New York State Teamsters v. United Parcel Serv.
| Decision Date | 09 April 2002 |
| Docket Number | No. 5:98-CV-1902 FJS/FLS.,5:98-CV-1902 FJS/FLS. |
| Citation | 198 F.Supp.2d 188 |
| Parties | NEW YORK STATE TEAMSTERS CONFERENCE PENSION & RETIREMENT FUND, New York State Teamsters Council Health & Hospital Fund, J. Dawson Cunningham, Frank Posato, Thomas Goodwin, Brian Masterson, John Bulgaro, Anthony Simoes, Daniel Schmidt and Don Little, Plaintiffs, v. UNITED PARCEL SERVICE, INC., Defendant. |
| Court | U.S. District Court — Northern District of New York |
Morgan, Lewis & Bockius, LLP, Washington, D.C. (Jonathan G. Rose, of counsel) Hancock & Estabrook, LLP, Syracuse, New York (Michael J. Sciotti, of counsel), for plaintiffs.
Pitney, Hardin, Kipp & Szuch, LLP, Morristown, New Jersey (Glenn E. Butash, of counsel), The Brett Law Firm, LLC, Syracuse, New York (Thomas Brett, of counsel), for defendant.
Plaintiffs New York State Teamsters Conference Pension and Retirement Fund ("Pension Fund") and New York State Teamsters Council Health and Hospital Fund ("Health Fund") (collectively "the Funds") commenced this action pursuant to § 515 of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1145.1 The Funds sought an Order requiring Defendant United Parcel Service, Inc. ("UPS") to pay all delinquent contributions including liquidated damages and interest. Additionally, the Funds sought an Order requiring UPS to execute Participation Agreements for the period August 1, 1993 to the present, which UPS has failed to execute. UPS answered and asserted a counterclaim, which sought credit for alleged overpayments it had made to the Funds.
From June 4 through June 8, 2001, the Court conducted a bench trial in this action in which the Funds sought delinquent contributions for UPS's alleged underpayment to the Funds for the period of August 1, 1990 through December 31, 1994.2 Based upon the evidence adduced at trial, the following constitutes the Court's findings of fact and conclusions of law as required by Rule 52(a) of the Federal Rules of Civil Procedure.
The Funds were created and exist pursuant to Agreements and Declarations of Trusts ("Trust Agreements"), which are entered into between participating employers and union locals affiliated with the International Brotherhood of Teamsters, A.F.L.—C.I.O. ("Teamsters"). See Joint Pretrial Stipulations at "Facts Not in Dispute" at ¶ 1. A Board of Trustees manages the Funds. See id. at ¶ 4. The Funds provide pension, hospital, medical, dental, death and disability benefits to qualified participants who satisfy the applicable eligibility requirements. See id.
Local unions affiliated with the Teamsters represent many of UPS's 340,000 employees. See id. at ¶ 6. UPS's upstate New York operations are centered in two distribution "hubs"—the Upstate New York District, which is centered in Syracuse and the West New York District, which is centered in Buffalo. See id. at ¶ 8. UPS makes contributions on behalf of approximately 3,200 employees in the Upstate New York District and approximately 1,800 employees in the West New York District. See id. at ¶ 9. UPS and the Teamsters have most recently entered into collective bargaining agreements ("CBA") for the periods of 1987-1990, 1990-1993, 1993-1997 and 1997-2002. See id. at ¶ 10.
In 1989, the Funds and UPS executed Settlement Agreements relating to the Health and Pension Funds (collectively "1989 Settlement Agreement"), which settled a dispute between the parties concerning contributions for the period of January 1, 1975 through December 31, 1986.4 See id. at ¶¶ 15, 17; P-11, P-12. Thereafter, the Teamsters and UPS executed an amendment to the 1987-1990 United Parcel Service Upstate New York District Supplemental Agreement ("1989 Amendment"). See Joint Pretrial Stipulations at "Facts Not in Dispute" at ¶ 11.
On March 25, 1993, the Funds and UPS executed another set of Settlement Agreements relating to the Health and Pension Funds (collectively "1993 Settlement Agreement"), which settled a dispute covering the period of January 1, 1987 through December 31, 1988. See id. at ¶¶ 18-19.
UPS has not signed any Participation Agreements for the contract periods of August 1, 1993 through July 31, 1997 or thereafter. See id. at ¶ 14. Pursuant to the CBA, UPS is contractually obligated to sign such Participation Agreements. See P-8 (1990-1993 CBA) at Article 60, Section 2; P-9 (1993-1997 CBA) at Article 61, Section 2.
