The opinion of the court was delivered by: KRAFT
The Secretary of Labor, United States Department of Labor (Secretary), brought this action against Gulf Oil Corporation (Gulf) for injunctive relief under the Welfare and Pension Plans Disclosure Act, as amended, 29 U.S.C. §§ 301-309 (Act). The case is before us on cross-motions for summary judgment.
The material facts are undisputed. Gulf is a corporation organized and existing under the laws of Pennsylvania, with executive offices in Philadelphia. It is concededly an employer engaged in commerce and in an industry or activity affecting commerce, within the meaning of § 3 of the Act, 29 U.S.C. § 302.
Since about 1939, a number of Gulf's employes at its Philadelphia Refinery have constituted a group insured under the 'Blue Cross and Blue Shield Plans,' which provides medical, surgical and hospital care and benefits. In the beginning, Gulf's paymaster, with Gulf's authorization, collected premium payments from group members and forwarded them to the Associated Hospital Service of Philadelphia (Blue Cross). In subsequent years, Gulf deducted the premiums from the employes' weekly pay and remitted them to the Blue Cross the following month. At some later date, Gulf began contributing one-third of the monthly premiums, within certain maximum and minimum limits not here material.
The Associated Hospital Service of Philadelphia is audited and supervised by the Insurance Commissioner through the Insurance Department of Pennsylvania. Blue Cross and Blue Shield insurance coverage is available at group rates, which are less costly than individual rates, to employes of a common employer or employes of associated employers provided that the following conditions are met: (1) the group must consist of a minimum number of employes; (2) a percentage of the common employer's (or associated employers') employes must enroll in the plan; (3) the employer must deduct premiums from the employes' pay and remit them to the Associated Hospital Service of Philadelphia.
The Gulf program is entirely optional with the employe; Gulf exerts no pressure for or against participation therein. Moreover, the employe need not select Blue Cross coverage -- Gulf will contribute on the same basis 'as long as it is a plan with any insurance company.' As we understand it, there are 1271 employes in the Gulf refinery, of whom all but 50 are covered by the Blue Cross-Blue Shield insurance.
Documents prepared by the Associated Hospital Service of Philadelphia are distributed to the employes at the Philadelphia refinery by Gulf's industrial relations department. These documents, specimens of which appear in the record, convey thorough and detailed information regarding the benefits available under the Blue Cross-Blue Shield plan. In addition, an employes handbook, prepared by Gulf and distributed by Gulf's industrial relations department, communicates to employes the availability of Blue Cross-Blue Shield insurance coverage and the basis on which Gulf contributes toward the cost of such benefits.
An employe desiring to become a member of the Gulf group signs an application therefor, which is sent by Gulf to the Blue Cross-Blue Shield. Upon acceptance, the application becomes a contract for admittance to the Gulf group. The employe also delivers to Gulf an authorization to deduct his portion of the premium from his pay. Gulf makes the deduction weekly and indicates it on the pay check. Gulf contributes its portion and remits the total amount of premiums monthly to the Associated Hospital Service of Philadelphia.
Gulf performs other functions in connection with the program. Through its mail room at the refinery, it mails communications from Blue Cross to Gulf employes. It fills out and returns various forms submitted to it from time to time by Blue Cross. It performs other services incidental to the program which need not be detailed for present purposes.
Gulf has no contractual relationship with Associated Hospital Service of Philadelphia, or with any other carrier of health or accident insurance. Gulf does not: determine eligibility of individual subscribers for receipt of benefits; process claims for benefits under the program; make determination of appeals; authorize payment of benefits; make payments to beneficiaries; select carrier or service organizations except to the extent that it might be necessary in order to avoid a multiplicity of carriers utilizing Gulf's payroll deduction.
The first issue presented is whether the Gulf program is an 'employee welfare benefit plan,' as defined in 3(1) of the Act, 29 U.S.C. § 302(1):
'The term 'employee welfare benefit plan' means any plan, fund, or program which is communicated or its benefits described in writing to the employees, and which was heretofore or is hereafter established by an employer or by an employee organization, or by both, for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death, or unemployment.'
We think it clear beyond peradventure that the subject program was 'communicated or its benefits described in writing to the employees' within the meaning of the Act. Perusal of the Blue Cross literature distributed to Gulf employes persuades us that no employe could entertain any doubt as to the benefits accruing under the program.
It is equally clear, we think, that the program was one 'established by an employer.' Gulf established this program in 1939, or thereabouts, when it agreed to collect premiums from employes and remit them to Blue Cross. Without this action on Gulf's part, group rates would have been impossible, since such rates are conditional on the employer's remittance of premiums. Moreover, as has been seen, the Gulf program has undergone modifications over the years, with payroll deductions, ...