United Steelworkers v. Rohm & Haas Co, No. 06-4346 (3d Cir. Apr. 14, 2008)

| Apr 14, 2008 | Daily Developments in EEO Law |

In advance of a U.S. Supreme Court decision next term in 14 Penn Plaza LLC v. Pyett, a Title VII case about mandatory arbitration under a collective bargaining agreement, here comes a fresh decision that anticipates the same issue under a different statute: arbitration of an ERISA claim through a CBA. The twist in this case was that it was the employer who sought to avoid arbitration.

In United Steelworkers v. Rohm & Haas Co, No. 06-4346 (3d Cir. Apr. 14, 2008), the panel summarizes:

“While we recognize the strong policy considerations favoring arbitration of labor disputes, there is no right to arbitration of ERISA benefits under a CBA unless the ERISA benefits sought are either: (i) derived directly from an ERISA plan established and maintained by or incorporated into a CBA whose grievance procedure contains an arbitration clause, or (ii) created by a separate ERISA plan and that plan and/or the CBA provide that adverse benefit determinations by a plan administrator are subject to the CBA’s grievance procedure that includes arbitration. Because we hold that the benefits sought in this case are neither created by or incorporated into the CBA nor made subject to the CBA’s grievance procedure, we reverse the District Court’s order granting summary judgment to the union and those workers seeking disability benefits and denying summary judgment to the employer.”

Four individual plaintiffs and the union sued for denial of disability benefits, provided under a conventional ERISA plan that was not referenced expressly by the CBA. After grieving the claims (unsuccessfully), the union and employees sought to arbitrate through the CBA, but the employer “argu[ed] that any challenge to a denial of benefits under the Plan had to be made pursuant to the appeal procedure contained in the Plan itself.” The district court granted summary judgment to the plaintiffs, holding that the employer was obliged to arbitrate.

On appeal, the panel held that the district court erred in finding that the ERISA claim was within the scope of the CBA arbitration clause.

“Here, the scope of the Bristol CBA’s grievance procedure is limited to ‘[s]uch questions arising under this Agreement as involve wages (other than general adjustments), individual base rates, hours of employment and working conditions which any employee may desire to discuss with the Company shall be subject to adjustment.’ Although we hold that the Bristol CBA’s arbitration clause is broad, the underlying basis for the grievance submitted through the Bristol CBA grievance procedure must still arise from some specific article of the Bristol CBA. The Bristol CBA does not, however, have an article devoted to disability benefits nor does it provide any sort of discussion as to the employees’ rights to or calculations regarding such benefits. Because there is no specific language addressing the employees’ rights to disability benefits, we cannot say that such benefits were provided for under the terms of the Bristol CBA.”

The panel rejected plaintiffs’ argument that disability benefits fell within the ambit of “working conditions” under the CBA, holding instead that the ordinary meaning of this provision included only the physical surroundings and hazards of the workplace.  It also rejected a backstop argument that a passing reference to the benefit plan (in a section of the CBA concerning medical examinations) was a toehold to arbitration.

The court remanded plaintiffs’ second count, a straight-forward claim for benefits under ERISA §§ 502(a)(1) and (3).

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