United States District Court, D. New Jersey
WILLIAM J. MARTINI, U.S.D. JUDGE.
John McKay brings this action against the Board of Trustees
of the Bakery Drivers and Salesmen Local 194 Pension Fund
(“Defendant”), alleging a violation of the
Employee Retirement Income Security Act of 1974
(“ERISA”), 29 U.S.C. § 1001, et
seq., in connection with Defendant's suspension of
Plaintiff's pension benefit. This matter comes before the
Court on the parties' cross-motions for summary judgment
pursuant to Federal Rule of Civil Procedure 56. There was no
oral argument. Fed.R.Civ.P. 78(b). For the reasons set forth
below, Defendant's motion is DENIED and
Plaintiff's motion is GRANTED.
is a participant in the Bakery Drivers and Salesmen Local 194
and Industry Pension Fund (“Pension Fund”).
See Pl.'s Rule 56.1 Statement of Material Facts
(“Pl.'s Statement.”) ¶ 1, ECF No. 10-1.
The Pension Fund “is a multiemployer/single union
defined benefit pension fund” administered by a board
of trustees (“Defendant”), which is comprised of
management and union representatives with equal
decision-making authority. Def.'s Rule 56.1 Statement of
Material Facts (“Def.'s Statement”)
¶¶ 1-2, ECF No. 13. The following facts are
in 1988, Plaintiff worked as a Route Salesman for the Wonder
Bread Baking Company (“Wonder Bread”) at its New
Jersey facility until the its closure in June 2013.
See Pl.'s Statement at ¶¶ 2-3. In
April 2013, roughly three months prior to the facility's
closure, Plaintiff started working for the Kellogg Company
(“Kellogg”) approximately 10 hours per week as a
Merchandiser. Id. at ¶ 3; see Aff. of
G. Prezioso (“Prezioso Aff.”), Bates No.
After his termination as a Route Salesman, Plaintiff applied
for and was awarded a monthly pension of $1, 249.00.
Pl.'s Statement at ¶ 4. Born in 1957, Plaintiff had
not reached the normal retirement age of 65 at the time of
his pension application. Def.'s Statement at ¶ 17.
Plaintiff, therefore, applied for an Early Retirement Benefit
under the Pension Fund. Id. Plaintiff did not
disclose his employment as a Merchandiser on his pension
application. Id. at ¶ 21.
October 17, 2016, Plaintiff submitted a certification and
employment verification to Defendant, in which he revealed
his employment with Kellogg. Id. at ¶¶
24-25. On December 4, 2016, Defendant determined that
Plaintiff engaged in disqualifying employment under the
Pension Fund rules (the “Rules”). Id. at
¶ 39. The Rules define “disqualifying
employment” as “employment with a Contributing
Employer; or self-employment in the same or related business
as any Contributing Employer; or employment or
self-employment in any business which is or may be under the
jurisdiction of the Union.” See Prezioso Aff.
letter dated December 19, 2016, Defendant informed Plaintiff
that his monthly pension benefit was being permanently
suspended due to his violation of the Rules and that he
further owed $34, 972.00 in benefits paid for which he was
not eligible. See id. at 156. Specifically,
Defendant stated, “Since the Kellogg Company is in the
same or related business as other contributing employers to
the Plan, your current employment is disqualifying employment
under the terms of the Plan.” Id.
filed a written appeal, in which he argued that his
employment did not meet any of the three prohibitions.
See id. at 170-72. Plaintiff outlined the
differences between his Kellogg employment and his Wonder
Bread employment, including the use of his own car, an hourly
wage, no sales responsibility and the absence of benefits.
Id. at 171. Nonetheless, on March 8, 2017, Defendant
denied Plaintiff's appeal, finding that “none of
the materials provided by [Plaintiff] had addressed the
application of the Plan's suspension rules or the basis
of the Plan's initial suspension [letter] . . . .”
See id. at 180. Defendant again stated that
Plaintiff engaged in disqualifying employment because
“delivering food to retail establishments is work that
is within the jurisdiction of the Union.” See
id. at 182.
parties now cross-move for summary judgment. Plaintiff argues
first that Defendant's suspension violates §
1053(a)(3)(B)(ii) of ERISA because Plaintiff's Kellogg
employment was not in the same industry as his Wonder Bread
employment and he was not employed in the same “trade
or craft.” See Pl.'s Mem. of Law in Supp.
of Mot. for Summ. J. (“Pl.'s Mem.”) 4-6, ECF
No. 10-2. Second, Plaintiff argues that Defendant misapplied
the meaning of “disqualifying employment” to
Plaintiff's Kellogg employment because nothing in the
administrative record establishes that Plaintiff delivered
food to retail establishments on behalf of Kellogg. See
id. at 7. Plaintiff further contends that Kellogg is not
in the same business as Wonder Bread because it does not make
and sell bread. Id.
argues that judicial review of its decision to suspend
Plaintiff's pension is entitled to an abuse of discretion
or “arbitrary and capricious” standard.
See Def.'s Br. in Supp. of Mot. for Summ. J.
(“Def.'s Br.”) 9-14, ECF No. 9-1. Defendant
asserts that the Rules provide for “the grant of
absolute and discretionary power to the Trustees over benefit
and eligibility determinations.” Id. at 9.
Consequently, according to Defendant, the Court must give
deference to Defendant's interpretation of the Rules and
enforcement thereof where such enforcement is reasonable.
See id. at 11-14. Accordingly, Defendant's
decision here is entitled to deference because “it was
deliberate, rational and reasonable, and based upon the
substantial evidence in the record.” See id.
at 16-20. Both parties filed oppositions to their
adversary's motion, which the Court will address below as
necessary. See Pl.'s Mem. of Law in Opp'n to
Def.'s Mot. (“Pl.'s Opp'n”), ECF No.
14; Def.'s Resp. in Opp'n to Summ. J. Mot. (“
Def.'s Opp'n”), ECF No. 16.
Rule of Civil Procedure 56 provides for summary judgment
“if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed.R.Civ.P. 56(a);
see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23
(1986); Turner v. Schering-Plough Corp., 901 F.2d
335, 340 (3d Cir. 1990). A factual dispute is genuine if a
reasonable jury could find for the non-moving party, and is
material if it will affect the outcome of the trial under
governing substantive law. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). The Court considers all
evidence and inferences drawn therefrom in the light most
favorable to the non-moving party. Andreoli v.
Gates, 482 F.3d 641, 647 (3d Cir. 2007). “When
confronted with cross-motions for summary judgment, the court
must rule on each party's motion on an individual and
separate basis, determining, for each side, whether a
judgment may be entered in accordance with the summary
judgment standard.” Marciniak v. Prudential Fin.
Ins. Co. of Am., 184 F. App'x 266, 270 (3d Cir.
Court will first address Defendant's motion because its
argument concerning the appropriate standard of review
requires correction. As an initial matter, the Court notes
that the essence of the dispute is the meaning of
“disqualifying employment” as defined under
Section 6.10(a)(i) of the Rules. See Prezioso Aff.
at 95. Ultimately, the Court finds that Defendant's
position that Plaintiff's Kellogg employment disqualifies
him from his pension benefit is unsupported by the