522 F.3d 324 (3rd Cir. 2008), 06-4346, United Steelworkers of America, AFL-CIO-CLC v. Rohm and Haas Co.

Docket Nº:06-4346.
Citation:522 F.3d 324
Party Name:UNITED STEELWORKERS OF AMERICA, AFL-CIO-CLC, et al., Appellees, v. ROHM AND HAAS COMPANY and Rohm and Haas Health and Welfare Plan, Appellants.
Case Date:April 14, 2008
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

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522 F.3d 324 (3rd Cir. 2008)



ROHM AND HAAS COMPANY and Rohm and Haas Health and Welfare Plan, Appellants.

No. 06-4346.

United States Court of Appeals, Third Circuit.

April 14, 2008

Argued: Feb. 4, 2008.

On Appeal from the Judgment of the United States District Court for the Eastern District of Pennsylvania (Civ. No. 05-0039) District Judge: Honorable J. Curtis Joyner

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[Copyrighted Material Omitted]

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Raymond A. Kresge, Esq. (Argued), Cozen O'Connor, Philadelphia, PA, for Appellants.

William Payne, Esq., (Argued), Pamina Ewing, Esq., Stember, Feinstein, Doyle & Payne, Pittsburgh, PA, for Appellees.

Before: McKEE, AMBRO, Circuit Judges, and IRENAS, [*] Senior District Judge.


IRENAS, Senior United States District Judge.

In this case we are asked to review a determination by the District Court that an employee's challenge to a denial of disability benefits under a plan adopted by an employer pursuant to the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq., is subject to the grievance procedure, including arbitration, contained in a separate collective bargaining agreement (the "CBA") negotiated between the employer and its workers under the National Labor Relations Act, 29 U.S.C. § 151 et seq. While we recognize the strong policy considerations favoring arbitration of labor disputes, there is no right to arbitration of ERISA benefits under a CBA unless the ERISA benefits sought are either: (i) derived directly from an ERISA plan established and maintained by or incorporated into a CBA whose grievance procedure contains an arbitration clause, or (ii) created by a separate ERISA plan and that plan and/or the CBA provide that adverse benefit determinations by a plan administrator are subject to the CBA's grievance procedure that includes

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arbitration. Because we hold that the benefits sought in this case are neither created by or incorporated into the CBA nor made subject to the CBA's grievance procedure, we reverse the District Court's order granting summary judgment to the union and those workers seeking disability benefits and denying summary judgment to the employer. We remand for further proceedings on the remaining claim consistent with this opinion.


Plaintiffs-Appellees United Steelworkers of America, AFL-CIO-CLC (the "Union"), Lewis Griffin, George Hemmert, George Keddie, and Janice Scott (the "Individual Plaintiffs"), filed a two count complaint in the Eastern District of Pennsylvania against Defendants-Appellants Rohm and Haas Company (the "Company") and Rohm and Haas Company Health and Welfare Plan (the "Plan"). The Individual Plaintiffs are employees at the Company's Bristol, Pennsylvania facility and members of the Union, which represents the hourly production and mechanical employees at this facility. Count I of the Complaint sought to compel arbitration of four grievances filed by the Individual Plaintiffs to challenge the denial of disability benefits under the Plan, pursuant to the CBA between the Company and the Union covering the Bristol facility (the "Bristol CBA"). 1 Count II, in the alternative, alleged violations of Section 502 of ERISA, 29 U.S.C. § 1132 (a)(1)(B) and (a)(3). At the inception of the case, the District Court ordered that the two counts be litigated separately and that discovery proceed initially on Count I only. Upon the filing of the parties' crossmotions for summary judgment as to Count I only, the District Court granted the Plaintiffs' motion for summary judgment and denied the Defendants' motion for summary judgment, thus disposing of the case and rendering Count II of the Complaint moot. The Company and the Plan now appeal the District Court's decision in its entirety.


