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Geib v. New York State Teamsters Conference Pension and Retirement Fund and Al Sgaglione

April 9, 1985

RICHARD GEIB, JOSEPH P. SUDIGALA, EDWARD BOGENSBERGER, ANTHONY J. HIEN, FRANK HOEGLER, JOSEPH LUMER, ANTHONY DIAZ, ALOIS G. PRECHTL, JOSEF PETERSELL, CARL N. ANDERSON, VICTOR CARCICH, AND JOSEPH JOHNSON, APPELLANTS
v.
NEW YORK STATE TEAMSTERS CONFERENCE PENSION AND RETIREMENT FUND AND AL SGAGLIONE, ADMINISTRATIVE EXECUTIVE OF NEW YORK STATE TEAMSTERS CONFERENCE PENSION AND RETIREMENT FUND, APPELLEES



Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. No. 82-4466).

Adams and Weis, Circuit Judges, and Harris, District Judge.*fn*

Author: Weis

Opinion OF THE COURT

WEIS, Circuit Judge.

In response in part to financial constraints, the trustees of a multi-employer pension plan amended its reemployment provision and suspended payments to pensioners receiving benefits under a retirement program based on years of service. The plan did not specify a "normal retirement age," and plaintiffs here are pensioners who had not reached age 65. In these circumstances, we find no error in the district court's determinations that the trustees had neither violated ERISA nor acted arbitrarily and capriciously. We therefore will affirm the judgment for the trustees.

After the parties filed a cross motions, the district court granted summary judgment in favor of defendants and denied the plaintiffs' motion. This appeal followed.

The twelve plaintiffs were formerly employed by F & M Schaefer Brewing Company in Kings County, New York and were members of the Brewery Workers Pension Fund, a multi-employer plan created in 1949. When the Brewery Fund's financial position deteriorated, its trustees negotiated a merger with the New York State Teamsters Pension and Retirement Fund. In 1973, the trustees of both Funds executed an Agreement and Plan of Integration.

The Agreement provided that after completion of the merger, the Teamsters Fund trustees would assume responsibility for the administration of both funds. Members of the Brewery Fund were given the opportunity to participate in either the Brewery or the Teamsters pension plan. The plaintiffs chose "to remain under and be covered by the existing provisions of the brewery plan to be interpreted by the Teamsters trustees in accordance with the rules and regulations of that plan and as they may be modified from the time to time hereinafter."

The Teamsters Fund soon realized that it had made a bad bargain and began protracted litigation in both state and federal courts to escape its commitments.*fn1 These efforts eventually proved unavailing. The Brewery Fund trustees submitted their resignations effective December 1, 1976 and, despite continued Teamsters' foot-dragging, a state court judgment declared the merger complete as of that date.

In the interim, the plaintiffs' employer ceased operations in New York state. Plaintiffs terminated their membership in the Brewery Workers Local at the New York plant, and later obtained full time employment at Schaefer's facility in Fogelsville, Pennsylvania.*fn2 They were hired as new employees and joined the United Cement, Lime & Gypsum Workers Local with no seniority credit for the time spent at the New York plant.

At the time Schaefer's New York operation was closed, none of the plaintiffs had reached age 65. All but one applied for a "Thirty Year Service Pension" under the Brewery Workers Plan. The other, with less service, applied for an "Early Retirement Pension." Benefits were approved and plaintiffs continued to receive their pensions while working for Schaefer at Fogelsville.

In 1980, financial strain on the merged funds led the Teamsters trustees to adopt a provision suspending benefits for pensioners who became reemployed. The new rule provided that when a Teamsters Conference retiree "goes to work in the same industry, trade or craft, and some geographic area [as is covered by the Teamsters Fund] or works for a contributing employer in any capacity, or for a former contributing employer in any capacity." benefits would not be paid for any month of reemployment. The Brewery Workers Plan had provided that payments would be suspended if a "pensioner enters the service of a participating company and becomes an employee entitled to membership in the plan.

In June 1982, plaintiffs were asked to sign a "Retirement Declaration" agreeing to abide by the terms of the new provision of the Teamsters Fund. When plaintiffs refused, their pensions were suspended.

The plaintiffs' suit alleged that defendants had violated the nonforfeitability an fiduciary duty provisions of ERISA and that adoption of the 1980 reemployment clause was arbitrary and capricious. The district court found that the "normal retirement age" under the Brewery Workers Plan were 65, and because plaintiffs had not ...


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