Dorward v. ILWU-PMA Pension Plan

• Decision Date: 06 March 1969
• Docket Number: ILWU-PMA,No. 39667,39667
• Citation: 452 P.2d 258,75 Wn.2d 478
• Court: Washington Supreme Court
• Parties: , 70 L.R.R.M. (BNA) 3401 William F. DORWARD, Respondent, v.PENSION PLAN; K. F. Saysette, Harry Bridges, Bent Damsgaard, James P. Cribbin, H. J. Bodine, George Schirmer and L. M. Thomas, its trustees, Appellants.

Page 478

75 Wn.2d 478

452 P.2d 258, 70 L.R.R.M. (BNA) 3401

William F. DORWARD, Respondent, v. ILWU-PMA PENSION PLAN; K. F. Saysette, Harry Bridges, Bent

Damsgaard, James P. Cribbin, H. J. Bodine, George

Schirmer and L. M. Thomas, its trustees,

Appellants.

No. 39667.

Supreme Court of Washington, Department 1.

March 6, 1969.

Bogle, Gates, Dobrin, Wakefield & Long, Dustin C. McCreary, Seattle, for appellants.

Schroeter & Jackson, Paul D. Jackson, Seattle, for respondent.

ARMSTRONG, Judge. ^*

This appeal arises from a contract action commenced by the plaintiff (respondent), William F. Dorward, a longshoreman, to collect pension payments from a joint labor management trust created under various collective bargaining agreements between employer associations in California, Oregon, and Washington and labor unions representing men employed in those states in the longshoring industry. The defendants (appellants), the ILWU-PMA Pension Plan and its trustees, appeal from the trial court's determination that the plaintiff was entitled to a pension based upon 25 years of employment as a longshoreman under the defendants' plan.

The plaintiff began his employment in the longshore industry in the Port of New York in May, 1936, where he affiliated with Local 976 of the International Longshoremen's Association (hereinafter called the ILA). He became a 'checker' in December, 1936, and continued his employment and union membership in New York until 1948 when he transferred to ILA Local 38--36 in Seattle and began work as a 'checker' in the Port of Seattle. The plaintiff remained employed in the Port of Seattle until his retirement on June 1, 1963 at the age of 65. At that time, he was affiliated with ILWU Local 52, which had been chartered as the Checkers Association in 1956.

Prior to 1949, there were no pension programs in either the Northwest ports or in the Port of New York covering men employed in the longshore industry other than social security benefits. However, as a result of collective bargaining agreements executed in 1949, the unions and the employers negotiated pension plans which went into operation in 1951. These plans were designed to cover longshoremen employed in California. Oregon, and Washington who met the qualifying requirements of the plans.

ILA District 38, representing certain local unions in the state of Washington, entered into its pension agreement on September 1, 1951 with a group of employers operating in this state and associated together as the Waterfront Employers of Washington (hereinafter called the WEW). In July, 1951, the International Longshoremen's and Warehousemen's Union (hereinafter called the ILWU) and the Pacific Maritime Association (hereinafter called the PMA), an employers' association, entered into a separate pension agreement covering employees they represented. The latter plan was reduced to a formal set of documents in December, 1951. Both the ILWU-PMA plan and the ILA-WEW plan were financed by employer contributions. The terms of the ILA-WEW plan covered longshoremen who had 15 or more qualifying years of employment on January 1, 1951 and had 25 years of service at the time of retirement. It was agreed that under no interpretation of the ILA-WEW plan did the plaintiff have 15 qualifying years of employment as of the January date.

In 1954, the Joint Union Welfare and Pension Committee of the Northwest replaced ILA District 38 as the union party to the ILA-WEW pension agreement. Also, in 1954, the plaintiff ceased to be represented by ILA Local 38--36 as an independent union replaced it. This labor body was subsequently chartered in 1956 as the Checkers Association, ILWU Local 52.

In 1955, the name of the ILA-WEW plan was changed to the 'Northwest Waterfront Pension Plan' (hereinafter called the Northwest Plan). This plan was later liberalized and the changes were incorporated in the First Amended Northwest Waterfront Pension Agreement executed on March 25, 1957. Thereafter, tentative agreement was reached on merging the Northwest Plan with the pre-existing ILWU-PMA pension plan. In order to facilitate the merger, the Northwest Plan was further amended on January 6, 1958 in a document entitled: Second Amended Northwest Waterfront Pension Agreement. An agreement of merger was entered into on February 1, 1958.

