Senior v. Nstar Elec. and Gas Corp.
| Citation | 449 F.3d 206 |
| Decision Date | 31 May 2006 |
| Docket Number | No. 05-2015.,05-2015. |
| Parties | Charles J. SENIOR; Norman Fahy; Ronald D. Phipps; Raymond W. Postma; Thomas G. Hirl; Garrett M. Fagan; United Steelworkers of America, Local 12004, Plaintiffs, Appellants, v. NSTAR ELECTRIC AND GAS CORPORATION; Commonwealth Gas Company, Defendants, Appellees. |
| Court | U.S. Court of Appeals — First Circuit |
Abigail V. Carter, with whom John M. West and Bredhoff & Kaiser, P.L.L.C. were on brief, for appellants.
Keith B. Muntyan, with whom Robert P. Morris and Morgan, Brown & Joy were on brief, for appellees.
Before SELYA, LYNCH, and LIPEZ, Circuit Judges.
The question presented is whether former utility company employees who took advantage of early retirement programs are entitled by reason of a labor agreement to vested lifetime dental benefits that could not be changed by the company. Such dental benefits are not given to other former employees or to present employees. These benefits are welfare benefit plan benefits under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001-1461. "Welfare benefit plans" — plans that provide "medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment," id. § 1002(1) — are not subject to the strict vesting requirements of ERISA pension benefit plans. Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73, 78, 115 S.Ct. 1223, 131 L.Ed.2d 94 (1995). Employers are "generally free ... for any reason at any time, to adopt, modify, or terminate welfare plans." Id.
Employers may provide retirees with vested retiree welfare benefits by contract or otherwise. "[U]nder both section 301 [of the Labor Management and Relations Act (LMRA)] and ERISA, if an employer promises vested benefits, that promise will be enforced." Am. Fed'n of Grain Millers v. Int'l Multifoods Corp., 116 F.3d 976, 980 (2d Cir.1997). The issue, then, is whether the labor agreements here provided for vested lifetime dental plan benefits that could not be changed by the company. The standard by which this question is evaluated is one of first impression in this court.
Retired union employees of Commonwealth Gas Company and their union, the United Steelworkers of America, Local # 12004, filed suit against the retirees' former employer and its successor, NSTAR Electric & Gas Corporation. The plaintiffs took advantage of one of two early retirement programs offered by the company, one in 1997 and one in 1999. These early retirement programs ("ERPs") were negotiated between the company and the union, and the negotiated terms were memorialized in two memoranda of agreement (the "ERP agreements"). These ERP agreements are enforceable under § 301 of the LMRA, 29 U.S.C. § 185(a).
The ERPs offered retirees continuing health and dental benefits, in line with the benefits that had been given to retirees by the company before the ERPs. In late 2002, the company announced a number of changes, including the change that company-paid dental benefits for all retirees ceased once the retiree reached sixty-five years of age, unless the retiree had already reached that age as of April 1, 2003.
The plaintiffs brought suit, alleging that the decision to cease reimbursement of their Medicare Part B premiums and dental plan coverage violated, inter alia, § 301 of the LMRA, 29 U.S.C. § 185(a), and § 502(a)(1) of ERISA, id. § 1132(a)(1)(b), because, in their view, the decision was contrary to the ERPs which were part of the 1997 and 1999 ERP agreements.
The district court granted the company's motion for summary judgment on all counts. See Senior v. NSTAR Elec. & Gas Corp., 372 F.Supp.2d 159, 168 (D.Mass.2005). Although plaintiffs originally styled their case as raising claims both under ERISA and § 301, their claims, as reframed on appeal, are in fact dependent upon an interpretation of the labor agreements and otherwise state no independent ERISA claim.1 We analyze the case under § 301 of the LMRA.
We affirm, though on different grounds than those relied on by the district court.
We recount the facts, taking all reasonable inferences in favor of the plaintiffs, the non-moving parties, as is done on summary judgment motions. See Douglas v. York County, 433 F.3d 143, 145 (1st Cir. 2005). The basic facts are not in dispute. To understand the dispute about the benefits provided for in the 1997 and 1999 ERPs at issue here, one needs to understand the status of those benefits before adoption of the ERPs.
