UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF INDIANA

HAMMOND DIVISION

FRANK L. GRAY, )

Plaintiff, )

)

v. ) CAUSE NO.: 2:13-CV-143-PRC

)

UNITED STATES STEEL CORPORATION, )

Defendant.

OPINION AND ORDER

This matter is before the Court on United States Steel Corporation’s Motion for Summary

Judgment [DE 36], filed on August 22, 2014. Plaintiff Frank L. Gray worked for Defendant United

States Steel Corporation (“U.S. Steel”) from 1969 to 2009. In 1995 and 2004, U.S. Steel entered into

EEOC Negotiated Settlement Agreements with Gray to resolve charges of employment

discrimination he had brought. Between 2003 and 2007, Gray filed grievances through the United

Steelworkers Union (“USW”) related to seniority violations, improper pay while on temporary

machine assignments, improper vacation pay from 2004, and unfair overtime equalization practices;

the USW separately filed related grievances on behalf of all affected employees of the Machine

Shop where Gray worked. Gray retired on June 1, 2009, without a resolution of those grievances.

Then, on November 12, 2011, U.S. Steel issued Gray a $30,000 grievance settlement payment. In

February 2012, Gray wrote to the administrator of U.S. Steel’s pension fund, requesting that his

pension be recalculated to account for the $30,000 settlement; the request was denied. 

Gray now brings suit, alleging a breach of the 1995 and 2004 Settlement Agreements by U.S.

Steel’s failure to properly calculate his pension earnings, timely resolve his grievances, properly

consider his seniority and overtime rights in violation of the 2003 and 2008 collective bargaining

agreements, grant him a full and fair hearing on his grievances, and allow him to actively participate
in the grievance procedures. Although styled as breach of contract claims, Gray’s claims, with the

exception of his ERISA claim, would either require an analysis of the collective bargaining

agreement under the Labor Management Relations Act and, thus, are barred by the six month statute

of limitations or could have been brought during his prior lawsuit in 2009 and, thus, are barred by

claim preclusion. Gray fares no better with his ERISA claim as U.S. Steel is not the proper party

defendant. As set forth more fully below, summary judgment is granted in favor of U.S. Steel on all

claims in Gray’s Complaint.

PROCEDURAL BACKGROUND

On August 17, 2012, Plaintiff Frank L. Gray filed a Charge of Discrimination (No. 470-

2012-03075) with the Equal Employment Opportunity Commission (“EEOC”) against “US Steel

Corp - Gary Works” and “US Steel & Carnegie Pension Fund.” Gray charged that Defendant United

States Steel Corporation (“U.S. Steel”) breached an EEOC negotiated settlement agreement from

1995 by failing to preserve his rights in all terms and conditions of employment, including seniority

rights, and that U.S. Steel breached a 2004 settlement agreement by retaliating against him for past

EEOC complaints. Specifically, Gray charged that U.S. Steel “grossly delayed” back pay wages

owed to him for over 4-1/2 years, almost 2-1/2 years after his retirement, and that the United States

Steel and Carnegie Pension Fund (“Carnegie Pension Fund”) refused to adjust his average pension

earnings to reflect the grievance settlement he was paid in December 2011. Gray charged that the

discrimination took place from January 1999 through February 21, 2012, and was continuing. The

EEOC issued a Dismissal of Notice of Rights on January 30, 2013, which Gray received on February

4, 2013.

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Gray, pro se, filed a Complaint in this case against Defendant U.S. Steel on April 25, 2013,

alleging that U.S. Steel breached “previous Title VII Negotiated Settlement Agreements.” (Compl.

1). Gray asserts that the Court has jurisdiction under Title VII of the Civil Rights Act of 1964, as

amended, and under ERISA, 29 U.S.C. § 1001.

In paragraph 1 of the Statement of Legal Claim in the Complaint (“Count 1”), Gray alleges

that U.S. Steel breached the EEOC negotiated settlement agreement of 1995 (“1995 Settlement

Agreement”) in denying him terms and conditions of employment. He alleges that, after awarding

him a $30,000 grievance settlement, U.S. Steel refused to adjust Gray’s monthly pension earnings

with back pay, in violation of the Pension Agreement between U.S. Steel and the USW regarding

“underpayments” and according to ERISA.

In paragraph 2 (“Count 2”), Gray alleges that U.S. Steel breached the 1995 Settlement

Agreement concerning “terms and conditions of employment, including seniority rights” by not

executing the grievance procedure in a timely fashion. Gray alleges that U.S. Steel refused to give

him a full and fair hearing on the grievances for more than eight years and then, in November 2011,

without comment or explanation, sent Gray a check for the $30,000 grievance settlement.

In paragraph 3 (“Count 3”), Gray alleges that U.S. Steel breached the 2004 negotiated

settlement agreement (“2004 Settlement Agreement”) by retaliating against Gray by repeatedly

ignoring his seniority and overtime equalization rights, in violation of the 2003 and 2008 Basic

Labor Agreements (“BLAs”) and by refusing to grant a full and fair hearing to Gray and to allow

Gray to actively participate in any of the grievances’ second and third step procedures.

Finally, in paragraph 4 (“Count 4”), Gray alleges that U.S. Steel has given Gray “just cause”

to charge violations of the 1995 and 2004 Settlement Agreements in that U.S. Steel “implied” that

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it may have violated the terms and conditions of the 2003 BLA against Gray when it issued the

grievance settlement check in November 2011. Gray alleges that these actions demonstrate a

violation of the Settlement Agreements and that equitable tolling should be applied.

On May 23, 2013, U.S. Steel filed an Answer.

On August 22, 2014, U.S. Steel filed the instant Motion for Summary Judgment and served

a Notice of Summary Judgment Motion as required by Northern District of Indiana Local Rule 56-

1(f). Gray filed a Response, a brief in support, a statement of genuine issues, and exhibits in support.

On October 30, 2014, U.S. Steel filed a reply brief as well as a Motion to Strike Gray’s response for

exceeding the page limit set by Northern District of Indiana Local Rule 7-1. In response, Gray filed

a Motion for Leave of Court to Correct Formatting Errors, filing a revised Statement of Genuine

Disputes and Material Facts and a revised Response Brief. On November 19, 2014, the Court

granted both motions, acknowledging the filing of the revised briefs. Having been granted leave of

Court to file a revised reply brief, U.S. Steel notified the Court on November 25, 2014, that U.S.

Steel stands on its original reply brief.

The parties filed forms of consent to have this case assigned to a United States Magistrate

Judge to conduct all further proceedings and to order the entry of a final judgment in this case.

Therefore, this Court has jurisdiction to decide this case pursuant to 28 U.S.C. § 636(c).

SUMMARY JUDGMENT STANDARD

The Federal Rules of Civil Procedure mandate that motions for summary judgment be

granted “if the movant shows that there is no genuine dispute as to any material fact and the movant

is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). Rule 56 further requires the entry

of summary judgment, after adequate time for discovery, against a party “who fails to make a

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showing sufficient to establish the existence of an element essential to that party’s case, and on

which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322

(1986) (citing Fed. R. Civ. P. 56(c)). “[S]ummary judgment is appropriate—in fact, is

mandated—where there are no disputed issues of material fact and the movant must prevail as a

matter of law. In other words, the record must reveal that no reasonable jury could find for the nonmoving party.” Dempsey v. Atchison, Topeka, & Santa Fe Ry. Co., 16 F.3d 832, 836 (7th Cir. 1994)

(citations and quotations omitted).

