Adams v. New Jersey Brewery Employees' Pension Trust Fund, Local Union 843
| Decision Date | 10 February 1982 |
| Docket Number | No. 77-2534,No. 81-1348,C,Nos. 76-1931 and 77-2543,No. 77-2543,No. 81-1347,81-1348,Nos. 81-1347,77-2534,81-1347,s. 76-1931 and 77-2543,77-2543,s. 81-1347 |
| Citation | 670 F.2d 387 |
| Parties | 114 L.R.R.M. (BNA) 2190, 93 Lab.Cas. P 13,219, 3 Employee Benefits Ca 1083 ADAMS, Gustav A., Andrew F. Dopkins, and Robert Malcolm, deceased by his Executrix Lillian Malcolm v. Trustees of the NEW JERSEY BREWERY EMPLOYEES' PENSION TRUST FUND, LOCAL UNION 843, I.B. of T., Falstaff Brewing Corporation, and Joseph M. Byrne Co., a corporation of the State of New Jersey. MICHOTA, Bruno; Walter Lemke; Abraham Geliman (sic); Lawrence Balback; Bolly Bonk; William Dunne; Bernard Kosciewicz; Siegfried Milchram; Howard Sears; Stephen Gardzinski; Harry Wolf; Bruno Dziedzic; William Riedel; Salvatore Guarneri; Samuel Monto; Fermin Loma; Vincent Sadowski; Stanley Kiesnowski; Anthony Bellina; Frank Pavolonis; William Roesch; Michael Duda; Edward Strittmatter; Frederick Hubner; Peter Rudy; Harold Wanthouse; Joseph Duffy; Joseph Coyle and Grace Green (Widow of Harold Green, Deceased) v. ANHEUSER BUSCH, INCORPORATED (Budweiser); P. Ballantine & Sons; Pabst Brewing Company; Falstaff Brewing Corporation; Investors Funding Corporation; Rheingold Breweries, Inc.; The New Jersey Brewery Employees' Pension Trust Fund; Henry T. Hamilton; Herbert V. Johnson; Frank A. Jackiewicz; Frank Sullivan; Herbert Heilmann, Jr.; Henry Tchorzewski; Benno Merker and Arthur Spinello as Trustees of The New Jersey Brewery Employees' Pension Trust Fund, the Pension Benefit Guaranty Corporation as Trustee for the New Jersey Brewery Employees' Pension Trust Fund. PENSION BENEFIT GUARANTY CORPORATION, Defendant-3rd Party Plaintiff, v. CHOCK FULL O'NUTS CORPORATION, 3rd-Party Defendant. Appeal of Bruno MICHOTA, Walter Lemke, Abraham Gellman (sic), Lawrence Balback, Bolly Bonk, William Dunne, Bernard Kosciewicz, Siegfried Milchram, Howard Sears, Stephen Gardzinski, Harry Wolf, Bruno Dziedzic, William Riedel, Salvatore Guarneri, Samuel Monto, Fermin Loma, Vincent Sadowski, Stanley Kiesnowski, Anthony Bellina, Frank Pavolonis, William Roesch, Michael Duda, Edward Strittmatter, Frederick Hubner, Peter Rudy, Harold Wa |
| Court | U.S. Court of Appeals — Third Circuit |
Richard K. Coplon (argued), Bernard Hellring, Hellring, Lindeman, Goldstein & Siegal, Newark, N. J., for Bruno Michota, et al., Individual plaintiffs-appellants and plaintiff class appellees.
Stephen D. Schrieber (argued), Pension Benefit Guaranty Corp., Henry Rose, Mitchell L. Strickler, Baruch Fellner, James N. Dulcan, Washington, D. C., for Pension Benefit Guaranty Corp.
Martin I. Shelton, New York City (argued), Roger Cukras, Dean G. Yuzek, Christopher J. Sues, New York City, Whipple & Ross, Newark, N. J., Shea & Gould, New York City, for Chock Full O'Nuts Corp.
Edward F. Ryan (argued), Laurance Reich, Rosemary A. Hall, Carpenter, Bennett & Morrissey, Newark, N. J., for Anheuser-Busch Inc.
Lawrence A. Whipple, Jr., Whipple & Ross, Newark, N. J., for Rheingold Breweries, Inc. and Chock Full O'Nuts Corp.
John J. Rizzo (argued), Stryker, Tams & Dill, Newark, N. J., for Pabst Brewing Corp.
Before HUNTER, ROSENN and WEIS, Circuit Judges.
