Parsons v. Power Mountain Coal Co.

• Citation: 604 F.3d 177
• Decision Date: 05 May 2010
• Docket Number: No. 09-1822.,09-1822.
• Parties: Gregory PARSONS; David Boothe; United Mine Workers of America, Plaintiffs-Appellees,v.POWER MOUNTAIN COAL COMPANY, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

604 F.3d 177

Gregory PARSONS; David Boothe; United Mine Workers of America, Plaintiffs-Appellees,v.POWER MOUNTAIN COAL COMPANY, Defendant-Appellant.

No. 09-1822.

United States Court of Appeals, Fourth Circuit.

Argued: March 24, 2010.

Decided: May 5, 2010.

ARGUED: John R. Woodrum, Ogletree, Deakins, Nash, Smoak & Stewart, PC, Washington, D.C., for Appellant. Bradley James Pyles, Pyles & Turner, LLP, Logan, West Virginia, for Appellees. ON BRIEF: W. Gregory Mott, Ogletree, Deakins, Nash, Smoak & Stewart, PC, Washington, D.C., for Appellant.

Before TRAXLER, Chief Judge, and WILKINSON and DUNCAN, Circuit Judges.

Affirmed by published opinion. Judge WILKINSON wrote the opinion, in which Chief Judge TRAXLER and Judge DUNCAN joined.

OPINION

WILKINSON, Circuit Judge:

This case involves a claim by two former coal miners, Gregory Parsons and David Boothe, to collect retirement health benefits allegedly owed to them by Power Mountain Coal Company (“Power Mountain”), a coal operator in West Virginia. Under the terms of a collective bargaining agreement to which Power Mountain was a signatory, a coal operator is responsible for the health benefits of certain miners “whose last signatory classified employment was with such Employer.” Power Mountain asserted that it was not their last signatory employer, but the designated arbitrators under the collective bargaining scheme disagreed. The district court upheld the arbitrators' decisions, and we affirm. Lest we risk the disruption of the carefully negotiated rules governing labor-management relations within the coal industry, we decline to second-guess the judgment of arbitrators interpreting a complicated collective bargaining scheme comprised of interwoven agreements.

I.

A.

Parsons and Boothe are UMWA members who worked for many years as coal miners for Pehem Industries (“Pehem”), a company that at one time operated a coal preparation plant in West Virginia. In 1997, Parsons and Boothe were laid off from their jobs with Pehem.

Later that same year, Power Mountain purchased the plant where Parsons and Boothe had previously worked. As a result of its purchase, Power Mountain became subject to two labor contracts between the UMWA and numerous coal operators. Specifically, Power Mountain assumed its predecessor's obligations under the National Bituminous Coal Wage Agreement of 1993 (“1993 NBCWA”) and also became a direct signatory to the National Bituminous Coal Wage Agreement of 1998 (“1998 NBCWA”). Power Mountain also inherited a duty to honor the “panel rights” of Pehem's laid-off employees. Under the panel system, laid-off employees were placed on a panel and given the opportunity to be recalled back to employment, in order of seniority, for any work falling within the scope of the 1998 NBCWA's work jurisdiction clause.

While the 1998 NBCWA was in effect, however, Power Mountain hired non-union contractors for work allegedly falling under the 1998 NBCWA's work jurisdiction clause. As a result, a number of UMWA members, including several panel members, filed grievances against Power Mountain, seeking to collect pay for the work they claimed they were contractually entitled to perform. Without admitting liability, Power Mountain settled the grievances for a total of almost $43,000 in two separate settlement agreements, one in 2002 and one in 2003. Both settlements were short and included brief disclaimers, reciting that the agreements would not set a precedent for future cases.

Neither agreement specified how the monies were to be distributed. As a practical matter, Power Mountain simply paid the bulk sum to the local union, which in turn distributed the proceeds in equal shares to those union members who likely would have been hired if not for the alleged violation. Specifically, the local union determined that if Power Mountain had not hired the non-union contractors, then Parsons and Boothe, given their relative seniority on the panel, would have been recalled to employment for Power Mountain. Parsons and Boothe therefore received a proportionate share of the 2002 and 2003 settlement proceeds. Power Mountain claims it had no knowledge of who might or did receive such distributions.

B.

The settlement payments received by Parsons and Boothe gave rise to the claim for health benefits in this case. The central purpose of the 1998 NBCWA is to provide lifetime health benefits to retired, laid-off, and disabled UMWA members and their dependents. The 1998 NBCWA places the burden for these lifetime benefits on a miner's last signatory employer, and, if the last signatory employer is out of business, on the 1993 Benefit Plan.

