Source: http://openjurist.org/583/f2d/82
Timestamp: 2015-11-26 05:26:12
Document Index: 603181140

Matched Legal Cases: ['§ 302', '§ 302', '§ 302', '§ 302', '§ 302', '§ 302', '§ 302', '§ 302', '§ 302', '§ 302', '§ 302', '§ 302', '§ 302', '§ 302']

583 F2d 82 Knauss v. E Gorman | OpenJurist
583 F. 2d 82 - Knauss v. E Gorman HomeFederal Reporter, Second Series 583 F.2d.
583 F2d 82 Knauss v. E Gorman 583 F.2d 82
84 Lab.Cas. P 10,769, 1 Employee Benefits Ca 1491
Edmund KNAUSS, Appellant,v.Patrick E. GORMAN, Willard J. Carlson, R. Emmett Kelly,Irving Stern, Frank Cimino, Fred Clavio, Richard A. Hepp,Darrell V. Stiffler, John E. Boyd, Monroe M. Rochester andOral Moody, Trustees solely in their official capacity, andAmalgamated Meat Cutters and Butcher Workman's Union andIndustry Pension Fund.
No. 77-2139.
Argued May 3, 1978.Decided Aug. 11, 1978.
In 1957, Local 424 of the Amalgamated Meat Cutters, in cooperation with Oswald & Hess and other meat packers, instituted a multi-employer pension fund pursuant to § 302(c)(5) of the Taft-Hartley Act.1 Under the terms of the 1957 Fund, participating employers contributed a stipulated amount per year for each employee to fund pension benefits. As an employee of Oswald & Hess, Knauss became a member of the plan, and from 1957 to 1962 payments were made to the pension fund on his behalf.
After attempting unsuccessfully to have this decision reversed administratively, Knauss brought suit against the National Fund and its trustees in the district court under § 302(e)4 of the Taft-Hartley Act. He claimed that the provision denying credits for contributions prior to a break in service was arbitrary and capricious, and therefore violated the requirement of § 302(c)(5) that joint employer-union pension plans be operated for the "sole and exclusive benefit" of employees.
B. STRUCTURAL VIOLATION
§ 302 of the Taft-Hartley Act prohibits payments to unions by employers. § 302(c)(5), however, fashions an exception to that prohibition for monies "paid to a trust fund established . . . for the sole and exclusive benefit of the employees of such employer, and their families and dependents," provided that such a trust fund meets certain statutory requirements.5 § 302(e) of the Act affirms that federal district courts have jurisdiction "to restrain violations of this section." Our first inquiry thus must be whether Knauss has set forth a claim cognizable under § 302.
In Associated Contractors v. Laborers International Union,6 we noted that "although the extent of jurisdiction under § 302(e) is not yet settled, this much is certain: a federal court does have jurisdiction under the section to enforce a trust fund's compliance with the statutory standards set forth in subsection (c)(5) by eliminating those offensive features in the structure or operation of the trust that would cause it to fail to qualify for a (c)(5) exception."7 Likewise, in this case we have no occasion to define further the reach of § 302, for as we said in Nedd v. UMW,8 the allegation of such a "structural" violation is sufficient to vest the court with jurisdiction.9
Here, Knauss alleges that the break-in-service provision of the rules of the National Fund arbitrarily excludes employees from benefits, and therefore does not operate for the sole and exclusive benefit of employees as required by § 302(c)(5). On its face, such an alleged defect would appear to support an action under § 302(e).
In any event, if the break-in-service clause does arbitrarily and without justification bar otherwise eligible workers from pension benefits, it constitutes a "structural violation" cognizable under § 302(e), although only a single individual is currently affected. As the Seventh Circuit noted in Johnson v. Botica,10 there are "some analytic difficulties in the use of the structural deficiency standard." Nonetheless, the distinction is rooted in the perception that Congress did not necessarily intend § 302(e) as a conduit to carry to the federal courts every claim for benefits denied by a § 302(c)(5) pension fund. Day-to-day discretionary decisions by the administrators of funds are not subject to continuous audit by federal courts. However, where a settled requirement capriciously excludes employees from benefits, it is not the prudence of the plan's administration which is at issue, but the fairness of its basic structure. Such an exclusion constitutes a failure to conform to the "sole and exclusive benefit" requirement, and thus may be reviewed in the federal courts without doing violence to the C