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Murray v. Nine Mile Point Nuclear Station

September 30, 2010

DONALD J. MURRAY; DOMINICK D'AMORE; LEE ADAMS; LINDA EDWARDS; LINDA MATTHEWS; LORETTA SHELLING, MARK SUTTER; JOSEPH ANNORINO; FRED BORDEN; WILLIAM DALE; CINDY ROBERT; DONALD CLARK; DIANE CRANDALL; FAY KIMBALL; ROBERT BRACE; WALT LEROY; DANIEL F. MACDONALD; AND WILLIAM D. BARBEAU, PLAINTIFFS,
v.
NINE MILE POINT NUCLEAR STATION, LLC; LOCAL UNION 97 OF THE INT'L BHD. OF ELEC. WORKERS; CONSTELLATION GENERATION GROUP; CONSTELLATION ENERGY COMMODITIES GROUP, INC.; CONSTELLATION ENERGY CORP.; CONSTELLATION ENERGY GROUP, INC.; CONSTELLATION ENERGY PROJECTS & SERVS. GROUP, INC.; CONSTELLATION ENERGY SOURCE, INC.; XYZ CORP.; AND NINE MILE POINT PENSION PLAN, DEFENDANTS.



The opinion of the court was delivered by: Hon. Glenn T. Suddaby, United States District Judge

DECISION and ORDER

Currently before the Court in this employee benefits action filed by the eighteen above-captioned Plaintiffs ("Plaintiffs") against Local Union 97 of the International Brotherhood of Electrical Workers ("Union Defendant") and the nine remaining above-captioned Defendants ("Employer Defendants") are (1) Union Defendant's motion for summary judgment (Dkt. No. 73), (2) Plaintiffs' cross-motion for summary judgment (Dkt. Nos. 79), and (3) Employer Defendants' cross-motion for summary judgment (Dkt. No. 81). For the reasons set forth below, Union Defendant's motion is granted, Employer Defendants' cross-motion is granted, Plaintiffs' cross-motion is denied, and Plaintiffs' Amended Complaint is dismissed in its entirety.

TABLE OF CONTENTS

I. RELEVANT BACKGROUND...............................................................................................3

A. Plaintiffs' Claims.........................................................................................................3

B. Undisputed Material Facts.........................................................................................5

C. Union Defendant's Motion for Summary Judgment.............................................13

D. Employer Defendants' Cross-Motion for Summary Judgment...........................14

E. Plaintiffs' Cross-Motion for Summary Judgment.................................................15

II. RELEVANT LEGAL STANDARDS...................................................................................18

A. Legal Standard Governing Motions for Summary Judgment..............................18

B. Legal Standards Governing Plaintiffs' Claims......................................................18

III. ANALYSIS.............................................................................................................................19

A. Plaintiffs' Common-Law Claims of Negligent and Fraudulent Misrepresentation and Breach of Duty..................................................................19

B. Plaintiffs' Two Claims Under Section 301 of LMRA............................................22

C. Plaintiffs' ERISA Claim...........................................................................................32

I. RELEVANT BACKGROUND

A. Plaintiffs' Claims

Plaintiffs' Amended Complaint asserts the following six claims against Defendants: (1) breach of the collective bargaining agreement; (2) fraudulent misrepresentation; (3) negligent misrepresentation; (4) breach of the duty of fair representation under the National Labor Relations Act ("NLRA") against Union Defendant; (5) violation of Section 301 of the Labor Management Relations Act ("LMRA"); and (6) breach of fiduciary duty pursuant to the Federal Employee Retirement Income Security Act of 1974 ("ERISA") against Employer Defendants. (Id.) Familiarity with the remaining factual allegations supporting these claims in Plaintiffs' Amended Complaint is assumed in this Decision and Order, which is intended primarily for review by the parties. (Dkt. No. 16.)

