(E.D. Pa. 1977) (agreements to arbitrate ERISA claims invalid).
Here, plaintiffs' ERISA counts (Counts I through III) allege violations of ERISA's fiduciary standards. Specifically, those counts assert claims under 29 U.S.C. § 1104(a)(1)(A)
(that a fiduciary discharge his duties solely in the interest of the participants and beneficiaries for the purpose of providing benefits to the participants and beneficiaries) and § 1104(a)(1)(D)
(that a fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries in accordance with the documents and instruments governing the plan). Construing plaintiffs' complaint in a liberal fashion and most favorably to the plaintiffs
(see Airline Pilots Association, 627 F.2d at 277), the Court finds that the first three counts of the complaint should be read as independently charging contravention of the obligatory fiduciary standards of ERISA, and, therefore, those counts are not subject to arbitration.
Moreover, two United States Supreme Court decisions, Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728, 67 L. Ed. 2d 641, 101 S. Ct. 1437 (1981) and Alexander v. Gardner-Denver Co., 415 U.S. 36, 39 L. Ed. 2d 147, 94 S. Ct. 1011 (1973), also support the position that exhaustion of arbitration provisions under a collective bargaining agreement are not a necessary prerequisite to a federal court action when a federal statutory right is involved. See also Gavalik v. Continental Can Co., Civil Action No. 81-1519 (W.D. Pa. March 26, 1982). In Alexander, the Supreme Court held that an individual's right to equal employment opportunity under Title VII was independent of an employee's non-discrimination rights under a collective bargaining agreement and that an employee's initial resort to the grievance procedure did not preclude a later court action.
The Court went on to note the specific problems with submitting a statutory dispute to an arbitrator. Foremost among those problems, according to the Supreme Court, is the fact that "the specialized competence of arbitrators pertains primarily to the law of the shop, not the law of the land."
415 U.S. at 57. "Moreover, the fact-finding process in arbitration usually is not equivalent to judicial findings"; that is, the record of an arbitration proceeding is not as complete as that of a court proceeding, the rules of evidence do not apply, and the right to discovery is severely limited. Id.
Likewise, in Barrentine, the Supreme Court concluded that an employee's right to minimum wages under the Fair Labor Standards Act, 29 U.S.C. § 201, et seq., was independent of his right to collectively bargain for wages.
Thus, according to Barrentine, a court can entertain an independent action pursuant to the Fair Labor Standards Act, even after a grievance has been filed and processed. In this respect, the Supreme Court specifically stated:
Not all disputes between an employee and his employer are suited for binding resolution in accordance with the procedures established by collective bargaining. While courts should defer to an arbitrable decision where the employee's claim is based on rights arising out of the collective bargaining agreement, different considerations apply where the employee's claim is based on rights arising out of a statute. . . .
The Court acknowledges that it can be argued here that plaintiffs' claims arise primarily from the very agreements which contain the arbitration and grievance provision. However, the Court must construe the complaint most favorably to the non-moving party, and the complaint specifically claims federal statutory violations. Therefore, the Court finds that the issues are not subject to arbitration,
but the Court also notes that it will restrict plaintiffs to proving the federal statutory violations at trial and not permit them to prevail on mere contractual violations.
As to the LMRA claim (Count IV), the Court also finds that this claim is not barred by plaintiffs' failure to exhaust the arbitration and grievance procedures. Defendant cites the Court to the United States Supreme Court decisions of Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 47 L. Ed. 2d 231, 96 S. Ct. 1048 (1976), Republic Steel Co. v. Maddox, 379 U.S. 650, 13 L. Ed. 2d 580, 85 S. Ct. 614 (1965), and Steelworkers v. Enterprise Corp., 363 U.S. 593, 4 L. Ed. 2d 1424, 80 S. Ct. 1358 (1960), claiming that these three cases require that plaintiffs must exhaust their contractual remedies before bringing an action in federal court under the LMRA. The Court again rejects defendant's argument because the three Supreme Court cases cited above all involved situations in which a party was asserting a contractual right arising out of a collective bargaining agreement, rather than a violation of a federal statutory mandate. Count IV asserts a violation of a specific statutory mandate and is, thus, controlled by the Alexander and Barrentine decisions discussed infra. Since plaintiffs' claim in Count IV is based on rights arising out of a statute,
it is not subject to arbitration.
Defendant next moves to dismiss Counts I and II of the complaint on the basis that plaintiffs lack standing to assert the claims contained therein. In support of this motion, defendant first cites the Court to § 13.3 of the pension agreement, which provides as follows:
In the event a plant is permanently shut down or a plant is relocated outside of the Geographical Area of its present operation, the assets of the fund established for the Pension Plan are to be allocated to each plant location in relationship to the contribution made on behalf of all Participants at such locations compared to the total Contributions made on behalf of all locations. From the funds so established, there shall be deducted: