The opinion of the court was delivered by: POLLACK
This is a suit claiming an alleged violation of an Insurance Plan established pursuant to a Pension and Insurance Agreement made as part of a labor collective bargaining agreement.
The parties are subject to the provisions of the Labor-Management Relations Act of 1947, as amended, and the Court has jurisdiction of the parties and of the subject matter thereunder. 29 U.S.C.A. § 185.
For the past 20 years, General Electric Company (the Company hereafter) and the International Union of Electrical Radio and Machine Workers, AFL-CIO-CLC (the Union hereafter) have been parties to a series of national collective bargaining agreements covering many thousands of Company employees, represented by the Union or one of its local union affiliates, at various plant locations throughout the United States. Aside from these specific national collective bargaining agreements (hereinafter referred to as "National Agreements" or, individually, as "National Agreement"), the parties entered into various other agreements covering the terms and conditions of employment of the represented employees. Among such other agreements were Pension and Insurance Agreements, providing for various insurance benefits for the employees.
The plaintiff Union claims that the Company wrongfully rejected sickness and accident claims filed pursuant to the said Plan; or, in the alternative, that the Company should return to the employees so much of their contributions to the cost of insurance which is attributable to a period when no sickness and accident coverage was provided for the employees.
The central issue in this case is the intent and interpretation of two clauses in the Plan which govern sickness and accident benefits when an employee is voluntarily absent from work by reason of a strike. The Company advanced the entire premiums on the insurance and, after the strike, reimbursed itself by deducting from the employees' compensation the regular contribution due from the employee under the Plan. Consequently, the alternate issue is whether an employee was obligated to reimburse the Company for the full contribution for the period of a strike when the Plan provides that a strike terminates his sickness and accident coverage for the duration of his absence from work.
The particular agreement which is the subject of this suit is a 1966 Pension and Insurance Agreement, ("Agreement" hereafter), which, by its terms, incorporated an Insurance Plan negotiated between the parties and dated October 3, 1966; this was attached to and made part of the agreement.
The 1966 Insurance Plan provided various forms of insurance for eligible employees, viz., life insurance, accidental death or dismemberment insurance, comprehensive medical expense insurance and coverage for total disability resulting from a non-occupational sickness or accident. The latter coverage provided weekly benefits, equal in amount to one-half of a disabled employee's normal straight-time weekly earnings up to a maximum weekly benefit of $100, after the seventh day of total disability or the first day of a hospitalization, if earlier, and up to a maximum of 26 weeks.
Although weekly sickness and accident coverage had existed in earlier insurance plans between the parties, the 1966 Insurance Plan, for the first time, included the following provision:
If you cease work because of a strike, your insurance coverage will automatically terminate at the end of the period for which your contributions have been paid. However, the Company may, in its discretion, make appropriate arangements to continue your coverage under this Plan during such strike.
In any event, Weekly Sickness and Accident coverage will not be continued beyond 31 days from the last day for which your contributions are paid and will not be reinstated until you return to active work.
The parties signed a memorandum settling the 1966 negotiations on October 14, 1966. Under the Pension and Insurance Agreement and the 1966 Insurance Plan, the Company admittedly undertook primary responsibility for furnishing Weekly Sickness and Accident coverage to represented employees. Where the Company furnished such coverage through an insurance carrier (as here, through defendant Metropolitan Life Insurance Company), the Company was, in effect, a self-insurer. In California, where the Company made no arrangements with any insurance carrier, it was a self-insurer in form and effect.
The 1966 National Agreement between the parties stated inter alia that the 1966 Pension and Insurance Agreement was in full settlement of all collective bargaining issues raised during the 1966 negotiations between the parties. Under the 1966 National Agreement, the Union-represented employees had the right to strike during the term of such agreement over certain fully processed but unsettled local grievances. After October 3, 1966, the effective date of the 1966 Pension and Insurance Agreement, there were a number of such contractually-permitted local grievance strikes, some of which lasted for more than 31 days.
At midnight on October 26, 1969, at the expiration of the 1966 National Agreement, a national strike was called by the Union against the Company. This strike ...