Generally, these claims arise from the following factual allegations: (1) on or about November 7, 2001, Union Defendant and Defendant Nine Mile Point Nuclear Station, LLC, entered into a Collective Bargaining Agreement ("the old CBA"), which was set to expire on or about July 1, 2006; (2) meanwhile, Employer Defendants were employing Plaintiffs full time at Nine Mile Point Nuclear Station; (3) at the time, Employer Defendants maintained for Plaintiffs an employee severance plan, separation allowance plan, pension plan, health care plan, and retirement plan; (4) under the old CBA, full-time regular employees who retired were eligible for, among other things, medical benefits; (5) in or about May 2006 "Defendant[] Nine Mile Point Nuclear Station, LLC, and the [Union Defendant] were engaged in negotiations for a new [CBA] set to begin on or about June 1, 2006"; (6) at the time, Plaintiffs were members of the Local Union 97 of the International Brotherhood of Electrical Workers ("Local 97" or "Union"); (7) in or about May of 2006, "[Employer] Defendants . . . began holding exit interviews with Plaintiffs"; (8) during those interviews, Union and Employer Defendants "misrepresented to Plaintiffs that if they did not retire with an effective date of June 1, . . . they would lose certain benefits[,] . . . includ[ing] . . . medical benefits," and that they "must be off-site by May 31, 2006 [to be eligible for the benefits afforded by the old CBA]"; (9) in reliance on these misrepresentations, Plaintiffs accepted early retirement, and were therefore not eligible to receive any of the benefits under the new CBA; (10) "Defendants extended the benefits of the [old CBA] under the new collective bargaining agreement that took effect on or about July 1, 2006" ("the new CBA"); (11) "Defendants enhanced retirement benefits under the new [CBA] included, among other things, a severance package [for which Plaintiffs were not eligible]"; (12) "[a]fter becoming aware of the misrepresentations Plaintiffs detrimentally relied on, Plaintiffs . . . asked [Employer] Defendants to rescind their retirement and . . . reinstate[ them and/or provide them with] the additional benefits they would have received if they had retired under the new [CBA]"; (13) "[Employer] Defendants refused to reinstate Plaintiffs and refused to provide [them] with the new enhanced benefits they would have received had they retired under the new [CBA]"; and (14) "[Union] Defendant filed a grievance regarding Plaintiffs staying employed until the end of the term of the [old CBA, but then] . . . wrongfully withdr[ew] . . . [that grievance]." (Id.)

Familiarity with the remaining factual allegations supporting Plaintiffs' claims is assumed in this Decision and Order, which is intended primarily for review by the parties. (Id.)

B. Undisputed Material Facts

1. Formation of the Old CBA

The following is a general summary of material facts that are undisputed by the parties. (Compare Dkt. No. 73, Attach. 1 [Union Def.'s Rule 7.1 Statement] with Dkt. No. 80, Attach. 18 [Plfs.' Rule 7.1 Statement] with Dkt. No. 81, Attach. 1 [Employer Defs.' Rule 7.1 Statement].)

Local 97 has represented employees at Nine Mile Point Nuclear Station ("Nine Mile") located in Oswego, New York, including Plaintiffs, for more than forty years.*fn1 In 2001, following the New York State Public Service Commission's order that Niagara Mohawk Power Corporation ("Niagara Mohawk") divest itself of its generating assets, Constellation Nuclear, LLC ("Constellation") purchased Nine Mile. In March 2001, Constellation negotiated and entered into a Memorandum of Agreement ("MOA") with Local 97 concerning its assumption and extension of the 1996 Niagara Mohawk Agreement and the transition of workers to employment with Constellation. Under the MOA, Constellation agreed to establish the Nine Mile Point Pension Plan (the "Pension Plan"), which was a defined benefit pension plan sponsored by Constellation for the Niagara Mohawk employees who elected to become Constellation employees.

Nuclear bargaining unit employees who had elected to transition to Constellation were covered under the March 9, 2001 MOA, the 1996 Niagara Mohawk Agreement, and Articles IX and XX of the 2001 Niagara Mohawk Agreement together with a Cash Balance Memorandum of Agreement. After the purchase of the nuclear facilities by Constellation was finalized and closing took place, various provisions in these documents were consolidated, streamlined and incorporated by the parties into a single document--the 2001 Constellation Collective Bargaining Agreement (a/k/a "the old CBA"), which was scheduled to expire on or about June 30, 2006. Under the old CBA, each Plaintiff was a participant in the Pension Plan, and was also eligible to participate in a health plan administered by Constellation (which included retiree health coverage), and receive a separation allowance severance plan (which provided severance pay in the event of involuntary separation).

