Becker v. Mack Trucks, Inc.
| Decision Date | 21 February 2002 |
| Docket Number | No. 00-4414.,00-4414. |
| Citation | 281 F.3d 372 |
| Parties | Larry BECKER; Stephen Capkovic, III; Lee R. Christ; James Daquisto; Michael Dreher; Randy Frey; Robert Gaston; Charles Grohotolski; Barry Jones; John Judd; Dennis Knopf, Wayne Labaty; William Lehman; Thomas Litchauer; Bruce McFarland; Michael Meyers; Samuel Oliveria; Robert Peters; Sherwood Peters; Thomas Roberts; Katherine Takacs; Scott Takacs; Anthony Tratnyek; Claire Williams; Dennis C. Acker; Richard Balliet; Alexander Bandi, Jr.; Stephen R. Becker; Timothy S. Beller; Anita L. Belles; Thomas F. Benner, Jr.; Judith A. Binder; David J. Bobo; James P. Burger, Jr.; Ralph A. Christman; Lavern R. Clater; Alfred W. Dilabio; Michael A. Dilcher; Wayne R. Ernst; Daniel H. Freed; Edward A. Freed; John L. Golden; Manuel I. Guedes; Dennis P. Hafer; Sheila K. Hansler; Claytor Howard; Jeffrey Husack; James P. Kalavoda, Jozef Kazimir; John S. Kerbacher; Anthony A. Kiss; Joseph J. Kiss; Stephen J. Kiss; Michael Klucar; Dennis G. Koehler; Andrew J. Korutz; Richard D. Dratzer; Thomas A. Marshman; Ronald P. Marcks; Jan A. Merkel; Jane L. Michael; Chester C. Miller; Paul J. Mishko, Jr.; Dennis R. Pascoe; Thomas E. Pruzinsky; Joseph M. Rice; Bruce L. Rothrock, Jr.; Edward R. Sajt; Gerald Robert Schueck; Peter M. Sinclair; David W. Smith; Dale R. Snyder; Maryann J. Sosnowski; Darrel C. Stofflet; George M. Szep; John J. Szilagyi; Bruce Torrence; Cheryl A. Yandrasits, Appellants, v. MACK TRUCKS, INC. |
| Court | U.S. Court of Appeals — Third Circuit |
Quintes D. Taglioli (Argued), Markowitz & Richman, Allentown, PA, Attorney for Appellants.
Edward T. Ellis (Argued), Jeanne L. Bakker, David E. Brier, Montgomery, McCracken, Walker & Rhoads, LLP, Philadelphia, PA, Attorneys for Appellee.
Mary Ellen Signorille, American Association of Retired Persons, Washington, DC, Attorney for Amici-Appellants American Association of Retired Persons and National Employment Lawyers Association.
Before: ROTH, AMBRO and FUENTES, Circuit Judges.
This case requires us to decide whether § 510 of the Employee Retirement and Income Security Act, 29 U.S.C. § 1140, applies to rehiring decisions. Plaintiffs are former employees of defendant Mack Trucks, Inc., who lost their jobs when Mack closed its Allentown plant in 1987. Some plaintiffs had vested pension rights at the time they were laid off. Others merely had credit for past service. In 1997, when the economy had improved, Mack needed to hire workers for its Macungie plant. By this time, all the plaintiffs had either exhausted or forfeited any recall rights with Mack. Mack declined to rehire plaintiffs because to do so would create a future pension liability disproportionately greater than that incurred by hiring employees without past service or pension credit. Plaintiffs contend that Mack's decision amounts to unlawful "discrimination" under § 510 of ERISA.
The District Court rejected plaintiffs' claims in their entirety on a motion for summary judgment. We will affirm that decision. We agree, as an initial matter, that those plaintiffs without vested pension rights lack standing to pursue their § 510 claim. See Shawley v. Bethlehem Steel Corp., 989 F.2d 652 (3d Cir.1993). Shawley does not foreclose standing for those plaintiffs with vested rights, however; thus, we reach the merits of their claims and resolve the question left unanswered in Shawley: Whether an employer's refusal to rehire based on a desire to avoid increased pension liability is prohibited activity under § 510. Id. at 655 n. 5. We conclude that § 510 does not proscribe Mack's refusal to rehire the vested plaintiffs.
