Bozetarnik, et al v. Mahland, et al

• Decision Date: 01 March 1999
• Docket Number: No. 3790,Docket No. 98-9192,3790
• Citation: 195 F.3d 77
• Parties: (2nd Cir. 1999) MARTIN BOZETARNIK, RAYMOND AKELEY and TERRANCE SLATE, Plaintiffs-Counter-Defendants, GRAPHIC COMMUNICATIONS INTERNATIONAL UNION LOCAL 109-b, Plaintiffs-Counter-Defendant-Appellant, v. RICHARD MAHLAND, KEVIN KELLEY and JOHN BIRKHOFER, Defendants-Counter-Claimants, QUEBECOR PRINTING BOOK PRESS, INC., Defendant-Counter-Claimant- Appellee. --
• Court: U.S. Court of Appeals — Second Circuit

Page 77

195 F.3d 77 (2nd Cir. 1999)

MARTIN BOZETARNIK, RAYMOND AKELEY and TERRANCE SLATE, Plaintiffs-Counter-Defendants, GRAPHIC COMMUNICATIONS INTERNATIONAL UNION LOCAL 109-b, Plaintiffs-Counter-Defendant-Appellant, v. RICHARD MAHLAND, KEVIN KELLEY and JOHN BIRKHOFER, Defendants-Counter-Claimants, QUEBECOR PRINTING BOOK PRESS, INC., Defendant-Counter-Claimant- Appellee.

Docket No. 98-9192

No. 3790 -- March Term, 1999

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Argued: March 19, 1999

Decided: October 20, 1999

Appeal from a judgment of the United States District Court for the District of Vermont(Murtha, J.).

Affirmed.

STEPHEN S. ANKUDA, ESQ. for Plaintiff-Counter-Defendant-Appellant

PETER BARR ROBB, ESQ. for Defendant-Counter-Claimant-Appellee

RUSSELL F. MORRIS, JR., ESQ. for Defendant-Counter-Claimant-Appellee

Before: McLAUGHLIN, CALABRESI, and GIBSON, ^* Circuit Judges.

JOHN R. GIBSON, Circuit Judge:

Local 109-B of the Graphic Communications International Union appeals the summary judgment entered against it in this dispute over the proper method for increasing members' pension benefit levels. The pension committee in charge of administering the local's pension plan voted to raise benefit levels, but the employer of the local's members, Quebecor Printing Book Press, Inc., refused to implement the increase on the ground that the committee had no power to increase the benefits. The local brought this suit against Quebecor, seeking arbitration of the dispute and a declaration of the local's rights under the parties' collective bargaining agreement and pension plan. On cross motions for summary judgment, the district court held that the committee had no power under the parties' collective bargaining agreement or the pension plan to increase the benefits; accordingly, the court entered summary judgment for Quebecor. We conclude that the governing documents unambiguously reserve to Quebecor the power to amend the plan. Therefore, we affirm the judgment of the district court.

Key to this dispute are the collective bargaining agreement and pension documents the parties adopted. The local's collective bargaining agreement with Quebecor dictates that Quebecor must pay forty cents into the pension fund for each hour worked by local members. The collective bargaining agreement has no provision for how that money is to be spent. The schedule of benefits is prescribed in the pension plan, and the amount of benefits has no direct relation to the forty cents per hour contribution required by the collective bargaining agreement. Instead, under the pension plan, an employee's accrued annual benefit is figured by multiplying the employee's years of service by a dollar amount. There is also a trust document for the pension fund, of which the parties have made only a few pages part of the record.

The collective bargaining agreement refers to the pension plan, stating that the name of the fund is "G.C.I.U. 109-B Pension Fund" and that the employer and union shall have equal representation on the "Pension Committee." The collective bargaining agreement then refers to the "Board of Trustees," which shall be composed of equal numbers of persons from the employer and the union. The trust agreement provides that the members of the board of trustees and the pension committee are identical. The collective bargaining agreement designates the board of trustees as the "policy-making body" and gives the trustees the power to make "[a] change of carrier or type of plan."

