Anderson v. Alpha Portland Industries, Inc.

• Decision Date: 16 January 1985
• Docket Number: No. 83-1358,83-1358
• Citation: 752 F.2d 1293
• Parties: 118 L.R.R.M. (BNA) 2265, 102 Lab.Cas. P 11,314, 6 Employee Benefits Ca 1046 Robert ANDERSON, Jr., et al., Appellants, v. ALPHA PORTLAND INDUSTRIES, INC., et al., Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1293

752 F.2d 1293

118 L.R.R.M. (BNA) 2265, 102 Lab.Cas. P 11,314,

6 Employee Benefits Ca 1046

Robert ANDERSON, Jr., et al., Appellants, v. ALPHA PORTLAND INDUSTRIES, INC., et al., Appellees.

No. 83-1358.

United States Court of Appeals,

Eighth Circuit.

Submitted Sept. 11, 1984.

Decided Jan. 16, 1985.

George S. Hecker, Michael G. Biggers, St. Louis, Mo., for appellees Alpha Portland Industries, Inc. and the Ins. and Health Plan for Hourly Employees of the Alpha Portland Cement Co.; Bryan, Cave, McPheeters & McRoberts, St. Louis, Mo., of counsel.

S. Sheldon Weinhaus, St. Louis, Mo., for appellants; Levin & Weinhaus, St. Louis, Mo., of counsel.

Before LAY, Chief Judge, HEANEY, BRIGHT, ROSS, McMILLIAN, ARNOLD, JOHN R. GIBSON, FAGG and BOWMAN, Circuit Judges, En Banc.

JOHN R. GIBSON, Circuit Judge.

The issue before the court en banc is whether retired employees of Alpha Portland Industries, Inc., must exhaust grievance procedures before making claims for insurance benefits under a plan provided for in the collective bargaining agreements in effect when they retired. The district court required exhaustion, 558 F.Supp. 913 (E.D.Mo.1982), but a panel of this court reversed. 727 F.2d 177 (8th Cir.1984). We granted rehearing en banc, and we reverse the district court.

The appellants, plaintiffs below, are retired employees of an Alpha cement plant in St. Louis. They worked under collective bargaining agreements, negotiated by the United Cement, Lime and Gypsum Workers, which provided life and health insurance for active and retired employees through reference to a group insurance program embodied in a separate agreement. The appellants had all retired prior to December 1981 when, because of financial problems, Alpha closed its St. Louis cement plant (Alpha sold its last cement plant in September 1982 and no longer operates any such plants). The local union was then dissolved, and shortly thereafter Alpha announced it was terminating insurance benefits for retirees. Plaintiffs brought this action under section 301 of the Labor Management Relations Act, 29 U.S.C. Sec. 185 (1982), and section 502 of the Employee Retirement Income Security Act (ERISA), id. Sec. 1132, claiming the right to lifetime insurance benefits under the agreements in effect when they retired.

The insurance plan since 1973 essentially had provided that "[a]ny difference arising under this Program respecting the administration, determination and/or implementation of the Program shall be subject to the grievance procedure established in the [collective bargaining agreement] beginning with Step 2 of such procedure." ¹ A summary description of the insurance plan, however, distributed by Alpha to employees and retirees effective May 1, 1978, stated that an appeal from a denial of insurance benefits could be made through the grievance procedure or by filing a written complaint with the personnel department.

The grievance procedure provided as follows:

All employees shall at all times make an effort to perform their duties in such manner as to promote the efficient operation of their department and the plant as a whole. When an employee has a grievance, he shall * * * make an effort to arrive at a satisfactory settlement with his foreman. Failing to do so, he or his representative may take the matter up with the Plant Manager. Should these representatives of the Company and the individual employee or his representative fail to agree, the matter shall then be submitted in writing to the Manager of Industrial Relations of the Company. After full consideration and such conferences as may be mutually agreed upon with a representative of the International Union of Cement, Lime and Gypsum Workers, the matter shall be considered settled when the employee's and the Company's representatives have reached an agreement.

* * *

* * *

If an agreement cannot be reached in this manner, the matter may by mutual agreement be submitted to arbitration in such manner as shall be acceptable to both parties. The decision of an impartial arbitrator shall be final and binding upon both parties.

The district court entered summary judgment in favor of Alpha on the basis that the retirees' suit was barred by their failure to exhaust this contractual remedy.

