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ZYDEL v. DRESSER INDUSTRIES

May 29, 1991

STANLEY J. ZYDEL, HELMUT LEHMANN, ANTHONY HARASIMOWICZ, PATRICK MCDONOUGH, ROBERT L. PAWELSKI, ALLEN NOBLE, RONALD HOIER, JOHN A. FILIPSKI, PATRICIA A. SKRETNY, ANGELO
v.
ROMANO, SOPHIE EATON, AS EXECUTRIX OF THE ESTATE OF GERALD D. EATON, JOHN J. CLOSS, FRANK MACIEJEWSKI, PLAINTIFFS, V. DRESSER INDUSTRIES, INC., INGERSOLL-RAND COMPANY, DRESSER-RAND COMPANY, DEFENDANTS.



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

BACKGROUND

This action was brought in March, 1988, by thirteen former employees of Dresser-Rand Company to collect unpaid pension benefits allegedly due. Dresser-Rand and its predecessor companies owned and operated the Worthington Compressor Plant in Buffalo, New York. Each plaintiff began his or her employment at the plant as a union member, either with the United Steel Workers of America ("USWA") or the Office and Professional Employees International Union ("OPEIU"). Each plaintiff thereafter transferred to a non-union management position at the plant and asserts that he or she was led to believe that if management positions were ever abolished, the plaintiff could return to his or her union position without loss of benefits.

In late 1986 and early 1987, defendants notified plaintiffs that they were terminating plaintiffs' management positions and closing the plant. The first three plaintiffs to be so notified were foundry employees Allen Noble, Anthony Harasimowicz, and Angelo Romano. They claim they were told by William Netols, Director of Human Services at Worthington, that they were entitled, because of their seniority, to return to the union and collect a union pension at their option. See Item 60 (Noble affidavit). Mr. Netols categorically denies this. Item 67, ¶ 2 (Netols affidavit). Plaintiffs claim that after they were so notified, the company changed its position and refused to allow them to return to the union.

The remaining ten plaintiffs learned in early 1987 they would be laid off. Although union personnel continued to work at Worthington until mid-1987, Dresser-Rand refused to permit any plaintiff to return to his or her union position. Instead, most of the plaintiffs left on March 31, 1987, receiving a retirement package less favorable than they would have received had they been granted a union pension. Plaintiffs seek to recover retirement benefits equal to those paid to union members. Item 14 (Amended Complaint).

Plaintiffs have offered five theories to prove their entitlement to union pensions. First, plaintiffs argue that defendants' "policy and practice" of returning a management employee to his or her union position upon abolishment of that person's management position is an "employee benefit plan" under the Employee Retirement Income Security Act ("ERISA"). 29 U.S.C. § 1002(3). Second, plaintiffs assert they are entitled to be returned to their positions under the state law doctrine of promissory estoppel. Third, plaintiffs claim they were "participants" in the union pension plan and are therefore entitled to benefits thereunder. Fourth, plaintiffs argue that defendants violated § 204(g) of ERISA, 29 U.S.C. § 1054(g), by decreasing or eliminating plaintiffs' accrued pension benefits. Finally, plaintiffs claim that defendants' attempt to amend the union plans in February, 1985, to cease crediting plaintiffs' years of service in the union pension fund is null and void, as plaintiffs were not notified of any amendment.

Defendants argue that plaintiffs were not entitled to return to their union positions, that the company never promised such a return, and that plaintiffs ceased to participate in the union pension plan when they accepted promotions to management. Defendants have moved for summary judgment on these, and other, grounds. Plaintiffs oppose the motion.

FACTS

As noted, the Worthington Compressor Plant was closed by defendants in 1987. Dresser Industries had purchased the plant from McGraw-Edison Company in early 1985. Dresser-Rand took over operation of the plant from January 1, 1987, until the plant closed later that year. Other corporate entities owned the plant between the time McGraw-Edison owned it, and the Worthington Corporation ("Worthington") built the plant.

DISCUSSION

I.  STANDING: WERE PLAINTIFFS "PARTICIPANTS" IN EITHER UNION
    PENSION PLAN?

As an initial matter, the court must decide whether plaintiffs were "participants" in either the USWA or OPEIU pension plans under ERISA. If not, plaintiffs would lack standing to sue for benefits under these plans. 29 U.S.C. § 1132(a). See also Tuvia Convalescent Center, Inc. v. National Union of Hosp. & Health Care Employees, 717 F.2d 726, 729 (2d Cir. 1983).

ERISA defines "participant" as "any employee or former employee of an employer . . . who is or may become eligible to receive a benefit of any type from an employee benefit plan which covers employees of such employer. . . ." 29 U.S.C. § 1002(7) (emphasis added). The Supreme Court, in Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989), has recently explained the scope of this definition.

    In our view, the term "participant" is
  naturally read to mean either "employees in, or
  reasonably expected to be in, currently covered
  employment," Saladino v. I.L.G.W.U. National
  Retirement Fund, 754 F.2d 473, 476 (CA2 1985), or
  former employees who "have . . . a reasonable
  expectation of returning to covered employment" or
  who have a "colorable claim" to vested benefits,
  Kuntz v. Reese, 785 F.2d 1410, 1411 (CA9) (per
  curiam), cert. denied, 479 U.S. 916 [107 S.Ct. 318,
  93 L.Ed.2d 291] (1986).

Bruch, 489 U.S. at 117, 109 S.Ct. at 957-958.

At this point, the court need not decide whether plaintiffs were "employees in . . . currently covered employment."*fn2 Id. (quoting Saladino, 754 F.2d at 476). For plaintiffs to have standing as participants, they need only have had a "reasonable expectation of returning to covered employment." Id. (quoting Kuntz, 785 F.2d at 1411).


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