Opinion
02 C 4420
September 04, 2003
MEMORANDUM OPINION
This matter comes before the court on cross-motions for summary judgment. For the reasons set forth below we grant Defendant's motion and deny Plaintiffs motion.
BACKGROUND
Plaintiff Teamsters Local 710 Pension Fund ("Local 710 Fund") brought this action to compel Defendant United Parcel Service ("UPS") to pay allegedly delinquent contributions owed under the terms of a collective bargaining agreement (the "Local CBA") pursuant to Section 502(a)(3) and (g)(2) and Section 515 of the Employee Retirement Income Security Act of 1974 ("ERISA"). 29 U.S.C. § 1132(a)(3), (g)(2); 29 U.S.C. § 1145. The Local CBA was executed between UPS and Local 710. The Local CBA mirrored a national collective bargaining agreement (the "National CBA"), which was executed between UPS and Teamsters UPS National Negotiating Committee ("Teamsters National").
Both CBAs required UPS to create a certain number of full-time positions out of existing part-time positions during each year of the CBAs' five year period, which ran from August 1, 1997, to July 31, 2002. The Local CBA required UPS to create 75 full-time positions each year, while the National CBA required the creation of 2000 full-time positions per year. (Local CBA § 25.11; National CBA § 22.3.) UPS refused to create any full time positions during the first two years because it thought a downsizing exception to its obligation applied. Teamsters National disagreed and initiated an arbitration to settle the issue. The arbitrator ruled that UPS was obligated to create the full-time positions as set forth in section 22.3 of the National CBA. He further ordered UPS to create the full-time positions and to make the corresponding employees whole as to pension contributions, among other things, they would have received had they been promoted to full-time status punctually.
At this point in time, UPS and the Local 710 Union ("Local 710"), which was not a party to the arbitration, contracted to apply the arbitrator's decision as issued between UPS and Teamsters National to their own identical dispute for the first year of the Local CBA. UPS and Local 710/Local 710 Fund memorialized this agreement in the First Year Agreement. UPS and Local 710 Fund also executed a Second Year Agreement, which mirrored the First Year Agreement except that it did not explicitly state that it was meant to apply the arbitrator's decision in the national dispute to the local dispute.
Local 710 Fund concedes that it is bound by the First and Second Year Agreements executed by the union Local 710. As such, we will refer directly to Local 710 Fund as the contracting party.
After the First and Second Year Agreements were executed between UPS and Local 710 Fund, a further dispute developed between UPS and Teamsters National as to what the arbitrator meant by making the employees whole as to pension contributions. Teamsters National argued that the new full-time employees should receive contributions to their pension funds in the amounts they would have received had they enjoyed full-time status during the delinquent time period. UPS argued that it should not have to pay full contributions because the employees at issue already received some contributions in a separate pension fund for part-time employees. UPS and Teamsters National resubmitted the dispute to the arbitrator for clarification. Before the arbitrator could clarify his ruling as to the make-whole provision, UPS and Teamsters National proposed a Supplemental Consent Award, which the arbitrator approved and implemented. The Supplemental Consent Award awarded the part-time employees, who were retroactively made full-time, only the difference between pension contributions they already earned as part-time employees and pension contributions they would have earned as full-time employees.
Although the arbitration settled the exact same issue before this court, Local 710 Fund was not a party to the arbitration and is, therefore, not directly bound by the arbitrator's decision. Thus, the parties now fight over the same make-whole language contained in the governing First and Second Year Agreements.
UPS and Local 710 each move for summary judgment.
LEGAL STANDARD
Summary judgment is appropriate when the record, viewed in the light most favorable to the nonmoving party, reveals that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Bay v. Cassens Transport Co., 212 F.3d 969, 972 (7th Cir. 2000). The moving party bears the initial burden of showing that no genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). The burden then shifts to the nonmoving party to show through specific evidence that a triable issue of fact remains on issues on which the nonmovant bears the burden of proof at trial. Id. The nonmovant may not rest upon mere allegations in the pleadings or upon conclusory statements in affidavits; it must go beyond the pleadings and support its contentions with proper documentary evidence. Id. A genuine issue of material fact exists when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
DISCUSSION
As set forth above, Local 710 Fund was not a party to the arbitration between UPS and Teamsters National. Thus, it is not directly bound by that arbitration. Rather, the First and Second Year Agreements directly govern the issue in dispute. UPS argues that by way of the First Year Agreement, Local 710 Fund signed on to be bound by the arbitration. Local 710 Fund, however, argues that it only signed on to the arbitrator's initial decision and not the later clarification as to the make-whole provision.
