🗞️ When the New Union Won, the Health Insurance Vanished: A Judge Says the Company Is to Blame

In October 2023, workers at a corrugated box plant in Salinas, California voted 88 to 3, out of 99 ballots cast, to leave their longtime union and join Teamsters Local 856. Within two weeks of that vote, their health insurance was gone, cancelled retroactively by the outgoing union, and their employer, WestRock Services LLC, a subsidiary of global packaging company Smurfit WestRock, moved to replace it with a company-designed plan that the new union argued left workers materially worse off.

What followed was a compressed round of bargaining spanning roughly one week. On May 12, 2026, Administrative Law Judge John T. Giannopoulos issued a decision finding that WestRock had violated the National Labor Relations Act by implementing its preferred insurance plan without first bargaining to a lawful impasse and, more fundamentally, by failing to genuinely engage with the union's counterproposals during negotiations.

The case, WestRock Services, LLC, JD(SF)–11–26, offers a detailed account of the legal obligations that arise when a newly certified union steps into an existing employment relationship and of the standard courts and federal labor authorities apply when assessing whether an employer has satisfied its duty to bargain.

The Core Dispute

Under WestRock's prior contract with District Council 2, employees received health, dental, and vision insurance through a composite plan with a fixed cost-sharing formula: the company paid 80 percent of the monthly premium and employees paid 20 percent. The total premium ran $1,629.55 per employee per month, with the company contributing $1,303.64 and each worker contributing $325.91.

When Teamsters Local 856 was certified on November 8, District Council 2 had already notified WestRock two days earlier, on November 6, that it was terminating the plan retroactively to October 31. The outgoing union's position was that its plan documents required cancellation upon the election outcome. The cancellation did not qualify as a COBRA-eligible event, meaning workers had no continuation coverage available.

WestRock's senior manager of labor relations, Matthew Gaston, received the notification on November 6. The following day, he emailed the union's representative, Richie Andazola, proposing that employees be enrolled in the company's existing Consumer Choice Plan, a tiered, health-savings-account-based plan already used at WestRock facilities nationwide.

The differences were significant. Under the Consumer Choice Plan, employees would pay 100 percent of vision premiums, 50 percent of dental premiums, and between 22 and 28 percent of health insurance premiums, all above the 20 percent employee share required under the expired contract. Workers electing full family coverage faced the steepest increase. During telephone calls on November 8, Andazola responded with three counterproposals: enroll Salinas workers in a comparable Teamsters health and welfare fund at the same employer contribution level; apply WestRock's per-employee dollar contribution from the prior plan to reduce out-of-pocket costs under the Consumer Choice Plan; or redirect savings the company would realize from lower-coverage tiers toward offsetting the higher cost of full family coverage. All three proposals were rejected.

In a November 9 email, Gaston wrote that adopting another union-controlled plan was "not something the Company is willing to do," citing its preference to consolidate employees into a single risk pool and its concern about ceding administrative control to a joint board of trustees. On November 10, a Veterans Day public holiday, Gaston wrote to Andazola stating that both parties appeared unwilling to move from their positions and invited Andazola to correct him if he disagreed. Three days later, on November 13, WestRock posted a memorandum at the Salinas plant notifying workers that the Consumer Choice Plan would be implemented, with coverage made retroactive to November 1.

The union filed an unfair labor practice charge the following day.

The Judge's Findings

Judge Giannopoulos's analysis turned on good faith, specifically whether WestRock's bargaining conduct met the standard required under the National Labor Relations Act before an employer may implement a unilateral change to terms and conditions of employment.

The judge concluded that the 80/20 premium-sharing formula from the expired District Council 2 contract remained the legally required status quo, binding on WestRock as a statutory obligation that survived the contract's expiration. Under established NLRB precedent, an employer cannot lawfully implement changes to wages, hours, or working conditions during bargaining unless it has first reached a genuine impasse, and impasse, the judge noted, presupposes good-faith bargaining.

WestRock's conduct, he found, did not meet that standard. The company presented a single proposal throughout negotiations, the Consumer Choice Plan, and did not modify it in response to any of the three counterproposals the union offered, two of which accepted the Consumer Choice Plan as a starting framework and sought only adjustments to the cost-sharing structure. Gaston acknowledged under testimony that nothing in the plan's design prevented WestRock from adopting a different premium split for the Salinas location; the company chose not to do so as a matter of policy.

The judge applied the five-factor impasse test from Taft Broadcasting Co., 163 NLRB 475 (1967), and found that each factor weighed against a finding of lawful impasse. Among the considerations: WestRock did not respond to the union's October 30 request for employee insurance demographic data, information the judge found directly relevant to evaluating the cost impact of any tiered insurance proposal, until after 5:00 p.m. on November 10, the same day Gaston's email declared a potential stalemate. That response arrived on a public holiday, leaving the union no practical opportunity to analyze the figures before the Consumer Choice Plan was implemented three days later.

"Respondent came to the bargaining table with a closed mind," the judge wrote, citing a "predetermined disposition not to bargain," and concluded that WestRock intended to force a stalemate in order to implement the Consumer Choice Plan at the Salinas facility.

Key Points

• WestRock's prior contract required an 80/20 employer/employee premium split for health, dental, and vision insurance. The Consumer Choice Plan required employees to pay 50 to 100 percent of dental and vision premiums and up to 28 percent of health premiums, absent participation in an optional wellness program not required under the prior contract.
• District Council 2, the outgoing union, cancelled the existing plan retroactively to October 31, 2023, without COBRA eligibility, days after losing the representation election.
• The union put forward three counterproposals during bargaining; two were structured around WestRock's own Consumer Choice Plan with modifications to cost-sharing. All were rejected without substantive engagement.
• WestRock's senior manager of labor relations sent an email to the union on Veterans Day, a public holiday, suggesting the parties were at a stalemate, then posted a notice to employees implementing the Consumer Choice Plan the following Monday, November 13, before the union had a meaningful opportunity to respond.
• Roughly 40 of approximately 102 employees declined to enroll in the Consumer Choice Plan in 2024. Enrollment under the prior plan had been mandatory. The judge noted that the resulting reduction in premium obligations generated an estimated $52,000 per month in direct savings for the company.
• Discharge claims involving two union supporters, Frank Pulido and Jesus Felix, were resolved through a private settlement on the last day of the hearing and are not addressed in the decision.
• The judge ordered WestRock to rescind the Consumer Choice Plan upon the union's request, restore the prior status quo including the 80/20 premium formula, make affected employees whole for losses incurred, and extend Teamsters Local 856's certification period by one full year from the date good-faith bargaining commences.

Sources

Primary Source Author: John T. Giannopoulos, Administrative Law Judge, NLRB Division of Judges, San Francisco Branch Office

Primary Source: WestRock Services, LLC, JD(SF)–11–26, National Labor Relations Board (May 12, 2026)

Primary Source Link: https://www.nlrb.gov/case/32-CA-330282

Supplemental Sources:

• NLRB Employer Rights and Obligations, Unilateral Changes
• NLRB Case Record, Representation Election, Case 32-RC-326077
• Teamsters Local 856, WestRock Workers Join Teamsters 856
• International Brotherhood of Teamsters, WestRock Workers in California Join Teamsters
• Monterey County Now, A Trial Begins for a Salinas Packaging Company Accused of Unfair Labor Practices
• NLRB, Board Revises Standard on Employers' Duty to Bargain Before Changing Terms and Conditions of Work