2. Pre-Negotiation Talks Regarding New CBA

Because the old CBA was set to expire on or about June 30, 2006, preparation for negotiations for a new contract began in the early part of 2006. In February 2006, contract proposal forms were distributed to the membership by the Union Stewards at Nine Mile. The membership was directed to submit proposals to Local 97 by April 7, 2006.

At a meeting conducted on or about February 2, 2006, Constellation informed Local 97 that, based in part on a staffing study, a reduction in the Nine Mile workforce was appropriate.*fn2

In response, Local 97 Business Manager David Falletta and Local 97 Vice President Martin Currier presented Local 97's position at the meeting. Local 97's position was that Nine Mile was properly staffed and layoffs were not necessary; however, if a reduction in the workforce was implemented by Constellation, the reduction should be voluntary. Further, Local 97 took the position at the meeting that any reduction would be subject to the restrictions contained in the old CBA, which stated that "the Company shall determine whether a reduction in the work force is necessary[, but] . . . no regular employee hired prior to 11/7/01 who has ten (10) or more years of continuous service shall be laid off because of lack of work nor shall their rate of pay be reduced thereby."*fn3

On or about February 23, 2006, Local 97 disseminated the information regarding Constellation's planned reduction in work force to represented employees. In addition, Local 97 prepared a voluntary early retirement plan proposal ("VERP"), whose purpose was to provide a monetary incentive for senior employees to voluntarily leave Constellation.*fn4 In April 2006, Local 97 provided Constellation with a cost analysis of the VERP. Around the same time, Local 97's Negotiating Committee ("Union Committee") also screened bargaining proposals presented by the membership.

3. Dispute Regarding Retirement-Notification Deadline

In late April 2006, Vice President Currier learned that Constellation was notifying represented employees contemplating retirement that they had to retire by May 31, 2006, to receive the retirement benefits provided in the old CBA, scheduled to expire on June 30, 2006. In response, from late April 2006 going forward, Local 97 made bargaining unit personnel aware that there was an ongoing dispute between Constellation and Local 97 regarding when an individual could retire and receive the benefits provided in the old CBA. In addition, Vice President Currier drafted a grievance regarding the retirement notification date ("Retirement Grievance"), which was to be presented to Constellation on May 10, 2006, the scheduled date for the exchange of contract proposals.*fn5

The issue presented in the grievance was one of general contract interpretation. Thus, consistent with Local 97's past practice and procedure, the grievance was filed on behalf of the entire 700 person bargaining unit and not on behalf of any one individual.

On May 5, 2006, a letter was distributed to the membership regarding the upcoming negotiations and the retirement notification dispute. The letter informed members of the following: (1) the Union Committee was finalizing contract proposals to exchange with Constellation on May 10, 2006; (2) the foundation of the proposals was to continue in securing wages, benefits and job security rights; (3) negotiations would commence between May 16, 2006, and May 18, 2006, and would continue Tuesdays through Thursdays through June 1, 2006, and then Mondays through Fridays through the month of June 2006; (4) the Vice President would keep them apprised of as much information as he could during this process, bearing in mind the confidentiality of negotiation discussions to both parties, and the fact that nothing would be final until a tentative agreement was reached and ratified by the membership;*fn6 (5) there would be contingency plans in place to initiate should a tentative agreement not be reached by the expiration, or any extension, of the old CBA; (6) there was a disagreement between Local 97 and Constellation regarding the date in which an employee could give notice of retirement under the terms of the old CBA, with Local 97 maintaining the date to be June 30, 2006, and Constellation believing the date to be May 31, 2006; (7) although the Union Committee would continue discussions with Constellation on May 10, 2006, regarding this matter, if they continued to disagree on the date through May 31, 2006, any individuals who were contemplating retirement under the terms of the old CBA would have to decide whether they would follow Constellation's date of notification or notify Constellation of retirement after their cut off date and be a part of a dispute through the grievance process;*fn7 and (8) a grievance would be filed if the issue remained unresolved.

