Source: http://openjurist.org/670/f2d/387/nos-81-1347-81-1348
Timestamp: 2016-12-03 14:30:38
Document Index: 642538088

Matched Legal Cases: ['§ 1292', '§ 302', '§ 302', '§ 186', '§ 186', '§ 302', '§ 186', '§ 3', '§ 302', '§ 186']

670 F. 2d 387 - Nos 81-1347 81-1348 HomeFederal Reporter, Second Series 670 F.2d.
30. The district court, noting that "the liability of the PBGC presents the core issue in this litigation,"17 certified its judgments for appeal pursuant to Fed.R.Civ.P. 54(b) and 28 U.S.C. § 1292(b) (1976). On February 5, 1981, this court granted permission to appeal.
31. The Taft Hartley Act (the Labor-Management Relations Act, "LMRA")18 established a set of rules to govern labor-management relations. Section 302 of the Act19 prohibits employers from making direct payments to a union. An exception is provided in § 302(c)(5)20 for contributions "paid to a trust fund established ... for the sole and exclusive benefit of the employees of such employer, and their families and dependents." Jurisdiction is conferred upon district courts to "restrain violations of this section."21 Under this provision, a district court is empowered to
enforce a trust fund's compliance with ... 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.
39. The rationality of these conditions depends in large part upon the justification for their enactment. Without substantial justification, an arbitrary break-in-service provision which deprives an otherwise eligible employee of all benefits must fall.29 Such a clause would constitute a "structural violation" under § 302(c)(5) of the LMRA.30
47. The plaintiff class's reliance on two recent Supreme Court decisions is similarly misplaced. In Nachman Corp. v. Pension Benefit Guaranty Corporation, 446 U.S. 359, 100 S.Ct. 1723, 64 L.Ed.2d 354 (1980), the Supreme Court held that promised benefits were nonforfeitable when they were vested but subject to a condition that benefits were limited to the assets of the plan. The condition was struck down by the Court. In Alessi v. Raybestos-Manhattan, 451 U.S. 504, 101 S.Ct. 1895 (1981), the Supreme Court affirmed a decision of this court,34 allowing the trustees to reduce otherwise vested pension benefits by an amount equal to the state benefits received by the employee.
Alessi, 451 U.S. at 510, 101 S.Ct. at 1899, quoting Nachman, 446 U.S. at 375, 100 S.Ct. at 1733 (emphasis added). Plaintiff class complains that the conditions (that is, the requirements of the partial termination clause) are invalid and need not be met. We find that the conditions are valid and must be met in order for benefits to be nonforfeitable. Plaintiffs have not satisfied these conditions and therefore do not qualify for pension benefits.37 The numerous cases cited by the plaintiffs are inapposite. While the analysis used by other courts is similar to our own, each case can be distinguished on its facts.38
50. The various claims against the employers were discussed at length by the district court. We find that discussion and analysis to be both complete and correct. Accordingly, we adopt Parts V through VIII of the district court's opinion. 526 F.Supp. 299 (D.N.J.1980).39
53. The circumstances surrounding Budweiser's refusal to place these employees on its seniority list have been discussed. It is undisputed that these plaintiffs never submitted this dispute to the grievance procedures provided in the applicable collective bargaining agreement. Appendix at 442. Failure to avail themselves of mandatory grievance provisions leaves the plaintiffs barred from litigating such claims at a later date. Republic Steel Corp. v. Maddox, 379 U.S. 650, 85 S.Ct. 614, 13 L.Ed.2d 580 (1965).42
55. The court supported its position by citing the "well established presumption in favor of the coverage of grievance and arbitration procedures. United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960)." Appendix at 444. Although this "presumption" is supportive, we are not required to rely on it. The remaining provisions of the grievance procedure (Article IX of the collective bargaining agreement) provide a conclusive ground upon which to rest this decision.
Vaca v. Sipes, 386 U.S. 171, 191-92, 87 S.Ct. 903, 917, 17 L.Ed.2d 842 (1967).
59. Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728, 101 S.Ct. 1437, 67 L.Ed.2d 641 (1981), is in accord. In that case employees submitted grievance claims to their union; the union failed to process these claims. The employees sued the union for a breach of its fiduciary duty of fair representation and sued the employer for a failure to pay wages as provided for under the Fair Labor Standards Act (FLSA).45 Both the district court and the court of appeals reached only the fair representation issue and found for the defendants.46
61. Seniority, on the other hand, is a "collective" right; it does not exist independently of a collective bargaining agreement as does a minimum wage requirement.48 While there may be many areas in which employees may be allowed to assert claims directly against an employer, we do not believe that seniority so qualifies. Barrentine, on which plaintiffs rely, explicitly states that "The Labor-Management Relations Act ... was designed ... to improve working conditions by encouraging employees to promote their interests collectively." 450 U.S. at 735, 101 S.Ct. at 1442 (emphasis added). Plaintiffs cite no authority supporting a conclusion that collective action should not be required in this case.
