March 1, 1983, the Steelworkers Union exercised its right to strike.
During a February 28, 1983 negotiation meeting, just one day prior to the strike deadline, Shenango informed the Steelworkers Union that the employees' insurance coverage would cease if the employees went on a lawful strike, and over the Steelworkers Union protest, Shenango asserted that all insurance benefits ceased upon the expiration of the 1980 collective bargaining agreement. Although the Steelworkers Union argued that under the "coverage-during-strike" provision of the Group Insurance Plan, Shenango was required to continue insurance premiums for a period of six months following the date of the lawful strike, Shenango stopped paying the premiums on March 1, 1983. In addition, Shenango informed hospitals and other health care providers that its employees' insurance coverage had been discontinued.
The lawful strike of the Steelworkers Union at Shenango's New Castle facility ended when Shenango and the Steelworkers Union reached a new collective bargaining agreement on March 27, 1983. The new agreement, by its terms, expires March 26, 1986. During the strike settlement negotiations Shenango refused to pay back-premiums for the 700 employees in the collective bargaining unit, but instead agreed to pay individual conversion rates for employees who actually received medical treatment and incurred medical expenses during the 27-day strike period and could not financially afford to pay the conversion rate themselves. The Group Insurance Plan, under the 1980 collective bargaining agreement, contains a 90-day conversion period during which employees insurance coverage continues in effect if premiums are paid at a higher individual rate at any time within 90 days after Shenango's group policy was discontinued.
During the strike period approximately 35 employees received medical treatment. Shenango paid each employee an amount equivalent to their individual conversion rate, or if their medical expenses were less than their conversion rate, Shenango paid the actual medical expense.
After Shenango refused to pay back-premiums for all 700 employees of the collective bargaining unit during the 27-day strike period, the Steelworkers Union brought this action on behalf of all plan participants. The Union alleged that by ceasing to pay premiums for group insurance after the collective bargaining agreement had terminated and the Union went on a lawful strike, Shenango violated specific provisions of the Group Insurance Plan and the Employee Retirement Income Security Act, § 502, 29 U.S.C. § 1132 et seq. (1974) (ERISA). Believing that it is entitled to judgment as a matter of law on the undisputed facts, the Steelworkers Union moved for summary judgment under Rule 56 of the Federal Rules of Civil Procedure.
Shenango filed no opposition to the Steelworkers Union's motion for summary judgment. Instead, Shenango filed a cross-motion to dismiss under Rule 12(b)(1) of the Federal Rules of Civil Procedure. Shenango alleged that the Steelworkers Union had failed to exhaust the mandatory procedure for resolution of disputes as required by the collective bargaining agreement between the parties. Arbitration, Shenango asserted, is a pre-requisite to federal court jurisdiction under section 502 of ERISA. Second, Shenango argued, the dispute is not justiciable because the employees suffered no economic damage and the strike settlement agreement between Shenango and the Steelworkers Union constituted a full accord and satisfaction of the claims herein.
A. THE PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT IS GRANTED.
1. THE UNDISPUTED FACTS WARRANT JUDGMENT AS A MATTER OF LAW IN THE PLAINTIFFS' FAVOR REGARDING SHENANGO'S ALLEGED VIOLATION OF THE GROUP INSURANCE PLAN.
The question presented by the Steelworkers Union's motion for summary judgment regarding Shenango's alleged violation of the Group Insurance Plan is solely one of law. Since no material, disputed issue of fact is raised on the record, this question is ripe for summary disposition under Rule 56 of the Federal Rules of Civil Procedure.
As noted earlier, the plaintiffs in this action are participants in the Group Insurance Plan which provides health insurance benefits to Shenango's employees. The 1980 collective bargaining agreement between Shenango and the Steelworkers Union incorporates, as an employee benefit, the Group Insurance Plan, which contains the following clause:
Absence From Active Work
If you are on special leave of absence, vacation, sick leave, regular leave of absence or layoff, or if you are absent because of a strike or lockout of employees of the company, your coverage under the Plan and the coverage of your dependants, if any, will continue in accordance with the following: