Groden v. C. Carney Recycling Sols. U

• Docket Number: Civil Action 21-10208-WGY
• Decision Date: 23 March 2023
• Parties: EDWARD F. GRODEN, Executive Director of the New England Teamsters and Trucking Industry Pension Fund, and CAROL BLANCHARD, Executive Director of the Teamsters Union 25 Health Services and Insurance Plan, Plaintiffs, v. C. CARNEY RECYCLING SOLUTIONS U, LLC, Defendant.
• Court: U.S. District Court — District of Massachusetts

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EDWARD F. GRODEN, Executive Director of the New England Teamsters and Trucking Industry Pension Fund, and CAROL BLANCHARD, Executive Director of the Teamsters Union 25 Health Services and Insurance Plan, Plaintiffs, C. CARNEY RECYCLING SOLUTIONS U, LLC, Defendant.

Civil Action No. 21-10208-WGY

United States District Court, D. Massachusetts

March 23, 2023

FINDINGS OF FACT, RULINGS OF LAW, AND ORDER FOR JUDGMENT

WILLIAM G. YOUNG JUDGE OF THE UNITED STATES ^[5]

I. INTRODUCTION

This case involves workplace injuries covered by a collective bargaining agreement ("CBA"). The injured employees received appropriate benefits as a result of their injuries up until the expiration date of the CBA. The affected employees also received termination notices on the expiration date of the CBA. The issue here is whether the right to the continuing contributions necessary to pay injury benefits vested prior to the expiration of the CBA.

The Executive Director of the New England Teamsters and Trucking Industry Pension Funds, Edward F. Groden ("Groden"), and the Executive Director of the Teamsters Union 25 Health Services & Insurance Plan, Carol Blanchard, (collectively "the Plaintiffs") filed their first complaint on February 5, 2021, against C. Carney Recycling Solutions U, LLC ("Carney"). Compl. ("Compl."), ECF No. 1. The Plaintiffs bring two counts arising both under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. section 1001, and section 301 of the Labor Management Relations Act ("LMRA"), as amended, 29 U.S.C. section 185. Id. ¶ 1, 13-30. Count One is on behalf of the Teamsters' Health Plan. Id. Count Two is on behalf of the Teamsters' Pension Fund. Id. In both counts, the Plaintiffs allege that Carney was obligated to make such continuing contributions by the terms of one or more of its CBAs and the Declaration of Trust of both the Health Plan and the Pension Fund ("Article 14 and 15"). Id. ¶ 10.

Carney argues that the Plaintiffs (1) fail to state a claim under section 515 of ERISA for "post contract obligations," (2) fail to show any "legal duty established and provided by applicable labor-management relations law" following expiration of the CBAs, (3) fail to show that Carney entered into any explicit or implicit agreement which survived expiration of the CBA, and (4) that post-contract expiration contributions to the funds would subject Carney to criminal penalties. Def. Memo. Supp. Summ. J. 2-3, 11, 14, 19, ECF No. 28.

Carney filed a motion for summary judgement against the Plaintiffs. Def. C. Carney Recycling Solutions U, LLC's Mot. Summ. J. Req. Oral Arg. ("Def. Summ. J."), ECF No. 27. The Plaintiffs filed a cross motion for summary judgement against Carney. Pl.'s Mot. Summ. J. ("Groden's Cross-Mot. Summ. J."), ECF No. 29. The issues have been briefed. See Pls.' Mem. Opp'n Mot. Summ. J. ("Groden's Opp'n C. Carney"), ECF No. 40, Def. C. Carney Recycling Solutions U, LLC's Opp'n Pls.' Mot. Summ. ("C. Carney's Opp'n C. Groden"), ECF No. 39. The parties consented to proceed case stated.^[1] Electronic Notice Resetting Hearing on Motion 29, ECF No. 46. This Court heard case stated oral arguments on September 22, 2022. Electronic Clerk's Notes, ECF No. 48.

Both parties submitted supplemental memoranda of law on September 29, 2022. Mem. of Law by C. Carney Recycling Solutions U, LLC to 48 Mot. Hr'g, ECF No. 49; Pls.' Supplemental. Mem. Supp. re 29 Mot. Summ. J., ECF No. 50. See Def. Summ. J. 2-3.

II. FINDINGS OF FACT

According to the Parties' Agreed Statement of Facts ("Undisputed Facts") ¶ 1, ECF No. 31., Teamsters Local Union No. 25 of the International Brotherhood of Teamsters ("the Union") and Carney entered into a CBA. Id. The relevant CBA began on May 1, 2016, and expired on June 30, 2020. Id. Article 23 of the CBA provided that it "shall continue thereafter year to year unless notice is given in writing of a desire to change, modify, or terminate the Agreement by either party to the other party sixty (60) days or more prior to the expiration of such period." Id. ¶ 3. On April 5, 2020, the Union sent a letter to Carney informing them of their intent to seek modifications to the soon to expire CBA, request negotiations, and potentially strike if a new agreement is not reached. Id. ¶ 2. On April 22, 2020, Carney sent a letter to the Union "accept[ing] the April 5, 2020 letter as the Union's notice, pursuant to Article 23, that the CBA would not automatically extend for one year and would end on June 30, 2020." Id. ¶ 4. In the same letter, Carney gave their notice as well of termination and non-extensions of the CBA. Id. ¶¶ 4-5. Carney explained they would "no longer have any driver employees which is the job classification that is now represented by the Union pursuant to Article 17 of the Agreement", as of June 30, 2022. Id. ¶ 6. Following Carney's April 22nd letter, the Union did not file any grievance or an unfair labor practice charge and did not request negotiations with Carney. Id. ¶ 8.

