Stout v. Bethlehem Steel Corp.

• Decision Date: 18 March 1997
• Docket Number: Civil Action No. 95 CV 0193.
• Citation: Stout v. Bethlehem Steel Corp., 957 F.Supp. 673 (E.D. Pa. 1997)
• Parties: Mary STOUT, Kenneth Debus, Daniel Gulini And Lee Hedden, Plaintiffs, v. BETHLEHEM STEEL CORPORATION, et al., Defendants.
• Court: U.S. District Court — Eastern District of Pennsylvania

Page 673

957 F.Supp. 673

Mary STOUT, Kenneth Debus, Daniel Gulini And Lee Hedden, Plaintiffs, v. BETHLEHEM STEEL CORPORATION, et al., Defendants.

Civil Action No. 95 CV 0193.

United States District Court, E.D. Pennsylvania.

March 18, 1997.

Elliot A. Strokoff, Strokoff & Cowden, P.C., Harrisburg, PA, for plaintiffs.

G. Stewart Webb, G. Stewart Webb, Jr., J. Preston Turner, Venable, Baetjer and Howard, Baltimore, MD, Kathleen M. Mills, Bethlehem Steel Corp., Bethlehem, PA, for defendant Bethlehem Steel Corp.

G. Stewart Webb, Venable, Baetzer & Howard, Baltimore, MD, Kathleen M. Mills, Bethlehem Steel Corp., Bethlehem, PA, for defendant Pension Plan of Bethlehem Steel Corp. and Subsidiary Companies.

DECISION AND ORDER

VAN ANTWERPEN, District Judge.

I. INTRODUCTION

This case arose originally under Section 510 of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1140. We have jurisdiction pursuant to Section 502 of ERISA, 29 U.S.C. § 1132(e) and under 28 U.S.C. § 1331. On January 12, 1995 Plaintiffs Mary Stout, Kenneth Debus, Daniel Gulini and Lee Hedden filed an action against Defendant Bethlehem Steel Corporation alleging unlawful interference with ERISA rights, and breach of the implied covenant of good faith and fair dealing in their employment contracts. Defendants were granted summary judgment on the breach of contract claim per our order of February 26, 1996.

We began to conduct a non-jury civil trial on April 16, 1996; however, we discontinued and postponed the balance of the trial to allow plaintiffs time to internally appeal the administrative decision denying them benefits. Plaintiffs subsequently filed an amended complaint on July 26, 1996 adding as defendants the Pension Plan of Bethlehem Steel Corporation and Subsidiary Companies, applicable to eligible salaried employees, the General Pension Plan and the Plan Administrator and alleging the further violation of ERISA under 29 U.S.C. § 1132 for failure to pay retirement benefits. On November 19, 1996, we resumed the nonjury trial, which continued until November 20, 1996. On that day, Plaintiffs and Defendants also filed a stipulation of agreed upon facts. Pursuant to Federal Rule of Civil Procedure 52(a), we make the findings of fact as set forth below.¹

II. FINDINGS OF FACT

The Parties and The Plan

1. Plaintiff Mary Stout was born on September 5, 1951, and started her employment with Bethlehem Steel Corporation on December 22, 1969. In January 1993, she was earning an annual salary of $30,396. Stipulation 1. Plaintiff Kenneth Debus was born on April 5, 1945, and started his employment with Bethlehem Steel Corporation on June 3, 1968. In January 1993, he was earning an annual salary of $33,456. Stipulation 2. Plaintiff Daniel Gulini was born on April 23, 1945, and started his employment with Bethlehem Steel Corporation on June 21, 1966. In January 1993, he was earning an annual salary of $33,540. Stipulation 3. Plaintiff Lee Hedden was born on October 29, 1946, and started his employment with Bethlehem Steel Corporation on May 18, 1970. In January 1993, he was earning an annual salary of $30,696. Stipulation 4.

2. Defendant Bethlehem Steel Corporation ("Bethlehem") is a Delaware corporation with its principal place of business in Bethlehem, Pennsylvania. Bethlehem has historically operated facilities at various locations around the country. Since at least the early 1980's, Bethlehem has been reducing or eliminating facilities and reducing the size of its workforce. In January of 1993, among the facilities that Bethlehem has operated and continues to operate are a steel plant in Burns Harbor, Indiana and a steel plant in Sparrows Point, Maryland, as well as plants in Lackawanna, New York, Steelton, Pennsylvania and Bethlehem, Pennsylvania. Stipulation 114.

3. Each of the Plaintiffs was a Customer Service Representative in the Tin Mill Products Group, located in Bethlehem, Pennsylvania. Stipulation 39. The Customer Service Representative position held by each Plaintiff was classified as an exempt, non-union, salaried position. Stipulation 40. In June, 1993, the Tin Mill Products Group consisted of: a General Manager; a Technical Service Manager; a Tin Mill Marketing Specialist; a Customer Service Supervisor; 7 Customer Service Representatives; 2 Administrative Clerks; and a Secretary. The positions of Administrative Clerk and Secretary were classified as non-exempt salaried positions. The other positions in the Tin Mill Products Group were exempt salaried positions. Stipulation 41.