During the period of May 1995 through April 1997, the Funds conducted an audit of UPS's books and records. See Joint Pretrial Stipulations at "Facts Not in Dispute" at ¶ 20. Based upon that audit, the Funds claimed that UPS owed $2,878,506.10 to the Pension Fund and $457,008.95 to the Health Fund in delinquent contributions and statutory penalties for the period of January 1, 1989 through December 31, 1994.5 See id. at ¶ 21. Specifically, the Funds contend that UPS owes contributions with respect to the following categories (1) overtime, (2) unused sick leave, (3) holidays and roving holidays, (4) vacations, (5) sick leave, (6) workers compensation and disability, (7) orientation, and (8) jury duty, funeral leave and military leave. As discussed below, UPS denies that it owes the Funds any additional contributions and, in addition, contends that it has made overpayments in some of these categories and, therefore, seeks reimbursement for those alleged overpayments.
The Funds assert that there is no eight-hours-per-day cap on UPS's contribution obligations but rather that there is only a weekly and yearly cap. Therefore, the Funds assert that UPS is obligated to make contributions for up to forty hours per week and 2,080 hours per year for each bargaining unit employee.6 To the contrary, UPS contends that an eight-hours-per-day cap exists and, thus, contributions assessed for hours worked in excess of eight hours per day are improper.
The question of whether an eight-hours-per-day cap applies to UPS's contribution obligations during the audit period at issue (August 1990-December 1994) can only be answered by reference to the history of the contractual relationship between the Funds, UPS and, to some extent, the Teamsters. Therefore, the Court will begin its discussion of this issue by reviewing the terms of the documents the parties introduced at trial, starting with the 1979-1982 CBA.
The 1979-1982 CBA explicitly provided for an eight-hours-per-day cap. See P-91 (1979-1982 CBA) at Article 56 . This eight-hours-per-day cap, however, was not explicitly included in subsequent CBAs; for example, the CBA, which covered the period of May 1, 1982 through June 1, 1985, provided that "[e]ffective April 1, 1982, the Employer agrees to contribute the sum of seventy-seven and one half cents ($.77½) per hour paid to any and all of its employees covered by this Agreement, but not to exceed thirty one dollars ($31.00) per week." See P-92 (1982-1985 CBA) at Article 56.7
In 1987 the Teamsters proposed a change to Article 61 of the CBA, which would have provided that the "employer [is] to make contributions on all hours worked and/or paid, including overtime and shall increase contribution rates $.50 per hour per year." See D-7. However, that proposal was subsequently withdrawn, and Article 61 of the 1987-1990 CBA provided that "[e]ffective August 1, 1987, the Employer agrees to contribute the sum of seventy-seven and one half cents ($.77½) per hour paid to any and all of its employees covered by this Agreement, but not to exceed thirty-one dollars ($31.00) per week...." See P-7 (1987-1990 CBA) at Article 61, Section 1.
Then, in 1989, UPS and the Funds entered into a Settlement Agreement, which provided, in pertinent part, that "it is agreed that [UPS] is not obligated to make contributions for any hour paid to an employee in excess of either eight hours per day or forty hours per week." See P-11 (1989 Settlement Agreement) at ¶ 5 (emphasis added). Subsequently, UPS and the Teamsters signed the 1989 Amendment, which amended Article 61, Section 1 of the 1987-1990 CBA to read, in pertinent part, that "[e]ffective August 1, 1987, the Employer agrees to contribute the sum of $2.755 per hour to any and all of its employees covered by this Agreement, but not to exceed a maximum of eight (8) hours per day or forty hours per week $110.20."8 See P-13 (1989 Amendment) at ¶ 1 (emphasis added).
Despite the language of the 1989 Settlement Agreement and the 1989 Amendment, the eight-hours-per-day cap was not explicitly included in subsequent CBAs.9 In particular the 1990-1993 CBA provides, in pertinent part, that "[e]ffective August 1, 1990, the Employer agrees to contribute the sum of three dollars and fifty and one half cents ($3.505) per hour paid to any and all of its employees covered by this Agreement, but not to exceed one hundred forty dollars and twenty cents ($140.20) per week." See P-8 (1990-1993 CBA) at Article 61, Section 1 (emphasis added). Moreover, in both 1993 and 1997, the Teamsters again proposed changes to Article 63 of the CBA which would have obligated UPS to make contributions on all hours worked, including overtime, with no maximum hours. See D-12 at UPS678; P-62 at UPS088. These proposals, however, were subsequently withdrawn.
UPS asserts that the 1989 Amendment to the 1987-1990 CBA was carried forward into all subsequent CBAs and that, therefore, an eight-hours-per-day cap applies to its contribution obligations for the audit period at issue. To support this contention, UPS points to Article 42 of the CBA, the duration clause, which provides, in pertinent part, that
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