Each of the four Individual Plaintiffs sought to obtain either disability retirement or long term disability benefits from the Plan, and these benefits were denied by the Plan administrator. Following these denials, the Union submitted grievances pursuant to the Bristol CBA on behalf of the four Individual Plaintiffs, to which the Company failed to respond. The grievances of the four Individual Plaintiffs were filed between August 27, 2003 and October 8, 2004. The Union contends that each of the Individual Plaintiffs fully exhausted the grievance procedures or that any additional attempts to exhaust such procedures would have been futile. The Union demanded that these grievances be arbitrated in accordance with the Bristol CBA; however, the Company refused to arbitrate these grievances, arguing that any challenge to a denial of benefits under the Plan had to be made pursuant to the appeal procedure contained in the Plan itself.

On January 6, 2003, prior to the filing of the grievances on behalf of the four Individual Plaintiffs, the Union filed a site-wide grievance pursuant to the Bristol CBA (the "Site-Wide Grievance") complaining that the "disability case management process" resulted in the termination or denial of disability benefits in a manner inconsistent

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with the Plan. 2 The Company has never responded to the Site-Wide Grievance, and the Union has never demanded arbitration of this grievance.


"Article II - Recognition" of the Bristol CBA, effective May 8, 2000 to May 7, 2004, 3 provides that "[t]he provisions of this Agreement hereafter pertain only to the wages, hours, and working conditions of the . . . employees." Article V then establishes a five-step grievance procedure covering "[s]uch questions arising under this Agreement as involve wages (other than general adjustments), individual base rates, hours of employment and working conditions which any employee may desire to discuss with the Company." The final step of the grievance procedure states: "Should agreement not be reached [during the previous steps] . . . then either party may submit the matter to arbitration as described in Article VI."

Article VI on Arbitration provides that "[t]he sole responsibility of said arbitrator shall be to interpret the meaning of the Articles of this contract, and it in no way shall be construed that the arbitrator shall have the power to add to, subtract from, or modify in any way the terms of this Agreement."

The Bristol CBA also contains an Article addressing the medical examinations of Union members:


1. All new employees must pass a Company medical examination.

2. Company medical examinations of employees or groups of employees shall be made from time to time. Should any examination disclose that a transfer to another department would be beneficial from a health standpoint, the employee will be consulted and the transfer considered. A transfer for this reason shall be with the concurrence of the Company and the Union and shall not be held in violation of the seniority provisions. Such exceptions are subject to periodic medical examinations.

3. Before any employee's status is changed due to physical incapacity, he shall be entitled to a medical examination by an impartial physician should there be disagreement between the Company physician and the employee's personal physician. When the Company physician and the employee's personal physician disagree, and prior to the receipt of an impartial physician's opinion, the employee will be placed on disability absence and be provided benefits under the provisions of the Sickness and Accident plan, provided no suitable reassignment

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is available. It shall be the Company's and the Union's goal to have such situations resolved as soon as possible.

4. When an employee feels he needs a medical examination, he will receive same upon a written request to the Labor Relations Manager. An employee's physician may obtain from the Plant physician a written statement of medical findings.

5. Should it be determined by a medical examination that an employee is no longer able to do his regular work, then this employee shall be eligible for such other regular work that may be available and which he can perform satisfactorily. It in no way is understood that the Company must provide such work. Said employee shall receive the rate of the job to which he is transferred but may be eligible for wage rate protection as provided for under the provisions of the Disability Rate Protection Policy. 4

With the exception of the mention of the "Sickness and Accident plan" in Article XIX (3), the Bristol CBA does not contain any other reference to disability benefits.

The Plan, as amended and restated effective January 1, 2003, provides for disability income benefits 5 and other benefits for eligible employees of the Company, including non-union employees, and is not limited to Company locations covered by the Bristol CBA. The Plan is governed by ERISA and exists outside of and is independent from the Bristol CBA. The Union is not a signatory to the Plan, and there is no reference to the Bristol CBA or the Union throughout the Plan.

The Plan vests the Rohm and Haas Benefits Administrative Committee with "the sole discretion to interpret the Plan and decide any matters arising...

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