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Challenger v. Local Union No. 1 of International Bridge

decided: April 16, 1980.

EDWARD A. CHALLENGER, PLAINTIFF-APPELLANT,
v.
LOCAL UNION NO. 1 OF THE INTERNATIONAL BRIDGE, STRUCTURAL, AND ORNAMENTAL IRONWORKERS, AFL-CIO, ET AL., DEFENDANT-APPELLEES.



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division No. 78-C-3385 -- George N. Leighton, Judge .

Before Cummings, Pell and Tone, Circuit Judges.

Author: Tone

The issue in this case is whether a dispute over the interpretation of the break-in-service provisions of a jointly administered pension plan is subject to compulsory arbitration under the terms of the plan, and, if so, whether this is permissible under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001-1381. The district court held that plaintiff, who claims pension benefits under the plan, was required to submit the dispute to arbitration. The court therefore dismissed the complaint for failure to state a claim on which relief could be granted. We affirm the judgment.

Plaintiff Challenger has been a structural ironworker since 1957, with the exception of a three-year period from 1964 through 1966. While employed as an ironworker he has been a participant in an employee pension plan maintained pursuant to collective bargaining agreements between his union and an association of employers engaged in the ironworking business.

In November 1977, pursuant to Challenger's request for advice on his pension expectancy, the plan administrator advised him that to date he had earned 10.5 pension credits and that these had accrued from 1967 through 1977. Challenger then engaged an attorney, who wrote a letter to the plan administrator taking the position that plaintiff was entitled to pension credits for the years before 1967. An attorney for the pension trustees responded that under the trustees' interpretation of the plan plaintiff was not entitled to pension credits for the work he performed before 1967 because that work preceded a three-year break in service from 1964 through 1966.

Challenger then brought this action under ERISA, invoking 29 U.S.C. § 1132(e) (1).*fn1 He alleges that he is entitled to six years' pension credits for the years before 1967, and that the trustees and plan administrator violated their fiduciary duties under § 404(a)(1)(A), (B), and (D) and § 401 of ERISA, 29 U.S.C. §§ 1104(a)(1)(A), (B), & (D), 1101. Declaratory and injunctive relief is sought. Challenger appeals from the district court's judgment dismissing the complaint for failure to state a claim.

I

The Structural Ironworkers Local No. 1 Pension Plan was adopted in the 1960's in conjunction with the collective bargaining agreement between the union and the Associated Steel Erectors of Chicago, the employers' association. The collective bargaining agreement, as renewed from time to time, has always made the pension plan agreement a part of the collective bargaining agreement, which provides that the pension fund is to be administered according to the plan agreement.

The pension plan contains, as Article VI, an arbitration provision, the pertinent parts of which are as follows:

Section 1. Any dispute or disagreement between an applicant and the Board of Trustees as to the proper interpretation or application of the terms and conditions of this Pension Plan shall be subject to the following appeal procedure:

(1) The applicant shall file a written appeal with the Board of Trustees within sixty (60) days after the date of the initial decision of the Trustees. . . .

(2) The Board of Trustees shall consider the applicant's appeal as soon as practicable . . . . The Board shall notify the applicant of its final decision in writing by mailing a copy to the applicant's last known address.

(3) The applicant may appeal the final decision of the Trustees to final and binding arbitration by notifying the Pension Plan office within thirty (30) days of the date of the decision of his desire to arbitrate. (Then ...


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