The opinion of the court was delivered by: MISHLER
MISHLER, D.J.: This action arises from the failure of the trustees of a pension trust fund to reach agreement regarding a proposed increase in retirement benefits. The parties to this action are the trustees of Plumbers Local Union No. 457 Pension Trust Fund ("Trust Fund"). Plaintiffs Irwin Botto, Max Sirlin and Milton Lewis are the employer trustees of the Trust Fund ("Employer Trustees"), as designated by Association of Employing Plumbing Contractors of Nassau County, Inc., a New York membership corporation ("Employer Association"). Defendants Robert J. Friedberg, Fred Formica and John B. Murray are the union trustees of the Trust Fund ("Union Trustees"), as designated by Plumbers Local Union No. 457 of the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada, a labor union with offices in Mineola, New York ("Union").
A certain trust agreement
which governs Trust Fund matters provides for the appointment of an impartial umpire by the court if the trustees fail to agree on "a matter relating to the administration of the Pension Trust Fund."
The arbitration rovision of such trust agreement is, in turn, mandated by Section 302(c)(5)(B) of the Labor Management Relations Act of 1947 ("LMRA"); 29 U.S.C. § 186(c)(5)(B) which requires that an agreement of this kind provide for arbitration in matters of administration. The question before this court is whether the proposed 17 percent increase in benefits is "a matter relating to administration" for purposes of the arbitration provision of the trust agreement or LMRA § 302(c)(5)(B). The parties posed differing interpretations of the term "administration". In addition, the Employer Trustees argued that the question of the proposed increase in benefits is not a proper issue for decision by the trustees pursuant to the fiduciary responsibility provisions of §§ 404 and 406 of Employees Retirement Income Security Act of 1974 ("ERISA"); 29 U.S.C. §§ 1104(a)(1) and 1106(b)(2).
Employer Trustees requested summary judgment pursuant to Fed.R.Civ.P. 56 declaring (1) that the proposed increase is not an arbitrable matter under the trust agreement and (2) that an umpire cannot be appointed. Union Trustees cross-moved for summary judgment (1) declaring that a deadlock exists that is subject to arbitration under the trust agreement and (2) naming an impartial umpire.
The court has jurisdiction of this action pursuant to ERISA § 502(a)(3)(B), 29 U.S.C. § 1132(a)(3)(B) and 28 U.S.C. § 1331, based upon question arising under 29 U.S.C. §§ 186(c)(5), 1104(a)(1) and 1106(b)(2).
As more fully discussed below, arbitration is not available to resolve the question of increased benefits before this court for two reasons. First, the proposed increase in retirement benefits is not a matter of Trust Fund administration (or "relating to the administration") that is subject to arbitration under the trust agreement or under LMRA § 302(c)(5)(B). Second, according to a recent decision by the United States Supreme Court, NLRB v. Amax Coal Co., 453 U.S. 322, 101 S. Ct. 2789, 69 L. Ed. 2d 672, rehearing denied, 453 U.S. 950, 102 S. Ct. 26, 69 L. Ed. 2d 1036 (1981), the proposed increase is not an appropriate matter for decision by Trust Fund trustees in the absence of an agreement on this subject by the collective bargaining agents of Employer Association and Union. The Supreme Court found that this prohibition was imposed by the fiduciary responsibility provisions of § 302 LMRA; 28 U.S.C. § 186 and ERISA §§ 404 and 406; 29 U.S.C. §§ 1104, 1106. As a result, the provisions set forth in the trust agreement regarding deadlock and arbitration are inapplicable to this matter and the choice of an umpire by this court is unnecessary. See: Barrett v. Miller, 276 F.2d 429 (2d Cir. 1960). Accordingly, plaintiffs Employer Trustees' motion for summary judgment is granted; defendants Union Trustees' cross-motion is denied.
The uncontested facts before the court are as follows:
1. Union and the predecessor in interest of Employer Association entered into a Collective Bargaining Agreement dated May 1, 1953 ("Collective Bargaining Agreement"), which established, inter alia, a pension program, including the creation of Pension Fund, Plumbers Local 457, and which required payment by employer members to the Pension Fund of a state percent of the gross weekly payroll for members of the Union.
2. Union and the predecessor in interest of Employer Association entered into an Agreement and Declaration of Trust, dated October 6, 1953 (Exhibit A to Plaintiffs' Complaint) and as amended May 3, 1966 (Exhibit A to Defendants' Answer), ("Trust Agreement"), providing for the Pension Fund to be held in trust, designating Employer Trustees and Union Trustees, and setting forth the powers and responsibilities of the trustees and the terms under which the two groups of trustees would effectuate the pension program to be established under the Collective Bargaining Agreement.
3. Article IV, § 8(a) of the Trust Agreement, as amended May 3, 1966, provides that at least two Union Trustees and two Employer Trustees are required for a quorum and that action on any question is to be decided by a majority vote, but in such event, the concurring vote shall not be less than four Trustee. Arbitration provisions are set forth at Article IV, § 8(b) of the Trust Agreement as follows:
(b) In the event of a deadlock, resulting from the failure of the Employer and Union Trustees to agree on a matter relating to the administration of the Pension Trust Fund, then and in that event, the Trustees shall appoint an impartial umpire to decide such dispute, whose decision shall be final and binding upon the Trustees, and upon failure of the Trustees to agree within a reasonable length of time on the selection of an impartial umpire, either the Employer or Union Trustees may petition the United States District Court for the Eastern District of New York for the appointment of such impartial umpire. (emphasis supplied).
4. A special meeting of the trustees was held on November 17, 1981 ("Meeting") to discuss the Union Trustees' proposal for increasing, by 17 percent, the benefits to be paid from the Trust Fund to present and future beneficiaries. The three Union Trustees present voted in favor of the proposal. One Employer Trustee (Max Sirlin) was absent due to illness; the two remaining Employer Trustees were present and voted against the proposed increase. Attorneys for both groups of trustees were also present at the Meeting.
5. At the Meeting, Milton Lawis, who was asked to speak on behalf of all the Employer Trustees, stated that they "felt that to increase benefits at this time would not be acting in a prudent fashion and would increase the liabilities which would have to be assumed by the Contractor. He also stated that the members of the Employer Association did not vote on this decision or give direction on this question to the Employer Trustees. Mr. Lewis said that the position of Employer Trustees was based upon their own judgment.
6.Robert Friedberg, Chairman of the Meeting, declared an impasse following the vote concerning the proposed increase in benefits. Attorneys for both parties advised the assembled trustees that appointment of an umpire for arbitration was appropriate and that names of proposed umpires would be submitted by each ...