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FRASCONE v. GENERAL PENSION BD. OF THE CONTINENTAL

December 5, 1990

JAMES FRASCONE, STEPHEN SCHALL, DENNIS SUTTER and PATRICK TEBO, Plaintiffs,
v.
GENERAL PENSION BOARD OF THE CONTINENTAL PENSION PLAN, CONTINENTAL CAN CO., a Delaware corporation, and U.S. CAN CO., a Delaware corporation, Defendants


Ilana Diamond Rovner, United States District Judge.


The opinion of the court was delivered by: ROVNER

ILANA DIAMOND ROVNER, UNITED STATES DISTRICT JUDGE

 I. INTRODUCTION

 Plaintiffs in this action seek pension benefits which were allegedly promised to them by their employer before they were laid off. Pending are cross-motions for partial summary judgment. For the reasons described below, plaintiffs' motion is granted and defendants' motion is denied.

 II. FACTS

 The majority of the facts in this case are undisputed. Plaintiffs are four former employees of defendant Continental Can Company ("CONCAN") who, beginning between 1960 and 1963, worked at a packaging plant in Itasca, Illinois, known as "Plant 465." Beginning in 1974, employees at Plant 465 elected six representatives on an annual basis to serve as members of a "Participative Management Committee." Those representatives negotiated with CONCAN regarding the terms and conditions of employment.

 On March 30, 1984, CONCAN management at Plant 465 issued a memorandum entitled "Understanding Between Permanent Employees at Plant 465 Itasca and the Management of General Packaging Operations" (the "1984 Memorandum"). The 1984 Memorandum expressed the management's commitment to provide certain wages and benefits in accordance with a collective bargaining agreement between CONCAN and the International Association of Machinists ("IAM") which was due to expire March 31, 1986. (The employees are not IAM members.) The 1984 Memorandum also stated:

 
This understanding will be for the duration of the agreement reached between the IAM and CCC on a national agreement basis, plus 30 days.
 
During the 30-day period following the expiration date of the IAM national agreement, company representatives and Itasca committee representatives will discuss the implementation of any changes negotiated so that parity may be achieved.

 The 1984 Memorandum was posted on bulletin boards, where it could be read by all employees.

 With respect to benefits, the 1984 Memorandum stated that CONCAN would "provide early pensions (75/80, R-65 w/25 years) consistent with the IAM Master Agreement." It is the "Rule of 65," or special early pension, benefit that is at issue in this case. The IAM Master Agreement incorporated a Pension Agreement which contained a provision for a special early pension for an employee whose continuous service is broken as the result of a layoff for two continuous years if that employee has completed 25 years of service and has combined years of age and regular continuous service equalling 65 or more.

 At a meeting of the Participative Management Committee on April 23, 1986, the employee representatives informed management that they wished to be governed by the new IAM Master Agreement covering the period from April 1, 1986, to March 31, 1989, but that they wanted wages $ 1.25 per hour higher than those provided in the Master Agreement. Also at that meeting, management gave the employee representatives copies of the Continental Pension Plan and Supplemental Unemployment Benefits Plan. The Pension Plan booklet included a provision for a "Rule of 65" pension benefit.

 At a subsequent meeting of the Participative Management Committee on May 8, 1986, management informed the employee representatives that CONCAN was willing to follow the new IAM Master Agreement but was not willing to pay the additional $ 1.25 per hour. The minutes of this meeting were posted on the plant bulletin board.

 On May 9, 1986, management representative Charles E. Crisp wrote a memorandum (the "1986 Memorandum") to O. Stickney, his superior at CONCAN's general offices in Connecticut, describing the previous day's meeting. Attached to the 1986 Memorandum was a four-page position paper setting forth the management's position in the negotiations. At the bottom of the second page appeared the words: "Our commitment -- IAM parity." The 1986 Memorandum and the position paper were posted on the plant bulletin board. By "IAM parity," the company meant that it was offering its employees the same wages and benefits as could reasonably be applied to the Itasca facility as those contained in the IAM Master Agreement.

 At a meeting of the Participative Management Committee on January 14, 1987, employee representative Patrick Tebo (a plaintiff in this case) reminded management that a pension plan booklet describing benefits under the new IAM Master Agreement needed to be prepared for distribution to all Plant 465 employees. Management representatives stated that a summary plan description specifically for Plant 465 employees would be prepared by CONCAN's actuaries and that, retroactive to March 1, 1968, the employees' pension ...


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