Although it was federal rights arising under ERIS A that motivated the parties to execute the First and Second Year Agreements, the action before us is essentially a contractual one. Under Illinois law, interpretation of an unambiguous contract is a question of law particularly suited to disposition on summary judgment, Kallman v. Radioshack Corp., 315 F.3d 731, 735 (7th Cir. 2002), and because there are no material facts in dispute, summary judgment is indeed proper. Bay, 212 F.3d at 972.
I. The First Year Agreement
The First Year Agreement states that "UPS shall make each employee whole for pension benefits and credits to which they would have been entitled from the appropriate fund had they been employed on a full-time basis during the back pay period. . . ." (First Year Agreement ¶ 7.) UPS and Local 710 Fund dispute the meaning of this language. The First Year Agreement, however, expressly incorporates the arbitrator's decision, stating that it is executed "for purpose of complying with and implementing the Opinion and Award issued by Arbitrator George Nicolau" in the arbitration. (First Year Agreement preamble.) Because of this language, UPS argues that Local 710 Fund is bound by the entire arbitration, including the Supplemental Consent Award, which resolved the same dispute as to the meaning of the make-whole provision. Local 710 Fund counters that the Supplemental Consent Award was the result of a settlement and a stipulated order, and, therefore, was not the arbitrator's decision.
We agree that Local 710 Fund should not be bound by a settlement to which it did not partake. In the Supplemental Consent Award, however, Arbitrator Nicolau explained that the "settlement" by the parties was fully consistent with his intentions all along:
It was the intent of my Opinion and Award . . . that the employees in question be made whole with respect to pension credits, but not unjustly enriched. . . . It was not the intention that these employees receive "overlapping" benefits (specifically, the part-time enhancement received by virtue of their actual part-time employment capacity on August 1, 1999 and full time pension coverage by virtue of their artificial seniority date) or "overlapping" time toward entitlement to pension benefits.
(Supplemental Consent Award ¶ 5.) Thus, in addition to approving the "settlement" between UPS and Teamsters National, Arbitrator Nicolau explained that his earlier decision was never meant to allow unjust enrichment or recovery of overlapping pension contributions. While it is most likely the case that the Supplemental Consent Award was written by UPS and/or Teamsters National as opposed to Arbitrator Nicolau, we cannot ignore the fact that Arbitrator Nicolau reviewed, signed, and adopted as his own the Supplemental Consent Award. Thus, with respect to the First Year Agreement, which incorporates Arbitrator Nicolau's decision including the Supplemental Consent Award, UPS must only contribute the difference between pension contributions the employees already earned on a part-time status and pension contributions they would have earned had they been treated as full-time employees punctually.
II. The Second Year Agreement
Like the First Year Agreement, the Second Year Agreement states that "UPS shall make each employee whole for pension benefits and credits to which they would have been entitled from the appropriate fund had they been employed on a full-time basis during the back pay period. . . ." (Second Year Agreement ¶ 7.) Again, UPS and Local 710 Fund dispute the meaning of this language. The Second Year Agreement, unlike the First Year Agreement, does not expressly incorporate the arbitrator's decision. Thus, we will interpret the language in dispute ourselves.
Having made our own analysis, we are in complete agreement with Arbitrator Nicolau that being made whole as to pension benefits does not mean that the employees are entitled to both complete part-time pension benefits and complete full-time pension benefits. This would be unjust enrichment and contrary to the contractual language of the Second Year Agreement, which only requires UPS to make the employees whole with respect to pension benefits. What Local 710 Fund seeks, and what we will not award, is to be made more than whole and unjustly enriched. With respect to the Second Year Agreement, UPS must only contribute the difference between pension contributions the employees already earned on a part-time basis and pension contributions they would have earned had they been treated as full-time employees punctually.
CONCLUSION
Based on the foregoing analysis, we grant UPS's motion and deny Local 710 Fund's motion.