A party seeking summary judgment bears the initial responsibility of informing the court of

the basis for its motion and identifying those portions of the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any, that it believes

demonstrate the absence of a genuine issue of material fact. See Celotex, 477 U.S. at 323; Fed. R.

Civ. P. 56(c). The moving party may discharge its initial responsibility by simply “‘showing’—that

is, pointing out to the district court—that there is an absence of evidence to support the nonmoving

party’s case.” Celotex, 477 U.S. at 325. When the nonmoving party would have the burden of proof

at trial, the moving party is not required to support its motion with affidavits or other similar

materials negating the opponent’s claim. Celotex, 477 U.S. at 323, 325; Green v. Whiteco Indus.,

Inc., 17 F.3d 199, 201 n.3 (7th Cir. 1994); Fitzpatrick v. Catholic Bishop of Chi., 916 F.2d 1254,

1256 (7th Cir. 1990). However, the moving party, if it chooses, may support its motion for summary

judgment with affidavits or other materials, and, if the moving party has “produced sufficient

evidence to support a conclusion that there are no genuine issues for trial,” then the burden shifts

to the nonmoving party to show that an issue of material fact exists. Becker v. Tenenbaum-Hill

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Assoc., 914 F.2d 107, 110-111 (7th Cir. 1990) (citations omitted); see also Hong v. Children’s

Mem’l Hosp., 993 F.2d 1257, 1261 (7th Cir. 1993).

Once a properly supported motion for summary judgment is made, the non-moving party

cannot resist the motion and withstand summary judgment by merely resting on its pleadings. See

Fed. R. Civ. P. 56(e); Donovan v. City of Milwaukee, 17 F.3d 944, 947 (7th Cir. 1994). Rule 56(e)

provides that “[i]f a party fails to properly support an assertion of fact or fails to properly address

another party’s assertion of fact as required by Rule 56(c), the court may . . . consider the fact

undisputed for purposes of the motion [or] grant summary judgment if the motion and supporting

materials—including the facts considered undisputed—show that the movant is entitled to it . . . .”

Fed. R. Civ. P. 56(e)(2), (3); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-50 (1986).

Thus, to demonstrate a genuine issue of fact, the nonmoving party must “do more than simply show

that there is some metaphysical doubt as to the material facts,” but must “come forward with

‘specific facts showing that there is a genuine issue for trial.’” Matsushita Elec. Indus. Co. v. Zenith

Radio Corp., 475 U.S. 574, 586-87 (1986) (quoting Fed. R. Civ. P. 56(e)).

In viewing the facts presented on a motion for summary judgment, a court must construe all

facts in a light most favorable to the non-moving party and draw all legitimate inferences in favor

of that party. See Anderson, 477 U.S. at 255; Srail v. Vill. of Lisle, 588 F.3d 940, 948 (7th Cir.

2009); NLFC, Inc. v. Devcom Mid-Am., Inc., 45 F.3d 231, 234 (7th Cir. 1995). A court’s role is not

to evaluate the weight of the evidence, to judge the credibility of witnesses, or to determine the truth

of the matter, but instead to determine whether there is a genuine issue of triable fact. See Anderson,

477 U.S. at 249-50.

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MATERIAL FACTS

A. General Background1

Plaintiff Gray began his employment at Defendant U.S. Steel at its Gary Works plant in

January 1969 and retired on June 1, 2009. Gray was a member of the United Steelworkers Union

(“USW”). 

The USW and its Local Unions are the exclusive representative of bargaining unit employees

working in Production and Maintenance at U.S. Steel’s domestic facilities. The terms and conditions

of employment for Production and Maintenance employees are governed by a collective bargaining

agreement, known as the Basic Labor Agreement (“BLA”), between U.S. Steel and the USW.

Among other things, the BLA contains provisions on discipline and discharges, grievances

and arbitration, hours of work, overtime, promotions, seniority, vacancies, wages, incentive rates,

and a management rights clause. The management rights clause provides that “[t]he Company

retains the exclusive right to manage the business and Plants and to direct the working forces. The

Company, in the exercise of its rights, shall observe the provisions of this Agreement.” (Def. Br.,

Ex. D, p. 105). It also provides that “[t]he rights to manage the business and Plants and to direct the

working forces include the right to hire, suspend or discharge for proper cause, or transfer, and the

right to relieve employees from duty because of lack of work or for other legitimate reasons.” Id.

at p. 106.

Should any differences arise between U.S. Steel and the USW relating to the interpretation,

application, or compliance with the BLA or any other agreement, the BLA provides that an

1

 Gray presented an extensive Statement of Facts, which the Court has carefully reviewed and verified against

the evidence submitted by Gray. Most of Gray’s facts are not material because they concern the merits of his many

grievances. Thus, only those facts supported by admissible evidence and that are material to the determination before

the Court are included.

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employee or the Union may file a grievance. The BLA has a detailed procedure governing the

handling of grievances. The BLA establishes that the USW is the exclusive representative of the

employees and may process grievances through the grievance procedure (including arbitration), or

it may adjust or settle any grievance.

B. Gray’s Previous Employment Discrimination 

Claims/Lawsuits/Agreements Regarding U.S. Steel

1. 1995 Settlement Agreement

As the result of an EEOC Charge of Discrimination filed by Gray in 1993, U.S. Steel entered

into an EEOC pre-determination negotiated settlement agreement with Gray in 1995. The 1995

Settlement Agreement provided that, in exchange for Gray’s promise not to initiate a lawsuit with

respect to EEOC charge 24E-1993-0219, U.S. Steel agreed to pay Gray a certain sum of money.

Additionally, the agreement provided, in relevant part:

USS recognizes its responsibilities under the applicable Basic Labor Agreement,

USS’ EEO policies and federal, state and local EEO laws and will assure that

Charging Party’s rights will be preserved in all terms and conditions of employment,

including seniority rights.

(Def. Br., Exh. G, ¶ 4). 

This 1995 Settlement Agreement was followed by two lawsuits initiated by Gray against

U.S. Steel in the United States District Court for the Northern District of Indiana: causes of action

2:99-CV-12 and 2:01-CV-178. In cause number 2:99-CV-12, Gray alleged, among other things, that

U.S. Steel denied him opportunities to earn wage incentives and overtime on the 319 bar machine

and other machines with high incentive rates due to discrimination based upon his race and his

disability and due to retaliation. He also claimed U.S. Steel’s actions breached the 1995 Settlement

Agreement. In that case, U.S. Steel’s Motion for Summary Judgment was granted, Gray appealed

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the decision to the Seventh Circuit Court of Appeals, and summary judgment for U.S. Steel was

affirmed. See Gray v. USX Corp., 28 Fed. Appx. 570 (7th Cir. 2002). In cause number 2:01-CV-178,

Gray, who was pro se, alleged, among other things, that U.S. Steel disregarded his seniority rights

by letting junior employees work the 319 bar machine as well as other machines, unfairly disciplined

him, refused to process his grievances, and/or otherwise discriminated against him because of his

race, his alleged disability/perceived disability, and in retaliation. He also claimed that U.S. Steel’s

actions violated the 1995 Settlement Agreement. Gray later voluntarily dismissed the case.

2. 2004 Settlement Agreement

As the result of another Charge of Discrimination filed with the EEOC by Gray in 2004, U.S.

Steel entered into a second EEOC pre-determination negotiated settlement agreement with Gray.

