under the collective bargaining agreement's grievance procedure but that the parties' proper recourse was to file a claim against the pension plan pursuant to the claims procedure therein.
At the time of the instant grievance, Gulf & Western and Local 5846 were parties to a collective bargaining agreement dated April 1, 1981, and a bargained-for Pension Agreement dated April 1, 1981.
The collective bargaining agreement expressly provides for the arbitration of a grievance, which is defined as "a difference of opinion between the Company and the Union, or between the Company and an employee covered by this Agreement, with respect to the meaning and application of the terms of this Agreement." Plaintiff's App., J-1, Section 49 at 367. The Pension Agreement does provide for an appeal process to be followed in the case of a denial of benefits, which includes a re-examination of the claim by the Board of Administration of the plan and a subsequent appeal to an impartial umpire. The duties of the Board of Administration, as specified in the plan, include:
"To determine all benefits and resolution of all questions arising from the administration, interpretation and application of Plan provision, either by general rules or by particular decisions so as not to discriminate in favor of or against any person and so as to treat all persons in similar circumstances in a uniform manner."
Pl. App., J-2, Paragraph 93 at 424.
The collective bargaining agreement in existence between the parties herein at the time the Union filed the instant grievance expressly addressed the issue of employee pension benefits:
SOCIAL INSURANCE & PENSION
* * * *
"The Pension Agreement and pension benefits as contained in the pension agreement dated April 1, 1981, shall remain in effect. The following additional changes were agreed upon: (a) Effective April 1, 1981 the amount of a regular pension for employees retiring after that date shall be $ 15.50 per month per year of service. (b) Eliminate 35 year maximum for unit benefit credit. (c) Change definition of Permanent and Total Disability to read: 'If the employee has been totally disabled by bodily injury or disease so as to be prevented thereby from engaging in any employment of the type covered by the Basic Agreement and . . .'. (d) Eliminate ineligibility for a disability pension resulting from 'habitual drunkenness or addiction to narcotics' to eligible for a disability pension. (e) Eliminate severance deductions from any deferred vested pensions. (f) Change 75/80 retirement to 70/80. (g) Eliminate 1% alternative method benefit calculation."
Pl. App., J-1, Paragraph 48 at 366-67. In addition, Appendix "E" to the agreement discusses in more detail these and other pension improvements agreed to by the parties at the time the collective bargaining agreement was negotiated. These changes and/or improvements, such as the change from 75/80 retirement to 70/80, are then discussed more fully in the pension agreement between the company and the Union which was effective March 31, 1981, a day before the effective date of the collective bargaining agreement.
In the Steelworkers trilogy
the Supreme Court found that courts have a limited function in Section 301 suits for determining the parties' rights and obligations to arbitrate grievances under a collective bargaining agreement which "is confined to ascertaining whether the party seeking arbitration is making a claim which on its fact is governed by the contract." United Steelworkers of America v. American Mfg. Co., 363 U.S. 564, 568, 4 L. Ed. 2d 1403, 80 S. Ct. 1343 (1960). Arbitration of grievances should be compelled unless it can be said with positive assurance that the arbitration clause in the agreement is not susceptible to an interpretation that covers the asserted dispute. United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 583, 4 L. Ed. 2d 1409, 80 S. Ct. 1347 (1960). Moreover, all doubts on the question of arbitrability are to be resolved in favor of coverage. Id.
Although the federal courts have adopted this strong policy in favor of arbitration, they have not lost sight of the fact that "'(a)rbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.'" AT&T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 648, 89 L. Ed. 2d 648, 106 S. Ct. 1415 (1986) (quoting Warrior & Gulf Navigation Co., 363 U.S. at 582). Thus, absent the parties' clear expression to the contrary, i.e., a willingness to voluntarily submit the question of arbitrability to an arbitrator, Johnson v. United Food & Commercial Workers, Int. Union Local No. 23, 828 F.2d 961, 964 (3d Cir. 1987), the threshold question of whether a dispute is arbitrable is to be decided by the court. AT&T Technologies, 475 U.S. at 648-50. In making this judicial determination, even where the arbitrator has addressed and decided the issue of arbitrability, the arbitrator's decision need not be given any deference.