29 U.S.C. § 186(c)(5) (1976). Subject matter jurisdiction pursuant to this statute was challenged below. The district court found that Knauss v. Gorman, 583 F.2d 82 (3d Cir. 1978), was controlling and jurisdiction existed. 526 F.Supp. 299, at 309 (D.N.J.1980). We agree
29 U.S.C. § 186(c)(5) (1976)
LMRA, § 302(e), 29 U.S.C. § 186(e) (1976). An allegation of a "structural violation" is sufficient to vest the court with jurisdiction. NEDD v. UMV, 556 F.2d 190, 201 n.18 (3d Cir. 1977), cert. denied, 434 U.S. 1013, 98 S.Ct. 727, 54 L.Ed.2d 757 (1978)
See, e.g., Mosley v. National Maritime Union & Welfare Plan, 451 F.Supp. 226 (E.D.N.Y.1978)
This problem has been explicitly recognized by other courts. See, e.g., Roark v. Lewis, 401 F.2d 425, 429 (D.C.Cir.1968)
See Roark v. Lewis, 401 F.2d 425 (D.C.Cir.1968)
It is argued that the choosing of a ninety day period is arbitrary and capricious. We disagree. As the District of Columbia Circuit has noted: "(B) y their very nature most eligibility requirements ... are colored to greater or lesser degree by an element of arbitrariness." Roark v. Lewis, 401 F.2d 425, 428 (D.C.Cir.1968)
Nachman, 446 U.S. at 371, 100 S.Ct. at 1731; Alessi, 451 U.S. at 511-512, 101 S.Ct. at 1900
Appellant Chock Full O'Nuts argues that the power of the trustees to reduce benefits makes these benefits conditional and therefore forfeitable under the test of Nachman and the explicit language of ERISA (benefits must be unconditional and legally enforceable against the Plan. 446 U.S. at 375, 100 S.Ct. at 1733, ERISA § 3, 29 U.S.C. 1002 (1976)). As we have decided that the enactment of the partial termination clause was a valid exercise of the trustees' power and as the plaintiff class has not contested the actions of the trustees in reducing the amount of benefits payable to all beneficiaries under Article VII, Section 2, we reserve opinion as to whether these benefits would in all instances be considered forfeitable
See, e.g., Pierce v. NECA-IBEW Welfare Trust Fund, 620 F.2d 589 (6th Cir.), cert. denied, 449 U.S. 1015, 101 S.Ct. 574, 66 L.Ed.2d 474 (1980), holding that the trustees of a multi-employer trust fund did not act arbitrarily and capriciously in reducing the benefits payable to employees of employers who have withdrawn from the Plan; Bridge, Structural and Iron Workers Local 111 v. Douglas, 646 F.2d 1211 (7th Cir.) cert. denied, --- U.S. ----, 102 S.Ct. 328, 70 L.Ed.2d 166, holding that the trustees of a multi-employer trust fund did not act arbitrarily and capriciously in enacting an amendment to a plan which required employees of a withdrawn employer to meet various conditions before they would qualify for otherwise vested pension benefits. The court noted that there was an unfunded liability of $400,000 prior to the Plan amendment. In its discussion the court found that the trustees adopted the amendment to avert financial impairment of the trust fund. This was considered to be within their discretion as fiduciaries. The Ninth Circuit cases cited by the plaintiff class are less clearly on point. In Lee v. Nesbitt, 453 F.2d 1309 (9th Cir. 1972), the court remanded for a determination under § 302 of ERISA, 29 U.S.C. § 186 (1964), as to whether the plaintiff's break in service was voluntary or involuntary. Plaintiff had claimed that no employment was available. Defendants offered no substantial justification for the enactment of the provision. In Burroughs v. Board of Trustees of Pension Trust, 542 F.2d 1128 (9th Cir. 1976), cert. denied, 429 U.S. 1096, 97 S.Ct. 1113, 51 L.Ed.2d 543 (1977), the court held that it was unfair to apply a break-in-service provision to an employee who did not have notice of its existence. As noted above, this question is not now before us
Numerous cases by the District of Columbia Circuit Court of Appeals have been cited. Robinson v. United Mine Workers, 640 F.2d 416 (D.C.Cir.), cert. granted, --- U.S. ----, 102 S.Ct. 89, 70 L.Ed.2d 82; Norton v. I. A. M. National Pension Fund, 553 F.2d 1352 (D.C.Cir.1970); Roark v. Lewis, 401 F.2d 425 (D.C.Cir.1968). Each of these cases can be clearly distinguished from the case at hand, and none contravenes our analysis.
See Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728, 101 S.Ct. 1437, 67 L.Ed.2d 641 (1981)
526 F.Supp. 299, at 318-322 (D.N.J.1981)
Various exceptions to this doctrine have been established. See, e.g., Barrentine v. Arkansas-Best Freight Systems, Inc., 450 U.S. 728, 101 S.Ct. 1437, 67 L.Ed.2d 641 (1981); Clayton v. Int'l Union, 451 U.S. 679, 101 S.Ct. 2088, 68 L.Ed.2d 538 (1981); Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967)
See, e.g., Swartz & Funston v. Local 7, 319 F.2d 116 (3d Cir. 1963); L.O. Koven & Brother v. Local 5767, 381 F.2d 196 (3d Cir. 1967); Blake Construction v. Laborers' Int'l, 511 F.2d 324 (D.C.Cir.1975)
See Barrentine, 450 U.S. at 728, 101 S.Ct. at 1440
450 U.S. at 735, 101 S.Ct. at 1442