The 2004 Settlement Agreement provided that, in exchange for Gray’s promise not to initiate a

lawsuit with respect to EEOC charge 24E-2004-00136, U.S. Steel agreed to pay Gray a certain

amount of money and agreed “[t]hat [Gray] will not be retaliated against in the future and that no

other potential employers will be advised of the facts and circumstances of these proceedings.” (Def.

Br., Ex. L, ¶ 3). The 2004 Settlement Agreement further provides that U.S. Steel agreed to provide

written notice to the local EEO Director within 10 days of satisfying each obligation specified in the

above paragraph of the Agreement.

C. Effects on the Machine Shop Resulting from the 2003 Basic Labor Agreement

Gray worked as a machinist in the Gary Works Machine Shop. In 2003, as a result of

extensive negotiations, U.S. Steel and the USW agreed to restructure the entire job classification

system for all production and maintenance bargaining unit employees at the various U.S. Steel

plants. For the Machine Shop, this meant that Gray and the other employees were now all classified

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under one broad category: Maintenance Technician-Mechanical (“MTM”). Furthermore,

management now had the ability to assign/reassign the MTMs in the Machine Shop to any of the

various assignments within the Machine Shop: i.e. working in the floor assembly areas, performing

field work, or working on any of the various machines used in machining parts, as these were all job

assignments falling under the MTM (Labor Grade 4) job umbrella.

D. Machine Shop Grievances and Memoranda of Agreement

Following the adoption of the 2003 BLA, numerous grievances from the Machine Shop were

filed. Gray brought several grievances, and the USW brought several additional grievances on behalf

of all employees in the Machine Shop:

1. WGa-2003-0650 – Frank Gray claimed U.S. Steel unfairly allowed junior employees to

work on the incentive machines and to earn overtime on those machines.

2. WGa-2003-0843 – Brought by USW Local 1014 on behalf of All Affected and claimed

U.S. Steel unfairly changed the work schedule in the Machine Shop.

3. WGa-2003-0858 – Frank Gray claimed U.S. Steel unfairly used junior employees (Phillip

Worthen and R. Scott Swenton) to fill in on the incentive machines, rather than using

employees with the most seniority.

4. WGa-2003-0861 – Brought by USW Local 1014 on behalf of All Affected claiming U.S.

Steel failed to use the previously established average incentive rates for employees filling

in on the incentive machines.

5. WGa-2003-0862 – Brought by USW Local 1014 on behalf of All Affected claiming U.S.

Steel failed to post vacancy notices so that employees could bid on different machines when

the current operator retired and a permanent vacancy was created.

6. WGa-2004-0271 – Brought by USW Local 1014 on behalf of All Affected claiming U.S.

Steel failed to pay the correct rate for vacation pay.

7. WGa-2004-0333 – Brought by USW Local 1014 on behalf of All Affected claiming that

U.S. Steel failed to equalize overtime appropriately and failed to compensate for this.

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8. WGa-2004-0620 – Brought by USW Local 1014 on behalf of All Affected claiming U.S.

Steel violated the BLA by failing to fill temporary vacancies according to an employee’s

seniority and job preference.

9. WGa-2005-0348 – Brought by USW Local 1014 on behalf of All Affected claiming U.S.

Steel paid the incorrect vacation pay to Benny Morris, Marvin Dillner, Perry Sinks, Pat

Lobdell, Frank Gray, Steve Kljajich, and Scott Swenton.

10. WGa-2005-0371 – Brought by USW Local 1014 on behalf of All Affected claiming U.S.

Steel failed to properly equalize overtime in the Machine Shop East.

11. WGa-2005-0405 – Frank Gray & Everett Iliff claimed U.S. Steel violated the 2003 BLA

when it failed to pay the correct incentive rate on the incentive machines.

12. WGa-2005-0763 – Brought by Local 1014 on behalf of All Affected claiming that U.S.

Steel failed to pay the correct incentive rate unique to each machine (machine average

performance) when employees filled-in on those machines.

13. WGa-2006-0454 – Frank Gray claimed U.S. Steel violated the BLA when it failed to pay

him at the correct rate for vacation days and amended his grievance on August 31, 2006,

stating he was not making the proper base rate; failed to get raises due to improper

application of the Earnings Protection Clause; was not making the proper incentives; and

that he was making only $32.84 an hour but should have been paid the rate earned by the

incumbent operator on the 1040 slotter, which was $38.78 an hour.

14. WGa-2006-0555 – Brought by USW Local 1014 on behalf of All Affected claiming U.S.

Steel failed to observe the past practice of posting vacancies for specific machines and

allowing employees to earn higher incentives.

15. WGa-2007-0106 – Brought by USW Local 1014 on behalf of All Affected claiming that

employees, who were assigned to the field crew, were unfairly denied the use of job

preferences and seniority for assignments.

16. WGa-2007-0431 – Brought by USW Local 1014 on behalf of All Affected claiming U.S.

Steel unfairly put a new MTM in a high incentive area (incentive machines) and failed to put

a MTM with more seniority in that position. 

For each of the above grievances, U.S. Steel denied that it violated the 2003 BLA. However, in an

effort to resolve all of the grievances that originated in the Machine Shop, Tim Mosby, the Gary

Works Coordinator of Manpower Utilization and Productivity Improvement, negotiated a settlement

with Joe Jarzabkowski, the USW Local 1014 Grievance Committee Chairman.

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Mosby knew of the issues raised in the Machine Shop grievances and, through his

negotiations with Jarzabkowski, sought to get a better and more consistent incentive plan in place

for the company while resolving the pending Machine Shop grievances that may have otherwise

consumed large amounts of time and energy if dealt with individually. Mosby did not perform an

analysis of how much money each employee was allegedly due for his grievance(s).

Mosby and Jarzabkowski’s negotiated settlement was memorialized in a Memorandum of

Agreement (“MOA”), dated August 8, 2007, between U.S. Steel-Gary Works and USW Local Union

1014. The parties agreed that the terms of the 2007 MOA were “[i]n full and final settlement of all

related grievances and claims (including but not limited to those on Attachment A) . . . .” (Def. Br.,

Ex. Q; Ex. N). The 2007 MOA provided that U.S. Steel would pay a sum of $125,000 to be paid in

two installments. However, the USW Local 1014 would provide the breakdown to U.S. Steel

regarding how the funds were to be disbursed among the affected employees. Jarzabkowski

suggested that Gray and Lobdell get $30,000 each and that the remaining money be split among the

rest of the affected Machine Shop personnel.

However, prior to the suggested distribution, U.S. Steel and the USW Local 1014 agreed to

amend the 2007 MOA in order to include additional employees, executing an Addendum to the 2007

MOA on October 8, 2007 (“Addendum”). Given that U.S. Steel would now be paying increased

rates to more employees than originally anticipated in the original 2007 MOA, the parties agreed

that U.S. Steel would now only pay out $62,000. Gray was told that the 2007 MOA and Addendum

settled all of his pending grievances. In August 2007, Jarzabkowski informed Gray that he would

be receiving $30,000 from U.S. Steel as a result of the settlement. 

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However, there was a great deal of discord among the other employees in the Machine Shop

regarding the terms contained in the 2007 MOA and Addendum. So much so that the USW Local

1014 eventually filed a new grievance (No. WGa-2008-51) challenging the legality of the 2007

MOA and Addendum. Given the many objections and the new grievance, U.S. Steel refrained from

making the $62,000 lump sum payment. Jarzabkowski later informed Gray that payment of the

money would be delayed.

