expectations and rights of the participants in the ILGWU Fund are not thwarted by the Plan's provision denying regular medical and hospital coverage when a spouse carries such insurance through his employer.
There appears to this court to have been a basic unfairness to Ruth Fazio in being denied benefits by both the ILGWU and the Teamsters Fund. In view of the fact that two collective bargaining contracts are involved, we must take a fundamental approach to the problem and construe the meaning of the contracts literally. A basic contract principle that must be applied is that where there is room for ambiguity it must be resolved against the writer of the policy. The ILGWU plan includes a specific exclusion denying Ruth Fazio coverage where her spouse's employer provides coverage. The Teamsters plan, however, includes only a coordination of benefits provision which is predicated on having available other coverage to qualify as the primary plan. Since it has been determined that the ILGWU Plan does not provide "coverage" to Ruth Fazio, the Teamsters coordination provision never needs to be applied. If, however, both plans were to contain an exclusion of benefits provision, the result would likely change. The exclusion in the ILGWU Plan covering Ruth Fazio would not apply since there would not be benefits at her spouse's place of employment providing "family coverage" due to the Teamsters exclusion. In the situation in issue here, though, only the ILGWU Plan contains an exclusion; therefore, the Teamsters is the only plan providing medical coverage to Ruth Fazio.
B. Discrimination Issue
Finally, the court must determine whether the ILGWU Fund violates public policy in containing such an exclusion of benefits provision. The defendants contend that the ILGWU Fund's Trustees violated ERISA by discriminatorily denying benefits to participants of the Fund on the basis of marital status and sex. Trustees who are vested with full authority over a welfare fund are held to the "arbitrary and capricious" standard generally applicable to fiduciaries. See Kosty v. Lewis, 115 U.S. App. D.C. 343, 319 F.2d 744, 747 (D.C.Cir.1963). The defendants' claim that the Trustees of the ILGWU Fund breached their fiduciary duty with regard to the eligibility rule because it draws a distinction by virtue of marital status. In addition, they contend that since the rule bears no rational relationship to any incident of employment, union membership or to the statutory purpose of the Fund, the trustees have discriminated against eligible members who are married in an arbitrary and capricious manner. See Brief of Defendant, Document No. 10 of the Record at 8-20. Congress has provided in ERISA that "a fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and -- (A) for the exclusive purpose of: (1) providing benefits to participants and their beneficiaries. . . ." 29 U.S.C. § 1104. However, where the trustees have adopted a provision "because they feared that the Fund might become financially impaired, they did not act in an arbitrary and capricious fashion but rather within their discretion as fiduciaries." Int'l. A. of Bridge, Structural and Ornamental Iron Workers Local No. 111 v. Douglas, 646 F.2d 1211, 1215 (7th Cir.1981). See also Wambheim v. J.C. Penney Co., 705 F.2d 1492 (9th Cir.1983) (where the appeals court concluded that legitimate business considerations justify the head of the household rule); Local Union No. 5 v. Mahoning and Trumbull City Bldg. Trades Welfare Fund, 541 F.2d 636 (6th Cir.1976) (where the court held that the eligibility rule adopted by the trustees for the purpose of protecting the long-term viability of the fund did not violate the fiduciary duty imposed on trustees); Wetzel v. Liberty Mutual Ins. Co., 511 F.2d 199 (3d Cir.1975), vacated and remanded on other grounds, 424 U.S. 737, 96 S. Ct. 1202, 47 L. Ed. 2d 435 (where the court determined that there was discriminatory impact but recognized the legitimacy in maintaining the financial integrity of the fund). The Court of Appeals for the Fourth Circuit, in a case based on alleged gender-based discrimination resulting from an employer's disability package, explained that since "the dependency requirement applied with equal force to male as well as female employees . . . the alleged discrimination, if any, was based upon the marital status of the participant and did not give rise to a cause of action for sex discrimination. . . ." Willett v. Emory and Henry College, 569 F.2d 212 (4th Cir.1978) (per curiam).
It is this court's belief that the ILGWU Fund and its Trustees have acted in a wholly legitimate manner, without any discrimination based upon sex or marital status. As the plaintiffs point out in their brief, the exclusion of benefits rule only applies when other coverage of a comparable type exists. See Brief of Plaintiffs, Document No. 12 of the Record at 23. Moreover, the fact that there are more of one gender in a particular plan, without more, does not make it discriminatory. The exclusion applies whether the participant is male or female. There is, likewise, no discrimination based upon marital status. A married person still gets total coverage, albeit from another source. If plaintiff does not receive these types of benefits from her spouse's carrier, then she receives them from her own. There is no discrimination. In alleging that discrimination exists, the defendants rely on cases in which an individual was denied benefits without other comparable benefits existing. See e.g., Kraft Co., Inc. v. State, 284 N.W.2d 386 (Minn.1979). The ILGWU rule in contrast only excludes coverage when there are other benefits available and may even provide supplemental benefits when such exclusion applies.
Lastly, there are allegations that the eligibility rule violates Section 404 of ERISA, 29 U.S.C. § 1104, as not being in the best interest of the ILGWU participants. As several courts have determined, supra, a valid consideration for trustees of a Fund such as this is the economic realities of the situation. Plaintiffs' Brief, supra, at 26-27, explains that due to conditions existing in the garment industry (i.e., low salaries), in order to preserve the Fund while not affecting the amount of benefits received by participants they chose to exclude coverage to individuals with other insurance. Whether this method of preserving the trust was the best method is not under review. As long as the trustees acted in a manner not "arbitrary or capricious" their decision must be upheld. Clearly, Trustees of the ILGWU Fund did not act arbitrarily or capriciously in enacting an eligibility rule which leaves no participant with less coverage and maintains the financial integrity of the Fund.
Therefore, since the Teamsters Fund is responsible for Mrs. Fazio's medical bills and there is no discrimination on the part of the ILGWU Fund, the court will grant Plaintiffs' cross-motion for summary judgment and deny defendants' motion for the same. An appropriate Order will enter.