Summary
In Tukwila, as in the instant case, a union brought suit on behalf of its members against an employer, the City of Tukwila, following a vote by the union members to opt-out of a social security plan which was partially funded by the City.
Summary of this case from Internat'l Assoc. of Firefighters v. Spokane AirOpinion
No. 6010-1.
February 20, 1979.
[1] Judgment — Summary Judgment — Determination — Function of Court. A summary judgment should be granted to avoid an unnecessary trial only when, viewing the pleadings, depositions, admissions, and affidavits in a light most favorable to the nonmoving party, it can be stated as a matter of law that there is no genuine issue of material fact, i.e., a fact upon which the outcome of the litigation depends in whole or in part, and the moving party is entitled to judgment under the facts.
[2] Pensions — Nature — In General. Pension programs are contractual in nature, constituting deferred compensation for employees regardless of the basic type of plan, and creating an obligation upon the employer to make contributions to the program and to pay benefits to any employee fulfilling the conditions of the program.
[3] Pensions — Pension Programs — Modifications. Pension programs may not be modified except to keep the program flexible and to maintain its integrity. Any modification which reduces a benefit must be offset by a corresponding increase in another benefit to employees.
[4] Judgment — Summary Judgment — Material Issue of Fact — Implied Fact. The specific absence of a material fact from the record does not prevent entry of a summary judgment when the existence of the fact is readily inferred from other facts in evidence and no contrary evidence has been offered.
Pensions — Pension Programs — Contributions — Duration.
Nature of Action: A firefighters union withdrew from social security and sought to have its municipal employer make equivalent contributions to another retirement plan.
Superior Court: The Superior Court for King County, No. 823864, Barbara Durham, J., on September 28, 1977, granted a summary judgment in favor of the union.
Court of Appeals: Holding that the existence of an obligation to make pension contributions could be inferred from the record but that the city could not be obligated to make contributions beyond the duration of its present agreement with the union, the court affirms the judgment but remands for a modification of its terms.
LeSourd, Patten, Fleming, Hartung Emory, Lawrence E. Hard, and John F. Colgrove, for appellants.
Inslee, Best, Chapin, Uhlman Doezie, and Thomas H. Grimm, for respondent.
The City of Tukwila (the City) appeals a summary judgment entered in favor of International Association of Firefighters, Local No. 2088 (the Union) in a dispute over contributions to a private pension fund. The City contends material issues of fact preclude a summary judgment and, in the alternative, the trial court erred in ordering future contributions. We do not find any material issues of fact, but remand for clarification of the judgment.
Since the inception of its fire department in 1969, the City contributed to the federal Social Security System on behalf of all its firefighters, each of whom currently belongs to the Union. In 1976 the firefighters learned their participation in social security could be terminated and contributions thereto refunded. Sam Ruljancich, representing the firefighters, worked with City Attorney Lawrence E. Hard during the spring and summer of 1976 to effect a withdrawal from social security.
The question whether the City could legally refuse to contribute to a substitute pension program upon the Union's withdrawal from social security was raised by both Ruljancich and a member of the city council. Hard responded via a memorandum by a research assistant that the City probably could not refuse to contribute but at minimum would have to negotiate the matter with the Union rather than act unilaterally.
On September 7, 1976, however, the city council passed a motion "that if the Fire Fighters determine not to take part in Social Security, the City's matching funds will stay in the general fund." The next week the firefighters met and voted unanimously to discontinue social security payments and establish a Hartford Deferred Compensation Plan. Thereafter, the City ceased making contributions to a retirement plan for the firefighters.
After fruitless attempts at bargaining, this lawsuit was filed. The firefighters sought an order compelling the City (1) to reimburse the firefighters the funds recovered from social security and (2) to resume contributions equal to social security payments to a qualified retirement plan. On a motion for summary judgment the firefighters prevailed on both causes, the trial court ordering as follows:
1. The City of Tukwila shall pay to a qualified retirement plan of plaintiff's choosing or to each individual employee (if the City and the employee so agree) all monies returned from Social Security to the City of Tukwila which were paid on behalf of members of the bargaining unit represented by plaintiff, whether those funds are returned by credit or otherwise.
2. The City of Tukwila shall also pay to a qualified retirement plan of plaintiff's choosing, or to each individual employee if the parties so agree, on behalf of each member of plaintiff's bargaining unit 5.85% of each employee's monthly wages for each month the City has failed or fails to make such payments from and after October 1, 1976.
The City does not appeal that part of the judgment requiring it to reimburse the firefighters' refunded social security payments, but takes issue solely with the order regarding past and future contributions.
[1] Initially, the City contends material issues of fact render a summary judgment inappropriate. This court in Island Air, Inc. v. LaBar, 18 Wn. App. 129, 136, 566 P.2d 972 (1977), reviewed the concept of summary judgment:
The purpose of a motion for summary judgment is to examine the sufficiency of the evidence supporting the plaintiff's formal allegations so that unnecessary trials may be avoided where no genuine issue of material fact exists. CR 56; Morris v. McNicol, 83 Wn.2d 491, 519 P.2d 7 (1974); Garbell v. Tall's Travel Shop, Inc., 17 Wn. App. 352, 353, 563 P.2d 211 (1977). A material fact is one upon which the outcome of litigation depends in whole or in part. Morris v. McNicol, supra; Amant v. Pacific Power Light Co., 10 Wn. App. 785, 520 P.2d 181 (1974), aff'd per curiam, 84 Wn.2d 872, 529 P.2d 829 (1975). The motion will be granted only if after viewing the pleadings, depositions, admissions and affidavits, and all reasonable inferences that may be drawn therefrom in the light most favorable to the nonmoving party, it can be stated as a matter of law that (1) there is no genuine issue as to any material fact, (2) all reasonable persons could reach only one conclusion, and (3) the moving party is entitled to judgment.
