Michota v. Anheuser-Busch, Inc.

• Decision Date: 19 September 1980
• Docket Number: 76-1931.,Civ. A. No. 77-2543
• Parties: Bruno MICHOTA, et al., Plaintiffs, v. ANHEUSER-BUSCH, INC., et al., Defendants. Gustav A. ADAMS, et al., Plaintiffs, v. TRUSTEES OF the N. J. BREWERY EMPLOYEES' PENSION TRUST FUND, et al., Defendants.
• Court: U.S. District Court — District of New Jersey

526 F. Supp. 299

Bruno MICHOTA, et al., Plaintiffs, v. ANHEUSER-BUSCH, INC., et al., Defendants.

Gustav A. ADAMS, et al., Plaintiffs, v. TRUSTEES OF the N. J. BREWERY EMPLOYEES' PENSION TRUST FUND, et al., Defendants.

Civ. A. Nos. 77-2543, 76-1931.

United States District Court, D. New Jersey.

September 19, 1980.

COPYRIGHT MATERIAL OMITTED

Hellring, Lindeman, Goldstein & Siegal by Richard K. Coplon, Newark, N. J., for Michota et al.

McMenaman & Grasso by Ronald E. Hoffman, Spring Lake Heights, N. J., for Adams et al.

Stephen D. Schreiber, Washington, D. C., for Pension Benefit Guaranty Corp.

Kapp & Finkel by Herman W. Kapp, Newark, N. J., for defendant Rheingold Breweries.

Stryker, Tams & Dill by John J. Rizzo, Newark, N. J., for defendant Pabst Brewing Co.

Carpenter, Bennett & Morrissey by Edward F. Ryan, Rosemary A. Hall, Newark, N. J., for defendant Anheuser-Busch, Inc. Orloff, Lowenbach, Stifelman & Siegel by Jeffrey M. Garrod, Newark, N. J., for defendant Falstaff Brewing Corp.

MEANOR, District Judge.

This complex litigation concerns the pensions of certain former employees of the P. Ballantine & Sons (Ballantine) brewery formerly located in Newark, New Jersey.

In 1956, Ballantine, along with several other employers, entered into an Agreement and Declaration of Trust with the Brewery Workers Joint Local Executive Board of New Jersey (Teamsters Locals 843 and 153, hereinafter the Union) and the New Jersey Brewers Association. The Agreement was denominated "New Jersey Brewery Employees Pension Trust Fund" (hereinafter Trust Fund). Among the other participating employers were Anheuser-Busch, Inc. (Budweiser), Pabst Brewing Co. (Pabst) and Liebmann Breweries, Inc. (Rheingold). The Trust Fund was jointly administered under § 302(c)(5) of the Labor-Management Relations Act of 1947 (LMRA), 29 U.S.C. § 186(c)(5). In June 1956, the trustees of the Trust Fund established a pension plan (hereinafter Brewery Plan) effective August 1, 1955.

I

To lend context to the facts leading to the institution of this lawsuit, some explication of the salient provisions of the Trust Fund and Brewery Plan is necessary.

Article V, § 5.1 of the Trust Fund required "each Employer ... to pay ... the Trustees the Employer contributions required ... by the current and effective CBA." Article VI, § 6.1(a) provided that "an Employer shall cease to be an Employer under this Agreement whenever ... his obligation to make contributions to the Trust Fund is no longer required by a CBA." When this eventuality occurred, Article VI, § 6.2(a) provided

The Employees of such Employer who have not begun to receive a pension under the Pension Plan shall cease being Employees for the purpose of this Trust and their rights and benefits shall be determined in accordance with the Pension Plan as it applies to Employees whose service has terminated; provided that if any Employees of such Employer enter service with another Employer and have contributions made on their behalf within such a period that their service is not considered broken or lost for the purpose of the Pension Plan, such Employees shall remain Employees under the Trust.

Additionally, upon withdrawal an employer had, with certain irrelevant exceptions, "no further ... obligations ... under this Trust Agreement." Article VI, § 6.2(b).

Article VIII, § 8.2(a) provided

No Employee nor any person claiming by or through such Employee shall have any right, title or interest in or to the funds or other property of the Trust Fund ... except as specifically provided herein and in the Pension Plan.

Article VIII, § 8.3 provided, in pertinent part,

Neither this Trust nor the Pension Plan imposes any obligation on any Employer to make any payments to the Fund; any such obligations are, as to Employers, derived solely from whatever provisions there may be in the Collective Bargaining Agreement from time to time ....

