Fifth Supp.Afft. of Bruno Michota (June 2, 1980) and Exhibits annexed thereto.
I believe the "Michota" plaintiffs have misconstrued the obligation imposed on Budweiser by § 13(e). Section 13(e) does not require the employer to add or subtract employees from the regular seniority list or to take any action whatsoever with respect to that status. Nor does § 13(e) impose any obligation on Budweiser to inform employees that they were not on the seniority list as of June 1, 1973. Thus, the certified letter referred to in § 13(e) does not operate as a precondition to any arbitration with respect to an employee contending that he has been wrongfully excluded from the seniority list. Moreover, § 13(e) is perfectly consistent with the remaining terms of the plan. Only employees on the seniority list as of June 1, 1973 were entitled to past service credit for benefit purposes. Finally, under § 13(e) the "Michota" plaintiffs were entitled to notice only upon their addition to the seniority list and then, consistent with the plan, only as their credited service "for vesting purposes." The "Michota" plaintiffs contend that Budweiser is required to recognize their past service for benefit purposes as well. Thus, the letter referred to in § 13(e) has nothing to do with the substantive claims herein. Budweiser's failure to comply with its only duty to the "Michota" plaintiffs under § 13(e) adds nothing to this litigation. I, therefore, reject the contention that the "Michota" plaintiffs are absolved from invoking the arbitral process by virtue of Budweiser's failure to comply with § 13(e) of the Budweiser plan.
Finally, the "Michota" plaintiffs contend that claims under ERISA are not subject to arbitration as a precondition of suit. The alleged wrongful exclusion of the "Michota" plaintiffs from the Budweiser seniority list occurred before June 1, 1973. The alleged improper amendment to the CBA was executed in October 1973. ERISA was not generally effective until September 2, 1974. Thus, any liability of Budweiser based on the exclusion of the "Michota" plaintiffs from its seniority list is outside the scope of ERISA. Even assuming that ERISA is applicable to this aspect of the case, the authority is by no means clear with respect to the non-arbitrability of ERISA claims. The leading case so holding is Lewis v. Merrill, Lynch, Pierce, Fenner & Smith, Inc., 431 F. Supp. 271 (E.D.Pa.1977). See also National Benefit Fund v. Presbyterian Hosp., 448 F. Supp. 136, 138 (S.D.N.Y.1978) (dictum). Several cases have adopted a contrary view. E. g., Air Line Pilots Ass'n., Int'l. v. Northwest Airlines, Inc., 200 U.S. App. D.C. 219, 627 F.2d 272 (D.C.Cir.1980) (compulsory arbitration procedures of Railway Labor Act, 45 U.S.C. § 151 et seq., not preempted by ERISA); de la Rosa Sanchez v. Eastern Airlines, Inc., 574 F.2d 29 (1st Cir. 1978) (same); Scheider v. United States Steel Corp., 486 F. Supp. 211 (W.D.Pa.1980) (ERISA claims subject to intra-fund disputes procedure, citing Republic Steel Corp. v. Maddox, supra ); Lucas v. Warner & Swasey Co., 475 F. Supp. 1071 (E.D.Pa.1979); Taylor v. Bakery & Confectionary Union & Industry Int'l. Welf. Fund, 455 F. Supp. 816 (E.D.N.C.1978). As pointed out in Scheider, supra, 486 F. Supp. at 213, Congress apparently intended that ERISA claims arise "in similar fashion to those brought under" § 301 of the LMRA, 29 U.S.C. § 185. H.R.Conf.Rep.No. 93-1280, reprinted at (1974) U.S.Code Cong. & Ad.News, 2d sess., vol. 3, pp. 4639, 5106-5107. The Republic Steel Corp. case clearly mandates that an employee's § 301 suit is subject to exhaustion of available grievance and arbitration procedures. I believe the better view to be that espoused by those cases holding ERISA claims subject to exhaustion of arbitration proceedings. I note in passing that Lewis, supra did not involve a situation where, as here, the strong policy favoring arbitration of disputes under collective bargaining agreements was implicated.
