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District Three

December 29, 2000

DISTRICT THREE, INTERNATIONAL UNION OF ELECTRONIC, ELECTRICAL, SALARIED, MACHINE AND FURNITURE WORKERS, AFL-CIO; LOCAL 433, INTERNATIONAL UNION OF ELECTRONIC, ELECTRICAL SALARIED, MACHINE AND FURNITURE WORKERS, AFL-CIO; GEORGEANNA PUGH, MARITZA RODRIGUEZ, KEVIN MARCELLA, ALEX ALONSO, AND LARRY JEFFRIES, ON BEHALF OF THEMSELVES AND OTHERS SIMILIARLY SITUATED; LOCAL 1199, INTERNATIONAL UNION OF ELECTRONIC, ELECTRICAL, SALARIED, MACHINE AND FURNITURE WORKERS, AFL-CIO; AND JUAN DOMINGUEZ, ROBERTO SANCHEZ, JAIME RUIZ AND ROBERTO GUERRERO, ON BEHALF OF THEMSELVES AND OTHERS SIMILIARLY SITUATED, PLAINTIFFS,
v.
ROBERT SORENSEN; DURO-TEST CORPORATION; DUROLITE INTERNATIONAL, INC. AND HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY, INC., AND FLEET CAPITAL CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Debevoise, Senior District Judge

NOT FOR PUBLICATION

OPINION

This is a civil action alleging violations of collective bargaining agreements under Section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, violation of Section 16 of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 216, violation of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq., violation of the Worker Adjustment and Retraining Notification Act ("WARN"), 29 U.S.C. § 2101 et seq. and tortious conversion under New Jersey common law. The matter is presently before the Court on plaintiffs' motion for certification as a class action. For the reasons set forth below, plaintiffs' motion will be granted.

STATEMENT OF FACTS

The factual background of this action has been fully described in the March 16, 2000 decision on plaintiffs' application for a preliminary injunction to enjoin defendants Sorensen, Duro-Test, Durolite, and Litetronics from failing to pay sufficient monies to Horizon Blue Cross to maintain health insurance coverage for all employees represented by Local 433 for three months past the date of the Clifton, New Jersey facility's closure.

To summarize, plaintiffs are Local 433 (the collective bargaining representative of approximately 150 former employees of a Clifton, New Jersey facility owned and operated by one of the defendants), District Three (the district council responsible for all local unions in New York, New Jersey, and other states affiliated with the union at issue here, including Local 433), Local 1199 (the collective bargaining representative of approximately 20 former employees of an Elk Grove, Illinois facility owned and operated by one of the defendants), and individual plaintiffs who were employed in the New Jersey and Illinois facilities and who were Local 433 and Local 1199 members. Defendants are (1) Duro-Test (a New Jersey corporation that manufactured and marketed lighting products, mostly to end-users), (2) Litetronics (an Illinois corporation that manufactured and marketed lighting products, mostly to distributors), (3) Durolite International (a corporation that acquired the stock of both Duro-Test and Litetronics), (4) Robert Sorensen (Chairman and Chief Executive Officer of Durolite and its largest shareholder), (5) Fleet Capital Corporation (the principal lender to Duro-Test and holder of a security interest in much of its assets), and (6) Horizon Blue Cross Blue Shield of New Jersey (administrator of Duro-Test's employee health benefits plan).

Plaintiffs allege that collective bargaining agreements provided for a three-month continuation of medical insurance in the event of plant closures or lay-offs, but because Duro-Test did not pay insurance premiums (even though money had been withheld from employees' paychecks for that purpose), Blue Cross did not maintain health insurance coverage for laid-off workers. As a result, laid-off employees found themselves without health insurance and with outstanding medical bills. Additionally, plaintiffs allege that laid-off workers were not compensated for unused personal and sick days, accrued vacation, did not receive wages to which they were entitled, and that although union dues and contributions to health insurance premiums were withheld from employees' paychecks, those monies were not paid to the unions and health insurance providers.

It is plaintiffs' contention that those practices violated the collective bargaining agreements and the LMRA, violated FLSA, ERISA, WARN, and constituted tortious conversion in violation of New Jersey law.

I granted an order enjoining Sorenson, Duro-Test, Durolite, and Litetronics from failing to pay sufficient monies to Blue Cross to maintain health insurance coverage for three months past the date of the Clifton facility's closure for employees covered as of February 1, 2000. Additionally, I directed that plaintiffs post a bond of $50,000.

Plaintiffs now seek to certify this litigation, with respect to seven of the nine causes of action listed in the Third Amended Complaint (excluding the LMRA and FLSA claims), as a class action pursuant to Fed. R. Civ. P. 23. Plaintiffs propose a class of "all union-represented participants in the Duro-Test Corporation employee medical benefit plan, and all members of the collective bargaining units at defendant Duro- Test Corporation represented by plaintiffs Locals 433 and 1199, International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers, AFL-CIO."

DISCUSSION

I. STANDING

Defendants allege that because plaintiffs' claims arise solely from the collective bargaining agreements, plaintiffs are seeking union-wide enforcement of those agreements and therefore the bargaining representatives, rather than the former employees, are the only proper plaintiffs. (Def. Br. at 8-12) It follows, according to defendants, that plaintiffs' motion for class certification should be denied. Plaintiffs counter that they are not seeking class certification with respect to the claims specifically alleging violations of the collective bargaining agreements. (Pl. Repl. Br. at 2)

In support of their argument, defendants cite Hawaii Teamsters & Allied Workers, Local 996 v. City Express, Inc., 751 F. Supp. 1426, 1430 (D. Hi. 1990), for the proposition that unions have standing to pursue union members' claims pursuant to a collective bargaining agreement creating an ERISA plan and that the case held that "the plan participants were not eligible to be named as individual plaintiffs." (Def. Br. at 11-12) Defendants' reading of that case is only partially correct. While the court did hold that the union had standing to pursue the ERISA claim, the court observed that "defendants' counsel conceded at oral argument that the plan participants can be named individually as plaintiffs. Thus, there is no question that these participants can be joined in this suit." ...


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