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SCOTTO v. BRINK'S INC.

October 25, 1990

FRANK SCOTTO AND JOSEPH F. MANGAN, AS TRUSTEES OF THE LOCAL 807 LABOR-MANAGEMENT HEALTH FUND, PLAINTIFFS,
v.
BRINK'S INCORPORATED, DEFENDANT.



The opinion of the court was delivered by: Sifton, District Judge.

MEMORANDUM DECISION AND ORDER

This ERISA claim is before the Court for decision following a bench trial. Plaintiffs are trustees of the Local 807 Labor Management Health Fund (the "Fund"). Defendant, Brink's, Inc. ("Brink's"), withdrew recognition from Local 807 upon expiration of their last collective bargaining agreement. Plaintiffs seek to compel defendant to make benefit contributions to the Fund based on vacation and sick pay that was allegedly earned before the expiration of the agreement but received after its expiration.

The facts are essentially undisputed, except for a question of contract interpretation. A collective bargaining agreement between Brink's and Local 807 obligated Brink's to make contributions to a multiemployer trust fund established by Local 807 under Section 302 of the Labor-Management Relations Act ("LMRA"), 29 U.S.C. § 186(g), and the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1002. A separate Agreement and Declaration of Trust (the "Trust"), which governs the operations of the Fund, provided that contributions shall be made pursuant to the terms of a collective bargaining agreement. Article XXXIV of the agreement provides: "Except as herein provided to the contrary, this Agreement shall be in effect as of March 21, 1983, and shall terminate at midnight as of March 18, 1984." On March 18, 1984, the agreement expired. Brink's has not made any contributions to the Fund since that date.

An initial round of litigation concerned Brink's right to withdraw recognition of Local 807 as the bargaining representative for its armored car general employees. Prior to the expiration of the agreement, Brink's notified Local 807 that it was withdrawing its recognition on the ground that the union's combined representation of guard and non-guard employees disqualified it from representing the guard employees pursuant to § 9(b)(3) of the National Labor Relations Act ("NLRA"), 29 U.S.C. § 159(b)(3). Brink's authority to withdraw recognition of Local 807 was upheld by the National Labor Relations Board ("NLRB") on May 31, 1984. See Wells Fargo Armored Services Corp., 270 N.L.R.B. 787 (1984). A parallel effort to compel arbitration of an issue under § 301 of the LRMA was rejected in Local 807, International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America v. Brink's, Inc., 744 F.2d 283 (2d Cir. 1984).

In this present action, plaintiffs seek contributions to the Fund based upon vacation and sick pay allegedly accrued under the terms of the agreement but not paid before the agreement expired. Article XXV(b) of the agreement defines the employer's contribution obligation as follows:

  "(b) Effective as of April 1, 1983, the EMPLOYER
  shall contribute to the Local 807 Labor Management
  Health Fund ("Health Fund") the amount of one
  dollar and fourteen cents ($1.14) per straight
  time hour for all hours paid to regular, full-time
  and extra*fn1 employees subject to a maximum of
  forty (40) hours per week, to provide the benefits
  prescribed by the Trustees of the Health Fund."

It is undisputed that contributions were paid into the Fund for all hours of vacation and sick time actually paid out to the regular and extra employees (the "unit employees") during the term of the agreement. Involved in this lawsuit are contributions allegedly due with respect to payments which would of necessity have been made for vacation time and sick time after the agreement terminated because of the provisions of the agreement relating to vacation and sick pay.

The terms of the agreement relevant to the issues raised by this lawsuit include the following. Under the agreement, vacation "credits" were calculated on the "basis of service performed during the preceding calendar year." Article XXI(a). Since all of the regular and extra unit employees had at least ten years of service as of December 31, 1983, each was entitled to four weeks paid vacation during calendar year 1984. Article XXI(c). The agreement further provided that, in the event of termination of an employee for any reason, "vacation pay for service performed during the current year shall be prorated and shall be paid at the time of termination, together with all vacation pay earned for service during the entire preceding calendar year which has not been previously taken or paid for." Article XXI(f).

With respect to sick pay, all regular and extra unit employees were entitled to a maximum of five days of sick leave per calendar year. Article XIX(a). If at the end of a calendar year an employee had unused sick days, he had the choice of either carrying over to the next calendar year a maximum of five "earned but unused" sick days or cashing them in for payment "at the prevailing rate of pay at the time when the days were accrued." Article XXI(b).

Subsequent to the expiration of the agreement, Brink's issued a new Fringe Benefit, Wage Rate and Working Conditions Plan which contained a savings provisions for the unit employees' 1984 vacation and sick pay entitlements. Those employees entitled to vacation or sick leave pay after March 18, 1984, for work performed during the term of the agreement have been paid by Brink's. However, no contributions to the Fund have been made with respect to those payments. As of October 1, 1984, benefit eligibility and Health Fund coverage for the regular and extra unit employees was terminated pursuant to the Fund's rules and regulations. According to plaintiffs, the unit employees received approximately $185,000 in benefits from the Fund between March 19 and September 30, 1984. The unit employees are now covered by a different plan selected by Brink's.

Defendant argues that this Court lacks subject matter jurisdiction to hear this case and that plaintiffs' cause of action is preempted. This Court rejected these arguments on prior motions and continues to find them without merit. What follows sets forth the reasons for this determination.

Plaintiffs invoke this Court's jurisdiction under ERISA § 502(a)(3)(B)(ii), which provides:

  "A civil action may be brought by a participant,
  beneficiary, or fiduciary to obtain other
  appropriate relief to enforce any provisions of
  this ...

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