Finally, Article VIII, § 8.4 provided, in pertinent part,

No dispute or question arising under this Trust or the Pension Plan shall be subject to the grievance or arbitration procedure provided for in the Collective Bargaining Agreement. All such disputes or questions ... shall be resolved by the Trustees in the manner herein provided.¹

Ballantine's Newark brewery terminated operations effective April 1, 1972. As of that date,² the Brewery Plan contained the following relevant provisions.

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 a CBA. Article I, § 11.

Pursuant to Article I, § 14(c), an employee lost his credited service if the employee "ceased to be employed by an Employer ... and did not become re-employed by such Employer or employed by another Employer within ... one year following ... cessation of employment, except as provided in Article X." Section 2 of Article X provided that "notwithstanding the provisions of § 14(c) ... an Employee whose employment is terminated shall be eligible for a pension at age 65 provided that at the time his employment is terminated he has completed ... the number of years of Credited Service for future service" determined by reference to a table set forth in the Brewery Plan. That table provided that, for plan years 1965 and later, 10 years of credited service for future service was necessary for an employee to come within Article X, § 2. This section was apparently derived from a proviso contained in earlier versions of Article I, § 14(c) which stated that the forfeiture provisions did not "apply as to loss of Credited Service if an Employee has completed at least 10 years of Credited Service for future service when he ceases to be employed by an Employer."

Eligibility for pension benefits was outlined in Article II. As provided in the Brewery Plan, an employee was eligible when he had "completed at least ten (10) years of Credited Service and attained age 65," had "completed at least thirty (30) years of Credited Service" or reached the compulsory retirement age of 67. Furthermore, Article II, § 2 provided for an early retirement option for an employee who had reached age 60 and had obtained between 15 and 30 years of credited service. That section included "a terminated Employee ... entitled to a deferred pension as provided in Article X." See also Article X, § 3 (prescribing procedural requirements for employees "eligible for a pension as provided in Section 2 of ... Article X").

The pivotal section of the Brewery Plan — Article VII — was inserted in the following form by an amendment in May 1970. Deposition of Horst Poeschla at 132; Exhibit 2 annexed to Afft. of William F. Griffin (Feb. 16, 1978). Prior to that time, withdrawal of an employer did not operate to divest an employee of those benefits "vested" by application of Article X, § 2.³ As inserted in May 1970, Article VII provided

Section 1. Notwithstanding any other provision of the Plan to the contrary if an Employer ceases to be an Employer ... all of the Credited Service of its then employees (including its former employees who terminated employment with such Employer within the three month period immediately preceding the date on which such Employer ceased to be an Employer) shall be cancelled except for the Credited Service of the following employees of the ceased Employer: (a) those Employees who have completed thirty (30) years or more of Credited Service; (b) those Employees who have both completed at least ten years (10) of Credited Service and attained age 65; (c) those Employees who have both completed at least fifteen (15) years of Credited Service and attained age 60; (d) those Employees who have completed at least ten (10) years of Credited Service with one or more of the Employers who is remaining as an Employer under the Plan; and (e) those Employees who are placed on the regular employees seniority list of a remaining Employer and accumulate enough Covered Days with such remaining Employer during the one year period commencing on and immediately following the date their Employer ceased to be an Employer to earn at least one-fifth ( 1/5 ) of a year of Credited Service, excluding for the purpose of this determination all Covered Days with their Employer who ceased to be an Employer and assuming, for the purpose of this determination, that the Covered Days with a remaining single Employer all were earned during one Plan Year.

The term employees as used in this Section 1 shall mean persons covered by the current Collective Bargaining Agreements between the Employers and the Unions.

Section 2. If an Employer ceases to be an Employer as defined herein, the Trustees shall instruct the actuary for the Plan to conduct a valuation of the Plan as of the date such Employer ceased to be an Employer, taking into consideration the total funds available and the actuarial liabilities for benefits accrued by all Employees based on the Credited Service in effect after the cancellation of Credited Service as defined in Section 1 of this Article VII. Based upon the results of this valuation, the monthly retirement pension payable in accordance with the provisions of Article II, Article III, Article IX and Article X shall be reduced for all eligible Employees who make application for pension on or after the date such Employer ceased to be an Employer and for all Employees who made application for retirement within the three month period

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