After protracted negotiations, U.S. Steel and the USW Local 1014 eventually reached a

global agreement and finalized a new MOA in August 2011 in order to settle the grievance

(#WGa-2008-51) that challenged the original 2007 MOA and Addendum. The August 2011 MOA

was also in full and final settlement of the grievances addressed in the original MOA. As part of the

settlement, U.S. Steel agreed to pay the $62,000. In November 2011, U.S. Steel paid $30,000 to

Gray. (Def. Br., Ex. A, p. 33).

E. Gray’s 2009 Lawsuit Against U.S. Steel and USW Local 1014

During the pendency of the grievance challenging the 2007 MOA and Addendum, Gray filed

an EEOC Charge of Discrimination against U.S. Steel in 2008. Gray complained that he was not

allowed to work the 319 machine at the incumbent rate of pay, he was not assigned to work the 319

machine despite having more seniority than the employee assigned to the machine, that he was

denied vacation pay, overtime, pay raises, and incentive pay, and that he was retaliated against. Gray

filed another EEOC Charge of Discrimination against U.S. Steel in 2009, complaining that U.S.

Steel failed to assign him overtime work from September 13, 2006, to September 13, 2008. These

charges served as the prerequisites to Gray’s third lawsuit against U. S. Steel (2:09-CV-327), which

he filed in 2009 in the United States District Court for the Northern District of Indiana. 

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In 2:09-CV-327, Gray sued both U.S. Steel and the USW Local 1014. Gray claimed that U.S.

Steel subjected him to discrimination based upon his race, disability/perceived disability, and

retaliation in violation of Title VII, 42 U.S.C. § 1981, and the Americans with Disabilities Act.

With respect to retaliation, Gray claimed that since he lost his first lawsuit against U.S. Steel

(2:99-CV-12), U.S. Steel would not act on his complaints about lost earnings opportunities. Gray

contended that, since 2000, U.S. Steel had retaliated against him (because he had initiated litigation)

by holding off on processing his grievances filed between 2003 and 2007 that were still pending.

Gray also claimed that he was retaliated against due to a complaint he made to the NLRB

relating to his grievances not being processed. He asserted that after his complaint, U.S. Steel did

not give him the $30,000, did not let him run the 319 bar machine, and did not give him overtime.

Gray also alleged that the USW Local 1014 discriminated against him based upon his race

and disability and breached its duty of fair representation. Gray complained that the USW failed to

communicate with him about the status of his grievances, settled his grievances as part of a global

settlement, and failed to arbitrate his grievances.

Gray was represented by counsel in the 2009 lawsuit. With the consent of the parties,

Magistrate Judge Andrew P. Rodovich presided over the case and, on December 17, 2013, granted

summary judgment in favor of U.S. Steel and the USW on all of Gray’s claims.

F. The United States Steel and Carnegie Pension Fund

After Gray retired on June 1, 2009, he began collecting a pension pursuant to the United

States Steel Corporation Plan for Employee Pension Benefits (“Plan”). 

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The United States Steel and Carnegie Pension Fund (“Carnegie Pension Fund”) is a nonprofit

Pennsylvania membership corporation. The Carnegie Pension Fund is a distinct entity from

Defendant U.S. Steel. The Plan is sponsored and financed by U.S. Steel.

Pursuant to the Plan, Carnegie Pension Fund is the “named fiduciary” of the Plan and is the

Plan administrator. See (Def. Br., Ex. W, p. 1, § 2, ¶¶ 1-3). The Plan provides that the Carnegie

Pension Fund 

shall have full, exclusive and discretionary authority to decide all questions arising

out of and relating to the administration of this Plan, including, but not limited to,

questions involving the interpretation of the terms and provisions of the Plan and

questions of fact. Subject to the provisions of Section 5, the decision of the [Carnegie

Pension Fund] shall be final and conclusive as to all questions of interpretation and

application of this Plan and as to all other matters arising in the administration of this

Plan.

Id. § 2, ¶ 3. Coverage under the Plan for employees covered by a collective bargaining agreement

is subject to rules outlined in the applicable pension agreement.

On February 14, 2014, Gray sent a letter to the Carnegie Pension Fund requesting that his

pension be recalculated in order to take into account the $30,000 settlement payment he received

in 2011 after he retired. The Carnegie Pension Fund responded in writing on February 21, 2012,

denying the request. The letter explained that, under the terms of the Plan, no additional information

was discovered or provided to change his service, which had stopped as of his last day of

employment. An “Appeals Procedure 7.1” was appended to the letter. There is no evidence that Gray

filed an appeal.

G. Gray’s Deposition Testimony

In his deposition for this lawsuit, Gray testified that U.S. Steel breached the 1995 Settlement

Agreement (1) by refusing to adjust his pension amount by taking into account the $30,000

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grievance settlement received in 2011, (2) based upon the violations of terms and conditions of his

employment he alleged in his grievances, and (3) by delaying the grievance procedure and/or by not

timely processing his grievances under the terms of the BLA. He testified that, under the terms of

the BLA, grievances are required to be settled in a timely fashion, and he testified that the terms and

conditions of the contract are also the terms of his personal EEOC Settlement Agreements.

Gray testified that there were many issues that arose in the workplace with the onset of the

2003 BLA. As a result, he filed grievances. When asked why he did not file a lawsuit in 2003

alleging that U.S. Steel breached the 1995 Settlement Agreement, he responded that U.S. Steel and

the USW were still in the administrative process of settling his grievances. He testified that he

believed that he had an obligation to allow U.S. Steel and the USW to negotiate and try to settle the

disputes.

When asked, Gray was not able to articulate how U.S. Steel violated ERISA other than the

refusal to adjust his monthly pension amount as a result of the $30,000 settlement payment and that

he felt he “was denied terms and conditions of employment.” (Def. Br., Ex. C, p. 16-17, 28). Gray

was also not able to articulate how U.S. Steel retaliated against him.

ANALYSIS

Defendant U.S. Steel seeks summary judgment on all of Gray’s claims, arguing that the

claims in Counts 2, 3, and 4 are time barred under the Labor Management Relations Act and are

barred by claim preclusion and that U.S. Steel is not the proper party for the ERISA claim in Count

I. Gray responds that his claims are distinct breach of contract claims alleging breaches of the 1995

and 2004 Settlement Agreements and that he is entitled to enforce the agreements based on U.S.

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Steel’s violations of the terms of the agreements directly “related to terms and conditions of our

2003 Labor Contract.” (Pl. Resp. 1).

A. Counts 2, 3, and 4

In Counts 2, 3, and 4, Gray alleges that U.S. Steel breached the 1995 and 2004 Settlement

Agreements. The 1995 Settlement Agreement provides, in relevant part:

4. USS recognizes its responsibilities under the applicable Basic Labor Agreement,

USS’ EEO policies and federal, state and local EEO laws and will assure that

Charging Party’s rights will be preserved in all terms and conditions of employment,

including seniority rights.

(Def. Br., Ex. G) (emphasis added). The 2004 Settlement Agreement provides, in relevant part:

3. (b) That the Charging Party will not be retaliated against in the future and that no

other potential employers will be advised of the facts and circumstances of these

proceedings.

(Def. Br., Ex. L) (emphasis added). Gray describes these provisions as being intended “to encourage

Managers to afford Plaintiff, as a minority, equal treatment and equal opportunities.” (Pl. Resp. Br.

