Kop-Flex Emerson Power Transmission Corp. v. International Ass'n of Machinists & Aerospace Workers Local Lodge No. 1784, District Lodge No. 4

840 F. Supp. 2d 885, 2012 WL 34018, 192 L.R.R.M. (BNA) 3129, 2012 U.S. Dist. LEXIS 1520
CourtDistrict Court, D. Maryland
DecidedJanuary 6, 2012
DocketCivil Action No. RDB-11-0120
StatusPublished
Cited by7 cases

This text of 840 F. Supp. 2d 885 (Kop-Flex Emerson Power Transmission Corp. v. International Ass'n of Machinists & Aerospace Workers Local Lodge No. 1784, District Lodge No. 4) is published on Counsel Stack Legal Research, covering District Court, D. Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kop-Flex Emerson Power Transmission Corp. v. International Ass'n of Machinists & Aerospace Workers Local Lodge No. 1784, District Lodge No. 4, 840 F. Supp. 2d 885, 2012 WL 34018, 192 L.R.R.M. (BNA) 3129, 2012 U.S. Dist. LEXIS 1520 (D. Md. 2012).

Opinion

MEMORANDUM OPINION

RICHARD D. BENNETT, District Judge.

In this case, Kop-Flex Emerson Power Transmission Corporation (f/k/a Kop-Flex, Inc.) (“Kop-Flex”), and Emerson Electric Company (“Emerson”) (collectively “Plaintiffs”) 1 seek certain declaratory judgments regarding collective bargaining agreements (“CBAs”) the Plaintiffs negotiated with the International Association of Machinists and Aerospace Workers, its Local Lodge No. 1784, District Lodge No. 4 (the “Union”), and individual Defendants George Hawk, Joseph Martin, Jackie Bolling, John Siemer, and Rose A. Coomes (collectively “Defendants”). Specifically, Kop-Flex seeks a declaration that it is not required to submit to arbitration the issue of whether it has the unilateral right to modify post-retirement health benefits provided to Kop-Flex retirees who retired during the terms of expired CBAs. Additionally, both Plaintiffs seek a declaration that they have the right to modify the post-retirement health benefits provided to retirees without violating the terms of the CBAs, the employee benefit plans, and other federal laws. The Defendants have moved to refer this matter to arbitration and to stay proceedings. This Court has reviewed the record, as well as the pleadings and exhibits, and finds that no hearing is necessary. See Local Rule 105.6 (D.Md.2011). For the following reasons, Defendants’ Motion to Refer Matter to Arbitration and to Stay Proceedings (ECF No. 16) will be GRANTED.

BACKGROUND

This dispute concerns a longstanding collective bargaining relationship between Plaintiff Kop-Flex, a manufacturing company, and Defendant International Association of Machinists and Aerospace Workers, Local Lodge No. 1784, the labor union representing Kop-Flex employees. Compl. ¶ 2. Since at least 1986, the collective bargaining agreements negotiated between the parties provided for post-retirement medical and prescription drug benefits. Id. ¶¶ 3, 43-37. Specifically, Article XXX, Section 30.3 of each CBA from 1986 to the present contains the relevant language. Id. ¶ 55. Each CBA covered a period of approximately three years. Id. ¶47.

Of particular importance to this litigation is the current (2007-2012) CBA's treatment of hourly employees who retired before the effective date of the current CBA. Specifically, Article XXX, Section 30.3 of the current CBA states that “[cjhanges in the Emerson Trust Prescription Plan as outlined in the plan will be effective for pre and post 65 retirees who retire after January 1, 2004.” 2007-2012 CBA p. 70, ECF No. 7-1. Additionally, this section of the current CBA specifies that pre-65 retirees (ie., persons hired before September 19, 1999) will have medical coverage and those retirees will be responsible for certain weekly contributions. Id. pp. 66-70. Of particular importance is the current CBA’s reference to weekly contribution levels effective in 2000, 2001, 2002, and beyond. These references indicate that the current CBA contemplates benefits of persons who retired before the effective date of the current 2007-2012 CBA.

[888]*888In addition to the references to retiree health benefits, each Collective Bargaining Agreement from 1986 to the present contains grievance and arbitration provisions. Article XX, Section 20.0 of the current CBA states “[i]f there is any dispute concerning the interpretation or application of any of the provisions of this Agreement, such dispute shall, at the written request of either the Company or the Union be submitted to arbitration.” Id. p. 52 (emphasis added). Moreover, Article XIX, Section 19.2 of the current CBA, which sets out the specific grievance procedures to be undertaken by the parties, states that “[t]he grievance procedure and arbitration provided herein shall constitute the sole and exclusive remedy to be utilized by the parties hereto for such determination, decision, adjustment or settlement of any and all grievances as herein defined.” Id.

On September 9, 2010, the Plaintiffs announced their intention to unilaterally change the prescription drug benefit package for Kop-Flex retirees and their dependents which would become effective on January 1, 2011. See Compl. ¶¶ 5, 76. Pursuant to this change, employees who retired on or before September 1, 2007, were age 65 or older, and were Medicare eligible, would no longer be able to rely on the Kop-Flex benefit plan as the primary provider of prescription drug benefits. Id. ¶ 78. The Defendants contend that this unilateral action violates the specific dictates of Article XXX of the current CBA, as well as the provisions of past CBAs relating to retiree medical benefits.

In that vein, the Defendants, pursuant to the grievance procedure outlined in Article XIX of the current CBA, filed a grievance with Kop-Flex contesting the legality of the unilateral changes made to the retiree prescription drug benefit plan by the Plaintiffs. Id. ¶ 100. Kop-Flex denied the grievance, and the Union invoked the arbitration procedures. Id. ¶ 101. KopFlex advised the Union that it is not obligated to arbitrate insofar as, inter alia, the retirees retired before the effective date of the current CBA and are therefore not covered by that CBA or its arbitration procedures. Furthermore, Kop-Flex advised the Union that it does not represent the retired Kop-Flex employees and therefore has no standing to represent them. Finally, Kop-Flex took the position that entitlement to post-retirement medical or prescription drug benefits negotiated through prior CBAs did not survive the expiration of those CBAs. Id. ¶ 102. The changes to the prescription drug benefit plans took effect as scheduled on January 1, 2011.

The Plaintiffs, in instituting this action, request this Court to issue a class action declaratory judgment that they are not required to submit to arbitration the issue of whether the Plaintiffs have the unilateral right to modify medical and prescription drug benefits provided to Kop-Flex retirees. Additionally, the Plaintiffs seek a declaratory judgment that their actions do not violate the current or prior CBAs negotiated between the parties, the various employee benefit plans, the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. §§ 1001, et seq., and the Labor Management Relations Act (“LMRA”), 29 U.S.C. §§ 141, et seq.

Pending before this Court is the Defendants’ Motion to Refer Matter to Arbitration and to Stay Proceedings (ECF No. 16). The five individual Defendants and some 52 additional retirees, dependents, and surviving spouses over the age of 65 have authorized the Union to represent them in arbitration over the January 1, 2011 changes to their prescription drug plans. According to the Defendants, these 57 authorizations represent some 77 percent of the persons directly affected by the Plaintiffs’ actions. See Defs.’ Mem. at 6, [889]*889ECF No. 16-1; Rivers Decl. ¶¶ 6-7, ECF No. 16-2.

STANDARD OF REVIEW

The Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1, et seq. requires that:

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840 F. Supp. 2d 885, 2012 WL 34018, 192 L.R.R.M. (BNA) 3129, 2012 U.S. Dist. LEXIS 1520, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kop-flex-emerson-power-transmission-corp-v-international-assn-of-mdd-2012.