The City argues that the Union and the trial court relied on the premise that the parties' collective bargaining agreement contractually obligated the City to contribute to another pension plan should the social security plan be terminated. The City denied such an obligation in its answer. Because a copy of the actual contract was never entered in the record the City contends there is a material issue of fact regarding whether it agreed to contribute to any plan other than social security. We find this argument unpersuasive. [2, 3] The court in Bakenhus v. Seattle, 48 Wn.2d 695, 698, 296 P.2d 536 (1956), addressed the question of pension payments to municipal employees:
The City also contends other issues of fact arise if we were to agree with this initial premise. Because we do not, these arguments will not be discussed.
In this state, a pension granted to a public employee is not a gratuity but is deferred compensation for services rendered.
The characterization of pension plans as deferred compensation has been applied to plans arising from private collective bargaining agreements also. Dorward v. ILWU-PMA Pension Plan, 75 Wn.2d 478, 482-83, 452 P.2d 258 (1969). Reviewing the law in this area, the court in Frank v. Day's, Inc., 13 Wn. App. 401, 404, 535 P.2d 479 (1975), stated:
In this jurisdiction, pensions or retirement programs, whether public, established by collective bargaining, or voluntarily employer-funded, constitute deferred compensation for services rendered and are designed to promote continued and faithful service to the employer and economic security to employees. A pension agreement is contractual in nature, and the employer is obligated to pay the pension if an employee fulfills the specific conditions of the agreement.
The Frank court also distinguished when certain rights vest, at page 405:
An employee has a vested right in a pension or retirement system upon becoming a qualified employee, and that system cannot be altered to his detriment without corresponding benefit to him. Dorward v. ILWU-PMA Pension Plan, supra; Bakenhus v. Seattle, supra. A vested right to payment, however, does not arise until the contractual conditions for payment set out in an agreement have been met. Jacoby v. Grays Harbor Chair Mfg. Co., [ 77 Wn.2d 911, 468 P.2d 666 (1970)]; DeRevere v. DeRevere, 5 Wn. App. 741, 491 P.2d 249 (1971).
See Bakenhus v. Seattle, supra at 699, quoting Holt v. Board of Police Fire Pension Comm'rs, 86 Cal.App.2d 714, 196 P.2d 94 (1948).
Finally, as averred in Bakenhus at page 701:
[T]he employee who accepts a job to which a pension plan is applicable contracts for a substantial pension and is entitled to receive the same when he has fulfilled the prescribed conditions. His pension rights may be modified prior to retirement, but only for the purpose of keeping the pension system flexible and maintaining its integrity.
See Mulholland v. Tacoma, 83 Wn.2d 782, 784-85, 522 P.2d 1157 (1974).
[4] Thus, the absence from the record of the written contract does not raise a material issue of fact as to the City's obligation to contribute to a retirement plan on behalf of the Union. The City admits making past payments to social security for the benefit of the firefighters. These payments were properly considered compensatory during arbitration proceedings between the City and the Union in 1976. The contractual obligation of the City to contribute to a union retirement plan is inferred. Just as the City may not improperly modify pension rights, neither may the Union inequitably alter the City's obligation. The City offered nothing in the record, however, implying that its burden of contribution would be perceptibly changed by a switch from social security to the Hartford Deferred Compensation Plan. Thus, the trial court did not err by ordering the City to pay an amount equal to earlier social security contributions to a qualified retirement plan of the Union's choosing for the period covered by the existing collective bargaining agreement. [5] The City also argues — correctly — that the language of the judgment erroneously implies an infinite contributory obligation on the City's part. Both the City and the Union agree that damages under the parties' collective bargaining agreement are limited to the term of that agreement. The Union contends, however, that the remedy for a breach of the statutory duty to bargain is not so limited, and argues the City could be held liable until it bargained in good faith or submitted to arbitration.
Of incidental interest, both parties admit — the City in its reply brief and the Union in oral argument — that their collective bargaining agreement does not speak to either social security or private pension plan payments.
We find the record before the trial court on this summary judgment motion inadequate to support a conclusion that the City breached a statutory duty to bargain. We therefore remand for modification of the judgment, to wit: that the City make the contributions ordered by the trial court for each month from and after October 1, 1976, for the term of the parties' collective bargaining agreement. Future obligations of contribution will have to be negotiated between the parties, but the City cannot discontinue contributions without providing a "corresponding benefit" to the firefighters. Frank v. Day's, Inc., supra.
Remanded for modification consistent with this opinion.
ANDERSEN, A.C.J., and RINGOLD, J., concur.
Reconsideration denied April 30, 1979.
Review denied by Supreme Court August 22, 1979.