Shortly thereafter, some bargaining unit members considering retirement contacted Local 97 regarding the retirement notification date and whether they should retire. Consistent with the letter of May 5, 2006, to the membership, they were told that there was an ongoing dispute between Constellation and Local 97 regarding the retirement notification date, and that Local 97 was pursuing the retirement notification issue through the grievance process and negotiations. Further, employees were told that they would have to make their own retirement decision based on personal circumstances.

On May 10, 2006, the Union Committee and Constellation's negotiating committee ("Employer Committee") met to exchange proposals.*fn8 Local 97's proposals included the continuation of retiree medical benefits and the VERP. Local 97 also presented the Retirement Grievance to Constellation, and, in an attempt to expedite the processing of grievances, proposed the resolution of all pending grievances. Included in Constellation's proposals was a demand to eliminate the "10 year security clause." At the time of the negotiations, there were approximately 115 security guards in the unit.

4. Commencement of Formal Negotiation Regarding New CBA

On May 16, 2006, Constellation and Local 97 held their first bargaining session. Constellation submitted an additional proposal that sought to eliminate retiree medical benefits. In addition, a detailed discussion of the Retirement Grievance took place, during which time Local 97 aggressively pushed its position that an individual's retirement date should be the date that the person actually retired.*fn9 However, Constellation maintained its position that an individual's effective retirement date is the first of the month following the date that an individual retires.*fn10

On this same day, after these discussions, Constellation formally denied the Retirement Grievance in writing at Step One, stating that the issue raised was "not subject to grievance and arbitration procedure." However, similar to most grievance procedures, Constellation and Local 97 had a multi-step process for resolving disputes.

Consistent with Local 97's practice in handling grievances during bargaining with employers, the grievance did not proceed to a formal Step Two. Instead, the grievance remained open after the initial denial, and Local 97 immediately pursued it through negotiations the next day. However, in substance, the grievance discussions held at the bargaining table were no different than what would have occurred at Steps Two or Three in the grievance procedure. At both steps, representatives from Constellation and Local 97 attempt to resolve the dispute through discussions, which is what occurred during the negotiations in question.

On May 31, 2006, there was no agreement on retiree medical benefits or a severance package. In fact, no agreement had been reached on any substantive issue as a result of the hangup involving the Security Clause.*fn11 Nonetheless, a majority of the retirement eligible members decided to remain employed.*fn12 However, thirty-six (36) members, including Plaintiffs, decided to retire.

During the first week of June 2006, negotiations were effectively stalled and the parties "walked away" from the table. Local 97 requested the assistance of the Federal Mediation and Conciliation Services ("FMCS"). However, Local 97's primary reason for contacting the FMCS was to obtain strike authorization.*fn13 Pursuant to a letter dated June 1, 2006, Local 97's membership was notified that the Union Committee had requested FMCS assistance.

Finally, during the week of June 18, 2006, a tentative agreement regarding the Security Clause was reached.*fn14 Later in the week, the parties tentatively agreed on several other terms and conditions, including security guards remaining in the bargaining unit, severance benefits, health care contributions, and retiree medical benefits.*fn15 As part of these negotiations, Local 97 had proposed that any agreed upon severance package be offered to individuals, such as Plaintiffs, who had retired on or immediately before May 31, 2006. However, Constellation would not consider retroactive application and summarily rejected the proposal.

After the new CBA was ratified, sixty-three (63) members, including thirty-four (34) of the remaining forty-seven (47) retirement eligible employees, accepted the agreed upon severance package and left Constellation. Constellation agreed to continue retiree medical benefits for current employees only. The retiree medical benefit was eliminated for employees hired after the effective date of the new CBA.

5. Withdrawal of Retirement Grievance

After discussing the Retirement Grievance in detail, the Union Committee recommended that it should be withdrawn because there were no members covered any longer under the grievance.*fn16 The Union Committee believed that no remedy was available for retired employees because an arbitrator could not "undo" their voluntary retirement. In addition, the Committee was not aware of any individuals still employed who were protesting the retirement notification date. The Committee did, however, wish to preserve Local 97's right to address the ...


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