2). Yet, Gray, who is black, argues that as he gained seniority status, the managers became more

determined to circumvent his seniority for the sake of younger white employees.

By bringing the instant lawsuit based on alleged breaches of the two Settlement Agreements,

Gray attempts to turn attention away from the true nature of his claims, focusing instead on the fact

that his grievances were not final until U.S. Steel paid him the $30,000 settlement in November

2011, that he brought new EEOC charges for violations of the Settlement Agreements only after the

$30,000 settlement payment was made, and that he timely filed his Complaint in this case once he

received his notice of right to sue from the EEOC. By contending that he could not have brought this

lawsuit for breach of the Settlement Agreements until the grievances were finally resolved in 2011,

Gray attempts to evade the restrictions of the statute of limitations for filing claims under the Labor

17
Management Relations Act for violations of the BLA as well as the preclusive effect of the final

ruling in Cause Number 2:09-CV-327 that shares a common factual basis with this action. In the

end, Gray has not identified a genuine issue of material fact as to any claims arising out of the 1995

and 2004 Settlement Agreements that are not either barred by the statute of limitations because they

are truly claims for violations of the BLA or barred by claim preclusion.

1. Labor Management Relations Act

U.S. Steel argues that Gray’s allegations that U.S. Steel breached the terms and conditions

of the 1995 and 2004 Settlement Agreements are a surreptitious attempt to disguise his claims that

are more properly characterized as breaches of the collective bargaining agreement–the BLA.

Indeed, in order to determine whether there was a breach of the 1995 Settlement Agreement by a

denial of the terms and conditions of employment or a breach of the 2004 Settlement Agreement by

retaliation by ignoring seniority and overtime equalization rights, one must first look to the BLA to

determine if there was in fact a violation of the terms and conditions of employment therein.

An action for damages caused by an alleged breach of an employer’s obligation embodied

in a collective bargaining agreement falls under section 301 of the Labor Management Relations Act

(“LMRA”), 29 U.S.C. § 185. See DelCostello v. Int’l Bhd. of Teamsters, 462 U.S. 151 (1983);

Bryant v. Honeywell Int’l, 3:11cv495, 2014 WL 1316949, at *9 (N.D. Ind. Mar. 28, 2014). The

LMRA governs “disputes involving the interpretation or enforcement of [collective bargaining

agreements] or are substantially dependent on analysis of a [collective bargaining agreement].” Fish

v. Reliance Elec. Co., 25 F.3d 1053, 1994 WL 196425, at *1 (7th Cir. May 18, 1994) (citing

Caterpillar, Inc. v. Williams, 482 U.S. 386, 394 (1987)). Claims under section 301 of the LMRA are

subject to a six-month statute of limitations. Chapple v. Nat’l Starch & Chem. Co. and Oil, 178 F.3d

18
501, 505 (7th Cir. 1999) (citing DelCostello, 462 U.S. 151). “Any such claims must be filed within

six months of a final decision on a claimant’s grievance, or from the time the claimant discovers,

or in the exercise of reasonable diligence should have discovered that no further action would be

taken on his grievance.” Bryant, 2014 WL 1316949, at *9; see also Richards v. Local, Int’l Bhd. of

Elec. Workers, 790 F.2d 633, 636 (7th Cir. 1986) (citing DelCostello, 462 U.S. at 155).

Despite Gray’s protests that he has brought no claims under the BLA or the LMRA and that

he is alleging a separate cause of action for breach of the Settlement Agreements, any alleged breach

of the BLA in this case constitutes a claim under Section 301 of the LMRA. In his Complaint and

throughout his response brief, Gray asserts that U.S. Steel breached the Settlement Agreements by

failing to account for Gray’s seniority in certain situations, by not giving him overtime, and by

improperly handling his grievances. All of these issues can be resolved only by interpreting the

BLA.

For example, in Count 2, Gray claims that (1) U.S. Steel did not execute the grievance

procedure in a timely fashion, (2) refused a full hearing on his grievances, and (3) did not provide

him with an explanation when he was sent the $30,000 grievance settlement payment. Any ruling

on these issues would necessarily involve an interpretation of the BLA, which contains a detailed

section regarding the processing of grievances. In addition, the BLA provides that the USW is the

exclusive representative of bargaining unit employees and, therefore, governs whether U.S. Steel

should explain Gray’s settlement payment to him.

In Count 3, Gray alleges that U.S. Steel “repeatedly ignored his seniority and overtime

equalization rights, in violation of the 2003 and 2008 BLA and refused to grant a full and fair

hearing to Plaintiff and refus[ed] to allow him to participate in any of the grievances’ 2nd and 3rd

19
step procedures.” These claims, too, require an interpretation of the BLA, which, as repeatedly noted

by Gray, explicitly addresses seniority, overtime, and grievances/hearings.

In Count 4, Gray alleges that U.S. Steel has implied that it may have violated the 2003 BLA

when it issued him the $30,000 grievance settlement check. Again, reference to the BLA is required

because it details how grievance settlements affect U.S. Steel’s position on the grievance: “The

settlement or withdrawal of a grievance prior to Step 3 shall be without precedent or prejudice to

either Party’s position.” (Def. Br., Ex. D, p. 91).

In his response brief to the instant Motion for Summary Judgment, despite his protestations

that he is not bringing claims under the LMRA, Gray makes arguments that continue to support a

reading of his claims as requiring interpretation of the BLA under the LMRA:

Plaintiff will show there are grounds to sue Defendant for violations of the 2003

Basic Labor Agreement and the 2009 Pension Agreement, which in effect violates,

two EEOC Conciliation Agreements, or promises to Plaintiff, which assured that

Defendant, would grant to Plaintiff all terms and conditions of employment. (Pl.

Resp. 1).

By the fact that Defendant settled by collective bargaining with Plaintiff’s Union (a

partial payment) of long-pending grievances involving Plaintiff (over 8-years-longpending), and by the fact Defendant Managers admitted (in sworn testimony) that

Plaintiff was denied certain terms while employed, such as: seniority, overtime, fair

pay, and equal treatment while employed at Defendant’s Machine Shop-Gary Works.

Defendant is subject to the applicable laws that permit Plaintiff to sue for damages.

(Pl. Resp. 2).

Plaintiff initiated this present Complaint after Defendant and Union made a “final”

decision in closing out Plaintiff’s grievances. However, Plaintiff requested by his

grievances, that he wanted to be “made whole” and to be paid “all lost earnings.” It

is for that “failure” for Defendant and Union to not make Plaintiff “whole,” Plaintiff

now seeks to be made whole through this suit for the Defendant violating “binding”

Conciliations Agreements sponsored through the EEOC. (Pl. Resp. 2-3).

Plaintiff should be . . . able to enforce a conciliation agreement, and the CBA. (Pl.

Resp. Br. 9) (emphasis added).

20
Defendant violated terms and conditions of Plaintiff’s employment that are related

to the 2003 BLA and U.S. Steel Policy #5106 and relating to past practices with

similarly situated employees. (Pl. Resp. Br. 3-4) (emphasis added).

This Court must also consider Defendant’s past practices in the treatment of similarly

situated employees as well as the reading of the 2003 BLA. (Pl. Resp. Br. 16)

(emphasis added).

[In Gray’s prior lawsuit, Judge Rodovich] did not weigh “all” evidence as to whether

the Defendant violated Plaintiff’s right to terms of the CBA, and [Judge Rodovich]

did not weigh the evidence as to the terms that were ‘promised’ to Plaintiff by

‘private’ Settlement Agreement(s). (Pl. Resp. Br. 17) (emphasis added).