In support of its argument that the arbitrator wrongly found the pension benefit claim arbitrable under the grievance procedure of the collective bargaining agreement, Gulf & Western relies on the Seventh Circuit's decision in Printing Specialties & Paper Products Union Local 680, Graphic Communications Int'l Union, AFL-CIO v. Nabisco Brands Inc., 833 F.2d 102 (7th Cir. 1987). In that case, the collective bargaining agreement between the parties contained a broad arbitration clause requiring arbitration of "any grievance or misunderstanding involving wages, hours or working conditions. . . ." The agreement also included one reference to Nabisco's pension plan which covered all union and non-union employees at its nationwide facilities which notes: "The company agrees to continue its present Pension Plan in full force and effect for the term of the agreement." At the time Nabisco sold one of its plants to Federal Paper Board Company, several employees claimed the sale was a job termination which entitled them to elect special early retirement benefits, rather than accept employment with the new company. After their request for pension benefits was denied and affirmed on review by the Employee Benefits Committee, the union filed a grievance under the collective bargaining agreement.
In affirming the district court's finding that this dispute was not arbitrable under the collective bargaining agreement, the Seventh Circuit concluded:
"We are convinced that the passing reference to the Pension Plan in the collective bargaining agreement does not bring specific pension disputes, such as the ones involved here, under the umbrella of the arbitration clause of the agreement. The collective bargaining agreement did not incorporate the provisions of the Pension Plan, but merely stated that Nabisco would keep the Pension Plan in full force and effect. We agree with the Third Circuit's statement in RCA Corp. v. Local 241, International Federation of Professional & Technical Engineers, 700 F.2d 921, 927 (3d Cir. 1983), that the 'mere mentioning of the Retirement Plan in the General (collective bargaining) Agreement is insufficient reason to construe the Retirement Plan as part and parcel of the General Agreement.'"
Id. at 105. The court based its decision on the lack of any clear relationship between the pension plan and the labor agreement, the strong evidence of the pension plan's independence from the agreement, and the lack of pension plan terms in the collective bargaining agreement. In addition, the court looked to the bargaining history of the parties, which showed that proposed changes to the pension plan submitted by the union during negotiations have been rejected by Nabisco, further establishing that pension plan terms were not included and not intended to be included in the collective bargaining agreement.
The present matter is clearly distinguishable from the Nabisco Brands case and the Third Circuit's decision in RCA Corp., relied on by the court in Nabisco Brands. The collective bargaining agreement between the parties herein does more than merely mention the retirement plan. It specifically lists changes to the pension plan negotiated by the Union during collective bargaining which amend in specific detail the pension agreement. The fact that pension benefits were bargained for and that these issues were raised simultaneously with the other matters included in the collective bargaining agreement means (at the very least) that the changes agreed to and listed in the labor agreement are part and parcel of the collective bargaining agreement.
In light of the number and scope of these amendments, the Court determines that the entire retirement plan is also incorporated in the collective bargaining agreement. See United Steelworkers of America v. Fort Pitt Steel Casting, 635 F.2d 1071, 1080 (3d Cir. 1980) ("the pension and insurance benefits are alluded to in the 1975 Agreement, and thus arguably are incorporated by reference").
Furthermore, the pension plan's so-called grievance mechanism, i.e., an appeal to the plan's Board of Administration, appears to address itself to disputes over an individual's benefits under the plan. This is clear from Paragraph 9.3(b)'s discussion of the Board's resolution of questions "so as not to discriminate in favor of or against any person and so as to treat all persons in similar circumstances in a uniform manner." This provision of the pension plan clearly does not address itself to the situation when an entire group of employees seeks resolution of a question of general entitlement to pension benefits. Although not raised by the parties herein, this may be a case where there is co-extensive jurisdiction under both of these agreements over this dispute, neither one being mutually exclusive of the other. In that situation, the Union could have chosen to raise its claim in either forum and properly decided to bring it to the arbitrator pursuant to the collective bargaining agreement. If co-extensive jurisdiction exists, then arbitration under the collective bargaining agreement is proper because arbitration should be compelled unless it can be said with positive assurance that the arbitration clause is not susceptible to an interpretation that covers the asserted dispute. Warrior & Gulf Navigation Co., 363 U.S. at 583.
There is no doubt that the arbitration clause in the collective bargaining agreement is susceptible to an interpretation that it covers the pension benefits dispute, an interpretation which this Court adopts. Accordingly, for the reasons stated above, this Court finds that the Union's grievance over employees' entitlement to pension benefits is arbitrable under the broad arbitration clause in the collective bargaining agreement between the Union and Gulf & Western.