Our approach is governed by the recent Supreme Court decision in Schneider Moving & Storage Co. v. Robbins, --- U.S. ----, 104 S.Ct. 1844, 80 L.Ed.2d 366 (1984). In Schneider, trustees of two multiemployer employee-benefit trust funds brought an action to enforce contribution and audit provisions against certain participating companies. The district court dismissed the suit pending exhaustion of remedies under the relevant collective bargaining agreements, but the Supreme Court reversed. In reaching its conclusion, the Supreme Court first rejected the applicability of a presumption in favor of arbitrability and then found that there was no express contractual language requiring, nor any indication of intent by the parties to require, exhaustion in regard to trustee claims relating to the fund. Thus, proceeding likewise, we look first to whether there is a presumption in favor of arbitrability as to grievances of retirees and then address the issues of contractual interpretation. ²

I.

The Supreme Court has held that, in light of national labor policy, contracts between unions and employers should be interpreted with a presumption in favor of requiring arbitration. United Steelworkers v. American Manufacturing Co., 363 U.S. 564, 80 S.Ct. 1343, 4 L.Ed.2d 1403 (1960); United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960); United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960). Alpha argues that this presumption should extend to this case and that Schneider is distinguishable in that it dealt not with retirees but with trustees "outside the collective bargaining relationship." ³ Alpha, however, then proceeds without discussion to cite cases and quote language in a fashion so as to equate retirees with "employees" and "the union." We cannot agree that Schneider divides the world of labor plaintiffs into "trustees" and "nontrustees" with the presumption of arbitrability applying to all but the former; the issue instead is whether the retirees here are more similarly situated with the trustees in Schneider or with active employees and their unions as to whom arbitration generally has been required.

The Supreme Court in Allied Chemical & Alkali Workers Local No. 1 v. Pittsburgh Plate Glass Co., 404 U.S. 157, 172, 92 S.Ct. 383, 394, 30 L.Ed.2d 341 (1971), held that retirees are not "employees" within the meaning of the National Labor Relations Act, 29 U.S.C. Secs. 151-168 (1982), and cannot properly be joined with active employees in a collective bargaining unit. Alpha seeks to avoid the import of this case by limiting it to the obligation to bargain on behalf of retirees, arguing that once a union chooses, as is still permissible, to so bargain, it then has an interest in enforcing the contract and thus the authority to represent retirees in grievance and arbitration proceedings. The cases Alpha cites, however, e.g., United Steelworkers v. Canron, Inc., 580 F.2d 77, 80-81 (3d Cir.1978); Textile Workers Local 129 v. Columbia Mills, 471 F.Supp. 527, 530-31 (N.D.N.Y.1978), support only the proposition that a union has standing to assert retirees' rights under a collective bargaining agreement to which it is a party if it chooses and that an employer may not refuse to arbitrate its contractual obligations with the union. These cases do not establish that a union which does bargain for its retirees becomes their exclusive representative and that the retirees then must proceed through the union. ⁴ In contrast, the Sixth Circuit has held that retirees may settle a claim against the company under the collective bargaining agreement even while the union has a suit pending on the issue. International Union, UAW v. Yard-Man, Inc., 716 F.2d 1476, 1484-85 (6th Cir.1983), cert. denied, --- U.S. ----, 104 S.Ct. 1002, 79 L.Ed.2d 234 (1984).

Alpha cites Republic Steel Corp. v. Maddox, 379 U.S. 650, 85 S.Ct. 614, 13 L.Ed.2d 580 (1965), as supporting its argument that individuals who are no longer members of the collective bargaining unit may still be required to invoke contract grievance procedures to settle disputes with the company. Republic Steel, however, involved a worker who had been laid off and was seeking severance pay under the collective bargaining agreement. The Supreme Court, in holding that that situation was not sufficiently different from grievances in general to justify an exception to the exhaustion requirement, said that use of contractual remedies would "complement[ ] the union's status as exclusive bargaining representative." Id. at 653, 85 S.Ct. at 616 (emphasis added). The Court found that issues concerning severance could have a significant effect on future union-company relations and could "inhibit" negotiations on subsequent collective bargaining agreements. Id. at 656, 85 S.Ct. at 618.

Allied Chemical, however, does answer both of these contentions. ⁵ A union, the Supreme Court held, is not the exclusive bargaining representative for retirees even when, as there, the insurance benefits modified by the company originally had been established through collective bargaining: The company did not commit an unfair labor practice by directly contacting retirees and proposing changes in the health plan. 404 U.S. at 183-88, 92 S.Ct. at 399-02.

The Supreme Court in Allied Chemical also found a union's interest in retirement benefits, unlike its interest in the severance provisions in Republic Steel, much more "speculative" because present employees would have no assurances that they were advancing their own interests by advancing pensioners' interests. They would have no guarantee of similar representation when ...