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April 16, 2008
ERISA and Arbitration Under a Collective Bargaining Agreement
The Third Circuit recently considered an interesting case at the intersection of employee benefits law and labor law, involving a multiemployer benefit plan and the necessity of employees to grieve under the CBA a disability benefit claims, rather than going directly to federal court.
Employees challenged the denials of their claims for disability benefits under their employer's Employee Retirement Income Security Act (ERISA) plan. The primary issue on appeal was whether those challenges were subject to the grievance procedure contained in a totally separate collective bargaining agreement (CBA) between the employer and the union. The 3rd Circuit held that "there is no right to arbitration of ERISA benefits under a CBA unless the ERISA benefits sought are either (i) derived directly from an ERISA plan established and maintained by or incorporated into a CBA whose grievance procedure contains an arbitration clause, or (ii) created by a separate ERISA plan and that plan and/or the CBA provide that adverse benefit determinations by a plan administrator are subject to the CBA's grievance procedure that includes arbitration."
The court explained "[w]e do not purport to hold that benefits provided pursuant to ERISA can never be subject to the grievance or arbitration provision contained within a CBA. Indeed, the regulations governing ERISA specifically contemplate that an ERISA plan may be established or maintained pursuant to a CBA and set forth separate guidelines for such plans." The court noted, however, that in this case neither the plan nor the CBA referenced each other. Since the requisite relationship between the plan and the CBA did not exist, the court held that the plan's denial of benefits was not subject to the CBA's grievance procedure.
I think the court got this right and the holding is consistent with union arbitration cases like Wright (U.S. 1998), which says that a union has to clearly and unmistakably waive an individual's rights to external law protections. Such waiver was clearly not found in this CBA.
PS
April 16, 2008 in Pension and Benefits | Permalink
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Comments
First, thanks and congratulations to Professor Secunda for reporting on and summarizing these Third Circuit decisions which were issued yesterday and two days ago respectively!
The ERISA and arbit case is United Steelworkers v. Rohm & Haas Co., 2008 WL 1700512 [not yet available on LEXIS, as of an hour ago], and it was the union and the four employees who were trying to bring it to arbitration. Most of the court's opinion concerned whether the usual Steelworkers Trilogy "presumption of arbitrability" applied, and the Third Circuit held that it did not. The "something else interesting" I refer to in the subject line is that the court, in rejecting the union's argument that the disability benefits claims were covered by a contract provision referring to "working conditions," relied on a distinction drawn between the term "working conditions" and the term "conditions of employment" made by courts in the 1970s. Here's what the Third Circuit said: "The phrase “working conditions” is distinct from the phrase “conditions of employment.” See In re Inland Steel, 77 N.L.R.B. at 11-12 (stating that the phrase “conditions of employment” is intended to have a broader meaning than “working conditions” as shown in the NLRA's legislative history). In the context of the Equal Pay Act, 29 U.S.C. § 206(d)(1), the phrase “working conditions” has been defined as the physical surroundings of and hazards to a worker. See, e.g., Corning Glass Works v. Brennan, 417 U.S. 188, 201-03 (1974) (“[T]he element of working conditions encompasses two subfactors: ‘surroundings' and ‘hazards.’ ‘Surroundings' measures the elements, such as toxic chemicals or fumes, regularly encountered by a worker, their intensity, and their frequency. ‘Hazards' takes into account the physical hazards regularly encountered, their frequency, and the severity of injury they can cause. This definition of ‘working conditions' is ... well accepted across a wide range of American industry.’'); Hodgson v. Corning Glass Works, 474 F.2d 226, 231-232 (2d Cir.1973) (relying on the Department of Labor's definition of “working conditions” as encompassing the physical environment of a worker, the court held that shift differentials were not “working conditions”).
I must confess that in teaching about collective bargaining agreement language in Labor Law and related courses, I have never emphasized this distinction between "working conditions" and "employment conditions." I will from now on, starting in my class this afternoon!
Thank you for your attention,
Michael Hayes
Visiting Professor, Albany Law School
Associate Professor, University of Baltimore School of Law
Posted by: Michael Hayes | Apr 16, 2008 12:22:20 PM