Having found plaintiff's claim for pension benefits arbitrable, the Court will now proceed to review the arbitrator's finding that the employees are entitled to pension benefits earned prior to the sale of the plant. Under the plan, an employee qualifies for deferred vesting of rights when employment is terminated and he qualifies for 70/80 benefits
when employment is broken by reason of a permanent shutdown of a plant or by reason of a layoff. In ruling that Gulf & Western violated the collective bargaining agreement in refusing pension benefits, the arbitrator found:
"As to Pension, Articles V (Retirement Benefits) and VI (Deferred Vested Benefits) of the Pension Agreement, referred to in Article VIII of the basic labor agreement, set forth the benefits to which the affected employees are entitled for their years of service with G&WMC. These benefits are controlled by the specific provisions as they apply to the employees of G& WMC up to and including the date of Sale and termination of their employment with G&WMC. These benefits relate both to 70/80 pension and vesting rights. Those rights did not disappear when the employment relationship of the affected employees ended as a result of 'sale' of the Somerville facility to TFS. Thus, the affected employees are entitled to whatever pension benefits they may have 'earned' under the Plan prior to October 26, 1984."
This Court finds that the arbitrator's decision as to entitlement to pension benefits is rationally derived from the plain language of the agreement between the parties. The sale of the Taylor Forge plant terminated these employees' employment relationship with Gulf & Western, but did not divest them of their rights to pension benefits, thereby making some of them eligible for vested deferred benefits and 70/80 benefits. In making this finding, the Court holds there is no question that the arbitrator was "arguably construing or applying the contract and acting within the scope of his authority." United Paperworkers, 98 L. Ed. 2d at 299. Therefore, this Court concludes that the arbitrator's award of pension benefits draws its essence from the collective bargaining agreement and must be affirmed.
C. Request for Interest, Costs, and Attorney's Fees
Finally, the Court will consider the Union's request for interest on the arbitration award, costs and attorney's fees. As to interest on the arbitrator's award, the Union's request is granted. See Trump Plaza Associates v. Hotel & Restaurant Employees Int'l Union, Local Union No. 54, AFL-CIO, 684 F. Supp. 104, 126 L.R.R.M. (BNA) 3252, 3256 (D.N.J. 1987); Stroh Die Casting Co. v. Int'l Association of Machinists & Aerospace Workers, AFL-CIO, Lodge No. 10, 553 F. Supp. 68, 70 (E.D. Wisc. 1982). Cf. Sun Ship, Inc. v. Matson Navigation Co., 785 F.2d 59, 63 (3d Cir. 1986) (confirmed arbitration award under federal Arbitration Act bears interest from date of arbitrator's judgment). The award of pre-judgment interest in a Section 301 action is within the discretion of the court. Int'l Association of Bridge, Structural & Ornamental Ironworkers, Local Union No. 103, AFL-CIO v. Higdon Construction Co., 739 F.2d 280, 283 (7th Cir. 1984); Oil, Chemical & Atomic Workers Int'l Union v. American Cyanamid Co., 546 F.2d 1144 (5th Cir. 1977). This Court determines in the exercise of its discretion that the Union's request for interest is proper and, therefore, interest is awarded on the arbitration award from the date of the arbitrator's decision.
The Union's request for attorney's fees, however, is denied. Attorney's fees are recoverable in an action to enforce an arbitration award if the non-complying party acts without justification or did not have a reasonable chance of prevailing. Chauffeurs, Teamsters & Helpers, Local Union No. 765 v. Stroehmann Brothers Co., 625 F.2d 1092, 1094 (3d Cir. 1980). Many courts have characterized the circumstances under which an award of attorney's fees will be made, in an action to enforce an arbitration award, as bad faith. See, e.g., Int'l Union of Petroleum & Industrial Workers v. Western Industrial Maintenance, Inc., 707 F.2d 425, 428 (9th Cir. 1983); Int'l Brotherhood of Electrical Workers, Local No. 265 v. O.K. Electric Co., 793 F.2d 214, 216 (8th Cir. 1986). In the instant case, Gulf & Western's refusal to abide by the arbitrator's decision was reasonable, for there was legal precedent favoring its position, and the question of arbitrability of the pension claim raised below was one for the Court to resolve. Therefore, the Union's request for attorney's fees is denied.
Taxable costs are awarded to the defendant Union, the prevailing party in this litigation. An Order reflecting this decision has been filed and transmitted to counsel under separate cover.
This matter having been opened to the Court on the cross-motions for summary judgment; and the Court having read and considered the papers submitted in support of and in opposition to said motions; and the Court having heard and considered the arguments of counsel; and good cause having been shown for the entry of this Order,
It is on this 10th day of February, 1988,
ORDERED that the arbitrator's award of pension benefits is hereby affirmed; and it is further
ORDERED that interest is hereby awarded, from the date of the arbitrator's decision, on the arbitration award; and it is further
ORDERED that defendant's request for attorney's fees is hereby denied; and it is further
ORDERED that taxable costs are hereby awarded to defendant Union.