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INSLEY v.JOYCE

August 12, 1971

CLAUDE W. INSLEY, PLAINTIFF,
v.
WILLIAM D. JOYCE ET AL., DEFENDANTS.



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

  MEMORANDUM OPINION

This class action, challenging a provision of a pension plan adopted by the defendants or their predecessors, is brought by a retired member of Local Union No. 710, International Brotherhood of Teamsters (hereafter referred to as Local 710), who, pursuant to the challenged provision, was denied a retirement pension by the defendants. The plaintiff alleges federal subject matter jurisdiction of this action under § 302 of the Labor Management Relations Act of 1947, 29 U.S.C. § 186 (hereafter referred to as the Act). The defendants move to dismiss the first amended complaint on the grounds that this Court lacks jurisdiction over the subject matter of the complaint and that the complaint fails to state a claim upon which relief may be granted.

The facts are not substantially in dispute. In February of 1955, the Pension Fund involved herein was established by representatives of Local 710 and the Central Motor Freight Association Inc. of Illinois, an association of trucking companies. The Pension Fund agreement provided that its trustees would pay retirement benefits to union members in accordance with the provisions of a Pension Plan to be formulated later. The Fund agreement provides for the employers to make continuing contributions pursuant to the provisions of the collective bargaining agreements entered into between the individual trucking companies and Local No. 710.

Some time after the establishment of the Fund, a Pension Plan was adopted by the trustees containing eligibility provisions for retirement pensions. This Plan provides that Local 710 members are entitled to retirement benefits if they have twenty years of "Credited Service" and satisfy other conditions which are not in issue in this case. The term "Credited Service" is defined as "* * * the sum of an Employee's Past Service and Future Service." The Plan further provides that no credit shall be given to an employee for past service for any period of covered employment prior to an interruption of covered employment of more than three years duration. It is this latter "break-in-service" provision which the plaintiff alleges violates Section 302 of the Act.

The first basis for the defendants' motion to dismiss is that this Court lacks jurisdiction over this complaint. The defendant contends that this Court has no jurisdiction to resolve disputes between parties to a pension plan created pursuant to Section 302. While this statement is correct as to disputes concerning the day-to-day administration of such a plan and trust, it is not determinative in the circumstances of this case.

Subsections (a) and (b) of Section 302 make it unlawful for an employer to make payments to a representative of his employees and for a representative to receive such payments. Subsection (c) (5) carves out an exception to the foregoing provisions for payments made to a trust fund complying with a statutorily enumerated list of requirements which include the following:

  (1) the trust fund must be established for the sole
      and exclusive benefit of employees and
      dependents;
  (2) payments must be held in trust to pay, from
      principal or income, for such employees' medical
      care, pensions, illness, etc.;
  (3) the detailed basis of payments must be set forth
      in writing;
  (4) employers and employees must have equal
      representation, with a provision for a neutral
      person or umpire;
  (5) the plan must contain provisions for an annual
      audit; and
  (6) there must be separate trusts for pension and
      annuity funds.

Subsection (e) of Section 302 provides that district courts of the United States shall have jurisdiction, for cause shown, ...


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