From April 1, 1973 to April 1, 1993, the collective bargaining agreements ("CBAs") between the company and the union provided dental benefits for current employees; the CBAs specified a particular dental plan and incorporated the terms and conditions of that plan. The CBAs did not, however, explicitly provide dental benefits for retirees. Still, the record reveals that union employees of Commonwealth Gas were given dental benefits upon retirement during this period.
The plaintiffs put into evidence personalized retirement benefits summaries, prepared by the company's benefits coordinator, which were given to union employees who retired before 1993 (and who are not plaintiffs here). These summaries described expected benefits, including pension payments, the employee savings plan, disability benefits, and life, medical, and dental insurance. One such summary given to an employee who retired in 1975 stated, as to dental coverage, in full: "Your Dental Plan coverage will continue for you, your spouse and your dependent children." The summary also contained references to plan documents: "In all cases, the exact provision of the various Benefit Contracts and applicable laws will determine the benefits to be paid thereunder."
Similar retirement benefits summaries were given to employees retiring in 1979, 1980, 1982, 1990, and 1991,2 and contained nearly identical language concerning continued dental plan coverage3 and identical references to plan documents.
The 1993 CBA (), like the agreements predating it, did not explicitly address retiree dental benefits, but provided for dental benefits for "[e]ligible employees": "Eligible employees, and their eligible spouses and dependents, will be covered under the terms and conditions of Dental Service of Massachusetts, Inc., DPP II, as amended, the provisions of which are made a part of this contract."
However, on April 13, 1993, the 1993 CBA was amended, effective April 1, 1993, to provide with respect to dental benefits for qualified employees who retired after April 1, 1993:
DENTAL PLAN
If you were age 40 or over with 12 or more years of service as of January 1, 1993 and subsequently retire or terminate with the "Rule of 75"[4] (with the System Companies) you WILL BE eligible for the COM/Energy sponsored Delta Dental Plan. If you retire or terminate prior to age 62, you will pay 10% of dental premiums in effect as of January 1, of the year in which you terminate or retire. When you reach age 62, COM/Energy will pay your entire premium.
This amendment did not change retiree benefits, but only clarified the eligibility requirements for benefits, at least with respect to employees covered by the contract.5 The dental benefits provided in the 1997 and 1999 ERPs closely mirrored the dental benefits already provided to union retirees via the amendment to the 1993 CBA.
The personalized summaries given after April 1, 1993 to retiring employees reflected the new agreement. One such document given to a union employee retiring in 1995, entitled "Information Relative to Employee Benefits Upon Your Retirement Date," stated, for covered retirees meeting the threshold requirements: "Your Dental Plan coverage will continue for you, your spouse and eligible dependents," and The summary also contained the same reference to plan documents as earlier personalized retirement benefits summaries: "In all cases, the exact provisions of the various Benefit Contracts and applicable laws will determine the benefits to be paid thereunder."
The 1996 CBA (covering April 1, 1996 to April 1, 2002)6 again does not make explicit reference to the eligibility requirements for retiree benefits, providing only that "[e]ligible employees, and their eligible spouses and dependents, will be covered under the terms and conditions of Dental Service of Massachusetts, Inc., DPP II, as amended, the provisions of which are made a part of this contract." However, the plaintiffs, in response to interrogatories, admitted that the 1996 CBA did not change the retiree benefits established by the amendment to the 1993 CBA.
Indeed, with respect to dental benefits, a personalized retirement benefits summary given to an employee who retired on July 1, 1996 (after the effective date of the 1996 CBA) contained language identical to the 1995 personalized benefits summary described above. It appears that under the 1996 CBA, retirees were eligible for dental benefits to the same extent as provided in the amendment to the 1993 CBA.
This sets the stage for the dispute about the ERP benefits.
Again, we give the background, working up to the time of the ERPs. Much of the dispute here relates to the documents governing retiree dental plans, and the extent to which we must look to these documents when interpreting the 1997 and 1999 ERP agreements.
It is undisputed that the dental plan contracts during all relevant times reserved the right of the company to amend, modify, or terminate the applicable dental plan (although the...
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