Based on the foregoing, I hold that the claims by the "Michota" plaintiffs against Budweiser on the second count of the complaint, as well as any other portion of the complaint, based upon violation of the 1970-1973 Budweiser CBA, is barred by failure of the "Michota" plaintiffs to resort to the grievance and arbitration procedures contained in that CBA.
The sub-group of "Michota" plaintiffs, described as "Ballantine-Falstaff-Budweiser" plaintiffs, present a claim essentially predicated upon an alleged obligation of Falstaff to follow the Ballantine CBA. Complaint PP 28, 29, 51. The "Ballantine-Falstaff-Budweiser" plaintiffs contend that Falstaff assumed Ballantine's obligation to contribute on their behalf to the Brewery Plan, that Falstaff breached this obligation by making contributions into an escrow fund and that this action resulted in a forfeiture of the service credit of this group of plaintiffs.
The facts surrounding Falstaff's employment of the "Ballantine-Falstaff-Budweiser" plaintiffs have been summarized previously. A group of over 100 men worked for Falstaff from April to November 1972. At that point, they were terminated. Although Falstaff had previously agreed to follow the Ballantine CBA for a limited period, it then took the position that no CBA was in effect. The union locals commenced a lawsuit attempting to compel arbitration of these dismissals under the Ballantine CBA. In that action,
Judge Coolahan held that Falstaff was only required to arbitrate the question of the extent to which it was bound by the Ballantine CBA. See NLRB v. Burns Int'l. Security Services, Inc., 406 U.S. 272, 92 S. Ct. 1571, 32 L. Ed. 2d 61 (1972). Apparently, that arbitration was never conducted.
Thereafter, Falstaff and the Unions entered into negotiations culminating in the execution of a CBA on June 5, 1973. The CBA was effective June 1, 1973 and had been ratified by a vote of the union membership. That CBA provided for the "supplemental list" referred to earlier. In late 1974, employment with Falstaff was offered to the individuals on the "supplemental list." None of the "Ballantine-Falstaff-Budweiser" plaintiffs accepted. It is undisputed that, had these individuals accepted, Falstaff would have recognized all of the individuals' credited service in the industry for purposes of the Falstaff plan.
Falstaff and the Unions had agreed in the 1973 CBA that Falstaff would follow the lead of Pabst with respect to pensions. That is, if Pabst remained a contributor to the Trust Fund so would Falstaff. If Pabst established its own plan, Falstaff would follow. Exhibit A annexed to Afft. of Henry A. Moran (Apr. 26, 1978). Pabst established its own plan effective June 1, 1973. Thereafter, Falstaff and the Unions entered into arbitration concerning Falstaff's pension obligations under the 1973 CBA. As part of the June 1974 arbitration award, Falstaff was directed to take the escrowed contributions made on behalf of its employees from April 2, 1972 and deposit those contributions in the newly-established Falstaff plan. Exhibit D annexed to Afft. of Henry A. Moran (Apr. 26, 1978)
Certain members of the Union were unsatisfied with the results of collective bargaining. In November 1973, Balback v. Teamsters Local 153, Civ. No. 1604-73 had been commenced. Thirteen of the 19 "Ballantine-Falstaff-Budweiser" plaintiffs were plaintiffs in Balback. Plaintiffs in Balback alleged, inter alia, that Falstaff had in several respects breached the Ballantine CBA and the Union (Local 153) had violated its duty of fair representation in the negotiations concerning the Falstaff CBA.
On February 24, 1977, I filed an opinion in Balback, supra.
I rejected the Balback plaintiffs' contention that Falstaff had breached the Ballantine CBA by making pension contributions into escrow rather than to the Trust Fund. Balback, supra at 7.
With respect to pensions, I commented
Nor were the plaintiffs deprived of eligibility for industry plan pension rights when FBC contributed pension monies into an escrow fund rather than into the industry pension fund. FBC's use of an escrow fund had no effect on plaintiffs' eligibility for a pension.
Plaintiffs lost their original seniority status for the purposes of fringe benefits only when they refused to accept employment off the supplemental list. While plaintiffs may well have lost pension benefits when they were legally terminated before their pension rights vested, this hardship does not result from a breach of contract by FBC.