Bloomberg News

PepsiCo Unions Seek NLRB Help to Fight $50 Tax on Fat, Smoking

February 13, 2012

Feb. 9 (Bloomberg) -- Teamster union members at PepsiCo Inc. in upstate New York are seeking National Labor Relations Board help to fight the company’s health-care policy that charges employees $50 a month when they smoke or have medical issues that may trigger weight gain.

Three International Brotherhood of Teamsters locals, representing about 300 drivers, sales agents and warehouse workers in Binghamton, Latham and Syracuse, complained to the labor board in October. PepsiCo is hindering the union’s effort to shop for a health plan without a “sin tax,” said Ozzie Martucci, secretary-treasurer of Teamsters Local 669.

“We’re against that type of tax, frankly,” Martucci said yesterday in a phone interview. “It feels wrong to tax workers if they are overweight or happen to have diabetes or smoke, and we wanted to look elsewhere for different insurance.”

PepsiCo workers can avoid the fee if they join programs to stop smoking or lose weight, said Dave DeCecco, a company spokesman. “These programs enable our associates and their families to live a healthier lifestyle,” he said.

The fee is applied to smokers, as well as to workers who have diabetes, hypertension, high blood pressure or asthma, conditions that often lead to being overweight, he said.

U.S. companies adding financial incentives and penalties to control workers’ health-care management rose 50 percent from 2009 to 2011, according to a survey of 355 employers by Towers Watson and the National Business Group on Health. The use of penalties may double this year, with 38 percent of respondents saying they plan to punish people who miss targets linked to cholesterol levels or body-mass index, the study showed.

Data Dispute

The New York Teamsters locals turned to the NLRB, which mediates disputes between employers and workers, after the company refused to turn over gender and age demographics the unions needed to shop for an alternative health plan, violating the labor agreement, Martucci said. The NLRB is reviewing the case.

“We have always been willing to provide the unions with as much information as possible,” DeCecco said. “We will collaborate with the NLRB to determine the best way forward, balancing the unions’ desire for information with our need to protect the privacy of our employees.”

The NLRB regional office in Buffalo, where the complaint was filed, told PepsiCo it would issue a complaint unless they settled the matter -- a step that is “standard practice” in such cases, Nancy Cleeland, the board’s Washington spokeswoman, said.

“Unless there is a settlement, the NLRB will issue a complaint saying it unlawfully withheld the information,” she said. The NLRB is not weighing in on the sin tax.

--Editor: Steve Geimann, David Ellis.

To contact the reporters on this story: Holly Rosenkrantz in Washington at hrosenkrantz@bloomberg.net;

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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