A. Carney's Notice of Termination of Employment

Mr. White and Mr. Smith were drivers employed by Carney. Undisputed Facts ¶ 11. Mr. White was injured on February 27, 2020, and Mr. Smith was injured on May 4, 2020. Id. In letters dated June 29, 2020, Mr. White and Mr. Smith, employees of Carney, were terminated effective June 30, 2020. Id. ¶¶ 9-10. Mr. White and Mr. Smith received workers' compensation benefits and settled their workers' compensation claims over a year later in October 2021. Id. ¶¶ 11-13. Mr. White and Mr. Smith were still unable to work by the CBA's expiration date due to their workplace injuries. Id. ¶¶ 11-12. Thereafter, Carney ended contributions to the Health Plan and Pension Fund for Mr. Smith and Mr. White. Id.

B. Payroll Audit by the Health Plan

A little over two months after the CBA expired, the attorney for the Health Plan notified Carney of their delinquency in the contributions for the months of July, that contribution for August 2020 was due, and alleged breach of violation of the CBA and ERISA. Undisputed Facts ¶ 14. On September 21 and 22, 2020, the Union retained an accounting firm ("WLGA") to verify payments to the Health Plan for the period January 1, 2018, to September 30, 2020. Id. ¶ 15. WLGA performed an independent audit of Carney and found no variance in the examination period "1/1/2018-9/30/2020, Actual 1/1/186/30/2020." Id. ¶ 17. The examination summary produced by WLGA states that the examination period ran through September 30, 2020, but the WLGA also stated that the actual examination period ended on June 30, 2020, which is the date the CBA expired. Id. On October 7, 2020, the Health Plan notified Carney that no discrepancies were found, and "no additional contributions are owed." Id. ¶ 20. Two months later, on December 21, 2020, attorneys for the Health Plan demanded payment of contributions to the Health Plan for Mr. White and Mr. Smith from and after July 1, 2020. Id. ¶ 21.

C. Payroll Audit by the Pension Fund

On September 15, 2020, attorneys for the Pension Fund ("the Fund") sent Carney a letter alleging delinquent contributions due on August 20, 2020, breach of the CBA, and threatening legal action. Undisputed Facts ¶ 23. An audit for 1/1/18-12/31/19 was conducted of Carney's payroll and it revealed underreported hours for Mr. Smith and Mr. White for July and August 2020.^[2] Id. ¶¶ 24-26.

III. RULINGS OF LAW

The parties here did not explicitly provide what would happen to the rights of an employee who was injured on the job prior to expiration of the CBA. Thus, it is this Court's responsibility to determine whether there was a vested obligation in the CBA owed to Mr. Smith and Mr. White even after its expiration.

The provisions at issue are excerpted below.

Article 14, PENSION, Section 14.02 ¶ 4 states:

If an employee is injured on the job, the Employer shall continue to pay the required contributions at the rate of forty (40) hours for each such week until the employee returns to work; however, such contributions of forty (40) hours shall not be paid for a period of more than twelve (12) months.

Similarly, Article 15, HEALTH & WELFARE, Section (b) ¶ 6 states: If an employee is injured on the job, the Employer shall continue to pay the required contributions at the rate of thirty-two (32) hours for each such week until the employee returns to work; however; such contributions of thirty-two (32) hours shall not be paid for a period of more than twelve (12) months. . . .

Id. 7-9.

Article I, Section 1.15, COVERED EMPLOYMENT, Section 1.19, EMPLOYEE, and Section 2.08, TERMINATION OF PARTICIPATION, within the Complete Rules and Regulations of the New England Teamsters & Trucking Industry Pension Plan state:

1.15 COVERED EMPLOYMENT:. . . . "Covered Employment" shall not, however, include employment by an employer after termination of that employer's status as a Contributing Employer for failure to pay contributions due pursuant to the provision of Section 2.08, or employment as an Employee excluded by the provisions of Section 1.19[.]

1.19 EMPLOYEE: (a) "Employee" means a person who is an employee of an Employer and who is covered by a Collective Bargaining Agreement requiring Employer contributions on his behalf[.]

2.08 TERMINATION OF PARTICIPATION: A Contributing Employer's participation in this Plan shall cease on the earliest of the dates described in subsections (a), (b), or (c) below. The termination of an Employer's participation in this plan, whether by action of the Trustees or otherwise, shall not relieve the Employer of any outstanding obligations to the Fund at the effective date of such termination.

(b) Contributions No Longer Required. A contributing Employer's participation in this Fund with respect to a bargaining unit will

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