Boeing Co. v. INTERN. UNION OF UAW

• Citation: 600 F.3d 722
• Decision Date: 18 March 2010
• Docket Number: No. 09-3542.,09-3542.
• Parties: BOEING COMPANY, Plaintiff-Appellant, v. INTERNATIONAL UNION OF UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA (UAW), et al., Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

600 F.3d 722

BOEING COMPANY, Plaintiff-Appellant,
v.
INTERNATIONAL UNION OF UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA (UAW), et al., Defendants-Appellees.

No. 09-3542.

United States Court of Appeals, Seventh Circuit.

Argued February 23, 2010.

Decided March 18, 2010.

600 F.3d 723

William J. Kilberg, Attorney, Gibson, Dunn & Crutcher, Washington, DC, for Plaintiff-Appellant.

Michael Nicholson, Attorney, Ann Arbor, MI, for Defendants-Appellees.

Before BAUER, POSNER, and SYKES, Circuit Judges.

POSNER, Circuit Judge.

This case is before us on Boeing's appeal from the denial by the district court of a challenge to an arbitration award in favor of the UAW. 9 U.S.C. §§ 9, 10. The appeal requires us to consider the interplay between ERISA, 29 U.S.C. §§ 1001 et seq., and section 301 of the Labor-Management Relations (Taft-Hartley) Act, 29 U.S.C. § 185, in the context of arbitration.

Boeing had manufacturing facilities in Tulsa and McAlester, Oklahoma. The hourly employees were represented by the UAW, which had negotiated with Boeing a collective bargaining agreement that entitled employees who were laid off when or after they turned 50 and had at least ten years of service to retire from the company at age 55 with a Boeing pension, plus lifetime health insurance also paid for by the company.

In 2005 Boeing sold its Oklahoma facilities to a company now called Spirit Aerosystems. The company hired a number of the workers and when that happened Boeing deemed their employment with Boeing to have "terminated as a result of divestiture." Boeing transferred to Spirit's pension fund the assets in the former employees' retirement accounts and denied that it had any further pension or benefits obligations to them. It treated the workers who didn't receive jobs with Spirit as having resigned.

The union filed a grievance, charging that Boeing's refusal to treat the workers as if it had laid them off violated the collective bargaining agreement. The union sued to compel arbitration of its grievance; the suit was settled by Boeing's yielding to the union's insistence on arbitration.

600 F.3d 724

A provision of the collective bargaining agreement states that a worker loses his seniority rights, which include the pension and health benefits provided in the Boeing ERISA plans, if his employment is "terminated" in any of 11 specified ways. (There is no suggestion that termination deprived the workers of rights that ERISA itself makes nonforfeitable. 29 U.S.C. § 1053(a).) Divestiture of Boeing facilities, plant closure, and other possible characterizations of what Boeing did are not among the listed ways and the arbitrator ruled that therefore the workers retained their entitlement to Boeing pension and health benefits.

Boeing has no argument worth a second's pause that the arbitrator exceeded his authority in concluding that Boeing had violated the collective bargaining agreement by repudiating its obligations to the laid-off workers. Its only (barely) colorable complaint is about the relief that the arbitrator ordered. He directed the affected employees (some 150 to 200) to apply to Boeing's plan administrator for the benefits to which the plan entitled them, but he further ruled that should the plan administrator deny their benefits claims, either because it concludes that they're no longer participants in the plan because they were laid off by Boeing, or because of the transfer of plan assets to Spirit's pension fund, then Boeing must assume the plan's obligations to those workers minus any entitlement that they may have under their Spirit pension and health-insurance plans. The arbitration award gives the workers who didn't go to work for Spirit the same relief as those who did, except that the...