Turner v. Local Union No. 302, Intern. Broth. of Teamsters, Chauffeurs, Warehousemen and Helpers of America

• Decision Date: 21 September 1979
• Docket Number: No. 77-2523,77-2523
• Citation: 604 F.2d 1219
• Parties: 102 L.R.R.M. (BNA) 2548, 87 Lab.Cas. P 11,575 CA 79-3491 Cecil B. TURNER, and all others similarly situated, Plaintiff-Appellant, v. LOCAL UNION NO. 302, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1219

604 F.2d 1219

102 L.R.R.M. (BNA) 2548, 87 Lab.Cas. P 11,575

CA 79-3491 Cecil B. TURNER, and all others similarly situated, Plaintiff-Appellant, v. LOCAL UNION NO. 302, INTERNATIONAL BROTHERHOOD OF TEAMSTERS CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA et al., Defendants-Appellees.

No. 77-2523.

United States Court of Appeals Ninth Circuit.

Sept. 21, 1979.

Alfred H. Sigman (argued), California Rural Legal Asst., Oakland, Cal., for plaintiff-appellant.

Brudage, Beeson, Tayer & Kovach (argued), San Francisco, Cal., Edward H. Moore, Moore, Sizoo & Cantwell, Oakland, Cal., on brief, for defendants-appellees.

Appeal from the United States District Court for the Northern District of California.

Before ELY and ANDERSON, Circuit Judges, and JAMESON, ^* District Judge.

JAMESON, District Judge:

This is an appeal by Cecil B. Turner, a retired employee of the dairy industry, as a class representative, from a summary judgment in favor of five labor organizations and six employers, in an action by Turner under §§ 301(a) and 302(c)(5) of the Labor-Management Relations Act of 1947 (LMRA), 29 U.S.C. §§ 185(a) and 186(c)(5), seeking restoration of certain benefits for retirees under a health and welfare trust and other relief.

A collective bargaining agreement between the appellee unions and employers had been amended in a manner which permitted the trustees to decrease the benefits of a health and welfare trust known as the Dairy Industry Trust Fund. In amended complaints the appellee unions and employers and the trustees of the Fund (comprised of an equal number of union and employer representatives), were all named as defendants. Following discovery all filed motions for summary judgment. The motion of the trustee was denied, and the class action against the trustees is pending. The district court granted the motions of the unions and employers. We affirm.

Factual Background

The material facts are not disputed. Turner worked as a driver-salesman for several employers in the Bay Area dairy industry for 24 years before his retirement in 1970. He worked for Berkeley Farms his last eight years. The terms and conditions of his employment had been governed by succeeding collective bargaining agreements between Berkeley Farms and Teamsters Local No. 302. In 1964 the collective bargaining agreement provided for the establishment of the Joint Council No. 7 Dairy Industry Fund to provide medical and hospital benefits for employees retiring after April 1, 1964.

Collective bargaining agreements between the dairies and the unions executed in 1966, 1968, 1970, 1971 and 1974 contained a clause whereby the employer agreed to maintain the benefits "in effect" on the date of the agreement, "throughout the term of this agreement". In 1971 and 1974 it was agreed that the necessary amount of the contributions, based on the number of employee work hours, was to be determined by the trustees of the Fund, as required to maintain the benefits then in effect. The 1974 agreement was executed on April 1, 1974 for a term of three years.

In July, 1973, Teamsters Local No. 302 and Berkeley Farms, together with the other appellee unions and employers, formed the Dairy Industry Trust Fund from several smaller trusts, including the Joint Council Trust, to administer health and welfare programs. There are ten trustees, five selected by the participating unions, and five by the participating employers. The Trust Agreement provides, Inter alia, that the trustees have authority "to increase the benefits available under any of the programs . . . if in (their) judgment there are sufficient sums in the Fund," and "to decrease benefits under any of the programs . . . if in (their) judgment such action is warranted". (Article IV Section 6)

Financial problems for the retiree benefit program became apparent in 1973 and 1974. The program reserves dropped from $197,323.30 to $10,674.15 between September 1, 1973, the date the Dairy Trust assumed administrative responsibility, and December 31, 1974. It appeared that the Fund would be depleted within a few weeks after January 1, 1975.

The financial problems of the Fund were attributable to changes in the distribution system of the dairy industry. There were fewer active employees while there were more retired employees. ¹ Because the employers' contributions to the Fund were based on the number of employee hours worked, monthly contributions were inadequate to match the current expenditures for retirees' benefits.