Section 5(a)(iii) (See footnote 1) of the merger agreement stipulated that the Trustees of the Northwest Plan would prepare schedules, containing the number of qualifying years of service of every covered employee under the Northwest Plan accumulated prior to January 1, 1958, and certify them to the Trustees of the ILWU-PMA pension plan. Another provision of the merger instrument, 3(f), stated in part:

* * * Trustees of the continuing plan (the ILWU-PAM Plan with the Northwest Plan merged into it) are authorized to accept as conclusive the facts certified to them by the Trustees of the Northwest plan in the schedules provided for in 5(a) * * *

Pursuant to these provisions, the Northwest Plan's Trustees prepared a preliminary schedule in February, 1958 showing the plaintiff with an initial employment date of May, 1936 and sent it to the ILWU-PMA Trustees to aid them in ascertaining whether they wanted to enter into the merger agreement. On December 1, 1958, the ILWU-PMA Trustees and the Trustees of the Northwest Plan formally completed and executed the merger agreement.

On or about December 10, 1958, after the merger agreement was formalized, the Northwest Plan's Trustees prepared and executed the final schedule called for in the merger agreement, listing the qualifying years of the various members of the ILA District locals and independent Washington locals involved and transmitted it to the ILWU-PMA Trustees. This schedule showed the plaintiff with 22 qualifying years of service and placed his employment date in the longshore industry as of May, 1936. At all times the plaintiff's work records were available to the local union, the WEW, and the Northwest Plan's Trustees. These records clearly indicated an initial employment date of May, 1936, and gave the place of said employment as the Port of New York.

In March, 1963, the plaintiff applied in writing for retirement under the ILWU--PMA Pension Plan. The plan administrator, Henry Schmidt, took the position that the plaintiff had only 15 qualifying years of service and that he was entitled only to a reduced or pro rata pension. The basis for their refusal of a full 25 year pension was that the ILWU--PMA Plan provided coverage only for longshoremen employed under West Coast bargaining agreements. The local union supported the plaintiff's application, contending that the plaintiff's years of employment on the East Coast should be counted in arriving at the total number of qualifying years under the ILWU--PMA Pension Plan and that he should be awarded a full pension based upon 25 years of service.

In Bakenhus v. City of Seattle, 48 Wash.2d 695, 296 P.2d 536 (1956), we stated at 698, 296 P.2d at 538:

In this state, a pension granted to a public employee is not a gratuity but is deferred compensation for services rendered. The contractual nature of the obligation to pay a pension when the employee has fulfilled all of the prescribed conditions was recognized in Luellen v. City of Aberdeen, 1944, 20 Wash.2d 594, 148 P.2d 849, in Benedict v. Board of Police Pension Fund Commissioners, 35 Wash.2d 465, 214 P.2d 171, 27 A.L.R.2d 992 (1950), and in Ayers v. City of Tacoma, 1940, 6 Wash.2d 545, 108 P.2d 348.

Inherent in a determination of the present controversy is the resolution of the following question: Should the Bakenhus rule, covering pension plans applicable to public employees, be extended to cover pension plans, benefiting individual labor union members, which are negotiated through collective bargaining agreements reached by labor and management units? We think the answer is in the affirmative.

In this jurisdiction, we do not subscribe to any distinction between the rights of public employees under pension plans granted by public authorities, and the rights of individual labor union members to pension plan benefits acquired by means of collective bargaining agreements. Neither pension is a gratuity, but rather is deferred compensation for services rendered. In alayzing the nature of collective bargaining agreements, judicial notice may be taken of the fact that pension plan rights acquired under said agreements are generally obtained at the cost of possible wage increases and other negotiated benefits. In negotiated collective bargaining agreements there is 'give and take' on behalf of both labor and management, and pension rights become irrevocably merged with wage increases in the finished product of the collective bargaining agreement. Both parties profit by the pension plan and both, in effect, contribute. The worker loses job mobility and possible wage increases, but gains pension rights. The employer gains employment stability because he can attract more competent employees and avoids labor turnovers.

As a result of collective bargaining, pension contracts are executed by labor unions representing their members, and employer associations bargaining for individual employers. The consideration rendered for the promise in the pension contract of the employer to pay a pension is established when the employee is shown to have knowledge of the pension plan and continues his employment. An enforceable contract will arise in such instances even though the pensioner does not know the precise terms of the pension agreement. See Hunter v. Sparling, 87 Cal.App.2d 711, 197 P.2d 807 (1948). It is clear that in the present case the plaintiff was aware of the pension plan and he did continue his employment until the age of 65.

Although an employee does not earn a pension until he has complied with the prescribed years of service, he acquires a vested right in the plan as soon as he perform services in the job...