1. This case comes before us by means of the district court's certification of its judgment for interlocutory appeal pursuant to 28 U.S.C. § 1292(b) (1976). On February 5, 1981, we granted the petition of the Pension Benefit Guaranty Corporation ("PBGC") for permission to appeal. 1
2. The district court held that the trustees of the New Jersey Brewery Employees Pension Trust Fund, in amending the Trust Fund Agreement to include a partial termination of benefits clause, acted in an arbitrary and capricious fashion, thereby rendering the clause null and void. The court's holding enabled the plaintiffs to receive 3. Plaintiffs below then sought to impose direct liability for pension benefits upon the employers signatory to the Trust Fund Agreement. The district court held that no such liability existed. The individual plaintiffs also claimed that Anheuser-Busch improperly excluded them from its seniority lists. The district court found these claims to be barred by the failure to use mandatory grievance and arbitration procedures required by the collective bargaining agreement then in effect.
pension benefits under the remaining terms of the Trust Fund and the pension plan enacted pursuant to it. As a result, the PBGC, as the statutorily created successor to the now-terminated Trust Fund, 2 is presently obligated to pay any nonforfeitable benefits for which the Trust Fund was liable. 3
4. We agree with the district court in its holding that the plaintiffs were barred from litigating claims properly the subject of arbitration. We also agree with the conclusion that direct liability for pension benefits should not be imposed on the employers who were signatory to the Trust Fund Agreement. We disagree with the district court in its conclusion that the partial termination clause was void. We hold that the creation of the partial termination clause was a valid exercise of the trustees' discretion, and we accordingly reverse this aspect of the judgment of the district court. We remand for a determination as to whether proper notification of the partial termination clause was required and properly given to the employees covered by the Trust Fund.
5. In 1956, Anheuser-Busch, Inc. ("Budweiser"), P. Ballantine & Sons ("Ballantine"), Liebmann Breweries, Inc. ("Rheingold") and Pabst Brewing Company ("Pabst"), among others, 4 entered into a Trust Fund Agreement with the Brewery Workers Joint Local Executive Board of New Jersey (Teamsters Locals 843 and 153, the "Union") and the New Jersey Brewers Association. The Trust Fund was established pursuant to § 302(c)(5) of the Labor Management Relations Act of 1947 ("LMRA"), 5 and was administered by eight union trustees and six "employer" trustees. 6 Pursuant to the terms of the Trust Fund, the trustees established a pension plan ("Brewery Plan") in June 1956, effective retroactively to August 1, 1955. Familiarity with the salient provisions of the Trust Fund Agreement and the Brewery Plan is necessary in order to evaluate the claims of the various parties.
6. The Trust Fund Agreement was limited to administrative and procedural matters. It imposed no obligations on any of the employers to contribute to the Trust Fund nor did it require the employers to guarantee benefits. To the contrary, it specifically disclaimed the existence of any such obligation. 7 The source of each firm's 7. The district court accurately summarized the original pension benefit provisions:
obligation to contribute was its individual collective bargaining agreement. 8 An employer could withdraw from the Trust Fund at any time, with no further obligations under either the Brewery Plan or the Trust Fund. 9
Article I, § 14 of the Brewery Plan defined Credited Service as the years of an Employee's past service and future service credit. Past service referred to the years an employee had worked prior to his employer becoming a contributor to the Trust Fund. Article I, § 14(b). Future service referred to credit received by an employee for employment from the time his employer was obligated to contribute. Article I, § 14(a). As in the Trust Fund, the term Employer in the Brewery Plan referred to an employer obligated to contribute to the Trust Fund by the terms of a CBA. Article I, § 9. An Employee meant an employee on behalf of whom contributions shall be required by virtue of CBA. Article I, § 11.
Appendix at 407-08. The court proceeded to explain the service requirements for pension benefits. A pension would be paid only if an employee met the following conditions:
A. An employee was at least sixty-five years of age and had ten years of credited service (Article II, § 1);
B. An employee reached the compulsory retirement age of sixty-eight years (Article II, § 1);
C. An employee was at least sixty years of age, had fifteen years of credited service and elected early retirement (Article II, § 2);
D. An employee was at least fifty years of age, totally and permanently disabled, and had fifteen years of credited service (Article IX, § 1).
8. Employees would lose their credited service if they had less than ten years of credited service, ceased to be employed by a participating employer, and were not re-employed by a participating employer within one year. Article I, § 14(c); Appendix at 37. Employees of an employer who ceased to be a participating employer were treated as if their employment ended on the date of withdrawal. Article VII, § 1; Appendix at 40.
9. The amount of the pension to be received by an employee upon retirement was determined solely by the trustees. The employers' obligations, as defined in each collective bargaining agreement, were only to the Brewery Plan, and were specified in terms of a fixed contribution per compensable day. Appendix at 438. There was no promise by any of the employers to pay a particular pension benefit to any employee or group of employees.
10. In the late 1960's, the trustees, the Union, and the employers became concerned over the declining health of the brewery industry and its effect upon the trust's solvency. Declining employment in the brewery industry was a major factor in the growing financial problems of the Trust 11. The pivotal section of the Brewery Plan-Article VII-was adopted in 1970. 11 In general it...
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