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LEARY v. WESTERN UNION TEL. CO.

September 13, 1983

FRANKLIN LEARY, Plaintiff, against THE WESTERN UNION TELEGRAPH COMPANY, et al., Defendants.


The opinion of the court was delivered by: COOPER

IRVING BEN COOPER, D.J.

Plaintiff seeks an order, pursuant to Rule 56 of the Federal Rules of Civil Procedure, granting summary judgment as to the First, Second, Third, Fourth and Fifth causes of action in the complaint. Each of the named defendants has cross-moved, pursuant to the same Rule 56, for summary judgment dismissing the complaint herein.

 Subject matter jurisdiction is founded upon Section 502 of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1132, authorizing a civil action by a participant of an "employee pension benefit plan" or "pension plan" to obtain appropriate relief for violations of the Act.

 The complaint and amended complaint, filed February 18, 1981 and September 23, 1981 respectively, allege violations of Section 13(d)(4) of the Collective Bargaining Agreement, Article XVII, Section 6, of the Communications Workers of America's Constitution, Section 204(g) of ERISA, 29 U.S.C. ┬ž 1054(g), and Section 101(a)(1) of the Labor-Management Reporting and Disclosure Act of 1959.

 The material facts of the case are not in dispute. Leary was employed by Western Union from January 21, 1957 until January 2, 1980. In April of 1966, when Communications Workers of America was certified as a bargaining representative at Western Union, Leary became a member of Local 1177. Pursuant to the Collective Bargaining Agreement between Western Union and Communications Workers of America, the Company may reduce the force at a location for any lawful reason and in any class of work. In December of 1979, Leary was notified by Western Union that he was subject to its plan to reduce its work force. Under Section 13(d) of the Collective Bargaining Agreement, as in effect prior to July 28, 1976, employees subject to force reduction were given four choices, within a specified notice period:

 1. pension, if eligible

 2. acceptance of force reduction furlough as provided herein below

 3. the right of bump the junior employee in the same, equal or lower class of work in any department as provided herein below

 4. acceptance of involuntary furlough with severance pay in accordance with the following schedule and subject to the conditions set forth herein below.

 In addition, the Company maintained a Pension Plan, adopted under the Collective Bargaining Agreement, "providing pension benefits upon normal, early or disability retirement to employees meeting the age, service and disability requirements for such pensions. The Pension Plan provided for a 'deferred vested pension' payable to any plan participant having a term of employment of ten years or more (or five years or more, if the participant were [sic] at least forty years of age), payment of such benefit being deferred to commence at a later date. Under this Plan, prior to January 1, 1976, an employee who selected severance pay under the Collective Bargaining Agreement would take such severance pay in lieu of his deferred vested pension." *fn1"

 On January 1, 1976 ERISA, 29 U.S.C. 1001, became effective and accordingly The Western Union Telegraph Company ("Company"), the Communications Workers of America, AFL-CIO, and Local 1177 of Communications Workers of America, AFL-CIO ("Union") negotiated "complementary changes in Section 13 of the Collective Bargaining Agreement and the Pension Plan.A new optional form of benefit was devised consisting of a lump-sum distribution of the present value of the periodic pension provided under the Pension Plan." *fn2" Simultaneously, the fourth severance-pay option in Section 13(d) of the Collective Bargaining Agreement was modified by adding the following proviso:

 provided, however, that the amount of severance pay, in the case of an employee eligible to retire on a pension or entitled to a vested deferred retirement benefit at the time of his termination of service, shall consist of a lump sum of equivalent actuarial value to the employee's pension or benefit in accordance with Option 6 of Section 13 of the EBF Plan plus additional severance pay computed by offsetting such lump sum against the amount of severance pay provided in accordance with the following schedule.

 "Thus, under Section 13(d)(4) of the Collective Bargaining Agreement, an employee electing to receive severance pay would have his severance pay reduced by the lump sum value of the pension or vested deferred retirement benefits to which the employee was then entitled, which sum would then be paid to him under the terms of the Pension Plan. Therefore, an employee entitled to severance pay under Section 13(d)(4) of the Collective Bargaining Agreement and also to pension or vested deferred retirement benefits under the Pension Plan could receive, after January 1, 1976, as before, the greater of the two benefits. Pursuant to the modification, the portion of the severance pay that represented the employee's pension or vested deferred retirement benefit entitlement would be paid under the Pension Plan, with the remainder of the employee's entitlement being paid under the severance pay provision of the Collective Bargaining Agreement, rather than the entire amount being paid under the severance pay provisions of the Collective Bargaining Agreement, as was the case prior to January 1, 1976." *fn3"

 Section 13(d)(4), as so amended, was included in the present Collective Bargaining Agreement, which became effective July 28, 1979 and expired July 2, 1982. It therefore was in effect on January 2, 1980, when ...


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