The parties to the collective bargaining agreement determined that the financial problems of the Fund could be resolved best by amending the collective bargaining agreement to increase the employers' contribution rate to the Fund and by deleting the agreement which required maintenance of the present level of benefits for retirees. The trustees of the Fund were given authority to provide health and welfare benefits within the limits of funds available for that purpose.

Active union members approved the amendment to the 1974 collective bargaining agreement in November, 1974. The Teamsters constitution prohibits retirees from voting. ² The trustees of the Fund then modified the benefits to which the retirees were entitled. Eyeglass and life insurance benefits were eliminated, the maximum payment on other benefits was reduced, and a $20.50 a month charge was imposed on retirees and their spouses who were not covered by Medicare if they wished to continue under the program. Appellant and other retirees covered by the fund were informed of the reduction in benefits in December, 1974.

Proceedings in District Court

In his original complaint Turner named only Berkeley Farms as defendant. In amended complaints the remaining defendants were added. Turner alleged that before his retirement he was told by an official of Local No. 302 that if he retired he would receive the same medical and hospital benefits which he had as an active employee. This was true with respect to the retiree program then in effect. He alleged further that he was unaware at any time of the provision in the trust agreement authorizing the trustees to decrease benefits under the retirees fund.

The amended complaints were based on Sections 301 and 302 of the LMRA, 29 U.S.C. §§ 185 and 186. Section 301 provides that suits for "violation of contracts between an employer and labor organization" may be brought in federal district court. Appellant alleged that the appellee labor organizations and employees, by amending the collective bargaining agreement, violated the "vested" right of the retirees to receive the benefits originally provided in the agreement. Appellant further alleged a violation of Section 302, which provides, Inter alia, that a jointly administered trust fund must be maintained "for the sole and exclusive benefit of the employees . . . ". ³

In entering summary judgment in favor of the appellee labor organizations and employers, the district court concluded in his remarks in open court:

. . . it does not seem to me, under the law, the activities that have been alleged to be wrong were not forbidden by any contractual legal provision and that there simply has not been, on what seems to be the undisputed evidence, any basis to the claims that are made.

Contentions on Appeal

Appellant contends that (1) the contract between the unions and employers gave the appellant-retiree a vested contractual right to a fixed level of health and welfare benefits, and the unions and employers could not, under the applicable federal common law of labor contracts, extinguish vested rights without the consent of the retirees; and (2) in agreeing to the amendment to the collective bargaining agreement the appellee unions violated § 302(c)(5) of the LMRA in that it rendered the trust fund not for the "sole and exclusive use of the employees".

Summary Judgment

Summary judgment is appropriate where no material issues of fact exist and where a party is entitled to judgment as a matter of law. Rule 56(c), F.R.Civ.P. Although the district court granted summary judgment without an explanatory memorandum, it is proper to affirm a summary judgment on any ground that appears from the record, whether or not the trial court relied on it. Helena Rubenstein, Inc. v. Bau, 433 F.2d 1021 (9 Cir. 1970); Sellers v. Regents of University of Cal., 432 F.2d 493 (9 Cir. 1970), Cert. denied 401 U.S. 981, 91 S.Ct. 1194, 28 L.Ed.2d 333 (1971).

I. § 301 of the LMRA

Section 301 of the Labor-Management Relations Act, 29 U.S.C. § 185, reads in part:

(a) Suits for Violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce . . . may be brought in any district court of the United States having jurisdiction of the parties . . . . (Emphasis added).

The central question presented is whether appellant and other retirees had a vested contractual right in the collective bargaining agreement and the appellee unions and employees violated that right in amending the agreement without the consent of the retirees.

In Allied Chemical & Alkali Workers of America v. Pittsburgh Plate Glass Co., 404 U.S. 157, 92 S.Ct. 383, 30 L.Ed.2d 341 (1971), the Court held that retirees were not employees for collective bargaining purposes and could not be included within the bargaining unit. The opinion recognizes that the union representatives on occasion might see fit to bargain for improved wages or other conditions favoring active employees at the expense of retirees' benefits. 404 U.S. at 173, 92 S.Ct. 383. Moreover, even though retirees may be included in health and welfare contracts, "(h)aving once found it advantageous to bargain for improvements in pensioners' benefits, active workers Are not forever thereafter bound to that view or obliged to negotiate on behalf of retirees again." (Emphasis added.) Id. at 181, 92 S.Ct. at 398. In a footnote the Court states that, "This does not mean that when a union...