The collective bargaining agreement also contains an "Alternate Article 24" which, had the union members voted to adopt it, would have fundamentally changed the nature of the employer's obligation. Under Alternate Article 24, the employer would have been obliged to pay a defined benefit rather than contributing the forty cents per hour worked. The collective bargaining agreement stated that if Alternate Article 24 were adopted during the term of the agreement, then the trustees "will cause the necessary action to be taken to increase the plan benefit to twenty-four ($24.00) dollars per month, per year of credited benefit service effective with the first month after said adoption." The union members did not adopt Alternate Article 24.

The pension plan designates the pension committee as the "Plan Administrator." Article IX, "Administration," provides:

The Plan Administrator shall have the sole discretion to interpret the provisions of the Plan and to determine all questions that may arise hereunder. The Plan Administrator shall determine the Retirement Benefits payable under the Plan, or he may rely on the certification of the amount of Retirement Benefits by the Actuary.

The pension plan's Article X, "Discontinuance of Company Contributions - Plan Amendments and Mergers," states: "Subject to the collective bargaining agreement between the Employer and Local 109B, the Employer shall have the right to amend this Plan at any time and to any extent that it may deem advisable." The article then limits Quebecor's right of amendment, prohibiting any amendment that would vest in the employer control or interest in the pension fund's money or that would deprive retired beneficiaries of benefits under the plan as it existed when they retired.

Pension committee minutes reflect that the pension committee had amended the plan's benefits on three occasions antedating the present collective bargaining agreement. First, the minutes for September 14, 1993 show that the committee discussed whether to increase benefits or instead to use a different actuarial table that would allow Quebecor to maintain the deductibility of the plan without raising benefits. Although these minutes are sketchy, they suggest that the plan was in danger of becoming overfunded, thereby threatening the deductibility of the plan. Quebecor's representative suggested using a different actuarial table (presumably a more conservative one), rather than passing a large benefit increase, to address the deductibility problem. The minutes show that Quebecor's representative proposed a small benefit increase, which did not pass, and that a local representative then proposed a large increase, which did not pass, either. Finally, the committee passed a compromise increase in an amount that fell between the two rejected proposals. Second, on July 26, 1993, a Quebecor representative made a successful motion to amend the plan to include a preretirement death benefit. Third, the February 20, 1991 minutes include a correction to the December 11, 1990 minutes to show that the future service benefit was increased at the December meeting.

At the August 22, 1996 meeting of the pension committee, the union-appointed committee members invited an actuary to discuss the current financial state of the pension fund in relation to the liability of the fund at the current benefit levels. According to the minutes, the actuary stated that the "current 40 cents per hour contribution was more than enough to support the current unit benefit." A union-appointed committee member then moved "to increase the unit benefit effective 7/1/95 to $21.00 with a full benefit age 62, which requires a contribution rate of 38.8o per hour." The only employer-appointed committeeman present objected that the committee did not have the power to enact the increase. When the union-appointed members made clear that they intended to vote on the measure, the employer-appointed member asked for a recess so he could retrieve proxies he had from the other two employer-appointed members. Quebecor contends that the union-appointed committee members did not allow the employer-appointed member to retrieve or vote the proxies, but the record is equivocal. The minutes record the vote as a tie, "3 votes aye . . . 3 votes nay," as if the proxies were voted; however, the minutes later state that the motion carried.

Quebecor refused to recognize the August 22, 1996 increase as legitimate. The local filed a petition in the district court to compel arbitration of the dispute, then amended to add claims for a declaration of the local's rights. The parties filed cross motions for summary judgment.

The district court entered summary judgment for Quebecor. The court reasoned that the provision in the pension plan giving the pension committee power to "determine retirement benefits" only "connotes the computation of established benefits for a specific pension applicant." The court held that under the contractual provisions in this case, the benefit levels could only be increased after collective bargaining.

On appeal, the local argues that specific contractual provisions entrust the committee with power to increase benefits, and that the parties' past practice of recognizing benefit increases voted by the pension committee has created a condition of employment which Quebecor cannot now change unilaterally. Quebecor responds that the contract and plan in this case do not permit amendment of the benefit levels by the trustees.

As a threshold issue, the local's attorney agreed at oral argument that the local waived any right to arbitration by seeking summary...