To achieve its overarching goal of lifetime benefits, the 1998 NBCWA works in tandem with a set of separate plans and trusts, which establish a comprehensive, albeit complicated, scheme specifying who is eligible for what benefits and from whom. One such plan is the 1974 Pension Plan. All questions of pension eligibility are determined under the detailed rules of the 1974 Pension Plan, as adjudicated by the plan's trustees (“1974 Trustees”). As explained by Article VIII(A), “[t]he Trustees ... shall have full and final determination as to all issues concerning eligibility for benefits.”

In the instant case, the 1974 Trustees determined that as a result of the settlement payments, Power Mountain was required to pay retirement health benefits to Parsons and Boothe under Article XX(c)(3)(i) of the 1998 NBCWA, which requires an employer to provide certain health benefits to “pensioners under the 1974 Pension Plan and Trust whose last signatory classified employment was with such Employer.” See also 1998 NBCWA, Art. XX(h). The Trustees' conclusion that Power Mountain was obligated to pay health benefits under this section rested on two findings.

The 1974 Trustees first determined that Parsons and Boothe were “pensioners under the 1974 Pension Plan and Trust” because they were eligible for a “Special Permanent Layoff Pension.” To receive such a pension, a retired miner must have worked a minimum of twenty years of signatory service, with 1000 hours of “credited service” per year. In calculating the number of hours of “credited service,” the 1974 Pension Plan treats hours actually worked and hours constructively worked virtually the same. In this sense, and consistent with the 1974 Trustees' past practice, settlement agreements may lead to awards of “credited service” if the settlement payments are “back pay” representing compensation for hours that the employee ought to have worked but did not. The basis for this general rule is Article I(A)(12), which provides that “back pay,” which is “agreed to by an Employer [and] intended to compensate an Employee for periods which the Employee would have been engaged in a performance of duties for the Employer,” yields “credited service” for “hours worked.” Using this provision, the 1974 Trustees interpreted the 2002 and 2003 settlement payments as “back pay,” and the resulting adjustment to “credited service” for “hours worked” meant that Parsons and Boothe met the threshold for a “Special Permanent Layoff Pension.” ¹

Second, the 1974 Trustees concluded that the settlement payments made Power Mountain Parsons and Boothe's last signatory employer. An employee's last signatory employer is the employer on his last day of “credited service.” Here, because Parsons and Boothe's last day of “credited service” derived from settlement payments made by Power Mountain, it was attributable to Power Mountain. In other words, the 1974 Trustees found that the settlement agreements represented constructive employment and that Power Mountain's constructive employment of plaintiffs (paying them for hours they did not work, but should have worked) was sufficient to make it their last signatory employer.

When Parsons and Boothe attempted to enroll in its health benefits plan, however, Power Mountain denied their claims, insisting that it was not their last signatory employer. In response, the UMWA invoked the Resolution of Dispute (“ROD”) procedure under Article XX(e)(5) of the 1998 NBCWA. Under this provision, contested issues of health benefits are adjudicated by the Trustees of the 1993 Benefit Plan (“1993 Trustees”). After evaluating a disputed matter, the 1993 Trustees typically issue an opinion, commonly referred to as a “ROD,” which “shall be final and binding on the parties.” In RODs for both Parsons and Boothe, the 1993 Trustees informed Power Mountain that the subsidiary question of Parsons and Boothe's last signatory employer would be addressed by the 1974 Trustees through the procedure authorized by Article XX(g) of the 1998 NBCWA. Under this provision, the 1974 Trustees were authorized to “promptly investigate and determine the eligibility or ineligibility of any beneficiary whose right to receive benefits from the Trusts has been challenged by ... any Employer.”

As to both Parsons and Boothe, the 1974 Trustees reaffirmed their earlier conclusion that Power Mountain was properly named as the last signatory employer and informed the 1993 Trustees of this determination in a thoroughly reasoned letter. The 1993 Trustees issued ROD opinions in Parsons's case on January 20, 2007, and in Boothe's case on October 24, 2007. In both rulings, the 1993 Trustees not only adopted the 1974 Trustees' decision on the issue of last signatory employer but also confirmed the existence of additional facts crucial to a determination of eligibility. The Trustees concluded Power Mountain was required to provide health benefits to Parsons and Boothe.

When Power Mountain refused to comply with the ROD decisions, the UMWA, Parsons, and Boothe sued in the Southern District of West Virginia, seeking, in part, enforcement of the RODs as arbitration awards. The parties filed cross-motions for summary judgment, and the district court subsequently granted plaintiffs' motion for summary judgment and denied defendant's. Parsons v. Power Mountain Coal Co., 2009 WL...