standard"); Pagan v. Nynex Pension Plan and Nynex Corporation, 1995 WL 215923, at 3 (2d Cir. 1995).
Plaintiffs contend that it is unnecessary to decide which standard of review applies because, in their view, the Board's Decision can be set aside under either standard. The Court disagrees. As will be explained below, I am convinced that the Board's Decision must stand if reviewed under the standard of review applied to decisions under the RLA. It is less clear that the decision should survive under the standard of review applied to decisions under ERISA. It is thus critical to determine the standard of review to be applied.
Although the ultimate goal is to determine the proper standard of review, the analysis involves a question of jurisdiction. Plaintiffs maintain that this Court is confronted with the task of reviewing the propriety of the Board's Decision under two separate bodies of law, ERISA and the RLA. Defendants maintain that the RLA pre-empts ERISA in this particular case, so that the Court lacks subject matter jurisdiction to decide plaintiffs' rights under ERISA. Thus, in their view, only one standard of review should be employed, and that standard should be the one used to review system board determinations under the RLA.
A. Is ERISA pre-empted by the RLA?
The RLA requires mandatory arbitration for two categories of disputes. The first category, concerning "rates of pay, rules or working conditions," 45 U.S.C. § 151a, are deemed "major" disputes. Such disputes relate to "'the formation of collective bargaining agreements or efforts to secure them.'" Consolidated Rail Corp. v. Railway Labor Executives' Assn., 491 U.S. 299, 302, 109 S. Ct. 2477, 105 L. Ed. 2d 250 (1989), quoting Elgin, J. & E.R. Co. v. Burley, 325 U.S. 711, 89 L. Ed. 1886, 65 S. Ct. 1282 (1945).
The second category of disputes are "minor" disputes. These are disputes "growing out of grievances or out of the interpretation or application of agreements covering rate of pay, rules, or working conditions", 45 U.S.C. § 151a, and they "involve controversies over the meaning of an existing collective bargaining agreement in a particular fact situation." Trainmen v. Chicago R & I.R. Co., 353 U.S. 30, 33, 77 S. Ct. 635, 1 L. Ed. 2d 622 (1957). If a dispute is a "minor" one, its resolution is governed exclusively by the arbitration scheme contained in the RLA, and a party may not avoid the effect of that scheme by characterizing the claim as arising under some alternative body of law. Hawaiian Airlines v. Norris, 129 L. Ed. 2d 203, 114 S. Ct. 2239, 2244 (1994) ("Hawaiian Airlines"); Atchison, T. & S.F.R. Co. v. Buell, 480 U.S. 557, 563, 94 L. Ed. 2d 563, 107 S. Ct. 1410 (1987) ("Buell"). It is thus necessary to determine if the present dispute is a "minor" one within the meaning of the RLA.
The Supreme Court has recently held that the determination of whether a dispute is a "minor" one, and accordingly whether its resolution by an RLA system board pre-empts an alternative cause of action, is to be made using the same analysis employed in determining whether a cause of action is reempted by Section 301, 29 U.S.C. § 185, of the Labor Management Relations Act ("Section 301"). Hawaiian Airlines, 114 S. Ct. at 2249. Section 301 allows a party to a collective bargaining agreement to bring an action in federal court to remedy a violation of that agreement. The Supreme Court has held that Congress, in passing Section 301, sought to insure that uniform federal law be applied to the interpretation of collective bargaining agreements. See, e.g., Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 404, 100 L. Ed. 2d 410, 108 S. Ct. 1877 (1987). Therefore, when a claim depends upon an interpretation of the collective bargaining agreement, Section 301 is the exclusive remedy available. Id. at 405-6. When, however, the claim is independent of the collective bargaining agreement, it is not pre-empted. United Steelworkers of America v. Rawson, 495 U.S. 362, 110 S. Ct. 1904, 109 L. Ed. 2d 362; 1909 (1990); Allis-Chalmers v. Lueck, 471 U.S. 202, 211-12, 85 L. Ed. 2d 206, 105 S. Ct. 1904 (1985). It is thus necessary to determine whether any or all of plaintiffs' claims are independent of the collective bargaining agreement.
While the standard "independent of the collective bargaining agreement" appears simple on its face, application of the standard to particular fact patterns has not proven easy. Indeed, a number of commentators have noted that pre-emption law is not, as a general rule, a model of clarity. See. e.g., Richard Shell, ERISA and Other Federal Employment Statutes: When is Commercial Arbitration an "Adequate Substitute" For the Courts?, 68 Tex. L. Rev. 509 (1990). Nonetheless, a review of the facts and holdings of several important cases provides a workable framework for analyzing whether the present claims are pre-empted.
In the Hawaiian Airlines case, the Supreme Court held that the RLA did not pre-empt an employee's state-law wrongful discharge claim. 114 S. Ct. at 2251. It reasoned that the issue of whether the employer's actions made out a claim of discharge under Hawaii law was a "purely factual question", determinable without any reference to the collective bargaining agreement. Id. The fact that a determination of whether the employer's conduct also violated the collective bargaining agreement would also require a similar factual analysis did not pre-empt the state law cause of action. Id.
In Lingle, the leading case on Section 301 pre-emption, an employee was fired for filing an allegedly false worker's compensation claim. 486 U.S. at 401. The applicable collective bargaining agreement protected employees against discharge except for "proper" or "just" cause. Id. The employee brought a state law wrongful discharge action in state court, and the employer removed based on diversity. Id. at 402. Both the District Court and the Court of Appeals held that such an action was pre-empted because the same factual analysis would be required to analyze both claims. Id. The Supreme Court reversed. Id. at 401. It noted that "where the resolution of a state-law claim depends on an interpretation of the collective bargaining agreement, the claim is pre-empted". Id. at 405-6. However, when the dispute centers around "purely factual questions" about an employee's conduct or an employer's conduct and motives, no interpretation of the collective bargaining agreement is required. Id. at 407. Thus, given that such "factual questions" were at the heart of plaintiff's claim, the state law wrongful discharge claim was not pre-empted by the LMRA. Id.
