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ROTHLEIN v. ARMOUR & CO.

June 28, 1974

Regis ROTHLEIN et al., Plaintiffs,
v.
ARMOUR AND COMPANY, Defendant


Weber, District Judge.


The opinion of the court was delivered by: WEBER

This is an action filed under the Labor Management Relations Act, 29 U.S.C. ยง 185(a) for violation of contracts between an employer and a labor organization representing employees. The plaintiffs are individuals who are representative of a class of plaintiffs who are or were employed by the defendant at various times between 1926 and 1960. There are approximately eighty-two individuals in the class. The plaintiffs were and are members of the General Teamsters Union, Local 249. In 1952 the defendant Armour and Company created a pension plan as a result of a collective bargaining agreement between it and the United Packing House Workers of America (CIO). A separate collective bargaining agreement between Teamsters Local 249 and the defendant Armour and Company made the provisions of the 1952 Armour Pension Plan applicable to the plaintiffs as members of Teamsters Local 249. The 1952 Armour Pension Plan was known as "Plan A" and it was eventually replaced by three subsequent plans known as B, C and D, which became effective on January 1, 1962. Each of these plans was applicable to members of Teamsters Local 249 as a result of collective bargaining agreements between Armour and the Teamsters. All of these Armour Pension Plans were employer financed and non-contributory and were qualified under I.R.S. Regulations.

 During the collective bargaining negotiations between Teamsters Local 249 and Armour and Company in 1964 it was agreed that the members of Teamsters Local 249 be removed from the Armour Pension Plan and transferred into the Teamsters Pension Fund. The collective bargaining agreement executed between the Teamsters and Armour on October 1, 1964 recited in Art. XVII that Armour agreed to contribute to the Teamsters Pension Plan a certain amount per week for each regular employee of the company. The agreement further recites that the Company policy of compulsory retirement for employees reaching sixty-five shall continue in effect. An exception was made in Art. XVII for certain employees in the Teamsters Local 249 unit who would not be eligible for coverage under the Teamsters Plan and it was provided that these employees would continue to be covered by the Armour Plan. Thereafter, Armour and Company made contributions for its employees in the Teamsters Local 249 unit to the Teamsters Pension Plan, and made no further contributions for these employees to the Armour Pension Plan with the exception of those employees who were specially noted in the October 1, 1964 agreement.

 The plaintiffs have brought this action on behalf of members of their class claiming that the October 1, 1964 agreement does not terminate their rights to participate in the Armour Pension Plan. The plaintiffs' claim presents several alternatives. Plaintiffs claim that as a matter of law the Teamsters Union representatives who negotiated the October 1, 1964 collective bargaining agreement had no right to bargain away the vested rights of its members in the Armour Pension Plan. As a corollary to that argument plaintiffs assert that there was never any agreement in the 1964 negotiations between the Teamsters Local 249 and Armour and Company that the employees of the Teamsters Unit who were transferred into the Teamsters Pension Plan would have no continuing interest in the Armour Pension Plan.

 A second claim of plaintiffs is that some twenty of the employees of the Teamsters Local 249 Unit had twenty years of service and were fifty-five years of age at the time the Armour Teamsters employees were transferred into the Teamsters Pension Plan and therefore had vested rights in the Armour Pension Plan.

 A third contention of the plaintiffs is that the October 1, 1964 agreement resulted in a partial termination of the Armour Pension Plan within the meaning of Art. IX, Section 1, of the Pension Plan resulting in the vesting of certain benefits under the provision of that Plan to the members of the Plan which was thus terminated.

 A fourth contention of the plaintiffs is that the denial of any benefits to them from Armour Pension Plan will result in the unjust enrichment of the defendant.

 The defendant has moved for summary judgment on all issues on the basis that there is no contractual or legal basis for any of the plaintiffs' claims in this case. The defendant argues that there are no disputed issues of fact, that the facts are contained in the written documents of record in this case consisting of collective bargaining agreements and pension plans, and defendant further argues that parol evidence cannot be admitted to alter or vary the conditions set forth in these written instruments, nor can an affidavit which solely sets forth legal conclusions from facts established in the record be considered on a motion for summary judgment.

 The first issue of fact which we approach is whether or not under the express terms of the Armour Pension Plan there was any vesting in any of the plaintiffs or members of the class they represent. From our examination of the Armour Pension Plan we have determined that there is no vesting of the right to receive a pension in any employee of Armour before he reaches the mandatory retirement age of sixty-five, except for one condition. This condition prescribes that where an employee shall (1) have attained age fifty-five years, (2) complete twenty or more years of service, and (3) have his service terminated under conditions which would entitle him to a separation Allowance in accordance with Art. XIX of the Master Agreement which refers to employees who are permanently dropped from service because of a reduction in force arising out of the closing of a unit of the business, or as a result of technological changes, and who is not expected to be re-employed after two years lay off, shall acquire a vested right in the plan. Therefore, unless this condition is satisfied, and it has not been shown to have been satisfied as to any plaintiff or member of his class, there are no vested rights in the Pension Plan until the actual retirement of the employee.

 Having found that there were no vested rights in the Armour Pension Plan possessed by any of the plaintiffs or members of their class as of October 1, 1964, the date of the new collective bargaining agreement with the Teamsters Union the allegation of the plaintiffs that the Union bargained away the vested rights of its members must fall. The decision of Hauser v. Farwell, Ozmun, Kirk & Co., 299 F. Supp. 387 [D.Minn.1969] is, therefore, not authority for the proposition which plaintiffs assert. In that case the court said:

 
"[A] Union may bargain as to prospective matters such as seniority rights, future conditions of employment, etc., it cannot bargain away the accrued or vested rights of its members." 299 F. Supp. at 393.

 The facts shown in the Hauser case concern an employer who ceased doing business and an agreement between the employer and the union subsequent to the cessation of business as to the distribution of a surplus in the pension fund. Because of the minimal benefits of certain of the beneficiaries under the plan the Union and the Company agreed to a distribution of the surplus in a manner other than that provided in the pension agreement. However, on the complaint of certain of the members of the Union who were thus eliminated, the court held that the Union and Employer had no right to change the vested benefits of any employee on dissolution without the express consent or authority of the particular individual involved.

 With respect to plaintiffs' contention that at the time of the transfer from the Armour Pension Plan to the Teamsters Pension Plan at least twenty members were fifty-five years of age or older and had completed twenty years or more of service, and therefore had vested rights we find that the condition of the separation from employment with Armour as required by the provisions of the Armour Pension Plan had not been met in any of these individuals. It appears from the record that all continued their employment with Armour with their pensions being funded through Armour's contribution to the Teamsters Pension Plan. Thus, there could be no vesting as to these alleged twenty employees.


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