seek arbitration. Once the Union made that choice, the denial
became permanent; whereas, if the claim had been placed before
the arbitrator it had an undetermined chance of being granted.
The plaintiffs contend that by exercising its discretion in
the claims handling procedure, the Union can affect the
outcome of a claim for benefits under the Swift employment
plan, even though the Union has no actual control of the
plan's funds. As a result of such discretion, the Union is a
Defendant Union urges that the authority granted the Union
by section 42 is no greater than that assumed by a Union
representative in any grievance process; and because the Union
is not ultimately responsible for deciding the merits of
beneficiaries' claims its authority is not "discretionary" as
contemplated by ERISA. To support this point, the Union
asserts that the plain language of section 42 permits it only
to present the claim to Swift, not to grant or deny that claim.
The Union additionally urges that it should not be held to the
fiduciary standard imposed by ERISA since that standard is
meant only to be applied to those who manage or administer the
plan as opposed to those who deal with beneficiaries of the
Neither party has presented the Court with a case on point,
nor could the Court find one. In United Ind. Flight Officers v.
United Air Lines, 756 F.2d 1262 (7th Cir. 1985), the Seventh
Circuit held that a Union was not a fiduciary within the
meaning of ERISA while it was negotiating terms and conditions
of future pension benefits. The Seventh Circuit reasoned that
"the duties imposed on a fiduciary are inconsistent with the
demands of negotiation and collective bargaining." Id. at 1268.
The Court went on to say that "[w]hile the Union does owe a
duty of fair representation to its members, . . . it does not
control, nor is it in a position to oversee, the employer's
contributions to the fund." Id. (quoting Rosen v. Hotel &
Restaurant Employees Union, Local 274, 637 F.2d 592, 599 n. 10
(3d Cir.), cert. denied, 454 U.S. 898, 102 S.Ct. 398, 70
L.Ed.2d 213 (1981).
In the instant case, the Court does not believe that the
responsibility imposed on the Union under the plan confers
fiduciary status on it under ERISA. Pursuant to the Master
Agreement, the Union has a duty to represent the claimant.
This duty is identical to the duty imposed under most
collective bargaining agreements. If the plaintiffs feel the
Union did a poor job in representing their interests, or that
the Union and the company conspired to deny them their
benefits, the Labor Management Relations Act (LMRA) provides
the plaintiffs with a avenue to pursue their claim.
See 29 U.S.C. § 185.
The only discretion granted the Union concerns its
representation of the plaintiffs after the Company denies a
claim. The Union cannot grant the benefits sought nor can it
deny them. Its discretion lies only in its ability to forego
arbitration. Under the plaintiffs' theory, the Union, owing a
fiduciary duty to each claimant, would be compelled to take
every dispute to arbitration, a result obviously not
contemplated by the Master Agreement or desired under ERISA.
The purpose in conferring fiduciary duties on those persons
who posses discretion under a plan is to compel them to act
solely in the best interests of the participants in and
beneficiaries of the plan. Id. Because foregoing arbitration
could never be in the best interests of the claimant, the Union
would always face a breach of fiduciary duty suit when it
exercised the very discretion that the plaintiffs maintain
mandates a finding of a fiduciary status. Congress could not
have intended such a result even under the broad language of
The plaintiffs problems lies in the fact that the Master
Agreement does not provide for mandatory arbitration. Maybe
the Union should have negotiated for such a provision.
However, as the Seventh Circuit stated in United Air Lines, a
Union is not a fiduciary in the negotiating process.
For these reasons, the Court holds that the Union is not a
fiduciary under ERISA. Based on this ruling, the Court need
not address the damages and jury issues.
Accordingly, the Court GRANTS the defendant Union's Motion
to Dismiss or Strike (Document No. 29). The Court hereby
DISMISSES the plaintiffs' claims against the Union.
IT IS SO ORDERED.
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