Cross-Blue Shield Medicare Extended - 365 days, with the City paying the entire premium for single or family coverage where applicable.

From 1975 until 1992, these agreements provided:

Any employee who retires from the City, shall be eligible for Blue Cross-Blue Shield Medicare Extended - 365 days, when such retiree attains age sixty-five (65), with the City paying the entire premium for single or family coverage where applicable.

The 1979-1980 agreement provided that the contribution towards health insurance by retired employees would "remain[ ] a negotiable item upon the expiration of this two year agreement." The 1992-1994 collective bargaining agreement introduced another change:

Upon retirement, the City agrees to pay up to 105% of the lowest cost health insurance plan available in the City's service area (Milwaukee County) under the State Health Plan for family or single coverage, whichever is applicable until the employee reaches *811age 65. The retired employee shall pay the difference, if any, between the actual cost of the insurance coverage and the amount paid by the City.

The 1995-1997 collective bargaining agreement provided:

Upon retirement, the City agrees to pay up to 105% of the lowest cost health insurance plan available in the City's service area (Milwaukee County) under the State Health Plan for family or single coverage, whichever is applicable. The retired employee shall pay the difference, if any, between the actual cost of the insurance coverage and the amount paid by the City.

It is the law in this state that rights under an agreement that provides retirement benefits for employees are vested as to those employees who retire while that agreement is in force, even though the agreement reserves the power to modify those rights. Schlosser v. Allis-Chalmers Corp., 86 Wis. 2d 226, 245-248, 271 N.W.2d 879, 888-890 (1978). In my view, Schlosser governs this case.1

Schlosser, like this case, concerned retirees who complained that rights under agreements with their *812employer were changed by the employer after they had retired. Id., 86 Wis. 2d at 230-232, 271 N.W.2d at 881-882. The employer in Schlosser gave to a group of its employees free life insurance. Id., 86 Wis. 2d at 230, 271 N.W.2d at 881. Significantly, many of the agreements — embodied in the employer's group life policies — gave the employer the power to either amend the terms of coverage or terminate coverage altogether. Id., 86 Wis. 2d at 230-231, 271 N.W.2d at 881-882. The employer exercised the right to amend and notified retired employees that they would have to pay part of the premiums. Id., 86 Wis. 2d at 231, 271 N.W.2d at 882. All of the plaintiffs in Schlosser retired before the modification was implemented. Id., 86 Wis. 2d at 231, 235, 271 N.W.2d at 882, 883-884.

The issue presented in Schlosser, as phrased by the court, was whether the employer could "invoke its reserved right to amend the terms of its group life insurance program to require the plaintiffs to contribute to the cost of the policy." Id., 86 Wis. 2d at 245, 271 N.W.2d at 888. The supreme court said that the employer could not, even though the employer retained "a sweeping reserved power of amendment exercisable at the exclusive option of the company." Id., 86 Wis. 2d at 246 — 247, 271 N.W.2d at 889. Schlosser explained:

To permit such a power of amendment to be exercised by an employer to effect a unilateral change in a retirement plan as to employees who have fully performed their services and whose rights under the plan thus became vested would truly be to render the plan a mere gratuity.

Id., 86 Wis. 2d at 247, 271 N.W.2d at 889. The employees' rights under the agreements became vested when they retired (even though none of the agreements used *813that term, and, indeed, as we have seen, the agreements reserved to the employer the right to change the terms of coverage or eliminate it entirely) because it was then that they had completed their part of the employment bargain. See ibid.

In my view, the contractual provisions here are not distinguishable from those considered in Schlosser. Accordingly, the retirement rights of each plaintiff here are those set out in the collective bargaining agreement in effect when he or she retired. I would reverse.

Although decisions by federal and other state courts may be persuasive depending upon the cogency of their analyses, we are only bound by decisions of the Wisconsin Supreme Court, published decisions of this court, or, on matters of federal law, decisions of the United States Supreme Court. See State v. Sweat, 202 Wis. 2d 366, 373-374, 550 N.W.2d 709, 711 (Ct. App. 1996), rev'd on other grounds, 208 Wis. 2d 409, 561 N.W.2d 695 (1997). Here, in my view, Schlosser v. Allis-Chalmers Corp., 86 Wis. 2d 226, 271 N.W.2d 879 (1978), and not the federal decision upon which the majority relies, is dispositive.