The Court should also look at the 2003 BLA terms and conditions (not necessarily

the Federal Statutes not to retaliate) that states the Employer will not retaliate against

any employee for exercising his rights under Federal Statutes. (Pl. Resp. Br. 25)

(emphasis added).

By Plaintiff, in this present case, submitting grievances through the collective

bargain[sic] process and possibly to arbitration, Plaintiff sought to vindicate his

contractual right under a CBA. (Pl. Resp. Br. 22) (emphasis added).

In his response brief, Gray lists many of the losses he claims to have suffered that formed

the bases of his grievances dating back to 2003, for which the $30,000 grievance settlement was

paid. These alleged losses include (a) the denial of overtime equalization opportunities totaling

approximately 1056 hours, (b) the denial of seniority rights to operate a machine at the “established

pay rate” for that machine, which was being operated by a junior employee for less than the

“established pay rate” for the machine, (c) lost average earnings for pension calculation purposes

over Gray’s last five-year period, (d) lost vacation pay from 2004 through 2007, and (e) lost earnings

due to U.S. Steel denying Gray the “established pay rate” for the machine Gray was allowed to

operate.

Thus, to prove a breach of the Settlement Agreements, to the extent that the facts Gray

identifies would even constitute a breach of those agreements, Gray would first have to show

21
violations of the BLA, which is governed by the LMRA. However, Gray’s filing of his Complaint

in this case on April 24, 2013, was not within six months of receiving the $30,000 settlement

payment in late 2011, which is when Gray “discovered or should have discovered that no further

action would be taken on his grievance.” Thus, the claims are untimely. Gray has failed to articulate

any credible reason why the statute of limitations should be tolled. Gray cannot evade the statute of

limitations under the BLA by bringing breach of contract claims.

Moreover, even if the statute of limitations had not expired on the LMRA claims arising

from the grievances for which Gray received the $30,000 settlement in 2011, Gray cannot make the

requisite preliminary showing that the USW breached its duty of fair representation. See

DelCostello, 462 U.S. at 164; Yeftich v. Navistar, Inc., 722 F.3d 911, 914 (7th Cir. 2013) (“When

union members sue their employer for breach of contract . . . they must also state a prerequisite

claim of breach of their union’s duty of fair representation . . . . The breach-of-fair-representation

requirement applies whether or not the plaintiffs name the union as a defendant in their LMRA

suit.”). In the 2009 lawsuit, Gray sued the USW for breach of its duty of fair representation in

handling the same grievances that are the subject of the instant lawsuit. Gray alleged that the USW

did not properly handle the grievances and that the USW failed to communicate with him regarding

the status of the grievances. In his December 17, 2013 Opinion and Order in 2:09-CV-143, Judge

Rodovich held that Gray had failed to raise a genuine issue of material fact that the Union breached

its duty. Gray v. United States Steel Corp., No. 2:09-CV-327, 2013 WL 6682951, at *17 (N.D. Ind.

Dec. 17, 2013).

Therefore, Gray’s claims in Counts 2, 3, and 4 based on an interpretation of the BLA are time

barred.

22
2. Res Judicata/Claim Preclusion

In addition, the issues in Counts 2, 3, and 4 of the Complaint in this case were already

litigated by Gray in the 2009 lawsuit before Judge Rodovich. Although the 2009 lawsuit was

brought under Title VII, § 1981, and the ADA and not under the BLA or as a breach of the

Settlement Agreements as in this case, both causes of action arise out of the same set of operative

facts for which there was a final resolution in favor of U.S. Steel and the USW. Gray could have

alleged that U.S. Steel was in violation of the 1995 and 2004 Settlement Agreements in the 2009

lawsuit.

“The doctrine of [res judicata or] claim preclusion is premised on the idea that, when a claim

has been fully litigated and come to judgment on the merits, finality trumps.” Czarniecki v. City of

Chicago, 633 F.3d 545, 548 (7th Cir. 2011) (citing In re Ingersoll, Inc., 562 F.3d 856, 861 (7th Cir.

2009)). There are three elements of claim preclusion under federal law: (1) a final decision in the

first suit; (2) a dispute arising from the same transaction (identified by its “operative facts”); and (3)

the same litigants (directly or through privity of interest). Id. (citing cases). All three elements are

met in this case.

First, it is undisputed that Judge Rodovich’s December 17, 2013 Opinion and Order was a

final decision in Gray’s 2009 lawsuit.

Second, it is undisputed that Gray and U.S. Steel were parties in the prior lawsuit.

Third, with the exception of the facts underlying Gray’s ERISA claim, addressed in the next

section, the dispute in this case arises out of the same transaction, or the same operative facts, as

those forming the basis of the 2009 lawsuit, namely that changes in the 2003 BLA engendered

numerous grievances regarding seniority, job assignments, incentive rates, and incumbency, all of

23
which concluded initially in the 2007 MOA and its Addendum and finally in the 2011 MOA with

the $30,000 grievance settlement to Gray. In the 2009 lawsuit against U.S. Steel, Gray made the

following factual arguments that are common to the allegations in this lawsuit. 

In the 2009 case, Gray argued that U.S. Steel had been “denying Plaintiff his seniority rights

since 2003 . . . with respect to the 319 bar machine” and that there was a “material issue of fact in

dispute as to whether USS was required to take seniority into consideration” with respect to the other

machines in the Machine Shop. ( 2:09-CV-327, Pl. Resp. 12, 13). Gray argued that U.S. Steel did

not allow him to work overtime on weekends. Id. at 6. Gray asserted that U.S. Steel ignored his

complaints about unfair overtime opportunities. Id. at 17. Gray filed a grievance in 2008

complaining that he was not receiving overtime prior to September 2008. (2:09-CV-327, Pl. Resp.

Stmt. of Facts 3). Gray argued that U.S. Steel and the USW did not negotiate a final agreement in

a timely fashion. Id. at 14. Gray alleged that U.S. Steel discriminated against him under the

Americans with Disabilities Act with regard to the denial of overtime. (2:09-CV-327, Am Compl.

10). Gray also alleged retaliation in violation of Title VII based on his prior EEOC charges. (2:09-

CV-327, Am Compl. 10). In the Opinion and Order, Judge Rodovich addressed Gray’s claims that

the USW withheld information from him concerning his grievances and excluded him from union

meetings. Judge Rodovich also addressed Gray’s claim that another employee was treated differently

by being permitted to withdraw his grievance from the negotiations that ultimately resulted in the

$30,000 settlement payment to Gray in 2011. Gray, 2013 WL 6682951, at *16.