4. Bethlehem is the sponsor of a defined benefit pension plan for its employees. The plan is named the Pension Plan of Bethlehem Steel Corporation and Subsidiary Companies ("Plan"). It is subject to and regulated by the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Id. at 63-64 (Dopera). The Plan is also a qualified pension plan under the Internal Revenue Code. Bethlehem funds the Plan. Employees do not make any contributions to the Plan. Stipulation 5. The Plan of Bethlehem and its Subsidiary Companies is an umbrella pension plan that contains subplans that apply to different employee groups. Tr. 11/19/96 at 30 (Dopera).

5. Michael Dopera has worked in the area of employee benefits at Bethlehem since 1968, and he has had responsibility for pension benefits since 1973. Tr. 11/19/96 at 62-63 (Dopera). Mr. Dopera is currently employed by Bethlehem as its Manager of Pension Plans and Communications in the Compensation and Benefit Services Division; he is the Plan Administrator of the Pension Plan of Bethlehem Steel Corporation and Subsidiary Companies. He also serves as the Secretary of the Employee Benefits Administration Committee. Stipulation 70; Tr. 4/16/96 at 17-18 (Dopera). The Plan specifically provides that the Secretary shall also be the Plan Administrator. Defendants' Exhibit 2 at p. 96. In addition, Bethlehem has historically had a policy where the person in charge of pension benefits, now Mr. Dopera, has also been the Secretary of the General Pension Board (now the Employee Benefits Administration Committee). Tr. 11/19/96 at 73 (Dopera). In 1993, Mr. Dopera was Bethlehem's Manager of Employee Benefits and served as the Secretary of the General Pension Board, the Employee Benefits Administration Committee's predecessor, and as such was the Plan Administrator of the Pension Plan. Tr. 4/16/96 at 17-18 (Dopera); See Defendants' Exhibit 1 at p. 97. Mr. Dopera has been an Assistant Secretary or Secretary of the General Pension Board / Employee Benefits Administration Committee since at least the early 1980's. Tr. 4/16/96 at 19-20 (Dopera). In his role as Plan Administrator, Mr. Dopera is and was responsible for the day-to-day administration of the Pension Plan, including granting pensions provided by the Plan and making and enforcing the rules and regulations of the General Pension Board / Employee Benefits Administration Committee. Tr. 4/16/96 at 15-17 (Dopera); Tr. 11/19/96 at 71-72 (Dopera).

6. Plaintiffs are all participants in the Plan. Their level of benefits thereunder is set forth in the Plan as applicable to non-represented salaried employees (hereinafter the "Salaried Plan"). Defendants' Exhibit 1 is a genuine and authentic copy of the Salaried Plan in effect, and applicable to Plaintiffs, at the time of the Plaintiffs' layoffs in 1993. Defendants' Exhibit 2 is a genuine and authentic copy of the Salaried Plan in effect, and applicable to Plaintiffs, at the time their continuous service broke in October, 1995. Stipulation 6.

7. The contents of the Salaried Plan, including its eligibility provisions and benefits, are established by Bethlehem Steel Corporation's Board of Directors. Tr. 11/19/96 at 65 (Dopera). In contrast, benefits available to employees represented by the United Steelworkers of America are set forth in a separate sub-plan, and the pension benefits afforded to those employees are determined by collective bargaining that results in a Pension Agreement between Bethlehem and the United Steelworkers. Tr. 11/19/96 at 65, 203 (Dopera, Kesselring). The Plaintiffs are not in any group of employees represented by the United Steelworkers; and no Plaintiff has ever been a participant in or covered by any pension plan or agreement negotiated by the United Steelworkers. Specifically, Plaintiffs are not and never have been covered by the Hourly Pension Plan or the Pension Agreement between Bethlehem and the United Steelworkers. Tr. 11/19/96 at 83 (Dopera).

8. During the course of their employment, Plaintiffs, and other non-represented salaried employees of Bethlehem, were provided with Summary Plan Descriptions which described the benefits available under the Salaried Plan. Defendants' Exhibit 3 is a genuine and authentic copy of the Summary Plan Description in effect at the time of Plaintiffs' layoffs in October, 1993. Stipulation 7.

9. Section 9 of the 1994 Salaried Plan (Defendants' Exhibit 2) deals with administration of the Plan. As explained by Mr. Dopera at trial, that Section gives the Employee Benefits Administration Committee the power to interpret the Plan, to administer the Plan and to make various administrative decisions with respect to the operation of the Plan. Tr. 11/19/96 at 69-70 (Dopera). In pertinent part, Section 9 contains the following provisions: the Employee Benefits Administration Committee "shall have the authority and responsibility for the administration of this Plan ... and shall appoint a Secretary and such Assistant Secretaries as it shall deem necessary or proper." The Secretary of the Employee Benefits Administration Committee "shall be the administrator of this Plan (hereinafter `Plan Administrator') for all purposes of ERISA with the powers and duties provided therein and in this Plan...." The Plan Administrator shall "make and enforce such rules and regulations as the Plan Administrator shall deem necessary or proper for the efficient administration of this...