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IT&T v. LOCAL 400

June 23, 1960


The opinion of the court was delivered by: MEANY

The plaintiff, International Telephone and Telegraph Corporation, a Maryland corporation, instituted the present suit asking for a declaratory judgment to the effect that a grievance presented to it by the defendant Local for arbitration is non-arbitrable.

Plaintiff is engaged in research and development work and has various plants in the State of New Jersey. The defendant is, and since 1951 has been, the certified recognized bargaining agent for the employees of the plaintiff. Plaintiff and defendant have heretofore entered into collective bargaining agreements, the latest one effective from September 22, 1959 through September 25, 1961. There have been separate agreements for different units of the ITT Laboratories Division but they are essentially of the same tenor and effect.

 The basic facts in the dispute are as follows. In or about December, 1959 four employees of plaintiff, all members of the defendant Local, being over the age of 65, were requested by their employer ITT Labs to submit an application for voluntary retirement under the ITT Labs Voluntary and Gratuitous Pension Plans. They were informed that if they refused so to do, their employment would be terminated. They refused to make the requested application and their employment was terminated effective January 1, 1960, and they were paid and accepted pension benefits in amounts provided for by the Company pension plans.

 There were two pension plans, one known as the Unfunded Plan, which was the original plan, in effect previous to 1950, and a second known as the Funded Plan, effective January 1, 1950, designed to replace in large measure the Unfunded Plan. Previous to the present situation, on only one other occasion has there been an attempt to terminate employment at retirement age without the consent of the employee involved. The Union in that case objected and the matter went to arbitration in 1947, and the arbitrator found in favor of the Union.

 In the contract negotiations which resulted in the current collective agreements, the plaintiff herein proposed a retirement program which provided significantly as follows: 'A member shall retire from service on a normal retirement allowance upon reaching normal retirement date.' This proposition was rejected by the Union as authorizing compulsory retirement instead of what it contended to be voluntary retirement under the effective provisions of the Company pension plans. The Company representative at the time called attention to Section F. 14 of the Unfunded Pension Plan which provides for compulsory retirement on and after January 1, 1960, at the age of 65. The Union representative retorted that any attempt at compulsory retirement would be resisted as a breach of the collective bargaining agreement, and would be the subject of arbitration after grievance filed under the terms of the agreement. The sole provision of the bargaining agreement anent the pension plans and their effect is Article XIX, Section 4, which provides 'Pensions and death benefits shall be governed by the Company's voluntary and gratuitous pension plans, copies of which are attached hereto as Exhibit 'A' and which shall continue without diminution for the duration of this agreement.'

 The court has set forth this somewhat sketchy background since both parties rely to some degree on the referential value of the provisions of the pension plans and their effectiveness.

 However, the court is concerned more immediately with the question of arbitrability of the grievance as submitted by the Union to the Employer. The employment of the four members of the Union was terminated by the Employer through action of its pension committee which on December 30, 1959 placed them in retirement status, awarding them pensions under the Company's pension plans. Notice of this action was sent to the employees on January 13, 1960. Previous to the action of the pension committee they had been informed that they would be retired on January 1, 1960 as they would before that date have arrived at the age of 65. Upon the involuntary termination of the employment of the four members of the Union, a grievance was submitted reading as follows:

 'The Company's action in discharging employees (naming the four referred to) was without justification and is a violation of Article XIV, Sections 1, 2 and 3 of the Collective Bargaining Agreements.

 'The Union demands that these people be reinstated immediately and that they be made whole for all losses suffered due to the Company's action.'

 Article XIV reads as follows:


 'Section 1. Discharge of employees for unsatisfactory conduct or performance shall be effected in accordance with the warning procedure set forth below:

 '(a) A written notice concerning his deficiency shall be given to the employee concerned.

 '(b) If there is no improvement within a reasonable time, the employee shall be given a second written warning notice and will be allowed a ...

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