Carl Bauer, Craig M. Bennett v. Rbx Industries, Inc.

368 F.3d 569, 33 Employee Benefits Cas. (BNA) 1729, 174 L.R.R.M. (BNA) 3121, 2004 U.S. App. LEXIS 9528, 2004 WL 1085191
CourtCourt of Appeals for the Sixth Circuit
DecidedMay 17, 2004
Docket02-4327
StatusPublished
Cited by43 cases

This text of 368 F.3d 569 (Carl Bauer, Craig M. Bennett v. Rbx Industries, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Carl Bauer, Craig M. Bennett v. Rbx Industries, Inc., 368 F.3d 569, 33 Employee Benefits Cas. (BNA) 1729, 174 L.R.R.M. (BNA) 3121, 2004 U.S. App. LEXIS 9528, 2004 WL 1085191 (6th Cir. 2004).

Opinion

*572 OPINION

MOORE, Circuit Judge.

The contentious relationship between a corporation and a group of its former employees following the closing of a manufacturing facility in Barberton, Ohio is the milieu for this appeal. At issue is a significant question of whether federal courts have the ability to hear claims filed pursuant to § 301 of the Labor-Management Relations Act (“LMRA”), 29 U.S.C. § 185(a), and pursuant to the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1132, when an accord reached between the corporation and the employees’ union terminates a previously negotiated Collective Bargaining Agreement (“CBA”), the breach of which provided the factual basis for both claims. Additionally, we must evaluate the scope of the “right to sue” provision of the Labor Management Reporting and Disclosure Act (“LMRDA”), 29 U.S.C. § 411, to determine whether a viable LMRDA claim has been alleged.

Plaintiffs-Appellants (“Plaintiffs”) were a group of former employees 1 at the Bar-berton, Ohio mixing facility owned by Midwest Rubber Custom Mixing Corp. (“Midwest”), which in turn was controlled by RBX Industries, Inc. (“RBX”). Following the closure of the Barberton facility, the Plaintiffs’ national union, the United Steel Workers of America, AFL-CIO (“USWA”), and RBX signed a Settlement agreement (the “Settlement”) in April 2002, which abrogated the previously negotiated CBA and purported to resolve all disputes between RBX and its former employees. The Plaintiffs filed an action against RBX, the USWA, and the employees’ local union, Local Union # 77L, United Steel Workers of America (“Local 77L”) 2 , alleging a “hybrid” § 301 breach of contract/breach of duty of fair representation claim under the LMRA, 29 U.S.C. § 185(a), and various claims relating to the denial of benefits under ERISA. 29 U.S.C. § 1132.

The district court granted RBX’s and the Unions’ motions for summary judgment and denied Plaintiffs’ motion to amend their complaint to include a claim under the LMRDA, 29 U.S.C. § 411. On appeal, the Plaintiffs argue that because the district court did not have jurisdiction over their § 301 hybrid claim, it erred in reaching the merits of the § 301 and ERISA claims, as it should have dismissed the action without prejudice. The Plaintiffs also argue that the district court erred in denying their motion to add the LMRDA claim. We agree that the district court lacked jurisdiction over the Plaintiffs’ § 301 and ERISA claims, and consequently we VACATE the judgment of the *573 district court and REMAND with instructions that the district court dismiss the Plaintiffs’ action without prejudice. We AFFIRM the district court’s denial of the Plaintiffs’ motion to amend the complaint to add an LMRDA claim.

I. BACKGROUND FACTS AND PROCEDURE

A. The 1997 CBA

The effects of the Settlement can not be fully understood without explaining the 1997 CBA, which the Settlement superseded. The 1997 CBA was the latest in a series of pacts negotiated between Midwest and Local 77L, and it tied in several previously negotiated benefit plans. Two of these plans are pertinent 3 : the Midwest Rubber Supplemental Unemployment Benefits Plan (“SUB Plan”) and the Midwest Rubber Custom Mixing Corp. Union Hourly Employees Medical and Life Insurance Plan (“Medical Plan”), the latter of which is also referred to as the “Agreement on Welfare Benefits Programs.” With regard to the Medical Plan, the 1997 CBA stated, “It is jrecognized by the parties hereto that the provisions as outlined in Section 1 Paragraph (a) of [the CBA] may be applied to and shall include the [Pension Plan] and the Agreement on Welfare Benefits Programs....” Joint Appendix (“J.A.”) at 1022 (art. XV, § 2(a)). Additionally, the 1997 CBA explicitly incorporated the SUB Plan. J.A. at 1022 (art XV, § 2(b)) (“It is recognized by the parties hereto that the separate Agreement on [SUBs] ... is a part of this Agreement.”). Either Midwest, a committee appointed by Midwest, or RBX, as Midwest’s successor, administered all three plans and possessed discretionary authority to determine eligibility, disburse benefits, and manage disputes.

1. The SUB Plan

The SUB Plan gave the Barberton employees “certain Benefits in the event of their layoff,” J.A. at 284 (art. I), which were “intended to supplement any State System Benefits,” J.A. at 284, rather than replace them. The SUB Plan provided for the disbursement of benefits and separation payments at amounts commensurate with seniority. A general trust fund served as the Plan’s only financial source. Midwest was required to pay a certain amount into the fund each month, but Midwest’s contribution could be offset or reduced by the costs of providing medical benefits for laid-off employees.

A Midwest employee at Barberton earned SUBs based upon several factors. An employee accrued “credit units” for each work week completed. The amount of the employee’s SUBs consequently depended on seniority, whether that employee had used his or her credit units for prior benefits, and the status of the “fund position.” The SUB fund position was determined by dividing the current market value of the fund’s assets by a number proportional to the number of covered employees. Credit units were canceled if the fund position fell below a certain level. For example, if the fund position fell below 80%, credit units were canceled in a manner that rewarded seniority. If the fund position fell below 4%, no SUBs were payable. The fund position also determined the payment of separation payments: separation payments would be distributed only if the fund position equaled or exceeded 80%. If the fund position fell below 80%, the separation payments would be deferred until the fund position exceeded *574 80%. The SUB Plan explicitly stated that employees did not have any rights or vested interests in the assets of the fund. J.A. at 322 (art. IX, § 5). Furthermore, the SUB Plan’s existence was tied to the CBA’s: “Upon the termination of the [CBA], [Midwest] shall have the right to continue the Plan in effect and to modify, amend, suspend, or terminate the Plan, except as may be otherwise provided in any subsequent [CBA].... ” J.A. at 326 (art. X, § 4(a)) (emphasis added).

2. The Medical Plan

The Medical Plan gave employees medical benefits and life insurance both during employment and in the event of a layoff. Following termination of employment, an employee would continue to receive medical benefits “for a period of 90 days beginning with the first day of layoff.” J.A. at 217 (art.

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368 F.3d 569, 33 Employee Benefits Cas. (BNA) 1729, 174 L.R.R.M. (BNA) 3121, 2004 U.S. App. LEXIS 9528, 2004 WL 1085191, Counsel Stack Legal Research, https://law.counselstack.com/opinion/carl-bauer-craig-m-bennett-v-rbx-industries-inc-ca6-2004.