“Two claims are one for the purposes of res judicata if they are based on the same, or nearly

the same factual allegations.” Czarniecki, 633 F.3d at 550 (citing Brzoskowski v. Laidlaw Waste

Sys., Inc., 49 F.3d 337, 339 (7th Cir. 1995)). Once a transaction has caused injury, all claims arising

24
from that transaction must be brought in one suit or be lost. Id. at 550. In this case, Gray has not

articulated any factual basis for the claims in Counts 2, 3, and 4 that are different from the operative

facts of the 2009 case. The list of alleged losses raised in his numerous grievances, set forth in the

previous section, are co-extensive with the factual allegations of the 2009 lawsuit. During his

deposition in this case, Gray was repeatedly asked to provide a factual narrative of the events that

constitute his claims for breach of the 1995 and 2004 Settlement Agreements. Gray’s only

comprehensible response was that he had previously filed grievances alleging violations of the terms

and conditions of employment under the BLA. The grievances that form the basis of this lawsuit for

breach of contract are the same grievances that were under consideration in the 2009 case. Those

grievances were the subject of the 2007 MOA and its Addendum, and they were also part of the

2011 MOA that ultimately resulted in the issuance of the $30,000 grievance settlement payment to

Gray.2

Gray cites Bowe v. Colgate-Palmolive Co., 416 F.2d 711, 714-15 (7th Cir. 1969), for his

argument that he had a right to allow the collective bargaining process come to a close with the

payment in 2011. In Bowe, the Seventh Circuit Court of Appeals held that “it was error not to allow

the plaintiffs to utilize dual or parallel prosecution both in court and through arbitration so long as

election of remedy was made after adjudication so as to preclude duplicate relief which would result

in an unjust enrichment or windfall to the plaintiff.” Id. This was so even though the defendant faced

2

 Another district court in the Seventh Circuit Court of Appeals faced with similar facts held that a clause in

the EEOC negotiated settlement agreement that the employer “acknowledges its legal obligation not to unlawfully

retaliate against [plaintiff] because she filed the Complaint” could not support a breach of contract claim because the

clause was an affirmation of the employer’s duty not to unlawfully retaliate under the ADEA. See Tate v.

Orthopaedics-Indianapolis, P.C., No. 1:12-CV-1188, 2014 WL 1091335, at *9 (S.D. Ind. Mar. 19, 2014). As in Tate,

a finding that U.S. Steel retaliated against Gray would also mean that U.S. Steel breached the Settlement Agreement.

Thus, Gray’s claim that U.S. Steel breached the agreement by retaliating against him is encompassed by his Title VII

retaliation claim in his 2009 suit, which has already been resolved in favor of U.S. Steel.

25
actions in multiple forums. Id. Similarly, Gray cites Alexander v. Gardner-Denver Co., 415 U.S. 36,

47-49 (1974), which rejected the election of remedies position taken by the district court and held

that the plaintiff had not waived the right to bring a Title VII claim by the exercise of collective

bargaining rights. In the instant case, however, Gray has not been precluded from pursuing both a

Title VII action and his grievances through the Union. Rather, any claims arising out of the

grievance process should have been brought within six months of the final decision and Gray should

have brought his breach of contract claim based on retaliation during the pendency of the 2009 Title

VII action as the grievance procedure was complete before the termination of the 2009 lawsuit and

the 2011 payment was included in the facts before Judge Rodovich.

In his response brief, Gray argues that U.S. Steel waived the affirmative defense of claim

preclusion by not affirmatively pleading it in its Answer as required by Federal Rule of Civil

Procedure 8. However, “a delay in asserting an affirmative defense waives the defense only if the

plaintiff was harmed as a result.” Curtis v. Timberlake, 436 F.3d 709, 711 (7th Cir. 2005) (citing

Williams v. Lampe, 399 F.3d 867, 870-71 (7th Cir. 2005) (per curiam); Carter v. United States, 333

F.3d 791, 796 (7th Cir. 2003)). Here, Gray is not prejudiced because he addressed the defense of

claim preclusion on the merits in his response to the instant motion. And, responding to the defense

would not require any additional discovery as knowledge of the factual basis of the 2009 lawsuit and

the instant lawsuit is within Gray’s control. Moreover, a court may raise the issue of preclusion on

its own in the interest of judicial economy even when a party fails to do so. Kratville v. Runyon, 90

F.3d 195, 198 (7th Cir. 1996). The Court finds that the EEOC did not forfeit the defense.

Gray also attempts to distinguish the two lawsuits by their different legal claims: Title VII

in the 2009 case versus breach of contract here. He notes that the causes of action have different

26
statutes of limitation and different remedies. But, the doctrine of claim preclusion prevents a party

from raising a claim or defense that could have been raised in the first proceeding. Sanders v. Ill.

Dep’t of Healthcare and Family Servs., 2014 WL 6439686, at * 1, — F. App’x —, — (7th Cir. Nov.

18, 2014) (citing Dookeran v. Cnty. of Cook, Ill., 719 F.3d 570, 575 (7th Cir. 2013); Garcia v. Vill.

of Mount Prospect, 360 F.3d 630, 637-39, 644 (7th Cir. 2004)). With the exception of his ERISA

claim, Gray has offered no reason why he could not have alleged a breach of the 1995 and 2004

Settlement Agreements in the 2009 lawsuit. Importantly, Judge Rodovich cited as a material fact in

his Opinion and Order that Gray had received the $30,000 grievance settlement in 2011. Thus, all

issues in Counts 2, 3, and 4 of the Complaint in this case were before Judge Rodovich for

consideration as well.

Gray argues for the application of “equitable tolling,” making references to § 1981 and a

four-year statute of limitations from the date he received the check for the $30,000 grievance

settlement. However, Gray has not argued how any § 1981 claim, a legal claim he did not identify

in this lawsuit until his response brief, is different from the Title VII and § 1981 claims he brought

in the 2009 lawsuit, given that both arise out of U.S. Steel’s handling of Gray’s grievances. Judge

Rodovich granted summary judgment in favor of U.S. Steel on Gray’s § 1981 claims in the 2009

case. Although Gray asserts that the § 1981 claim arises from the final grievance settlement in 2011,

that settlement was part of the facts set out in Judge Rodovich’s Opinion and Order underlying the

2009 lawsuit. Gray has not explained why he could not have brought any different § 1981 claim in

the prior proceeding.

Gray had ample time and opportunity to bring his breach of contract claims in the prior

lawsuit and failed to do so. Thus, the Court grants summary judgment in favor of U.S. Steel on

27
Gray’s claims for breach of the 1995 and 2004 Settlement Agreements in Counts 2, 3, and 4 of the

Complaint. As a result, the Court does not address those portions of Gray’s response brief dedicated

to rearguing the merits of his grievances or asserting that Judge Rodovich’s summary ruling in 2:09-

CV-327 was based on incorrect facts. See (Pl. Resp. Br. ¶¶ 6-15). 

B. ERISA Claim for Adjustment of Monthly Pension Earnings

In Count 1, Gray alleges that U.S. Steel breached the 1995 and 2004 Settlement Agreements

by refusing to adjust Gray’s monthly pension earnings with back pay to account for the $30,000

grievance settlement in violation of the Pension Agreement between U.S. Steel and USW and in

violation of ERISA. U.S. Steel seeks summary judgment on the basis that the Carnegie Pension Fund

and not Defendant U.S. Steel is the administrator of the pension plan, and, thus, U.S. Steel is not the

proper defendant for this ERISA claim of improper calculation of pension earnings.

ERISA’s civil-enforcement section provides that “[a] civil action may be brought . . . by a

participant or beneficiary . . . to recover benefits due to him under the terms of his plan, to enforce

his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the

plan.” 29 U.S.C. § 1132(a)(1)(B) (also known as ERISA § 502(a)(1)(B)). The proper defendant in

a suit for benefits due under an ERISA plan is the Plan and not the employer. Larson v. United

Healthcare Ins. Co., 723 F.3d 905, 911, 913 (7th Cir. 2013) (citing Feinberg v. RM Acquisition,

LLC, 629 F.3d 671, 673 (7th Cir. 2011); Leister v. Dovetail, Inc., 546 F.3d 875, 879 (7th Cir. 2008);

Blickenstaff v. R.R. Donnelley & Sons Co. Short Term Disability Plan, 378 F.3d 669, 674 (7th Cir.

