Opinion ID: 786209
Heading Depth: 3
Heading Rank: 1

Heading: The 1997 CBA

Text: 4 The effects of the Settlement can not be fully understood without explaining the 1997 CBA, which the Settlement superseded. The 1997 CBA was the latest in a series of pacts negotiated between Midwest and Local 77L, and it tied in several previously negotiated benefit plans. Two of these plans are pertinent 3 : the Midwest Rubber Supplemental Unemployment Benefits Plan (SUB Plan) and the Midwest Rubber Custom Mixing Corp. Union Hourly Employees Medical and Life Insurance Plan (Medical Plan), the latter of which is also referred to as the Agreement on Welfare Benefits Programs. With regard to the Medical Plan, the 1997 CBA stated, It is recognized by the parties hereto that the provisions as outlined in Section 1 Paragraph (a) of [the CBA] may be applied to and shall include the [Pension Plan] and the Agreement on Welfare Benefits Programs.... Joint Appendix (J.A.) at 1022 (art. XV, § 2(a)). Additionally, the 1997 CBA explicitly incorporated the SUB Plan. J.A. at 1022 (art XV, § 2(b)) (It is recognized by the parties hereto that the separate Agreement on [SUBs] ... is a part of this Agreement.). Either Midwest, a committee appointed by Midwest, or RBX, as Midwest's successor, administered all three plans and possessed discretionary authority to determine eligibility, disburse benefits, and manage disputes.
5 The SUB Plan gave the Barberton employees certain Benefits in the event of their layoff, J.A. at 284 (art. I), which were intended to supplement any State System Benefits, J.A. at 284, rather than replace them. The SUB Plan provided for the disbursement of benefits and separation payments at amounts commensurate with seniority. A general trust fund served as the Plan's only financial source. Midwest was required to pay a certain amount into the fund each month, but Midwest's contribution could be offset or reduced by the costs of providing medical benefits for laid-off employees. 6 A Midwest employee at Barberton earned SUBs based upon several factors. An employee accrued credit units for each work week completed. The amount of the employee's SUBs consequently depended on seniority, whether that employee had used his or her credit units for prior benefits, and the status of the fund position. The SUB fund position was determined by dividing the current market value of the fund's assets by a number proportional to the number of covered employees. Credit units were canceled if the fund position fell below a certain level. For example, if the fund position fell below 80%, credit units were canceled in a manner that rewarded seniority. If the fund position fell below 4%, no SUBs were payable. The fund position also determined the payment of separation payments: separation payments would be distributed only if the fund position equaled or exceeded 80%. If the fund position fell below 80%, the separation payments would be deferred until the fund position exceeded 80%. The SUB Plan explicitly stated that employees did not have any rights or vested interests in the assets of the fund. J.A. at 322 (art. IX, § 5). Furthermore, the SUB Plan's existence was tied to the CBA's: Upon the termination of the [CBA], [Midwest] shall have the right to continue the Plan in effect and to modify, amend, suspend, or terminate the Plan, except as may be otherwise provided in any subsequent [CBA].... J.A. at 326 (art. X, § 4(a)) (emphasis added).
7 The Medical Plan gave employees medical benefits and life insurance both during employment and in the event of a layoff. Following termination of employment, an employee would continue to receive medical benefits for a period of 90 days beginning with the first day of layoff. J.A. at 217 (art. IV, § K.1(a)). An employee would also be covered for an additional time period beyond the first ninety days, which varied as a function of the number of SUBs an employee would expect to receive given an employee's available credit units on the last day worked prior to the layoff. For example, if an employee were entitled to thirty-three weeks of SUBs, as determined by the employee's seniority and the SUB Plan's fund position, the employee would receive ninety days plus five months of full medical coverage. See J.A. at 218 (art. IV, § K.1(b), (c)). If the SUB fund position dropped below 4% at the time of layoff, the employee would not be entitled to any SUB benefits, which consequently would limit the employee's post-layoff medical coverage to ninety days. Furthermore, if the SUB Plan were terminated, a laid-off employee would only be entitled to ninety days of medical care following the date of termination.