Hagan v. Kaiser Aluminum & Chemical Corp.

668 F. Supp. 1298, 126 L.R.R.M. (BNA) 2421, 8 Employee Benefits Cas. (BNA) 2354, 1987 U.S. Dist. LEXIS 7943
CourtDistrict Court, E.D. Missouri
DecidedAugust 20, 1987
Docket85-1310 C (5)
StatusPublished

This text of 668 F. Supp. 1298 (Hagan v. Kaiser Aluminum & Chemical Corp.) is published on Counsel Stack Legal Research, covering District Court, E.D. Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hagan v. Kaiser Aluminum & Chemical Corp., 668 F. Supp. 1298, 126 L.R.R.M. (BNA) 2421, 8 Employee Benefits Cas. (BNA) 2354, 1987 U.S. Dist. LEXIS 7943 (E.D. Mo. 1987).

Opinion

668 F.Supp. 1298 (1987)

John T. HAGAN, et al., Plaintiffs,
v.
KAISER ALUMINUM & CHEMICAL CORPORATION, et al., Defendants.

No. 85-1310 C (5).

United States District Court, E.D. Missouri.

August 20, 1987.

Jay E. Sushelsky, St. Louis, Mo., for plaintiffs.

Bryan, Cave, McPheeters & McRoberts, Michael P. Burke, JoAnne Clark Kuhns, St. Louis, Mo., for defendants Kaiser and Kaiser Refractories.

ORDER

LIMBAUGH, District Judge.

This matter is before the Court on cross-motions for summary judgment. The case involves determination of the validity and propriety of an amendment to a pension plan that served to eliminate certain contingent early pension benefits provided to members of the plaintiff class. Plaintiffs are former employees of defendant Kaiser Aluminum and Chemical Corporation (Kaiser) who were employed at Kaiser's Mexico, Missouri refractories plant. Their cause of action arises out of their status as participants and beneficiaries under the Kaiser Refractories Mexico Division Pension Plan (the Plan). In December 1984, the Plan was amended so as to eliminate provisions pertaining to a type of early retirement benefit known as a "75/80" retirement pension. This benefit, which was available to employees at a given combination of age and years of service, was contingent upon a permanent shutdown of the employee's plant, department, or sub-division *1299 or by reason of a layoff or physical disability.

Plaintiffs were at all times members of Local 660-B of the Aluminum, Brick and Glass Workers International Union, AFL-CIO, CLC, which was a party to a collective bargaining agreement with Kaiser pertaining to wages, pension, working conditions and related employment matters. The Plan is an employee pension benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended, ("ERISA)", 29 U.S.C. § 1002(2) and (3). Kaiser at all times was the administrator and sponsor of the Plan.

The claims at issue here arose out of a sequence of events which began around September of 1984 and continued through the end of that year. In summary, Kaiser announced plans in early September to sell its Refractories Division to a new company which would be organized and run by the existing management group of the division. One of the features of the proposal was that the new company—which was eventually named National Refractories and Minerals Corporation (National)—would use an Employee Stock Ownership Plan (ESOP) so that it would eventually be owned almost entirely by its own employees. As part of this sale proposal, the hourly workers at the various Refractories Division locations, including the Mexico Plant, voted on the basic concept of the ESOP proposal.[1] In September, after each location voted to accept the proposal, Kaiser and National proceeded toward finalizing the transaction by December 31, 1984.

On December 20, 1984, as the final arrangements were being made to organize the ESOP and complete the sale of the refractories division, the officers of Local 660-B and Wayne Murray, a vice president of the international union, were called to a meeting with Kaiser officials. The union representatives were presented with proposed revisions to both the existing pension plan and the collective bargaining agreement then in force which Kaiser insisted were necessary if the contemplated ESOP transaction was to be finalized. The effect of the pension plan amendment set forth by Kaiser was to eliminate the 75/80 retirement pension plan provisions. According to plaintiffs, Kaiser threatened to close the Mexico plant in 11 days if the amendment was not accepted by the union.[2] Murray and the officers of Local 660-B advised Radakovich that the proposed pension revision needed to be presented to the rank and file of the local for a vote. Mr. Radakovich apparently rejected this, however, and stated that the document had to be signed at once and that Kaiser was not willing to abide presentation of the issue to the rank and file.[3]

The officers of the local and the international vice-president initially refused to sign the plan revisions proposed by Kaiser. Later that day, however, the Local 660-B committee members were summoned to a meeting at which the Mexico Plant Manager, Charles Duckworth, advised that he had *1300 received a call from Kaiser's headquarters directing him to shut down the Mexico plant on December 31, 1984 if the local refused to agree to the proposed pension agreement revisions. The following day, December 21, 1984, the members of the local union committee, international vice-president Murray and representatives of Kaiser met at the Bridgeton, Missouri office of the international union. The local union officials still refused to sign the pension plan amendment. Wayne Murray, however, signed the revision under protest on behalf of the local and received a "hold harmless" agreement running from Kaiser to the international union and various locals that had contracts at Kaiser refractories contemplated under the ESOP.

Conclusions of Law

Plaintiffs' cause of action is based on § 301 of the Labor Management Relations Act alleging a breach of a collective bargaining agreement covering their employment by their former employer, Kaiser. Plaintiffs also allege certain violations of ERISA, 29 U.S.C. § 1001 et seq. As pointed out by both sides in this case, the critical issue before the Court on the pending cross-motions for summary judgment is the validity vel non of the amended pension agreement and its effect of revoking certain contingent early retirement benefits as outlined above. For the reasons that follow, the Court has determined that the amendment was effective and that defendants have committed no offense actionable under either § 301 or the pertinent provisions of ERISA.

To begin with, it is clear that Wayne Murray's acceptance of the company's proposed pension amendment was effective to bind the local under the concepts of both actual and apparent authority. Section 301 of the Labor Management Relations Act provides that "any labor organization which represents employees in an industry affecting commerce as defined in this chapter ... shall be bound by the acts of its agents." 29 U.S.C. § 185(b). The United States Supreme Court has held that a union constitution is a contract between a parent union and its locals which can be enforced in federal court. United Association of Journeymen and Apprentices, AFL-CIO v. Local 334, 452 U.S. 615, 624, 101 S.Ct. 2546, 2551, 69 L.Ed.2d 280 (1981). As applied here, it is plain that the express terms of the International Union Constitution explicitly provide that the International Union has whatever actual authority is necessary to enter into binding agreements on behalf of its local unions.

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668 F. Supp. 1298, 126 L.R.R.M. (BNA) 2421, 8 Employee Benefits Cas. (BNA) 2354, 1987 U.S. Dist. LEXIS 7943, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hagan-v-kaiser-aluminum-chemical-corp-moed-1987.