Defendant Mack Trucks manufactures and distributes heavy-duty trucks. It operates an assembly plant in Macungie, Lehigh County, Pennsylvania, and, until 1987, operated machining and fabrication plants in Allentown, Pennsylvania. Employees in both locations are and were represented by the United Automobile, Aerospace and Agricultural Implement Workers (UAW) and UAW Local 677. The plants in Allentown and Macungie were covered by the Mack-UAW Master Agreement as well as by local agreements.
The Master Agreement includes, as Appendix A, the Mack-UAW Pension Plan, which is subject to renegotiation every time the Master Agreement itself is renegotiated. Prior to January 1, 1989, an employee covered by the Plan became vested under the Plan after ten years of service. On and after January 1, 1989, employees became vested after five years of service. The Plan also provided that any rehired former employee would be entitled to credit for past service no matter how long the break between employment periods.
When Mack closed its facilities in Allentown in 1987, a number of employees lost their jobs. Some transferred or were absorbed into other Mack plants. Others, like the plaintiffs, either accepted a cash "dislocation benefit" to relinquish their seniority rights or were laid off and eventually exhausted their recall rights. Some plaintiffs were laid off before meeting the ten year vesting requirement in place at the time; other plaintiffs were fully vested by the time they were laid off.
In 1997, a combination of rising production needs and workforce attrition made it necessary for Mack to hire new employees at the Macungie plant. Although Mack's former employees were initially the first to be offered new jobs, Mack soon realized that a rehired former employee with credited service under the Plan would receive a disproportionately larger pension than would a newly hired employee.
There are three reasons for this difference in pension benefits between former employees and new hires. First, former employees who had not vested under the Plan would receive credit for past service and would become vested in less than the five years applicable to new hires.1 Second, former employees were more likely to become eligible for early retirement before age 62. Third, former employees would be entitled to raise their pension rate on retirement above the lower benefit rate in place as of the day they had been laid off in 1987.
As a result, in July of 1997 Mack decided to stop hiring former employees with credited service under the plan. All 78 plaintiffs are former Mack employees who were not considered for re-employment due to Mack's pension liability avoidance policy.
The plaintiffs brought a complaint seeking injunctive and monetary relief based on allegations that Mack violated 29 U.S.C. § 1140 when it refused to rehire them. After Mack filed a timely answer admitting the essential facts of the complaint, the parties brought cross-motions for summary judgment and asked the District Court to rule on a core set of stipulated facts. On November 30, 2000, the District Court found that Mack's decision not to rehire plaintiffs was not unlawful and entered judgment in favor of Mack. Plaintiffs filed a timely appeal.
We have federal question jurisdiction over this case under 28 U.S.C. § 1331 because plaintiffs have alleged a violation of § 510 of ERISA, 29 U.S.C. § 1140. We also have appellate jurisdiction to review the District Court's November 30, 2000, order granting summary judgment under 28 U.S.C. § 1291.
The cross-motions for summary judgment were submitted with no dispute as to a core set of stipulated facts, and the District Court resolved only issues of law in its ruling. As a result the standard of our review for the District Court's decision is plenary. See West American Insurance Co. v. Park, 933 F.2d 1236, 1238 (3d Cir. 1991).
We first address whether the non-vested plaintiffs have standing to sue under § 510. A plaintiff may bring a civil action under § 510 of ERISA if he is a "participant or beneficiary" of a benefit plan. 29 U.S.C. § 1132(a)(1)(B). The statute defines a participant as "any employee or former employee of an employer ... who is or may become eligible to receive a benefit of any type from an employee benefit plan ..." Id. at § 1002(7).