The Court went on to note that the result was not altered by the fact that the state law claim might depend in part on an analysis of the collective bargaining agreement. Rather, the Court stressed that "as long as the state-law claim can be resolved without interpreting the agreement itself, the claim is 'independent' of the agreement for Section 301 pre-emption purposes." Id. at 408-10.
Lastly, in Buell, supra, a railroad employee sought damages for workplace injuries under the Federal Employers' Liability Act (FELA), 45 U.S.C. § 51 et seq., which provides a remedy to railroad workers injured through an employer's or coworker's negligence. 480 U.S. at 559. The railroad argued that the conduct in question was subject to the collective bargaining agreement, and therefore the employee's sole remedy was through RLA arbitration. Id. at 560. The Supreme Court disagreed:
"Notwithstanding the strong policies encouraging arbitration, 'different considerations apply where the employee's claim is based on rights arising out of a statute designed to provide minimum substantive guarantees to individual workers.' The FELA...provides railroad workers with substantive protection against negligent conduct that is independent of the employer's obligations under its collective bargaining agreement." Id. at 565.
As the preceding discussion reflects, those cases that have held that an alternative cause of action is not pre-empted have typically involved alternative laws that provided employees with substantive, minimum levels of protection.
See also Michael Campbell, Grievance Procedures: The Carrier's Perspective, C941 ALI-ABA 293, 307 (1994); Barrentine v. Arkansas-Best Freight Sys., 450 U.S. 728, 734, 67 L. Ed. 2d 641, 101 S. Ct. 1437 (1981) (wage claims under the FLSA not pre-empted); Coppinger v. Metro-N. Commuter R.R., 861 F.2d 33 (2d Cir. 1988) (§ 1983 action, based on Fourth Amendment violation, not preempted). In all these cases, the employee would have been able to bring an action under the alternative source of law even if he or she had never been a party to a collective bargaining agreement.
It is apparent from reading these cases that it is critical to understand what is meant by a "claim or right" that is independent of the collective bargaining agreement. State laws that provide a right of action to recover for a breach of contract, and provisions of ERISA that allow a party to bring an action for failure to adhere to the terms of a pension plan, are certainly independent of a collective bargaining agreement. In addition, these laws do, in a practical sense, provide entities with "rights" that are valuable and substantive, in that they provide access to the court system and a body of rules for insuring that parties adhere to their voluntary agreements. They are not the type of "rights", however, that were meant to escape RLA and LMRA pre-emption. "Rights" such as these provide a mechanism to vindicate some other substantive right. Congress, however, in the RLA and in Section 301, has provided a mechanism for vindicating these "other substantive rights" when they are generated solely from the terms of a collective bargaining agreement. In such cases, Congress' interest in having such disputes resolved through its specified mechanism pre-empts alternative mechanisms that otherwise would have entitled the aggrieved party to seek the same relief.
The independent "rights" at the heart of pre-emption analysis can best be discerned by looking at the ultimate or specific relief sought by the aggrieved party. The general relief sought is that the other side not breach the collective bargaining agreement; the ultimate or specific relief sought is that, i.e., the employer award the employee the $ 5 raise provided for in the collective bargaining agreement. If this specific right is generated from a source outside of the collective bargaining agreement, a party may employ an alternative available mechanism to vindicate it. If, however, the specific right owes its existence solely to the terms of the collective bargaining agreement, the RLA arbitration mechanism must be the exclusive vehicle for vindication of that right.
A hypothetical may be useful in illustrating the difference between a claim that is pre-empted and one that is not. A collective bargaining agreement might provide that certain employees working in "managerial" positions are entitled to a wage of $ 18/hour. The right to be paid that wage does not exist in any source of law, and came into existence solely through the terms of the collective bargaining agreement. The employee would have no right to it if the collective bargaining agreement did not exist. Thus, an action by an employee seeking a determination that she is a "managerial" employee entitled to that wage rate would be governed exclusively by the RLA arbitration scheme, and would pre-empt a breach of contract action based on state law.
Conversely, if that same collective bargaining agreement provided that "non-managerial" employees would earn a wage of $ 2/hour, an employee disgruntled with an interpretation of the collective bargaining agreement placing him in this category, though pre-empted from bringing a state law breach of contract action, would not be pre-empted from bringing an action under the Federal law establishing a minimum hourly wage. This is because the employee's right to a wage above that provided for by the collective bargaining agreement exists independently of whatever obligations may be specified in the agreement.
Turning now to the present case, plaintiffs' complaint contains six counts of alleged violations of the ERISA statute. They can be summarized as follows:
(1) Defendants, as fiduciaries, failed to discharge their duties "in accordance with the documents and instruments governing the plan", as required by Section 404(a)(1)(D), 29 U.S.C. § 1104(a)(1)(D). This failure is evidenced by various misinterpretations of the contract's provisions. Count 1.
(2) Section 404(a)(1)(B), 29 U.S.C. § 1104(a)(1)(B) requires plan fiduciaries to discharge their duties in compliance with a standard of prudence. By requiring the plaintiffs to provide Meusel with a benefit that is not "in accordance with the documents and instruments governing the plan", plaintiffs will be forced to breach their fiduciary duty to act with prudence in discharging their duties. Count 2.