2004)). 

ERISA also provides a claim for breach of fiduciary duty. 29 U.S.C. § 1132(a)(3). The

“threshold question” for such a claim is “whether [the defendant] was acting as a fiduciary (that is,

28
was performing a fiduciary function) when taking the action subject to complaint.” Brooks v. Pactiv

Corp., 729 F.3d 758, 765 (7th Cir. 2013) (internal quotation marks omitted) (quoting Pegram v.

Herdich, 530 U.S. 211, 226 (2000)). The fiduciary duty under ERISA includes a requirement that

the fiduciary “discharge his duties with respect to a plan solely in the interest of the participants and

beneficiaries” for the exclusive purpose of “providing benefits to participants and their

beneficiaries,” among other duties. 29 U.S.C. § 1104. A fiduciary is defined under § 3(21)(A) of

ERISA:

Except as otherwise provided in subparagraph (B), a person is a fiduciary with

respect to a plan to the extent (i) he exercises any discretionary authority or

discretionary control respecting management of such plan or exercises any authority

or control respecting management or disposition of its assets, (ii) he renders

investment advice for a fee or other compensation, direct or indirect, with respect to

any moneys or other property of such plan, or has any authority or responsibility to

do so, or (iii) he has any discretionary authority or discretionary responsibility in the

administration of such plan. Such term includes any person designated under section

1105(c)(1)(B) of this title.

29 U.S.C. § 1002(21)(A) (emphasis added). Thus, ERISA “defines ‘fiduciary’ not in terms of formal

trusteeship, but in functional terms of control and authority over the plan, thus expanding the

universe of persons subject to fiduciary duties.” Larson, 723 F.3d at 916 (quoting Mertens v. Hewitt

Assocs., 508 U.S. 248, 251 (1993)) (internal quotation marks and citation omitted).

“[A] benefit determination is part and parcel of the ordinary fiduciary responsibilities

connected to the administration of a plan.” Aetna Health Inc. v. Davila, 542 U.S. 200, 219 (2004).

“Therefore, ‘the ultimate decisionmaker in a plan regarding an award of benefits’ is a fiduciary and

acts as a fiduciary ‘when determining a participant’s or beneficiary’s claim.’” Larson, 723 F.3d at

916 (quoting Davila, 542 U.S. at 220). An employer can be the fiduciary of its employee-benefits

plan if it meets this definition. See Brooks, 729 F.3d at 766 (“When an employer also serves as the

29
administrator of its employee-benefits plan, it wears two hats, and not all of the employer’s business

decisions involve acts of an ERISA fiduciary.”) (emphasis added) (citing Varity Corp. v. Howe, 516

U.S. 489, 498 (1996); Fletcher v. Kroger Co., 942 F.2d 1137, 1139 (7th Cir. 1991)).

The action at issue in Gray’s Complaint is the computation of his pension benefits with

respect to the $30,000 settlement he received in 2011 (after he had already retired in 2009). The

fiduciary is Carnegie Pension Fund, a non-profit membership corporation, and not Defendant U.S.

Steel, a separate entity. The Plan explicitly provides that Carnegie Pension Fund has full and

exclusive authority to decide all questions involving the interpretation of the terms and provision

of the Plan and questions of fact. And, Carnegie Pension Fund handled Gray’s correspondence

seeking an adjustment of his pension benefits. It is undisputed that Gray sent a letter to Carnegie

Pension Fund in February 2012 requesting that his pension be recalculated to account for the

$30,000 settlement. It is also undisputed that Carnegie Pension Fund sent correspondence to Gray

shortly thereafter advising him that, under the terms of the Plan, there was no basis to adjust his

monthly pension benefits. There is no evidence that U.S. Steel was involved in the calculation of

Gray’s pension, the decision, or the correspondence.

Gray asserts that U.S. Steel “retains responsibility for the administration of pension

benefits,” (Pl. Resp. Br. 6); U.S. Steel “exercised ‘discretion’ when it ‘designated’ [Carnegie

Pension Fund] as administrators,” id.; and that U.S. Steel “exercises discretionary authority or

control respecting administration of the benefits of the 2009 Pension Agreement,” id. at 22. Yet,

Gray has designated no evidence to show that U.S. Steel took any acts that would qualify it as a

fiduciary under ERISA in relation to Gray’s claim. Gray also contends that U.S. Steel “declared

30
itself to be responsible for the administration of benefits.” (Pl. Resp. Br. 6). However, the portion

of the Pension Agreement, § 10.1, cited by Gray in fact provides: 

The Company, through its designated management representatives, shall be

responsible for the administration of the benefits set forth in This Pension

Agreement.

The Company has chosen to delegate the administration of the benefits set forth in

This Pension Agreement to the [Carnegie Pension Fund]. References to the Company

in the text of This Pension Agreement shall be deemed to refer to the [Carnegie

Pension Fund] where appropriate.

(Pl. Br., Ex. 3, § 10.1)

Gray argues that U.S. Steel should have contacted the Carnegie Pension Fund to credit the

$30,000 grievance settlement as a “creditable earning.” Yet, Gray does not identify any authority

for this position. Rather, Gray cites generally the provision titled “Creditable Earnings For Pension

Purposes,” which dictates how the Plan administrator is to treat creditable earnings and which

defines what constitutes a creditable earning. (Pl. Resp, Exh. 4, p. 30 (GRAY020383)). Gray does

not cite or quote any specific portion of this section in support of his claim against U.S. Steel. In

conjunction with this argument, Gray contends, without explanation, that U.S. Steel violated Section

8 of the Plan titled “Recovery of Overpayments and Correction of Underpayments” (Pl. Resp, Ex.

4, p. 11 (GRAY020392)). Again, this section governs the responsibility of the administrator and

does not impose any obligations on U.S. Steel. 

Finally, Gray argues that because U.S. Steel retained the right to amend or terminate the Plan

at any time in its sole discretion it retains “some degree of ‘discretion according to ERISA Section

3(21)(A).” (Pl. Br. 23). The plain meaning of these words belies Gray’s argument. The power to

amend or terminate the Plan does not equate with discretionary control over a plan’s management,

administration, or assets.

31
Because U.S. Steel is not the proper defendant for Gray’s claim that the refusal to recalculate

his monthly pension earnings to account for the $30,000 grievance settlement was improper, the

Court grants summary judgment in favor of U.S. Steel on Gray’s ERISA claim in Count I.3

CONCLUSION

Based on the foregoing, the Court hereby GRANTS United States Steel Corporation’s

Motion for Summary Judgment [DE 36]. The Court DIRECTS the Clerk of Court to enter judgment

in favor of Defendant United States Steel Corporation and against Plaintiff Frank L. Gray.

So ORDERED this 9th day of December, 2014.

s/ Paul Cherry 

MAGISTRATE JUDGE PAUL R. CHERRY

UNITED STATES DISTRICT COURT

cc: All counsel of record

Pro se Plaintiff

3

 Because Defendant U.S. Steel is not the proper defendant, the Court need not address Gray’s claim that he

was not given proper notification of the appeals process or U.S. Steel’s related argument in the Motion for Summary

Judgment that Gray failed to follow the appeals procedure in the Pension Agreement negotiated by U.S. Steel and the

USW, which has been adopted by the Pension Benefits Plan. See (Def. Br. 11).

32