While there is no dispute that the non-vested plaintiffs are former employees, it is unclear whether they are "participants" under § 1002(7). To resolve this issue we must decide whether the non-vested plaintiffs, as former employees,2 have (1) a "reasonable expectation of returning to covered employment" or (2) "`a colorable claim' to vested benefits." Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 117, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). While it is clear that the vested plaintiffs have standing under the second element, our opinion in Shawley v. Bethlehem Steel Corp., 989 F.2d 652 (3d Cir. 1993), establishes that the non-vested plaintiffs fail both elements of Firestone.
Like the plaintiffs in Shawley v. Bethlehem Steel Corp., 989 F.2d 652 (3d Cir.1993), the non-vested plaintiffs lack a reasonable expectation of returning to covered employment. The plaintiffs in Shawley were a group of former employees who had been laid off for several years. When their previous employer considered rehiring them but refused to do so, they sued under ERISA. The employees claimed that the employer violated the law by basing its hiring decision upon a desire to avoid increased pension liability. Shawley, 989 F.2d at 654-55. Under those facts, "where the collective bargaining agreement expressly covers recall rights, and former employees were not hired before the expiration of those rights — we believe plaintiffs had no reasonable expectation of reemployment." Id. at 658.
The non-vested plaintiffs here are indistinguishable. Their collective bargaining agreement also covers recall rights. By the time Mack considered rehiring them, all of their recall rights had either expired or been waived in lieu of dislocation benefits. Thus, under our holding in Shawley...
To continue reading
Request your trial
-
Edes v. Verizon Communications, Inc.
...any particular benefits and does not itself proscribe discrimination in the provision of employee benefits); Becker v. Mack Trucks, Inc., 281 F.3d 372, 380-383 (3d Cir.2002) (holding that § 510 does not apply to hiring and rehiring decisions); Williams v. American Int'l Group, Inc., 01-CIV-......
-
Khodara Environmental, Inc. v. Burch
...at 209 (quoting Marshak v. Treadwell, 240 F.3d 184, 192-93 (3d Cir.2001)); Rosenberg, 274 F.3d at 141. See also Becker v. Mack Trucks, Inc., 281 F.3d 372, 380 (3d Cir.2002) (In construing a statutory provision courts "must not be guided by a single sentence or member of a sentence, but look......
-
Apsley v. The Boeing Co., Case No. 05-1368-EFM.
...119 (2009) (admonishing courts not to blindly import proof frameworks that were developed under Title VII). 30Thiessen, 267 F.3d at 1109. 31281 F.3d 372 (3d Cir.2002). 32Id. at 379-83. 33Id. at 383. 34See Andes v. Ford Motor Co., 70 F.3d 1332, 1338 (D.C.Cir.1995). 35Id. at 1337-38. 36Id. at......
-
Miller v. Rite Aid Corp.
...Firestone Tire and Rubber Company v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 ... (1989)."); see also Becker v. Mack Trucks, Inc., 281 F.3d 372, 377-79 (3d Cir.2002) (addressing standing before "turn[ing] to the merits of their claims"); Shawley v. Bethlehem Steel Corp., 989 F.2d ......
-
The Pay or Play Penalty Under the Affordable Care Act: Emerging Issues
...Tire and Rubber Co. v. Bruch, 489 U.S. 101, 105 (1989). 87. Firestone, 489 U.S. at 117 (citations omitted). 88. Id.at 117-18. 89. 281 F.3d 372 (3d Cir. 90. Becker v. Mack Trucks, Inc. 281 F.3d 372, 377 (3d Cir. 2002). The court, however, rejected their claims on the merits because, accordin......
-
The Pay or Play Penalty Under the Affordable Care Act: Emerging Issues
...Tire and Rubber Co. v. Bruch, 489 U.S. 101, 105 (1989). 87. Firestone, 489 U.S. at 117 (citations omitted). 88. Id.at 117-18. 89. 281 F.3d 372 (3d Cir. 90. Becker v. Mack Trucks, Inc. 281 F.3d 372, 377 (3d Cir. 2002). The court, however, rejected their claims on the merits because, accordin......